Proposition 1: Groups, clubs, committees and professional associations would make better decisions if their smarter, more passionate members were to get involved.
Proposition 2: Central banking would work if only Alan Greenspan had a smarter brother.
Proposition 3: True Communism has never been tried.
I don’t consider these statements equivalent, but they are of the same species, the Wishful Thinking Fallacy.
Inasmuch as we are living through the nightmare of Proposition 2, one might think we could learn a lesson. We won’t, and every eye was on the Fed this afternoon.
Parents who wrote a fat check for a skinny college Freshman in August can expect the return on their investment in the form of Proposition 3 over Thanksgiving dinner.
From Proposition 1, though, there is not even the comic relief of a sardonic resignation. We want so desperately for it to be true that we will not even consider entertaining the obvious truth that all committees suck, and good committees suck the least when they adjourn early.
These three propositions are alike in another way, a way that illustrates why they are uniformly false, any devout wishing to the contrary: All three turn on a power devoid of consequences. They are fundamentally anti-Capitalist. Their errors are not correctable accidents, they are a necessary consequence of the caprice that is the opposite of Capitalism:
But in fact, in politics and economics, the opposite of capitalism is caprice. A government’s decisions are not awful because they are always corrupt — although they often are. They are awful because there is no reward for being right, no penalty for being wrong, and no one anywhere to take responsibility for anything either way.
Capitalism is not instantly rational — it is not always automatically right about what to do, where and in what quantity. But capitalism is ultimately rational. In due course, entrepreneurs will achieve something approaching optimal results. Why? Because they are rewarded for being right, penalized for being wrong, and they are proud to take responsibility for their endeavors.
Matthew Hardy left what I thought was a brilliant comment to my post on technological ineptitude at the Arizona Association of Realtors:
So the instruction is to join the miasma that produces the current offerings? I don’t think Greg is being merely contrarian. I think he doesn’t want to see good ideas diluted. Many innovators believe that consensus does not always produce the best product.
Why not instead instruct members of local associations, committees or boards to simply read this blog?
David Gibbons from Zillow.com asked me in email if the NAR has responded to my jeremiads against it. David would be all over every complaint, within an hour, but the Cluetrain doesn’t run in Chicago.
In a very thoughtful comment, Charles Woodall offer this:
The best way to effect change, albeit a slow process, is to become involved in the leadership of your association.
I could not disagree less. The best way I have of effecting change is right here, talking about what we and other people are doing in our businesses, challenging other bright people to match and surpass our efforts and leaving the dinosaurs in the dust, their minds inert and their mouths agape.
The instant point is this: Not even Mycroft Holmes can make Communism, central banking or committees work as you might wish them to work. Their failure is an unavoidable consequence of their composition.
More viewpoints, pro and con, on supplanting the NAR:
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Technorati Tags: disintermediation, real estate, real estate marketing
Scott Rogers says:
Your idea of effecting change (expressing your views on your blog, instead of becoming involved in your associations) relies upon the change-makers reading your blog — which I suspect may not happen based on your generalizations about their use of technology.
Matthew Hardy suggests telling those leaders to read your blog, but again, I think that is unlikely to occur.
I’m curious — are you currently involved in the leadership of your local or state association, or have you been in the past?
September 18, 2007 — 7:43 pm
Greg Swann says:
> Your idea of effecting change (expressing your views on your blog, instead of becoming involved in your associations) relies upon the change-makers reading your blog
Like fun! My idea of change is changing my way of doing business. If you want to do better, you’ll change, too. If not, you’re not my problem. The dinosaurs in the NAR will be introduced to change by the auctioneer, the constable and the locksmith.
> I’m curious — are you currently involved in the leadership of your local or state association, or have you been in the past?
Never. Never will be, for many more reasons that I’ve named so far.
September 18, 2007 — 9:08 pm
Michael Wurzer says:
Greg, here are a couple of ideas that don’t require you to join a committee to consider:
1. Competition is good.
2. Standards foster competition.
3. RETS is a standard being promoted for real estate.
4. RETS adoption could benefit from promotion to your readers. The more brokers and agents who insist that their vendors follow industry standards, the more systems will be able to work together.
5. The more systems that work together, the more choice there will be for end users.
6. Life and business is good.
Importantly, beyond the technical standards, MLSs also need to agree on data access and distribution standards. This is why I started the Future of MLS Wiki, to get people discussing these ideas to enhance and preserve competition.
To that end, there are both short and long-term views. In the short-term (1-3 years), I’ve proposed that once broad and deep data standards are developed (this should be largely complete by December at the current pace), that all MLSs should agree to contribute data to a national repository in exchange for the right to download whatever slice of the national data they want. This approach would create intense competition among MLSs and make cross-market boundaries disappear. In essence, any MLS will have the option to become a national MLS, or a super regional or sub-regional or hyper-local or micro or whatever MLS. The point is, choices will abound.
In the long-term, all software may hit the repository directly and a true national MLS might develop. I actually don’t think agents will use such a tool regularly, they’ll stick with the more tailored versions competition will produce, but advertising companies could have a hay day, if they could get access, and the complaints about antiquated user interfaces would disappear.
These appear to be issues you care about (namely preservation of choice and competition), as evidenced by your posts the past few days, and there are discussions occurring right now that will tilt one way or another and will either foster competition or frustrate it. There’s no need to join a committee or attend a meeting, but hearing your views on these possibilities certainly would be interesting.
September 18, 2007 — 9:09 pm
Greg Swann says:
> Importantly, beyond the technical standards, MLSs also need to agree on data access and distribution standards.
Actually I cut a big chunk from that post dealing with MLS systems. Here’s a piece of it:
I know RETS is dear to your heart, but it means nothing to me. It seems unlikely that we’ll divorce the commissions anytime soon. Stipulating that, in preference to a national standard for MLS listings, what I would like to have is multiple MLS vendors competing for my money at the local level. Tempo sucks, and while some other monopoly product might suck less (much as Paul Volcker sucked less than Alan Greenspan), every monopoly vendor sucks where it counts, in competing for the satisfaction of individual end-users. Even an oligopoly of vendors would be preferable to the current monopoly. As a general principle, leaving individuals free to pursue their own ideal of perfection is preferable to any alternative. Chain gangs are for slaves or prisoners, not free people.
September 18, 2007 — 9:28 pm
Michael Wurzer says:
That’s the point. Standards make that possible.
September 18, 2007 — 9:34 pm
Greg Swann says:
> That’s the point. Standards make that possible.
The ARMLS database is stored in Access. If it were made available to multiple vendors, with end-users free to pick one and switch at will, the standards those vendors used would be their business. At that point, I’m philosophically anti-choir, as it were, since I don’t associate innovation with committee-bred standards. Either way, it doesn’t matter to me as long as I’m dealing with a vendor who wants to earn my loyalty and, at the same time, fears the loss of my business. At a certain point, a contractor is a black box. If the output is satisfactory, the internals are irrelevant.
I’ll put it another way: I’m interested in my job. I love it that you’re so interested in yours, because as soon as I have to concern myself with your job, I’m already thinking about firing you. If your claim is that my job requires me to think about what you’re doing, I’m already an unhappy customer. I’m paying you so that I don’t have to think about how you do what you do.
I want free competition among hungry MLS vendors — ideally without having to concern myself with the internals. I will not get this until listings are no longer controlled by the NAR, which means, practically speaking, until the commissions are divorced. Whatever benefits RETS may bring — and they may be legion — it will not rid me of the scourge of a monopoly MLS vendor at ARMLS.
September 18, 2007 — 9:57 pm
Scott Rogers says:
“Whatever benefits RETS may bring — and they may be legion — it will not rid me of the scourge of a monopoly MLS vendor at ARMLS.”
It’s possible in the near future that you could rid yourself of your current MLS vendor, if:
1. Your current vendor provides a RETS feed (most do these days), and
2. MLS vendors tweaked their product to be able to:
– run off of data from a RETS feed instead of data in their internal database, and
– sell it to individual agents as an interface for accessing MLS data
The only issue, I suppose, would be using that third-party app to write back into your local MLS. Michael — does RETS address “write” issues, or only “read” issues?
September 18, 2007 — 10:37 pm
Michael Wurzer says:
At this time and in this place, I do think brokers and agents should concern themselves with the standards being developed. This isn’t doing the job of a technologist but rather defining the reality you want. As with all things on the web today, the reality is definable and someone will define it, whether it’s Facebook, Google, NAR, Realtor.com, ARMLS, Zillow, or the brokers and agents who engage on the issues. I generally understand the issue of divorcing the commissions but I don’t understand how that impacts the aggregation of listings, which, I believe, is both useful and necessary for agents and consumers. Even if the commissions were divorced, wouldn’t it still be beneficial to aggregate the data? And if that is true, doesn’t that require some level of cooperation among the brokers collecting the data? Lastly, even though the commissions are not divorced, there are MLSs in the country now where there are multiple MLS systems in the same market, competing as you desire. It is possible and made more so by data standards, because that makes the markets much easier for many competitors to attack. The examples of standards fostering innovation abound, from electricity to the Internet, which is entirely built on standards of the type I’m speaking. Anyway, I do understand and respect your desire to not care about this issue. I just thought I’d take another crack at it, but I could have saved us both some time had I heeded Seth’s advice regarding marketing to those with a lack of interest. 🙂
September 18, 2007 — 10:41 pm
Greg Swann says:
Ah, so RETS is like the public schools! I can pay for the vendor I really want, so long as I pay taxes to support the vendor I don’t want. Who says membership organizations aren’t just like governments…?
September 18, 2007 — 10:41 pm
Michael Wurzer says:
Scott, yes, RETS deals with the writing back to the server and that part of the specification is called update.
September 18, 2007 — 10:46 pm
Greg Swann says:
If we divorced the commissions, we would be rid of the MLS entities. What happened after that would be a free-market problem. Everything you’re trying to do would be much easier, virtually overnight.
> there are MLSs in the country now where there are multiple MLS systems in the same market, competing as you desire
Where?
September 18, 2007 — 10:47 pm
Scott Rogers says:
One well-known example is in the Detroit market — they are served by both MiRealSource and RealComp.
In some other markets across the country you have similar situations, or if not entirely overlapping MLS coverage, they overlap enough such that the MLS systems are competing as Michael indicates.
September 18, 2007 — 10:57 pm
Michael Wurzer says:
Minneapolis, Chicago (at least until recently), and Atlanta (two competing MLS operations in the same market) have this situation now, and many more (like the CDU in Southern California and other regionalization efforts) are pursuing a multiple vendor or “front end of choice” model.
Left exclusively to individual choices (the free market), I do not believe any one site would gain a critical mass of listings for any length of time. The Zillows and Trulias of the world prove that right now. Every broker could choose right now to put their listings on any or all of those sites, but they don’t all choose the same sites for their own competitive reasons. This little bit of cooperation is something of value I believe the MLS brings to the table separate from the offer of compensation.
September 18, 2007 — 11:08 pm
Greg Swann says:
Are there any Realtors working in cities with multiple competing MLS systems who can talk about their experiences? What I’m interested in, and what I’m not sure I’m hearing about, are multiple competing systems reading from and writing back to the exact same database of listings. I don’t care if any of them also serve other markets, provided that each serves at least one market in common. Within that one market, how do you get to choose which vendor to use, and how is that vendor compensated?
September 19, 2007 — 12:14 am
Michael Wurzer says:
We don’t service any of those markets, so I don’t have direct referrals for you. Perhaps some of your readers are from those markets.
My general understanding is that these systems read from the exact same database but listing maintenance typically is done through a single application and the resulting database is then distributed on a highly-frequent basis (every five minutes or so) to the competing applications. Of those I know about, I don’t believe the members pay any more to choose any of the competing options. I believe these markets present more of an oligopolistic situation, where the MLS has chosen the vendors and negotiated contracts with them on a per actual user (as opposed to membership-wide) basis. But, again, I have no direct knowledge of this, just what I hear in the marketplace.
At any rate, whatever is the case today has little to do with tomorrow. A national repository fueled by RETS has a lot of benefits. To get there quickly, however, I suggest that leveraging the existing systems through a mutual right of download of the entire database would enable competition to produce the best result.
September 19, 2007 — 5:30 am
Michael Cook says:
A lot of Greenspan bashing going on out there. While I totally agree that committees tend to be less effecient than individuals, I do not agree that they are inferior. Give me the FOMC over nothing (or worse one smart person). Sure the government will always be one step behind smart people, but if left unchecked “smart” people could do some real damage. See MBS derivatives, subprime mortgage packaging, etc. Blame the government if you must, but without them creating the boundries on the playing field, the world would be much, much worse.
September 19, 2007 — 7:11 am
Greg Swann says:
> Give me the FOMC over nothing (or worse one smart person).
These are both specious alternatives. The cure for the ills of centralized banking is decentralized banking. There would still be crises with private banks of issue, but they would be localized by region or industry-specific. The kinds of national crises we expect and regularly get from the Federal Reserve Bank could not happen. Alan Greenspan understands this better than either of us.
September 19, 2007 — 8:42 am
Michael Cook says:
“The kinds of national crises we expect and regularly get from the Federal Reserve Bank could not happen.”
Disagree totally here. Look at the global implications of the US economy. Just because our Fed has no bearing on the banks of others does not means its actions do not. Similiarly in a decentralized economy with transactions happen across borders, you would see the same effects. There is a reason why the SEC creates Blue Sky laws to guide states and why a variety of federal organizations keep state laws in check.
Smart people will always go where its easiest to make money and where the laws are loosest. In an active economy, there is no such thing as a localized problem. Ask Europe how they feel about our Subprime issue. A local problem, with very global realities. Who would have thought because some homeowners in California didnt pay their mortgage payments that a bank (possibly banks)in the UK or Germany would go under? I wont even go into the issues that has caused.
Looking at implentation of centralized banking makes more sense then comparing centralized and decentralized banking if your argument is one governance by committee. National crises would be far worse with decentralized banking. You dont have to Alan Greenspan to understand that.
September 19, 2007 — 9:58 am
Greg Swann says:
> National crises would be far worse with decentralized banking.
Completely absurd — and belied by history as well as theory. A corollary statement would be that centralized automobile or software design would yield fewer and smaller errors. No electrician would wire a house with one big generalized circuit breaker rather than dozens of breakers specialized by room, application and amperage. No competent engineer would design a complex system with one centralized failure point. The only way private banks of issue could produce crises like those produced by central banks would be if every one of those private banks made exactly the same errors of judgement at exactly the same time. We know from thousands of years of human practice that decentralized decision-making produces better results and fewer, less-consequential errors — and this is why it is no surprise that economic theorists — including Alan Greenspan — consistently argue against central banking. What we’re going through now is not an anomaly. It’s a necessary consequence of running all of our financial power through one over-loaded circuit breaker.
September 19, 2007 — 10:57 am
Michael Cook says:
1967? Anything more recent. I am sure Greenspan learned a few things in 30 years. Not to mention the fact the article has very little to do with a decentralized economy. Speaking of specious alternatives(I just looked that up 🙂 ), the things you mentioned above are lacking the human characteristic of economies.
While this discussion has gotten way off topic, I still dont see you addressing any of the things I mentioned above. Unfortunately an economy is not like an electrical system or any of the things you mentioned above. And it never could be. The fact that people can move in and out of markets means that there has to be a way for an economy to act in concert to address overarching concerns. My argument is simple, the US economy is way too big, too agile, and too important to be fragmented. It would be like having to pay a toll and show a passport to get from one state to the next. Or worse, allowing one state the abiliity to wage war (economy or physical) against another.
Again, if history is so telling, how come the European Union, UK, Japan, China, and others seem to think central banking is the way to go? They are far more recent converts than the US. Centralized banking done right is far superior to decentralized banking. Centralized banking done wrong (i.e. Great Depression of 1929) is evidence of nothing. Centralized banking reduces economic volatility and allows for quicker more measured responses to economic shocks.
September 19, 2007 — 12:26 pm
Sock Puppet says:
I was under the impression “The Cluetrain” was written by a committee.
-Athol
September 19, 2007 — 5:29 pm
Greg Swann says:
> I was under the impression “The Cluetrain” was written by a committee.
The Cluetrain Manifesto was written by four entrepreneurs working together.
September 19, 2007 — 8:07 pm
Greg Swann says:
> how come the European Union, UK, Japan, China, and others seem to think central banking is the way to go?
Central banks, going back at least to the quaestors of the Roman Republic, are a means for governments to impose a hidden tax on passive thrift by artificially inflating the quantity of money. It’s no mystery why governments like them.
September 19, 2007 — 8:11 pm
Charles Woodall says:
>>I could not disagree less. The best way I have of effecting change is right here, talking about what we and other people are doing in our businesses, challenging other bright people to match and surpass our efforts and leaving the dinosaurs in the dust, their minds inert and their mouths agape.
Changing the real estate business in the grassroots effort you suggest would be a slow process as well. Look at the Fair Tax. Grassroots efforts are great, but it would literally take thousands or ten of thousands of people to make it happen. We already have a powerful trade organization in place, so getting a few hundred people involved would be easier, in my humble opinion.
While your thoughts are noble, and I agree on several points, until leadership in REALTOR associations on the local and state level want to move into the 21st century, it just isn’t going to happen. Folks such as yourself getting involved will be required.
September 20, 2007 — 8:20 am
Sock Puppet says:
Greg can’t “get involved” because he sees trade groups and governance as causing the majority of problems he sees by their mere existance.
It’s like telling a pacifist to join the miltary and work from within. The two viewpoints are mutually exclusive.
-Athol
September 20, 2007 — 1:59 pm
Greg Swann says:
Athol Kay: I would take it as a blessing if you would not presume to speak for me. In the second place, you have no idea what you’re talking about, but, in the first place, it’s morally objectionable behavior.
September 20, 2007 — 2:27 pm
Sock Puppet says:
“Shut up” is not an argument.
-Athol
September 20, 2007 — 5:26 pm
Greg Swann says:
> “Shut up” is not an argument.
You have every right to speak in your own behalf. You have no right to presume to speak for another person. It is well-poisoning, a form of the argumentum ad hominem, and it is not acceptable.
September 20, 2007 — 8:13 pm
Sock Puppet says:
Well then, speaking on my behalf and phrasing everything in the form of question…
Greg, I don’t believe that you can “get involved” because I believe you see trade groups and governance as causing the majority of problems you see by their mere existance.
Would I be correct in thinking that someone telling you to “get involved” would be like telling a pacifist to join the miltary and work from within. The two viewpoints are mutually exclusive.
I ask this question, because as I see it, it is the fundamental problem with the anarchist viewpoint. It sheds some great insight into the problems of social organization, but creates a moral quagmire for it’s adherents in affectting social change, because effective social change both requires, and results in, social organization.
Am I understanding your point of view correctly?
September 21, 2007 — 7:11 am
Greg Swann says:
> Am I understanding your point of view correctly?
Obviously not.
As I said, you have no idea what you’re talking about. If I thought you were actually curious, I would be more helpful, but, as before, I think this is simply well-poisoning.
For the benefit of inlookers who may have been confused by this move: In addition to working with the very diverse contributors to BloodhoundBlog and running a very, very small business, I am a married man with a son. Obviously I am not opposed to social relationships. What I oppose, argue against and hope someday to see banished from human civilization are involuntary social relationships — crimes.
September 21, 2007 — 7:36 am