The problem is, the well-off people don't care about those savings
anyway, so the market for B is really rather limited. In fact, A may
find it more valuable being able to brag to his friends about how he
buys all of his games (say) at full price anyway. Humans have always
liked to flaunt their wealth when they have it. Admitting that you get
your stuff cheaper by having your neighbour collect coupons or
whatever may be socially embarrassing.
There'll always be the ability to sell gilt-plated versions to the
superrich who seek to buy status as well as the actual product or
service. I'm not denying this.
Curiously, a blog I routinely monitor, Architectures of Control
(
http://architectures.danlockton.co.uk) recently linked to an article
on Slate (
http://www.slate.com/id/2133754) that discusses a closely
related concept and notes:
"A firm in a perfectly competitive market would suffer if it sabotaged
its cheapest products because rivals would jump at the opportunity to
steal alienated customers. Starbucks, with its coffee supremacy, can
afford this kind of price discrimination, thanks to loyal, or just
plain lazy, customers."
Yep -- luxury products are effectively exempt. And *Microsoft* of all
possible sources appears to agree with us on the behavior of perfectly
competitive markets (Microsoft knows its stuff; it just doesn't *like*
perfectly competitive markets. It knows it can't move into the luxury-
OS space and related spaces because that ground is firmly held by
Apple already. It's still smarting from the Zune fiasco in which they
got their lunch fed to them by a horde of angry iPods!)
Now perhaps you have some ideas about those "normal rates of return".
Is it just a matter of twisting the interest-rates knob? Even the
existence of a central such knob is an indication of collusion,
specifically in the lending sector, it seems.
The sketchy outline in my crystal ball currently looks like this:
2010: the IP system is imploding. Increasing foreign non-cooperation
with US-based laws (India is rejecting some questionable drug patents
as we speak; coverage at
http://www.againstmonopoly.org and now also
Techdirt; also the rising fortunes of the Pirate Party in Europe and
similar developments), mass civil disobedience, defacto
unenforceability against noncommercial copying, and so forth render
copyrights and patents increasingly meaningless, and, importantly,
reduce their perceived value to corporations. DRM-like enforcement
regimes and private enforcement through mercenary-type methods abroad
have been tried a whole bunch and proven to be expensive failures. The
main use of DRM to turn a profit proves to be in copyright abuse vs.
legitimate customers, not anti-piracy usage, making legitimate
customers have to pay over the odds or otherwise enforce additional
restrictions that are unsupported by plain copyright law. That too has
failed as DRM now provokes rapid and violent revolt when applied in
any commodity markets. Vista has been at best a dubious half-assed
"success" for MS; Windows XP still has substantial market share and
Linux, with Ubuntu leading the charge, has been steadily encroaching
on the desktop market. With Linux climbing up from the market's low
end and Apple creeping down from the high end with more affordable
hardware and, perhaps, MacOS products unencumbered by hardware-
authenticating DRM, Microsoft is feeling the pinch and it is
increasingly viewed in the mainstream as having had its day in the
sun. Google is on slightly shakier ground as attempts to push paid
"software as a service" fail, privacy concerns dog its search and any
"software as a service" offerings increasingly, antitrust regulators
are increasingly scrutinizing and pestering it, and it has at least
one disaster involving acquiring a social-networking company at some
point. Worst is the beginning of a freenet-like DHT-derived
decentralized web successor, its expansion slow so far but showing
signs of an exponentiating trend. Fast networks, cheap storage, rent-a-
datacenter capabilities offered by Sun and soon by others, and p2p
based systems all prove to be agile in the hands of new-era companies
and more ad-hoc organizations whose business models are radically
unlike the old real-world, scarcity-minded models that currently still
dominate online and off. They are also agile at dodging the
increasingly thick swarm of incoming DDoS and hack-attack bullets,
while traditional ebusinesses are caught flat-footed with vulnerable
central servers at fixed IP addresses and fixed physical network
sites. Online on-demand services, with flat fees or even free, are
beginning to cut into radio and TV audiences noticeably. Ad-blocking
software is chewing up the online ad markets except for sponsored
search results, auction sites, and classifieds, and making unwanted
ads in the new on-demand media untenable. Costs are covered by making
more and more on-demand media virally distributed rather than
centrally. Youtube peaks and begins to decline as p2p based video
swapping grows, further paining Google. Profits are made by product
placements in video and by other methods, such as Amazon-type business
models involving physical goods. High quality video productions are
increasingly created for mere thousands of dollars, and the diversity
of sources is exponentiating, both geographically and in terms of who
makes stuff.
2015: The entire advertising sector is going into freefall and Big
Pharma and Big Entertainment are starting to quickly slide. Copyright
and patent laws remain on the books but are increasingly meaningless.
Enforcement schemes are still sometimes tried, and quickly hacked.
Physical-world issues, chiefly environmental and demographic-shift-
related, are further shaking up the traditional model. The old economy
is showing increasing strain and teetering on the brink of collapse.
Mad policies are enacted to prop it up, including fiddling with all
kinds of knobs and macroeconomic policies. Some countries are more
agile; China is one of them. New economic methods and systems,
increasingly powered and automated by computers and networks and with
vanishingly tiny transaction costs, are outcompeting old ones. New
forms of currency, some purely virtual, are exchanging against the
dollar and other old currencies, and smarter folk in the US are
quietly moving lots of their assets into the new economy and new
currencies. First geeks of moderate means and the odd wealthy geek;
then increasingly regular non-geeky rich folk. These wealth transfers
out of the old economy accelerate its slide. Traditional media is a
withered thing clung to by nostalgic old folks and the most desperate
reactionary sorts of conservative. This includes the so-called
"liberals" of the old Hollywood entertainment complex. People get such
a diverse variety of perspectives from various unofficial sources that
the fog of bullshit that has kept politics running and the status quo
maintained through the latter part of the twentieth and first decade
of the 21st is gone. The decentralized new media have killed it, and
changed the way leaders are elected and things run as surely as
television did before it, and radio and newspapers before that. (Hint:
Radio and newspapers made liberal market democracies stabler than
feudal societies. Television made the last sixty or so years the way
they were, politics-wise.) The final last-gasp attempts to enforce the
old order in some countries have failed, as agile ad-hoc wireless
broadband networks evade any and all attempts at government regulation
and corporate control. The most successful attacks are virus-based,
and the networks have enough internal diversity and robustness to
survive even these. Most other types of attack don't even cause any
damage; like filesharer-suing now, they take a single node offline and
throw some poor sap in jail or bankrupt him, but have no discernible
effect on the whole system. Stopping the onrushing future by such
methods is like trying to stop a tidal wave by arresting the water
molecules one by one and trying them in criminal court; the courthouse
is inundated before a few trials have been completed. Viruses and
large-scale physical violence are like firing cannon into the wave --
they actually make noticeable and perhaps-satisfying splashes before
those deploying the weapons get swept under.
by 2020: The tipping point is reached, probably triggered by wealth
transfers into the new forms of currency and panicked bail-outs of
failing old-model businesses by corporate elites. The old economy
collapses with shocking abruptness; every major pre-existing stock
market is wiped out in a day, the DOW starting one weekday at maybe
15,000 and valued at pennies by the closing bell, and so forth. So
much productivity is centered on the new economy that the disruption
isn't as severe as one might imagine, though it's by no means mild.
The political structure of the US is left in a shambles, however, and
the US begins to splinter into independent states. Those slowest to
cut dependencies on the fortunes of the old economy are wiped out.
Some of the US-fragments are basically third-world countries; others,
such as California, remain affluent though heavily changed
(particularly as Hollywood is basically gone). Many other countries
have been rocked too, as much by the changed media landscape and lack
of media concentration and by the free flow of information over the
net as by the economic chaos. And the next big upheaval is already
taking shape: the first strong signs of the end of scarcity in many
material items. Home fabbing is becoming noticeably more common and
poised for exponential takeoff. And there's that whole AI thing, and
the new medical technologies that can greatly reduce aging, cure
cancer, and enhance humans even beyond "normal" in many areas from
sense acuity to intelligence...promising far more radical changes than
even an end to material scarcity.
2030: Can't see anything but fog this far out. I don't know if it's
huge uncertainties or that stuff called "utility fog" though. It's
ubiquitous, whatever it is; the world has changed more between 2007
and 2030 than it had changed between 11,500 BC and 2007 and that's the
only safe prediction.
