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Life Inc.: How the World Became a Corporation and How to Take It Back

Douglas Rushkoff begins Life Inc. by recounting the story of how he was mugged at gunpoint on Christmas Eve in his Park Slope, Brooklyn neighborhood. Later that night, after posting news of the crime on the Park Slope Parent’s list, he is shocked to find that both of the first two people who respond choose—not to sympathize—but to chastise him for mentioning the street where the crime took place, a mention they fear will hurt their property values. Their lack of sympathy jolts Rushkoff into reflection upon man’s inhumanity to man, especially, he suspects, when money, markets, or corporations are involved. In large part, the remaining 250 pages of the book are a variation on this theme.

Rushkoff comes off as a passionate, inquisitive and principled humanist; he is bold enough to venture to and fro across disciplinary boundaries (among them, history, economics, psychology, political science, sociology) in pursuit of an apt diagnosis of what ails him and, he conjectures, you and me, too. This is to be applauded. He would be great fun to engage in conversation over a barbecue (on which more below).

Unfortunately, the breadth of the book comes at the price of coherence and depth. In particular, the book omits or gets wrong key parts of the story about money, markets and corporations, and as a result—it is no surprise—it gets wrong the nature of opportunities for reform.

I will do my best to summarize the book, and then I will present my primary dissatisfactions with it.

After relating the story about the mugging, Rushkoff asserts that there is a core problem with modern society and it is that “instead of collaborating with each other to ensure the best prospects for us all, we pursue short-term advantages” (xvi). This is because we are selfish. But, Rushkoff claims, we are only selfish because we have internalized some very bad, very old corporate juju. We are the unwitting victims of the biases programmed into state-enforced monopoly charters four hundred years ago, and into state-enforced currency monopolies seven hundred years ago (his estimates, not mine).

Because of this bad programming, he asserts, we derive vulgar pleasures from branded consumer goods and reality TV; we believe the lies told to us by marketers, PR guys, Big Energy, Big Agra, Big Pharma; we patronize national or multi-national chains when we should buy local; we fall for get-rich-quick schemes and positive-thinking snake-oil; and we buy into individualist mythology, free market ideology, and Social Darwinism.

Unfortunately, according to Rushkoff, what ails us cannot be remedied with the standard cocktail of electoral and constitutional politics, better rules and regulations, market competition, nonprofit enterprise, philanthropy, consciousness-raising journalism, and Internet-enabled self-organization. The obvious modes of improvement are inadequate or even counter-productive. He proposes we try using local currencies and babysitting clubs, coaching Little League, tending rooftop gardens, and relishing long conversations at neighborhood barbecues. Viva la revolución!

These are good things, but not the stuff promised in the title (“…and How to Take It Back”). How are we to understand this?

Theory 1: Rushkoff is a guarded optimist. Rushkoff is sincere; he believes there is a way to take it back, but he is wary of grand, centralized plans that over-promise and under-deliver. He says:

Small is the new big, and the surest path to global change in a highly networked world is to make an extremely local impact that works so well it spreads. This may amount to a new form of activism, but it is one without slogans, heroes, or glory. The efforts, and the rewards, are scaled to human beings (233).

This seems right to me, but if this works, then shouldn’t we think better of the combination of economic, political, social and technological changes that made our world highly networked in the first place? I do not believe Rushkoff is in fact a guarded optimist, but I do believe he should be. More on this to come. 

Theory 2: Rushkoff is a closeted pessimist. Rushkoff is insincere; he does not believe there is a way “to take it back.” Perhaps he is compelled by corporatist competition to be insincere. Some corporate suit at Random House, Inc. rejected the shorter and less solution-oriented title, “How the World Became a Corporation,” so Rushkoff added “…and How to Take It Back,” as well as the last ten pages of the book.  Voila, the book flies off the shelves and into the hopeful hands of patsies everywhere. The only “remedy” Rushkoff sees is to return to the Dark Ages, which, he argues, have been badly defamed.  In his account, eleventh-century Europe is in fact a golden age, which “offered an enviable quality of life for ordinary people…[t]hey ate well, they had plenty of leisure time, and they enjoyed close social bonds” (166-7). Unfortunately, there is no way to get from here to there. Or no way short of the apocalypse. But pressing the apocalypse button would work:

For many, the apocalypse is less a looming fear than a secret wish. Like Y2K enthusiasts, who predicted that planes would fall from the sky when computers attempted to register four-digit years, we’re almost giddy at the thought of our dehumanizing infrastructure crumbling under its own weight. One well-targeted electromagnetic pulse and our debts are erased along with our credit scores. No more Blackberries. What a relief! We can all go back to the simple life. There’s only one catch: all of a sudden, essential skills from which we’ve been so long disconnected—how to grow food, how to find water, how to build a shelter—will be at a premium. For better or for worse, real people would be called upon to create real value (232).

Is the present so bad and the post-apocalypse so likely to be good? Heck no! If this is Rushkoff’s fantasy, mine is to douse him with a bucket of cold water! Wake up, my man!

This passage is emblematic of my dissatisfactions with the rest of the book. Rushkoff ignores much of the good about what he does not like (“modernity”) and much of the bad about what he does like (“the quasi-medieval post-apocalypse”). This makes the case for a “well-targeted electromagnetic pulse” seem attractive, when in fact it is not. Rushkoff does not grok the fact that the average person in 1800 had roughly the same real income (~$3 per day) as their ancestors had in 100,000 BCE, and that the average person in a developed country today has a real income that is at least sixteen times that large (~$48 per day). Indeed, since 1980, more than 500 million people in China have gone from $3 per day to a middle-class existence.This massive and unprecedented increase in the size of the pie has doubled life expectancies, and increased the non-material quality of every year we live. We are safer from violence and disease. More of us have had access to the education that sets us free from our own ignorance and prejudices, and to the mobility that sets us free from that of stifling local norms. This has enabled greater gender and racial equality. More people than ever before have the opportunity to focus on self-actualization rather than mere survival.

Rushkoff does not give commercial enterprise its due, especially in the case where the barriers to entry are low. He gets the story right when it comes to how monopoly charters created lucrative alliances between incumbent political and commercial elites. He gets it right that this led Adam Smith and others to articulate ideas about economic liberty. Usually, this history would cover the story of how the ability to form a corporation went from becoming the privilege of a few to a right of all, and how this unleashed competition in a way that tended to generate better goods at lower prices, generating the sixteen-fold increase in real income mentioned above. But not here.

Instead, Rushkoff switches over to the story of how corporations came to be considered legal persons in the United States and in the process dehumanized real people:

The elevation of corporations to personhood was accompanied by a slow, corresponding devolution of human beings to something less than personhood. Corporations were bigger than people, lived longer, had more money and more influence. The biases programmed into them four centuries earlier, however—to thwart local activity, prevent competition, and disconnect people from their resources and competencies—remained the same, regardless of circumstances (14).

Where to begin? First, if a bias is the same regardless of circumstance, like the self-important desire to advance one’s own purposes and enlarge one’s own capabilities, might it be because the way it is hard-coded in the human heart makes it fairly robust to the soft-code of social context? There is no doubt that we are also hard-coded to love family and friends, to project ourselves into one another’s shoes, to identify potential allies and enemies, to seek to raise our own status and that of our allies, to internalize context-specific rules of behavior, and to feel angry when they are violated. The art of modern political economy is to identify the social-legal contexts that allow these tendencies to be harnessed for mutually productive rather than mutually destructive ends. As an example, the same status-seeking manifested in conspicuous consumption could drive more destructive behavior (e.g. the bludgeoning of out-group members in a deadly ethnic riot) or more constructive behavior (e.g. the desire to “build a better mousetrap,” or create a better school, better song, or better novel for that matter). Vanity and self-importance can lead human beings to rape, murder and pillage, or to truck, barter and trade. The details of the social-legal context set the path of least resistance, and therefore matter a great deal. The first step on the road to improving that social-legal context is acknowledging that our behavioral constraints are not the product of a four-hundred-year-old corporate cabal.

This brings up the second problem with the passage above. What exactly are the “biases programmed into” corporations? At no point does Rushkoff explain what about the historical program is purportedly driving present problems, and how different changes to the code would make things better or worse. In fact, despite the existence of a voluminous literature on structure and scope of business firms, Rushkoff does not identify alternatives to a standard limited liability joint-stock company. Perhaps sole proprietorships or partnerships would better suit his organizational fancy? The question of alternative organizational forms is never considered.

Third, why did people want their enterprises to have the legal status of persons? Rushkoff does not say, but the insinuation is that immortal and insidious corporations wanted—like vampires—to suck the human essence out of humans. The non-vampire theory is that people wanted assurance that the state would not capriciously revoke or rewrite charters at the urging of the politically powerful (see, for example, Dartmouth College v. Woodward), but this theory is not featured in Life, Inc.

Ultimately, the book does not seem to be about money, markets and corporations, but about things Rushkoff doesn’t like about modernity. There is plenty there to fill 304 pages. He doesn’t like fiat currency, or currencies that hold their value for that matter. He doesn’t like it when rich people move out of the city (chasing status), or when they move back in (causing gentrification). He doesn’t like monopolies, but he doesn’t like competition either. He doesn’t like the cult of positive thinking, nor does he like cold, instrumental reason. He doesn’t like double entry bookkeeping, or the triple bottom line.

For Rushkoff, criticism comes more naturally than appreciation. If things are so bad, one would think the alternatives would be obvious. But they are not obvious. As Sam Rayburn is supposed to have said: “Any jackass can kick down a barn, but it takes a good carpenter to build one.” Rushkoff does more kicking than carpentry. He does not offer alternatives, at least not in the space between the babysitting clubs and barbecues, on the one hand, and, on the other, the world-ending electromagnetic pulse. So we are left mostly with his grievances. As John Milton wrote in the first paragraph of Areopagitica, his “Speech for the Liberty of Unlicensed Printing”:

For this is not the liberty which we can hope, that no grievance ever should arise in the Commonwealth--that let no man in this world expect; but when complaints are freely heard, deeply considered and speedily reformed, then is the utmost bound of civil liberty attained that wise men look for.

It is Douglas Rushkoff’s great fortune that, as a result of the dramatic increase in the number of literate and connected human beings, he will have his ideas freely heard and deeply considered by more people in his lifetime than Lao-Tzu, Plato, Cicero, Dante, Francis Bacon, or John Milton did in theirs. The great advantage of societies that have spent generations already on the road to becoming free, fair and wealthy is that we are afforded the desire and opportunity to discuss the many paths to improving the rules of the game, and thereby the welfare of our families, communities, and fellow human beings. And that is why I, like many an entrepreneur, philanthropist or would-be reformer, remain a guarded optimist.

1 Angus Maddison, The World Economy (Paris: Organization for Economic Cooperation and Development, 2006).


T. Clark Durant is an adjunct professor in the Economics Department at New York University.

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