Category: Digital Culture

Rime of the Corporate Manager

“Nor any drop to drink.”

It was a year ago this week that I first launched this blog, and when a friend shared the above video the other day, it reminded me why I choose to write about digital-age issues, the rights of artists and creators, and the assertion of the humanistic over the technological:  it’s because I believe the economics of the internet  too often reflect exaggerated corporate values disguised as social values.  I’ve produced videos similar to this one, have sat down with CEOs to record no small amount of gibberish in my career, but Nestle CEO Peter Brabeck-Letmathe appears to be a paragon in the art of believing one’s own bullshit.  When a guy calls “extreme” the assertion that water is a human right, it’s probably time to break out the pitchforks and torches. If the molecule that makes all life possible isn’t a human right, then there are no human rights. Of course, Nestle has long been featured in many a rogues gallery among watchdog organizations for a range of abuses around the world, including its purchase of cocoa harvested by child slaves in Africa.

There’s nothing wrong with corporations, just corporate culture; and it’s my belief that for about a half-century, we’ve been nurturing a mindset so detached from social responsibility that it should really be no surprise when executives at the top of the hill espouse viewpoints bordering on depravity. More to the point, this dissociative behavior is not exclusive to wealthy CEOs. For everyone you know who might want to defenestrate the architects of the mortgage-backed securities fraud, you probably know just as many people who privately think, “I wish I’d been in on that.” And the truth is these corrupt bubbles are often pumped up as much by greedy individuals and small entities tailgating the bigger players in these schemes.  We have trained ourselves to pursue short-term, high-return ventures regardless of their value or toxicity to society overall. And the sad reality is that the economy we have fostered leaves us with little choice other than to become social cannibals. As the middle class in the developed world is hollowed out by the schemes of the uber-wealthy, those in the middle begin to recognize that a modest and sustainable existence is nearly impossible; and so we become schemers ourselves, assuming that the only security lies in rapid wealth accumulation by whatever means. Victims be damned.

I have believed for a long time that our economic woes are cultural more than they are systemic, and if this is true, it means things will have to get really bad before a new generation redefines its principles out of necessity.  And that brings us to the massive influence of Silicon Valley and the many populist promises of Web 2.0.  The marketing is an ongoing montage of human potential, entrepreneurism, innovation, global connectivity, and a better quality of life for more people — all set to the tune of some world-music anthem. To watch the commercials, one gets the idea that all we need is to endow every individual with a smartphone, and human potential becomes limitless. If we just plug in, we can all live beautiful, upper-middle-class lives, dress like hipsters, and share our beautiful experiences with one another through social media.  Meanwhile, I meet more American millennials who have no idea what they want to do with themselves, partly because jobs are scarce and the market is flooded with educated people.

The underlying message emanating from the internet industry is indeed one that promotes tearing down existing systems (i.e. “barriers”) because technology “empowers the individual.”  And there is some truth in these promises evidenced by many entrepreneurial and grassroots enterprises that would not exist without the digital revolution; but there is also an illusion of personal empowerment that I think blinds many to the same old corporate interests behind all the feel-good PR.

My concern is that the internet industry, both tangibly and ideologically, represents everything that’s already dangerous about corporate culture, only on steroids. Take a step back from the apparent vastness of the web and consider how few major corporations profit from most of our activity.  Name another Facebook.  Name another Amazon.  Name another Google.  Web 2.0 is a highly circumscribed environment owned by a small number of corporations that don’t employ very many people. Moreover, if we’re going to be brutal about it, the most successful web business are fundamentally exploitative in nature. Whether we’re talking about social media, a news aggregator, music streaming, some sophomoric diversion site, a YouTube, or a torrent, the business model is clear — drive traffic to paying advertisers without investing much or anything in the production of content.  This is the underlying reason why the industry is antagonistic to intellectual property (and sometimes even privacy) rights — because such constructs are just a nuisance to the money-for-nothing model that is the foundation of most of these self-proclaimed innovations in the market.  “Water is not a human right” is a message that supports Nestle’s bottom line. “Privacy and IP aren’t civil rights” are messages that support the bottom line of most high-profit web companies.

We may be in danger of very rapidly expanding the WalMart model throughout multiple sectors of the economy by having too much faith in these technological promises. The big-box retailer is monopolistic and exerts excessive pressure on suppliers.  As consumers, we see lower prices at the store but too often fail to realize that we’re part of a vicious cycle that actually leaves us with fewer dollars to spend in the first place and even forces manufacturers to export labor overseas where workers may be mistreated in the production of inferior goods.  We see this same, unilateral bargaining power as Apple’s new music streaming service negotiates licensing rates with the major publishers; we’ll see it as YouTube negotiates with entities like the NFL and as Google inserts itself more directly into the filmed-entertainment business.  Instead of diversity and competition, which the web promises, we seem to be fostering consolidated wealth and power not seen since the days of John D. Rockefeller. And although many people have come to look at the WalMart model holistically, we still tend to look at web enterprises only as consumers benefiting from all the cheap and free stuff.

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Photo by Haje

There are social, moral, and financial reasons to be wary of our exuberant embrace of models that rapidly devalue goods and services, or principles like privacy, intellectual property, or common decency. Nevertheless, every day, some lobbyist or paid consultant or academic with a book to sell will extoll the value of devaluation. Not only do many of these theories remind me of Mr. CEO of Nestle defining water as a “food stuff,” it reminds me of an old joke . . .

A guy buys firewood at $1.50/lb and sells it to his customers for $1.25/lb. When he realizes he’s not making any money, he decides he needs a bigger truck.

Common Grounds: Coffee Houses & Copyright Review

coffee sepiaI am presently ensconced in what I expect will become my new morning writing venue — a local coffee house/bakery located just a few miles from my alma mater, Bard College.  Like other establishments of its kind, especially those in proximity to very liberal, liberal-arts colleges, this place is steeped in the atmosphere of social consciousness. All the coffee is fair-trade, as is the chocolate used in the baked goods and confectionaries made on site. Posters adorn the walls advertising the fair-trade collective supported, depicting photos of Latin American and African workers enjoying the fruits of their labor rather than suffering the deprivations of many who harvest or produce the goods we consume.

It’s August now, but the Bard students will be here soon, gathering in ebullient clumps to study and socialize; and regardless of their majors or career goals, anecdotal evidence suggests that their sense of social justice will be an even more prominent component of their life plans than those of my friends and mine when we were here as students.  In the 1980s, we were mostly hoping Ronald Reagan wouldn’t start WWIII with nuclear weapons, but today’s digitally connected generation appears anyway to be more instinctively aware of their role as global citizens — that choices made in pampered, western life can directly affect the well being or suffering of individuals halfway around the world.  Of course, even this kind of consciousness only goes so far as it is nearly impossible to live in the developed world without inadvertently benefitting from exploitation in the developing world (see your iPhone), but at least the trend toward thinking globally and acting locally is common in the next generation, and I think it’s fair to credit social media as a catalyst in this case.

My new morning haunt is also a venue for local musicians to perform; and near the entrance is a sign reading, “Play what the people like.  We own every license there is!”  Below this, the BMI, ASCAP, and SESAC logos are displayed.  The sign isn’t very prominent, many people won’t even notice it no matter how many times they walk through the door; but it would not be out of place if it were hung next to the posters of thriving coffee, tea, and cocoa harvesters.  license signI’m sure the owner of this shop was simply following the law when he bought the music licenses, but whether he knows it or not, the sign about the music is entirely consistent with the non-exploitative ethos of the business. Despite the raw tonnage of gibberish that has been promulgated on the subject of media piracy as a “new model,” there is not one idea yet proposed that is anything more than a hypocritical contradiction of the same social consciousness that wants to promote and acquire fair-trade goods. So, with regard to media consumption, the next generation has to decide whether or not they can agree that exploitation is universally wrong while recognizing that some of the “innovation” that has been brought to you by Web 2.0 is merely the acceleration and expansion of junk business.  Check your SPAM filters.

On August 1, the House Judiciary Committee held its third round of hearings in the process leading up to comprehensive review of copyright law, and the witnesses invited to testify were supposed to offer various points of view on digital-age innovation and, in theory, make a case for why the present copyright system stifles said innovation.  The witnesses were as follows:

Ms. Danae Ringleman
Founder and Chief Customer Officer
Indigogo, Inc.

Mr. Jm Fruchterman
President and CEO
Benetech, Inc.

Mr. Nathan Seidle
CEO
SparkFun Electronics, Inc.

Mr. Rakesh Agrawal
Founder and CEO
SnapStream Media

Mr. Van Lindberg
Vice President of Intellectual Property
Rackspace Hosting, Inc.

Each witness represented burgeoning, intriguing, and humanistic business ventures, but not one witness presented a single, declarative statement as to what specific mechanism(s) in the current copyright system act as barriers to innovation.  Absent such testimony, and in light of the fact that all of these individuals can boast thriving  and legal businesses, one might only conclude that copyright in general must not be the proverbial monkey wrench holding back the future that people keeping saying it is.  This might explain why several of the witnesses, when pressed with direct questions from the committee, were quick to change the subject from copyright to patent law.  In fact, by my estimate, roughly half the hearing was devoted to discussion of the patent system, and I wouldn’t be surprised if some of the committee members had to double-check the name at the top of their briefing documents to make sure they were in the right room. We’re used to seeing this in public debate — certain technology interests assailing the principle of intellectual property in general, toggling between copyrights and patents at will — but I was surprised to see it happen in a Congressional hearing and do hope copyright review will become more focused on specifics going forward.

On the other hand, we could streamline the process, if we take a lesson from my new, local coffee house.  If the next generation of socially conscious citizens in the developed world simply consumes media the way they consume coffee, tea, and chocolate, we might save ourselves hours of misdirected testimony that is sure to come.  If people choose to marginalize media piracy to an exception, we will reduce the vague and vacillating assault on IP as a general concept and open the floor to frank analysis of what does and does not work in these legal systems.  Sadly, though, reports like this one by Helienne Lindvall indicating music piracy is most prevalent among the wealthy reveal that privilege too often begets a sense of entitlement that selectively overrides social consciousness. Among the hundreds of Bard students who will soon be tromping through here, most of whom will be art majors, I do wonder how many of their smart phones will be filled with music or filmed entertainment downloaded from torrent sites. Correct this one hypocrisy, and the debate becomes so much simpler.

Steal a Little: Piracy & the Economy

I’ve wanted a sailing yacht for years but have never been able to afford one — until now.  Thanks in part to a report on piracy and counterfeiting by the GAO and this explication by CCIA (Computer & Communications Industry Association)  lobbyist Matt Schruers, I now have a plan that will put me at the helm of the sloop Larceny by the Summer of 2016.  And the best part is the whole family gets to collaborate to make it happen. According to my rough calculations, all we have to do is steal groceries like a Dickensian gang for three full years, and we’ll save enough for a substantial down payment on the boat.  I’m thinking Beneteau 45ft, but if any seasoned mariner out there has a recommendation, let me know.

Now, you might think shoplifting food is a bit radical as an alternative financing option, but that’s where you’re wrong.  See, if the cops nab me or one of my kids while boosting a chicken from the local farm stand (we’d steal organic of course), all I have to do is point to this GAO report, which according to Mr. Schruers, advocates a truly progressive economic principle most of us have never considered.  If you want more things than you can afford, steal some and pay for the rest. Why is that okay? Because in the economy overall, it’ll be a wash. To quote Mr. Schruers:

“So what is The Issue of Which One May Not Speak?  The fact that money not spent on pirated content is, in many cases, still spent.

The U.S. Government Accountability Office pointed this out in a widely discussed report in 2010, observing that “effects of piracy within the United States are mainly redistributions within the economy for other purposes and that they should not be considered as a loss to the overall economy.”  Money does not “just vanish.”  A Swiss Government commission made a similar observation the following year.”

Go back and read that again. Because full-grown adults are saying without a hint of irony that if you don’t spend the money in your pocket, it doesn’t just disappear but will remain there until you spend it on something else! The concept is quite a mind-blower when you come to recognize its elegance. The money you have is the money you have. It’s zen-like.  I am sorry to report, though, that the money spent to reveal this discovery is in fact gone forever.

Of course, in my scheme, when I do get pinched for shoplifting my way toward boating bliss, I have to hope the prosecutor only reads Matt Schruers’s post and not the GAO report because the report itself mostly says piracy and counterfeiting are likely very harmful to the economy in several ways.  In fact, the report devotes a lot of ink detailing the inconclusiveness of many studies that look either positively or negatively at the effects of piracy and counterfeiting, but if we’re just pulling quotes at will, how about this one:

“For example, when pirated movies are sold, it damages not only the motion picture industry, but all other industries linked to those sales.”

 That’s just common sense, and it seems to me the only point worth making if one is going to assess the macroeconomic pros and cons of actually stealing from any industry.  While it’s true that not paying for selected goods and services  will undoubtedly leave you with more disposable income to spend on other things, the industry you’re not paying for will eventually shed jobs.  And if those jobs were held by people in your community, they will no longer be customers for whatever it is you’re selling.  See how that works?  It’s the same economics we learned in high school because it’s pretty damn basic. Perhaps Matt Schruers skipped class that day to hone whatever budding skills would produce this paragraph:

“Normatively bad isn’t the same as an economically bad, however.  Not all normative transgressions necessarily have macroeconomic consequences.  And yet those two items are invariably linked when studies consider infringement.  Infringement is bad, therefore we must assign an economic cost to its badness.  Hence, study after study makes the repeatedly discredited assumption that every infringement is a lost sale, usually calculated at the highest retail price for which the good was offered, and every lost sale represents a commensurate economic loss.”

Strip away words like normative that make the above sound smart and thoughtful, and it’s really just proposing a thesis — that infringement might be a form of theft that doesn’t cause macroeconomic harm — for which Schruers can offer no support.  In fact, were he to refer to the same GAO report, he would find quite a few assumptions of macroeconomic harm from piracy and counterfeiting.  Instead, Schruers segues to the repetitious, obvious, and irrelevant observation that not every individual infringement represents a lost sale.  One doesn’t need a study to draw this narrowly-focused conclusion, and the lost sale analysis is not an indicator of macroeconomic loss. Also, if we’re just going to repeat the words the average 14-year-old will use to justify torrenting music and movies, it’s a safe bet we’re not riding the wave of avant-garde economic theory.

One of my colleagues in the artists’ rights community asked if I were going to sail my new, ill-gotten yacht to Neverland, and the joke resonated more than I think he intended.    Each time I encounter some new attempt to construct a logical or economic argument for the supposed benefits of mass theft of intellectual property, it feels very much like a visit to Mr. Barrie’s  imaginary island — a place where boys refuse to grow up, where they feast on food that isn’t there, and all they really long for is someone who can tell a good story.

See Chris Castle’s “Stealing is Good for You…”