What Hayek Taught Us About Nature
I’m suggesting that public analysis of free and open environmental information leads to optimized outcomes, just as it does with market prices and government policy.
Preface for the reader: F.A. Hayek was an author and economist who wrote a critique of centralized fascist and communist governments in his famous book, "The Road to Serfdom," in 1944. His work was later celebrated as a call for free-market capitalism.
Say what you will about Friedrich Hayek and his merry band of economists, but he made a good point: that markets and access to information make for good choices in aggregate. Better than experts. Or perhaps: the more experts, the merrier.
This is not to say that free-market economics will necessarily lead to good environmental outcomes. Nor is this a call for more regulation - or deregulation. Hayek critiqued both fascist corporatism and socialist centralized planning. I’m suggesting that public analysis of free and open environmental information leads to optimized outcomes, just as it does with market prices and government policy.
Hayek’s might argue, that achieving a sustainable future can’t happen by blindly accepting the green goodwill espoused by corporations. Nor could it be dictated by a centralized green government. Both scenarios in their extreme are implausible. Both scenarios rely on the opacity of information and the centrality of control. As Hayek says, both extremes of corporatism and centralized government "cannot be reconciled with the preservation of a free society" (Hayek, 1956). The remedy to one is not the other. The remedy to both is free and open access to environmental data.
One critique of Hayek’s work is the inability of markets to manage complex risks, which requires a degree of expert regulation. This was the subject of Nobel laureate Joseph E. Stiglitz’s recent book The Road to Freedom (2024) which was written in response to Hayek’s famous book “The Road to Surfdom (2024). But Stiglitz acknowledges the need for greater access to information and analysis of open data rather than private interests or government regulation.
Similarly, Ulrich Beck's influential essay Risk Society (1992), describes the example of a nuclear power plant. The risks are so complex that no single expert, government, or company can fully manage or address them independently. Beck suggests that assessing such risks requires collaboration among scientists and engineers, along with democratic input from all those potentially affected - not simply experts, companies, or government. This approach doesn't mean making all nuclear documents public but calls for sharing critical statistics, reports, and operational aspects, similar to practices in public health data and infrastructure safety reports. Beck’s argument reinforces the idea that transparency, and broad consensus, like markets, are essential for deciding costs and values in complex environmental risks.
While free and open-source data may seem irrelevant or inaccessible to the average citizen, consider that until 1993, financial securities data, upon which all public stock trading is now based, was closely guarded by the U.S. Securities and Exchange Commission (SEC). It took the persistence of open-data enthusiast Carl Malamud, who was told there would be ‘little public interest’ in this dry financial data (Malamud 2016). The subsequent boom in online securities trading has enabled the market to grow nearly ten fold from 1993 levels, to what is now $50 trillion annually in the U.S. alone. At the time, corporate executives and officials resisted publishing financial records, claiming it would hurt the bottom line. Ultimately, it did the opposite. Open financial data made a vastly larger, more efficient, and more robust market for public securities - one that millions of people now trust. Open data did the same for the justice system, medical research, and software.
Perhaps environmental data has yet to have its moment. Just as open financial data revolutionized public stock markets, open environmental data could be the missing link in driving better, more informed environmental policies and practices.
Works Cited
Beck, U. (1992). Risk Society: Towards a New Modernity. Sage Publications.
Hayek, F. A. (1956). The Road to Serfdom (Preface). University of Chicago Press.
Stiglitz, J. E. (2024). The Road to Freedom: Economics and the Good Society. W. W. Norton & Company
Backchannel. (2016). The Internet’s Own Instigator: Carl Malamud’s epic crusade to make public information public has landed him in court. The Big Story.