In one generation, the Internet went from opening up new free markets to creating a series of Fake Markets that exploit society, without most media or politicians even noticing.
1. The open internet markets
American culture loves to use the ideal of competitive free markets as the solution to all kinds of social problems. Though the vaunted Free Market has no incentives to, say, take care of babies with cancer, a well-functioning market can definitely be a great way to see which provider offers the cheapest price for a roll of toilet paper or a bushel of apples.
Given that cultural predilection, some of the first things people made in the early days of the web were new markets. Perhaps the canonical example was eBay; anybody (well, almost anybody) could list their ceramic figurines for sale on eBay and participate in a relatively fair market. On one side, a gaggle of figurine aficionados, enthusiastically searching for the best deals. On the other, a bunch of figurine vendors, competing on price, quality and service. In the middle, a neutral market that just helps connect buyers and sellers through instantly updated information. Everybody’s happy!
Later, a seller could buy preferred positioning for their products in eBay’s search results, and some product categories started to be dominated by wholesale suppliers, but it still remained a relatively open system. Everybody’s mostly happy!
Not long after eBay started, Google launched, as a sort of market of content, with its PageRank system choosing which pages show up in our search results, ranked by the number of inbound links. On one side were readers, and on the other side we had publishers, and in between was Google using a mysterious but still kind of comprehensible algorithm to create a market where almost everybody felt like they could participate.
But before long, those rankings started to be tainted by spammers… Read the full version from the author’s website.