Let us step back and consider an everyday, almost humdrum concept; commerce. Imagine a traditional market square. A centre of exchange, and a community in action. A timeless scene replicated throughout the world, regardless of creed, colour or culture. We have a space dedicated to transaction and valuation, interaction and negotiation. It is a society at its best, underpinned and guided by the power of commerce. The original product-market fit
In essence, we are talking about an organic, natural force. It caters to a desire to connect, create and provide. It can be the source of our best relationships, our pride and our education. It supports the fortune, and facilitates the demise, of many an independent trader and small business. Commerce is the great leveller, binding us together through the process of production, the act of buying and the art of selling. Discrimination and conflict are bad for business, after all.
In its purest form, commerce acts as the great motivator, the ultimate mentor. We conduct our commercial affairs against a backdrop of economic and trading uncertainty. Our decisions and behaviour are constantly pitted against known unknowns and unknown unknowns. We are drawn to ingenuity and innovation through the actions and presence of our competitors. We observe, learn from, and adapt to ever shifting risks and opportunities.
You keep the upside, and you own the downside. You have skin in the game.
Perhaps we paint an intolerably cheery landscape? Or present a heady combination of naivety and rose tinted spectacles? Using our imaginary market square, we could easily point out the potential flaws; it is undirected and loosely regulated, for sure. It most likely attracts petty criminality, and crude attempts at tax avoidance. Independent traders are not always bastions of sound finance and clean conduct. Yet by and large, this scene, and countless others across the world, have sustained themselves through thick and thin, peace and war, feast and famine.
Commerce is a dynamic creature. It responds to the innovation and ideologies of each era. We try to throttle, tame and subdue with numerous attempts at holding back the tide. Think five year plans, industrial quotas, price controls, restrictive labour laws, and collective farming. The list is endless.
On the other hand, we are at times in thrall to its power. We stray from the ancient ideals, and request too little skin in the game. Too big to fail comes to mind. We let it run wild, with the inevitable hangover that follows; ask Lehman Brothers or Royal Bank of Scotland how that feels. Yet we can never, ever truly humble or fatally discredit commerce, no matter how hard we try. Why? Because it accords with and complements the core of human nature. Commerce, as a way of life, will always attract followers.
So where does commerce stand today, at this digitalised, hyper capitalist juncture? The fuel that powers our modern economy, the internet itself, is ironically not a product of our beloved commerce. We have the Cold War and the United States Department of Defence to thank for that. Sir Tim Berners-Lee, as the father of our World Wide Web, was motivated by neither vast fortune or great fame. Yet, without commercial endeavour, his creation may well have remained a narrow, academic pursuit; a provincial experience cherished by science, mathematics and engineering, but of limited interest elsewhere.
Instead, our online world has reached out and touched nearly all aspects of our daily lives. It has eclipsed and displaced such large areas of physical transaction, in such a short time, that it is easy to forget or truly appreciate the scale of change. Software, as predicted, has eaten the world. We have shifted our expectations, and no longer take much notice of the revolution.
The internet is now a public utility, like fresh water, electricity and public transport. In theory, we have the perfect platform for thriving independent commerce.
Something is amiss, however. The barriers to entry for potential traders have collapsed, permitting anyone with a screen, and a Wi-Fi connection, to access and ply their wares in the greatest market square ever built. In practice, we are still dominated by just a handful of big names from Silicon Valley. This in part reflects the quality of their service offering. You cannot deny that, for all their many faults, Google, Amazon and Facebook, amongst other big beasts have provided compelling value. Yet we must not cede complete control of our greatest liberating force to their private interests.
It reflects a wider malaise. Free market capitalism, as espoused by the west, has been limping along in recent years. It is suffering from a tough ten year bout of indigestion, following an overindulgence beyond anything we have attempted at Christmas. Take a look at the menu.
We start with a plate of deindustrialisation, Gordon Gekko and labour offshoring. Then it is a meaty main consisting of financialisation, credit binges, an epic asset bubble and a side dish of digital disruption. To finish, we have an extra sticky and sugary dessert topped with quantitative easing, negative interest rates and corporate bailouts. No wonder it needs to lie down and take a nap.
There is a serious point to all of this. The distortions, inequalities and monopolies introduced and sustained by such indigestion carry very real, existential threats. Life has been pretty damn good for the globalised, metropolitan classes of Manhattan and the City of London. It has been very generous to unprofitable ‘tech’ darlings and zombie companies. High on the hog of ultra-loose liquidity, sovereign wealth funds and unicorn valuations, it is rather easy to dominate markets and avoid commercial reality. It is also very easy to ignore the fragile, crumbling foundations of globalised capitalism. It is the epitome of our modern gilded age.
Outside of these lucky circles, our disenfranchised communities, stripped of their industrial pride, and told to get on their bikes, are beginning to take action. Make America Great Again is not so deplorable when viewed from the Rust Belt. Take Back Control is not quite the xenophobic rallying cry so often portrayed in prosperous Islington, or educated Edinburgh.
We are witnessing the emergence of a new cultural, political and economic. The outcome is very much up for grabs.
The scenario outlined above just so happens to coincide with Act III of the internet's story.
Act I was about creation and emergence.
Act II was about revolution and dominance.
Act III must be about ownership, if nothing else.
Commerce, as it has done so throughout history, will play a pivotal role. As things stand, we are so familiar with the current online landscape that it feels permanent; yet change is afoot.
The online experience is becoming more granular and less generic. Small business, representing the backbone of commerce, can and should take full advantage of the supply chains, logistical networks, cloud computing, service expectations and technical skillsets forged in the monopoly era. Those legacies, coupled with low coding trends, challenger banks and new payment solutions, provide commercial activity an opportunity, at all levels, to truly flourish in this next phase of our digital age.
It is this, rather than any government intervention, that will promote the re-invigoration of our neglected regions, depressed market towns and the gradual reorientation of the wider economy. Commerce can bring back a sense of pride, connection and institutional knowledge cast aside and lost to these areas for many years.
By supporting this change with real estate, we can help nurture a new generation of local, browser based businesses. This will in turn support healthier, confident, and secure communities. It will represent the final rejection of an economic framework that is long past its use-by date.