How Growth Became the Enemy of Prosperity

* Book: Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity. by Douglas Rushkoff. Portfolio, 2016

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Description

1. Short:

"Digital technology was supposed to usher in a new age of distributed prosperity, but so far it has been used to put industrial capitalism on steroids. It’s not technology’s fault, but that of an extractive, growth-driven, economic operating system that has reached the limits of its ability to serve anyone, rich or poor, human or corporate. Robots threaten our jobs while algorithms drain our portfolios. But there must be a better response to the lopsided returns of the digital economy than to throw rocks at the shuttle buses carrying Google employees to their jobs, as protesters did in December 2013.

In this groundbreaking book, acclaimed media scholar and technology author Douglas Rushkoff calls on us to abandon the monopolist, winner-takes-all values we are unwittingly embedding into the digital economy, and to embrace the more distributed possibilities of these platforms. He shows how we can optimize every aspect of the economy—from central currency and debt to corporations and labor—to create sustainable prosperity for business and people alike."

2. Long:

"The digital economy has gone wrong. Everybody knows it, but no one knows quite how to fix it, or even how to explain the problem. Workers lose to automation, investors lose to algorithms, musicians lose to power law dynamics, drivers lose to Uber, neighborhoods lose to Airbnb, and even tech developers lose their visions to the demands of the startup economy.

Douglas Rushkoff argues that it doesn’t have to be this way. This isn’t the fault of digital technology at all, but the way we are deploying it: instead of building the distributed digital economy these new networks could foster, we are doubling down on the industrial age mandate for growth above all. As Rushkoff shows, this is more the legacy of early corporatism and central currency than a feature of digital technology. In his words, “we are running a 21st century digital economy on a 13th Century printing-press era operating system.”

In Throwing Rocks at the Google Bus, Rushkoff shows how we went wrong, why we did it, and how we can reprogram the digital economy and our businesses from the inside out to promote sustainable prosperity for pretty much everyone. Rushkoff calls on business to:

• Accept that era of extractive growth is over. Rather, businesses must – like eBay and Kickstarter – give people the ability to exchange value and invest in one another.

• Eschew platform monopolies like Uber in favor of distributed, worker-owned co-ops, orchestrated through collective authentication systems like bitcoin and blockchains instead of top-down control.

• Resist the short-term, growth-addicted mindset of publicly traded markets, by delivering dividends instead of share price increases, or opting to stay private or buy back one’s own shares.

• Recognize contributions of land and labor as important as capital, and develop business ecosystems that work more like family companies, investing in the local economies on which they ultimately depend.

Rushkoff calls on us to reboot this obsolete economic operating system and use the unique distributive power of the internet to break free of the winner-take-all game defining business today. A fundamentally optimistic book, THROWING ROCKS AT THE GOOGLE BUS culminates with a series of practical steps to remake the economic operating system from the inside out—and prosper along the way." (http://www.rushkoff.com/books/throwing-rocks-at-the-google-bus/)

Interview

Douglas Rushkoff, interviewed by ERIN LYNCH:

* "Your new book, Throwing Rocks at the Google Bus, examines your thoughts around the digital economy and how you believe it’s currently on the wrong track. What, in your opinion, have been the biggest mis-steps in the development of this digital transaction space?

I guess the biggest mis-step is for innovators to focus on “disrupting” one small sector, without ever questioning the underlying business processes. So they may develop a technology that disrupts music or journalism, but then they run to a venture fund or Goldman Sachs to get on the track to be acquired or having an IPO. So the problem is that everyone is keen on creating new operating systems for one thing or another, but no one is questioning the bigger operating system on which all of this is occurring: capitalism.

Now capitalism itself isn’t so bad – as long as investors realize that there are factors of production that must be valued other than the capital. Traditionally, as long as there has been economics, we’ve recognized the factors of production to be land, labor and capital. All three are required to make business work. But capital – money – is the only one of those factors that can be digitized and scale up. And so it’s the only contribution that gets valued. The people putting in the money end up the only ones who own a piece of the pie.

* As a follow up to that question, of those mis-steps, which do you think are the easiest to change in order to right the ship? And even more to the point, can it be righted?

The easiest path to a fix is to recognize that there are more stakeholders than the investors. You could start with the workers. Let the people using a platform be its owners. Distribute just 10% of Uber’s shares to the drivers. That would be the first step toward adopting a business model that seeks to create wealth rather than simply extract it." (http://www.webvisionsevent.com/2016/01/the-throes-of-change-an-interview-with-douglas-rushkoff/)

The Digital Renaissance as Neo-Medievalism

* In one of your recent lectures at The New School you talked about the initial purposes of the industrial age, one of which was to remove peer-to-peer transaction. Do you see that reversing and what would be the overall benefits of it?

I see almost everything about the industrial age being reversed by the things being “retrieved” by the digital age. A renaissance means old, repressed ideas being reborn (re-naissance) in a new context. So industrialism really came out of the last renaissance, which was largely about rebirthing the ideas of ancient Greece and Rome: centralization of authority, empire, and expansion.

Today’s renaissance would retrieve the medieval values (not the lifestyle!) that were stamped out by the renaissance: crafts, peer-to-peer trading at the market, local value creation…even craft beers! Really, it’s no coincidence that the cultural expressions of the digital age – like Burning Man and etsy – share so many medieval qualities.

The benefits of reversing the dehumanizing bias of the industrial age – the drive to reduce human involvement and intervention in production and expansion – is to put the economy and technology back in the service of human beings, instead of letting them continue to devalue us. Because today’s technologies are so much more powerful than they were in the era of the steam engine. If we program them to remove human interference, this time they may be able to do it." (http://www.webvisionsevent.com/2016/01/the-throes-of-change-an-interview-with-douglas-rushkoff/)

Discussion

• Rebooting Work: Programming the Economy for People

"Digital and robotic technologies offer us both a bounty of productivity as well as welcome relief from myriad repeatable tasks. Unfortunately, as our economy is currently configured, both of these seeming miracles are also big problems. How do we maintain market prices in a world with surplus productivity? And, even more to the point, how do we employ people when robots are taking all the jobs?

Back in the 1940’s, when computers were completing their very first cycles, the father of “cybernetics,” Norbert Wiener, began to worry about what these thinking technologies might mean for the human employees who would someday have to compete with them. His concern for “the dignity and rights of the worker” in a technologized marketplace were decried as communist sympathizing, and he was shunned from most science and policy circles.

Although it may still sound like heresy today, Wiener realized that if we didn’t change the underlying operating system of our economy – the very nature and structure of employment and compensation – our technologies may not serve our economic prosperity as positively as we might hope.

As we wrestle with the bounty of productivity as well as the displacement of employees by digital technologies, we may consider the greater operating system on which they’re all running. If we do, we may come to see that the values of the industrial economy are not failing under the pressures of digital technology. Rather, digital technology is expressing and amplifying the embedded values of industrialism.

It’s time we have the conversation toward which Wiener was pushing us, and challenge some of the underlying assumptions of human employment. The current anxiety over the future of work may be inspired by the increasing processing power of computers and networks, or even the platform monopolies of Amazon and Uber. But it has its roots in mechanisms much older than these technologies – mechanisms set in motion at the onset of industrialism, in the 13th century.

Looked at in terms of human value creation, the industrial economy appears to have been programmed to remove human beings from the value chain. Before the Industrial Age, the former peasants of feudalism were enjoying a terrific economic expansion. Yes, in spite of the way they’ve been chronicled by Renaissance court historians, the very late Middle Ages were actually a boom time. The Crusaders had just returned from their global treks, having established trade routes through which the goods of many lands could travel. They also returned with new technologies for agriculture and trade, including the bazaar – a marketplace for the exchange of crafts, crops, grain and meat, which used new financial instruments such as grain receipts and market money.

But as the peasants got wealthy exchanging goods and services, the aristocracy got relatively poorer. So they re-established control over the economy by outlawing market moneys and chartering monopolies with dominion over particular industries. So now, instead of making shoes himself, the local cobbler had to get a job at the officially chartered monopoly company. Thus what we think of as “employment” was born – less an opportunity than a restriction on creating value.

Instead of selling his shoes, the cobbler sold his hours – a form of indenture previously known only to slaves. Worse, his skills were not valued. The owners of proto-factories saw in industrial processes a way to hire cheaper workers, with less leverage against them. Why hire a skilled craftsman when you can break down the shoe-making into tiny steps, each capable of being taught to a day laborer in 15 minutes?

Viewed in this light the Industrial Age may have had no more to do with making products better or more efficiently than simply removing human beings from the value equation, and monopolizing wealth at the top. Automation reduced the economy’s dependence on the laboring classes. Those few tasks that still required humans could go to the lowest bidder – ideally in countries too far away for the human toll to be noticed by potential customers.

The only business priority these companies understood was growth. That’s largely because their own solvency was based on paying interest to nobles chartering and later to the banks financing them. But today, growth has become an end in itself—the engine of the economy—and humans have come to be understood as impediments to its functioning. If only people and our idiosyncratic demands could be eliminated, business would be free to reduce costs, increase consumption, extract more value, and grow.

This is one of the primary legacies of the Industrial Age, when the miraculous efficiency of machines appeared to offer us a path to infinite growth—at least to the extent that human interference could be minimized. Applying this ethos in a digital age means replacing the receptionist with a computer, the factory worker with a robot, and the manager with an algorithm. When digital companies disrupt an existing industry, they tend to offer just one new job for every 10 they render obsolete.

If we want a digital economy that gets people back to work, we have to program it for something very different. The word digital itself refers to the digits—the 10 fingers – that we humans use to build, to count, and to program computers in the first place. That we should now witness a renaissance in makers, crafts and artisanal production is no coincidence. The digital landscape encourages production from the periphery, lateral trade, and the distribution of wealth. Instead of depending on centralized institutions for sustenance, we begin to depend on one another.

Where the corporations of the past depended on government regulation to maintain their monopolies, today’s digital companies do it through the monopoly of the platforms themselves. Today’s digital behemoths are not factories but networks whose embedded programming controls the landscape on which interactions take place. In a sense, Uber is software designed to extract labor and capital (in the form of automobiles) from drivers and convert it into share price for its investors. It is not an opportunity to exchange value so much as to do the R&D for a future network of robotic cars, without even offering a share in the ownership.

Thankfully, the remedies are varied. Unlike the one-size-fits-all solutions of the Industrial Age, distributed prosperity in a digital age won’t scale infinitely. Rather, the solutions gain their traction and power by reconnecting people and rewriting business plans from the perspective of serving human stakeholders rather than abstracted share values.

Yes, on the surface most of them sound idealistic or even socialist, but they are being tried by companies and communities around the world, and with documented success. Among the many I explore in my upcoming book on the subject are letting employees share in increased productivity by reducing their workweek -- at the same rate of pay. Or contending with overproduction by implementing a guaranteed minimum income. Or retrieving the Papal concepts of “distributism” and “subsidiarity,” through which workers are required to own the means of production, and companies grow only as large as they need to in order to fulfill their purpose. Growth for growth’s sake is discouraged.

Many companies today – from ridesharing app Lazooz to Walmart competitor WinCo – are implementing worker-owned “platform cooperatives” to replace platform monopolies, allowing those contributing land or labor to an enterprise to earn an ownership share equal to those contributing just capital.

Finally, distributing the spoils of distributed technologies means accepting the good news: there may simply be fewer employment opportunities for people. We must remember that employment may really just be an artifact of an old system – the reactionary move of a bunch of nobles who were afraid for people to create value for themselves.

Once we’re no longer conflating the idea of “work” with that of “employment,” we are free to create value in ways unrecognized by the current growth-based market economy. We can teach, farm, feed, care for and even entertain one another. The work challenge is not a problem of scarcity but a spoil of riches. It’s time we learn to deal with it that way."