My all-time favorite article by Hayek is his 1945 classic, "The Use of Knowledge in Society." Although he doesn't mention the term "local knowledge" in that article, that is the term we Hayekians have adopted to refer to his "knowledge of the particular circumstances of time and place."
On Saturday night, I drove to the Salinas Rodeo to see a performance by Credence Clearwater Revisited. (I give it an A, by the way.) Sitting there listening, I remembered one of my favorite passages from Stewart Brand, ed., The Next Whole Earth Catalogue, 1980:
Peter Spectre went to a Frank Zappa concert in Amherst, and in the middle of it, someone in the balcony threw a whiskey bottle at Frank Zappa and hit him in the arm. Zappa instantly stopped the music, called for the houselights, hauled his stool to the middle of the stage and said, "I'm not playing another note till the c**ks**ker who threw that bottle is in jail." Peter thought, "There goes the concert." But as soon as Zappa spoke, the people in front started looking back because they knew that was generally where it had come from and of course the closer people were sitting to the thrower the more specifically they knew where he was and they looked in that specific direction and the people next to him and in back of him looked right at him and within 4 or 5 seconds everyone in the whole place was looking at one guy, and the cops went over, picked him up and took him away. He didn't say a word. Zappa order the houselights down, went back to his guitar, and finished the concert.