James McCormick

[cross-posted on Albion’s Seedlings]

[based on a free review copy provided by the publisher]

Anderson, Chris, The Long Tail: Why the Future of Business is Selling Less of More, New York, 2006. 238pp.

In late 2004, about the time that the Anglosphere Challenge was published, WIRED magazine editor-in-chief Chris Anderson wrote an influential article called The Long Tail.

Looking at the sales figures of companies in a new generation of online industries (such as digital jukebox company eCast), he discovered that substantial corporate income was being made from the vast array of goods which didn’t appear on anyone’s “hit” list. Sales figures showed a so-called power law distribution. As one moved down the sales ranking, sales volume dropped dramatically. In the new world of online marketing and distribution however, people were responding to more choices in products (the “Long Tail” of the sales distribution curve) by purchasing a wider variety of goods. Vendors were selling less of the lower ranked items, but in aggregate were actually selling more. As Anderson puts it, “popularity no longer has a monopoly on profitability.” The early online success stories were companies that carried the “hits” of their industry but offered a new and efficient way to find and access older and less famous choices.

The so-called Pareto principle … where 80% of sales come from 20% of catalog items … was giving way to a new and more attenuated sales pattern. The Long Tail of sales persisted, in modest but significant numbers, as far down the sales ranking list as anyone wanted to measure. Whether it was ITunes, Netflix, Amazon, Rhapsody (an online music rental service), or eBay, it seemed clear that even a huge inventory of goods, if matched successfully with a large enough pool of purchasers, would attract sales of almost every item. The cleverest retailers were finding new ways to lengthen the Tail (add inventory) and fatten the Tail (increase unit sales).

At the time, Anderson proposed three rules for generating a Long Tail business.

1. Make everything available.
2. Cut the price in half. Now lower it.
3. Help me find it.

Anderson’s article generated plenty of “why didn’t I think of that” moments and the phrase Long Tail has since become a dot-com buzzword and a handy way to encapsulate how the Internet has become a streamlined vehicle for providing, finding, and selling many kinds of goods. Some of those goods can be dropped on one’s shoe (as Amazon, eBay, and WalMart.com prove every day) and some of those goods (like eBooks and music files) seem more like an electronic dance between your credit card, your computer screen, and perhaps a digital appliance.

Now Mr. Anderson has assembled a more thorough, more data-rich inspection of the Long Tail concept. By working closely with economists at prominent universities, and using a Long Tail weblog to engage the assistance of a community of readers, the author has evaluated a number of Long Tail industries (and actual sales data sources), to see whether his ideas about the Long Tail in his earlier article hold up under scrutiny.

The short answer, with a few modest caveats, is Yes.

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[cross-posted on Albion’s Seedlings]

Reynolds, Glenn, An Army of Davids: How Markets and technology empower ordinary people to beat big media, Big Government, and other Goliaths, Nelson Current, 2006, 289 pp.

Glenn Reynolds (the Instapundit) has carved out a unique niche in the blogosphere for the last five years with an amazing stream of interesting links (often with brief commentary), an eclectic set of hobbies and intellectual enthusiasms, and a law professor’s expertise in sorting through the legislative and legal whims of American society. Mostly libertarian, with a proactive attitude on personal and national safety, he remains as one of the few prominent “one-man band” bloggers to remain active through the years since 9/11. His energy and productivity are legendary and his influence, I believe, is substantial and growing.

In Army of Davids (AoD), he summarizes his personal experiences with the changes wrought by technology in the last decade, especially those which allow ordinary people to create goods and services which were once the province of large organizations. And he investigates topics that have long held his interest: beer-making, music, the Internet and broadcast media, games, nanotechnology, politics, space exploration, and life extension.

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[cross-posted on Albion’s Seedlings]

Heather, Peter, The Fall of the Roman Empire: A New History, Macmillan, 2005, 572pp.

Earlier this year, I spent some time reading about global economic patterns. William Lewis’s book “The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability” [reviewed here] was a great comparative introduction to the internal dynamics of national economies. Among nations over 10 million, the US has a per capita income (at purchase price parity) roughly 20% more than the next in line (Canada) and roughly 25% above the rest of the G7. Its “differential” with most of the other nations of the world is literally insurmountable. This economic gap is driven by long-standing economic dynamism (and therefore productivity) which is widely “diversified” across industrial sectors. And the “osmotic” pressure of immigration drawn by both that prosperity and individual freedom is relentless.

Amy Chua’s book “World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability” [reviewed here] presents her argument that much of the world’s economic activity is controlled by “market-dominant minorities” (MDMs) and as democratic values take hold, there is often a conflict with the power of those minorities in dangerous ways. More dramatically, she proposes that the US is effectively now a global “market-dominant minority” which controls global values and activities in ways that are often not in the best interest of many entrenched or traditional power bases in the industrial and non-industrialized world.

Even more recently, I had a chance to read Moises Naim’s “Illicit: How Smugglers, Traffickers, and Copycats are Hijacking the Global Economy,” [reviewed here] which looks at illegal traffic in humans, drugs, guns, information, and cash from a neutral or economic perspective. His investigations suggest that illicit trade is growing much, much quicker than legitimate trade thanks to reduced costs of communication and transportation. And law enforcement is falling behind, when it is even cognisant enough to spot the new forms of illicit trade.

Taken as a set, these three books suggest sobering times ahead. The patterns they describe are deeply engrained in our modern world and guide world events as the tides would a boat. We can also add to this list Tom Barnett’s book "The Pentagon’s New Map" which charts the flow of people, money, ideas, equipment, and violence in different directions to form a geopolitical pattern with contrasting Gap and Functioning Core. Barnett recommends particular institutional solutions to “shrink the Gap.”

Current events in Israel/Lebanon, and the recent debates over immigration in the US, have reawakened an interest I had several years ago in Roman frontier studies … an interest which led to intensive visits to the Hadrianic and Antonine Walls in England and Scotland, respectively. In the course of doing a little research on the German-Roman frontier (sussing out yet another guided tour for 2007) I came on a citation for a new book on the fall of the Roman Empire.

Since my knowledge of the “Fall” was sketchy and dated at best, I was long overdue for a refresh … and it turns out that this “New History” of the fall of the Roman Empire is very much worth the effort.

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[cross-posted on Albion’s Seedlings]

Jacob, Margaret C. and Larry Stewart, Practical Matter: Newton’s Science in the Service of Industry and Empire 1687-1851, Harvard University Press, 2004. 201pp.

This book is a small gem. Well-written, modest in size, and tightly focused for the general reader, it describes the deep ties between Anglosphere civic culture and the development of modern science and industry. I stumbled on the title, as occasionally happens, when browsing through the bibliographies of other books, looking for interesting titles.

Professor Larry Stewart (Univ. Saskatchewan) wrote a book in 1992 called “The Rise of Public Science: Rhetoric, Technology, and Natural Philosophy in Newtonian Britain, 1660-1750“. Regretably, even a second-hand copy is well nigh impossible to nab. Professor Margaret C. Jacob (UCLA) wrote “Scientific Culture and the Making of the Industrial West” in 1997. Both books were referenced in Joel Mokyr’s Gifts of Athena: Historical Origins of the Knowledge Economy (reviewed recently here) because they discussed the way that public interest in scientific concepts was influential in the initial development of the Industrial Revolution in Great Britain.

And it is that public angle that intrigued me and suggested a good Anglosphere fit. As an alternative to hunting down those older books, I decided to buy a more recent book co-authored by Jacob and Stewart, and get a sense of the authors’ arguments. If “Practical Matter” is any gauge, these authors deserve addition to a “watch list.” This little book has a premise that is both fascinating yet powerfully straightforward.

What was the impact of Sir Isaac Newton’s Philosophiae Naturalis Principia Mathematica on the course of European social and economic history, from its publication in the late 1600s until the 1851 Crystal Palace exhibition in London?

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[cross-posted on Albion’s Seedlings]

Pei, Minxin, China’s Trapped Transition: The Limits of Developmental Autocracy, Harvard Univ Press, 2006. 294pp.

As much as the end of the Cold War, the big story of the tail end of the 20th century was the movement toward economic liberalism in mainland China after 1979. After twenty-five years on a new compass heading, how are things going?

For the interested general reader, business, foreign policy, and military websites provide deeply contradictory news. On the one hand, China seems to have dramatically increased its per capita wealth and changed its peoples’ lifestyle faster than any other nation in history. On the other hand, the vast majority of Chinese are stuck in unproductive state-owned enterprises (SOEs) or subject to the whim of central authorities when it comes to the pricing of agricultural goods. That translates into hundreds of millions of people with little hope of climbing the Chinese ladder of prosperity in their lifetimes. China, according to the demographers and “best-case” economists, will still grow old before it grows rich.

On the military front, China appears as the most likely candidate for super-power status with a central autocratic government, a growing economic engine to fund military purchases, a massive population, a compliant diaspora funneling international secrets homeward (Time article [subscription] from early 2005), and a chip on its shoulder lovingly nurtured for centuries as a substitute for an effective political theory. The naysayers, in contrast, claim that China is fortress with no one manning the walls … an army, navy, and air force more effective on paper than in reality, and a billion people dangerously dependent on potential enemies for the raw materials and consumer markets that would subsidize any military modernization.

Which is it?

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