Upon reading Gordon’s draft on the morphing of capitalism, Frank Coluccio of DTI Consulting in New York and Silicon Investor fame reposted it on his forum, then engaged in this colloquy with a reader, investor Jim Kayne.
It’s the kind of dialogue we hope all investors will engage in following the release of Bruce’s book on Monday.
Both have given permission for highlights of that discussion to be posted here.
While the author pays service to the idea of defining the public interest, his focus is on malpractice, if you will. I would argue that "deregulation" in the Americas was simply abandoning the field. The public interest wasn't defined, wasn't abstracted, in concepts such as "access to information" or networks as "infrastructure".
That short-sighted political failure created a vacuum, and incumbents did what came naturally - what they had been doing for years.
The political failure predates deregulation. The author misses historical context, where incumbents were joined at the hip with national security interests in an evolving story culminating in a Cold War collaboration where telecommunications were recognized as being a national interest, while the public interest was never explicity defined.
Here, we can't possibly defeat the retrograde forces at work without a clear definition, in law, of the way it should be. That first, then other things will fall into place, over time. But as the EU experience has taught us, it's still a battle.
Finally, I would add that capitalism works just fine, in the presence of good policy. There have been many examples posted here - from Sweden to The Netherlands, where companies are making a profit, while both business and the public are beginning to enjoy the advantages of Big Fat Pipes, at fair prices.
In the end, if the author's call results in political action, then the result could be positive. However, I think it's a mistake to lay the blame for the problem exclusively on capitalism.
Capitalism has served us well when we've recognized the need to constrain and guide its behaviour. The fact that incumbents have been able to exploit political failures is not an indictment of capitalism.
On this list we have multiple interests (groups, affiliations) who are posting, and there seem to be more joining each day. Still, there's no mention that I can recall of bonding or forming a broader coalition in a formal way, or, in the most ambitious case, forming a federation of many like-minded groups and coalitions who share a common set of goals and vision. The telco machine that needs to be addressed (and dressed down, too, while we're at it) is formidable. The opposition, through its various means, can swat groups like ours down in the public arena before breakfast without breaking a sweat, and it can swat many like-sized and like-minded groups as ours down in an afternoon before tea. I'm not so sure, however, how able it would be in dealing with a large swarm all at once, i.e., a single front backed by all. Who can produce a list of all "like-minded" groups?
Frankly, while I hate to rain on parades when they're as noble as ours is, the chances that I assign of succeeding in a significant way, or failing, by any individual group going it alone can be inferred from what I've already written above. Am I alone in my thinking about this?
Reading the essay several times, however, and with an admittedly closer knowledge of some of the specifics cited - because I've been in direct contact with the principals mentioned in many cases, as a result of my participation on Gordon's discussion lists - I was able to see that capitalism, per se, wasn't being indicted, but rather its transformation was being described, as well as how favorably or dismally certain nations were adapting to changes.
Truth be told, I had some reservations, even apprehensions, upon my first posting the essay because I anticipated that some members here would jump the gun and develop defensive positions about capitalism, as I in fact did at first, myself. But reading it a second time allows one to see that it's not about that and that this topic, at this point in history, can't be discussed using the same old linear terms and concepts as might have been appropriate in earlier times. Capitalism today is tipping in favor of bit-based dynamics based in optical domains, and the powers that be are still hauling atoms and molecules on duce-and-a-half flatbeds, for the most part.
Capitalism itself isn't under fire, but the commodities it once traded in, and the currencies it once exchanged, are. I've posted your comments to the Cook Symposium list. I'll get back to you with any meaningful replies if and when they occur.
As it stands, the matter seems to me to be a question of how we allow the "new" capitalists to play on a level field with the "old" capitalists.
IMO we can't just disenfranchise the "old" capitalists. They need to be displaced, or outflanked: their transport models need to be superceded by better ones.
That argues for the creation of a level playing field, where their position is exposed to competition, and (one assumes) erosion. Their silos need to be opened up.
It's still my belief that can only be done through the political process.
Political success is not likely through a highly technical public debate. That's an old trick, and the audience will get lost in complexity.
Again, the issue needs to be abstracted: identified in concepts and terms such as "access to information" and "infrastructure". The issue needs to be demystified and popularized.
Keep the dialogue going where you are.