Failure in an Open-Access Order
By Arnold Kling
Open systems are a profound threat not only because they outsucceed commercial firms but also because they outfail them. They grow not in spite of failure but because of it.
In traditional business, trying anything is expensive, even if only in staff time spent discussing the idea; so some advance attempt to distinguish the successes from the failures is required. Even at firms committed to experimentation, considerable effort has to go into reducing the likelihood of failure. And because green-lighting ideas that turn out to be failures will be noticed more than killing radical but promising ones, many people err on the side of caution.
In open systems, by contrast, the cost of failure is reduced, partly because less coordination is required among the various players and partly because each player is willing to accept some of the risks of failure directly.
Rashi Glazer (scroll up from Shirky) writes,
market economies have been understood to rest on specialization: Individuals are producers of one thing and consumers of everything else. In what is sometimes called the nanocosm, by contrast, consumers could become the sole producers of finished products of all kinds.
Eighteen other pundits also contribute to a list of “breakthrough ideas” compiled by Harvard Business Review. Strongly recommended. Thanks for the pointer to Tyler Cowen, from Ben Casnocha, from Renee Blodgett.