TechRepublic – ‘Digital industrialism’: Why we need to rethink the purpose of our economy

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When protesters in San Francisco lay down in front of the Google bus, which shuttled workers from downtown to the company’s corporate campus, longtime media theorist Douglas Rushkoff “smiled in solidarity.” The locals were rebelling against the massive tech company that had spiked up rent and gentrified their city. But things soon turned dark: weeks later, a group in Oakland threw rocks at the Google bus, smashing a window.

Rushkoff saw something deeper at stake. His new book, Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity, out today, explores how we got to the point of “digital industrialism,” why we must rethink the values of our economy, and how to bring humans back into the fabric of the digital age.

“We have lost track of the purpose of our economy,” Rushkoff wrote.

According to Rushkoff, our never-ending appetite for economic “growth” has become unsustainable—and, a misguided end goal. Rushkoff sees us living in a period of “digital industrialism,” marked by a “disproportionate relationship between capital and value.” Web-based companies are creating platforms, but not necessarily value—at least, a value that can keep up with the venture capital backing they’ve received. In the case of Twitter, “they’re making half a billion dollars a quarter,” Rushkoff told TechRepublic. “There is value being created there. But because they took so much venture capital and then had an IPO which made them worth many billions of dollars, even that five hundred million dollars revenue is not enough to satisfy investors who want a hundred or a thousand times on returns.”

As a result, businesses are increasingly trying to monetize “likes” and big data, making people the end product, rather than creating value that consumers can use. The payoff comes not through a sustainable income, but when the platform is sold to a big spender—when Huffington Post was sold to AOL, for instance—creating artificial bubbles.

Rushkoff traces the current values of digital industrialism to an age where monarchs began shutting down bazaars, which had originated as places for townspeople to trade goods and crafts in a peer-to-peer networking fashion. Fearing that the lower classes would gain power, the aristocracy regained control. All along, the working class has been stripped of its power to create, which extended to the industrial age where workers became shuffled into factories, performing low-skill labor.

Blaming tech giants for the exacerbation in wealth disparity is misguided, as well. “Digital technology,” Rushkoff wrote, “is expressing the values of the industrial economy.”

MIT’s Erik Brynjolfsson and Andrew McAfee have been at the forefront of the conversation around technology and labor with their book The Second Machine Age, showing how production continues to increase while income inequality grows. But Rushkoff thinks that their premise of growth-based economy “as a pre-existing condition,” is the wrong way to think about the issue. “This income disparity is not a fact of nature or an accident of capitalism,” he wrote, “but part of its central code,” he wrote.

“There will be no second machine age.”

Calling it a second machine age is reactionary, said Rushkoff. “It’s ‘okay, it’s going to be like that, and the workers will be like this.’ Ultimately, however revolutionary their rhetoric, they’re arguing that this is essentially the same thing.”

But it’s not, said Rushkoff. “The industrial age could be understood with a printing press logic. You could have a printing press economy, and a printing press banking system, and a printing press company. The digital realm is really different. It’s highly individuated. It’s lateral in its construction.”

There are, however, opportunities that the digital world offers to rethink our current economic model, he believes.

To shift into a system that values people over “clicks,” and handmade goods above mass-produced factory products, Rushkoff believes we need to shift our values. Away from the from 40 hour workweek, which, he believes, is simply not what’s needed in society today. Away from “growth” as an end goal. Away from the value system of industrialism, in which “each industrial innovation leads to diminished human presence.”

“Joblessness may be a feature, not bug, of new economy,” he wrote.

Ironically, Rushkoff sees web-based peer-to-peer sharing platforms like Uber and Airbnb has eventually eliminating the human element. While today, “freelancers” at these companies have, in a sense, a lot of freedom with their work situation, companies like Uber and Airbnb are taking advantage of people, he believes, treating them as objects rather than as real stakeholders in the company. And now that Uber has self-driving research in the works, “the final indignity” will come when the drivers are replaced by machines. “Peer-to-peer is not a means of including people, but a prelude to getting rid of them,” Rushkoff wrote.

So what can businesses, startups, and corporations do to incorporate these human values? Rushkoff thinks that we need to put power back in the hands of individuals.

In the case of Twitter, “the first rule of thumb would be, take as little money as possible at the lowest valuation possible,” said Rushkoff. “The only reason to take a lot of money up front would be if you’re in Uber and you need the money to try to destroy other players in your space, to create a monopoly.”

For the startup world, what normally happens is “you look to get revenue as late as possible because the minute you’ve shown revenue, then investors see what you’re actually worth,” said Rushkoff. “I would flip that around and try to get your revenue as quickly as possible. Then you anchor users with the idea that this is a fee for service property, and the more money you make, the less leverage your investors have over your company.”

What he would like to see happen? “I think, rather than a simple revolution, we get a renaissance. A genuine rebirth of repressed ideas and mechanisms,” Rushkoff said.

“When you look at everything from Burning Man to eBay, you see there’s a kind of fundamentally different thing going on. Culturally, between community supported agriculture and the environmental movement, and Steampunk and craft beers and the Maker Movement,” he said.

“It’s different than a second machine age. It’s people getting their hands back into things and starting to value the human contribution over the mechanical contributions to things.”