Dmitry Orlov: Dead Souls
By Dmitry Orlov
23 July 2011 With each passing week more and more of us become ready to concede that economic growth is no longer possible. Economic development, on the old model, which UN Secretary Ban Ki-moon recently characterized as a “global suicide pact,” is becoming constrained by the limits of natural resources of the finite planet, energy, arable land and fresh water foremost among them, and stressed further by extreme weather events that increase in frequency due to the rapidly destabilizing climate. Since the narrowly averted financial collapse of 2008, aggregate indicators of economic growth have been anemic at best, and would be negative were it not for a dramatic expansion in public debt and aggressive financial manipulation by American and European central banks. These methods are only effective up to a point. Some time ago it became apparent that we had reached the point of diminishing returns on debt expansion: further expansion of public debt decreases rather than increases GDP. Perhaps the next realization to hit us is that public debt is in runaway mode: it will continue to go up whether government spending is cut or increased. From this it follows that the government’s days are numbered; but few people are ready to make this leap yet. Against this background of economic stagnation and decay and widespread financial insolvency one sector is experiencing a boom time: Silicon Valley is booming again, and tech start-up IPOs are doing well. Social networking and mobile computing are hot, and some are expecting them to power the global economy out of the doldrums. Others contend that this industry segment is, and will remain, far too small to pick up the slack for the rest of the resource-strapped global economy. What neither side seems to grasp is this: as the virtualized realm of cyberreality and social networking takes over daily life, the actual physical economy will matter less and less (to those who are still alive and have an internet connection). What these new gadgets offer is, simply put, escapism. In a world of dwindling resources, where each person’s share of the physical realm decreases over time, it is no wonder that physical reality fails to satisfy. But thanks to the new, intimate, glowing handheld mobile computing devices, the unsatisfactory real world can be blotted out, and replaced with a cleansed, bouncy, shiny version of society in which little avatars utter terse little messages. In the cyber-realm there are no sweaty bodies, no cacophony of voices to suffer through—just a smooth, polished, expertly branded user experience. While riding the subway through the Boston rush hour, I have been able to observe just how well these personal electronic mental life-support units work in shielding people from the sight of their fellow-passengers, who are becoming a rougher and rougher-looking crew, with more and more people in obvious distress. By focusing all of their attentions on the tiny screen, they are also spared the sight of our well-worn and crumbling urban infrastructure. It is as if the physical world doesn’t really exist for them, or at least doesn’t matter. But as Horace already understood over 2000 years ago, “Naturam expellas furca, tamen usque recurret” (“You may drive out Nature with a pitchfork, yet she still will hurry back.”) If we ignore the physical realm, the physical economy (the one that actually keeps people fed and sheltered and moves them about the landscape) shrinks and decays. The inevitable result is that more and more of these cyber-campers and their gadgets will drop off the network, shrivel, and die with nary a tweet to signal their demise. And this is, of course, a shame: a terrible and unnecessary loss to the online community. Yes, resource depletion cannot be turned back, nor can catastrophic climate change. Yes, the global economy will crumble as a result, and people will die. But why should their online personae die with them? That, at least, seems preventable. Not only that, but letting users die is bad for the economy: companies like Facebook, Twitter, Google, and numerous tech start-ups are judged based on the size of their user base. Some of them may not generate much in the way of revenue, but if they have millions of users then everyone assumes that they must be worth something. But if the physical economy continues to cave in on itself and their users start to drop off like flies in autumn, then that would be bad for a company’s valuation and stand in the way of it securing additional rounds of financing. If it finds a way to compensate, then all would be well with their business plan, and their innovative social networking platform might indeed help power the global economy out of the doldrums and into some other nautical metaphor… the coastal shallows, perhaps, where it would be careened and methodically picked clean by the coast-dwelling troglodytes… But if not, then it would be doomed. Doomed! Investors don’t like the sound of the word “doomed.” […]
