Lunchtime

Craigslist does not make as much money as it could. Like, $475M less than it could, sez the Wall Street Journal.

This article is from a couple of weeks ago, but it took me some time to put together what I had to say.

In Mr. Buckmaster's view, newspapers would be better off being a little more Craigslist-like: Go private, eschew Wall Street's demands for continually "goosing profitability" and give your readers what they want. Much trouble in the world comes, in Mr. Buckmaster's view, from losing sight of that essential goal.

After we've retired back to the living room for coffee, Mr. Buckmaster allows that the world is perhaps not quite that simple. When asked whether there's a Craigslist model that other companies could emulate, the unflappable Mr. Buckmaster, his eyes once more fixed firmly on the horizon out the window, waxes lyrical for a moment: "It's unrealistic to say, but -- imagine our entire U.S. workforce deployed in units of 20. Each unit of 20 is running a business that tens of millions of people are getting enormous amounts of value out of each month. What kind of world would that be?"

Before I have time to object, Mr. Buckmaster comes back to our world. "Now, there's something wrong in the reasoning there," he admits. "You can't run a steel company in the same way that you run an Internet company" -- more points for understatement. "But still, it's a nice kind of fantasy that there are more and more businesses where huge amounts of value can flow to the user for free. I like the idea, just as an end-user, of there being as many businesses like that as possible." As an end-user, I suppose I do, too. But there are no free lunches, even if Craigslist -- and the meal Mr. Buckmaster and Ms. Best provided for me -- sometimes seem to come close.

The article says Craigslist employs about 21 people, and makes $25M a year. It's safe to assume that money isn't split evenly among all the employees, but I bet nobody's doing badly either.

The idea that you look to be helpful, and make plenty of money (the Buckmasters live in a nice house, after all) but not as much as you could, is very like what I was talking about when I said we make the economy, the economy does not make us.

You don't take money just because you can. You take a generous amount and leave the rest, because there's just no good reason to have more.

Here's the new scheme: Rather than concentrate the money in a vicious oligarchy, a business takes a fair amount and leaves the rest for other businesses who are also taking a fair amount and leaving the rest. This increases the overall pool of viable businesses, which generates more work for more people, and lower costs on the goods and services that already exist (due both to suppliers taking less than they could, and increased demand).

It wouldn't even be communism. Capitalism would thrive because there would be less punishment for failure. You could recover from a business failure in a fraction of the time it takes currently. It seems counter-intuitive to capitalism as we know it that this would work, but it easily could.

The reason it won't is that a significant number of us won't buy into it. We don't even ALL have to buy into it. Some miserable number of us can still be greedy bastards. Maybe even a miserable majority can continue. As long as a significant minority are willing to run this way, we'll see the rewards.

There might not be any free lunches. But expensive lunches are entirely optional.