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Civilization and its complexities

Cobb keys off a post by Nulan to talk about complexity as it relates to advanced civilizations like ours. Nulan's argument is that eventually things get too complex and then civilization goes splat; Cobb counters that as profit margins get skinnier, civilizations tend to simplify, and offers Wal-Mart and gas stations as an example.

It's the market at work, and to a certain extent it relates to the spread of chain restaurants and chain stores. People want a certain amount of variety, and the presures of the market force people to find a successful formula to work with instead of reinventing the wheel. Thus you get McDonald's and Burger King and Wendy's in place of all the little mom & pop diners, because as franchise owners they can tap into a purchasing network that gets them the lowest prices on beef, chicken, fish, and veggie patties along with all the other starchy sugary goodness on the fast-food nation's menu. (For that matter, down home there's even a chain of diner-style restaurants for folks that want that kind of experience.) Ditto for Mexican food, ditto for seafood, ditto for steak, in a variety of market niches that cater to everyone from Joe Sixpack to Rush Limbaugh.

The same is true of gasoline - the number of independent refiners and oil companies has been squeezed down until there's only a handful of major gasoline chains left, since it doesn't make a whole lot of difference to most drivers whether the gas comes from BP, Chevron, Exxon, SuperAmerica, or the handful of mom & pop places left that buy their gas by the tankload from Valero, which has the lion's share of the refineries these days. Cobb's wrong about gasoline on the national level, by the way - because of EPA regulations and state laws, 90 octane midgrade in Iowa isn't the same as 89 octane midgrade in Virginia, but since the differences are between regions they're pretty much invisible to the average driver.

By and large, mature technologies are a lot simpler to operate than new, bleeding-edge stuff, but they do have some complex production requirements behind them. Wal-Mart's low prices come at the cost of a significant investment in complicated supply-management software; the failure to acquire or develop that software eventually killed K-Mart and drove it into the arms of Sears. Jury's still out on whether that merger's going to work out in the long term or just put off the demise of both companies for a few years. Meanwhile, not everyone shops at Wal-Mart, either because the clothes are too cheap or not stylish enough, and that's why Target is still around, to say nothing of the other dozen or so clothing stores that cater specifically to teenagers, white-collar women, and yuppies. Complexity.

Speaking of mature technologies and market niches, I wonder if somebody besides Nissan will take advantage of the fact that Ford and GM are shuttering a lot of plants and laying off workers. It strikes me that people might be willing to pay a little more for custom cars built to order with chassis and drive trains from Chrysler, GM or Ford. Saturn, Kia and Hyundai showed that the market is open to new makes of cars; is it all that unrealistic to think that Packard and Studebaker might make a comeback along with other vanished companies?


( 4 comments — Leave a comment )
Dec. 6th, 2006 06:17 pm (UTC)
Apparently, it was this "Nulan" who sent the article to Cobb, but the article is mine; and it is basically a summary of Joseph Tainter's Collapse of Complex Societies. I disagree with the point of Cobb's post, which he also left a paragraph of as a comment on my article, so I will quote my response to him:

Since you left a similar comment on the post itself, I'll simply quote my response there:

By that logic, states would be less complex than tribes, because states consolidate many tribes into a single entity. But this isn't the case at all; rather, states institute additional layers of complexity on top of the tribe.

Does corporate consolidation really simplify the economy? Does 1 WalMart replacing 17 smaller stores make things simpler? I would argue that it does not, since the functionality of those stores are now subsumed as departments at WalMart. In other words, all the complexity once carried on by each of those 17 stores remains, though now as a department at WalMart rather than an independent store. What WalMart does is the same as what the state does: it adds a level of complexity on top of those other stores.

This has obvious benefits, most immediately an economy of scale (but see Jeff Vail (http://jeffvail.net)'s "Anti-Economies (http://www.jeffvail.net/2005/10/anti-economies.html)"). Whether or not complexity has benefits is not the issue, though; the issue is the marginal return one can get from that investment in complexity—or, for example, whether the benefit of an economy of scale is worth the added costs in overhead, management, and other costs of increased complexity.

As I added in response to his own article:

To illustrate the general nature of this, let's take a look at another example you raise here—varieties of fuel. There are certain areas where complexty limits further complexity, such as fuel. By reducing the types of fuel available, interoperability increases, and you can produce more complexity based on that. Yes, we have reduced the types of fuel, but we have done so in order to increase the types of machines that can use it. Net complexity increases. That's an important point—it's net complexity that civilization is always compelled to expand, and that sometimes means reducing complexity in one niche, but the net result is always more complexity.

Jason Godesky
Dec. 7th, 2006 03:12 am (UTC)
Re: Complexity
Thanks for the correction and the comment, Jason. I don't know the real name of Nulan (or cnulan, as he's known in Cobb's comments) and jumped to the conclusion that you were he, for which I apologize.

While I'm tempted to argue that consolidating 17 mom & pop stores into one Wal-Mart Supercenter certainly simplifies things for the consumer, my own post would contradict that argument. I will say that if the increased complexity doesn't profit somebody, then it's not going to happen - the market, left to its own devices, will destroy the excessively complex innovation and move on.
Dec. 7th, 2006 11:40 am (UTC)
In thinking about Mom & Pop stores vs. big chains, I think from now on I'm going to choose The Source over Borders (even though I have a Borders Rewards card) when it comes to buying manga/graphic novels. And one of the owners of The Source is a friend of mine (he always used to set aside new Sailor Moon merchandise for me back in the days when Sailor Moon was A Big Deal). A lot of the employees recognize me. Although with the number of customers I see there most times, I don't think they're in any danger of going under. They offer something that is rare in American society today - customer service!
Dec. 7th, 2006 01:38 pm (UTC)
It's how the mom & pop stores win: they become part of the community and exploit niches that the chains don't do well in.
( 4 comments — Leave a comment )



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