November 15th, 2017
Hogging the Holy Water
A couple thousand years ago, Hero of Alexandria, engineer, author, mathematician, and above all inventor, encountered a problem that needed fixing. Visitors to a nearby temple were helping themselves to more than their fair share of holy water. Hero’s solution was to invent the vending machine. Insert a coin into Hero’s vendo, and the weight of the coin would cause the pan on which it rested to tilt. This tripped a lever which started a flow which lasted until the pan finally tilted so much that the coin fell off and everything returned to the starting position, awaiting the next pilgrim with the next coin.
Fast-forward two thousand years to the latest “disruptive” technology. Two ex-Google employees – demonstrating the combination of avarice and tone-deafness for which their tribe is famous – have gotten venture capital funding for what they call Bodega™ and what anyone else would call a vending machine with bluetooth.
Two things help to fully decode their pratfall. First, the name. If you haven’t spent time on the east coast, then you might not know that a bodega is a corner store of the kind that carries a little bit of everything, from lottery tickets to milk, and is typically run by moms and pops of color. The second is that the startup’s business plan fancies a future where no city dweller will ever be more than 100 feet from Bodega™, meaning “centralized shopping locations won’t be necessary.”
As you might imagine, naming your startup after the institution you plan to kill is not high on the list of ways to be subtle. There’s been a lot of verbal backtracking since word got out, but a visit to Bodega.ai shows that blogs are cheap. The smugly confident PR photo still screams cultural appropriation and the product shots — lumbersexual white millennials rising from their creative class slouch to buy a Bodega™ snack — neatly delineate the cliché worldview and those who get to inhabit it. We will likely never know whether haplessness or offering only products you’d find in a real vending machine would have been the undoing of Bodega™ because there’s already a much bigger truck coming at this particular puppy. The real “innovation” underlying Bodega™ is putting retail workers out of work, and the Bodega™ founders are very late to that party.
Retail work may not be glamorous, but it’s the 800-pound gorilla of United States employment. The factory workers and coal miners beloved of Trump voters are small potatoes next to the people you meet in the checkout aisle; they are the most common kind of workers in the United States, their numbers in the millions. And they are squarely in the sights of automation-fixated management.
If you’ve checked your own bag at the airport or scanned your own items at a big box store, you are already an (unpaid) employee of the corporations experimenting with automated customer service. The executive suite is still exploring how this works, massaging the final roll-out, seeing just how human-free it can be. Amazon even has a company commissary where automation enables a sort of criminal fantasy: by taking anything off the shelf and walking right out with it, the customer flirts with being a kleptomaniac; by invisibly removing funds from the customer, the company role-plays the pickpocket.
Now, I’d be the first for to admit that I’ve had some retail experiences — chain drugstores in NYC loom large here — for which I would gladly trade for the anonymity of a machine. But they are greatly outnumbered by the other kind. By way of example, I give you the two grocery stores in my community.
One is a national chain, a Safeway, and the other is a local firm, started 60 years ago. The general rap on the two stores is that the local one has better products and the Safeway is cheaper, but in many ways, they appear similar to customers.
But these two stores look dramatically different if you watch what happens when money touches them. Leaving aside the way in which large grocery chains in the US practice predatory pricing – using their effective monopoly to dictate prices to their suppliers, farmers particularly — the path of any money spent at Safeway follows a distinctive path.
If I drop $100 at Safeway, $25 of that will be end up in paychecks for someone who lives near me. Spend the same amount at the local grocery, and $52 will end of in the pocket of my neighbors. They, of course, will spend that too, and if they’re thoughtful about it, they’ll try to spend it at businesses where the main office is in the same town as the front office. If you’ve got an active local business community, it’s not unusual for a given dollar to circulate four or five times before it departs for an untaxed account in the Caymans.
This is basic local economy stuff, but it’s worth repeating that keeping dollars circulating in the place where you live literally means there’s more wealth where you live. That’s because for most of us, what matters isn’t the number of actual dollars, but the number of times those dollars change hands. Money, it turns out, has a velocity, and if we keep it moving amongst our friends and neighbors, it has the same effect as attracting new money from outside our communities. It’s called the multiplier effect.
Now, what about that other $75 that I spent at Safeway? Well, it immediately leaves my community, transmitted to the conglomerate HQ in Boise. But Boise, not altogether unsurprisingly, isn’t the last stop. That would be NYC and the offices of something called Cerberus Capital Management. That, we discover, is a firm which specializes in distressed (vulture) investing and is run by a billionaire (Steven Feinberg) who is given to pithy quotes like, “If anyone at Cerberus has his picture in the paper and a picture of his apartment, we will do more than fire that person. We will kill him.”
(I should mention that when I started writing this piece I had never heard of Steven Feinberg or Cerberus Capital. But what does it say about how the world works that three minutes’ web-searching for the geographical location of Safeway’s HQ delivers supporting evidence for the notion that sociopaths are disproportionately represented among CEOs of large companies? Bonus trivia: Cerberus is the monster dog that guards the gates of hell in Greek mythology, preventing the souls of the dead [and apparently the cash of the living] from escaping.)
All this means that when someone in my community of 23,000 chooses between patronizing Safeway or “The T&C,” they are also, unwittingly, making a choice between funneling their money to Feinberg and his photo-shy colleagues or to the Nakata family who, it so happens, live about a 20 minute walk from their store. The 52¢ on the dollar that T&C recycles through the local community is in the form of wages and locally produced products. For Safeway, the bulk of the 25¢ on the dollar that doesn’t immediately go into Cerberus’ dog dish is mostly wages for employees, who are by definition local. And that is where automation rears its head, with the promise of transforming local employees into placeless corporate assets in the form of retail automation.
So, back to where we started. Is Bodega™ asset stripping disguised as “innovation?” I’d say yes, but Bodega™’s ambitions are damn pathetic compared to the state of the money mining art represented by large grocery chains. If anything, Bodega’s hapless creators failed the most fundamental trick that your local Safeway does every single day — vacuuming money out of your community without anyone noticing.But, as dubious as all this is, the question that nags at me isn’t economic at all. It’s about the the interaction that goes with the transaction.
One day, this self-same local grocery not far from my home, I caught sight of a checker leaving her register to bustle back into the produce aisles. She had a large box of berries in hand and a frankly skeptical look on her face as she accosted the first greengrocer she encountered.
“Take a look at this, what happened here?” she demanded as she held out what had been ten dollars worth of ripe and delicate raspberries, but now seemed like they’d been mugged. The greengrocer pursed his lips.
“Looks like they got dropped—”
“Exactly what I said!” exclaimed the checker. “The customer put them on the belt and I told her she had to get a better box of berries and she says, ‘No, no, I dropped them…’ So I just took them away from her.”
The checker unloaded the wrecked berries into the hands of the greengrocer and took a fresh box from the display, bustling back to the checkout, shaking her head. “Can’t be eating berries off the floor…”
Now, I don’t attribute this to the inherent goodness of traditional grocery stores. I think it’s more a matter of the specific culture of this specific store and the particular checker and for that matter, another day with all the same players could have lead to a different outcome. But the point is that what I witnessed — or any of the dozen variants of it that might have happened — would never happen with Robo-Checker.
This, I think, is the fundamental choice that’s being offered to us. When big dogs like those at Cerberus slaver over the prospect of automated aisles, they’re hoping that we will choose to glide past machines instead of take the risk of rubbing up against other people. It’s no accident that Hero invented the vending machine in a city. His Alexandria was huge and thriving, rivaled only by Ancient Rome, a home to one of the Seven Wonders, filled with people of different cultures, a hub of learning and trade. There was so much humanity that the keepers of the temple didn’t have time or patience to measure out their holy water to all those who came in search of what only it could provide.
I have no doubt that Hero was delighted with his cleverness (and it was damned clever). He’d solved a human problem by cutting out the human factor. Never again would thirsty, dusty, or guilty pilgrims hog the holy water, and the temple would turn a profit in the bargain. In this, it’s difficult not to see the template of Hero in his present-day tech descendants, finding a way to smooth over the alternately surprising, awkward, annoying, and delightful ways we provoke one another with devices that remove both the uncertainty and the serendipity for a small fee.
Of course, modern tech is more polished. It’s all meant to look the same, only faster and more convenient and comfortingly predictable. You’ll get what you are after with no one to break your concentration or intrude with a thought that wasn’t yours. Machine learning will ensure that the corn chips are never out of stock, and that the holy water always flows. The only thing that you might miss, fleetingly, during the period of transition before all such jobs are automated, would be the presence of another person. But, honestly, they were usually just there for the transaction, too, earning their pay while you spent yours. And, after some years, you and I will probably forget that every once in a while, the person on the other side of the checkout counter did something that reminded us that what was holy wasn’t only in the water.