Imperfect Periodical

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Posts Tagged ‘finance

Caterpillar Capitalism

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There is something desperately wrong with the way we’re playing Capitalism here in America. The genius- and I mean this in the “animating spirit” sense of the word- of finance capitalism is the ability to get money into the hands of people with creative ideas and then make those ideas into reality. Tangible products. Works of mass commercial art. Goods and services that people need. Experiences that people desire.

The accumulation of wealth which is then turned around and made into the seed capital of another venture brings to my mind the image of a caterpillar eating up everything in its path on the way to becoming a butterfly. Eating and eating, growing fatter and fatter until the time for chrysalis followed by metamorphosis.

It seems to me that our society is stuck in the caterpillar stage. Goldman Sachs, for example, is one very FAT caterpillar.

When the next step fails to occur, when the capital is skimmed off the top and not reinvested into the creation of something useful, the genius of the system is betrayed. This is happening at a time when we so clearly need an infusion of energy to spark our society’s transformation into its adult form. The caterpillars have transformed into leeches instead of butterflies, and as our metaphor slides out from underneath us we become aware that the host body of these parasites is in grave condition.

Profit for profit’s sake is a waste of good money.

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Written by njnelson

April 20, 2010 at 7:59 pm

Abstracting Ourselves To Death

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Social Networks, Derivatives, and the loss of self.

When the record labels first started touting CDs to the masses one of the big selling points was how digital copies were superior to analog ones. All kinds of distortion can come into play when you make an analog copy- even temperature can come into play when it comes to the fidelity of a copy on tape. The same problems just don’t exist with digital tech. It’s all ones and zeros. Sure a file can become corrupted, but bit for bit, generation for generation, the quality of an uncorrupted digital master is preserved.

The damage, such as it is, has already been done.

When I was a kid a short-lived and terribly controversial Saturday morning TV show called “Captain Power” posited a world where evil machines had taken over. Human survivors were hunted down by CGI androids whose most terrible power was the ability to “digitize” a person. An arm mounted energy beam could pixelate the atomic structure of a person and then vacuum it up like a DNA dust buster.

The effects are terrible by today’s standards, and the Mattel toy line was shoddy when compared to the other franchises of the day. Yet the themes- the series’ Executive Story Editor was future Oscar nominated screenwriter and genre perennial J. Michael Straczynski- were prescient.

Only we don’t have CGI eagle-men diving down from the sky, hunting us down and metabolizing our vital essences for some megalomanic’s DNA wikipedia. Instead our nearest and dearest deploy that most devastating of WMD’s- peer pressure- and we voluntarily digitize ourselves. First for Friendster, then MySpace, and then for the crown prince of social networks- the Book that must not be named. (Pat yourself on the back if you remember SixDegrees, which presaged them all. But not too vigorously, grandpa, digital geezerism is still a preexisting condition.)

Like the villains on that old Saturday morning show, social networks take a human identity and abstract it. Abstraction as a tool is not all bad. Abstraction allows for perspective- whether its in the form of a math equation or a metaphor. Abstractions allow that quite literally critical amount of distance from a given subject that makes that which is being considered, considerable. One of the impressive outcomes of the digital revolution has been the increased utility of our abstractions. Our reality simulators are getting so good that even our video games are changing the way athletes play professional sports.

Yet as we entangle our lives more and more intimately with our technology we risk not only mistaking the map for the territory, but abandoning non-digital measures of our self-worth. It’s belaboring the point to suggest that “friend counts” are replacing actual friendships measured for their quality, but anyone who has really gotten into a social network can attest to the thrill that comes with hitting a number with a lot of zeros after it.

This is the same kind of thinking that drives the banking industry, and it is there that we can begin to see the horrific outlines of a possible– let me repeat that already stressed word for emphasis- possible digital destiny. The current masters of abstraction are the hedge fund managers: slicing, dicing and spinning numbers like an unholy union of ninja and politician. The current financial crisis was brought on by the collapse of the derivatives market. Finance capitalism had long since left behind the pedestrian world of raising money for ventures that might make a tangible impact on people’s lives. The real money was to be made on the bets that those stocks would fail. To use a familiar gambling metaphor: it stopped mattering whether a given stock rose or fell, only if your broker had bet right on the spread.

Which is the logical destiny of unchecked abstraction in a nutshell. Real value ceases to have as much influence as perceived value. We start planning our futures around models of models. ‘Reality” is confined to what can be perceived in a prospectus or a press release. To a certain degree this is unavoidable. If abstraction wasn’t a powerful tool we wouldn’t use it so much, but the simple wisdom of not buying into our own bullshit seems to have been lost on an entire generation or three of Americans.

What is truly frightening is that this logical error has begun to seep into every aspect of our culture. Worse still, it appears to be self-reinforcing. The boy geniuses at the Book that shall not be named are raked over the coals by the social media press and their customers alike for altering the core experience of their service without notice. Forgetting that even their click-through data doesn’t tell them what their users are actually looking for. Clicking on, yes. Looking at, no way no how.

Google recently decided, with the disastrous rollout of Buzz- that the way to improve upon the current crop of social networking options was to take the human element out of the process. Who wouldn’t want to have everyone you ever had email contact with having instant access to reams of information about you? It’s all just bits and bytes, after all!

The “lords of the clouds”- to use virtual reality pioneer Jaron Lanier’s term- appear to have developed a blind spot for reality. They forget that our “online avatars” are very much the shadows of real people, taking real actions. From up on high only the crowd as a whole has a value. If you’ve ever looked at the way online advertising is billed you’d know this is true. Google and their ilk can’t make money by currying favor with individuals. Not with the business models they’ve chosen. They’re forced into seeing us in the aggregate only, their responsibility to their shareholders demands it. As we come to rely on what they build we risk adopting the same perspective.

We risk our worth as individuals.

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You can find Noah J Nelson, professional hypocritic, every day on twitter in the guise of @areyouthatguy. He could use some more followers to bolster his self esteem.

Written by njnelson

March 2, 2010 at 10:15 am