Economists are known not to agree on explanation of past events, and to be a disaster when it comes to predicting what will happen in the economy.
Among their feats, economists still can’t explain how Wikipedia, for example, works. As quoted by Alex Tabarrok in his post “Shared Creation”, they still can’t figure out what is the effect of such low transaction costs in the spontaneous assembly of people performing for free a seemingly so valuable service to Humankind.
Because non monetary motivation is more important than any kind of economic exchange in this case, the usual tools of the economists based on the “economically rational individual” fail completely. And indeed – Wikipedia lives only through the voluntarily contributions of millions of people. Still, it is now an institution that is supported by many and has become so indispensable in our lives.
As Alex Tabarrok mentions, “Economists thought that Wikipedia couldn’t work because of problems of motivation but what turned out to matter most was not motivation but transaction costs. With 7 billion people and low transaction costs what other forms of shared creation become possible?”
That transaction costs are now zero changes completely the logic of the exchange of value. A lot of what we are doing during the day is not any more just motivated by economic rationality. It makes the reason why so many organizations and institutions exist completely obsolete. Will economists become also an extinct profession in the Fourth Revolution?
