Discussing Bruce’s Book

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.

Jim started it off.

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.

<snip>

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.

Responded Frank:

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.

Finally, this from Jim:

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.