The Center vs.the Fringe: How TiVo caused the war on Iraq

I was putting away the laundry this morning while listening to a book on tape called "Next: The Future Just Happened".

As I was folding my favorite bright yellow "Born to be Wild" tee shirt, the author, Michael Lewis, began talking about the new direction being taken by the people who bankroll America's corporations. "The smartest capitalists are no long the ones who do the big deals on Wall Street. The smartest capitalists are the ones who do the little deals with the companies who are threatening the big companies." Aha!

According to Lewis, when he was researching this book seven or eight years ago, venture capitalists had already begun moving in a new direction. Capital, like water, always flows in the shortest, easiest, most direct and efficient direction. And, following this natural market flow, venture capitalists had decided, back in the 1990s, to leave the old corporate dinosaurs behind to lumber along by themselves and to start investing in newer, more innovative and inventive companies instead -- such as computer software designers, print-on-demand book publishers, internet stock traders and rebel web-based entrainment systems -- companies who thought outside the box.

"Something has occurred that had disempowered the center and empowered the fringe," said Lewis. Revolutionary ideas were being developed all over America -- in geeks' garages and in start-up companies' back rooms. Lewis cited the example of TiVo, the television black box that managed to undermine the entire television industry in favor of consumers -- who like new ideas that work.

Of course capital was still doing what capitalism does best -- following the money. But now the internet was making all this possible in a whole new fresh way because word-of-mouth about a good deal now instantly traveled all over the world. Consumers were being empowered and the old industries who used to have a monopoly on distribution -- and therefore did not need to change -- were losing their edge.

Interesting concept. I've got to think about this. So I matched up some socks, folded some sheets and thought. "Money? Capital? Flowing away from the old guys who are stuck in the mud toward the new guys who are more inventive? Hummm." I put away three pairs of jeans.

Does that mean that the old boring idea-scarce manufacturers, car companies, record companies, broadcasting networks, stock traders, etc. who used to dominate American business aren't the big barons of Wall Street any more -- as capital passes them by and looks elsewhere for new concepts and plans? That the dinosaurs are no longer fast enough to keep up?

I searched for a missing brown sock.

If the big industries are not attracting capital any more -- who wants to buy stock in a Buick when they could buy Prius stock instead? -- then where can the dinosaurs get their capital from?

I found the missing brown sock.

If you can't get capital to flow your way because you aren't making a better product -- and even GE and GM need capital -- then WHERE can you get capital from?

War!

So. Rather than be flexible, innovative and smart, the dinosaurs just began looking for a new source of capital that would allow them to continue their old inflexible ways. Sure they added a few gadgets and gewgaws to their product lines but mostly it was just window dressing and basically they just kept churning out the same old stuff in the same old way that had worked so well for them back in 1924.

And who was this fabulous new source of capital?

The TAXPAYERS!

Until the dinosaurs who have run the American economy for the last 150 years get up off their butts and become more flexible and capital starts flowing in THEIR direction because they have finally started coming up with fabulous new ideas -- or unless the internet bloggers who are horrified by the waste and greed of the dinosaurs' clone in the White House reach critical mass really soon or unless we all get nuked out of existence and no longer even care -- then our dinosaur-dominated American economy is doomed to be financed not by water-flowing-downhill capitalism but by greed, inefficiency, corporate welfare and endless war.

The book on tape finished playing. I finished the laundry. We may continue to have endless war forever but at least I finished the laundry -- at least until next week.

PS: The Henry George Institute http://www.henrygeorge.org/ defines "capital" as "all wealth used to produce more wealth". No wonder the smart capitalists keep away from the dinosaurs and the dinosaurs need to "terrify" the taxpayers into filling the gap. War does not produce wealth.

If you look at our current economy like it was a game of marbles, the rich guys -- who used to pay 40% of our taxes and now only pay 7% -- bend the rules so that THEY will own all the marbles at the end of the game and we will own none. It's a win-lose situation. They win. We lose.

What would happen if our economy was set up cooperatively, so that we ALL won instead?