Alberto Mingardi  

Rushkoff's nostalgia

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Douglas Rushkoff's "Throwing Rocks at the Google Bus" has 38 reviews on Amazon, all but one fairly positive. I got my hands on it because, from the little I got from some non-Amazon reviews, I thought this might be an important book, though one mostly critical of contemporary "neoliberalism" (whatever that means). Having read most of it, I wouldn't bet on Rushkoff being the next Piketty.
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Rushkoff is a "tech" guru who nonetheless considers the division of labour the root of all evil.

His books is predicated upon a delusion: in the early days of the Internet, he thought the net could produce an economy based upon some version of barter between artisans, but it has unfortunately, because of the Amazons of this world, evolved into another big supermarket.

Rushkoff believes that we should look forward to "new, more distributed modes of value creation and exchange," which may sound nice until you understand what he means.

He maintains that "for a happy couple of centuries before industrialism and the modern era, the business landscape looked something like Burning Man, the famous desert festival for digital artisans." He likes the invention of the "bazaar," a "peer-to-peer economy, something along the lines of eBay or Etsy, where attention to human relationships and reputations promoted better business."

But then he produces his version of Marx's theory of original accumulation, which led to the "divorce" of the producers from the means of production. Instead of focusing on the bourgeoisie hoarding while waiting for modern capitalism to happen, Rushkoff believes that it was the aristocracy which aimed to "usurp the growth it witnessed in the peasants' marketplace and to imitate it by other means." In his view, industrialisation and specialisation are processes by which we learn how to "require less skill from human labourers, in order to restore "the power on those on top."

Rushkoff seems to be completely oblivious to the fact that an increased division of labour makes for greater productivity, and was responsible for modern economic growth. That the industrialised world fed better a growing population is a trivial point for him. Not surprisingly, his book, which denounces global capitalism (including regulatory capture, kudos for that), pays basically no attention to the betterment of living standards all over the world because of globalisation.

Rushkoff is thoroughly skeptical of "the economy of likes," as he believes that "the digital economy continues the industrial practice of preventing real people from participating in the growth economy." Social media originally appeared to provide some sort of "peer-to-peer" alternative, but then got "industrialised" - which, in this case, it means it became prey to the pervasive culture of advertising. Big data adds to this phenomena, which generates a context in which "nothing of value is created but billions of dollars are made."

There are in particular three things that I do not get out of Professor Rushkoff's reasoning:

(a) He sees all of this as black or white. But, in real life, the very same people can go to a farmers' market on Friday and to Costco on Sunday. Why does it have to be either the bazaar or the supermarket? Is it to weird to see that they meet different needs?
(b) He is strongly inimical to "likes" and similar devices. But don't they precisely work in order to allow us to benefit, on a larger scale, from those repetitional mechanisms that he seems to like (pardon the pun) in a peer-to-peer economy?
(c) He writes that "in its currently inflated state, the entirety of advertising, marketing, public relations, and associated research still accounts for less than 5 percent of gross domestic product (GDP), by the very most generous estimates." Why shall we worry then?

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COMMENTS (2 to date)
Don Boudreaux writes:

Alberto: You are very generous to Rushkoff. (I say this as genuine praise for you.) I read this book and, I must say, it's probably the worst book that I've ever read. Rushkoff seems to be unaware of the most obvious details of the reality about which he purports to write. An example: he says that the purpose the U.S. Federal Reserve is to protect the wealth of rich people - who, Rushkoff believes, hold the bulk of their assets in cash (!) - by ensuring that the dollar doesn't deteriorate in value through inflation.

What to say?!

Don Boudreaux writes:

P.S. to my previous comment: Rushkoff writes as if the Fed actually managed to avoid inflation. In my review of Rushkoff's book, I cite the finding of Selgin, Lastrapes, and White that, from 1790 until 1913 (the year of the Fed's creation), the dollar lost about 8 percent of its value; from 1913 until today, the dollar has lost about 96 percent of its value.) Rushkoff - who, by the way, believes that inflation has been too low over the years - seems to be unaware of the history of the dollar's value.

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