Tyler Cowen: belief

Transcript context

…Let’s talk about anarchy. You have first written about this; I hadn’t read the last time we talked, and it’s really interesting. So maybe you can restate your arguments as you answer this question, but how much of your arguments about how network industries lead to these cartel-like dynamics? How much of that can help explain what happened to social media, Web 2.0? I don’t view that as such a cartel. I think there’s a cartel at one level, which is small but significant. This is maybe more true three, four years ago than today, with Elon owning Twitter and other changes, but if someone got kicked off social media platforms three, four years ago, they would tend to get kicked off all or most of them. It wasn’t like a consciously collusive decision, but it’s a bit like, oh, well, I know the guy who runs that platform, and he’s pretty smart, and if he’s worried, I should be worried. And that was very bad. I don’t think it was otherwise such a collusive equilibrium, maybe some dimensions on hiring social people, software engineers. There was some collusion, not enough bidding, but it was mostly competing for attention. So I think the real risk protection agencies’ side of network-based collusion is through banking systems, where you have clearinghouses and payments networks, and to be part of it, the clearinghouse, in the absence of legal constraint, can indeed help everyone collude. And if you don’t go along with the collusion, you’re kicked out of the payment system. That strikes me as a real issue. Do your arguments against anarchy, do they apply at all to web 3.0 crypto-like stuff?…

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