This morning’s Observer column:
When, in the mid-1990s, the world wide web transformed the internet from a geek playground into a global marketplace, I once had an image of seeing two elderly gentlemen dancing delightedly in that part of heaven reserved for political philosophers. Their names: Adam Smith and Friedrich Hayek.
Why were they celebrating? Because they saw in the internet a technology that would validate their most treasured beliefs. Smith saw vigorous competition as the benevolent “invisible hand” that ensured individuals’ efforts to pursue their own interests could benefit society more than if they were actually trying to achieve that end. Hayek foresaw the potential of the internet to turn almost any set of transactions into a marketplace as a way of corroborating his belief that price signals communicated via open markets were the optimum way for individuals to co-ordinate their activities.
In the 1990s, those rosy views of the online world made sense…