Sunstein on Hayek and Wikipedia

As an engineer, I have to deal with the realities of centralized and decentralized systems, so I probably tend to approach system design in a more pragmatic manner than people who work solely in the realm of policy and theory. And my systems are computer networks, not systems of purely human interaction, so the tradeoffs are different. We frequently find that the best technical system to promote decentralized human dialog is a centralized one, so we don't assume that we're always going to see symmetry of design across the various levels in a network system.

The insight that strikes me as important in making the tradeoff between centralization and dispersal is the location of the information that needs to be transferred, and the timeliness of the transfer. Decentralized systems are often times a prelude to re-centralization around different control points, so if you cast the architecture problem on a timeline you're going to see a Hegelian dialectic.

For example:

Highly centralized phone network
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V

Highly de-centralized Ethernet
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V

Multiply-centralized WiFi

-X-

So its obviously true that decentralized and centralized systems are better for different things, as RB points.

One thing I think is interesting, and don't quite understand, is how often, however, humans tend to underestimate the potential of decentralized solutions

That's what Hayek was getting at in his paper -- there's no question that if you put a perfect, planned economy next to an unplanned economy, the planned economy will win. Hands down.

But we aren't good at knowing when information problems will cripple what would have been the better system.

So maybe we're overcompensating, as RB suggests, in the direction of decentralized systems, but I happen to think we have to fight a perfectionist instinct that drives us too over-centralization

Just ask Napoleon III

I left a comment on Sunstein's blog, but here's the short version: one lesson we've learned about aggregation and decentralization is that you don't need to cast your net any wider than the circle of expertise you need to harness. Wikipedia proves that decentralized editorship doesn't make a better book, just a bigger one. The content of Wikipedia is suspect in many areas, but it has stuff about trivia and pop culture that's never going to find its way into Britannica.

Markets are fully decentralized, but so is the expertise that drives buying decisions. We're each experts on what we'll spend money on. But few fields of human endeavor fit that profile, hence excessive decentralization degrades quality most of the time. I don't want the man-on-the-street's opinion about brain surgery, global warming, or net neutrality, but he's a fine judge of American Idols and the taste of soda water.