Networker: Let's trade
Want to buy or sell something over the internet? It isn't too hard.
First in the US and now in Australia, companies such as eBay have been offering on-line auctions for a few years. This allows you to advertise something you want to sell, such as an original 1960s band poster or handicrafts or just about anything, and other people can bid for it on line, with the person bidding most getting to buy it.
eBay was one of the first companies to say that trading like this on the internet is more than just buying and selling, it is about building communities. The stories are homely, about people who regularly trade over the internet and then, when they don't show up for a while, their on-line (that is, internet-connected) friends ask after them. That's the public relations spin.
Among the early popular trading items on eBay were guns, which caused a stir. More recent offerings have been a baby and human body parts.
By and large, all these auctions are small trades: a few dollars, maybe a few thousand dollars, settled by personal cheque. At the other end of the scale, some really big "communities" are coming along. You just about can't open a financial paper these days without reading that a group of industrialists is launching a "trading community" or "exchange".
Take the car industry, for example: there is a high degree of integration between many different companies. Ford doesn't make many of the parts for its cars, it assembles them. In general, it doesn't sell them directly; it works through thousands of dealers.
Some of the companies it works with are very small and just assemble some small part of the car. Others, such as the suppliers of steel or glass, may be global industrial giants.
Coordinating the efforts of all these companies is a very expensive activity. Every invoice, and there are millions of them, costs tens of dollars. Negotiating contracts with a wide range of terms and conditions is a massive task.
In the late 1980s, a solution called EDI (electronic data interchange) came along, and was embraced by the car industry and many others. However, its setup cost and the difficulty of implementing it meant that, in general, only large companies could afford to connect together that way.
The internet promises to solve that because of its spread. Within a few years, virtually every company in much of the advanced capitalist world, and many in the Third World, will have internet access.
But there are still two problems. First, the internet was not designed for commercial practice, and doesn't support it very well. The internet is a "best effort" network, and any internet user knows that sometimes that is a pretty poor effort.
The second problem is much bigger. The whole of modern capitalist industry is based on monopolistic and anti-competitive agreements between capitalist companies. By writing computer programs that allow these relations to be automated, the companies are in practice documenting illegal relations such as price fixing (when several companies dominating a market agree to keep their prices pretty much the same).
Plans for these exchanges are huge. Industry associations hope to channel hundreds of billions of dollars of business through each of a few dozen global industry exchanges (although the battle to establish the dominant exchange in each global sector has only just begun). Government monopoly regulators and sidelined industrialists are getting ready to challenge this direction. Legal firms must be licking their lips in anticipation of the litigation that is about to arise.
BY GREG HARRIS