Far too many people are squealing over Google’s heinous crime concerning the Las Vegas shootings. Can you believe it, they actually ran as a top news result something that wasn’t true? Clearly, we’ll have to confiscate the private planes owned by its co-founders just because they indirectly told us Geary Danley was the shooter.
Except to be outraged about this, as Abby Ohlheiser is at the Washington Post, or Adi Robertson at The Verge, is to miss the entire point of why we have markets in the first place. Which is to have a space in which people can screw up. It’s even true that we positively desire that people should get things wrong.
Our basic economic problem is scarcity – there’re a lot of things people would like to have done. We don’t have the resources to do all of them, therefore, some form of allocation must take place. That’s what economics is, the study of that allocation. In a static world it is, at least theoretically, possible for there to be a planned system of such allocation. However, as is obvious after even a moment’s thought, we are not in a static world.
Indeed, we’re in the middle of a technological revolution, something that simply adds to our economic problem. It’s a reasonable estimate that, right now in Manhattan alone, there are 1 billion things for sale. No, not units, but a billion different things from 8 oz jars of mayonnaise to left-hand thread one-inch brass screws. There’s some rather large number of combinations of those things. We need a way of sorting through those combinations.
There’re also some sets of desires from the 7 billion of us out here, wants perhaps that we’d like sated. What we want is something that will sort through those possible combinations to see whether they match any of those wants or desires.
We then need to add changing technology. By the month certainly and probably by the hour, even minute, there are new things becoming available. Which can be combined with those extant billion to potentially sate one or other of those desires. We therefore need some system which can perform this sorting process for us.
Which is what markets do.
People get to try combinations of whatever takes their fancy and offer it to us consumers. If we like it, excellent, that’s another desire sated — if we don’t, then on to the next experiment. The important thing to understand about this process is that near all combinations tried are failures. They either simply do not work or they don’t do something that people want done.
All of which applies to the news business just as much as it does to anything else. The point here being not that an errant algorithm promoted an untruth to public consciousness, but that the system as a whole worked so well. Look how fast the system worked – some unknown on 4Chan speculated, Google picked it up, within mere hours the entire news ecosystem is telling us that the speculation is wrong. That is, we’ve sorted through, using this market idea, to find what is useful and there’s simply no other system which could or would have done that this fast.
This is also, of course, the underlying argument in favor of free speech. Any random nutter can say whatever they want, and we already have a system to sort through the verity of what they’re saying. And it is at the system level that we’ve got to consider the effects. With speech, it’s all of us considering and then accepting or rejecting. With fake news, it’s the rest of the media examining the assertion. With markets more generally, it’s again us considering that a tennis racket made of chocolate ice cream doesn’t meet any desire or want, even though it is possible.
Which is why castigating Google for screwing up, as is being done, isn’t worthwhile. For in the news business, just as in the economy as a whole, we want people to make mistakes — that’s how we find out what doesn’t work. It is by that elimination that we find what does work. We also need to consider all of this at the system level, not that of the individual actor.
We found out very quickly that Geary Danley had nothing to do with it – excellent, the system is working.
Tim Worstall (@worstall) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute.
If you would like to write an op-ed for the Washington Examiner, please read our guidelines on submissions here.
