economics | May 01, 2016

New Videos: Douglas Rushkoff Dismantles the New Economy for Big Think

Media theorist Douglas Rushkoff surveys the modern economy and sees a broken machine, stubbornly plodding along on old software. We’re stuck in the past, he says, blindly following the outdated principle of “growth above all.” But we have the ability to change. In his latest book, Throwing Rocks at the Google Bus, Rushkoff outlines a new school of thought—one of value exchange and community investment—and champions an overhaul of modern business practices. In these four new videos from Big Think, he picks apart the new economy, fallacy by fallacy. Is the “economy of likes” sustainable? Are computerized algorithms stealing our jobs? Watch the videos to get Rushkoff’s eye-opening, incisive take.

In the newest video, Rushkoff takes to task the “scorched Earth” value creation paradigm exemplified by digital companies like Google, Amazon, and Uber. These businesses make money not by creating wealth in their communities, but by extracting it outright. And although we place tech on a pedestal, digital companies actually represent only a tiny fraction of the GDP—four percent. Our current financial system rewards this method of value creation, but should it? And is there an alternative?

In our second clip, Rushkoff tackles automation and computer algorithms. Increasingly, businesses are supplanting employees with digital technology to cut costs. But when we do this, Rushkoff says, we’re actually passing those costs onto our customers. And furthermore, he says, “When we implement digital technologies in order to get people out of the way, we end up killing the only expertise we have.” Unique insight from real people, not findings culled from big data algorithms, is a company’s true competitive advantage.

Online companies used to be evaluated on how much money they made. But in the digital world, says Rushkoff, we’ve developed an “economy of likes”—and it’s meaningless. Valuations of online entities like Facebook come primarily from their user bases, not from their profits, because “likes” are a conduit for measuring consumer behavior directly. But when online businesses are buying and selling likes, is anything really being circulated? When no real goods or services are being exchanged, the economy begins to stagnate.

Our economy has worked for three or four hundred years—but things start to go awry when you “juice it up with digital steroids,” says Rushkoff. Today, the “winner take all” mindset prevails—it’s about having a growth (and exit) strategy, regardless of how successful your business is. As he explains, Wall Street considers Twitter a failure, even if it makes $500M per quarter, simply because it won’t expand into new markets or reinvent itself. If we answer solely to shareholders, hang on to companies just long enough to cash out, and forget to invest in each other and our communities, we’re heading for disaster—in employment, in resource scarcity, and for the earth itself.

Named one of the world’s 10 most influential thinkers by MIT, Douglas Rushkoff delivers illuminating keynotes on the digital economy, the “like” generation, and the phenomenon of “present shock.” To hire Douglas Rushkoff for your next keynote event, contact The Lavin Agency speakers bureau.