NETFUTURE

                    Technology and Human Responsibility

--------------------------------------------------------------------------
Issue #106     A Publication of The Nature Institute           May 9, 2000
--------------------------------------------------------------------------
          Editor:  Stephen L. Talbott (stevet@netfuture.org)

                  On the Web: http://www.netfuture.org/
     You may redistribute this newsletter for noncommercial purposes.

NetFuture is a reader-supported publication.


CONTENTS
---------

Editor's Note

Quotes and Provocations
   Laughing Our Way to the Global Village
   Greed Is Greed Is Greed ... Is Good?

The World Trade Organization: Economics as Technology (Stephen L. Talbott)
   There is no such thing as a commodity

Who Owns Microsoft's Profits? (Stephen L. Talbott)
   Capitalism is about assigning value where value is due

DEPARTMENTS

Announcements and Resources
   The Child and the Machine
   User-specified Tools for Online Collaboration

About this newsletter


==========================================================================

                              EDITOR'S NOTE

An issue devoted to economics and commerce -- and, in particular, various
ramifications of this puzzle:

   If freeing the distributed power of diverse, individual initiative is
   crucial to capitalism, why is it that the particular nature of the
   individual's action, healthy or unhealthy, greedy or caring, isn't
   thought to matter much?  Or, if it does matter, why aren't more of
   capitalism's defenders, for the sake of their own hopes, out there
   vigorously promoting responsible individual action and combatting
   irresponsible action?

The answer turns out to have a lot to do with the way our minds have been
taken over by technological habits of thinking.

I guarantee you I'll get some vitriolic responses on this one.  (Virginia
Postrel, are you there?)

SLT

Goto table of contents


==========================================================================

                         QUOTES AND PROVOCATIONS


Laughing Our Way to the Global Village
--------------------------------------

This came through via NewsScan Daily (April 18):

   Remember DotTV?  The Idealab-sponsored company cut a deal with the
   Pacific Island nation of Tuvalu to sell Internet domain names using its
   ".tv" suffix.  DotTV began taking registrations last week, and has
   already raked in half a million dollars in revenue and changed its
   business plan to auction off names to the highest bidder rather than
   sell them for a fixed price.  "We'd be disappointed if we don't see
   names going in excess of a million dollars in the next year," says
   DotTV CEO Lou Kerner.  So what's next?  Moldova is cashing in communism
   for e-capitalism, having made a pact with a Florida firm allowing it to
   register medical sites with a ".md" suffix, and South Pacific's Niue
   has signed on with .NU Domain Ltd. to sell ".nu" names.  And why is
   ".nu" in demand, you might ask? In addition to representing "new," "nu"
   is also French for "naked."  (Investor's Business Daily 18 Apr 2000)

Sovereign nations selling their names for a little bit of that dot-com
wealth -- I have to admit, it almost gives me hope.  Perhaps the forces of
a debauched commercial globalization will finally exhaust themselves --
not in a great and disastrous apocalypse, but in a laugh-until-you-expire
comic convulsion.


Greed Is Greed Is Greed ... Is Good?
------------------------------------

Denise Caruso's "Digital Commerce" column in the March 27 New York Times
was headlined, "Technology has transformed the economy and made some
people a lot of money, but is that all there is?"  In the column she
mentions venture capitalist John Doerr, who famously remarked that the
digital technology boom has yielded the greatest legal creation of wealth
in history.  But, says Caruso, there are changes in the air:

   Venture investors, the rocket fuel of the Internet economy, have
   started to question the path that so many Internet companies have taken
   -- despite the tremendous profit they make from the present state of
   affairs.  In fact, at a recent conference, Mr. Doerr apologized to the
   assembled crowd for his "legal creation of wealth" remark, saying that
   he never expected everyone to focus on the money, to the exclusion of
   creating substantial businesses.

Personally, however, I don't see much hope for real change until one of
the most entrenched dogmas of our day has been pried loose from the
nation's psyche.  I mean the libel against capitalism that says it makes a
virtue out of greed.  You encounter the libel everywhere -- even in pleas
for a return to sanity.  Here's how it comes out when Caruso interviews
long-time Silicon Valley player, Randy Komisar:

   "We're moving toward the toxic extreme of capitalism," Mr. Komisar said
   in an interview last week.  Capitalism works better than any other
   market structure that has been devised, he added, because it harnesses
   man's "absolute base instincts -- greed and aggression."  But a focus
   on money, to the exclusion of substance and human relationships, he
   said, will ultimately fail, perhaps spectacularly.

It's nice to hear Komisar calling for at least some attention to substance
and human relationships.  And it's nice that he worries about the "toxic
extreme of capitalism".  But how can we escape that extreme without
recognizing and countering the sources of toxicity?

Greed is, inescapably, toxic.  There is no special capitalist magic when
it comes to greed.  We are imperfect creatures, and it's true that our
families often can survive our imperfections, as can our governing
institutions, our civic organizations, our churches -- and, yes, our
businesses.  "Can survive", I say -- but this requires that what Komisar
refers to as our "absolute base instincts" be hedged around by social
convention, institutional safeguards, a healthy education, a will toward
self-improvement, and so on.

It also requires that, when a particular base instinct comes disturbingly
to the fore in society, we begin to work on its taming in a more conscious
and explicit way.  And, for this purpose, saying that we can be as greedy
as we wish because the market will make a virtue of our greed hardly
qualifies as the right sort of work.

The fact is that greed has exactly the same destructive consequences in
business as it has elsewhere.  Employees and customers and competitors who
get walked over by my selfish interest in personal gain are not somehow
exempted by the laws of capitalism from suffering the kind of hurt this
behavior inflicts in other arenas.  Nor are businesses, any more than
families and civic organizations, exempt from the stresses caused by such
hurt -- stresses that impose huge economic costs.  Nor are the end
products of a business likely to be healthy for society when those
products were conceived by selfishly grasping minds looking only for
personal advantage.

What blinds so many people to the obvious, I think, is that, in their
thinking about capitalism, they remove their gaze from people and living
contexts, and look instead at the abstract, numerical functioning of what
they imagine to be a huge, economic machine.  The parameters of this
machine -- quantities such as gross domestic product, standard of living,
and unemployment rate -- are convenient to deal with, and their
theoretical manipulation offers many intellectual satisfactions.

But these parameters are hopelessly inadequate to reality (see following
article).  And it is easy to forget, in this rather-too-neat world of
clean constructs, that the whole point of a figure such as standard of
living is, in the end, to help us come to grips with the welfare of human
beings -- the same human beings whose lives are made miserable by the
greed of their fellows.

No, capitalism does not harness greed and turn it into good.  What it
harnesses is diverse individual choice and initiative, which it weaves,
without central planning, into a collective tapestry.  This is its great
virtue.  But the virtue in no way obviates the fact that the tapestry,
beautiful or soiled, depends on those individual choices, beautiful or
soiled.  When the choices are driven more and more by greed, society
sickens -- precisely because capitalism grounds society so
fundamentally upon the individual's freedom.

It may be that there were more restraining forces at work in our society
in earlier times, forces just "imposed" upon us (as Adam Smith suggested),
setting rough bounds to our behavior.  But restraining is not the same as
turning evil into good.  And these culturally enforced restraining bonds
are exactly what today's culture-destroying, out-of-control commerce is so
effectively bursting.  The devil in us is being let loose.  We have no
choice but to take up the task that our own history is setting before us:
where before we had the luxury of remaining half asleep, now we must, in
all moral seriousness, consciously choose what sort of society we will
create.

You can see signs everywhere that this necessity is dawning on people
today.  Just look at the frenzy of "we can build a new society" impulses
that have engulfed the Net (and also the despair as the same old anything-
for-a-buck commercial powers appropriate the Net for their own purposes).
What is necessary is to take on the hard work of purging these worthy
impulses of their worst contradictions.  And the grandest of the
contradictions is the belief that we can build a new and better society
without taking responsibility for ourselves.

To rejoice that capitalism unleashes the creative power of millions of
individuals is quite proper; to turn around and sheepishly say, "Now that
the individual has been unleashed, it turns out that it doesn't matter
much what the hell he does" -- well, then, why all the fuss about the
creative potentials of the individual in the first place?  Or have we
discovered some new sort of creative power with potential for good but not
for evil?

You tell me:  is all this really so hard to see?


                          ---------------------

Related articles:

** "Beyond the Dreams of Avarice (Part 2: I'm Stiffing You for the Good of
   Society" in NF #60.  Does the Invisible Hand transmute evil into good?

SLT

Goto table of contents


==========================================================================

          THE WORLD TRADE ORGANIZATION: ECONOMICS AS TECHNOLOGY

                            Stephen L. Talbott
                          (stevet@netfuture.org)

If you want to grasp what is pathological about the World Trade
Organization (WTO), a good place to start is with a remark by Maine
forester, Mitch Lansky:

   We've reached a point in our society where consumers have no idea where
   things come from, or how they're produced.  They just want cheap
   products.  But, unfortunately, when commodities are cheap, what
   produces the commodities has to be cheap as well.  That means, in our
   case, cheapened forests, cheapened workers, and cheapened communities.
   (Orion Afield, Fall, 1999)

In other words -- and I think this is Lansky's point -- a commodity isn't
really just a commodity; it is an inextricable part of its environment and
our own way of life.

That's the stumbling block -- you might almost say the mountain range --
we need to get past today.  Commodities in the narrow sense don't exist,
and the mistaken notion that they do is one of the primary errors with
which the WTO would infect the world.

A commodity, according to the wisdom of the WTO, is a reasonably self-
contained, well-defined entity that can be transported from here to there
and whose value can be defined wholly in terms of what is transported.
Once this value has been set by corporations that are as unrooted as the
products they traffic in, woe be unto any nation that tries to understand
the product in its wholeness and let the market deal with the full reality
of it.

What we see here is outmoded atomism with a vengeance.  It wrenches the
commodity out of the environmental and communal context that alone enables
its existence, rather as if we tried to understand and productively use
the leaves of trees while denying ourselves any reference to root, trunk,
and branch.


Friction-free Capitalism Is Context-free Capitalism
---------------------------------------------------

The wrench, of course, is quite possible and even legitimate for certain
functions of the intellect.  What is not legitimate is to forget the
artificiality of the exercise.  It is physically impossible, after all,
merely to buy a potato, as if it had suddenly materialized out of nothing.
You also buy a farming practice, a style of rural community, a set of
labor practices, a transport, wholesale, and retail system, and an altered
ecological balance.

But we are not allowed, in the WTO's world, to assess and take
responsibility for the full range of consequences of our own actions as
consumers.  This disastrous mandate for moral detachment and
irresponsibility is hardly surprising; it is the playing out of the
original economic premise that capitalism includes a kind of alchemy,
transmuting greed into social good.  How do you reinstate a concern for
qualities and values once you have turned a willfully blind eye toward
avarice?

The upshot of all this is that when a nation tries to recognize the full
reality of an imported product, restoring it to its context and seeking to
account for the true costs of its production and consumption, then the
offended corporations can use the WTO to cry "foul" and force that nation
to return to one-dimensional economic falsehoods.

This is how it happened that the U.S. could use the WTO to overturn a
European ban on hormone-treated meat.  It is also how it happened that the
WTO disallowed a U.S. environmental regulation stipulating that imported
shrimp must be harvested without causing undue danger to sea turtles.  And
it is how the WTO has positioned itself to overrule all efforts to
stengthen local economies based on knowledge of the peculiar social and
environmental requirements of a particular community.

The WTO policy of enforced decontextualization reflects a pathology of
thinking.  It is a pathology that has led legions of economists to spend
thousands of man-years erecting sophisticated theoretical edifices upon a
foundation of make-believe concepts like "commodity" -- this despite the
few open-eyed economists such as Herman Daly who occasionally point out
the absurdity of such an approach.

Perhaps the purest expression of the pathology -- as of so many unbalanced
tendencies today -- is found in the online world.  Numerous premature
declarations have proclaimed the Internet to be the ideal world the WTO is
striving for.  The whole idea behind the celebration of the supposedly
friction-free capitalism delivered by e-commerce is that we're finally
creating the non-communities of non-peoples the economists have yearned
for as a fulfillment of their abstract theorizing.  On the Net we are
supposed to have commodities as the perfect, friction-free atoms moving to
and fro with delicious efficiency -- something they can do precisely
because they drag nothing of their friction-inducing contexts with them.

On this view, a commodity put up for sale at any single node in the world
can compete on exactly equal terms with a commodity offered at any other
node, because they are presumed to be exactly equivalent.  Their contexts
-- real people living in real communities; environments that can be
qualitatively enhanced or degraded -- fall out of the picture on the Net
with an ease that must make the entrepreneurial titans behind the WTO
drool in anticipation.


Basing Policy on Falsehood
--------------------------

The false notions represented by "commodity" and "friction-free
capitalism" are the easy way out for theorists.  Our several hundred
years' experience with machines, along with our disregard of organisms,
has taught us to think in the simplified and manageable terms of stasis,
discrete entities, and precisely definable, formal relations between the
separable parts of things -- what could be called "technological thought".
(This thought, incidentally, is even more extreme -- not overcome -- in
the work of complexity theorists.  But that's another article.)

The result of this habit -- and its near-perfection in the field of
economics -- is that (in Bill McKibben's words)

   abstractions like the economy have become more real to people than the
   physical world in which we live.  It's easier for them to visualize
   dangers to the economy than it is for them to visualize dangers to the
   planet.  ("Warning Skies: The Deeper Aspects of Climate Change",
   Lapis #10)

It's fine for the economist to idealize and decontextualize his working
concepts.  What is not so fine is to turn around and impose these one-
dimensional concepts, which now become powerful distorting factors, upon
real-world contexts.  A decontextualized concept is always false to the
context from which it came, pretty much by definition.  This falseness is
given power over us when, in the world of actual exchange, we treat
commodities as if they really were things we could buy in isolation from
everything that is in fact inseparable from them.  And the same falseness
is institutionalized when economists armed with one-dimensional concepts
advise governments, corporations, and individuals how to behave within the
complex matrix of society and the natural world.

Economists do acknowledge the problems of context in a backhanded sort of
way when they refer to "externalities" -- costs (or benefits) not
reflected in the price of something.  But neither the holistic movement of
thought through which we recognize externalities, nor the behavior
motivated by such imaginative insight, is given adequate place within the
economist's world.  It is positively scorned in the corporation-driven
world of the WTO.


A Market in Choices vs. a Market Mechanism
------------------------------------------

To truly address any one problem in its social and humane dimensions is to
discover that it is no longer a single, narrowly conceived, precisely
defined problem.  You have to visualize the whole -- and then, like a
painter reconceiving a canvas, imagine how this whole might "go fluid",
evolving lawfully into other, slightly different wholes in which
everything has changed.

This is the imaginative exercise the WTO would like to make illegal.  Or,
rather, it would make illegal any choice to act upon one's imagination of
a better world, because this would be to introduce considerations "alien"
to the clean, mathematically precise valuation of particular commodities
severed from their own wholes.  We must not allow citizens to choose what
sort of world they will live in, but instead must hope that a pure
calculus of number will automatically create the world of their choice.

Given the falseness built into these decontextualized numbers, this hope
amounts to a belief in magic -- and our societal commitment to the
efficacy of the magic is one of history's most striking cases of mass
delusion.

It all comes down to this:  To say that the market -- the place where we
exercise free and individual choice -- has become more important in our
day, is also to say that your and my choices have become more important.
Why, then, do so many of those preaching the virtues of the market want
the WTO to disallow free, individual choice -- and disallow it where it
matters most to us?  The answer, I think, is that they don't really
believe in a free market, that is, a market between free and responsible
individuals.  What they want is a market mechanism -- something
that functions automatically and without the messy complications
introduced by individuals responsible for choosing what sort of world they
will live in.

The Internet and the WTO, as we have them today, fit together remarkably
well in delivering a vision of global society as a grand machine.


We Must Globalize
-----------------

There is, I believe, deep within the WTO's promoters, a sense for this
truth:  We are entering a global era; it is our future.  The world has
never seen its like before.  We do not have the choice of shutting
ourselves up behind rigidly isolationist barriers.  We must increasingly
discover what it means to be global citizens.

I, too, believe this.  And I worry that some of those (at times I am
numbered among them) who fight against the forces of a destructive
globalization are so frozen by fear of the powers they see let loose that
they lose sight of the positive mandate.  Yet, it is only through our
grasp of a positive counter-image that we can combat what is unhealthy.

So what does it mean to be a global citizen?  Here's one way to begin
thinking about it:

It is imperative for the indivdidual to retain a certain openness to those
around him -- for example, openness to the ideas of others.  In fact, his
growth as an individual will depend on this openness.  But at the same
time, mere openness -- passive yielding to every thought that approaches
him -- is less a matter of openness than emptiness.  It is the end of
individuality.  If he does not have his own particular character to
preserve and develop in dynamic interaction with others -- and if those
others, too, are lacking any such character -- then what we're looking at
is not so much a society of individuals as a bland collection of nobodies.
From where, after all, does a group derive its vitality, from where does
it derive all the things worth passing around and sharing, if not from the
distinctive achievements of its members?

Of course, once you see this, you also see it the other way around:  the
indivdidual can only thrive to the fullest in a community.  What you have
here is a polar tension (see NF #84) between the individual and society.
And, as with all such polar tensions, each pole exists only by grace of
its opposite.


Give Us Market Choice
---------------------

Let this discussion of individual and group stand as an analogy (actually,
it's more than an analogy) to the dynamics of globalization and free
trade.  The question for those who are gripped by the compelling logic of
global free trade is this:  "How do you work into this logic its polar
opposite principle, so as to prevent this free trade from becoming,
finally, an empty exchange of meaningless things?  How do you preserve the
diversity, the distinctive contributions, the valuable local realities,
that alone can make global exchange desirable?"

I have written before that the only way to globalize today is to
strengthen today's badly weakened local center.  If you want ripples to
extend farther toward the edges of the lake, the stone you drop in the
center must be weightier.

But, of course, every place on the globe is a center.  The earth consists
of nothing else but locales and neighborhoods, so there is, in a very real
sense, nothing to do except to localize.  Proper globalization can only
arise out of this process, as an expression of the healthy locale's need
to transcend itself on the way to preserving itself.  The more intensely
these local centers are cultivated, the more diverse and richly meaningful
will be their possible ways of connecting with each other.

If this is true, and if cultural diversity entails making room for
different, competing sets of values -- including values placed on sea
turtles and carcinogenic hormones injected into meats -- then we just
can't have the mathematical economist's precious notion of
decontextualized commodities moving along frictionless global
trajectories.  It is vastly more complicated than that.

What the globalizer owes us is a full and explicit set of reflections upon
this polar relation between globalization and localization.  Does he care
about local places and diverse cultures?  If not, how does a global
collection of noplaces become worth striving for?  If, on the other hand,
he does care, how does this care play into his policy recommendations?

"But if we grant what you are asking, we'd have to give up on global free
trade altogether!  There would only be a chaotic collection of nations,
each going its own way."

No, no, no.  Go back to the earlier analogy.  It is the truest individuals
who become most universally human and capable of the farthest global
reach.  Surely the same applies to the relation between local communities
and the larger community of mankind.

Listen.  Don't you believe your own rhetoric?  Don't you believe there are
enticing benefits to be had from global exchange?  Do you doubt that free
peoples, exercising their own choices and doing their best to understand
all the dimensions of a product -- a product embedded in the real world
and not just in the theoretical matrix of economists -- do you doubt that
these people will be inclined to make choices to their own advantage,
wherever there really is an advantage?  If you do doubt it, what business
do you have urging capitalist doctrine?

We have crossed a threshold, impelled by an unstoppable urge toward
universality.  But we can embrace this universality only by becoming more
truly free, individual, and communally rooted.  Don't deny us the kind of
wise, deeply contextualized choice through which we can establish
ourselves as individuals and at the same time connect to the whole.  It
is, after all, context alone that produces global, meaningful wholes, as
opposed to the mere aggregation and glut of things.


                          ---------------------

(There is an alternative vision to the one sponsored by the WTO.  It is
articulated by Nicanor Perlas in his new book, Shaping Globalization:
Civil Society, Cultural Power and Threefolding.  I hope to review this
book in the near future.)

Related articles:

** "Want to Globalize? Then Localize!" in NF #84.

** "Beyond the Dreams of Avarice (Part 3: A Taste for Number Magic)" in
   NF #68.  Reflections on the quantitative side of the technological thought of
   economics.


Goto table of contents


==========================================================================

                      WHO OWNS MICROSOFT'S PROFITS?

                            Stephen L. Talbott
                          (stevet@netfuture.org)

Notes concerning Mephistopheles' Anvil: Forging a More Human Future, by
John Alexandra (Spring Valley, N.Y.: Rose Harmony Publications, 1996).
Hardcover, 349 pages, $24.95.

One of the glories of capitalism is its ability to establish reasonable
values for things.  Somehow, out of the chaos of perhaps millions of
separate transactions in the marketplace, the approximately correct value
for a good or service declares itself.  Or, at least, can declare itself.
It requires some wise and subtle adjustment of many institutions --
adjustments learned through long, hard experience -- to make the system
work.  But it works well enough to provide us with a near-miracle of
continual, organic readjustment among the countless claims and
counter-claims of producers and consumers.

It's cause for worry among those of us inclined toward capitalism when a
systematic distortion of values occurs.  One such distortion has in fact
been occurring for a long time, and it has a lot to do with our ideas of
ownership.  John Alexandra, executive vice president and chief financial
officer of NewCentury Bank in Phoenixville, Pennsylvania, discusses the
matter in his book, Mephistopheles' Anvil: Forging a More Human
Future.

Alexandra spent eleven years at the Wall Street investment firm, J.P.
Morgan, where he was a vice president.  Interestingly, he was also a
teacher for seventeen years, with students ranging from first grade to
college.  And, beside his MBA in finance, he holds an MA in mathematics
and physics.  His breadth of life experience shows itself refreshingly in
the humane dimensions of his book.


How Do You Make a Calculator from Nothing?
------------------------------------------

Alexandra asks who is responsible for the invention of the modern
electronic calculator.  Certainly the engineers who produced the finished
product deserve a lot of credit.  But behind them lay a long history of
scientific work, including Newton's development of the calculus and
Michael Faraday's formulation of the principles of electricity.  Without
these, there would be no calculator.  "Newton's research, done centuries
ago, is thus a contributor to the capital-creation that takes place today
when a calculator makes an accountant more productive."

In these various contributions, we can distinguish between what is more
fundamental and long-lasting, and what is less so.  For example, the
engineers who design a keypad for efficient use definitely contribute to
the value of the calculator.  But

   There is a significant economic contrast ... between this research and
   Newton's.  Although the keypad research, which is less fundamental than
   Newton's, is more likely to yield immediate economic returns, it will
   also become obsolete more quickly.  One of the early weaving machines
   probably generated greater economic returns in a few years than the
   application of calculus generated during Newton's whole lifetime.  But
   this specialized machine soon ceased to be productive.  The productive
   application of calculus, by contrast, although it began much later and
   more slowly, has lasted for centuries.

Similarly, Alexandra imagines a student who learns to type at secretarial
school.  The new skill immediately makes him more productive.  But what he
learned at secretarial school is perhaps less important than his manual
dexterity and habits of care, which he learned in his earliest years.  If
he failed to develop dexterity as a child, he will not easily overcome the
failure as an adult.  Typing, on the other hand, can be learned at almost
any age.  In sum,

   A typing training increases people's short-term productivity far more
   than learning calculus.  A training in accurate thinking, however, as
   well as specific mathematical skills, will probably be vastly more
   economically productive in the long-term than typing skills.
   Kindergarten teachers, and others around young children, help develop
   the dexterity fundamental to all later abilities, as well as the
   foundation for thinking, and basic qualities such as motivation,
   creativity, patience, care, etc.  These people generally contribute far
   more to long-term productivity than do typing instructors (or
   engineering professors, for that matter).  Fundamental education is
   productive for an individual's whole lifetime, just as fundamental
   research can be productive for centuries.


What Is Most Human Is Most Productive
-------------------------------------

Alexandra makes the crucial point that the most fundamental and long-term
gains in productivity stem from the activities that are most universally
human -- and these activities tend to be furthest from, rather than
closest to, the production process.

   When Newton was developing calculus, he probably had little idea of, or
   even interest in, its technological applications.  His interest was
   purely human.  He wanted to understand the movements of the heavenly
   bodies, particularly the planets.  Likewise, the kindergarten teacher's
   principal interest is not the children's future jobs, but to develop to
   the fullest their latent human potential.

So Newton's invention is still creating capital.  Why should this part of
the capital resulting from the manufacture of calculators belong either to
the capitalists or the workers?  Alexandra calls this capital "free"
because it comes essentially as a gift without strings -- just as Newton,
who himself produced no economic commodities, was the beneficiary of gift
money.  In this way gift capital flows forward through time, accounting
for what is most creative and fruitful and unexpected in a culture,
because it is not strictly tied (as lending capital properly is) to a
particular production process.

   The capital created today through Newton's research belongs neither to
   the workers nor the capitalists.  Nor can it be given to Newton.  It is
   therefore "free" -- available to support other fundamentally creative
   and more universally human activities, such as fundamental education
   and research.  The capital generated in the future through these latter
   activities will then again be free capital.

Alexandra illustrates the situation from the life of Ernst Abbe, the son
of a poor factory worker.  Abbe eventually became owner of the Carl Zeiss
optical instrument company in Jena, Germany.  He analyzed his own
situation, Alexandra points out, clearly and precisely.

   He reasoned as follows:  "My father worked hard, but was poor.  I have
   worked no harder than he, yet I am rich.  What has made the
   difference?"  His answer was:  "In addition to what my workers have
   contributed, the success of the factory is due to my education and to
   the scientific research I have been able to use."  So he gave a large
   portion of his profits to the university in Jena.  And, recognizing his
   workers' contribution, he provided them with unusual benefits.  For
   him, this had nothing to do with giving alms, but was a matter of
   social insight.  He himself lived a relatively simple life.


Coerced Giving
--------------

Today the flows of free capital are cramped as a result of their passage
through inappropriate bureaucracies:

   Taxation and its associated government spending are the major conduit
   for free capital-flows in a modern economy.  Taxes are,
   essentially, coerced gift-capital, since the taxpayer has to pay them
   and receives no direct return, and the revenues support such
   universally human creative activities as education and research.  They
   force us to do what we cannot or will not do through conscious
   recognition.  Yet, since these coerced gifts are hampered by expensive,
   bureaucratic procedures, enormous problems and inefficiencies result.
   The resulting capital-flows are much less effective than those provided
   directly by people able to recognize those researchers and educators
   with significant capacities.  Insight, which is essential to the
   fruitful application of capital, is not exactly the government's forte
   or even its appropriate domain.  Government funding of education, for
   example, helps to right the social injustice of education being
   available only to the wealthy.  Simultaneously, it cramps the
   educational process itself through the bureaucracy and regulations
   attached to the funding, which are death to any creative process.

This is why, despite our massive spending on education, "nothing remotely
resembling a blossoming of culture has taken place".  Alexandra, by the
way, is not arguing against government in general.  He is only questioning
the government-imposed redirection of free (gift) capital.  This capital
should be gifted toward cultural endeavors -- art, science, education --
through the free agency of the individual.

The government's responsibilities, on this view, have to do with the
sphere of activity where we must all be treated as "equal before the law".
Free capital, by contrast, serves the expression of our creative
capacities, wherein we are decidedly unequal.  It's one thing for
government to do its best to guarantee equal access to education (which it
should do), but quite another to control and specify the spirit that
speaks through this education.  (This is the sort of distinction we
desperately need to learn to make if we are to overcome simplistic and
destructive oppositions such as "free market vs. government".)


Stewardship Is Not Ownership
----------------------------

In light of the considerations Alexandra raises, it does not make sense to
say that the capitalist owners of a business have a valid claim upon the
profits of the business, without limit.  Nor is there anything about the
spirit of capitalism that requires such an unrealistic claim.  In general,
our notions of ownership have suffered a kind of rigor mortis that is
unseemly under an economic regime celebrating continual change.

Unfortunately, however, the discussion of economic alternatives remains so
horribly shackled by the ghosts of old battles -- in particular, the
battle between capitalism and socialism -- that some capitalists
apparently can't bring themselves to believe they really won.  And so
their knee-jerk reaction to the suggestion that they can't rightly claim
as their own all the profits of their businesses is, "You mean you want
central planners to run the economy?"

What this ignores is that you can alter the rules of capital distribution
while leaving the work of distribution -- though not the ground rules --
to the realm of diverse, free, individual choice.  It's just that some of
those choices now become a matter of stewardship rather than personal
ownership.  After all, we already have, in the huge nonprofit sector, one
kind of limit upon the claim to profits.  But where these unowned profits
go is not centrally decreed; it is determined by individuals and groups
who, in all their unsurveyable variety, act as trustees for the funds (and
not always according to healthy rules; there's plenty to work on here).

There is a whole world of possibility regarding corporate structure and
ownership.  Should we claim, against all the usual capitalist hopes for
innovation and improvement, that the peculiar set of legal forms we now
have -- evolved from the peculiar and sometimes distorted historical
experience of one capitalist nation -- are the final, divinely decreed
norms for corporations?  If we truly believed in the ferment, the
experimentation, the continual exploration of alternatives that capitalism
is so good at encouraging, we would be working especially hard at devising
new corporate forms that reflected more accurately the historical and
cultural realities of ownership.  For the historical fact of the matter,
if not the current legal fact, is that the stockholders do not own
all of Microsoft's profits.


                          ---------------------

(The discussion cited above is only one small part of Alexandra's valuable
book, which offers a wide-ranging characterization of technology's role in
contemporary society.)

Related articles:

** "Beyond the Dreams of Avarice (Part 1: Is There Life after Communism?)" in NF #57.


Goto table of contents


==========================================================================

                       ANNOUNCEMENTS AND RESOURCES


The Child and the Machine
-------------------------

The Whole Alliance is presenting a one-day (9 am to 1 pm), Los Angeles-
area workshop entitled "The Child and the Machine".  The workshop will
feature Alison Armstrong (co-author of The Child and the Machine),
Alan Kay (well known commentator on computers and education), and William
Rukeyser (director of Learning in the Real World, www.realworld.org).  The
event will take place at the Satellite Student Union, Shoshone Room,
California State University, Northridge.  Cost is $15 per person.

The Whole Alliance describes itself as "a bridge-building initiative
focused on creating more dynamic and decentralized K-12 educational
options.  Whole Alliance is part of a global initiative networking social
entrepreneurs to reconceive our social architecture and institutions to
better profit individuals, families, and communities, protect the
biosphere, and take responsibility for the positive evolution of greater
social awareness and human consciousness".  See www.whole.org for more
information.  You will find there a list of the other sponsors, including
the Alliance for Childhood (see NF #99).


User-specified Tools for Online Collaboration
---------------------------------------------

NetFuture reader Aldo de Moor has completed a Ph.D. dissertation that some
of you may be interested in.  Here are a few sentences from the preface:

   All over the world, forests are disappearing at an alarming rate.  I
   usd to be quite involved in several forest conservation campaigns.
   However, while working on these issues, it became increasingly clear to
   me that there are no simple solutions for dealing with this very urgent
   problem.  The only way to address complex issues like this is to
   involve many people, who represent a wide range of stakeholders, in a
   continuous dialogue.

   ....time and again we found out how difficult it is to keep prolonged
   and intensive computer-enabled collaboration going.  People would start
   to work together enthusiastically, but somehow, results failed to
   materialize, after which participation would wane quickly.  This
   despite common goals and considerable initial efforts of the
   participants, and despite the fact that when the same networks of
   professionals meet physically, collaboration is often successful
   indeed.  While investigating these failures, I found out that the
   problems encountered are not particular to our network.  In fact,
   similar breakdowns are reported in a wide body of literature on
   computer supported cooperative work.

In working on this problem, de Moor produced "a theory of legitimate user-
driven specification, as well as a supporting method and [software] tool.
They should enable members of virtual professional communities to use
their potential for collaboration to create network information systems
that better meet the communal needs".

De Moor wrote his thesis at Tilburg University in The Netherlands, and
summaries of it in English and Dutch, as well as information for obtaining
English copies of the entire thesis, are available at
http://infolab.kub.nl/people/ademoor/phd .

Goto table of contents


==========================================================================

                          ABOUT THIS NEWSLETTER

Copyright 2000 by The Nature Institute.  You may redistribute this
newsletter for noncommercial purposes.  You may also redistribute
individual articles in their entirety, provided the NetFuture url and this
paragraph are attached.

NetFuture is supported by freely given reader contributions, and could not
survive without them.  For details and special offers, see
http://netfuture.org/support.html .

Current and past issues of NetFuture are available on the Web:

    http://netfuture.org/

To subscribe or unsubscribe to NetFuture:
    http://netfuture.org/subscribe.html.

Steve Talbott :: NetFuture #106 :: May 9, 2000

Goto table of contents