From each according to his IPO

Stalin would have loved Silicon Valley's dot-communists. Too bad they got purged.

By James Grimmelmann

Apr 25, 2001 |

The government has encouraged young people to ignore all other questions in favor of economic progress ... for the younger generation, this regulation has in some ways been a very happy one. It has relieved these young people to a large extent of the curses of egotism, romanticism, daydreaming, introspection, and perplexity which befall the youth of bourgeois countries. But its permanent effect cannot be a beneficial one. -- George Kennan, "Memorandum for the Minister"

Kennan was analyzing the youth of the Soviet Union in 1932, but he could equally well have been describing the Christmas-rush atmosphere at Amazon.com, or the prelaunch frenzy at Netscape. His memorandum predicted the ultimate collapse of the Soviet Union as a consequence of the inevitable disillusionment of its economically obsessed youth, but his analysis applies just as well to the equally sudden collapse of any number of dot-com companies as their internal unreality engines finally ran out of steam.

"Work hard. Have fun. Make history," reads Amazon's employment Web page, offering the helpful gloss that "have fun" is to be interpreted as "We are passionate about what we're doing. Because of that, we have fun at work, and it makes it easy for us to work hard." The all-consuming role that world-shaping ambitions are expected to play in defining one's Amazonian life, both personal and professional, is hard to miss. Tellme, a phone-to-Internet company, proudly advertises to potential employees that its offices are equipped with bunk beds. Especially in the halcyon days of Internet start-ups, such details, with their unmissable implications of sacrifice and grueling labor, were routinely offered as inducements to attract employees, a fact that is curious enough to deserve closer scrutiny.

The conventional line holds that most Internet start-ups were created and staffed by men and women who openly sought (and sometimes achieved) enormous personal fortunes, who preached the power of the market, who were wholly in favor of the accumulation of capital. They believed wholeheartedly in an economy fundamentally built upon private investment. All of which is entirely true, but fails utterly to explain why such self-interested, utility-maximizing capitalists would so joyfully forgo any personal existence other than endless hours staring at their computer screens. The missing element in this psychological portrait is that doing a dot-com wasn't work, it was revolution. And revolution is a different kettle of fish.

In the glory days of the new economy, suddenly everyone was a revolutionary. The most fanatical free-market capitalists on the planet started thinking of themselves as radicals: Every leveraged buyout or IPO was a bold strike on behalf of humanity, every layoff a liberation from bondage. Tom Frank's "One Market Under God" provides the most trenchant analysis of this phenomenon, describing such rhetoric as a form of posturing, a co-optation of the language of genuine social change for purely commercial purposes. As Frank pointedly notes, such talk, when it comes from CEOs of Fortune 500 corporations, is highly suspect. But if one looks more closely at some of the words and deeds of the dot-com start-ups, there is something oddly familiar about the imagery and the ideas.

The concept of worker ownership of the means of production hardly began with the invention of stock options; the idea that old economic structures needed to be swept away long predated the new economy. Radical disruptive change, breaking down outmoded materialistic class distinctions, worldwide revolution led by a vanguard of knowledge workers -- nothing new here. And any company dedicated to empowering its customers by delivering to them exactly what they needed usually wound up recapitulating Marx's famous "From each according to his ability, to each according to his need," albeit in the less felicitous phrasing used for corporate mission statements.

Nor was all of this rhetoric entirely for show. Most e-commerce ventures were attempts to trim out some middleman or other, to remove some expropriating capitalist from the equation. New media companies like Icebox and Pseudo would give their content away. MP3.com would liberate musicians from exploitative recording contracts, freeing them to create their art for the good of all humanity. Open-source software companies would renounce intellectual property and build their business by building community. All knowledge would be available to anyone, anywhere, anytime: In such a world, how could injustice or inequality possibly endure?

Next Page: After the collapse, the hardcore capitalists move in

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