Language As a Limiting Factor for Centralization.

There are still many open questions concerning the respective merits and deficiencies of different types of resource-allocation processes. The main purpose of this paper is to show some limitations of those types of centralized processes where a central agency determines either all commodity flows or the prices of all commodities. It does so by considering some problems of languages available for inter unit communication. Instead of the traditional assumption of a sufficiently detailed common language equally well understood by all participants in the process, it chooses a more realistic approach, viewing any common language as inevitably based on some agreement among the participants' individual classifications of economic states and events. This allows us to see other obstacles to centralization besides traditional difficulties with the speed and costs of centralized communication and computation. To avoid any misinterpretation of thearguments presented, two marginal remarks may be in order. First, arguments againstcentralization are by no means a defense of decentralization