Neo-Schumpeterian Fiction: Perez vs. Doctorow

The above is a slide lifted from Growth After the Financial Crisis, a fantastic lecture from Venezuelan techno-economist Carlota Perez at the Institute for Public Policy Research. Audio available here. Surprisingly accessible, with moments of pure clarity, it comes highly recommended …

“there is *always* over-investment in infrastructure, and that’s one of the reasons for the bubbles …”

Shaking the unpleasant memories of bone dry theories of international political economy ingested then regurgitated as part of my undergrad degree (mostly about tulips), Perez‘s is an approach which excites me.

Although I haven’t (yet) read her book, the core thesis of her work seems to rest on the relationships and interlinking of technology, institutional structures, innovation and speculative finance in a way that – gasp! – actually seems to explain things.

In the field (political economy?), Perez seems to be what’s known as a neo-Schumpeterian – someone whose work builds on the work of Austrian economist Joseph Schumpeter. Now, while remaining relatively unknown outside the academy, one of Schumpeter’s ideas does seem to have crept into the popular consciousness: “creative destruction“.

Interestingly, in the link just given, Wikipedia’s contributors have chosen to illustrate “creative destruction” with the image of a camera. Outpaced by digital photography, the assumption is that the Kodaks & Polaroids of our business landscape are dinosaurs: in their death throes, if not already extinct.

But then something weird happens. Polaroid is reclaimed as a cultural icon by the analog-fetishists, the enthusiasts & the hipsters … and it all goes a bit new media, a bit long-tail. End result: The Impossible Project. Professional amateurs + photography + the internet. Weird, but deeply, effortlessly cool.

For a “refocusing” Kodak, meanwhile, we see something equally strange. A (hypothetical) future incarnation of the firm (“Kodacell”) is claimed by Canadian journalist / science fiction author Cory Doctorow,  as an important actor in his upcoming novel Makers … currently unfolding as an internet serial on the website of its publisher, Tor Books. Still with me? Good.

So, from the mouth of the ‘new CEO and front for the majority owners of Kodak/Duracell’, we get the following:

“Capitalism is eating itself. The market works, and when it works, it commodifies or obsoletes everything. That’s not to say that there’s no money out there to be had, but the money won’t come from a single, monolithic product line. The days of companies with names like ‘General Electric’ and ‘General Mills’ and ‘General Motors’ are over. The money on the table is like krill: a billion little entrepreneurial opportunities that can be discovered and exploited by smart, creative people.”

Occasionally, there are moments where Doctorow’s writing becomes thin & (unapologetically?) didactic. Characters become authorial mouthpieces; puppets of a higher narrative power. This opening monologue from Landon Kettlewell (Doctorow’s Hubertus Bigend?) shows this kind of didactic writing – setting the book’s tone, hinting at themes & context.

Doctorow’s novel is still being serialised: at the time of writing, we’re not even a fifth of the way through (13/81).  But while I only have the first chronological “section” to work with, and even if it fails as prediction, Makers seems more important than your average sci-fi novel. More believeable.

When Doctorow shows us what life’s like for those driving developments in “new work” – the Kettlewells, the embedded journalists & geeks on the ground – he’s giving us a literary look at the origins of a Kondratiev wave. In this case, a wave rooted in the technologies of desktop manufacturing & rapid protovation. A wave which comes crashing down at a point of economic stagnation; when it is becoming increasingly apparent that, to quote Chairman Bruce:

“The ruins of the unsustainable are the 21st century’s frontier.”

And our new frontiersmen? Our Kondratiev surfers? They’re the dumpster divers & shed-dwellers; the squatters with weight problems & their own 3d printers. The everygeek. The target demographic of BoingBoing and Make magazine. And when Kettlewell & his contemporaries hand these Makers the key to the company jet, revolution is in the air.

Hmm? Us? Don’t worry, we’re only reconfiguring the techno-economic paradigm …

(excerpt from Carlota Pérez’s Technological revolutions and financial capital, 2003)

So, the first “chunk” of Makers appearing to compress the installation stage to a matter of months (?), by the end of which, “new work” accounts for something like 20% of US employment. The section concludes with a bursting bubble, as Kettlewell realises -

“Sure, if you looked at [the numbers] our way, they were great. If you looked at them the way the Street looks at them, we were in deep shit. Analysts couldn’t figure out how to value us. Add a little market chaos and some old score-settling assholes … and it’s a wonder we lasted as long as we did. They’re already calling us the twenty first century Enron.”

The “Kodacell” iteration of the technology withers on the vine, but something survives: the techno-economic paradigm shift continues elsewhere.  And with an abrupt temporal leap at the start of the thirteenth instalment, we’re around to see our beloved “new work” stripped of its gleam, absorbed by the margins, and – minus the marketing and distribution channels of the corporate dinosaurs – return to the junk yard. The revolution has stalled, and we’re looking at transition to nowhere.

C’est tres favela chic, non?

And it’s here that we realise we’re rooting for “new work”, a model of innovation & employment, far more than any of the characters. I want to see the paradigm shift complete. Although interesting, I find myself caring far less about the intricate, self-defeating loops of Suzanne’s love life or the body image issues of the geeks on the ground. For me, the characters matter in narrative sense only in as much as they are the revolution – less Kondratiev surfers than agents of the wave, enabling the paradigm to shift through their actions and reactions… But this is starting to sound a bit weird and, well, Hegelian, so I’ll leave that there.

Ahem.

Returning to the main thrust of my argument (ramble?), the reason I believe Makers is an important book is that it’s simultaneously blueprint, voice, and analysis. “New work” is presented as something desirable; a positive alternative to the ossified hierarchies and bureaucracies of the Fordist economy (Perez’s “Post-war Golden age”), but – at least in its early stages – dependent upon those very same structures. From the current section, it’s clear that the first configuration of the relationship between “old” and “new work” was untenable, and if “new work” is to succeed, it’ll have to find an alternative way of self-organising, free from the patronage & indulgence of the Kettlewells of the old order.

It’ll be interesting to see how that happens, exactly how rocky & obstacle-laden Doctorow chooses to make the road to revolution, and the balance of attention given to characters and milieu. Regardless, this looks to be a fantastic book, and contains the seeds of a potently optimistic and (despite what I was muttering earlier about Hegel) SEHI-driven future.

To conclude – Makers is exactly what we need right now. I expect it to make a big splash when it’s released in dead-tree format come October, and I’d like to see more (science) fiction in a similar, neo-Schumpeterian mould.  The 21st century is, after all, when it all changes Schumpeter’s Century.

(Ford Model T image by dave_7)