Rushkoff is an eloquent and enthusiastic speaker, who can turn a complex, nuanced argument into a funny, inspiring performance reminiscent of Russell Brand at his impassioned best. His political-economic approach integrates aspects of classical liberalism (factors of production and the peer-to-peer market as a challenge to feudalism), marxism (alienation of workers from their products), anarchism (waged work as part-time slavery), digital libertarianism (the shared platform as a radical alternative to the corporation), cooperativismo (wages can be higher and prices lower when workers are also shareholders), monetary reform (the inflationary nature of using centralized, interest-bearing debt as currency) and more. Rushkoff combines all these ingredients into a thoughtful and coherent dish of problem statements and possible solutions, rather than just throwing them all into a blender, along with a grab bag of tin-foil-hat speculation, as the makers of films like Zeitgeist or Thrive do. In fact, I’d love to see someone make an arty, activist documentary illustrating Rushkoff’s ideas with the same budget as ‘Thrive’. Something like The Corporation, but with more focus on alternatives and solutions.

One of the core themes of the talk is the question of what drives small businesses to turn into corporations, or get bought by them? First, we need to be clear on our definition of “corporation” (also known as a “public company”), which is a state-incorporated, for-profit, limited liability structure, owned at least in part by whoever buys its shares on the sharemarket. Rushkoff points out that in the tech industry, “start-ups” (small businesses) need funding to develop before they can earn enough revenue to be sustainable, and the usual route for this is Venture Capitalists (VC). One the VCs put their capital in, they gradually “pivot” the business towards being acquired by a corporation, or IPO (selling shares and becoming one), so the VC can get their capital back fast, with capital gains, to put into another business.

Another option is to take out a business loan, but there is a legal limit to how much money a company can borrow. A business has to be solvent at all times (assets higher than debt), and while a loan goes on the books as a debt, an investment of equity goes on the books as an asset. Also, who hands out business loans? Banks. What are they? Usually, corporations. Since banks charge interest on loans, this also drives the business to grow, so they can afford to pay the interest as well as paying off the capital they were loaned.

Whatever idealistic social enterprise we might start-up, we are stuck in this trap unless we create sustainable alternative investment models like equity crowdfunding, micro-patronage, and ethical investment funds, who only buy non-transferable shares that can only be sold back to the business itself. These are the kinds of “small and slow solutions” (to quote Holmgren’s permaculture principles) Rushkoff discusses at the end of ‘Life Inc.’, and goes into in more detail in ‘Throwing Rocks…’. I listened to an audio book version of Life Inc. last year, read by Rushkoff himself. I highly recommend it (in either text or audio form) and I’m looking forward to reading the new one. If you only watch one online talk this year, his SXSW talk would be a pretty good choice, right up there with Yochai Benkler’s talk from last year’s CreativeCommons Summit, which was the base of my Crowdsoucing or Outsourcing blog post late last year.

The post Douglas Rushkoff on Updating our Economic Operating System appeared first on P2P Foundation.

For me, the first two months of this year will be about seeding the world with memes from my upcoming book, Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity, which will be published on March 1. I humbly ask you to pre-order the book or the Kindle.

The great thing about publishing a book is that it’s also an excuse to launch a whole lot of different but related ideas in a whole lot of places. So the piece below is about the future of work in a digital economy. The one on Shareable tomorrow is about the Fed. The one for British Air is about Disrupting Disruption. And so on.

Plus, I’ll be doing some talks in NY, SF, LA, and Portland. More on those soon. For those of you who don’t read books or leave the house, I’ve also booked some great late night TV (yeah that show). Very psyched to hit mainstream America with the idea that a digital economy can distribute wealth instead of just destroying markets and converting real value into dead assets.

More soon. Enjoy this piece. I’ll be back more frequently as I’ve got stuff to share.

Digital and robotic technologies offer us both a bounty of productivity as well as welcome relief from myriad repeatable tasks. Unfortunately, as our economy is currently configured, both of these seeming miracles are also big problems. How do we maintain market prices in a world with surplus productivity? And, even more to the point, how do we employ people when robots are taking all the jobs?

Back in the 1940’s, when computers were completing their very first cycles, the father of “cybernetics,” Norbert Wiener, began to worry about what these thinking technologies might mean for the human employees who would someday have to compete with them. His concern for “the dignity and rights of the worker” in a technologized marketplace were decried as communist sympathizing, and he was shunned from most science and policy circles.

Although it may still sound like heresy today, Wiener realized that if we didn’t change the underlying operating system of our economy – the very nature and structure of employment and compensation – our technologies may not serve our economic prosperity as positively as we might hope.

As we wrestle with the bounty of productivity as well as the displacement of employees by digital technologies, we may consider the greater operating system on which they’re all running. If we do, we may come to see that the values of the industrial economy are not failing under the pressures of digital technology. Rather, digital technology is expressing and amplifying the embedded values of industrialism.

It’s time we have the conversation toward which Wiener was pushing us, and challenge some of the underlying assumptions of human employment. The current anxiety over the future of work may be inspired by the increasing processing power of computers and networks, or even the platform monopolies of Amazon and Uber. But it has its roots in mechanisms much older than these technologies – mechanisms set in motion at the onset of industrialism, in the 13th century.

Looked at in terms of human value creation, the industrial economy appears to have been programmed to remove human beings from the value chain. Before the Industrial Age, the former peasants of feudalism were enjoying a terrific economic expansion. Yes, in spite of the way they’ve been chronicled by Renaissance court historians, the very late Middle Ages were actually a boom time. The Crusaders had just returned from their global treks, having established trade routes through which the goods of many lands could travel. They also returned with new technologies for agriculture and trade, including the bazaar – a marketplace for the exchange of crafts, crops, grain and meat, which used new financial instruments such as grain receipts and market money.

But as the peasants got wealthy exchanging goods and services, the aristocracy got relatively poorer. So they re-established control over the economy by outlawing market moneys and chartering monopolies with dominion over particular industries. So now, instead of making shoes himself, the local cobbler had to get a job at the officially chartered monopoly company. Thus what we think of as “employment” was born – less an opportunity than a restriction on creating value.

Instead of selling his shoes, the cobbler sold his hours – a form of indenture previously known only to slaves. Worse, his skills were not valued. The owners of proto-factories saw in industrial processes a way to hire cheaper workers, with less leverage against them. Why hire a skilled craftsman when you can break down the shoe-making into tiny steps, each capable of being taught to a day laborer in 15 minutes?

Viewed in this light the Industrial Age may have had no more to do with making products better or more efficiently than simply removing human beings from the value equation, and monopolizing wealth at the top. Automation reduced the economy’s dependence on the laboring classes. Those few tasks that still required humans could go to the lowest bidder – ideally in countries too far away for the human toll to be noticed by potential customers.

The only business priority these companies understood was growth. That’s largely because their own solvency was based on paying interest to nobles chartering and later to the banks financing them. But today, growth has become an end in itself—the engine of the economy—and humans have come to be understood as impediments to its functioning. If only people and our idiosyncratic demands could be eliminated, business would be free to reduce costs, increase consumption, extract more value, and grow.

This is one of the primary legacies of the Industrial Age, when the miraculous efficiency of machines appeared to offer us a path to infinite growth—at least to the extent that human interference could be minimized. Applying this ethos in a digital age means replacing the receptionist with a computer, the factory worker with a robot, and the manager with an algorithm. When digital companies disrupt an existing industry, they tend to offer just one new job for every 10 they render obsolete.

If we want a digital economy that gets people back to work, we have to program it for something very different. The word digital itself refers to the digits—the 10 fingers – that we humans use to build, to count, and to program computers in the first place. That we should now witness a renaissance in makers, crafts and artisanal production is no coincidence. The digital landscape encourages production from the periphery, lateral trade, and the distribution of wealth. Instead of depending on centralized institutions for sustenance, we begin to depend on one another.

Where the corporations of the past depended on government regulation to maintain their monopolies, today’s digital companies do it through the monopoly of the platforms themselves. Today’s digital behemoths are not factories but networks whose embedded programming controls the landscape on which interactions take place. In a sense, Uber is software designed to extract labor and capital (in the form of automobiles) from drivers and convert it into share price for its investors. It is not an opportunity to exchange value so much as to do the R&D for a future network of robotic cars, without even offering a share in the ownership.

Thankfully, the remedies are varied. Unlike the one-size-fits-all solutions of the Industrial Age, distributed prosperity in a digital age won’t scale infinitely. Rather, the solutions gain their traction and power by reconnecting people and rewriting business plans from the perspective of serving human stakeholders rather than abstracted share values.

Yes, on the surface most of them sound idealistic or even socialist, but they are being tried by companies and communities around the world, and with documented success. Among the many I explore in my upcoming book on the subject are letting employees share in increased productivity by reducing their workweek — at the same rate of pay. Or contending with overproduction by implementing a guaranteed minimum income. Or retrieving the Papal concepts of “distributism” and “subsidiarity,” through which workers are required to own the means of production, and companies grow only as large as they need to in order to fulfill their purpose. Growth for growth’s sake is discouraged.

Many companies today – from ridesharing app Lazooz to Walmart competitor WinCo – are implementing worker-owned “platform cooperatives” to replace platform monopolies, allowing those contributing land or labor to an enterprise to earn an ownership share equal to those contributing just capital.

Finally, distributing the spoils of distributed technologies means accepting the good news: there may simply be fewer employment opportunities for people. We must remember that employment may really just be an artifact of an old system – the reactionary move of a bunch of nobles who were afraid for people to create value for themselves.

Once we’re no longer conflating the idea of “work” with that of “employment,” we are free to create value in ways unrecognized by the current growth-based market economy. We can teach, farm, feed, care for and even entertain one another. The work challenge is not a problem of scarcity but a spoil of riches. It’s time we learn to deal with it that way.

Douglas Rushkoff is Professor of Media Theory and Digital Economics at Queens/CUNY, and the author of “Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity’’ (Portfolio, March 2016).

Lead image by Bryan Hindle

The post Rebooting Work: Programming the Economy for People appeared first on P2P Foundation.