Category: economics

Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity  by Douglas Rushkoff

Power corrupts and money ruins everything. These are basically the premises that Douglas Rushkoff starts from in his latest book, a critique of the concentration of power in the digital economy and the inequality it breeds. He uses the protests targeting private Google buses in 2013 to highlight the inequality driven by the US economy dominated by the monopolous forerunners of the digital economy. I was in SF at the time, and commented on what I saw:

I was struck by how conflicted the city is. The chasm between those in tech and those not in tech is nearly at class-warfare levels. Almost daily there are articles about the chasm widening (eg. the recent Google Bus demonstration). To get better sense of the civic strife, read the following link-filled article: Silicon Valley Is Living Inside A Bubble Of Tone-Deaf Arrogance.

Rushkoff has always been writing on the edges of technology and society. Now he tries his hand at technology and economics. His argument is that the digital economy is not a disruption, but merely an extension of the industrial age, with the problematic bits of that era even more acute. He takes great pains to show the monopolistic tendencies of networks and the ill effects of “digitally accelerated capitalism.” The evidence that he provides is damning, but his framework of analysis is not particularly convincing. His mistake is to analyze corporations using McLuhan’s tetrad of media effects, which ends up looking like this:

1. What does the corporation enhance?
2. What does the corporation make obsolete?
3. What does the corporation retrieve that had been obsolesced earlier?
4. What does the corporation flip into when pushed to extremes?

It is an interesting thought experiment, but ultimately fails where more traditional economic arguments would succeed. The results are muddled. For example in chapter 21 he criticizes mainstream economic education, yet nowhere in the book does he name alternative economic models. The terms “neoliberalism”, “socialism”, “socialist democracy” never appear in the book. “Communism” pops up a handful of times, but only in a defensive matter:

For a business to find its appropriate size even if this means scaling down is not a Communist Plot. [pp. 105]

Rushkoff fears being accused as “communist” above all else, and that ends up undermining his argument. For Rushkoff, there is only Capitalism and Communism. His understanding of political theory comes off as unsubtle, but maybe it is the the limited of understanding of his audience that is influencing him, aka. the big tech CEOs that ask him for advice running their companies or hire him for highly paid corporate speaking engagements. This economic calculus might be the reason for Rushkoff’s lukewarm critique. He is not willing to go to the radical, or use radical language for fear of alienating his audience (née customers). The result is a fuzzy, friendly, plush toy critical theory. He is good at pointing out how damaging capitalism is, but instead of rejecting it, he dreams of a more “conscious” capitalism, a more “humane” capitalism. His solution is go back to a pre-industrial economic model, like the putting out system. Imagine a massive distributed network of makers 3D printing bespoke items for their neighbours out of their handmade cottages. This is how it should have been. Rushkoff is a nostalgic utopian, and this is further evidenced by his analysis of the internet.

Many of the greatest hits of 1990s internet theory are covered in this book, each critiqued and shown how they were not bourne out in the past decade and a half. Rushkoff gives a recent history lesson, showing how terrible things currently are, but then wishes things were like the old theorists thought it would be. Rushkoff is an early model cyberutopian.

However, there is a difference: the saviour of our society is not necessarily technology(!). In fact, Rushkoff argues that it comes down to how we structure our firms and our economy that will save society (aka. politics). That being said, he still thinks that distributed technologies can play a big role in achieving a less centralized system. Thus, Rushkoff’s view might be categorized alongside Steven Johnson’s peer progressivism (see some of my old thinking about PP here).

Throwing Rocks at the Google Bus might not be the final wrench in the gears of our system of unfettered cyber-capitalism, but it is still worth the read. There are some excellent arguments in here against our addiction to growth, some cool examples of alternative transaction systems (local currencies, time dollars, LETS), and a spectacular takedown of startups and venture capital near the end of the book. Despite coming up short in its overall analysis, it is a good book to recommend to a friend who has just started to smell something bad in tech, knows something wrong, but is not quite ready for a full-blown attack on the real underlying problem: capitalism itself.