Organizations and Markets

| Peter Klein |

US defense officials are relying increasingly on decentralized, open-source methods of gathering and processing intelligence information. This weekend’s New York Times features a lengthy profile. And here is Calvin Andrus’s paper “The Wiki and the Blog: Toward a Complex Adaptive Intelligence Community,” which won a CIA-sponsored competition to develop new ideas on information sharing.

For organization theorists, the key question is whether government bureaucracies can effectively implement a highly decentralized system for knowledge management. Besides the problems faced by any organization using market-based management, government agencies face the fundamental problem identified by Mises in 1944 that their output is not sold on markets, making it impossible to measure performance using market signals of customer satisfaction.