Adam Smith Institute

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Designing economic solutions is fine but we want the chaotic serendipity of undirected markets too

A piece in the New York Times from a designer. Bemoaning the manner in which all those little start ups aren't using design in their process of trying to solve economic problems. Par for the course from a designer, that more people should use design. As with hydraulic engineers wanting to see the economy as a hydraulic project and so on - we all view things through our own professional competences. 

She is also correct in part - we would like to use conscious design at times in order to work out what to do about certain economic problems. No, this isn't the same as the idiot idea of trying to plan the whole economy. But say we've a problem - pollution or emissions, possibly the existence of real destitution in our country. Yes, we should think about this and design solutions. In order there, Pigou Taxes and a bit of income redistribution perhaps. 

However, even given that it is wrong to decry the seemingly silliness of the undirected, undesigned, innovation going on:

Perhaps the main reason these frivolous products and services frustrate me is because of their creators’ insistence that changing lives for the better is their reason for being. To wit, the venture capitalist Marc Andreessen, who has invested in companies like Airbnb and Twitter but also in services such as LikeALittle (which started out as a flirting tool among college students) and Soylent (a sort of SlimFast concoction for tech geeks), tweeted last week: “The perpetually missing headline: ‘Capitalism worked okay again today and most people in the world got a little better off.’ ”

This is to completely miss what is going on here. To miss the value of what those undirected efforts gain us.

We start with the basic assumption that human desires and wants are unlimited. Further, that we have scarce resources available to sate them. Technology is, in one way of thinking about it all, the method by which we transform resources into sating those desires and wants. So, when technology changes we can sate more of them.

However, we don't know which. We don't know which in two senses. We don't know which on the list of unsolved desires humans would like to have solved next - we don't know utility functions. We also don't know which desires the technology can be used to solve. We must therefore experiment - and that is what that entirely undirected market activity is really doing.

Exploring the newly available technological space in order to see which desire or want can be sated and which people want to have sated.

A service that delivers a new toothbrush head to your mailbox every three months.

A service that delivers your beer right to your door.

An app that analyzes the quality of your French kissing.

A “smart” button and zipper that alerts you if your fly is down.

An app with speaker that plays music from within a mother’s vaginal walls to her unborn baby.

A sensor placed in your child’s diaper that sends you an alert when the diaper needs changing.

None of those look civilisation changing we'll agree although some do at least look fun. The derivative innovation of a new way to deliver a porno sound track could work.....

Someone has obviously already done Uber for Plumbers but what about Teenagers 'R' Us? The instant dispatch of a spotty youth to any young couple feeling frisky - to berate them as to why they don't understand anything and why all hate them. Should increase contraceptive usage, that one. 

Or to be serious - we face uncertainty here. Not just risk but proper uncertainty, we just don't know and cannot know. What can newly be done and what would people like to have done? Thus we need that chaos of the undirected market efforts to explore this new technological space. Design is just fine when we know what we want to do and are just figuring out how to do it. But design isn't enough.