University of Chicago law professor Cass Sunstein may not be among libertarians’ favorite thinkers, but Sunstein is, in his own way, a strong advocate of individual liberty and free markets.
Hayek fans will enjoy Sunstein’s op-ed in today’s Washington Post, in which he describes how individuals are using computer-age technology to aggregate information. A snippet:
Developing one of the most important ideas of the 20th century, Nobel Prize-winning economist Friedrich Hayek attacked socialist planning on the grounds that no planner could possibly obtain the “dispersed bits” of information held by individual members of society. Hayek insisted that the knowledge of individuals, taken as a whole, is far greater than that of any commission or board, however diligent and expert. The magic of the system of prices and of economic markets is that they incorporate a great deal of diffuse knowledge.
Wikipedia’s entries are not exactly prices, but they do aggregate the widely dispersed information of countless volunteer writers and editors. In this respect, Wikipedia is merely one of many experiments in aggregating knowledge and creativity that have been made possible by new technologies.
Sunstein’s op-ed goes on to discuss intriguing experiments with events futures, which should delight Cato friend Robin Hanson:
But wikis are merely one way to assemble dispersed knowledge. The number of prediction markets has also climbed over the past decade. These markets aggregate information by inviting people to “bet” on future events — the outcome of elections, changes in gross domestic product, the likelihood of a natural disaster or an outbreak of avian flu.