Sunday, July 21, 2013

Intentions and the NEA of the new economy

One of the odd things about the new economy is some changes in the way we understand how markets work.   I was prompted to think about it in an Econtalk podcast with Doc Searls.  Searls is an odd collection of skills.  He is a guy who has written about a lot of topics including something he calls the intention economy, where he makes the case that consumers should be able to signal a lot better on things they want from suppliers - in essence he is proposing what Chris Anderson wrote about in the Long Tail only not only that people should be able to define their markets into smaller and smaller units but that suppliers should be guided by the individualized need of consumers.   The bargaining, that economics textbooks tout, should be carried out in all things.  The podcast is interesting because he offers a series of ways to accomplish those kinds of individualized markets.

What struck me most about his discussion was his idea of NEA.   He discussed an economy where Nobody owns it, Everybody can use it and Anybody can change it.   At the end of Walter Isaacson's long and somewhat interesting biography of Steve Jobs - Isaacson makes the case that Apple is a closed system.   At the time I read the book (see my review of it here) I commented that Isaacson really did not understand closed versus open systems.   Searls helped me think about the differences in some new ways.   Many writers compare Apple (supposedly closed) to Android (supposedly open) to describe differences.   But as I listened to Searls I think there is a better typology. 

Android is mostly an open system.   Nobody owns it, Everybody can use it, and Anybody can change it - within limits.  There is still an insider's group which makes sure that the Android platform continues to function - so while anyone can change it - some changes become dead ends.

Microsoft Office is a closed system.   The company indeed listens to customers a bit but ultimately the company decides what will happen in that product.   Many of us who have quit using Microsoft have grown tired of the bloated software that is offered in Office - when you want to do a simple document there are much better alternatives than the ones in the Office Suite.

So where does Apple fit into this paradigm?   Isaacson argued that it is a closed system just like Microsoft.  That is wrong.   What is fundamentally different is the environment of the IOS for Apple.   The underlying operating system is closed but the developer's toolkit is fundamentally open.   Thus, were I a programmer I would have very little influence on how the operating system functions.  At the same time I would have the ability to use both APIs (application programming interfaces - those little parts of the program that can connect you and your computer to a larger world in specific ways - for example using your Facebook ID to log into a site unrelated to Facebook) and the toolkit to build new functionality to the device.    So if I want to develop something which will allow my laptop and phone and tablet to synch together on a set of documents - I could write the APP called Evernote (which works across platforms) to do that.   I could then use an IOS phone, and Android Tablet and even a Window's based laptop to allow me to have all that information anywhere I go.   I happen to like the integration of look and feel so I stay in the Apple environment.   But you are not restricted to it.

One other comment that Searls opened on but which I think could be even more important.   The late Garrett Hardin, who was not an economist, wrote a paper in 2003 which has contributed to a mighty debate about the appropriate role of the government sector in protecting areas and populations in the economic literature.   The paper has always bothered me because Hardin's inescapable conclusion is that the only way to solve the misallocation of resources is to encourage more government regulation.  But Searls discussion of the Intention Economy - blows a hole in that line of reasoning.   The more people can actually bargain on issues relatively efficiently, the less there will be a need for massive government interventions.   A good friend of mine, John Kirlin, once said that governments should be looking for opportunities to steer not row.   Searls promotes the idea that this kind of person to person relationship is made stronger as technology grows.

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