Post Capitalism

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Jonathan Taplin on Jul 25

The British journalist Paul Mason published a provocative except from his new book Postcapitalism in the Guardian last week. His theory is that the sharing economy is ushering in a new age.

Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed — not just to subsist but to provide a decent life for all.

Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system’s defence mechanism is to form monopolies — the giant tech companies — on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.

Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world — Wikipedia — is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.

Since the 1930’s when Lord Keynes worried about a future in which we would have so much leisure time that we might not be able to create enough poets to fill our evening hours. So of course I am skeptical as most of my friends are working longer hours than 10 years ago when their every waking hour wasn’t harried by smartphones chirping.

But I do believe that Mason’s point, about the potential of Open Source technology to break up the “fragile corporate edifice” constructed by the tech monopolies that I have written about, is real. Consider the edifice that was Microsoft’s Windows operating system in 1998 when the Justice Department brought its anti-trust action. Since that time two Open Source software systems, Linux and Apache have made huge inroads into the corporate and Web server business. Both systems were constructed by hundreds of thousands of man hours of free labor contributed by geeks interested in improving the software and sharing their improvements with a large community for free. So in that sense, Mason is right that this is a post capitalist construct.

But here is the current problem with the sharing economy. It tends towards a winner take all economy.

Whether Uber ends up buying Lyft is yet to be determined, but my guess is that market will look like markets dominated by AirBnb, Instagram, Facebook, YouTube and Google. As Susie Cagle recently pointed out:

While technology has provided underlying infrastructure to spark and support new peer-to-peer network behavior, it hasn’t really changed anything about how those networks are built and owned. For example, we now have the tools and ability to disrupt the taxi industry by allowing collectives of drivers to reach customers directly — but instead, we have Lyft and Uber, multibillion dollar companies that neither offer benefits to their drivers, nor truly give them the opportunity to run their own independent businesses.

Likewise, we have the tools and ability to build collectively owned messaging and social platforms — but instead, we have Twitter and Facebook, which mediate what users can see from other users and collect personal data to better tailor advertising sales.

My concerns relate to the media and entertainment industry that we study at the USC Annenberg Innovation Lab. And in that world the possibility of using the Open Source model to build a new kind of Digital Distribution Cooperative seems very possible.

Ask yourself this question: why should YouTube take 55% of the ad revenue from a Beyonce (or any other artist) video when all they provide is the platform?

They provide no production money, no marketing support and their ad engine runs lights out on algorithms.

Imagine in today’s music business a distribution cooperative that would run something like the coops that farmer’s use (think Sunkist for orange growers). Here is how they are described.

Many marketing cooperatives operate through “pooling.” The member delivers his product to the association, which pools it with products of like grade and quality delivered by other members. After doing whatever processing is necessary, the co-op sells the products at the best price it can get and returns to the members their share of total proceeds, less marketing expenses.

In our model (much like the early days of the United Artists film distribution company formed in the 1920’s by Charlie Chaplin, Douglas Fairbanks, Mary Pickford and D.W.Griffith) the producers of music would upload their new tunes to the coop servers, do their own social marketing and probably end up getting back 85–90% of the revenues rather the 45% they get from YouTube. The coop could rent cloud space from Amazon Web Services just like Netflix and Spotify do.

All of this is possible because in the world of entertainment the artist is the brand. No one ever suggested to you, “let’s go to a Paramount movie tonight.” It is possible that we are entering a post capitalist age, but it cannot exist as long as the sharing economy is dominated by a few monopolists. Perhaps some bold experiments on the part of music artists could point the way towards a truly innovative way of using technology for the good of the artist rather than for her exploitation.

https://medium.com/@jonathantaplin/post-capitalism-f8d687d19c3

How to make $7 billion in 45 minutes

Jeff Bezos, CEO and founder of Amazon, at the introduction of the new Amazon Kindle Fire HD and Kindle Paperwhite personal devices, in Santa Monica, Calif., Thursday, Sept. 6, 2012. (AP Photo/Reed Saxon)

25 July 2015

On Thursday, Amazon, the online retail giant, announced that, contrary to analysts’ predictions and after months of financial losses, it had turned a profit in the second quarter.

The stock market responded with euphoria. Amazon’s share price surged by 18 percent in a single day, adding $40 billion to the company’s market capitalization. With 154,000 employees, Amazon overnight became the world’s largest retailer by market capitalization, surpassing Wal-Mart, with 2.2 million employees.

The market response was conditioned by the fact that stocks have been registering significant losses in the US in the past week, with earnings reports of major companies falling short of expectations amidst growing signs of slump in the United States and internationally.

These include a continuing sharp fall in the prices of commodities such as oil and iron ore, along with declining growth rates in China and a number of emerging markets, and ongoing stagnation in Europe. The International Monetary Fund earlier this month predicted the worst year for global growth since 2009, and last week the US Federal Reserve Board, in its semiannual Monetary Policy Report, painted a grim picture of the state of the US economy.

The signs are mounting—the stock panic in China, extreme volatility on US markets—that the disconnect between a stagnant real economy and a booming stock market, which has prevailed in the US since the beginning of the stock market recovery in the spring of 2009, may well be setting the stage for a new financial meltdown even greater than that of 2008.

In the meantime, multibillionaires such as Amazon CEO Jeffrey Bezos continue to milk the economy. For Bezos, Thursday’s trading was, to put it mildly, lucrative. He made $7 billion in 45 minutes.

Now the seventh-richest man in the world, Bezos saw his wealth surge to $43 billion. For all the hype surrounding the company he founded 20 years ago, Bezos got his billions by sweating his workers, monopolizing the market and capitalizing on a decades-long financial bubble.

Employees in Amazon’s fulfillment centers are paid $11-12 per hour. They are subject to grueling and humiliating conditions. They are regularly searched and foremen record how many times they use the restroom.

A 2011 report in a Pennsylvania newspaper noted that the company would not open the doors to ventilate one of its warehouses even when temperatures reached 110 degrees, for fear of theft. When workers started passing out, the company stationed ambulances outside for them.

Amazon now accounts for a bigger share of online sales than the next dozen competitors. It has used its enormous market power to strong-arm small publishers and authors, recently announcing unilaterally that it will start paying authors of e-books by the page view, instead of by the download, resulting in sharply reduced commissions. Bezos purchased the Washington Post with $250 million of his personal funds in 2013.

It is worth making some comparisons. The amount of money Bezos made Thursday is:

* Equivalent to what 300,000 US workers earning the median income earn in an entire year.

* Forty-seven times larger than the annual budget for the National Endowment for the Arts.

* Three hundred and eighteen times the Detroit Water and Sewerage Department’s deficit, which is being addressed by shutting off water to tens of thousands of households.

* More than two-thirds of the annual funding of America’s free and reduced-price school lunch program.

* Enough to provide every one of America’s 15.8 million hungry children $450 per year in food assistance.

The accumulation of such personal wealth amid the vast social misery that prevails in the United States can only be called obscene. But such an assessment would be news to the US media, which salutes every milestone hit by the Dow or NASDAQ with rapture and depicts the members of America’s billionaire oligarchy as geniuses and innovators.

There is something deeply dysfunctional about an economic system in which the announcement of a $92 million profit—the first-ever quarterly profit reported by Amazon—triggers $40 billion in share purchases in a matter of minutes.

The continual diversion of vast amounts of money into the stock market is a symptom of an underlying economic crisis of immense proportions. Every dollar that goes into speculating on a stock like Amazon, with a price-to-earnings ratio of nearly 1,000, is a dollar not used for productive investment.

While the real economy in the US has grown by only 13 percent since the depth of the recession in 2009, all three major American stock indexes have more than tripled. This year, NASDAQ for the first time surpassed the heights it reached just before the collapse of the dot.com bubble in 2000.

Meanwhile, the US economy shrank at an annual rate of 0.2 percent in the first quarter of this year. The falloff in economic activity was led by a collapse in business fixed investment, which fell by 2 percent. Investment in nonresidential structures fell by 18 percent.

The sharp fall in investment came despite the fact that US corporations are hoarding some $1.4 trillion in cash and similar assets, the largest such figure on record, amassed as a result of years of record profits amid falling wages and an influx of cheap money from the world’s central banks.

Instead of using this cash to hire workers and build factories, corporations are diverting it to raise dividends, buy back shares, hike executive pay and carry out mergers and acquisitions, all at record levels. Earlier this year, the Wall Street Journal reported that major US corporations in 2013 spent 36 percent of their operating cash to buy back their own shares, more than double the rate a decade before.

This speculative frenzy has been driven by six years of near-zero interest rates and money printing by the Federal Reserve, whose policies underlie the enormous overvaluation of companies such as Amazon.

The performance of the US stock market has decoupled from economic growth to such an extent that any indication of genuine recovery in the real economy generally prompts a market sell-off, while signs of economic slump tend to send the markets higher.

This state of affairs is an expression of the crisis and decline of American capitalism, which has for nearly four decades responded to declining profit margins in manufacturing by turning ever more decisively to financial parasitism.

The US ruling class and the capitalist system over which it presides have no answers to the social crisis in America. For every problem, they have the same solution: impoverish workers and use the money to gamble on the stock market. If workers don’t like it, there are always the police to keep them in line.

Andre Damon

 

http://www.wsws.org/en/articles/2015/07/25/pers-j25.html

Mindfulness: Capitalism’s New Favorite Tool for Maintaining the Status Quo

PERSONAL HEALTH

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The meditative practice is being used in a way that betrays its anti-materialist roots.

I stumbled across mindfulness, the meditation practice now favored by titans of tech, sensitive C-suiters, new media gurus and celebrities, without even really knowing it.

A couple of years ago, I was deeply mired in an insane schedule that involved almost everything (compulsive list-making at 4am, vacations mostly spent working, lots of being “on”) except for one desperately missed item (sleep; pretty much just sleep). A friend suggested I download Headspace, a meditation app he swore would calm the thoughts buzzing incessantly in my head, relax my anxious energy and help me be more present. I took his advice, noting the app’s first 10 trial sessions — to be done at the same time over 10 consecutive days — were free. When I found the time to do it, it was, at best, incredibly relaxing; at worst, it barely made a dent in my frazzled synapses. When I didn’t find the time (because again, schedule), the effort to somehow make time became its own source of stress. In the end, I got an equally hectic yet far more satisfying career, took up running and forgot Headspace existed.

That is, until the term “mindfulness” reached a tipping point of near ubiquity. As it turned out, what I’d regarded as just a digitized form of guided meditation was actually a “mindfulness technique,” part of a bigger, buzzy, Buddhism-derived movement toward some version of corporate enlightenment. As long ago as 2012, Forbes reported that Google, Apple, Deutsche Bank and several other corporate behemoths already had mindfulness programs in place for employees. Phil Jackson, the basketball coach with a record-setting 11 NBA titles, tacitly praised mindfulness for his wins, telling Oprah he’d incorporated the technique into player practice regiments. Arianna Huffington, empress of media, not only sings the praises of mindfulness in speeches around the country, but she and Morning Joe  co-host Mika Brzezinski just hosted anentire conference dedicated to it this past April. And perhaps least surprising of all, Gwyneth Paltrow is a proselytizing adherent, giving mindfulness in general, and Headspace in particular, a shout-out on her lifestyles-of-the-rich-and-beautiful website, Goop.

You can tell a lot about trendy new concepts by who embraces them, and why. In the case of mindfulness, business leaders cite a number of reasons why they’ve adopted the concept so wholeheartedly. Studies have found that mindfulness meditation reduces stress, thereby making it a safeguard against employee burnout. Research finds that mindfulness bolsters memory retention and reading comprehension, which means employees can be more accurate in processing information. One Dutch study found that mindfulness makes practitioners more creative, helping ensure workers remain a fount of ideas. And some schools for children as young as first grade have begun teaching mindfulness meditation, based on studies that suggest it helps maintainfocus, a resource in constant threat of short supply for those multitasking their way through so many mundane, workaday obligations.

The idea is that mindfulness helps cleanse cerebral clutter and hush neural distractions so we can redirect that brain power into being our most in-the-moment selves.

But really, we already knew this. Long before mindfulness became the path toward corporate good vibes — back when Westerners were getting into what was then simply called Zen meditation — millions were already offering unsolicited testaments to the restorative powers of the technique. (To modify an old joke about vegans, Q: How do you know someone’s into meditation? A: Oh, don’t worry, they’ll tell you.) The pesky problem with meditation, now dubbed “mindfulness,” was its connection with Buddhism. Jon Kabat-Zinn, widely credited with introducing the concept of mindfulness to America in the 1970s, reportedly recognized the spread of the concept might be helped by loosening its religious ties. As a New York Times article on the practice explains, Kabat-Zinn redefined the technique, giving it a secular makeover and describing it as “[t]he awareness that arises through paying attention on purpose in the present moment, and non-judgmentally.” Without all that dogma attached, the opportunities for use were suddenly endless.

And there’s nothing business loves better than a good opportunity. Silicon Valley, which sits in the shadow of San Francisco and its countercultural influence, was first to recognize the benefits of mindfulness. In a New Yorkerpiece that explores the history of the phenomenon, Lizzie Widdicombe cites Steve Jobs — who traveled India as a teen and was an avid practitioner of meditation — as the first tech industry icon to weave mindfulness with business practices. His heir apparent in this arena is Chade-Meng Tan, whose title at Google is, no kidding, Jolly Good Fellow, or alternately, the slightly more formal Head of Personal Growth. Originally hired in 1999 as an engineer, in 2007 Tan headed up the company’s first “Search Inside Yourself” course, a two-day mindfulness-focused program. Since then, the corporate adopters of mindfulness, which also include Procter & Gamble, General Mills and Aetna, have grown to include companies in every area of business, stretching far beyond tech to banking, law, advertising, and even the United States military. (Although, it should be noted, deep meditation may actually be damaging for some PTSD sufferers, exacerbating the condition.)

Strip away all the fuzzy wuzzy, and one glaring fact stands out about mindfulness’s proliferation across the corporate world: At the end of the day, the name of the game is increased productivity. In other words, the practice has become a capitalist tool for squeezing even more work out of an already overworked workforce. Buddhism’s anti-materialist ethos seems in direct odds with this application of one of its key practices, even if it has been divorced from its Zen roots. In an article about “McMindfulness,” the pejorative term indicting the commodified, secularized, corporatized version of the meditative practice, David Loy states “[m]indfulness training has wide appeal because it has become a trendy method for subduing employee unrest, promoting a tacit acceptance of the status quo, and as an instrumental tool for keeping attention focused on institutional goals.”

A 2013 piece from the Economist titled “The Mindfulness Business” compares mindfulness to the culture of self-help, previously held as the cure-all for a business culture looking to maximize worker usefulness. The piece points out that this recontextualized version of meditation seems, cynically, to miss the point of the practice’s original intent:

“Gurus talk about ‘the competitive advantage of meditation.’ Pupils come to see it as a way to get ahead in life. And the point of the whole exercise is lost. What has parading around in pricey Lululemon outfits got to do with the Buddhist ethic of non-attachment to material goods? And what has staring at a computer-generated dot got to do with the ancient art of meditation? Western capitalism seems to be doing rather more to change eastern religion than eastern religion is doing to change Western capitalism.”

It’s a valid point that drives home the schism between the roots of the practice and the warped interpretation of it.

For now, there seems no end to the spread of mindfulness — which isn’t such a bad idea. The notion of self-care in an era of constant digital distractions, as well as midnight and weekend work email exchanges, is a welcome one. But what of the halfhearted appropriation of a noble, anti-capitalist practice to thicken the bottom line? As Loy notes in his Huffington Post piece, American Buddhist monk Bhikkhu Bodhi warns that “absent a sharp social critique, Buddhist practices could easily be used to justify and stabilize the status quo, becoming a reinforcement of consumer capitalism.” That’s a pretty good summation of what’s already happening. Until corporate America discovers its next trendy panacea, the practice will continue to spread, its miraculous effects touted — and often overstated— as a booster of profits and more. It’s a bit like oms for making better worker drones; or rather, Zen done the American way.

http://www.alternet.org/personal-health/mindfulness-capitalisms-new-favorite-tool-maintaining-status-quo?akid=13299.265072.H0AeTf&rd=1&src=newsletter1039283&t=1

Beware inspirational online images – they may be more insidious than you think

A photo of Daniel Cabrera, a homeless Filipino, is being used to support the rightwing narrative that there are no excuses for failure or poverty
This handout photo taken on June 23, 201
‘Someone has turned the picture into an inspirational postcard with the caption: “If it is important to you, you will find a way. If not, you’ll find an excuse.”‘ Photograph: Joyce Torrefranca/AFP/Getty Images

Moved by the scene, Torrefranca took a photograph and posted it on Facebook. “For me as a student,” she wrote, “it just hit me a lot, like, big time.”

Torrefranca wasn’t the only one inspired by the nine-year-old boy without a home. Since Daniel Cabrera’s house burned down, he has reportedly been living in a food stall with his mother and two brothers. His father is dead. Reports also say he owns only one pencil. A second pencil was stolen from him.

As the story went viral, people emerged to help the boy, giving him books, pencils and crayons. He also received a battery-powered lamp so he would no longer have to do his homework in the car park. A fundraising page was set up to help cover the costs of his schooling.

This is far from the first inspirational story to attract attention online. Whether it’s a limbless man surfing, a cancer survivor climbing some of the world’s highest peaks or a homeless woman making it all the way to Harvard, we are easily touched by these stories, and there’s nothing strange or wrong with that. But we might want to examine some of the reasons why we – or others – love them so much, or at least question the conclusions some of us wish to draw from them.

One tabloid newspaper has recommended parents show the picture of the hardworking boy to their children next time they are moaning. In a similar vein, someone has turned the picture into an inspirational postcard with the caption: “If it is important to you, you will find a way. If not, you’ll find an excuse.”

In these interpretations, the picture is used to suggest that there are no excuses for failure or poverty. Even if you are poor and live in a makeshift home, you have the choice to work yourself out of that predicament. All you need is determination, willpower and the right, can-do attitude. Private troubles, whether poverty or unemployment, should remain private troubles. They should not be regarded as public issues because that is merely a way of trying to find an excuse. Such is the lesson we should teach ourselves and take from this.

It is depressingly easy to find other examples of this mindset today, the idea that we can all rise above our circumstances – however difficult – through a programme of self-improvement.

In Los Angeles, for instance, the New Village Charter High School is using transcendental meditation not just to release stress but also, in the words of itsprincipal, Javier Guzman, “to combat poverty”. This may help some of the children to achieve better results at school. But the problem is not personal when the bottom income quartile in the US make up only 5% of enrolments in top universities.

Another proposal to fight poverty comes from the US Republican politician Paul Ryan. Inspired by the writer Ayn Rand, he recently presented an anti-poverty plan in which he proposed poor people should sit down with a life coach and develop an “opportunity plan”.

This might sound a uniquely north American venture but Sweden, popularly known as the land of equality and welfare, is probably the country that has come closest to achieving Ryan’s dream.

In the course of only four years, the Swedish state paid out 4.7bn Swedish krona (£360m) to job coaches. The actual benefits of this initiative have proved modest, and the methods used by these coaches, including healing and therapeutic touching, have been called into question.

But more problematic than their questionable usefulness is that these methods implicitly encourage socially vulnerable groups, whether poor or unemployed, to stop looking for answers in the public sphere. They are told instead that the barrier lies within themselves.

One US study, which followed unemployed white-collar workers who attend support organisations, found that jobseekers were encouraged to stop reading the newspaper and go on a “news fast”. They were also asked to stop using the word “unemployment”, since that would betray a negative attitude.

Similar observations were made in Ivor Southwood’s auto-ethnographic account of UK jobcentres, Non-Stop Inertia, in which he describes how jobseekers are told to do “three positive things per week” or else they might be disciplined.

In his recent ethnography of the Swedish equivalent of Jobcentre Plus, Roland Paulsen describes mandatory humilating exercises, so-called brag rounds, in which the long-term unemployed are encouraged to show off in front of their fellow jobseekers.

In a distressing article recently published in Medical Humanities it was suggested that these types of exercises, intended to modify attitudes, beliefs and personality, have become a political strategy to eradicate the experience of social and economic inequality.

Again, there is nothing wrong with being moved by a picture of a young boy concentrating hard on his homework. But we should remember that pictures of this kind may serve more sinister purposes when paired with “inspirational” messages. Serious discussion of external circumstances – including a proper understanding of inequality – is not helped by the suggestion that the only thing holding a person back is their attitude.

http://www.theguardian.com/commentisfree/2015/jul/10/inspirational-online-images-daniel-cabrera-homeless-filipino?CMP=fb_gu

 

Resisting the “sharing” economy

Under the guise of “innovation,” capitalism creeps into our personal relationships, networks and community.

He’s helped you a lot in the past and you don’t think twice about saying yes.

When the day comes, you pick him up in your car and drive together, alternating between chatting and singing along, badly, to the radio. You drop him off at the gate, give him a hug and wish him well on his trip. He offers to pay for gas, but you shake your head and say he can cook you dinner when he gets back instead. He smiles and takes his bag into the terminal. You wave and get back into your car.

You come to that dinner a few months later. The smell of food fills his apartment. As you wait for the dish to finish in the oven, he talks about his trip: all the places he went and the people he met. He said that a friend of someone he met there has been backpacking in this area and will be staying on his couch for a week or two. It was the least he could do, he said, after they treated him so well when he was there. A timer goes off and your friend goes to the oven to remove dinner. About an hour later, you’re both stuffed and, looking at what’s left, realize that he probably made way too much food. A conversation about food waste bubbles up and soon your friend gets an idea.

Your friend knocks on his neighbor’s door while you hold the tin of way-too-many leftovers. The neighbor opens up and your friend explains that he made more food than he could ever eat before it would spoil and so was wondering if she wanted some. She smiles and gets a tupperware that your friend fills up, she asks the two of you to come in for some wine, which you both eagerly accept. It’s tart and strong and refreshing. You stay for about 15 minutes and talk about cooking. After leaving, you and your friend repeat this with more of his neighbors until the leftovers are all gone, though you’re not exactly empty-handed: you have a small pie from one neighbor, a loaned book from another, two bottles of beer from a third, and a bunch of fresh basil from the forth, all given without any prompting or expectations, and accepted not as payment or exchange but as an expression of goodwill reflecting that which your friend sent to them.

What you witnessed that night is technically called “community”, but it’s something so fundamental to the human experience and so foundational to human well-being that even those without the word would recognize it for what it is: social relations for the sake of social relations, the benefits coming not as part of some market mechanism but from simple human connections, the very thing that allowed humans to survive without the teeth and claws that other creatures enjoyed. It’s something that has sustained us before the capitalist economic system was even conceived of.

Because of this, it doesn’t follow the logic of the market, the ruthlessness and greed that give meaning and horror, to the capitalist system. It follows, instead, the logic of solidarity and friendship – it cannot be turned into a stock, it cannot be sold in stores, and it cannot be hawked on an infomercial. Indeed, that is the point. And it is because of this that the capitalist system finds it so threatening and why it works so hard to dismantle it.

While capitalism has always produced alienation, the rise of the so-called “sharing” economy, facilitated through smartphone apps and fueled by mountains of venture capital, is the apotheosis of the system’s war against the non-economic sphere. You can share cars, apartments, even meals with the touch of a button. It promises to take power away from the large corporations and put it into the hands of the individual, turning a top-down command economy into a peer-to-peer networked one. In reality, however, it is nothing more than capitalism rebranding itself. Having studied complaints about it with all the seriousness of a market researcher, it has launched the same old product in a bright, shiny new package, the New Coke of economic systems. Don’t believe it. The end goal is the same as it always was: profit.

The rhetoric surrounding these “services” is nothing more than a cover for capitalism’s direct colonization of our social interactions, our personal relationships becoming nothing more than one more means of production for some far off executive congratulating himself for a job well done. No longer content with monopolizing our physical world, it has now turned to our social relations as well, seeking to reduce something fundamental to who we are into a line item on a balance sheet.

Under this system, getting a ride to the airport, staying at someone’s house when traveling, cooking meals and sharing leftovers, are actions undertaken not in the name of friendship and camaraderie but as an impersonal economic transaction. The “sharing” economy is nothing of the sort – it is a way for companies to get people to do their work without having to deal with things like wages or benefits. It’s a way to build a hotel empire without having to build any actual hotels; it’s how you make money off selling food without making, or even buying any yourself; it’s a fleet of taxis without having to deal with things like fuel costs, liability insurance and licensing (not to mention ornery unions). At best, it should be called a renting economy. The participants take on all the work and all the risk. All the companies do is provide the connections, something that can easily be done for free, and has been for centuries and yet, for some reason, the people who create these services are praised as innovators. It is a parasitic relationship that masquerades as symbiosis.

The tragedy of all this is that it has turned an idea with revolutionary potential into one more manifestation of the dominant economic paradigm, a top-down structure where anything outside the bottom line is, at best, a secondary concern best dealt with after the quarterly earnings report comes out, so as not to spook the investors. It’s like if someone invented the steam engine and the only thing people used it for was to get wrinkles out of shirts, for a hefty price. We shouldn’t really be surprised about this, though. This is what capitalism does: it expands and absorbs anything it touches. It has to grow, or it will die. It constantly needs new things to monetize, to commercialize, to turn into products that it can feed its captive global market, and so when it begins running out of other things to make money off of, why not turn to our social relations? At this rate, nowhere and nothing and no one will be free of its influence, to rise above the status of a commodity.

There is still a chance to preserve this one last bulwark against the hungry market, however, while the “sharing” economy is growing, it has yet to surpass the size of the real sharing economy, the old connections we share and the new ones we make every day. We must discard parasitism disguised as sharing and promote mutual aid and solidarity; networks of people that can sustain themselves and each other outside the ruthless logic of market relations. We must share food, not because we can make some money,but because we care about each other. We must share rooms, not because we have aspirations of becoming some mini-entrepreneur, but because we value our connections. We must open up to new relationships, not because they present more opportunities for monetization, but because we want to reverse the alienation and isolation that has been foisted on us by a cruel and uncaring economic system. We must not allow the last refuge from rapacious market relations to fall to capitalism, turning even our most intimate relationships into something with a calculable dollars-and-cents value that can be bought and sold like a used car.

This battle presents unique opportunities for resistance, because it is one that is largely decoupled from the physical world. They are fighting us on the ground of our personal relationships and it is here that we, not they, have the home field advantage. We can fight and we can win, as long as we have our friends.

— Chris Cunderscoreg is the founder of the blog We Are the 99 Percent.

https://www.adbusters.org/magazine/120/resisting-so-called-sharing-economy.html

“Steve Jobs,” portrait of the artist as tech guru: What we lose when we worship at the altar of commerce

When we abandon the arts, this is what’s left 

"Steve Jobs," portrait of the artist as tech guru: What we lose when we worship at the altar of commerce
Michael Fassbender in “Steve Jobs” (Credit: Universal Pictures)

The trailer for the new Steve Jobs biopic has just been released, and it looks like the movie could be formidable, maybe one of the films of the year. Despite changes in cast and director, the matching of director Danny Boyle with actor Michael Fassbender (along with screenwriter Aaron Sorkin) could summon serious dramatic firepower.

The movie seems to make explicit something that’s been swirling for a while now: That engineers, software jockeys, and product designers are the capital-A Artists of our age. They are what painters and sculptors were to the Renaissance, what composers and poets were to the 19th century, what novelists and, later, auteur film directors, were to the 20th.

The likening of tech savants to artists goes back at least as far as Richard Florida’s books about the creative class, but it picked up energy with the 2011 death of Jobs, who was hailed as a job creator by Republican politicians and mystic genius by many others. You see this same impulse in the opening of Jonah Lehrer’s now-discredited book “Imagine,” which compared the inventor of the Swiffer (which “continues to dominate the post-mop market”) with William James and Bob Dylan.

The metaphor becomes quite clear in “Steve Jobs,” which is based on Walter Isaacson’s bestselling biography. In the trailer, Fassbender’s Jobs announces that he is not a musician – he is the conductor. “Musicians play their instruments,” he says. “I play the orchestra.” Stirring orchestral music – with stabbing violins – plays through the trailer. “Artists lead,” the Jobs character rants to a meeting at a particularly fraught time, and “hacks ask for a show of hands.”

But how many Americans – including those who can tell you the difference between every generation of iPhone – can name a single living conductor? What about a real visual artist? (That is, someone besides Lady Gaga.) As a recent CNN article asks, what about a famous living poet? (“No, not Maya Angelou. She died last year.”)

So how did we get here, where technology designers claiming the mantle of the Artist have replaced – in both the media and in the public’s esteem — the actual working, living, breathing artist?

The reason is not just the weird technological fetishism that has gripped American culture since the ‘80s. It also comes from how we as a society have spent our resources, and it goes way back.

While Americans, on the whole, didn’t worship culture with the same dedication as Europeans, the whole West saw the arts as something central, even a replacement for religion: After Nietzsche told us God was dead, theaters and concerts halls that looked like churches sprouted up not just in Britain and the continent, but in the wealthier and more settled cities in the States as well. Conductors like Toscanini became cultural heroes. Nations and plutocrats alike spent money to spread the gospel.

Cold War funding supported culture even more directly – Eisenhower sent Louis Armstrong overseas – and television stations and magazines considered the dissemination of the arts part of what they did. Maria Callas, Thelonious Monk, and Leonard Bernstein showed up not just in small-circulation specialty publications but on the cover of Time magazine.

For all the difference between their politics, generations, and backgrounds, the president who followed Eisenhower did not abandon the religion of culture: Kennedy had Robert Frost read at his inauguration. JFK spoke often, publicly and privately, about the importance of culture, writing that “There is a connection, hard to explain logically but easy to feel, between achievement in public life and progress in the arts.” Lyndon Johnson followed him by founding the National Endowment for the Arts. Nixon made war on a lot of the previous administration’s achievements, but not this.

Even more important, public schools offered music and arts education that gave at least some students a sense that this stuff mattered and was a basic part of being an educated, informed citizen.

How did all of this edifice collapse, so that music, poetry, theater, painting and everything else would be just another part of mix of commerce and “content”? That’s hard to make sense of, but let’s just say that the culture wars of the Bush I years, the demonization of artists and other subversives as a “cultural elite,” and the attacks on the canon by the academic left didn’t help. Nor did the conquest of neoliberalism, waged by Reagan and Thatcher and their respective brain trusts, which told us that markets are supreme and more important than musty old ideas like society or culture. And the globalization that came after gave narrow-minded utilitarians reason to slice and dice arts education. It’s still happening.

In the simplest sense: When you use state funding to help develop computer technology and what would become the Internet, and cut support for arts and culture, what do you think is gonna happen?

So what’s wrong with making Steve Jobs and others who came up with cool gadgets and efficient apps for getting pizza to people in San Francisco into the artists of our age? Doesn’t culture change over the decades and centuries?

Well, sort of, but here’s the key difference. The whole idea of poetry or a symphony or a novel is to get past daily life. It’s not just about cool or efficiency or even entertainment but an aspect of – to mangle the title of Geoff Dyer’s excellent essay collection – what was previously known as the human condition. We used to see culture as something that could be deeper than a really fast computer or a cordless mouse.

The literary essayist Richard Rodriguez has said that we live in “the age of the engineer.” If so, something really has died inside us. The Jobs movie looks great, but if this guys is our John Lennon or Nina Simone or Bernstein or Beethoven, we really are cooked.

Scott Timberg is a staff writer for Salon, focusing on culture. A longtime arts reporter in Los Angeles who has contributed to the New York Times, he runs the blog Culture Crash.He’s the author of the new book, “Culture Crash: The Killing of the Creative Class.”

The Tech Industry Bubble Is About To Burst

Euphoric reaction to superstar tech businesses is rampant — so much so that the tech industry is in denial about looming threats. The tech industry is in a bubble, and there are sufficient indicators for those willing to open their eyes. Rearing unicorns, however, is a distracting fascination.

The Perfect Storm

Raising funding for tech startups has never been so easy. Some of this flood of money has been because of mutual funds and hedge funds, including Fidelity, T. Rowe Price and Tiger Global Management. This is altering not only the funding landscape for tech startups, but also valuation expectations.

There are many concerns that valuations for businesses are confounding rationale. Entrepreneurs and their investors are deviating from more traditional valuation and performance metrics to more unconventional ones. Another cause cited for increasing valuations is the trend of protections for late investors that cause valuations to inflate further. The combination of a number of these factors has put the sector into a state of artificial valuations.

Meanwhile, the companies themselves are burning through cash like there is no tomorrow. Throwing money at marketing, overheads and, in particular, remuneration has become the accepted investment strategy for startup growth. All this does is perpetuate the vicious cycle of raising more money and spending more money. For the amounts that some of these businesses have raised, the jury is still out on actual profitability.

Unicorn Season

CB Insights publishes information on unicorns (companies with a valuation above $1 billion), which shows that access to the club has become increasingly less exclusive in the last couple of years. The chart below shows that the number of companies valued at $1 billion or above in 2014 exceeded previous years by quite some margin (47 unicorns joined the club in 2014 vs. 7 and 8 in 2012 and 2013, respectively). In addition, for the first 5 months of 2015, this trend shows no signs of abating (32 new unicorns as of June 1, 2015).

bubblechart

Different Experts, Same Conclusion

In the face of these trends, a small group of well-respected and influential individuals are voicing their concern. They are reflecting on what happened in the last dot-com bust and identifying fallacies in the current unsustainable modus operandi. These relatively lonely voices are difficult to ignore. They include established successful entrepreneurs, respected VC and hedge fund investors, economists and CEOs who are riding their very own unicorns.

Mark Cuban is scathing in his personal blog, arguing that this tech bubble is worse than that of 2000, because, he states, that unlike in 2000, this time the “bubble comes from private investors,” including angel investors and crowd funders. The problem for these investors is there is no liquidity in their investments, and we’re currently in a market with “no valuations and no liquidity.” He was one of the fortunate ones who exited his company, Broadcast.com, just before the 2000 boom, netting $5 billion. But he saw others around him not so lucky then, and fears the same this time around.

A number of high-profile investors have come out and said what their peers all secretly must know. Responding to concerns raised by Bill Gurley (Benchmark) and Fred Wilson (Union Square Ventures), Marc Andreessen of Andreessen Horowitz expressed his thoughts in an 18-tweet tirade. Andreessen agrees with Gurley and Wilson in that high cash burn in startups is the cause of spiralling valuations and underperformance; the availability of capital is hampering common sense.

The tech startup space at the moment resembles the story of the emperor with no clothes.

As Wilson emphasizes, “At some point you have to build a real business, generate real profits, sustain the company without the largess of investor’s capital, and start producing value the old fashioned way.” Gurley, a stalwart investor, puts the discussion into context by saying “We’re in a risk bubble … we’re taking on … a level of risk that we’ve never taken on before in the history of Silicon Valley startups.”

The tech bubble has resulted in unconventional investors, such as hedge funds, in privately owned startups. David Einhorn of Greenlight Capital Inc. stated that although he is bullish on the tech sector, he believes he has identified a number of momentum technology stocks that have reached prices beyond any normal sense of valuation, and that they have shorted many of them in what they call the “bubble basket.”

Meanwhile, Noble Prize-winning economist Robert Shiller, who previously warned about both the dot-com and housing bubbles, suspects the recent equity valuation increases are more because of fear than exuberance. Shiller believes that “compared with history, US stocks are overvalued.” He says, “one way to assess this is by looking at the CAPE (cyclically adjusted P/E) ratio … defined as the real stock price (using the S&P Composite Stock Price Index deflated by CPI) divided by the ten-year average of real earnings per share.”

Shiller says this has been a “good predictor of subsequent stock market returns, especially over the long run. The CAPE ratio has recently been around 27, which is quite high by US historical standards. The only other times it is has been that high or higher were in 1929, 2000, and 2007 — all moments before market crashes.”

Perhaps the most surprising contributor to the debate on a looming tech bubble is Evan Spiegel, CEO of Snapchat. Founded in 2011, Spiegel’s company is a certified “unicorn,” with a valuation in excess of $15 billion. Spiegel believes that years of near-zero interest rates have created an asset bubble that has led people to make “riskier investments” than they otherwise would. He added that a correction was inevitable.

What Does A Bubble Look Like?

To shed light on how close we may be to the tech bubble bursting, it is worthwhile trying to understand what determines being in a bubble. Typically, this refers to a situation where the price of an asset exceeds by a large margin its fundamental value.

In his 1986 book Stabilizing an Unstable Economy, economist Hyman Minsky’s theory of financial instability attracted a great deal of attention, and gathered an increasing number of adherents following the crisis of 2008-09. Minsky identified five stages that culminate in a bubble, as described in this Forbes article: displacement, boom, euphoria, profit taking, and panic.

Uber is an enviable company for much of what it has achieved, and the team is to be commended for how they have grown this business, as well as their previous successes. However, it serves as a good example to illustrate the dynamics of the tech bubble.

Displacement:Investors’ excitement with a new paradigm, such as advances in technology or historically low interest rates. The explosion of the “sharing economy” has resulted in companies such as Uber, Lyft and Airbnb growing exponentially in recent years by taking advantage of this new mode of operation.

Boom:Prices rise slowly at first, but then gain momentum as more participants enter the market. Fear of missing out (FOMO) attracts even more participants. Consequently, publicity for the asset class in question increases. Reviewing investment rounds for Uber since 2010 when they completed their seed round shows a large variety of investors wanting a piece of the action, perhaps in part due to a fear of missing out on the golden goose. The introduction of hedge funds and investment banks funding the business can also be seen, which underlines the facelift happening in this sector.

Euphoria:Asset prices increase exponentially; there is little rationale evident in decision making. During this phase, new valuation measures and metrics are touted to justify the unrelenting rise of asset prices. Uber’s increased valuation between funding rounds symbolizes the euphoria around the business. The chart below shows the evolution of Uber’s pre-money valuation over the last number of funding rounds.

Source: CB Insights; data analyzed by Funding Your Tech Startup

 

Although the pace of revenue growth at Uber is astounding (doubling approximately every 12 months at the moment), profitability is less certain. Profitability margins should increase over time as recognition and saturation are achieved in newer markets, but it is difficult to ignore the regulatory burdens and lawsuits the business is facing, which could steer it off course.

Profit taking:The few that have identified what’s going on are making their profit by selling their positions. This is the right time to exit, but is not seen by the majority. This is the next indicator on the horizon that will underline that we are in a tech bubble, and that it is about to burst. The catalyst for profit taking could be regulatory strains or excessive cash consumption that isn’t reflected by profitability gains in startups. Savvy investors will take the opportunity to exit while valuations are still high. The exits may well be too late for investors who are further behind on the FOMO curve or new types of investors who don’t appreciate that the market has moved.

Panic:By now it’s too late and asset prices collapse as rapidly as they once increased. With everyone trying to cash in realizing the situation, supply outstrips demand and many face big losses. Watch this space for the unfortunately impending examples.

Conclusion

The fact that we are in a tech bubble is in no doubt. The fact that the bubble is about to burst, however, is not something the sector wants to wake up to. The good times the sector is enjoying are becoming increasingly artificial. The tech startup space at the moment resembles the story of the emperor with no clothes. It remains for a few established, reasoned voices to persist with their concerns so the majority will finally listen.

 

http://techcrunch.com/2015/06/26/the-tech-industry-is-in-denial-but-the-bubble-is-about-to-burst/?ncid=rss&cps=gravity_1462_-7218853287940442458