The state should confine itself to establishing rules applying to general types of situations and should allow the individuals freedom in everything which depends on the circumstances of time and place, because only the individuals concerned in each instance can fully know these circumstances and adapt their actions to them. If the individuals are to be able to use their knowledge effectively in making plans, they must be able to predict actions of the state which may affect these plans. But if the actions of the state are to be predictable, they must be determined by rules fixed independently of the concrete circumstances which can neither be foreseen not taken into account beforehand: and the particular effects of such actions will be unpredictable.  If, on the other hand, the state were to direct the individual’s actions so as to achieve particular ends, its actions would have to be decided on the basis of the full circumstances of the moment and would therefore be unpredictable.  Hence the familiar fact that the more the state “plans,” the more difficult planning becomes for the individual.

from The Road to Serfdom by F. A. Hayek

HKO comments:

Written in 1944 Hayek examined the state of affairs in Europe and concluded that the outcome of a “planned” economy inevitably led to an assault on the democratic institutions and the classical liberalism of individualism.  Currently, business is frozen from the uncertainty created by radical new legislation and regulation. This passage explains why business is now sitting on top of trillions of dollars, and afraid to deploy it.