His critique goes well beyond just the quantity of data.
This is, perhaps, also the point where I should briefly mention the fact that the sort of knowledge with which I have been concerned is knowledge of the kind which by its nature cannot enter into statistics and therefore cannot be conveyed to any central authority in statistical form.
His bigger argument though, is even if it were effective, it is inherently undemocratic.
It will often be necessary that the will of a small minority be imposed upon the people
Exactly. This was a big part of the thesis of The Road to Serfdom.
He makes the point that so long as everyone is on the same page, working to the same goal, central-planning can be very effective. We can see this historically when a nation unites in defense, as America (and much of the world) did during WWII.
But when every person has their own goals and values, the central planning is no longer able to work effectively. It's not simply that it's hard to optimize that many functions at once, but that much more fundamentally, it's impossible for the central planner to know what those individual functions even are.
So the titular road to serfdom is when we agree to unite toward a central goal and thus subject ourselves to the central planning, that central authority can't easily be removed later when the shared goal has been achieved. Thus we find the central authority acting as an obstacle toward the individual goals that we've returned to.
The issue is that it's impossible for a computer to know what everybody values. When people participate in a market, this allows their values to be expressed: at a particular time, if they spend their money on A over B, then they valued A over B. Talk is cheap (people can say anything they want; it conveys extremely little information if they're not putting their money where their mouth is, so to speak).
On top of this, there is also all the distributed information about the available quantity and quality of goods and services in a particular location. The knowledge that a bunch of good machine parts for a certain piece of equipment are gathering dust in some warehouse can be extremely valuable if that equipment is in shortage, and that kind of data is routinely the source of profit to enterprising people in the real economy. It’s impossible to gather and process all that data and to make it available to everyone. It requires a distributed effort of people and firms acting in their own interests.
No, market participation just requires constraining one’s values to the options afforded by the market system. E.g., lots of people would be willing to take a pay cut for an extra day off per week but the job market does not provide that option. Why not?
Computer systems have gotten fast enough that a 00s Pentium 4 can handle all of the US economy, with the rest being a problem of gathering inputs.