December 15, 2003

Information! Cheap!

Posted by shonk at 08:36 PM in Geek Talk | TrackBack

In his Washington Post article, Everett Ehrlich synthesizes a simple observation made by Ronald Coase to explain both shrinking firms and the ascendancy of Howard Dean: “The cost of gathering information determines the size of organizations”.

Just as the abundance of cheap information in modern times is cutting the old monoliths like GM down to size, cheap information in the form of blogging and internet campaigns is allowing a relative outsider like Dean to make inroads into (or even “take over”) the monolithic Democratic party.

Though I doubt he intended to make it generalizable, this statement may be more prescient than Ehrlich realizes:

But the Internet doesn’t reinforce the parties — instead, it questions their very rationale. You don’t need a political party to keep the ball rolling — you can have a virtual party do it just as easily.

As I thank Samizdata for the link, I’d like to commend you to a comment made there by “mad dog” (that you, Miles?):

An interesting insight on a developing theme. Reading it on Samizdata saved me all the effort of searching that out myself. Just like the article says…

Indeed, the low transaction costs available online allow small organizations such as myself (heh) to consume and produce information that is more widely available than ever before.