Hayek's conclusion about the importance of local knowledge can be extended far beyond markets into many parts of our lives. In this essay, I summarize Hayek's argument and then apply it to some good things that happened on September 11, 2001, and to two cases after 9/11--the case of the "shoe bomber" and that of the "underpants bomber"--when airline passengers acted together to save themselves from terrorists.
I thank my sometimes co-authors Jeff Hummel and Charley Hooper for valuable comments. Jeff found a huge problem with one of my applications of Hayek's insight, pointing out that I was right historically but wrong to use it in this context. Charley pointed out that a generalization I tried to make in a previous draft was a bridge too far.
Interestingly, noted Levin, after 9/11, FAA officials started to write a set of procedures for getting planes on the ground in case something like 9/11 happened again. But then they stopped. Levin quoted Frank Hatfield, the FAA's eastern region chief: "A lot of things were done intuitively, things that you can't write down in a textbook or you can't train somebody to do." Indeed. Hayek's insight strikes again.