Wikipedia, Hayek and the marketplace

'Belette' comments here that "there is no marketplace on wiki". Well perhaps there isn't, but its founders certainly thought there is. Hayek's paper about market mechanisms "The Use of Knowledge in Society" is supposed by some, not least by Jimmy Wales himself, to be the model for Wikipedia. You can read the paper for yourself, but Hayek's central argument is that there are two types of knowledge, namely knowledge of the eternally true, scientific sort of stuff that you read about in books, and knowledge of "circumstance", i.e. of little facts peculiar to a time or place, knowledge of which "never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess." Hayek argues that all economic activity is planning, but all planning must be based on knowledge which is not initially available to the planner but to somebody else, which somehow will have to be conveyed to the planner. Which is the best way of utilising this knowledge: central planning or the use of a price mechanism?

Assume that somewhere in the world a new opportunity for the use of some raw material, say, tin, has arisen, or that one of the sources of supply of tin has been eliminated. It does not matter for our purpose—and it is very significant that it does not matter—which of these two causes has made tin more scarce. All that the users of tin need to know is that some of the tin they used to consume is now more profitably employed elsewhere and that, in consequence, they must economize tin. There is no need for the great majority of them even to know where the more urgent need has arisen, or in favor of what other needs they ought to husband the supply.

Wales claims (in an email to me) that this idea underpins his whole thinking about Wikipedia. Larry Sanger also had some similar ideas which he expressed in a mini-essay here in 2001.

Academia is sometimes compared to the marketplace of ideas. That's also an apt description of Wikipedia at present: it's unregulated (except for some basic ground rules), and anyone can come in and "set up shop" (write an article), but other "business owners" (contributors) can "compete" (improve the article) according to their understanding of what the facts are, what the best way to express them is, etc. Competition improves articles. Regulation tends to stifle free competition."