Future Perfect

Since I found out about Steven Johnson in his TED talk about Where good ideas come from I started reading his work. His book about the TED talk is great and his recent show in PBS "How we got to now" is great. I had great expectations about Future Perfect. His core ideas are very interesting especially the value of networks (part of his work on how ideas come up) and how what is know as "peer-economy" is invigorating the power of networks.

However I found disappointing his misrepresentation of many "libertarian" ideas and the Austrian School of Economics. As many other political camps there are multiple flavors and variations however Johnson personifies it in a "scarecrow fallacy". His ideas of Peer-Progressive are closer to many libertarian thinkers than what he is willing to admit. One of the key authors of libertarianism is Murray Rothbard who in his book For a New Liberty: The Libertarian Manifesto, defines libertarianism in terms completely different from Johnson's misconception.

Some concepts that are misrepresented in Future Perfect are.

The Market itself. For Johnson the market is only about commercial transaction, however as Ludwing Von Mises defines it in his book Human Action, "The market is not a place, a thing, or a collective entity. The market is a process, actuated by the interplay of the actions of the various individuals cooperating under the division of labor. The forces determining the — continually changing — state of the market are the value judgments of these individuals and their actions as directed by these value judgments". What Johnson see as a market failures (peer to peer) are actually pure market transactions, people make value judgments to enter freely into these transactions. In a market individuals exchange values by values, money is just a mean to barter not the end in itself. Johnson mistakenly considered a non-monetary transaction a non-market exchange. There are no such thing as market failures because only people make mistakes. The idea of perfect markets are not part of the Austrian Tradition.

Role of Government. He as many libertarians are skeptical about big government and big corporations. What Johnson misses is that many times big corporations are the result of cronyism, a mercantilist protection of the incumbents by the governments, not capitalism and markets. On the flip side, he shows some examples of great achievements in the realm of government (i.e. ARPANet) but misses the fact that these developments were indeed exceptional given the nature of governments; power and control, force. The Lagrand Star model is what governments do best. Common Core, Obamacare, etc. are in the nature of Government. In the name of equality of results, governments try to eliminate diversity by evening out the differences by enforcing redistribution of wealth. The problem of campaign funding is caused by the epidemic growth of governments. If government plays a bigger and bigger role in the economy and the lives of the people, who doesn't want to fight for a piece of the pie? Libertarians reject any form of initiation of force and therefore are suspicious (from minarchism to anarchism) of any government intervention since its main tool is the use of force against individuals. Diversity is what makes social interaction rich, and all we need is sound institutions that provide common rules to everybody. We are not equal in the Net, as Johnson implies. Indeed, as he also points out, few people make lots of money from YouTube videos. What is even indeed are the rules of the game, we all play under the same rules and some succeed and some not.

The other subject that Johnson falls short is his understanding of the ideas of Frederick Hayek. When Hayek talked about the role of prices in his essay The use of knowledge in society he was explaining how they are a spontaneous solution to the problem of knowledge in society as a counterargument against socialistic ideas of central planners of the economy. If Johnson goes further in Hayek's ideas he would find that in Law, Legislation and Liberty he explains the difference of a Taxis, an order created by men, and Cosmos, an order that emerged spontaneously without the direction of anyone in specific. The problem of knowledge is superior than prices, the later are just one of the solutions that have emerge from human interaction. What Johnson value of peer networks is exactly what Hayek explained in these concepts. 

Hayek didn't have a theory of the firm as Johnson attributes when he talks about big corporations. To understand a theory of the firm in the Austrian tradition check Ronald Coase Nature of the Firm essay and later contributions by other authors. Coase was puzzled by the same problem as Johnson. Why firms are inside centrally planned but interact in a spontaneous order? What defines the size of the firm? The examples presented by Johnson are instances of the same question. Why Whole Foods is more decentralize than WalMart?

Recent developments in peer-to-peer and shared economy are celebrated by libertarians (see Jeffrey Tucker book Bit by Bit: How P2P Is Freeing the World.) Companies like AirBNB or Uber that face opposition from the incumbents like medallion holders of taxi services and hotels, or the rejection from car dealers about Tesla's direct sales business model, are just some notorious examples of disruptive initiative that are changing the market process as Kickstarter does. These are not a market failure, but market expansions and shifts. Libertarians support with enthusiasm these pioneers as well as Bitcoins and other challenges of the State Force, while empowering the people.

In summary, Johnson book adds to the new era of entrepreneurship where networks and collaboration are giving form to new markets and new institutions. His ideas could be more powerful if he reconciliates his political framework with the Classical Liberal tradition and departs from the Progressives who see the government as an active player in the betterment of society.