The Next Social Revolution?

Cryofan writes "In a recent interview, Howard Rheingold (author of Smart Mobs) discussed the possibility of a 'new economic system' born of 'unconscious cooperation' embodied by such technologies as Google links and Amazon lists, Wikipedia, wireless devices using unlicensed spectrum, Web logs, and open-source software. Rheingold speculates that 'the technology of the Internet, reputation systems, online communities, mobile devices...may make some new economic system possible....We had markets, then we had capitalism, and socialism was a reaction to industrial-era capitalism. There's been an assumption that since communism failed, capitalism is triumphant, therefore humans have stopped evolving new systems for economic production.' However, Rheingold is worried that established companies with business models that are threatened by these new technologies could 'quash such nascent innovations as file-sharing -- and potentially put the U.S. at risk of falling behind the rest of the world.'"

Comments

'New economy'

[Digital Avatar]

Oh my, a 'new economy' based on 'unconscious cooperation'. My, that sounds like Capitalism.

Re:'New economy'

[PapayaSF]

Oh my, a 'new economy' based on 'unconscious cooperation'. My, that sounds like Capitalism

Indeed. Howard is a nice guy and has some interesting ideas, but like a lot of lefties he keeps hoping that there is some workable, "non-oppressive" alternative to the free market. Unfortunately, Churchill's statement about democracy as a political system applies here as well: capitalism is the worst economic system, except for all the others.

Re:'New economy'

[j1m 5n0w]

but like a lot of lefties he keeps hoping that there is some workable, "non-oppressive" alternative to the free market

The free market is well entrenched because it is, as far as I can tell, the most effective economic system for dealing with scarcity. It has its problems under some conditions (such as lack of competition or information asymmetry), but it generally works.

However, in the world of intelectual property, there is no such thing as scarcity, so it makes perfect sense to consider new forms of distribution. The hard part is to provide an incentive to create without limiting distribution.

-jim

Solution

[EvanED]

Rheingold is worried that established companies with business models that are threatened by these new technologies could 'quash such nascent innovations as file-sharing -- and potentially put the U.S. at risk of falling behind the rest of the world.'

The easy solution? Make the rest of the world quash innovations such as file-sharing too.

(Sadly, this seems to be too common the attitude, and seems to work somewhat...)

Re:Don't worry

[Rosco P. Coltrane]

The rest of us are consumers however much we'd like to think of ourselves as somehow above the comman man. But the fact is we buy our equipment from big corporations. Those big corporations will take whatever steps are necessary to stay in business and prosper.

I know I shouldn't feed the trolls and you're going to get rightly modded down to oblivion after I'm done writing this, but...

Big companies of today will try to keep the way they do business unchanged, until such time as the consumer will grow tired enough of their attitude that they'll vote with their wallets. When that happens, those companies one of two things:

- They will evolve and adopt the way consumers want them to do business, simply because it's in their best interest, if nothing else to survive.

- If they can't evolve, they will go the way of the dodo.

You can see the latter happening to media companies. They had their hayday, and they used to have a purpose, which is distributing intellectual material (music, movies...) by distributing the media they're stored on. Now that technology allows people to share the intellectual material without exchanging the physical media, media companies find themselves with no business case. They're superfluous and struggling to stay alive, but they won't be able to adapt, simply because they aren't needed anymore.

Now, in your example, nobody will need to build computers from scratch, because computer-making companies will adapt to whatever new way of distributing goods emerges. That's because, as you point out, people have a need for someone to manufacture computers for them.

I don't know what the new way of distributing/selling computers will be, and how it will happen, but rest assured that it will happen. The RIAAs and MPAAs of the world however will not be part of the new world, that's for sure. The only question is, how many victims will they make in their downfalls...

"Real" Capitalism

[maggeth]

Actually it sounds more like "Real Capitalism" as opposed to this phoney, monopolistic system we have right now. Innovation is only used when a competitor that you couldn't shut out of the market forces you to keep up (sound like Microsoft?). People will eventually demand real free markets instead of "free" markets built by and run by a few selected corporations who can set up toll booths at their choosing (like the Microsoft tax, for example).

This interview is especially interesting because it outlines some specifics about HOW this can proceed, using technology as a tool to force social progress. Hopefully governments won't start fucking with things to protect their client corporations and realise that everyone needs to adapt. Otherwise they might as well be full-blown communists.

Free-market capitalism

[core_dump_0]

Industrial capitalism: Presence of corporations, legal "people" with unlimited liability protected by the State. Phony "free trade agreements" and "free trade organizations" which are nothing more than protection of businesses. Strict intellectual property laws. This is what we have in America.

Free-market capitalism: What this guy is describing. No corporations, true free trade (meaning the absence of subsidies, tariffs, embargoes, outsourcing bans, and other restrictions, NOT by agreements or organizations, but by lack of laws.) Whether there is intellectual property or not is debatable. I don't think that this has ever been fully put into practice.

Re:Don't worry

[Daniel Dvorkin]

FWIW, I think that's because only in the US is ice so widely used by the general public. A friend visited from Germany recently, and everywhere he went, he had to make a point of asking them not to put ice in his drink ...

Economic or Social Revolution?

[Keitopsis]

This is sounding like a new way to pass the buck. At the same time, there are far more social implications to these technologies.

What geeks saw in the 80's. College students saw in the early 90s, and what the entire world is waking up to now is that by changing the extent of a single persons ability to communicate, we have a much larger base population for any one society.

It is interesting to note that while large corperations are throwing money at ways to resist economic change, governments and traditional cultures are also trying to resist a "global" society by protecting viewpoints,certain sentimentalities,and cultural identification. Are we seeing a unilateral changes in social-political power structures as well as economic systems?

My $.02, but I think I have change coming.
Kei

You mean .. it could all be like an invisible hand

[crmartin]

Congratulations, Howard, you're discovered free markets. Self-organizing, self-optimizing.

Best of all, gussy it up with some techie-speak and no one will ever notice you're repeating one of the best sellers of '76.

1776.

Re:...but Hitler called himself a christian.

[timeOday]

Whoops, you forgot the biggest murderer of all, Stalin. And in my opinion he was also the most evil, because he reigned not by persuasion but by terror and deception. Even his followers either hated him or had no idea what he was up to. He was no religious zealot.

And Ghengis Khan:

These first four Mongol Khans never preferred one religion over another. They allowed freedom of religion in the lands they conquered. Also, because they never believed in the superiority of any religion, they were not picky over those they massacared. They slaughtered 30 million Chinese, another couple million Russians and Europeans, and another couple million Muslims.

There is need for concern...

[Infonaut]

but history is filled with examples of big business being pressured to conform to society's wishes.

AT&T's monopoly was dismembered.

Standard Oil's monopoly was dismembered.

The horrific child labor conditions of the Industrial Age were checked by laws.

Labor unions were established.

The weekend was created.

This is obviously not an exhaustive list, but the point is that business in the United States is not immune to pressure from the population at large. It just takes a lot of hard work and political activism to force change of any kind, and most Americans are for a variety of reasons singularly uninterested in exercising their political power.

Re:There is need for concern...

[seanadams.com]

One counterpoint to the cases you mentioned though, is that the companies fighting those changes were not opposing new technology paradigms, but rather direct competition (AT&T, Std Oil) or humanity (child labor etc).

What we're seeing now is interesting in that outmoded businesses are now receiving strong legal protection (with no popular support) in the form of bizarre laws that allow them to do very anticompetitive/anticapitalist things. From what I know of American history, we used to be very eager to embrace new technologies - indeed, technology has been the backbone of the USA since the industrial age, and that tradition is what's being threatened here.

The good news is, the USA has a remarkable "healing" ability and after a few years, once everybody sees what's going on, we usually correct our mistakes pretty quickly and move on to the next battle.

Re:There is need for concern...

[Hortensia Patel]

technology has been the backbone of the USA since the industrial age

Since, maybe. During, no. The USA's initial industrialization was largely founded on cotton, which in turn was founded on genocide (providing cheap land) and slavery (providing cheap labour).

after a few years, once everybody sees what's going on, we usually correct our mistakes pretty quickly

Erm... how can I put this delicately...

Re:But the problem is

[WillWare]

If I am creating digital music I am putting my time and effort in to that, rather than other things. Thus if I wish to do it all the time, I must recieve compensation for it since I have physical needs... IF you want all IP to be free, that's fine, but then you basically religate it to the realm of spare-time projects.

A few years ago Stephen King was doing an experiment of an end-run around the publishing industry, and doing it wrong (possibly with the intention of poisoning that well for unknown authors, as a bone thrown to his publishing buddies). What he did wrong was to insist that a minimum percentage of downloaders should contribute. What he should have done was release each chapter in response to a total contribution for the previous one, regardless of the percentage. He required an honesty level that wasn't necessary for his business model, and which caused his experiment to "fail".

Most writers obviously don't have the creds of Stephen King. So suppose it's a few years ago and you're Cory Doctorow - you're a very good writer but you're not widely known (now watch as I get told that I was the only person on Earth not following his work for the last 20 years). You have a great idea for a wonderful book about immortality and Disneyland. I forget how many chapters it is, let's say twenty. You put the first four in the public domain and post them on your website. You announce you will post the next chapter when you've gotten contributions totalling some amount of money. If you're good, the contributions will roll in pretty quickly. Maybe you put a thermometer picture on your website to let readers know how close they are to seeing the next chapter.

If this works, the creator gets his money even though the entire work ends up in the public domain. It would be really interesting to see somebody try this.

Re:Don't worry

[saden1]

Who want's half of their drink as ice? You go to the movies and those bastards fill half the cup with it! Seems to me like a classic case of water down the product and rip off the consumer.

Re:Don't worry

[visualight]

Small companies who are successful selling computers, become big companies or go out of business.

Why does it have to be like this though? Why is it that the stock market must go up, corporate profits must increase, and small companies must become large ones to survive?

Central Banks, that's why. They are so entrenched that just getting rid of them (Federal Reserve buy back) would cause much suffering for most of us.

I haven't heard anyone "pipe up" with a sensible plan to get ourselves out of this hole we've (our grandfathers) dug, but maybe this is it.

An alternative system evolves slowly and quietly alongside the old one, eventually replacing it. The final step would maybe not be a revolution but a collective decision to ignore the old system.

There are real issues, but these aren't them

[Animats]

That article sounds like something from the Industry Standard in 1998, during the run-up to the dot-com boom. Been there, done that.

Some real trends worth following:

• Too cheap to bill More things are becoming too cheap to bill for. Or, more specifically, the costs of accounting, marketing, billing, and support functions exceed the cost of the delivered product or service. This happened to the Internet some time back. It happened to long distance calls a decade ago. It's happening to telephony, much to the pain of the telecom industry.

  This isn't a new phenomenon. There are many tangible products where the manufacturing cost is a tiny fraction of the retail price. Soft drinks, for example. Bottled water. Jeans. Batteries. Printer ink. There are successful business strategies for pushing the price up, ranging from heavy brand promotion to lock-in. Just because it could be cheap doesn't mean it will be.

  We're starting to see these strategies applied to the Internet. "SBC Yahoo DSL", and "AOL for Broadband" are examples.

• Unstable markets Some markets are unstable. Electric power. North Atlantic airline tickets. Some commodities. This annoys free-market fanatics no end, but is unsurprising to anyone who understands feedback control system instability. Just because there's an equilibrium point doesn't guarantee the system will settle there. Nor does improving information or reducing delays necessarily improve stability.

  Electric power is a striking example of an unstable market. There's no inventory. Demand is relatively inelastic. Producers have high fixed costs. The result is prices that change by three orders of magnitude within a single day. This huge volatility can be exploited by traders, which makes things worse.

  There's much economic theology around this issue, and not enough theory with predictive power. This area needs more simulation and less pontification.

• The attention shortage There's a major shortage of attention to advertising messages. Advertising people call this "clutter". Advertising has become a near zero sum game, where vast efforts are made to be more visible than competitors. Advertising cost per unit of product climbs until the product is barely affordable. Neither the buyer nor the seller profits from this; it's a pure cost of competition.

• The futility of education Education can be viewed as a way to increase one's value relative to others. As a larger fraction of the population is educated, the relative value of education declines. It may decline to a level below the price of the education. This has already happened with much "job retraining" and computer-related "certifications", and is happening for many fields of higher education. This calls into question the basic concept that higher education is a social good.

• The race for the bottom You know this one. Work moves to very low cost areas. Eventually, those areas do become wealthier, and in theory, everybody wins. But that takes decades. Moving work to low-cost areas now takes only months. This speedup has produced the offshoring movement.

Now these are the real issues in postmodern capitalism. Not peer to peer networking.

Re:There are real issues, but these aren't them

[ReciprocityProject]

The futility of education Education can be viewed as a way to increase one's value relative to others. As a larger fraction of the population is educated, the relative value of education declines. It may decline to a level below the price of the education. This has already happened with much "job retraining" and computer-related "certifications", and is happening for many fields of higher education. This calls into question the basic concept that higher education is a social good.

Whoa. I hope that was a semantic error, and that you really meant, "This calls into the question the basic concept that higher education is an economic good [for the individual worker]. (I was about to mod you up but had to reply instead.)

Education offers important benefits other than increasing one's economic value. You need an education (by which I do not mean an indoctrination, an education-that-is-not-an-indoctrination being admittedly very, very hard to come by) to vote intelligently on issues like the economy, environment, energy, and foreign policy. Most of our voting populace is incompetent to make decisions as voters.

Note that I would never advocate actually restricting someone's right to vote based on whether they have a diploma, or any similarly-spirited criteria, but most of the people voting in the upcoming election will vote for the person who will "fix the economy" and "do the right thing in Iraq," not only without an understanding of the intricacies of those situations, but without an understanding that intricacies actually exist that need to be understood.

For a demonstration, go out on the street and ask about the relationship between Turkey and Iraq, or between interest rates and inflation, or the drop in biodiversity over the last 300 years, or the vulnerabilities in combat of the "Stryker" tank, or what happens if we never pay off the national debt, or what a nuclear winter is.

The irony, I think, is that while we're one of the most "over-educated" countries in the world, we're killing ourselves through our own ignorance. It's a catastrophe.

Re:Don't worry

[dalutong]

I think the idea is that with the lowered cost of technology independent movies will be able to gain a greater foothold. This will continue to be true.

The nature of free markets (truly free markets) is that people will do what is possible. Once indy movies are possible at a reasonable quality (something that is subjective) they will find ways to be distribued. As technology for distribution increases (high speed web access, for instance) you will see interesting ways to distribute them.

In a truly free market the profit margin is always very thin -- which is why many don't like the idea of a truly free market...

Re:I would agree with him...

[Jedi Alec]

by it's very definition Science Fiction is....well, Fiction. Ofcourse this logically entails that all of the things described do not exist and never will. I mean, take this Jules Verne character, I mean, airplanes? submarines? pah, such nonsense, no way. or this whole psychohistory babble this Asimov person brought up...

An extrapolation

[lysium]

We desire cold drinks because it is part of our culture.

Knowing the classic American love of conspicious consumption, I think it had to do with the fact that, before refrigeration, the wealthy elites of American society could afford an icehouse or deliveries of ice. They put ice in their drinks; this was emulated by whomever in the middle class could afford it. Once refridgeration spread, everyone could 'look rich' for a penny's worth of water. Ice used to be valuable, and so it remains as a cultural preference to this day.

I'll tell you what's fictional

[Travoltus]

The concept that the runaway consumption of natural resources and the paving over of fertile land

either in the name of western Capitalism, or in the name of nature-unfriendly Communism (China and the former USSR has/had a HORRIBLE environmental record)

can go on forever

is science fiction.