creating scarcity
Via Hack-a-Day and Slashdot, an enterprising geek named Shadowmite has completely redefined the capabilities of one particularly hot smartphone, the Treo 650.
The 650 is a pretty sexy piece of tech -- produced by PalmOne (henceforth Palm), it's a cellphone/PDA that people actually like. Integrated keyboard, a nice color screen, not-too-big size... it's a good product, even if it was a step backward, in some limited respects, from the 600. However, one thing has always bugged Treo users: the device has an SDIO slot. Folks make SDIO wifi cards. And similar Palm devices -- specifically the Tungsten C -- support wifi. So why can't the Treo? "Interference with the cell phone antenna!" cried Palm. "Impure thoughts from the user! The fundamental cruelty of the universe!" Basically: we tried, it's not our fault.
Now ask yourself: would I be telling this story if the corporation came out looking like the good guy?
So of course Palm was full of shit. Shadowmite was able to hack the device -- in a fairly minor way -- and turn the wifi support back on. Palm had built the device so that it supported wifi perfectly well, then decided to turn it off for some reason and lie to the consumer. Why did they do this? Well, the speculation tends to involve VoIP: if you put wifi on a phone, then users can place their calls over the internet instead of cell networks (whenever they're in wifi range, anyway). T-Mobile and the other Treo carriers probably didn't like that idea. It seems probable that they got Palm to axe the wifi feature in order to preserve their business.
It seems obvious to me that this is bad, but why it's bad isn't necessarily obvious. Nobody got cheated -- Treo owners weren't promised wifi, and they bought the device anyway. Aside from the lying there's no obvious reason to get angry at PalmOne. They're obligated to turn a profit, and failing to satisfy the mobile carriers would endanger their business.
No, what's frustrating here is that the market failed in the worst way: it created a scarcity where none was necessary. When companies are in the business of keeping things from the consumer, something has gone wrong.
I tend to take a pretty pragmatic line on all of this market nonsense: I think corporations should be allowed to exist only because they benefit the consumer. The law used to be unequivocal about this: corporations were only allowed to form when they could demonstrate that they would benefit the public. That's no longer the case; in fact, now they enjoy many of the legal privileges of individuals. When you reflect on the fact that legislation has been introduced to make it illegal to skip through commercials, it's easy to conclude that our society is teetering on the edge of adopting an unwritten Right to Profit. Folks, it just ain't so. Corporations are there to serve us; to the extent that I have to look at Coca Cola advertisements, or pay a patent royalty when I buy a DVD player, or surrender my personal information to private entities, I do so because of the idea that ultimately the system makes my life better. If it doesn't, though -- well, there's a lot of corporate intrusion into our lives. Libertarians worry about the government restricting their freedom, but the government's stupid, slow, and doesn't have much of a rooting interest. On the other hand, there are plenty of companies who'd love to lock you into a goo-filled cocoon, Matrix-style, and plug you into a giant computer simulation where all you ever do is refinance your house. I'd prefer to avoid that scenario.
Obviously there's a need for a measured, rule-utilitarian line here: you've got to establish principles so that people know what to expect. Deciding on a case-by-case basis whether a company has performed evil and should be disbanded would make the business environment impossibly unpredictable. By the broad standard of retaining and profiting from intellectual property so that its development might be encouraged, Palm hasn't done anything wrong. However, when companies find themselves in a position where they must take deliberate steps to ensure that whatever need they satisfy continues to exist, they cease to serve the public interest.
I have faith that eventually the market will take care of putting these jerks out of business. Let's not shed any tears when it does.
Comments
Corporations are just groups of individuals, and those individuals have a right to TRY to sell things at a price they think is fair. Consumers are ALSO a group of individuals who have the right to TRY to buy things at a price they think is fair. Corpoprations are not here for "the good of the public", they use the public for their own good, much as the public uses them for THEIR own good. It's a symbiotic relationship, based around fair trade and individual rights.
Your issues, in reality, are:
1. The government shouldn't be fucking with this system - legislating the broadcast flag is immoral and should be illegal.
2. Consumers aren't highly educated about every product that they buy, so when you ARE more educated WRT to a certain product, it's frustrating that people don't place the same importance on things that you do. YOu said it with "they weren't promised WIFI and they bought it anyway".
3. Palm basically lied about why it wasn't included. Here's a Hint: Stop buying their products, and tell them you are doing so if you don't like dealing with liars. Corporations are free to TRY to lie to you, but with a minimal amount of education, you can send them a message that you want to deal openly with them.
I think it's far more effective, in the long run, if the gov't stays out of these types of things. It requires (though somewhat painfully) that consumers become more educated about the products that they buy. Isn't that ultimately a good thing? Why would you blindly trust the goverment more so than "a coroporation" to tell you what's the case.
I also think that there are MANY MANY _businesses_ that are honest, open, and fair. Probably many more than you would like to think; those benefiting from capitalism and using it fairly, and to say that just because the VERY VERY few (in the grand scheme of things) you hear about in the media are dicks, it doesn't mean that all corporations (here's a hint: the hot dog vendor is a coporation, too) are evil.
Seriously, there are very few true monopolies, and you can avoid whichever corporations you think are evil with a minimal amount of effort on your part. And until you do so, and notify them of such, you really have no right to complain.
I think you're making a mistake by saying corporations are "just a group of individuals". Actually, the dictionary definition makes it pretty clear that this isn't the case: "A body that is granted a charter recognizing it as a separate legal entity having its own rights, privileges, and liabilities distinct from those of its members." I think it make sense to consider corporations as distinct entities rather than just a bunch of folks coming together. This thesis was most widely popularized in The Corporation, and I think it's an important one.
You and I basically agree that the appropriate solution is for folks to not buy PalmOne products if they don't want to be treated this way. But I'm not sure where most of your numbered points are coming from -- I didn't mention the broadcast flag in this post (although I probably have in the past); and I didn't mean to indict the intelligence of consumers as you imply in point 2 (the treo is pretty sweet even without wifi, and although it wasn't worth the money to me, I certainly wanted one).
It's true I don't like the lying bit, but my real problem here is that by removing a feature the Palm/Cellular cabal has deprived the public of wealth in order to ensure their own. That might seem alright according to the bizarre modern ethic wherein conglomerates are people too, but -- in theory at least -- it's not how things are supposed to work. The corporation is supposed to get richer by virtue of enriching the public (by providing goods or services that improve our lives). In this case that didn't happen. The company failed to fulfill its purpose, and I say fuck 'em*.
* (in principle, not in practice -- there's where the rule utilitarian bit comes in)
Your definition of corporation is just what I mean by "gov't should not be fucking with the system". Of course, end of day, the owners (all individuals) can sue the board of directors, and you could buy as much of any corporation as you want and are able.
But, more to the point, a business is not there to make your life better. They are there because they think they have something someone wants to pay for. And that's fine. You just have to decide which products enrich your life and which do not and purchase accordingly.
I fail to see how lack of providing access to wifi on your palm is "depriving you of wealth." You are the one taking your hard-earned money and exchanging it for a product; not them. You do not have a claim on anything they invent or come up with EXCEPT ON THEIR TERMS, which you are free to reject. If YOUR terms are fair enough, someone will provide what you want on YOUR terms (which will match THEIRs) and everyone is happy.
And, just think, if Palm had decided to "do the right thing" in your eyes, it would have required them to either (presumably) break a contract with Verizon etc., thus costing them lots of money in legal fees, thus driving up the price of their products, or NOT provide any cellular features, or pay Verizon some money to cover their losses in the event of someone using VOIP with that product.
Just as you decide how much to pay for things by buying them (or not), Palm and Verizion, too, must decide what things are worth. Palm probably decided that by using the same hardware for a new product, but disabling part of it, they could save manufacturing costs (keeping prices where they are) and meet whatever agreement with Verizon they had in place (if that was the case).
I think we're kind of getting at this from different angles -- a micro/macro distinction. No illegal activity has happened here. But I do think there's been a market failure. Resources were spent to create wealth in the form of a new product, then that wealth was kept out of the hands of the public. That's a failure of the system. Maybe there's no good way to prevent occasional failures like this one, but we shouldn't resign ourselves to them either. Property rights are a means, not an end.
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