I'd say you are right in your capsule view, more or less. Hayek had a great observation and went on to apply it to develop his social and political philosophy. Other people took it in other directions, including the development of mechanism design.

My view of Hayek in a capsule is that he came up with a great observation about localized information but did not develop it into what is now mechanism design theory because of his lack of interest in mathematical tools. Fortunately, many other smart people stepped in and created the theory anyway and are still making advances.

In any case, most theorists probably don't worry about these issues at all, so I'm all for more discussion of them!

Enjoyed the comments, but I want to take issue with one of the claims above which I think is really at the heart of misunderstandings between ABM types and more traditional theorists. "Econometric testing of theoretical models" is, in and of itself, completely incompatible with what I think the role of theory in social science ought be. As you noted, physicists and chemists attempt to write models of better and better match with reality, hoping to actually pin down parameters in nature. For complexity reasons, such a goal is hopeless in economics. Rather, economic theorems can only, using math for standardization and formality, state logical arguments about how interagent interactions aggregate. They help provide intuition to policymakers about what effects might be important and how important they might be. They do not, in the strict sense, make predictions.

So then, why ambivalence about ABM? Since theory provides arguments only, and since the mathematical structure itself *is* the argument, only an argument written in a consistent way which follows a foundational paradigm and allows simple comparison with earlier work, the proof *itself* is the critical component of theory. Although simulation is, as you note, nothing but a series of proofs, the exact nature of how those proofs work is what is hidden in the black box. I happen to like a lot of the simulation work, so (as I'm sure you agree) the final argument, the analogy, the intuition about what might be going on in society can be more easily and more comprehensively read from the output of a simulation than from a traditional theorem. But the black box hides the proof itself from future researchers, which in a real sense limits the ability of social science to progress.