Thursday, October 20, 2011

Amazon and Information

Recently I read a Wall Street Journal article about the founding of One paragraph was very surprising to me:

One of [the founder's] more controversial early decisions was to allow customers to post their own book reviews on the site, whether they were positive or negative. Competitors couldn't understand why a bookseller would allow such a thing. Within a few weeks, Mr. Bezos said, "I started receiving letters from well-meaning folks saying that perhaps you don't understand your business. You make money when you sell things. Why are you allowing negative reviews on your Web site? But our point of view is [that] we will sell more if we help people make purchasing decisions."

I have always been used to user feedback and reviews, so I just considered it a natural fact of life on the Internet.  It amazed me that the concept could be controversial or that anyone could question it. Yes, if people post negative reviews of a book, then other customers will not buy that book. They will buy a different book. Then they will be happier with that other book, which means they will be happier with the store and more likely to come back. And chances are that the better-reviewed book will be more expensive, so the store get more profit when reviews steer your customers away from cheap junk and toward good stuff.

People who questioned Amazon's strategy obviously have no idea how the modern world works. Lying, misrepresentation, or even just concealing information is not a viable long-term strategy in the Information Age. Companies that try to prevent information flows in order to sell inferior products will not survive very long, nor should they. People who would prevent the posting of negative reviews have a short-sighted sociopathic mindset. They are trying to make a quick buck by shoving junk onto their customers. Any well-run company, by contrast, will welcome user feedback and use it in their purchasing decisions, in order to reduce the chances of buying or promoting junk.

People have an instinct to lie and hide information. This is because these were good strategies in our ancestral environment of small bands of foragers. If there are only about a hundred people to interact with, and there is no written language, no kind of recording technology, no way to take objective measurements, and there is no rule of law and everything of importance is decided by political intrigue, then a charismatic liar can be very successful. People really can bury negative information forever in that environment. But that world started to end when the Dark Ages were replaced by the printing press and the Enlightenment, and modern technology is finishing it off.

In the modern world, people will find out the truth, and they will reward the people who help them do so. The success of Amazon, and the failure of so many of its competitors, shows this.  But the Wikileaks mess shows that our governments do not get the modern world either. They are like the companies whose now-dead business plans relied on hiding information from people. Diplomacy is still based on lying, deception, double-speak, and other kinds of sociopathic Stone Age behavior, and our government shows no signs of trying to change its behavior. Instead, they continue to use the power of the state to try to fight the tools of honesty.

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