Douglas Rushkoff joins the rank of French economist Thomas Piketty in expressing skepticism about free market capitalism in the digital age. Groundbreaking companies like Google, Amazon, and Uber operate using a “scorched Earth” method of value creation, says Rushkoff, which resembles 13th century colonialism. To make money, they extract value from communities rather than create it, much like conquistadors would extract precious metals from South American nations. If that sounds like a hyperbolic statement to you, you are probably not alone.
But Rushkoff points out that for all our fascination with digital companies, they have yet to make up more than four percent of the real economy, based on gross domestic product. They are not, strictly speaking, very good at creating value. Because they offer services to millions — even billions — of people, it appears they have value, but, Rushkoff asks, what value are those services adding to local communities? Often times, very little. They are, like Walmart, creating a vacuum in which local businesses struggle survive.
It is not that companies like Amazon or Walmart are misanthropic, but that our financial system rewards their method of creating value. Banks grant loans based on a business’s ability to extract wealth from a community, not on whether it make positive a positive contribution to a neighborhood. There is another way, says Rushkoff — a way that’s good for banks, businesses, and local communities…
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