Thursday, 13 February 2014

e-Commerce, not social media, the real driver of Net benefits

© Depositphotos.com/@alexroz
It has long been my hope that the Net would be a great freedom machine that would break down the old institutions, making way for a deeper, richer, more transparent form of citizen-led politics to fulfil the yet-to-be-truly-realised ideals of liberal democracy. In early 2007, I tried as best I could to use social media as the new "public sphere" that would give citizens more power over the "unrepresentative swill". Needless to say, it hardly made a dent.

I used Facebook, Yammer, Twitter, blogs and wikis in my teaching and focused on developing my students' Web 2.0 skills. But by the beginning of 2012, I was disillusioned. Facebook had listed on the NASDAQ, every journalist and their dog had taken over Twitter, and the same old gatekeepers had subsumed the new media into the old institutions. Yammer looked exactly like Facebook, and I could not search for any product online without getting bombarded with ads that either I or my most active "friends" had looked at in the past few hours. Not only that, but social media meant that all I did was endlessly help people who no longer needed to help themselves. It convinced me that there was nothing substantially new about new media, and since then I have focused more closely on the use of historical institutionalism to understand what helps and hinders the deployment of high technology infrastructure rather than the applications associated with such infrastructure. 

I no longer use a mobile phone, I am no longer on Facebook or Twitter or Yammer or LinkedIn, and I bought a typewriter and frequently write letters to the people who are most important to me, rather than endure endless "likes" and snide comments to and from people I only ever reconnected with because of Facebook. I must say life is much simpler, and I try to make effective use of technology rather than use technology for technology's sake. People love to receive hand-written letters and I have so many pen pals now I can hardly keep up. Things couldn't be better.

So while the Web 2.0 bubble might yet burst, does that mean that the Net has had its day? Has the old order really re-plastered the façade of not-quite-liberal democracy? Maybe. Maybe not.

While I have removed myself from social media, my online purchasing is quickly surpassing my face-to-face shopping. I assumed this was true of everyone but several vox pops suggest otherwise.

What does this have to do with the Net and liberal democracy? Well, first off, our political representatives are more likely to remind us of our responsibilities rather than to protect our rights. To quote the National Archives website:
The relationship between citizens and government is blurred by the absence of a clear definition of Australian citizenship, its rights and obligations.
The Australian Constitution merely sets out the administrative rules for the customs union of the former colonies, with no mention of citizens (except to exclude citizens of foreign powers from being elected) or rights beyond the right of "residents" to be treated equally in each state, and that the Commonwealth shall not make laws concerning religion. But that doesn't stop local councils from interfering in the practice of one's religion. The rights of citizenship require much more than the support of a political document to be "actualised".

The Museum of Australian Democracy outlines the major definitional problems associated with liberal democracies, and thankfully such resources which are still supported by the public purse are pure gold. And I am yet to see a display at Old Parliament House that does not cut through the patriotic blinkers. Moreover, I am constantly surprised by an increasing number of people who no longer believe in the old-fashioned "lucky country" propaganda - especially those who regularly travel overseas. But that doesn't mean that consumers have sufficient choice when it comes to available products and services.

The way I see it, if Australian citizens have more money in their pockets, then they are more in control of their own lot. If citizens have greater access to a range of choices of products and services, then they have more power as consumers. Indeed, the Boston Consulting Group suggests that the digital revolution was driven by consumers. So waiting around for political power to come to citizens as part of some trickle-down fantasy is just crazy talk. Especially now that Web 2.0 evolved into little more than the same-old-same-old with new typewriters.

There is little doubt that in protectionist economies, consumers are at the very bottom of the power tree. Where there are more firms competing for consumers' purchasing dollar, consumers have more power. It may not be sexy, but there is little doubt that the concept of liberal democracy as we know it was the result of the increasingly wealthy merchant class clawing their political representation from their (increasingly broke) former lords and masters.

For too long, Australians have been subjected to protectionist dogma in a market that can "bear" almost any price. It is certainly a "first-world problem", but compared to almost anywhere else in the developed world, and increasingly in the developing world, we pay far too much for inferior service and limited product choice. I may not have political representation, but I certainly don't have to pay for inferior products and services as long as I can purchase globally via the Net.

Which brings me to e-commerce. Why is it that an online book retailer in the UK can send me a copy of Hemingway's A Moveable Feast with free postage for less than the same book from an Australian store where the postage is also free. Is it because Australia Post charges more than Royal Mail? I doubt it. Try searching for something obscure like food-grade Dolomite and see how that turns out (US$4.79 in the US, not available from online retailers in Australia, apparently).

And while not every consumer will have access to a Costco warehouse, it is pretty clear that the Great Australian Grocery Duopoly (not to mention tyres, electronics and so on) in Australia has a limited shelf-life. Change is possible, but it takes a major overseas player to change the rules. While the average consumer has no ability to usher in the next Costco to the Australian marketplace, the Net, that great freedom machine, provides a power far greater than any Web 2.0 application is ever likely to achieve other than assisting with targeted marketing.

My prediction is that Web 2.0 will eventually become like unwanted telemarketers and television advertisements which get the old mute button treatment once viewers reach a certain age. It will certainly make many people rich in the meantime, but its political clout, much like the television, will likely benefit the news media and politicians directly while citizens will only (marginally) benefit from the indirect benefits of greater access to information.

But e-commerce is where the power really lies, especially for consumers geographically confined to Australia's still-mostly-protected market. The Net increases choices for consumers and although e-commerce is yet to mature in Australia, it is clearly only a matter of time. Maybe not clear to some people, but to the average consumer it makes good sense.

The industrial revolution didn't happen overnight, and the dot.com bubble burst and maybe the Web 2.0 bubble will burst soon enough, too. But keep your eye on e-commerce. And focus on the Net as infrastructure. There is no such thing as a "killer app". Institutional change is more likely to occur as a result of a redistribution of wealth as the old guard gives way to the new. 

Liberal democracy came about as a result of increasing commercial power, coupled with an increasingly free market. It makes sense that increasing consumer power will enable greater citizen power. It wasn't citizen-led power that brought about political change, it was economic prosperity brought about by the increasingly free movement of goods and services. Just ask Adam Smith. It didn't happen overnight, but it did happen...

Creative Commons License Except where indicated otherwise, Le Flâneur Politique by Michael de Percy is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 Australia License. Based on a work at politicalscience.com.au. Background image ©Depositphotos.com/ @redshinestudio