Friday, November 14, 2008

No more business as usual

A million thanks to SusanG at Daily Kos for mentioning this:

Obama's Victory: A Consumer-Citizen Revolt
As recently as this summer, while the economy unraveled (BusinessWeek, 7/14/08), I made two trips to Silicon Valley in the hopes of finding leaders who grasped the crisis—and the opportunity—inherent in the destruction of trust. I listened to Facebook executives but found them obsessed with how to monetize the site with advertising. Their users were not individuals, but "eyeballs." I asked Google (GOOG) CEO Eric Schmidt how he would develop and sustain the trust of his users. His response was to cite the provision of two classes of stock intended to insulate top management from investor pressures. I gave a talk on the crisis of trust. The response from self-described Internet court jester Esther Dyson was typical of what I had been hearing: "Personally, I'm not that concerned if people don't trust large institutions."

A few weeks later economic panic gripped the stock market. I flipped on ABC's Sunday morning news show with George Stephanopoulos only to hear economist Larry Summers explaining that the surprising depth of the economic meltdown was due to the loss of trust in institutions. What he didn't say was that this loss of trust is a vast sea whose level has been rising for decades. The subprime debacle and the ensuing credit freeze simply marked the moment when the sea wall was finally breached. ...

So can we invent a business model in which advocacy, support, authenticity, trust, relationship, and profit are linked? Can I write that sentence without invoking fear, disbelief, cynicism, or peals of laughter? The ugly practices that killed trust seem intractable to most people, whether they are the ones trapped inside the money machine or on the receiving end of its operations. But after this election, the answer to these questions has irreversibly changed. The answer today would have to be not only "yes we can" but also "yes we must."

No, this is not about "science" per se, unless one considers the philosophical side of economics (rather than the quantitative side) to be a science. Rather, it is the simple observation that anyone reading the daily news with an open mind can understand: Basing a modern large-scale economy primarily on the evolutionarily ancient motivation of greed and personal self-interest is not working out very well...

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