There has been both agreement and disagreement regarding
Polanyi's argument that science is like a market. There is one dissimilarity and one similarity I wish to
emphasize.
First, as has been pointed out there is no "profit
motive" in scientific discovery.
There can't be, since there is no supply and demand and hence no
prices. This does not mean there is no
self-interest (there is). Rather, as
Polanyi himself points out, the specific institutional framework for the
transmission of knowledge and information is what differs.
How then are they the same?
What Polanyi is trying to bring out is first that both are feedback mechanisms and second the nature of the feedback
mechanism. Both science and markets depend upon
feedback. This feedback must be in the
form of other individuals (or decision centers) that are free to decide for
themselves what feedback they will give.
In this respect, the argument is similar to arguments concerning the
benefit of free speech. We allow people
to speak freely because this is the best way to uncover the truth. It is in the process of arguing that the
truth comes out. Polanyi adds to this
argument that there must be a framework for this feedback. In science it is universities and
journals. In markets it will be the institutions
that give rise to prices. These
institutions are what transform the cacophony of everyone talking at once into
useful information. Otherwise it is just noise.
Furthermore, we
sort of see in Polanyi what will be explicit in Adam Smith: The larger the
feedback framework the more useful it is.
This is why the Ghemawat video is so important. Many assume that the market loop is already
at a maximum (the globe) when it turns out that most markets fall far short of
global feedback.
The underlying assumption here is that larger loops are
better. It is not until we read Smith and
Hayek in week three, though, that we get specific arguments as to why larger loops are
better in the market.
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