[pdonis]

> The above statement is a paraphrase of what I thought the author's argument was.

Fair enough.

> Amazon has more information than a single market participant has. Since it is the market because it is a marketplace-as-a-service, it has exactly the information that Hayek says the sum total of all market participants have.

No, it doesn't. It has all the information that a large market participant has--i.e., a market participant that has a very large number of transactions with a very large number of other market participants. Hayek was perfectly well aware that such market participants existed (after all, such participants existed in his day--for example, Standard Oil).

But Amazon's information is still limited to information that a market participant can have: namely, as I said, the prices at which the various goods it sells are sold. It does not have any more information than that. It has information about a lot more transactions than most other market participants, but the information it has about each transaction is the same as what the other participant in the transaction has, no more.

[morningseagulls]

>Hayek was perfectly well aware that such market participants existed (after all, such participants existed in his day--for example, Standard Oil).

And Hayek did mention monopolies or "coordinated industries" as a "halfway house" between centrally planned economies and free markets. Sure.

>But Amazon's information is still limited to information that a market participant can have: namely, as I said, the prices at which the various goods it sells are sold. It does not have any more information than that.

Actually, Amazon does collect and process information that a market participant wouldn't normally have: consumer preferences.

Hayek argued that a central planner wouldn't be able to suck up the decentralised information embodied in every market participant. However, what Amazon is doing is mining the data it has about a consumer's purchase history, as well as the responses the consumer gave to recommendations made by its recommender engine. That is a lot more information than what most market participants would normally have access to.

Now, Hayek has outlined what he thinks is needed to construct a "rational economic order" in the beginning of "The Use of Knowledge in Society":

1) "If we possess all the relevant information",

2) "if we can start out from a given system of preferences",

3) "if we command complete knowledge of available means".

Unlike the monopolies of old, which may have 1) to some extent, Amazon also has 2), and is trying to acquire 3) with its Amazon Business offering. So its capabilities are arguably an improvement over the capabilities of the old monopolies.

[pdonis]

> Amazon does collect and process information that a market participant wouldn't normally have: consumer preferences.

This is wrong. A market participant does normally have information about the preferences of other market participants. That's precisely the information conveyed by market transactions, buying and selling certain quantities of certain goods at certain prices. The only difference between Amazon and you or I is that Amazon engages in a lot more transactions, so it makes a lot more sense for Amazon to invest significant resources in collecting and analyzing its transaction data. But that doesn't make Amazon a successful central planner; it just makes Amazon a successful large market participant.

> Unlike the monopolies of old, which may have 1) to some extent, Amazon also has 2), and is trying to acquire 3) with its Amazon Business offering

Wrong again. Amazon has none of those three, nor has any other monopolist in history. Or indeed any central planner such as the government of the Soviet Union. Nobody has all relevant information. Nobody can take an entire system of preferences as given. And nobody has complete knowledge of all available means. All three of those requirements are extremely strong, and Hayek meant them to be that way. He didn't mean them as approximations; he meant them as literal exact requirements, which no real entity can possibly fulfill. Certainly Amazon doesn't.

> its capabilities are arguably an improvement over the capabilities of the old monopolies

I think this is true, but it's a much, much weaker claim than the one you have been making.

[morningseagulls]

>> its capabilities are arguably an improvement over the capabilities of the old monopolies

>I think this is true, but it's a much, much weaker claim than the one you have been making.

I think you need to stop identifying me with the author of the article. My original comment was to make fun of the author for his ludicrous comment about Marxists calling it a day after nationalizing Amazon, which got some Marxists riled up:

>Perhaps we need to break up Amazon because communism? /s

The comment you replied to in starting this conversation spelled out exactly the same argument you made above:

>So a communist economy, in Marx's sense, is also an economy in which there's perfect information. That can't possibly happen in the real world, of course, and Hayek correctly points this out about a centralised bureaucracy.

So the "much, much weaker claim" is the one I have always been making.

>>> Unlike the monopolies of old, which may have 1) to some extent, Amazon also has 2), and is trying to acquire 3) with its Amazon Business offering

>Wrong again. Amazon has none of those three, nor has any other monopolist in history.

It's exhausting to have to always qualify my statements. Of course I did mean "Amazon also has 2) to some extent, and is trying to make inroads into acquiring 3) to some extent".

>> Amazon does collect and process information that a market participant wouldn't normally have: consumer preferences.

>This is wrong. A market participant does normally have information about the preferences of other market participants. That's precisely the information conveyed by market transactions, buying and selling certain quantities of certain goods at certain prices.

No, this is wrong. Amazon collects information about the preferences of market participants through non-market non-priced transactions as well. Here's a non-exhaustive list of such information collection:

- information from consumer responses to recommendations made by the recommender system

- information from consumers immediately after they've clicked on a link supplied by an Amazon associate, which then directs them to a product page.[0] Yes, there is a market transaction between Amazon and its associates, but at the time of the click, the information isn't generated from a market transaction between Amazon and the consumer.

- information supplied by consumers themselves through Amazon Lists, listing explicitly their preferences for goods and services.[1]

- information supplied by consumers themselves about their social network and preferences through Amazon Wish List.[1]

This is evidence for suggesting that "Amazon also has 2) [to some extent]", possibly to a greater extent than any monopolies of the past century has ever had.

[0] https://affiliate-program.amazon.com/

[1] https://www.amazon.com/gp/aw/ls