
A Wave of Fear in American Commerce - howard941
https://mattstoller.substack.com/p/the-wave-of-terror-in-american-commerce
======
sgt101
There's kinda a flip side of this in modern life too - which is the getting
away with murder that goes on in commerce and other organisations. By this I
mean an executive or engineer can do something exploitative and unprofessional
- load a company with debt, release a tranche of necessary employees, increase
a dividend... or for engineers, make false claims about business cases,
delivery schedules or technical capabilities. There are no consequences
(provided the timing is done cleverly), a bubble of sucess is created - the
act is lorded or claimed on a CV and the person moves on and up the ladder.
When the company gets into trouble or the project catastrophically failes the
exited individual is rarely confronted with this, and if they are they simply
say "it was great when I left - I don't know what went wrong but they really
blew it!" There is no community of disapproval, and there is no genuine
mechanism of reputataion management.

~~~
mlthoughts2018
This seems like a place where you should apply Hanlon’s Razor: don’t assume
malice when incompetence will suffice.

Executives and senior domain experts make a lot of stupid decisions borne out
of overconfidence and attempts to do flashy things for bonuses or promotions.

It’s extremely tenuous and would require huge evidence to argue this sort of
thing is malicious or criminally negligent, as opposed to just someone
sincerely doing their job in a way that leads to a mistake or is punished by
market trends or competitor advancements or whatever.

~~~
chillacy
Even if it’s incompetence you can’t get better if you never realize you made a
mistake.

~~~
mlthoughts2018
Sure, but a lot of the folks making these mistakes inside of companies also
don’t care about getting better, just getting paid.

If you wanted every such type of mistake to be susceptible to crimimal or
civil litigation, boy, you’d be legislating morality for one (deciding exactly
when someone can value money or believe a certain risk is worthwhile), and
have almost no way to enforce it (how can you prove a sincere mistake I
“learned from” vs negligence I never cared about, without something like
smoking gun email admissions or something?), and further no competent people
will agree to do these jobs if they feel they cannot have a perfectly healthy
and normal process of making mistakes without great risk someone will try to
turn it into a lawsuit or criminal charges?

You might say these are all matters of degree, and you just use targeted
legislation to make it punishable according to specific guidelines, but it’s
just a giant slippery slope, and very susceptible to political subversion for
people who have the same malicious intent only operating on the regulatory or
legislative side rather than in private firms.

It’s a huge moral hazard problem, but one that can really only be solved by
rare, upstanding management, and hardly ever by litigation.

~~~
chillacy
> making these mistakes inside of companies also don’t care about getting
> better, just getting paid.

I guess that's the problem, but at least for people who are competent today,
they got there by failing and learning.

> If you wanted every such type of mistake to be susceptible to crimimal or
> civil litigation

No I don't, that's bad for all the reasons you said.

Rather I'm all for letting people deal with the consequences of their
decisions so that they learn over time. That's a structural change. Some
examples:

* Engineers who write the code should also test/debug it

* UX designers should regularly see new users trying their products

I haven't thought too much of the case for CEOs but I imagine it's similar. At
least in the startup world CEOs with a failed company under their belt are
more valued than those with no experience.

------
mdorazio
This is an interesting piece. The author tackles a few different kinds of
fears, starting with fear of Libra destroying normal consumer transaction
paths and then looks at fear of entire small and medium sized businesses
getting straight up destroyed by moves from giant players like Amazon.

I think the author is pretty spot-on in the implicit conclusion that this is
the natural result of increasingly centralized businesses running pseudo-
monopolies in key industries.

~~~
jdreyfuss
Definitely thought provoking. I hadn't thought much about how the effects of
the fear of retribution reverberate in how people and companies interact with
governments, employers, and suppliers.

I feel like this is usually discussed on the micro-level (e.g. an employee's
fear of whistleblowing on her boss), but not so much on the macro-level.

~~~
sroussey
Like people saying bad things about the government in CN and then able to ride
a train in said country?

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anm89
I can't put a finger on it but something feels sort of dishonest about this
article to me.

He seems to be applying the concept of fear in an inconsistent manner that
ends up just reducing down to “things are happening I don't like" and then
noting that people experienced the normal human emotion of fear relating to
that list.

Like is manufacturers being worried about about being undercut by a competitor
for a big contract a wave of terror? As unpleasant as I could imagine that is
for the small supplier, that's a pretty healthy way for that transaction to
work.

It just seems like fear is another way of saying, not everyone gets what they
want and this article is simply a list of things this guy doesn't like. It's
not even a bad list it just doesn't really say much of anything.

~~~
ethbro
The author's point is about fear corroding democracy by limiting public action
and information.

"I am not going to let you sell your widget through Tamazon" is unfortunate
and potentially crippling for the supplier, but as you've pointed out that's
business.

"I am not going to let you sell your widget through Tamazon... _in the event
you make disparaging remarks about Tamazon in any public forum or divulge any
information about our agreements_ " is very different.

In the later case, the last mile is threatening to retaliate in the event the
supplier does anything they don't like.

Which, as a supplier, you rightly wonder "What can I do to avoid getting on
Tamazon's naughty list?" To which Tamazon replies with a wink and a smile,
"Just be careful what you say and to who, and I'm sure it won't come to that."

Absent legal protections and methods of redress, this dynamic is likely to
exist in any market where the aggregator captures a sizable customer share.
The size disparity is simply too great.

~~~
anm89
Yeah, for me I personally agreed with his points when they were relating to
how much power some corporate giants have to instill fear.

But then the union bit and the anecdote about bidding the contract just seemed
totally off topic except for the fact that someone felt scared at some point.

I honestly don't hate the article but it ended up feeling like he was fishing
for some story where someone was scared.

~~~
TheOtherHobbes
Same class of interaction - and it highlights the extent to which monopolies
are a distortion of _political_ power and freedom of action.

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chatmasta
Interesting article. I wish he touched on another point, which is the
political monoculture in tech and media. The left has a vice grip on the
discourse in these industries. Many conservatives have a justified fear of
speaking publicly, worried they’ll be labeled a racist/nazi and have trouble
getting jobs or making sales. I’m not sure what the downstream effects of this
will be, but the culture of ostracizing wrongthink is real, and a worrying
trend.

~~~
howlingfantods
How does the left has a vice grip on discourse in media? The most watched
cable news network is conservative. The largest operator of local tv is
conservative.

~~~
ethbro
I believe parent's point might be a bit more "tech / media on the US _west
coast_ is a liberal monoculture." Which seems objectively supported.

Without wading into the weeds, one casualty of these American political times
is the loss of _intellectual_ conservatism as a tenable public position.

We are all made greater having our convinctions tested with honest debate, and
lesser for the lack of it.

~~~
pjc50
Intellectual conservativism was destroyed from the right. Incoherent anger
politics turned out to be far more effective at getting the voters.

Edit: meanwhile in Oregon the conservatives have fled to break a quorum rule
and are issuing press releases with armed anti-government groups. As the
Maoists discovered, who needs intellectuals when you have guns and slogans?

~~~
avmich
Intellectual conservatism - at least under certain definition - is tricky to
defend. When there is a choice between "progress" \- moving forward - and
"stability" \- avoiding changes - staying implies perceived perfection, which
doesn't seem particularly intellectual. Progress doesn't just mean "change by
all means", but conservation does mean "reject change", otherwise there would
be no difference to talk about.

~~~
antepodius
You can be conservative in some directions and progressive in others.

~~~
Can_Not
In some ways conservatism can mean "let's go, but not go too fast" but
recently it's been more of an ideology of regression.

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negamax
If Libra can give people an option of a stable currency and chance against bad
central bank (Zimbabwe, Venezuela etc) than may be it's not that bad of a
thing. It's backed by basket of currencies and over a long period will face
inflationary and bad monetary issues but it will still be a leg up over many
many currencies.

Author has not lived into high inflation market or lack awareness of people
who suffer under these everyday. If Libra can free a multitude from this
menace, we should support it indeed.

~~~
robertAngst
>Libra can give people an option of a stable currency and chance against bad
central bank

In the future we will have strong criticisms of the US Dollar. It historically
has not been stable over long periods of time. However, the US government has
nearly forced every country to doing business in USD.

This is great for ease of business, but given how low interest rates are, I
expect a historic inflation of USD in my lifetime.

Given its impossible to hire someone at Minimum Wage(2019), I believe we have
inflation that is not being recorded with the US federal reserve. 2%/yr
seems... fake.

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svd4anything
Facebook’s Libra seems to have grabbed all the attention of regulators,
legislators, and pundits, which could be seen an absolutely fabulous gift to
wider cryptocurrency world as now it’s Facebook’s problem to deal with all of
them, deflecting scrutiny away from real cryptocurrencies and to this
corporate reserve/ETF currency something or other.

~~~
amelius
That's not their only problem. It's very likely that Apple will forbid in-app
cryptocurrencies, and force users to use Apple Pay instead.

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riffic
Hey Matt Stoller, you should be familiar with ISO 8601.

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phkahler
I found irony in this:

"I’ve heard from venture capitalists frightened to talk for fear they can’t
sell portfolio companies to big tech"

So you want to profit from selling out to big tech, but you're afraid of them
because they've become so big and powerful - in part by buying other
companies...

~~~
notfromhere
VCs are basically suppliers to these guys.

~~~
PakG1
In this analogy, are the founders and employees the hired workforce, the raw
materials, or other? Just joking not really joking. ;)

~~~
sgt101
Yeah - there are three exits :

\- IPO : good luck

\- Sale on revenue and clients : boring, competitive and comparably low return
for founders. Invest 10-15 years at comparatively low compensation with high
risk of total failure , and huge opportunity cost.

\- Sale on IP and team : quick, high return.

Founders often build category 2 opportunites without knowing, and are removed
after a short time, with no compensation and several years of their lives
missing!

------
provolone
Article sounds self-contradictory.

"...could threaten the ability of emerging market governments to control their
monetary supply, the local means of exchange, and, in some cases, their
ability to impose capital controls."

Read 'emerging' as 'failed centrally planned economy'. The self-described
anti-monopolist is defending an failed state monopoly.

"After many mistakes, we have learnt that we want a central bank to act to
increase or decrease the monetary supply in moments of contraction or
expansion."

Yet he is railing against monopolies fueled by artificially cheap credit and
stock buy backs.

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deogeo
Why is no-one making the "free speech doesn't mean freedom from consequences"
argument in response to small(er) businesses being afraid to criticize
oligopolies?

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no1youknowz
Some issues with this article:

> The sponsors are right that a liquid, stable currency would be attractive to
> many in emerging markets. So attractive, in fact, that if enough people
> trade out of their local currencies, they could threaten the ability of
> emerging market governments to control their monetary supply, the local
> means of exchange, and, in some cases, their ability to impose capital
> controls.

Easy to counter. The government can declare that Libra is illegal and stop its
banks from converting Libra into Fiat. Sure you could probably get around it
by a P2P marketplace.

Countries that have done this are: China, Russia, Vietnam and others [0].

> Unless regulators jump in quickly, these for-profit companies will set the
> standards for identity verification, at least in the short run, as well as
> defining the rules and enforcement around the privacy of transactions and
> what to do in case of theft.”

No there are already defined and in place rules for banks to adhere too.
Companies cannot just set these standards. They'll be fined until they are
told by the regulators to close shop.

> “That’s sort of the most dangerous consequence of this kind of concentration
> is the ability to exclude rivals, put them out of business, diminish
> innovation, diminish entrepreneurship, diminish choices for consumers,” he
> said.

This is one thing that regulators will look at with regards to Libra. There's
just one wallet. Who are the competitors. In the case of banking there are
many competitors. If Chase closes your account, you can move over to TD Bank.
But if say Stripe closes your account because they take umbrage with you, does
your wallet also get closed down? What happens also with your Libra coins?
These questions must be answered in precise detail for consumer protections
and this right there, consumer protections determines the progress of Libra.

I do think Libra is a good idea. But a few things must be brought up to the
fore.

\- FB must open source their tech. Have other companies [or even groups of
people once they are certified] run other groups of nodes. If these
conglomerates of Stripe, Paypal, etc which have a history of banning people
just because. Have the built-in ability that someone can move over to another
provider.

\- Have FB ensure that standards are met in terms of banking regulations and
fine heavily if they don't. Make them feel the pain. Have some teeth when
fining them.

[0]:
[https://www.investopedia.com/articles/forex/041515/countries...](https://www.investopedia.com/articles/forex/041515/countries-
where-bitcoin-legal-illegal.asp)

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darknesszy
It makes one wonder if the Chinese government has a point. In the modern
world, perhaps it’s not the government that should be feared, but the
conglomerate corporations. A centralised government could have more teeth to
compete with. Just an opinion...let’s keep it civil

~~~
gbhn
Are you suggesting the Chinese market is more competitive due to the
government being big enough that companies in the market have to exist in an
impartial regime? This isn't the impression I get from many other sources.

~~~
germinalphrase
I don’t agree with respect to China - but perhaps the OP is suggesting that
it’s like having an impartial referee.

~~~
bilbo0s
I don't think _any_ government is impartial, but you're right. That seems like
it's the idea. In theory, it's much better to have the government be the big
man on campus. You really don't want to live in a place where corporations are
more powerful than the government.

~~~
inflatableDodo
This relates well with the gang model of politics, where the government is
merely the biggest gang. It is an interesting way of looking at political
systems because it encompasses such a range of scales.

~~~
Can_Not
Just make the biggest gang a democracy.

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itsaidpens
Man! The cyberpunk dystopia is here; it just doesn’t look as cool as I wanted
it to.

