Monday, 31 January, 2011

Organic trading

If I leave the internet aside for a minute and look at the world around me, in an Indian city like Delhi, I see a whole new dimension to life, commerce and trade; one that is vastly different from the virtual tools with slick interfaces that abound on the internet and attempt to make life easier for the one whose lives are already too easy.

The most obvious deduction from this is the inequitable distribution of wealth and how a few are getting more prosperous while the majority breathe in the fumes left in the wake of the speeding economy. Moved by this deduction, one's charitable streak might be awakened; and we have countless NGOs and pseudo-charitable institutions that start with noble intentions and end up nowhere.

This, I think, is precisely where the problem lies. Nobody would indulge in charity if it were not convenient and rewarding, in some way. Charity requires a certain relative degree of downtrodden-ness to exist. If there is none, we humans would artificially create one; so that there would be someone to save. The definition of homeless, for example, is quite different in different societies. Now, a recipient of charity is bound to change with the arrival of aid. It is inevitable that he will begin to look more and more like the donor. As the gap is closed, the downtrodden-ness decreases, the donor is progressively less motivated to be charitable; and starts looking for opportunities where the efforts at charity will result in a greater sense of fulfillment and reward; leaving the earlier recipient hanging in a half saved state.

So, charity as a means to achieve a just future, is part of the problem. It depends on a fix. And like any drug, it requires newer cells to kill.

Having eliminated charity, what remains is trade. sell what you have to others who are willing to reward you for it.

Simple as that appears, there are a few problems that make it difficult for everyone to know how to be rewarded in an optimal way. In a small, insular town, things are simple. Everyone knows whom to call when a pipe bursts; and the plumber can only charge what the people can afford to pay.

With millions of people moving from those small towns to the cities, we are back in an Indian city like Delhi. Walk along any busy street where brisk trade occurs, and usually where bargains are to be had, and you will find hungry bunches of people squatting by the side of the road with the tools of their trade before them - plumbers with their wrenches and pipe bits and painters with brushes and paint mixing cans. It is like a marketplace for casual labour. These people, called naka (street corner) workers, wait for work to come their way. It is most likely an organic evolution of a marketplace, which started with two people engaging in trade, both of whom nobody remembers. There is no entry barrier to trade at this market. OK. Perhaps the mafia regulates the market, but the mafia by its very nature is organic too.

Far from being an unorganized sector, the naka workers and domestic help in India are quite organized. Just that they are organized in organic ways, which are self-regulated. While this is probably a more 'sustainable' way of conducting trade, it does not fit with the inorganic evolution of marketplaces in urban society. Thus you have a home improvement store in a mall that provides plumbing services to people who visit such malls at rates that are not even on the same planet as the rates charged by the naka plumber, for the same amount and quality of work. The quality has to be the same since the store's plumber was sourced from the same milieu as the naka plumber.

The naka worker, squatting in his organic marketplace, charging the same fee to buyers from all strata of society is quite clearly the loser.

So, what is it that differentiates the naka plumber from the store? I think it is the availability of information that would enable trade.

Matchmaking - between the one who wants his wall painted and the one who would like to paint it and be paid for it.

The internet is a great place for matchmaking - of all sorts. However, I get the feeling that internet based matchmaking is restricted to urban and/or inorganic marketplaces. And since there always is a gatekeeper, any marketplace that is purposefully created on the internet will by necessity, be inorganic and hence tend towards inequality.

There are two problems in the above paragraph - One of enabling works in organic marketplaces to better their lives and the second of achieving justness.

Justness, I believe, can come about from transparency of information and I had written about this in an earlier post.

Enabling organically evolved (or evolving) marketplaces to trade with the more rigid forms of business is a challenge.

To give an example, how do you get the naka plumber in touch with a prosperous urban and (normally exploitative) client and help him quote a 'market price' for his services and land the contract?


  1. Firstly, please include another reaction - 'thought provoking'.
    Secondly, yes, as you have so preceptively pointed out there is a need for a unique 'internet' for india. Such 'naka' workers in a developed country would probably have iphones on which they would check their orders. What would be the equivalent in a third world country? e-chaupal was one such - maybe that model can be replicated...?

  2. I think a combination of SMS+not-for-profit+call center might just about do least for a start