The world is changing, everybody knows that. The main reason of this change is called the Internet. It has no need for further introduction. The economy, however, is on the brink of collapse. What is wrong? Well, I am no economist, I am just a computer geek. Let me tell you first why Apple sucks.
Apple is one of the most innovative and creative companies in the world, right? Its iDevices have, for the past decade, swept all competition due to their incredible ease of use and good taste. While it is true iDevices can be said to be user friendly and beautiful, these features come not for free. It comes at the price of user choice. Apple does not offer a device, or a software, or a service. It offers the whole thing, a sort of a binding contract. It gives you the physical device together with a set of restrictions. It tells customers: this is the device, this is the operating system you have to use with it, and this is the way (only way) you can use it. These are the applications I have approved and allow you to install. You do not have permission to install any other thing I have not approved. In fact, you can only install applications using my service, in which I take 30% of the profit of everything sold. Not only 30% of every application in the store, but also 30% of the things you can eventually buy through the applications themselves, including magazines and newspapers subscriptions. Oh, and I also have the ability to manually remove any app remotely from your (my?) device if I wish to do so.
Examples of Apple policy of restrictions on users and developers alike abound. Many more reasons for why Apple sucks also exist, the reader is advised to do their own research if they so wish.
The question is: Why does it matter to me or you? If you don’t like it, you have the choice not to buy it and not to use it. While that is very true, this is the perfect example of something going very wrong with the world today. To deal with this new, free and boundless thing called the Internet, what Apple offers you is a cage. A luxurious cage carved in gold, but a cage nonetheless. And people gladly buy it, because they fear the wild world out there, the limitless possibilities it can offer them. They buy it, because they feel safe inside it, they buy it because it is shiny. Let us not even begin talking about the people who buy the cage just to break out of it.
The Internet removed the need for the middleman, which is just the thing they are trying to recreate. It is the old world trying to survive in the new world. You do not need to buy a physical medium anymore to access information, culture and knowledge. But this is not only about the middleman. This is about the whole concept of owning, buying and selling data ( which includes software, music, books, information, knowledge, culture) as a product.
If you produce one bicycle and sell it, at the end of the transaction you will have zero bicycles. Now, if you sell a piece of data, you still have the ability to make limitless copies of it, with no cost at all. This example is beautifully summarized in the following quote from George Bernard Shaw: “If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.”
This is the multiplying effect of ideas on society. The modern era, though, have so far supported intellectual property laws (namely copyright law and patent law) on the argument that people will not be motivated to have ideas if they cannot own and make a profit with them.
But is that really the case? For copyright, it is certainly not. People will not stop writing novels, making music, producing culture, as this is part of human nature. Culture does not need to be profitable. Culture is inherent to society. It is made for the people by the people, and it is not a product. Examples to substantiate this claim also abound, and I will not discuss it any further here. Furthermore, it is natural for people to produce and rely on previous work to build their own work, even if they are not realising it. Is it not worthy to think of a world where copyright protection is not necessary? Thanks to initiatives such as Creative Commons, we might already have a glimpse of how such a world would be. And it is promising.
In the case of patent law it is more complicated, but the claim is also arguable. On a capitalist society, companies need to make their products different to attract customers. For that, a certain level of innovation is required to happen. I have for long been against copyright law, but it took me a while to finally decide to be against patents. Where innovation can not be developed spontaneously by private parties due to high cost, the State can develop in research centers or universities, as already happens today with all kinds of research that are not profitable or at least not immediately profitable. Companies may also be required to donate part of its profit to a research center or participate in it. These solutions not only remove the bloated, subjective, overloaded, often idiotic patent system, but also reduces cost by transferring the research responsibility from corporations to research centers.
Bill Gates himself once wrote: “If people had understood how patents would be granted when most of today’s ideas were invented and had taken out patents, the industry would be at a complete stand-still today. The solution … is patent as much as we can…. A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose. That price might be high: Established companies have an interest in excluding future competitors”. Already now there are uncountable patent wars going on between big corporations. This is not only harmful for a capitalist competitive society, but also extremely unproductive, as more and more money is being invested on lawyers and lawsuits instead of effectively fostering innovation and production.
Speaking of being productive, we can finally tackle the problem the world economy is currently facing. The crisis is a result of a broken economy model. Some say it is capitalist society that is inherently broken, others say the welfare-state society model has collapsed, some even say that crisis happened because we were not liberal enough and the State controlled too much.
Reality, as it usually is, may be a little more complicated than that. The fact is, whoever is right, we are pretty sure that all of our tries to build a happy and prosperous society have failed so far. We need a new model. And we have none. We are hopeless. We want to protest, but we don’t know what we want. We want to protest but we don’t know who is to blame.
The theorists, of course, will say they know the answer. The keynesians will say one thing, the economists from the Austrian School another, the socialists will say a lot of other things. But we have tried all that, and we failed miserably. We need something new.
Now, I don’t really know what that something new is. Sometimes something new is just something old dressed differently. Something made with the help of the internet, for a world where we are all connected?
To make this text complete, not complete in the sense of a well-put-together text, but in the sense that I wrote everything I wanted to write, I have to tell a bit about Binary Economics, a minor heterodox theory of economics.
Some time in the year 1958 this guy called Louis Kelso wrote a book called the Capitalist Manifesto. Two things are central in the ideas proposed in this book, further developed later in others books of his:
1. A new concept of productiveness. For instance, suppose the shovel allows a worker to dig 4 times faster as he would without it. Classical economics would say the productivity of the worker has increased 4 times. Binary economics say 75% of the productiveness comes from the shovel and 25% comes from the man. Therefore the capital (shovel) owned by the man or the capitalist is responsible for 75% of the produced output. As technology advances, the instruments become more important than the labor, capital generates more wealth than labor. The consequences of this change of paradigms could be better understood by this quote of Kelso:
“It is, if anything an underestimation rather than an exaggeration to say that the aggregate physical contribution to the production of the wealth of the workers in the United States today accounts for less than 10 percent of the wealth produced, and that the contribution by the owners of capital instruments, through their physical instruments, accounts in physical terms for more than 90 percent of the wealth produced”
2. From the first idea, to build a just society, we conclude that we should enable every worker to own capital, so that he can own his own instruments that generate his wealth. This is done by means of government issued interest-free loans.
It is hard to put everything here, as this is supposed to be only a teaser. I don’t really know whether this system put in practice would really work. But what is very clear to me is this: It hasn’t been tried yet and it looks very promising. I am very curious to study this in more detail.
Could this be the something new we are looking for? Maybe, maybe not. If it is, it is only a part of it. But we do need to start thinking, and start thinking fast, for we are at the crossroads of a new era. What do we want for the future?