Friday, June 05, 2015

The Virtualization of Everything Will Not Be Televised: Hillary, Jeb, Facebook and Disorder

My first and best ex recommended "Hillary, Jeb, Facebook and Disorder" (Thomas Friendman, May 20, 2015) and asked my thoughts. It's a cogently argued article about the growth of virtual enterprises, and about why this very important topic is not debated by our political candidates.

1. The phenomenon extends to remarkable realms.
How much of the material shipped to Afghanistan in support of our adventures there were shipped in aircraft owned not by our military, but rented?
Quite a few - and this had consequences. Every time a hull shipped tons of boots or MREs to Kandahar, that craft had to get back to Dover Delaware for another load.
The military pays for the round trip - that's part of the contract - but why should the 747 fly empty? There's nothing worth shipping back from Afghanstan - flag-draped coffins fly military - but just a few hours to the East are the great manufacturing centers of our economic rivals. If you were in the business of making money leasing aircraft, wouldn't you rent out any empty space heading stateside? That's just common sense!

So when you order a laptop or a server or a bundt pan with free shipping, it's highly likely that the shipping is "free" because that air freighter coming back from the wars and the manufacturies, a four-engined Santa, was not owned by, and yet was paid for, by yous. This is not a conspiracy to keep the wars going, it's just taking fair advantage.
So enjoy the bundt pan - and be sure to protest the wars by way of those laptops!

2. How does the virtualization of everything affect the individual?
A family legend (although I no longer remember whether it is of my biological family or of one of my in-laws) explains a long-ago decision to go homestead because a great-grandfather came home one night and said, "We're ruined."
He had been a salesman for a company that made bucket-based pumps for pulling water out of mineshafts; when he saw his rival demonstrate a hydrolic pump, he know it was over.
This disaster had a happy ending, for there was still a frontier (a.k.a. land stolen from the Indians) to which he could go and feed his family by hard word.

But today?

A skilled tool maker comes home having taught his trade to someone from another country who will do the work for pennies. To what frontier can he go now?
It is not "merely" the loss of one job or of an industry; it is the loss of *work*itself* that virtualization threatens.

I state without fear of contradiction that this has consequence for every individual, and for every collection of individuals. Work is important, to self-image and to survival. If work no longer exist, the individual can choose to believe in his worthlessness (thereby preserving his illusion that the world is well-made, it's just himself that is faulty), or undergo the painful, wrenching admission that he has been played by his former employers.

I daresay more than a few will cling to their illusions. This has consequences that I'd love to have a mental health expert talk about.

3. Delaying actions can be fought. 

Skilful use of economic virtualization can enable temporary survival. Heck, that's what I have been doing since my job was destroyed (...age discrimination is a thing, but let's not go there now...).

Recently I wanted to buy some buttens for the "World Peace Through Law" section of the Washington State Bar Association, a group dedicated to Doing The Right Thing if every you heard of one. Reflexively, I checked the prices on some website-based service that promised the buttons at a reasonabe price and - hey presto! - free shipping. As a good like communitarian, I passed the proposal around the Board for comment, expecting nothing but praise. Instead, a friend asked why I was not having them made locally.

Made locally? Is that a thing anymore?

Well yes, yes it is. A 1-second internet search revealed a shop 2 miles away. I went there and actually talked with the people who would be making them; discussed the advantages of the 1-inch vs 2-inch buttons; and on the way back picked up a quality beer for enjoyment at home. Without information technology, I would be unlikely to know of this shop (?remember searching the Yellow Pages?)

The money involved was roughly the same - maybe I'd save a little by ordering on the internet, but I would not have had the discussion. More to the point, that money I spent went into the local economy so maybe I'll see it again.

However I was lucky that I could specify my city in my search. The biggest, loudest virtualizer has an advantage over rivals who can do similar work. This is not a conspiracy; this is profit maximization.

4. This is not a conspiracy... 

...and those who worry about this are not conspiracy theorists. It's a property of changes in the world due largely to the reduction in the cost of exchanging information.

In the past, an Evil Supervillain or Cabal Of Baddies might conspire for ends that, however destructive, at least had a human motive. But the motives of orgnizations empowered by the new technology is not known or, to a great extent, knowable.

Contrary to the mythology of popularizer economics, this is not designed. We do not know where it is going because it is not being directed anywhere.

Will it be stable? will it crash? will it lead to universal prosperity after a period of ajustment, or will it empower a new Dark Ages in which an economic royalty suffers surfs to toil on virtual land/

We don't know, because virtualization through information technology is a new development.

The first earthly creatures that used photosynthesis to generate energy by converting CO2 to O2 and by products had no idea what they were doing (presumably they had no brains, but even if they had, how could they have known?) Eventually they destroyed the anaerobic ecology, except for a few holdouts in ocean vents and improperly canned vegetables - the rest of the planet is now hostile to them.

Let's hope that the new power of virtualized organizations is kinder to we mere humans.

5. This Is Not To Be Discussed.

Friedman's opening point is to not that none of thie is discussed in political conversation. Can you imagine Hillary and Jeb debating this without putting their audience to sleep - or without the talking heads crying about "Class Warfare!!!". You might as well try to talk sense about global warming LOL - and yet it will affect the next generation far more than Benghazi, the Duggars and the latest bearded bogeyman put together.
I suppose you could try to make this concrete. Ask a worker where his job went - and when he says it's o.k. to be unemployed because he can buy a computer for half the cash, ask him how many computers he can buy without a good-paying job.
Faced with this, the two cultures of America have opposite reactions consistent with their culture. Red Americans get angry because you're making them feel bad. Blue Americans want to hold  a rally for the press to ignore.
Perhaps we'd be better off trying something else.

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