Josh Haas's Web Log

The terror of capitalism is: I don’t grow my own food.

We are alienated from the process of sustaining human life. Our relationship with food, shelter, sanitation, and housing is mediated by the market. If you don’t have something to sell, something that the market wants, you starve.

Our survival depends on an indifferent god. The market is not benevolent. It does not reward virtue or hard work. The market, like Rhett Butler, doesn’t give a damn.

In fact, perfect competition is perfect poverty. On a truly level playing field, profits go inexorably to zero. The only reason anyone makes money is market inefficiency, because in an efficient market, all innovation is copied and all prices are undercut. There is always someone willing someone to work that extra hour, or that dollar cheaper, because starving slowly is better than starving quickly.

The invisible hand is real, and it has one job: to squeeze your life out. The free market will strip-mine you.

So what do we do? We make monopolies. Everyone who has any wealth at all is participating in some form of a monopoly. Monopolies are forces of anti-competition. They are social constructs with the purpose of excluding outsiders from a given market, in order to make that market inefficient.

Almost everything in a money-based society is a form of monopoly. Corporations are monopolies. Labor unions are monopolies. Political parties are monopolies, and congressional pork is not a failure of government but its reason for existence. Advertisers who convince us that their sugar water is different from other sugar waters are building monopolies. Educational credentials and the institutions that grant them are all monopolies. Trade barriers and immigration restrictions are monopolies. Too big to fail is a monopoly. Patents are monopolies, as are trade secrets, as are social norms against “stealing” someone’s ideas. All forms of discrimination are monopolies, as are all ideologies.

We are all monopolists, because if we weren’t, we would starve. In a capitalist world, monopoly is the primary expression of human creativity.

Based on our monopolies, we judge each other. We say this one is good, this one is bad. We defend our own and attack those of others, and call it social justice or morality or freedom. The truth though is that the only way a monopoly can exist is by forcing out other people. We create artificial standards for comparison that outsiders can’t compete with (it’s called branding if it the lie is about the product, elitism if the lie is about the person). We enforce laws that stop them outright (it’s called regulation, or intellectual property, or protectionism). We create fear and pander to desire. The tactics are as diverse as humanity, and none of them are any more or less moral than a bird eating a mouse.

People in Silicon Valley are excited about “disruption”. Disrupt has become an imperative: “TechCrunch: Disrupt!” Disruption means the destruction of an old monopoly to replace it with a new one. It means that outsiders get to become insiders, and insiders become outsiders.

The ideology of disruption justifies itself: Disruption creates value. Disruption advances technology. The old monopolies are inefficient. The new monopolies are better.

The best lies contain a grain of truth, which is why disruption is such a powerful ideology. It is true that disruption advances technology. It is true that it leads to better goods and services. It is true that everyone wins when the state of the art advances.

What is left out of this truth, though, is that for the disrupters to profit from their innovation, they must capture the value they create through monopoly. They need to raise barriers to keep people from following them, or else they will see no return on their investment. So, everyone else does win — as consumers. But they lose as producers. They are the new outsiders, shut out of the new economy.

A disrupted world is a world of constant fear. The faster technology advances, the faster the new monopoly becomes the old monopoly. The only security in a disruptive world is to constantly be disrupting, to innovate faster than your competitors can. Disruption, therefore, is elitist. The subtext of disruption is always, “I am smarter and therefore more worthy.”

Every elitist claim conceals a fear of its opposite. What if you aren’t actually smarter? What if the other guy is? This fear is what drives the social universe of Silicon Valley. This is why successful CEOs are hero-worshipped, and why people flock from trend to trend, hopelessly trying to reverse-engineer success. It’s the continual anxiety of the perpetually lost, trying to find their way over to the right side of history before it’s too late.

I can’t hate disrupters for wanting to move from the outside to the inside. I can’t hate them for raging against the existing monopolies, for deploring their stasis, their complacency, the coercion and lies necessary to maintain them. Who doesn’t want to be an insider? Who doesn’t want to feel secure?

And yet disruption doesn’t really offer security. It only offers further violence, the new against the old, the new becoming the old, the new new against the new old.

Is there a better way? Is there a third alternative to the stasis of entrenched monopoly versus the violence of new monopoly?

Yes. Yes, there is. There is a currency out there that is not zero-sum at all, that is not based on fear, that does not rely on insiders versus outsiders.

We can state the imperative of monopoly as: seek power for yourself.

And the imperative that can defeat monopoly? Seek power for others.

Seeking power for others, empowerment, means working to increase the effectiveness of our neighbors in the world. It means working to put more material resources into their hands. It means sharing technologies with them. It means helping them be happy and psychologically whole.

This kind of empowerment is not feel-good charity. It’s money in the bank, for yourself. When shit hits the fan and it’s you who needs food, medicine, shelter, the absolutely best resource you can have is a network of empowered people who feel that they owe you one. It’s much easier, in fact, to wipe out a bank balance than it is to wipe out an empowered social network.

What does empowerment look like in practice? In practice, it looks very similar to capitalism. Like a capitalist, you understand what the people around you want (and you also pay attention to what they need). Like a capitalist, you provide goods and services that meet those needs. Sometimes people pay you for those goods and services. Sometimes they sponsor you to provide them, a la Kickstarter. And sometimes you just give them away for free.

The difference is primarily one of ends, not means. You can use existing channels of capitalism or democracy. The difference is that the goal of every transaction is first and foremost for the other person to gain in terms of power, and secondarily for you to get what you need to keep transacting. It’s the difference between keeping prices as low as you can afford, rather than as high as you can get away with. It’s the difference between giving people resources versus feeding people’s addictions.

Empowering others is not about overthrowing capitalism, it’s about building on top of it, of playing the free markets by different rules.

Empowering others is practical strategy. Empowerment can go head-to-head against self-interest and win. Self-interest is a short-term game. It’s extractive; you build your monopoly, and you use it to milk the people around you dry. You gain resources, but lose network. Conversely, empowerment doesn’t gain you as many resources up front, but it creates compounding interest as the people you empower are more able to empower other people, causing the network as a whole to gain value exponentially.

More and more people are choosing this new game. Outside of the world of venture-backed disruption, entrepreneurs are increasingly rejecting the premise that companies exist to provide return on investment, in favor of the premise that companies exist to create a social good. Within the existing corporate order, the rise of the B Corporation provides a legal framework for companies to put social goals ahead of shareholder profits. Entire ecosystems such as the open source community have been built around freely giving. Those are examples from my own experience; I’m sure there are many others across the world.

Values are ultimately practical; they are rules of thumb for navigating complex environments. Values that don’t preserve the well-being of their adherents don’t survive. The values of capitalism, namely self-interested wealth-seeking, have had an enormously successful run. They have turned the world inside out over and over again. And they’ve left a compounding pile of messy disaster in their wake. It’s time to move on. The institutions and accomplishments of capitalism will likely continue in a recognizable form, but the time for self-interest is over. Survival in the new economy is about networked, cooperative power. Let’s embrace that, and transform the future into something to anticipate, not something to fear.

One of the traditional contrasts drawn between Eastern and Western thought is that Eastern thought focuses on acceptance of reality as it is, whereas Western thought focuses on progress to make reality better.

This contrast has always bothered me, because to me it feels like I’d want both! I’m a believer in progress and changing the world, but I also think it’s very important to live in the now and accept reality as it is.

I’ve always been in interested in a unified theory of psychological growth that explains the role of both expanding horizons and goals, as well as deeper acceptance of reality.

I’ve been thinking about this problem again lately, and I have a theory now that I’d like to share.

The theory maps out the lifecycle of psychological growth of an agent. By an agent, I mean an intelligent, goal-directed being like a human (or an AI if we ever figure out how to program one).

Being an agent, to me, means having a mental model of the world, and having the tendency to act in ways that brings the world into alignment with certain features of the model (i.e., goals).

Psychological growth means developing a richer, more effective model of the world; it also correlates with basic human values like becoming more loving and more happy. So, this can be regarded as an exercise in amateur developmental psychology — how does a baby grow up, and progress into happy, functional adulthood?

Unlike other models such as Piaget’s stages of cognitive development, I’m less interested in what understanding is acquired when, and more interested in what the basic process of acquiring understanding looks like. In my examples I use a baby since baby’s lives are simpler, but I see this process as continuing all the way through a person’s old age as long as that person continues to grow.

Below, I’ll present the model — the fun part — and then below that, some more notes on what I think an agent is (a little less interesting, but useful for getting a richer understanding of the theory).

This is totally speculation, but it’s fun speculation, and it correlates pretty well to my personal observations of what growth feels like. If I ever try to program an AI, I’ll be keeping this theory in mind. Read the rest of this entry »

Albert Wenger from Union Square Ventures wrote a blog post in favor of a utopian revolution that I’ve been thinking a lot about the last couple days.

To summarize, his point is basically: a) the current political and economic system isn’t working, b) we don’t have a concrete vision of what to replace it with, c) let’s aim big (total eradication of poverty while living in harmony with the environment on a global scale), because d) we now have the technology to pull it off over the next few generations.

His suggested approach is along the lines of guaranteeing income and internet access for everyone, and decentralizing governmental power to cities, which he’s putting out as a vague roadmap to be fleshed out through continued conversation and research.

My initial reaction was intense enthusiasm, because I generally agree that things aren’t working and that incremental change isn’t going to get there, and because I’m a believer in big ambitious crazy goals.

I’m still positive, but I’ve been thinking about what’s really wrong with the status quo, why it’s intractable, and what a solution would have to look like.

My basic sense is that high-tech, highly-networked capitalism is structurally flawed. The problem is that there is too much competition for too few ecological niches. As transportation and communication technologies improve, markets move from local to global, letting a single player provide for the entire system.

For instance, in an agrarian economy, Read the rest of this entry »