The Lanier Effect

The Holy Grail for those of us that practice information aggregating is finding root level information sources. One of the most profound thinkers of our time is Jaron Lanier, who recently sat for an extensive interview with Edge.org. Jason is responsible for popularizing the term virtual reality. He consults to some of the most powerful organizations in the world including Google and Microsoft.

It is very difficult to translate his most recent thoughts into a brief narrative, however, I will try, so forgive me if I don't quite get it all correct or you come away with different conclusions after reading or watching the interview. 

Jaron explains that Walmart was the first global information network and was able to capture a global market by combining their knowledge of consumer buying patterns, manufacturing and transportation logistics. Once they sprinted out ahead they developed such an advantage that it was impossible for anyone to catch them. The problem is that they got so big and so good at what they did that ended up consuming their market. They were successful because they were able to offer value by significantly reducing the cost of consumer goods and food. They were able to provide value by controlling the manufacturing processes and leveraging the wage differentials achieved by outsourcing production offshore. In the process they became the worlds largest employer, but their workers are low wage earners. As years became decades, we became so dependent on cheap prices that we traded away the middle class along with our manufacturing capacity. The Lanier Effect is that if you use your power to capture a market instead of just trading in it, you will not have a long term sustainable model. 

Make no mistake, this is not all about Walmart. He discusses how Google creates so much data that only they can sort it, how Apple is choking on their tether to iTunes, how insurance companies only want to cover healthy and safe people and how the financial services industry was eventually poisoned by their own toxic waste. I hope I haven't tried to make it too simple, as he does a very deep dive.