Douglas Rushkoff, image: Seth Kushner

Spotlight

Social Critic & Team Human author Douglas Rushkoff on Taking Back the Economy

Locavesting Staff | May 26, 2019

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Douglas Rushkoff has been critiquing technology and social trends for more than two decades. His 17th(!) book, Team Human, weaves together the threads of much of his earlier work and asks us to rediscover our humanity in this age of technological and economic dislocation. Rushkoff will kick of ComCap19 in Detroit on June 11. We caught up with him to learn more about Team Human and its connection to the community capital movement.

What drove you to write Team Human? 

Well, the initial impulse was a panel discussion where I was forced to defend the right of humans to exist in the digital future. A famous singularity proponent had been explaining that it was time for humans to pass the evolutionary torch to our digital successors. That we should accept our extinction and replacement by machines. It made me see how the digital economy was leading us to understand human beings purely in terms of our utility value — how well we serve the economy — rather than our intrinsic value. So I decided someone needed to write a manifesto arguing for human dignity and articulating the essential value of being human.

It’s the culmination of a career looking at the profound reversals between human beings and our various systems. We try to adapt people to the economy or to technology, as if it is our function to serve these systems. When these systems should be programmed to benefit us. This is the core but forgotten insight of the digital age: we can program reality to suit our needs, rather than re-programming human beings to serve the needs of capital.

You say that instead of optimizing our economy for the growth and extraction of capital, we should optimize it for the velocity of money. What do you mean by that?

This is super-duper basic economics. But whenever I talk about this at a banking conference, people think it’s outrageous, provocative, and wrong. It’s really not radical.

Right now, the way we understand business is based on some old and rather obsolete notions of how to make money. Business people think the way to make money is to buy and sell businesses. So you invest money in a business, get it to grow, and then sell it a higher price. That’s an interesting model, for sure, and it works for people who have a lot of capital to invest.

Rushkoff The radical new bizarre way I’m proposing people make money, instead, is by selling goods and services to people. So, you source some raw materials at some price, then add value to those materials by combining them into something (like making a pizza, say) and then sell the final product for more than it cost you to make them. The difference between your cost and the selling price is the profit. Then, you can use some of the profit to pay yourself, or even reinvest it in the business. Or even pay dividends to some of your original investors, if you have any.

Now, people who only understand success in terms of growth don’t understand that paragraph at all. Those are the folks that called Twitter a failure when it was making $2 billion of profit a year. Why? Because Twitter had peaked at around that amount. Its growth had reached a plateau.

The problem with an entirely growth-based model of economics is that companies end up draining their marketplaces in order to show growth. Like a Walmart, coming into a town and putting everyone else out of business, then paying unlivable wages to its employees so that the town has to pay out more in welfare and food stamps. Companies like Amazon and Uber are great at sucking all the capital out of a marketplace, but bad at deploying the assets they’ve accumulated. In business parlance, return on assets has been steadily decreasing for the past 75 years. They are obese.

“As the climate and geopolitics get worse, and international supply chains are disrupted, there will be more interest in local businesses that actually source and fabricate locally.”

I’m suggesting that instead of optimizing the economy for the continued, pointless growth of these behemoths, we optimize it instead for circulation. Right now, the tax code rewards capital gains, and punishes revenue. Why is that? Because people with money make the law. But what about if people who *earned* money made the law? There are many ways to promote the circulation of money through communities, instead of extracting it and delivering it up to some distant shareholders. Those are all optimizing for the velocity of money, instead of the growth of capital. It’s better to earn the same dollar ten times than to earn ten dollars once.

What is the role of locally-rooted businesses in the economy and society, and how can we better support them?

The role of locally-rooted businesses is to foster the prosperity of a community, rather than its destruction. Big businesses want to take the money way from the people and places where they operate. Local businesses want their customers to be wealthy and happy, so that these people have more money to spend with them. I know it sounds preposterous to traditional businesspeople (they think this is “communist” idea) but what I’ve been arguing is that businesses should make their customers and suppliers rich. The wealthier the marketplace in which you’re operating, the better off you are.

The easiest way to support local businesses is to do business with them. This could mean using your eyes and legs and friends to choose a business, rather than a Google search. The Google search is generic, and favors those who have paid the company. But there could be stores and businesses on your own Main Street that you don’t even know about because you’re spending so much time looking at your smart phone. Another way to support local businesses is with local investment and local currencies.

So, what is the biggest obstacle to achieving a more human economy?

The hardest part right now is that most communities don’t actually produce anything. If all the businesses in a town are just retail outlets for the same goods that are sold on Amazon, it’s really hard to get any leverage. A human economy requires humans who are adding value to the goods and services being sold. Another big obstacle is that big corporations get capital cheaper than human-scaled enterprises. So they have a huge advantage. The monopoly money we all must use is cheaper for some than others. But as the climate and geopolitics get worse, and international supply chains are disrupted, there will be more interest in local businesses that actually source and fabricate locally.

A lot of people in the community capital field are out on the front lines every day, coming up against constant challenges presented by the status quo. Any advice for these people?

Mainly, don’t do it alone. Our media, technology, and economy are all heavily invested in alienating us from one another. Our devices train us to see other people as enemies. That makes it really hard to reach out to others, to establish rapport, or to forge solidarity. We can’t believe what our devices are telling us. There are other people in the world who feel the same way you do, and are after the same goals. If you can find some people who are willing to look you in the eye, you are halfway there toward a sustainable, community economy. The rapport comes first. Then the solidarity.

On that note, we look forward to being with you in Detroit in June!

Image at top by Seth Kushner.

EDITOR’S NOTE: Due to a scheduling change after this story was published, Douglas Rushkoff will not be speaking at ComCap19.

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