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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.

Adding a Facebook Page

As the one-year anniversary of this blog approaches, I’m launching a Facebook page and proposing the following:

Why my 457 Facebook Friends should pay attention to copyright review.

I counted, and it turns out that at least 53% of you are direct or indirect beneficiaries of the copyright system in the United States.  Among you are several copyright holders; several professionals whose jobs would not exist without copyrights; the children of professionals who worked in copyright-supported industries; and a handful of you who are the direct descendants of some very high-profile copyright holders whose names are legendary in American art and culture.  Those of you who pay attention to my posts or read my blog The Illusion of More know that I regularly follow these issues, but my guess is that copyright is not exactly the most compelling subject. I’d like to suggest, however, that the minority of very wealthy, vested interests who hope to weaken these laws are counting on your ambivalence, counting on you not to understand the extent to which your lives and careers have benefitted, or still benefit, from this particular body of law.

You might have noticed that there is a general trend toward dismantling some of the pillars of the legal framework — most notably voting rights, women’s rights, and environmental laws — that only became law at about the same time our generation was born.  Dissatisfaction with the economy and with leadership in general, I believe, has led to a cultural tendency across the political spectrum to tear down many systems asserted by one interest or another to be barriers to the next renaissance of opportunity, growth, and freedom.  Included in this are the systems of copyright and patents that have protected the rights of creators and inventors and fostered prosperity.

For nearly two years, I have insinuated myself into this debate because I believe there is much more at stake than the protection of royalties for a songwriter or an author, which are certainly important, but to paraphrase Jaron Lanier from his new book, the creative classes are the “canaries in the coal mine” with regard to the potential economic impact of the digital age. Over these two years, I have met creators, journalists, lawyers, advocates, and policy-makers who believe, as I do, that the overwhelming influence of Silicon Valley is potentially comparable to a second coming of the Robber Baron, albeit in jeans and a hoodie. In fact, in just the last several months, articles have appeared in Forbes, Salon, Newsweek, The Guardian, and others that paint a portrait of the internet industry as a classic ivory tower built of consolidated wealth and a myopia bordering on negligence regarding that industry’s impact on real lives.  All while spinning tales of a utopian future.

As we head into Fall, Congress will review copyrights, and your Facebook walls may once again be filled with memes and headlines warning of threats to the internet and to free speech itself, and I encourage you to look beyond the smoke and mirrors. To that end, I’m launching a companion Facebook page for The Illusion of More blog in order to foster more informal discussion and to point you in the direction of real experts, who can answer specific questions better than I in most cases.  As for the other 47% of my friends who have nothing to do with copyrights per se, I’ll just mention that it’s many of those 53% who eat in your restaurants, shop in your stores, and hire your services.

Thanks!  DN

Are we sure copyright isn’t part of the future?

You know how you can tell a social or political point of view is losing ground?  When the crazy stuff bubbles to the surface.   Here in the U.S., for example, the GOP is floundering because it has a bit of a crazy people problem.  Intelligent conservatives remain frustrated by the headline-making loons in their party who don’t realize the sexual revolution already happened.  I certainly do a spit-take just like millions of others when I read about yet another politician who wants to make gayness illegal or roll back the rights of women to the dark ages, but I temper my own reaction with the faith that at least some of this righteous regressiveness is due to the disintegration of a dying element in our politics, just fading voices trying to be heard against the tidal wave of history.  Interestingly, the anti-copyright crowd would have you believe the same thing about those of us who speak out in defense of this body of law — that we are the ones clinging to a set of old values and methodologies while the future moves inexorably away from our world view because we don’t realize the digital revolution already happened.  But even a casual sampling of observations suggests to me that it is the presumptive revolutionaries on these matters whose positions are fizzling like an unstable isotope.

Speaking broadly, I’ve been paying close attention to this debate for just about two years, and it was this time last year that I started writing and hosting this blog.  Regarding copyright, it’s clear that the largest plank in the anti platform is the assertion that this system of laws stifles innovation.  Yet, despite the constant repetition of this particular thesis, I have yet to encounter one solid example of some economy-growing innovation being asphyxiated by the alleged toxicity of copyright.  From talks and articles by the learned Mr. Lessig to the smart-aleck drumbeat of Techdirt to the un-researched RSC memo of Derek Khanna to even the testimony of innovators last week before the House Judiciary Committee, nobody has presented any tangible examples of the untapped opportunities we are failing to exploit to the benefit of our prosperity.  I keep listening for a solid example, and I would not write in opposition if I heard one. After all, I have kids who need jobs in the future; and I no more wish to protect irrelevant, economically untenable, legal systems than I want my daughter growing up in a society without rights for women.  But after two years of listening, I got nothin’.

And not unlike the minutia-madness exhibited by factions of the contemporary GOP, we seem to be witnessing a lot of desperate scrambling these days among copyright’s antagonists; and it is interesting to watch some of the wheels come off just as we head into Fall and a comprehensive review of the law.  At one extreme we have Rick Falkvinge, founder of the European Pirate Party, sounding in this recent article like the black knight from Monty Python’s Holy Grail, proclaiming victory within his grasp despite having all four limbs hacked off.  To quote musician/journalist Helienne Lindvall, “As a Swede living in the UK, I can tell you how little influence the Pirate Party has in either country. Sure, they had a perfect storm back in 2009, when the Pirate Bay trial coincided with the election for the EU Parliament, managing to get two reps elected. But in the general election the following year the party got 0.65% of the vote, so has no representatives at all in the parliament/riksdag. They still feature in media debates on copyright – after all, a little controversy increases viewer numbers – but are largely viewed as a sideshow.”

Two posts ago, I wrote about the strange macro-economics of CCIA lobbyist Matt Schruers making the astonishingly facile argument that money not spent on media still goes into the economy somewhere.  And this week, Mr. Schruers offers this report stating that search engines (i.e. Google) actually contribute very little to pirate website traffic, whence we are meant to draw the conclusion that “disappearing” search results is unlikely to have a substantial effect on infringement because most users intent on finding illegal media already know where they’re going. Aside from substantiating a generalization that seems intuitive, the report indicates that, for example, a mere 8% of traffic to The Pirate Bay comes from a Google search. It’s worth noting, though, that if this number is accurate, that’s still about 240 million page views for the largest infringing site in the world. (See also VoxIndie’s analysis of this report.)

But in the scheme of what we’re talking about, does it matter if search is responsible for 8, 15, or 30 percent of traffic to TPB when the funding industry behind the study is responsible for 100% of the PR messages that tell users media piracy is socially beneficial, and copyright is irrelevant in the digital age? Or when that funding industry profits from said traffic no matter how it travels? Because I’m pretty sure U.S. companies are supposed to be 0% responsible for supporting or profiting from illegal markets, so I personally find studies like these and the not-so-investigative journalism they spawn to be exactly the kind of distraction they’re designed to be.  It’s lobbyist hairsplitting reminiscent of the political spin used by interests who are skating on rather thin ice — and probably in the wrong direction.

Photo by caitlin_w
Photo by caitlin_w

After two years of paying close attention to these matters, I can say that both anecdotal and studied evidence suggests that most of the general public and leaders in the U.S. and abroad still support creator and author rights. In fact, very few outspoken antagonists of copyright can even bring themselves to openly say that creator rights are unimportant.  This makes sense given the likelihood that anywhere from 30 to 50% of the people you know are rights holders or direct beneficiaries of intellectual property.  As outspoken and unapologetic as musician David Lowery has been on these issues, his bands Camper Van Beethoven and Cracker have actually seen an increase in their fan base and overall support.  Chris Ruen, in his book Freeloading, states that nearly everyone he speaks to about the ills of freely downloading music come to understand the mechanics at play and to sympathize with the musicians being harmed.  In late July, the American Consumer Institute released a report indicating that 90% of Americans support and understand the value of intellectual property rights.  And just last week, US Commerce Secretary Penny Pritzker announced during a presidential visit to Music Row in Nashville, “Instead of viewing a new album as an expense to our economy, we now view it as an asset, because it supports jobs and generates revenue for years to come.”  This was in reference to a recent change in how we calculate GDP to reflect innovation, R&D, and the creation of “multiple types of intellectual property” like movies, books, music, and television.

This is where the real conversation is going.  So, it’s little surprise to see the anti-copyright crowd grasping at so many flimsy straws.