Tuesday, November 16, 2010

1.4285714285714285714285714285714 e-10

With the world's population to pass seven billion next year– meaning that my and your fair share of the world's resources will be on the order of 1.4285714285714285714285714285714e-10 – it is time perhaps to give some consideration as to who "owns" what on this sweltering planet. The very concept of ownership digs very deep into the psyche and the way in which the owned object is used. Let's take your or my car for example. The odds are that one of us is an owner – and it is well known there is not a single country, a single city on this planet in which the owners of automobiles pay even a small fraction of their total cost to society. What does that mean in this particular case?

Well, as Economics 101 told us: price low, demand high. And in the case of a car, it is catapulted higher still since the full cost of ownership – even if this only means the out-of-pocket costs to the car owner – is effectively hidden, since once we have paid for the vehicle itself, insurance and other up front costs, when it is time to make a decision about using our car or not, we tend to see that next trip as almost free (ex. eventual parking charges). Hmm. But what happens when we shift to an alternative ownership pattern, such as carsharing for example, where the cost of that next trip is explicit to the last penny. Well what happens is that each time before we jump into the car and step on the gas, we chose to think about it, if only momentarily -- so that at the end of the day or the year, we use our car far far less. And still, if the various surveys of carshare users are any guide, are no less happy for it.

So since ownership vs. usership is an important issue for World Streets and for transport, economics and environmental policies world-wide, when we find a thoughtful piece which invites us to puzzle on the implications of more traditional forms of ownership, we wake up and have a read. As we did yesterday with Andrew Curry's piece on " The limits of ownership" which starts with football and which we invite you to read here.

The limits of ownership

Market-based ownership models have damaged the public and social interest. Innovation is inevitable.

The recent transfer of the ownership of Liverpool Football Club from two unsuccessful American millionaires to another group of Americans tells us something about the state of English professional football, but led me to more interesting questions about how and why societies should impose limits on ownership. This goes far beyond football, and the answer seems to be when the value generated by the organisation is primarily social; this value should not be open to private appropriation. It seems increasingly clear that ownership is going to become one of the contested issues of the coming decade. In this post I am going to try to take some case studies to tease this out.

Football is a fairly straightforward case. Most of the value in a football club is located firmly in its location. A club is made by its fans; players, managers, and chief executives come and go, but fans are forever. Support is about identity. In the days when they were small businesses, they used to attract small town sharks (car dealers and the like) whose sharp practice was kept in check, to some extent, by strict League rules preventing directors from taking fees from the club, a structure which tried to align the commercial interest to that of the supporters. That was swept aside when the creation of the Premier League combined greed and deregulation to familiar effect, but with one proviso: even now most football clubs are not significantly-sized businesses.

Football, of course, could sort this out quite easily. In Germany, teams are controlled by their supporters, and the European body, UEFA has significant authority to impose controls on clubs and structures. Just as it is currently setting limits to the debt a club can carry, and the composition of its squads, it could simply set a deadline by which ownership models had to change.

Corporations can’t bind their successors

The second case is the Google Books Settlement (disclosure: I opted out). Google’s view is that it has done people a favour by digitising all of these books (in and out of copyright) and I would have been pleased to have my own book (a co-written history of the BBC and its battle with Thatcher in the 1980s and 1990s) available to students and researchers. We could have set a zero price to ensure that it stayed accessible. But in the end, the public interest had got lost in the process – a globally available digital library, the Alexandria of our times, should not be the property of any one company, even one that claims not to be evil.

No matter who owns it now, or what undertakings they give, even if we don’t mind the privatisation of our cultural history, it’s a well-known corporate principle that boards can’t bind their successors. The Google digital archive should not be locked into a private interest.

. . .

*For the full text of Andrew Curry's piece kindly click here.

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About the author:

Andrew Curry works for the London-based consultancy The Futures Company (formerly Henley Centre HeadlightVision), where he specialises in futures and digital media. (Its blog is here). He started as a financial journalist for BBC Radio 4′s Financial World Tonight, before moving to Channel 4 News during the 1980s. In 1993 he was hired by the cable company Videotron to launch Britain’s first interactive television channel before moving to his present employment in 1999 He maintains an interest in digital media and in the notion of the creative economy, and writes occasional articles, about futures, about the digital and creative economy, and other topics of interest, which can be found here.

* You may also want to have a look at Andrew's related piece on "Transport and the lock-in problem".

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