Doc Searls: The Bottom Line Isn’t Everything


From DOC SEARLS
Linux Journal

Is there something new that [computer] open source development methods and values can bring to the economy? How about something old?

I think the answer may come from the developing world, where pre-industrial methods and values persist and offer some helpful models and lessons for a networked world that’s less post-industrial than industrial in a new and less impersonal way.

This began to become apparent to me a few years ago I had a Socratic exchange with a Nigerian pastor named Sayo, whom I was lucky to find sitting next to me on a long airplane trip. We were both on speaking junkets. He was coming from an event related to his latest work: translating the Bible to Yoruba, one of the eight languages he spoke. I was on my way to give a talk about The Cluetrain Manifesto, a book I co-authored.

My main contribution to Cluetrain was a chapter called “Markets are conversations. Sayo asked me what we meant by that. After hearing my answer, he acknowledged that our observations were astute, but also incomplete. Something more was going on in markets than just transactions and conversations, he said. What was it?

I said I didn’t know. Here is the dialogue that followed, as close to verbatim as I can recall it…

“Pretend this is a garment”, Sayo said, picking up one of those blue airplane pillows. “Let’s say you see it for sale in a public market in my country, and you are interested in buying it. What is your first question to the seller?”

“What does it cost?” I said.

“Yes”, he answered. “You would ask that. Let’s say he says, ‘Fifty dollars’. What happens next?”

“If I want the garment, I bargain with him until we reach an agreeable price.”

“Good. Now let’s say you know something about textiles. And the two of you get into a long conversation where both of you learn much from each other. You learn about the origin of the garment, the yarn used, the dyes, the name of the artist, and so on. He learns about how fabric is made in your country, how distribution works, and so on. In the course of this you get to know each other. What happens to the price?”

“Maybe I want to pay him more and he wants to charge me less”.

“Yes. And why is that?”

“I’m not sure.”

“You now have a relationship”.

He went on to point out that, in his country, and in much of what we call the developing world, relationship is of paramount importance in public markets. Transaction still matters, of course. So does conversation. But the biggest wedge in the social pie of the public marketplace is relationship. Prices less set than found, and the context for finding prices is both conversation and relationship. In many cases, relationship is the primary concern, not price. The bottom line is not everything.

Transaction rules the Industrialized world. Here prices are set by those who control the manufacturing, distribution and retail systems. Customers do have an influence on prices, but only in the form of aggregate demand. The rates at which they buy or don’t buy something determines what price the “market” will bear — in a system where “market” means aggregated demand, manifested in prices paid and quantities sold. Here the whole economic system is viewed mostly through the prism of price, which is seen as the outcome of tug between supply and demand.

Price still matters in the developing world, Sayo said, but relationship matters more. It’s a higher context with a higher set of values, many of which are trivialized or made invisible when viewed through the prism of price. Relationship is not reducible to price, even though it may influence price. Families and friends don’t put prices on their relationships. (At least not consciously, and only at the risk of cheapening or losing a relationship.) Love, the most giving force in any relationship, is not about exchanging. It is not fungible. You don’t expect a payback or a rate of return on the love you give your child, your wife or husband, your friends.

Even in the industrialized world, relationship has an enormous bearing on the way markets work, Sayo said. But it is poorly understood in the developed world, where so much “comes down to the bottom line”.
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