Тег: platform economy

How will prostitution work under ancap?

Digit

I thought it would be interesting to discuss this issue specifically after a couple of posts about a hypothetical cellular stimulator that allows one to gain serious short-term advantages at the cost of premature wear and tear on the body. Professional prostitution in a free market is exactly the same trade-off. Intensive exploitation of one’s body while it is young and beautiful, and after that, it is a personal matter how to dispose of the fruits of this exploitation: one can squander it, invest it successfully, or invest it unsuccessfully.

The fewer the barriers to entry into the market, the higher the competition, the lower the prices, and the lower the chances of exchanging youth and beauty for a sufficiently serious income that such an exchange would make sense at all. Therefore, of course, prostitution as a mass profession under ancap is unlikely. It is far more likely that it will be used as a side job while searching for more suitable permanent employment, including during the period of study. Roughly for the same reasons people go work as couriers, taxi drivers, or waiters.

Naturally, as is the case now, various activists will speak in defense of these low-paid unskilled service workers, with varying degrees of clumsiness. But, since under ancap they will not have options like “achieving a ban on the activities of aggregator platforms” or “achieving the criminalization of the purchase of services,” this activism will be reduced either to demands for the reduction of platform commissions or to campaigns such as “I always pay service workers good tips, do as I do.”

As is well known, the activity of taxi aggregators currently faces active opposition from professional licensed taxi drivers. Under ancap, this activity is not licensed, and professional licensed taxi drivers simply disappear, so competition for freelance taxi drivers using various aggregators is provided only by those who prefer to be behind the wheel themselves, including those who give friends rides for free. The same applies to prostitution—permanent marriage unions and ordinary friendly flings will not go anywhere; both have their costs, but direct payment is usually not discussed here. However, somewhere at the junction between full-fledged prostitution and completely free sex, work for donations may well be located: a person may be shy about stating a fixed price but clearly makes it known that they would be glad for a voluntary reward.

This is exactly how I create my texts. They will appear for free because I enjoy the creative process, but I will give preference to a question with a donation, even if it is not as interesting as a free one—because I need money, and because the fact of payment creates a moral obligation. Moreover, this provides a simple ranking of those for whom my answer is more important and those for whom it is less so. Roughly the same mechanism will operate within ancap and with donations for sex: if one party basically enjoys the process but does not want to make a hobby a profession, and the other represents an undefined circle of people, then instead of a long and careful search for an exclusive partner, such a donation scheme is quite likely.

As a reminder, it is better to ask questions here, and the ways to donate are listed here.

How much did they donate? Right, the get-together with girlfriends is canceled, I’m scheduling a meeting.

Consumer Serfdom

Currently, many companies, such as Apple, Tesla, and John Deere, design their products so that in the event of a breakdown, the user cannot repair them, even if they know how. For example, a farmer could buy a certain part for a John Deere tractor for $100 and would have no trouble replacing it. However, the software installed on the tractor will prevent such a procedure, and the farmer will either have to pay $5,000 for the manufacturer’s service or install pirated software. In essence, the farmer does not own the tractor but merely takes it on an indefinite lease.
How does libertarianism view such a policy?

themouse1_ from Bulbaland

The examples provided are particular cases of the platform economy. Similarly, an app developer is forced to adapt to the requirements of the company producing the operating system for which the app is developed. Likewise, a hired worker on a plantation in Brazil a century ago was obliged to buy groceries only from the shop run by the plantation owner, and in Soviet Russia, a collective farmer could only redeem his work-days, again, at a specific village store.

In short, these are not entirely market cases. Can such quasi-monopolistic situations arise in a completely free economy? Yes, but they are unstable. The emergence of a profit source significantly higher than the market average leads to others wanting to imitate such success, and soon competition levels the margin: platform owners, competing for the customer, begin to spend more on maintaining their loyalty.

Libertarianism proposes removing politics from the economy. Will this make John Deere more reasonable? Not immediately. Simply put, they will no longer have the ability to sue the farmer for installing pirated software. Therefore, wanting their authorized service to not go completely under, they will lower repair prices. Moreover, some Japanese or Belarusian tractors will start being imported duty-free, so the consumer will have a real choice and will be able to acquire the solution that maximizes their profit from operating the tractor.

Similarly, without the ability to force a worker to eat expensive slop in the factory canteen, without the ability to forbid installing apps from outside the app store on a smartphone, without the ability to punish a kiosk owner for moving under the protection of another security firm—the owners of all these platforms will find that racketeering practices work worse and worse, and they must get used to acting within the framework of fair competition. It’s fine, they’ll get used to it.

A good tractor, what else

Could you please analyze this video?

Your friendly neighbor from LPR

Thank you, very good channel, I’ve subscribed. Now about the video.

In effect, it was convincingly demonstrated to us, with illustrations, that modern corporations differ little from states, and vice versa. Not every business becomes a mega-corporation capable of effective expansion, but rather the one that performs the function of a platform for other businesses. The costs of scaling a platform business are relatively low, and profit primarily depends on the network effect. Therefore, old-style corporations, like Gazprom for example, will not move the needle in the new global market, but Yandex, for instance, is a serious player with prospects for further growth, especially if it manages to devour the Russian Federation that is getting in its way.

But here is the thing. There are relatively few actual employees in such corporations. However, the development of platforms is a factor that contributes to the success of small businesses, or even freelancers, who earn their living on these very platforms. With every new platform, there are more and more people earning money on them. The platforms themselves have far more, of course, but why should we care?

No, we shouldn’t care, as long as the game looks fair. The video describes several cases where the game was played ruthlessly, while the players were in significantly different weight categories. Corporations, becoming comparable to states in power, can well afford methods that are more appropriate for criminal gangs. Should we expect the good old territorial gangster to take a swing at the young, arrogant, and extraterritorial one? Should we fear the new gangster more than the old one?

Anything is possible. One can easily imagine evil corporations in a free market, as Hollywood has depicted them in abundance. But there is still a certain air of theatricality surrounding such companies. It is much easier to imagine a corporation merged with a classic state in symbiosis, using political methods to eliminate rivals when brute force is more convenient, and economic power when a softer approach is better. We see such corporations already; they eat US presidents for breakfast. But we also see the power of civil opposition to dirty tricks, as exemplified by the recent GameStop story.

Following the author of the video, I shrug my shoulders many times in this post because we see that the rules are changing right before our eyes, and it is not entirely clear exactly how “the market” will resolve it. But for now, I can make a cautious assumption that the market will push states further aside so they don’t interfere, and the owners of various platforms, as the market saturates, will fidget less and value the predictability of rules more. And for this, they will have to follow them themselves. By rules, I don’t mean what the platform owner demands from their users, but what the platform owners have agreed upon among themselves. And with the emergence of law, conflicts are resolved much more easily and cause much less damage.

And again about the monopoly

This question was inspired by an article on Habr and the subsequent comments. The gist is: there is Yandex — they have a search engine. In the search engine, they promote their other products, thereby limiting competition. How correct is this? In the article and comments themselves, there are quite a few arguments IN FAVOR of antitrust legislation. What do you think?

анонимный вопрос

In connection with this question, I would like to recommend Vyacheslav Kostrov’s lecture “Platform Economy and the Hayekian Market Process,” delivered by him at the “Capitalism and Freedom” conference in 2019.

The lecture is very rambling and contains no conclusions, but it places the question you are asking into a broader frame — it considers not a specific case of using a dominant market position, but the principles of the functioning of the platform economy as such.

Let’s consider a platform such as a search engine. By design, it is a service that searches the web for mentions of information that interests the user, based on certain input data provided by the user. After attracting a sufficiently large number of users with the convenience of the service and the quality of the search, the owner of the search engine may raise the question of monetizing the platform.

The most direct way to monetize a service in its original form is through customer donations. This method is implemented by Wikipedia, and it allows it to focus its efforts on the completeness of content and the neatness of its presentation, that is, on improving exactly those consumer qualities of the supplied product for which the user came to the platform. Of course, Wikipedia is not a search engine in the pure sense, but theoretically, nothing prevents the use of the same model for classic search engines. My channel practices this method of monetization.

A search engine could also sell analytics on user search queries to interested clients. This is also a fairly “herbivorous” way to make money and, as in the case of Wiki, is unlikely to bring in mega-bucks. My channel also practices this method of monetization in a sense — these are answers to questions with attached donations and commissioned articles.

Next come the methods of earning money whose application degrades the product itself.

First, there is advertising. In addition to providing the user with what they are searching for, the search engine slips into the results something that the advertiser would like them to be introduced to. Thus, for the user, the product becomes worse due to the lower relevance of the results, but the platform owner gets a profit. I no longer practice this method, and if a request to sell advertising on the channel appears, I try to switch the requester to one of the monetization methods mentioned above.

And finally, the owners of the search engine may start earning not only from others’ advertising, but also lure the user to their own subsidiary services that have no direct relation to the search engine. This is exactly what we see in the article under discussion. As a result of such a policy, search results become even less relevant for the user, and they start looking toward DuckDuckGo, but before the user has completely fled the search engine, the subsidiary platforms, thanks to the inertia of human thinking, will manage to build their own customer base. I do not practice this either, but I can well imagine a blogger periodically advertising some own business on their channel.

As a result of the development of such a mega-platform, after some time it turns out that some businesses under the general brand are more profitable, others less, and some are completely loss-making. However, making decisions about optimizing the asset structure is quite difficult because they influence each other. The platform flounders, making increasingly less balanced decisions, until it finally goes belly up. Just relatively recently, one such behemoth of the platform economy went bankrupt — Cook’s outfit, which existed for over a century and a half. It was the first to implement the package principle for organizing tourist trips, thanks to which it quickly became a global hegemon in the tourism industry, and it ultimately burned out on exactly that: too many of its assets, instead of reacting to market stimuli, were engaged in serving other subsidiary companies of the holding. Its own airlines, its own hotels, its own tour operators — it would seem, here is a monopoly, just collect the rent — but no, it failed to keep up with progress and lost to a conditional Booking.com, a next-generation platform business.

Exactly the same fate will befall Yandex, without any antitrust authorities.