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 LifeIncorporated.net.
from CHAPTER ONE
ONCE REMOVED: THE CORPORATE LIFE- FORM
...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.
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.
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
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.
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.
from - CHAPTER SEVEN
FROM ECOLOGY TO ECONOMY
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
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
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.
Winner of the Media Ecology Association's first Neil Postman award for Career Achievement in Public Intellectual Activity, Douglas Rushkoff is an author, teacher, and documentarian who focuses on the ways people, cultures, and institutions create, share, and influence each other's values. He is technology and media commentator for CNN, and has taught and lectured around the world about media, technology, culture and economics. His new book, Program or Be Programmed: Ten Commands for a Digital Age, a followup to his Frontline documentary, Digital Nation. His last book, an analysis of the corporate spectacle called Life Inc., was also made into a short, award-winning film.