First God created Heaven and Earth. Then He created The Market. If you prefer your creation myths more scientific, you might say that after the Big Bang, market forces became the natural law of the universe. This, of course, is not true. In America’s plutocratic economy where net worth is held up as the greatest achievement, there isn’t much that we think the market can’t solve. We say the market is setting low wages for workers, that the market enables Amazon and Walmart decimate local businesses, and even that ideas to help the world’s poor should be market-based.
Douglas Rushkoff‘s new book, Throwing Rocks at the Google Bus, reminds us to stop shrugging our shoulders and using the market as an excuse for society’s ills. The market was created–and it can change. “All I ask is that people at the very least acknowledge that the venture capital/startup/financially-driven operating system is a choice, not a preexisting condition of nature,” he says. “The market is a construction. God didn’t make the market.”
To forestall an economic collapse that he sees coming if we keep up business as usual, Rushkoff says we need to “develop local, resilient, human-scaled enterprises that work in a variety of economic landscapes.” The book serves as a sort of prescription for how we might do that. From solutions to the mass unemployment being wrought by automation to alternate currencies designed to keep money circulating locally to new ways to generate value for investors without needing an “exit event,” the book offers examples of what a new economy might look like and how you–no matter what industry you’re in–might help move yourself and your company toward it.
The underlying theme is a new way of economic thinking that eschews the occasional startup whose value explodes in favor of what Rushkoff calls the steady-state economy. The one edict that should govern all businesses: “Does this make my customers rich? If I’m making other people wealthy, then I am supporting the ecosystem that will keep my business alive.”
Right now, our economy is set up to ask the entire opposite question: Does this make our investors rich? Instead of valuing and rewarding the creation of a sustainable economy, we value growth above all other things. Venture capital infuses companies with enough cash that they can expand astronomically and make their founders incredibly wealthy. Look at Twitter, currently besieged by open letters about how to improve its business as its stock tanks. This is the prime example of an economy with the wrong priorities–and the mistakes founders can make by giving into a mindset that growth is the only meaningful goal of business. “Their $500-million a quarter in revenue company is considered a failure by Wall Street. If you make $2 billion a year on 140-character messages, that is such a home run,” he says. Instead, stock holders are demanding more growth, in order to increase the stock price so they can sell; they’re not interested in owning part of a company whose technology has been the underpinning of so much global change, they’re interested in making a profit on the market.
Twitter is just one company, but multiply this attitude across the entire economy and things get scary: To continue growing at a rate that will satisfy their investors, companies are forced to find more and more extractive modes of generating revenue. Eventually, with enough companies mindlessly creating new revenue streams to continue to justify their valuations or appease shareholders, they’ll suck consumers of their remaining cash. This extraction is creating a human toll to the damaging economic system: The digital revolution that was supposed to make our lives easier. But as it’s forced to squeeze more and more value from its users, it’s doing the opposite. “This is why you see Bernie Sanders and Donald Trump alike rising. People are doubly disillusioned. Technology is making us work harder and we earn less. It’s not going well. …But then the double anger is that these companies rose on the pretense of being on our side,” says Rushkoff.
And to do that requires rejecting the idea that the market is a rule of nature that can’t be changed. CEOs need to find ways to operate their company without acquiescing to shareholder demand for constant growth. You (and Milton Friedman) might argue that that is, in fact, the only thing a company should be doing, but in making that argument, you’re buying into a system that doesn’t need to exist the way it currently: “You can’t ignore the development of the modern marketplace. The market has rules that were written by people, in certain moments in history. … Who made that rule? Why did they make it? Who does it favor and who does it disempower?”
The rules, Rushkoff argues, were made not by God, but by aristocrats around the 11th century, intent on preventing the peasants from creating a vibrant economy not controlled by the ruling class. Today, the rules can be whatever we want them to be. Rushkoff doesn’t want a revolution, just a rethinking. “They worked really well for 700 years of colonial expansion,” he says, “but they could use a tweak or two.”
Can we actually get there? Will the people made rich by the current economic system listen to his prophecies and realize their success is built on a crumbling foundation and alter their business models–and the very system that made them successful in the first place? Rushkoff says he thinks we can, and that it won’t take economic collapse or violent revolution, but just common sense (he admits, he’s having an optimistic week). He writes in the book that CEOs he talks to are exhausted by being forced into the short term thinking of quarterly growth, and says that as people are reading the book, they’re relieved, because the solutions within give them a path to a better business model: “I’m getting emails from CEOs from Fortune 50-sized companies saying, ‘I can use this, it’s going to work.’ Because these CEOs have been looking for ways to reconfigure to this slow-growth, new normal economy that we’re actually in without getting fired or sued.”
So just remember, human beings made this system, and human beings can change it. And one thing we all can agree on is that the system isn’t working: “Big business and small business, extreme libertarians and Bernie Sanders people all are looking toward the same solution. … We’re realizing that we don’t really care about our ideologies as much as about the fact that we’ve let a system get out of control.”