Hayek's Heroes.

The greatest idea of the 20th century paid off on its biggest day.

To close out this century, I decided to read a book about what was arguably its most important day: June 6, 1944. Hey, call me a party animal. But you, too, might want to welcome the millennium by checking out 1994's D-Day: The Climactic Battle of World War II, by historian Stephen Ambrose.

Even today we think of the Wehrmacht as a mighty force. Certainly, its well-trained, well-armed, battle-tested soldiers struck a fearsome pose at Normandy, the most heavily fortified coastline in history. The Allies viewed the Germans as an unforgiving piece of iron.

So doubts ran high as 175,000 Allied troops - Yanks, Brits, Canadians, and Aussies - traversed the English Channel. Could the children of democracy prove themselves warriors? Would they freeze in mortal combat? Adolf Hitler, who slept until noon on D-Day, believed the disciplined defenders of Third Reich would crush the soft soldiers of the liberal West.

Yet Ambrose shows that it was the rigid Nazi war command that fell apart on D-Day. The Allied soldier kept his head while all about him were (all too often) losing theirs. Such resilience proved necessary. The best-laid plans of the Supreme Allied Command were almost immediately rendered moot; the massive landing amounted to a chaotic dumping of troops into a very hostile environment. Allied forces landed out of position, units were a shambles, and radio communications were knocked out.

But Ambrose identifies a crucial difference between the German and Allied fighting men. The Germans were hamstrung by sweeping orders issued from far away. In contrast, the Allies relied on mid-level and junior-grade officers issuing impromptu commands based on facts gleaned firsthand.

There is no more dramatic example of F.A. Hayek's seminal discovery: the importance of dispersed information - "knowledge of time and place." Hayek, who was to win the Nobel Memorial Prize in Economic Science in 1974, published his memorable essay, "The Use of Knowledge in Society," in the American Economic Review just the year after D-Day. It explained the motive force driving Adam Smith's "invisible hand" by noting that great efficiencies resulted when millions of dispersed individuals, motivated by market incentives, utilized the information uniquely available to them to make decisions. It's why a decentralized competitive system beats a top-down bureaucracy, even when the planners are "experts."

The bloody beaches of France graphically illustrate the advantages. German soldiers had been commanded to defend every inch of coastline. They were rendered immobile by strict orders to stay put - why trust low-level soldiers to freelance when the High Command had it planned out already? But that strict Wehrmacht policy saved Allied troops even in places where they were extremely vulnerable. The ferocious Panzer tank divisions set aside for counter-attack were too precious to trust to field commanders; only Der Fuhrer had the right to deploy those. As the military genius in Berlin snoozed, German positions were overrun. Even then, despite reports from the front, Hitler held back his elite motorized units, convinced the real landing was to come at Pas-de-Calais.

Meanwhile, Allied soldiers dodged mines and intense enemy fire. They were hopelessly ill-equipped - in the chaos of the landing, their best heavy equipment never made it to shore - but they improvised. Mid-level commanders - sometimes a sergeant was the highest-surviving rank - seized the moment, issuing orders and rallying soldiers. Empowered by a flexible command structure, leaders emerged instantly, spontaneously. Fighting units were reconstituted and assault plans redefined on the fly.

Perhaps the classic demonstration was the landing on Utah Beach at 6:30 a.m. - the first wave. Due to unexpectedly strong tides, landing craft deposited units over 1,000 meters from their pre-arranged positions. Heavy machine gun fire pinned down those who managed to survive long enough to reach the beach. Crouching for cover, U.S. infantrymen assembled and spread out their maps. They had no radio contact, and most of their commanders could not be located. What the hell to do? Should they get down the beach to where they were supposed to be, or attack the German artillery directly in front of them?

The ranking officer quickly made a decision: "Let's start the war from here." With that, brave Americans charged Nazi fortifications straight ahead, knocked out guns, scaled the bluff, and circled around to capture the ground they had originally been assigned to take.

While no lowly soldier in the Wehrmacht had the authority to revamp official orders, the Allied invasion consisted of little besides ad hoc heroism. Decentralized information stormed the beaches on June 6, 1944, and irreparably breached the Atlantic Wall by dusk. Pretty good theory for one day's work. Pretty good work for one day's theory.

Contributing Editor Thomas W. Hazlett ([e-mail]) is a resident scholar at the American Enterprise Institute and a professor of economics at the University of California at Davis.