8. The central contradiction of capitalism is IP in the digital age
Because of its centrality to the digital revolution in communications, the market for software is crucial to the struggle over intellectual property. Software consists of disembodied machines, recipes of pure information that achieve their effects through a variety of material forms (hardware). Since reproduction involves little or no cost, their being owned ownership as private property poses an acute problem for corporate accumulation. Even so, the Microsoft corporation built a position of market dominance for its Windows system by licensing software whose source code is kept secret from the public. A movement arose to challenge this commercial monopoly, Free/Libre/Open-Source Software (FLOSS), which is divided between those who oppose selling as such and those who accept money payment, if users modify the source code and reproduce it with acknowledgment. FLOSS accepted the need for legal protection, for example though a General Public License (GPL) and the Creative Commons license introduced by Stanford law professor, Lawrence Lessig. These have brought resistance to the permission culture promoted by the IP regime that started with hackers like MIT’s Richard Stallman and the Finn boy wonder, Linus Torvalds.
FLOSS has one great advantage over the corporate monopolies. It pools the talents of thousands of software engineers, amateur and professional, whereas Microsoft hires only a few workers and hopes that its customers will find bugs through trial and error. Its licenses are less restrictive; and the most popular system of open-source software, Linux, has been adopted by some leading computing corporations. IBM embraced Linux to help the Brazilian government convert the public sector to open-source software. Microsoft’s business methods are predatory, as in the browser war with Netscape that led to some government anti-trust wrist-slapping. Despite the US denying countries flouting its IP rules to its third of the world market, diffusion of digital media globally has been faster than for any other information technology. Hewlett-Packard have targeted the world’s four billion poorest inhabitants by setting up test sites in China, the Middle East and Africa to explore modifications of machinery and software needed there.
The critical player in this fast-evolving scenario is India, with its vast population and huge pool of cheap, computer-literate English-speakers, plus a diaspora steadily returning home from Silicon Valley. The relocation of information services to cities like Bangalore, Hyderabad, and Mumbai already evokes the specter of massive middle-class job loss in the West. Thousands of decisions to install software and machines are made at every level of Indian society. Microsoft and Red Hat Linux are the main competitors, the former stressing collaboration with government in regulating access to the internet, the latter that their software is cheaper, more robust and flexible. This is the nub of the IP issue. As with the East Indian tea monopoly in the American colonies, huge corporations rely on US laws and policing powers and venal governments everywhere to maintain artificially high profits and rents. The United States wants to impose its own solutions to the commercial challenges of the digital media globally. Just as Edison’s monopoly was once circumvented by Hollywood, however, the recent shift of economic power to Asia exposes cracks in the American empire.
US businesses and activists have so far led opposition to the monopolists; their liberal constitution still exercises a powerful grip on American minds. Bill Gates has called detractors of IP rules “communists”. Yet, as an internal memo of 1991 acknowledged, “If people had understood how patents would be granted when most of today’s ideas were invented for taking out patents, the industry would be at a complete standstill today. A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose.”
The fundamental weakness today of attempts to build a “free” world market on principles of command and control is that the digital revolution promotes a broader conception of democracy than an alliance of leading governments and corporations could ever contain. The struggle to shape the future of digital media is a moral one. Businessmen, politicians, and the lawyers who defend them are now often accused of immorality, lying, and committing crimes. Public bureaucracies are widely considered to be indifferent to human interests. The legions of activists in the movement for democracy are motivated by an ethical politics whose highest value is personal responsibility.
9. The distinction between real and artificial persons for businesses must be restored
The history of private property contains personal agency and impersonal forces, but the difference between them no longer exists. This allows the rhetoric and symbolism of the early liberal revolutions to be appropriated by powerful interests whose aim is the opposite of democracy. World society now resembles the Old Regime as a result. Copyright was intended originally to protect the interests of individual authors; their interests are invoked today to justify rent extraction by corporations running the music, movie and software businesses. Liberal democracy has turned into its antithesis. A wedge must be driven between the apologists for a new enclosure of the commons and the ideology they invoke to disguise their real purposes. An attempt to carve out a sphere of impersonal social life is necessary and useful; but individuality, moral purpose, and religion have been driven from conduct of our common affairs as a result. We must learn to separate the personal and impersonal dimensions of social life and combine them in new ways.
Every human being is a unique individual who lives in society; the two sides of our dual human nature are inseparable. Society is both inside and outside us; a lot rides on being able to tell the difference and make a meaningful connection between them. Society is personal when it is lived by each of us in particular; it is impersonal when it takes the form of collective ideas. Life and ideas are likewise inseparable in practice, but they sometimes must be distinguished.
Insisting on a radical separation of individuals and society or life and ideas does as much damage as collapsing the difference between them. Modern capitalism’s moral economy rests on dividing social life every day between “home” (an intimate personal sphere) and “the market” (where impersonal rationality rules). For many of us, including children, this imposes an intolerable strain. Private property from the beginning made it hard to reconcile our individuality and an active sense of mutual belonging. Then private property came to be owned by the state and large corporations, making society itself invisible or unreachable for most people. The merger of personal and impersonal spheres in economic law left political culture confused by individual citizens’ rights being shared by abstract social entities with much more power than any living person ever had. The consequences for democracy in practice are disastrous.
Is it so hard to distinguish between real persons and the impersonal organizations they own? Bill Gates is Bill Gates, not Microsoft and, when he plays bridge with Warren Buffet, they talk about money with consequences for all of us. We can appreciate a play representing modern physics as a meeting between Nils Bohr and Werner Heisenberg in Copenhagen. The academic humanities have become so abstract that it is now old-fashioned to imagine that living people are what make society and ideas. The Anglophone founders of classical liberalism expressed this in words we have forgotten: “General Forms have their vitality in Particulars, and every Particular is a Man” (William Blake).
The convergence of phones, TV and computers in a digital communication has sped up human connection around the world. Society now takes several forms—global, regional, national and local. We need new impersonal norms to guide our social interactions in such a world, but only if we think individual personalities are also important. A new humanism could unite these poles of our existence. “Humanity” expresses our common predicament and its potential synthesis. It is a collective noun, a moral quality. and a historical project for our species. We are still primitives, but we, the people, will eventually make society on our own terms. This means above all mastering the means needed to make world society—machines and money. The masses will of course encounter immense social forces bent on blocking a drive for genuine democracy.
There is much talk these days of “good governance”. This could be dismissed as a cynical disguise of power passed onto a gullible public by transnational oligarchies. It also reflects a widespread desire to bridge the gap between politics and morality left by the last century’s construction of an impersonal society ruled by state bureaucracy, capitalist markets, and scientific experts. The remarkable strength of religious feeling in the world’s most modern society and the role of Islam in mobilizing resistance to the American Empire is not an anomalous hangover from the past. Rather, it reflects people’s desire for meaningful connection when secular states’ grip on society is much weaker than before.
10. The plutocracy are “monarchists and pseudo-aristocrats” and hostile to democracy
Thomas Jefferson identified three main obstacles to achieving democracy—big government, organized religion and commercial monopolies. He called the last “monarchists and pseudo-aristocrats. Thanks to his Federalist opponents, it slipped through the cracks when the US constitution was formed. A world dominated by the American Empire since 1945 is now reduced to a merger—instead of their previous compromised alliance—between the traditional rulers and capitalists who needed them for crowd control and enforcing contracts. Our moment in history sees plutocracy everywhere, with either side in power.
The fight is on to save the commons of human society, culture and ecology from the encroachments of corporate private property. This is no longer mainly about conserving the earth’s natural resources, although it is surely that, nor of the deterioration of public services left to the mercies of privatized agencies. Increasingly, we buy and sell ideas; and their reproduction is made infinitely easier by digital technology. The larger corporations have launched a campaign to assert their exclusive ownership of what was recently shared culture to which members of a community had free and equal access.
In 1936 Ronald Coase, a British institutional economist asked, if markets are efficient, why would any self-employed person choose to work in a firm controlled by a few bosses, rather than outsource what they could not do themselves. His answer was that transaction costs are high in markets, and firms can reduce them by hoarding the own specialists. Oliver Williamson, a “Nobel” (Bank of Sweden) prize-winner in economics and founder of the “new institutional economics”, took what is internal and external to the firm to be entirely flexible. He extended this idea to relations between corporations and governments. But the phase of internalizing transaction costs is now over, because transferring information is much cheaper and more reliable.
Corporations have not ceased to be large and powerful, however. Of the hundred largest economic entities on earth, two-thirds are corporations and one third governments, half each if whole national economies are included. The top 150 firms are financial, with only one exception. The drive for corporate political independence would leave them the only citizens in a world society made to suit their own interests. This result was the original goal when the difference between real and artificial persons in law for businesses was removed in the late nineteenth century. Mere human beings cannot compete with organizations of their size, wealth, reach, longevity, and power.
Williamson and his followers consider as inevitable a world where companies control the marketing of their brand, outsource production, logistics and much else, and internalize government. Why rely on nation-states for conflict resolution? Corporations too must handle conflicts internally. Why have state laws, when what the world needs most is moral law? “Corporate social responsibility” was at first an internal corporate slogan for shifting the basis of promotion from contribution to shareholders’ profits—but rarely in practice. This slogan was later applied to negotiating changes in relations between firms, society, and the environment; its keywords, such as sustainability, have acquired general use. What kinds of political mobilization at all levels of society could challenge corporate power? We will need to harness global social networks to alliances between grassroots initiatives and some large-scale bureaucracies with both wealth and power. There are strong anti-humanist forces in this world. We must build bridges between local actors and the new human universal, world society. To be fully human, we must make sense not only of our personal experience, but also of impersonal social forces. Individual rational choice cannot come close to grasping this situation. If learning to be human is difficult in a world growing ever more unequal, we should be clear that people have that potential as individual personalities living in society and business corporations do not.