McKenzie Wark on 5 Dec 2000 22:02:12 -0000

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[Nettime-bold] Re: <nettime> Fw: Enemies of the Future

of course one can't say much about resource allocation, except
after the fact, in cases where it has clearly failed. I'm sure
we agree that the securities 'industry' could be better
regulated. But i'm not persuaded there's a better resource
allocation mechanism than markets where efficiency is the goal.
But why should it always be the goal? There are other
values that other resource allocation mechanisms can maximise.
One might value an equitable distribution of a resource, for
example, and entrust its allocation to the state. But take a
look at economies where the state plays a very large role, and
its not a pretty picture. Its hardly controversial to assert
that, comparatively, markets do better than the state, if
the goal valued is efficiency. The hard part is when you have
businesses, whole industries, that thrive off the imperfections
in the regulatory framework of a market. Who scream blue
murder when you want to make them accontable to a transparent,
competitive marketplace. The great myth of our times is that
markets are somehow naturally occuring, and that business left
to its own devices operates in a 'free market'. Markets require
a regulatory framework in which to function.

On Tue, 5 Dec 2000, Doug Henwood wrote:

> McKenzie Wark wrote:
> >Felix is quite right, the bubble is not the main thing. But it
> >is not entirely irrelevant either. The 'irrational exuberance'
> >of investors plowed a lot of money into dotcoms that, in
> >hindsight, could have been better invested elswhere. Its the
> >price you pay, in a market economy for getting resources
> >allocated more or less right most of the time -- those times
> >when investment just goes up in smoke.
> How do you know they're correctly allocated most of the time? By what
> standard? What's your counterfactual?
> By the way, you don't think that much money travels from the stock
> market into real investment, do you? Almost never happens in any
> quantity, and when it does, it's usually a bubble.
> --

McKenzie Wark
Guest Scholar, American Studies, New York University
"We no longer have origins we have terminals"

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