Go with a smile!

Thursday, January 12, 2012

Life Inc

I’m starting to wonder how on earth I managed to spend so much time on books during my 9 years of a working life. At first, it was good intentions, but I think that after maybe 2007 I was running on a treadmill, reading a lot of stuff over and over again. Beyond that, maybe the problem was that I just delved into a lot of knowledge that interested me on the surface, I would learn a lot about some random topic, but then afterwards, some crucial context is lost. I would get that knowledge without the surrounding context, and then it would lose a lot of its meaning.

My sister told me about a dream that she had about me – she wanted to eat A but I was on a mission to cook B and to cook a LOT of it. That is sadly typical of me. One of my biggest weaknesses is my propensity to go down blind alleys.

However I have read 2 very good books recently. One of them I had already talked about – “Push” by John Seely Brown. Another one is “Life Inc” by Douglas Rushkoff. In a way this book is similar to “The Corporation” by Joel Bakan, in that it shines a light on the evil behavior of corporations. But I like “Life Inc” better. “The Corporation” is merely about the evil that corporations do. But “Life Inc” is about Corporatism – the logic behind corporations, that has spread like a cancer on all of our values.

Corporations assume that people are rational and self-interested agents, and that the primary relationship between them is competition. Corporations act by turning people into numbers, discouraging direct interactions between people and instead, making interactions go through them. They lure people into a system where people compete against each other, but they work for the benefit of masters of the system.
In fact, one of the key (and startling insights) of the book is that corporatism is very similar in character to Mussolini’s Fascism:

We have succumbed to an ideology that has the same intellectual underpinnings and assumptions about human nature as - dare we say it - mid-twentieth century fascism. ... that we're forced to dance around this F word today would certainly have pleased Goebbels greatly.... The current situation resembles the managed capitalism of Mussolini's Italy in particular. It shares a common intellectual heritage (in disappointed progressives who wanted to order society on a scientific understanding of human nature), the same political alliance (the collaboration of the state and the corporate sector), and some of the same techniques for securing consent (through public relations and propaganda). Above all, it shares with fascism the same deep suspicion of free humans.

One of the most startling passages of this book is a revisionist history of the Middle Ages. This is a story that he brings up in order to illustrate the fact that the money that we use has its own bias. To quote from the blurb:

1. Money is not a part of nature, to be studied by a science like economics, but an invention with a specific purpose.
2. Centralized currency is just one kind of money – one not intended to promote transactions but to promote the accumulation of capital by the wealthy.
3. Banking is our society's biggest industry, and debt is our biggest product.
4. Corporations were never intended to promote commerce, but to prevent it.
5. 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.
6. The more money we make, the more debt we have actually created.

You can think of the money we used today as being a pyramid scheme, lent out through a central authority, with all other forms of money disallowed. All things have a price relative to that money. The permanence of money allows money to be hoarded, instead of being used as a medium of exchange between products. This hoarding constantly depreciates the value of money because when people build their wealth, the medium gets taken out of the system. Money can be lent, but since compounding makes the face value of the loan increase exponentially over time, when you lend out money, the money automatically multiples in value for the lender. For the borrower, he will have to work that much harder to pay back the loan. The lenders are the rich, and they benefit at the expense of the poor, who often have to borrow just to get by. In other words, the entire money system was engineered to benefit rich people!
In contrast, Rushkoff mentions that the money that was used in Europe in the late Middle ages had an expiry date. It could not be saved indefinitely. It had to be spent. If you wanted to buy something big, you paid in installments. If you couldn’t spend all your money, you had to give it away. It was a system which worked very well, and apparently it promoted the growth of economy, everybody had plenty to eat.

However later on money became centralized, and kings outlawed the use of local money so that they could control and centralize the flow of currency. In a way, money in the permanent and centralized form we know of today was an invention borne of need: you had to have capital in a long term form that was legal tender over great distances in order to make international trade possible.

So the big question today is: can we go back to a system where we have a 2-tiered money system: money that self-destructs, to be paid to individuals as wages, and long term capital, which can be used for long term investments and risk management? Would that make it a more equitable system for everyone?

Anyway, reading that passage was extremely eye-opening for me. At least I found out why usury was once regarded as extremely evil, and why institutions like Oxford and Cambridge mysteriously arose during what was supposedly the “dark ages” of Europe.
There are so many good insights in that book that you probably have to read it yourself to absorb them all. IT is a wonderful book. Of course, you will not agree with everything that is written, but even when you disagree with him, he will make you think. This book is valuable to me because it goes deep into the heart of the hidden logic underlying what goes on in a lot of the world.

Later on, Douglas Rushkoff will write another book, “Program or be programmed”. In fact, I was going to read that and, failing to find that book in the library, decided to go try out “Life Inc” instead. And instead I found that “Life Inc” was such a wonderful book! In “Program or be programmed” book, I think that Rushkoff goes off on one tangent hinted at in “Life Inc”, and talks about how all systems have inherent biases that affect its behavior. (Of course, most of what he talks about in “Life Inc” is about how corporatism is really the sum of how the inherent biases of corporatism influences its character.)


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