Craigslist: Libertarian Newspaper Slayer!

Michael C. Moynihan | June 3, 2009

I'd understand if The New Republic's Barron YoungSmith watched this ReasonTV video excoriating the politicians and pundits who advocate newspaper bailouts and was left wondering if "libertarian ideology is killing newspapers." But this bizarre post at The Plank argues that Craigslist's owners, often (erroneously) blamed for destroying the old media business model by putting classified ads online for free, are destroying the news industry because they "are devoted to a form of libertarian ideology." He explains:

While Wal-Mart is bent on maximizing returns for its shareholders--an appropriate goal, for a corporation--Craigslist is not. Instead, [Big Money's Mark] Gimein explains, Craigslist doesn't even try to profit from its economic activities, because its owners are devoted to a form of libertarian ideology:

For all the stories written about Craigslist and the profiles of its founder, the company can still baffle anybody trying to make sense of it. A telling episode was the performance of Jim Buckmaster, the CEO who runs Craigslist day to day, at an investor conference where he was asked to explain the company's strategy for maximizing revenue. Buckmaster answered that it didn't have one... or want one because that wasn't the point.

[Ellipses in the original.]

I haven't a clue what any of this means. Is one engaged in "economic activities" if, by and large, no money is changing hands? If there is no intention of making a profit; no advertising; and limited fees for those posting ads? (Small fees were first introduced as a way of preventing double posting of real estate listings from spamming New York brokers). So why is Wal-Mart (a company I defended here) not "libertarian," while Craigslist, which is run by the left-liberal Craig Newmark and basically provides its services for free, is? It is unclear how Jim Buckmaster's non-strategy strategy counts as sinister and free market, but YoungSmith adds this bit of clarification:

Instead of profits, Gimein shows, Craigslist's owners manage the organization in the service of an idea.

A lesson that it was hard for [me] to learn," [founder Craig] Newmark told Charlie Rose, "was that people are good and trustworthy and moderate." Craigslist is Newmark's vote of confidence in that lesson. ... Bad things don't come from what two individuals decide to do together. They come from the institutions that stand between them.

Shorter YoungSmith: A business that facilitates yardsale-like transactions, that eases the process of unloading your excess junk on neighborhood hoarders, is working in service of a libertarian idea. And by destroying a key newspaper revenue stream, those Craigslist libertarians are, in turn, destroying those who valiantly defend democracy at the Los Angeles Times, Rocky Mountain News, and Lowell Sun. Or something.

Comments

|6.3.09 @ 6:53PM|#

Actually, Craiglist seems to be intent on gathering massive market share, then slowly start introducing revenue streams -- in particular, the $10 fee for posting in the adult services category.

Basically, right now almost everything they do is a loss leader, but that could slowly change.

|6.3.09 @ 6:59PM|#

Long story short:

The prostitute resents the promiscuous.

There, saved you a lot of bloviation.

|6.3.09 @ 6:59PM|#

Is one engaged in "economic activities" if, by and large, no money is changing hands?

Lots and lots of economic activity involves transactions not facilitated by government fiat money (and thus not subject to taxation):

barter systems

A housewife or househusband providing child care and other domestic services in exchange for certain services.

A boyfriend exchanging affection and romance in exchange for his girlfriend providing sex.

A neighbor lending a hand painting your house in exchange for you later helping them build a fence, or pick mangoes off the tree in your yard, or whatnot.

And on and on.

|6.3.09 @ 7:06PM|#

Shortest YoungSmith: I don't understand much but I get paid to write anyway.

|6.3.09 @ 7:48PM|#

Even shorter YoungSmith: I don't know what "libertarian" means.

dead_elvis: Excellent. I love that.

|6.3.09 @ 7:56PM|#

If Craigslist is evil

and Libertarians are evil

then Craiglist is libertarian

Famous Mortimer|6.3.09 @ 8:33PM|#

Holy Shit! OMG! They mentioned Libertarians.

Somehow, despite the author's confusion, Craigslist will likely make one of those Libertarian lists where the vast majority of the groups or individuals listed on it couldn't even define the term "Libertarian."

PETA used to do the same thing regarding Vegetarians.

GILMORE|6.3.09 @ 10:24PM|#

What dead elvis and Josh Corning said.

I think what it has become is that people who are used to "Conservative/Liberal" - "Republican/Democrat" - now cling to some kind of false "Libertarian vs. Sensible Centrist" dichotomy.

As in, "Silly libertarian, why do you so hate the status quo so?" As though all libertarian thinking has something to do with burning down our institutions and implementing some kind of anarchic state.

It has nothing to do with acknowledging the basics of classical liberal thinking. I blame the weasel farming/bazooka owning branches of libertoids for promulgating this idea. And the Lew(Rockwell)tards.

ed|6.3.09 @ 10:58PM|#

this bizarre post at The Plank

The what? Oh, let me click the link...

"It's long been remarked..."

Hold it right there. "It's" means "it is," not "it has." This story fails from the git-go.

Why is Reason linking to third-rate blogs? Filler? Boredom? Discuss.

pedantphile|6.3.09 @ 11:48PM|#

Hold it right there. "It's" means "it is," not "it has." This story fails from the git-go.


Uh, no. It's perfectly fine as a contraction for both "it is" and "it has."

|6.3.09 @ 11:53PM|#

I'm scratching my head at this one. Economic activities certainly don't have to involve money per se. Economists realize that any sort of transaction involves economics, and that time is money as well.

But usually libertarians are painted as being too obsessed with money. I've never heard of the "libertarians too obsessed with making things cost no money" idea. Is this new?

|6.4.09 @ 12:05AM|#

Here is my take on why YoungSmith says that Craigslist is working in the service of the libertarian (small "l") idea.

In a libertarian society economic transactions are easy to do because there is less government interference.

A guy/gal could make an elixer and say that it cures people of socialism. (Always a good idea). He wouldn't need to spend megabucks getting this new elixer approved by the FDA before he could market it.

He just makes it up, puts a label on it and attempts to sell it.

This is what Craigslist helps people to do. Complete economic transactions easier without a lot of government type of overhead and hinderance. So in that sense it is libertarian (small "l") like. But then so is eBay.

|6.4.09 @ 12:45AM|#

How do you figure that anything they do is a loss leader? Their sites aren't very flashy. It's mostly just text. Bandwidth costs must be next to nothing.

Paul|6.4.09 @ 1:27AM|#

Los Angeles Times, Rocky Mountain News, and Lowell Sun.

Let them eat cake.

But seriously guys, you're overthinking this. It actually has far less to do with economics. At least not directly.

The answer is hidden right in front of you.

Freedom of association.

To wit:

Bad things don't come from what two individuals decide to do together. They come from the institutions that stand between them.

Seriously. Can you guys think of one thing that is more an anathema to the liberal than freedom of association? It's at the core of everything they consider evil. Freedom of association leads to unfavorable outcomes. And therefore, institutions must stand between people for their protection.

|6.4.09 @ 1:36AM|#

I've never heard of the "libertarians too obsessed with making things cost no money" idea. Is this new?

Not really. Far-left anarcho-noncapitalism has been around a while, a melding of the hatred of monetary exchanges with a hatred of the state. Charles Stross has described such a moneyless state quite well in one of his novels -- I think it was Accelerando, but maybe it was Glasshouse or Halting State. All wonderful books, BTW.

How do you figure that anything they do is a loss leader? Their sites aren't very flashy. It's mostly just text. Bandwidth costs must be next to nothing.

If you only lose a tiny amount of money per transaction, a miniscule fraction of a cent, it is still a loss leader, and you still have to have some profit center from people drawn to the site by the loss leaders to make a viable business model.

It's just that Craigslist has their costs pared down so much, they can essentially give away virtually everything for free and still be a viable business.

Making lots of money isn't a necessary condition for libertarianism -- it's just that the people who are attracted to this philosophy tend to be considerable more financially successful than average, in part because if you're the Fountainhead propping up a welfare state, the theft becomes so blatant it's hard to ignore without massive cognitive dissonance.

Justen|6.4.09 @ 2:23AM|#

That big media is mentioning libertarianism is an almost sure sign that the authoritarians are so low in public confidence that they need to attack their tiny minority opposition before they loose any sheep.

As far as Craigslist goes, I think they *are* maximizing revenue, even if they don't know it. Their success is predicated on the huge user base, which would shrink massively if there was even a penny charged per post. Not only due to people refusing to pay, but due to not having the means or confidence to use online payment systems. It's hard to imagine a circumstance where they could make up the difference in volume from increasing prices. It'd be suicide; and even if it did work, why take the risk of changing a hugely successful model? They're clearly not going bankrupt.

Mike T|6.4.09 @ 7:07AM|#

I haven't a clue what any of this means. Is one engaged in "economic activities" if, by and large, no money is changing hands? If there is no intention of making a profit; no advertising; and limited fees for those posting ads?

I've seen "libertarians" who are staunch defenders of the IP cartels argue that the mere act of production is inherently an economic activity, and that neither trade nor profit is directly related to the question of whether or not it is an economic activity. Totalitarian to the nth degree, but there you have it (not that I agree with it).

|6.4.09 @ 7:31AM|#

YoungSmith:
Craigslist is a market and is free.
Libertarians like the free market.
Craigslist is Libertarian.

|6.4.09 @ 7:46AM|#

Shorter article:

Craigslist takes ad revenue from papers, threatening me.

Libertarians oppose measures I've attached my ego to, and oppose bailing out my newspaper, threatening me.

They both threaten me, so they both must be the same.

Tomcat1066|6.4.09 @ 7:57AM|#

It's always fun to see people discuss libertarian principles when they don't even know WTF they actually are. It gives me a warm, tingly feeling. While Craigslist has some libertarian ideas (the lack of government control over the market), it's still not a libertarian thing...and I don't care how much they try to claim it is!

Xeones|6.4.09 @ 8:46AM|#

Shut the fuck up, Barron YoungSmith.

Virtual agorism FTW

robc|6.4.09 @ 8:54AM|#

before they loose any sheep

Is that like letting slip the dogs of war, only fluffier and dumber?

Larry Miller|6.4.09 @ 9:13AM|#

The great American chicken foot symbol Craigslist uses speaks more to leftist hippie roots. They may function to facilitate Libertarianism, but I doubt that it is their goal.

As far as the newspapers loosing a revenue stream, classifieds are just a part of their problem. Using Craigslist is immediate as well as free. You type the ad yourself and it is ready. You don't have to go through some intermediary and give them your card number and wait a day or two.

Ads are just one more way the internet (not Craigslist) is killing the newspapers which have long ago deserted their defender of democracy role.

|6.4.09 @ 9:38AM|#

So why is Wal-Mart (a company I defended here) not "libertarian," while Craigslist, which is run by the left-liberal Craig Newmark and basically provides its services for free, is?

Whether they are engaged in economic activity involving the exchange of legal tender is largely irrelevant to whether they are libertarian.

Libertarianism is a primarily a political philosophy espousing minarchism. You can be engaged in purely libertarian activities that are not economic in any sense at all, by establishing/supporting civil society institutions that displace the state.

|6.4.09 @ 9:39AM|#

Is one engaged in "economic activities" if, by and large, no money is changing hands?

Sure, if growing marijuana in your own back yard for personal consumption is "interstate commerce."

robc|6.4.09 @ 9:59AM|#

As far as the newspapers loosing a revenue stream

I suggest they tighten it up then.

Come on people, twice in one thread? They arent even homonyms or homophones or homosexuals.

I hate going all grammar nazi (especially since I confuse no/know on a regular basis), but there is no excuse for lose/loose confusion. None.

|6.4.09 @ 10:13AM|#

no excuse for lose/loose confusion

Sticky keyboard after a long night at nastydwarfs.com

|6.4.09 @ 10:28AM|#

The author at the Plank is a moron, however, the more controversial comment is made by Moynihan.

often (erroneously) blamed for destroying the old media business model by putting classified ads online for free

What's erroneous about blaming Craigslist for the decline in classified revenues? Craigslist is the leader in online classifieds, revenue from classifieds in newspapers has dropped over $10B since its peak in 2000. Granted, people would likely go to the web for classifieds anyway, but it's not a stretch to blame a new competitor for doing significant damage to an existing business.

|6.4.09 @ 10:29AM|#

I don't think that the newspaper people have figured out that operating Craigslist costs practically nothing. They don't need legions of copysetters, salemen, marketers, delivery boys, etc. If they made the site less usable (e.g. by charging money), people would just migrate to a Craigslist-clone site.

|6.4.09 @ 12:32PM|#

Newspapers (at least the MSM ones) are some of the main supports of The State. Craigslist threatens newspapers. Craigslist therefore threatens The State and is thus libertarian. See?

|6.4.09 @ 1:36PM|#

I think it was Accelerando, but maybe it was Glasshouse or Halting State. All wonderful books, BTW.

Expain how Accelerando is even readable, let alone wonderful. I like Charlie Stross, but I put this one down for good when that douchebag got his fancy glasses stolen. Do likeable characters appear at some point?

|6.4.09 @ 4:36PM|#

The great American chicken foot symbol Craigslist uses speaks more to leftist hippie roots.

I don't think hippies were originally leftist...I agree Craigslist comes from the hippie sensibility...but not necessarily a leftists one.