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Allin's example of Open Source Software speaks to the Hayekian point. Are
we confident that it can be the model for running a whole complex economy?
The contributors to open source software have other day jobs.
While capitalism tended to emerge spontaneously as a practice under the
feudal mode of production, socialism tends to emerge spontaneously as an
ideology under the capitalist mode of production.
>On Fri, 14 Jan 2000, Duncan K. Foley wrote:
>> [Hayek] views the market as a device that does two things:
>> 1. It induces people to reveal at least some of this
>> information, which he thinks they otherwise would be
>> reluctant or unwilling to do. The market willy-nilly forces
>> people to take positions (or risks) that reveal some of
>> their information.
>Suppose I come up with an invention that permits the production
>of some item using less than the going amount of social labour
>time. If I'm operating in a market system I have an incentive
>to utilize that invention, undersell the competition and make a
>super-profit. My investment in the new technique reveals to
>others _that_ I have a new method, but it does not reveal what
>that method is, how it works. I may patent the new method and
>keep it a secret for as long as possible. Contrast this with
>the communist procedure that we see with Open Source software
>these days. A new invention is made; the inventor has the
>incentive of kudos and the esteem of his peers to reveal what
>he's done, and the further incentive that by opening up the
>invention he's likely to get help with advancing it faster than
>The implied contrast with the view you ascribe to Hayek seems to
>be that people in a non-market system would just sit on their
>information, not revealing it for fear that they would get no
>reward and would just have their plan quota raised. That seems
>a bleak -- and, happily, unrealistic -- picture of human
>behavior, given a modicum of cooperative culture and interest in
>> 2. The market roughly integrates these disparate pieces of
>> information and thus makes social production possible.
>True, but here Paul's technical points kick in. There's reason
>to believe that a planned system using the right methods could
>do better than the market's "rough", slow, ex post integration.
>I believe (but then I would!) that the burden is now on those
>who maintain Hayek's position, to show just what it is that only
>the market is able to achieve.
Duncan K. Foley
Department of Economics
New School University
65 Fifth Avenue
New York, NY 10003
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