+1 vote
asked ago in General Economics Questions by (150 points)
It's wonderful that the AEA decided to create this forum, but I'm not so sure about the voting part.  Right now the vast majority of social websites are democratic in nature.  Members of these democratic social websites (DSWs) can vote for the content that matches their preferences.  Recently though, thanks to crypto, there are some new websites where members can spend their money on their preferred content.  Here are the market social websites (MSWs) that I know of...


Just to be clear, I don't own any of these websites or work for any of them, but I am helping to test the first two.  

Personally I'm pretty sure that MSWs are better than DSWs.  Because... if voting and spending are equally good at revealing the demand for things, then why have markets?  

On MSWs it's possible to actually see the demand for features and functions that members request.  For example, on Cent the demand for the function to auto-save drafts is 64 cents... https://beta.cent.co/+usqxgt   So it's possible for the development of MSWs to be driven entirely by demand.

Right now there are probably some organizations that make decisions democratically, but the vast majority of organizations are top-down.  Facebook, for example, uses democracy for its content, but the organization itself is a command economy.  This strikes me as economically incoherent.  

From my very pro-market perspective, I think that MSWs have the potential to conclusively prove that markets are better than the alternatives at allocating resources.  This would mean an end to democracy and top-down systems.  

What do you think?  Am I overestimating the usefulness of markets?

1 Answer

0 votes
answered ago by (2.7k points)
Due to scarce resources owned by public, a Market online system is the better way to know the opinion of the majority of consumers. When a democratic election is chosen, the public is looking after their job, life standarts, and even their health quality. So they are looking after their scarce resources too. I think that the consumer sovereignty is a kind of democratic election and both of the two choices (democratic election and market guidance) are equally valid in different scenarios aiming almost for the same purpose.

I'm sorry if my English is not perfect.
commented ago by (150 points)

Are voting and spending equally good at allocating attention?  Attention is a very valuable resource.  Perhaps it's the most valuable resource.  

Voting and spending are very different things so they can't be equally effective at allocating attention.  

Voting doesn't have a cost, so it allocates attention to the most popular things.  Spending, on the other hand, does have a cost, so it allocates attention to the most valuable things.  This is how and why markets work.   It's also how and why democracy doesn't work.
commented ago by (2.7k points)
I agree with you. But I think that when you are voting looking after your own scarce resources like your job or your health, your votes are even more important than your expenditures. So, in my opinion free markets and democracy are perfect complements.

Spending always tend to be directed to popular things as well. I think it's the human nature. If you value a thing, of course a lot of people around you should value it more or less in the same degree. That's democracy or consumer sovereignty.