Rethinking Markets

John Gruber talks about a difference between Google and Apple’s approaches to selling hardware:

Google Glass absolutely is generating buzz, but it’s not “the sort of buzz usually reserved for Apple products”. Glass has nerds excited; Apple products get the general public excited, and often annoy nerds by being iterative improvements that press the “familiar but better” button instead of the “new and different” button.

“Familiar-but-better” is consistent with an approach to institutional change that emphasizes continuity and incrementalism (Wolfgang Streeck and Kathleen Thelen’s Beyond Continuity is where I would start with this, especially their introductory chapter). The main idea is that revolution is rare, but that doesn’t mean that there is not transformation. Instead, it is a mistake to imagine that dramatic institutional transformations only happen as part of revolutions. Institutional changes are more likely to occur as incremental changes.

One reason for this is that any existing institutional structure is likely to have incumbents who benefit from it. And they often (but not always) get good at protecting their way of doing things. The second is that current arrangements define what ‘works’ and what does not ‘work’. That last one is a bit vague, but there’s a good study of the development of bicycles in Wiebe Bijker’s book Of Bicycles, Bakelite, and Bulbs. It is a study of technological change, where one of his arguments is that when there is no set idea of what a bicycle is, there is quite a bit of variation in what bicycles look like. Some are sporting bikes, others are cruising bikes. The design of these bikes is variable, they are good for different things (think, old-timey giant-wheeled bicycles). When the safety bike ‘won’, alternative designs began to look like bikes that ‘didn’t work’ – they weren’t stable enough, they required wheels that were not effective, etc. The working bike then began to define what kinds of bikes came afterwards. Bijker (and SCOT studies) calls this theoretical closure.

If you are looking for revolution, then, you run the risk of being too disruptive, or having a non-working solution. I’m thinking broadly here – Lis Clemens talked in The People’s Lobby about challenges associated with women’s suffrage. Occupy Wall Street, with its alternative forms of organizing as well a message that was so different from what the Very Serious People were talking about, provoked almost across-the-board heavy handed resistance. I can feel this slipping into a kind of ‘acting within the system’ versus ‘acting outside the system’ argument, but that’s not what I am trying to get at. Instead, it is more about institutional creeping versus institutional hopscotching.

So the iPod is a better Walkman, and an iPhone is a better cell phone. Electronic futures trading is just a faster version of face-to-face trading. Revolution gets smuggled in in familiar form. You can often see incumbent players, misjudging just how revolutionary a change is, reacting late. What seemed like a small technological change which instead re-opened a theoretical closure. Suddenly the MP3 technology re-opens a conception of what works in music from ‘audio fidelity’ (which was supposed to be the promise of digital music) to ‘transferability.’ And file-sharing.

The challenge, of course, is to flesh out when a creeping change is likely to become transformational, and when it’s not.