Corporations were created to give limited liability to organizations that were taking on large, capital-intensive projects, like building railways. Today, most corporations have little physical capital and instead derive their value from intangible goods and services. Such a significant economic shift should make us question the value of putting so much value into the corporation, when most of it now is created by workers. Do we still need a corporation to enable wealth-creation for a post-industrial, and more importantly, a post-job, economy? For example, the open source model has shown that software can be developed faster and cheaper (and many would say better) without a corporate, hierarchical structure. There are alternatives.
A network economy can retrieve artisans and guilds, distributing power to those who do the work, and reconnecting thinkers and doers. This can extend human value through the economy, distributing value so it does not only accrue to the top of the hierarchical pyramid. Corporations, as we know them, are obsolete for a network economy. However, they could still re-emerge in the form of platform capitalism, masquerading as the sharing economy.
The “job” was the way we redistributed wealth, making capitalists pay for the means of production and in return creating a middle class that could pay for mass produced goods. That period is almost over. America has hit peak jobs TechCrunch informs us. The New York Times calls it the rise of the permanent temp economy. The recession, combined with technology, is killing middle class jobs, reports the Associated Press.
An artisan is a skilled worker in a particular craft, using specialized tools and machinery. Artisans were the dominant producers of goods before the Industrial era. Knowledge artisans are retrieving the older artisan model and re-integrating previously separate skills. Knowledge artisans not only design the work but they can do the work. It is not passed down the assembly line. Many integrate marketing, sales, and customer service with their creations. To ensure that they stay current, they become members of various Guilds, known today as communities of practice or knowledge networks. One of the earliest guilds was the open source community which developed many of the communication tools and processes used by knowledge artisans today: distributed work; results only work environments (your code speaks for you); RSS, blogs, wikis, etc.
Companies like Uber are not part of a ‘sharing economy’ but are rather ‘platform capitalists’, the new robber barons of the 21st century. They have combined the power of network effects with a 20th century corporate capitalist, winner-takes-all approach. Amazon is choking the book publishing industry, Google and Facebook are dominating advertising, and telecommunications companies are using their control of the pipes to directly compete with service providers. Uber is going after the taxi and car rental industries, getting to be larger than established rental car brands, with none of the overhead. All of these companies may provide initially good services to customers. But over time their monopolistic tendencies kill competition and the entire ecosystem of innovation.
We should be looking at alternatives to the corporate model in a market economy. Networks are not markets. Networks require structures that are more flexible and can respond faster to change than hierarchical corporations. Work in complex environments requires faster feedback loops. Social networks, which are comprised of people that we trust in some way, can speed up knowledge feedback loops at work. However, to do this, we have to already have that human connection. The post-corporate organization has to incorporate social networks as part of its structure. This can be the first step in developing a wirearchy: giving explicit permission to engage in social networks and bypassing, or even obsolescing, the formal communications structures. If the work still gets done, you don’t need the formal structure any more.
Let’s make 2015 the year of the wirearchy.
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