Confessions of an eBay Addict

Ebay

Your contributor first tried using eBay in its early days and was not very impressed. The experiment was not repeated for several years.

However, a combination of desperation for a particular item and the persuasion of an acquaintance with a more successful experience led to the internet auction site being given a second chance over the summer – with such positive results that there is a danger of addiction.

eBay has come of age – for reasons that should bring joy to all supporters of free markets.

First, it is a perfect example of how supply and demand can be seen to be setting a fair price. If you are looking for an item that comes up fairly frequently, and are in no hurry, it is worth taking the time to watch the closing prices of auctions. There are exceptions, when someone gets caught up in the heat of bidding, or picks up a bargain while no one else is watching, but, more often than not, prices for items of the same type usually settle around similar figures.

Second, it illustrates how open markets with a free flow of information are better at improving quality than any amount of regulation. When most business was essentially local, reputation was the key to quality. One of the drawbacks of globalisation was that reliable information about reputation became harder to obtain. However, that is less of a problem on eBay now that their rating system is well-established. Most sellers, and buyers, are proud of their scores and will go out of their way to avoid them being reduced by a single negative rating.

Operations like eBay and Amazon Marketplace point the way to how most businesses will operate in future. Some products and services, by their nature, require personal contact, but, for the vast majority, the global marketplace is already a fact of life, and international marketing and sourcing the norm. This will be increasingly tough on businesses, like the proverbial corner shops, whose focus has been exclusively local, but even such businesses may profit if they take the opportunity to develop an online operation that synergises – using that word properly for once – with their existing work.

The Secret of All Business Success

Haber-Bosch

While Britons and Americans are gloomy about deficits and possible recession, for Germans it is as if 2008 never happened.

Germany has just reported the highest export figures since records began. While there are worries about the euro, this is only because other eurozone members are so weak. Germans predict a “golden decade” ahead for their own country.

That may be hyperbole, but there is no denying that Germany is now in a relatively strong position. There is no mystery to that success. Successful nations, businesses, and entrepreneurs all follow a very simple formula: provide others with the goods and services they want, but keep a firm grip on the finances.

The firm grip on the finances has been the Merkel government’s great contribution. Even left-leaning German ministers were scornful of the British – and, by implication, American – government attempts to borrow their way out of the 2008 crisis. The results of the differing approaches are plain to see: Germany came out of the crisis quicker and stronger.

As for providing the goods and services people want, the German way has always been to compete on the basis of quality rather than price. If you want something done cheaply, go to China; if you want it done to perfection, go to Germany.

This gives the lie to the accusation that business favours globalisation because it relies on “cheap labour”. German labour costs are high, but the business community – unlike its critics – has always understood that quality has a price, and has never objected to paying that price so long as it gets value for money. It objects to high labour costs only when there are no viable products or services in return for its investment.

Germany’s high labour costs are – usually – justified by the high quality of both the labour and its end product. This quality in turn owes much to the superiority of the German secondary, tertiary, and technical education systems. When American and British entrepreneurs are asked why they no longer locate their factories in their home countries, they usually cite the high labour costs – but they are just as likely to mention how the state schools there are not providing them with workers fit for employment. Indeed, many of them would rather employ a German who has been taught excellent English than a native English-speaker. Germany has itself become a successful brand name again.

5 Reasons Why the Swiss Succeed

Zurich, Monday 16 August 2010

When most informed commentators are issuing dire warnings about the economic future of “Europe”, they usually mean the European Union, or at least the Eurozone.

So the warnings do not apply to Switzerland, which is neither a member of the EU nor in a particularly dangerous financial position. This is not to say that everything is perfect in Helvetia, or that the Twenty Six Cantons have some form of exemption from the problems of the global markets – but it does seem that Switzerland is in a far better condition to weather the storms than most other European countries.

Swiss Chateau

 

Although Switzerland’s independence from the EU is currently working in its favour, it would be facile to attribute the relative prosperity of the Swiss to that one factor alone. It is rather a symptom of a number of deeper strengths that have allowed the Confederation to enjoy hundreds of years of wealth disproportionate to its natural resources.

1   In spite – indeed, because – of its small size, Switzerland has always understood its economy depends on being open to foreign trade.

2   The high sense of civic responsibility of the Swiss, combined with the small size of both the Confederation and its constituent Cantons, have always imposed a tight fiscal discipline on government. It is harder to hide public debt when it must be shared among a small population.

3   Swiss banking and tax laws have always been hospitable to outsiders with money.

4   Switzerland is proof that economic liberalism is compatible with a strong sense of social cohesion, based on shared traditional values. Switzerland is a clean and safe place in which to live and do business – a nation armed to the teeth in which there is little gun crime.

5   The Swiss retain a formidable work ethic, an obsession with the quality and precision of their products, and a passion for punctuality. Although Switzerland has been mocked as the nation which gave the world the cuckoo-clock, the clever little timepiece is actually a good symbol of the virtues that make a strong economy.

The combined impact of these strengths is a healthy economy, which means a strong currency. Perhaps that is why your contributor, trying to stretch out is his devalued pounds sterling, feels so impoverished travelling through this great nation.

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