Social lending (Prosper, Asheesh Advani and Virgin Money, Zopa) is one more dimension to power to the people - brought about by the internet. The more I think about it, the more it seems to be that it is finally the possession (exclusive, mostly) of knowledge that is the real power - or at least it is what gives the politicians, the financial markets (commercial bank, investment banks, hegde funds, private equity - everybody who makes more money than the sorry investor who puts his money in the bank and earns a paltry return) and the retail industry their power.
All the three above are essentially brokers; brokers of information. They are not really a part of the division of labour chain; they are facilitators. And while facilitating, they take your money (oh yeah make no mistake, the banks are more unthrustworthy than even your politican with his false promises and the retail guy who charges you that hefty premium). None of them are a skill industry; take their monopoly on knowledge away and you can take them away.
Which is what is happening. Ebay Amazon Yahoo etc took on the retail industry. Betfair took on the bookmakers. Then electronic trading took on the brokers from the financial industry. Now social lending on the commercial banks.
There will be more to come. We will take on the equity analysts - they are easy meat; an open online analysis and ranking platform of companies can obliterate those. Better electronic trading, with more tools to the users, (and maybe using the power of distributed computing) can take out the marketmakers, even the hedge funds. When social lending becomes commercial lending, the commercial banks will start fading. A consolidation of political views on the internet can take on the politicians.
It shall be a fairer world. Information, knowledge and thus power to the people.
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1 comment:
No new brainy stuff to blog? Try some stupid ones. U r allowed. Atleast I can relate to them.
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