Saturday, May 14, 2011

Thoughts While Reading: Can Society Be Run Like a Business? I Don't Think So.

Reading: Here Comes Everybody: The Power of Organizing Without Organizations by Clay Shirky

I'm reading chapter 10, "Failure for Free", and a light comes on in my head when I read the passage about how a small Canadian laboratory beat a larger Chinese scientific community with more sophisticated technological infrastructure in sequencing the genome of the SARS virus. In recent months, the US Republicans have apparently been trying to repeal democratic politics in this country, and all the states under their control, so they can privatize the governments and run American society like a business. More efficient, they insist; besides, if you put power in the hands of the perfidious people, they'll make this country communist if they aren't stopped. Or so the official spin goes.

Here's the thing: China really is run like a business. A giant corporation whose holding company officially calls itself the Collective Property Party of China (with "Collective Property" usually translated "Communist", though under its current policy of state capitalism [though some would not call it "capitalist"] "Corporate" would probably be a better translation) but might as well be called the Chinese National Management Corporation. China, following the example of large American corporations known for their paranoia about their precious trade secrets, has a perpetual ban on horizontal communications; information can only legally be shared along the established hierarchical lines of authority. The small Canadian lab that beat it to the SARS genome, the Genome Sciences Centre, used all open-source software tools and took advantage of the Internet and the public database of genetic sequences called GenBank. That is, all its information sharing outside the organization was horizontal. In the end, this proved to be GSC's unfair advantage. China ended up acting like a large, unwieldy conglomerate top-heavy with management. Like, say, AT&T.

China is what the Republicans want to turn America into. That is, they want to abolish "politics" and replace it with "business". Run government as a business! Yeah, right. Run it like Ma Bell, especially before she got broken up into several regional telephone companies back in the day. Since the most militant corporatists in America today are the brothers Koch, the better comparison would be less AT&T and more Standard Oil (that is, the oil monopoly J.D. Rockefeller built), as they seem bent on consolidating the oil industry into a colossus that can overthrow the American government. Looking at China, what would America be like if it came under corporate management? Heavy restrictions on information sharing, of course. Also, considering that the Kochs are trying to force their employees to vote for what they tell them to vote for Or Else, any criticism of national management would be ruthlessly punished, as in China. Already the Republicans are trying to shout down all the liberals and even claim that dissent is by definition treason. Just as in China!

Meanwhile, smaller companies tend to clump in big cities where the social and business ecologies are structured like internets (as explained by the Small World theory of social networking). It is in these environments that the real free markets thrive, where new companies and new ideas proliferate. Giant corporations like Koch Industries, however, strive to destroy such ecologies by consolidating them into monolithic hierarchical structures of management. The Chinese government has structured the entire society of China that way, like a gigantic monopoly conglomerate. The thing about these corporate hierarchies is that they entail monster overhead, especially the bigger they get. On the other hand, open systems can have no businesses and no employees, and yet, amazingly enough, they can work a lot more efficiently than hierarchical control systems such as, say, the management of AT&T (as Shirky shows in a personal anecdote).

The reason is that open systems, such as the open-source software movement, reduce the cost of failure to almost nothing. In a traditional corporation, there's a high inherent cost to failure because the company invests a lot of money in paying professionals (IT specialists, R&D specialists, marketing specialists, etc.) and the extra overhead needed to maintain these employees. Because failure can be disastrous to the company, it needs to filter out potential failures beforehand. That's why companies (and bureaucratic governments) are so conservative. Now look at SourceForge, where the vast majority of the open-source software projects have precisely zero users. And yet since there's no business organization and no employees, this open system has all but eliminated the cost of failure, so filtering can occur after publishing rather than before it.

Now look at the difference between democratic and authoritarian societies. China may be prospering right now, but all power is in the hands of the holding company's management, and if Chinese Communist Enterprises management becomes incompetent, they can bring the whole company nation down with them. In America, even if the (at least nominally) democratic political infrastructure has long been corrupted by technocratic bureaucratism, it has a resiliency that no authoritarian system, corporate or political, has. If the Chinese workers launch a national strike against the nation's corporate management, the result will be devastating. The same thing, interestingly enough, is happening in Wisconsin, where a Republican government is trying to restrict voting rights along with worker rights and meeting mass resistance that is likely to spell a GOP rout in this and next year's elections. In a free democratic society, worker resistance may be bad for business, but it's part of the political landscape, and a traditional one at that. The Chinese Communist Corporation is determined to crush all democratic tendencies because a free market spells an end to its monopoly over politics and therefore the corporation itself.

And so I think it's a bad idea for a society to be run like a corporation. It's not just that society is structured much differently from any corporation. It's also because a managerial society is rigid and inflexible, and responds badly to both crisis and opportunity. Just look at Japan fumble after the Great East Japan Earthquake...

That's the thought that came to me while reading today. I realized right at that moment that I had to share it.

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