What Is the Ultimate Significance of eBay?

The Perfect Store

What Is the Ultimate Significance of eBay?

The Perfect Store

What Is the Ultimate Significance of eBay?
New books dissected over email.
Aug. 21 2002 1:45 PM

The Perfect Store

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Hail fellows, well met!

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As to Andrew C.'s surprise about the trusting nature of people, economic psychology experiments are clear that people are initially trusting and continue to be as long as their trust is returned. In any case, I am more astonished by the fact that people will have sexual congress with relative strangers than that they exchange Swedish fluting irons.

One thing that we haven't talked about is the ultimate significance of eBay. Cohen takes a very narrow, journalistic approach filled with observations and only a few, generally hagiographic interpretations. The BIG question that he only elliptically approaches: Is eBay a mega-phenomenon that will eventually be an integral part of all of our lives and the history of the world (as Cohen almost manages to suggest), or is it just a great big flea market online?

My answer to that question would start with a quote from Pierre that gives a sense of the eBaysian mind-set: "I wanted to do something different, to give the individual the power to be a producer as well as a consumer." Well, Pierre, the eBay sellers aren't producing anything at all but serving only as distributors of mostly second-hand (or nth-hand) goods. Churning used goods is important and useful, but most commerce (and most people) will always be (or buy) new goods sold through established distributors.

It's illuminating that the auction is becoming a smaller share of the action, as more goods at eBay are sold through "Buy It Now" and Half.com at fixed prices to people who want the goods without the games. eBay's growth (at least as I've plotted its last few quarters) is slowing dramatically. eBay's advantages in fixed-price sales are much more subtle, and I think that Wal-Mart and even Amazon are probably safe for now.

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Cohen's most reverent and last tale of the book relates how eBay management and its charitable foundation are assisting weavers in a small village in Guatemala to get on eBay. The upshot: They will be able to bypass the rapacious middlemen and sell directly to First World buyers. This ultimate disintermediation will presumably jump-start Third World development and result in a One World community of Internet *hugs* and ¡holas! If this is the future of eBay, then the other issues of fraud, pornography, and addiction are at best footnotes to the real story.

Alas, much as I'd like to believe it, this seems unlikely to happen. Let's start, for instance, with the profound difficulty of First and Third World people establishing a community while making one-off purchases. Our discussion this week has shown the issues involved with forging a community within an advanced Internet culture, or the significant differences even between the United States, England, France, and Germany eBay cultures—melding Scarsdale matrons with Guatemalan villagers would be more of a stretch.

Even neglecting social issues, unintended economic effects are likely to be important here. If the First World were to develop a taste for Third World products, the supply would increase, possibly driving down already low prices. Or the village weavers would possibly get co-opted by small manufacturing enterprises that drive them out of business or into servitude. (I think of the match-maker and rug-maker children in India and Pakistan.) While eBay has a natural distrust of middlemen, up till now these intermediaries have presumably been the primary sources of income and promise for these village weavers, large markups or not; the middlemen in any case are more likely to get online than the weavers themselves. I am anything but a Luddite, and eBay and the Internet may have some role to play in Third World development, but Cohen's hushed tones are unwarranted.

Finally, my Underbrother Aaron, an underwear expert in his own right, pointed out to me that ex-President Clinton infamously took a deduction on his taxes for used underwear donated to the Salvation Army. He wondered whether what seemed at the time to be sleazy was visionary instead. I wonder what category used underwear with presidential seals would be listed under.

To continue Andrew C.'s nod to Hobbes, the extended quote includes the adjectives "solitary" and "poor," and the end of our discussion will certainly leave me more solitary and poorer in community.

Thanks to you both,
David