[UKUUG Logo] Copyright © 1995-2004 UKUUG Ltd


Previous Next

Soap Box

Why I never buy books from Amazon.com

Steve Talbott

The popularity of web auction sites has gotten me thinking about the ever-increasing number of collectors' markets out there -- from baseball cards to old 45-rpm record jackets, from antique furniture to Pez dispensers, from stamps to beer bottles, from coins to teddy bears.

One feature distinguishing a collectors' market from most other markets is that it's primarily a kind of futures market: people tend to buy things based on anticipated future monetary value rather than any sense of general usefulness or intrinsic worth. That is, they bet on how much others will be willing to pay for an item at some later time.

Such a market for a particular type of product can emerge overnight for no other reason than that people begin to conceive it and then start bidding up each other's expectations. I suppose you could say it is a market in expectations. It becomes one of those many contemporary domains in which a kind of numbers game replaces any qualitative sense of value. The context in which value is assessed extends scarcely further than my guess about how others will assess the value in the future. Of course, if these others are like me -- if they are only putting a number on their expectations regarding what number others will put on their expectations regarding what number others... -- then no reckoning of actual value need ever contaminate the picture.

There is, needless to say, something arbitrary and unrooted, something conducive to bubble economics -- okay, something like the current stock market -- in this game of mutually induced levitation. And all that, it seems to me, is a useful backdrop for viewing more conventional markets that we do not think of as belonging to collectors. There is more than one way, it turns out, to ignore actual worth in favor of a numbers game.

Casino Economics

Having first established itself as an online bookseller, Amazon.com is now rapidly adding other businesses. First it was, naturally enough, music and videos. Then gifts and pharmaceuticals. Then pet supplies and auction services. And, in venture capitalist Bill Gurley's words, "Why stop there? Some people would argue that Amazon is evolving into an online transaction company, which could mean that it would eventually compete with financial institutions such as credit card companies." More generally yet, why not anything and everything?

Gurley claims that the Internet is blurring the boundaries between markets:

Imagine, if you will, a large body of land covered by independent lakes. Think of these lakes as markets, and the species that inhabit each lake as competitors. Over time, these individual ecosystems have evolved separately, and certain species have emerged as leaders in each market (lake). Now imagine what would happen if a canal were installed between each and every lake, thereby enabling each fish to swim freely. The Internet, an electronic version of the canal, is having this effect on business. Your competition is no longer limited to your lake, and you may find yourself face to face with a species you have never seen before. (Above the Crowd, Feb. 22, 1999)

The upshot of all this is that "everyone is a potential competitor" and "doing business on the Net is like playing the game of Risk with a twist -- a little line connects every country on the planet, and anyone can attack anyone."

This, I think, is horribly true. It is also horribly false. The truth is rooted in the way we are reducing markets to formal abstractions. Goods and services are viewed, in familiar atomic fashion, as discrete, self- contained, and neatly transportable entities without regard to context. This decontextualization points toward the possibility of an objective, well-behaved market in this atom or that, where anyone who tosses his atoms into the ring is playing exactly the same game as everyone else.

Since one atom is qualitatively indistinguishable from another, we are again in a pure numbers game. And in a market where there are only numbers and a competitive drive to come out on top, everything that would ground commercial activity, everything that would bind it in an orderly fashion to the structure and meaning of our lives, tends to disappear. No wonder, then, that Brian Arthur, in his widely cited paper on "Increasing Returns and the New World of Business", likens the economics of the high- tech industry to casino gambling:

We can imagine the top figures in high tech -- the Gateses and Gerstners and Groves of their industries -- as milling in a large casino. Over at this table, a game is starting called multimedia. Over at that one, a game called Web services. In the corner is electronic banking. There are many such tables. You sit at one. How much to play? you ask. Three billion, the croupier replies. Who'll be playing? We won't know until they show up. What are the rules? Those'll emerge as the game unfolds. What are my odds of winning? We can't say. Do you still want to play? (Harvard Business Review, July/Aug., 1996)

The game, says Arthur, "is primarily a psychological one", and it's "not for the timid". The question is whether it's also not for those who care about society's future.

What Do We Really Buy?

This brings me to what is horribly false in the vision of a single, common reservoir of chaotic economic molecules seeking a kind of thermodynamic equilibrium. While we may be trying our best to realize such a vision, it negates what is most important in our economic life.

The products and services that matter are not neatly atomic, and they can become so only through the destruction of all context. When I buy something, I am not merely paying for a discrete object, or for a single, precisely delimited service. With my transaction I step into a complex ongoing dance, and the effect of my entry ripples through the entire pattern to its farthest edges as the other participants adjust to my activity.

Surely we realize this sort of truth in many other spheres, whether in ecology or complexity studies or the attack upon social problems such as poverty or highway congestion or violence in our schools. There is never a single, isolated answer. Why? Because everything is related to everything else. The only way to advance against such problems is to learn to see imaginatively, pictorially. Otherwise, we are left with thousands of informational shards that make no sense.

When I buy milk, eggs, and vegetables at the local "farm store" a mile down the street from my home, I am not only supporting the organic food movement, but also a local farm some of whose fields are adjacent to my home. I support ecological diversity, a pesticide-free environment, and the humane treatment of animals. I support a diverse local community -- one whose kids are neither cut off from nature nor from the world of adult work nor from each other. I support a context in which consumers have an intimate awareness of their connection to the earth and the sources of their sustenance. I support minimization of the long-distance hauling and warehousing of food, which degrades quality and places heavy demands upon the transportation infrastructure. I support many forms of meaningful work on a comprehensible scale. I support a community social center, which is one of the things a store such as this tends to become. And, of course, I withhold my support from many unsavory practices I disapprove.

My aim in reciting this litany -- which could be extended indefinitely -- is not to tell you what choices you should make. I am only pointing out some of the places where you do in fact make choices. Furthermore, it needs emphasizing how greatly an economics that embraces the kind of issues sketched in the previous paragraph differs from the casino madness Brian Arthur describes. The gambling-house atmosphere reigns only when the reduction to a numbers game has eradicated all the concrete values that might give order, context, and a degree of stability to a field of endeavor.

All Economic Competition is, in the End, Qualitative

You can begin to see the problem when Bill Gurley says that the Internet makes "everyone a potential competitor". Certainly there is truth in this, and there remains a degree of truth even when you subtract out the casino mentality. But at the same time the statement ignores most of what is interesting in any economic picture. Given the entire context that I buy into with my purchases of milk, eggs, and vegetables, who is in a position to compete in any precise and unambiguous sense with the store down the street? Certainly no one else can sell me exactly the same complex pattern of values. We get a pure numbers game only by ignoring all the context.

This is not to say that the farm store is insulated from competition. My wife and I do in fact sometimes buy those "same" products from any of several co-ops and whole food stores within a fifteen-mile radius. And, yes, we sometimes do price comparisons. But there can be no sudden, wholesale shifting of allegiance based purely on pricing -- not, at least, until many value judgments about what we are actually paying for have been considered and integrated.

In any sound economic system competition occurs and "rational" prices result. But the myriad individual judgments that coalesce into these prices are personal, qualitative, and unique. It is one thing when, in the true wizardry of the marketplace, such qualitative judgments resolve themselves into reliable numbers, such as product prices. It is quite a different thing when the fateful reversal occurs and we allow numbers to dictate our judgments.

All this, I hope, will suggest to you why I personally choose not to buy books at Amazon.com. The core issue has to do with my growing sense of commitment to what has been called community economics, which seems to me crucial for our future. Amazon.com just doesn't fit into this commitment very comfortably. Its scale of operation, its decontextualization of its businesses, its cultivation of a consumer and entrepreneurial mindset that sees economic products as isolated atomic entities whose attached numbers (prices) represent the only thing about them relevant to our buying choices -- this strikes me as unhealthy in the extreme and not worth "voting" for with my choices.

You may well evaluate these issues differently from me. That's fine. But I dearly hope you will evaluate them. Or, rather, begin to evaluate them. If you are like me, you may sometimes despair of getting a handle on "the things that count". About the only thing I feel absolutely certain of is that we must make the best beginning we can of bringing our awareness of context and value into our economic dealings.

Reproduced with permission from Netfuture, Issue #90, May 14, 1999.

Previous Next
Last modified 24 Oct 1999 00:00
Tel: 01763 273 475
Fax: 01763 273 255
Web: Webmaster
Queries: Ask Here
Join UKUUG Today!

UKUUG Secretariat