Note to Book People: We’re Back

I just wrote a little piece for Publishers Weekly on why publishing is on the way back:

The corporate consolidation of publishing over the past two decades has finally maxed out. Borders is verging on bankruptcy; Barnes & Noble is closing stores; and major media conglomerates are closing imprints and ejecting talent faster than they gobbled it up in the 1990s. While this makes for some bleak headlines in the short term, it bodes well for the future of a publishing industry that operates on a scale more appropriate to the medium we’re all creating and selling.

Publishing is a sustainable industry—and a great one at that. The book business, however, was never a good fit for today’s corporate behemoths. The corporations that went on spending sprees in the 1980s and ’90s were not truly interested in the art of publishing. These conglomerates, from Time Warner to Vivendi, are really just holding companies. They service their shareholders by servicing debt more rapidly than they accrue it. Their businesses are really just the stories they use to garner more investment capital. In order to continue leveraging debt, they need to demonstrate growth. The problem is that media, especially books, can’t offer enough organic growth—people can only read so many books from so many authors.

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George Dyson on ‘Economics is Not a Science’

One of my heroes, George Dyson, posted this in reaction to my recent Edge essay, Economics is Not a Natural Science.

Rushkoff is right: our 21st-century global computing platform is still running a 13th-century banking system, and the resulting performance sucks.

In any hydrodynamic system, the non-dimensional Reynolds Number characterizes the ratio between inertial forces (the result of mass and velocity) to viscous forces (the result of the inherent stickiness of the fluid). When the Reynolds number reaches a certain critical value, the system changes from laminar to turbulent flow. There is an equivalent to the Reynolds Number for an economic system: the ratio between the speed (and amplitude) at which currency is flowing through the system to the viscosity of the financial medium. The Reynolds number of our electronically-mediated economy has recently gone way up, with destabilizing results. The latest problem is that automated programs — -the barnacles of the New Economy — -are now trading *within* the frequency spectrum of the turbulent boundary layer. If this happens to a ship, it will slow down, and if it happens to an airplane, it will go into a stall. Where’s the anti-fouling paint?

How to best transcend the current economic mess? Put Jeff Bezos, Pierre Omidyar, Elon Musk, Tim O’Reilly, Larry Page, Sergey Brin, Nathan Myhrvold, and Danny Hillis in a room somewhere and don’t let them out until they have framed a new, massively-distributed financial system, founded on sound, open, peer-to-peer principles, from the start. And don’t call it a bank. Launch a new financial medium that is as open, scale-free, universally accessible, self-improving, and non-proprietary as the Internet, and leave the 13th century behind.”

Please do check out the essay. It’s the most important thing I’ve written in a long time.

National Healthcare: Socialism vs. Corporatism

The healthcare debate has gotten so weird, I think it’s time someone (I guess me) says what’s actually going on. I do not presume to have the answers to all of these problems (well, actually I think I have most of it figured out) but all I mean to do is share what appears to be happening. It is bizarre. Let’s start simple.

Obama said he wanted national healthcare, and presented Congress with a bill that would create a public health insurance option for people who can’t or won’t afford the ones offered by the private sector. It’s like having public school for people who can’t/won’t afford private, or even public libraries for people who don’t want to buy and own books. The idea was that it would save so much money by preventing poor people from showing up at the emergency room in crisis (or just being sick at all), it would pay for itself. The insurance companies got really upset, and got Republicans to argue that this would hurt competition, and upset the free market.

Obama understands this perspective: that the sanctity of the free market is in some ways more important than the health of the nation’s people, and has begun to back down. What is being ignored is that health insurance is not a free market. It is part of a monopoly of corporations currently controlling what we call healthcare in America – a healthcare system that promotes the use of costsly patented pharmaceuticals over preventative care, nutrition, and basic health education. If we had a truly free healthcare market… well, don’t get me started.

But all that aside, when Obama suggests he is open to removing the national healthcare part of the national healthcare act, he is turning it from social spending to straight corporatism. Now, instead of requiring everyone have insurance, and then subsidizing a person’s participation in a government health plan, the act will still require everyone have insurance, and then subsidize a person’s participation in a private health plan. So the net effect of the law is to use public funds to subsidize a private, highly inefficient healthcare insurance industry which has been documented to care much more about profit than anyone’s health.

This is corporatism.

And it is not even a step in the right direction, not a step towards getting America healthier or more people properly insured. It promises only to exacerbate the very features of private-sector healthcare that already puts America fiftieth in the list for life expectancy and general health (Canada is 8th, UK is 36th).

But the weird part is that Republicans – in the thrall of the insurance companies – are now still making a show of arguing against the bill on grounds that it’s socialism, when in fact it’s really just corporatism or corporate welfare. This is the bill they actually want passed. But in addition to making sure it passes (all they need is enough Democrats to stupidly vote for it) they want to earn political points by arguing against the steamroller of socialism that Obama is supposedly driving over us all. Get it? It’s all backwards.

An End to Movements

Just posted a piece on Arthur Magazine about the ineffectiveness – and maybe obsolescence – of movements. Here’s a snippet:

The best techniques for galvanizing a movement have long been co-opted and surpassed by public relations and advertising firms. Whether a movement is real or Astroturf has become almost impossible for even discerning viewers to figure out. The question often becomes the new content of the Sunday morning news panel, taking the place of whatever real issue might have been addressed.

But the problem is not simply that we’ve lost the ability to distinguish between real movements and cynically concocted fake ones. It’s that they are functionally indistinguishable. They may as well be the same thing.

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Economics is Not a Natural Science

With a great deal of editorial guidance from John Brockman, I’ve just posted my first Edge.org essay, Economics is not a Natural Science.

We must stop perpetuating the fiction that existence itself is dictated by the immutable laws of economics. These so-called laws are, in actuality, the economic mechanisms of 13th Century monarchs. Some of us analyzing digital culture and its impact on business must reveal economics as the artificial construction it really is. Although it may be subjected to the scientific method and mathematical scrutiny, it is not a natural science; it is game theory, with a set of underlying assumptions that have little to do with anything resembling genetics, neurology, evolution, or natural systems.

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post removed

This post has been removed.

I wrote a piece I believed to be in support of a web site that has gotten a lot of undeserved heat lately. But many members of that community saw in the piece a betrayal of their ambitions. They successfully took down this site, posted personal details elsewhere on the web, and crashed my email. I don’t have the means or energy to keep this site up or my online life functioning with the piece in place.

So, for the sake of everything and everyone else I’m hoping to support with this site, I have made the decision to remove it. The net isn’t quite censorship free, yet. Uncle.

YesMen Fix the World – on MediaSquat Radio

PLAY INTERVIEW

I had a great discussion last night with the most brilliant media viralists walking the earth – the YesMen – on my radio show The MediaSquat last night. You can play it above, or go see their movie trailer at The YesMen Fix the World website.

Monday’s show also featured an interview with the founder of Appropedia.org, a wiki Appropedia for collaborative solutions in sustainability, poverty reduction and international development.

If you haven’t ever listened to The MediaSquat, you can always find it live on WFMU or WFMU.org, every Monday night at 6pm EST – or via iTunes, mp3, streaming bla bla right here. We’re looking for ideas and pieces from you, too. Come make the MediaSquat with us. We’re just getting started.

The end of mass everything. DIY Days, Philly

KEYNOTE – DOUGLAS RUSHKOFF
The End of the Story: How capitalism killed narrative, and how to grow new ones
The myth of infinite market expansion was supported, at least in part, by a story structure dependent on crisis, climax, and relief. Just as we are now demanding bankers give up their absolute control of our monetary system, must we as storytellers give up control of our narratives? And how can we make a living telling stories in a world where everyone now has a story to tell, and a means of telling it?

Rushkoff vs Andersen

Change Observer just posted the first part of a conversation between me and Kurt Andersen, on the economy and just how big an opportunity this crisis might be affording us.

Andersen is smart – really smart – though a bit more sanguine about all that’s going on around us than I am. I think that might be, in part, because he has done so very well at everything he has tried. Maybe that’s a law of the universe, and one I should just follow (rather than letting my misgivings about “success” impede my own path toward it). But that’s a discussion for another day.

Some excerpts:

Andersen: I tend to agree with Doug’s major premises, such as the unsustainability of an economy dominated by financial speculators instead of “value creators,” and the fact that the particulars of our system are the result of human choices rather than immutable “conditions of nature.” And I see the gobsmacking crash and resulting flux as a rare limited-time-only opportunity to significantly update and reform the system and the habits of mind that are its cause and effect. Thus we now have a chance to remake our medical and energy and educational and urban planning systems along vastly more sensible lines. But for all my hopefulness about the possibilities of change — and my desire in some ways for radical reform — as a practical matter I do take as a given our basic market-driven political economy. The decline of manufacturing and the hypertrophied financial and marketing sectors notwithstanding, Doug’s assertion that “very few American businesses actually [do] anything, anymore” seems extreme to me.

Rushkoff: The reason I’m not as forgiving as Kurt, I suppose, is that I don’t see these cycles as weather or earthquakes. I see them as entirely predictable manifestations of the system we’ve adopted. People think they need cars because “how else would I get to work?” without understanding that they only need a car to get to work because the suburbs were zoned, in part, to promote car ownership (or, in most cases, promote real estate speculation). So we look at Europeans and think how lovely it is they get to walk home for lunch, and assume something about America’s geography made this impossible. Does this mean we can get rid of the car suburbs? Probably not. At least not in the short term.

And neither do we just retire the Fed and crash the banks. We can’t go back to the Middle Ages, and we don’t want to. What we can do is promote the development of complementary economic mechanisms. New ways (and old ways) of doing commerce.

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Best of Times, Worst of Times: Two Economies, by design

Today’s generally accepted business headline, from the NYTimes: “Signs of Economic Growth Push Markets Up”

Just parsing that phrase pretty much says it all. Signs of economic growth can and will push markets up. This means, literally, that if the metrics we use to measure economic growth indicate a positive trend, more speculators will invest capital into the shares originally used to lend money to corporations.

Of course, the signs of economic growth – these metrics – are really just derivatives of the GNP. More-ness of output or consumption. The sign of economic growth leading to today’s market optimism was that manufacturing activity in Europe increased. Oil prices are going up again, as well – having nothing to do with actual demand, but speculators’ belief that demand may grow. Even if it doesn’t, they can make money by investing now, promoting the belief that demand will grow, and then selling to the next round of speculators who believe the story.

Meanwhile, the most worshipped indicator of economic growth – the stock indexes – aren’t really signs of economic growth at all. They’re just a measure of speculators’ belief in whether the bubble in that investment is inflating or deflating.

Most significantly for those of us living back in the real world, however, all these economic indicators inspiring confidence on Wall Street have little or nothing to do with the real economy of work, home, and basic security. Job losses continue to pile up – most likely to above 10% actual unemployment in the US (the figures come out lower because of those who have given up actively looking after losing unemployment benefits), credit card and mortgage defaults are only beginning to get registered, and prospective home sellers are only now realizing the painful truth that no one is interested in buying.

My point is not gloom and doom. Rather, it’s that the “signs of economic growth” stimulating the speculative economy and DowJones average have little or nothing to do with the prospects for real people to make ends meet, find gainful employment, or – more importantly – create and exchange value back here on earth.

In fact, the vital signs of the speculative economy might better be understood as the health points of the monster whose very purpose is to extract value from the real, and inject it into the virtual, derivative economy.