Arnold Kling  

Hayek and the Internet

My Book is Available... Squeezed Up...

Michael Van Winkle argues that the Internet's weblogs represent Hayek's concept of spontaneous order.

We've all heard critics of the Internet claim that, because no one "controls" it, no one can control it from disseminating the most outrageous rumors and conspiracies. A similar critique was leveled at Hayek's arguments about markets: Sure, markets (spontaneous systems) can deliver food at reasonable prices, but advertising and marketing often mislead people about which foods they should buy.

...Slowly but surely a loose network of bloggers is sometimes beating the designed, controlled systems of checks and balances at deciphering what's true and what's not. This is exactly what Hayek would've predicted.

I do not think that I would have ever developed an appreciation for Hayek were it not for the Internet. Just over ten years ago, as I contemplated leaving a secure job to start an Internet business, I studied the Internet and gained an understanding of how its decentralized architecture works. The analogy between the Internet's architecture and Hayek's view of markets is what made Hayek accessible to me.

For Discussion. In what ways does the Internet facilitate decentralizes markets?

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CATEGORIES: Austrian Economics

COMMENTS (4 to date)

A side-note:

For the definition of spontaneous order and some topical readings, see:

(Econlib Editor)

Lawrance George Lux writes:

The NY Times is currently running an article on Spyware and Adware. The development of both, and the degree of rigor in their design, indicates Business and organization are deeply afraid that the Internet can develop decentralized markets. The amount of funds devoted to their development could be a fair measure of the Internet's success in this area. lgl

Patri Friedman writes:

The internet has low costs of communication between any pair of people. This will tend to lead to more decentralized structures, because it is not cost-prohibitive to be decentralized.

It also makes it cheaper to find buyers/sellers of what you want. Without this property, you pretty much have to go to a central marketplace to find something.

John Thacker writes:

Obvious examples include EBay and the used book market (including using Amazon as an intermediary).

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