Here is his conclusion:
Digg is an economy. Votes represent demand and articles
represent a non-infinite, but exceedingly large supply of articles. Incentives are important in any economy and explain human behavior very well. Incentives can also control behavior that is less desirable, as can be found on sites like Digg and Netscape. The invisible hand on Digg is crippled — the emphasis on being democratic is misguided, since democracies have problems, as is the case with Digg; because of the problems on Digg, hence, Kevin Rose has implemented regulation in the forms of Algorithms and Policies. But, such regulatory measures, in the long run, do not work. What will work, is to use the notion of incentives to curb undesirable behavior. As a consequence, however, here might be fewer votes, but the votes will truly count. Moreover, this might be another revenue model for sites like Digg, which currently rely on an ad-based model.
Economically, this sort of paradigm may make me a communist for my support of Google News.
(A tip of my hat goes to Stephen Dubner for pointing this out.)