Something to ponder…

You talk early in “Who Owns the Future?” about Kodak — about thousand of jobs being destroyed, and Instagram picking up the slack — but with almost no jobs produced. So give us a sense of how that happens and what the result is. It seems like the seed of your book in a way.

Right. Well, I think what’s been happening is a shift from the formal to the informal economy for most people. So that’s to say if you use Instagram to show pictures to your friends and relatives, or whatever service it is, there are a couple of things that are still the same as they were in the times of Kodak. One is that the number of people who are contributing to the system to make it viable is probably the same. Instagram wouldn’t work if there weren’t many millions of people using it. And furthermore, many people kind of have to use social networks for them to be functional besides being valuable. People have to, there’s a constant tending that’s done on a volunteer basis so that people can find each other and whatnot.

So there’s still a lot of human effort, but the difference is that whereas before when people made contributions to the system that they used, they received formal benefits, which means not only salary but pensions and certain kinds of social safety nets. Now, instead, they receive benefits on an informal basis. And what an informal economy is like is the economy in a developing country slum. It’s reputation, it’s barter, it’s that kind of stuff.

So instead of somebody paying money to get their photo developed, and somebody getting a part of a job, a little fragment of a job, at least, and retirement and all the other things that we’re accustomed to, it works informally now, and intangibly.

Yeah, and I remember there was this fascination with the idea of the informal economy about 10 years ago. Stewart Brand was talking about how brilliant it is that people get by in slums on an informal economy. He’s a friend so I don’t want to rag on him too much. But he was talking about how wonderful it is to live in an informal economy and how beautiful trust is and all that.

And you know, that’s all kind of true when you’re young and if you’re not sick, but if you look at the infant mortality rate and the life expectancy and the education of the people who live in those slums, you really see what the benefit of the formal economy is if you’re a person in the West, in the developed world. And then meanwhile this loss, or this shift in the line from what’s formal to what’s informal, doesn’t mean that we’re abandoning what’s formal. I mean, if it was uniform, and we were all entering a socialist utopia or something, that would be one thing, but the formal benefits are accruing at this fantastic rate, at this global record rate to the people who own the biggest computer that’s connecting all the people.

So Kodak has 140,000 really good middle-class employees, and Instagram has 13 employees, period. You have this intense concentration of the formal benefits, and that winner-take-all feeling is not just for the people who are on the computers but also from the people who are using them. So there’s this tiny token number of people who will get by from using YouTube or Kickstarter, and everybody else lives on hope. There’s not a middle-class hump. It’s an all-or-nothing society.

Right, and also I think part of what you’re saying too is that it’s still in most ways a formal economy in that the person who lost his job at Kodak still has to pay rent with old-fashioned money he or she is no longer earning. He can’t pay his rent with cultural capital that’s replaced it.

Yeah, well, people will say you can find a place to crash. People who tour right now will find a couch to crash on. But, you know, this is the difference … I’m not saying that there aren’t ever benefits, like yeah, sometimes you can find a couch. But as I put it in the book, you have to sing for your supper for every meal. The informal way of getting by doesn’t tide you over when you’re sick and it doesn’t let you raise kids and it doesn’t let you grow old. It’s not biologically real.

Obviously a problem when you have an assembly line pushing people into the criminal “justice” (and of course I use the term ironically) system and they all need jobs:

PHILADELPHIA (CBS) — The City of Philadelphia shut down a career fair for ex-offenders today after an unexpected crowd of thousands showed up, résumés in hand.

There were lots of disppointed job seekers and potential employers this morning.

The city was expecting about 1,000 people to show up, but about three times that number were standing in a line that wrapped around the Municipal Services Building, across from City Hall.

And when someone jumped the line, order collapsed.

There was no yelling, no shoving — just 3,000 people all trying to get into the job fair at once.

Everett Gillison, the deputy mayor for public safety, says the space designated for the event could not handle the crowd, so they closed it down shortly after it began.

If there’s anything that makes me furious, it’s when wingnuts start insisting that small children who face ordeals like this do not need any help from anyone to thrive. Instead, we get lectures about people pulling themselves up by their bootstraps — when some people don’t even have boots.

This might be one of the most disgusting stories I’ve ever read:

In The Atlantic, Jordan Weissmann does a very good job of summing up the New America Foundation’s important new report,Undermining Pell: How Colleges Compete for Wealthy Students and Leave the Low-Income Behind [PDF], by Stephen Burd. The report documents how private universities in America have raised the cost of tuition to incredible heights, and reserve their “merit scholarships” (paid for with government grants) for wealthy students whose parents can pay the rest in cash, while poor students have to take out punishing loans, effectively subsidizing the rich students’ education and career opportunities.

Sometimes, colleges (and states) really are just competing to outbid each other on star students. But there are also economic incentives at play, particularly for small, endowment-poor institutions. “After all,” Burd writes, “it’s more profitable for schools to provide four scholarships of $5,000 each to induce affluent students who will be able to pay the balance than it is to provide a single $20,000 grant to one low-income student.” The study notes that, according to the Department of Education’s most recent study, 19 percent of undergrads at four-year colleges received merit aid despite scoring under 700 on the SAT. Their only merit, in some cases, might well have been mom and dad’s bank account.

There’s nothing inherently wrong with handing out tuition breaks to the middle class, or even the rich. The problem is that it seems to be happening at the expense of the poor. At 89 percent of the 479 private colleges Burd examined, students from families earning less than $30,000 a year were charged an average “net price” of more than $10,000 annually — “net price” being the full annual cost of attendance minus all institutional and government aid. Less technically, it’s what students can actually expect to pay. At 60 percent of private colleges, that net price was more than $15,000.

In other words, low-income families are routinely being asked to fork over more than half of their annual income for the privilege of sending their child off to campus for a year.

Look, she’s clearly a lackey for the moneyed interests and she’s doing rather well herself as a result. So I’m always happy to see her strategies and utter bullshit attacked.