But its more than that. Youve put them together in a way that takes us on a journey with you. Reading a book Still Matters in this age of bitesized social media and tweets and likes and so on. And there is i think nobody who has traveled in that space since its very early days when he wrote a book called siberia which almost didnt get published because his first publisher thought the internet was a fad and it was going to go away. So theres no one better to help us understand the times, the crazy times that were living in when technology seems to be bringing us more amazing innovations every day, and yet for some reason something about life doesnt seem right. So im really excited and thrilled to bring Douglas Rushkoff back. George bullen from the open Technology Institute where she is director of technology as part of new america is a perfect interlocutor to bring douglas here. So welcome them both to civic hall, and if youre interested in learning more about civic hall, go to civichall. Org, sign up for our emails, come visit the space and come join the community. Thank you. Youre on. [applause] hi. And thank you, everybody. This is my first time actually in the civic hall space. I used to be based in new york, but im down in d. C. , so this is really exciting to be here. So we were talking a little bit about the book beforehand, and one of the things you were saying to me is that this book is different from your other books. I was wondering if you could talk about why and how and what your goal is with throwing rocks at the google bus. I dont know if it started out different, but most of the books i write kind of end up meaning something to people about ten years after they come out. [laughter] which is cool in a way, because it means ive got foresight or im prescient or something, but it sucks in a way because the conversation i want to have at that time i cant have right. And ten years later when im on to something else, people want to talk about it. So then im trying to dig up what did all that mean. This book, i started to i mean, i was thinking about this book two or three books ago. But i didnt really have an answer. I was getting increasingly concerned about why things werent working out quite like they could be or should be, you know . Why were, was Digital Technology not yielding the, you know, the burning manlike rave that i had imagined society becoming in the early 90s . And i couldnt put my finger on exactly what it was. I understood that Young Developers were taking too much money too early and then having to change their companies in order to deliver to their v. C. What they wanted, 100x return, but killing the actual idea. And so i started writing about that, and i decided when i was going to write this book i understood what the problem was, but i didnt understand what the solution was. I said, look, if i get a year or so to write a book, i will figure out not only whats wrong, but how to fix it. And since most people havent read the book im guessing, because it came out today [laughter] do you want to talk about what the problem, like, whats your sort of [inaudible] for getting people to understand the problem . Well, the main problem is that we, in a nutshell, i mean, this has got to be unpacked, i guess. But in a nutshell, what weve done is weve optimized the Digital Economy for the accumulation of capital instead of for the velocity of money. And the latter, the velocity of money, is much more consonant with the distributed architecture of the internet itself. And would lead to a whole lot more happiness than what weve got. You know, the easiest way of understanding the problem is that theres all these Great Developers who are willing to disrupt one industry or another, you know . Theyll disrupt publishing or disrupt music. But then as soon as theyve got their idea kind of down, they run to the equivalent of Goldman Sachs or morgan stanley, and they surrender their disruptive idea to another operating system that they act as if out isnt even there. They assume that Venture Capital and ip o and act by its and acquisition and the stock market and 100x return, that thats just this preexisting condition of nature, that thats the real system that we have to somehow succumb to. And so you look at something, you know, when i saw and these are friends of mine. I mean, we all have friends now who are billionaires, which is strange in itself. [laughter] i saw the founders of twitter on the cover of the wall street journal the day they had their ipo. And under each of their faces was the number of billion dollars that each of them were worth. And im thinking here i know two different people who are over 5 billion each, but i found myself feeling sorry for them. Because i realize that these are the guys, they disrupted, you know, visa and mastercard with paypal, originally anyway. They disrupted journalism with twitter. And now here they were surrendering what they had done, surrendering all that disruption to the biggest, baddest industry on the block. You know, because when they let you ring the bell at the Nasdaq Stock Exchange [laughter] and clap for you, its not because you have done something disruptive, right . [laughter] its because youve confirmed the primacy of Corporate Capital to the whole scheme. And youve made, youve enslaved yourself and your company now to pithing towards pivoting towards 100x or 1,000x return and away from whatever it did. So now were here with twitter, one of my favorite apps, by the way. Twitter, 140character app that makes 500 million a quarter, and thats considered an abject failure by wall street. Thats a failure. And the company now has to go become, what, theyve got video advertising, blah, blah, and where goes twitter . So what i wanted to do was figure out what could they have done and what could we do to have a Development Path that leads to something other than just magnifying this growth imperative which is driving us off a cliff anyway. So, and you talk a little pit about what companies can do and what individuals can do. I mean, theres a role for government to play in all this as well, right . As a Public Policy person, like what should we how do we incentivize change . If the system is in place, how are we going to start to take down the system . Well, i hate to sound libertarian here, but i will for a moment because be im not. But one thing the government can do is change the nature of their regulations. Im not saying deregulate the marketplace so that wall street can go crazy or deregulate so that the rich can have rich. What im saying is dont right now regulations arent really being made in the interests of people anyway. The people who write the regulations are the very largest players in the industry. So when a simple nontech example would be there was a big lead paint scare in the toy industry a bunch of years ago. A bunch of dora toys had red paint in it, they were all outsourced from china. They came in, they had lead paint. So what do we do . Were going to form a commission, get the leaders of industry together with the leaders of government, and the regulations they came up with was a Testing Process that required 40,000 per toy that youre going to release on the market. What are small toy manufacturers supposed to do with that . If you make handcrafted toy train that is you want to sell to a toy store, how do you participate in that . Well, you cant. So industry used their own mistake, their own problem of bigotry as an excuse to regulate the marketplace so that it would advantage them even more. Right . So regulation right now favors, favors the largest players on the block. Right . The reason why uber can move into new york is because they have a war chest. The investment in uber is not paying for the app. The investment in uber is paying to deregulate the marketplace in their favor. So thats one. The other biggie, and its a simple tax shift, is, i mean, the simple way to say it is right now in the way i sound like bernie here. [laughter] right now our tax should people write you in . [laughter] our simple problem with our tax code is that Capital Gains are taxed much, much less than real earnings, than dividends, right . So what is that . If youre thinking of it as a Computer Program and now youre biasing it so that people who make money dont have to pay taxes, but people who make money by earning money have to pay taxes. What are you build boog that system . Building into that system . If you want to optimize your economy for the accumulation of capital, for the extraction of poker chips from the playing board into the accounts of shareholders, then optimize it that way. If you want to optimize the economy for the circulation of capital through the society so that people can create an Exchange Value between each other, then you want to reverse that buy bias. You want taxes on dividends and earnings to be really low and taxes on capital accumulation to be high. So how do we make that happen . Like, how do we actually get people to change, and what can what could people who are here do in daytoday choices or in choices with their startups that theyre working on . Well, i mean, the easy way to disempower the sitting bags of capital that are there is to try, in some ways try to ignore them, which is hard to do. You create an application with two friends, and you can build it pretty much on a laptop and then use a scaleable server, even go to amazon cloud, i dont care. Go to something scaleable. You dont need tens of millions of dollars from y come by nateer to get to the next level. Now youre no longer building a business for the prosperity of that business. Now youre building a business in order to sell it. So if your goal is to create a thriving, sustainable business, then think twice about selling it. Right . Dont sell it. You know, hold on to it. So thats sort of number one. As individuals its really as consumers, you can make way better choices about how you buy things. Its as simple if someone buys my book from a local bookseller instead of from amazon, and i mean their local bookseller, now there is money that is circulating in their community. Thats a dollar more, a dollar more for their book, but youre going to see that dollar circulate through your Community Five times. So youre going to get that dollar five more times than you would if you spent it on amazon, and it goes up into a share price, or youre spending it at a company thats taking a loss on the book in order to create a platform monopoly in publishing so they can hop over into whats called another vertical and take that over to. They dont care about the books. They care about the monopoly. Is so its a very different, a very different thing. You can, if youre organizing a company, consider how can your company make everyone who touches your company wealthy. The traditional corporate industrial tactic is to look at everybody else as a resource to extract value from that. But if youre extracting value from your customer base, vergingly they get too eventually they get too poor to be your customer. Thats the problem walmart is having now. The towns are going bankrupt. Theyre losing their customers, so now walmarts closing their stores, and the towns are having to figure out how do we rebuild, how do we create a drug store and a bookstore and Everything Else that we need to replace this big vacuum that came to our community and wiped out our connective tissue . Companies can start thinking about communicating with their shareholders differently. So instead of being beholden to the growth of the share price, start telling your shareholders theyre going to get dividends, theyre going to earn real money for owning a portion of your company. Create companies as platform cooperateives where your workers are owners in the company. Theres a competitor to uber in new york called juneau in a few weeks, and its the same basic idea as uber except they pay the cabbies more, and the drivers own 50 of the company. What does that mean . It means that when that company eventually pivots as they all will to mechanical cars driven by computers, you havent done the research and development for the thing that that will replace you. Youve done the research and development for the company that you own. So now the drivers are going out doing your work, your job has been replaced, but your income hasnt been taken away because you own the thing. So these are really, they sound complicated, but theyre really simple things to do. Theyre just the basic steps you have to think of things. Were in a digital age. You have to think of the mechanisms that youre using and that the instruments that youre putting into place. You have to think of them like programs that are going to keep going, that are going to have operating principles and bias them towards circulation, bias them towards making people wealthy. I promise you if you have a business thats making us customers its customers wealthy, thats making its suppliers wealthy, its competitors wealthy, theyre going to keep you around. But its just not the way we think. Oh, make other people wealthy . Yes, make them wealthy so they can buy stuff from you, you know . Its not Rocket Science to do that. And, i mean, to that point, thats another policy suggestion, right . Building in mechanisms for other types of businesses. Because cooperative businesses of that model that youre describing arent actually possible in a lot of places. So thats another right. I mean, luckily theres things like b corps and multipurpose theres a lot of alternative structures you can adopt now that let you value things other than your fiduciary responsibility to your share holders. You know, its from an economics perspective, its understanding that when you take in capital and you let a Venture Capitalist be in charge of your company, then the only contribution hes going to value is capital. But if you understand economics, you understand theres three main factors of production. Capital is one of them, but land and labor are the other two. And this is back to adam smith and any economist, any libertarian will tell you land, labor and capital. So how do we value the land and labor again . Thats by building it into the core of the company to understand that there are three kinds of contributions, and all three have to be rewarded by the company. You cant just look at a company as Venture Capital thats extracting value there land and labor from land and labor, or you end up with a world thats going to die and with people with no jobs. I dont its interesting, like you mentioned y come by nateer earlier, and a portion of why people are going to them is for the v. C. Funding, but its also for the mentorship molds. Theres a question, does everybody know how to do this, right . I think the answer is probably that they dont. So if theyre not if some of what needs to change is actually the advice theyre getting, like how do we build a better support system for changing the thinking around how business happens . Like, are there advantage lists that exist evangelists that exist that we can start to tell their stories more . Does it need to be a special, different type of incubator that focuses on this model . How can we change the Community Around i mean, lets do it. [laughter] you know, its part of what civic hall is for. Its part of why were here, part of why i wrote this book, to say heres a manual. Understand what went wrong and understand how to do it right. Theres people around. Talk to Trevor Schultz at the new school whos starting a whole organization is he here . Oh, here. Platform cooperatives with nathan schneider. Talk to Michelle Bowens at the peer to peer foundation, go to p to p. Net, talk to robin hood in finland, spiral in new zealand. I mean, there are a lot of groups out there. A lot of them are looking at block chain even, a lot of those folks are sort of looking at how can we do authentication in a peer ortopeer way. Those efforts get sidetracked because people invest in them. Oh, wit coynes bitcoins once you see the winklevoss twins anywhere, stay away. [laughter] they did a bunch of investing in bitcoin. There are mentors out this but, honestly, i feel like a lot of people know in their gut what theyre doing right. Its not Rocket Science. The young people that when theyre in their dorm room in stanford or columbia and they come up with that idea, i feel like so many of them would be better off with 50,000 and no mentorship than 5 million and the mentorship theyre getting. And the mentorship theyre getting, theyre not dumb. Theyre smart people, the v. C. Guys. But theyre smart at doing a very particular thing which is bringing something to exit, right . Bringing something to an exit event. And, i mean, gosh, ive got friends, davids in here right now with a product called ready, you know . Which has just gotten away from Venture Capital, and now hes like, oh, we can just do this thing, you know . It used to be called bootstrapping, but these days they call it bootstrapping, but it used to just be called building a business. You build a business, you get some revenue, you invest some of that revenue back in the company. Its a Slower Growth thing, but when you grow slower, so much easier to develop a product that your customers like because then you can see your customer reaction, you can use good, oldfashioned quarters and semiannual feedback and adjust and change. Youre not stuck on the clock of 18 months, ive got 18 months to turn this thing around. Thats not fair to any real business thats in the real world. People dont see these things, right . Of the initiatives that you just mentioned, how many people in the room know of one of them . Have herald of one of them . Have heard of one of them . Okay. Thats about ten you heard a lot of them. Youve heard of lumio, theres a lot of them you wont hear of, right . Just like a lot of the best candidates for president you probably never heard of, you know . We heard of trump. Just because you dont know them doesnt mean theyre not great. And the fact is a lot of them are local. There is nothing wrong with creating a business that doesnt scale up. Not everything scales up. Scaling up is an artifact of the Industrial