Search results for social capital

Crossposted on Rhizomicomm

I’m currently working on an ethnographic paper examining innovation in a global context.  The above map is a depiction of innovation clusters throughout the world, on the dimensions of patent growth and firm diversity.  As it turns out, the area I’m looking at is off the chart with very high growth and few firms.  The area is also one where western notions of property rights are out the window.  The main question we are addressing is how should firms innovate globally when their intellectual property {IP} rights are tenuous or uncertain?  The economic argument for granting exclusive property rights is to ensure an entrepreneurial entity has the incentives to commercialize an idea.  So, an innovator is allowed a monopolist position for a period of time, allowing for a path to cash and attracting investors, in order to ensure there is grist for the innovative mill.  In our research, exclusive property rights may exist, but aren’t enforced.  This begs the question, why is there growth?  Why would anyone invest in such a chaotic environment?  There must be some value in doing so.  Finally, I think it would be interesting to re-examine the above map with cultural dimensions, not in terms of sweeping generalizations, but nuanced, regional differences like the ones AnnaLee Saxenian found between Silicon Valley and Route 128 in Massachusetts.

Macleans had two articles on the buzz generated by Chris Anderson’s {Wired editor and proponent of the long tail} new book, Free: The Future at a Radical Price, which Russell has referred to. The first article talked Anderson’s ideas of “freeconomics,” where costs of storage and distribution are approaching zero and consumer behavior can go viral when the price is free.  It goes on to describe how critics were lambasting Anderson for his notions, including Malcolm Gladwell’s savaging of the book in the New Yorker. The other article invokes Frankfurt School critical theorist Walter Benjamin to highlight a trend where what is valued is what cannot be readily reproduced and digitized…the return of aura of the experience.

How does this relate to global IP concerns?

Let’s assume that we’re in an economic reality where intellectual “work” can often be readily digitized and reproduced infinitely.  We’re talking creative content, educational resources, biotechnology/genetic information, etc., so it would seem that the producers of music, film, news journalism, the university lecture, and the sequenced genome all have a dog in this fight.  Producers of valuable things want to profit from their efforts.  Their investors demand it.  Here comes Chris Anderson saying that the new economic model is to offer things for free.

Enter Malcolm Gladwell and other naysayers.  Gladwell asserts that Anderson is wrong on several counts.  The YouTube business model has failed to make money for Google, hence the “free” business model is untenable.  The logic of “free” is flawed, as capital-intensive infrastructures, costly complementary goods and services, and downstream costs often mean that goods simply cannot be free.  One can nitpick the flaws in Gladwell’s arguments.  He cites that the costs of clinical trials is what drives up pharmaceutical prices, which is true today, but the objective with biotech. is to use genomics to better target the use of molecules for specific therapies geared towards specific diseases and specific people, based on genetic profiling.  To use an “Obamaism,” the idea is to bend the innovation curve.

When IP faces rampant piracy or when property rights are not or cannot be enforced, globally, the potential of infinite reproduction puts pricing pressures towards the free, whether the producer likes it or not.  This is what’s happening to the firms in our research.  The successful global firms we studied are the ones that are embracing cultural particulars and negotiating as best they can their claims to IP revenue streams.

Interestingly, Chris Anderson has been accused of cribbing IP from sources like Wikipedia, acting like a veritable Web 2.0 Jack Sparrow.  The question I have is does this or should this diminish the value of his book by readers?  Is this a violation of some “authorly” ethics or is this just the new IP where everything is up for grabs and the key is deliver value.  Anderson even stated that one could get the information in Free by compiling blog posts and articles, but that the book adds value by synthesizing it.  He also practices what he preaches.  One can read Free for free, but just because it’s free, doesn’t mean it will be easy.  The free versions of the book text are limited by format or are DRM-protected.  Some consumers are complaining because of different expectations of what “free” means, but this approach is consistent to Anderson’s core ideas.  Being in Canada, I’ll have to jump through more hoops to read this for free, due to publishing restrictions, but I’ll figure it out and I’m actually looking forward to reading it.

Is this commerce or is this anarchy?  The lessons being learned are similar to those in the second Macleans article.  The focus needs to be on the delivery of value, rather than the protection of rights.  Globalization is achieving what a thousand socialist mandates could not.  The erosion of property rights is forcing firms to figure out how to deliver value when an innovation is free.  Web 2.o has offered firms the ability to do what I have called “stagesetting” in several research projects and a case on Pixar.  Stagesetting is where a firm has a sequential approach to its ultimate strategic objectives.  We see firms trying to leverage network effects to create value for users through sites and technologies using social media.  Flickr has no value with hundreds of users, but has tremendous value with millions.  One can talk about MySpace, Twitter, and Facebook revenues in terms of advertising, but the holy grail is the data mining and finding what the exact value proposition is to generate revenues from business and institutional clients.  The “freemium” model of the basics for free, but added features are extra, is based upon stagesetting, where value is created.  What Anderson offers is a glimpse into a global economic reality and gives firms the incentives to rethink the nature of value…or they can try their luck in the courts, like the RIAA did with prosecutions of a Minnesota mom and college kids.

Twitterversion:: Will IP matter in global contxt?ChrisAnderson=Web2.0 JackSparrow decentrng IP auth,making value-creation salient. http://url.ie/23kj @chr1sa @Prof_K

Song:: O.P.P – Naughty By Nature lyrics

Last week, the Young Republicans got into a dustup over yet another Facebook flap.  This spring, we discussed how Facebook derailed an NDP candidate to provincial office in British Columbia, when the BC-Liberal opposition got wind of “racy” photos posted.  In this incident, there’s differing opinions which are arguably representations of fragmentation in the Republican Party.  According to the DailyBeast, it started with Audra Shay, vice chairman of the Young Republicans hosting a discussion on Wal*Mart endorsing Barack Obama’s health care plan.  Things unravelled when an “Eric S. Piker” made racially charged comments using the word “coon,” another ThickCulture topic from the spring {See above}.  Audra agreed with the statements, adding a LOL.

Subsequently, there were others criticizing these remarks, Cassie Wallender {a national committeewoman from the Washington Young Republican Federation} and Sean Connor {chairman of the D.C. Young Republicans}.  While these critics were “de-friended” by Audra, “Piker,” for the time being, remained a “friend.”  On Thursday, a black Republican activist, Lenny McAllister condemned these remarks and prior statements by Shay::

McAllister references a culture war going on in the Republican Party and regarding the racially charged remarks going around, he stated “You can cover cyanide with chocolate, but you still can’t call it candy.”

Her own recounting of the events, possible unaware of the screencap, paint a different picture of the events.  In her statement on 3 July, Shay went on to denounce the remarks and attributed the dustup to her political enemies capitalizing on an opportunity.  Irreparable damage may have already been done, as her upcoming bid to be Young Republican chairman may have been derailed.  

I’m not going to engage in any admonishing finger-waving on the dangers of social media, a bete-noire of mine.  I think this is beyond a matter of “political correctness” or freedom of speech issues and do reflect a growing divide between moderates and a more divisive fringe.  Indicative of this is how moderates are often criticized as being RINOs, Republicans-in-name-only, who are not sufficiently conservative. The RINO label was thrown at Wallender by Shay supporters after her criticism of the racial remarks.  In order for Republicans to move forward, they will have to deal with these issues head-on.  Will they use social media to do this?

Twitterversion:: #YoungRepublican schism over racially-charged #Facebook flap. Indicative of a larger #CultureWar within the party?  @Prof_K

Song:: Space Oddity (1990 Digital Remaster) – David Bowie

  

Crosspost:: A shorter version is available on Rhizomicomm.

When I was a senior in college, I must admit thought quite highly of economics and its rationality.  It was the early 1990s and I was contemplating law school and doctoral programs in environmental economics, with interests in law and economics and public choice.  I was given The Gift Economy by David Cheal to read, altering my worldview forever.  A close second was Jean Baudrillard’s Selected Writings, but that’s another post.

Cheal’s book focuses on the tensions between market relationships {political economy} and social ones {moral economy}, as a distinctive characteristic of the social milieu in capitalist societies.  While gifts may be given for instrumentalist means, they often are not, hence being representative of a wide array of behaviors firmly in the realm of the symbolic and the relational.  Cheal talks about the interplay between the market and social realms, which could easily be superimposed on a Pierre Bourdieu framework of fields, habitus, doxa, and forms of capital.  In the past, gift-giving was often marginalized and thought to be subsumed in a capitalist exchange model.  Recent thinking considers gifts to be a social process, one that has a significant economic impact.

So, how is this interplay affected by social media?  In my current work, I’ve been thinking of the use of Facebook by organizations, particularly in the realm of philanthropy.  Organizations have been embracing the idea of creating relationships with constituents, rather than focusing on transactions.  Health non-profits often provide information and advocate on behalf of their constituents.  By doing so, this creates a person-organization relationship and ideally leads to greater levels of philanthropy {economic resources for the non-profit}.  The key is that the relationship must have salient meanings for the constituents, i.e., the brand meaning system.  Depending on the context, this is often tied to outcomes, e.g., cures for diseases, social change, identity, etc.

Social media and social networking sites like Facebook not only foster person-organizational relationships via information disemmination and services, but also peer-to-peer relationships.  These relationships are social, but are within a capitalist market context.  Hence, we return to the gift.  We manage relationships through gift-giving and other behaviours, through the management of symbols::

Social media has the ability to move constituents from this model::

Organizational Activities -> Org.-Person Relationship -> Outcomes

more towards this one::

Organizational Activities  -> Communities of practice -> Outcomes

The latter being facilitated by the Internet and with the possibility of a richer set of outcomes stemming from an engaged community.  We want gifts to be expressive of our relational ties, hence full of meanings, within a given social context, e.g., a community of practice.

Facebook is a global player, but still needs a solid revenue model.  Apple’s success with “apps” show the power of a platform to deliver value, often at a low price-point.  The Facebook platform should be developed in line with how people, how a large number of people, actually engage in symbolic relationship management, tied to other strategies, such as::

• Bling gifts that are expressive of sentiments {various media}
• Donations and sponsorships
• Online events to engage community members
• Free/Low-cost personalized apps that add value, e.g., health monitoring, reminders, alerts, etc.

Organizations are still figuring out how to use social media and Facebook is still figuring out how to deliver value.  All I can say its future isn’t online ads and organizations just paying lip service to their constituencies with social media is as transparent as this::

Twitterversion::  #newblogpost #Facebook & #socialmedia in reconfig of econmics. Interplay {political&moral economies}.Implic.for orgs&FBk. http://url.ie/1x6e  @Prof_K

Notes from north of 49ºN

While the Vancouver Canucks advance in their bid for the Stanley Cup, the British Columbia provincial election is heating up, as the NDP has pulled within 2 points (39/41 +/- 3.4) of the not-so-liberal BC Liberal Party.  The Green Party is running a distant third at 13%.

One of the big election issues is the Carbon Tax, which is a tax on pollution.  It puts a price on the social costs of environmental degradation {negative externalities}.  The carbon tax was initiated last year in BC, which should give Obama insights into his plans to address carbon reduction.  {Obama’s already talking of a nationwide “cap and trade” policy.}

BC Carbon Tax & The Economic Sociology of the Environment

The BC carbon tax claims to be revenue neutral, meaning it returns the tax in the form of lower personal and corporate income tax.  The tax shuffles funds around in the following manner where one-third of the carbon tax revenues are paid by individuals and two-thirds by industry, while two-thirds of the tax reductions benefit individuals and one-third benefit business.  A fairness issue arises, as some businesses can pass the tax along to consumers, depending on the elasticity of demand.  The carbon tax is initially (effective 7/1/08) $10 per tonne of carbon dioxide equivalent (CO2e) emissions (2.41¢ per litre on gasoline), but will increase each year after until 2012 to a final price of $30 per tonne (7.2¢ per litre).  For US readers, this is currently 7.68¢ US per gallon of gasoline and will go up to 22.9¢ in 2012 (4/30/2009 exchange rate).

One of the issues brought up is that while the BC Liberal Party is imposing a tax on pollution, it’s allowing the export of carbon-producing fuels to leave the province untaxed.  In addition, the government is allowing offshore drilling for oil as part of their energy policy.  This is opening up the BC Liberals to charges of hypocrisy.

So, in the past 10 months, what has been the effect?  I think it’s impossible to gauge the results, given that gasoline prices have gone down and the BC economy is in a recession, although with lower unemployment than Washington, Oregon, and California.  I have to admit I am skeptical that the BC Liberal’s  carbon tax policy will actually reduce carbon emissions.  Why?  This Canadian Dimension editorial introduces a paradox::

“By way of comparison, the average retail price of gas in Canada, adjusted for inflation, has risen forty percent in the past five years. The increase is the equivalent of $120 per tonne of emissions — four times as much as the maximum tax proposed in B.C.

But consumption did not decline. In fact, during the same period both gasoline sales and greenhouse-gas emissions rose to record levels…

In short, the B.C. carbon tax is regressive, shifting ever more of the province’s tax burden onto working people, while reducing taxes on corporations. It will do nothing to cut emissions or slow global warming.”–“B.C.’s Carbon Tax: A Regressive Hoax” from Canadian Dimension (4/30/2008)

How can this be?  Are the economists that off-base?

As an economic sociologist, with a BA in the dismal science, I know at least some of the answers.  Increasing prices through a Pigouvian tax without consumption/production alternatives offers no incentives to alter behaviour away from carbon emitting activities.

A Northwestern sociologist, Monica Prasad, offered this interesting observation::

“The one country in which carbon taxes have led to a large decrease in emissions is Denmark, whose per capita carbon dioxide emissions were nearly 15 percent lower in 2005 than in 1990. And Denmark accomplished this while posting a remarkably strong economic record and without relying on nuclear power.”

—“On Carbon, Tax and Don’t Spend,” NYT (3/25/08)

How did Denmark do it?  According to Prasad, Danish policymakers subsidized environmental innovation by businesses and investing heavily in alternatives.  The idea here is to give incentives to move consumers and businesses away from carbon emission generating technologies towards renewable ones.  As a sociologist, I’m wary of talk of “pricing” carbon, as it attempts to reduce natural capital (i.e., the environment) with financial capital and the assignment of property rights, politicizing economic activity along the lines of power and wealth.  I’d much rather see policy aimed at moving towards a different technological curve, away from carbon, along with an increase in investments in public infrastructure (e.g., mass transit in cities/suburbs) that offers alternatives to carbon-heavy practices.

The Politics of Carbon: “Axe the Tax”

Carole James, leader of the NDP, has been advocating dumping the carbon tax in favour of a “cap and trade” approach, the direction Obama is leaning towards.  The NDP “axe the tax” stance was costing them politically, despite the tax being unpopular, as environmental groups criticized the move.  In this election, there are 85 seats up for grabs.  While the Green Party may siphon off votes from the NDP, it is very unlikely that a single seat will go to the Greens.  Given the overall BC Liberal Party stance on the environment, environmentalists may have a tough choice on May 12.  The carbon tax may fade away as a key issue, as the economy and issues of ethics and integrity might come front and center, but perhaps the economy and the environment will become an intertwined issue.

I’d like to see policies in BC and elsewhere move towards weaning citizens away from carbon.  A recent Wired Magazine article  goes over many of the issues involved in green technologies, including who will pay for the costs of innovation.  I think the BC Liberal carbon tax isn’t the best policy, as I don’t see it reducing carbon emissions and is mute on carbon-emitting fuels being exported and untaxed.  Whichever party wins, I see the BC government as playing a key role in spurring behavior changes through investments and incentives, but who will foot the bill, particularly given a tight budget?

• What are your thoughts on a carbon tax?  (In BC or even in the US)
• What are your thoughts on policies that create incentives for businesses & residences to adopt new greener technologies or retrofit carbon-based ones?
• Should policy focus on investing in new green technologies?  How much should government foot the bill? Should green be linked to economic recovery plans?
• What would the candidates & the “Fake Tweeple” candidates say?

When I heard that HuffPo was instituting standards for citizen journalists, my initial thoughts were that this is like having cinematic standards for porn or a paparazzi code of conduct.  Jeff Bercovici explains why he feels that the 2,500 or so citizen journalists should follow professional standards.  NYU Journalism prof. Jay Rosen has a different views, evident when he explained last year why he thinks that citizen journalists have a place, in light of the Mayhill Fowler dustup about her HuffPo article based on interview with Bill Clinton, where she did not reveal she was a member of the “press.”  Rosen makes a good point here::

“When we admit the validity of both we expand the social space of the press. That is a good thing. If it has pro and amateur wings maybe the press can fly again. If the pros and lots of citizens care about things like “access” maybe that will expand the accessible zone in politics. Dave Winer said it this weekend: Blow up the Beltway. My formulation is milder: expand the press!”

“This makes it very difficult for the rest of us to do our jobs…If you don’t have trust, you don’t get good stories. If someone comes along and uses deception to shatter that trust, she has hurt the very cause of a free flow of public information that [Fowler] claims she wants to assist. You identify yourself when you’re interviewing somebody…It’s just a form of cheating not to.”

Hey, alleged child molesters are an easy target, so it’s all for the best, right?  Never mind that professional journalism was found engaging in entrapment of a Assistant District Attorney who committed suicide over being targeted in the “sting” operation.

While I surmise that most professional journalists would decry these tactics and To Catch a Predator would not be viewed by many as professional journalism, it highlights how journalistic integrity within that institution is far from above reproach.

I’ve argued that satire masquerading as journalism can serve the journalistic function outside the institution of journalism.  It should be noted that Colbert and Stewart are still a part of infotainment, albeit with a different stance.  I’m all for a plurality of voices and stances in the media.  I’m more interested in the journalistic function of the fourth estate than preserving some abstract notion of the institution of journalism as a craft.  I’d rather see journalists push the envelope à la Hunter S. Thompson, rather than play it safe or curry favor with advertisers.  ¡Viva Gonzo!

Song:  The Jam, “News of the World” (1978) (#27UK Singles)

This will be the first installment of a multi-part series.  José, in a recent blog, brought up some excellent points regarding policy, power, and capital.  So, who are these villainous characters populating the halls of places like AIG, Lehman, and Merrill-Lynch?  A bunch of capitalist MBAs, who may never have read a word of Ayn Rand prose, but act out all sorts of wild, objectivist fantasies, right?

Well, there’s been a recent battle brewing on the Harvard Business blogs on the topic of the recent financial crisis and How to Fix Business Schools.   The editor-in-chief of the Harvard Business Review wanted to start a dialogue on the very topic::

“Are our business schools up to the job? Many critics have charged that the values imparted in MBA programs contributed significantly to the ethical and strategic lapses that led to the current economic crisis. Is that fair? And if so, what needs to change? How can business schools regain popular trust?”–Adi Ignatius

Joel Podolny, a Sociologist, notes in his blog post that “Business schools provide students with many technical skills, but they appear to do little, or nothing, to foster responsibility and accountability.”  Bob Sutton, an organizational sociologist, also brings up some interesting points on the Harvard blog, as well as his own::

• “One of the root problems with business schools is that too many are infected with assumptions that reinforce and bring out the worst in human-beings. In particular, the logic and discipline of economics usually rules the roost at business schools.”
• “I have had Stanford students tell me for decades that Merrill is (or was) fundamentally dog eat dog world to live in and there is no incentive for helping coworkers and you get ahead by ignoring them, doing your work, and occasionally sticking a knife in their back.”

Sutton points a finger squarely at economics, which is a dominant mode of thinking in business schools (more on this later).  On the other side of the fence, Steve Kaplan, an economist, offers up “The Economists Have It Right,” where he notes the positives of economic thinking and how not following good economics leads to bad results::

“The tools economists give to students better equip them to understand the business world they will experience. In fact, one of the ways CEOs of financial services firms (e.g., Lehman’s Dick Fuld, Merrill Lynch’s Stan O’Neal and Citigroup’s Charles Prince) failed was in not understanding the agency theory and economics taught in business school. In particular, it is a simple economic point that it is a bad idea to pay up front fees and bonuses for investments or loans that have long-term payoffs.”

He goes on to state that efficiency advances due to economics has increased world GDP and well-being through businesses and capitalism.

First off, I have three degrees from AACSB business schools, but I’ve always been interdisciplinary and my training was steeped in the social sciences, as well as having exposure to the humanities at the graduate level.  My take is that many business schools have created a received-view, dare I say the hackneyed term paradigm, of solving problems.  I’ve seen and heard arguments about adding rigor through quantitative logics or a emphasis on ethics in the curriculum as solutions.  Given this, I have often wondered what type of students are we creating.  Critical problem solvers or disciples of a rational economics worldview (tempered with business ethics)?  It’s not just about how many economics courses are taken, but rather which paradigms are being used to build knowledge.  Which normative logics are being taught?

I think students pick up from business schools and the workplace HOW work gets done and how to get ahead.  There needs to be no smoking gun memo issued by a manager or a PowerPoint slide by a professor stating this.  How is this so?  It’s all about habitus (i.e., our actions are guided by our learned dispositions within a context) and doxa (i.e., what is taken-for-granted in a given context), borrowing from Pierre Bourdieu.  Business schools teach “the game.”  Pop culture depicts the habitus and doxa of the business game with overkill, but the examples are nevertheless instructive.

Oliver Stone’s Wall Street (1987) {left} has Gordon Gekko state a declaration of principles, seeming to echo the very spirit of Adam Smith himself.  “Greed is good” is declared with almost religious fervor, a manifestation of the final trajectory of Max Weber’s take on Martin Luther’s “quiet revolution.”  Boiler Room (2000) {right} has Jim Young indoctrinate the noobs* to the culture.  Now, imagine these images of hyperbole toned down and couched in lectures, cases, and war stories.  This is not to say that it’s all bad and that all that is being taught is that opportunism and guile are justly rewarded.  I will say that there are patterns based upon dominant ways of thinking about business and organizations, often based upon assumptions of rationality and certain logics (but not others).  One might just say it’s simple pragmatics.  It doesn’t have to be this way.  Sutton, in a comment response to Kaplan, notes what is being done at Stanford::

“…The bulk of the class is getting the students out and spreading ideas — they have spread (or tried to spread — failure happens!): Firefox (by building real browsers); practices for making Wal-Mart employees more aware of the environmental impact of the products they sell; hip-hop music; financial responsibility among younger people; and Facebook. In all cases, they have done these things by working among real customers and employees, and their work was judged by real executives from this companies. In other classes, we have done stuff like redesign and change an all-hands meeting in a real company.

So although the image of practical education most business schools present is the telling of war stories, our approach (which is expensive and inefficient) is to start with and weave in some general principles (including design thinking), some stories about how it works, and then to require the students to actually implement some change. This is a different model of management education than most business school professors imagine.”

Exactly.  I know that this type of approach is likely only at top-tier schools and niche programs.

I’d like to see business schools move towards giving students concepts and tools to re-think processes and practices that go beyond how things are currently done.  I’d like to see programs as incubators of ideas.  Places where students can try things and fail, learning from their mistakes.  I’d like to see business schools get students to think in terms of social systems and to incorporate practical solutions to dealing with the interface of different forms of capital (i.e., financial, social, political, cultural, natural, etc.).  In other words, stop trying to boil everything down to financial capital or over-rely upon particular disciplinary thinking.

I think there is creative work ahead for business schools, particularly given the current scrutiny, as well as the fact that the market for programs is increasingly global.  I’ll leave this installment with a Goethe quote::

“To refashion the fashioned, lest it harden into iron, is work of an endless vital activity/Und umzuschaffen das Geschaffne,  Damit sichs nicht zum Starren waffne,  Wirkt ewiges lebendiges Tun.”–Eins und Alles 

I think I’m being converted.

For a good part of my intellectual life, I’ve been skpetical of Neo-Marxist understandings of power. As an urban politics student in graduate school, I rejected the views of urban scholars like Harvey Molotch, Ira Katznelson and David Harvey that claims that the dictates of capital proceeded unabated in urban space. The zeitgeist at the time was that urban power (an power in general) was a more open, fluid process. The capital accumulative class might have strong advantages in the U.S. policy process, but the process was open and by no means was the state simply a handmaiden of capital like neo-Marxists might presume. Policy was a contest, the outcome was not predetermined.

Then AIG happened.

Matt Taibi has a particularly effective and scathing piece in Rolling Stone that guides the reader through the impenetrable minefield of new terms that help us unpack the crisis we face: collateralized debt obligations, credit default swaps, The Glass-Steagall Act, Commodity Futures Modernization Act. Taibi lays the blame for the credit crisis on the combination of a lax regulatory system that allowed companies like AIG to become “too large to fail” and a risk-taking culture within the financial service industry that rewarded immediate profit above all else. As Taibi points out, the state could have stepped in a brought order to this chaos before it was too late, but they demurred:

There’s this notion that the regulators couldn’t do anything to stop AIG,” says a government official who was present during the bailout. “That’s bullshit. What you have to understand is that these regulators have ultimate power. They can send you a letter and say, ‘You don’t exist anymore,’ and that’s basically that. They don’t even really need due process. The OTS could have said, ‘We’re going to pull your charter; we’re going to pull your license; we’re going to sue you.’ And getting sued by your primary regulator is the kiss of death.

All of this could simply mean the “capture” of the state by the financial system. A good public policy scholar would tell you that in the 1990 the financial regulatory system had been “captured” by an iron triangle of interest groups, congressional staff and bureaucrats that agreed on a laissez faire approach to the financial services industry. Not unusual…nothing to see here.

But a good public policy scholar would also tell you that that policy capture is not permanent. A good shock to the policy system, a punctuated equilibrium if you will, would re-open the policy space the include new actors and ideas. Once a major catastrophe happens, policy areas are subject to major shifts. The cessation of constructing nuclear power plants after the Three Mile Island accident is a classic example of a radical shift in the policy space.

So what happened with the financial services equivalent of Chernobyl…. Taibi calls it Paulsonism:

The state is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening directly in the economy, for the sole purpose of preserving the influence of the megafirms. In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize “toxic” risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage holders and other such financial losers.

Rather than open up the policy space for a broader consideration of policy alternatives, our response to the financial crisis has been significant bailouts of investment firms with few strings attached. Sure there are some rumblings about the need for new regulation and overblows assessments of our current political climate, like Newsweek’s silly presumption that “We’re all Socialists Now.” But in the main, our policy discourse space remains firmly neo-liberal, even with a seemingly progressive president.

I don’t know about you, but I’m dusting off my Urban Fortunes and City Trenches Social Justice and the City. They have more to tell us that we’ve been willing to hear in urban studies and policy analysis for quite some time.

So it’s time to admit it: We’re fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we’re still in denial — we still think this is some kind of unfortunate accident

I’ve been thinking about José’s blog on Luther’s Freedom (2/19), which reminded of Max Weber’s The Protestant Ethic and the Spirit of Capitalism (PESC).

I find many of these ideas to be interesting.  The idea of Luther’s Reformation as a catalyst for change in terms of social relations in markets is pretty heady stuff.  I see the Reformation as the obvious move away from the [ideas/ideals] of the Catholic church (and its take on absolution and salvation, which was often criticized from within), which also marked a shift (in my opinion) a new era of spirituality, going from a more commutarian approach to an individualistic one, particularly under Calvinism.

After the Reformation, salvation was divorced (no pun intended) from leading a Christian life.  Pascal’s wager was irrelevant, as man could not influence God.  Nevertheless, through work could man serve God.  One’s profession was one’s calling.  It was later developments in Protestantism, i.e., John Calvin, where one couldn’t know for sure if they were saved, BUT success might be an indicator of it.  Hence, the Protestant work ethic was born.  It gave people meaning, as opposed to wallowing in nihilism due to not knowing one’s eternal fate.  Actions became centralized around the individual.  Community wasn’t dead, but status and legitimacy were now focused more than ever towards personal success.

Slouching towards late capitalism (or postmodernity), spiritual life was usurped by the profane.  The final fall of mediaeval asceticism?  The ascendance of a bourgeois ideology?  Materialism filled in the gaps of meaning.  (S)he who dies with the most toys, wins?  Brands become the symbols/totems that hold meanings.  Nike = transcendence.  Coca-Cola = global community.  Apple = cool rebellion.

While I find Weber’s PESC to be interesting, I think that the main idea is that the cultural context matters when it comes to determining the roots of the various flavors of capitalism, which is being fleshed out with recent research.  One could write a paper on the Shintoist ethic and the divine spirit of capitalism to explain the rise and fall of Japan, layering how feudal structures were thrust into capitalism under Meiji and how, decades later, overembedded networks of people and organizations were both a boon (70s-80s) and an albatross (90s-00s) to economic growth.  Cultural context.

• Is the trajectory of Protestantism responsible, at least in part, for our current era of materialism?
• Was the trajectory inevitable?
• If so, what does this say about Luther’s freedom?

image:  “Difference between the Protestant and Catholic church service” Cranach the Younger

A topic of contention in my courses is whether the U.S. government is beginning its gradual decline into Socialism with the passage and imminent signing of a massive stimulus bill. John Bellamy Foster and Robert McChesney have a thought provoking article at Monthly Review where they assess the prospects for a “New New Deal.” While the article is worth a read in its own right, they provide some very useful charts on American domestic spending over time and in comparison to other countries.

The crux of their argument is that federal “consumption” has maxed our at around 15% of GDP since the New Deal era. Even during the 1930’s, domestic spending was restricted to what they call “ad hoc salvage,” not massive public works. This graph traces the U.S. government’s domestic consumption/spending since the 1930’s.

Their argument is that this 15% cap is held in place by monopoly capital, a term used by Economist Paul Sweezy in a 1966 book of the same title. The theory is that entrenched elite oligarchs have little desire for government to spend beyond a basic level of domestic investment and thus collude to keep domestic spending down.

They suggest that weak labor unions and an excessively pro-private capital political culture is to blame for our underinvestment. As evidence, they provide comparative info on government spending as a percentage of GDP. And they advocate for increased government expenditure and call for a major restructuring of our political economy to make it happen (after all this is published in Monthly Review).

While I’m not big a big believer of the coordinative abilities of a superstructure to ensure a 15% “cap,” it does provide food for thought. I’m more disposed to believe that a path dependent process exists where Congress and the president, for political reasons, look askance at raising or lowering domestic public spending much beyond the previous year’s levels (at least until the last administration).

At the very least, it provides ammunition for those semi-heated classroom discussions on the perceived U.S. slide into socialism.

I know lots of people are on the Brand Obama bandwaggon, but I haven’t seen much discussion of the implications of Obama’s brand for governing. There is already a book out by Barry Liebert and Rick Faulk called Barack Inc. that promises to share with you the winning business lessons from the Obama campaign. The idea that a political campaign could have any insights for the private sector is pretty paradigm shaking. It’s hard for me to fathom a book detailing the marketing secrets for business from the Kerry campaign or even the Bush campaign.

As any popular book would do, they’ve broken the more complex reality of Obama’s branding success into a pithy sondbyte:

Be Cool, Be Social, Be the Change

I’m not sure what to make of the the “Be cool” or “Be the Change” stuff yet….it doesn’t seem too earthshaking, but I haven’t read the book. But what I am interested in seeing and thinking about for the next few years is how/whether the “be social” parts can translate into political capital. The “be social” part deals with the penetration of the campaign into multiple corners of the on-line social networking world.

What will it take to translate these micro-communities the Obama campaign built on various platforms into leverage that can be used to pressure congress into effecting policy change? Will the Obama campaign get out in front of developments in the Semantic web to create even more narrowly tailored communities? In the public policy literature we talk about epistemic communities of experts and interest groups that produce the ideas that shape policy debates. Will the Obama campaign try to create “super-epistemic” communitiies that can shape policy agendas? can they create targeted “flash” epistiemic communities to deal with pressing crises? We’ll know soon.