The True History of Libertarianism in America: A Phony Ideology to Promote a Corporate Agenda

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Before Milton Friedman was earning plaudits as an economic genius, he was a shill for the real estate industry.

This is an adapted version of an article that first appeared on NSFWCORP. Published daily online and monthly in print, NSFWCORP is The Future of Journalism (With Jokes).

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Every couple of years, mainstream media hacks pretend to have just discovered libertarianism as some sort of radical, new and dynamic force in American politics. It’s a rehash that goes back decades, and hacks love it because it’s easy to write, and because it’s such a non-threatening “radical” politics (unlike radical left politics, which threatens the rich). The latest version involves a summer-long pundit debate in the pages of the New York Times, Reasonmagazine and elsewhere over so-called “libertarian populism.” It doesn’t really matter whose arguments prevail, so long as no one questions where libertarianism came from or why we’re defining libertarianism as anything but a big business public relations campaign, the winner in this debate is Libertarianism.

Pull up libertarianism’s floorboards, look beneath the surface into the big business PR campaign’s early years, and there you’ll start to get a sense of its purpose, its funders, and the PR hucksters who brought the peculiar political strain of American libertarianism into being — beginning with the libertarian movement’s founding father, Milton Friedman. Back in 1950, the House of Representatives held hearings on illegal lobbying activities and exposed both Friedman and the earliest libertarian think-tank outfit as a front for business lobbyists. Those hearings have been largely forgotten, in part because we’re too busy arguing over the finer points of “libertarian populism.”

In his early days, before millions were spent on burnishing his reputation, Friedman worked as a business lobby shill, a propagandist who would say whatever he was paid to say.  That’s the story we need to revisit to get to the bottom of the modern American libertarian “movement,” to see what it’s really all about. We need to take a trip back to the post-war years, and to the largely forgotten Buchanan Committee hearings on illegal lobbying activities, led by a pro-labor Democrat from Pennsylvania, Frank Buchanan.

What the Buchanan Committee discovered was that in 1946, Milton Friedman and his University of Chicago cohort George Stigler arranged an under-the-table deal with a Washington lobbying executive to pump out covert propaganda for the national real estate lobby in exchange for a hefty payout, the terms of which were never meant to be released to the public. They also discovered that a lobbying outfit which is today credited by libertarians as the movement’s first think-tank — the Foundation for Economic Education (FEE)— was itself a big business PR project backed by the largest corporations and lobbying fronts in the country.

The FEE focused on promoting a new pro-business ideology—which it called “libertarianism”— to supplement other business lobbying groups which focused on specific policies and legislation. It is generally regarded as “the first libertarian think-tank” as Reason’s Brian Doherty calls it in his book “Radicals For Capitalism: A Freewheeling History of the Modern Libertarian Movement” (2007). As the Buchanan Committee discovered, the Foundation was the best-funded conservative lobbying outfit ever known up to that time, sponsored by a Who’s Who of US industry in 1946.

A partial list of FEE’s original donors in its first four years— a list discovered by the Buchanan Committee — includes: The Big Three auto makers (GM, Chrysler and Ford); top oil majors including Gulf Oil, Standard Oil, and Sun Oil; major steel producers US Steel, National Steel, Republic Steel; major retailers including Montgomery Ward, Marshall Field and Sears; chemicals majors Monsanto and DuPont; and other Fortune 500 corporations including General Electric, Merrill Lynch, Eli Lilly, BF Goodrich, ConEd, and more.

The FEE was set up by a longtime US Chamber of Commerce executive named Leonard Read, together with Donaldson Brown, a director in the National Association of Manufacturers lobby group and board member at DuPont and General Motors.

That is how libertarianism in America started: As an arm of big business lobbying.

Before bringing back Milton Friedman into the picture, this needs to be repeated again: “Libertarianism” was a project of the corporate lobby world, launched as a big business “ideology” in 1946 by The US Chamber of Commerce and the National Association of Manufacturers. The FEE’s board included the future founder of the John Birch Society, Robert Welch; the most powerful figure in the Mormon church at that time, J Reuben Clark, a frothing racist and anti-Semite after whom BYU named its law school; and United Fruit president Herb Cornuelle.

The purpose of the FEE — and libertarianism, as it was originally created — was to supplement big business lobbying with a pseudo-intellectual, pseudo-economics rationale to back up its policy and legislative attacks on labor and government regulations.

This background is important in the Milton Friedman story because Friedman is a founding father of libertarianism, and because the corrupt lobbying deal he was busted playing a part in was arranged through the Foundation for Economic Education.

According to Congressional hearings on illegal lobbying activities 1946 was the year that Milton Friedman and his U Chicago cohort George Stigler arranged an under-the-table deal with a Washington lobbying executive to pump out covert propaganda for the national real estate lobby in exchange for a hefty payout, the terms of which were never meant to be released to the public.

The arrangement between Friedman and Stigler with the Washington real estate lobbyist was finally revealed during a congressional review of illegal lobbying activities in 1950, called the Buchanan Committee. Yes, there was something called accountability back then. I only came across the revelations about Friedman’s sordid beginnings in the footnotes of an old book on the history of lobbying by former Newsweek book editor Karl Schriftgiesser, published in 1951, shortly after the Buchanan Committee hearings ended. The actual details of Milton Friedman’s PR deal are sordid and familiar, with tentacles reaching into our ideologically rotted-out era.

False, whitewashed history is as much a part of the Milton Friedman mythology as it is the libertarian movement’s own airbrushed history about its origins; the 1950 Buchanan Committee hearings expose both as creations of big business lobby groups whose purpose is to deceive and defraud the public and legislators in order to advance the cause of corporate America.

The story starts like this: In 1946, Herbert Nelson was the chief lobbyist and executive vice president for the National Association of Real Estate Boards, and one of the highest paid lobbyists in the nation. Mr. Nelson’s real estate constituency was unhappy with rent control laws that Truman kept in effect after the war ended. Nelson and his real estate lobby led what House investigators discovered was the most formidable and best-funded opposition to President Truman in the post-war years, amassing some $5,000,000 for their lobby efforts—that’s $5 million in 1946 dollars, or roughly $60 million in 2012 dollars.

So Herbert Nelson contracted out the PR services of the Foundation for Economic Education to concoct “third party” propaganda designed to shore up the National Real Estate lobby’s legislative drive — and the propagandists who took on the job were Milton Friedman and his U Chicago cohort, George Stigler.

To understand the sort of person Herbert Nelson was, here is a letter he wrote in 1949 that Congressional investigators discovered and recorded:

I do not believe in democracy. I think it stinks. I don’t think anybody except direct taxpayers should be allowed to vote. I don’t believe women should be allowed to vote at all. Ever since they started, our public affairs have been in a worse mess than ever.

It’s an old libertarian mantra, libertarianism versus democracy, libertarianism versus women’s suffrage; a position recently repeated by billionaire libertarian Peter Thiel — who was Ron Paul’s main campaign funder in his 2012 presidential campaign.

So in 1946, this same Herbert Nelson turned to the Foundation for Economic Education to manufacture some propaganda to help the National Association of Real Estate Boards fight rent control laws. Nelson chose to work with the FEE because he knew that its founder, Leonard Read, agreed with him on a lot of important issues. Such as their mutual contempt for democracy, and their disdain for the American public.

Read argued that the public should not be allowed to know which corporations donated to his libertarian front-group because, he argued, the public could not be trusted to make “sound judgments” with disclosed information:

The public reporting would present a single fact—the amount of a contributor’s donation—to casual readers, persons having only a cursory interest in the matter at issue, persons who would not and perhaps could not possess all the facts. These folks of the so-called public thus receive only oversimplifications or half-truths from which only erroneous conclusions are almost certain to be drawn. If there is a public interest in the rightness or wrongness of corporate or personal donations to charitable, religious or education institutions, and I am not at all ready to concede that there is, then that interest should be guarded by some such agency as the Bureau of Internal Revenue, an agency that is in a position to obtain all the facts, not by Mr. John Public who lacks relevant information for the forming of sound judgments…Public reporting of a half-truth is indeed a significant provocation

So in May 1946, Herbert Nelson of the real estate lobby, looking for backup in his drive to abolish federal rent control laws on behalf of landlords, contacted Read with an order for a PR pamphlet “with some such title as ‘The Case against Federal Real Estate Control’,” according to Karl Schriftgiesser’s book The Lobbyists.

What happened next, I’ll quote from Schriftgiesser:

They were now busily co-operating on the new project which the foundation had engaged Milton Friedman and George J. Stigler to write. It was to be called Roofs and Ceilings and it was to be an outright attack on rent controls. When Nelson received a copy of the manuscript he wrote Read to say, “The pamphlet…is a dandy. It is just what I wanted.

The National Association of Real Estate Boards was so pleased with Milton Friedman’s made-to-order propaganda that they ordered up 500,000 pamphlets from the FEE, and distributed them throughout the real estate lobby’s vast local network of real estate brokers and agents.

In libertarianism’s own airbrushed history about itself, the Foundation was a brave, quixotic bastion of libertarian “true believers” doomed to defeat at the all-powerful hands of the liberal Keynsian Leviathan and the collectivist mob. Here is how libertarian historian Brian Doherty describes the FEE and its chief lobbyist:

[Read] would never explicitly scrape for funds… He never directly asked anyone to give anything, he proudly insisted, and while FEE would sell literature to all comers, it was also free to anyone who asked. His attitude toward money was Zen, sometimes hilariously so. When asked how FEE was doing financially, his favorite reply was, “Just perfectly.”… Read wanted no endowments and frowned on any donation meant to be held in reserve for some future need.

And here is what the committee’s own findings reported—findings lost in history:

It is difficult to avoid the conclusion that the Foundation for Economic Education exerts, or at least expects to exert, a considerable influence on national legislative policy….It is equally difficult to imagine that the nation’s largest corporations would subsidize the entire venture if they did not anticipate that it would pay solid, long-range legislative dividends.

Or in the words of Rep. Carl Albert (D-OK): “Every bit of this literature is along propaganda lines.”

The manufactured history about libertarian’s origins, or its purpose, parallels the manufactured myths about one of big business’s key propaganda tools, Milton Friedman. As the author of The Lobbyists, not knowing who Milton Friedman was at the time, wrote of Friedman’s collaborative effort with Stigler:

“Certainly [the FEE’s] booklet, Roofs or Ceilings, was definitely propaganda and sought to influence legislation….This booklet was printed in bulk by the foundation and half a million copies were sold at cost to the National Association of Real Estate Boards, which had them widely distributed throughout the country by its far-flung network of local member boards.”

There’s no idealism here. The notion that libertarian ideas have captured the political imagination of millions in this country is a root problem: if we’re going to escape the corporate oligarchy that is running this country–their ideas can’t possibility be the alternative solution. This movement has to be recognized for what it is.

Published daily online and monthly in print, NSFWCORP is The Future of Journalism (With Jokes). For more features, or to subscribe, click here.

Amazon’s frightening CIA partnership

Capitalism, corporations and our massive new surveillance state

Hundreds of millions flow to Amazon from the national security state. It’s a kind of partnership we shouldn’t allow

Amazon's frightening CIA partnership: Capitalism, corporations and our massive new surveillance state
Jeff Bezos, Dick Cheney (Credit: AP/Reed Saxon/Manuel Balce Ceneta/Photo montage by Salon)

When Internet retailer and would-be 21st century overlord Amazon.com kicked WikiLeaks off its servers back in 2010, the decision was not precipitated by men in black suits knocking on the door of one of Jeff Bezos’ mansions at 3 a.m., nor were any company executives awoken by calls from gruff strangers suggesting they possessed certain information that certain individuals lying next to them asking “who is that?” would certainly like to know.

Corporations, like those who lead them, are amoral entities, legally bound to maximize quarterly profits. And rich people, oft-observed desiring to become richer, may often be fools, but when it comes to making money even the most foolish executive knows there’s more to be made serving the corporate state than giving a platform to those accused of undermining national security.

The whistle-blowing website is “putting innocent people in jeopardy,” Amazon said in a statement released 24 hours after WikiLeaks first signed up for its Web hosting service. And the company wasn’t about to let someone use their servers for “securing and storing large quantities of data that isn’t rightfully theirs,” even if much of that data, leaked by Army private Chelsea Manning, showed that its rightful possessors were covering up crimes, including the murder of innocent civilians from Yemen to Iraq.

The statement was over the top — try as it might, not even the government has been able to point to a single life lost due to Manning’s disclosures — but, nonetheless, Amazon’s capitalist apologists on the libertarian right claimed the big corporation had just been victimized by big bad government. David Henderson, a research fellow at Stanford University’s Hoover Institution, explained that those calling for a boycott of Amazon were out of line, as the real enemy was “megalomaniacal Senator Joe Lieberman,” who had earlier called on Amazon to drop WikiLeaks (and is, admittedly, a rock-solid choice for a villain).



“The simple fact is that we live in a society whose governments are so big, so powerful, so intrusive, and so arbitrary, that we have to be very careful in dealing with them,” Henderson wrote. That Amazon itself cited a purported violation of its terms of service to kick WikiLeaks off its cloud was “a lie,” according to Henderson, meant to further protect Amazon from state retribution. Did it make him happy? No, of course not. “But boycotting one of the government’s many victims? No way.”

But Amazon was no victim. Henderson, like many a libertarian, fundamentally misreads the relationship between corporations and the state, creating a distinction between the two that doesn’t really exist outside of an intro-to-economics textbook. The state draws up the charter that gives corporations life, granting them the same rights as people — more rights, in fact, as a corporate person can do what would land an actual person in prison with impunity or close to it, as when Big Banana was caught paying labor organizer-killing, right-wing death squads in Colombia and got off with a fine.

Corporations are more properly understood not as victims of the state, but its for-profit accomplices. Indeed, Amazon was eager to help the U.S. government’s campaign against a website that — thanks almost entirely to Chelsea Manning — had exposed many embarrassing acts of U.S. criminality across the globe: the condoning of torture by U.S. allies in Iraq; the sexual abuse of young boys by U.S. contractors in Afghanistan; the cover-up of U.S. airstrikes in Yemen, including one that killed 41 civilians, 21 of them children. The decision to boot WikiLeaks was, in fact, one that was made internally, no pressure from the deep state required.

“I consulted people I knew fairly high up in the State Department off the record, and they said that they did not have to put pressure … on Amazon for that to happen,” said Robert McChesney, a professor of communication at the University of Illinois, in an appearance on “Democracy Now!.” “It was not a difficult sell.”

And it paid off. A little more than a year later, Amazon was awarded a generous $600 million contract from the CIA to build a cloud computing service that will reportedly “provide all 17 [U.S.] intelligence agencies unprecedented access to an untold number of computers for various on-demand computing, analytic, storage, collaboration and other services.” As The Atlanticnoted, and as former NSA contractor Edward Snowden revealed, these same agencies collect “billions and perhaps trillions of pieces of metadata, phone and Internet records, and other various bits of information on an annual basis.”

That is to say: On Amazon’s servers will be information on millions of people that the intelligence community has no right to possess — Director of National Intelligence James Clapper initially denied the intelligence community was collecting such data for a reason — which is used to facilitate corporate espionage and drone strikes that don’t just jeopardize innocent lives, but have demonstrably ended hundreds of them.

Instead of helping expose U.S. war crimes, then, Amazon’s cloud service could be used to facilitate them, for which it will be paid handsomely — which was, in all likelihood, the whole point of the company proving itself a good corporate citizen by disassociating itself from an organization that sought to expose its future clients in the intelligence community.

“We look forward to a successful relationship with the CIA,” Amazon said in a 2013 statement after winning that long-sought contract (following a protracted battle for it with a similarly eager tech giant, IBM).

If it were more honest, Amazon might have said “We look forward to a successful relationship with the [coup d’état-promoting, drone-striking, blood-stained] CIA.”

And if it were more honest, Amazon could have said the same thing in 2010.

So long as there are giant piles of money to be made by systematically violating the privacy of the public (the CIA and NSA together enjoy a budget of over $25 billion), corporations will gladly lie in the same bed as those who created them, which is, yes, gross. Protecting consumer privacy is at best an advertising slogan, not a motivating principle for entities whose sole responsibility to shareholders is to maximize quarterly profits. This isn’t an admission of defeat — and when companies fear state-sanctioned invasions of privacy will cost them customers in the private sector or contracts with foreign states, they do sometimes roll back their participation — but a call to recognize the true villain: If we desire more than just an iPhone with encryption, we must acknowledge the issue is not just a few individual megalomaniacs we call senators, but a system called capitalism that systemically encourages this behavior.

In the 1970s, following the resignation of President Richard Nixon, the Church Committee exposed rampant spying on dissidents that was illegal even according to the loose legal standards of the time. Speeches were made, reforms were demanded and new laws were passed. The abuses, it was claimed, were relegated to history. What happened next? Look around: The total surveillance we enjoy today, enabled by high-tech military contractors including AT&T and Googleand Verizon and every other nominally private tech company that capitalism encourages to value profits over privacy — a public-private partnership that grants those in power a means of spying on the powerless beyond the wildest dreams of any 20th century totalitarian. Sure, ostensibly communist states can of course be quite awful too, but the difference is that, in capitalist nations, the citizens actually place the eavesdropping devices in their own homes.

Now, whether the reforms of the 1970s were inadequate or were just plain ignored by those who were to be reformed is sort of beside the point; the status quo is what it is and, at least if one values privacy and the ability to organize and engage in political discussion and search the Internet without fear a spy agency or one of its contractors is monitoring it all in real-time, it sure isn’t good. So when groups such as the Electronic Frontier Foundation and progressive magazines such as The Nation call for “another Church Committee,” the question we ought to ask them is: “Fucking really?”

Abolishing capitalism is indeed a utopian goal, but when corporations routinely go above and beyond their legal duties to serve the state — granting police and intelligence agencies access to their customers’ data without so much as a judge’s rubberstamp on a warrant — expecting meaningful change from a few hearings or legislative reforms will only leave the reformers disappointed to find their efforts have just led to dystopia. So long as there’s money to be made serving the corporate state, that is what corporations will do; there’s no need to resort to conspiracy for it’s right there in their corporate. And that’s not to be defeatist, but to suggest we ought to try a different approach: we ought to be organizing to put a stop to public-private partnerships altogether.

Right-wing libertarians and other defenders of capitalism are absolutely right when they say that the profit motive is a mighty motive indeed — and that’s precisely why we should seek to remove it; to take away even just the prospect of a federal contract. If the demands of privacy advocates are limited by myopic concerns of what’s politically possible here and now, all they will have to show for their advocacy will be a false sense of achievement. The problem isn’t, as some imagine it, a state spying without appropriate limits, but the fact that capitalism erases the distinction between public and private, making it so non-state actors gleefully act as the state’s eyes and ears. This isn’t about just Google or the government, but both: the capitalist state. And until we start recognizing that and saying as much, the result of our efforts will be more of the same.

Charles Davis is a writer and producer in Los Angeles whose work has been published by outlets including Al Jazeera, The New Inquiry and Vice. You can read more of his writing here.

 

http://www.salon.com/2014/12/01/amazons_frightening_cia_partnership_capitalism_corporations_and_our_massive_new_surveillance_state/?source=newsletter

Atheist libertarians pose as skeptics — except when it comes to free markets and the nature of corporate power

The atheist libertarian lie: Ayn Rand, income inequality and the fantasy of the “free market”

The atheist libertarian lie: Ayn Rand, income inequality and the fantasy of the "free market"
Rand Paul, Ayn Rand, Richard Dawkins (Credit: AP/Timothy D. Easley/Reuters/Chris Keane)

Why atheists are disproportionately drawn to libertarianism is a question that many liberal atheists have trouble grasping.  To believe that markets operate and exist in a state of nature is, in itself, to believe in the supernatural. The very thing atheists have spent their lives fleeing from.

According to the American Values Survey, a mere 7 percent of Americans identify as “consistently libertarian.” Compared to the general population, libertarians are significantly more likely to be white (94 percent), young (62 percent under 50) and male (68 percent). You know, almost identical to the demographic makeup of atheists – white (95 percent), young (65 percent under 50) and male (67 percent). So there’s your first clue.

Your second clue is that atheist libertarians are skeptical of government authority in the same way they’re skeptical of religion. In their mind, the state and the pope are interchangeable, which partly explains the libertarian atheist’s guttural gag reflex to what they perceive as government interference with the natural order of things, especially “free markets.”

Robert Reich says that one of the most deceptive ideas embraced by the Ayn Rand-inspired libertarian movement is that the free market is natural, and exists outside and beyond government. In other words, the “free market” is a constructed supernatural myth.

There is much to cover here, but a jumping-off point is the fact that corporations are a government construct, and that fact alone refutes any case for economic libertarianism. Corporations, which are designed to protect shareholders insofar as mitigating risk beyond the amount of their investment, are created and maintained only via government action.  “Statutes, passed by the government, allow for the creation of corporations, and anyone wishing to form one must fill out the necessary government paperwork and utilize the apparatus of the state in numerous ways. Thus, the corporate entity is by definition a government-created obstruction to the free marketplace, so the entire concept should be appalling to libertarians,” says David Niose, an atheist and legal director of the American Humanist Association.

In the 18th century, Adam Smith, the granddaddy of American free-market capitalism, wrote his economic tome “The Wealth of Nations.” But his book has as much relevance to modern mega-corporation hyper-capitalism today as the Old Testament has to morality in the 21st century.



Reich says rules that define the playing field of today’s capitalism don’t exist in nature; they are human creations. Governments don’t “intrude” on free markets; governments organize and maintain them. Markets aren’t “free” of rules; the rules define them. “In reality, the ‘free market’ is a bunch of rules about 1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); 2) on what terms (equal access to the Internet? the right to organize unions? corporate monopolies? the length of patent protections?); 3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?); 4) what’s private and what’s public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); 5) how to pay for what (taxes, user fees, individual pricing?). And so on.”

Atheists are skeptics, but atheist libertarians evidently check their skepticism at the door when it comes to corporate power and the self-regulatory willingness of corporations to act in the interests of the common good. In the mind of an atheist libertarian, both religion and government is bad, but corporations are saintly. On what planet, where? Corporations exist for one purpose only: to derive maximum profit for their shareholders. “The corporation’s legally defined mandate is to pursue, relentlessly and without exception, its own self-interest, regardless of the often harmful consequences it might cause others,” writes Joel Bakan, author of “The Corporation: The Pathological Pursuit of Profit and Power.”

Corporations pollute, lie, steal, oppress, manipulate and deceive, all in the name of maximizing profit. Corporations have no interest for the common good. You really believe Big Tobacco wouldn’t sell cigarettes to 10-year-olds if government didn’t prohibit it? Do you really think Big Oil wouldn’t discharge more poisons and environmentally harmful waste into the atmosphere if government regulations didn’t restrict it? Do you really believe Wal-Mart wouldn’t pay its workers less than the current minimum wage if the federal government didn’t prohibit it? If you answered yes to any of the above, you may be an atheist libertarian in desperate need of Jesus.

That awkward pause that inevitably follows asking a libertarian how it is that unrestricted corporate power, particularly for Big Oil, helps solve our existential crisis, climate change, is always enjoyable. “Corporations will harm you, or even kill you, if it is profitable to do so and they can get away with it … recall the infamous case of the Ford Pinto, where in the 1970s the automaker did a cost-benefit analysis and decided not to remedy a defective gas tank design because doing so would be more expensive than simply allowing the inevitable deaths and injuries to occur and then paying the anticipated settlements,” warns Niose.

In the 1970s, consumer protection advocate Ralph Nader became famous for helping protect car owners from the unsafe practices of the auto industry. Corporate America, in turn, went out of its way in a coordinated effort, led by U.S. Supreme Court Justice Lewis Powell, to destroy Nader. The documentary “Unreasonable Man” demonstrates how corporate CEOs of America’s biggest corporations had Nader followed in an attempt to discredit and blackmail him. General Motors went so far as to send an attractive lady to his local supermarket in an effort to meet him, and seduce him. That’s how much corporate America was fearful of having to implement pesky and costly measures designed to protect the well-being of their customers.

Today America is facing its greatest moral crisis since the civil rights movement, and its greatest economic crisis since the Great Depression: income inequality. Now, income inequality doesn’t happen by accident. It happens by the political choices a country makes. Today America is the most income unequal among all developed nations, and we find ourselves here today not because of government regulation or interference, but a lack thereof. The past three decades have seen our political class become totally beholden to the armies of corporate lobbyists who fund the political campaigns of our elected officials. Today the bottom 99 percent of income earners has no influence on domestic policy whatsoever.

The unilateral control that Wall Street and mega-corporations have over economic policy is now extreme, and our corporate overlords have seen to the greatest transfer of wealth from the middle class to the rich in U.S. history, while corporations contribute their lowest share of total federal tax revenue ever. The destruction of labor; serf-level minimum wage; and the deregulation, monopolization and privatization of public assets have pushed us deeper into becoming a winner-takes-all society.

In effect, America virtually exists as a libertarian state, certainly when compared to liberal democracies found in Western Europe, Canada and Australia. In these countries, there’s a sense of “we are all in this together,” but here the romantic idealism of the rugged individual allows corporate influence of the political class to gut public safety nets, eradicate collective bargaining, strip regulatory control of our banks, water, skies and our food.

By every measure, Australians, Scandinavians, Canadians, Germans and the Dutch are happier and more economically secure. The U.N. World Development Fund, the U.N. World Happiness Index and the Social Progress Index contain the empirical evidence atheist libertarians  should seek, and the results are conclusive: People are happier, healthier and more socially mobile where the size of the state is bigger, and taxes and regulations on corporations are greater. You know, the opposite of the libertarian dream that would turn America into a deeper nightmare.

CJ Werleman is the author of “Crucifying America” and “God Hates You. Hate Him Back.” You can follow him on Twitter:  @cjwerleman

 

http://www.salon.com/2014/09/14/the_atheist_libertarian_lie_ayn_rand_income_inequality_and_the_fantasy_of_the_free_market/?source=newsletter

Who talks like FDR but acts like Ayn Rand? Easy: Silicon Valley’s wealthiest and most powerful people

Tech’s toxic political culture: The stealth libertarianism of Silicon Valley bigwigs

Tech's toxic political culture: The stealth libertarianism of Silicon Valley bigwigs
Ayn Rand, Marc Andreessen, Franklin D. Roosevelt (Credit: AP/Reuters/Fred Prouser/Salon)

Marc Andreessen is a major architect of our current technologically mediated reality. As the leader of the team that created the Mosaic Web browser in the early ’90s and as co-founder of Netscape, Andreessen, possibly more than any single other person, helped make the Internet accessible to the masses.

In his second act as a Silicon Valley venture capitalist, Andreessen has hardly slackened the pace. The portfolio of companies with investments from his VC firm, Andreessen Horowitz, is a roll-call for tech “disruption.” (Included on the list: Airbnb, Lyft, Box, Oculus VR, Imgur, Pinterest, RapGenius, Skype and, of course, Twitter and Facebook.) Social media, the “sharing” economy, Bitcoin — Andreessen’s dollars are fueling all of it.

So when the man tweets, people listen.

And, good grief, right now the man is tweeting. Since Jan. 1, when Andreessen decided to aggressively reengage with Twitter after staying mostly silent for years, @pmarca has been pumping out so many tweets that one wonders how he finds time to attend to his normal business.

On June 1, Andreessen took his game to a new level. In what seems to be a major bid to establish himself as Silicon Valley’s premier public intellectual, Andreessen has deployed Twitter to deliver a unified theory of tech utopia.

In seven different multi-part tweet streams, adding up to a total of almost 100 tweets, Andreessen argues that we shouldn’t bother our heads about the prospect that robots will steal all our jobs.  Technological innovation will end poverty, solve bottlenecks in education and healthcare, and usher in an era of ubiquitous affluence in which all our basic needs are taken care of. We will occupy our time engaged in the creative pursuits of our heart’s desire.



So how do we get there? Easy! All we have to do is just get out of Silicon Valley’s way. (Andreessen is never specific about exactly what he means by this, but it’s easy to guess: Don’t burden tech’s disruptive firms with the safety, health and insurance regulations that the old economy must abide by.)

Oh, and one other little thing: Make sure that we have a social welfare safety net robust enough to take care of the people who fall though the cracks (or are eaten by robots).

The full collection of tweets marks an impressive achievement — a manifesto, you might even call it, although Andreessen has been quick to distinguish his techno-capitalist-created utopia from any kind of Marxist paradise. But there’s a hole in his argument big enough to steer a $500 million round of Series A financing right through. Getting out of the way of Silicon Valley and ensuring a strong safety net add up to a political paradox. Because Silicon Valley doesn’t want to pay for the safety net.

* * *

http://www.salon.com/2014/06/06/techs_toxic_political_culture_the_stealth_libertarianism_of_silicon_valley_bigwigs/

Who Really Owns The Internet?

http://gagful.com/uploads/2011_12/1322992719_nothing_is_fun_in_the_internet_anymore_gag.jpg

Why are a tiny handful of people making so much money off of material produced for nothing or next-to-nothing by so many others? Why do we make it so easy for Internet moguls to avoid stepping on to what one called “the treadmill of paying for content”? Who owns the Internet?

In her excellent new book The People’s Platform, Astra Taylor thinks through issues of money and power in the age of the Internet with clarity, nuance, and wit. (The book is fun to read, even as it terrifies you about the future of culture and of the economy.) She brings to bear her estimable experience as a documentary filmmaker—she is the director of two engaging films about philosophy, Zizek! And Examined Life—as well as a publisher and musician. For the past several months, she has been on the road performing with the reunion tour of Neutral Milk Hotel (she is married to the band’s lead singer, Jeff Magnum). We spoke over coffee on the Lower East Side during a brief break from her tour.

Can we solve the issues that you talk about without radically reorganizing the economy?

No. (Laughs) Which I think is why I’ve been so active. I’ve been thinking about this in connection with all these writers who are coming up who found each other through Occupy, and why all of us were willing to participate in that uprising despite all the problems and the occasional ridiculousness of it.

But the economy can be revolutionized or the economy can be reformed, and I don’t discount the latter option. That level of social change happens in unpredictable ways. It’s actually harder to think of a revolutionary event that has had a positive outcome, whereas there have been lots of reforms and lots of things that people have done on the edges that have had powerful consequences. Would I like to see an economic revolution? Definitely. But I think there are a lot of ways to insert a kind of friction into the system that can be beneficial.

This book is about economics, and the amazing, probably very American ability to not talk about economics—particularly with technology, which is supposed to be this magical realm, so pure and disruptive and unpredictable that it transcends economic conditions and constraints. The basic idea is that that’s not the case.

To a lot of people this is self-evident, but I was surprised at how outside the mainstream conversation that insight was. When money is brought up, there’s this incredible romanticism, like the Yochai Benkler quote about being motivated by things other than money. But we’re talking about platforms that go to Goldman Sachs to handle their IPOs. Money is here. Wake up!

The people at the top are making money.

In that conversation about creativity and work, there’s so much ire directed at cultural elites. And rightly so. Newspapers suck. They’re not doing the job that they could do for us. Book publishers publish crap. Cultural elites deserve criticism. The punching bags of this Web 2.0 conversation all deserve it. But when we let the economic elites off the hook, that’s feeding into the tradition of right-wing populism. Ultimately, the guys getting rich behind the curtain aren’t being treated as the real enemies.

You mention that when you wrote to people who posted your films online, you either received no response or a very angry response.

One thing I took away from that experience is that it’s almost as though people really believe that the Internet is a library. “I should be able to watch on YouTube a full-length film about philosophy. It’s a library, it should be full of edifying, enlightening things!

My response was that I spent two years making this film, and I want a window—I didn’t ask them to take it down forever, I asked for a grace period of I think two months. Conceptually, we’re not grasping the fact that even though there are private platforms that increase our access to things, first those things have to exist. How have we not thought through how these products are funded?

I empathized with the person on the other end, who wanted these films. I made them because I hoped that people would want them. But I can’t invest another two years of my life in an esoteric and expensive production if all I can do is put it on YouTube and pray that it goes viral.

And even if it goes viral, you might not make any money from it.

Right. The whole model doesn’t work in that context. And I can see both sides. Especially on the copyright issue. As a documentary filmmaker, you’re so dependent on gleaning from the world, gleaning from other people’s creations. You’re not always the author of the words on the screen. I don’t want some closed, locked-down scenario where every utterance is closed and monitored by algorithms who have no ethical imperatives and have no nuance and who don’t understand fair use.

Another person I’ve talked to for this series is Benjamin Kunkel, who said his introduction to Marxist theory is already a bit antiquated because of Jesse Myerson’s Rolling Stone article, which recommends, among other things, a universal basic income. As I was reading your book, I was thinking about how a universal basic income might help.

I actually mention universal income in passing, in the chapter that looks at the enthusiasm for amateurism that was actually a bit more prominent a few years ago, when I started writing. “We finally have a platform that allows non-professionals to participate!There were things in that conversation that were so reminiscent of utopian predictions from centuries past about how machines would free us to live the life of a poet. “We’ll only work four hours a day.Why didn’t those visions come to pass? Because those machines were not harnessed by the people. They were harnessed by the ruling elite.

I was struck by how ours is a diminished utopianism. It wasn’t that we would use these machines to free us from labor; it was that now in our stolen minutes after work we can go online and be on social media. How did it come to this, that’s that all we can hope for? And the answer is in how the economy has been reshaped by neoliberalism or whatever you want to call it over the last few decades.

The idea of labor-saving devices has been around. Oscar Wilde, Keynes. But it was pretty common in the 1960s, when there was a robust social safety net. So I think you’re exactly right, that we need something in the public-policy and social sphere, not the technological sphere, to address these issues.

It’s great that people are talking about a universal income, at least in our little tiny circles. You step outside bubble of the young intellectual left of New York, and people will say: What the fuck are you talking about?

We think this idea is getting traction, but it’s because we all follow each other online and we’re all reading the same magazines. Not everyone is reading Kathi Weeks or Ben Kunkel in their free time. I don’t agree with Ben that his book is out of date because of that one article in Rolling Stone. We need to keep harping on these basic concepts.

I think it’s a ripe time for it, considering recent research into the employment prospects for millenials. College indebtedness is insane right now. That’s why I got involved with StrikeDebt. When the economy is forcing you to separate the romantic idea of what you consider your calling from what you have to do for money since there are no fucking jobs that have anything to do with your degree, you start to think that maybe a universal income might make a lot of sense.

If the economy won’t support you to do what you love for a living, you’re already halfway there.

Can you talk about Occupy and how you got involved?

I was working on this book before Occupy, and the tech realm was where a lot of our political hopes were being invested. If you think back, there wasn’t a vibrant protest movement in the US. Instead, there was this idea of democracy through social media, and technologically-enabled protests abroad. That might account a bit for why I gravitated towards this subject.

Then Occupy happened. If anything, it distracted me from The People’s Platform. I wound up putting out five issues of the Occupy Gazette with n+1. Then I got roped into, or rather I roped myself into, this offshoot of Occupy called StrikeDebt that has been doing the Rolling Jubilee campaign.

But my work with the Occupy campaign suffused my analysis more and more. Calling attention to the economic elite fits very well into Occupy’s idea of the ninety-nine percent and the one percent. The amount of value being hoarded by these companies is just mind-boggling.

So these projects did go in tandem. Both of them are thinking about power today. In this book, I was trying to think through how power operates in the technological sphere generally, but particularly in relationship to media. So no longer are you just watching what’s been chosen for you on television. Now you’re supposed to be the agent of your own destiny, clicking around. But there’s still power; there’s still money.

People will say, “How can you criticize these technological tools that helped people overthrow dictators?We constantly use this framework of the people against the authoritarian dictator. There was a lot of buzz about how social media empowered the protests in the Middle East which mostly turned out to be false. But what about the US? There’s no dictator. There’s a far more complicated power dynamic. The challenge of our generation is how you build economic association and aggregate economic power when you’re not going to be doing conventional workplace organizing, because there are no jobs, let alone stable, long-term jobs.

So, this is depressing. Could you talk about solutions?

The solutions aren’t that radical: The library model that we project on to the Internet but that doesn’t quite fit—we can invent something analogous to it. There are lots of cool things we could be doing. But we’re locked into this model that’s really stupid and inefficient: the advertising model. That’s the most ridiculous way to create these services and platforms. The advertising model is commonsensical because it’s common, but it’s not sensical.

What would socialized social media—and non-social media—look like?

Ben Kunkel has an essay where he talks a bit about this. But first, we have to get away from the idea that the government is the bad guy. One thing that we’ve learned in the wake of the NSA scandals is that the public and private sectors are really intertwined; government surveillance piggybacks off of corporate surveillance. It might be less technological and more about funding things for their own sake. If you look at countries with robust cultural policies, under the broadcast model a lot of them instate quotas. There would be a lot of protectionist regulations, and they would invest in their own work.

Quotas are complicated, obviously. But you can look to the model of public broadcasting. Public broadcasting wasn’t a government propaganda machine. Liberals and conservatives both worry that this would create something bland. But when public broadcasting came under fire, it was usually for being too edgy and provocative. There are mechanisms that you can introduce to prevent whatever visions of sad iron-curtain art you have in your head.

One thing that comes up a lot in some liberal critiques of Edward Snowden is that he might be a libertarian.

I don’t know Snowden, so I can’t comment on him. But I think that a lot of us are libertarians. Libertarianism is the default ideology of our day because there’s something deeply appealing about the idea of free agents—people on their own in charge of their own destinies. That has to do with the retreat of institutions from our lives, which results in an inability to imagine a positive role for them to play. We’re still dependent on institutions; we just don’t recognize it or give them much credit.

This ubiquitous libertarianism, particularly in tech circles, was a major target of my book. All of these things you want these tools to bring about—an egalitarian sphere, a sphere where the best could rise to the top, one that is not dominated by old Goliaths—within the libertarian framework, you’ll never get there. You have to have a more productive economic critique.

But I also think that if you’re on the left, you need to recognize what’s appealing about libertarianism. It’s the emphasis on freedom. We need to articulate a left politics that has freedom at its center. We can’t be afraid of freedom or individuality, and we need to challenge the idea that equality and freedom are somehow contradictions.

At the same time, even on the radical left, there’s a knee-jerk suspicion of institutions. When we criticize institutions that serve as buffers or bastions against market forces, the right wins out more. It’s a complicated thing.

When I defend institutions in this book, I knew I might provoke my more radical friends. The position that everything is corrupt—journalism is corrupt, educational institutions are corrupt, publishers are corrupt—sounds great. And on some level it’s true. They’ve disappointed us. But we need more and better—more robust, more accountable—institutions. So I tried to move out of the position of just criticizing those arrangements and enumerating all their flaws and all the ways they’ve failed us. What happens when we’ve burned all these institutions to the ground and it’s just us and Google?

One of my favorite aspects of your book is your emphasis on the physical aspects of the Internet. It reminded me of the scene in Examined Life where Zizek is standing on the garbage heap, talking about how material stuff disappears.

That image we have of the Internet as weightless—it’s so high-tech it doesn’t really exist!—is part of why we misunderstand it. There are some people doing good work around this, people like Andrew Blum, who wrote the book Tubes, asking what the Internet is. There’s infrastructure. It’s immense, and it’s of great consequence, especially as more and more of our lives move online. The materiality is really important to keep in mind.

We’re moving to a place where we have a better of grasp of this. People are finally realizing that the online and the offline are not separate realms. It’s not really like I have my online life where I’m pretending to be a 65-year-old man in a chat room, and then I’m Astra at the coffee shop. Those identities are as complicated and as coherent as any human identity has ever been. That can extend towards thinking about objects.

The other night I was re-reading Vance Packard’s The Waste Makers—the sort of book that makes you feel like you’re just reheated whatever, and that this person did it so much better the first time around. He outlines planned obsolescence, stuff made to break. It’s so relevant to our gadgets, our technology. He wrote it in 1960, at that moment where the economy had been saturated, so everybody had their fridge and their car. So how do you keep GDP going up? It’s actually patriotic to make things that break.

You talk about Steve Jobs in that context.

Steve Jobs is the ultimate incarnation of that plan. You have to have a new iPod every year. But he presented himself as this artist-craftsman who would never sacrifice quality. That’s such a lie.

You talk about how both sides of the Internet debate, if you will, see a radical break with the past, whereas you see more continuity.

I think that that’s crucial to understanding where we’re at. This standard assumption that there would be a massive transformation blocked us from seeing the obvious outcomes and set us back in terms of having a grasp on our current condition. If we had gone into it with a bit more realism, more respect for the power of the market, less faith in technology’s ability to transcend it, we’d be better off.

Could you say more about respect for the power of the market?

You don’t want to be too deterministic, I suppose, but the market drives the development of these tools. Especially once you’ve gone public and you’re beholden to your shareholders.

There’s confusion because we’ve been here before with the first tech boom. One thing that got me thinking about this—and that confused me—was that I came to New York right at the tail end of that. I didn’t work for a startup or anything like that, but I had friends who did, friends who were fired. I followed what was happening in the Bay Area, they lost hundreds of thousands of jobs. You think: okay, we learned from that. We learned that because of the way the market sought investments, they propped up some really stupid ideas, there was a bubble, and it burst. What’s amazing to me is that fifteen years later, the same commentators are suddenly back, talking about social media, Web 2.0, and making proclamations about how the culture will evolve. You were wrong then, partially because you ignored the financial aspect of what was going on, and here you are again, ignoring the money. Give the market its due.

Do you have advice for what people—people like me—who write or produce other work for the Internet can do about this situation?

I’m encouraged by all these little magazines that have started in the last few years. Building institutions, even if they’re small, is a very powerful thing, so that we’re less isolated. When you’re isolated, you’re forced into the logic of building our own brand. If you build something together, you’re more able to focus on endeavors that don’t immediately feed into that. That’s what an institution can buy you—the space to focus on other things.

What would help creators more than anything else in this country are things that would help other workers: Real public health care, real social provisions. Artists are people like everybody else; we need the same things as our barista.

I quote John Lennon: “You think you’re so clever and classless and free. One thing we need is an end to artist exceptionalism. When we can see our connection to other precarious people in the economy, that’s when interesting things could happen. When we justify our position with our own specialness…

You talk about how Steve Jobs would tell his employees that they were artists.

Right. How could you ask to be properly compensated, don’t you see that you’re supposed to be an artist? Grad students were given that advice, too.

That’s where this ties in to Miya Tokumitsu’s essay on the problems with the concept of “Do What You Love.”

Exactly. Now, precarity shouldn’t be a consequence of being an artist. Everyone should have more security. But it’s more and more the condition of our time. One thing I say in passing is that the ethos of the artist—someone who is willing to work around the clock with no security, and who will keep on working after punching out the clock—that attitude is more and more demanded of everyone in the economy. Maybe artists can be at the vanguard of saying no to that. But yes, there would have to be a psychological shift where people would have to accept being less special.

David Burr Gerrard’s debut novel, Short Century, has just been released by Rare Bird Books. He can be followed on Twitter. The interview has been condensed and edited.

http://www.theawl.com/2014/04/who-owns-the-internet

“Sharing economy” shams: Deception at the core of the Internet’s hottest businesses

 

How companies like Airbnb use the language of “sharing” and “gifts” to conceal ambitions far more libertarian

 

 

(Credit: akindo via iStock)

 

“Sharing is the new buying.”

The title of technology analyst Jeremy Owyang’s survey of the sharing economy was exquisitely designed to grab attention: It was released just before the start of SXSW Interactive, the annual orgy of techie self-congratulation held every March in Austin, Texas. It boasted a clever, cognitively disjunctive twist: Sharing? Buying? Aren’t they opposites? And in an era of unlimited hype, it tabulated real data, reportedly “engaging 90,112 people in the US, Canada and the UK” to discern how and why they were embracing services like Lyft and Airbnb and Yerdle.

The study’s findings make for interesting and useful reading for anyone tracking the rise of what is called “collaborative consumption” — the proliferation of services that allow us to rent out our spare rooms and cars and junk gathering dust in the garage. But as I perused the contents, I found myself repeatedly coming back to a question I’d been obsessing over for months.

What, I wondered, would a Kwakiutl chieftain make of the sharing economy? (Bear with me for a moment.)

It is one of the delightful oddities of Internet anthropology: Dig deep enough into the early days of online communication and you are sure to stumble upon references to the practices of the Kwakiutl, indigenous inhabitants of North America who once reigned over a significant swath of what is now British Columbia. The Kwakiutl were famous for their “gift economy” rituals, festive gatherings in which gifts were exchanged to mark relative social status and create ties of reciprocity.



It was once fashionable for both libertarian programmers and left-wing social critics to characterize the early growth of the Internet as following “gift economy” practices that broke the traditional rules of market capitalism. In the Internet’s gift economy, programmers built tools and wrote code that they contributed freely to the benefit of the common good. They didn’t labor for anything as crass as money. Because they wanted to “scratch their own itch,” or aspired to higher status among their own peers, or for reasons of simple pragmatism, voluntary coordination seemed like a more effective way to solve common problems. The Internet was one giant potluck (a word derived from the Kwakitul “potlatch”) — we brought what we had to give, and got to taste everyone else’s offerings. The theorist Richard Barbrook dubbed it “cybernetic communism.”

The new sharing economy overlaps with its predecessor, the gift economy, in many obvious ways: Before the emergence of globe-spanning digital networks, it was impossible for far-flung programmers to efficiently collaborate on huge projects like the Linux operating system. The infrastructure of the Internet enabled programmers to share, copy and modify code with ease. In other words, it was suddenly much easier to give away the product of your programming labor and coordinate that labor with others. Similarly, there’s no Lyft without networks and smartphones — and no way to find out where the nearest Lyft driver is to the would-be Lyft rider. The fact that the Internet and mobile devices have enabled much more efficient resource allocation is not hype. It’s a fundamental building block of our new world.

But there’s also an overlap of rhetoric. The early advocates of the Internet gift economy saw it as a better way to be. This amazing information-sharing network, built from code that anyone could modify or copy, would benefit all of society! The sharing economy is proselytized with similar language. Sharing apps, we are told, builds trust between consumers and service providers. Sharing our stuff also conserves resources (e.g., ride sharing is good for the planet). Stare long enough at the marketing materials for Yerdle — “a marketplace where everything is free” — and “cybernetic communism” seems alive and well.

But there’s one crucial area where the linkages between the gift economy and the sharing economy break down. Reciprocity. The anthropologists who studied the Kwakiutl and other cultures with similar gift economy practices argued that the act of gift giving was meant to be reciprocated. Gift giving created obligations to respond in kind. These mutual obligations were the ties that bound society together.

The sharing economy doesn’t work quite the same way. The most high-profile sharing economy apps are designed to generate significant profits for a relatively small number of people. It is an open question whether the concentration of wealth that will result will bind our society closer together or continue to exacerbate the growing income inequality that is ripping us apart. This is the defining contradiction of the new economy: apps that enable us to pinch pennies and survive in an era of intense competition — to make do with less — will make them rich. That’s not the Internet “gift economy” as originally conceived, a utopia in which we all benefit from our voluntary contributions. It’s something quite different — the relentless co-optation of the gift economy by market capitalism. The sharing economy, as practiced by Silicon Valley, is a betrayal of the gift economy. The potlatch has been paved over, and replaced with a digital shopping mall.

*  * *

In her introduction to Marcel Mauss’ “The Gift: The Form and Reason for Exchange in Archaic Societies,” the British anthropologist Mary Douglas wrote that “a gift that does nothing to enhance solidarity is a contradiction.” Mauss himself writes that potlatch implies “a succession of rights and duties to consume and reciprocate, corresponding to rights and duties to offer and accept.” When we give each other gifts we are not being altruists; we are strengthening our mutual connections. This is how a group of individuals becomes a society.

I won’t deny that you can hear faint echoes of this sense of solidarity in the sharing economy. When I fist-bump with a Lyft driver I feel more of a sense of connection with her than I do with my typical Yellow Cab driver. If your Airbnb experience has you ending up in a spare bedroom of a house that is occupied by its owner at the same time you are there, then you may very well strike up a bond more meaningful than those that you share with the concierge at the nearest Hilton.

But I can’t shake the suspicion that this nascent, fragile solidarity is nothing more than marketing for some of the most agile capitalists on the planet. Consider Lyft. Last week, Lyft announced it was halfway through a new round of financing that aims to add another $150 million of capital on top of the $83 million the company has already raised. The new infusion will value Lyft at around $700 million. If all goes as planned, Lyft will one day enjoy a spectacular public offering or be purchased by another company for billions of dollars — and the investors will happily haul in some significant multiple of their initial payout. It will be a great day for Lyft shareholders.

But what does that mean for solidarity? What will the Lyft shareholders do with their profits? Outside of a few philanthropists, it’s not at all clear they will “give” their bounty back to the larger community or otherwise “share” it. Quite the contrary! As best we can tell, the politics of the venture capital elite boil down to fending off higher taxes, keeping labor costs low and reducing the “burden” of government regulation.

The concentration of great wealth in the hands of a small group that then employs that wealth to protect its own privileges and fortify its own status is the polar opposite of reciprocity. Growing income inequality weakens social ties. Our “sharing” is their windfall. That’s not how the gift economy is supposed to work.

Nowhere is this contradiction more self-serving than in the sharing economy’s stance on regulation. As articulated recently in “Trusting the ‘Sharing Economy’ to Regulate Itself,” a New York Times Op-Ed written by Arun Sundararajan, a business school professor at New York University, we are somehow supposed to believe that the forces of capital mobilizing behind the sharing economy are qualitatively different from any other potentially misbehaving market.

The profit-seeking interests of these private marketplaces aren’t that different from those of a textbook regulator: encouraging productive trade, keeping market participants safe and preventing “market failure.”

This is an extraordinary claim. The profit-seeking interests of private marketplaces are usually considered to be, by definition, at odds with the interests of regulators. The intersection of public safety and profit-seeking is exactly the point at which true friction enters the system. It’s exactly the point at which the general public can’t trust the private sector. It’s hard to understand why Sundrarajan thinks that sharing-economy companies are different from any other consumer-facing company. Don’t they all want to keep participants safe and prevent market failure?

In “Sharing Is the New Buying,” Jeremy Owyang declares that “brands that want to succeed in the sharing economy must tell stories around value and trust.” That strikes me as an odd formulation. Brands that want to succeed need to deliver value. And as for trust? In the earliest gift economy sense, trust was built from reciprocity and mutual obligation. Silicon Valley is going to have to work a lot harder to make that happen. It could start by putting a stop to pretending that the sharing economy is about anything other than making a killing.

 

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

http://www.salon.com/2014/03/14/sharing_economy_shams_deception_at_the_core_of_the_internets_hottest_businesses/?source=newsletter

 

The Obsolete Crime Lord

S.F. Tech Culture Begat the Silk Road and Its Replaceable Founder

By Rachel Swan Wednesday, Nov 20 2013

The Obsolete Crime Lord: S.F. Tech Culture Begat the Silk Road and Its Replaceable Founder

There was strange trouble at Glen Park Library on the first of October, an otherwise unremarkable Tuesday, in what’s otherwise one of the quietest buildings in San Francisco. Around 3 p.m., a librarian heard a thump in the science fiction department. Thinking someone had fallen out of a chair, she went to investigate and saw two patrons holding a spindly young man against a window. One of them, a woman with unusually “beefy” arms, flashed a badge. “FBI,” the woman said.

The man at the window, 29-year-old Ross Ulbricht, had a narrow, square-jawed face, copper-colored eyes, and the kind of haircut you’d see on children in Norman Rockwell paintings. He looked pliant and unassuming. He would turn out to be an international drug trafficking suspect. His arrest was two years in the making.

Once a promising engineer, Ulbricht faces a minimum 10-year sentence for allegedly creating Silk Road, a massive drug and contraband marketplace that occupied a dark hinterland of the Internet called the “deep web.” He’s an accused crime boss whose virtual hideout couldn’t be accessed on traditional browsers, and who trafficked exclusively in the electronic currency Bitcoin (a form of money transferred over the Internet, with no central bank attached). Federal prosecutors say he built an empire out of things he couldn’t see or touch. His alleged henchmen were doughy computer guys who shipped massive quantities of drugs from their bedrooms. They corresponded over message boards. It’s doubtful that Ulbricht met any of them in real life.

Momi Toby's Revolution Cafe & Art Bar, where Ross Ulbricht occasionally set up shop.

Mike Koozmin
Momi Toby’s Revolution Cafe & Art Bar, where Ross Ulbricht occasionally set up shop.
Before his arrest, Ross Ulbricht left no real impression on anyone.

LinkedIn
Before his arrest, Ross Ulbricht left no real impression on anyone.

To many, Ulbricht seems like a perfect parable for the Internet age, a computer geek who moved drug shipments while pecking at his keyboard. His alleged alias, Dread Pirate Roberts, referred to a series of characters in the novel and film versions of The Princess Bride who were all anonymous and replicable. If he was, indeed, the person cited in court complaints, then he’d taken the idea of a criminal dynasty and rendered it a meme.

But Silk Road might also be the inevitable byproduct of tech culture in San Francisco, where innovation and the desire for personal freedoms are at once an economic engine, a lifestyle, and a belief system. And Ulbricht, the alleged mastermind, left a trail of ideological crumbs to explain his motivations. In college he joined campus libertarian groups and supported Ron Paul‘s 2008 presidential bid; afterward he moved to San Francisco, tried to partake of the start-up boom. In the interim he wrote long Facebook soliloquies about freedom and personal liberties.

His political philosophy matches a current of thought that is ascendant in Silicon Valley. Look no further than Berkeley entrepreneur Patri Friedman, who amassed more than $2 million in venture capital to build a floating libertarian island just outside the San Francisco Bay. Or San Francisco entrepreneur Balaji Srinivasan, who recently preached secessionism — the formation of a separate society, with unregulated digital currency, and sharing economy hotels, and unlicensed firearms — to a roomful of aspiring start-up founders.

So it was inevitable that, in the land of chaotic, multi-billion dollar IPOs, someone would also build a new version of an ancient economy, dealing exclusively in the forbidden. Dread Pirate Roberts was not the first person to trade in Bitcoin, or to build a site on the deep web, but he caused both of them to snowball in popularity. By disrupting the black market, he’d taken all of San Francisco’s ideals about tearing down institutions to their extreme. He inspired a confederation of supporters whose faith in Silk Road has an almost evangelical cast.

But they were enchanted by the vessel, not the person — or people — behind it. Dread Pirate Roberts, however many of them there may be, was just an avatar; Silk Road fulfilled the dark promise of San Francisco’s tech culture.

The small cult of adoration Ulbricht himself spawned, via a few “Free Ross Ulbricht” Facebook pages, didn’t bear any trace of old-school outlaw allure. If anything, fans seem fixated on the ideological underpinnings of Silk Road, rather than the man who prosecutors say embodies them.

And Dread Pirate Roberts never resisted being a cipher for a set of ideals. Many observers say the avatar is no accident; that the founder of Silk Road saw himself as a franchise rather than a Don. Some even believe the name extends to multiple administrators, most of whom may never be caught. Their suspicions were supported when a new iteration of the site, Silk Road 2.0, arose with the same template, the same product offerings, and a new Dread Pirate Roberts just weeks after Ulbricht was apprehended.

If Ulbricht was endlessly franchisable online, he was equally replaceable in real life, a boy-next-door type with a willowy frame and nondescript features, and a lifestyle that resembled that of any bright-eyed, aspiring San Francisco tech bro. Even while harvesting millions in Bitcoin, Ulbricht lived modestly, on a tight-knit row of single-family walk-ups whose owners say they had no idea that an alleged drug dealer operated in their midst. A barista at Momi Toby’s Revolution Cafe & Art Bar in Hayes Valley, cited in the FBI indictment as a place where Ulbricht worked, says he can’t recall seeing Ulbricht’s face, either.

CONTINUED:   http://www.sfweekly.com/2013-11-20/news/ross-ulbricht-silk-road-dread-pirate-roberts-bitcoin-glen-park?utm_source=Newsletters&utm_medium=email