Douglas Rushkoff's Present Shock

The End Of Time Is Not The End Of The World
Anthony Wing Kosner, Contributor
I explore the art and science of producing and consuming content.
12-22-12
http://www.forbes.com/sites/anthonykosner/2012/12/22/douglas-rushkoffs-present-shock-the-end-of-time-is-not-the-end-of-the-world

If you read one book next year to help you make sense of the present moment, let it be Present Shock by Douglas Rushkoff. Subtitled, “When Everything Happens Now,” the book is a contemporary rejoinder to Alvin Toffler’s seminal scripture of futurology, Future Shock, published in 1970.

What has happened in those 40 years has undermined our notions of the future. Indeed, one of Toffler’s tenets is that “change is non-linear and can go backwards, forwards and sideways.” Rushkoff takes this notion a step further an describes a present in which “there is no temporal backdrop against which to measure our progress, no narrative through which to make sense of our actions, no future toward which we may strive, and seemingly no time to figure any of this out.”

Rushkoff toes the line between apocalypse and ascension. He diagnoses the cultural problems engendered by our disorientation from traditional concepts of time and attempts to propose concrete steps we can take to recover some sense of control and purpose.

Program or be Programmed, Rushkoff’s last book, followed a similar arc, by explaining ten commands we can use to take control of our digital lives. The book inspired the founders of Codeacademy, Zach Sims and Ryan Bubinski, a free, online platform for teaching programming. Rushkoff is now Codevangelist in Residence at Codeacademy, where I interviewed him recently.

Present Shock is a big concept with profound implications for culture, politics and business. A simple visualization (borrowed from Adrian Bejan’s theories of flow systems) is to think of time as a river flowing at a certain pace. Below a certain threshold, the movements of things on the river are fairly linear and predictable. You launch a barge in the river here and three days later you have drifted to there. This is historical progress as we have come to know it over the millennia  But when the speed of the flow increases beyond that threshold, the river becomes turbulent, non-linear, unpredictable. Such is the state of time in 2012.

What does this mean? Rushkoff breaks up “presentism” into five symptoms or challenges and matches each with constructive solutions for pressing the pause button. The “aha-moment-per-page ratio in Present Shock is high. Once you identify these concepts for yourself, you will start to see them everywhere.

Narrative Collapse: Rushkoff identifies both the sensationalism of reality TV and the meta-stories of The Simpsons and Family Guy as examples of how we no longer have the time or patience for linear stories. From entertainment to financial investment, the payoff has to be virtually instantaneous in order to justify our attention. Politically, he shows how these impulses play out both in the Tea Party and the Occupy movement. A news cycle divested of linear time, pushes politicians into present tense reactions with unsustainable results. Rushkoff’s sympathies are clearly more with Occupy who confounded conservatives and the mainstream press by having a large impact without an easily identifiable goal. In remix culture and contemporary activism, he sees the potential for us to seize the narrative frame and use them in new ways to invent innovative story forms and flexible agendas.

Digiphrenia: Because technology enables us to be aware of and have control over multiple conceptual spaces simultaneously, our attention is increasingly divided. Whether we are “multi-tasking” at work or piloting drone strikes in Afghanistan from a suburban office park in Las Vegas, we are not in the present moment (in a zen sense) but actually in fragments between moments that happen to be occurring at the same time. The key to avoiding these dislocation, Rushkoff suggests, is to understand the difference between time as data flow (like a Twitter feed) and time as data storage (like a book.) Knowing when to be in “the now,” and when to insulate yourself from it can help you reclaim control of your time and attention.
Overwinding: The “shock” part of future shock really comes from how much time we have “springloaded” into the present. From financial derivatives to the piracy of intellectual property, Rushkoff shows how we use leverage “to squish huge timescales into much smaller ones,”  attempting to capture the value of (others’) labor in the click of a mouse. This is why Black Friday gets earlier and earlier each year or why shaving a couple of milliseconds off the time to execute a computerized trade confers significant advantage. But we can also use this fact in more constructive ways to “springload” time into things, like the example Rushkoff cites of the fully functional “pop-up” hospital that Israel sent to Japan after the Tsunami.

Fractalnoia: One of the biggest risks in the barrage of big data spawned by our digital lives is that our abilities of pattern recognition are imprecise. When we succeed at making sense of the world in one scale or time frame we easily apply that “fractal” pattern elsewhere, often inappropriately. As the pace of change increases, our feedback loops get shorter and shorter until all we have is feedback screech. Computers, operating out of human time, can in fact discern patterns in that noise, but it is up to us humans to put those patterns in the correct context. When we fudge the hierarchy we end up with conspiracy theories and unsupportable science.

Apocalypto: The time pressures are so great and our confidence in our own ability to solve the world’s problems so weak that apocalyptic finality has an unshakable appeal. Rushkoff links together not only “Preppers” in their bunkers and cryogenic “Singularity-ists,” but also the current cultural fascination with zombies as examples of our wish to “level up” (in game parlance) out of our present situation. These grand finales are fantasies, like the doomsday predictions about the end of the Mayan calendar, but they speak to a powerful yearning. Rushkoff suggest we resist these temptations and instead, “let up on the pedal just a bit… [and] envision slow paths to sustainability that don’t require zombies or the demise of the majority of the world’s population.

For all of these impacted symptoms of time distress, Rushkoff proposes actionable solutions. I noted in the acknowledgements section the thanks he gave to Courtney Young for “encouraging me to keep considering the positive implications of present shock.” It is tempting, of course, to merely be  critical. Rushkoff has something of the old-testament prophet about him, full of honest indignation—but he balances that with an awareness of what people, businesses and governments need in the present moment to solve their immediate problems.

To the problem of narrative collapse, Rushkoff suggests that young people have reacted to the loss of storytellers by realizing they have to become the storyteller. The gamer can write his own next level. We can be fragmented by allowing ourselves to operate on the (non-temporal) time scale of computers or we can program our computers to keep us in sync with our own goals and our own lives. Technology is, in fact, neutral. It doesn’t “want” things to be a certain way. But all technologies are ste up by people with certain biases, but those biases are often unclear until they play out in the real world. So civilians do have an opportunity to intervene in technologies that they dont’t fully understand because they do have the capacity to understand the impact of those technologies on their lives.

Rushkoff sees that technology and financial opportunism have strengthened each other in ways that are ultimately not in the greater good. But he doesn’t see this  overwinding of certain values as opposed to others as inevitable or apocalyptic. Now that we see how these things work Rushkoff argues, we can begin to “unwind” them into more sustainable, egalitarian shapes. But as with a computer program, it is important to understand where you are in the code at any given point. Each part of a hierarchically nested system has a certain scope, and assuming global functions or variables can lead to errors.

Most importantly, the end of time as we have known it is not the end of the world. It is a new world that we can assert control over in new ways. So get over your doomsday hangover and get to work!

Reality as Subversion

Douglas Rushkoff
Tuesday, November 29, 2011
http://www.rushkoff.com/blog/2011/11/29/reality-as-subversion.html

I wrote this piece six years ago for Arthur magazine, anticipating or at least wishing for the Occupy movement. LSD magazine just republished it in their latest issue with some beautiful graphics, here.

Here's the original text version:

Arthur, June 2005

I had a weird vision the other day.

Having brought our newborn back from the hospital just days before, my wife and I weren’t getting much sleep. I lied on the bed next to the baby and slipped into one of those theta wave trances you can reach on the way to a magick spell, visionquest, or psychedelic trip.

I was in a natural chamber of some kind, maybe a cave or clearing in a woods. It was a starting place from which any number of journeys could be taken. At each opening, another creature or entity beckoned me to follow it. And, had it been any other time in my life, I probably would have picked the one that seemed the most promising and followed it down the twists and turns of its path – and been either delighted or terrified by what happened. (The idea of being an experienced traveler or magician is getting better at predicting, guiding, or simply tolerating the variety of what’s on offer, and learning to bring back things or ideas of value.)

This time, however, for no particular reason other than really being okay with floating in that little entrance foyer, decided to stay put. The beckoning entities gave up and scurried or drifted down their reality tunnels, and I lied there, motionless.

Only then, after I decided to do nothing, did I notice the Elders. Three or four of them - shamans, prophets, zen masters, or some combination – sitting on a bench to my side, looking down at me. “Welcome,” they said, nodding. And I immediately got it. By doing nothing, I was doing everything. The path of no path. Just be.

And though I’ve spent a career, maybe even a whole lifetime creating realities for myself and others as a way of retreating from the oppressive consensus culture of the American Marketplace, I’m wondering if we might best abandon that tactic. Maybe, it’s time to stand still and let them do the conjuring.

Hear me out.

What I teach in my classes is that the evolution of media sees control of the story move away from the teller, and towards the reader or listener. The invention of text allowed people other than priests and royals to read and write, showing human beings that they were contributing to the human story. Thanks to the alphabet, we got the Judeo-Christian tradition, laws, and all those notions of progress.

The printing press put texts in the hands of many, leading to the democratization of interpretation, the development of “perspective,” and eventually the Enlightenment. If all perspectives matter, then all people matter equally.

Although TV set things back a bit, deconstruction and post-modernism came to the rescue, giving us all the ability to take apart what we see, and dissemble the many messages being piped into our living rooms and brains. Master deconstructionists, from William Burroughs and Bryon Gysin to Genesis P-Orridge and Negativeland, cut-up the news and paste it back together in news ways, in Burroughs words, to find out “what it really says.”

Of course, they were only foretelling the advent of the Internet, which turned the whole mediascape – the primary landscape of alternative media creation – over to us. Now, at least in theory, we are as capable of creating and disseminating a message as anyone else. Your basic middle class American teen (admittedly, among the planet’s better equipped individuals) can build a set of images, texts, or videos that extend his visions to the greater world. Rupert Murdoch’s ideas matter no more than those of the kid posting on Slashdot.

And so we fight for our rights or even just our freedom to do what we want to in the media space. To keep our Bittorrents flowing and our alternative media blogs rolling. We know the power of image creation, and want to retain our ability to make the images that stimulate, hypnotize, and program our world.

That’s why the powers that be are so committed to retaking their control over the image factory. Whether it’s American Idol recasting its stacked deck talent show as some sort of SMS-enabled democracy, or Project Echelon monitoring all our keystrokes so that truly subversive material can be cut off at the source, we’re witnessing first hand the dismemberment of our new body politic. Just as the forces of business turned the original Internet into a strip mall, they are now bribing the most popular bloggers with ad-based revenues and creating watered down simulations of online autonomy.

Meanwhile, they distract us with scary stories about how the latest and greatest technologies will be used against us. Neuromarketing, for example, the latest new tool in the advertising arsenal, is supposedly capable of using MRI technology to measure, definitively, our response to packages and advertisements. They shove some poor soul into an MRI machine (that could be used for a diagnosing a sick person) and then show him some Coke or Pepsi labels and then see what parts of the brain light up. Then fascinated but misguided journalists write bestselling books about that moment of decision that supposedly takes place independent of any conscious or rational process. Worse, these subconscious triggers can be tripped intentionally by any marketer or political linguist with the access and money.

That’s magick, people. And fake magick, at that, except for the fact that we believe this shit. It just isn’t true. It’s the kind of tripe that marketers and advertisers use to peddle their wares to the companies trying to compete with real culture, real thought, and real human progress. Of course the books claiming that our most important decisions happen in a “blink” are going to sell well, because they are part of the culture of selling.

It’s no wonder we get fooled by such stuff. For in our effort to exert some measure of control over our reality, we have migrated to the semiotic landscape – fighting with image and symbol, rhetoric and reason. In the spirit of Hegel, we match their faulty thesis with our daring antithesis, but forget that neither one necessarily brings us any closer to the truth. Just because you’ve got two opposing arguments doesn’t mean they resolve into some reality-based synthesis. (Two politicians can argue about whether the tax code should have 39 or 40 lines while a peasant starves on the Capitol steps.)

The realities that marketers offer us, just like the ones we offer back in return, are speciously detached from reality on the ground. Sure, they provide solutions to our problems, but from where do those problems originate?

As a new parent, I’ve been painfully aware of how little real community there is around us. This is a market success. Our parents are too far, our friends are too shy, the mothering old ladies are nowhere to be found. So who teaches my wife to breast feed? The “lactation consultant.” Yes – there is such a thing! And who watches the baby when we have to take a shower or get to work? Not a family member or friend down the hall, but a professional babysitter, daycare center or nanny. The diminishment of community is what fuels these new markets.

The greatest magic act of all – the unrecognized king of all sigils – was the creation of the dollar itself. We support the reality of this symbol whether we’re going after dollars or complaining about the lack of opportunity to accumulate them. By taking the very real values of wealth and prosperity and assigning them to the symbol of money, we dissociated our labor from the real. Sure, if we had some authority over that symbol system we might be in business. But we don’t; it’s the most protected and inaccessible set of mythology around. No cut and paste permitted, William.

I’m thinking we should let them win. Surrender the unreal realities to the bad guys. If they want broadcast television, mainstream newspapers, or even the web, let ‘em have it. They’ve conjured up an alternative universe that has very little true connection to what’s really going on here. And the market-based, competitive, reality-as-propaganda dream has swallowed them up. They are the victims of their own illusions. We don’t have to be.

We can take charge of the real reality they left behind. I mean the world we’re actually living in. The yards and streets and fingers and tongues. Let’s build bike lanes and barbecues, after school programs and AIDS care networks, places to play music and playgrounds for kids. They’re so busy monitoring the airwaves for signs of treason against the market or state that they’ve lost track of what’s happening between real people. Turn off your cell phone and speak to that guy sitting next to you on the bus. That’s about the most subversive thing you could do.

Instead, like well-meaning Pied Pipers, we play our tunes hoping the children might follow us instead of the other guy taking them off the cliff. But when we enter into that competition, we’re no better than the tune we can muster at that moment. If ours is more hypnotic or captivating than theirs, we win for the time being, and keep the kids believing our version of things until the next round.

And in entering that pissing contest, we deny ourselves the home field advantage. We live here, after all. If we can learn to sit still for a moment rather than following any of those phantoms, we can take over real reality, instead. It’s right here for the taking.

Think Occupy Wall St. is a phase? You don't get it

Douglas Rushkoff, Special to CNN
October 5, 2011
http://edition.cnn.com/2011/10/05/opinion/rushkoff-occupy-wall-street/index.html

Douglas Rushkoff is a media theorist and the author of "Program or Be Programmed: Ten Commands for a Digital Age" and "Life Inc: How Corporatism Conquered the World and How We Can Take it Back."

(CNN) -- Like the spokesmen for Arab dictators feigning bewilderment over protesters' demands, mainstream television news reporters finally training their attention on the growing Occupy Wall Street protest movement seem determined to cast it as the random, silly blather of an ungrateful and lazy generation of weirdos. They couldn't be more wrong and, as time will tell, may eventually be forced to accept the inevitability of their own obsolescence.

Consider how CNN anchor Erin Burnett, covered the goings on at Zuccotti Park downtown, where the protesters are encamped, in a segment called "Seriously?!" "What are they protesting?" she asked, "nobody seems to know." Like Jay Leno testing random mall patrons on American History, the main objective seemed to be to prove that the protesters didn't, for example, know that the U.S. government has been reimbursed for the bank bailouts. It was condescending and reductionist.

More predictably perhaps, a Fox News reporter appears flummoxed in this outtake from "On the Record," in which the respondent refuses to explain how he wants the protests to "end." Transcending the shallow partisan politics of the moment, the protester explains "As far as seeing it end, I wouldn't like to see it end. I would like to see the conversation continue."

To be fair, the reason why some mainstream news journalists and many of the audiences they serve see the Occupy Wall Street protests as incoherent is because the press and the public are themselves. It is difficult to comprehend a 21st century movement from the perspective of the 20th century politics, media, and economics in which we are still steeped.

In fact, we are witnessing America's first true Internet-era movement, which -- unlike civil rights protests, labor marches, or even the Obama campaign -- does not take its cue from a charismatic leader, express itself in bumper-sticker-length goals and understand itself as having a particular endpoint.

Yes, there are a wide array of complaints, demands, and goals from the Wall Street protesters: the collapsing environment, labor standards, housing policy, government corruption, World Bank lending practices, unemployment, increasing wealth disparity and so on. Different people have been affected by different aspects of the same system -- and they believe they are symptoms of the same core problem.

Are they ready to articulate exactly what that problem is and how to address it? No, not yet. But neither are Congress or the president who, in thrall to corporate America and Wall Street, respectively, have consistently failed to engage in anything resembling a conversation as cogent as the many I witnessed as I strolled by Occupy Wall Street's many teach-ins this morning. There were young people teaching one another about, among other things, how the economy works, about the disconnection of investment banking from the economy of goods and services, the history of centralized interest-bearing currency, the creation and growth of the derivatives industry, and about the Obama administration deciding to settle with, rather than investigate and prosecute the investment banking industry for housing fraud.

Anyone who says he has no idea what these folks are protesting is not being truthful. Whether we agree with them or not, we all know what they are upset about, and we all know that there are investment bankers working on Wall Street getting richer while things for most of the rest of us are getting tougher. What upsets banking's defenders and politicians alike is the refusal of this movement to state its terms or set its goals in the traditional language of campaigns.

That's because, unlike a political campaign designed to get some person in office and then close up shop (as in the election of Obama), this is not a movement with a traditional narrative arc. As the product of the decentralized networked-era culture, it is less about victory than sustainability. It is not about one-pointedness, but inclusion and groping toward consensus. It is not like a book; it is like the Internet.

Occupy Wall Street is meant more as a way of life that spreads through contagion, creates as many questions as it answers, aims to force a reconsideration of the way the nation does business and offers hope to those of us who previously felt alone in our belief that the current economic system is broken.

But unlike a traditional protest, which identifies the enemy and fights for a particular solution, Occupy Wall Street just sits there talking with itself, debating its own worth, recognizing its internal inconsistencies and then continuing on as if this were some sort of new normal. It models a new collectivism, picking up on the sustainable protest village of the movement's Egyptian counterparts, with food, first aid, and a library.

Yes, as so many journalists seem obligated to point out, kids are criticizing corporate America while tweeting through their iPhones. The simplistic critique is that if someone is upset about corporate excess, he is supposed to abandon all connection with any corporate product. Of course, the more nuanced approach to such tradeoffs would be to seek balance rather than ultimatums. Yes, there are things big corporations might do very well, like making iPhones. There are other things big corporations may not do so well, like structure mortgage derivatives. Might we be able to use corporations for what works, and get them out of doing what doesn't?

And yes, some kids are showing up at Occupy Wall Street because it's fun. They come for the people, the excitement, the camaraderie and the sense of purpose they might not be able to find elsewhere. But does this mean that something about Occupy Wall Street is lacking, or that it is providing something that jobs and schools are not (thanks in part to rising unemployment and skyrocketing tuitions)?

The members of Occupy Wall Street may be as unwieldy, paradoxical, and inconsistent as those of us living in the real world. But that is precisely why their new approach to protest is more applicable, sustainable and actionable than what passes for politics today. They are suggesting that the fiscal operating system on which we are attempting to run our economy is no longer appropriate to the task. They mean to show that there is an inappropriate and correctable disconnect between the abundance America produces and the scarcity its markets manufacture.

And in the process, they are pointing the way toward something entirely different than the zero-sum game of artificial scarcity favoring top-down investors and media makers alike.

The opinions expressed in this commentary are solely those of Douglas Rushkoff.

Media futurist: Time to replace the Internet

Nathan Diebenow
Friday, February 18th, 2011
http://www.rawstory.com/rs/2011/02/18/media-futurist-time-to-replace-the-internet

How can the stranglehold on humanity's digital communications be broken? One media studies professor has a revolutionary idea.

"If we have a dream of how social media could restore peer-to-peer commerce, culture, and government, and if the current Internet is too tightly controlled [by the network owners] to allow for it, why not build the kind of network and mechanisms to realize it?” asked Douglas Rushkoff, writing for Mashable earlier this month.

Rushkoff is the author of "Program or be Programmed: Ten Commands for a Digital Age" and a noted Internet futurist. He also teaches media studies at The New School University in Manhattan.

To foster this emerging, peer-to-peer Internet, Rushkoff announced plans for a summit called “Contact” in October at the Angel Orensanz Center in New York City.

“From the development of a new non-hierarchical Internet to the implementation of alternative e-currencies, the prototyping of open source democracy to experiments in collective cultural expression, Contact will seek to initiate mechanisms that realize the true promise of the networking revolution,” he said.

Rushkoff told Raw Story last December that authorities already have the ability to quash cyber dissent. This is due to the Internet's original design as a top-down, authoritarian device with a centralized indexing system.

Rushkoff concluded that the Internet in its current form is simply unredeemable. From the near expulsion of WikiLeaks to Egypt's Internet blackout, it became clear to him that a fundamental change must be made.

As evidenced by the troubles dealt to secrets outlet WikiLeaks, essentially all one needs to do to halt a website is delete its address from the domain name system registry. A peer-to-peer Internet would use individual computers to route traffic to sites, as opposed to one centralized server, making it more resistant to censorship.

"This is not rocket science," Rushkoff quipped.

“A p2p network protected only by laws -- that exists but for the grace of those in charge -- is not a p2p network,” he wrote. “It is a hierarchical network allowing itself to be used in a p2p fashion, when convenient to those currently in charge.”

Rushkoff previously theorized that the new system might operate like FidoNet, a pre-Internet network that relied on personal computers acting as their own servers connected by modems via telephones.

“25 years of networking later, lessons learned, and battles fought; can you imagine how much better we could do?” he asked. “So let's get on it.”

Program or be Programmed

http://www.orbooks.com/our-books/program/

Program or be Programmed
Ten Commands for a Digital Age
Douglas Rushkoff
With illustrations by Leland Purvis

“Thinking twice about our use of digital media, what our practices are doing to us, and what we are doing to each other, is one of the most important priorities people have today—and Douglas Rushkoff gives us great guidelines for doing that thinking. Read this before and after you Tweet, Facebook, email or YouTube.” —Howard Rheingold

Paperback: $16 Ebook: $10 Print + Ebook: $20

The debate over whether the Net is good or bad for us fills the airwaves and the blogosphere. But for all the heat of claim and counter-claim, the argument is essentially beside the point: it’s here; it’s everywhere. The real question is, do we direct technology, or do we let ourselves be directed by it and those who have mastered it? “Choose the former,” writes Rushkoff, “and you gain access to the control panel of civilization. Choose the latter, and it could be the last real choice you get to make.” In ten chapters, composed of ten “commands” accompanied by original illustrations from comic artist Leland Purvis, Rushkoff provides cyberenthusiasts and technophobes alike with the guidelines to navigate this new universe.

In this spirited, accessible poetics of new media, Rushkoff picks up where Marshall McLuhan left off, helping readers come to recognize programming as the new literacy of the digital age––and as a template through which to see beyond social conventions and power structures that have vexed us for centuries. This is a friendly little book with a big and actionable message.

World-renowned media theorist and counterculture figure Douglas Rushkoff is the originator of ideas such as “viral media,” “social currency” and “screenagers.” He has been at the forefront of digital society from its beginning, correctly predicting the rise of the net, the dotcom boom and bust, as well as the current financial crisis. He is a familiar voice on NPR, face on PBS, and writer in publications from Discover Magazine to the New York Times.

“Douglas Rushkoff is one of the great thinkers––and writers––of our time.” —Timothy Leary

“Rushkoff is damn smart. As someone who understood the digital revolution faster and better than almost anyone, he shows how the internet is a social transformer that should change the way your business culture operates." —Walter Isaacson

Publication November 1 2010 152 pages

ECONOMICS IS NOT NATURAL SCIENCE

http://www.edge.org/3rd_culture/rushkoff09/rushkoff09_index.html

We must stop perpetuating the fiction that existence itself is dictated by the immutable laws of economics. These so-called laws are, in actuality, the economic mechanisms of 13th Century monarchs. Some of us analyzing digital culture and its impact on business must reveal economics as the artificial construction it really is. Although it may be subjected to the scientific method and mathematical scrutiny, it is not a natural science; it is game theory, with a set of underlying assumptions that have little to do with anything resembling genetics, neurology, evolution, or natural systems.
ECONOMICS IS NOT NATURAL SCIENCE

[8.11.09]
By Douglas Rushkoff

DOUGLAS RUSHKOFF is a media analyst; documentary filmmaker, and author. His latest book is Life Inc.: How the World Became a Corporation and How to Take It Back.

ECONOMICS IS NOT NATURAL SCIENCE

The marketplace in which most commerce takes place today is not a pre-existing condition of the universe. It's not nature. It's a game, with very particular rules, set in motion by real people with real purposes. That's why it's so amazing to me that scientists, and people calling themselves scientists, would propose to study the market as if it were some natural system — like the weather, or a coral reef.

It's not. It's a product not of nature but of engineering. And to treat the market as nature, as some product of purely evolutionary forces, is to deny ourselves access to its ongoing redesign. It's as if we woke up in a world where just one operating system was running on all our computers and, worse, we didn't realize that any other operating system ever did or could ever exist. We would simply accept Windows as a given circumstance, and look for ways to adjust our society to its needs rather than the other way around.

It is up to our most rigorous thinkers and writers not to base their work on widely accepted but largely artificial constructs. It is their job to differentiate between the map and the territory — to recognize when a series of false assumptions is corrupting their observations and conclusions. As the great interest in the arguments of Richard Dawkins, Daniel Dennett, Sam Harris, and Christopher Hitchens shows us, there is a growing acceptance and hunger for thinkers who dare to challenge the widespread belief in creation mythologies. That it has become easier to challenge the supremacy of God than to question the supremacy of the market testifies to the way any group can fall victim to a creation myth — especially when they are rewarded to do so.

Too many technologists, scientists, writers and theorists accept the underlying premise of our corporate-driven marketplace as a precondition of the universe or, worse, as the ultimate beneficiary of their findings. If a "free" economy of the sort depicted by Chris Anderson or Clay Shirky is really on its way, then books themselves are soon to be little more than loss leaders for high-priced corporate lecturing. In such a scheme how could professional writers and theorists possibly escape biasing their works towards the needs of the corporate lecture market? It's as if the value of a theory or perspective rests solely in its applicability to the business sector.

Whether it's being done in honest ignorance, blind obedience, or cynical exploitation of the market, the result is the same: our ability to envision new solutions to the latest challenges is stunted by a dependence on market-driven and market-compatible answers. Instead, we are encouraged to apply the rules of genetics, neuroscience, or systems theory to the economy, and to do so in a dangerously determinist fashion.

In their ongoing effort to define and the defend the functioning of the market through science and systems theory, some of today's brightest thinkers have, perhaps inadvertently, promoted a mythology about commerce, culture, and competition. And it is a mythology as false, dangerous, and ultimately deadly as any religion.

The trend began on the pages of the digital business magazine, Wired, which served to reframe new tech innovations and science discoveries in terms friendly to disoriented speculators. Wired would not fundamentally challenge the market; it would provide bankers and investors with a map to the new territory, including the consultants they'd need to maintain their authority over the economy.

The first and probably most influential among them was Peter Schwartz, who, in 1997, with Peter Leyden, forecast a "long boom" of at least 25 years of prosperity and environmental health fueled by digital technology and, most importantly, the maintenance of open markets. Kevin Kelly foresaw the way digital abundance would challenge scarce markets, and offered clear rules through which the largest companies could still thrive on the phenomenon.

Stewart Brand joined Schwartz and others in cofounding GBN, a futurist consulting firm whose very name Global Business Network , seemed to cast the emergence of a web economy in a new light. What did it mean that everyone from William Gibson to Brian Eno to Marvin Minsky would now be consulting to the biggest corporations on earth? Would they even be able to control their own messages? Brand did famously say in 1984 that "information wants to be free." But, much less publicized and remembered, he did so only after explaining that "information wants to be expensive, because it's so valuable." Would his and others' work now be parsed for the tidbits most effective at promoting a skewed vision of the new economy? Would the counterculture be able to use its newfound access to the board rooms of the Fortune 500 to hack the business landscape, or had they simply surrendered to the eventual absorption of everything and everyone to an eternal primacy of corporate capitalism? The "scenario plans" that resulted from this work, through which corporations could envision continued domination of their industries, appeared to indicate the latter.

Chris Anderson has analyzed where all this is going, and — rather than offering up a vision of a post-scarcity economy — advised companies to simply leverage the abundant to sell whatever they can keep scarce. Likewise, Tim O'Reilly and John Batelle's new, highly dimensional conception of the net — Web Squared— ultimately offers itself up as a template through which companies can make money by controlling the indexes people use to navigate information space.

Both science and technology are challenging long-held assumptions about top-down control, competition, and scarcity. But our leading thinkers are less likely to provide us with genuinely revolutionary axioms for a more highly evolved marketplace than reactionary responses to the networks, technologies, and discoveries that threaten to expose the marketplace for the arbitrarily designed poker game it is. They are not new rules for a new economy, but new rules for propping up old economic interests in the face of massive decentralization.

While we can find evidence of the corporate marketplace biasing the application of any field of inquiry, it is our limited economic perspective that prevents us from supporting work that serves values external to the market. This is why it is particularly treacherous to limit economic thought to the game as it is currently played, and to present these arguments with near-scientific certainty.

The sense of inevitability and pre-destiny shaping these narratives, as well as their ultimate obedience to market dogma, is most dangerous, however, for the way it trickles down to writers and theorists less directly or consciously concerned with market forces. It fosters, both directly and by example, a willingness to apply genetics, neuroscience, or systems theory to the economy, and of doing so in a decidedly determinist and often sloppy fashion. Then, the pull of the market itself does the rest of the work, tilting the ideas of many of today's best minds toward the agenda of the highest bidder.

So Steven Johnson ends up leaning, perhaps more than he should, on the corporate-friendly evidence that commercial TV and video games are actually healthy. (Think of how many corporations would hire a speaker who argued that everything bad — like marketing and media — is actually bad for you.) Likewise, Malcolm Gladwell finds himself repeatedly using recent discoveries from neuroscience to argue that higher human cognition is more than trumped by reptilian impulse; we may as well be guided by advertising professionals, since we're just acting mindlessly in response to crude stimuli, anyway. Everything becomes about business — and that's more than okay.

This widespread acceptance of the current economic order as a fact of nature ends up compromising the impact of new findings, and changing the public's relationship to the science going on around them. These authors do not chronicle (or celebrate) the full frontal assault that new technologies and scientific discoveries pose to, say, the monopolization of value creation or the centralization of currency. Instead, they sell corporations a new, science-based algorithm for strategic investing on the new landscape. Higher sales reports and lecture fees serve as positive reinforcement for authors to incorporate the market's bias even more enthusiastically the next time out. Write books that business likes, and you do better business. The cycle is self-perpetuating. But just because it pays the mortgage doesn't make it true.

In fact, thanks to their blind acceptance of a particular theory of the market, most of these concepts end up failing to accurately predict the future. Instead of 25 years of prosperity and eco-health, we got the dotcom bust and global warming. Immersion in media is not really good for us. People are capable of responding to a more complex call to action than the over-simplified and emotional rants of right-wing ideologues. The decentralizing effect of new media has been met by an overwhelming concentration of corporate conglomeration.

These theories fail not because the math or science underlying them is false, but rather because it is being inappropriately applied. Yet too many theorists keep buying into them, desperate for some logical flourish through which the premise of scarcity can somehow fit in, and business audiences won. In the process, they ignore the genuinely relevant question: whether the economic model, the game rules set in place half a millennium ago by kings with armies, can continue to hold back the genuine market activity of people enabled by computers.

People are beginning to create and exchange value again, and they are coming to realize the market they have taken for granted is not a condition of nature. This is the threat — and no amount of theoretical recontextualization is going to change that — or successfully prevent it.

Making Markets: From Abundance To Artificial Scarcity

The economy in which we operate is not a natural system, but a set of rules developed in the Late Middle Ages in order to prevent the unchecked rise of a merchant class that was creating and exchanging value with impunity. This was what we might today call a peer-to-peer economy, and did not depend on central employers or even central currency.

People brought grain in from the fields, had it weighed at a grain store, and left with a receipt — usually stamped into a thin piece of foil. The foil could be torn into smaller pieces and used as currency in town. Each piece represented a specific amount of grain. The money was quite literally earned into existence — and the total amount in circulation reflected the abundance of the crop.

Now the interesting thing about this money is that it lost value over time. The grain store had to be paid, some of the grain was lost to rats and spoilage. So each year, the grain store would reissue the money for any grain that hadn't actually been claimed. This meant that the money was biased towards transactions — towards circulation, rather than hording. People wanted to spend it. And the more money circulates (to a point) the better and more bountiful the economy. Preventative maintenance on machinery, research and development on new windmills and water wheels, was at a high.

Many towns became so prosperous that they invested in long-term projects, like cathedrals. The "Age of Cathedrals" of this pre-Renaissance period was not funded by the Vatican, but by the bottom-up activity of vibrant local economies. The work week got shorter, people got taller, and life expectancy increased. (Were the Late Middle Ages perfect? No — not by any means. I am not in any way calling for a return to the Middle Ages. But an honest appraisal of the economic mechanisms in place before our own is required if we are ever going to contend with the biases of the system we are currently mistaking for the way it has always and must always be.)

Feudal lords, early kings, and the aristocracy were not participating in this wealth creation. Their families hadn't created value in centuries, and they needed a mechanism through which to maintain their own stature in the face of a rising middle class. The two ideas they came up with are still with us today in essentially the same form, and have become so embedded in commerce that we mistake them for pre-existing laws of economic activity.

The first innovation was to centralize currency. What better way for the already rich to maintain their wealth than to make money scarce? Monarchs forcibly made abundant local currencies illegal, and required people to exchange value through artificially scarce central currencies, instead. Not only was centrally issued money easier to tax, but it gave central banks an easy way to extract value through debasement (removing gold content). The bias of scarce currency, however, was towards hording. Those with access to the treasury could accrue wealth by lending or investing passively in value creation by others. Prosperity on the periphery quickly diminished as value was drawn toward the center. Within a few decades of the establishment of central currency in France came local poverty, an end to subsistence farming, and the plague. (The economy we now celebrate as the happy result of these Renaissance innovations only took effect after Europe had lost half of its population.)

As it's currently practiced, the issuance of currency — a public utility, really — is still controlled in much the same manner by central banks. They issue the currency in the form of a loan to a bank, which in turn loans it a business. Each borrower must pay back more then he has acquired, necessitating competition — and more borrowing. An economy with a strictly enforced central currency must expand at the rate of debt; it is no longer ruled principally by the laws of supply and demand, but the debt structures of its lenders and borrowers. Those who can't grow organically must acquire businesses in order to grow artificially. Even though nearly 80% of mergers and acquisitions fail to create value for either party, the rules of a debt-based economy — and the shareholders it was developed to favor — insist on growth at the expense of long-term value.

The second great innovation was the chartered monopoly, through which kings could grant exclusive control over a sector or region to a favored company in return for an investment in the enterprise. This gave rise to monopoly markets, such as the British East India Trading Company's exclusive right to trade in the American Colonies. Colonists who grew cotton were not permitted to sell it to other people or, worse, fabricate clothes. These activities would have generated value from the bottom up, in a way that could not have been extracted by a central authority. Instead, colonists were required to sell cotton to the Company, at fixed prices, who shipped it back to England where it was fabricated into clothes by another chartered monopoly, and then shipped to back to America for sale to the colonists. It was not more efficient; it was simply more extractive.

The resulting economy encouraged — and often forced — people to accept employment from chartered corporations rather than create value for themselves. When natives of the Indies began making rope to sell to the Dutch East India Trading Company, the Company sought and won laws making rope fabrication in the Indies illegal for anyone except the Company itself. Former rope-makers had to close their workshops, and work instead for lower wages as employees of the company.

We ended up with an economy based in scarcity and competition rather than abundance and collaboration; an economy that requires growth and eschews sustainable business models. It may or may not better reflect the laws of nature — and that it is a conversation we really should have — but it is certainly not the result of entirely natural set of principles in action. It is a system designed by certain people at a certain moment in history, with very specific interests.

Like artists of the Renaissance, who were required to find patrons to support their work, most scientists, mathematicians, theorists, and technologists today must find support from either the public or private sectors to carry on their work. This support is not won by calling attention to the Monopoly board most of us mistake for the real economy. It is won by applying insights to the techniques through which their patrons can better play the game.

This has biased their observations and their conclusions. Like John Nash, who carried out game theory experiments for RAND in the 1950's, these business consultants see competition and self-interest where there is none, and reject all evidence to the contrary. Although he later recanted his conclusions, Nash and his colleagues couldn't believe that their subjects would choose a collaborative course of action when presented with the "prisoner's dilemma," and simply ignored their initial results.

Likewise, the proponents of today's digital libertarianism exploit any evidence they can find of evolutionary principles that reflect the fundamental competitiveness of human beings and other life forms, while ignoring the much more rigorously gathered evidence of cooperation as a primary human social skill. The late archeologist Glynn Isaac, for one, demonstrated how food sharing, labor distribution, social networking and other collaborative activities are what gave our evolutionary forefathers the ability to survive. Harvard biologist Ian Gilby's research on hunting among bats and chimps demonstrates advanced forms of cooperation, collective action, and sharing of meat disproportional to the risks taken to kill it.

Instead, it is more popular to focus on the self-interested battle for survival of the fittest. Whether or not he intends his work to be used this way, Steven Pinker's arguments about decreasing violence among humans over time are employed by others as evidence of the free market's peaceful influence on civilization. Ray Kurzweil relegates the entire human race to a subordinate role in the much more significant evolution of machines — a dehumanizing stance that dovetails all too well with an industrial marketplace in which most human beings are now relegated to the reactive role of consumers.

In Chris Anderson's vision of the coming "Petabyte Age," no human scientists are even required. That's because the structures that emerge from multi-dimensional data sets will be self-organizing and self-apparent. The emergent properties of natural systems and artificial markets are treated interchangeably. Like Adam Smith's "invisible hand," or Austrian economist Friedrich Hayek's notion of "catallaxy," markets are predestined to reach equilibrium by their very nature. Just like any other complex, natural system.

In short, these economic theories are selecting examples from nature to confirm the properties of a wholly designed marketplace: self-interested actors, inevitable equilibrium, a scarcity of resources, competition for survival. In doing so, they confirm — or at the very least, reinforce — the false idea that the laws of an artificially scarce fiscal scheme are a species' inheritance rather than a social construction enforced with gunpowder. At the very least, the language of science confers undeserved authority on these blindly accepted economic assumptions.

The Net Effect

Worst of all, when a potentially destabilizing and decentralizing medium such as the Internet comes along, this half-true and half-hearted style of inquiry follows the story only until a means to arrest its development is discovered and new strategies may be offered.

The open source ethos, through which anyone who understands the code can effectively redesign a program to his own liking, is repackaged by Jeff Howe as "crowdsourcing" through which corporations can once again harness the tremendous potential of real people acting in concert, for free. Viral media is reinvented by Malcolm Gladwell as "social contagion," or Tim Draper as "viral marketing" — techniques through which mass marketers can once again define human choice as a series of consumer decisions.

The decentralizing bias of new media is thus accepted and interpolated only until the market's intellectual guard can devise a new countermeasure for their patrons to employ on behalf of preserving business as usual.

Meanwhile, the same corporate libertarian think tanks using Richard Dawkins' theories of evolution to falsely justify the chaotic logic of capitalism through their white papers also advise politicians how to exploit the beliefs of fundamentalist Christian creationists in order to garner public support for self-sufficiency as a state of personal grace, and to galvanize suspicion of a welfare state. This is cynical at best.

It doesn't take a genius or a scientist to understand how the rules of the economic game as it is currently played reflect neither human values nor the laws of physics. The market cannot expand infinitely like the redshifts in Hubble's universe. How many other species attempt to store up enough fat during their productive years so that they can simply "retire" on their horded resources? How could a metric like the GNP accurately reflect the health of the real economy when toxic spills and disease epidemics alike actually count as short-term booms?

The Internet may be very much like a rhizome, but it is still energized by a currency that is anything but a neutral player. Most Internet business enthusiasts applaud Google's efforts to build open systems the same way their predecessors applauded the World Bank's gift of open markets to developing nations around the world — utterly unaware of (or unwilling to look at) what exactly we are opening our world to.

The net (whether we're talking Web 2.0, Wikipedia, social networks or laptops) offers people the opportunity to build economies based on different rules — commerce that exists outside the economic map we have mistaken for the territory of human interaction.

We can startup and even scale companies with little or no money, making the banks and investment capital on which business once depended obsolete. That's the real reason for the so-called economic crisis: there is less of a market for the debt on which the top-heavy game is based. We can develop local and complementary currencies, barter networks, and other exchange systems independently of a central bank, and carry out secure transactions with our cell phones.

In doing so, we become capable of imagining a marketplace based in something other than scarcity — a requirement if we're ever going to find a way to employ an abundant energy supply. It's not that we don't have the technological means to source renewable energy; it's that we don't have a market concept capable of contending with abundance. As Buckminster Fuller would remind us: these are not problems of nature, they are problems of design.

If science can take on God, it should not fear the market. Both are, after all, creations of man.

We must stop perpetuating the fiction that existence itself is dictated by the immutable laws of economics. These so-called laws are, in actuality, the economic mechanisms of 13th Century monarchs. Some of us analyzing digital culture and its impact on business must reveal economics as the artificial construction it really is. Although it may be subjected to the scientific method and mathematical scrutiny, it is not a natural science; it is game theory, with a set of underlying assumptions that have little to do with anything resembling genetics, neurology, evolution, or natural systems.

The scientific tradition exposed the unpopular astronomical fact that the earth was not at the center of the universe. This stance challenged the social order, and its proponents were met with less than a welcoming reception. Today, science has a similar opportunity: to expose the fallacies underlying our economic model instead of producing short-term strategies for mitigating the effects of inventions and discoveries that threaten this inherited market hallucination.

The economic model has broken, for good. It's time to stop pretending it describes our world.

Beyond Life Inc: Talking with Douglas Rushkoff

http://www.realitysandwich.com/beyond_life_inc_talking_douglas_rushkoff

Beyond Life Inc: Talking with Douglas Rushkoff
Peggy Nelson

In his new book, Life Inc., media ecologist and author Douglas Rushkoff tells the story of how the corporation has made us over into its own image, how we have altered our reality to serve its needs, and how we can take it back. In this conversation, Douglas illuminates the Dark Ages, reveals why there's a God on our money, and explains what we're really buying into when we buy that mortgage. We have the code to open-source everything, he says. Time to go to work!

1. Vol Is Hungry, We Must Feed Vol

PN: The corporation is not a recent phenomenon; it goes back hundreds of years. What is the origin story of the corporation? Where did it come from, and what is it, exactly?

DR: The corporation is the result of two innovations: the creation of centralized currency, and the creation of the chartered monopoly. In the late 1300s the upper classes -- the aristocrats, the people who had been feudal lords -- were becoming less wealthy relative to real people. As the merchant class and people in towns were producing and doing, the relative wealth of the aristocracy was going down, and this was a problem; the aristocrats wanted to continue the system that had been working for them for the last 500 years wherein they didn't have to "do" anything to be rich. So they hit upon the idea of passively investing in other people's industries.

Suppose I am the monarch. I want to make money through your shipping company; how do I get you to let me invest? Well, I use what power I have as a monarch to write up a charter, which means I give you a monopoly in a certain area, and you give me 30% of the shares in the company. The chosen merchant avoids competition and gains protection from bankruptcy, while the king receives loyalty, because the merchants' monopolies are based on keeping him in power. He doesn't mind if a *few of the merchant class are as rich as he is, as long as he is able to get still richer as a result.

But this was not the promotion of free-market capitalism. It was the promotion of monopoly, non-market capitalism! It was locking into place a set of players and a set of systems that had nothing to do with the free market. And it changed the bias of these merchants away from innovation; in other words, from "how do I innovate and maintain my competitive edge" to "how do I extract wealth from the realm that I now control?"

Then they're going to be very conservative because they'll want to maintain what they have and not risk wrecking it.

Conservative in that sense, but rapacious in another. Say I'm now in charge of the Colonies. What I want to do is extract their wealth; I want to prevent the people who live in the Colonies from creating any value for themselves. If the colonists are going to grow cotton, that's fine, but they're going to use MY seeds, my agricultural tools, they're going to use everything from ME. If you are a farmer you're allowed to grow the cotton but you have to sell it to ME at my prices. You're not allowed to make fabric out of that cotton! Fabricating is creating value. And then you're going to -- what? You're going to make it into clothes? Those are clothes you could have bought from me! No, no, no, you must give all the cotton to me, I'll put it on my ship and bring it back to England, then the king's other chartered monopoly, the clothes manufacturer, will make it into clothes, and then I'll ship them back and sell them to you -- at a profit.

So it's all export crops?

Right. And anything else I will shoot you for.

And they did!

And they DID.

2. Single-handedly Rehabilitating the Middle Ages

So for about three centuries, the middle and merchant classes were doing really well. Towns that had been in shambles since the fall of the Roman Empire and had lived under strict feudalism were finally coming into their own. This all hinged on the use of local currencies -- grain receipts -- through which people transacted. They were what we would now call "demurrage" currencies that were earned into existence. Towns ended up creating more value than they knew what to do with! They started investing in their infrastructure and their windmills and their water wheels; and also in their future in the form of cathedrals and other tourist attractions.

Are you saying these towns funded the cathedrals themselves? They didn't get money from Rome?

They did not. The Vatican and central Rome did NOT build the cathedrals. The funds came from local currency, which was very different than money as we use it now. It was based on grain, which lost value over time. The grain would slowly rot or get eaten by rats or cost money to store, so the money needed to be spent as quickly as possible before it became devalued. And when people spend and spend and spend a lot of money, you end up with an economy that grows very quickly.

Now unlike a capitalist economy where money is hoarded, with local currency, money is moving. The same dollar can end up being the salary for three people rather than just one. There was so much money circulating that they had to figure out what to do with it, how to reinvest it. Saving money was not an option, you couldn't just stick it in the bank and have it grow because it would not grow there, it would shrink. So they paid the workers really well and they shortened the work week to four and in some cases three days per week. And they invested in the future by way of infrastructure -- they started to build cathedrals. They couldn't build them all at once, but they took the long view -- with three generations of investment they could build an entire cathedral, and their great-grandchildren could live in a rich town! That's how the great cathedrals were built, like Chartres. Some historians actually term the late Middle Ages "The Age of Cathedrals."

They were the best-fed people in the history of Europe; women in England were taller than they are today, and men were taller than they have been at any point in time until the 1970s or 80s (with the recent growth spurt largely the result of hormones in the food supply). Life expectancy of course was still lower; they lacked modern medicine, but people were actually healthier and stronger and better back then, in ways that we don't admit.

That was right before the corporation and the original chartered monopolies were created, before central currency was created and local currencies were outlawed. When everything gets moved into the center, things began to change.

It seems like the Dark Ages were not perhaps so "dark?"

Yes, I think that's disinformation. I'm not usually a conspiracy theorist about these things, but I think the reason why we celebrate the Renaissance as a high point of western culture is really a marketing campaign. It was a way for Renaissance monarchs and nation-states, and the industrial age powers that followed, to recast the end of one of the most vibrant human civilizations we've had, as a dark, plague-ridden, horrible time.

Historically, the plague arrived after the invention of the chartered corporation, and after central currency was mandated. Central currency became law, and 40 years later you get the plague. People got that poor that quickly. They were no longer allowed to use the land. It shifted from an abundance model to a scarcity model; from an economy based on annual grain production to one based on gold released by the king.

That's a totally different way of understanding money. Land was no longer a thing the peasants could grow stuff on, land became an investment, land became an asset class for the wealthy. Once it became an asset class they started Partitioning and Enclosure, which meant people weren't allowed to grow stuff on it, so subsistence farming was no longer a viable lifestyle. If you can't do subsistence farming you must find a job, so then you go into the city and volunteer to do unskilled labor in a proto-factory for some guy who wants the least-skilled, cheapest labor possible. You move your whole family to where the work is, into the squalor, where conditions are overcrowded and impoverished -- the perfect breeding ground for plague and death!

3. There Is A God, And He's On All The Money

The money that the king was releasing, what was that based on? The other currency was based on grain, it's a direct relationship to how much grain there is, and as the grain degrades, the currency degrades . . .
The king's currency? It was actually not even gold: king's currency was based in the king's imprimatur. It was coin of the realm because his face was stamped on it.

That's kind of abstract.

It is. And because people don't believe in that abstraction, because they're used to grain receipts being based in something real, precious metal was required for the king's currency -- silver, gold; they had to use something that was considered valuable so people would believe!

Fast-forward to the 1970s. After four or five centuries of people believing it, Nixon realized that people now DO believe, so the currency can be taken off the central metal and just be based on belief. That's when they started putting "In God We Trust" on paper money, when it was taken off the gold standard!

That hadn't always been on there?

No, it was on coins, but it wasn't on bills. Because finally, belief is all that's left.

4. Let's All Be Independent Together

How does idea of the individual fit into these other developments?

Corporatism, with its promotion of competition between individuals over scarce resources and money, laid the ground for individualism and for a heightened concept of the self. I'm a media ecologist, I look at media and society as an ecology in which changes in one area reflect changes in another. The notion of the individual was invented, re-invented, in the Renaissance. This is part of why it was a re-naissance, a re-birth of old ideas, the rebirth of Greek ideals. The the Greek notion of the individual, which was always "the individual in relationship to the state," the citizen, was recast as "the individual."

The first individual in Renaissance literature was Dr. Faustus, who represented the extreme limits of greed. This was the new man, not a citizen of the city-state but an individual who has his own perspective on the world. We get perspective painting in the Renaissance, which meant the individual was a self-sufficient being whose point of view is important; we get reading in the Renaissance, which meant that a man can sit alone in his study and have his own relationship to the Bible, instead of gathering in the town square or the church, having the Bible read to him by a priest, as part of a congregation. So on the one hand it was this beautiful celebration of individual consciousness and perspective, but on the other it was all in the context of a new economy, one in which individuals were in competition against one another for scarce jobs, scarce resources, scarce land, and scarce money.

Everyone is going to ask, but what about the artists? So: what about the artists?

Historians say that one of the great things about the Renaissance were the patrons who could patronize a great artist. But before the Renaissance you didn't need a "patron" in order to be an artist! You could actually live in a town and do some stuff and be a great artist. The Renaissance model of commerce and arts was not a pre-existing condition of the universe. Yes, the Vatican could commission some basilica to be painted, but . . . I'd be interested to see what Leonardo da Vinci or Michelangelo would have been like had they not been part of a centralized bureaucracy, but instead been independent little homespun artist guys. They might have been better artists, you never know.

So now we have individuals and corporations as we know them.

The king's currency, centralized currency, is monopoly currency; demurrage currencies were declared illegal by the king. Why? First, centralized currency is easier to tax. Second, the king could remove gold from the currency whenever he wanted, he could basically suck the value out of it at will. And finally, because this is a currency based in scarcity, everyone has to compete for it. It's a way to help people who have money be powerful just for having money -- not because of what they can spend, but because of what they can hold.

So money becomes a resource.

It becomes a resource in itself. Actually it's a resource once-removed, literally a derivative, the first derivative. Centralizing turns money from a representation of something real into a derivative asset class. We live in this derivatives-based economy today, it has trickled down to us in the form of central banking. Now most people believe that the way to fuel an economy is for a bank to inject money, and the way to start a business is by borrowing from the bank. The way that money comes into existence is it is literally lent into existence. But for every dollar that is lent into existence, for every dollar you earn, there's a negative on the balance sheet somewhere.

So there's debt right at the beginning?

It IS debt, the money we have IS debt. Here's how it works. You start a business by borrowing $100K from the bank. This means that you're going to have to pay back say, $200K or $300K to the bank in 10 years when your loan is up. Where does the other $200K come from? It comes from someone else who's borrowed $100K from the bank! And where are they going to get that? Either they go bankrupt, because they can't pay it back, or they borrow another $200K from the bank. And then that has to be paid back, plus interest. So now they've borrowed $300K total and might have $900K to pay back.
The money supply has to grow as a function of interest. The rate at which we do business and make profit is actually driven and determined by the debt structure of the company rather than supply and demand. This is what Adam Smith was actually talking about. Adam Smith was NOT a free market libertarian, he was not a corporate industrialist the way the Economist or the Wall Street Journal likes to paint him. Smith said that economies only work in scale, they only work locally. He was living in a world where everyone was a farmer, and he hated corporations as much as he hated central government, because he knew that an interest-based economy does not ultimately work. And that is because debt is not actually a product! There's nothing there. Nothing. Yet that's what it was made for. The debt-based economy was invented so that people with money could get richer by having money, that's what it's FOR. I'm not saying it's evil, it was an idea. But, it doesn't actually work. If the number of people who want to make money by having money gets so big that there are more people existing that way than actually producing anything, eventually the economy will collapse.

It sounds like a big Ponzi scheme.

It IS a Ponzi scheme! None of the companies we're looking at as companies are what they are, they're all just the names on debt. GM is a name on debt, Sony's a name on debt.

The New York Times . . .

. . . is a name on debt. They're all publically-listed, traded companies with these P/E ratios; there are the issued shares, and then there's the actual business: those two things aren't the same. The shares are actually more a drag on the system than they are an investment in the company. There's all this debt to pay back.

5. Corporations R Us

Debt has an emotional component as well, in the sense of, you're going to owe me, and you're going to owe me forever. So, better get busy!

Slowly over time, as corporations attempted to extract more and more value from people, both as workers and as consumers and ultimately as shareholders and investors in our own 401k plans, we all basically outsourced our lives. I outsource my job to a company. I outsource my consumption to a company, I go to Wal-Mart, I go to Costco. I outsource my investing and savings to companies, I give it to Citibank, instead of the local banker or my credit union or my restaurant or my children or my cathedral. All of our interactions have been mediated by corporations -- you don't work for me and I don't work for you.

Let's talk about different kinds of value. Right now we have money, we measure everything by the little green metric. But there are other kinds, we all know that, there are personal relationships, there are other ways of measuring value . . .
We have different ways of experiencing value, but it's really hard to measure those. I feel that in the current environment, what people could or should be valuing makes them nervous, makes them anxious.

What kind of stuff?

Sitting with a friend . . . OK, I'll sit with a friend as long as I have my Paxil or something, because it's almost like we've been acculturated to be desocialized.

We have been!

I can spend time with you because we're doing work, right?

Right, it's productive.

Productive -- and we can measure it on the tape! Is it still turning? [yes]

You're saying money is not value-neutral.

Not only is money not value-neutral, but our money is not money-neutral. Our currency is not the only money. There are other kinds of money, just like there are different kinds of media out there, and they all encourage different behaviors. Computers encourage certain kinds of behavior, television encourages certain kinds of behavior. A gold-based money encourages certain kinds of behavior, a centralized currency encourages certain kinds of behavior, and a demurrage local grain-based currency encourages certain other kinds of behavior. The kind of behavior that our money encourages, intentionally, by design, is: hoarding. This is currency that earns interest over time so you want to hoard it and not spend it. And that's OK if you need that tool.

But maybe that shouldn't be the only thing in the toolbox.

It's like we only have a hammer and it's really hard to put in screws. Centralized currency is really, really good for competition, it's really, really good for big companies. Wal-Mart and Citibank can get money more cheaply; the bigger you are, the closer you are to the storehouse. And the big guys don't want local currencies, they don't want bottom-up value creation, work-based money, money that is worked into existence instead of borrowed into existence, because that reduces their monopoly over the means of exchange.

The problem with defining ourselves by our jobs or socialism or by economic class is that we're not just our economics, we're not just our money.

Right, I create value, but the value I create for my community is not just say, as a baker. It's not just as a tailor. It's also as the guy who brings those funny jokes to the party, the guy who has that beautiful daughter . . .

And it's not just ONE thing and it's not measurable in just one way.

6. Home Sweet Home Depot

From the 1920s to the 1970s an iconography was developed that turned corporations into our heroes. Instead of me buying stuff from people I know, I actually trust the Quaker Oat Man more than you. This is the result of public relations campaigns, and the development of public relations as a profession.

Did the rise of PR just happen, or did they have to do that in order to prevent things from getting out of control?

They had to do that in order to prevent things from getting out of control. The significant points in the development of public relations were all at crisis moments. For example, labor movements; it's not just that labor was revolting but that people were seeing that labor was revolting. There was a need to re-fashion the stories so that people would think that labor activists were bad scary people, so that people would think they should move to the suburbs and insulate themselves from these throngs of laborers, from "the masses." Or to return to the Quaker Oats example, people used to look at long-distance-shipped factory products with distrust. Here's a plain brown box, it's being shipped from far away, why am I supposed to buy this instead of something from a person I've known all my life? A mass media is necessary to make you distrust your neighbor and transfer your trust to an abstract entity, the corporation, and believe it will usher in a better tomorrow and all that.
It got the most crafty after WWII when all the soldiers were coming home. FDR was in cahoots with the PR people. Traumatized vets were coming back from WWII, and everyone knew these guys were freaked out and fucked up. We had enough psychology and psychiatry by then to know that these guys were badly off, they knew how to use weapons, and -- this was bad! If the vets came back into the same labor movement that they left before WWII, it would have been all over. So the idea was that we should provide houses for these guys, make them feel good, and we get the creation of Levittown and other carefully planned developments designed with psychologists and social scientists. Let's put these vets in a house, let's celebrate the nuclear family.

So home becomes a thing, rather than a series of relationships?

The definition of home as people use the word now means "my house," rather than what it had been previously, which was "where I'm from.'" My home's New York, what's your home?

Right, your town.

Where are you from? Not that "structure." But they had to redefine home, and they used a lot of government money to do it. They created houses in neighborhoods specifically designed to isolate people from one another, and prevent men in particular from congregating and organizing -- there are no social halls, no beer halls in these developments. They wanted men to be busy with their front lawns, with three fruit trees in every garden, with home fix-it-up projects; for the women, the kitchen will be in the back where they can see the kids playing in the back yard.

So you don't see the neighbors going by. No front porch.

Everything's got to be individual, this was all planned! Any man that has a mortgage to pay is not going to be a revolutionary. With that amount to pay back, he's got a stake in the system. True, he's on the short end of the stick of the interest economy, but in 30 years he could own his own home.

7. Freedom Isn't Free

Let's talk about technology. In terms of administering a shared goods-and-services system, the internet might be a good match. But it also seems that the internet, and machines and technology in general, can stand in place of actual relationships, and can be a stumbling block. How do you negotiate between those ideas?

The word that describes digital for me is discrete. For example, take sounds. With an actual sound, no matter how hard we zoom in, it's still a real thing. There's still more fidelity, more information to be found. If I scan or sample it, I've now translated that sound in the real world into a number. Something that was an event, in nature, in the world, is now a number. It's a derivative of reality. That number encapsulates as many metrics and as much information about the sound as I'm capable of including, and I can then make copies of the number and manipulate them. So there's greater choice in that way. But the only things the number can reproduce about that sound are the things I've told it to reproduce.

It only knows what it's supposed to measure.

The reproduction process also involves a sampling rate, which necessarily leaves stuff out. Even if the sampling rate is so good, so super-mp3, that it's beyond my conscious hearing, there is still space between the samples. Just like a fluorescent light; there's space between the flashes.

Now the question is, for all intents and purposes, is it the same, or not? I would argue that for many intents and purposes, it is the same, but for ALL intents and purposes, it is NOT. It is a re-creation of a thing, and an approximation, and without even getting spiritual and talking about prana and chi and everything else, there IS a difference.

In high school when I needed to do a research project, I would go to the library to find a book. I couldn't help but see the 20 other books on the shelf nearby, I had to read 20 spines before I found mine. And in reading those 20 spines I would see stuff I wouldn't have found otherwise, and I might get ideas for my paper randomly -- not by predetermined choice! I would see them by virtue of the fact that some librarian who was alive before me made a decision, by virtue of legacies and input and real life messiness. Whereas when I'm in the digital realm and I know the book I want, I type it into Google, and it's there. And nothing else.

This discrete freedom of choice sounds like a very controlled environment. I wonder how much real freedom that is?

Right, what are my range of choices? And who's giving me that range? People are utterly unaware of that. So when I look at technology I say well great, people have the ability to write online, but they don't, most of them, have the ability to program. In other words we can enter our text into the little blog box, but we aren't thinking about the biases built into a daily blog structure, which are towards short, daily thoughts, not introspective . . .

Or look at online communities. I'm going to become friends with another person who owns a 2004 red Mini with a sunroof, like mine, rather than with my neighbor who happens to have a different car; I'm going to look for that perfect affinity. But that's not a real relationship, that's my digital relationship, which is discrete! Discrete communities end up groping towards conformity of behavior really quickly.

That's why it's a consumer paradise, because it really does celebrate the idea of increasingly granular affinity groups, increasingly granular product choices.

8. The Derivative Life, An (Un)Reality Show

An over-arching theme I found in the book is how the common-sense stuff of our reality, the economy and money and shopping and working, is really science fiction; we don't live inside a "natural" economic structure -- we made it up.

It gets very much like Baudrillard in a way. We lived in a real world where we created value, and understood the value that we created as individuals and groups for one another. Then we systematically disconnected from the real world: from ourselves, from one another, and from the value we create, and reconnected to an artificial landscape of derivative value of working for corporations and false gods and all that. It is in some sense Baudrillard's three steps of life in the simulacra.
So by now, as Borges would say, we've mistaken the map for the territory. We've mistaken our jobs for work. We've mistaken our bank accounts for savings. We've mistaken our 401k investments for our future. We've mistaken our property for assets, and our assets for the world. We have these places where we live, then they become property that we own, then they become mortgages that we owe, then they become mortgage-backed loans that our pensions finance, then they become packages of debt, and so on and so on. We've been living in a world where the further up the chain of abstraction you operate, the wealthier you are.

9. The Way Out

So since this is a system we created, we can create something else?

Right, that's what open-source was supposed to be about. I believe that every realm of human experience and design is ultimately open-source if we choose for it to be. That's why I got interested in religion and money, because those seemed to be the two areas that people would not accept an open-source premise. Religion -- of course it isn't, those are sacred truths! But I would argue that Judaism was actually intended as an open-source religion. I've written a book about that, called Nothing Sacred, which was and still is controversial. Because if the Torah is open for interpretation, if it's this beautiful, myriad, hypertextual, hyperdimensional document that it is, then the whole thing is up for grabs: what happens to the real estate, the Israeli state?

Money of course is the other big area, it's still the one thing they won't let you print.

You've seen the dual currency idea from the Middle Ages coming back in certain places?

We've seen it coming back for 10 or 20 years now in places like Ithaca, New York, and Portland, Oregon; little places with alternative communities and hippies and weirdos and Grateful Dead parking lots and things like that. They could try local currency because people were weird enough to go for it.

More recently, after the economic downturn in Japan, dual currencies started to take hold in the non-"alternative" community. Everyone had time, but no one had money. Everyone was willing to work, but there were no companies they could work for. And since the only way we know how to work is to outsource our employment to a company, things looked bad.

One of the main needs people had was getting health care to their grandparents and great-grandparents who lived in towns far away. No one could afford home health care for them -- people to bathe them, walk them around, give them their shots, their IVs, their bedpans. So if you can't afford the service what can you do? What they did was set up a non-local complementary currency system where you would volunteer a certain number of hours of work to take care of an old person where you lived. You would acquire credits, and then someone who lived near your grandparents would take care of them for the credits you paid. There was no money involved! The currency was literally worked into existence. Even after the economy improved and people got their health insurance back, old people preferred the health care workers who were coming from the real people rather than the ones that came from the companies.

Now it's starting to hit places in the US where things are especially bad -- Detroit, Lansing, Cleveland -- these are towns that have resources in people, land, old factories. They have time, they have energy, but they don't have money and they don't have any corporate interest. So what can they do? Make a local currency, start doing things for each other. I'll fix your car, and you do something for me.

And it's easy! When I talk to economists, or when I talk to bankers, they all say, "well that doesn't work, you need a bank to go in and invest in a community for it to happen." Actually -- you don't. You don't need the bank.

Promoting bank-lent businesses is basically saying that you don't believe in sustainable business models yet. Any business that started with the bank is not a sustainable business model, because it's already in the debt/interest track. This is where Obama is still confused. He should say, "Look, I realize the economic crisis is real, there are mortgages and loans and we're going to work on that. But the more important thing right now is, rather than spending $5 trillion of your great-grandchildren's money on these bankers that screwed up, let's see how can we spend a teeny bit of money and reeducate communities about real economic development and sustainability."

To order the book, see when Douglas Rushkoff might be speaking in your area, and access videos, podcasts, and tons of other stuff, check the Life Inc. website.

Peggy Nelson is a new media artist and writer. Her work has appeared in Litkicks, Hilobrow.com, The Brattle Theater's Film Blog, and OtherZine, a journal about experimental, avant-garde, and outsider cinema.

Douglas Rushkoff on The Colbert Report

http://www.colbertnation.com/the-colbert-report-videos/238643/july-15-2009/douglas-rushkoff

Wednesday, July 15, 2009
Douglas Rushkoff

Douglass Rushkoff discusses the downfalls of operating the world like a corporation, and how to weaken its influence. (05:58)

Life Inc.

http://lifeincorporated.net/

This didn’t just happen.

In Life Inc., award-winning writer, documentary filmmaker, and scholar Douglas Rushkoff traces how corporations went from a convenient legal fiction to the dominant fact of contemporary life. Indeed as Rushkoff shows, most Americans have so willingly adopted the values of corporations that they’re no longer even aware of it.

This fascinating journey reveals the roots of our debacle, from the late Middle Ages to today. From the founding of the chartered monopoly to the branding of the self; from the invention of central currency to the privatization of banking; from the birth of the modern, self-interested individual to his exploitation through the false ideal of the single-family home; from the Victorian Great Exhibition to the solipsism of MySpace; the corporation has infiltrated all aspects of our daily lives. Life Inc. exposes why we see our homes as investments rather than places to live, our 401k plans as the ultimate measure of success, and the Internet as just another place to do business.

Most of all, Life Inc. shows how the current financial crisis is actually an opportunity to reverse this 600-year-old trend, and to begin to create, invest and transact directly rather than outsourcing all this activity to institutions that exist solely for their own sakes.

Corporatism didn’t evolve naturally. The landscape on which we are living - the operating system on which we are now running our social software - was invented by people, sold to us as a better way of life, supported by myths, and ultimately allowed to develop into a self-sustaining reality. It is a map that has replaced the territory.

Rushkoff illuminates both how we’ve become disconnected from our world, and how we can reconnect to our towns, to the value we can create, and mostly, to one another. As the speculative economy collapses under its own weight, Life Inc. shows us how to build a real and human-scaled society to take its place.

In Life Inc, Douglas Rushkoff presents the unnerving, unbelievable, but ultimately undeniable proof that our world has been overtaken by an absolutely artificial economy.

He shows how our most fundamental assumptions about money and commerce are actually false ones - artifacts of a 400-year-old plan by a waning aristocracy to maintain control of Western Europe. Although the architects of this corporatism have long since passed on, we still live in a landscape defined by their plans and have internalized their values as our own.

Taking on some of the biggest assumptions of our age, this is a book filled with dangerous ideas and rather unspeakable heresies:

Money is not a part of nature, to be studied by a science like economics, but an invention with a specific purpose.

Centralized currency is just one kind of money - one not intended to promote transactions but to promote the accumulation of capital by the wealthy.

Banking is our society’s biggest industry, and debt is our biggest product.

Corporations were never intended to promote commerce, but to prevent it.

The development of chartered corporations and centralized currency caused the plague; the economic devastation ended Europe’s most prosperous centuries, and led to the deaths of half of its population.

The more money we make, the more debt we have actually created.

Most importantly, Rushkoff shows how this moment of financial crisis is actually an opportunity to reinstate commerce and communities based in creating value for one another, rather than continuing to extract it for the benefit of institutions that no longer exist.

LET IT DIE: Rushkoff on the economy

http://www.arthurmag.com/2009/03/16/let-it-die-rushkoff-on-the-economy/

LET IT DIE: Rushkoff on the economy
by Douglas Rushkoff

March 15, 2009

With any luck, the economy will never recover.

In a perfect world, the stock market would decline another 70 or 80 percent along with the shuttering of about that fraction of our nation’s banks. Yes, unemployment would rise as hundreds of thousands of formerly well-paid brokers and bankers lost their jobs; but at least they would no longer be extracting wealth at our expense. They would need to be fed, but that would be a lot cheaper than keeping them in the luxurious conditions they’re enjoying now. Even Bernie Madoff costs us less in jail than he does on Park Avenue.

Alas, I’m not being sarcastic. If you had spent the last decade, as I have, reviewing the way a centralized economic plan ravaged the real world over the past 500 years, you would appreciate the current financial meltdown for what it is: a comeuppance. This is the sound of the other shoe dropping; it’s what happens when the chickens come home to roost; it’s justice, equilibrium reasserting itself, and ultimately a good thing.

I started writing a book three years ago through which I hoped to help people see the artificial and ultimately dehumanizing landscape of corporatism on which we conduct so much of our lives. It’s not just that I saw the downturn coming—it’s that I feared it wouldn’t come quickly or clearly enough to help us wake up from the self-destructive fantasy of an eternally expanding economic frontier. The planet, and its people, were being taxed beyond their capacity to produce. Try arguing that to a banker whose livelihood is based on perpetuating that illusion, or to people whose retirement incomes depend on just one more generation falling for the scam. It’s like arguing to Brooklyn’s latest crop of brownstone buyers that they’ve invested in real estate at the very moment the whole market is about to tank. (I did; it wasn’t pretty.)

Now that the scheme we have mistaken for the real economy is collapsing under its own weight, however, it’s a whole lot easier to make these arguments. And, if anything, it’s even more important for us to come to grips with the fact that the system in peril is not a natural one, or even one that we should be attempting to revive and restore. The thing that is dying—the corporatized model of commerce—has not, nor has it ever been, supportive of the real economy. It wasn’t meant to be. And before we start lamenting its demise or, worse, spending good money after bad to resuscitate it, we had better understand what it was for, how it nearly sucked us all dry, and why we should put it out of our misery.

Chartered Corporations

Back in the good ol’ days—I mean as far back as the late middle ages—people just did business with each other. As traveling got easier and people got access to new resources and markets, a middle class of merchants and small businesspeople started to get wealthy. So wealthy that they threatened the power of the aristocracy. Monarchs needed to come up with a way to stabilize their own wealth before the free market unseated them.

They invented the corporate charter. By granting an exclusive charter, a king could give one of his friends in the merchant class monopoly control over a region or sector. In exchange, he’d get shares in the company. So the businessperson no longer had to worry about competition—his position at the top of the business hierarchy was locked in place, by law. And the monarch never had to worry about losing his authority; businesses with crown-guaranteed charters tend to support the crown.

But this changed the shape of business fundamentally. Instead of thriving on innovation and progress, corporate monopolies simply sought to extract wealth from the regions they controlled. They didn’t need to compete, anymore, so they just sucked resources from places and people. Meanwhile, people living and working in the real world lost the ability to generate value by or for themselves.

For example: In the 1700s, American colonists were allowed to grow corn but they weren’t allowed to do anything with it–except sell it at fixed prices to the British East India Trading Company, the corporation sanctioned by England to do business in the colonies. Colonists weren’t allowed to sell their cotton to each other or, worse, make clothes out of it. They were mandated, by law, to ship it back to England where clothes were fabricated by another chartered monopoly, then shipped back to America where they could be purchased. The American war for independence was less a revolt against England than a revolt against her chartered corporations.

The other big innovation of the early corporate era was monopoly currency. There used to be lots of different kinds of money. Local currencies, which helped regions reinvest in their own activities, and centralized currencies, for long distance transactions. Local currencies were earned into existence. A farmer would grow a bunch of grain, bring it to the grain store, and get receipts for how much grain he had deposited. The receipts could be used as money—even by people who didn’t need grain at that particular moment. Everyone knew what it was worth.

The interesting thing about local, grain-based currencies was that they lost value over time. The people at the grain store had to be paid, and a certain amount of grain was lost to rain or rodents. So every year, the money would be worth less. This encouraged people to spend it rather than save it. And they did. Late Middle Ages workers were paid more for less work time than at any point in history. Women were taller in England in that era than they are today—an indication of their relative health. People did preventative maintenance on their equipment, and invested in innovation. There was so much extra money looking for productive investment, that people built cathedrals. The great cathedrals of Europe were not paid for with money from the Vatican; they were local investments, made by small towns looking for ways to share their prosperity with future generations by creating tourist attractions.

Local currencies favored local transactions, and worked against the interests of large corporations working from far away. In order to secure their own position as well as that of their chartered monopolies, monarchs began to make local currencies illegal, and force locals to instead use “coin of the realm.” These centralized currencies worked the opposite way. They were not earned into existence, they were lent into existence by a central bank. This meant any money issued to a person or business had to be paid back to the central bank, with interest.

What does that do to an economy? It bankrupts it. Think of it this way: A business borrows 1000 dollars from the bank to get started. In ten years, say, it is supposed to pay back 2000 to the bank. Where does the other 1000 come from? Some other business that has borrowed 1000 from the bank. For one business to pay back what it owes, another must go bankrupt. That, or borrow yet another 1000, and so on.

An economy based on an interest-bearing centralized currency must grow to survive, and this means extracting more, producing more and consuming more. Interest-bearing currency favors the redistribution of wealth from the periphery (the people) to the center (the corporations and their owners). Just sitting on money—capital—is the most assured way of increasing wealth. By the very mechanics of the system, the rich get richer on an absolute and relative basis.

The biggest wealth generator of all was banking itself. By lending money at interest to people and businesses who had no other way to conduct transactions or make investments, banks put themselves at the center of the extraction equation. The longer the economy survived, the more money would have to be borrowed, and the more interest earned by the bank.

Financial Meltdown

Which is pretty much how things have worked over the past 500 years to today. So what went wrong? Nothing. The system worked exactly as it was supposed to. The problem was that after America’s post WWII expansion, there was really no longer any real growth area in the economy from which to extract wealth. We were producing and consuming about as much as we could. Almost no commercial activity was occurring outside the corporate system. There was no room left to grow. Sure, outsourcing, lay-offs, and technology created some efficiencies, but wars, rising costs of health care, and exchange rates essentially offset any gains.

Making matters worse, all that capital that the wealthy had accumulated needed markets—even fake markets—in which to be invested. There was a ton of money out there—just nowhere to put it. Nothing on which to speculate.

The dot.com boom seemed to offer the promise of a new market, but it fizzled almost as quickly as it rose. So speculators turned instead to real assets, like corn, oil, even real estate. They started investing speculatively on the things that real people need to stay alive. What real people didn’t understand was that there is no way to compete against speculators. Speculators aren’t buying homes in which to live—they are buying houses to flip. Speculators aren’t buying corn to eat or oil to burn, but bushels to hoard and tankers to park off shore until prices rise. The fact that the speculative economy for cash and commodities accounts for over 95% of economic transactions, while people actually using money and consuming commodities constitute less than 5% tells us something important. Real supply and demand have almost nothing to do with prices. We do not live in an economy, we live in a Ponzi scheme.

Luckily for us, the banks, and the speculators depending on them, made a bad wager: they bet on our continuing capacity to provide a reality on which to base their highly leveraged schemes. We just couldn’t do it. They put us between a rock and a hard place. With George W’s help, they sold us on the notion of home ownership as a prerequisite to the American dream. And they created a number of loan products which made it look as if we could actually afford over-priced homes. The banking industry spent hundreds of millions of dollars lobbying for laws making bankruptcy difficult or impossible for average people to accomplish—while simultaneously selling average people loans that they would never be able to pay back.

The banks didn’t really care, anyway, since they never meant to keep these loans. They simply provided the cash to mortgage companies, who then packaged the loans. In return for putting up the original cash, the banks also won the right to underwrite the sale of those mortgage packages to investors—investors like pension funds, retirement funds, or you and me. Get it? The banks get all the interest, but we put up all the money. Our retirement accounts and pension funds invest in the very mortgages that we can’t pay back. The bank collects any interest, playing both sides of the equation but responsible for neither.

And when the whole scheme begins to break down, what do we do? We try to bail out the very banks that created the mess, under the premise that we need these banks in order for business to come back, since only banks can lend the capital required for businesses to flourish.

Yes, It is Wrong

President Obama may be smarter than most of us, but he’s still attempting to rescue the very institutions that robbed us in the first place. He’s not a socialist, as conservatives may be arguing, but he is a corporatist. Using future tax dollars to fund government job programs is one thing. Using future tax dollars to give banks more money to lend out at interest is robbing from the poor to pay the rich to rob from the poor.

As painful as it might be to watch, and as irritating as it might be to those with shrinking retirement savings, the collapse of the centralized corporate economy is ultimately a good thing. It makes room for a real economy to rise up in its place. And while it may be temporarily uncomfortable for the rich, and even temporarily devastating for the poor, it may be the fastest and least violent way to dismantle a system set in place for the benefit of 14th Century monarchs who have long since left this earth.

If the corporate supermarket chain’s debt structure renders it incapable of stocking its shelves this spring, this may be the wake-up call that consumers need to finally subscribe to a Community Supported Agriculture farmer. If the former associate fund analyst at Lehman realizes that he is unable to get a job not just because his industry is contracting but because his work day creates no real value for anyone at all, he will be forced to learn how to do something that does. If an urban elite parent realizes he can no longer pay private school tuition for his kids, maybe he’ll consider donating to public school the time he would have spent earning that tuition.

In short, the less we are able to depend on business-as-usual to provide for our basic needs, the more we will be forced to provide them for ourselves and one another. Sometimes we’ll do this for free, because we like each other, or live in the same community. Sometimes we’ll exchange services or favors. Sometimes we’ll use one of the alternative, local currencies coming into use across the country as Central bank-issued currencies become too hard to get without a corporate job.

Deprived of centralized banks and corporations, we’ll be forced to do things again. And in the process, we’ll find out that these institutions were not our benefactors at all. They were never meant to be. They were invented to mediate transactions between people, and extract the value that would have passed between us. Far from making commerce or industry more efficient, they served to turn the real world into a set of speculative assets, and real people into debtors.

The current financial crisis is the best opportunity we have had in a very long time for a bloodless revolution against the faceless fascism under which we have been living, unaware, for much too long. Let us seize the day.

Longtime Arthur columnist Douglas Rushkoff has just finished his life’s work, “Life Inc: How the world became a corporation and how to take it back,” to be published June 2, 2009 by Random House. His live talk radio show, Media Squat Radio, airs Mondays 7-8pm EDT on WFMU. Streams at www.wfmu.org and iTunes.