We’ll figure out how to share technology’s bounty in cities. The British writer Paul Mason has a useful framework for talking about the impact of technology on the global economy. There’s a book-length version, but you can get the outline pretty quickly from this recent talk Mason gave (Medium): Technology today is driving costs for many informational goods to zero, while automating tons of jobs. This could trap us in a “stagnant neo-feudalism,” desperately creating “bullshit jobs” if we don’t change course. Under the rubric of “post-capitalism,” Mason proposes that we instead embrace the collaborative power tech unleashes and use it to move beyond the now-inadequate profit-driven economy. Post-capitalism means actively promoting this platform-cooperativist future, and cities are the best place for that. Unlike whole nations, they’re the right scale for experiments with basic income pans, data-driven decision-making models for public affairs, and broader efforts at liberating data from private silos. It’s the old software-world argument between open-source and proprietary systems, transposed into the realm of urban policy. Mason thinks Barcelona might be a good place to start.
And now for something completely different. Shell-shocked by last night’s debate? Take a sanity break with President Obama’s essay on the economic challenges that will confront his successor (The Economist). Trumpism and Brexit are driven partly by nativist fears but also by more legitimate concerns about inequality, Obama writes. If we’re going to make headway in that realm, we need to shed our allergy to tax-supported public projects, invest in education, enforce trade rules, and respond to climate change. “We have a choice,” he says: “Retreat into old, closed-off economies or press forward, acknowledging the inequality that can come with globalization while committing ourselves to making the global economy work better for all people, not just those at the top.” If the depths of the 2016 campaign have left you dejected, remember that for the next several months at least, the White House still has an occupant who can think and write about what matters.
How does a company culture go wrong? As Wells Fargo tries to persuade the public that it can be trusted in the wake of its bogus-accounts scandal, it faces the same kinds of questions that have plagued other recent high-profile corporate meltdowns (for instance, Volkswagen and its doctored emission data): How could they let that happen? It’s all about culture (The New York Times). If a company’s culture is toxic, it doesn’t much matter what leaders say. Employees are going to act based on the real signals the company sends them and the leadership behavior they actually observe. For instance, you can tell call center employees that you care more about quality than speed, but if you put a digital read-out of each call’s time front and center on their display, they’re getting a different message. If you want to change a business’s culture, start with its behavioral cues.
Why contract work matters. “Contract theory” — the economics field in which the two scholars who just won a Nobel Prize specialize — sounds arcane and obscure. But the prize is actually an acknowledgment of a highly practical and increasingly central challenge that businesses face (The Washington Post): How do you monitor job performance and reward it effectively? That’s the focus of MIT economist Bengt Holmström’s studies. How do you write a contract that assures a desired outcome when the other party has an incentive to cut corners? That problem, which comes up in many arrangements to privatize public services, is what Harvard’s Oliver Hart studies. “Contracts” is just another term to describe what we expect from one another and what happens when we don’t get it. They can live in a handshake, a legal document, or a piece of code. Designing them better is important work.
Amazon vs. Etsy is more about values than scale. A year ago Amazon thought it would be a relatively easy matter to move in on Etsy, the Brooklyn-based platform for makers of handmade goods. But the fight has turned out to be less a simple matter of scale and financial muscle than a complex struggle over values — and in that realm, Etsy definitely has had the edge (Backchannel). Though some portion of its sellers may feel Etsy is now too big and corporate, it’s still a lean and idealistic youth compared to the behemoth Amazon. A year after the launch of Amazon’s “Etsy-killer” Handmade, the Amazon rival has become largely a secondary market for some Etsy sellers. Etsy, a B Corp that is aiming to balance its ideals and the demands of the stock market, is still growing and able to command a ton of loyalty. It’s still early innings, to be sure, but for now, at least, Etsy seems to have dodged Amazon’s bullets.
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