Connectivity is the New Capital

The initial public offering (IPO) of Facebook has been widely seen as a disaster, but it is actually a signal of fundamental and positive change.

To understand what has happened, we have to review some economic history.

In feudal times land was "capital." Tenant farmers monetized it and the landed gentry grew rich.

As advances in seafaring allowed merchants to engage in international trade, they created joint stock corporations to raise money and share risk: corporate funds became the "capital" of that era.

When corporations became the primary drivers of industrialization  "capital" evolved  into the capacity to bundle supplies, technology and labour into a productive and profitable process.

In each of those transitions, the concept of "capital" changed radically. Land gave way to money, which then became a factor of corporate organization.

Now, in the Information Age, the meaning of "capital" has changed once again. It is connectivity that drives profits. Corporate advertisers who monetize that connectivity are the tenant farmers of the Information Age.

In that context, Facebook represents a strange and troubling phenomenon for the corporate world: its connectivity cannot be easily monetized.
But for the rest of us non-corporate types, Facebook represents the future. The power of its connectivity holds huge potential for societies that have the vision to recognize that an epochal change has occurred.

The essence of that change lies in the obsolescence of the industrial corporation. Its top-down processses and command and control structures are inefficient in a networked age; its structures for raising, spending and monitoring funds are increasingly outmoded.

The real estate sector can be used to illustrates the change.

In feudal Europe ownership of land was concentrated in social elites. No one else had the resources to buy land, and those who sought ownership had to take out a "mortgage," a word that in its French original literally means "engaged to the death."

In the mercantilist and industrial periods land ownership became much easier for merchant princes and barons of industry, but free and clear ownership remained beyond the reach of most ordinary people in Europe (the home of all these definitions).

Today, when Connectivity is Capital, the situation is radically different: the buying power of the collective can be mobilized to allow everyone to own real estate.

Perhaps the best way to explain how that can happen is to look at the current depressed housing market in the United States, the aftermath of a "real estate bubble" inflated and burst by the irresponsible greed of bankers.

The main components of the depressed market are a large supply of overpriced houses and a newfound wariness of risk on the part of mortgage lenders.

Both those factors could be easily circumvented if houses were made prizes in existing state lotteries and winners had the option of taking possession or selling them at prices set by local realtors to facilitate easy sale.

Such a process would quickly reduce the overhang of unsold houses on the market while  liberating sellers from overpriced properties.

If the lottery system is institutionalized as the primary means to sell real estate, it would generate a steady flow of housing capital to fund new construction and refurbish old stock. The mortgage industry would die ignominiously, but only those who profit from it will see that as cause for lament.

Using the power of the collective for social good has the potential to revolutionize all areas of life. It could be used to conserve and protect the environment, to counter the power of moneyed elites in politics, to resist tyranny and to build a peaceful and prosperous world.

The Facebook IPO is not cause for mourning; it should be celebrated as the dawning of a new age of social capital.

Undemocratic Anti-Terrorism

The threat of a draconian National Counter-Terrorism Centre combining Intelligence and Police powers seems to have been beaten back, at least for the moment.

All major state leaders, including those supportive of the Manmohan Singh government seem to have opposed the move at the 5 May meeting in New Delhi.

I have to say “seem” because the meeting was closed to the media.

On a situation of critical importance to the future of Indian democracy the government chose to veil debate and keep citizens in the dark.

For this government that is par for the course.

It sneaked in changes to legislation on law and order to create a secretive and unaccountable Intelligence apparatus and is now trying to pretend that is no big deal.

The NCTC “will merely arrest and hand over people to the State police” the Home Minister was quoted in news reports.

He makes it seem so smooth, so law abiding, so impervious to the thuggish proclivities that have characterized “anti-terrorist” activity.

It is as if he never heard of encounter killings or custodial deaths of people manifestly innocent of anything but attracting the interest of gum shoes who think they are storm troopers.

So far, such malignancies have been confined to some states and rogue cops; the NCTC will make that phenomenon national and concentrate abusive power in very few hands.

Even without police powers our Intelligence agencies behave with scant respect for the civil rights of Indians.

I speak from experience about that, as can most journalists whose writings and attitudes have been noticed by the authorities. (The late lamented Dharam Shourie, PTI correspondent at the UN for two decades, told me that whenever he was putting together a politically sensitive story in Delhi a "telephone repairman" would magically appear to work on the connection outside his house.)

What part of my writings and attitudes has attracted the attentions of some agency of the Indian government I cannot say, but it has kept me under surveillance and periodically rifled through my belongings ever since I returned to India in 2008 after four decades in the United States.

The operatives involved have not been masters of their art, so it has been hard to ignore their efforts. In one case my tail followed me into a camera shop and stood behind me gesturing to the salesman not to sell me what I wanted; his image was clearly visible in the glass case we both faced.

At a meeting convened by Pondicherry’s “Progressive Writers,” I was examining my eyelids for holes when the speaker paused to observe that the “spy was asleep;” evidently he hadn’t got the memo that “progressives” should take the assertions of government agents with some salt.

The most recent evidence comes from an experiment I conducted: before leaving Pondicherry on 3 May I locked the door to my bedroom. In New Delhi on 5 May my bag was rifled in my Ashram room and the small bag containing all my keys taken. For some obscure reason they also took all my pens, including a marker I was using to highlight passages in a biography of Sri Aurobindo. 

If pure paranoia can drive agents of the Indian government to act with such breathtaking brazenness towards a senior citizen and life-long votary of Gandhi, what will they not do?

If this piece should be followed by my developing sudden multiple organ failure as happened with pacifist J. Sri Raman a few months ago, chalk it down to anti-terrorism.

In case readers think that is being overly dramatic: in Pondicherry on two occasions motorcyclists who had the look of cops ran into my bicycle quite deliberately and then took off. It was sheer luck that I escaped with only bruises and a concussion.

For the sake of balance I should add that in the United States I was also a person of interest. After 9/11 that was very much an in-your-face phenomenon, with my telephones broadcasting racist talk radio and periodic assaults on my car and house.  At one point a posse of plain-clothes and uniformed police appeared at my door at night and conducted an impromptu cross examination in the living room, vastly thrilling my young children.

Both in the United States and in India I interested the authorities not because of anything I have ever done but because I fit a profile they dreamed up. Perhaps it was simply that their cynical calculus could not compute my independence or idealism.

In such a world it is only prudent to refuse when a government demands an increase in its powers of abuse.