Getting the Market to Tell the Truth

We like to believe that what we see and hear is real, or at least a reflection of reality. But in fact, our perception is conditioned by what we already believe, and the language we have that lets us recognize the raw data that’s coming in to our senses.

For a vivid example of this phenomenon, walk out into a meadow, and watch how long it takes you to distinguish how many different types of grass you see. If you were a farmer, a rancher, or a botanist, you might quickly recognize oats, fescue, rye, and a variety of other grasses. As a city slicker, it will all blend into one, until you spend the time to look, slowly disambiguating all the different species that would jump out at you if you already had names for them. For another example, see my article Remaking the Peer to Peer Meme, which talks in part about how the name change from “free software” to “open source” was an exercise in meme engineering, reframing the boundaries of a subject that everyone thought was already well understood. Or for that matter, just look at What is Web 2.0? Changing the words changed what we were able to see.

Names and concepts are tools that let us see and think, and new concepts help you see the world in new ways. In this light, I wanted to share Ethan Zuckerman’s thought-provoking post over at about Lester Brown’s argument about why conservation, not new energy sources, remains critical in the face of global warming.

Ethan wrote:

“The key to restructuring the global economy is to get the market to tell the truth.” The
prices we’re paying now aren’t real prices – our gasoline prices don’t include climate change, respiratory injury and other consequences. If we included these costs, we’d be paying $10 a gallon, not $3. We need to restructure the tax system to lower income taxes and raise carbon taxes, as they’re doing in Sweden.


Brown observes that socialism collapsed because it didn’t let the market tell the economic truth. Capitalism, he believes, may collapse because it doesn’t tell the ecological truth.

I love the idea of “getting the market to tell the truth.” Put that filter on, and you see a whole lot of things in a new light! This is a useful idea whether or not you’re interested in the threat of global warming. It’s a fabulous way to think about all kinds of markets. (For example, I used to argue that open source is science, not religion. We don’t have to argue for particular positions or ideologies. We have to discover what is true about how software development works in the networked age. It was that discovery process, incidentally, that led me from Open Source to Web 2.0.)

Telling the truth is not a moral concept in this sense, it’s a scientific one. It’s using our intelligence to understand things in a broader context, and to give ourselves a framework for thinking more clearly, a map that is more accurate, and thus helps us get where we really want to go.