Douglas Rushkoff's Blog, page 26
April 15, 2016
Big Think – The Online Economy Is Breaking Businesses, and Stealing Our Time and Energy
It’s harder for most people to making a living now than it was before the rise of online businesses like Facebook and Amazon. That’s because the digital economy is hurting the real economy, says media theorist Douglas Rushkoff. Competition is increasingly fierce in just about every industry, and digital technologies have allowed companies to pursue monopolies like never before — because they chase the entire world’s population as a customer base.
Businesses have always sought growth, but applying the growth mindset to digital technology wields some very disturbing results. Take Twitter for instance: as a company, it makes $500 billion each quarter, but market observers have questioned the company’s value because it doesn’t have a growth strategy. Compare that to Amazon or Facebook or Google, each of which span multiple industries and have grown rapidly over the last decade.
Interestingly, for all our fascination with businesses owned by shareholders, family businesses perform better in just about every metric. The reason, says Rushkoff, is that family businesses are more concerned for the future — the long term future, not just next quarter. Rushkoff explains more surprising facts about our digital economy in his book, Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity. It’s truly a fascinating read.
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“Throwing Rocks” Talk at the 92nd St. Y
Digital technology was supposed to usher in a new age of endless prosperity, but so far it has been used to put industrial capitalism on steroids, with Internet startups selling for billions, but destroying more jobs than they create, extracting more cash from circulation than they put in, and disrupting entire marketplaces and neighborhoods in the process.
Douglas Rushkoff, the author of Throwing Rocks at the Google Bus, will explain what went wrong, and how to optimize our economy for distributed prosperity instead of mindless growth.
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April 13, 2016
Chronicle of Higher Education – Douglas Rushkoff Questions Technology
Originally published at The Chronicle of Higher Education.
Douglas Rushkoff doesn’t mince words about how technology, in his view, has been wrongly manipulated over the past two decades to fit the needs of a voracious stock market. But while he’s often labeled a cybercritic, he’s careful to qualify that description.
Credited with coining the terms “viral media” and “digital native,” Mr. Rushkoff, 55, is a professor of media studies at Queens College of the City University of New York and a public intellectual. He says he isn’t a critic of technology itself, or its potential, and in fact is especially excited about the role that massive open online courses, or MOOCs, can play in higher education. “They can take the burden off of real colleges becoming trade schools,” he says. “We can say, Oh, you just want to learn to do that? Do a MOOC!”
The core problem with technology is twofold, Mr. Rushkoff argues. First, the structure of the current digital economy is centered on infinite growth — a principle he doesn’t believe to be sustainable. The prevailing mind-set among digital-technology pioneers now is to create and expand companies, no matter the cost, and then sell them quickly for 10-figure sums, not to make them sustainable or benefit their workers, he says.
Second, those companies exercise an outsize degree of control over society, he says. “When you strap a device to somebody that’s going to ping and vibrate every time a company wants your attention, you’re living in a state of perpetual emergency interruption,” he says. “We lose the ability to think critically of the world around us.”
“The classroom,” he adds, “is one of the few places where we get to sit and look in each other’s eyes and actually speak with one another.”
Mr. Rushkoff remembers exactly when his fears about technology companies were forever stoked. It was August 9, 1995, the day Netscape made its initial public offering and set off the first dot-com boom — or, in Mr. Rushkoff’s words, “the original moment when the civic and human potential of the Internet was sacrificed to the financial hopes of a dying Wall Street.”
The original Internet was really developed by educators and not corporate interests, Mr. Rushkoff says. But after Netscape went public, the idea of infinite growth online gained increasing traction, he says. Not even the dot-com crash of 1999 could quell the temptation of investors and profits.
“We’ve applied technology to the needs of the market,” he says. He stresses, though, that “it’s not the technology’s fault. It’s where and how we implement it.” For instance, using technology to flip courses could help improve conventional teaching. “There’s an appropriate use of these really powerful tools.”
Mr. Rushkoff has been preaching about the pitfalls of the digital economy for years, and has written 10 books on the subject. (His latest is Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity.) Robert W. McChesney, a professor of communication at the University of Illinois at Urbana-Champaign, often assigns them in his courses. Mr. Rushkoff “has never taken his cues” from outside groups or people within academe, says Mr. McChesney, who’s also a media critic. Mr. Rushkoff’s work reflects “a sense of independence and integrity and accessibility that much academic writing does not have,” he says.
Mr. Rushkoff was called to academe only recently, earning a Ph.D. in 2012 from Utrecht University, in the Netherlands. He joined the faculty at Queens, where many students are first generation, low income, or immigrants, in 2014. He brought new-media expertise to a department that had been more traditional, says Richard Maxwell, chair of the media-studies department and a self-described political economist of media.
Both scholars believe academe has a critical role to play in debates over technology’s influence. Scholars can show people the unseen parts of technology, Mr. Rushkoff says, such as controversial questions surrounding smartphones. “The smartphone doesn’t just sit in your pocket,” he says. “It creates a social, cognitive, economic, and political environment around itself.” He asks: Where do its materials come from? Who’s paying for it? What kind of energy is it using? Who are the company’s real customers?
One of Mr. Rushkoff’s tougher tasks involves emboldening his students to question the value of social media, particularly Facebook. He encourages them to examine how the company makes money. That process should help show them, he says, “that Facebook is not your friend.”
Hoping to inspire students to explore such questions, Mr. Rushkoff helped start a master’s program in media studies at Queens last year that he says differs from many other media-studies programs. “There are places you can go to be a media-reception scholar,” he says, referring to academics who “read the media” and draw conclusions based on such observations, “or learn how to make apps and sell them to Google or Yahoo and get your money. But who is thinking about Team Human?” he asks. “Who is thinking about how tools and technology are impacting who we are, and how we can use them to pursue social justice?”
He pauses when asked if he’s optimistic about the future of technology. “I know what we can do,” he says, describing an idealistic vision for a reformed digital economy that distributes value to workers and consumers instead of extracting it from them in the name of profits. “We’ll get there one way or another.”
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Douglas Rushkoff Questions Technology
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April 12, 2016
The Kindle Chronicles Interviews Douglas Rushkoff
Listen to the audio podcast at The Kindle Chronicles
“The people who are throwing rocks at the Google bus, they’re on to something. They understand something. We should listen. And we can reconfigure, we can optimize, reprogram our economy to help everybody—That’s extremely optimistic. I put myself on the hopeful side of the equation right now.”
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April 11, 2016
The Week – Douglas Rushkoff’s 6 favorite books about big ideas
Technics & Civilization by Lewis Mumford (Univ. of Chicago, $25). This 1934 book invented media theory, the notion that our technologies create entire environments that reshape life as we know it. The invention of the clock led to hourly employment. The capital-intensive machinery of the industrial age led to consolidated corporate power. Mumford said it all, first.
Technopoly: The Surrender of Culture to Technology by Neil Postman (Vintage, $16). Still the simplest explanation of how new technologies get the better of us: We make a tool, we change our lives to accommodate the tool, the tool becomes our new reality. Think cars, TV, computers, smartphones…
Operating Manual for Spaceship Earth by Buckminster Fuller (Lars Muller, $20). This is the biggest little book I know, jamming the grandest ideas of the 20th century’s greatest designer into just 120 pages of conversational text. In brief, our problems are not laws of nature, but artifacts of bad design decisions. And we can change them.
Debt: The First 5,000 Years by David Graeber (Melville House, $22). The gripping saga of how debt — an abstract virus — became the default operating system for all human commerce. It represents the original “gamification” of business, and a rule so deeply embedded in our culture that we forgot it was invented.
The Peripheral by William Gibson (Berkley, $17). Gibson’s novel describes a digital economic landscape only a notch or two more extreme than our own, and plays out a scenario detailing what happens when we get all the tech we want, but it’s all geared toward extracting value from us. Crazy brilliant.
Capital by Karl Marx (Penguin, $58 for three volumes). If America had never begun equating Marx’s thought with Soviet-style communism, this book would likely have become incorporated into the business arsenal along with Sun Tzu’s The Art of War. Marx was the first — and best — at understanding the economy as a system that not only is informed by existing power relationships but also reinforces them. All talk of digital businesses as ecosystems comes from here.
The post The Week – Douglas Rushkoff’s 6 favorite books about big ideas appeared first on Rushkoff.
Douglas Rushkoff’s 6 favorite books about big ideas
Technics & Civilization by Lewis Mumford (Univ. of Chicago, $25). This 1934 book invented media theory, the notion that our technologies create entire environments that reshape life as we know it. The invention of the clock led to hourly employment. The capital-intensive machinery of the industrial age led to consolidated corporate power. Mumford said it all, first.
Technopoly: The Surrender of Culture to Technology by Neil Postman (Vintage, $16). Still the simplest explanation of how new technologies get the better of us: We make a tool, we change our lives to accommodate the tool, the tool becomes our new reality. Think cars, TV, computers, smartphones…
Operating Manual for Spaceship Earth by Buckminster Fuller (Lars Muller, $20). This is the biggest little book I know, jamming the grandest ideas of the 20th century’s greatest designer into just 120 pages of conversational text. In brief, our problems are not laws of nature, but artifacts of bad design decisions. And we can change them.
Debt: The First 5,000 Years by David Graeber (Melville House, $22). The gripping saga of how debt — an abstract virus — became the default operating system for all human commerce. It represents the original “gamification” of business, and a rule so deeply embedded in our culture that we forgot it was invented.
The Peripheral by William Gibson (Berkley, $17). Gibson’s novel describes a digital economic landscape only a notch or two more extreme than our own, and plays out a scenario detailing what happens when we get all the tech we want, but it’s all geared toward extracting value from us. Crazy brilliant.
Capital by Karl Marx (Penguin, $58 for three volumes). If America had never begun equating Marx’s thought with Soviet-style communism, this book would likely have become incorporated into the business arsenal along with Sun Tzu’s The Art of War. Marx was the first — and best — at understanding the economy as a system that not only is informed by existing power relationships but also reinforces them. All talk of digital businesses as ecosystems comes from here.
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The Royal Geographical Society Reviews ‘Throwing Rocks’
Read this piece at Geographical
If you create a business you want it to expand, preferably forever and a day. This may seem like the most obvious of goals but Douglas Rushkoff regards the underlying logic as ‘quite arbitrary’
Why, he asks, do we ‘accept the growth-based economy as a pre-existing condition of nature’? For Rushkoff, the process is one of the chief causes of social and economic inequality and it simply can’t be sustained: an infinitely expanding market is a myth, so structural collapse is only a matter of time.
Rushkoff may be whistling an old tune, but he makes quite an impression by applying his critique to the shiny new world of digital technology. After all, the internet was supposed to be so very different. The idealists hoped that it would be rooted in ‘decentralized connectivity and ad hoc social activity’. The ‘college dorm-room experiment’ was supposed to be the seedbed of an ‘equally distributed market-place’ and an endlessly creative ‘people-driven economy’. Regrettably, ‘instead of getting more varieties of human expression and interaction we pushed for more market-friendly predictability.’ In other words, if you were successful you began to play by the old rules, most especially that ‘growth was king’. Just look at Twitter, says Rushkoff. It didn’t cost much to create or maintain and it could have jogged along happily in a way that kept employees paid decently and customers satisfied. It did not require massive capital investment and yet it became a ‘publicly traded, multibillion-dollar company’ without adding anything of inherent value. It was ‘sacrificed… to the singular pursuit of growth.’
The new companies, Rushkoff writes, are ‘still operating as if they were 20th century industrial corporations’ and the same parlous consequences ensue. The human element is threatened and just as machines took the place of manual workers, so the manager is now replaced by an algorithm. The unique intelligence-gathering powers of a ‘living human interface’ are diluted and we encounter intrusive, data-mining bots. The space for genuine innovation or satisfying personal encounter between trader and seller is diminished. Worse yet, the obsession with growth means that there are winners and losers and in the digital world – with ‘commerce on crack’ – there is a quest to monopolise any given sector: ‘iTunes sells the music, Netflix sells the movies, and Amazon sells the books (and almost everything else).’ There is a veneer of diversity (you can sell your junk on eBay) but ‘everyone passes through the same digital turnstiles.’
What escape route does Rushkoff propose? He dreams of a ‘more functional, even compassionate economic system’ defined by ‘new, more distributed modes of value creation and exchange.’ People grow to maturity and then stop: why can’t businesses do the same? In the West, at least, most of us have all we need so we should ‘accept the potentially scary truth that we have finally succeeded.’ We can ‘make a whole lot less stuff – or even stop making more stuff – and still not end up waiting in 1970s Soviet-style lines for toothpaste.’
Rushkoff talks of a landscape filled with imaginative corporate structures that place social or environmental priorities above profit. He talks of old rivals sharing ideas and abandoning bad habits of secrecy and ‘scorched-earth determination’. There will be new ways of understanding money – treating it purely as a means to facilitate exchange rather than a commodity to be accumulated – and in the land of ‘sustainable prosperity’ people can work less, or be employed in public work schemes, or not work at all. Decentralisation will be regnant and we will return to the exciting commercial milieu of the medieval bazaar. The false idol of growth will be toppled and replaced by a ‘dynamic steady state’.
Rushkoff points to existing collaborative and imaginative initiatives that might be harbingers of this new dawn. He does concede, however, that his plan ‘sounds pretty grandiose’. This, I’m afraid, would be an understatement. Still, while many of Rushkoff’s ideas are fanciful and his tone borders on the homiletic, he reminds us that the true purpose of any economy is human betterment – whatever the stockholders might believe.
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April 8, 2016
FastCo – Why You Might Want To Rethink Making Those 401(k) Contributions
Read the original piece at Fast Company
Many of us take for granted that our retirement is our own personal responsibility. Young professionals understand that they’re playing a game, competing against one another not just in a race for jobs but also for retirement strategies. The only trouble is that 401(k)s might be creating many more losers than winners.
THE IGNOBLE RISE OF THE 401(K)
As the United States’s manufacturing base declines, fewer young workers expect old-fashioned, long-term guarantees such as pensions, anyway. The rise of the 401(k) and concurrent decline in pensions emerged at a propitious moment in American history, when a strain of “free market” fundamentalism had seeped from the Goldwater and Friedman fringes of the Republican Party into the techno-libertarian mainstream. As the finance journalist Helaine Olen observes in her book Pound Foolish, the long boom of the 1990s, and its accompanying corporate focus on lean management and cost cutting, only amplified that trend.
This confluence of circumstances created a feedback loop in which each element exaggerates and entrenches the others. Between 1979 and 2012, pension enrollment rates dropped from 28% to 3% of employees.
All this would be fine if individual retirement accounts performed as well as or better than the old pension plans. But as reported by sources from Forbes to USA Today, 401(k) participants actually end up saving less money, not more—and certainly not enough to retire on securely. Managing and monitoring retirement saving accounts require a degree of financial acumen that is simply beyond that of the average person. (It’s actually beyond the capability of most advisers.) Commissions and financial fees—often obfuscated—account for the rest of the decline in returns.
In fact, as Olen reports, until the hard-won (but easily and regularly rescinded) banking reforms of 2012, retirement fund managers weren’t even required to report the fees they charged. That’s right: From the emergence of these plans in 1981 until the summer of 2012, there literally was no legal requirement to inform consumers how much they were paying for the privilege of having a retirement account. They could look up the fees internal to the mutual funds, but the financial firms administering the accounts were not required to disclose them.
And consumers were accordingly clueless. A 2011 AARP survey noted that 71% of 401(k) holders erroneously believed that they were not being charged any fees, while another 6% admitted they did not know whether they were being charged or not. As a result, according to Forbes, in 2011, pension-style plans performed at a 2.74% rate of return, while 401(k)s actually lost an average 0.22%.
MORE LIABILITY, FEWER SAVINGS
So personal retirement plans are sold as a means of empowering the individual investor to get in on the game, but in practice they more frequently exploit a person’s ignorance and lack of negotiating power. For a middle-class worker’s 401(k) to perform well enough to retire on, Olen observes, she must not only invest like a pro but also never get seriously ill, never get divorced, and never get laid off. In other words, it rarely, if ever, works in real life.
By tasking individuals with their own retirement savings, companies transferred risk to employees, shifted profits to shareholders, and created a tremendous new market for financial services—which in turn siphoned off more value from people to the banking sector.
Nevertheless, a majority of us still hold out hope that those upward graphs and pie charts about compound earnings are really true—even though our investments are not going up as advertised. Most of us believe the story told to us by our employer-assigned financial advisers and the business press: That over time, those of us keeping our money in the stock market will average 7% or 8% a year.
As Michael Shuman notes in his book Local Dollars, Local Sense, the MIT economist Zvi Bodie has looked at the composite of the S&P since 1915 and shown the true rate of return for any 44-year period of investment over the past century. The real average is about 3.8%. The best moment for a person to have retired would have been 1965, for an average gain of about 6%. Retire today, and you’re looking at having made under 3%—before fees, of course. So much for taking charge of our own finances.
Fully aware of these liabilities, the financial services industry became less concerned about helping people invest for their own futures than about finding ways to make money off that very need: To game the system itself, all the while finding new ways to make investors feel they were getting in on it.
This makes the typical pyramid scheme of the original stock market look honest by comparison. On the stock exchange, at least, those who get in early can win—albeit at the expense of those who come in later. That’s just the way investing works. You speculate on the future value of things—buy low, sell high. The patsy is the guy doing the opposite.
In the 401(k) game, the patsy is anyone who follows the advice of the human resources department and surrenders a portion of his or her paycheck to the retirement planning industry, all under the pretense of personal responsibility.
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