The Saturday debate: it’s no longer about market versus state

Here’s your starter for ten as we experiment with a Saturday slot posing a view for debate:

For the last hundred years the big organizational question has been whether any given task was best taken on by the state, directing the effort in a planned way, or by businesses competing in a market. This debate was based on the universal and unspoken supposition that people couldn’t simply self-assemble; the choice between markets and managed effort assumed there was no third alternative. Now there is. Our electronic networks are enabling novel forms of collective action, enabling the creation of collaborative groups that are larger and more distributed than at any other time in history. (Clay Shirky, Here Comes Everybody)

Agree? Disagree? What’s the implication for public policy? Comment away…

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  • Tom Papworth 30th Jan '10 - 5:50pm

    I think this is a false dichotomy. As Niklas says, “markets are a form of “self assembly” (otherwise known as voluntary association).” The choice in the C20th that was between state-run coercive monopolies and competitive free association.

    Indeed, “novel forms of collective action, enabling the creation of collaborative groups” might very well be how somebody would have described the joint stock company in C19th (they’re actually older but the 1848 Act was very significant).

    Furthermore, the market has always been a pluralistic arena. For example, PLCs and multinationals compete with cooperatives, familiy firms and even not-for-profit providers. What Clay Shirky is focussing on really a quantitative, rather than a qualitative, difference.

    One thing is for certain, however. We do not want to stay as far away from the state planned economy as we can. There is no room in a planned economy for “collaborative groups that are large… and more distributed”.

  • One difference between a tradition corporate-dominant market and an electronic network is the amount of individual knowledge of information and control is more extensive in the latter than former, but otherwise the are both forms of voluntary association. Essentially improved networks can improve the market, by adding in new ways of competing (from those alraready mentioned: family firm, cooperative etc)

  • And the matter of state versus market was settled a few years ago…!

  • Tom Papworth 31st Jan '10 - 1:02pm

    On a seperate topic, I feel that the “experiment with a Saturday slot posing a view for debate” may have been unsuccessful.

    Or it might just have been a lousy question.

  • Andrew Duffield 31st Jan '10 - 3:13pm

    And there was me thinking the banking crisis was the result of a heavily restricted market with massive barriers to entry and entirely dependent on a symbiotically subserviant state to:
    a) create and maintain its privileged position and bail it out on demand; and
    b) tax production instead of the economic rent, on which the banks continue to gorge.

    How wrong could I be? It was free and unfettered market forces all along!

  • Matthew Huntbach 1st Feb '10 - 10:11am

    I’ve been hearing the point made here by Clay Shirky since the early days of email and text bulletin boards. And it’s been proved completely wrong in practice. Do we have for example, lots of collectively-owned co-operative competing web-based book selling organisations? No, we have one Amazon. Ditto one Google etc.

    Open-source software may be a bit more like Shirky’s suggestion, but that’s niche, and I suspect owes something to a heroic hacker mentality that is now dying out. There’s no successor to Linux, is there? And for all the collectivity of Wiki, there’s only one Wikipedia, and it’s run by one man.

    The reality seems to be that web-based service providers work best when there is just one which everyone knows and uses. There may be a struggle to become that one, and there is just the chance that it can get knocked off. But on the whole, there is not a stable situation of lots. Partly it’s because people like standards – they will use what is the standard rather than what is unusual but better. That is why, for example, I’m typing this on a QWERTY keyboard.

    Web-based services require centrally owned and managed software. If they are providing something physical, they still require the same sort of big warehouse set-up that means, though we moan about it, we mostly use the big providers for other things because they can provide us with variety cheaply.

    If anyone mentions Obama as a success of collective web-based action, Obama’s failure now shows the problem of where that leads. To some extent, it worked because that’s how USA politics works – presidential elections are really about forming scratch parties for a one-off. But such things don’t last, hence Obama can’t compete now against his right-wing opponents who have control of the broadcast media.

  • But collective action is not collective ownership. Collaboration doesn’t require ownership.

  • ditto the above. I don’t think compuer networks necessarily bring about drasic change, in terms of providing somwthing radically different from the market, but it does extent the ability of people to collaborate, check, and choose far more easily.

    That there are near-monopolies in many sectors is a worry. The recent – macmillan dispute over kindle publishing, is worrying in that these monopolies could exert massive control. I looked for an amazon replacement but there is none.

    Nevertheless in general web based institutions seem to increase individual power

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