Anglosphere

[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.

Read more

[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.

Read more

[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.

Read more