Everybody agrees that the economic meltdown was caused by a crisis of trust. Once disbelief entered the system, tight knit economic networks swiftly frayed into “every man for himself” loose threads. The Emperor Economy has no clothes.
So who can weave together a new economic fabric? No, not Washinton D.C. Silicon Valley. And you.
During the United States Presidential Election, the Obama team successfully used the slogan “Change We Can Believe In.” The media lasered in on the word “change” because that meant “not Republicans” but it’s my belief that average public hearts were most responding to the “believe in” aspect. Human beings are intrinsically wired not to like change, but it’s an inherent need to believe in the people, ideas and institutions that surround us.
A growing number of American citizens are already becoming leery or downright fearful of President Obama’s sweeping list of changes. While talking “bottom up solutions” during the campaign, he’s working to impose more and more top-down mandates. That’s no surprise. The Federal Government was designed to be the top of a power hierarchy. Obama must work within that top-down system.
The problem is that no matter what the Obama administration desires, no matter what actions they take, trust — that one essential element that can turn around the economy – will not be injected back into the economy by government. They simply don’t have the power or means to do it. The bailouts and stimulus bill haven’t helped because they haven’t restored trust. Many argue they’ve done just the opposite by highlighting abuse and excess and have made matters worse.
Recession lingers and depression threatens because of deep mistrust that is turning into despair. Now that it’s lost, how can the public be expected to rebuild faith in people we don’t know, institutions we can’t reach, and extraordinarily complex systems we don’t fathom? There is only one way. Trust must come, as Obama rightfully stated in the campaign, from the bottom up. It must start by believing in the people and the commerce around you.
My regular readers will be tired of hearing this from me again, but understanding this is so vital to economic recovery (and the avoidance of grave world conflict sparked by global depression) that I can’t say it enough. For the two hundred thousand years that modern humans have lived on this Earth, social networks were economic networks. Everybody depended on family, friends and trading partners for their livelihoods. It was people they knew, they spoke with, they trusted, who kept them alive.
Today, especially online, social networking is mostly about conversation, education and entertainment, not about making a living. For most of us, our ability to earn or lose money is dependent on things so far removed from us that we have very little control over it. Mysterious things that happen in far-off places affect us more than the people and things we can touch.
This needs to change. Luckily, everything is already in place to make that change. We just need to tweak and build on what already exists. We just need to turn online social networks into simultaneous economic networks, as they are naturally meant to become. Social networking grows up, if you will.
I’ve written here and here about what Silicon Valley can do and how. Basically, we need to create a true digitized economy based on heart to heart connection. This means taking responsibility for letting friends, family and followers know which products and services are worth supporting and being compensated for that endorsement.
This, in turn, means taking power away from corporations so that successful advertising distribution is dependent more on having goodwill than having deep pockets. By holding companies accountable, having the power to affect their ability to find customers, gross atrocities will at least diminish if not end.
It also means creating a market for ALL digital goods. Every creative person no matter what their skills and passions needs to have a seat at the table, not just musicians and application developers.
Journalism must also have a seat at the table. Professional journalists who work for publications as well as compensated independent bloggers must be included.
The final thing that’s required is to allow people who produce non-digital goods and services to have access to the market. If I have one pizza shop in Petaluma, I should have as much opportunity to reach potential customers in my area as Pizza Hut does.
By creating one-on-one bonds between buyers and sellers, we can rebuild trust, get buying and selling going strong again, and rebuild the economy. Moreover, we can strengthen the social/economic fabric so that devastating economic unraveling never happens again.
But Silicon Valley must step up. The tech world needs to stop wasting its time on having no business models, no outward look, and no clear and focused ambition. It’s time for the Valley to cross over into the mainsteam instead of waiting for the mainstream to come to them. It’s time to show some leadership.
The world needs Silicon Valley to create some change we can believe in.