you want.
It turned out that Wal-Mart had calculated a pretty good guess before you showed up about what everyone’s real bottom lines would be. Often enough, you would realize that you could (barely) accept the counteroffer, even though it wasn’t what you were looking for.
Wal-Mart didn’t need to get direct information about everyone in the loop. A sampling of information about a system is good enough to form an approximate model of that system. That meansthat someone can be indirectly spied on without any information about that person being gathered directly. Instead, the behaviors of those who interact with a party might yield some clues, and a whole picture is roughly pieced together automatically.
Once other big retailers understood what Wal-Mart had achieved, they hired their own specialists and powered up their own big data centers. But it was too late. Wal-Mart had already repatterned the world, giving itself a special place in it. Vendors were often already coordinated with each other to offer the lowest prices in a particular way that was finely tuned to Wal-Mart’s needs. The supply chain had become optimized to deliver to Wal-Mart’s door.
Wal-Mart didn’t cheat, spy, or steal to get information. * It just applied the best available computers to calculate the best possible statistics using legitimately available data.
* Once again, perhaps my assessment is more charitable than others. I see a collective mistake rather than a class of villains.
Everyone else’s margins got slammed to the bare minimums. It was like playing blackjack with an idiot savant who can’t help but count cards. This is the moral puzzle of Siren Servers. In the network age there can be collusion without colluders, conspiracies without conspirators.
From the Customer’s Point of View
Wal-Mart confronted the ordinary shopper with two interesting pieces of news. One was that stuff they wanted to buy got cheaper, which of course was great. This news was delivered first, and caused cheering.
But there was another piece of news that emerged more gradually. It has often been claimed that Wal-Mart plays a role in the reduction of employment prospects for the very people who tend to be its customers. 1 Wal-Mart has certainly made the world more efficient in a certain sense. It moved manufacturing to any spot in the world that could accomplish it at the very lowest cost; it rewarded vendors willing to cut corners to the maximum degree.
Wal-Mart’s defenders might acknowledge some churn in the labor market, but to paraphrase the familiar rebuttal, “making the market more efficient might have cost some people their jobs, but it saved even more people a lot of money by lowering prices. In the long term everybody wins because of efficiencies.”
It’s certainly reasonable to expect that making economic activities more efficient ought to increase opportunity for everyone in the longer term. * However, you can’t really compare the two sides of the equation, of lower prices and lowered job prospects.
* As I will explain, I strongly agree with the assertion, but only if we don’t remove massive amounts of value from our ledgers.
This is so obviously the case that it seems strange to point it out, but I have found that it is a hard truth to convey to people who have not experienced anything other than affluence. So: If you already have enough to live on, saving some money on a purchase is a nice perk. But if you haven’t reached that threshold, or if you had been there but lost your perch, then saving is not the equivalent of making; it instead becomes part of a day-to-day calculus of just getting by. You can never save enough to get ahead if you don’t have adequate career prospects.
To me this false trade-off, which was often stated in the 1990s, foreshadowed what we hear today about free Internet services. Tech companies have played similar games, said similar things, and pale in the same harsh light. “Sure there might be
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