Throwing Rocks At The Google Bus: How Growth Became The Enemy Of Prosperity by Douglas Rushkoff, Portfolio Penguin, New York, 2016.
Raw Deal: How The “Uber Economy” And Runaway Capitalism Are Screwing Workers by Steven Hill, St. Martin’s Press, New York, 2015.
Throwing Rocks at the Google Bus and Raw Deal summarize the good and bad news and the backlash brewing against Silicon Valley’s approach to IT innovation. Authors Douglas Rushkoff and Steven Hill level well-researched critiques of Uber, Airbnb, Task Rabbit, Mechanical Turk and similar electronic platforms promoting as the “sharing economy”. Such applications of IT do increase narrowly defined economic efficiency. As digitization overtakes ever more sectors of industrial societies, there are too few broad analyses of the nature of these disruptive technologies, whom they benefit, and how they are restructuring every aspect of our lives.
In the 1960s and 1970s, serious academic studies emerged, often well-funded by foundations and science policy units in government agencies such as the US Office of Technology Assessment (OTA) and the National Science Foundation. These reports covered the broader societal implications and effects of information technology, automation and artificial intelligence and their likely impacts on employment, inequality, privacy, medicine, communications, cities, trade, finance and economies. Most of these earlier reports predicted the promise and challenges of our Information Age. Not only were they largely ignored but as in the case of OTA deliberately deep-sixed as OTA was shut down in 1996.
Today, the most predictive of these OTA reports are being re-published by the Library Press @ UF, University of Florida Press, and Ethical Markets. They illustrate like “smoking guns” the long-standing denial of science and anti-intellectualism we still see within the US Congress. Thus, we now rely on independent authors like Rushkoff and Hill as well as Kevin Carey’s The End of College, to explore in-depth the second-order effects of Silicon Valley’s digitization of the US economy and society.
Steven Hill, in Raw Deal, focuses on the fallacies of the business models of such “unicorns” as Uber, Task-Rabbit, Mechanical Turk and others. These companies laud the “sharing economy” and the efficiencies created when people can monetize their cars, rooms, and spare time, and thereby increase their living standards and incomes. With in-depth chapters on many of these Silicon Valley companies, Hill describes the gritty realities of often desperate people trying to make ends meet, holding multiple part-time jobs – making up some 30% of the US labor force as the contingent self-employed. The “sharing economy” turns out to be a new kind of labor exchange where workers rush between “gigs” on their own time and expense, with no certainty, security or benefits, with low wages. All this is very different from those based on earlier barter platforms where people actually share: exchange clothes, appliances, the time banks, exchanging services and the local currencies and credit circles which run on cooperation and community service. I covered this pure information-based economy in ” Information: the World’s Currency Isn’t Scarce.” The Silicon Valley “unicorns” have coopted these cooperative models and built high-profit expectations to appeal to venture capital. Hill’s examination of how these business models are unsustainable is now validated by Fortune’s review (March 15, 2016) of these companies’ stock valuations and pre-IPO hopes which sees them as the next IT bubble.
Rushkoff’s Throwing Rocks at the Google Bus confirms the findings of Hill inRaw Deal, taking his analysis further into the need for new economic models and deeper paradigm shifts re-thinking work, efficiency, success and what is meant by “progress” beyond GDP-growth. Rushkoff’s insights reveal the centralizing effects of digitization and the “big brother” dangers of the expanding big data powered “attention economy” which I also reported inBuilding a Win-Win World (1996) as the triumph of “mediocracies”. Whatever our forms of government, today media shapes politics, culture, public discourse, finance and business in most countries. Coupled with digitization and the power laws of the internet, competition is now between platforms Google (NASDAQ:GOOG), Ali Baba (NYSE:BABA), Amazon (NASDAQ:AMZN), Etsy (NASDAQ:ETSY), Twitter (NYSE:TWTR), Facebook (NASDAQ:FB), Instagram, TenCent (OTCPK:TCEHY) and the latest Fintech 100 now taking the lunch of bankers, stockbrokers in the global financial casino lost in cyberspace. Rushkoff nails these trends and the “like economy” where human users of these platforms are the product being sold to advertisers, insurance companies, government agencies and other bidders. He documents how 25% of all video ad viewers are not human users but “bots”, which incurred losses to advertisers in 2015 of $6.3 billion. These disruptions of two irresponsible industries: finance and advertising, are in sense karmic come-uppances.
Rushkoff digs deeper and finds more socially responsible models beyond the information monopolies seeking, like Amazon, Facebook and Google, to own the market itself. He looks at the other higher ethical possibilities in Blockchain, inclusive capitalism, B Corps, and employee ownership ESOPS. He also examines Kickstarter, Indiegogo, AngelList, PandoDaily, microfinance,crowdfunding, genuine sharing and barter sites, ethical investing, and NGOs’ Jubilee movement for debt cancellation.
Rushkoff’s analysis is the most sweeping and presents all the better models for the future. Both books are must-reading for all investors and asset managers navigating these massive, disruptive shifts now accelerating in the global economy due to their unprecedented interactivity.