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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

Aricle is silly!!!

 

I sugest an introductory course in micro-economics to explain to you all some fundamental concepts such as division of labor and gains from trade. While you all can now do things on your own -- which previously you needed a corporation to do for you (such as print out a newspaper from your printer rather than buy one at a news stand), the trend in recent decades has been away from self reliance, and increasingly towards general complexity. In fact companies today do not produce products, but rather specialize in parts of products and in inputs of production. The car (which author thinks will be simple enough to be built by anyone) is probably build from part of dozzens of diffrent companies from all over the planet. Same with your computer. How many of you are using a machine with ametican CPU, taiwanese motherboard and Korean RAM? Graphics card itself probably has components made by various corportations.

If anything the trend in the world is towards more complex economy with increasing specialization and reliance on corporations. Now here is supprize: THIS IS A GOOD THING. I suggest people read Adam Smiths "inquiry into cause of and wealth of nations".

Re: Aricle is silly!!!

Hmm...

It may be so now that corporations produce parts and other corporations are putting it together or with computers, you can put it together yourself..

But we are speaking of incoming nanotechnology era here where blueprints and a good molecular construction devices (call it "replicators") are all that you need to construct the needed parts and then the whole product aout of those parts. So, i don't think we will rely on corporations that much to produce those parts for us.

One thing however what corporations will try to sell is those blueprints. Everything finally comes down to information, the knowledge, and for the good of society we know that information has to be open and free to share. Again, that's the role of the evergrowing free software movement that will grow into bigger things once nanotechnology starts to emerge. It's all about freeing the information. And getting to liberate information you are killing that dependancy on corporations.

Thank you
Daniel

Re: wishful thinking

 

Hi Charls,

Sorry i couldnt find how a new thread can be made Sad

I liked your article and share the ideals.

I've little doubt abt Nanotechnologies. I dont know much abt it.
But how much control do people have on this technology ?
In case of software a few people with resonable resource can make a change. Is it the same case in technology ? (I would like it to be so).

Also Nano technologies can create harm to nature. How the social control can be created ?

arun

Re: wishful thinking

 

Hello Arun,

it is first important to point out that nanotechnology is at an early stag of development. The outcome of these technologies are not directly tangible today. But I think that despite what many ecologists say (the ones who think we should all live in a hut and smoking pot :-P ), nanotechnology is the surest way to stop any pollution.
We're talking about modifying matter one atom at a time. Any matter. Hence the potential to have industries transforming trash into industrial manufacturing base. Nanotechnology experts call that "green goo".
The problem with nanotech is that it scares a lot of people because it can get dangerous. But it also can be higly benefitable for humanity and environment.

Charles.

Re: wishful thinking

 
Quote:

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....

Where have you been?
The correct answer is:

Quote:

A relatively small number of companies own and operate the fiber and cables that form the Internet infrastructure, with most of the power centered in the U.S., which has been the dominant nation in terms of Internet backbone and use. MCI WorldCom's UUNet division, AT&T, GTE's Internetworking, Global Crossing, Qwest Communications International and PSINet are among the U.S.-based major players. Globally, Telstra, the Australian national telecommunications carrier, and Global TeleSystems Group , which offers broadband in 20 European countries as well as various Asian incumbent telecommunications companies, have major ownership stakes.

(from here: http://www.e-gateway.net/infoarea/news/news.cfm?nid=407 )

(or just enter "who owns the internet?" in askjeeves.com)

The time the net was exclusively owned by the US government is already gone for ages. The infrastructure is mostly owned by "big companies", and because of that, THEY have a lot of control over who has access to the net and who hasn't.
Of course it is in their best interest to give access to everyone, so it's not a very bad thing, at this moment.

Re: wishful thinking

 

Read this one too:

http://www.nlgcdc.org/articles/internet_drew.html

Quote:

So why be concerned?
That the Internet is being monopolized by a small handful of multinational corporations should come as no surprise to any observer of current media practices. While Internet culture was once proud of its non-commercial and noble imperatives, these ideals are rapidly becoming a quaint idea of the past. Commercial messages are quickly invading the Internet, appearing on individual web sites and on usenet discussion groups. On-line services such as America On-line, which are based on the small-town metaphor, now find themselves developing mega-malls in the center of their cyber villages. The rapid commercialization of the Internet is promoted as naturalistic and normal, and frequently presented as an integral part of the Internet's "maturation." In fact, the decentered, individualistic nature of the Internet is ideal for newly developing marketing strategies based on market segmentation. What appeared to be an ideal form of democratic participation and communication has now become a very sophisticated method of reaching a geographically dispersed, high income consumer market.

The current transition to an information-based economy has resulted in enormous corporate monopolization of broadcasting, cablecasting, printing, entertainment, film production, and other media. The Internet is now seen as just another sector of this information and culture industry. Although much popular discussion of the Internet and digital technology dwells on the nature of the technology itself, the current corporate raiding of media strongly resembles earlier decades of corporate media activity. In fact, the private takeover of the Internet is similar to the early days of radio technology, as researched by Robert McChesney.5 Just as radio stations set up by public institutions during the 1920s and 1930s were pushed out by corporations following passage of the 1934 Communications Act, the computer networks built primarily by non-profit organizations, public institutions, individual volunteers and universities are now being shoved aside by large corporations with the help of allies in Congress.

Not suprisingly, many of the corporations active in the new media are the same corporations that were active in the early broadcasting industry. RCA, the founder of the first radio network and owner of NBC along with parent company GE, is a primary owner of satellite delivery systems that may soon uplink programming and serve as a global link to the future information superhighway. AT&T, a player in broadcasting from the very beginning with its wire links between broadcasting stations, is playing a major role in providing telecommunication support and high-speed data lines such as ISDN and fiber optic links for the network. Given the pace of privatization, the Internet increasingly risks following in the footprints of other media technologies such as radio and television. That is, the Internet is rapidly becoming just another delivery system for commercialism, consumerism, and bland entertainment, as well as another powerful medium to promote and reinforce a corporate ideology.

Media, Monopoly and Censorship
While charges of intensifying media monopolization were once subject to debate, most observers now agree that mass media and emerging communications systems are indeed under the control of just a handful of corporations. Gerald Taylor, president of MCI, goes so far as to say, "There's probably going to be only four to six global gangs emerge [sic] over the next five years as all of this sorts out."6 Though some of these "gangs" are only a few years old, they are already large enough to control an enormous amount of the world's mass media and communications systems. The 1989 merger of Time, Inc. and Warner Communications created the world's largest media complex. Media giant Viacom purchased Paramount Communications in 1994 and Blockbuster Video in 1995. In recent years, Disney purchased Capital Cities/ABC, and Westinghouse purchased CBS. General Electric already owns NBC. Telephone giants SBC (Southwestern Bell) and Pacific Telesis are now merging. Other recent mergers include NYNEX and Bell Atlantic, and British Telecom and MCI. Rarely a day goes by without a new announcement in the business section of the daily newspapers about a new merger, acquisition or strategic alliance.

Corporate apologists like to boast about the advantages big corporations bring to media management, frequently citing such benefits as efficiency and access. At the very least, proponents of deregulation claim that content is not touched, and that little difference in management can be discerned following a merger. For example, Everette Dennis, executive director of the Freedom Forum Media Studies Center at Columbia University (formerly the Gannett Foundation, of the Gannett newspaper chain), recently dismissed criticism of the creation of the largest media monopoly in the world, the ABC/Cap Cities/Disney conglomerate:
There are indeed fewer companies, but there are still a great many companies controlling newspapers, magazines, broadcasting and others. I think what we've seen is [sic] journalistic enterprises following general economic trends which has [sic] poured greater concentration, fewer firms and larger concentration of activity. Does this diminish freedom of expression and reduce the number of voices? Not at all.7
Not surprisingly, neo-liberal, supply-side, and market economists argue vehemently that increased control of media in less hands has few negative repercussions. Both Disney and Westinghouse were adamant about this point while acquiring ABC and CBS. The assertion that corporate headquarters takes a "hands off" approach to the daily functioning of the media sometimes goes one step further. Advocates of corporate concentration argue that media and freedom of expression can actually benefit from the protection of a large corporate owner because with such economic power they can take more risks in the market place. Some "free market" apologists contend that such concentration is necessary to withstand intense competition in the new global economy, particularly against media giants in Europe and Japan.

Critics of media monopolization frequently point out the many problems inherent in such a concentrated ownership of media and information. These critics see a number of alarming facts, trends, and possibilities stemming from increasing monopoly control.8 Ben Bagdikian, in his study of corporate control of mass media, provides numerous examples of the dangers of increasing concentration and ownership of media by multinational corporations. One major objection is that, despite avowals to the contrary, corporate influence does extend into the content and distribution of information and media owned by multinationals. Bagdikian cites numerous examples of journalists fired by corporate executives for "unfriendly" reporting, and of stories being ignored because they are not in line with corporate interests. Bagdikian also states that executives of corporate media have their own pro-business agenda, and the result is often the suppression or self-censorship of media content. Examples of corporate censorship abound, most recently in Warner's canceling of the book Counter-Revolutionary Violence by Noam Chomsky, the suppression of Prentice-Hall's expos�on Dupont -- Behind the Nylon Curtain, the dropping of the book Corporate Murder by Paramount's Gulf & Western and Bantams killing of Walt Disney: Hollywood's Dark Prince.9

The issue of corporate censorship is magnified by the inter-locking directorates that frequently develop on corporate boards of directors. These alliances involve not only the media owners, but other corporate interests as well. For example, ABC, which canceled an important documentary story on tobacco interests, includes a representative of the tobacco companies on its board of directors. General Electric, which owns NBC, is noted as the network least likely to broadcast information on the nuclear industry. General Electric, of course, is one of the largest manufacturer of parts for the nuclear industry. Representatives of GE also sit on other boards of directors, and they are outspoken about their views on the media, one saying, "we insist on a program environment that reinforces our corporate message."10 While investigating the ownership of media corporations, Cees Hamelink found that:
In addition to these direct interlocks there were important indirect interlocks, mainly through directorates. Such interlocks implied that directors of corporation A would meet directors of corporation B across the boardroom tables of X other corporations. This meant that what seemed to be major competitors in the information industry such as IBM and AT&T had 22 indirect routes through which they could supply convenient conduits for possible private solution of the public debate between monopoly and competition in the telecommunications industry, according to the report of a US Senate Subcomittee.11

Re: wishful thinking

 

Ahem...
I think I'm about to make you a "Darth Vader"-like reply Laughing
What you are saying is true...on a telecom point of view.
The US government and the CERN in Geneva still have the most primary control over the Net: they have the right to NAME THINGS. There's no such thing in Worldcom's portfolio.
It's like you are telling me that you have the imperial star fleet on your side, and I tell you that the force is on my side... There's no comparison.
Oh, and on a legal basis, the great telco's don't even own the backbone. They have "rented" it for 99 years or so, and the ones who built the other branch of the backbones still have to complied with the US governement's regulations and orders...

C.

Totally Agree - Emphasising on Market decline

 

I totally agree with your article - adding to this the market size decline since more and more of the middle class is going to lower class, and the middle class itself is declining rapidly
In every economic - social society from the US to Europe to the acient socieites of the east , it is always the middle class that contains the technology knowhow to add value to the large "corporate owners" , plus that has the market drive, the less wealthy, and healthy the middle class is, the fewer the ones in the top, and the more the ones in the bottom, the higher the chances for a market collapse (Corportes will cease to have enough buyers), new blood will cease to enter to the economy pushing those corporations to new ideas and technologies
I guess we are all sitting on an ecnomic time bomb not knowing when it will reallly explode and the closer the ones to the time bomb are the CEOs of the corporations...

Re:Who Owns the Internet

 

I would say that Google and the main search engines 'own' the Internet more than the U.S. Goverment and large service providers. For there will always be large service providers as long as the internet exists. And furthermore the U.S. Goverment can not control the websites hosted in other countries, can it? Google on the other hand, defines the web and its content, with its search filters and just by whose websites they chose to search. Evil or Very Mad

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