RC: Nothing guarantees success. Given human fallibility, we are bound to make mistakes all the time.
WN: So the question is how we can learn from experiments at minimal cost. Or, how could we structure our economy and society in such a way that collective learning can be facilitated at a bearable price?
RC: That’s right. Hayek made a good point that knowledge was diffused in society and that made central planning impossible.
WN: The diffusion of knowledge creates another social problem: conflict between competing ideas. To my knowledge, only people fight for ideas (religious or ideological), only people are willing to die for their ideas. The animal world might be bloody and uncivilized. But animals, as far as we know, do not fight over ideas.
RC: That’s probably right. That’s why we need a market for ideas. Ideas can compete; people with different ideas do not need to slaughter each other.Really interesting tension. I'm still working through what to make of it. Collectively, we're smarter because we disagree? And vice versa?
Snipped here (Knowledge Problem just made my blogroll), with a hat tip to marginal revolution