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Comments (17) Posted 07.29.09 | PERMALINK | PRINT

Dialogue

Kurt Andersen and Douglas Rushkoff: Part I


By Julie Lasky



Long before the global economy seized up, Kurt Andersen and Douglas Rushkoff were contemplating the links between society and capital—which makes their views on the recent recession timely, if notably different from one another's. In June, Rushkoff, the media critic and documentary filmmaker, published Life Inc.: How the World Became a Corporation and How to Take It Back. In this book, he interprets the recession as the outcome of a centuries-old ethos prizing speculation over value and profit over human connection. Andersen, essayist, novelist, and host of public radio's Studio 360 arts program, for his part, has just come out with Reset: How This Crisis Can Restore Our Values and Renew America. As the title suggests, it’s a study in optimism.

Change Observer’s Julie Lasky invited both men to discuss how we landed in this stew and what the recession portends. The conversation took place via email July 6–10, 2009.

Julie Lasky

Let me start by asking each of you about the impulses behind your projects. Doug, you’ve famously recounted the story of being mugged in Park Slope, Brooklyn, and bringing down the wrath of your neighbors for reporting the incident on a community website. In Life Inc., you describe decamping to the suburbs not to escape crime but to get away from people whose worry over property values trumped their concern about the inequities and tensions bred by urban gentrification. You attribute such attitudes to a corporate mentality that has evolved over centuries. Was it a simple step from the Park Slope mugging to this book, which I think can be fairly described as an anti-corporate diatribe, or are there more complicated roots? And if so, what are they?

Douglas Rushkoff

I began the book about a year before the mugging incident. Originally, my purpose was to look at the economy from the perspective of a media theorist. And in doing so, I became amazed by a few things:

1. People seemed incapable of recognizing that the money they were using was just one kind of money, with very particular biases. They were relating to Federal Reserve notes as if it were the only kind of money that ever existed or could ever exist. And they seemed completely unaware of how money loaned into existence by a central bank demands that businesses and the economy grow at the rate of interest rather than some connection to supply and demand.

2. Debt had become our nation's biggest product — and it doesn't actually create any value. It's ultimately an extractive force. I always understood how our economy could support a few people who do nothing but speculate on the economy — but I was having trouble understanding how the economy could support more speculators than value creators.

3. It seemed that very few American businesses actually did anything any more. Many companies were calling me to help them communicate their brand values more "transparently" to consumers — but transparency would mean opening the companies to observation and participation. This is plainly impossible for companies that don't actually do anything. I was amazed by the dog food scandal, in which people called their dog food companies to find out if their manufacturing had been outsourced to the plant in China responsible for the poisoning. American dog food companies could not answer their customers' queries, because they just didn't know. They had outsourced their outsourcing to yet another Chinese company. They didn't even do their own outsourcing.

4. And finally, like any media theorist, I was intrigued by the fact that most people accepted the rules of our particular market as the market — as a pre-existing condition of nature, rather than a very particular marketplace developed at a particular moment in time by particular people, for reasons that may or may not be relevant or applicable to our current economic priorities.

These factors combine to make a simple deconstruction of what happened and how it happened appear to you, Julie, like an anti-corporate diatribe. I'd argue it's because these institutions seem so necessary, so much a part of nature, that merely considering their origins as human inventions is almost sacrilegious. I got really interested in just that phenomenon. Sure, people bemoan the second Starbucks opening on the same block, but that's just a question of aesthetics, for the most part. At least, as they understand it. So complaining about it is pointless venting.

Understanding it—the economics of what it means to work for a Starbucks instead of owning a local coffee shop—is very different. So I would hope to distinguish my work from, say, the movie The Corporation or Ben Barber's book Consumed, which either personify the corporation or (in Barber's case) complain about the "puerile" culture that results.

All I wanted to do was show how we got here, how this way of life was sold to us in the 20th century by the very same folks who originally saw fascism as a great idea, and why I believed it to be economically unsustainable. Remember, now, every chief economist of every major investment firm or bank I spoke with insisted that the economy was sound, and that it was bound for increasing expansion. And none of them knew what I was talking about when I asked them about the biases of the money we use. "There were other kinds of money?" they all asked, amazed.

So it was in this context that I got mugged, posted what had happened to a mailing list and got attacked for announcing the street on which it happened; people thought it would hurt the asset value of their real estate. That gave me an opportunity to realize how deeply these values had been internalized. People cared more for the short-term asset value of their houses as property than the long-term value of their houses as homes as part of a neighborhood. This simply made it even more important for me to look at the way we had become corporatized ourselves. It's not about blaming Wal-Mart. It's about looking at the way we think and act. So rather than railing against corporations (I explain why it must not be done three or four times in the book), I insist we simply understand the process through which we adopted the underlying logic of corporatism as natural law rather than a construction.

Then the crash happened — when I was about halfway through the book — and I was freed to go a bit further, and look at the next stage: the crisis is actually an opportunity. It helped everyone see this unsustainable (or even anti-sustainable) economic system more clearly, and liberated me to begin exploring the ways we can reclaim and revitalize value creation over mere value extraction.

Lasky

Kurt, Reset began as a Time magazine essay. What gave rise to this more forgiving representation of the centralized institutions, both corporate and political, that govern us?

Kurt Andersen

Actually, the ideas in Reset germinated six or seven years ago, when I was deep into historical research for Heyday, my most recent novel, which is set in the mid-19th century. Through that research and writing, I acquired a new gut understanding of what I take to be the cyclical course of American economic and political history, and of the concomitant bipolar nature of the American character — that is, how America has always swung back and forth between Yankee prudence and manic magical thinking, between free-market worship and communitarian public-spiritedness, between financially driven busts and bubbly booms. Sometimes the cyclical swings are swift and extreme, and those violent swings can result in progressive political and economic rejiggerings of the system. So when the crash came last fall, followed by (and probably causing) the election of Barack Obama, I was inclined to take a longer view, and see it as a rare and potentially positive convergence of cyclical economic and political swings. And that led me to write Reset.

So I’m more “forgiving” of brutal bottom-line thinking and money madness than Doug, I guess, almost the way that I’m forgiving of extreme weather and earthquakes—that is, I see the age of excess just ended as the latest iteration of a periodic cycle that appears again and again in our political economy, anomalous only in terms of its exceptional 25-year-long length. I tend to agree with Doug’s major premises, such as the unsustainability of an economy dominated by financial speculators instead of “value creators,” and the fact that the particulars of our system are the result of human choices rather than immutable “conditions of nature." And I see the gobsmacking crash and resulting flux as a rare limited-time-only opportunity to significantly update and reform the system and the habits of mind that are its cause and effect. Thus we now have a chance to remake our medical and energy and educational and urban planning systems along vastly more sensible lines. But for all my hopefulness about the possibilities of change — and my desire in some ways for radical reform — as a practical matter I do take as a given our basic market-driven political economy. The decline of manufacturing and the hypertrophied financial and marketing sectors notwithstanding, Doug's assertion that "very few American businesses actually [do] anything, anymore" seems extreme to me. And I’m afraid I don’t quite get how the concern of his speak-no-evil Park Slope neighbors for their property values, no matter how cravenly expressed, is especially new or "corporate."

Lasky

Let’s talk about the temporal aspects of your books. Kurt, isn’t the divided personality you describe, and the resulting cycles of exuberance and prudence, a cause for pessimism rather than optimism? As you point out in Reset, it took only 25 years for America to fully shake off the reluctance of using aggressive military power overseas (the “Vietnam Syndrome”) and invade Iraq. It didn’t even require a generation to die out and a new one to come of age. Given our fugitive national values and convictions, how can we hope to undertake the long, hard work of reinventing our institutions, an effort that will have to involve some tinkering and readjustment over time to get it right?

Doug, at the end of Life Inc. you also refer to “the speculative economy’s cyclical nature,” but the book mostly traces a long, steady decline. One gets the sense of a golden age tarnished by centuries of greedy power brokers. You laud the early Middle Ages for its widespread wealth, leisure and educational opportunities, thanks to the use of multiple currencies. Was that period, in your view, civilization’s high point? Would you have us return to any part of it?

Rushkoff

I'm not writing about the long slow decline of the economy so much as the way our choice of economy has worked to slowly, steadily claim pretty much everything in its path. Even in the best, most optimistic "cyclical" view, the expansion and decline of the economy (and the shift of wealth between its various sectors) seems to be occurring right alongside a steady decline of something else.

I do agree that there's an ebb and flow: the economy grows and as it does, it slowly replaces our social interactions with market interactions. So things people might do together or as parts of communities become things that people do apart, and through corporate-mediated exchanges. And then, somehow, the corporations collapse and people start doing stuff with and for each other again, or retaining a bit more of the value they create. Then corporations retool, make this person-to-person economic activity illegal (or unsustainable) and reclaim commerce for themselves.

So during the Great Depression, people did start interacting and transacting again; local currencies were established. But the successful ones were eventually folded back into the regular banking system (by force) in order to stimulate the greater economy.

While there are cycles, or undulations, each of the populist uprisings Kurt's mentioning really only occur during profound recessions or depressions. They are corrections, not full pendulum swings. Laws are rarely changed to shrink corporate power or diminish the influence of speculative investment over the real economy. By the time the correction is over, we are "worse" off than we were before, at least in terms of the comparative influence of real people on their own economy.

So while I see the pendulum swinging, I see the whole thing moving in a particular direction, as well.

I don't see a golden age tarnished by centuries of evil power brokers. I see a very particular moment in history when feudalism was defended through law rather than just weapons. The late Middle Ages had its problems, for sure, but it also represented the rise of a multi-tiered system of commerce. People could use local currencies and local businesses for immediate, local needs; and they could use long-distance currencies and distant businesses for needs that couldn't be addressed locally. There was more than one economic tool for each economic job.

And this did lead to tremendous bottom-up wealth and economic activity. By some metrics, people lived better than we do: they were taller, ate more meals, invested more in R&D as a percent of GDP, did more preventative maintenance on their equipment and had tremendous surpluses of wealth — so much so that they built cathedrals. (This is not to say that we need to return to gothic architecture or a late medieval diet; just that there was tremendous wealth and a huge population increase.)

Of course, all this bottom-up wealth and the emergence of a middle class were at the relative expense of feudal lords and proto-kings, who hadn't actually created value in centuries. They simply extracted value from others. The development of centralized coin of the realm and of chartered monopoly corporations were — and I've documented all this — quite specifically geared toward giving these failing monarchs (the dying aristocracy) a way to make money by having money.

In the process, though, they made local currencies illegal. They made it illegal for colonists and locals to make clothes out of the cotton they grew. (The poverty that resulted from these changes, the new requirement to travel to a city to work for a company, the inability to do subsistence farming, are what led directly to the plague — just 30 years after local currencies were outlawed in France.) And while these laws aren't quite as explicit in most cases today, the bias of the economy developed by those few folks is still with us today. The very architecture of the economy is tilted away from the kinds of populist economic activity we all favor during these shifts of the pendulum.

So it's not some long chain of evil people. It's just a series of rules — a program, if you will — put in place a few centuries ago that almost no one seems willing to question, or even explore. We accept the rules of the economy as if they were rules of nature. The people we might like to think of as evil are simply unconscious. They really don't see the economy as open source in the least. They're just using Windows 3.1 as if it's the only OS in town.

The reason I'm not as forgiving as Kurt, I suppose, is that I don't see these cycles as weather or earthquakes. I see them as entirely predictable manifestations of the system we've adopted. People think they need cars because "how else would I get to work?" without understanding that they only need a car to get to work because the suburbs were zoned, in part, to promote car ownership (or, in most cases, promote real estate speculation). So we look at Europeans and think how lovely it is they get to walk home for lunch, and assume something about America's geography made this impossible. Does this mean we can get rid of the car suburbs? Probably not. At least not in the short term.

And neither do we just retire the Fed and crash the banks. We can't go back to the Middle Ages, and we don't want to.

What we can do is promote the development of complementary economic mechanisms. New ways (and old ways) of doing commerce. Things as simple as Community Supported Agriculture, where people subscribe to a local farm instead of just buying Big Agra produce from the supermarket. It's not that local farming is genuinely less efficient; it's that it has been rendered less efficient by a marketplace developed by and for agricultural conglomerates. No conspiracy required. Just another one of those biases built in to an economy based on centralized currency and centralized banking, or where corporate lobbies can argue for the interests of large entities more effectively than local constituencies can argue for their own.

That's why I am in full agreement with Kurt when he explains: “I see the gobsmacking crash and resulting flux as a rare limited-time-only opportunity to significantly update and reform the system and the habits of mind that are its cause and effect. Thus we now have a chance to remake our medical and energy and educational and urban planning systems along vastly more sensible lines.”

This is the goal. And some of it really does need to be accomplished using large, centralized agencies or businesses. National healthcare, energy....

But, when Kurt adds: “For all my hopefulness about the possibilities of change — and my desire in some ways for radical reform — as a practical matter I do take as a given our basic market-driven political economy,” I'd have to counter that the basic market-driven political economy in which we are living can be slowly improved as we introduce alternative methods of investment and transaction.

The local organic restaurant in my town was unable to complete its renovation because the bank it had been dealing with froze its lending. So the owner turned to the community, instead. We each invested what money we had to spare, and received credit to spend at the restaurant. Every 100 dollars invested got us credit for 120 dollars of food. He got the money he needed cheaper than he could get it through the bank, and we got 20 percent return on our investment.

Plus, instead of simply outsourcing our investment to unknown companies doing unknown things, we invested in the fabric of our own community — making it a better place to live, attracting more business, and so on.

As people do more of this — if people do more of this — the political economy that we're talking about will necessarily be drained of its overwhelming power. It doesn't have to go away at all; it's just that it should be funding oil rigs and fighter jets — not local restaurants, at exorbitant interest rates that ultimately favor Wal-Mart over mom and pop.

And as people source food through alternative means, and consider working locally instead of commuting to corporate jobs, then the economy that has been based on highly centralized industries like oil and agra ends up being fundamentally changed. So I'm not talking about creating some kind of movement where we upend the market economy. Just lots of activity outside it.

Andersen

I agree with most of what Doug has just said — especially his New Urbanist critique of the wasteful, community-busting, car-centric real estate development paradigm that has dominated since World War II. I'm all for encouraging alternative methods of investment and transaction, whether Community Supported Agriculture or organic food patrons becoming micro-investors in their beloved local organic restaurant.

But I would point out that in a more or less free market economy, even if large businesses do sometimes strive to "make...person-to person-to-person economic activity illegal (or unsustainable)," they're seldom able to do so altogether. Yesterday, for instance, I undertook three main economic transactions: I took clothes to an individually owned laundry a few blocks away, called in a guy from a five-person tech-maintenance firm to fix my Wi-Fi system and had dinner with old friends at a 30-year-old stand-alone restaurant. And, of course, the internet has enabled vast amounts of person-to-person economic activity, some of it mediated by large corporate entities (such as eBay) and a lot of it not (craigslist, Alibris), and a lot of it not really economic at all (such as Change Observer and our present discussion). And on the other hand I've got to say that not all corporate attempts to reclaim commerce for themselves seem sinister to me: for instance, the legal fight by the recording industry against file-sharing has been ham-fisted, for sure, but as a creator of intellectual property I'm sympathetic. Also, Doug may not think the 1930s or 1960s represented full pendulum swings, but they (and the swing of the last 25 years) were plenty full enough for me. Concerning the globalizing spread of large-scale, corporate-dominated market systems, I would point out the hundreds of millions of people — especially Chinese people — it has lifted out of wretched poverty during the last few decades.

As for the strongly two-sided nature of the American character and the (related, though not necessarily "resulting") cyclical nature of the American economy and zeitgeist, I think it's perfectly plausible to see it as either a glass half-full or half-empty. But because I do take those bipolarities as givens and I am more optimistic than not, to me the task of right-thinking Americans is to moderate and mitigate the waste and pain produced at the extremes of the cycles, and to use the periodic systemic seizures as opportunities to clear out the decadent and dysfunctional bits and adjust and improve the particulars of the system. I do think our size and power as a nation for the last century has made this all more problematic on the global military front — you don't really want a superpower swinging between bipolar extremes. I think we over-corrected after Vietnam, and then over-corrected for that over-correction (from the invasion of Grenada to the invasion of Iraq), and one of the reasons I'm hopeful right now is that we seem to have learned the lessons of both extremes, and to be on an unusually sensible, sober, sustainable foreign policy path.

I do worry that Americans lack the patience to do the long, hard work of reinventing (and readjusting) institutions. The digital revolution has, for worse as well as better, reinforced our national weakness for instant solutions. On the other hand, the era just ended was so exceptionally long — a quarter century — that it seems reasonable to imagine that the chastened, more prudent era now getting underway will last long enough to let us fix the things we need to fix. "Fugitive national values and convictions" is a great phrase, but my point is that those values and convictions and temperaments have always co-existed. What we need to do is integrate them with a little more finesse, learn to embrace the paradox — as F. Scott Fitzgerald said, to hold two opposing ideas in mind at the same time and retain the ability to function.

Rushkoff

“I do worry that Americans lack the patience to do the long, hard work of reinventing (and readjusting) institutions.”

Yeah. That's what keeps me up at night, too. (And then I worry about the fungus killing all the bats, the whatever-it-is killing all the bees and the way Michael Jackson wiped Iran off Twitter.)

Google recently announced its new OS. And while (as an enemy of corporatism) I'm supposed to be upset, I find myself thrilled at the relief from consumption such a development portends. Instead of maintaining a laptop bloated with software and files, I'm actually going to get to have a netbook or net-desktop that does pretty much everything I want. (And no, I'm not scared of the massive centralization posed by a Google-served net universe any more than I am by one where we buy all of our installed software from the same couple of companies.)

So I am as thrilled as you are by the scaling down of a certain kind of consumption and production, a cultural ethos that values efficiency and a certain kind of modesty over Lincoln Navigators and McMansions.

You are right that the (rather unconsciously perpetrated) corporate-government alliance usually can't shut down things completely. But then I remember examples like the toy outsourcing scandal, where American toy corps distributed toys from China painted with lead. New regulations were developed by industry and government "working together," which now require toy manufacturers to test any toy being sold to an American child. The tests cost upwards of $50,000, and require a hundred or so units of the toy to be destroyed in the process. Because the regulation applies to all toys, it effectively puts small companies out of business. If the regulation isn't repealed by February, that's it. The mega-corporate practice leads to problems that in turn lead to regulations that favor mega-corporate practices.

Unless, of course, people find out, write letters, and demand the right kinds of changes.

I just came to feel that there are so many similar regulations in place that they no longer feel like regulations. They just feel like the way business happens. People think local currencies are impossible because there is no "oversight" or "checks and balances," failing to realize that babysitting clubs may not benefit from federal oversight, or that if someone lies about having put in an extra hour of babysitting, it might not crash the whole system.

And the other biggie I'm looking at now is whether there are ways for us to feel comfortable transacting, even if the things we are exchanging are in abundance. I understand how we make markets for scarce things, and why we (or central banks and monarchs) made money artificially scarce.

What I don't yet fully grasp is how our economy will be able to tolerate things in abundance. And this seems a pity. If we really could get everything we absolutely need with everyone working just a day or two a week, how would we cope? The fact that this possibility isn't acceptable by our current economy means to me that some adjustment is in order – or at least some head-scratching.

Andersen

Totally agree with you about Google. In fact, it's an excellent example of how the last 15 years have been the best of times as well as the worst of times: Google versus Microsoft is real competition producing real progress, and in fact I trust Google with my precious data (such as Google Docs) more than I would a small, non-"corporate" entity. And your example of misguided corporate-scale regulation in the toy industry is a perfect illustration of why progressives need to forge a regulatory Third Way.

I must say I find your fondness for the idea of local currencies rather quixotic. Until I did my research for Heyday I hadn't really known about America's experiment in the mid-19th century with local paper currencies — issued by 1,600 local banks in 30,000 varieties. That didn't work out too well. And the occasional utopian schemes involving local currency — such as Josiah Warren's “labor notes” used in the 1840s in the Ohio River Valley — never managed to catch on either. As soon as railroads and the telegraph arrived, national coherence demanded national currency (and national time zones and a zillion other national rules of the road).

Central banks make money artificially scarce? Yes, but not only scarce — and certainly not our central bank right now, for instance. Isn't it more like a carburetor that makes fuel, second by second, "artificially" scarce and plentiful?

Your final, larger question — coping with superabundance and cultivating habits other than pedal-to-the-metal revenue maximization as individuals and enterprises — is indeed a vexing one. But to the degree more and more people these days are eagerly lavishing time and energy on financially non-remunerative activities and enterprises — the web, as you know, is as much or more about a renaissance of the amateur spirit as it is about large-scale corporate commerce — I'm heartened.





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Comments (17)   |   JUMP TO MOST RECENT >>

Somewhere there is a pair of economists who are making equally uninformed commentary about the process of novel writing, or media theorizing or whatever it is these two claim is their professions. Seriously, I find it galling that the people (like these two) who most decry the supposed lack of productivity in America are the ones who, themselves, do so little actual work.
colin
08.04.09 at 03:02

That comment is unfair and petty.

1. These men love what they do. They write and PRODUCE books. Find me a speculator or debtor (the people who Ruskoff talks about) who legitamitely enjoys their job. I doubt you'll find any.

2. Like i stated above they do produce and work very hard. One of the hardest professions in the world is that of a historian/research writer/critic. The guy who wrote A Clockwork Orange was one of those and he said writing a novel was easy and he did it just to make money.
Josh
08.04.09 at 06:18

Wow colin. It is quite possible for the human mind to contemplate and understand very involved *multidisciplinary* concepts. So while these guys may not be able to manipulate economic formulas, the trends and correlations they discuss are very valuable insights and very real. (now, to quote Sagan, "Correlation doesn't equal causation". But it does mean that we might want to look at these issues more closely).

Also, they do indeed produce something. Books with longer term, broader perspectives that many of us are over looking in our hurry scurry lives. Remember the old saying..."can't see the forest for the trees" ?

Ceci
08.04.09 at 08:19

@colin - where you get that andersen and rushkoff's material is "uninformed" is, well, pretty uninformed. most brilliant people i know, and i know a bonafide handful, do enjoy dabbling in other arts, as they are brilliant because they are *curious*. and to write entire books about mere curiosities makes one wonder how much brain muscle truly is up there. perhaps more than you can imagine?

lasky's questions were brilliant and the exchange, when i heard about it before it ran, stirred as much anticipation in me as i had when i queued up for star wars: phantom menace, only in the case of this exchange, i was not disappointed.

rushkoff's contribution is the rich historical perspective on the interplay of power and the evolution of various political and economic systems that led to the hyperconsumptive patterns we know today. hyperconsumptive, of course, presupposes hyperproductive, and it is this very hyperproductivity that creates jobs for readers of DO. that being said, it can be argued that design is merely a variable in a complex equation of supply and demand, preferences and trends, passive and bald-faced manipulation of consumers, wasteful and sustainable. what both andersen and rushkoff agree on is the present-value maximization culture that is borne of this hyperproductivity, leads to such distortions in the socio-political fabric, that we are simply reeling from it. the financial crisis and sustainability discourse today are merely tropes that unveiled the true nature of our current system. both andersen and rushkoff see this and have delved into the why's and what next of the questions that kick up after this disruptive unveiling.

let me translate as plainly as possible for this design audience (and colin): design as we know it was borne of the inertia of these political-economic systems, namely industrial capitalism. we have that to thank for. we would not exist without industrialization. andersen and rushkoff both see the negative externalities, negative effects, bad mojo, whatever you want to call it, of this type of global, cultural, and technological expansion. the implications for design is very straightforward -- if you buy into the culture of continuous unrestrained hyperproductivity and hyperconsumption, then you will have a job for the next, say 5 years. if you don't buy it, and buy into both andersen and rushkoff's critique, then you are allowing yourself to see alternative patterns and possibilities in applying design to a different kind of system, which they both agree is beginning to unfold. it's just that they are much closer to naming it than any designer has exhibited. and it's NOT CALLED SUSTAINABLE DESIGN. that is a red herring. it is something else entirely. something that sits just beyond, underneath, askew...to hyperproductivity and hyperconsumption. and it has to do with the way people are thinking a little differently about how to live their lives. perhaps even living their lives a little less conspicuously. a little more morally. steering toward and altogether different star than we've known in our collective lifetimes. gosh i hope so, because the status quo just ain't that, well, good. it's pretty bad, in fact. shameful, for the most intelligent species on this planet.

what's easy now that the flaws have been unveiled, are what all the problems are. the harder part are the solutions. so...if design was borne out of what inherently is the problem part of the equation, how does it redeem itself in becoming part of the solution? i don't know exactly, but i think about this all the time. but i will guarantee you that the colins' of the world won't have very much to contribute to this discourse. with nose so far up in the sky, watch out for open manhole!

gong
Gong Szeto
08.06.09 at 02:15

Look, I've got a degree in econ and I think I agree with colin. However, colin could have probably said it better to avoid making non-economics people defensive. Paul Krugman wrote a great article for Slate about non-economists making economic speculations without really being versed in the basics of the science called the Accidental Theorist (available here: http://www.slate.com/id/1916/) or more succinctly as Keynes said: "“Even the most practical man of affairs is usually in the thrall of the ideas of some long-dead economist.” –J.M. Keynes
Tim Morris
08.06.09 at 02:53

Maybe Tim Morris is right, I could have said that better, but I read part of Rushkoff's work and I have never read a more ill-informed work in all my days. I would think that if one of your central thesis is the evils of speculation, then you would be doing readers a favor if you actually read and understood what economists believe is going on. Then, and only then, could you go on to refute the commonly held beliefs. However, Rushkoff simply assumes he understands the nature of such thing, independent of literally centuries of science and observation. Again, maybe Im too harsh on these two, Ive only read 3 chapters of Rushkoff's work, and none of Andersen, but I recognize uninformed opinion when I see it.
colin
08.06.09 at 09:28

Also, that Slate article that time provided is really good, and apropos here as well. One should approach the iconoclastic amateur with skepticism.
colin
08.06.09 at 09:59

@colin @tim

keynes also said this: "Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."

(i like keynes a lot) and needless to say keynes is alive and well in this adminitration's economic ethos.

if i were to distill down your POV into a sentence, that would be: "If you are not an economist, then you should have no POV on the economy, on society, on culture."

that is a silly claim. or turf tantrum, rather. need i remind you that economics, the hierarchy of sciences, was born out of the *social* sciences, and works very very hard at elevating itself, experiencing something not unlike the rodney dangerfield effect. reference to krugman's 19(97) piece on wm greider - well look at all the things krugman has also done, along with mankiw, cowen, leavitt, and others, is to capitalize on the thrall around economics in the mainstream, and published very accessible econ-lite titles by big publishing houses. and during this period, we've also had awesome stuff from the likes of greider, alperowitz, reich, barber (public policy) who all use economic themes in their books, but delivering through the lens of impact on democracy. and now andersen and rushkoff, through the lens of media and cultural theory.

i would argue that this trend will continue in full force, but this wave is less a bandwagon wave, but a full-on critique wave. economists are rather in the gulag of public opinion now aren't they? rational and efficient market theory is now considered a classic non-starter. oops...there went a hundred years of theory down the toilet.

what's the old saying? economists make the world fit into their models and if the models don't work, then that means something is wrong with the world?

what colin and tim are arguing for is a really dangerous tendency that reinforces the balkanization of a discipline with respect to other disciplines. why? what is the absolute worst thing that can happen to have two media theorists coopt issues that (were nver truly in the first place) are in the purview of economists and econometricians? that the general public begin to engage economics issues on a whole new level?

ralph gamory, whom i also like a lot (including roubini and taleb), is not a degreed economist (he's a mathematician). but his writings and analysis on the urgency to rebuild the US's manufacturing base as the only way to build a strong nation uses the sheep-goat example of comparative advantage as a trope to get his message across. sheep are econ-snobs. goats are everyone else. many top minds are questioning *everything* this discipline has spewed for the last 100 years.

lastly, if what you argue is true, that means general journalism is out of the question, nevermind financial journalism. no accident that the absolute best financial journalism has occurred in the last 12 months (lind, taibbi, moore, lewis, salmon, and more) and that's because the colossal public failure of economics to predict the financial crisis has left the whole discipline with egg on their faces. what you are saying basically, is that if you are not born of the discipline, you are allowed to ask questions and critique it. these two men to, and their books are provocations and they are ready to engage, moreso than most. it is a proper example of anti-hegemonic thinking.

now is the time to question all the assumptions, all the theories, all the models. and if the economists themselves won't do it, then someone else has to. or at least raise enough eyebrows that they come out of their ivory towers and kiss the ground (and the population's collective asses) from time to time.

colin, share with us your hallowed credentials. tim, you two. name the institution, name the bias (keynes, galbraith, chicago school, etc). that would help. but what would be the most helpful of all is for you both to take just ONE THEME in the andersen-rushkoff debate and show us "economistically" what is flawed, and then, offer your own fully-baked POV that isn't just a regurgitation of "another dead economist". where you both rather fail, is that if krugman or anyone of equivalent stature were here, i'd bet he'd really *try* and craft a statement that engaged a theme or two, rather than some meta-turf tantrum. the '97 piece on greider (and thanks for sharing) was truly not his finest hour. he comes off, well, like he's having a turf-tantrum. yeesh.

g
Gong Szeto
08.06.09 at 11:13

some links to economists (yeah, real ones) and other notable public intellectuals who more or less echo the themes reflected in the exchange by anderson-rushkoff:

economist thomas palley "america's exhausted paradigm" http://bit.ly/StZWx

australian panel "2050: a hypothetical future" http://bit.ly/HW4dL (there's a funny statement in this: economics will become a sub-discipline of ECOLOGY by 2050)

herman daly, pioneer of steady-state economics http://bit.ly/aWoS5

economist samuel bowles (complex systems and anthropological adaptation) http://bit.ly/yF1Pu (see specifically his papers on social capital and altruism)

economist hernando de soto http://bit.ly/18a6RS who challenges the primacy of the property ideal as it relates to the efficiency of capital allocation in developing nations.

i can name more, but this is a good sampler. andersen and rushkoff are not thinking in a vacuum.

g
Gong Szeto
08.06.09 at 01:19

3 more (these are good)

quantum physicists (!) taking on economics at the perimeter institute in "the economic manhattan project" http://bit.ly/MDcE8

economist serge latouche on "de-growing" http://bit.ly/cMmzP

economist (and historian) niall ferguson vs. james fallows (journalist) on "chimerica" http://bit.ly/10ECjB

lots...couldn't resist. all good. all relevant.
g
Gong Szeto
08.06.09 at 01:35

Let me offer another way of looking at this: If I wrote a book which was titled "everything that astronomers know is false" then you, the skeptical reader, would reasonably believe that I knew *something* about astronomy in the first place. After all, I cant really refute something I dont even understand, right?

Thats where Rushkoff is, critiquing things he doesnt really understand. Again, Ive only read a couple of chapters of his book so I may not be the best judge, but I would say, at a minimum, he does not understand the time-value of money theory, judging by his distaste for both lending and speculation. I would love to explain these to you, but, judging by the tone of your posts, I suspect you would not care to learn, but rather just look for an opportunity to slam me, to put "egg on my face" as you say. I think that is too bad, too. What you and Rushkoff forget is that it is good to question what you learn, but you have to learn it first.
Colin
08.06.09 at 01:58

Again, Id add that Im more referring to what I read in Rushkoff's book, not so much the things expressed here.

Also, just glancing at some of the links you have provided, I see _economists_ critiquing advanced elements of economic thought from a perspective of understanding the fundamentals. I agree with a lot of what they say, but this is not a refutation of the fundamentals, rather a critique of the more advanced applications of economic thought.
Colin
08.06.09 at 02:10

@colin
uncle. you are right. new ideas and insights can only be traced back to their original roots and intellectual purity is everything. but wait a minute! wasn't adam smith a POLITICAL PHILOSOPHER first before INVENTING classical economic theory? come ON, colin.

;-)

g
Gong Szeto
08.06.09 at 03:18

For the record, if you're basing anything in Rushkoff's book on the first two or three chapters you should be aware that it doesn't really get cooking until the 3rd quarter IMHO.
akamarkman
08.06.09 at 06:55

to all DO readers - i fully admit to having gotten derailed by colin's complete fixation with discrediting both andersen and rushkoff's contributions to the general conversation about the implications of the financial crisis on our economy, on life in general. this exchange obscufates terribly important issues and themes for design that andersen and rushkoff only scratch the surface of in this exchange.

their exchange is not really about economic theory per se, but rather, how we, as individuals, factor into the overall picture, not as mere economic actors (abstractions), but as people trying to live successfully amongst one another, within a political-economic system that is too easily gamed to favor high concentrations of existing power over the public good. we are all caught in this dynamic, passion play, comedy/tragedy, whatever you want to call it.

DO's decision to run this two part interview, in my opinion, is due largely to its editorial perception that engaging complex socio-political-economic issues through the lenses of two masters in media and cultural inquiry would be useful to the DO audience. and i think they were right. you do not have to read all the classical and contemporary texts in political economy to "feel" that something is very awry, and to at least vicariously plow through the implications via andersen and rushkoff is pretty much worth doing, again, in my opinion.

in the Financial Times, only two days ago, they ran a story related to the Queen of England's innocent question to the economic elite, "Why did no one see the crisis coming?" An excerpt from FT's response to the Queen:

"It [the shift in the 20th c toward quantitative methods] reflects a persistent bias in economics towards an idealised account of human behaviour; what Joseph Schumpeter called the “Ricardian Vice” of excessive abstraction. It is only by imagining a mechanical world of interacting robots that economics has gained its status as a hard, predictive science. But how much do its mechanical constructions, with their roots in Newtonian physics, tell us about the springs of human behaviour? [...]

One of the most interesting contributions to the FT.com debate was the argument that, after Keynes, economists should have aligned their discipline with other social sciences concerned with human behaviour. Keynes opened the way to political economy; but economists opted for a regressive research programme, disguised by sophisticated mathematics, that set it apart. The present crisis gives us an opportunity to try again."

(me:)
This is an astonishing statement. It portends quite possibly a seismic shift in an entire discipline's priorities and the way it's current and next generations of students will be taught. A shift toward a much, much more *human* (or at least humanities-based) approach to this social science, a "science" that has had more influence in politics, and therefore, society, than any i can think of.

That being said, it also mirrors some fundamental priority realignments in the disciplines of Design (and i care not which flavor, it's happening in all). and these shifts are reflected in DO 3.0, clearly. But let me be clear - design *follows* the patterns of other disciplines, but never has it led. design inherits its value from other worlds of thought, which is not a bad thing at all - design theory in general draws its strengths from the output of the humanities and science. we eventually *apply* thought to action in the form of tangible goods and services that....people...engage with.

people and their collective concerns are what the discipline of design has in common with all disciplines concerned with people. and that list is very long. my point, ultimately, is this: if there indeed are structural realignment patterns happening in the world from political, social, economic, and moral perspectives, what do we as a collective profession say to this?

it has been our pattern to inherit the values that underly our creative briefs. perhaps now we are seeing that those very briefs, like fundamentalist free market economic thought, have also been emperors with no clothes? what on earth do we do now?

the answer is as simple as it is complicated: we as a profession really ought to be in the business of *writing the new brief*. why? well, if you think about it, all these (perceived) realignments are actually aligning TOWARD design's already deeply embedded value systems - ethical, humane, thinking, feeling...and dare i say, beauty, simplicity, utility.

both andersen and rushkoff are teasing these things out but through the lenses of economy and culture. the funny thing is (to me anyway) what they are advocating i profoundly believe, we already knew.

it's just that i don't think we knew we knew. this may sound obvious, but knowing requires really KNOWING. and it is through conversations outside of design that the insights from validation can be seen. what's wrong with this picture? nothing.

so, step outside yourself and really marinate in what andersen and rushkoff are talking about. read the books, then dig a little deeper. and so on. and someday you'll meet a bonafide economist at a cocktail party and have a rich exchange, whereby she will see herself reflected in you and vice versa. with the notable exception that what you do makes what she thinks---material reality.

i yield to the colin and his fundamentalism, as his POV is as germaine as anyone else's. including your own. so let's hear it.

(sorry so long, i have a lot to say, it's a flaw)
g



Gong Szeto
08.07.09 at 06:49

Meh.
The back and forth one witnesses in the exchanges between economists today, (at least in the media) leads one to think that there is a great deal of pseudo science involved rather then science.

Probably has more to do with alchemy really trying to make gold out of thin air, and value out of debt.
D
08.11.09 at 05:04

Writing letters to politicians is going to solve anything? Ya right, that worked what, like four times ever?

If you think about *any* time in the past (let's say yesterday) and were happy with some sort of "average" of whatever you feel like considering "standard of living", don't you think we could be happy with that for a while? Yet we still "want" to consume more and more every second...

What we've done is set up a giant consumption machine: we are cogs in our own consuming machine. Part of that machine is the debt-based currency supply, part of it is the institutionalization of EVERYthing (you can't even decide what colour to paint your house outside of a narrow range in a lot of places).

Our infatuation with centralizing power structures must end. We must decentralize them all (baking first if you like, but whatever).
mike
08.11.09 at 07:05



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ABOUT THE AUTHOR

Julie Lasky is editor of Change Observer. She was previously editor-in-chief of I.D. and Interiors, and managing editor of Print. Lasky has contributed to The New York Times, Metropolis, Dwell, Eye, Slate and NPR.
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Douglas Rushkoff is an author, teacher, and documentarian who focuses on the ways people, cultures, and institutions create, share, and influence each other’s values.
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Kurt Andersen is a writer, editor, television producer and radio host of PRI's Studio 360. His writing has appeared in numerous publications and he's the author of the novels Heyday and Turn of the Century.
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