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Big, corporate America may be over. As Anderson puts it:
Huge vertically integrated conglomerates were created to minimize what economist Ronald Coase called transaction costs between teams and up and down the supply chain. Now distributed-information networks would do the same outside the walls of a single company. The Web would be globalization taken to the extreme. Projects would be open to the best of breed anywhere, creating virtual flash firms of suppliers and workers that would come together for one product and then re-form for another. "Small pieces, loosely joined" was the mantra.But out in the reality of the world's great industries, the opposite seemed to happen. Corporations just kept getting bigger. On Wall Street, Goldman Sachs was pulling in almost $90 billion a year, tripling annual revenue in less than a decade. The pharmaceutical industry consolidated through hundreds of mergers and acquisitions. The Fortune 10, which today includes Wal-Mart and General Electric, more than tripled in size since 1990. And AT&T, far from breaking up into 300,000 different companies, became even bigger than before and, once again--at least for iPhone users--a monopoly.
And then last September it all came toppling down. Those big financial firms turned out to have been inflated by debt at levels never before seen (and hopefully never repeated). The big car companies crashed head-on into skyrocketing oil prices and plummeting consumer demand. Big Pharma ran out of blockbusters. Wal-Mart kept closing stores, while GE tried to sell off divisions. (OK, AT&T is still an iPhone monopoly, but give it time!)
So now, in the graveyard of giants, it's worth asking: Was Malone right? Was his age of nimble mammals simply delayed by the final march of corporate dinosaurs into the tar pits?
This crisis is not just the trough of a cycle but the end of an era. We will come out not just wiser but different.
What we have discovered over the past nine months are growing diseconomies of scale. Bigger firms are harder to run on cash flow alone, so they need more debt (oops!). Bigger companies have to place bigger bets but have less and less control over distribution and competition in an increasingly diverse marketplace. Those bets get riskier and the payoffs lower. And as Wall Street firms are learning, bigger companies are going to get more regulated, limiting their flexibility. The stars of finance are fleeing for smaller firms; it's the only place they can imagine getting anything interesting done.
As venture capitalist Paul Graham put it, "It turns out the rule 'large and disciplined organizations win' needs to have a qualification appended: 'at games that change slowly.' No one knew till change reached a sufficient speed."
The result is that the next new economy, the one rising from the ashes of this latest meltdown, will favor the small.
It's worth noting that "Small Pieces, Loosely Joined" is also the title of a great 2002 book by David Weinberger, on - surprise, surprise - the nature of the Internet.
I write these words with some trepidation, and I'll admit that this is one of those essays I'm writing more to get my own thoughts in order rather than in an attempt to convey some grandiose, sweeping idea to anyone reading this. I write this because I've seen firsthand both the glory and the terror of the post-corporate landscape. When I graduated from Kenyon in 2000, I spent several years working for a large corporation and enjoyed the benefits of such. Literally. I wasn't making a lot of money, but I did enjoy health insurance and subsidized transportation. It didn't take long for me to start doing consulting work on the side in order to make ends meet - and for a while there, things were going pretty well. Then, however, I suffered a pretty big personal fallout around 2002-2003, and within the space of a couple of months I was unexpectedly and heartbreakingly single and working for myself as a full-time consultant. The two were only partly related, but that was still one of the blackest points in my personal history.
And then I got a severe ear infection. Without health insurance.
I went to a quack doctor doing business in a double-wide trailer off the side of the freeway outside DC because I had no health insurance of my own and this was the best that my COBRA coverage (which was excruciatingly expensive) would pay for. She took a look at it, told me to take Tylenol and it would clear up. It didn't. Instead, it worsened, building up pressure until my eardrum blew out from the inside. I still have some hearing loss from that joyful experience. In fact, that ranks right up there with the time I spent with a broken wisdom tooth - also due to a periodic lack of health insurance - as good times.
It still wasn't enough to completely deter me from the joy of the self-employed lifestyle, and I stayed self-employed until I came here to start graduate work at MIT in 2005. I don't regret it at all, because that time was, I thoroughly believe, what qualified me to come to MIT - I spent an obscene amount of time studying, building, writing and learning, the kinds of things that are not inherently supported by major corporations, but are necessary to survive in the kind of nimble "future of work" advocated by Anderson, Pink and a whole host of other futurists that have been prophesying these shifts for decades. If this change happens the way they say it will, I'm ready. What's spooky is that America isn't ready - not only will this kind of change be downright terrifying for the majority of American workers in places like my own hometown, but America as a government isn't ready to support such a shift. Which is interesting, because in ways, this future America looks a lot like past America.
People talk about how in this future America, job security is a thing of the past. I think this is inherently false - job security will be much greater, if only because it's really damned hard to fire yourself. I suspect that the future will have a much greater number of Mom-and-Pop shops, only catering to either a global market, a hyperlocal market, or some wonderful combination of the two. In short, survival will require a much stronger sense of entrepreneurialism. If big corporations go bye-bye, they'll need to be replaced with smaller ones - and this isn't just smaller white-collar, blue-collar, green-collar or no-collar gigs, it's also the support staff for such industries. The "search for enough" may become the new crucial element, with a broader number of individuals finding that it costs less to thrive in a smaller environment than it does to compete with supercompanies, and the smaller companies thus prove to be more healthy. In a certain sense, the collapse of GM is a real "wizard behind the curtain" moment, showing that many corporations are sacrificing profitability (and sustainability) for the sake of appearances, for the sake of staying big - and that may not be what future America is all about. Future America may be about smaller scales, more intimate scales, the hyperlocal - while still catering to worldwide markets through the advent of the web. This is old Kool-Aid but still definitely drinkable; it's possible that this new depression is less of a depression and, as some have already suggested, a painful correction into the new business model that we've all seen coming for a while now.
Will a storefront in Wooster, Ohio house a company that makes specialty garden equipment and ships it to China? It's possible. Small, nimble, located outside of a major city where the cost of living is shot past all hope of sustainability... What frightens me, however, is that the health care and education components aren't there yet. I could totally go back to my consulting days, being nimble, quick and continually learning, except for two major fears: the abso-fucking-lutely ludicrous cost of health care in this country and the almost equally terrifying cost of putting one or more children through college. If Obama and the Democrats can step up to the plate and shore up the architecture needed to supply quality health care to every American (and not the quack doctor on the side of the freeway) as well as helping to get the cost of education back under control, then the collapse of GM and other similar companies may not be wholly a bad thing. Use whatever trite metaphor you want - phoenixes and ashes, eggs and omelettes - but what we're seeing here is a massive sea change, and it's one that we've absolutely seen coming - but the challenge is how to meet the challenges of infrastructure that will be needed to get this new, greener, more hyperlocal, and flat-out better America up and running as quickly as possible - and how we ourselves as individual Americans can realign our thinking to capitalize on the amazing opportunities that are riddled throughout this entire situation.
Smaller might be scarier, but it might also be happier - and it might also be a lot more sustainable. The key is in figuring out how to make that happen.
The New York Times' Freakonomics blog is weighing in on the "public library renaissance":
...If nobody seems to be out buying books, movies, and music, what are they doing with their leisure time instead?Apparently: going to the library. The Boston Globe reports that public libraries around the country are posting double-digit percentage increases in circulation and new library-card applications.
Derrick Z. Jackson's original Boston Globe article, meanwhile, calls libraries "a recession sanctuary" and cites President-Elect Obama's tendency to use libraries as a "rhetorical anchor" in his speeches. The real chewy stuff, though, is in the statistics:
In Kern County, California, where Diane Duquette has been library director for 22 years, library checkouts were up 19 percent in the last quarter. She told the Bakersfield Californian, "We've never had that kind of increase before. Wow. In my time here, we've maybe had a 1 percent or 2 percent increase in good years."The Boston Public Library is no different. New library cards are up 32.7 percent from July to November of 2008, compared with the same period in 2007. Visits are up 13 percent, from 1.4 million visits to 1.6 million. Checkouts of books, CDs, and DVDs are up 7.2 percent overall over the last fiscal year. More telling is that checkouts have soared between 27 percent and 37 percent at the Egleston Square, Fields Corner, Jamaica Plain, and Orient Heights branches.
New BPL president Amy Ryan said a baby story program at the Copley library has grown from fluctuating between 60 and 80 families to well over 100. Monthly visits to a free Internet homework tutoring service have doubled from 300 to 600. She said anecdotal reports indicate a spike in people using branch libraries to research new careers or returning to school. This is despite the BPL probably facing cuts, too.
What I like is how there's no hand-wringing in the article about the popularity of CDs and DVDs as well as books in libraries, which is how I think it should be. Back home in Wooster, there was a sizable amount of grumbling about how our new library seems to have more space dedicated to computers than books, but had I been in charge of that project I would have devoted even more space to multimedia use, including the creation of as many underground theaters as I could build for people to reserve for the private screening of DVDs, classic films and – gasp! – video games. I'd be sure to do a heavy cross-sell of other media that tie into the items (wouldn't it be nifty to do an Amazon-esque mailing list for library patrons that promoted other works by the creators of the stuff they'd checked out, or similar pieces from other media?) but libraries, like literature, shouldn't be mono-media concepts. If all good things run to the avenue, then the creation and maintenance of libraries as public all-media centers is only logical.
Were Benjamin Franklin creating the nation's first subscription library today, I'd bet my bottom dollar that he'd include every media type he could get his hands on – he didn't get to be Benjamin Franklin by being closed-minded. IMHO, libraries absolutely should have Twilight displays, and they should be accompanied by copies of Stoker's Dracula, books on vampire bats, vampire games, vampire movies like Nosferatu and even classic romances like the works of Jane Austen. At the center of the Venn diagram of what people should want and what they do want is where learning is to be found.
"We have to do it in the Facebook, with the Twittering, the different technology that young people are using today."RNC incumbent chairman - Mike Duncan
It hurts. Oh, God, it hurts. "Out of touch" doesn't even begin to describe it.
OTOH, "do it in the Facebook" just sounds dirty.
Ugh. Well, at least he took Boston:
Hillary Clinton withstood a string of high-profile endorsements for Barack Obama to glide to a surprisingly decisive victory, while Mitt Romney held onto his Republican base to handily beat John McCain yesterday, in the most competitive and meaningful Massachusetts presidential primary in memory.In one of the largest of voter turnouts in state presidential primaries, Clinton surged to a lead with the earliest returns last night, then never gave it up - in sharp contrast to the public surveys that had shown Obama closing in over the final week. With about 92 percent of the state's precincts reporting, she held a 56 percent to 41 percent lead. Clinton had 47 Massachusetts delegates to Obama's 29, according to preliminary counts.
Obama, who had the support of Governor Deval Patrick and Senators Edward M. Kennedy and John F. Kerry, carried Boston by a small margin of under 10,000 votes, as Mayor Thomas M. Menino's political machine kept her close. Obama also did well in liberal, affluent suburbs.
But Clinton ran up comfortable margins in urban areas such as Quincy, Worcester, Fall River, Springfield, New Bedford, and other more conservative towns in the Merrimack Valley and South Shore.
"This is still Clinton country," Menino said in an interview last night. "Our campaign wasn't about speeches; it was about work. All we had was people making the phone calls, knocking on doors. We weren't involved in superstar campaigns; we were involved in workers campaigns."
I've been talking about the election with a number of my friends (I prefer thinking buddies to drinking buddies), and so far the overwhelming opinion is Obama FTW. I tend to agree, as do Michael Chabon and Lawrence Lessig, but at this point I honestly feel like I'd vote for the Democrats no matter who they ran this time around simply because I feel the Republican party needs to be sent a message – and I'm a registered Republican. I've never voted Republican, mind you, because so far I haven't seen the Republicans float a single candidate that actually represents what it means to be a Republican. I'll be voting Democrat both because the Democrats seem to be closer to what my opinion of good government happens to be, and because I honestly feel that the Republicans need to be punished for the last eight years of wanton profiteering and mismanagement. For me, the next election should be transformative, but I'd settle for punitive.
Asshats.
So, in a turn of events that probably has all the politicos scratching their heads, McCain defeated Romney and Clinton is currently besting Obama in the New Hampshire primary. Adding further complexity to the matter, Huckabee, who took first in the Republican race in Iowa, came in a somewhat distant third – McCain took 37% of the vote, Romney took 31% and Huckabee snared a lowly 12%, only three percentage points better than Giuliani and four better than Ron Paul. Fred Thompson? 1%. Ouch.
Things weren't much clearer on the Democratic side of the ticket – as of this writing, Clinton has 39%, Obama has 36%, but Edwards, who dang near tied these two in Iowa, is trailing with a weak 17%.
But you know what's really awesome? What's genuinely, truly heartening to young people, intelligent people and people fed up with the crap we've been getting from Washington for the past God-knows-how-many years? From the same New York Times article:
Reflecting the intense statewide interest in the contest in both parties, turnout approached record levels and New Hampshire’s independent voters most likely were the ones who decided both parties’ races. Mr. Obama and Mr. McCain won the votes of independents by large margins over their closest competitors, Mrs. Clinton and Mr. Romney, according to exit polls.Roughly four in 10 voters who participated in each primary identified themselves as independents.
Rock the vote indeed! I tell you what, this is going to be a primary to watch.
I'm trying not to get all worked up about next year's election, since the last time I was thoroughly excited about an election – ahem – things didn't go as I'd hoped. However, I've still got enough political interest left to have me keeping an eye on the Iowa caucuses tonight, which, for those of you who don't follow politics that much, often serve as a sort of canary in the coal mine for who's going to land the nomination for each party. Consider the previous winners of this particular contest:
| Democrats | Republicans |
| 2004 John Kerry | 2000 George W. Bush |
| 2000 Al Gore | 1996 Bob Dole |
| 1992 Tom Harkin | 1988 Bob Dole |
| 1988 Richard A. Gephardt | |
| 1984 Walter F. Mondale |
At this moment, ~9:20 PM EST, the Dems are reporting an Obama-Edwards-Clinton neck-and-neck-and-neck race, with results at 33.7%, 31.9% and 31.6% respectively. Total, that's 97.4%; Bill Richardson's weighing in with 1.7% and Biden's at 0.9%, leaving Dodd, Gravel, Ohio's local loon Kucinich and all others at 0.0%. I hadn't honestly expected Edwards to be making such a strong showing, but good for him!
What interests me even more than the Dems at the moment is the Republican race. Mike Huckabee's been declared the winner already with 35% of the votes, followed by Romney with 24, Thompson with 14.2, McCain with 11.8, Ron Paul with 10.9 and – this is where I cackle with glee – Giuliani with a paltry 3.7%. Why does this warm my heart? Because I've found Giuliani's campaign technique so far to be utterly deplorable, a despicable attempt to capitalize on the loss of American lives during 9/11. Up until I stopped keeping track, for the majority of his campaign every single one of his speeches included some sort of reference to 9/11. And, by God, I sure hope to high heaven that the next 4-8 years aren't going to be dictated by the events of 9/11 as the last 4-8 years.
God, I miss The West Wing. I loved Charlie Wilson's War – Aaron, buddy, where are you now that we need you? We're sorry we turned up our noses at Studio 60! Please tell us you got your snarking at the TV industry out of your system and are working on a new political series! We're dying out here in an arid wasteland of I Love New York and other reality dreck! Save us! Please!
Man, it's like Christmas came early: Rumsfeld is stepping down. I'm not entirely surprised – after the Dems thrashed the Republicans largely thanks to voters tired of the war in Iraq, Rummy is an obvious target.
Don't let the door hit you in the ass on your way out, you warmongering bastard.
Interesting piece in The Washington Post on what the Dems are planning:
Early Democratic priorities will include raising the minimum wage, boosting homeland security spending, shifting the nation's energy policy away from oil and gas exploration toward alternative fuel sources, and reversing cuts to education spending.Meanwhile in the committee chambers, aggressive new chairmen, such as Rep. John D. Dingell (D-Mich.) and Henry A. Waxman (D-Calif.), promise a series of investigations and hearings into matters that have largely gone unexplored under GOP control, such as allegations of waste in Iraq and mismanagement of the war.
That alone could dramatically change the political atmosphere during Bush's final two years in office.
While "increasing homeland security spending" doesn't sound very Democratic, the rest of the list had me grinning from ear to ear, especially the bits about alternative energy sources and increased education spending – and the thought of finally hoisting Halliburton on its own petard. C'mon, Pelosi – light the way!
After last night's nail-biting results, even if the Dems don't take the Senate (which they might not; Montana is still 49%-49% with 100% of the precincts reporting, with the Dems only up by 1,735 votes and Virginia is Dems up 50%-49% with 100% precincts reporting – both of which sound fantastic but are definite recount material), there's only one way to express my emotions.
Oogachaka, baby!
While on my morning "jog" around the news sites, I read the The New York Times piece on Barack Obama's hinting at a 2008 presidential candidacy. I am neither racist nor sexist, but I find myself wondering at the wisdom of a Democratic party simultaneously attempting to retake the White House and elect either the first African-American president or woman president in history.
Anyway, those were the thoughts bouncing around my mind when they were completely blown out of the water by this little nugget:
Mr. Obama’s television appearance came as he embarked on a publicity campaign for his second book, “The Audacity of Hope.” Although politicians have been known to suggest they might run for president as a way of spiking book sales, Mr. Obama’s political adviser, David Axelrod, said that was not the case here.“Absolutely not,” he said. “The book is doing fine. We don’t need to add any mustard to the hot dog.”
Apparently "gilding the lily" is too highfalutin' a phrase these days, and has been replaced by the much more blue-collar We don't need to add any mustard to the hot dog. I'd be offended if I didn't find the phrase so bizarrely funny. (Plus, I always take mustard on my hot dogs.)
We don't need to add any mustard to the hot dog. Good Lord.
