Recently I wrote Why Email Clients Need to Change which was a commentary on a post by the same name on gigaom. The gist of the post is that we are on the verge of a paradigm shift in personal information management, driven by the explosion of user generated content about which we care (ours and others). Managing all this information with our current application technology is untenable. Email clients, blogs, twitter, and so on, in their current form, won't cut it. As ever more of our life is brought into the digital world, we will have better ways to deal with and organize this information.

Over the past few weeks I've seen an increase in the amount of spam to one of my email addresses, perhaps as much as three times the average from a month ago. It's usually not possible to tell the exact cause of an increase in spam: unless you judiciously track and sparingly use an address, there is always the possibility that it's arrival on spam lists was simply delayed or through an avenue you had not even considered. Nevertheless, I decided to try to search for the address in Google to see if I could find some clue, and I just may have found one.

Forgive me my ignorance if there is already a way to do this.

I find it so odd and frustrating, this friction between 'for the good of consumers' and 'for the good of companies' in our society and economic system. That is to say that, often what is 'good' for the people is not good for enterprise, and vice versa, what is good for enterprise is often not good for the consumers they serve. Wouldn't it be splendid if corporations generally tried to do what is good for themselves, except where it is not good for consumers? After all, are corporations not made up of people themselves? Why must corporate owners go to such lengths to further their own profits with little or no regard to the people that make the enterprise possible in the first place?!

Take as an example the measures that credit card companies take to ensure that consumers use credit cards for purchases so they can benefit from the fees merchants pay to make those purchases possible (which amounted to more than 42 billion dollars in 2007). Of course credit card companies want to keep this revenue, and at the time when the network was being rolled out it made a lot of sense to charge fees for the novel service. Unfortunately these fees are inevitably passed on to consumers, even those who choose not to use a credit card, by spreading the fees out over the cost of the products.

This is not a 'natural market dynamic;' the situation is being artificially maintained by credit card companies who dictate the rules merchants must follow in the credit card processing contract, to ensure that consumers remain uneducated and merchants have little choice. For example, as I understand it merchant contracts usually state that if a merchant wishes to give discounts to customers paying in cash, they must post both prices and the credit card price must be more prominent than the cash price.

Credit card companies argue that this prevents 'bait-and'switch' tactics by merchants, where higher prices are charged at the register, but I don't completely buy it. First, the cost of processing credit card transactions has continually dropped, yet processing fees have remained constant. If the credit card companies were really concerned about merchants defrauding consumers, I think they would reduce the processing fees to alleviate pressure to use a split price system. Second, why does the credit card price have to be more prominent, could they not be of equal prominence? If the system is well understood (i.e. has been around for a while), then consumers will generally be aware of surcharges related to credit card processing fees. Furthermore, since consumers would become aware of the fee and view it from the perspective of a surcharge, credit card processers would be forced stop price fixing in order to be competitive.

Most importantly, perhaps, is that the system being imposed by the credit card companies benefits them another way which is very damaging to consumers. The fact that merchants are generally forced to charge the same price even though cash and debit transactions actually cost less artificially encourages credit card use. This system is propping up the credit card debt problem in the United States, where 40% of households spend more than they earn (Credit Card Debt Statitsics, hoffmanbrinker.com) and the median family credit card debt is $3,000 (Survey of Consumer Finances 2007, The Federal Reserve Board (pdf)). If this processing monopoly were broken up, I think it could possibly have an effect on reducing credit card debt overall, since consumers would have additional motivation to actively avoid using credit cards unless really necessary.

Fortunately there is legislation in the works attempting to "lift constraints that Visa, MasterCard and other credit card networks impose on merchants' ability to offer discounts for paying by cash or check" and "ban retaliation against retailers who charge less for transactions that don't involve credit cards." However, those who stand to "lose revenue if consumers cut card use are pushing back," and "[h]eavy pressure from banks could force lawmakers to shelve the measure... to avoid sinking the broader bill." (Paying with Cash Could Soon Pay Off, The Wall Street Journal).

Naturally... Which brings me back to the original point: wouldn't it be nice if the companies could/would recognize the best way to benefit consumers, and push pro-consumer innovation themselves? Why must we always see this as a pro-consumer or pro-business choice? Why must it always be a fight? Why must corporations be prodded into making pro-consumer choices? I'm well aware of the fiduciary duty that corporate officers and employees owe to the shareholders, but what about the moral obligations that corporations owe to society?

I think it's time for corporations to wake up and rethink their strategy, but alas the slumbering giants move slowly. Nature will take it's course, however, and somehow I feel that slow moving corporations will lose advantage quicker than ever before if they fail to adapt. I for one continually strive to base my decisions and place my trust in companies based on their behavior in this regard.

See also:

• Credit Card Interchange Fees (Helcim's Credi Card Processing Blog)