The Real Meaning of Markets

Seven seconds is the life expectancy of a detail. Phone numbers, names, street signs, the exact words in the last sentence, all gone in seven seconds, give or take a few. We can trick our minds into carrying more of the very recent past, but only one fact remains: memory for detail is wickedly, blessedly, short. Decay is the rule.

Yet meaning persists, and if it has any value, it grows.

Meaning is the valued cargo in our trains of thought. The trains come and go, but their purpose is to leave goods on the platform. That's what we get from what the other person says—or what they deliver when their words carry meaning.

What do we mean when we talk about markets? Do we mean populations of consumers we hope will buy our products? Do we mean fields of battle where companies fight to grab or protect territory? Do we mean invisible hands and other animal forces—bulls and bears—that push stock prices up and down? Do we mean a large drop zone at the end of the value chain?

How about when we use the word “market” as a verb? Do we mean air support for sales troops on the ground? Do we mean selling by another name? Do we mean “serving the customer, no matter what”, as Theodore Levitt put it? Or do we mean nothing, as Tom Hanks' character suggested in the movie Big, when he asked “What's marketing?” and his boss replied, “Exactly”?

The truth is, we mean all those things—each one is a metaphor. But here's what we forget: none of them were in use before the Industrial Revolution. None of them have anything to do with what markets were in the first place or how they really work.

The first markets were places, not targets, demographics, seats, eyeballs or other abstractions. In the first markets, producers and consumers were a handshake apart—and so were all the other reciprocal market nouns: producer and consumer, vendor and customer, supply and demand. They were all embodied in seller and buyer.

In the first markets, most sellers were also producers; most buyers were also consumers. Our surnames still express the personal roles our ancestors played in the markets they made: Weaver, Potter, Hunter, Smith, Shoemaker, Baker, Fisher, Carpenter.

The first markets were central to culture itself. No setting had a more civilizing effect on our species. The Greek word for market, agora, means “gathering place”. The Agora of classical Athens was where citizens gathered to make civilization. Politics, philosophy and democracy—all Greek words—were born in The Agora amidst the noise of commerce: vendors and patrons arguing the merits and prices of good bread and bolts of cloth.

For thousands of years, we knew exactly what markets were, but when industry arrived, we began to forget. We made markets into battlefields for competitors, populations of consumers, targets for messages, collections of numbers, forces with animal natures, economic demons and deities, and verbs for actions done to people rather than with them. Why?

Industry pushed production and consumption far apart, then reconceived business as an activity that begins with factories and ends with consumers, interposing a vast distribution delta between the two. As Alvin Toffler put it in The Third Wave, industry drove an “invisible wedge” between production and consumption. By rending the two, this wedge “ripped apart the underlying unity of society, creating a way of life filled with economic tension, social conflict and psychological malaise.”

The movement of materials from production to consumption—from flax to linen and from ore to musket—was a long one, but this distance made room for business at every stage along the way. Thus the wedge Toffler talks about is the “value chain” that runs like a conveyor belt from supply to demand, producer to consumer. For two hundred years, we have been thinking in terms of that chain and the metaphor it requires. In business, that metaphor is shipping.

We literally conceive business in shipping terms. We make content that we address for delivery through distribution channels. What we now call markets (populations of tastes, demographics or characterizations like eyeballs) are so far removed from their suppliers that we need a new professional concern, marketing, to understand and influence them. To do its work, marketing uses military versions of business' shipping metaphor. It addresses goods called messages, but deploys them through campaigns that are aimed or targetted to deliver impact or obtain penetration.

In the Industrial Age, these metaphors made perfect sense, but now that age is ending. It is customary to say we now live in the Information Age, but we have also customarily conceived information as an industrial good. In fact, we betray our industrial thinking when we re-characterize information as content. The popularity of the word “content” betrays a monstrous irony: we live in an age of information, while continuing to think in industrial terms.

For example, speaking to PC Week last year, Lycos CEO Bob Davis said, “We're a media company. We make our money by delivering an audience that people want to pay for.” Note the two different species: audience and people. And note the roles: the audience is cargo; the people are customers. You can see Toffler's wedge sticking out of Davis' head like an axe. Look in the mirror of our own prose, and we see the same axe wedged in our own heads.

With that axe still stuck in our heads, we misconceive what's really going on in the marketplace. We don't see that the Third Wave is not the next stage after the Second Wave, but a return to the First.

The Internet is not just a way to ship content. It is the new agora. It restores markets to what they were in the first place: settings where people can meet, talk about “Stuff that Matters” (thank you, Slashdot), and sell goods to each other. It allows us to reconceive markets as conversations—just as they were before we began to forget, before the long interruption we call the Industrial Age.

What does all this have to do with Linux? It's us—the Linux community—along with like-minded carpenters building the new agora with materials and methods (especially open source) that we create and share. We do it for the same reason our ancestors did it: it's good for everybody's business.

More than any other professional category, open-source developers are demonstrating the truly conversational nature of markets. That means we are the ones in the best position to remember and demonstrate what “market” actually means. It's our job to start yanking those axes out of everybody's heads.