CraigsList: Technology Enhancing Commerce

The Internet is a beautiful thing.  It can bring together people from many different worlds. It is invaluable in business in so many ways including bringing buyers and sellers together efficiently. In a failing economy we need all the help we can get. CraigsList is one of  the Internet’s commerce success stories.

I admit, I rarely take advantage of the possibilities of the Internet to enhance my life. While I often need tradesmen to fix up my 80 year old house I have not explored Angie’s list. And while I have several items to sell–primarily some furniture if any of my readers are  interested– I have heard of but not used CraigsList.

I start by being amazed that someone would have the idea and the execution skill to create an Internet business from something that was once dominated by large public companies–in the case of  classified ads CraigsList is helping to drive newspapers from the face of the earth. How can you take nothing and make it into revenues? True genius.

Actually the true genius is knowing where the money is.  In the case of personal ads it seems to be in prostitution. While no statistics have been presented on the percent of CraigsList’s revenues that prostitution provides, the Company has refused to eliminate its Erotic Services section.

On one hand there is the position of the typical sex worker (ba dum dum). In this CNET article a 35 year old sex worker expounds on how Craigs List has enhanced her work life.  “Craigslist is important to helping us avoid violence,” says the woman, who is originally from Europe. “Craigslist is a way to filter out that kind of person…and with Craigslist there is no need for pimps.” (BTW, all economists know that eliminating the middle man, pimps for example, make for a more efficient economy.)

The other point of view is represented in the CNET article by Chicago Cook County Sheriff Tom Dart. On Thursday, the Cook County Sheriff’s Office sued CraigList,  accusing the Internet site of being one of the largest sources of prostitution in the country.

In the interview with CNET News, Dart said that the kind of sex services being advertised on Craigslist frequently involves minors as well as people forced into prostitution against their will. The federal lawsuit filed by Dart’s office claims that Craigslist’s erotic section is a powerful marketing tool for pimps and prostitutes and makes it easier for criminals to elude police.

I am sure that the leaders of CraigsList have good reason for doing what they are doing ($$$). If a few minors become collateral damage in having a more efficient economy so be it.

The first thought in my head when I heard about this has its basis more in pure economics than commerce. Does a more efficient market merely enhance the profitability of the transaction or does it increase the supply and demand for the services? In other words, in addition to being able to sell my furniture can I thank CraigsList for increasing the number of prostitutes and those seeking their services.?

One last thought was supplied by a caller to a morning radio show I listen to on my way to work. Why would anyone go to the Erotic services section of CraigsList and pay for sex when they could click on the Personals section and find many people willing to have sex for free? Now in today’s tough economic times how can you turn down a free sample?

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About 48facets
What you read is what you get.

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