Sublime

When Friedrich von Hayek launched his influential argument in the 1940s about the importance of price signals in market economies, he was observing a related phenomenon: the decentralized pricing mechanism of the marketplace allows an entrepreneur to gauge the relative value of his or her innovation. If you come up with an interesting new contrapti

Brigham Young, Bill Gore, Malcolm Gladwell, and Robin Dunbar may have been onto something. For typical real-world values of the control parameters there is, in fact, a sudden change in incentives around the magic number 150. At that size, the balance of forces in the tug-of-war changes, and the system suddenly snaps from favoring a focus on loonsho

Hayek gives us the intuition of prices conveying only what market participants deem to be the most important information and actually destroying the rest, and Holland shows how this can be represented with the formalism of complex systems.

If, as in a social network, we knew with whom we were dealing in economic exchange, we could perhaps base this communication in the simpler medium of trust than in money. But since we mostly do not, the specific social scalability conferred by money allows for what Szabo calls “trust minimization,” or, “reducing the vulnerability of participants to

But, to anachronistically borrow our function metaphor once more, Hayek points out that the projection from the n-dimensions of information to the one dimension of price destroys an enormous amount of information.