“BOYHOOD” THE MOVIE

Boyhood_film

 

I watched “Boyhood” last night. Didn’t think I could deal with a film running nearly three hours focused on the reality-based coming of age theme. I was, however, much impressed by the epic technical achievement the film represents, and I was deeply moved by the genuinely human intimacies shared throughout. The ending was a powerful insight into the human condition.

Got me to thinking about the values of the tech-fueled Bay Area where I live.

I really loath, truly hate, the materialistic, money-fueled tech culture that has enveloped San Francisco. And it’s not the technology per se. I’ve been using and building computers since 1985. It’s the disgusting excess and glorification of same.

Interestingly, watching “Boyhood” last night reminded me that there are other, more appealing, lifestyles and choices still available in the country. The main character in the film was not obsessed with tech. He questions the value of the ubiquitous smart phone. He works after school. Middle class. He doesn’t dream of going to Stanford or MIT, etc., to get a degree in CS and code. Hell, he wants to be an artist. He’s interested in the meaning of life. Like people I used to know in school and throughout my life. He represents my American Dream. Not this SF version with conspicuous consumption and phony hipster culture.

 

 

A Sucker Is Optimized Every Minute

CreditIllustration by Javier Jaén

Not long ago, our blockbuster business books spoke in unison: Trust your gut. The secret to decision-making lay outside our intellects, across the aisle in our loopy right brains, with their emo melodramas and surges of intuition. Linear thinking was suddenly the royal road to ruin. Dan Ariely’s “Predictably Irrational” tracked the extravagant illogic of our best judgment calls. The “Freakonomics” authors urged us to think like nut jobs. In “Blink,” Malcolm Gladwell counseled abandoning scientific method in favor of snap judgments. Tedious hours of research, conducted by artless cubicle drones, became the province of companies courting Chapter 11. To the artsy dropouts who could barely grasp a polynomial would go the spoils of the serial bull markets.

In 2007, when Barack Obama first visited Google’s headquarters as a candidate, he announced himself as less a torchbearer than a data connoisseur. “I am a big believer in reason and facts and evidence and science and feedback,” he told the Google crowd. “That’s what we should be doing in our government.” This was music to the company’s ears, as one of its proudest internal inventions was “A/B testing” — an optimization process, now widespread, that constantly tests design tweaks on us to see how they perform.

Dan Siroker, a Google employee, was so smitten with this rhetoric that he went to work on Obama’s campaign, creating an audience for electoral propaganda by optimizing the campaign’s “squeeze page,” which is where a site bilks visitors of their email addresses. Now Siroker is chief executive of Optimizely, a “web-testing firm” that doubles as the Oval Office for the ascendant ideology of everything-optimization.

Optimization sounds dignified and scientific, and sometimes it is, mindbogglingly so. But in lifestyle headlines it has become something less than common sense. In the last few years, The Huffington Post has doled out advice on how to “optimize” your three-day weekend, your taxes, your Twitter profile, your year-end ritual, your sex drive, your website, your wallet, your joy, your workouts, your Social Security benefits, your testosterone, your investor pitch, your news release, your to-do list and the world itself. I’m not giving away trade secrets when I reveal that, according to HuffPo, the Big Three ways to optimize your sex drive are: exercise, relax and don’t drink too much. Equally snoozy is the optimization strategy for a three-day weekend: Plan well and turn off your phone.

Like the best corporate argot, “optimize” is back-formation. Some uses seem to have derived from the Latin optimus, which the poet Horace used to mean “morally good and indifferent to trivia.” But others appear to come from “optimist” — which is rich, given that optimizers consider themselves cold-eyed realists. If they want to improve anything, it’s not America’s topsoil or fellow-man stuff but rather something more Ayn Randian: efficiency, maybe, or performance.

Optimization addresses itself not to our inner hero but to our inner bean counter. Perhaps the reason it has such appeal is that it doesn’t require Olympian talent or Randian ambition. To do it, you need only to have a computer or to evince a computer-like immunity to boredom. All of that data — the insight that, say, 70 percent of three-day weekends suffer when 10 percent less planning is done — must intrigue you. You feel better in the mornings when you take B vitamins the night before, but only when you’ve ingested dairy products at the same time? Whoa, there: Your ingenuity as an optimizer now lies in your capacity to recognize this as a data bonanza.

On the web, “optimizing” has become a fine art — and, if not a dark art, at least a dim one that has become dimmer (and finer) since Siroker did it for Obama in 2007. For years, search-engine optimization, or S.E.O., has turned web pages into Googlebait. These days, optimizers of squeeze pages, drawing lessons as much from the labcoats at Optimizely as from the big daddies at Google, recommend creating a three-to-10 minute video that’s introduced by a “magnetic headline” (“Find the Perfect Lampshade for Any Lamp”) and quickly chase it with an “information gap” like “You’re Not Going to Believe the Trick I Use While Lampshade Shopping.” (Article of faith among optimizers: humans find information gaps intolerable and will move heaven and earth to close them.) Next you get specific: “Click the play button to see me do my lampshade trick!” — after which the video unspools, only to stall at the midpoint with a virtual tollbooth. You can’t go on unless you hand over an email address. Presto.

A sucker is optimized every minute.

For optimizers, all values flatten: There’soptimal at one end and the dread suboptimalat the other. This can be freeing for those who get worked up by emotional, political or moral language. In theory, through optimization, arguments can be dispassionately adjudicated and then resolved without tears. You find Inkwell, the true black-and-white Instagram filter, beautiful? Sorry: Instagram photos filtered with the purplish monochrome Willow get way more hearts than Inkwell photos. I’m just saying. I mean, it’s just data.

Earlier this month, when Hillary Clinton defended her use of a personal email account for communications of state, she refused to acknowledge an ethical breach — only a optimizational one. “Looking back, it would have been better for me to use two separate phones and two email accounts,” she said. “I thought using one device would be simpler, and obviously, it hasn’t worked out that way.” Her choice was neither right nor wrong, then, neither honest nor sinister. It was merely, as the blog TechPresident put it, “less than optimal.”

“Of course it is sinister,” wrote Andrew Meier, the author of “The Lost Spy: An American in Stalin’s Secret Service,” via email. “It’s venomous, even. Stalin is all about optimization. Take the gulag, the greatest example, and achievement, of Soviet optimization. The lords of the gulag had charts and charts re: minimum food intake and maximum work output.”

Maximum work, minimum food. Such was optimization pre-Google. A grim application, perhaps, but we shouldn’t be surprised that the systems-obsessed Soviets possessed the will to optimize early on. In “Red Plenty,” a novelized history of the Bolshevik promise of abundance, Francis Spufford explains Moscow’s real “potato-optimizing program” of the 1960s. To get potatoes into the hands of as many Muscovites as possible and thus create the impression of agricultural bounty, a B.E.S.M. mainframe — Large Electronically Computing Machine, in English — churned through 75,000 variables, subject to 563 constraints. Spufford spells out why optimization and computers grew up together: “This problem is out of reach of fingers and slide rules. But thanks to computers, thanks to the B.E.S.M.’s inhuman patience at iterating approximate answers over and over again, it is a problem that can be solved.”

The Large Electronically Computing Machine, with its remarkable capacity for optimizing, was the direct precursor of our own data-amassing and refining machines. B.E.S.M., after all, was built on the math of Leonid Kantorovich, the economist and Nobel Laureate who is widely considered the father of linear programming. Not long after that, in the United States, George Dantzig made complementary discoveries in linear programming and developed the simplex algorithm. In 1973 Dantzig founded the Systems Optimization Laboratory at Stanford, which is now about a 12-minute drive from the Google headquarters in Mountain View, Calif. — America’s leading producer of data, algorithms and optimization.

The Apple Watch, which arrived on March 9 to the sort of popular rubbernecking that new machinery occasioned in the 1930s, is a Very Small Electronically Computing Machine with some prodigious optimizing chops. After time keeping, the watch’s chief feature is “fitness tracking”: It clocks and stores physiological data with the aim of getting you to observe and change your habits of sloth and gluttony. Evidently I wasn’t the only one whose thoughts turned to 20th-century despotism: The entrepreneur Anil Dash quipped on Twitter, albeit stretching the truth, “Not since I.B.M. sold mainframes to the Nazis has a high-tech company embraced medical data at this scale.”

And yet what attracts me to the Apple Watch are my own totalitarian tendencies. I would keep very, very close tabs on the data my body produces. How much I eat. How much I sleep. How much I exercise and accomplish. I’m feeling hopeful about this: If I watch the numbers closely and use my new tech wisely, I could really get to minimum food intake and maximum work output. Right there in my Apple Watch: a mini Gulag, optimized just for me.

Correction: March 19, 2015
An earlier version of this article erroneously cited an award for George Dantzig. He did not win a Nobel Prize. 

http://www.nytimes.com/2015/03/22/magazine/a-sucker-is-optimized-every-minute.html

DIGITAL MUSIC NEWS

RIAA: U.S. Digital Streaming Revenue

Surpassed CD Retail Sales In 2014

 

Green Dollars      The Recording Industry Association of America (RIAA) this week reported that music streaming has eclipsed the sale of physical CDs and is closing in on digital downloads as the largest source of revenue in the U.S. recorded music industry. According to RIAA figures, revenues from subscription streaming (e.g., Spotify and Rhapsody) and streaming radio services including Sirius XM hit $1.87 billion in 2014, a 29% increase vs. 2013 and equivalent to 27% per cent of total music industry revenues. CD sales slipped 12.7% to $1.85 billion. As noted by the Financial Times, downloads have been the U.S. music industry’s largest source of digital revenue for a decade, but they peaked in 2012 and have been in decline ever since. In 2014, download revenues fell 8.7% vs. 2013 to $2.58 billion, equivalent to 37% of total industry revenues.

“The music business continues to undergo a staggering transformation,” RIAA Chairman/CEO Cary Sherman said in a statement. “Record companies are now digital music firms, earning more than two-thirds of their revenues from a variety of digital formats.”

In aggregate, the various kinds of streaming outlets generated $1.87 billion, up nearly 29% from the year before – and, for the first time, slightly more than the total for CDs. That figure includes not only paid subscription outlets like Spotify, Rdio and Rhapsody, but also such internet radio services as Pandora, which does not let users pick exactly what songs they will hear, and outlets like YouTube and Spotify’s free tier, which let users pick specific songs and are generally supported by advertising.

Performance royalty fees paid by streaming radio services grew sharply from $590 million in FY:13 to $773 million last year. All physical music sales together – including CDs, vinyl and music videos – slipped below a third of the industry’s total revenues for the first time, falling from 35% in 2013 to 32% last year. Total U.S. retail revenues were flat for the fifth year in succession at $6.97 billion. 

Shift From Sales To Digital Streaming

Is Causing Growing Pains For Artists

 

     This week the RIAA reported streaming music services have begun to overtake sales of physical CDs and music downloads in revenue (see story, above), a shifting business model that has many artists seeing red in more ways than one. While advertisers, listeners, and some label execs are embracing this change, the money collected via subscription and ad-supported license fees slows to a trickle by the time it reaches the music creators. That’s one reason Taylor Swift pulled her tracks from Spotify when she released her 1989 album last fall, and other artists continue to withhold their catalogs from the service.

How worrisome is the drought caused by the shift to streaming? As AdWeek pointed out this week, Pharrell’s “Happy” arguably was the song of 2014, topping the charts in the U.S. and selling 6.45 million copies. It also was in heavy rotation on the digital radio platform Pandora, streaming 43 million times in the first quarter alone. Despite all that exposure, Sony/ATV Music Publishing says it received just $2,700 from Pandora for plays of the tune during that period, which it split with writer Pharrell Williams.

“Streaming services are going to be the major method in the way music is accessed [but] I don’t think enough money trickles down to the songwriters,” says Sony/ATV CEO Marty Bandier.

By contrast, Pandora argues that its model is justified, with CEO Brian McAndrews insisting that “we want to be an indispensable partner to music makers, and that involves paying a tremendous amount in royalties.”

Of course, AM/FM radio has never paid performance royalties to labels or artists, but the difference here is that digital streaming appears to be replacing music sales, while traditional radio served to promote it. As AdWeek asks (somewhat rhetorically), are music streaming services in as much trouble as the record business they were meant to give new life to? Or are these merely the growing pains of an emerging medium?

 

Forbes: Internet Radio Poised To

Be “Ad Opportunity Of The Future”

 

     Owners of AM/FM radio stations might not agree (or even want to read further), but internet radio has the potential to be the most ubiquitous form of media ever – and the biggest advertising opportunity of the future. That’s the word from Forbes, which this week detailed the reasons digital streaming – no longer a fledgling medium – is set to become an essential part of the targeted media mainstream. As the magazine’s David Porter points out, one third of Americans used their phones to stream music last year, and those 18-24 listened to internet radio more than terrestrial. Additionally, two of the top five most-popular apps in the U.S. (Pandora and Youtube) are used for streaming music, which increasingly is becoming personalized to individual listening tastes and experiences.

“Internet radio will need to match every part of your day,” Porter wrote in an industry analysis this week. “Imagine passively being pushed the right music that helps you wake up, motivates you to run faster, work more productively, and more. This type of personalization has already begun in advertising…[and] the barriers to this type of hyper-personal internet radio are slowly being eliminated. The swath of personal data that comprise our tastes is growing, which in turn means we are also able to better understand the tastes of similar people.”

Porter explains that, with the decreasing costs of streaming, collecting and storing large sums of data – as well as growth of powerful tools to analyze it – the ability to explore and draw inferences from this wealth of information is seemingly endless. “With the inevitable growth of internet radio, as we continue to shift digitally, the abundance of listener data will provide advertisers improved targeting, as well as awareness of their demographic,” he says. “This new paradigm will offer companies an unprecedented opportunity to connect with the right listeners at the perfect moment. The only question remaining, what will your station look like?”

 

iTunes Has Banned “Soundalikes”

Designed To Fool Paying Customers

 

     Apple’s iTunes store last month responded to a surge of “soundalikes” – cover tracks designed to mimic the original song – by aggressively banning them from the online store. As reported by Forbes writer Shawn Setaro, soundalikes are meant to fool listeners into thinking they’re the real deal, and streaming services are flooded with them. Example: The Cheer Squad’s soundalike of Katy Perry’s “California Gurls,” both of which can be found on virtually every streaming music platform.

While someone listening to a streaming service typically can skip to the next song if a soundalike comes on, iTunes customers pay for the track, which can fool consumers into buying the wrong download. Hence, iTunes has sent notices to digital distributors laying out new guidelines that ban titling songs in the search-friendly way common to soundalikes: Having the artist’s name in the song’s title, for example, and nixing phrases like “originally performed by” and “in the style of.” The guidelines called these practices “deceptive and misleading.”

Setaro says these guidelines apply only to iTunes, but they probably will affect all digital music services. Example: Such digital distributors as TuneCore put songs on all the digital music services at the same time, so if a song has one title for iTunes, it has to have the same one for all the other streaming services.

 

Sony Music Buys The Rest Of

The Orchard For $200 Million

 

     Sony Music Entertainment has purchased the remaining equity stake in the Orchard from Dimensional Associates for about $200 million. According to an SEC filing, the Orchard is currently owned by Orchard Assets Holdings, believed to be a joint venture between Dimensional Associates and Sony. According to Billboard, Sony bought what has been consistently described as a majority stake in the Orchard in March 2012. While the exact percentages of Sony’s stake have never been publicly disclosed, sources say Sony owed 51% of the company and Dimensional held the remaining 49%.

The new deal requires regulatory approvals and is expected to close after March 31, 2015. In addition to the Orchard, Sony Music Entertainment also owns RED, widely considered to be one of the biggest indie U.S. distributors.

The Orchard was founded by songwriter/producer Richard Gottehrer and digital music executive Scott Cohen in 1997, and currently has annual revenues of $200 million. 

Rhapsody Subscribers Now Can Share

Music Tracks With Twitter Followers

 

     Rhapsody this week announced its subscribers now can share songs from with their Twitter followers, who will be able to play them in full without leaving the social media site – even if they don’t pay for a Rhapsody subscription. Rhapsody claims it’s the first streaming music service to offer full-track playback on Twitter, using its Audio Cards feature. The music is fully licensed by Rhapsody, with a percentage of revenue going to artists, labels, and publishers.

Rhapsody says one reason for the approach – which will be available only in the U.S. – is “to reinforce that music isn’t free.” The streaming music company is testing the feature to see if it can recoup the licensing fees, over time, by converting the Twitter exposure into new subscribers for its $9.99/month music service. “It’s going to be a huge experiment in how we make music social again,” Rhapsody CFO Ethan Rudin said in an interview with Geek Wire. “We’re extraordinarily confident in the success we’re going to have in converting people to loyal Rhapsody subscribers. If there is the opportunity to fine-tune and make sure this is economically viable in perpetuity, we want to have the proof points to get it right.”

Rudin says Rhapsody will collect audience data and share the results with its industry partners in an effort to find an approach that works. 

 

A publication of Bunzel Media Resources © 2015

America is becoming more like the illiberal pseudo-democracies and kleptocracies.

Can American Democracy Survive Against Rising Political Corruption and Privatization?

images

In 1932, on the eve of FDR’s presidency, Benito Mussolini proclaimed, “The liberal state is destined to perish.” He added, all too accurately, “All the political experiments of our day are anti-liberal.”

The democracies were doomed, Il Duce declared, because they could not solve crucial problems. Unlike the dictatorships, which were willing to forcefully use a strong state, the democracies could not fix their broken economies. Parliamentary systems were hamstrung politically. The democracies were also war-weary, conflict-averse, and ill-prepared to fight. The fascists, unlike the democracies, had solved the problem of who was part of the community.

Mussolini’s ally, Adolf Hitler, was further contemptuous of “mongrelization” in American democracy. Who was an American? How did immigrants fit in? What about Negroes? The fascist states, by contrast, rallied their citizens to a common vision and a common purpose. Hitler was quite confident that he knew who was a German and who was not. To prove it, he fashioned the Nuremberg laws; he annexed German-speaking regions of his neighbors. As Hitler infamously put it, Ein Volk, ein Reich, ein Fuehrer.

Though he was a buffoonish dictator, Il Duce was not such a bad political scientist. In the 1930s, a lot of liberal democrats wondered the same thing, and for the same reasons. As Ira Katznelson wrote in Fear Itself: “Such beliefs and opinions were not limited to dictators and dictatorships. As Roosevelt prepared to speak [in his first inaugural], skepticism was prevalent about whether representative parliamentary democracies could cope within their liberal constitutional bounds with capitalism’s utter collapse, the manifest military ambitions by the dictatorships, or international politics characterized by ultranationalist territorial demands. Hesitation, alarm, and democratic exhaustion were widespread.”

The democracies did survive, of course, and they flourished. The New Deal got us halfway out of the Great Depression, and the war buildup did the rest. Fascism was defeated, militarily and ideologically. The collapse of Soviet communism took another half-century. Thanks to the wisdom of containment, Stalinism fell of its own weight, as both an economic and political failure.

Not only did the democracies endure—by the 1980s, America had broadened the inclusiveness of its polity. Europe had embarked on a bold experiment toward continental democracy. In the final days of communism, there was triumphalism in the West. Francis Fukuyama even proclaimed, incautiously, in his 1989 essay, “The End of History?” that all societies were necessarily gravitating toward capitalism and democracy, two ideals that were supposedly linked.

***

Today, it is Mussolini’s words that resonate. Once again, the democracies are having grave difficulty pulling their economies out of a prolonged economic slump. Once again, they are suffering from parliamentary deadlock and loss of faith in democratic institutions. The American version reflects a radically obstructionist Republican Party taking advantage of constitutional provisions that Madison (and Obama) imagined as promoting compromise; instead, the result is deadlock. The European variant is enfeebled by the multiple veto points of a flawed European Union unable to pursue anything but crippling austerity. Once again, several anti-liberal alternatives are on the march. “All the political experiments of our day are anti-liberal.”

Take a tour of the horizon. Mussolini would not be surprised. The fastest-growing economy, China’s, is nothing if not anti-liberal, and getting steadily more adroit at suppressing liberal aspirations. The Beijing regime, which has learned the virtues of patience since Tiananmen, waited out the Hong Kong protests and efficiently shut them down. The Hong Kong elections of 2017 will be limited to candidates approved by the communist regime on the mainland. Capitalism was supposed to bring with it democracy and rule of law. But the Chinese have been superbly effective at combining dynamic state-led capitalism with one-party rule.

What unites regimes as dissimilar as Iran, Turkey, Hungary, Egypt, Venezuela, and Russia is that they combine some of the outward forms of democracy with illiberal rule. The press is not truly free, but is mostly a tool of the government. Editors and journalists are in personal danger of disappearing. There are elections, but  the opposition somehow doesn’t get to come to power. Minority religion and ethnic groups are repressed, sometimes subtly, sometimes brutally. Dissidents, even if they break no laws, risk life and limb. The regimes in these nations have varying degrees of corruption between the state and economic oligarchs, which helps keep both in power. In Hungary, a member of the E.U., which is a union of liberal democracies, Prime Minister Viktor Orbán has expressly invoked the ideal of an illiberal state. In Turkey, Recep Tayyip Erdogan has dramatically increased enrollments in state-supported religious schools and automatically assigned some children to them, against the wishes of their secular parents.

Turkey is a stalwart member of NATO. Elsewhere in the Middle East, our closest allies don’t even go through the motions of democracy; they are proud monarchies. Israel, our most intimate friend in the region, is becoming less of a democracy almost daily. Israelis are seriously debating whether to formally sacrifice elements of democracy for Jewish identity. And this tally doesn’t even include the flagrant tyrannies such as the insurgency that calls itself the Islamic State, or ISIL. All the political experiments of our day are anti-liberal.

Ironically, some liberals are pinning great hopes on recent stirrings in a venerable institution of hierarchy, autocracy, secrecy, and privilege that has been the antithesis of liberal for nearly two millennia—the Catholic Church, now under a reformist pope. One has to wish Francis well and hope that his new openness extends to the entire institution, but these reforms are fragile. It has been a few centuries since the Church murdered its rivals, but in my lifetime the Church was very cozy with fascists.

One of the great inventions of liberal democracy was the concept of a loyal opposition. You could oppose the government without being considered treasonous. A leader, conversely, could be tossed out of office by the electorate without fearing imprisonment or execution by successors. In much of the world, this ideal now seems almost quaint, and certainly imprudent. A corrupt or dictatorial regime has much to fear from displacement, including jail and even death at the hands of an opposition in power.

There are a few bright spots. Some of Africa has managed to have roughly free and fair elections. South Africa’s young democracy is fragile, but seems to be holding. Some of the Pacific Rim is moving in the direction of genuine democracy. Many former Soviet satellites in Eastern Europe are functioning democracies, even liberal ones. And democratic aspiration is far from dead, as events in Ukraine show. Latin America has more democratically elected governments than it has had in a generation, but it also has several nominal democracies that are illiberal, or prone to coups, or simply corrupt. Mexico, our close NAFTA partner, epitomizes illiberal democracy.

***

But it is the democratic heartland, Europe and North America, that presents the most cause for dismay. Rather than the United States serving as a beacon to inspire repressed peoples seeking true liberal democracy, America is becoming more like the illiberal pseudo-democracies and kleptocracies. A dispassionate review of what is occurring in our own country has to include deliberate suppression of the right to vote; ever more cynical manipulation of voting districts in the nation that invented gerrymandering; the deepening displacement of citizenship with money and rise of plutocracy; the corruption of the regulatory process; a steep decline in public confidence in government and in democracy itself; and a concomitant doubt that democratic participation is worth the trouble. In my piece in this issue’s special report, I address some of these questions in the context of markets versus government, but the challenge goes much deeper.

Obstruction feeds public cynicism about government. Though the mischief and refusal to compromise are mostly one-sided—it is hard to recall a Democratic president more genuinely eager to accommodate the opposition than Barack Obama—the resulting deadlock erodes confidence in democracy and government in general. Why can’t these people just get along and work for the common good? Democrats, as the party that believes in government, take the blame more than Republicans. Government’s failure to address festering, complex problems feeds the dynamic.

This is all the more alarming because the challenges ahead will require strong government and above all legitimate government. At best, global climate change and sea level rise will require public coordination and some personal dislocation. Transition to a sustainable economy demands far more intensive public measures, as well as public trust in the hope that changes in old habits of carbon energy use need not result in reduced living standards. The risk of epidemics such as Ebola will require more effective government to coordinate responses that the private sector can’t manage. The popular frustration with flat or declining earnings for all but the top demands more government intervention. Weak government can’t accomplish any of this. Mussolini’s taunt burns: The liberal democracies are incapable of solving national problems.

A generation ago, political scientists coined a useful phrase—strong democracy. The Prospect published some pieces making this case, by authors like Benjamin Barber. Others, such as Jane Mansbridge and James Fishkin, writing in the same spirit, called for more participatory democracy. The common theme was that democracy needed to be re-energized, with more citizen involvement, more direct deliberation. What has happened is the reverse. The combination of economic stresses, the allure of other entertainments, the rise of the Internet as a venue for more social interchange but less civic renewal, has left democracy weaker when it needs to be stronger.

The other contention of the fascists—that the democracies had trouble with the vexing questions of community and membership—was never more of a challenge. In Europe, the poisonous mix of high unemployment, anxiety about terrorism, and influx of refugees and immigrants is feeding a vicious nationalist backlash and nurturing the far right. At home, the failure to normalize the status of an estimated 12 million immigrants lacking proper documents deprives large numbers of residents of normal rights and stokes nativism. Assaults on voting rights even for citizens, coupled with physical assaults by police, make African Americans less than full members of the democracy, despite the civil rights revolution of half a century ago.

Mussolini’s other taunt was that the liberal democracies were too divided and war-weary to fight. When Hitler remilitarized the Rhineland in March 1936, in defiance of the Treaty of Versailles, the democracies did nothing. They dithered right up until Germany’s invasion of Poland in September 1939. As late as 1940, Roosevelt was more eager to keep America out of another European war than to help the British make a stand against the Nazis.

The military challenge today is more complex. America in this century has vacillated between grandiosity and timidity. It fought the wrong war in Iraq, and then may have pulled out prematurely. The administration has been weak and divided in its policies toward Syria and ISIL. To some extent this is understandable; these are hydra-headed threats, with no easy solutions. If President Obama is ambivalent, the public is even more so. Yet the greatest military threats to American democracy are not the risks of invasion or terrorist assault, but what we are doing to ourselves. The Obama administration, like that of George W. Bush, has been all too willing to subordinate liberty to security, secrecy, and autocracy, even in cases where these objectives are not in direct contention.

The risk is not that American democracy will abruptly “perish,” but that it will be slowly denuded of its vital content. If we are to reverse the appeal of anti-liberal society globally, we have to repair our democracy at home. The challenge is multifaceted, and will take time. It should be the great project of the next president and the ongoing work of the citizenry.

Robert Kuttner is the former co-editor of the American Prospect and a senior fellow at Demos. His latest book is “Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.”

 

http://www.alternet.org/news-amp-politics/can-american-democracy-survive-against-rising-political-corruption-and?akid=12900.265072.Crh72K&rd=1&src=newsletter1033428&t=11

Welcome to ‘Libertarian Island': Inside the Frightening Economic Dreams of Silicon Valley’s Super Rich

Jeff Bezos

Ayn Rand, Peter Thiel, Rand Paul (Credit: AP/Reuters/Fred Prouser/Charles Dharapak/Photo montage by Salon)

The idea that we are all in it together is foreign to the tech billionaires.

In the clever science fiction video game Bioshock, an Objectivist business magnate named Andrew Ryan (recognize those initials?) creates an underwater city, where the world’s elite members can flourish free from the controls of government. It is a utopian village that Ayn Rand and her hero John Galt would surely approve of, but unfortunately it ends up becoming a dystopian nightmare after class distinctions form (what a shocker) and technological innovation gets out of hand. It was a hell of a video game, for those of you into that kind of thing.

But I don’t bring up Bioshock to talk about video games. I bring it up because there is currently a similar movement happening in real life, and it is being funded by another rather eccentric businessman, the Paypal billionaire Peter Thiel. As some may already know, Thiel has teamed up with the grandson of libertarian icon Milton Friedman, Patri Friedman, to try and develop a “seastead,” or a permanent and autonomous dwelling at sea. Friedman formed the “Seasteading Institute” in 2008, and Thiel has donated more than a million dollars to fund its creation.

It is all very utopian, to say the least. But on the website, they claim a floating city could be just years away. The real trick is finding a proper location to build this twenty-first century atlantis. Currently, they are attempting to find a host nation that will allow the floating city somewhat close to land, for the calm waters and ability to easily travel to and from the seastead.

The project has been coined “libertarian island,” and it reveals a building movement within Silicon Valley; a sort of free market techno-capitalist faction that seems to come right out of Ayn Rand’s imagination. And as with all utopian ideologies, it is very appealing, especially when you live in a land where everything seems possible, with the proper technological advancements.

Tech billionaires like Thiel, Travis Kalanick and Marc Andressen, are leading the libertarian revolution in the land of computers, and it is not a surprising place for this laissez faire ideology to flourish. Silicon Valley is generally considered to have a laid back Californian culture, but behind all of the polite cordialities, there rests a necessary cutthroat attitude. A perfect example of this was Steve Jobs, who was so revered by the community, and much of the world, yet almost psychopathically merciless. The recent anti-trust case against the big tech companies like Google, Apple, and Intel, who colluded not to recruit each others employees, has even lead to speculation as to whether Jobs should be in jail today, if he were still alive.

So while Silicon Valley is no doubt a socially progressive place (i.e. gay marriage), if one looks past social beliefs, there is as much ruthlessness as you’d expect in any capitalist industry. Look at the offshore tax avoidance, the despicable overseas working conditions, the outright violations of privacy and illegal behavior. There is a very real arrogance within Silicon Valley that seems to care little about rules and regulations.

Libertarianism preaches a night-watchmen government that stays out of businesses way, and allows private industries to regulate themselves. It is a utopian ideology, as was communism, that has an almost religious-like faith in the free market, and an absolute distrust of any government. It is a perfect philosophy for a large corporation, like Apple, Google or Facebook. If we lived in an ideal libertarian society, these companies would not have to avoid taxes, because they would be non-existent, and they wouldn’t have to worry about annoying restrictions on privacy. In a libertarian society, these companies could regulate their own actions, and surely Google, with their famous “Don’t be evil” slogan, believes in corporate altruism.

In the Valley, innovation and entrepreneurship is everything, so a blind faith in the market is hardly shocking. And last year one of the leading libertarians, Rand Paul, flew out to San Francisco to speak at the Lincoln Labs Reboot Conference, held to “create and support a community of like-minded individuals who desire to advance liberty in the public square with the use of technology.” Paul said at the conference, “use your ingenuity, use your big head to think of solutions the marketplace can figure out, that the idiots and trolls in Washington will never come up with,” surely earning laughs and pats on the back.

Rand Paul has had one on one meetings with Mark Zuckerberg, and the floating island billionaire himself, Peter Thiel. The founder and CEO of Uber, Travis Kalanick is another noted libertarian, who used to have the cover of Ayn Rand’s “The Fountainhead” as his twitter icon. Kalanick runs Uber just as a devoted follower of Ayn Rand would, continuously fighting regulators and living by what writer Paul Carr has called the “cult of disruption.” Carr nicely summarizes the philosophy of this cult: “In a digitally connected age, there’s absolutely no need for public carriage laws (or hotel laws, or food safety laws, or… or…) because the market will quickly move to drive out bad actors. If an Uber driver behaves badly, his low star rating will soon push him out of business.”

So basically, with the internet, regulation has become nothing more than a outdated relic of the past, and today consumers truly have the power to make corporations behave by speaking out on social media, or providing negative ratings on Yelp, or filing a petition on Change.com, etc. It is the same old libertarian argument wrapped up in a new millennial cloak, that corporations will act ethically because if they don’t, consumers will go elsewhere.

As usual, it leaves out important realities that don’t sit well with the self-regulation myth. These realities include the irrationality and apathy of consumers, the lack of information available to consumers, and the overall secretive nature of corporations. The problem with self-regulation is that, consumers do not know what goes on at a corporation behind closed doors, so how would they force a company to act ethically if they are not aware of their misdeeds. Had the government not gone after Google for privacy violations, users would have never known. Google and other tech companies have a constant crave for innovation over everything, and bypass things like privacy when they get in its way. Would they control themselves had the government not stepped in?

Another important truth is that many consumers usually continue willfully using products, even if a company has done something that is contrary to their moral beliefs. It is a sort of hypocritical selfishness where one puts comfort or convenience over ethics. Just look at Apple: everyone is aware of the appalling factory conditions and the tax avoidance, but that doesn’t stop many people from buying the latest iPhone.

When looking at other industries, like oil and gas, the myth of self-regulation is even more comical. The famous oil billionaire Koch brothers, who are also fanatic libertarians,  have knowingly avoided regulations, and have hurt people in the process. During the nineties, they were particularly careless, and the bottom line influenced every decision. When pipelines were in bad shape, they would determine whether fixing them or leaving them, and possibly paying off a lawsuit in the future, was more profitable. In 1996, a pipeline that had been given the second treatment leaked butane into the air, and killed two teenagers who ignited it with the spark of their car ignition.

Even if the consumers were completely rational and had access to all information, would it really be worth it to wait for companies to abide? For example, many libertarians argue that legislation that made seat belts and airbags mandatory in all vehicles was pointless, because the free market would have eventually brought them anyways. But even if this were true, how long would it take, and how many lives could this inaction have caused?

The most damning evidence against the myth of self regulation may very well be history. Before government regulatory agencies like the FDA came around, the safety of workers and consumers were both constantly at stake, as muckrakers like Upton Sinclair described so vividly. More recently, the lack of regulation in the financial industry, particularly in derivatives, contributed to one of the worst economic crises in history, and hurt many people in the process.

Libertarians are uninterested in these realities, and believe that all government intervention is useless and stifles innovation, and it is the “cult of innovation” that makes the libertarian philosophy particularly popular in the technology obsessed Silicon Valley. In the their world, innovation is more important than privacy or safety, and the best and brightest should not have to play by the rules.

While overall, Silicon Valley still supports the Democrats over Republicans, it would not be surprising to see a shift in the coming years. The libertarian philosophy is very attractive to those who worship technology and entrepreneurship, which is nearly all of the techies. And with millions of potential campaign dollars coming out of the valley, it could very well be a problematic territory for liberals in the future.

 

http://www.alternet.org/news-amp-politics/welcome-libertarian-island-inside-frightening-economic-dreams-silicon-valleys?akid=12898.265072._0WWy9&rd=1&src=newsletter1033376&t=9

Uber Investor: The Bay Area Bubble Will Pop This Year

…And More Than Tech Will Suffer

cabin_in_the_woods.jpg
Screengrab of attacking unicorn: The Cabin In The Woods

Less than two weeks after investor Mark Cuban warned us all that the Silicon Valley sky is getting ready to fall, another VC is making similar predictions: that the Bay Area is in a “risk bubble” and, when it pops, tech companies, companies that do business with those tech joints, and area real estate are all going to suffer.This time the doomsayer is investor Bill Gurley, who has money in Uber, DropBox, SnapChat and co-working real-estate play WeWork, among others. Gurley, who’s described with superlatives like “tech’s most prominent investor” by various tech pubs, was speaking at SXSW when he made his predictions, and they aren’t all that rosy. Some quotes:

“I don’t know that we are in a valuation bubble,” Gurley said. “We are taking on, in these startups, especially these so-called unicorns, a level of risk that we haven’t seen since 1999.” [Siliconhills]

There is no fear in Silicon Valley right now,” he said. “A complete absence of fear.” He added that more people are employed by money-losing companies in Silicon Valley than ever before. [Forbes]

Silicon Valley’s optimism could lead to the death of so-called “unicorn” companies — startups that reach a $1 billion valuation before their IPO. Those companies could face a turn in the market in the near future. “I do think you’ll see some dead unicorns this year,” Gurley said. [Business Insider]

By some accounts, there are more than 50 of these billion-plus companies in the Valley at the moment, with more added seemingly every other week. [New York Times]

The number of tech unicorns is thought to have doubled in the past 12 months, with data from Digi-Capital showing that there are now more than ever before. In 2014 there were 68 unicorns in mobile internet companies alone, with a total value of around $261 billion. [Business Insider]

Burn rates, the amount of cash companies are losing every month to operate, are higher than they have ever been, Gurley said. [Siliconhills]

If the free flowing capital, which is driven by low interest rates, ever dries up, it will affect more than just money-losing startups… it will affect a number of companies whose revenue is increasingly reliant on spending by venture-backed startups. Take Facebook, for example. A significant portion of their income now comes from venture-backed apps that are spending heavily to promote app downloads within Facebook, Gurley said. “As you get more of these dependancies, it increases the likelihood that if anything slows we’ll have [problems],” Gurley said. [Forbes]

If there is indeed a collapse, Mr. Gurley says, it will not just be the tech industry that feels the pain. Real estate, for example, could take a hit. Home prices in the San Francisco Bay area have appreciated by 97 percent since January 2000, according to a study published by the Paragon Real Estate group. If the influx of tech industry wealth begins to dry up, Bay-area property owners will have to deal with the potential drop in prices. [New York Times]

This isn’t the first time Gurley’s pulled the bubble alarm: in a January Forbes report entitled “The Age of Unicorns,” he said that “many” of these so-called unicorns were going to flame out this year, warning that “I think you’re going to see a lot of failure in 2015.”

Some of these unicorns (I wish we could find a better term that “unicorn,” any ideas?) will collapse under “their own overvalued weight,” Gurley predicts, and others will die after the failure of one leads to a trickle-down financial pullback. Those of you who were around in 2000 might recall that era’s collapsing companies and the resulting pullback panic, as VCs got scared and stopped handing out money to any fool who asked for it.

So is this a situation of those who don’t recall history being doomed to repeat it? According to Gurley, yeah. Per Siliconhills, Gurley said that, “A number of entrepreneurs today don’t even remember the Dot Com bust of 2000.”

“They were in 9th grade when that happened and the further they get away from that event, the more risk they are willing to take on.”

Previously: The New York Times Warns That Silicon Valley Bubble Might Be Ready To Pop And Ruin Us All
Shark Tank Billionaire Says ‘This Tech Bubble is Worse Than The Tech Bubble of 2000.’ Is He Right?

 

http://sfist.com/2015/03/16/uber_investor_the_bay_area_bubble_w.php