Manicured, moisturized and sheathed in a kid glove, the invisible hand is turning into a helping hand. Or so Doc Searls would have us believe.
He senses that, thanks to the internet, business may be shifting from a “morality of self-interest” to a “morality of generosity.” He singles out Flickr as an example. The popular photo-sharing site lets other companies freely tap into its data and software to create their own businesses. Not because it wants anything in return – it’s not about “transactions” – but out of the innate human goodness of its creators. “It’s wide open,” writes Searls. “Free-range. Most of all, however, it is a ‘good citizen’. It is generous where it counts. Nurturing.” And that, apparently, is the model for our new post-Adam Smith age of air-kiss capitalism:
We give. We are open. We love without expectation of reward, or even accounting. (In fact, when you bring in accounting, you compromise it.) Think about how we give to our spouses, our children, without strings. It pays off, too. But that’s fundamentally not what it’s about.
Not everyone is buying it. “I find it difficult to make sense of these arguments,” responds Kevin Farnham. “Or to accept that they apply to anyone except for the privileged few.” Even Tim O’Reilly is taken aback: “I find the idea that Web 2.0 is about a different kind of morality to completely miss the point,” he says. “It’s ultimately about the internet as platform. And any network-oriented platform follows network scaling rules, in which ‘generosity’ is better survival behavior.”
What bothers me about Searls’s position, though, is not how elitist or sentimental it seems, but how cavalier. To Searls, the old “morality of self-interest” is worthy only of contempt: “This gives us ‘owning’, ‘domination’, etc. The Old School. Industrial Age shit. Still prevails in many business plans that are just for killing other companies.” Industrial Age shit? You mean the kind of self-interested shit that created the middle class, that pulled millions out of poverty and squalor, that provided a foundation for democracy, that made an incredible array of goods cheap enough to be purchased and enjoyed by the masses? Yeah, good riddance to that horrible, mercantilist, transactional, competitive shit.
I agree that there appears to be some kind of basic economic shift going on. It certainly seems to have something to do with “scalable platforms,” and it may well have something to do with generosity, if by that we mean giving away stuff that you used to have to charge for. In the Industrial Age, things didn’t scale that easily – you had to give lots of people jobs if you wanted to expand your operation. And you had to charge a decent price for your products so you could afford to pay your workers and also make a profit for yourself. Generosity, as a commercial strategy, would have done no one any good. Now, given the unusual economics of software running on a network, you can create vast businesses with hardly any employees, and because you can operate so leanly, you can afford to give tons of stuff away and still make an enormous amount of money for yourself. In the process you get to destroy those Old School labor-intensive dinosaurs – or at least take out their pension plans and a large portion of their work forces.
There will always be an accounting. Even generosity has a price.
We’re seeing what looks like the erosion of the American middle class and the rise of a new aristocracy, as a very thin slice of the population reaps an ever larger share of the bounties of Information Age capitalism. Generosity sounds lovely as an economic principle, and I suppose it can be lovely in reality, too – so long as you’re one of the chosen few who can afford to exchange precious gifts.
More cluelss crap from one of the authors of the world’s most vapid tome, The Cluetrain Manifesto. Following your link to Searls original writing (between himself and Tim O’Reilly in a fit of name dropping and back patting), I read this bit:
“People love Flickr because Flickr loves people. The good guys finish first.”
1. I don’t love Flickr.
2. Flickr is a company, not a person so how can it love?
3. “The good guys finish first.” Huh? Who are the bad guys? WHAT is a good guy?
Sounds like more of the “A” list self congratulatory, back patting, cross linking, puffery.
I’ll buy Doc Searls argument when he generously offers to pay off my mortgage.
As commenters on that thread noted, generosity is a requirement to survive in the networked world. It is not an objective in and of itself, it is not a transitional feature only to be offered by the new kid on the block. No, it is the way software has to work to survive in such a flexible, fast-changing environment. If I write an app that has 2 neat features, call them A and B, and a competitor comes along that can do feature B better than me, my app is not necessarily obsolete as long as I can interoperate (aka be generous). My app can survive along with the competitor, me providing feature A, them providing feature B, giving me an opportunity to improve my app. This finer granularity means that my business can bend without breaking.
This is technological survival, not morality.
Nick,
Very independent and thought provoking as usual.
I’m struck by a couple of things:
– You seem to have, for lack of a better word, found religion when it comes to this Web 2.0 stuff. If social software has the power to cause an “erosion of the American middle class and the rise of a new aristocracy…” it would seem that you’re acknowledging that all these social media start-ups might be on to something. You have always seemed to me luke warm (at best) in your assessment of the impact of these types of Web services. Welcome to the Web 2.0 Kool-aide drinkers club.
– You simultaneously defend and deride capitalism – defending it in terms of the Industrial Age, yet deriding the havoc that next generation Internet companies can wreak on old school industries. Why is the first economic shift worthy of defense, while the second to blame for the rise of a new Aristocracy?
Where I disagree with you is in your thinking that the wealth created by this shift will be held in the hands of a few.
What’s going to happen to Flickr when an identical service comes along that shares ad revenue with those that share pictures? They’ll start sharing revenue too.
It won’t be long before every social media company compensates its participants in some way – not because they’re generous, but because they are in a war for attention.
Nick,
This may be a tad heretical but the Searls piece reminded me vaguely of a man with a beard who was buried in Highgate cementary.
“all the springs of co-operative wealth flow more abundantly – only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!”
Sounds a lot like “We give. We are open. We love without expectation of reward..” _______________________________________
“…nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have a mind, without ever becoming hunter, fisherman, shepherd or critic.”
___________________________________________
Enough Utopia for one evening. He got Utopia very badly wrong, but I don’t think he would have been suprised by web 2.0
The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society.
.
Mr. Carr,
My thanks for articulating what I’m sure many like me were thinking in response to the original article. Namely, “huh?”
I like to think I am on about in the middle on the normal distribution curve of generosity. But, as a business owner with employees, shareholders and customers, I cannot reconcile the whole generosity thing. My employees want a paycheck, my shareholders want a return on their investment and my customers want me to stay in business. *None* of them wants me to be arbritrarily generous.
Your post was helpful as it helped validate, to some extent, that I’m not in the minority when it comes to this stuff. Companies like Flikr are (as you noted), not the “good guys”. The better label is the “smart guys” for figuring out a model that works — at least for them.
“Manicured, moisturized and sheathed in a kid glove, the invisible hand is turning into a helping hand.”
I always wondered what the other hand was doing.
Anthony: Right. In other words, the “generosity” is an expression of self-interest and very much transactional.
Lawrence: You’ve astutely spotted some contradictions in my thinking – though I like to think of them as “tensions,” which may be resolved through the discovery of some deeper coherency. [insert smiley face doo-dad here]
My beef with Searls lies in the cavalier way he attributes different levels of morality to different modes of business based solely on how well they fit with his personal preferences and ignoring their broader implications for others. In discussing the shifting economics, I was referring to software-mediated information businesses in general, not just to social software. Social software, though, does bring those economics to media businesses. I guess there are two common views of Web 2.0 (among its promoters): that it produces wonderful stuff, and that it’s economically disruptive. I don’t buy into the former, but I do feel that the latter is probably true (and not necessarily good).
Capitalism has its good points and its bad points, and I think the balance between the two is determined at least in part by the degree to which economic power is diffused at any given moment. Though Industrial Age capitalism may look ugly to some today, I think it worked pretty well in diffusing power. It ended up spreading wealth pretty widely and pretty equitably (the diffusion of power preventing labor from being turned into a pure commodity). More recent changes seem to me (at the moment) to be concentrating economic power and hence wealth, with labor becoming more of a pure commodity (traded on a global market). I have a problem with assuming the former system is morally inferior to the latter, even if the latter involves more “generosity.”
Thomas: I don’t see much Marxism in what Searls says. If anything, it seems like an expression of what Marx called “bourgeois socialism”: “A part of the bourgeoisie is desirous of redressing social grievances, in order to secure the continued existence of bourgeois society. To this section belong economists, philanthropists, humanitarians, improvers of the conditions of the working class, organizers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind … Bourgeois socialism attains adequate expression when, and only when, it becomes a mere figure of speech.”
Dharmesh: You’re welcome. Giving employees paychecks is about as “moral” as a business is going to get.
Ordaj: Picking pockets?
Talk of “generosity” puts me in mind of a quote from the recent _Newsweek_ article:
“But that’s not why Yahoo bought it for an estimated $35 million. With less than 10 people on the payroll, they had millions of users generating content, millions of users organizing that content for them, tens of thousands of users distributing that across the Internet, and thousands of people not on the payroll actually building the thing,” says Yahoo exec Bradley Horowitz.
“That’s a neat trick. If we could do that same thing with Yahoo, and take our half-billion user base and achieve the same kind of effect, we knew we were on to something.”
Be generous! Help the start-ups get their multi-million-dollar buy-outs, an opportunity they give us out of the goodness of their hearts. It’s the new morality (err, pretty old morality, actually).
“Picking pockets?”
That’s one at any given moment in time. Another would be brandishing a whip. Productivity and all that hooha.
See, Seth, that’s what happens when you bring in accounting. You get all cynical and stuff. You need to learn to love without expectation of reward.
Hi Nick
Great post. I think open source would have been a better fit for Doc’s argument. After all, it’s all about free software, free code, free whatever. No controls, no strings attached, no proprietorship. And there is true generosity involved because anyone can go ahead and use it to make money even if the brains behind don’t benefit. Even Project Gutenberg fits the category.
Social media companies are just waiting to get snapped up; not that users are complaining, because the core service remains free and is bound to stay that way.
I just tagged your post “brilliant” on Rojo. thought you should know. It’s amazing how many of of history’s lessons have to be relearned by each generation of revolutions.
Nick, you’re clearly on a role ;-)