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Why large corporations will disappear, after all...

In his article \"Open Source and Post Capitalistic Society\" , Daniel Orsolic assumes that the Capitalistic society has come to an end, and why FOSS will eventually lead us to a new kind of society, the \"Post Capitalistic\" Society, the Information age.

I won\'t go as far as Daniel in saying that countries may somewhat disappear or lose their power. That I don\'t know, because, unlike the Marxists or the communists, I do not think that everything turns around economy, production, money, and greed. Well, much turns around that, for sure. But not everything. We live in a world that gets crazier day after day since the 9/11. We live in a world where there is a clear revival of religious feeling, in one sense of another.
Yet, we live in one of the most terrible and exciting world ever.
And now some start to see some unexpected revolutions and outcome to it.
One of the evolution of the \"Post Capitalistic\" society is the doom of large corporations.
(I hear voices in the audiences wondering if I\'m mentally sane). Well, large global groups are going to their own doom, even though they never seemed as powerful as today.
But they will eventually disappear, at least in terms of size and power. I\'ve always thought that it\'s when somebody shouts in the loudest way that it is in trouble. Well, look at the RIAA now. Look at the intense lobbying of major corporations. They seem huge and invincible, but if they really were that strong, they would not shout. They would relax and shut up. But the world has become a dangerous place for them too. One of the cause of this instability and danger is technology. Another one is their structure and process.
I\'ll start with the last of the factors, \"structure and process\".
Structures of big corporations are complex, hugely complex, and these corporations are constantly trying to come up with new process in order to operate seamlessly and effeciently. But they\'re facing two major adverse forces. One is the market (i.e concurrence and challengers) and the other one is... themselves, that is, their stockholders. To be a stockholder and having the last word in a business is not a bad thing. It\'s actually the way it is supposed to work. Businesses are not like social security. They\'re not here for you and me, they\'re here to make money, and if it pays their employees well, so be it, but the money ultimately goes back to the stockholder. The problem today is that when you\'re a stockholder who invested x amount of money in a company 10 years ago, you were promessed a dividend rate, called \"y\". But as business goes on, successfully in theory, you expect to gain a rate of dividend that\'s growing with the years. Now, with the time passing by, you may expect a dividend rate at 2y this year. The consequence of this is simple. You come to get more money out of your company. And more money means that there will be less money to hire people, and less cash reserve to sustain a possible downfall in the market activity. This simple point lets you see a problem: corporations are pressurized.
That\'s where the corporations stand these days. You are stressed to generate always more money while facing ever-growing competitors\'threats. That\'s not necessarily a bad thing. After all, capitalistic economy has the ultimate goal to make the owners richer. But today it starts to be a problem, as stockholders and stockbrokers at the stock exchange expect always more performing figures. Yet, companies never made as much money as these days. But nobody seems to have a clue about where this money goes. This money is immaterial, and is increasingly meaningless. I was shocked to hear once that the Oracle corporation stocks had dropped once two years ago because of earnings that were inferior to the analysts\'expectations: Oracle had earned 65 billion dollars while expectations had put it in a range of 67 billion dollars. In pure benefit, Oracle was still making a dozen billion dollars, so the difference was not \"that big\". But it causes the Oracle shares to drop.
I\'ll let you imagine how some people have lost any sense of reality when it comes to money. Does 65 billion dollars really mean 650 dollars? Am I getting pissed of because I\'ll make 10 millions instead of 12 millions this year? Come on, this is sick...
Now that one can see how corporations are getting weaker and weaker, while showing the contrary in appearence, I\'ll focus on technology.
Technology has an evolution that has started an exponential curve since the late sixties or so. Aided by capitalism, we\'re only seeing, through FOSS that it is qucikly disrupting all the \"old\" rules and structures. It\'s just a beginning.
Enter NanoTechnology. In case you don\'t know what this is, it is a set of technologies that will/may allow humanity to manipulate matter one atom at a time. This has, among other things, a huge influence just in terms of production and goods\'manufacturing. We will come to it, and we already use it, albeit in a very limited way. Nanotechnology will dramatically reduce the costs of production of nearly every goods, making it reachable for the average citizen in Europe to produce its own set of cars for, say, 50 euros. Now you get the point. Big corporations will fall down at that time, just because it won\'t be relevant for them to hire 10, 20, 60 thousands employees. It will be too much. So they\'ll get thinner... But aside the individual drama of unemployment, people, individuals, will start ventures and sell goods themselves that only large industrial groups today can build.
I believe only services\'businesses will be left pretty much unaffected by this revolution. Big corporations won\'t exist anymore. But an economy of free trade, networked business among individuals or small groups will exist. And that is calld progress, my friends.

Charles-H. Schulz.

Discuss It Here

Comments

You are right

 

Yeah what you say will happen in future. IMHO capitalism destroyes itself , it stresses so more on money making that after some time the people over consumes the money making resources & all the trade & business falls in danger.

The Cyclic variation in every business & trade is the direct effect of Captalisim

Now the solutions may be communism & but gives very less fredom to individual people so it is not also good. So may be FLOSS style of socity will be the society of the near future where only individual merit will matter & there will be no huge organization to bully you.

Anirban Biswas.

Re: You are right

This article is great as it clearly describes how and why would big corporations just fail in the future. My first article to which this is a respond to is a bit harsh, written almost in one breath enbodying my thoughts of quite some time, but this one goes with facts that compliment this post-capitalistic (not to call it anti-capitalistic) environment that is being created around Free Software movement.

However, this anticapitalistic environment is not all against economy, but against domination, restrictions etc. in the name of better economy, and that is what todays capitalism is.

The new post-capitalistic system is indeed NOT communism, but a FLOSS style society you Anirban mentioned. It is a society where the economy will not exist on the foundations of selling goods as such (software, hardware (in nano-technology, etc.), but selling work, selling services. There would be no big corporations getting billions by restricting everybodies use of their product, but service companies that make a decent sums of money on their quality services.
Products will not be sold nor licenced for use, but freely distributed for a price (which is a service).
Simply said, in the future where everything is commodity you wont make money by selling things, but by selling your work, that is, the service you are offering. I hope i emphasized the "services and work" enough. :-)

Thank you
Danijel Orsolic

wishful thinking

 

The BigCo's may not be doing as well as they did in the near past, but many of them have survived such times like we have now before.
They have huge reserves and are not in any real trouble.
Also, I don't see them making much more noise than they used to. Sure, there was the SCO thing, and it was a great opportunity for IBM to get goodwill from the open source community.
Open source software is not a threat to the big companies. They have found and will find more ways to integrate it into their systems.

One more thing: Longhorn is vaporware, just intended to make the open source community extend their OSes with useless nonsense and slow them down in that way. The "me too" effect is really working, developers are wasting their time to be "better" than something that will never exist.
In reality, microsoft is probably making changes to windows XP to make running linux applications as easy as running windows applications. That way, for many people linux will be the inferior OS! Microsoft has a big advantage over the wine project here, because they can read any source code they might want to read. Wine has to reverse-engineer everything.

Of course, this is a big guess, but I would be surprised if I were very wrong.

And even if I'm wrong, then we will just see the end of some big software companies. The open source community-like society depends very much on communication, especially on the internet.

Did you ever wonder who owns the internet?

Re: wishful thinking

 

Hello, "I-m-PK",

I really like your thoughts about LongHorn. It really does make sense to me. But I can't help thinking that the goals of LongHorn for MS are the final control of the web (or at least, the "client-side" aspect of the web that's becoming so strategic these days). This is still a very important point for MS. If they lose this battle, it won't even be worth looking after them as a real threat.
Now, to your question: who owns the Net? I'll answer very simply, and even without any political bias, as this is just the truth: the US government....
:yes:

Have a good week-end,

Charles.

Re: wishful thinking

Hm.. i'd like to think that the public owns the net, but THAT might be called wishful thinking.

However, even if it is true that US Government owns the net i think it is about to be loosing that control more and more into the future because of the free software/open source movement which already starts to play a major role in setting the standards. And who is the free/open source software movement? It's the public, it's us!

And that's what net is supposed to be, owned by everyone, not by one.

Thank you
Daniel

Re: wishful thinking

 

Daniel,
the point here is not to know how open source software is building the web. It's imho a totally different question. (Well, everybody knows that without open standards and FOSS, the Net as we know it wouldn't exist, but it's still not the point here).
Do you remember this famous sentence in the Bible: "and in the beginning there was the verb" (/or the word, in other translations)?
Same applies for the Net. Who nominates an object or a domain on the Net? Who decides that e-commerce or corporate web sites should be named .com, that French domains should be .fr, and so on?
The ICANN. Of course the ICANN is internationally represented, but when all is said and done, the ICANN, a US based company, is not really independent from the US government, which is both good and bad, when you think of it (imagine the ICANN being owned by MS instead :-( ). And where are the Terminal Domain servers (the big 6) that connect the main dots of the main backbone? 5 are in the US, the last is in Switzerland, or not far anyway I think. ....
To me the answer is clear...

Charles.

Re: wishful thinking

Well.. yes, i agree to that. And we could say that it's at least a "lesser evil" for the net to be owned by US government and not by Microsoft. ICANN is what crossed my mind on this also, but i just rounded it all through standards as standards (protocols, algorithms etc.) is by which the whole net functions. So it has some connection to this...
Anyway, it is clear.. and i somehow think it's not the major problem (if it is a problem) to deal with as of yet, software patents are the major problem.

Thanks
Daniel

Re: You are right

 

I like your article. It is something which will get you to think and see an emerging way of how things are happening. But it might not be quick. One thing to add is the fossil fuel, and how it is going. I think biodiesel will one day take over, and everyone can produce their own fuel with spent oil, caustic soda and methyl alcohol in their own garages. The big oil companies will probably go away, and diesel engines become the de facto engines which will transport people around. All this points to a way were slowly at least some of the mega corporations might lose its current power and move to people who does things taking over and sustaining the economy
in a very holistic way.

Corporations may survive after all.

 

There is an interesting point in the article: once darn cheap production systems are in place (the article suggests nanotechnology as an enabler), big corporations will not survive to competition.

Even if we accept such a drop in production costs of goods (which is in itself accepting too much IMHO), corporations can survive thanks to patents. The patent system allows corporations to survive by:
1) Getting royalties.
2) Extort to death small-sized competitors that can't deal with justice costs.
3) Developing new technology and patent it.
4) Back to poing 1.

An example of such a corporation is Phillips. Phillips usually develops technology, patent it and license it. It seldom deals directly with production stuff. It is not its mainstream source of income.

I would fully agree with the comming "end-of-corporations era" if the patent system and the high costs of justice weren't a reality.

My reply to this would be plain simple: Patents should be taken out of the equasion.

What you say is true, if the patenting system survives, but patents in itself are of no good to the society. Software patents are plain obviously wrong, and once nanotechnology gives physical products (hardware) the same characteristics of today's software, patenting those would be wrong and against the society progress. Therefore, we should fight and stop software patents and when the time comes (nanotechnology) fight and stop all patents. Free and open source software movement and possible future free "hardware" movement will see to it. Smiling

Thank you
Daniel

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