The internet, Kickstarter, and the obsolescence of markets

NOTE HXA7241 2012-06-10T09:29Z

How much is the idea of markets obsoleted by digital networks ?

Markets work substantially by ignorance. You produce speculatively, then find out if anyone wants the product. If they do not, you have wasted the effort to produce. If they want more than you produced, you have spent time doing other things when you should have been producing. Markets are predicated upon a basically wasteful, inefficient interaction.

In a sense, a market is using actual production as information that those things can be produced, and using actual buying as information that those things are wanted. This is accurate, in a way, but dumb: it says what has happened, but it expresses no abstract model or understanding.

Surely one of the essentials of intelligent action is predictive models – the use of information: in a simple form: to get information first and then act – the exact opposite to markets.

Markets are often described in opposition to ‘planned economies’, but this question is not about some grand monolithic design. It is about something simpler and more general – it is about getting and using available information: something the internet can now do that was not possible before.


Is this picture of markets OK? A market is usually described as being about buyers and sellers exchanging goods. But there is a difficulty there. How broadly is this defined? Is the normal idea really too much about particular implementations (like money)?

A more general definition would be built of two elements: actions/objects and information: people do things, and share information (both are nicely primitive, objective, and quantifiable in various ways) – and then we can describe what structures those can be arranged into.

But that would not necessarily including buying, selling, or even exchange. Without those, are there markets? Either a more reasonable definition of ‘market’ is much wider and more unfamiliar than normal, or the normal one seems arbitrarily restricted to traditional old forms.

And the point is that with software we can now support that wider definition.


This is why the Kickstarter-like structure of commerce is not simply what it appears: it is deeper. It is one initial form of using a different flow of information to interact economically in a different way to before.

Currently Kickstarter somewhat follows the traditional ways: there are large discrete products and there are bands of numeric/monetary pledges. But since both are representable and analysable as information there are many possible alternative decompositions, variations, interactions.

How we produce things and move them around is really quite similar and related to how we interact socially – is not one really a kind of the other? We already feel, with networked software, there is an endless variety of possible new social interactions. We ought now to be imagining all the new possibilities of economic arrangement too.

Some way along these will no longer be markets in any traditional recognisable sense. (In what way is Flattr a market?)