business
December 2008 
Lessig: Is Google (2008) Microsoft (1998)? (aka Supercapitalism)
~C4Chaos
(Crossposted from www.c4chaos.com)
Last night me and my good friend Dave attended a lecture by Lawrence Lessig at the University of Washington. The title of the lecture: Is Google (2008) Microsoft (1998)?
As usual, Lawrence Lessig delivered another brilliant and insightful presentation. He deserved the standing ovation. He packed more information in one hour of lecture than I can digest. Good thing I took some notes. Here are some bumper sticker notes:
-- "the data is the platform"
-- "comedy of the commons"
-- "lawyers are not innovators"
-- "silly to moralize a corporation"
-- "Microsoft is not evil"
-- "support the competition"
-- "politics diverted"
I hope that Lessig posts a video of that presentation so I can share it with everyone. Really good stuff.
In the meantime, allow me to share some of the nuggets of wisdom I got out of that lecture.
First, the title of the lecture is a bit misleading. It's more like a hook to get people to pay attention. Mention Google and Microsoft and heads would turn immediately. But I'm not disappointed one bit. In fact, Lessig delivered more than what was promised by the title. Here's my attempt at summarizing the lecture.
Lessig started his trademark Powerpoint presentation with the story of how Microsoft lost its "coolness." And then he proceeded with the story of how Google now dominates the tech industry, while still maintaining its "coolness" factor -- the data is now the platform. In his storytelling he covered his usual topics such as copyright, creative commons, read-only/read-write culture, economies of culture (e.g. hybrid companies), and corruption. But those topics, as interesting and fascinating as they were, were only ingredients to the meat of the lecture.
The real meat of the lecture is: the eroding of trust by the public on the government and the misplace of this trust on "good" corporations undermine our democracy.
Lessig concluded his lecture by pitching the book Supercapitalism by Robert Reich. The arguments in this book (which Lessig agrees with) go contrary to the popular idea of Corporate Social Responsibility. Here's an excerpt on Lessig's blog:
"The problem, from Reich's (and my) perspective, is that the other half of us - the part that thinks not as an actor in a market, but as a citizen - has atrophied. That is, the half of us (again, of each of us - Reich's point is that each of us has these two parts) that demands that government set sensible and efficient limits on private action has atrophied. Deep skepticism about government has made most of us turn away from it as a tool of sensible policy making. We instead (and this is a truly brilliant part of the book) turn to corporations to make good policy in government's stead. We push for "corporate social responsibility" and praise corporations who agree to do the "good" thing, imagining that this means something other than the "money making" thing. This, Reich says, is "politics diverted" - trusting companies to do good policy rather than getting government to set good policy, imagining "corporate social responsibility" will produce something different from corporations maximizing profits."
....
"Corporations are not more efficient governments. They are instead increasingly efficient money making machines. And while there's nothing at all wrong with money making machines -- indeed, wealth and growth depends upon them -- there is something fundamentally wrong with trusting these machines to restrain the drive for profits in the name of doing the right thing."
And this, for me, is the most important nugget of wisdom from that lecture. As much as I support and love the idea of Corporate Social Responsibility and Conscious Capitalism, I also admire Lawrence Lessig's brilliance so I pay attention to his arguments. So I'll be adding Supercapitalism to my reading list. It would be interesting to see how I can hold these opposing views and still manage to do the right thing, at least in my own sphere of influence.
For more info on Supercapitalism, keep watching this bookmark tag:
http://coolmel.zaadz.com/bookmarks/tagged/supercapitalism
I now leave you with this excerpt from a Robert Reich interview on Forbes:
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Forbes.com: Doesn't the increase in consumer power allow the average American a greater opportunity to act as a citizen both of the U.S. and of the world?
Robert Reich: If consumers were willing to sacrifice good deals for the sake of some social goal they believed in--for example, paying more for a garment with a label guaranteeing it's not made by children in a poor country or for a book that's made with recycled paper--then you're right: Supercapitalism, as I've called it, would serve the interests of us both as consumers and as citizens. But the overwhelming evidence shows that consumers are not willing to make such sacrifices. If items are priced the same, consumers will choose the one that better matches their personal ethics, but they won't pay more for one that does.
Consumers are acting logically, because they have no guarantee that other consumers would make the same choice--meaning that their sacrifice would be pointless. The only way to make sure any such economic sacrifice is effective is to seek laws and rules that match one's ethical values.
That's where citizenship and democracy come in. It's through the democratic process that the economic "rules of the game" are determined--rules that all consumers and all private-sector competitors have to play by.
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Access: Public
From European Side of the Atlantic I feel very comfortable with Reichs and Lessigs position.
Its all about getting comprehensive.
Again the four dilemmas for bridging global maps :
- Liberalisation vs. Protection
-Regulation vs. Own Responsibiltiy
-Industrialisation vs. Environment
-Valuing Global Public Goods vs. Skepticism of the Market
A great Bigger Than Life project for true GLOBAL Insight/Action.
Strategies for Bridging Global Gaps
Here is a quote from Reich that raised some pretty serious concerns for me. “But the overwhelming evidence shows that consumers are not willing to make such sacrifices. If items are priced the same, consumers will choose the one that better matches their personal ethics, but they won't pay more for one that does.”
Huh. How are fair trade, organic foods or even the company Whole Foods gaining any traction in the marketplace if this is indeed true? My understanding of the evidence is that quite a large number of consumers are willing to pay more for things that resonate with their virtues. Corporations can indeed make lots of money by “doing the right thing,” since a large fraction of the population is at green or higher altitudes.
Reich's approach at least seems to come from an “organge” value system that assumes consumers act “logically.” Look at this sentence: “Consumers are acting logically, because they have no guarantee that other consumers would make the same choice–meaning that their sacrifice would be pointless.” This is a classic “orange” economic assumptions about how people act, and really does not hold up in the face of developmental psychology evidence.
I think the demand for corporate social responsibility can be largely explained by developmentally psychology as well, although public opinions about their trust for government versus corporations could indeed play a role. Based on his support for Supercapitalism, my guess is that Lessig is also holds traditional “orange” economic assumptions about human behavior, so he uses changes in public opinion to fully explain these new phenomenon in the marketplace. But, because you are so impressed with him ~C4Chaos, I feel like I must be missing something. Please elaborate on anything you see that I am missing.
“Huh. How are fair trade, organic foods or even the company Whole Foods gaining any traction in the marketplace if this is indeed true? My understanding of the evidence is that quite a large number of consumers are willing to pay more for things that resonate with their virtues. Corporations can indeed make lots of money by “doing the right thing,” since a large fraction of the population is at green or higher altitudes. ”
i haven't read the book Supercapitalism yet, and I haven't researched enough yet on Robert Reich to make a more informed opinion. however, based on my own understanding, yes the marketplace is indeed getting aware of their responsibility as conscious consumers. BUT, at this time, most of them belong to the upper-middle and upper class. those are the people who can afford organic and shop at Wholefoods. most middle class and below still go for price. that's why Wal-Mart and Costco are expanding faster than ever. not to mention that most big corporations are looking at China for their expansion. and this is Reich's main point. check out this article by Robert Reich on Wal-Mart:
“But you and I aren't just consumers. We're also workers and citizens. How do we strike the right balance? To claim that people shouldn't have access to Wal-Mart or to cut-rate airfares or services from India or to Internet shopping, because these somehow reduce their quality of life, is paternalistic tripe. No one is a better judge of what people want than they themselves.
“The problem is, the choices we make in the market don't fully reflect our values as workers or as citizens. I didn't want our community bookstore in Cambridge, Mass., to close (as it did last fall) yet I still bought lots of books from Amazon.com. In addition, we may not see the larger bargain when our own job or community isn't directly at stake. I don't like what's happening to airline workers, but I still try for the cheapest fare I can get.”
good thing Wal-Mart and Costco are into Corporate Social Responsibility too (i.e. riding the green bandwagon) because it's also good for their bottom-lines. but i'll read up on the book, Supercapitalism, so i can understand Reich's arguments more clearly.having said that, i would love to see a dialogue between Robert Reich and John Mackey on this issue.
as to your question on Lessig, i think he's one of those who holds a more “integral” view of things from a public policy standpoint than the traditional mainstream. he's a lawyer by profession maybe that's why you perceive him as “traditional orange.” but imho, he's one of the most innovative voices out there. even if he says that “lawyers are not innovators” :) i suggest that you look up his work on Creative Commons and read his book, Free Culture (download is free). in addition, check out his lecture on corruption (video here).
~C
Thanks ~C4Chaos! All of what I wrote was some initial impressions from what you wrote above, and I recognize I would need to read a lot more to make more accurate judgments. I understand your point about Reich and the influence of social class. I think that is definitely a component along with developmental altitude; I'm not really sure what is the relative impact of both factors. I look forward to hearing more details once you've checked out his book. I didn't get anything from what you wrote above though to indicate any second-tier thinking, values, etc. on Reich's part.
I suspected that you had a different impression on Lessig given your strong endorsement of him. My impression of what you wrote above is that he doesn't take developmental altitude into account in his description of how corporate responsibility is undermining our democracy. I got my orange impression of him from these statements (not his lawyer style): ”We push for “corporate social responsibility” and praise corporations who agree to do the “good” thing, imagining that this means something other than the “money making” thing. This, Reich says, is “politics diverted” - trusting companies to do good policy rather than getting government to set good policy, imagining “corporate social responsibility” will produce something different from corporations maximizing profits.“ “They (companies) are instead increasingly efficient money making machines.” Why can't we expect companies to do the “money making” thing by doing the “good” thing given the fact that there is a market for doing the “good” thing? There is no need “to restrain companies from driving for profits” in these cases. Those statements seemed very close to classic orange economic reasoning (the sole responsibility of companies is to make profits for their shareholders) rather than someone like John Mackey (companies have many important shareholders that all need to be considered). I also didn't see how people couldn't look for government and companies to both do the “good” thing. It seemed like a false either/or scenario when both/and thinking would have been more appropriate. I'll check out the links and respond tomorrow if I feel a need to do as much. Thanks for your response!