11 ms·

A Wave of Fear in American Commerce

201 points by howard941 7y ago

mdorazio 7y ago
This is an interesting piece. The author tackles a few different kinds of fears, starting with fear of Libra destroying normal consumer transaction paths and then looks at fear of entire small and medium sized businesses getting straight up destroyed by moves from giant players like Amazon. I think the author is pretty spot-on in the implicit conclusion that this is the natural result of increasingly centralized businesses running pseudo-monopolies in key industries.
- jdreyfuss 7y ago
  Definitely thought provoking. I hadn't thought much about how the effects of the fear of retribution reverberate in how people and companies interact with governments, employers, and suppliers. I feel like this is usually discussed on the micro-level (e.g. an employee's fear of whistleblowing on her boss), but not so much on the macro-level.
  - sroussey 7y ago
    Like people saying bad things about the government in CN and then able to ride a train in said country?
- specialist 7y ago
  "...the natural result of increasingly centralized businesses running pseudo-monopolies in key industries." Preferential attachment begets winner takes all. Internet begets fewer, larger markets, meaning fewer, larger players. Engagement driven revenue begets outrageous content. I don't have a problem with these three natural phenomenon. It's just two maths and one psychology. The two differences today are a) scale and b) the combination is far more potent. As Stalin praised, quantity has its own quality. My issue is the willful ignorance (Freedom Markets™ ideology) thwarting any kind of reasonable counterbalance. I'd like the world of commerce to be more NFL and less MLB.
darknesszy 7y ago
It makes one wonder if the Chinese government has a point. In the modern world, perhaps it’s not the government that should be feared, but the conglomerate corporations. A centralised government could have more teeth to compete with. Just an opinion...let’s keep it civil
- gbhn 7y ago
  Are you suggesting the Chinese market is more competitive due to the government being big enough that companies in the market have to exist in an impartial regime? This isn't the impression I get from many other sources.
  - germinalphrase 7y ago
    I don’t agree with respect to China - but perhaps the OP is suggesting that it’s like having an impartial referee.
    - bilbo0s 7y ago
      I don't think any government is impartial, but you're right. That seems like it's the idea. In theory, it's much better to have the government be the big man on campus. You really don't want to live in a place where corporations are more powerful than the government.
      - inflatableDodo 7y ago
        This relates well with the gang model of politics, where the government is merely the biggest gang. It is an interesting way of looking at political systems because it encompasses such a range of scales.
        Can_Not 7y ago
        Just make the biggest gang a democracy.
- 7y ago
phkahler 7y ago
I found irony in this: "I’ve heard from venture capitalists frightened to talk for fear they can’t sell portfolio companies to big tech" So you want to profit from selling out to big tech, but you're afraid of them because they've become so big and powerful - in part by buying other companies...
- notfromhere 7y ago
  VCs are basically suppliers to these guys.
  - PakG1 7y ago
    In this analogy, are the founders and employees the hired workforce, the raw materials, or other? Just joking not really joking. ;)
    - sgt101 7y ago
      Yeah - there are three exits : - IPO : good luck - Sale on revenue and clients : boring, competitive and comparably low return for founders. Invest 10-15 years at comparatively low compensation with high risk of total failure , and huge opportunity cost. - Sale on IP and team : quick, high return. Founders often build category 2 opportunites without knowing, and are removed after a short time, with no compensation and several years of their lives missing!
itsaidpens 7y ago
Man! The cyberpunk dystopia is here; it just doesn’t look as cool as I wanted it to.
anm89 7y ago
I can't put a finger on it but something feels sort of dishonest about this article to me. He seems to be applying the concept of fear in an inconsistent manner that ends up just reducing down to “things are happening I don't like" and then noting that people experienced the normal human emotion of fear relating to that list. Like is manufacturers being worried about about being undercut by a competitor for a big contract a wave of terror? As unpleasant as I could imagine that is for the small supplier, that's a pretty healthy way for that transaction to work. It just seems like fear is another way of saying, not everyone gets what they want and this article is simply a list of things this guy doesn't like. It's not even a bad list it just doesn't really say much of anything.
- ethbro 7y ago
  The author's point is about fear corroding democracy by limiting public action and information. "I am not going to let you sell your widget through Tamazon" is unfortunate and potentially crippling for the supplier, but as you've pointed out that's business. "I am not going to let you sell your widget through Tamazon... in the event you make disparaging remarks about Tamazon in any public forum or divulge any information about our agreements" is very different. In the later case, the last mile is threatening to retaliate in the event the supplier does anything they don't like. Which, as a supplier, you rightly wonder "What can I do to avoid getting on Tamazon's naughty list?" To which Tamazon replies with a wink and a smile, "Just be careful what you say and to who, and I'm sure it won't come to that." Absent legal protections and methods of redress, this dynamic is likely to exist in any market where the aggregator captures a sizable customer share. The size disparity is simply too great.
  - anm89 7y ago
    Yeah, for me I personally agreed with his points when they were relating to how much power some corporate giants have to instill fear. But then the union bit and the anecdote about bidding the contract just seemed totally off topic except for the fact that someone felt scared at some point. I honestly don't hate the article but it ended up feeling like he was fishing for some story where someone was scared.
riffic 7y ago
Hey Matt Stoller, you should be familiar with ISO 8601.
chatmasta 7y ago
Interesting article. I wish he touched on another point, which is the political monoculture in tech and media. The left has a vice grip on the discourse in these industries. Many conservatives have a justified fear of speaking publicly, worried they’ll be labeled a racist/nazi and have trouble getting jobs or making sales. I’m not sure what the downstream effects of this will be, but the culture of ostracizing wrongthink is real, and a worrying trend.
- howlingfantods 7y ago
  How does the left has a vice grip on discourse in media? The most watched cable news network is conservative. The largest operator of local tv is conservative.
  - pvaldes 7y ago
    > The most watched cable news network is conservative. The largest operator of local tv is conservative. In USA. But nowadays is more complicated than this. There is also CCTV and Al Jazeera for example that have a mix of USA and non-USA watchers largely exceding the number of USA population.
  - swampthinker 7y ago
    In traditional media, yes. But most New Media companies (Google, Facebook, BuzzFeed, etc) are liberal leaning.
    - ngold 7y ago
      That is hilarious. Good thing they have strong unions and "don't be evil." Being slightly less conservative to the rabid dogs of today's right wing juggernaut is not a socialist utopia. In your world george bush jr. is a socialist lefty.
      - robdachshund 7y ago
        What planet do you live on?
svd4anything 7y ago
Facebook’s Libra seems to have grabbed all the attention of regulators, legislators, and pundits, which could be seen an absolutely fabulous gift to wider cryptocurrency world as now it’s Facebook’s problem to deal with all of them, deflecting scrutiny away from real cryptocurrencies and to this corporate reserve/ETF currency something or other.
- amelius 7y ago
  That's not their only problem. It's very likely that Apple will forbid in-app cryptocurrencies, and force users to use Apple Pay instead.
sgt101 7y ago
There's kinda a flip side of this in modern life too - which is the getting away with murder that goes on in commerce and other organisations. By this I mean an executive or engineer can do something exploitative and unprofessional - load a company with debt, release a tranche of necessary employees, increase a dividend... or for engineers, make false claims about business cases, delivery schedules or technical capabilities. There are no consequences (provided the timing is done cleverly), a bubble of sucess is created - the act is lorded or claimed on a CV and the person moves on and up the ladder. When the company gets into trouble or the project catastrophically failes the exited individual is rarely confronted with this, and if they are they simply say "it was great when I left - I don't know what went wrong but they really blew it!" There is no community of disapproval, and there is no genuine mechanism of reputataion management.
- bob33212 7y ago
  Maybe an executive did choose a technology to pad his resume over functionally. Without an email from him stating that he is just padding his resume, how can you prove that the new technology wasn't going to be successful?
- mars4rp 7y ago
  Yes, and it is happening a lot everywhere especially in finance. When they sell the mortgage they collect the commission but life of mortgage is 30 years. Nasim Taleb has a great book about this called skin in the game
- mlthoughts2018 7y ago
  This seems like a place where you should apply Hanlon’s Razor: don’t assume malice when incompetence will suffice. Executives and senior domain experts make a lot of stupid decisions borne out of overconfidence and attempts to do flashy things for bonuses or promotions. It’s extremely tenuous and would require huge evidence to argue this sort of thing is malicious or criminally negligent, as opposed to just someone sincerely doing their job in a way that leads to a mistake or is punished by market trends or competitor advancements or whatever.
  - 7y ago
provolone 7y ago
Article sounds self-contradictory. "...could threaten the ability of emerging market governments to control their monetary supply, the local means of exchange, and, in some cases, their ability to impose capital controls." Read 'emerging' as 'failed centrally planned economy'. The self-described anti-monopolist is defending an failed state monopoly. "After many mistakes, we have learnt that we want a central bank to act to increase or decrease the monetary supply in moments of contraction or expansion." Yet he is railing against monopolies fueled by artificially cheap credit and stock buy backs.
negamax 7y ago
If Libra can give people an option of a stable currency and chance against bad central bank (Zimbabwe, Venezuela etc) than may be it's not that bad of a thing. It's backed by basket of currencies and over a long period will face inflationary and bad monetary issues but it will still be a leg up over many many currencies. Author has not lived into high inflation market or lack awareness of people who suffer under these everyday. If Libra can free a multitude from this menace, we should support it indeed.
- robertAngst 7y ago
  >Libra can give people an option of a stable currency and chance against bad central bank In the future we will have strong criticisms of the US Dollar. It historically has not been stable over long periods of time. However, the US government has nearly forced every country to doing business in USD. This is great for ease of business, but given how low interest rates are, I expect a historic inflation of USD in my lifetime. Given its impossible to hire someone at Minimum Wage(2019), I believe we have inflation that is not being recorded with the US federal reserve. 2%/yr seems... fake.
no1youknowz 7y ago
Some issues with this article: > The sponsors are right that a liquid, stable currency would be attractive to many in emerging markets. So attractive, in fact, that if enough people trade out of their local currencies, they could threaten the ability of emerging market governments to control their monetary supply, the local means of exchange, and, in some cases, their ability to impose capital controls. Easy to counter. The government can declare that Libra is illegal and stop its banks from converting Libra into Fiat. Sure you could probably get around it by a P2P marketplace. Countries that have done this are: China, Russia, Vietnam and others [0]. > Unless regulators jump in quickly, these for-profit companies will set the standards for identity verification, at least in the short run, as well as defining the rules and enforcement around the privacy of transactions and what to do in case of theft.” No there are already defined and in place rules for banks to adhere too. Companies cannot just set these standards. They'll be fined until they are told by the regulators to close shop. > “That’s sort of the most dangerous consequence of this kind of concentration is the ability to exclude rivals, put them out of business, diminish innovation, diminish entrepreneurship, diminish choices for consumers,” he said. This is one thing that regulators will look at with regards to Libra. There's just one wallet. Who are the competitors. In the case of banking there are many competitors. If Chase closes your account, you can move over to TD Bank. But if say Stripe closes your account because they take umbrage with you, does your wallet also get closed down? What happens also with your Libra coins? These questions must be answered in precise detail for consumer protections and this right there, consumer protections determines the progress of Libra. I do think Libra is a good idea. But a few things must be brought up to the fore. - FB must open source their tech. Have other companies [or even groups of people once they are certified] run other groups of nodes. If these conglomerates of Stripe, Paypal, etc which have a history of banning people just because. Have the built-in ability that someone can move over to another provider. - Have FB ensure that standards are met in terms of banking regulations and fine heavily if they don't. Make them feel the pain. Have some teeth when fining them. [0]: https://www.investopedia.com/articles/forex/041515/countries-where-bitcoin-legal-illegal.asp https://www.investopedia.com/articles/forex/041515/countries...
deogeo 7y ago
Why is no-one making the "free speech doesn't mean freedom from consequences" argument in response to small(er) businesses being afraid to criticize oligopolies?

201 points by howard941 7y ago

This is an interesting piece. The author tackles a few different kinds of fears, starting with fear of Libra destroying normal consumer transaction paths and then looks at fear of entire small and medium sized businesses getting straight up destroyed by moves from giant players like Amazon. I think the author is pretty spot-on in the implicit conclusion that this is the natural result of increasingly centralized businesses running pseudo-monopolies in key industries.

jdreyfuss 7y ago
Definitely thought provoking. I hadn't thought much about how the effects of the fear of retribution reverberate in how people and companies interact with governments, employers, and suppliers. I feel like this is usually discussed on the micro-level (e.g. an employee's fear of whistleblowing on her boss), but not so much on the macro-level.
- sroussey 7y ago
  Like people saying bad things about the government in CN and then able to ride a train in said country?
specialist 7y ago
"...the natural result of increasingly centralized businesses running pseudo-monopolies in key industries." Preferential attachment begets winner takes all. Internet begets fewer, larger markets, meaning fewer, larger players. Engagement driven revenue begets outrageous content. I don't have a problem with these three natural phenomenon. It's just two maths and one psychology. The two differences today are a) scale and b) the combination is far more potent. As Stalin praised, quantity has its own quality. My issue is the willful ignorance (Freedom Markets™ ideology) thwarting any kind of reasonable counterbalance. I'd like the world of commerce to be more NFL and less MLB.

darknesszy 7y ago

It makes one wonder if the Chinese government has a point. In the modern world, perhaps it’s not the government that should be feared, but the conglomerate corporations. A centralised government could have more teeth to compete with. Just an opinion...let’s keep it civil

gbhn 7y ago
Are you suggesting the Chinese market is more competitive due to the government being big enough that companies in the market have to exist in an impartial regime? This isn't the impression I get from many other sources.
- germinalphrase 7y ago
  I don’t agree with respect to China - but perhaps the OP is suggesting that it’s like having an impartial referee.
  - bilbo0s 7y ago
    I don't think any government is impartial, but you're right. That seems like it's the idea. In theory, it's much better to have the government be the big man on campus. You really don't want to live in a place where corporations are more powerful than the government.
    - inflatableDodo 7y ago
      This relates well with the gang model of politics, where the government is merely the biggest gang. It is an interesting way of looking at political systems because it encompasses such a range of scales.
      - Can_Not 7y ago
        Just make the biggest gang a democracy.
7y ago

phkahler 7y ago

I found irony in this: "I’ve heard from venture capitalists frightened to talk for fear they can’t sell portfolio companies to big tech" So you want to profit from selling out to big tech, but you're afraid of them because they've become so big and powerful - in part by buying other companies...

notfromhere 7y ago
VCs are basically suppliers to these guys.
- PakG1 7y ago
  In this analogy, are the founders and employees the hired workforce, the raw materials, or other? Just joking not really joking. ;)
  - sgt101 7y ago
    Yeah - there are three exits : - IPO : good luck - Sale on revenue and clients : boring, competitive and comparably low return for founders. Invest 10-15 years at comparatively low compensation with high risk of total failure , and huge opportunity cost. - Sale on IP and team : quick, high return. Founders often build category 2 opportunites without knowing, and are removed after a short time, with no compensation and several years of their lives missing!

itsaidpens 7y ago

Man! The cyberpunk dystopia is here; it just doesn’t look as cool as I wanted it to.

anm89 7y ago

I can't put a finger on it but something feels sort of dishonest about this article to me. He seems to be applying the concept of fear in an inconsistent manner that ends up just reducing down to “things are happening I don't like" and then noting that people experienced the normal human emotion of fear relating to that list. Like is manufacturers being worried about about being undercut by a competitor for a big contract a wave of terror? As unpleasant as I could imagine that is for the small supplier, that's a pretty healthy way for that transaction to work. It just seems like fear is another way of saying, not everyone gets what they want and this article is simply a list of things this guy doesn't like. It's not even a bad list it just doesn't really say much of anything.

ethbro 7y ago
The author's point is about fear corroding democracy by limiting public action and information. "I am not going to let you sell your widget through Tamazon" is unfortunate and potentially crippling for the supplier, but as you've pointed out that's business. "I am not going to let you sell your widget through Tamazon... in the event you make disparaging remarks about Tamazon in any public forum or divulge any information about our agreements" is very different. In the later case, the last mile is threatening to retaliate in the event the supplier does anything they don't like. Which, as a supplier, you rightly wonder "What can I do to avoid getting on Tamazon's naughty list?" To which Tamazon replies with a wink and a smile, "Just be careful what you say and to who, and I'm sure it won't come to that." Absent legal protections and methods of redress, this dynamic is likely to exist in any market where the aggregator captures a sizable customer share. The size disparity is simply too great.
- anm89 7y ago
  Yeah, for me I personally agreed with his points when they were relating to how much power some corporate giants have to instill fear. But then the union bit and the anecdote about bidding the contract just seemed totally off topic except for the fact that someone felt scared at some point. I honestly don't hate the article but it ended up feeling like he was fishing for some story where someone was scared.

riffic 7y ago

Hey Matt Stoller, you should be familiar with ISO 8601.

chatmasta 7y ago

Interesting article. I wish he touched on another point, which is the political monoculture in tech and media. The left has a vice grip on the discourse in these industries. Many conservatives have a justified fear of speaking publicly, worried they’ll be labeled a racist/nazi and have trouble getting jobs or making sales. I’m not sure what the downstream effects of this will be, but the culture of ostracizing wrongthink is real, and a worrying trend.

howlingfantods 7y ago
How does the left has a vice grip on discourse in media? The most watched cable news network is conservative. The largest operator of local tv is conservative.
- pvaldes 7y ago
  > The most watched cable news network is conservative. The largest operator of local tv is conservative. In USA. But nowadays is more complicated than this. There is also CCTV and Al Jazeera for example that have a mix of USA and non-USA watchers largely exceding the number of USA population.
- swampthinker 7y ago
  In traditional media, yes. But most New Media companies (Google, Facebook, BuzzFeed, etc) are liberal leaning.
  - ngold 7y ago
    That is hilarious. Good thing they have strong unions and "don't be evil." Being slightly less conservative to the rabid dogs of today's right wing juggernaut is not a socialist utopia. In your world george bush jr. is a socialist lefty.
    - robdachshund 7y ago
      What planet do you live on?

svd4anything 7y ago

Facebook’s Libra seems to have grabbed all the attention of regulators, legislators, and pundits, which could be seen an absolutely fabulous gift to wider cryptocurrency world as now it’s Facebook’s problem to deal with all of them, deflecting scrutiny away from real cryptocurrencies and to this corporate reserve/ETF currency something or other.

amelius 7y ago
That's not their only problem. It's very likely that Apple will forbid in-app cryptocurrencies, and force users to use Apple Pay instead.

sgt101 7y ago

There's kinda a flip side of this in modern life too - which is the getting away with murder that goes on in commerce and other organisations. By this I mean an executive or engineer can do something exploitative and unprofessional - load a company with debt, release a tranche of necessary employees, increase a dividend... or for engineers, make false claims about business cases, delivery schedules or technical capabilities. There are no consequences (provided the timing is done cleverly), a bubble of sucess is created - the act is lorded or claimed on a CV and the person moves on and up the ladder. When the company gets into trouble or the project catastrophically failes the exited individual is rarely confronted with this, and if they are they simply say "it was great when I left - I don't know what went wrong but they really blew it!" There is no community of disapproval, and there is no genuine mechanism of reputataion management.

bob33212 7y ago
Maybe an executive did choose a technology to pad his resume over functionally. Without an email from him stating that he is just padding his resume, how can you prove that the new technology wasn't going to be successful?
mars4rp 7y ago
Yes, and it is happening a lot everywhere especially in finance. When they sell the mortgage they collect the commission but life of mortgage is 30 years. Nasim Taleb has a great book about this called skin in the game
mlthoughts2018 7y ago
This seems like a place where you should apply Hanlon’s Razor: don’t assume malice when incompetence will suffice. Executives and senior domain experts make a lot of stupid decisions borne out of overconfidence and attempts to do flashy things for bonuses or promotions. It’s extremely tenuous and would require huge evidence to argue this sort of thing is malicious or criminally negligent, as opposed to just someone sincerely doing their job in a way that leads to a mistake or is punished by market trends or competitor advancements or whatever.
- 7y ago

provolone 7y ago

Article sounds self-contradictory. "...could threaten the ability of emerging market governments to control their monetary supply, the local means of exchange, and, in some cases, their ability to impose capital controls." Read 'emerging' as 'failed centrally planned economy'. The self-described anti-monopolist is defending an failed state monopoly. "After many mistakes, we have learnt that we want a central bank to act to increase or decrease the monetary supply in moments of contraction or expansion." Yet he is railing against monopolies fueled by artificially cheap credit and stock buy backs.

negamax 7y ago

If Libra can give people an option of a stable currency and chance against bad central bank (Zimbabwe, Venezuela etc) than may be it's not that bad of a thing. It's backed by basket of currencies and over a long period will face inflationary and bad monetary issues but it will still be a leg up over many many currencies. Author has not lived into high inflation market or lack awareness of people who suffer under these everyday. If Libra can free a multitude from this menace, we should support it indeed.

robertAngst 7y ago
>Libra can give people an option of a stable currency and chance against bad central bank In the future we will have strong criticisms of the US Dollar. It historically has not been stable over long periods of time. However, the US government has nearly forced every country to doing business in USD. This is great for ease of business, but given how low interest rates are, I expect a historic inflation of USD in my lifetime. Given its impossible to hire someone at Minimum Wage(2019), I believe we have inflation that is not being recorded with the US federal reserve. 2%/yr seems... fake.

no1youknowz 7y ago

Some issues with this article: > The sponsors are right that a liquid, stable currency would be attractive to many in emerging markets. So attractive, in fact, that if enough people trade out of their local currencies, they could threaten the ability of emerging market governments to control their monetary supply, the local means of exchange, and, in some cases, their ability to impose capital controls. Easy to counter. The government can declare that Libra is illegal and stop its banks from converting Libra into Fiat. Sure you could probably get around it by a P2P marketplace. Countries that have done this are: China, Russia, Vietnam and others [0]. > Unless regulators jump in quickly, these for-profit companies will set the standards for identity verification, at least in the short run, as well as defining the rules and enforcement around the privacy of transactions and what to do in case of theft.” No there are already defined and in place rules for banks to adhere too. Companies cannot just set these standards. They'll be fined until they are told by the regulators to close shop. > “That’s sort of the most dangerous consequence of this kind of concentration is the ability to exclude rivals, put them out of business, diminish innovation, diminish entrepreneurship, diminish choices for consumers,” he said. This is one thing that regulators will look at with regards to Libra. There's just one wallet. Who are the competitors. In the case of banking there are many competitors. If Chase closes your account, you can move over to TD Bank. But if say Stripe closes your account because they take umbrage with you, does your wallet also get closed down? What happens also with your Libra coins? These questions must be answered in precise detail for consumer protections and this right there, consumer protections determines the progress of Libra. I do think Libra is a good idea. But a few things must be brought up to the fore. - FB must open source their tech. Have other companies [or even groups of people once they are certified] run other groups of nodes. If these conglomerates of Stripe, Paypal, etc which have a history of banning people just because. Have the built-in ability that someone can move over to another provider. - Have FB ensure that standards are met in terms of banking regulations and fine heavily if they don't. Make them feel the pain. Have some teeth when fining them. [0]: https://www.investopedia.com/articles/forex/041515/countries-where-bitcoin-legal-illegal.asp https://www.investopedia.com/articles/forex/041515/countries...

deogeo 7y ago

Why is no-one making the "free speech doesn't mean freedom from consequences" argument in response to small(er) businesses being afraid to criticize oligopolies?