Yelp Has Revived Intimate Capitalism

Such a state of affairs, the social conditions of intimate capitalism, shaped how a tradesman made sense of his self-interest and went about pursuing it. Indeed, for Smith, an individual’s self-interest was never more than an amalgam of interests that jostle for priority and attention. The composition changes over time—an old codger on the edge of oblivion probably prefers family time far more than he did as a man-on-the-make in his early 20s—but what stays consistent is that we can never entirely satisfy all of our interests at once and that, in addition to the burden of choice, how we pursue one particular interest influences the likelihood of realizing, or retaining, the others. 

For the men on Wadsworth’s map, the art of managing these interests was especially complicated, for social and economic affairs were always interwoven. To ignominy or advantage, any activity behind the shop counter would be remembered in the town square. If the butcher put his thumb on the scale, the brewer watered down his beer, or the baker boxed his apprentices about the ears, word would immediately make its way around town, and such behavior would be rewarded by disapproving looks and decreased traffic. Conversely, a winning smile and a way with customer service won a busy shop and the bounty of friendship.

One colonial shopkeeper who viscerally understood the high stakes of intimate capitalism was Benjamin Franklin. In his autobiography, a work largely concerned with Franklin’s early years in the printing business, Philadelphia’s first son reflected at length on how one’s personal and professional activities are the tesserae of public reputation, a mosaic whose appeal overwhelmingly determines the likelihood of commercial success.

Such concerns took on a special urgency when the 22-year-old Franklin passed from being a precocious apprentice to the proprietor of his own printing house. This was his big shot, and in what I have long considered the quintessential passage of his memoir, he reflected on the behavior necessary to ensure his fate. “In order to secure my Credit and Character as a Tradesman, I took care not only to be in Reality Industrious & frugal, but to avoid all Appearances to the Contrary.” Franklin continues:

I drest plainly; I was seen at no Places of idle Diversion; I never went out a-fishing or shooting; a Book, indeed, sometimes debauch’d me from my Work; but that was seldom, snug, & gave no Scandal: and to show that I was not above my Business, I sometimes brought home the Paper I purchas’d at the Stores, thro’ the Streets on a Wheelbarrow. Thus being esteem’d an industrious thriving young Man, and paying duly for what I bought, the Merchants who imported Stationary solicited my Custom, others propos’d supplying me with Books, & I went on swimmingly.

If “Credit” and “Character” appear codependent, that’s because of the way gossip functioned in the commercial sphere Franklin occupied and Adam Smith assumed. It was a world of routine engagements, where any bad behavior on either side of the shop counter would boomerang on a tradesman, ruining his credibility as a borrower and a businessman. Indeed, good character was so critical that the “Reality” of it, alone, wasn’t enough. A tradesman like Franklin had to be known throughout the community for the component parts of a good reputation—honesty, industry, prudence, and thrift—for nothing less than his viability in business depended on it.

Franklin and Smith died within a few months of each other in 1790, so they didn’t live long enough to see the industrial revolution fundamentally transform the social conditions of capitalism, which moved from small towns to super cities, from the intimacy of the shop counter to the anonymity of the factory floor. In this new terrain of anonymous capitalism, the quintessential commercial experience was the interplay of actors—buyers and sellers, employers and employees—who had no overlapping experience or interests beyond the economic. A robber baron could blithely sign off on the brutal conditions in his mills, for he never had any fear of being provoked to paroxysms of shame by his social peers. They would never set foot inside them, and those who did on a daily basis were members of another community altogether. 

This is not to say that, with the advent of anonymous capitalism, all commercial engagements would inevitably be given over to the grossest conduct, merely that moral correctives would come about in two ways that Adam Smith never put much stock in: the prod of conscience and the power of markets. Perhaps it was the case that more than the occasional merchant would be guided by an inner light, routinely preferring what is right to what is merely expedient; and, who knows, maybe we would discover that the natural tendency of markets, when liberated from social suasion, is to reward us for saintly behavior. To Smith, however, the first case would have seemed exceptional, the second utterly unlikely. Intimate capitalism never assumed that men were angels but rather that people, when presented with the choice of losing a buck or looking like a bum, would actively prefer the former. They would have to choose between doing well and doing good, rather than simply trusting that the two always went hand in hand.

The rise of anonymous capitalism changed the stakes of self-interest, for it largely eliminated the social sting of bad conduct in moneymaking endeavors. This made for a commercial status quo that persisted for over 150 years, long enough that, when I began teaching business ethics in 2005, I treated it as an essential feature of contemporary capitalism, a quality which, if it didn’t exactly inspire the aforementioned parade of horribles, it no doubt paved the way for them. 

But things have changed in the past 15 years. In a fashion Adam Smith could never have predicted, we have seen something akin to a revival of the social forces that once shaped intimate capitalism, a turn of events courtesy of the internet. 

“The worst dental service I have ever experienced over my 60 years of life,” one William H. declares in an online review of the practice I visited. “I could have cleaned my teeth with a toothpick and done better.” Another, John H., seconds the verdict. “The ‘teeth cleaning’ was literally just [a] few scrapes followed by flossing,” he writes. “But then I was asked if I wanted a ‘deep cleaning’ for an extra $300!” He notes that he declined. “I hope this place burbs [sic] to the ground.”

By the time I arrived, nearly six months later, the office hadn’t gone up in flames, but if I’d read these reviews, or most any of the other 93 on the website Yelp, where the practice has a wince-inducing rating of 2.5 stars out of a possible 5, I would have saved myself the trouble. 

Yelp, which started less than a year before I began teaching in 2005, has become the principal hub in an ecosystem of online gossip that is helping to re-intimize capitalism. In the second quarter of 2019, it reported a monthly average of nearly 140 million unique users. That’s far less than Facebook or Twitter or other sites that similarly disseminate virtual gossip, but Yelp’s outsize influence is due to the fact that its explicit mission is to provide a word-of-mouth forum for commendations and criticism of commercial actors. If I want to know something about the credit and character of a counterparty—whether it be a potential employer or a place for deep-dish pizza—Yelp is the obvious place to turn. 

Similar to other consumer-sourced websites, what Yelp has effectively done is to recreate the lines of gossip that once fed intimate capitalism and the social forces that patrolled self-interest. In his work, Smith never envisioned a world where the overwhelming majority of people we do business with are alien to us, but this became the standard experience with the rise of industrialization and urbanization, when the number of commercial counterparties the average person did business with grew far beyond the reckoning of intimate relationships. 

The advent of the internet has not changed this impersonal state of affairs entirely. I still couldn’t tell you much about the men and women who trim my hair, fix my brakes, or flip my burgers, certainly no more than they might say about me. Some among them may become friends or neighbors, but unlike the world of Adam Smith, I can’t assume as much of the people I do business with.