James Surowiecki, Viktor Mayer-Schönberger, Thomas Ramge

What we are witnessing, they contend, is the advent of an economy in which data matters far more than capital, a change that represents “a fundamental reorganization of our economy.”


Up to this point, we’ve used price as the key determinant of how resources are allocated — what we make, how much of it we make, what we invest in, and so on. We’ve done this because prices convey information about supply and demand — how much people want to buy and sell things — in a condensed, easy-to-understand form. But for all its effectiveness, price is also a blunt instrument. It can’t fully convey the intensity of people’s preferences. It can’t let businesses know what consumers might want instead of what they’re selling, or even how much they’d be willing to pay for the things they do buy.

The advent of big data […] changes all this. Now, it’s much easier to get a clearer, if still imperfect, picture of what people actually want. It’s possible to understand individual demand, and to customize responses to meet that demand. And you can do this, in many cases, without ever asking individuals directly what they want. Instead, you can simply follow the traces they leave as they move through the digital world — the things they click on and the things they don’t, the amount of time they spend on one site rather than another.

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