Clay Shirky is a Coasian, and a very smart one at that. His analysis of emerging, internet-enabled social structures is based on the economic theory of transaction costs. My report on the nature and future of the firm is also Coasian up to a point, and yet I'm eager to take an exit from neo-classical economics, and to enter political sociology instead.
What I'm trying to stress, which I don't pick up from Shirky's work (and certainly not from the freakonomic Chicago-based followers of Coase), is that if non-market structures can be more efficient than market ones, then this makes political questions of authority, legitimacy, power and democracy (even more) unavoidable. The liberal economic attempt to entirely bracket questions of efficiency falters, once the very concept of efficiency becomes entangled with coercive or co-operative industrial structures.
This would then lead to a critique of Shirky, that I'd love to develop properly at some point. The seeds of it are actually contained in my Demos work. The section which the geekier amongst you may find interesting is entitled 'the future of co-operation?' and begins on p. 54. I take the following economic premise:
One might say that where mutuals have their value locked in to them, open networked collaboration practices make sure that value remains locked out of any private hands or organisation. If most firms seek to defend their intangible assets as a ‘private good’, and mutual societies do so as a ‘club good’, then open networked collaboration does so as a ‘public good’.
So far so Coasian. But then the political critique:
The problem these associations have is that they struggle to appoint decision makers or to overcome their defining feature, which is the freedom for people to exit and enter from one moment to the next. A mutual establishes a set of democratic rules that everyone then consents to. Power becomes centralised, but on the understanding that it is used within a constitutional structure. Open collaborative networks, on the other hand, have certain individuals who are more powerful than others (the highly connected, the initiators, the brokers) but little sense of legitimacy surrounding these individuals, and therefore little obligation for others to obey them. The bodies providing the ‘constitutions’ of the new associations tend to be private companies – Facebook, Google, Zopa etc – and their rules are currently established as they please. If a new democratic mutualism is to arise from any of this, and not merely a new informational mutualism, then this problem will have to be overcome.
My full Weberian rewrite of Here Comes Everybody will have to wait for another day.
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