Blog Archives

Could the Alibaba Model Undo the Wal-Mart Model?

These are questions that arise as a consequence of the digitization of the global/local supply chain in the peer-to-peer model.

Longtime correspondent Bill M. reckoned I missed the longer-term story in my piece on the Alibaba IPO: namely, that the Alibaba Model of makers selling directly to buyers could undo the Wal-Mart Model of super-stores dependent on massive inventory. My essay The China Boom Story: Alibaba and the 40 Thieves addressed the China Boom rather than the Alibaba model, so let’s compare and contrast the Alibaba model and the Wal-Mart model.

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When Conventional Success Is No Longer Possible, Degrowth and the Black Market Beckon

“Phantom economies tend to give rise to gray and black markets in proportion to the deviance of the phantom economy from reality.”

College graduates around the world are discovering that getting a university diploma no longer guarantees the conventional success story of a secure job and a life of ever-rising consumption. Doing all the things that the Status Quo said would lead to success no longer yields success, for the simple reason that the Status Quo is failing on a structural/systemic level.

The system is rigged to protect the Status Quo mafia from competition. As noted in The Mafia State of Mind (February 6, 2014), the Status Quo is a set of overlapping monopolies/extortion rackets. The system needs a trickle of new technocrats and apparatchiks to manage the rackets, but there is no place for the tens of millions of college graduates who are flooding into the job market every year around the world.

New conventional enterprises face essentially impossible barriers: sky-high rents, absurdly lengthy and costly permitting processes, onerous fees and reporting requirements, and a host of other barriers reputedly imposed to “protect the public” but whose real purpose is to eliminate small-enterprise competition to corporate dominance.

Which organizations have the cash flow, financing, legal expertise and political influence to meet all the requirements and pay the insanely overpriced leases? Global corporations and the state–two sides of the same kleptocratic coin.

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The “Impossible” But Inevitable Solution: Decentralization

What lies beyond the current failing, unsustainable versions of Capitalism and Socialism? Decentralization.

Correspondent John D. recently sent in a link to an interview with energy expert and author Jeremy Leggett. The title, “Make no mistake, this is an energy civil war” is a bit sensationalist, but the gist of his point is that centralized control of energy (and the capital that controls the energy and distribution networks) are colliding with new models of decentralized, locally autonomous control and ownership of energy generation and distribution.

Given the immense power of the banking/energy/political Elites that directly benefit from centralization of energy, capital and political power, I term this decentralization solution “impossible.” Yet because it is driven by the diminishing returns of the centralized model and the emergence of the Web as an unstoppable force distributing decentralization and new models, the transition from ossified, failing centralized models to adaptive, faster-better-cheaper decentralized models is also inevitable.

This is the context of Leggett’s view that there is an ‘energy civil war’ between the powers defending centralization and those promoting community ownership and control of energy:

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