Category: Economics

They’re All Super Markets

There is no better argument for deregulation than marketplaces.

If you haven’t experienced one, I recommend it.

Ebay, Uber, Lyft, Amazon, Rover, Facebook Marketplace, the list goes on.

Anytime buyers and a sellers congregate together something beautiful happens. There is a special kind of harmony when the friction of regulation is removed from transactions, and people are set free to deal with each other peacefully.

Even the negotiation process is a form of art. Both buyer and seller have a price point that makes sense to them for a particular good. Neither has to participate if the price doesn’t fit their model. But when both parties finding that happy medium – magic happens.

Markets free people people to signal their preferences with the world: “I have X good at Y price, who wants it?” and “I have X budget, and am looking for Y good, who’s willing to sell?” Both parties participate of their own accord. Peacefully.

People often give markets a bad wrap. Protesting low wages for ride share drivers, or Amazon and Ebay as disrupters of the retail industry. But they’re missing the point.

In free marketplaces, no one forces others to participate in exchange. It happens voluntarily. Spontaneously. Beautifully.

This kind of mutually-beneficial exchange forms the bedrock of a free, prosperous, peaceful society.

Markets are an amazing innovation. They’re something to marvel at. Not condemn.

 

The Power of the Double Thank You

The best transactions involve a double thank you.

Maybe you’re at a coffee shop. You place your order and swipe your card. The barista replies, “thank you.” When she delivers your cup of coffee, you echo back, “thank you.”

The barista is better off with your cash. You’re better off with your coffee.

The double thank you isn’t about niceties. It’s about choosing to engage in the world as a positive sum game. Both parties walk away from an exchange improved by the exchange.

The power of a double thank you can be applied to all walks of life. It’s not just about exchanging money for goods or services. The same mindset is powerful for relationships and all human interactions.

Imagine for a moment if every interaction you participated in, both you and the other person walked away better off. Can you truthfully say that’s the case? If yes, then congratulations Mister Holier Than Thou. If not, maybe there’s an opportunity to reevaluate how you engage with the world.

Again, it’s not about niceties. We all have a choice of how we choose to engage with the world and with others. And today, I’m reminding myself to reach for mutually beneficial encounters.

Thank you.

Make America Great Again: A Journal Entry with Adam Smith.

I bet none of those people thought of me today on their way to work either. It doesn’t bother me. I didn’t think of them. They were each just doing their own thing. Just like I’m doing mine.

 

The alarm buzzed and I reached to hit snooze. Who am I kidding? The alarm had been ringing for 20 minutes before I finally wrangled it into silence. Not unlike every morning the first move I made was to walk into the kitchen and flip on the coffee pot.

It’s the fancy kind that has an alarm but I don’t set it. You could make a case that I’m too lazy. I pretend it’s because I enjoy the sound of the drip-drip-dripping followed by the wafting scent of the freshly brewed ground beans. Whatever. I’m just glad somebody built such a contraption.

I prefer a dark roast ideally. Right now I’m on a Columbian kick. Something about opening up the little yellow bag and smelling the robust flavors makes me appreciate the little things in life. I bought the coffee a few blocks away at the Publix. It cost about $10 for the bag. Not to mention the tax I paid. I enjoy good coffee and I’m glad it cost so little.

I’m glad for the guy who probably makes around market wage to stock the shelves so I don’t have to hunt for it long. I’m also glad for the guy who took my money at the register and made the purchase so easy. The guy who thanked me for shopping at Publix and sacked my groceries wasn’t so bad either. I thanked him back. We both smiled and went about our own lives. Everybody wins.

In a way, I’m happy I contributed to their income. It didn’t cross my mind when I bought the groceries. I don’t think about them when I brew my coffee. I’m just glad they’re there when I need them. Providing a service. Exchanging their labor for my money. It’s brilliant.

So anyway, back to the coffee before it gets cold.

I sat down at the table to work. These days as I make my start in the mornings I pull up one page on my Macbook Air and another on the Microsoft Surface. I like screens. The more the better. What a cool world I live in where I can drink my coffee from the comfort of the house and talk with people miles away before I’ve even stepped a foot out the door.

I didn’t think about it this morning but I’m thankful for the people who built those machines. Not to mention the wireless internet. I bet the inventors weren’t thinking about me. Nor the manufacturers. Or the technician who installed the internet service. They were just living their lives. Just like I was living mine.

I finished my second cup of java and poured the remaining contents into my steel Yeti cup. If you’ve never had one I highly recommend it. I still burn my tongue in the afternoon from coffee I poured in the morning. It’s fantastic. Those two guys that created it did me a solid. I tossed on real people clothes and headed out. It’s pretty cool to lock the door and leave all of my stuff behind each day. Remind me to thank somebody for that later.

For the past couple weeks I’ve been switching between talk radio and podcasts on my morning commute. Today it was talk radio. What good entertainment. There were several riffs about Chris Rock’s monologue last night. Some demonized. Some praised. After about the fifth election ad I settled on another station. It was one where people call in and talk about terrible dates. “Who listens to this shit?” I thought to myself as I became invested in Jessica’s story about Todd. It was clear the talk show hosts weren’t thinking about me. They were each just doing their thing. I’m glad they did. I got a kick out of it.

By the time I made it to work this morning I had probably benefitted from a few dozen other people, maybe even a few hundred. I hadn’t even spoken a word aloud to any of them. I just used their stuff. The products of their labor. The stuff I’d traded money for. It didn’t cross my mind. Today was just another Monday.

I bet none of those people thought of me today on their way to work either. It doesn’t bother me. I didn’t think of them. They were each just doing their own thing. Just like I’m doing mine.

Tonight I scrolled through my news feed. I saw a million more campaign ads. I tried to ignore it. I couldn’t. I ended up watching a few spoof videos. “Little Marco Rubio…the light weight…” I laughed. I liked. I scrolled on.

I started to fall asleep on the couch. I got up. I took a shower. I laid down for a few minutes. I began to drift off and the words Make America Great Again stirred me back to life.

I started thinking about all the individual actors whose labor had gotten me through the day. I’m glad I could trade my money for their products and services. I bet they weren’t thinking about me. They were each probably just doing their own thing. Just like I was doing mine.

I thought about my coffee drip-drip-dripping tomorrow morning. America’s pretty great already I guess.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.”

–Adam Smith, An Inquiry into the Nature & Causes of the Wealth of Nations, Vol 1

 

 

 

 

Everyone Sells.

Take-Home Message: There’s nothing wrong with selling. 

A few months ago, I overheard someone having a conversation about how they didn’t get a degree just so they could be a salesperson. This reference to sales as a lowly, dark-arts job almost made me laugh. It made me consider my own thoughts about the art of selling, and how I feel when approached by a “salesperson.”

I hate feeling like I’m being sold. It’s a degrading feeling for me when someone is telling me what I need, particularly when the person has failed to ask what I want. From my own observations, this feeling is universal. We all hate being sold. It makes us feel like we’re being duped or something, I suppose. And we all hate having the wool pulled over our eyes.

So, when someone even resembles a salesperson, we immediately throw up our guard and march to a different tune. It’s like an evolved defense mechanism we all have and frequently use.

I think we should stop shirking away from these encounters so quickly, though. In fact, I think we should embrace them and use them as learning opportunities. I believe this and am seeking to combat this behavior because I think we are all salespeople in one way or another. We all believe in something, work for something, and want to connect with others on some level. To do this, and to do it effectively, we have to be able to reach out to others, and in some sense, persuade them of the legitimacy of our ideas.

Everybody has a product to sell–no matter whether you’re an employee, a founder, or an investor. It’s true even if your company consists of just you and your computer. Look around. If you don’t see any salespeople, you’re the salesperson. –Peter Thiel, Zero to One

Peter Thiel makes a compelling case in his book, Zero To One: Notes on Startups, or How to Build the Future. He discusses sales as a skill requiring immense time and effort to look flawless. He also says it’s something that works when hidden. Because, no one likes feeling sold.

But, in the world in which we live, there are an immense number of goods, services, and ideas which are being slung all around us. We are each being sold on something almost perpetually. Some people are terrible at selling, while others are so good we never see them coming. Most of our encounters, though, even if they are not situations which involve a monetary transaction, require a sale.

Because of this, I believe we should start regularly engaging the people who attempt to sell us something, be it idea, product, or service. I think each of these encounters provides an opportunity for learning and improving our own techniques.

I think in so doing, we can transform our view of sales. I personally have attempted to shift my outlook lately on this. I’ve been approaching some of these interactions with the mindset that the “salesperson” is attempting to add value to my life, rather than dupe me. It’s allowed me to have much more friendly conversations with these people, and even on occasion, learn a thing or two.

As I’ve set out on my own mission to “sell” ideas, I’ve thought it important to become a better listener to others who are attempting to do the same. I’ve learned a lot from changing my mindset to one less hostile. In the back of my mind when I’m being sold, whether it’s an idea, product, or service, I’ve been attempting to think of Frederic Bastiat’s words: “By virtue of exchange, one man’s prosperity is beneficial to all others.” 

I believe Thiel’s and Bastiat’s words both have practical importance to our lives. We are all selling things, and because we are, we can all be better off. I think it’s important to recognize the value of being better off as a result of exchange. In fact, it’s been only out of recognition of this that I’ve been able to make any ground in improving my attitude with “salespeople” who are just doing the best they can.

I’ll close with this thought because I think Ash Ambirge summarizes this transaction process eloquently.

Sales is about a mutual exchange of pleasure. The first keyword is mutual, and the second pleasure. When a transaction between a seller and buyer takes place, it isn’t because the seller is greedy and the buyer is stupid. Buyers are not stupid; they know exactly what they’re doing. And what they’re doing is giving you something you want (money) in exchange for something they want (what you sell).

–Ash Ambirge, You Don’t Need A Job, You Need Guts

Reputation Markets Change Everything.

Take-Home Message: The rules of the game are rigged against you. Do not be dismayed. Entrepreneurs to the rescue.

Before long, we’ll all be flustered, rushing to the accountant’s office with a stack of papers and a shoebox of receipts, begging them to perform a miracle. Meanwhile, we’re hoping not to get pulled over on the way to the office for speeding, or a seatbelt ticket, or for running a red light. Then, once we finally find a parking spot, we all hope that it doesn’t take more than 45 minutes, or we’ll earn a parking ticket.

You may have taken the highway to the accountants office, so, there may have been a toll. Of course, you’re already in your car, with your state-issued driver’s license, your mandatory insurance, tag, license plate, title and registration. Not to mention the money you put into the tank, or the oil, or the filter, or having the tire rotated recently. Those maintenance charges were all yours, though.

At every turn, there is a barrier. At every stop, there’s a new fine, tax, expense, surcharge, fee, or request for “charitable contribution.” On top of that, there are things to think about like putting food on the table, keeping the lights and water on, putting back for some future child’s college (or paying tuition already), regularly maintenance the vehicles, mow the yard, feed the dogs, clean the house, and on and on and on…

We stretch every dollar, nickel, and cent as thin as it will go. We stretch every hour and minute to cross of item after item of perpetually multiplying checklists. And for what? Is there a light at the end of the tunnel? Is there a way for our burden to be lifted?

How do we manage to juggle all of the impositions, restrictions, regulations, licensure requirements, fees, taxes, and (I’ll call it for what it is) bullshit that piles up commensurate our own lives’ duties?

One of the ideas I’ve been recently examining focuses on the role of entrepreneurship and innovation as means to combat these impositions in our lives and to free back up our money and time so we can spend both of them where we would rather prefer. So we can spend OUR money and time on OUR lives.

It’s basically the tangible application of public choice theory into the marketplace. , It’s ideas like Facebook, Twitter, Uber, Yelp!, Lyft, TaskRabbit, Tinder (Regardless of how you feel about it, Tinder achieves this), dating websites, AirBnb, HomeAway, and an exponentially growing number of other brilliant ideas from entrepreneurial minds.

It’s this concept of what I’ll refer to as reputation markets. Each of these takes the wants, needs,  and preferences of consumers, just like me and you, into account, and transforms not only the way we find businesses and people, but the way we perform transactions. And they’re drastically reducing prices for these things we want.

Not only do these lower transaction costs, though. These applications also provide a means of feedback. They put accountability back into the hands of consumers and service providers alike. It removes the need for “regulations that keep us safe.” It eliminates the middle man. It puts people with people. It’s the Peer-2-Peer revolution, and it’s dramatically transforming every facet of our lives–if we’ll only embrace it.

So, what does this revolution mean for us? It means that with every new advancement, we achieve a new means for finding whatever it is for which we are searching.

It means when I’m landing in an unfamiliar city, I don’t have to jump in a car with a cabbie about whom I know nothing. With the press of a button, I can signal my desire for a ride, while simultaneously checking out the reputation of the driver. And then I can punch another button and find a cool place to eat I’ve never been, and the driver can drop me off. And hell, if I have one too many drinks (and would prefer not to risk a DUI), I can just hit the same button again  to make it home safely.

It means when I’m doing an artistic portrait photoshoot and I need to find a lens that I don’t own, with the touch of a button and a quick charge to my VISA, I can summon this lens from outer space via the magic of entrepreneurial innovation and the stork will drop it off on my front porch the next day.

It means when I’m taking a vacation with my family but don’t want to stay at some cookie-cutter hotel or resort, I can search for someone’s vacation home and rent it directly from them for the amount of time I’d like to stay.

It means if I need something done around my house that I don’t know how to do or simply don’t have the time to do, at the click of a button, someone other people have trusted into their homes before me will show up and trade me money to accomplish the task at hand.

It means you can find someone with similar interests and connect.

It means you can find something to buy or rent. It means, too, that you can sell your stuff for cash. Instantaneously.

It means that we don’t need someone standing between us at every transaction. It means we don’t need anyone to keep us safe. We’ve got 2 billion friends out there watching our back, using their experiences to rate services at every turn–and this number is growing each day as entrepreneurs find creative ways to provide affordable internet worldwide.

It means you can have your life back and your money back. And it’s all right down the pipeline. So, pull out your Smart phone, visit the app store, and see what brilliant ideas entrepreneurs are cooking up to give you back your lives and hard-earned cash.

P.S.– As I spend more time in-depth researching these ideas, I will provide more data and scholarly resources to assess the way these innovations change human interactions in a positive way. (At least, that’s what I hope to prove).