A few minutes ago, I went to drop off my shirt and pants and pick up my dry cleaning. I gave Jennifer the slip for my pick-up items. It's pink and they've been using pink slips for some time. Then she printed out the new slip for my drop-off items. It was orange.
"Jen," I said, "you do realize that orange is not the new pink."
She laughed, immediately recognizing my approximate quote from the movie Legally Blonde. Then we started talking about how much we loved the movie. I've seen it in whole or in part at least 8 times. I told her that one of my favorite lines, again approximate, was Reese Witherspoon's comment to reporters at the end of the trial: "The laws of hair care are simple and finite."
As I drove away, I got thinking. Witherspoon's two insights in the movie that help her--SPOILER ALERT--win the case are both examples of Hayek's "local knowledge." Thus the title of this post. (They are also examples of Israel Kirzner's idea of entrepreneurial alertness.)
First, the clue she gets about the sexual orientation of one of the prosecution's key witnesses depends on her particular knowledge of fashion and of common differences between heterosexual males and homosexual males.
Second, the knowledge she has about hair care helps her see through another key prosecution witness.