How Privatization Could Spell the End of Democracy

ECONOMY
Between Trump and tech, never before have so many powerful people been so intent on transforming government into a business.

Brands: Amazon, Yelp, Uber, Hillary
Photo Credit: Jewish Journal

It’s a hot day in New York City. You’re thirsty, but your water bottle is empty. So you walk into a store and place your bottle in a machine. You activate the machine with an app on your phone, and it fills your bottle with tap water. Now you are no longer thirsty.

This is the future envisioned by the founders of a startup called Reefill. If the premise sounds oddly familiar, that’s because it is: Reefill has reinvented the water fountain as a Bluetooth-enabled subscription service. Customers pay $1.99 a month for the privilege of using its machines, located at participating businesses around Manhattan.

Predictably, the company has already come in for its fair share of ridicule. In Slate, Henry Grabar called it “tap water in a suit”. But while Reefill is a particularly cartoonish example, its basic business model is a popular one within tech. The playbook is simple: take a public service and build a private, app-powered version of it.

he most obvious examples are Uber and Lyft, which aspire not merely to eliminate the taxi industry, but to replace public transportation. They’re slowly succeeding: municipalities around America are now subsidizing ride-hailing fares instead of running public buses. And earlier this year, Lyft began offering a fixed-route, flat-rate service called Lyft Shuttle in Chicago and San Francisco – an aggressive bid to poach more riders from public transit.

These companies wouldn’t have customers if better public alternatives existed. It can be hard to find a water fountain in Manhattan, and public transit in American cities ranges from mediocre to nonexistent. But solving these problems by ceding them to the private sector ensures that public services will continue to deteriorate until they disappear.

Decades of defunding and outsourcing have already pushed public services to the brink. Now, fortified with piles of investor cash and the smartphone, tech companies are trying to finish them off.

Proponents of privatization believe this is a good thing. For years, they have advanced the argument that business will always perform a given task better than government, whether it’s running buses or schools, supplying healthcare or housing. The public sector is sclerotic, wasteful and undisciplined by the profit motive. The private sector is dynamic, innovative and, above all, efficient.

This belief has become common sense in political life. It is widely shared by the country’s elite, and has guided much policymaking over the past several decades. But like most of our governing myths, it collapses on closer inspection.

No word is invoked more frequently or more fervently by apostles of privatization than efficiency. Yet this is a strange basis on which to build their case, given the fact that public services are often more efficient than private ones. Take healthcare. The United States has one of the least efficient systems on the planet: we spend more money on healthcare than anyone else, and in return we receive some of the worst health outcomes in the west. Not coincidentally, we also have the most privatized healthcare system in the advanced world. By contrast, the UK spends a fraction of what we do and achieves far better results. It also happens to provision healthcare as a public service. Somehow, the absence of the profit motive has not produced an epidemic of inefficiency in British healthcare. Meanwhile, we pay nearly $10,000 per capita and a staggering 17% of our GDP to achieve a life expectancy somewhere between that of Costa Rica and Cuba.

A profit-driven system doesn’t mean we get more for our money – it means someone gets to make more money off of us. The healthcare industry posts record profits and rewards its chief executives with the highest salaries in the country. It takes a peculiar frame of mind to see this arrangement as anything resembling efficient.

Attacking public services on the grounds of efficiency isn’t just incorrect, however – it’s beside the point. Decades of neoliberalism have corroded our capacity to think in non-economic terms. We’ve been taught that all fields of human life should be organized as markets, and that government should be run like a business. This ideology has found its perverse culmination in the figure of Donald Trump, a celebrity billionaire with no prior political experience who catapulted himself into the White House by invoking his expertise as an businessman. The premise of Trump’s campaign was that America didn’t need a president – it needed a CEO.

Nowhere is the neoliberal faith embodied by Trump more deeply felt than in Silicon Valley. Tech entrepreneurs work tirelessly to turn more of our lives into markets and devote enormous resources towards “disrupting” government by privatizing its functions. Perhaps this is why, despite Silicon Valley’s veneer of liberal cosmopolitanism, it has a certain affinity for the president. On Monday, Trump met with top executives from Apple, Amazon, Google and other major tech firms to explore how to “unleash the creativity of the private sector to provide citizen services”, in the words of Jared Kushner. Between Trump and tech, never before have so many powerful people been so intent on transforming government into a business.

But government isn’t a business; it’s a different kind of machine. At its worst, it can be repressive and corrupt and autocratic. At its best, it can be an invaluable tool for developing and sustaining a democratic society. Among other things, this includes ensuring that everyone receives the resources they need to exercise the freedoms on which democracy depends. When we privatize public services, we don’t just risk replacing them with less efficient alternatives – we risk damaging democracy itself.

If this seems like a stretch, that’s because pundits and politicians have spent decades defining the idea of democracy downwards. It has come to mean little more than holding elections every few years. But this is the absolute minimum of democracy’s meaning. Its Greek root translates to “rule of the people” – not rule by certain people, such as the rich (plutocracy) or the priests (theocracy), but by all people. Democracy describes a way of organizing society in which the whole of the people determine how society should be organized.

What does this have to do with buses or schools or hospitals or houses? In a democracy, everyone gets to participate in the decisions that affect their lives. But that’s impossible if people don’t have access to the goods they need to survive – if they’re hungry or homeless or sick. And the reality is that when goods are rationed by the market, fewer people have access to them. Markets are places of winners and losers. You don’t get what you need – you get what you can afford.

By contrast, public services offer a more equitable way to satisfy basic needs. By taking things off the market, government can democratize access to the resources that people rely on to lead reasonably dignified lives. Those resources can be offered cheap or free, funded by progressive taxation. They can also be managed by publicly accountable institutions led by elected officials, or subject to more direct mechanisms of popular control.

These ideas are considered wildly radical in American politics. Yet other places around the world have implemented them with great success. When Oxfam surveyed more than 100 countries, they discovered that public services significantly reduce economic inequality. They shrink the distance between rich and poor by lowering the cost of living. They empower working people by making their survival less dependent on their bosses and landlords and creditors. Perhaps most importantly, they entitle citizens to a share of society’s wealth and a say over how it’s used.

But where will the money come from? This is the perennial question, posed whenever someone suggests raising the welfare state above a whisper. Fortunately, it has a simple answer. The United States is the richest country in the history of the world. It is so rich, in fact, that its richest people can afford to pour billions of dollars into a company such as Uber, which loses billions of dollars each year, in the hopes of getting just a little bit richer. In the face of such extravagance, diverting a modest portion of the prosperity we produce in common toward services that benefit everyone shouldn’t be controversial. It’s a small price to pay for making democracy mean more than a hollow slogan, or a sick joke.

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The new American economy is literally putting us in mortal danger

Right-to-work laws and the gig economy are hurting Americans

The new American economy is literally putting us in mortal danger

(Credit: AP/Duane Burleson/Getty/Mike Coppola)

President Donald Trump has campaigned on the sentiment of “bringing back jobs” to America. He mentioned factories specifically in his inauguration speech, stating, “the jobs left and the factories closed . . . that all changes starting right here, right now.”

But the price of such jobs, particularly at auto parts plants in the south “epitomizes the global economy’s race to the bottom,” Bloomberg writes:

Parts suppliers in the American South compete for low-margin orders against suppliers in Mexico and Asia. They promise delivery schedules they can’t possibly meet and face ruinous penalties if they fall short. Employees work ungodly hours, six or seven days a week, for months on end. Pay is low, turnover is high, training is scant, and safety is an afterthought, usually after someone is badly hurt. Many of the same woes that typify work conditions at contract manufacturers across Asia now bedevil parts plants in the South.

Common injuries at these factories include crushed and severed limbs, burning flesh and bodily contact with acid. So even if Trump does bring jobs back to this country, without a serious adjustment of the conditions that workers are expected to produce in or a priority for safety and humanity over end-of-day numbers and profits, auto industry workers will continue to be in danger.

But what about going the non-employment route and entering instead into the “gig economy?” Surely the promise of flexibility will make it easier for the American workforce? That idea isn’t working out too well either.

What Lyft intended to be a charming story about an employee’s commitment to the company — the pre-labor tale of nine-month pregnant Mary, who picked up a rider en route to the hospital to deliver her baby — looked more like a scene out of a horror film.

“Within the ghoulishly cheerful Lyft public-relations machinery, Mary is an exemplar of hard work and dedication . . . Or maybe Mary kept accepting riders because the gig economy has further normalized the circumstances in which earning an extra eleven dollars can feel more important than seeking out the urgent medical care that these quasi-employers do not sponsor,” the New Yorker wrote.

“At the root of this is the American obsession with self-reliance, which makes it more acceptable to applaud an individual for working himself to death than to argue that an individual working himself to death is evidence of a flawed economic system.”

For low-income workers across this country desperate work, the choices are whether deal with horrific conditions in nonunion shops in the south or the horrors of freelance labor everywhere else.

The famous union slogan, “an injury to one is an injury to all,” seems quite prescient here.

 

http://www.salon.com/2017/03/23/the-new-american-economy-is-literally-putting-us-in-mortal-danger/?source=newsletter

Uber cuts protested by New York City drivers

By Steve Light and Isaac Finn
2 February 2016

In response to a 15 percent fare cut announced by the company over the weekend, hundreds of Uber and other taxi drivers protested Monday at the Uber headquarters near Queens Plaza in New York City. They expressed anger that their already meager incomes would be reduced even further by the company’s action, forcing them to work even longer hours.

Uber driver rally against rate cuts

Uber is an international “ride share” service, whose drivers are treated as independent contractors rather than as employees. As of last summer, the company was valued at $17 billion. The rate cut was reportedly undertaken to increase the company’s market share, in competition with Lyft, another ride-share service, as well as regular taxis and car services.

The super-exploitation of Uber and other taxi workers is just one aspect of the ever-widening economic inequality in the city that is the financial capital of the world. With astronomically high living expenses, millions of low-wage workers are barely eking by in a city where are workers, according to a recent report, need to earn an hourly wage of least $38.80, roughly four times the current minimum wage, in order to afford the city’s 2015 median asking rent of $2,690.

A significant proportion of the rally was composed of drivers from countries such as Nepal, China, Russia, and the Caucasus region, reflecting the super-exploitation of immigrant workers. Signs expressed anger at wage cuts by billionaire owners. Trucks, cars, and taxis rolling by the rally blew their horns in support and were met with cheers from the drivers.

Many Uber drivers are part-timers, and net an average $300 per week for 25 hours worked, from which they still have to pay for gasoline, insurance, vehicle expenses, and self-employment taxes. Recent reports show drivers making $2.89 an hour, less than half the official minimum wage.

The development of Internet-based service using cell phone apps has greatly intensified competition, forcing drivers to work longer hours to try make sufficient income and pay off their investments for cars. The technology-based changes in the taxi industry have led to protests against Uber in at least nine countries in Latin America, Europe, Canada and the Far East.

Uber and other drivers at the rally spoke to reporters from the WSWS .

Victor, an immigrant from Russiam with two years experience, stated, “Even before they dropped the price we were working with very low margins. We already have to pay for inspections and insurance. We are always risking getting a ticket, and if we do we have to pay it.

“One of the guys did the math, and if you work about 57 hours, under the new rate, after expenses you are making about $9.50 an hour. Why not work in a warehouse, if they are only going to pay that much?

The protest at Uber headquarters

“When I joined Uber two years ago, I knew the rates and then the company changed the rules. I have already bought the car, the dealer doesn’t change the cost because of this, and my insurance is the same. I know in other states things are different and a lot of the drivers just work part-time, but we already paid out thousands of dollars for these cars.

“They say we are ‘partners’ but they didn’t ask us anything before making these changes. I think a lot of people will leave Uber, and then there will be less drivers. We might be really busy, but eventually the market will adjust and this will hit us hard.”

Pemba Sherpa, an immigrant from Nepal, who has worked for Uber for five months, decried the rate cuts, “They are trying to kill us. We have to pay rent, plus the cost of a car, which is between $60,000 and $65,000, and they are asking us to work for just over $4 an hour.

“When I started working for Uber, I asked them, ‘should I get the black car?’ and they told me to get it. Then they told me I had to pick up UberX clients for less money, or do pulls, which means I have to pick up multiple clients at the same time. If you are doing pulls, I could be picking up six people and they are all paying $2 each that is less than a subway ride. It is like I am a bus driver, but I did not sign up to be a bus driver.

“We are entrapped because we already bought the cars, and they just keep changing the rules. They send us our times and conditions every night, and we have to accept them or we won’t be able to work.”

Another Uber driver, added, “They want us to work for $4.89 an hour, and you can’t take care of your family for that. We will be working longer hours for the same amount of money, and that is an insult.

“We already have to pay for the cars, for insurance. We have to pay for dry cleaning for our shirts, and we are getting less money than if we worked at McDonalds.”

Parminder Singh, an Uber driver and former taxi driver, explained “Uber just keeps adding cars, and making things worse for us. New York taxi companies can’t add more cars, because that increases congestion on the roads and makes things worse.

“We just want to raise our kids, but you can’t do that on this much money. I work from noon until 1 or 2AM. My son is nine years old, and I never see him. He wants to see me, but I can’t because I am at work.”

Asked about the political issues raised by his working conditions, Singh added, “The city should be responsible for taking care of the people that live here. When I was in Yellow Cab we had protested in front of the Governor’s office, to make things better for all the drivers, but the politicians still have not done anything.

“My feeling is that the city should be providing jobs to people with qualifications. We should not have people becoming drivers, when they are trained for something else.”

“Uber is 1,500 drivers, and they will make us homeless” Bahkyti Yori asserted. “What happens when we cannot cover our insurance, financial costs? We will lose our cars, everything.”

Pasand Sherpa told the WSWS, “Uber lowered the rate 15 percent but Uber takes a high percentage, 30 to 35 percent, but there is no percentage increase for us. It was $8 at the start for riders but now it is $7. Every trip they charge us 35 percent. They discount from the customer’s side but not from the driver’s side. Wages are going down but we are working harder. It was better but now we would have to drive 500 miles. We don’t have a union. The Taxi Workers Alliance organized this.”

Medallion (yellow cab) taxi drivers joined the rally in support of the Uber drivers. Iqbal Singh, a yellow cab driver for 25 years, was there in support of the Uber drivers. “We came out to fight with them. Uber made $62 billion. If they are cutting back the fare, so they make less, then yellow cabs also make less money. They can then cut the fare again and make it even worse. We want Uber to have a set price.”

An Uber driver for two years, Shamsu Uddin said, “The jobs came online before for $3 per mile, then $2.15, and now again forty cents less. We can’t even make $100 to $150 an hour. How can we make the mortgage payments or pay for the new car or take care of our family. I drive twelve hours a day. Everything goes up in price, every bill, but not us. We built the billionaire boss. There are many competing companies–Yellow, Green, LYFT, Uber, Gate, Bayer, and now Juno is coming in April. [Mayor] De Blasio said it is not good for the driver but he set this up.”

Tenzin Wangyal assessed the situation, “I think there is a decent amount that can be made by drivers but the company takes 30 percent and the driver is left not making much. They structure the system to get people to fight against each other. It needs to be structured to bring people together. This should not only be including taxi but all people should support this fight. It is about fairness and justice. People just keep talking. No one is doing anything. That is why we are here, for our voice to be heard. They make the same speech, but it is the same old reality. It is time to act now and do the right thing. It is for democracy and justice.”

 

http://www.wsws.org/en/articles/2016/02/02/uber-f02.html

Resisting the “sharing” economy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why Uber must be stopped

The touted start-up is proving to be the embodiment of unrestrained hyper-capitalism. What happens when it wins?

 

Why Uber must be stopped
Jordan Belfort and Gordon Gekko

What is Uber? A paragon of free market efficiency and technological innovation serving the greater convenience and comfort of the general public? Or living proof for why capitalist societies require regulation?

It is testimony to the ceaseless striving of Uber that Silicon Valley watchers find themselves with new reasons to ponder these questions nearly every week. But the end of August brought special vim and vigor to the debate. In particular, Verge’s publication of Casey Newton’s great scoop about the tactics Uber has been deploying to recruit riders from its top competitor, Lyft, has excited reams of commentary.

No matter what you think of Uber, the scope of “Operation SLOG” (Supplying Long-term Operations Growth) is impressive. Uber has hired hundreds of private contractors in multiple cities and equipped them with multiple burner phones (so as to prevent Lyft from identifying recruiters and blocking them from using its service), as well as credit card numbers and recruitment kits, and mobilized them to lure Lyft drivers over to the other side. Collateral damage to Lyft has extended beyond the siphoning away of drivers. When a Uber recruiter ordered a ride and discovered that the driver was someone who had been previously recruited, he or she immediately cancelled the ride. According to Lyft, Uber has been responsible for more than 5,000 cancelled rides in recent months.

Defenders of no-holds-barred free-market competition see nothing to be alarmed or concerned about. Riders can only benefit from fierce competition for their services, and the number of cancellations is trivial compared to Lyft’s total volume of rides, explains Timothy Lee at Vox. On the other hand, if you are inclined to see Uber as the acme of ruthless and amoral profit-seeking, then the latest news on Uber’s “deceptive tactics” is just one more confirmation of how the company will do anything to win.



Whichever side you fall on, the story is fascinating. There’s little doubt that Uber is the closest thing we’ve got today to the living, breathing essence of unrestrained capitalism. This is like watching Andrew Carnegie or John D. Rockefeller in action. This is how robber barons play. From top to bottom, the company flaunts a street-fighter ethos.

Uber’s ambitions are limitless and it has the bankroll to do what it wants. Indeed, there is some irony to the fact that Uber has so much cash in the bank that it need not comply with the most basic premise of capitalism — the notion that survival is predicated on making more money than you spend. With access to an astonishing $1.5 billion in capital, Uber can simultaneously wage regulatory battles in multiple cities, engage in recruitment wars in which smartphones are distributed like candy, subsidize drivers at below cost, and employ whomever is necessary to achieve long-term goals.

The real question we should be asking ourselves is this: What happens when a company with the DNA of Uber ends up winning it all? What happens when the local taxi companies are destroyed and Lyft is crushed? When Uber has dominant market position in every major city on the globe? “UberEverywhere” isn’t a joke. It’s a mantra, a call to arms, a holy ideology.

What happens when Uber’s priorities turn to generating cash rather than spending it? What happens to labor — the Uber drivers — when they have no alternative but Uber? What happens when it rains and the surge-pricing spikes and there’s nowhere else to go? A company with the street-fighting ethos of Uber isn’t going to let drivers unionize, and it certainly isn’t going to pay them more than it is required to by the harsh laws of competition. It will also dump them entirely in a nanosecond when self-driving cars prove that they are cheaper and safer. Making the case that drivers are benefitting from the current recruitment wars starts to look like a pretty short-term play. The more powerful Uber gets, the more leverage it will have over labor.

So here’s what’s going to happen. Society is going to realize that power as great as Uber’s needs to be checked. Uber, by virtue of its own success, will demonstrate where the lines need to be drawn for the general good. When Uber is the only game in town, the necessity for comprehensive requirements for commercial insurance and background checks will be obvious. When Uber starts using its logistics clout and unlimited investment capital to go after UPS and Hertz and FedEx, regulators will start wondering about antitrust issues.

It’s probably too soon to cry out “Break up Uber.” The company hasn’t won yet. But the smart money is on Uber (by definition, if you consider Google and Goldman Sachs, two prominent Uber investors, to be “smart”). When we allow capitalism to play out without rules, and learn anew how labor gets exploited under that scenario, we may recall why we had rules in the first place.

 

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

 

http://www.salon.com/2014/08/31/why_uber_must_be_stopped/

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/

“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.

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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