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Monday, April 11, 2016

Fat Cats and Very Skinny, Very Hungry Mice

Economic disruption is nothing new, as anyone who thinks about it for two minutes must realize, but how far back in history would you look for the first displacement of workers? Douglas Rushkoff, in Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity, sees the beginning of the corporate model, still dominant today’s digital economy, occurring in the late Middle Ages -- not long after a few clever peasants (mice, in my scenario) had managed to escape the thumb of the aristocrats.

Prior to the rise of trade guilds, the aristocracy held all the cards. With the guilds, a previously nonexistent merchant class began to emerge. Europeans returning from the Crusades brought back the notion of the bazaar, and European economic expansion took off.

“The problem,” Rushkoff writes, “was that while the merchant class was gaining wealth, the aristocracy was losing it.” Naturally, the aristocracy was not thrilled with this turn of events, and since they were still the ones making laws, they had the power to reconfigure the emergent economy. Demanding taxes and official charters, breaking up guilds (think “unions” today), and outlawing of local currencies by mandating that only the “coin of the realm,” issued by the king, was legitimate, the aristocracy soon had craftsmen selling their labor rather than their products.
What we now call industrialization was actually an extension of the aristocracy’s effort to usurp the growth it witnessed in the peasants’ marketplace and to imitate it by other means.
With mass production came cheap goods – nominally “cheap,” anyway, because many costs, then as now, were hidden or externalized. “Prices may be low, but the costs are high,” Rushkoff writes. Then, for some reason obscure to me, he puts the following key sentence in parentheses:
(The government pays for wars to procure cheap oil and roads to convey mass-produced products, while we all pay for the environmental stresses caused by corporate agriculture, and so on.)
His primary historical thesis is that the digital revolution has only speeded up a sequence of events repeated many times throughout the course of history: independent artists, artisans, and entrepreneurs find ingenious ways to escape what we in the Sixties called “the System,” only to have the System evolve new ways to ensnare labor or eliminate the need for workers altogether so fat cats can take the lion’s share of profits. Industrial robotics? Just the latest wave.

Responsibility of corporate CEOs is only to shareholders, not to you, the employee, or you, the member of a community. Not only industry but even education has been transformed by burden-shifting. And as for the immigration “problem,” it isn’t so much families illegally entering the U.S. from Mexico but business gaming of guestworker regulations that should be worrying Americans. Read about that, if you please.

These days musicians and writers are expected to give their work away 24/7 for the “exposure,” Uber drivers (many of them unemployed workers driving fulltime) find themselves making less than minimum wage after expenses, and at-home keyboard pokers for the online behemoth earn less than two dollars an hour.
...When Arianna Huffington went on to sell [her] entire enterprise to AOL for $315 million, she did not cut her nine thousand unpaid writers in on the winnings. It was as if receiving exposure on the Web site’s pages, we were already the beneficiaries of Arianna’s largesse.
“Re-invent yourself! Brand yourself!” the laid-off worker is told in hearty, encouraging tones by life coaches paid to promote positive thinking. Meanwhile, firms that manage retirement funds take bites out of the savings of others at every turn, that savings often shrinking rather than growing, while 70% of the savers don’t even know they are being charged fees.

So it’s an old story, repeated down through the ages -- but now that there are no new continents left to exploit, according to Rushkoff, the system has begun to cannibalize itself, and that’s why in the digital/investment world the best way to make a killing is not to make anything. The dream now is to have an idea, attract investors, and then turn around and sell for a fortune. Those of us who still work for a living and believe in the value of work are the chumps, as in “If you’re so smart, why aren’t you rich?”

Could the world be different? Amazingly, the author believes the answer is yes. Money, he points out, is a system created by human beings, so there’s no reason they can’t modify the system or create substitutes. He gives detailed examples, but I’m not getting into that. I’ve tried to distill only enough of the story to convince you that this book is worth reading.

What do you think?

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Oddly, perhaps, I feel less alone seeing my life and those of my cohort in historical perspective, and I feel proud of those of us who do an honest day's work. Am I crazy? We’re not raking in the dough, maybe barely hanging on, but we’re keeping the faith, and I would be ashamed to acquire wealth, as my artist husband puts it, by “kneeling on the backs of the oppressed.” 

A few years ago I was approached by a financial scam artist who opened his spiel by saying that perhaps I’d noticed he wasn’t working any more – and that was because, he boasted, he longer had to work. He’d gotten in on this terrific Ponzi scheme – oops! He didn’t call it that, of course. “Financial opportunity,” I believe, was the phrase he used. Still, he was not a very smooth operator, in general, putting his foot fully into his mouth to assure me that he didn’t expect me to have money for the scheme (true, but gratuitously insulting). He just thought I could give him the names and telephone numbers of some of my “rich friends.”

What kind of friend did he take me for? Drive my friends like lambs to the slaughter? I hope it goes without saying that I declined to be involved in any way, shape or form.

Only later, à l’escalier, as it were, did it occur to me what I should have said when he told me he was no longer working because he “didn’t have to.” This is it:

I’m still working. I feel I have something to contribute to society.

Anyway, read the book. No kidding, it’s a page-turner. I’d love to see the National Writers Series bring Rushkoff to Traverse City. Anyone else feel the same way?

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