 Hey, baby, are you really a doctor? Yeah, I have a PhD. Can I see it? You can hear about it. When do you want to get together? How about Thursday at noon? How about every Thursday at noon on CFUVFN? Do you want other people to hear us? I want everyone to hear us. It's early, April. Almost every Saturday morning, I pull myself out of bed, and either kiss my wife goodbye, or leave her a love note, and then I take the maps and other documents I compiled the night before, and I go into the jungle. I set my sights on specific game. I know what I want, I know how to track it, and I know what I'm willing to sacrifice to get it. There are others in the jungle. Some are happy to bag almost anything. I am not. I would rather come back empty-handed than carrying an unworthy trophy. But I do have great trophies. A $15 television, a $5 VCR, a $2 wooden coffee table in very good condition, or VGC, 250 cent lamps, several 25 cent books, and my favorite, the $1 microwave oven. And you should have seen the ones that got away. I am speaking, of course, of garage sales. And I am not alone on the streets. Go out on any sunny spring Saturday in Victoria, and hundreds of people are driving around in circles, parking anywhere they can, and sorting through other people's stuff. Hundreds of other people are pulling their stuff out of their garages and onto their lawns, putting up makeshift ads on lamp posts, and waiting for people to come and sort through their stuff. This ritual is repeated weekly and replicated in communities throughout North America. Every once in a while, when I have been out on my rounds, I have happened upon an open garage with stuff laid out in an organized fashion. Excited to be the first to arrive, I have wandered into the garage, only to be confronted by a rather puzzled homeowner who has explained to me that I am on his property. After much confusion, I figure out that no sale is in progress, or about to begin, and this is just his storage space. On the other hand, I happened upon a sale here in Victoria a few weeks ago, where a very nice man explained to me that he had not set out to have a garage sale that day. He was intending to clean and organize his garage. After he pulled his stuff onto his lawn, however, people started stopping at his house and asking him how much he wanted for things. After a few cars, and sending people away, he gave up and started selling things. He was having a garage sale based upon consumer demand. It is hard to tell, I guess, a sale of junk from the collection of junk. A seasoned hunter, Dickers, the asking price is not the selling price. That is my mantra. I am sometimes amused that my training in market economics and finance as an MBA seems to be more valid in these micro interactions, than in so-called business transactions. This is rational exchange, pricing according to the market. No manipulation or propagandizing, just buyer and seller, teta-teta, making or breaking the deal. So I wondered, am I the only one who thought about garage sales in market terms? I decided to invite my wife on one of my hunting trips, and instead of looking for the usual targets, we interviewed the other in my weekly ritual. We talked to people holding garage sales. Why did you decide to have a garage sale today? Well, because my elderly friend died. His son doesn't live in Victoria, and I'm trying to get rid of a lot of stuff for him. Okay. Is this the first time you've had a garage sale? No. I've had a garage sale on a number of occasions, both in Victoria and other cities where I've lived. When I move, I usually have a garage sale. Are you a customer of these things also? I mean, you're not having one yourself. Do you go around to garage sales? I often drop in at garage sales and pick up things. Pretty regularly? Well, yeah, fairly regularly, yeah. For this sale, did you consider other venues like the Internet or Flea Markets? No way. No, I don't have any high priced or items of real value that if I did, I would sell them through probably newspaper ads, but no, there's nothing other than small items here and there for what's only appropriate for a garage sale. Well, I wish more people would come here and buy some more of the stuff I have, to back it up and take it to the South Asian Army here or something like that. First off, why did you decide to have a yard sale? Well, I have a lot of junk at my house and I have a little house and I need to get rid of some of it. Is this your first yard sale? No, my grandmother has a yard sale every Mother's Day. Every year? Every year. Last, oh, 10 years. Have you been a customer of these garage sales also? No, I don't usually go to garage sales. I usually only go to garage sales in the spring and the fall. I don't know what the difference is. Well, garage sales, usually people have them, right? And the rummage sale is usually at the churches, yeah. Have you considered other venues? Did you think about, for instance, selling this on the internet or flea markets or anything like that? No, usually what I do is I give it to the Cridge Center all my stuff, but it just happened this year that I decided I'd sell it. Whatever I don't sell, I'll give to the Cridge. Why are you having a garage sale today? Because we're moving and after 12 years it was time to move out some stuff and we needed to get rid of it. It's not going to go to the new house. Is this the first garage sale you've ever held? We had one about five or six years ago. A move the last time, too? No, that was three families that were clearing out stuff. So are you a customer? Do you go around yard sales and do you yard sale? I don't. Okay. How about rummage sales or any of that kind of thing? No. Totally into new stuff. So this is not recycled? No. It's not going through the second time around? No, not at all. Okay. Have you thought about other kinds of venues to sell your things like going to a flea market or getting on eBay, that kind of thing on the internet? Not eBay, but I have thought about like I've got a bunch of furniture to sell because this isn't my house, this is my mom's house so I've got a bunch of stuff to move from my house and I'll try and sell the furniture and stuff like that there if I don't then I'll go to a second-hand store and take it there. Hopefully they'd just buy it because something's worth $25. I'll try and sell it in the garage sale for $25. If I take it to a used store they're going to give me 10 and sell it for $25. All right. So you're having fun this time? We're having fun. All right. This is great. When did you decide to have a yard sale? Well, the biggest motivation was that we're moving and we actually are garage sale junkies ourselves and so over the years have collected quite a mass of treasures and so it's time to part with someone. Is this the first yard sale you've had? No, we've had probably two in the last 13 years. We've been in this particular area. The next question is whether you've been a customer of a lot of different garage sales? Absolutely. Like I said, garage sale junkies. So you've moved your life from both sides now? Absolutely, yes. Last question. Have you looked into other venues for selling these things? I was thinking about the internet, flea markets, that kind of thing. You know, because most of the stuff is sort of things that really don't have a lot of value we just consider garage sale right away. There are a few things over the years that I think that are more collectible that we have considered putting on eBay or something like that. But it's such a good area. You basically don't even need signs. You just put your stuff out and people walk by and that's kind of the only way we approach it. Just luck of the draw if you can come and buy and if they find something that they can take them. It's good enough for us. Why are you having a yard sale today? Well, I'm particularly doing the yard sale to do fundraising for my program. I have a childcare center and I've had a lot of parents that they're trying to do fundraising for. Okay, so everything that you're in here today is going to go to... What's the daycare program? Is this the first time that you've held a yard sale? No. They try to do four times a year. It depends on the season. There are some seasons we do well and some are slower. The only yard sales that you've done then are for raising money? Yeah. Are you a customer? Do you go around to other yard sales? Yes, I actually did. I actually posted a few things for my neighbors. But if I know it's going to go towards the useful for my children that I need like, for example, now those boxes. So I would do that. That's what it is. We want to sell and get something also that we would use. We can use. Why not? So you find that the yard sales are benefiting you in both directions. It allows you to get things for the children. Yeah. And at the same time sell what you can to raise money. Have you considered other venues like, for instance, doing something in a flea market or maybe selling something on the internet? That kind of thing. I have, but I haven't tried. I don't know how successful that could be. How much of a time does it need? I haven't tried those things. I'm open-minded. Has it been pretty easy to set up this then? Yeah. Is that one of the appeals? Yeah. It's easier. That's the reason you see they are in boxes. Yeah. Even suggested to the parents if they were kept it was easy. You know, divided things according to what it works, you know. Yeah. If it's kitchen stuff, you know. So then it's, you know, then people can view it better. And sometimes, you know, if they want the whole crate at a good price at the same thing, they can just take the whole box. If they don't sell, you know, we do know after a while, we try again, yes. If you find something that no way is not going to go, then we just do an 82. Why are you having a garage sale today? I'm trying to clear out my closet and we're going on a trip, so I'm trying to make a little bit extra money. Is this the first time you've had a garage sale? No. We usually have, like, an annual yard sale here, but this one I'm just doing on my own. This is the first one I've done by myself. Are you a customer at the garage sales also? Yeah, all the time. We go around on the weekend, check out different yard sales. Usually we look for baby stuff. That's why we have so much of it. Yeah, we always go around. We go to the flea markets and everything, too. Did you consider other venues when you decided to do this? Did you think about flea markets or selling it on the internet? Yes, actually both. Western Speedway, I was thinking of going out there and getting a table, but I had to think of whether or not it was going to be worthwhile. And the internet, definitely, but I don't have the time to make up a page to sell the stuff because it just takes so much time. So I decided this is the best way. And I'm really just trying to get rid of some stuff to free up some space. So it's not like I'm doing it for big fun. But if I was, I'd be using a flea market or something like that. Tell me, why did you have a yard sale today? Because I'm a student and I'm tired of carting my stuff back and forth to Vancouver. So I wanted to get rid of some stuff and see if I could get money before I gave it away. So you're leaving for Vancouver? I've been in Vancouver and I'm going back again in August. I'm going to clear out the house a bit and not leave my stuff here and take it back. Is this the first time you've done a yard sale or is this something you do? I've been involved in them before, but this is the first time I've done it myself. Did you find it hard? No. No, not really. No, like a little bit of organizing and stuff, but no, not very difficult. Okay. Do you go around to yard sales or are you constantly? Usually, yeah. Is that something you do frequently or? Not frequently, but I collect all the stuff, so I do. I go to second-hand stores a lot. You already pack up a few things. So what I'm going to do is I'm going to have another one because I've got other stuff and this wasn't very organized, so I'm doing half and half. The stuff that I totally don't want, I'm going to get to win and then I'm keeping stuff over for my next one because I'm going to have another one. And have you ever thought about or have you ever used other venues, like for instance have you done a flea market? I've been to flea markets. I actually went to a flea market through school. Have you done a flea did you take stuff to start at the flea market? I've never done stuff, but I did. I have done a flea market before. And what about like online like ebay or ebay or something like that? I've never done anything like that but I would. If I had something that I thought was valuable enough that people would bid on, I would do ebay. So for you it's kind of is it fair to say that you think of it in terms of this stuff wouldn't be sellable on ebay because it's not of a certain quality. Exactly, like this is a lot of knick-knack and kitchen stuff and I think with ebay it would have to be more people would have to have a better desire for it and somebody's going to buy my thermos on ebay, you know, that kind of stuff but maybe not so much value but just desire for it the want for it. So you actually are thinking market analysis? Yeah, I do fashion marketing and fashion design. So you have a little bit of training too. What do you think? Was it fun today? Oh it was fun and we made like $235 and we paid $30 for the ad. So basically we made $200. That would be a profit. Exactly, I would say our hunting trip was successful. We thought about doing an analysis at this point but sometimes you meet somebody who is willing to do that analysis for you and so we'll leave you with one gentleman's assessment of the day. We think he said it better than we ever could. I am moving out of the province of British Columbia and I thought it would be worthwhile to downsize considering the cost of moving tons and tons of stuff to another province. So I'm downsizing. Is this the first time you've had a garage sale? Yes it is. The very first? The very first time of it. Are you a customer of these things also? Last year when I arrived in Victoria I went to a number of garage sales on bright sunny weekends to see what was there. I picked up some good values. I was quite happy with what I had gotten there. In total in my life I suppose I have been to 20 garage sales. That's it. And they were mostly last year and they were here in Victoria. When you decided to have the sale had you considered other venues such as the internet and flea markets? Not at all, no. Not at all. Never thought about it? Not at all. I had no concern in doing something more complex. To me it was amazingly easy just to go to the local newspaper, take an ad for Saturday and then put up various signs indicating for people to come to this address. I'm alone here. I've been set all this up myself. I found it very easy to do and I enjoyed it. I had a nice time I think it's very good talking with people more fun than doing it on the internet let's say more fun than being in a serious place like a flea market. So I had fun doing this. For purposes of downsizing when you decide to put something into it that has a sentimental value it almost breaks your heart. I mean if you have to sit down and think about what you're doing it can be very painful to do that with some of the things I'm crying now. You see me? I'm crying because some of the stuff I love it. But these are all the things and that in the end some of the pieces I know when I went out and bought things originally $65 $85 for a glass a grave thing and now I'm putting it on the table here for $8 and somebody then comes along and tries to beat me down to $5 for that particular thing that has huge sentimental value and I'm willing to say okay let it go and why am I doing that? Why am I saying let it go on this stuff has meaning you yourself you know that you've gone to had your own grave sales your sentimental value attached to the things is immeasurable it's far more valuable than the item itself original price but we stick it on there because we say you know like I have to move into the future there will be other things that I'll want to buy and keep and more value than what I have here and so you go ahead and do these things look at my little candelabras that I have there I paid $125 for this look at the price over here now $20 $20 if somebody offered me $12 for that I'd say yes but this is a great candelabra I mean you put three candles in there and that's a real nice piece for the center of a table look at this etching on this glass here all that etching that's right on there but look at the price on that $7 you know how much I paid for that this is a $35 item down to $7 if somebody came along here and said $4 I'd say yes and so on and so on you see these rugs over here like they're over over $700 each the price on them is $150 and yet there was a guy in here telling me he was almost insulting me because I was charging $150 I'm not wavering from my price I'll keep these things they're very nice rugs there's no problem with them they're not stained they're not dirty so I'll keep them but the guy is trying to beat me down to $80 each I mean come on you know that's ridiculous I don't have to get rid of them that desperately but it's interesting in the garage sale you have this interaction going on and it's really fun talking with a lot of people a kid in here that was asking about this sword it's an ornamental Japanese sword I'm selling it for $75 the actual price originally was $250 American he must have been 12 years old and he was fascinated with his sword and he had a stack of 20s in his pocket he was all ready to buy it and I kept on saying what are you going to do with this sword because I'm thinking a 12 year old child should not have a sword I really was talking him out of it but I feel that he thought $75 was too expensive even though he had a wad of 20s in his pocket where a kid 12 years old gets a wad I never had a wad of 20s at 12 years old I had a number of things from a Harrods department store here earlier too and this woman came in and she said she collects Harrods logos so it was fascinating but she connected right away with a particular item that I had it was highball underliners like coasters for your highball glass with the Harrods logo on the Harrods department store in London, England she snapped it up right away it was $2 $2 for this thing that she collected for her it was perfect she had a steal she ran out of here with a smile from ear to ear and that's a fun of I mean you know it's fun it can be fun doing a garage sale or anything like this where you're interacting with the folk strangers that come along information going back and forth I was talking about the sword here you see that on the piece of paper here there's a hand design this guy was talking to me I'm going to switch languages here for a moment he was going to talk to me in French because he was French then the design of the sword for him it was like this now what I just said was that he spoke French and so we're interacting in different languages and the sword that he has is a two handed sword like this we talked about the swords here for a good 20 minutes and that was the only discussion and he's telling me all about the sword that he had so now where do you get the value of you're doing a radio show right it's fascinating the people that you wind up talking with and discussing information it's amazing I mean people just come out here and they download all this information that's really fascinating stuff what's it going to do me at the end of the day today I'll say I have a real pleasant time I made lots of money on this thing I got rid of a bunch of stuff that who knows whether it'll be valuable in the future to me or not I don't care but it was a really great day it's sunny today my dog has really been interacting with everybody that came along it's great she's having a wonderful time look at her all this stuff that hasn't moved so what can I just take a card all back into the house and that's it and that is my story there you go how about that you're listening to First Person Plural on CFUV Victoria's Public Radio 101.9 FM 104.3 cable and on the internet cfub.uvag.ca giving sociology an edge after I finished my MBA at the Gazeta School of Business at Emory University I wanted to work for myself I wanted to take a hobby of mine and put it together with my business knowledge I had a computer I had internet access I had research capabilities in other areas I decided to build an online business I had a product the business was to be one in sports collectibles my desire to do this coincided with the rise of online auctions touted by its originators as America's garage sale eBay was fast becoming the predominant online secondary source for collectibles and seemed like a good place for me to tap into my target market like many other vendors I found that I could sell my stuff on eBay and advertise my website at the same time at first it seemed efficient and powerful I was intrigued what I didn't realize when I started was how much I could learn about markets and economies from this experience eBay made for a nice post-graduate laboratory to understand the social context of markets eBay is a great example of increasing returns the concept of increasing returns being one I credit to Polymath Brian Arthur Arthur's considerable accomplishments can be found on his bio page at the Santa Fe Institute website eBay has become the place for online exchange the more people who come to eBay to buy and sell the more appealing buying and selling become on eBay you can put stuff on other auction sites or classified ad sites but because the traffic is so much less than it is on eBay you have the feeling you aren't reaching enough people so you are encouraged to use eBay because that's where all the people come when all the people are coming because that's where all the items are listed thus eBay's position becomes increasingly strong the more it does the bigger it gets the more solid its position becomes you call it circular reasoning or groupthink Arthur would call it increasing returns if traditional economics were correct there would be competitors to eBay who would begin to take away part of the market particularly if their products were comparable to or better than eBay's there are plenty of disgruntled customers websites whose primary purpose is to facilitate complaining about eBay exist with many contributors posting their horror stories but eBay hasn't experienced diminishing returns in a sense eBay is the provider of a marketplace it is not a market maker in the sense in which that term is used on Wall Street but the creator and overseer of the physical and procedural aspects of a marketplace for a market to function it must have the capacity for buyers and sellers to discuss terms if only for the necessary mutual agreement to a set of terms to be expressed storefronts in downtown areas are markets flea markets have booths where sellers show their goods and buyers inspect them and sometimes make offers the organization called the New York Stock Exchange has a physical aspect namely its essentially permanent structural facilities in Manhattan when we talk about a market and the sense of a venue for commerce as opposed to the sense reflective of the actions of the participants within that venue we mean first and foremost a place it can be a place in the physical world or it can be a constructed or intellectual space so one of the players in the economy is the provider of the place as is the landlord the real estate broker the stock exchange owner the auction house or the flea market manager who uses that place for its intended purpose but eBay is a player in the world of e-commerce with its forms and fees and so forth it often acts as the umpire who both officiates the game as a player eBay isn't an impartial provider of a place it is more akin to a casino manager at eBay the house always wins eBay doesn't especially care how well its clients make out in the course of using their facilities whether profit of any sort is realized by buyer or seller the transaction fees have to be paid this dual role leads to role conflict eBay has been an easy target for corruption because of its fee structure eBay is motivated to get as many players as possible because the more listings the more money eBay makes eBay has had a poor track record of keeping con artists out of the market because buyers and sellers need to trust each other in order to make the system of exchange work any corruption in the system undermines all of the transactions in the system eBay makes money whether or not a sale resulting from one of its actions can be completed in practice so eBay has little motivation to ensure that any particular transaction is successful thus horror stories of ripoffs are plentiful I began to have problems with the link with clients soon enough and I learned quickly that law is not cut up with the realities of online commerce I sent money to a seller who said he was in Texas but turned out to have moved to New York he never sent me the item I purchased I found out later by posting to several related internet forums that he had done this to more than one other person Texas begged off on jurisdiction because the guy only said he was in Texas Florida where I lived at the time in a park where the seller had moved at some point said that it was California's problem California being where eBay was based as for the federal government investigating the matter of using the US mail to defraud they were apparently too busy with other projects to be bothered the transaction was too small to merit my retaining compensated legal representation let alone traveling to California to go to small claims court my only alternative was to give the guy a bad rating on eBay's feedback system which I will discuss in detail in a moment and to warn people in the sports collectibles world about him but by the time I was able to do that he was long gone with my money and several other people's money as well the con game had ended and the warnings were too late eBay has a formal system available to allow buyers to provide useful feedback regarding service and product for other buyers to read the rating system is one of the best features about eBay and it speaks to the marketplace being a social system buyers and sellers not only conduct transactions with each other they pay attention to what other people say about their counterparts in the transactions we ask for recommendations and all our transactions and sometimes are willing to pay a higher price for someone who comes highly recommended or are willing to forego the lowest price because of the reputation of someone as being a bad risk in addition there are forums bulletin boards for people to discuss their problems with eBay though little evidence exists that eBay actually pays attention to these problems with specific vendors or buyers within different genres of product online communities grow and develop social relationships that contextualize the market this happens in the real world as well people are regulars and spend time at stores and restaurants to the point that they become part of the experience of that particular market eventually however I found myself bogged down in details I never anticipated as being part of the process I love the commercial for a courier company that shows a toy football shopping out of a fax machine after someone has purchased it online the point of the commercial was that once the transaction took place shipping had to be part of the equation shipping has not caught up in technological efficiency as distinct from the administrative kind to online commerce it took longer and was more detail oriented than I liked I envisioned spending time with a hobby I enjoyed and talking with customers who cared about the same features of the hobby that I did instead entirely too much of my time was spent trying to find the best cardboard box in which to ship my oddly shaped merchandise and beating the virtual bushes for the best available shipping deal given that I was too small a player to get the courier company's full attention I also had to think about how many items I was willing to keep on hand similar activities rounded out the lion's share of the everyday experience of running the business and I suspected throughout that my education had prepared me for better things I grew tired of the eBay culture the spoilers were successful far too often intending the whole experience I grew weary of trying to figure out who wasn't trustworthy and in what way they weren't and whether they had come up with any new ways to ruin my enterprise as the previous day when I wasn't successful in anticipating the swindlers it took a disproportionate amount of time to straighten things out it simply didn't constitute a worthwhile venture for an adult perhaps the last straw was that the word money defied its conventional definition within this context eBay was coming up with systems of escrow and prepayment that addressed part of the unsavory matters at hand but added bureaucratic complexity lots of vendors were credit card only vendors to whom checks and money orders were not acceptable after a while I was becoming convinced that money wasn't liquid anymore also I was dealing in such small amounts that I actually had people send cash through the mail to me which made me nervous I knew it was just a matter of time before someone said they had sent cash when they had not and I would have no way to prove they had not the culture of eBay was evolving into a hostile and distrustful culture and I wasn't having any fun at all the prisoners dilemma in game theory seemed pertinent the guys who were arrested for committing a crime the police do not have any real evidence that they have the right guys so they need one of them to confess and turn in the other guy they are put in separate rooms and asked about the crime they are told that if one of them confesses he will be given a light sentence for his testimony and the other one will be put away for a long time of course if both of them confess and they will both go to prison since neither confession will be needed to convict the other both having admitted to the crime if neither confesses then they will both go free it is simple to set up the situation so that it is in each prisoner's individual interest to inform on the other and the example serves in textbooks and several subjects to illustrate how individuals each of whom acts out of self-interest can combine to create a situation less advantageous to the result that would have ensued had cooperation been allowed ebay is a place that could work if everyone worked to the good of the market but the advantages that occur to spoilers were and are too great for many ebay users to resist thus acting only in one's best interest is not enough for optimization of global gain the only hindrance to someone taking advantage of such a system comes when a general understanding of the mutual profit of keeping the system intact is matched by action that systematizes that mutuality everyone absolutely everyone ends up losing in the end if the whole system breaks down it is true that game theory allows for a certain number of predators being sustained within a population but this is a tendency that arises only to the extent that the cost-benefit trade-offs permitted to do so it is also true that it is not the successful parasite which kills its host or which simply annoys its host so much that its host takes it between two fingers and flicks it a considerable distance away I dissolved the corporation I had formed to the end of selling sports collectibles in the middle of the year 2000 you're listening to First Person Plural on CFUV 101.9 FM Victoria tell me what you mean by TV Economist Carl someone who plays an economist on TV regardless of his training usually these people are PhDs in the econ he does this by talking about economic indicators and sounding very scientific they have a lot of mathematics training in graduate school in the econ well yeah they know how to crunch their numbers very well the problem that we have with it is the meaning of the numbers and the context in which this information is related to the public they are creating a narrative of sorts about what the economy is and how it works whether or not it is heading in one direction or another I don't think that they ever recognize the ways in which what they say actually affects the economy itself it's as if they think they're outside the fishbowl a good example that I think would be after Bush was elected he called a recession the next day and I expected Alan Greenspan as the chairman of the Federal Reserve Board in the United States to say something unbiased and detached and not political about it but instead Greenspan was on TV the next day saying he's right you know we aren't the only ones who observed that the rhetoric during the election and before the election was that the economy had gone quite well in the 1990s I remember a CNN commentator wondering what Bush was saying when he said that the economy was going downhill it is almost like he called a recession and then I noticed that nobody ever said that on CNN again my understanding of the term macroeconomics is that it involves monetary policy it involves a government trying to figure out based on what some of the actors in business in that environment are doing what monetary policy should be and basically the central principle of it is if you let the big guys fail the government goes down to microeconomics to my understanding of the term is more intellectualized it covers efficient market theory and rational actors and so forth and the central principle of that is efficient so you combine these which you shouldn't do an economist know you shouldn't do this and do it anyway and what you get is oligopoly is good small businesses have no right to anything they should pull themselves up by their own bootstraps but the big guys must be sustained no matter what otherwise the whole thing falls apart 225 years after Adam Smith published Wealth of Nations that's as much progress as it's made actually that's being too critical the best of the best are starting to get wise about it in certain respects the concept of elasticity as opposed to perfect efficiency is decades old and that's one that they've been working with enthusiastically perfect information versus imperfect information someone won the Nobel Prize for that a couple years ago so perhaps my criticism is too harsh but there are many of them who simply believe this it was what they were taught in school and they knew they either had to repeat it or get out of the program and find some other way to make a living and by golly they chose to repeat it yeah I think the meta-narrative still exists even though they are tweaking some of the parts of it by looking at elasticity and looking at imperfect information there still is a meta-narrative of this happens in a sphere of life that isn't touched by the rest of our considerations because one of the outgrows of this sort of macro-micro approach is that grassroots commerce gets left out and in fact economists who are playing the social role of economists and making money at it career economists will call them TV economists is not exactly yet career economists don't especially care about grassroots commerce because there's no money to be made in studying it they don't look at how commerce happens on the most rudimentary levels how as a practical matter things get bought and sold, exchanged how people go about doing this both the act itself and the actors on the grassroots level get missed there's a lot of discussion among economists about competition and how good competition is but in truth in order for commerce to take place in order for exchange to take place there has to be collaboration and there has to be trust there has to be some basic level of trust at a minimum there has to be the understanding that exchange can take place i.e. a meeting of the minds has reached that the exchange will take place that in fact there will be no barriers to there will be no allowance for somebody taking what is offered without surrendering what he has agreed to surrender in return if you don't have that it degenerates to the kind of scene you see in gangster films where gangster number one and gangster number two are trying to exchange something each of which holds in his left hand while he reaches out with his right hand for what the other guy is holding in his left hand and they jockey back and forth for about 5 minutes until finally they snatch from the other's left hand what he is offering and comic effect is achieved and they laugh at that but that's the sort of thing that happens very often in commerce one of the two parties receives what receives consideration without reciprocating and the security that has to exist must exist for both parties for one thing the roles are not always clearly defined who is the vendor and who is the customer are not uniquely determined in practice a good example this would be barter if you're exchanging like for like then really neither one of you fits that role barter happens all the time sometimes it's mentioned on one's tax returns sometimes it is not but it's there it's called the informal economy which is a polite way of saying I do it for you, you do it for me and neither one of us tells Revenue Canada about it or the IRS depending on where you live I think that some of the problems that you've talked about on eBay and a lot of people have talked about this that because there are people on online auctions who put stuff up who are not actually selling anything they take money and then they move from jurisdiction to jurisdiction they can't get away with that forever but they can get away with it sometimes long enough to get what they want and that undermines the whole system you don't know when you're looking at this description versus that description especially if it's early on in the process and nobody's rated anybody yet whether or not you are able to trust that transaction and at that point the whole system falls apart even if most of the people in the system are honest even if most of them are trustworthy if there isn't some sort of control in the system that keeps the spoilers from spoiling the system the system starts breaking down because there is no way to tell who is the trustworthy actor and who is not a trustworthy actor an environment must be created in which exchange can take place for exchange to take place as anyone who's been out of the house recently can tell you there is considerable difficulty in setting up such a controlled environment in fact in setting up any kind of a controlled environment at all the difficulty varies from case to case but this has to exist somewhere for commerce to take place and again the security has to be extended not just to quote vendors but to quote customers Patricia Williams is a law prof at the University of Wisconsin previously she was working at Columbia as a law prof and one of the things that happened to her was she went to a store that would remain unnamed and the clerk wouldn't buzz her in for those of you who don't know what that means certain stores now have security systems close quote that allow the staff to admit or refuse admission to whomever they like part of this may have been that Patricia Williams wasn't as a woman of color she wrote about the incident in her book The Alchemy of Race and Rights there are any number of blacks still alive in the United States who have been told at one point or another quote your money's no good here close quote as a way of being told well any number of negative things I would say that that contextualizes the possibility of commerce the possibility of exchange heavily wouldn't you? She also tells another story about a store that she saw in New York that was a thrift shop it actually had a sign on the wall that said no bums allowed and she found this very ironic since they were selling coats at $2 a piece and who better than a poor person who's living on the street to put together $2 and buy a coat so that they could stay warm who else would be the customer there and when she took a look at it in fact it was middle class kids coming down and purchasing recycled clothing in order to achieve the then popular grunge look they had issued the ostentatious and of course you know we're near Seattle here so we all know where the grunge look came from she was commenting on how this was an incredibly sad statement about what has happened in terms of economic and social relationships thrift stores were in fact tapping into a market of people who could not afford to buy things brand new and here were people who in fact could afford to buy things brand new and they were the preferred customers at a thrift store so much for the idea of the efficient market indigent persons were being refused the opportunity to engage in commerce right away that trashes the notion of well equality of money notion that one person's money is as good as another person's money is central to economics well central to the economic narrative well maybe I should put that in the inverse economics does not cover the possibility that one person's money isn't as good as another's they cover price discrimination somewhat but they'll tell you that because it leads immediately to inefficiency this is a microeconomics topic because it leads immediately to inefficiency that it can't exist it is not consistent with rational actor theory but if you take a look at transactions in everyday life what you see is that it in fact does exist there is a way in which the hierarchical relationships contextualize transactions that have nothing to do with whether or not somebody is going to benefit the reciprocity that is needed in order to make commerce happen is compromised by the prejudices or the preconceived notions of the people involved there's another assumption in economics that is very central to most of the really crunchy stuff the assumption of enlightened self-interest I would say that sometimes well there are a number of people who air in either direction there are those who are much more altruistic than the model would suggest and there are some who are willing to be malignant to other people even when their own interest suffers in the process that in practice one runs into both types quite often and so it's obvious that another agenda is going on besides the agenda of enlightened self-interest maybe econ shouldn't have to deal with that because it's a very far flung topic but it's something that one does deal with in street commerce street level commerce oh man that sounds like drew in drugs or something then anyway our prostitution which I guess are both economic arrangements I would say that they're really good examples of it but before we get into that this is sort of a silly example but I'm reminded of the altruistic part when I saw an episode of who's the boss and I hate to admit that I used to watch who's the boss but anyway in this episode Tony is trying to sell his van he's bought a brand new car and he's very happy with his new car but he can't quite give up his van because the van has a lot of sentimental value it is the van that he bought when his wife and him first married he almost sells it two or three times but it's every time somebody bids on it he just can't quite come to the asking price and just as he's decided that he's going to keep the van because he can't let it go a guy shows up who's telling him all about he's just about ready to get married and they need the van in order to start their life together and this guy reminds him of him and his wife he realizes that this kid really could use the van to start out his new life and his new wife he doesn't sell the kid the van he gives it to him and so here's an item that had no price available on it and yet he was able to give it away people throw away things all the time and I think it would make an interesting well I want to say economics study but since economics isn't concerned with empiricism in the sense that I understand that word it would make an interesting social economy story a social science study that seems broad enough to see what people throw away and for what reasons I didn't have the heart to do it with the garage sale interviews because I couldn't bring myself to ask somebody to sell all this stuff or oh man why must you have thrown away I have the capacity to be that forward I don't always use it though but people do throw things away and I guess that that might be covered by traditional econ in that there are storage costs and administrative costs and so forth I noticed that a lot of people were willing to sell their stuff but they weren't willing to store it that at the end of it they had their idea of what they were going to give it to people mentioned goodwill salvation army win and so forth and they had a concept in their head of what I can't sell and make money off of I will give to a charity I noticed that in a couple of the interviews it's a sort of random altruism throw it all out on the lawn stick some prices on it expecting to sell half of it and the half that doesn't sell you simply truck it down to the salvation army and give it away so knowing where your money goes is the attraction there something brings up another interesting idea in sociology and that is that there are different types of exchange relationships and they talk about this in terms of kinship and the way families exchange things as opposed to the way that you exchange with strangers or with people that you have just a economic relationship with there is specific exchange where there's a kind of quid pro quo I give you something money or some item and you give me something in return money or some item and we both walk away with a sense of satisfaction to that but there's also what's called general exchange relationships and that's when you're part of a social system a neighborhood, a family something like that in which you do things for other people in the system but you might not be reciprocated from that system from the specific person if I watch family A's kids and family A watches family B's kids and family B's kids watches my kids then and we're all part of the same social system then we feel like we're getting something from the social system even though we haven't gotten it directly back and it's never really formalized no it's never formalized there is just a sense that that's what we all do for each other and it's only works if people feel like what they're giving they're receiving in return but they don't necessarily look for the receiving end of it to come directly from the person that they give to it may not come back from directly the person that I've done something for but it does come back from the social group that I'm involved in we'd be hard pressed to call this an economic relationship I guess but it is one in the sense that this is a place that I get resources I get things that help me create a livelihood stay alive survive and so forth and I'm not relying upon an economic relationship for the same thing I mean it's not really altruism in the sense that I'm giving away and don't expect something in return I do expect something in return but it is an economy in the capitalist sense of the term because what I'm not expecting in return is money what I'm expecting in return is something of value to me I did a long and involved group project with three other people in grad school on Spain certain marketing opportunities that were opening up in Spain we provided some context in the course of the project and one of the things I noted about the country from my reading was that by the estimate I saw one third of the economy there is quote informal close quote I don't know why that is the case as that was noted as a high fraction for Europe it may be that they simply like dodging their taxes but I think more commonly in rural areas especially that it's just their tradition if somebody needs help they call around on it they get together and the other people send over their oldest son or whatever to pitch in on the project I don't know similarly there are barn raisings in Utah in the United States the whole community gets together and just puts up a barn in a day and it's quite a serviceable barn as well so where cultures draw the lines between the stuff we don't bother to keep track of we just do and the stuff that we actually start writing down numbers about I would guess varies widely based even on that limited experience and the additional aspects of my limited experience in the topic I would say that's a very heavy very definitional cultural contextualization of commerce of what counts as real commerce as legitimized commerce and what is just stuff we do anyway right that we don't think of an economic term that we never think of constructing as business and yet it is yes yes because it adds value to our life it creates a chance for us to have livelihood it is in fact resources that make our existence work in the world and in that sense that that's exactly what economics is trying to do and in that sense it is economics and I think that there are more people and maybe this is ending this on a positive note this week and we'll probably wrap it up from here but I think that there are more people who are beginning to see that these kind of informal relationships are part of what make an economy sustainable it's part of what makes your life more meaningful and it also has a way of subverting some of the worst things about capitalism it takes away from the competition it takes away from the greed it provides a venue for people who would rather be in cooperation with each other it recognizes the cooperation and it begins to tap into a sense of public good the meta narrative of economists is that public good is meaningless that public good is a byproduct of us all thinking about our own good it's a misreading of Adam Smith I think or it's not a misreading but a distortion we were talking about memes last week and I think this is one meme that's gotten twisted all out of shape there are certain minimal cooperative conditions certain things that have to exist certain conditions that have to be stipulated and remain intact for Adam Smith's system to function? Yes that got lost somewhere along the way and what was retained was we can just do whatever we want we collectively can just do whatever we want and in fact the more hostile we are the better it works the more competitive we are the more selfish we are even to the point of tearing down the very mechanisms that make exchange possible that make the possibility of commerce possible Adam Smith wrote Wealth of Nations in a cultural context and that context was he wanted to subvert the dominant paradigm of the monarchy and of mercantilism of his day mercantilism was just misinformed we can dismiss that easily but monarchism was informed among other things by the notion that somebody had to be in charge some specific someone what Smith was pointing out was no not really if we collectively, if the society the economy, whatever you want to collect by observing certain conditions then they need to observe no more there needs to be in charge these principles, these depersonalized principles merely need to hold for this to work out in certain ways but he didn't, he wasn't talking about anarchy no he wasn't not even economic anarchy he was talking, yeah, laissez-faire meant no king laissez-faire did not mean no rules it didn't mean no principles in any case or no conditions whether the conditions are stipulated or simply lie or challenge them or defeated them is perhaps material perhaps not but they must remain intact and there is a small but important movement going on that is recovering these principles because when they talk about sustainable economy when they talk about thinking about the public good and social responsibility and that there are a number of stakeholders that are involved in any transaction it begins to create a narrative to these principles that say that people have to have some sense of trust some sense of reciprocity some sense of cooperation and collaboration in order to make the economy work and you can see this in exchanges such as yard sale exchanges, you can see this breaking down in some of the internet exchanges that started out with a spirit of cooperation but have kind of lost it over the last three or four years and you can see that looking at the economics of everyday life taking a look at the ways in which people make these decisions has a social context if you start adding the social to it then you begin to see where capitalism the capitalism the way that it is today has lost something and the key to bringing it sort of back to a workable system well I say for capitalism is not reconcilable in the hierarchy of social roles that the identity of the vendor and the customer may be distinct in a particular transaction but they're not lifelong labels that these people wear on their foreheads if a hierarchy of social roles is absolute then money becomes a dangling signifier if I outrank you in extremis I can just take all your money and there's nothing you can do about it and that's indistinguishable from a situation in which there's no money at all and I just tell you what to do or from a situation in which I aim a gun at you and tell you we're going to have an exchange now sure if I stick a gun in your mouth and put a $20 bill in your purse and take the keys to your car out of your purse go outside and drive off in your brand new car that's not exchange that's let's see extortion at the very least armed robbery at the very least it's a power relationship yes I would say so yes excuse the extremity of my example but I think it makes my point well and so basically what we're saying today to conclude this is you cannot have a good economy without a sense of justice and a sense of the social and a good economy is born out of a good sense of fairness a good sense of fair play a sense of cooperation a sense of justice and a sense of people being able to come to the table without being intimidated without being ruled out of the game you have been listening to first person plural on CFUV 101.9 FM in Victoria British Columbia simulcast it on 104.3 cable and CFUV.UVIC.CA first person plural is produced weekly by Dr. Patty Thomas and Carl Wilkerson all music for first person plural is composed, performed and produced by Carl Wilkerson for more information about first person plural or Patty Thomas and Carl Wilkerson visit our website culturalconstructioncompany.com