Life Inc: Everything's Open Source but Money


Douglas Rushkoff - author of the book Life Inc: How the world became a corporation and how to take it back - is a guest blogger.

I'm posting an excerpt from my upcoming book, Life Inc., every Monday morning until the book publishes on June 2. Two weeks ago, I published the introduction. Last week, I published the first half of Chapter One. Today, some excerpts that answer or at least address the questions and comments being raised here at BB. Next week is the final installment. I'll also be keeping the excerpts up as PDFs at


...As a result, our physical, commercial, spiritual, and personal accomplishments came to be valued only insofar as they could serve the market. And while the market may be as good a model as any for human interaction, the corporate terrain did not represent a level playing field or a "free market" in which value might be created from anywhere. Remember--in spite of its individualistic mythology of open competition, the landscape of corporatism was first cultivated during the Renaissance, when local currencies were outlawed in favor of centralized money.

In the United States, in an assumption of centralized value creation that reached a crescendo under the Nixon administration, the Federal Reserve won the authority to create money by fiat, based on nothing but faith in its own corporate chutzpah.

The massive potential of computers and networking, technologies developed in many cases by engineers hoping to decentralize the very power structures funding their projects, was quickly recontextualized as a market opportunity--the beginning of a "long boom"--and appropriated as NASDAQ's stepchild. New rules for a new economy were invented, in which people's ability to access interactive technology for free or to create value independent of any corporation could be understood as the power of the network to leverage what were formerly "externalities." The dot- com boosters sought to reconcile the incompatibility of an abundant, decentralized media space with the legacy of a scarce, centralized monetary system.

Everything is "open source," except, of course, money itself.

Instead of serving to reconnect us, our technologies now serve to disconnect us further, reducing our contact to virtual prods and pokes. Meanwhile, corporations are finding online a path toward incarnation: Chase and Coca- Cola build avatars in online environments such as the Second Life "virtual world" that are as real as we are. Sometimes more so, especially as our life and status online dictate or even supersede our life and status in the former real world.

The institutions of last resort, be they religious or nonprofit, are themselves in the thrall of the marketing techniques employed on behalf of their corporate rivals. Instead of presenting alternatives to totalitarian corporatism, they conclude that "if you can't beat them, join them." Religions hire consultants to re-brand them in the image of MTV, while charities refashion themselves into for-profit corporations seeking "social- philanthropy" money as sexy to venture capitalists as an Internet IPO (initial public offering of shares). Even those who seek to overturn what they see as the corporate hegemony succumb to the logic of corporatism in their campaigns.

It's not just that the landscape is sloped toward corporate interests, but that our own beliefs and activities are directed by corporate logic. When those of us alive today have no memory of a world that functioned in any other way, how are we to think otherwise? Like kids with a radio dial that plays nothing but Top 40 songs, we have adapted to the music that we hear, and choose our favorite tunes and pop heroes from the available menagerie.

With no other choice available, we grow up partnering with corporations for our very identities. A kid's selection of sneaker brand says more about him than his creative- writing assignments do, and is approached with greater care. Our ability to actually do anything about, say, greenhouse- gas emissions is based entirely on the extent to which we can trust Toyota's claims about developing a car that cleans the air as it drives. Our feedback and participation are managed by customer service, empowering us as consumers by infantilizing us as human beings. This dependency augurs a regression on our part, and a transference of parental authority onto our corporations that recalls our ancestors' allegiance to emperors and high priests.

While some corporations may serve as our accepted public enemies, others quickly step in to embody our dissent. Ford's contention that it knew the one right car for every American was countered by GM's repackaging of its cars in personalized brands for each of us. As much as Microsoft frightens us by echoing the tactics of chartered monopolies, Apple and Google excite us by presenting the illusion of a bottom- up, people- centered alternative. We hate Nike and love Air-walk, hate Hummer and love Mini, hate Nabisco and love Hain, hate A&P and love Whole Foods. Or vice versa.

But we all love corporations.

Big Business and the Disconnect from Value

...There are two economies--the real economy of groceries, day care, and paychecks, and the speculative economy of assets, commodities, and derivatives. What forecasters refer to as "the economy" today isn't the real one; it's almost entirely virtual. It's a speculative marketplace that has very little to do with getting real things to the people who need them, and much more to do with providing ways for passive investors to increase their capital. This economy of markets--first created to give the rising merchant class in the late Middle Ages a way to invest their winnings--is not based on work or even the injection of capital into new enterprises. It's based instead on "making markets" in things that are scarce--or, more accurately, things that can be made scarce, like land, food, coal, oil, and even money itself.

Because there's so much excess capital to invest, speculators make markets in pretty much anything that real people actually use, or can be made to use through lobbying and advertising. The problem is that when coal or corn isn't just fuel or food but also an asset class, the laws of supply and demand cease to be the principal forces determining their price.

When there's a lot of money and few places to invest it, anything considered a speculative asset becomes overpriced. And then real people can't afford the stuff they need. The oil spike of 2008, which contributed to the fall of ill- prepared American car companies, has ultimately been attributed not to the laws of supply and demand, but to the price manipulations of hedge- fund speculators. Real jobs were lost to movements in a purely speculative marketplace.

This is the reality of speculation in an economy defined by scarcity. Pollution is good, not bad, because it turns water from a plentiful resource into a scarce asset class. When sixty- eight million acres of corporate- leased U.S. oil fields are left untapped and filled tankers are parked offshore, energy futures stay high. Airlines that bet correctly on these oil futures stay in business; those that focus on service or safety, instead, end up acquisition targets at best--and pension calamities at worst. Such is the logic of the speculative economy.

As more assets fall under the control of the futures markets, speculators gain more influence over both government policy and public opinion. Between 2000 and 2007, trading in commodities markets in the United States more than sextupled. During that same period, the staff of the Commodity Futures Trading Commission overseeing those trades was cut more than 20 percent, with no corresponding increase in technological efficiency. Meanwhile, speculators have only gotten better at exploiting structural loopholes to engage in commodities trades beyond the sight of the few remaining regulators. Over-the- counter trading on the International Commodities Exchange in London is virtually untraceable, while massive and highly leveraged trades from one hedge fund to another are impossible to track until one or the other goes belly- up--and pleads to be bailed out with some form of taxpayer dollars. Government is essentially powerless to identify those who are manipulating commodities futures at consumers' expense, and even more powerless to prosecute them under current law even if they could. People, meanwhile, come to believe that oil or corn is more scarce than it is (or needs to be), and that they're in competition with the Chinese or the neighbors for what's left.

The speculative economy is related to the real economy, but more as a parasite than as a positive force. It is detached from the real needs of people, and even detached from the real commerce that goes on between humans. It is a form of meta- commerce, like a Las Vegas casino betting on the outcome of a political election. Only in this case, the bets change the costs of the real things people depend on.

As wealth is sucked out of real economies and shifted into the speculative economy, people's behavior and activities can't help but become more market- based and less social. We begin to act more in accordance with John Nash's selfish and calculating competitors, confirming and reinforcing our dog- eat- dog behaviors. The problem is, because it's actually against our nature to behave this way, we're not too good at it. We end up struggling against one another while getting fleeced by more skilled and structurally favored competition from distant and abstracted banks and corporations. Worse, we begin to feel as though any activity not in some way tied to the corporate sphere is not really happening.

Wal- Mart's success in extracting value from local communities, for example, is tied directly to the company's participation in speculative markets beyond the reach of small business, and its tremendous ability to centralize capital. We buy from Wal- Mart because Wal- Mart sells imported and long- distance products cheaper than the local tailor or pharmacist can. Not only does the company get better wholesale prices; its centrality and size lets it get its money cheaper. Meanwhile, because we are forced to use centralized currency instead of a more local means of exchange or barter (and we'll look at these possibilities later), each of our transactions with local merchants is passed through a multiplicity of distant banks and lenders.

All of the advantages and efficiencies of local commerce are neutralized when we are required to use long- distance, antitransactional currency for local exchange between people. We must earn the currency from one corporation that has borrowed from the central bank in order to pay another corporation for a product it has purchased from yet another. We don't have an easy way to get the very same product from the guy down the street who knows how to make it better and get it to us ultimately more efficiently than the factory in Asia.

But the notion of purchasing things with some kind of local currency system, bartering for them with members of our local community, or--worst of all--accepting favors in exchange for other ones feels messy and confusing to us. Besides, Wal- Mart is a big company with lots of insurance and presumably some deep pockets we could sue if something goes wrong. When favors replace dollars, who is responsible for what? Too many of us would rather hire a professional rug cleaner, nanny, or taxi than borrow a steamer from a neighbor (what if we break it?), do a babysitting exchange (do we really like them?), or join a carpool (every day? Ugh). Social obligations are less defined than financial ones.

Our successive disconnects from place and people are what make this final disconnection from value so complete and difficult to combat. We have lost our identification with place as anything but a measure of assets, and we have surrendered our identification with others to an obsession with ourselves against everybody else. Without access or even inclination to social or civic alternatives, we turn to the speculative market to fulfill needs that could have been satisfied in other ways.



  1. Isn’t america’s auto/big 3 demise because detroit can’t make a car better than a honda/toyota for the same or cheaper price?

    sincerely patrick

  2. Rushkoff, your posts always lead me to the exact same question. Yeah yeah, the world sucks. So what exactly was your solution again?

    I need a computer. The computer was put together by Dell, or whomever. Dell bought the components from a dozen manufactures that put together the various boards. Those dozen manufactures bought chips and electrical components from a dozen other companies. Those companies bought equipment from another dozen which in turn bought from a dozen more, so on and so forth. You can hit exponentials to make your eyes bleed in a few seconds of thinking. My computer took the cooperation of literally millions of people with billions of hours worth of education and the investment in hundreds of billions of dollars of capital. Sprinkle this with liberal uses of processes that use some god awful ugly chemicals that if used improperly will very quickly kill a human (try a few drops of HF on your hand and see what happens to your arm).

    My point? There is no other way humanly possible to organize the creation of such a vastly complex product as a simple computer without a capitalistic system. Further, there is no way for any human to get a hold of such a system on a human scale price except using that evil money stuff to make the exchange.

    If you have a DIY ethos or believe in local involvement you can perhaps skip Dell and buy the components directly and pay someone local to toss it together. Great. You just cut out one corporation in the production of a computer leaving the other ten-to-some-exponent. You still need to buy the circuit boards put together in China, and those still need a multi-billion dollar semiconductor fab working with toxic chemicals for the components that were slapped on that circuit board.

    I am all for local community involvement and I am a big fan of DIY culture. That said, I don’t delude myself into thinking that the lifestyle I choose for purely social and aesthetic reasons is the key to toppling the evil corporate world and over turning the current economic order. The vast majority of physical “stuff” is far outside of the reach of your average person or group of persons to produce. Accept it, deal with it, and shoot for personal happiness. Avoid trying to obtain happiness through materialistic things, make good friends, eat good food (preferably with friends), and don’t let advertising get to you. Is that going to save the average idiot from an empty life of SUVs and over priced clothing with a corporation’s logo smeared across making them into a walking billboard? Nope. I say leave them to their own diluted attempt at happiness while you pursue yours. If in your attempt to pursue happiness you happen to buy a few hundred LEDs and coin batteries from a Chinese supplier instead of digging up the raw metals from the ground, don’t let it get you down.

  3. “There is no other way humanly possible to organize the creation of such a vastly complex product as a simple computer without a capitalistic system.”

    How did the Cold War happen then? Or were the communist bombs illusionary?

  4. @Rindan

    You are committing a logical fallacy by claiming that capitalism is the only way to achieve a computer. The capitalism-uber-alles shtick is a little played out, akin to saying slavery is the only way to grow cotton because that is How It Is Done. Please do yourself a favor by allowing the possibility that there could be another economic system possible. Or cling like a cleric to a Ptolemaic outlook, if you wish.


    Have you encountered participatory economics (par-econ)? Can you explain why this robust theory is so rarely discussed?
    Thank you for posts and for Life, Inc.

  5. @Rindan:

    Your reply is essentially the watchmaker argument, applied to econ. Changing its context doesn’t make it an acceptable argument.

  6. I think it’s rarely discussed because, in the current way of thinking about economics, “participatory economics” seems like an oxymoron. Collaborative competition? Capitalist Communism? It just doesn’t compute for people.

    As for the negativity, I really don’t mean it to come off that way. I do believe we need corporations. Absolutely. I know this sentence will be ignored by those who want to see what I’m saying as anti-corporate rather than simply anti-corporatist. And there’s a big difference.

    I am all for corporations. I want there to be corporations. I think corporations can be great for assembly and distribution of things that require large groups of people, or highly internationalized, non-local assembly. Stuff like computers, absolutely. Stuff like central currency.

    I think corporations are great for this and should be kept for this and celebrated for this. I don’t think corporations should go away.

    My concern is with a landscape that has been systematically changed to benefit the functioning of corporations and to discourage all other forms of commerce. I am dedicated to pointing out that our own corporate heritage involved not just corporate charters but chartered monopolies, and that this bias towards monopoly and long-distance value extraction still dominates corporate thinking and practice.

    I’m trying to show how the spread and internalization of these priorities has changed the business environment from one of potential collaboration to one of extreme competition and scorched earth tactics, as well as to a policy environment that favor debt-based central currencies, and lending-based economic development.

    Yes, things have gotten pretty difficult, and I don’t think we can sugarcoat it all much longer. But we really will need to at least supplement our corporate capitalism with a few other scales of commerce.

    Just because you buy your computer from Dell doesn’t mean you have to buy your chard from Big Agra or your soldiers from Blackwell. What works for one product might not work for all of them.

  7. ‘How did the Cold War happen then? Or were the communist bombs illusionary?’

    Playing devil’s advocate here, but the Russians and Chineese both relied heavily on espionage both to create their atomic and thermonuclear bombs, and to create their computer industries during the Cold War.

    So, no, the bombs were not illusionary, but a logical conclusion would be that if it were not for capitalism, the Communist Bomb would have come later, if at all.

    That said, the atomic and thermonuclear bomb programs, the development of the computer, and related industries were all created via socialist programs, all organized, paid for, and owned by the US Government. If there ever was a working example of a centrally-run planned economy, it is the Millitary-Industrial Complex.

    Of course, the question of who is running who is still up for grabs.

  8. @Takuan

    I really don’t want to get into an argument over how awesome central planning was and how much actual central planning went on. Sufficient to say, even Stalin paid in cash. Communist regimes always ended up resorting to money because they could find no other alternative. You might live in a communist utopia, but if you wanted ‘stuff’, you still paid in rubles. Further, when the munitions factory need more steel, they still had to pay in cash.


    You are committing a logical fallacy by claiming that capitalism is the only way to achieve a computer. … Please do yourself a favor by allowing the possibility that there could be another economic system possible.

    I certainly allow the possibility. Hell, I can even think up a way to do it. I am sure sufficiently advanced AI a few orders of magnitude more powerful than a human could sweep this whole system under the rug. You could also kill off 99% of the population and go back to hunting gathering. We could kill of just 80% of the population and develop a moneyless agrarian feudal system. There are options, but none that anyone can or would want to take. Hey, there might even be options we could take right now. I don’t claim omnipotence.

    Which brings me back to the very first question I asked in my original post…

    “Yeah yeah, the world sucks. So what exactly was your solution again?”

    I see post after post about how much the current order sucks. Ok. I agree. That still doesn’t explain where you get your computers from. You say that there are alternative solutions. What are they? Believe me, I’m interested, which is why I asked the very first question that I asked. I still fail to see an answer.

  9. Where to get (new) computers (once there is an anarchist socialist revolution)?

    Just sit people down all over the internet and figure out what needs to be produced and where it needs to be produced.

  10. @Rushkoff

    I’m curious as to your opinion of the buy-in cooperatives à la Kim Stanley Robinson’s Mars Trilogy.

    How I vaguely remember it: Everyone bought their way into the corporation as an equal partner/investor and worked for profit as usual, taking equal wages and investing in their own company. The director and management were simply the people who prefered to organise rather than to produce, and both management and production were equally respected(and equally paying) tasks.

  11. “Why can’t I still get my computers from Dell?”

    Maybe you still can get Dell computers, if the people of earth will decide to still brand computers Dell in the future anarcho-socialist utopia.

    If they want to, the same people producing computers in utopia will be the people that used to produce Dell computers before utopia.

  12. the`question isn’t; “what economic system can we build to best serve us?”, it’s “how can we best work with the economic system that happens to us?”

    Too many variables, it’s always been beyond our conceit.

  13. @Rushkoff

    Soryy, but that is a really lame reason for people not to discuss parecon. Because of the name? You make a good point, perhaps the name should be changed.

    So a more direct question: Are you familiar with Robin Hahnel’s work? Why do you feel that his market-based economic model geared for economic democracy is not even given airtime by people like you when it could really give you a lot of technical ammunition in response to the “So what do we do? kthxbye” refutations of your system.


    If you don’t claim omnipotence, stop asserting that capitalism is the Only Way short of genocide. Do some research.

  14. @Rindan

    Sorry, that got cut off, and I look churlish. Do some research on Participatory Economics ( wikipedia has a page, google will find you some stuff).

  15. Takuan, I think we can ask and talk about both those questions.

    In practise, the “what to do now” question is probably more important.

  16. @Rushkoff

    Have you ever read any of the Deleuze’s works on Capitalism? His work has a similar tone to yours in its acceptance of Capitalism and its puppeting of culture for its own interests. His answer, if i can claim to understand it, is that we should accept the capitalist system, even indulge in it in a Dionysion way. He suggests that by indulging in the power of the system new forms of interacting with it will arise that will eventually overcome it. The open source movement itself could be understood in this way.

  17. An amazing parallel to the Metaverse Manifesto which states
    “We see then, that the means of experiencing reality itself were gradually “acquired”, and then monopolized by mainstream media and corporations.”
    It’s a root text.

  18. “Rushkoff, your posts always lead me to the exact same question. Yeah yeah, the world sucks. So what exactly was your solution again?”

    Jct: I think it’s pretty clear that his suggestion to start an interest-free local currency is the solution to not enough federal money.

  19. “If you have a DIY ethos or believe in local involvement you can perhaps skip Dell and buy the components directly and pay someone local to toss it together.”

    Jct: Would you say trucks and tractors are as hard to barter for as computers? Then consider how Ford and GM had to accept farmers’ IOUs for grain during the Argentina crash because there was no other way to sell their products. All Dell has to do is accept farmers’ IOUs for grain or anything too.

  20. @ab5tract, May 18, 2009 10:19 AM

    you say:

    Soryy, but that is a really lame reason for people not to discuss parecon. Because of the name? You make a good point, perhaps the name should be changed.”

    I do think Lakoff is right about the way people avoid subjects that don’t make sense to them in the right ways. But I think the real reason people don’t discuss parecon is the same reason they don’t discuss Hahnel or anyone else like that – because they are associated with “anarchism” which seems to people like terrorism. Who is going to protect my *stuff* if there’s anarchy? They don’t see the possibility for cooperation between people, and don’t relish the notion of some kind of ongoing negotiation. They would really rather not think or make choices.

    Not naturally, I don’t think. Just through acculturation.

    As for Deleuze, yes. And a real influence.

  21. @Rindan “So what exactly was your solution again?”.

    Here is the answer to your question, refuse to participate in what you find objectable or goes against your moral belief. Ex: If I was opposed to a computer corporation for out sourcing or because, I believed there practices to be bad, I have the choice not to buy one. Stop trying to figure out away to fix everybody else problems and start with yourself. (that’s not a personal attack on you Rindan it goes for everyone). Corporations are not making people anti-social, we are; self included. Maybe when the virtual world dies and the keeping up with the Johnson’s mentality passes, maybe only then we will be force to confront reality and each other.

    “I would never get the opportunity to feel guilty or angry for all the immoral people and practices in the world if I just didn’t feel so damn obligated to pay attention to them” …Me.

  22. I don’t understand how these religious fanatics of capitalism think that free markets are good for everything EXCEPT MONEY.

    We can’t have a free market nor a democratic government while we have monopolized money.

    That’s why we’ve been building the core underlying infrastructure for “open sourcing” currencies:

Comments are closed.