SecretPlans.org

The Hayekian argument of dispersed knowledge and its importance in seeking equilibrium is not as important as it seems in explaining why the Soviet project failed. As Joseph Berliner has illustrated, the Soviet economy did not fail to reach local equilibria. Where it failed so spectacularly was in extracting itself out of these equilibria. The dispersed knowledge argument is open to the riposte that better implementation of the control revolution will eventually overcome these problems – indeed much of the current techno-utopian version of the control revolution is based on this assumption. It is a weak argument for free enterprise, a much stronger argument for which is the need to maintain a system that retains the ability to reinvent itself and find a new, hitherto unknown trajectory via the destruction of the incumbents combined with the emergence of the new. Where the Soviet experiment failed is that it eliminated the possibility of failure, that Berliner called the ‘invisible foot’. The success of the free enterprise system has been built not upon the positive incentive of the invisible hand but the negative incentive of the invisible foot to counter the visible hand of the control revolution. It is this threat and occasional realisation of failure and disorder that is the key to maintaining system resilience and evolvability.