In his latest book, Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity (Portfolio/Penguin), media/technology theorist and PBS documentarian, Douglas Rushkoff asks “Why doesn’t the explosive growth of companies like Facebook and Uber deliver more prosperity for everyone? What is the systemic problem that sets the rich against the poor and the technologists against everybody else?”
Rapid technological improvements have created unforeseen societal chaos and this change is just starting to pick up speed. Our economic operating system—the “program” at the heart of Capitalism itself—is deliriously out of control. The economy no longer serves the human race, just a tiny elite sliver of it. The rest of us, whether we realize it or not, to a certain extent toil on their behalf. Think about it: How did the Waltons become the richest family in America, amassing a collective fortune of around $150 billion, if not by siphoning off a micropayment from every single gallon of milk, bottle of shampoo or box of Hostess Ding Dongs sold there? Bud and Sam Walton might have started Walmart, but all their offspring did was win the lottery at birth.
If you think that sounds predatory—and it should—just wait until you get a load of what the big technology firms have in mind for us…
I asked my friend of some twenty years some questions over email.
Richard Metzger: You write how the operating system of capitalism is obsolete, creating vast spoils for a select group of lucky human beings who are more or less basically leeching off the rest of mankind’s activities, and in a world of increasing automation to make things even worse. What’s the new book’s diagnosis of the modern economy?
Douglas Rushkoff: That sounds like a pretty good diagnosis to me. Or I suppose those are the symptoms? The underlying problem is not a disease, however. It’s not that corporate capitalism has been corrupted by greed or even by the startup economy of digital businesses. The system is working precisely as it was designed to.
It’s just that the transfer of value from people and places into capital used to happen a bit slower. And our companies tended to do it to other places more than to us. So in the 1400’s, British East India Trading Company might have enslaved thousands of Africans or taken land from the people of the West Indies - where today it’s Walmart bankrupting our towns and Uber extracting labor from drivers.
So now, the extractive power of expansionary, growth-based capitalism has been turned against us. The same sorts of companies are growing, but at the expense of all humans - not just those we can’t see. And the startup economy does all this a whole lot faster. A company goes from zero to a billion in 24 months. And it only does that by abandoning its original goals of helping people do something new, and instead adopting scorched earth policies toward its own markets.
That’s the real problem: companies that want to be around for a long time need to keep their markets - their customers and suppliers and workers - healthy and viable. Once companies are in control of venture capitalists, that’s no longer the goal. They haven’t bought the company to own it, but to sell it. They only need their markets to survive long enough to get to the exit - the IPO or acquisition that lets them cash out.
In the process, the company can use its war chest of investment capital to regulate the marketplace in its favor, or undercut the prices of the competition. It’s not about doing business; it’s about selling the company.
Okay, if that’s the diagnosis, then what’s the remedy? Is there one?
There’s not a single remedy. That’s the one-size-fits-all ethos of the industrial age: figure out the solution, then scale it universally! (And make a ton of money in the process.) Rather, the solution set will be as varied as the people and communities of our planet. The first step is to remember that human beings retain their home field advantage as long as they stay in the real world, on planet earth. We are the natives here - the corporations and technologies and business plans are all invented alien. That’s part what the SF protesters mean when they lay in front of the Google buses.
The way to reduce the power of the companies extracting value from our economy is to begin transacting locally and laterally. Do as much locally as you can. See your town or city as the economy. If there’s people with needs, and people with skills, you have the basis for an economy. You just may need to develop an alternative means of exchange, such as a local currency or favor bank.
Of course that doesn’t replace the entire economy. People look at a suggestion like that, and they immediately thing I’m arguing that cash, banking, corporations, iPhones, and automobiles go away. We can’t help but think of things in apocalyptic terms. But all I’m suggesting is that we balance out even just a little of our Walmart or Amazon purchases with some more local, small-scaled value creation and exchange.
The other remedy is for those developing new technologies or applications not to accept so much venture capital. They still think that getting a lot of money for their idea is the best way to build it. But it’s not. The more money you take, the less control you have over the future of your company. When you take in VC, you have already sold your company to someone who doesn’t care about your app, your customers, your employees, or your mission. Kiss it good-bye. They only care about selling your business to someone else - to the next round of investors - and that means plumping it up. You will be forced to pivot from whatever you wanted to do, to something they think can let them sell the company. It doesn’t even have to make money - it just has to destroy a market and claim a monopoly over what’s left.
Continues after the jump…