Myth: path dependence: busted

"Typing Errors":

Stanford University economist Paul Krugman offered the central claim of this literature boldly and with admirable simplicity: "In QWERTY worlds, markets can't be trusted." The reason that he uses "QWERTY worlds," and not DOS worlds, or VHS worlds, is that the DOS and VHS examples are not very compelling. Almost no one uses DOS anymore, and many video recorder purchasers thought VHS was better than Beta (as it was, in terms of recording time, as we have discussed at length elsewhere).

The typewriter keyboard is central to this literature because it appears to be the single best example where luck caused an inferior product to defeat a demonstrably superior product. It is an often repeated story that is generally believed to be true. Interestingly, the typewriter story, though charming, is also false.

Obama 2.0

From the Sun-Times, via Foundation for Economic Education:

Transition officials call it Obama 2.0 — an ambitious effort to transform the president-elect’s vast Web operation and database of supporters into a modern new tool to accomplish his goals in the White House. If it works, the new president could have an unprecedented ability to appeal for help from millions of Americans who already favor his ideas, bypassing the news media to pressure Congress. ‘‘He’s built the largest network anyone has ever seen in politics, and congressional Republicans are clueless about the communications shift that has happened,’’ Democratic strategist Joe Trippi proclaims. The results, he says, ‘‘will be amazing to watch.’’

Wikipedia and Economics

Interview with Jimmy Wales, founder of Wikipedia: "Wikipedia and Beyond" (Reason Magazine):

.... Wales has offered a more erudite account of the site's origins and purpose. In 1945, in his famous essay "The Use of Knowledge in Society," the libertarian economist F.A. Hayek argued that market mechanisms serve "to share and synchronize local and personal knowledge, allowing society's members to achieve diverse, complicated ends through a principle of spontaneous self-organization." .... "One can't understand my ideas about Wikipedia without understanding Hayek." Long before socialism crumbled, Hayek saw the perils of centralization. When information is dispersed (as it always is), decisions are best left to those with the most local knowledge ....