You Say You Want a Revolution…

Mitch points to Joi Ito’s draft of an essay on Japan’s deer-in-the-headlights economy and culture:

It’s great stuff and, I think, a presaging of a debate that will come to pass in the United States if we don’t reinvigorate our own system and introduce many more voices into the debate.

You see, as old corporations fight to survive in the U.S. economy, they do stupid things like invest in the election of presidents that increase the gap between rich and poor , support proprietary communications over public communications , and launch imperial campaigns to shore up the economy here at home. Pretty soon, you end up with the situation in Japan, where executives travel with entourages and  bully advocates of change while an entrenched Liberal Democratic Party does nothing but study change in order to squelch it .

All this happens in the name of investor returns, which do spur innovation. Old companies, however, are caught in the jaws of the innovator’s dilemma, sooner or later you are the target of innovation and face obsolescence. This isn’t about party or ideology, just the plain facts of our history. And these things always come down to a struggle between the old and new; it seems to me that when these battles happen in an active free marketplace of ideas, people are a lot better off than when they take place over bloodied barricades. Business people should recognize they need to lead this change rather than fight it , if they want to remain true to the roots of American success.

Given the global tide of deflation we’re looking at with mixed feelings right now, I would not be surprised to see a wave of 1848-style revolutions–not necessarily successful, but that do have an impact on the public discourse–around the world in the 2010s.

Tom Jefferson would be delighted:

“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is its natural manure.”

But I wonder about the nature of revolution in societies in which the protocols of privilege are so tightly woven into the tapestry of everyone’s livelihood. In the agrarian economies of 1776, the 1790’s and 1848, the revolutionaries were not employees, but farmers and merchants whose livelihood had been extorted from them and for whom revolution was their last resort. Modern societies employ those who probably should rebel but whose lives are bleak only in contrast to what they might be. They’re like the staff of a managed care hospital who think they’re in charge even though they are the inmates of the economic system.

In our world, the might-be patriots can’t see the difference between themselves and the tyrants. It truly is a meritocracy, so, at least in theory, any of us or our children qualify for admission into the Tyrants’ Club and that’s our fondest hope. It might be more like asking French revolutionaries to stop speaking French than to challenge the aristocrats.

Nothing but Net

The Internet really does change everything. What Marx called the means of production are, in this over-capitalized deflationary age, semi-public utilities—whoever needs the products of those means can have them for a song. It doesn’t take a lot of prescience to see that most business activity is moving onto the Internet. Whatever is left “out there” in 2010 will hardly be worth counting. Our farm-to-market roads and commercial arteries will overwhelmingly be net-based rather than physical or logistical.

When I was a commercial real estate developer, I learned that the best way to make a lot of money was to get approval for an intersection or a “curb cut” to serve previously inaccessible land. In the world Mitch and Joi are discussing, access will be via the net, not the Highway Department.

Highway departments, post-innovative companies and legislatures are such natural enemies of change and what is quaintly called “ethics” that they cannot nor will they ever lead change rather than fight it. As long as they can hope to intermediate between those with something to sell and those with money to spend, they will resist the change which might un-constrict our collective air supply.

But clink! the greatest unintended consequence in history has given the power of access approval to the engineers of the Internet, which wouldn’t be so bad for the established order if it weren’t for Searls’ NEA Law of the Internet:

Nobody Owns It, Everybody Can Use It; Anybody can Improve It.

The Internet is a watershed for infrastructure which, not so coincidentally, is one of Doc’s favorite topics.

Aristocracy has always been based on economics, typically through control of scarce resources and the allocation of them which, it turns out, is the very definition of economics. Remember the Troll? You know, the one who lived under the bridge and demanded payment to let you pass? Every person and business seeks a unique, unfair, troll-like competitive advantage. Those who’ve attained advantage hold on for dear life. That’s what’s going on now.

But what if there are multiple bridges over the creek? Plus helicopters, hovercraft, stilts, porters, etc.? What if the people over there deliver? What if the attractions on the other side of the creek are no better than the new ones built on this side? What if half the attractions are digital and most of them are in your iPod or Tivo? That’s the world of abundant capital and its offspring, deflation.

Deflation has always been a race among falling prices, falling incomes and paralyzed management. As my favorite economist, Tom Robbins, put it:

“During periods of so-called economic depression, societies suffer for want of all manner of essential goods, yet investigation almost invariably discloses that there are plenty of goods available. Plenty of coal in the ground, corn in the fields, wool on the sheep. What is missing is not materials but an abstract unit of measurement called ‘money.’ It is akin to a starving woman with a sweet tooth lamenting that she can’t bake a cake because she doesn’t have any ounces. She has butter, flour, eggs, mi
lk, and sugar, she just doesn’t have any ounces, any pinches, any pints.”
                       —Skinny Legs and All

Robbins is describing trolls at work. Imagine a distribution system that routes around trolls. That would be us, re-designing the access rules.

We’re the anybody who can re-engineer the curb cuts. We can do anything we want and trade with anybody we want and, collectively, prevail upon the public utilities to produce more widgets or scooters or running shoes, since the marginal cost of production is, effectively, zero. Sure, management is currently frozen into unresponsiveness, but their public, productive utilities will not disappear when the rules are changed.

The Internet’s Neutron Econobomb will turn out the trolls but leave the infrastructure intact.

And it’ll be as relatively easy as shaking up the British Parliament with a fax server.

12:17:55 AM