Hayek Was Right: Why Cloud Computing Proves the Power of Markets

[saveliberty]

The Atlantic:

Hayek Was Right: Why Cloud Computing Proves the Power of Markets

 

By Megan McArdle

 

 

May 18 2012, 11:58 AM ET 54

Guest post by Jim Manzi, founder and Chairman of Applied Predictive Technologies, and the author of Uncontrolled: The Surprising Payoff of Trial-and-Error for Business, Politics and Society.

 

A commenter to one of Gabriel's posts made the point that it's hard for Megan's regular readers to have a sense of where each of the guest posters is coming from in general, and therefore how to see our various posts in context. This makes sense to me.

 

For my final guest post, I'll try to provide context. Rather than going through some long framework, however, I'll give a very quick summary, and then tell a story that I hope illustrates what I'm trying to say.

 

In his review of my book at The New Republic, Eric Posner made a great overarching point:

The book is less interested in the RFT than in the limits of empirical knowledge. Given these limits, what attitude should we take toward government?

 

Just so. I summarize the thesis of Uncontrolled in the Introduction as five points:

• 
  Nonexperimental social science currently is not capable of making useful, reliable, and nonobvious predictions for the effects of most proposed policy interventions.
  
• 
  Social science very likely can improve its practical utility by conducting many more experiments, and should do so.
  
• 
  Even with such improvement, it will not be able to adjudicate most important policy debates.
  
• 
  Recognition of this uncertainty calls for a heavy reliance on unstructured trial-and-error progress.
  
• 
  The limits to the use of trial and error are established predominantly by the need for strategy and long-term vision.
  

[saveliberty]

H/T Instapundit