[FoRK] The World Is Not Flat

Stephen Williams sdw at lig.net
Tue Jan 19 12:11:27 PST 2010

Ken Ganshirt @ Yahoo wrote:
> --- On Tue, 1/19/10, Jeff Bone <jbone at place.org> wrote:
>> ...  All value flows towards the middle of the
>> network...  and all the while the dynamic equilibria of
>> the network is increasingly undermined, requiring higher and
>> higher (potentially unsustainable) "input energy" (i.e.,
>> economic resources and non-economic forces applied) to
>> maintain any appearance of stability.
> Appealing. That last makes me think there's a relationship between that and the "casino capitalism" that was recently mentioned and the whining I've been doing about related activities of gamblers-not-traders in things like commodities markets and elsewhere. There's a holistic thing going on here that I can't get my head around but I can feel it. Yours is the first articulation I've seen of something that makes it fit somewhere.
> Do you suppose there is a tie-in of these things in the above aspect of Bone's developing Theory of General Relativity as applied to Distribution Networks?
> That is, to the extent that these activities are intermediation points in distribution networks but add little or no value, do they add to the "resistance" implied by the above, similar to, say, resistance to market entry? 
> Raises the first question: Are they intermediation points? (I think so, but...)
> Does the theory extend to assigning "resistance values" to intermediation points? E.g. the more value an intermediation point adds, versus its cost, the less "resistance" it adds to the network? E.g. a transporter is physically moving a good from one location to another at a fair market price, thus adding relatively lower resistance. Versus, e.g. a commodity speculator who simply buys and then resells a contract for the same good and peels off some of the available aggregate "margin" while adding little or nothing to the movement of the good from source to sink or to its value and thus adding relatively higher resistance.

Actual distance is a red herring now because of hyper-efficient 
shipping.  Intermediaries in many cases are only there when they are 
more efficient than the alternatives.  Commercial distance is a metric 
of time and money which is only loosely connected to actual distance.

Just a few data points: It cost me 3 times as much to move a container 
from the East Coast of the US to the West Coast as a couple moving a 
container from Mountain View, CA to Israel.  5 years ago, from DC via 
email and a trip to the bank, I paid the factory directly for and drop 
shipped 30 specialty computers to Honolulu, arriving just 2 days before 
I assembled and installed them.  No customs costs or brokers needed and 
my client saved about 40% over the US distributor that I ordered samples 
from.  Cheap items are sold on eBay and shipped directly from Taiwan or 
Hong Kong for a few dollars of postage.

Sure, I have an awesome farmer's market in every small town around me a 
couple days a week.  Hard to find that in the winter on the East Coast.

For some things, we have it great today compared to the past.  Walmart / 
Target / CostCo have many things impossibly cheap.  There are 
aggregators for Chinese electronics junk/semi-junk that mean you can buy 
all kinds of gadgets cheap.  You can easily buy directly from in-country 
supply chain aggregators,

Where is it worse?

I think you have to separate out the commercial equivalent of "all 
traffic flows through the highways" kind of traffic from true 
intermediation points.

> It seems the former (transport) would be something on the "edge" and the latter (speculation/gambling) would be part of the jam-up in the "middle" that you mention.
> That last statement is probably wrong on two counts in that I'm inferring "jam-up" but you did not state it. And, there is likely no relationship between a resistance metric of an intermediation point and its location on the network. Or is there?
> Which, then, causes me to ask what you mean by "All value flows towards the middle of the network..." ("value" is such a mushy word), or at least why you say that? 
> Is this (middle of the network) where the relative difference between value-add [little...lots] versus the quantity of available aggregate margin extracted [little...lots] creates the highest resistance to transit of the network by the good from source to sink?
> By the way, are you still having problems with my paragraphs not wrapping? If so, would a switch (by me) fom Yahoo to Gmail make a difference? Simple enough to do if it will fix it.

Still fine with Thunderbird.
>          ...ken...


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