[MUSIC PLAYING]
SPEAKER: Hey, everyone.
Thanks for joining us today.
My name is [INAUDIBLE], and I'm
managing the Social Good team
here in New York.
And today, I'm
excited to introduce
Douglas Rushkoff, who's going
to talk about his new book,
"Throwing Rocks at
the Google Bus."
Douglas is a writer,
documentarian,
lecturer whose focus is human
autonomy in the digital age.
And he wrote 15
bestselling books,
did many award-winning
documentaries.
He was named one of
the World's 10 Most
Influential
Intellectuals by MIT.
And he coined concepts
like "viral media"
or "social currency."
And when he's not giving talks
at Google or somewhere else,
he's a professor at
CUNY Queens College.
And today, he's going to
talk about his latest book
and how growth became
the envy of prosperity.
Please join me in
welcoming Douglas.
[APPLAUSE]
DOUGLAS RUSHKOFF: Thanks.
Is that human or is that Google?
AUDIENCE: Human.
DOUGLAS RUSHKOFF: That's human?
Because it was very fast.
I guess that's like a
court stenographer person.
AUDIENCE: She's award-winning.
DOUGLAS RUSHKOFF: Is she?
AUDIENCE: Yes.
DOUGLAS RUSHKOFF: She's good.
Hello.
See?
That's almost the
whole thing I'm
thinking about these
days is humans creating
value, the ability of humans to
create value in a digital age.
And what happens when
the humans are replaced?
Why are we replacing
certain humans
with technologies
and not others?
When is it better?
When is it not?
And what's the real
underlying philosophy?
What's the underlying drive
for doing these things?
I first started to
think about this
when the human
receptionist was replaced
by a automatic answering
machine at a law firm.
I was temping, back in
the days when no one knew
how to do word processing.
If you knew how to word process,
you could get $40, $50 an hour
for typing at
night in law firms.
That's what we did
in the late '80s.
And there was this
great receptionist
I was building up the
courage to ask out.
And she got replaced before
I had the chance to do it.
And she was replaced with an
automatic answering thing.
And it was the primitive
kind, where you really--
I mean, going through
the menus was hard.
I mean, it still is, but it was
particularly hard back then.
And I remember thinking
about the savings.
And I understood that the
company was saving money
by having a machine instead
of a human receptionist
they had to pay and
give health insurance.
But the amount of time it took
everybody else who was calling
into the company
got vastly expanded
going through all these menus.
So the total cost,
the total man hours,
and total corporate
money that was
being spent as a result of the
replacement of the receptionist
with the machine
actually went up.
The law firm just externalized--
it's the corporate word.
They externalized the
cost of phone answering
to the callers, which created
a kind of arms race then.
Then, every other
company has to do that.
Everyone has to externalize.
Otherwise now, you're paying the
price of their phone machine,
but not reaping the
benefits of having your own.
So everyone ends up
externalizing these things.
And in the end, I
thought of that--
and this was counter-intuitive.
This was anti-Harvard Business
School, anti-General Electric.
I thought of that as bad
business and still do.
Because now, the
company's customers
have to spend more time.
The company's shareholders
have to spend more time
to get shareholder information,
which makes them angry.
The suppliers have
to spend more time.
So it's costing more money
to the financial ecosystem,
if we are allowed to use
that word anymore talking
about finance.
The financial system in
which the company exists
ends up more stressed
rather than more healthy.
But if we have a corporate
individualistic understanding,
more of a military sort of
strategy for the company,
then there's no
other way for things
to go in this kind of
bastardized version
of Darwinian selection, where
you think that, oh, you've
got to be the meanest company,
doing the meanest things,
and taking from other and all
that, in order to succeed.
It's an infantile
understanding of--
I mean, we're seeing it
on many stages today.
You know, a very primitive,
childlike understanding
of how business works.
And I don't blame
people so much for it
as our inability to
recognize the operating
system on which we're
trying to run our companies
and do our work
and live our lives.
So when I first wrote this
book, the original title
was very optimistic.
It was called "Distributed:
A new OS for the Digital
Economy."
And what I was
arguing was that we
could move from an extractive,
growth-based paradigm
to a distributive
circulatory one.
In my shorthand, I would
say rather than optimizing
for growth and
extraction, we optimized
for the velocity of money.
We optimized for the
amount of transactions.
So how do you really get the
economy off the hard drive
and into RAM when we're
working on it the other way?
I mean, that's the underlying
philosophy of this work,
of how I'm seeing things.
And the thing that got me
the most upset, the most
kind of agitated, was that
developers, engineers,
programmers seemed oblivious to
the operating system on which
their companies were running.
That they accepted
the underlying values
as if they were preexisting
conditions of nature
rather than a very specific
operating system that
was developed at a
specific moment in history
with specific needs in mind.
And that it might actually be
obsolete in our current setup.
And certainly, in a digital age.
So I would look at a friend,
like Evan Williams, one
of the founders of
Twitter, and see him
on the cover of the
"Wall Street Journal"
with the number $4.3 billion
under his face, which
is the amount that he was
worth the day of the IPO.
And I would think,
oh, this poor fucker.
It's over.
He's fucked.
And anybody who
understands how this worked
understood he was fucked.
Because Twitter-- it
turns out Twitter can only
make about $2 billion a year.
That's about their limit.
And you would think for
140-character messaging app, $2
billion a year is pretty good.
Pretty good revenue.
And you think about
what you actually
need to maintain that app.
It's not that much.
Amazon for servers,
just [INAUDIBLE].
Once you've built
that, it's not that--
it doesn't cost
$2 billion a year
to maintain that messaging.
It costs a whole lot less.
You could reach sustainability
and great profitability.
But we know that once Evan's got
$4.3 billion of investor money,
he's got to return
$400.3 billion.
$430 billion.
That these are investors,
who even at the IPO,
are expecting 100x or 1,000x
returns on a growth-based
company.
So now he's trapped.
Now, Twitter is a failure.
Twitter has to do,
what do they call it?
Has to pivot.
Twitter is going to have
to pivot into being--
they tried-- a video company,
an ad company, this company,
or that.
They're going to have to pivot
to something that can deliver
that kind of growth.
And if they don't, what?
They get bought
by Yahoo, I guess.
And then, Jack Ma or
somebody buys that.
And that's what this
moment was about for me,
the "Throwing Rocks at
the Google Bus" moment.
I mean, a lot of people
think I'm saying,
oh, let's throw rocks
at the Google bus.
No, I'm not saying that at all.
I mean, throwing rocks at the
Google bus is this almost--
is meant as a poetic
metaphor for the situation
that we've gotten in.
For the enmity and the inability
of our technology companies
to actually create
distributed value
for lots and lots of people.
The fact that Google, which
I mean, those of you who
are old enough to
remember, Google
was two kids in their
Stanford dorm room
that came up with an
algorithm to take down Yahoo.
We all resented Yahoo
in the early internet
because Yahoo was using
humans, and judgment,
and values to
categorize the internet.
This was a man-made
hierarchical system.
And Yahoo seemed invincible.
And then, this little algorithm.
The idea was that
now the links that--
I mean, you know guys
know Google, right?
The links that
people make are going
to decide in a bottom-up
fashion behaviorally
how are we going to
organize information.
So it was this people-driven,
bottom-up, democratic,
populist, reorganization
of the world's information
by how we use it and how real
people think about it rather
than how some corporation
decides to divvy it out
in order to promote
sales of things,
and existing worldviews,
and all that.
They got it, that we're
living in kind of a tag cloud.
And that this could be fun.
And then, what happens
though, is Google gets--
I mean, we know Google
gets all this investment.
It becomes this
giant corporation.
Then, Google has to show a
certain amount of growth.
Google has to grow.
And it has to grow it at a
weird, accelerating, giant
rate.
So sure, they're based
not even in San Francisco.
But if you're going to be
a Google program, where
are you going to live?
You're going to live
down near the airport,
or you're going to live in San
Francisco and get on the bus
and go down there.
And as you know, people
who lived in San Francisco,
their rents ended up
doubling and tripling.
Because not just of Google,
but all the activity
that was going on there.
And then Google, in
an appropriate way,
said, look, we're putting
so much traffic on the roads
and all this pollution.
Let's do these buses so that
we can actually make it easier,
have less of an impact
on this community,
and get more hours of work
out of our people, of course,
because they're going to work
on the way down and on the way
up with nice Wi-Fi.
And what happened
is that, as we know,
if you're in walking distance
of a Google bus stop in San
Francisco, your
rent is 30% higher
even than it would have been.
So here are these people.
Their rents have gone up.
The bodegas are out of business.
The local shops can't
afford their rent anymore.
And they're looking
at these buses
coming in as if it's an
alien invasion, bringing
these developers
from the mothership.
And what they're
experiencing is this company
is getting much bigger,
but their actual lives
are getting worse.
They're having to
leave their town.
They see the private buses
on a public bus stop.
Their rent's going up.
And a company that seems to
be using San Francisco more
as a Hollywood backdrop
rather than as a place
that it's actually invested in.
You would think if a business
is located somewhere,
that it contributes to the
prosperity of that place.
But here, Google seemed to be
more like a foreign corporation
extracting value from this
place and leaving nothing there.
So when people started
throwing rocks,
it was at an Oakland protest.
They started throwing
rocks at the Google bus.
People were messaging
me on Twitter saying,
isn't this cool?
Isn't this great?
I was like, no, it's not great.
I know people on the--
you guys do, too.
Howard Rheingold's daughter
was on one of those buses that
got stuff chucked at it.
He's a writer friend of mine.
And the Googlers
aren't to blame.
I mean, most of the
people on those buses,
they just want to try to keep
their jobs for four or five
years before they
burn out, right?
What's the average
time span for--
I don't know, but it's hard.
So then you could blame their--
what?
You going to blame
their bosses for the way
they make them work?
Or you could blame
the CEO of Google
saying, oh, look the
way Google's impact.
The CEO is just listening
to the shareholders
who are going to
sell the stock if he
doesn't make the stock grow.
And who are the shareholders?
Some of the very
same people that
are lying in front
of the Google bus,
who have Google in
their S&P 500 fund.
So who is to blame?
And I'm arguing that it's
not a human is to blame
or everyone is to blame.
That we can exercise
human intervention
at any place along that chain.
But at the same time, it's not
the effortful acts of humans,
but this obedience to
an economic operating
system that was invented by
people who have long since left
the building.
And what I wanted to do,
the project of this book,
was to convince people that
this is a very particular
economic operating system.
And the way to do that was
to use the tools of the media
theorist-- who invented
it, when did they do it,
and why did they do it.
And what I found
out was that this
originated after the Crusades.
It was right after the Crusades
that all the soldiers came
back to their towns
in Western Europe
because they had gone to
Arab worlds, found out
all these other things, found
new technologies, new systems.
They came back to their
towns in Western Europe,
and they erected the
marketplace for the first time.
It was an innovation from the
Arab world called the bazaar.
The marketplace that was
there two days a week.
Usually, Tuesdays and
Thursdays, Tuesdays and Fridays.
People would bring all the
stuff they had made or grown
and they would trade
it with each other.
Instead of just
giving everything
to the feudal lord
or the vassal now,
they started to trade in
a peer-to-peer fashion.
And when bartering
wasn't enough,
they developed local
currencies, market monies.
Not big central currencies,
little market monies
that were usually
invented in the morning,
and then expired by
the end of the day.
So these were more
like poker chips.
So we can look
into specific ones.
There were a lot
of different ones.
But they got those from
the Arab world, too.
And it was interesting because
people never had money before.
That money was for
long distance trade.
You know, gold
florins, and things.
Peasants didn't have that.
They didn't have a
means of exchange.
So now they had a
means of exchange,
and they started to get wealthy.
This was the beginning
of what later
called the Burghers, the
Bourgeois, the middle class.
The merchant class
got really wealthy.
And no, it wasn't
the best of times.
It was still the Middle Ages,
and there were rats, and death,
and people beating you up.
It was a Game of Thrones-y.
But it was the greatest
period of economic growth
that we've ever really seen
of organic, distributed
economic growth.
People started to work only
three or four days a week.
Women were taller in medieval
England with the marketplace
than they were at
any time in history
until 1980, which is
an interesting one.
It's just one
measure of the fact
that these people were eating
and healthy and doing well.
The problem with
it, of course, was
that as the people got
wealthy, the aristocracy
got relatively poorer.
These were families that
hadn't worked in 10 centuries.
They had always-- it's true.
These were the former
feudal lords and now
the proto-aristocracy.
So what they did
was they came up
with two innovations,
two sort of core tenets
of a new operating
system to slow
the rise of the merchant class.
This isn't just
my interpretation.
Look at what they read.
Look at what they read,
what they wrote down
about why they were establishing
chartered monopolies.
Why they were establishing
central currency.
This is the history
that for some reason
is not as celebrated or as
talked about as it should be.
First invention
they came up with
was the chartered monopoly.
The chartered
monopoly was a rule.
A chartered monopoly.
It was exactly what
it sounds like.
So now, one business is
chartered by the King
to be in charge of
an entire industry
and everyone else has
to work for that person.
So whoever's the King's friend.
Let's say it's Irwin.
You're a shoemaker.
And you're my favorite
shoemaker in all of my country.
So now, anybody who
wants to be a shoemaker,
you've got to work
for him, period.
Or I'll kill you.
I mean, we had swords and
knights and people to do that.
So if you're working for him
rather than making shoes,
what does that mean?
Now instead of creating
shoes and exchanging
the value you created, now
you are working for him.
This is really when
employment was invented.
The only people who were
indentured by time before that
were slaves.
Now, people knew that
the normal way to work
was for me to clock hours.
So instead of selling
the value I created,
now I'm selling the
time I've spent.
That's when the clock tower
went up on the tallest
building in medieval towns.
Because now time was money.
And the idea of the
clock made it feel fair.
It's really an hour.
I'm not working longer.
It's not taking his word for it.
There's a clock to
make it all fair.
But it was fair what?
It was fair monopoly.
The second invention they came
up with was central currency.
They made all local currencies,
all of these market moneys
were illegal.
Now if you wanted to have money
in order to buy something,
you had to borrow money from the
central treasury at interest.
Very clever idea because
what did that do?
An interest-bearing
currency lets
people who have money make
money simply by lending money.
That was the point.
It allowed the
people who already
had capital make
money by lending
their capital to others.
Because this was
interest-bearing currency.
The other problem with
interest-bearing currency
is not only do you
have to borrow it,
but you have to pay
back more than you
borrowed in the first place.
And if everybody's going to pay
back more than they borrowed
in the first place, what does
that mean about the economy?
Economy has to grow.
Either that or you end up
with a lot of bankrupt people
who can't pay back
what they borrowed.
So interest-bearing
currency demands,
its bias is towards growth.
And this worked well right then
because what was Western Europe
doing?
Growing.
We were colonizing everywhere.
Colonizing America,
colonizing South America,
colonizing Africa,
trying to colonize China.
As long as we were
growing, that was great.
So we had our great
chartered monopoly,
British East India Trading
Company, Dutch East India
Trading Company.
We had them going out
taking over spaces
partnered with the monarchs
and their gunships.
And it all looked
pretty good as long
as we could keep expanding
into other places.
And that all finally
came crumbling down
around World War II, when these
countries started to push back.
When little brown people
in brown places said,
no, you can't just extract our
value and enslave our people.
We're going to push back.
So England gives up
some of its colonies.
And then, Eisenhower,
right after World War II,
he's faced with this problem.
How do we continue
to grow as an economy
without these developing
nations to take over?
We can have Bretton Woods, and
some trade deals, and all that.
And all everybody's money
pegged to our money.
But what are we going to do?
And that's when Vannevar
Bush wrote the famous essay
"As We May Think,"
which most of us
just think is this great
description of computer
technology.
It's not just that.
"As We May Think" is
really an argument
saying these tools of
war can be repurposed
to tools to build our economy,
to tools of a civilization.
And what was the idea was
that even though we'd run out
of physical territory, computer
technology could create
virtual territory,
virtual surface area
on the market, so the market
could continue to expand.
But instead of
expanding physically,
now we expand in terms
of consciousness.
That's why we moved into
an intention economy.
The new resource
that we colonize
is human attention,
human time rather than
physical territory
and resources,
which we still, of course,
have to go and extract.
But what we ended up with
then were digital businesses,
if you will, from
not just Google.
And Google is really not the
worst of it in some ways.
Because at least Google
has the intention
to be here 10, 20,
30 years from now.
So it has to take a
slightly different approach.
Google is not flipping.
You're not going to flip Google.
It's kind of too big
to flip at this point.
I mean, Uber or
somebody, they're still--
what sort of business model does
this operating system engender?
It promotes the
Wal-Mart model, which
is just colonialism writ small.
What does Wal-Mart do?
Wal-Mart moves into a region.
It uses its tremendous
war chest of capital
to undercut all the local
merchants, to put them
all out of business.
That's good for two reasons.
One, no one can buy
anything anywhere else.
And two, no one can
work anywhere else.
So now we can change
the terms of employment,
so that if you
want a job, you've
got to work part-time
for Wal-Mart.
And you don't get health care.
And you don't get this,
you don't get that.
So slowly over
time, the people who
are working in a Wal-Mart
town have to go on welfare.
The town gets poorer and poorer.
And eventually-- it takes
about 15 or 20 years,
the town goes bankrupt.
And then, what does Wal-Mart do?
Closes and moves to the next
area and sucks their value out.
I mean, that's the
scorched earth approach
of a company like that.
That's the way
they understand it.
And as long as they understand
the world to be infinite,
it's OK.
We can move into China.
We move into India.
We'll find other places.
And then when that economy there
is restored with the last place
that we closed,
we'll go back there
and suck out the money again.
That's the mindset.
So when that mindset ends
up informing businesses
that are running on
digital platforms,
it no longer takes 20
years for that to happen.
It only takes two years
for that to happen.
So you look at a company like--
it's not about being evil.
It's just about adopting an
operating system as the way
to do business.
It's just understanding
it as the way things are.
So you take a
company like Amazon.
So why does Amazon choose the
book industry to go into first?
Is it because Bezos
and his friends
just love books and they want
to promote literature and help
authors and publishers
reach more people?
No.
It's because the
publishing industry--
I know this because
I'm part of it.
The publishing industry
is low-hanging fruit.
We are a motley, awful,
non-growth, inefficient
business.
The brilliance of
the book industry
is we managed to hide the
fact that we don't make money
for the last 200 years.
We don't.
It doesn't.
It's this little
kind of just fudge
it and get to the next
book kind of industry.
So why did they pick that?
Because it was an
easy one to take over.
It wasn't to make
money with books.
It was to establish
a platform monopoly
in books that could then
be leveraged to another one
and another one.
Why did Uber pick cabs?
Because they want to
stay in the taxi business
because that's such
a great industry
that's going to really promote
a multibillion dollar company?
No.
It's because cabs were the
most inefficiently run,
awful, slow-growth,
ridiculously,
barely-sustainable industry.
Meaning it was ripe
for takeover if you've
got a war chest of capital.
So the poor guys, if you're
driving a car for Uber,
what are you really doing?
You are doing R&D for
a robotic car company
that you don't even own.
You're making your
own job obsolete,
that's the work
that you're doing.
And they don't really care.
They don't care
because-- so you go in
and you destroy
the existing taxi
economy and infrastructure.
It doesn't matter if they can't
make the long-run money out
of that.
But They're destroying
that market,
just as Amazon destroyed
the book market.
You destroy the marketplace
because you're just using it
to leverage into another one.
And that's the problem
is that we end up
putting destructive,
extractive corporate capitalism
on digital steroids.
And then you see how
all this keeps going.
And it's not just
a digital problem.
It's a finance problem.
As Deloitte showed in
2011, corporate profit
over corporate size has been
going down for 75 years.
Think about that in
terms of functions.
Corporate profit over corporate
size has been going down.
What does that mean?
It means that corporations
are really good at extracting
all the money from an
economy, but really
bad at deploying those
assets once they have them.
It's not just because they're
stuck in some European bank
account and they can't bring
it over without taxation.
It's that they're obese.
It's that they're
storing the money in fat
rather than muscle.
They don't know how to actually
do anything with the money.
And that's because the
OS that they're using
is to extract money and
store it in share price
rather than to think
of how to create
a healthy, living, ongoing
circulatory economy.
They would rather make $10
once than $1 ten times.
They can't even conceive
of the $1 ten times,
because then you've
got to keep letting
go of the money to make it.
They're stuck.
Like I said, they're stuck on
the hard drive and not in RAM.
And then you look at the way
we deploy our developers,
our smartest kids.
They come out of
Stanford and what
job do you take if you
get out of Stanford?
The highest-paying one is going
to be working for Goldman.
And what are you going
to do for Goldman?
Are you going to be helping
them use money to create value?
Help them deploy capital in
ways that is the most efficient
for the development
of an economy?
No.
You're going to write algorithms
that help you extract money
from the stock exchange,
or write derivatives
of derivatives of derivatives
that help you compress time.
Derivatives are
basically abstractions
of stock, which are
abstractions of the marketplace.
So you can do derivatives
or meta-derivatives
and meta-derivatives of that.
And of course, the
derivative market
has gotten so much bigger
than the real stock market,
that the New York Stock
Exchange was purchased
by its derivatives exchange.
It was.
A thing has been swallowed
by its own abstraction.
And that's the biggest
business in the world now.
So what to do about this?
I mean, this is what we can
talk about in our conversation.
I mean, I think what to
do about this is to use--
develop technologies
that are optimized more
for the velocity of transaction,
for the velocity of money
rather than the
extraction of capital.
Traditionally, there are
three factors of production--
land, labor, and capital.
And right now, young
developers, in particular,
as soon as they
have a good idea,
they go to the
capitalist, who then
becomes his new daddy
figure or something.
And they do everything
in the name of capital
and forget about
the land and labor.
And that's why we have
disenfranchised labor force.
It's why we-- are
we still allowed
to talk about global
warming and climate change?
And we have a climate
that some scientists
suspect may be changing.
So I came up with some really
simple ideas for what to do.
I mean, let's call
them principles.
I mean, the first one
is make them rich.
Make everyone you
work with rich.
And Google is actually good
at this in some respect.
If you look at Facebook, you
put your video up on Facebook
and they just pretty much charge
you to show it to anybody,
beyond the three
of your followers
who actually are sent the
thing, and they don't share
any of the revenue with you.
If you put YouTube up on
Google, what do you get?
Do you get half the revenue,
half the advertising?
50%?
Does anyone?
AUDIENCE: 45.
DOUGLAS RUSHKOFF: 45%?
I mean, what is that?
That at least is saying, OK,
rather than charging people
to share their content, at least
we're going to include them.
Because why is that smart?
Because then you're going
to get more healthy,
good people making content.
It's worth sharing.
And it's not just to be nice.
It's not to be weak and nice
or to fall victim to socialism.
No.
It's about creating
a working economy,
then people can actually
live and develop stuff.
Another way to
think about this is
to look at the techniques
or the strategies
that family businesses use.
Traditional businesses
think about it,
or a traditional
CEO or chairman will
think, how can I extract
enough money from this business
in order to leave something
for my grandchildren?
Someone in a family
business will
think, how can I make
this business so healthy
that it will still be
here spewing good revenue
when my grandchildren
take it over?
And when you have
a family business,
then you start
thinking about, well,
what is the relationship of
this business to its employees?
My kids are going to the
same school as my employees.
If I'm an asshole
to my employees,
they're going to beat up my kid.
There's that sensibility.
I mean, it's obviously
more complex than that.
But that sensibility
is the reason why--
and nobody wants to
share this data either.
Family businesses do better
than shareholder-owned business
in every single
metric except one.
And that is that
shareholder-owned businesses
grow faster during booms.
They grow faster during bubbles.
Other than that,
shareholder-owned businesses
grow faster and they pop.
Family businesses do better
on every other metric.
They actually make more
revenue over the long term.
They have more stability, better
alpha and beta, everything.
Another thing to look at
is whether it's possible,
and how could it be
possible for a business
to become a
steady-state business?
It's what John Stuart
Mill talked about actually
back when, that an economy
reaches a carrying capacity.
And once it does, you have
to start thinking about,
how do you maintain
a steady state?
This sort of an
equilibrium state.
How could a company-- is it
even possible for a company
to reach a certain
level of sustainability,
and then stay there?
I did a talk for
one of the-- we'll
just call it one of the
world's very biggest, biggest
soft drink companies.
They did their shareholder
rally thing, and then I came.
And for the
shareholder rally, they
got the shareholders
and the executives
and the vice presidents
all shouting 4.3, 4.3,
which was the growth rate that
they wanted to hit that year.
They had banners coming
down from the thing.
And I got up there
and I said, you guys
are one of the 50 biggest
companies in the world.
If you need to grow at
4.3% in order to be OK,
then we're all doomed.
So how do you get
to a steady state?
And that's thinking now in
terms of things like dividends,
letting your
employees work less.
If you start thinking about
land and labor as participants
rather than just the people
who have given the capital,
then all of a sudden
you can start to see,
oh, we've gotten more efficient.
There's ways to share the
wealth and to sustain a company,
but you've got to bring in
different sorts of investors.
It's
Look at the way Unilever
is talking to its investors
now, saying we're not going to
give you that kind of growth.
If you want that, go.
It's scary, but those ones go
and other investors come in.
Ones who understand that
in order to have a planet,
we're going to have to think
of another way to do this.
I'm arguing that companies
learn to experiment.
You can't go to a
company and say, oh,
go from this company to be one
of those kind of companies.
But you can slip things in.
Call it public relations.
So I went to a bank
and I was arguing
that what they should do
is rather than give, say,
$100,000 to a pizzeria
that wants to expand.
Why don't you give $50,000
to the pizzeria contingent
on their ability to crowdsource
$50,000 from their community?
And then you can
give them the tool,
give them an app or something,
that lets them do that.
And the way they
crowdsourced would
be if you give $100
to the pizzeria today,
you get $120 of pizza
at the restaurant
when the expansion is finished.
So now you've gotten a
20% return on your value--
on your money in
less than a year.
And you've invested in your
town, making your town better
with that money rather than
in a Filipino mining company
or something that's
just going to destroy
the planet with that money
and give you less return.
Meanwhile, the bank
now is seen not just
as the extractor of capital
and value from the community,
not just as the bank,
but as a facilitator
of local economic reinvestment.
As someone who has an
expertise in the flow of money
rather than just a
monopoly on the extraction
and loaning of money,
which is something really
important for banks to be
able to develop as we move
into a world where
people can't borrow money
and where there's
going to be some--
hopefully, a shift towards
local economic activity.
But you don't tell Chase,
this is your new policy.
You tell Chase, wouldn't
this be an interesting thing
to try in Lansing, Michigan,
for a six-month period
as a public relations thing?
And get MSNBC to come in and
do something about this trial.
So little trials.
When the little trials work,
they swallow the company.
Or they can.
Remember GM with Saturn?
That was a trial.
And what if we're actually nice
to labor and build good cars
and have customer service?
And it got so good that
GM had to shut it down.
That the people in
regular GM got mad.
The same way people at Delta
got mad at Song airlines
because Song was doing all this
stuff that Delta couldn't do.
Five.
Think about, what
does it mean to be
in a bounded economy rather
than an infinite economy?
There is no infinite economy.
You can't externalize
everything.
Eventually, all the crap that
they're burying in China,
that turns out is on
the same planet as us. .
All the workers there, the
revolutions, the angry--
the planet got small.
There's no place to send stuff.
The economy can't
keep growing forever.
It just can't.
We can't keep folding
in so much stuff.
We'd have to all be--
God knows what we'd
have to do to ourselves
to maintain economic
growth all the time.
We're consuming.
We're working.
Everything we do
is working somehow.
When you unplug, it's
almost a revolutionary act
at this point.
But a bounded economy, you would
start to think more in terms
of, how can I get the
same money moving around?
And I got the idea from
the US steel workers
who in 2007 after
the crash, they
were looking for where to invest
their retirement money to take
their pension funds.
And what they did with
the pension funds was they
invested it in
construction projects
that hired steel workers.
And people got really
upset at this at first,
saying wait a minute, are
they allowed to do that?
This is like double dipping.
You're putting your
investment money
in a project that then
is going to pay you
back the money as salary?
Of course they're
allowed to do that.
And then they thought, well,
why don't we now triple dip?
We'll invest our money in
construction projects that
hire steel workers
to build old age
homes for their own parents.
Which they did.
So now they're triple dipping.
And it sounds
illegal, but it's not.
That's the way money works if
you think of it as bounded.
How do we initiate that
boomerang effect in money?
And the only way
to really do that
is to create some
sense of boundary.
And this is where--
although misguided
and mentally ill,
this is where Trump's
notion of nationalism
actually does make some sense.
That people do have an
instinctual understanding
that the global economy
doesn't serve human beings
in scaled communities.
How do we get boundaries?
Nationalist boundaries are fake.
What you really want are
city-state boundaries.
You want urban boundaries.
Nationalism itself
was a construct.
You know, the nations,
those lines, those
are not organic
groupings of people.
And a couple of the other
things I'm looking at
are platform cooperatives,
where worker's
own the means of production.
What would it mean
if Uber drivers owned
the company rather
than someone they
don't know owning the company?
Will Juno work in New York?
Which is really a platform
co-operative version of Uber,
hopefully.
And currencies.
I'm really interested in local
and alternative currencies,
and using them for
exchange between people.
If money has gotten
too expensive,
then screw their money.
If you've got people with
needs and people with skills,
they can begin to
exchange value.
They just need a way
to keep track of it.
And I don't mean Bitcoin,
which is just digital gold.
It is.
Another scarcity-based currency.
You could use the
blockchain to--
if you really
don't trust people,
you can use the
blockchain to create
a public verifiable ledger.
But it's really much more Uber--
Bitcoin is the kind
of an Uber currency.
But Bitcoin does
not engender trust
between people in new ways.
Bitcoin replaces, it substitutes
for trust in a new way.
So as I see it, as we try
to evolve towards a more
communitarian, social,
peer-to-peer economic world,
I don't see more substitution
as really the way through it.
But I mean, as you
can tell, really
the whole argument
I'm making, which
is really my original cyberpunk
argument of 1994, if anything,
is we have to stop
thinking of ways
to optimize human beings
for digital technology.
And instead, look at ways to
optimize digital technology
for human beings.
And the economy is
really the main landscape
that we're programming
at this point.
We've internalized the values
of extractive growth-based
corporate capitalism as
a necessary component
of the innovations
that we develop.
And it's not.
It's just one way to make money.
And there are all these
other ways to make money.
You know, all boats raise.
But all boats raising is
not this terrible thing.
It's really OK for
everybody to be happy.
This sort of scorched
earth competitive model
does not work in a
distributed digital economy.
The effects of our causes
are much too great.
We're all developing apps that
are potentially high leverage
points in entire economies.
And that puts a different
kind of responsibility on us
to at least look at, what
is the economic impact
of this innovation?
Is this spreading wealth
or extracting wealth?
Is this making people richer?
Is it making people poor?
Is it helping
create circulation,
or is it taking
money off the table?
And when you start
thinking about it that way,
all of a sudden it becomes--
it's not like some crazy
socialist, Marxist insanity.
It's actually more consonant
with digital technology
than it is a threat to what
it is that we're trying to do.
OK, good.
Thanks.
[APPLAUSE]
I went too long.
I'm sorry.
But we get to talk.
SPEAKER: All right.
So we have 15 minutes.
Got some microphones, some
questions if you have.
And I'm going to start by
asking you some questions.
I had a whole list of questions.
And I have to trim it done,
so we keep to the tricky ones.
So you argued that we have to
go local instead of global.
And this is to increase
the velocity of money.
And now, the problem is
that there are some shocks--
and you mentioned
Wal-Mart, or whatever,
who can go into this local
economy and eat you alive.
And you make a point,
I believe, in your book
that government has to
step in at some point
to make this work.
So what concretely does
government need to do?
And if for whatever
reason we're not
too hopeful in our
government abilities, what's
the alternative?
DOUGLAS RUSHKOFF:
Government can't
step in and make this work.
I mean, government can--
especially because
government is--
as we know it, government
and corporatism
are really the same thing.
They co-evolved.
They moved together.
What government can do
is get out of the way.
Right now, we live in
a economic landscape
that is regulated to
favor those with capital.
Look at our tax code.
You are taxed low
for capital gains
and you're taxed high for
dividends and income and wages.
What does that mean?
It means that the person
who works for a living
is the sucker and the person
who has others working for him,
or just has his capital working
for him, that's the winner.
And that's the kinds of
regulations we can change.
But the regulations
are so easily
corrupted by the
larger players when--
I forgot which American
toy manufacturer
had lead paint on
their Dora toys.
They had red lead paint.
They established a new
regulatory commission
to come up with new rules
that will stop there
from ever being lead paint
getting to American children.
And of course, what
they did was they
invited government, and
then the five biggest toy
companies in America,
to come to this meeting.
And they come up with
rules that say, oh, you
have to spend $40,000
of testing on any toy
that you want to promote--
that you want to
sell in America.
Now, why did they come up
with a regulation like that?
Because it put every small
player out of business.
If you're making
30 trains a year,
30 little toy
trains by hand, how
are you going to do $40,000
of testing on that train?
You can't.
And each is one of a kind.
So the temptation of
regulation is for the players
to use regulation
to favor themselves.
So I would say no, it's a matter
of municipalities developing
alternative mechanisms
of exchange.
The only reason why Wal-Mart
sells its stuff cheaper
is because money is
cheaper for them.
Money is cheaper for Wal-Mart
than it is for you or me.
But if we had our own
money, it could be as cheap
as we wanted it to be.
I mean, no.
We're still going to
have to get some stuff.
You're still going to need
to get your iPhones and--
what are they called now,
the new Android phone?
SPEAKER: Pixel.
DOUGLAS RUSHKOFF: Pixel?
We'll talk about it.
I guess they're saying it's a
better camera with that, right?
That's the idea?
Or something-- more visual?
No.
But your Pixel.
You're still going to get that.
You're still going to need
little slave children in Africa
to go and get your rare earth
metals and other kids in China
lose their fingers
to make this stuff.
So you still get to buy your
big, abusive, international
corporate stuff
By inventing means of exchange
between people in real places,
I think it's more of
a bottom-up phenomenon
than it is something that
government regulates.
If we're going to
lobby for anything,
it's things like
changing the tax code,
doing things to make it less
expensive to generate revenue.
SPEAKER: So if we go local--
and this is going to
be progressive, right?
Not everyone is going
to go local overnight.
So some places will still do
the global game, and the capital
game, and whatever.
And today, some of the advances
we make around health care
or sending satellites,
they are very expensive
and require a lot of capital.
So are we going to have
a two-speed society
where the people who do the
sharing and live happily
don't get to benefit from
the advances of longer
life and those crazy,
fast cars, or whatever?
DOUGLAS RUSHKOFF:
I think there's
going to be two approaches
toward longer life.
One approach toward longer
life is living the kind of life
where you live longer.
Eating organic, local, CSA food.
Having a chiropractor, or
homeopath, or naturopath
in your world.
A more sustainable maintenance,
healthy way of living.
Then, you could
live on jet planes
and traveling around the world.
And luckily, you'll
make enough money
to get chemotherapy
and gene replacement,
and you'll go about it that way.
So you will see a
two-tiered world.
I wonder who will actually live
longer in such an environment.
But in the period
of the late Middle
Ages that I was
talking about, we
had two economies
that coexisted.
You still had the florin.
You still used gold and
long-distance trade for things
that you couldn't get.
For spices, for
gunpowder, for whatever
it is that you got
from far away places.
And you had local currencies
that you used for your food,
for your babysitting,
for local things.
It's just that so many things
that could be supplied locally
are now being supplied
through big agra
and big pharma and
big-- so unnecessarily.
So it's a matter of
creating balance.
I don't think you live
in one world completely
or the other completely.
It's just a matter of shifting
the balance a little bit.
And digital technology actually
promotes local activity
more than it does national.
The nationalism, the Brexit, the
divisiveness that you're seeing
are all products
of the digital age.
This is important media
theory for anybody
in the digital
landscape to understand.
Television was global.
Television was the simultaneous
real around-the-world satellite
images of man landing on
the moon and Olympics.
These were embracing.
The peak of the television
age was Ronald Reagan
in front of the Brandenburg
Gate on CNN saying,
Mr. Gorbachev, tear
down this wall.
It was about globalism.
What's the digital age about?
It's Donald Trump saying,
let's build a wall.
Let's divide our country.
Let's get out of the euro.
What were we?
It's built on memory.
That's why they
always keep saying,
make America great again.
Remember when Britain was great?
There's all this
sense of false memory
of where things were, because
this whole platform is
living on memory.
And second, it's because
digital is discrete.
Not just ones and zeros.
But you think of
a snap-to it grid.
You're either here or there.
Are you Mexican or American?
Are you Canadian or American?
Are you on that side of the
wall or this side of the wall?
That sense of individual,
of divisiveness,
is actually more local
than it is universal.
I feel like that's
what's being retrieved.
And initially, it's being
treated in an infantile way,
but we could do it in a more
intelligent, articulated way
later.
SPEAKER: Let's take a
question from the audience.
AUDIENCE: What would
the proposition
be to individuals
and companies who
are embedded in the
current operating system?
Is a new operating system
something altruistic,
that's necessary for
the good of mankind,
or is it something
that's necessary
because we've reached the
limits of global scale?
Or is this something
where you can actually
increase your profits by getting
a 20% return on your dollar
investing in local
pizzerias at scale?
Which is it?
DOUGLAS RUSHKOFF: I don't
know which one it's not.
Extract of corporate capitalism
has reached its limit.
It actually has.
I mean, that's why I
quoted the Deloitte study,
that corporate profit over
corporate growth failed.
So you know, Jack
Welch and GE, when
they realized we can make
more money lending someone
to buy a washing machine
than we can selling them
a washing machine, GE sold
their appliance business
and became more like a bank.
And they did.
And Harvard Business
School, that's--
I think it still
is-- what they're
teaching as how to do business.
Become a holding company.
Like Google did.
It became Alphabet.
Become a holding company.
Buy and sell
companies rather than
do internal
technological innovation.
But that reached its peak.
So I think it's actually better
business teaching companies how
to return to
revenue-based models
rather than what they're doing.
I mean, the soft drink
company, they were--
at that point, they were selling
their most productive assets
in order to show short-term
growth on the balance sheet.
So that's not a good
long-term strategy.
That's self-cannibalization at
that point to show the growth.
But it never plays
to say it's altruism.
Oh, this is good for the world.
Oh, there might be a planet for
your grandchildren to live on.
No one wants to hear that.
They don't.
That's not my job.
That's not my job.
I do that at home.
That's not my job.
My job is to be--
make money.
But a lot of it's shareholder
communication, too.
How do you communicate
to shareholders
that getting dividends
might be better
than just the growth
in their stock?
And the way to convince them
that is to get the tax law
changed on dividends so they
don't hate them so much.
SPEAKER: Question.
AUDIENCE: Hi.
So you mentioned a few
times that you thought
it would be good for
people or corporations
to optimize more for money
moving around or circulating,
but it's not immediately clear
to me why that's a good thing.
Can you talk about that?
DOUGLAS RUSHKOFF: Yeah.
I mean, the problem with
extractive corporate capitalism
is if you take the money out of
the economy, then the people--
your customers no
longer have any money
to buy stuff from you.
So you want them to be able--
Wal-Mart's strategy of pushing
people down to the poverty line
in order to take all the
money that's on the table
ends up being a bad
idea because no one is
going to loan these people
money because they have no jobs.
And they can't spend money
because they don't have cash.
So what I'm suggesting is
that if companies circulated
or thought of ways to
circulate the money faster,
they end up with just as much
money coming through their toll
booth, but they don't take
it off the table the minute
it goes through the toll booth.
The vacuum cleaner effect
of an Amazon or an Uber
destroys the marketplaces
on which those companies are
ultimately depending in
order to have revenue, which
is why Google, by
helping to try to make
video makers rich rather
than poor, at least
they have a model for
a sustainable market
rather than one that needs
to get its money coming in
from elsewhere.
AUDIENCE: Thanks.
AUDIENCE: [INAUDIBLE].
DOUGLAS RUSHKOFF: Yeah.
AUDIENCE: You keep the
goose around rather
than killing it once.
DOUGLAS RUSHKOFF: Right.
And eating it.
But you have to.
If you've got to show 100x
returns, kill the goose.
Here.
Get out.
I mean, will Travis be at
Uber when it has its IPO?
That's the question.
There's a point at which you're
playing flip this business.
You have an idea
from the dorm room.
You bring it to the VC.
And the VC says, now take that
idea and pivot toward something
that we can sell for
100 times what we just
spent within 2 years.
So you throw away
that great idea.
Think of all the
great apps that got
dispensed with because they
had to do this one thing.
You know, that's
what we're doing.
We're building software to
extract money from marketplaces
and store it in share price.
And that's a strange
thing to be using
all of this technological
know-how to do.
AUDIENCE: So you paint a
pretty compelling picture
of the impact of
capitalism for centuries,
and how it effects the
digital economy today.
But when you were talking about
the Middle Ages, for example,
I was thinking about
what was happening
in some other non-European
parts of the world
at the time who were not
necessarily colonizing.
They were expanding.
So for example, feudal
Russia and feudal China.
And it's perhaps not entirely
a historical accident
that those countries wound
up for a period of time
in their histories
experimenting with communism
rather than capitalism.
So how do you think
those countries and just
the existence of
this not necessarily
parallel, but distinct economic
structure is going to affect
and is already affecting
the digital age?
DOUGLAS RUSHKOFF:
It's interesting.
I mean, I feel like
in a digital age,
we have more room for
the retrieval of some
of these alternative models.
One of them I was looking at--
I don't talk about that much,
but was the Arab millet system.
They had a completely different
currency system than we did.
We were the Crusaders
going there.
But we had a colonial
mandate because we
had to grow our economy.
When they didn't have a
colonial mandate, as China say,
they end up looking at things
with a much longer-term
strategy.
I mean, China now,
why would China
care more about global warming,
say, than America would?
Because China's economic
model is bounded.
Yeah, they think of
themselves as the empire,
but it's not about
becoming global.
It's about China as this thing.
The millet system, which
was a whole other currency
system in the Arab world,
you don't grow your money.
It was a sustainable money
that stayed at the same value,
or even had demarrage.
It even devalued over time.
And different localities could
really generate as much money
as they needed to accomplish
their economic goals,
not that the Arab world is doing
totally great philosophically
right now.
AUDIENCE: Right.
So to follow-up on
that, in that same vein,
I mean, do you not agree
with the Western mentality
that we're taught that all of
those experiments have failed
or are failing?
I mean, we tend to think--
I mean, obviously,
Russia is whatever.
I'm Russian, so I'm allowed
to say it, but I won't.
And then, the Arab
world is experiencing
cultural issues and religious
extremism, et cetera.
And you know, China is--
in the United States,
we're not necessarily
taught by our mentality
that China is doing well.
We're taught that
it's going to fail.
DOUGLAS RUSHKOFF: Right.
Well, now that
we're going to fail,
it's going to be interesting.
Now that we're just
one of everybody,
it's an interesting moment.
But you know who got asked the
question, interestingly enough,
was the Pope got
asked that question.
Not this one, but
one right after Marx.
The Pope was asked, well,
do you agree with Marx
about the worker, or do you
agree with the capitalists?
And the Pope is
trying to be global.
And the Pope came up with
a different economic model
he called distributism.
And the idea with
distributism was
that no business
should be bigger
than it needs to be in
order to serve its function.
So you don't grow
for growth's sake.
A business becomes as big as it
needs to be to do what it does.
And then if someone else
wants to do that business,
then they do it somewhere else.
If it's going to scale, it's
going to scale laterally
by other people.
The other idea of
distributism, what
the Pope said was the
object of the game
is not to redistribute
the spoils of capitalism
after the fact.
What we do is pre-distribute
the means of production
before the fact.
So distributism held
that the worker should
own the means of production.
The worker should
own his own tools.
By inference, the cab
driver should own Uber
instead of working for Uber.
And it's an interesting model.
And one that I don't
think worked then,
but is actually one
that could work now.
That's why I'm hopeful that
a digital economy could
be distributist in its nature.
So if we own the
platform through platform
co-operativism, then
we end up with--
I mean, what if the
YouTubers owned YouTube?
I mean, it's when it gets to
that place, you start thinking,
oh, the Pope maybe
understood something.
And Pope Francis, for the
first time in 100 years,
he retrieved some
of the language
from that original kind
of distributist manifesto
in the last thing, [INAUDIBLE],
his little treaties.
Because he understands
that distributism at least
is an economic
model that doesn't
depend on the destruction
of the planet.
SPEAKER: Thank you.
We're running out of time.
So we have some books
you can get there.
They're subsidized.
And I think Douglas is
going to stay around.
If you have more questions,
you can come and ask
some questions.
DOUGLAS RUSHKOFF: Thank you.
SPEAKER: So again,
thank you for coming.
DOUGLAS RUSHKOFF: Good luck.
[APPLAUSE]
