From my paternal grandparents and especially my dad, the phrase, “Don’t trust bankers and lawyers.” was often heard around our ancestral ranch along the Tetons and over family dinners when I was growing up.
For some reason dad threw “doctors” into the old saw as well.
I eventually learned that these were euphemisms for corporate America, a dirty word to family ranchers which are the epitome of what we call today micro businesses or entrepreneurs.
Conceived and born after my dad returned from duties near the end of World War II, I recall that his stories as we went through his gear and memorabilia from that time were ultimately always about technology.
He returned absolutely convinced that huge technological advances, fostered by entrepreneurs, such as those he saw and used training for his tank battalion, were being deliberately prevented from coming to market by corporations seeking to maintain monopolies or oligopolies.
He was as conservative as a conservative can get, but he seemed more like a libertarian or liberal (turning over in his grave
) whenever this topic came up, which was often.
When I was 11, my life-long rancher dad took work at Phillips 66, a major petroleum company, to help pay off creditors after a commodities broker absconded with his and their monies.
Lets just say that all of my projects from wood shop to pine derby were spray painted bright orange
.
Beginning in the maintenance area, he thrived and worked his way up in corporate management during the revolution in gas pump technologies and the transition of service stations to small retail outlets.
Still, the things he learned and heard only deepened his suspicion that many technological developments like innovations that would revolutionize things such as fuel economy, engine and tire wear, as well as what would lead to hybrid technology, were purposely being bought up and kept off the market.
This, he believed, was because these innovations would not only dramatically reduce profit margins but also strand capital costs and investment in old technologies.
He wasn’t college educated nor had he read the works of economists published before he was born and during his early years. He just had a practical suspicion back then of what economists have long known, that the marketplace is always at war with itself.
My ancestors were not all horse and cattle ranchers.
Among my great, great-great and great-great-great grandparents were also two gold miners, three who started multiple saw mills and two others in manufacturing, one for molasses before sugar became available in the west and another a carriage maker.
They were also entrepreneurs and evidence that my penchant for startups was in my genes.
They saw the reality of innovation. It always begins at the margins with entrepreneurs. Once the technologies threaten the status quo, then large concerns buy the advances up and control or quietly bury them.
Or the entrepreneurs quickly leapfrog established larger or more established competitors trapped in old technologies as I repeatedly did through my start up/entrepreneurial approach during a four-decade career in community destination marketing.
Ironically, once break-throughs are achieved, all too often a few entrepreneurs seem to try and maintain their edge and protect investments by then stifling, slowing, controlling or monopolizing other innovations.
When my dad was the age of my grandsons now, economists were noting this cycle. But he knew it from real world experience.
If he were alive today, it would be no surprise to him to see newly minted tech giants follow this cycle, some even seeming to try and stifle or undermine the innovation neutrality of the Internet called “net neutrality” (watch the video at this link.)
This may be why we see corporations put so much effort into influence and control of governmental law and policy makers.
Take billboard companies, for instance. Long obsolete, rather than create value, they pay huge sums in campaign contributions and lobbying to garner permission to create more and more blight along roadside through allies in legislatures.
We all have a front row seat to how desperate corporations can get when new technologies render them obsolete and they find billions trapped in stranded infrastructure.
Just look around: newspapers can’t seem to give away huge Heidelberg printing presses, millions of miles of long distance telephone wires now sit idle, television has collapsed into cable, which is now collapsing into Internet streaming.
Corporations with monopolies to generate and distribute power are like deer in the headlights as low cost energy internet infrastructure quickly evolves around renewables.
None will go quietly. The battleground is to control government in hopes it will extend their monopolies by either giving them control of the public domain or conspiring to strangle new infrastructure and stifle innovation.
This never works for long, though. Entrepreneurs have always nibbled along the edges in search of incrementally reducing costs here and there or improving productivity and sometimes they even shift paradigms.
The war within capitalism as foreseen by economists three generations ago is intensifying, but as laid out in the fascinating new book, The Zero Marginal Cost Society, Jeremy Rifkin makes the case that the paradigm shift now underway marginalizes capitalism itself.
No we won’t all become communists, which has never worked or socialists either, but I am sure in desperation that will be avowed by those sensing the continued eclipse of capitalism over the next 20 or 30 years.
But how will we then find work and make a living?
This, of course, is not a new worry. It was addressed in a short essay published in 1930 when my dad was eight years old entitled Economic Possibilities for our Grandchildren by the economist Dr. John Maynard Keyes.
He wrote about “technological unemployment” a term he coined to describe a condition economists had theorized about since the 19th century. Keynes surmised that in the near term this would only be a “temporary phase of maladjustment.”
In his mid-1990s book The Road Ahead, Bill Gates wrote that - "We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”
For the ideas in his 1930 essay, Keynes’ calculus using the “Gate’s Rule” would have been in multiples of decades but in another two his idea may reach its tipping point.
In what Rifkin describes as a near zero marginal world, fewer jobs will be about wealth and profit while far more than even today will turn on “the true character of ‘purposiveness’ with which in varying degrees Nature has endowed almost all of us,” according to Keynes.
He continues, “For purposiveness means that we are more concerned with the remote future results of our actions than with their own quality or their immediate effects on our environment.”
This does not mean that we will all work for the government.
It means that a majority in the future will work in what Peter Barnes coined the “Commons Sector” but that term does not mean we will all work in community destination marketing organizations, which is only one form.
Like DMOs, many may be facilitated by government but independent and for public purpose of which the market as it remains by then is a beneficiary.
But a better example according to Rifkin’s logic may be social enterprises such as cooperatives. A great example, based in Durham, North Carolina where I live is the Center for Community Self-Help, now expanded statewide.
It is a social enterprise for the purpose of community lending and real estate development, a model now for Durham’s growing reputation as a center for social entrepreneurship.
Co-ops date to colonial times in America and ironically they evolved in the upheaval caused by the first industrial revolution. They are primarily democratic and self-managed. Think Blue Cross Blue Shields when they started in places such as Durham.
Our ranch was part of the Fremont County Co-op. Irrigation for our meadows was a co-op. In the decade before I was born, our ranch gained electricity through independent co-ops.
They were facilitated by small government loans, a movement that by the time I was two years old had brought electricity to every corner of rural America in just eight years.
It was a movement initiated because electric utility companies thought it too expensive and at a fraction the cost they had estimated. The only think blocking replication of this model for other needs is the powerful lobby near monopolies deployed to block it.
Today, one out of every four Americans belong to a cooperative and the proportion is even higher in other parts of the free world.
In the U.S. alone as of 2011, “29,000 cooperatives with 120 million members , operating in 73,000 places…..account for more than $3 trillion in assets, $500 billion in annual revenue, $25 billion in wages and benefits and nearly 2 million jobs.”
Even when we go to Ace Hardware, Rifkin writes, we’re going to a co-op, same when we buy Land O’ Lakes products.
Unless we “sell out,” a word my dad used often to describe the reluctance people have to stand up to “legal corruption,” and a law is passed banning entrepreneurs, the term “back to the future” may be with us for many decades to come.
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