The increasing velocity and decreasing costs of information transfer should continue to change the structures of society, or cause increased tension with forces that seek to resist change.

The Mitrailleuse

I am reading The Revolt of the Public and the Crisis of Authority in the New Millennium by Martin Gurri. It is about the spread of networks and how they challenge traditional hierarchical organizations. So far, it seems to fit into the broader narrative of the decline of traditional types of authority, being replaced by networks. This narrative includes the spread of the sharing economy, Uber, AirBnB, the blockchain, Bitcoin, as well as the loss of trust in governments.

While reading I had a realization, that in retrospect seems obvious. However, I have yet to read anyone else make the claim I am about to very explicitly, so I feel it is worth blogging about.

The decline of hierarchy and the growth of networks fits perfectly into Coase’s theory of the firm. Coase, in his famous 1937 article argues that firms exist to reduce transaction costs. What he calls firms…

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