Sunday, December 11, 2011

Spontaneous Order Auto Design

The future of design is crowdsourcing -- another word for "spontaneous order" -- as we can see in this story on Local Motors. Of course, of equal note is the brilliant way they have managed to get around all of the laws that make new car companies impossible to start: if you want it, you have to come help build it, so it can be considered a "kit car."

Agglomeration economy theory could easily be used to explain why there are only a few, very large auto makers in the U.S. -- and the world -- but one should also wonder at the costs imposed by regulations, too, which ensure that only the auto makers already in existence can afford to make automobiles. If auto production were truly a self-organizing system, you would expect to see a power law distribution of auto makers -- many small ones, a medium number of medium-sized ones, and a small number of large ones. Of course, if we consider parts makers as part of this -- as one should -- one should expect them to add to the variety. Probably the auto industry, this broadly conceived, comes a bit closer -- but the industry is still unhealthy from a self-organizing process point of view.

One would expect to see auto parts producers supplying small, local auto makers and inventors. The broader distribution of auto makers would drive innovation, and there may even be a viable electric car by now -- or something even better. But because our laws have resulted in the centralization of the auto industry into a few well-protected crony companies, innovation is slow at best.

The good news is that Local Motors exists, and they are using spontaneous order theory to design their automobiles. Competition is a discovery procedure. Our auto companies need more competition so we can discover better ways of making automobiles.
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