Jerry Davis on The Uprising of Communities and Co-Ops: Reclaiming Power Over Markets and Data

Most organizations—whether corporations, governments, or communities—are built on assumptions that lock us into systems destined for failure. But what if we could reimagine the very foundations of how we organize, create, and govern? 

In this episode, Jerry Davis, a leading scholar of organizations and society, shares a compelling vision for a future where innovation is aligned with the common good—and where the mistakes of the past become lessons, not destiny.

You’ll discover how current corporate models often prioritize short-term profits over societal well-being, fueling social harm from vaping to opioids. Jerry breaks down the illusions of markets as the ultimate coordinators, revealing how financial logic can distort innovations meant to serve humanity. 

We explore concrete examples—from the rise of software replicators turning into post-scarcity tools, to Detroit’s thriving community initiatives—showing how local self-reliance and democratic ownership could reshape societies.

This episode pushes you to question whether the current path is inevitable or if a radical design shift is possible. We discuss the potential for new organizational grammars rooted in community, authority, and shared ownership to replace the decaying institutions of the past. 

Jerry’s optimism isn’t naive—it’s grounded in evidence that human ingenuity, collective action, and intentional design can lead us toward a more flourishing, resilient future. Perfect for entrepreneurs, students, policymakers, or anyone who believes that a better world is not only imaginable but within reach—and that it starts with the way we organize ourselves. 

If you’re ready to see chaos as a crucible for innovation and to challenge the dominant narratives shaping our society, this episode is essential listening.

Jerry Davis is a renowned scholar at the University of Michigan, known for his work on the evolution of corporations and alternative models of organization. His insights challenge the status quo and point us toward a future where we build institutions that serve everyone, not just the few.

Get inspired to reimagine what’s possible—because the future is a fabric we can weave differently.

Transcript

SPEAKER_00 0:01

This is reality proves possibility, an exploration of human ingenuity. Welcome. This is Reality Proves Possibility. And I am Michael Pearson. I'm excited to be here with Jerry Davis of the University of Michigan, a provocateur, a deep thinker, a uh a real mensch. And um I'm excited for our conversations, but before that, I'm just gonna give more of a traditional introduction. So, Jerry, thank you so much for being here. But Jerry, you're the Gilbert and Ruth Whitaker Professor of Business Administration at the University of Michigan's Ross School of Business, and a professor of sociology at the University of Michigan. And you're considered a leading scholar of organizations, corporate governance, finance, and society. You have a couple books on that, social movements, and the new forms of enterprise. So you have helped us in your career, I think, help us understand how corporations shape and are shaped by societies around them. And your work asks some of the most urgent questions of our time. What is the corporation actually for? And who does it serve? And what kinds of organizations might actually help us to serve better a society that is ultimately democratic, equitable, or flourishing. And so, for our context here, reality proofs possibility, you're particularly relevant because you have also imagined and written about not only the limitations of the current models, but alternatives and sort of rigorously examine what those alternatives are that could make another future possible. So thanks so much for being here, Jerry. And my initial prompt is just reality proofs possibility. We can do better than this. What's your take?

SPEAKER_01 2:00

Yeah, I I love your title. I love the premise of the whole thing. And, you know, I am kind of a fan of speculative fiction and not not sort of the standard science fiction that Elon Musk might have been raised on, but but you know, some of my favorite authors are like Octavia Butler and uh Corey Doctorow, Margaret Atwood, Kim Stanley Robinson. Uh there's like a lot of authors that are really good at taking a premise and saying, where could this go? And I feel like the reality we're living in now, it's often take any new technological innovation, you know, anything that that has the possibility to make the world a better place, and then think, what would a venture capitalist do with this innovation? And you instantly go to the most black mirror episode, like what's the worst thing that could happen to humanity? That's the thing that ends up getting uh that ends up getting funded and supported, because oftentimes the thing that's going to bring you the biggest returns are not the things that are going to be the best for society. So you may know who remember Joule, the uh the vaping. And the origins of Joule are really interesting. It was started by two graduate students at Stanford's Design School, and they were both cigarette smokers. And I went to Stanford. I could tell you that if you were, you know, seen smoking, it it would there, there's not much worse that you could do in this world. If you were involved in the slave trade, that might be a little bit worse. But you know, being a smoker is just not not good in the context of California. And so these two guys were out having a smoking break, you know, and being you know glared at by passers by and said, you know, if only we could come up with some way to get the the uh nicotine into our bodies without the smoke that makes everybody so angry. And so they invented an electronic cigarette that eventually evolved into Joule. Now, I have to admit, this story's at least slightly embellished, but it's it's truthy, as Stephen Colbert would have said. So they they came up with this great idea. And the whole premise was we're gonna come up with a tool to help adult smokers wean themselves off of smoking, off of combusting tobacco, and still be able to sort of make it through the day by getting the nicotine that their bodies are craving. So that was the original premise. When it finally made it out into the world, eventually they were selling candy-flavored vape pods to 12-year-olds and they were they were placing ads online at Nick uh Nickelodeon and and uh Nick Jr. and other children-oriented website. And from a financial perspective, so if you were to calculate customer lifetime value, which is a concept that our friends in marketing really love, customer lifetime value. If you could addict someone at age 12 to a substance that they will use for the rest of their life, I mean, kaching, that is a much better market than grown-ups who are trying to quit smoking and want to stop using your product eventually. You know, the financial logic of addicting 12-year-olds is kind of inescapable. Now, I'm not saying that the company purposefully targeted underage smokers, but certainly the candy-flavored vape pods is a reason why the government ultimately banned them. And so that was a miniature version, a synecdochy, if you will, of something that happens a lot in our world, which is we generate technologies or ideas that could make us all much better off, that could solve a real social problem, and then they end up getting getting used in the worst possible way. I have to give one more example because it just happened last week. You are familiar with Purdue Pharma, owned by the Sackler family, whose name is on museums all over your fair city of New York, I'm sure. And Purdue Pharma received the corporate death penalty last week. This very rarely happens, but Purdue Pharma will be ceasing as an organization, and then whatever's left of it will be reborn as an anti-opioid organization. But they basically killed a corporation for promulgating the use of OxyContin. And I listened to this wonderful book called Empire of Pain that described the origin of OxyContin. And the original idea was fairly ingenious. The problem with opioids is you get an instant blast, like you get high from using them, and users find that attractive and potentially addictive. And the idea behind Oxycontin is you can bind the opioids with these chemicals so that in your stomach it releases slowly. So you eat oxycontin, it doesn't get you high. It releases slowly, and so it's like, you know, its potential for addiction would be much lower. And the problem is that once it gets out into the public, people discover if you just mash the pills up and snort them, you get all of the drugs at once. You're you're not suffering from, you know, you're not, you're not getting the slow release part, you're getting all the opioids at once. And when presented with this outcome, the discovery that users can mash it up and get, you know, the instant high that they weren't going to get from regular oxycontin, companies faced with a choice. Like, do we say, let's pull this off the market or let's double down on making it slow release? Or do you say, let's find all the doctors who prescribe opioids and make sure that they're prescribing oxycontin? Let's let's pay physicians to present at a lunch or to give them compensation to be higher prescribers of oxycontin. And so, you know, in both of those cases, it's something where you go in with something that could be good and it ends up being turned into something not good at all. And there seems to be something about the system that we live in that points things in that direction, that you can create innovations that could make the world a much better place. But there's something about, you know, I blame venture capitalists, there might be a couple of other things that we could point to that that seem to take these things and say, customer lifetime value, and you know, what what's what's the biggest growth rate that we could get with this innovation? So in a moment like that, I feel, with uh with artificial intelligence and specifically tools like Claude Code. So I don't are you a are you a science fiction person? Did you ever watch Star Trek The Next Generation?

SPEAKER_00 8:26

Barely, I'll admit, but I I I am sort of aware.

SPEAKER_01 8:29

But uh yeah. I'm kind of in the same place, but there was one thing that always struck me that's you know, check Captain Jean-Luc Picard, and I loved him because he was bald, and I feel like bald guys really don't get the respect they deserve. And uh, they had a tool called the replicator that would turn energy into matter. And basically you name the thing, and the replicator could make that thing. So it's kind of a vision of a post-scarcity society, and Captain Picard would say, Oh, gray, hot, and a mug of tea would appear in the replicator. So we're kind of living through that now with software. So think about Claude code. You could basically mumble a few lines and say, hey, I'm paying $40 a month for my accounting software. Here it is, here's what it looks like. Could you just make a knockoff of the same thing so that I can stop paying? And poof, an hour later, you've got this amazing software package. And so the magical part about that is that it feels like Captain Picard and the replicator, like you can speak into existence. Hey, I'd like to create a data set out of a bunch of junk that's out there in the world. You know, I've been writing these bots for my MBA students that essentially do tasks that would take them four hours, and it automates them, grabbing all this information, putting it together, creating a report. It's like, damn, that is like the replicator for software. It's like we are living in a post-scarcity world. And in Star Trek, it's fairly idyllic. Like people are, you know, across the galaxies are finding ways to get along, and it's basically a crypto-socialist utopia, you know, in a in a land beyond scarcity. Hooray, that's that sounds great. And we're at that point with software, but like, how is this going to go wrong? Um, so it's it's uh magical if you're me creating new tools, and it's really bad if you're a company that sells accounting software. You know, if you're in the software as a service business, every time Anthropic makes a product announcement, your share price goes down 25% and your employees start looking elsewhere. It's like, oh, that's really, you know, potentially existential. So so the so the tools could be amazing. We could we could imagine a world where every individual is suddenly empowered with these tools to solve so many of their problems. If, you know, in a world beyond scarcity, that's you know, it doesn't get much better than that. Like if you if you can spend your day on art and not on doing, you know, bland task. I don't know. So so it feels like in the software world we're seeing this prefiguration of a post-scarcity world. What's going to happen with it? Like, what is it going to lead to sort of a utopia where everyone has control of their own data and their own life? Or do we end up being serfs on plantations run by big tech? And it feels like that's the moment that we're living through now. So I feel like there's a very long non-answer to your question, but it's getting at, I mean, it is, it is, there is sort of the reality of software that you can speak into existence. Like we've already got the replicator from Star Trek in the world of software. And where's it gonna take us? Like, is it is it going to turn out great, or is it gonna turn out like so many other innovations getting turned into something we really don't want to see?

SPEAKER_00 12:02

That's a long damn rant. Sorry. Yeah, yeah, yeah. No, but I think you're you're getting at, okay, there are different realities that are possible. The question is, what do we choose? Do we have a choice? And I think that choice is also part of at uh at your work, but maybe you want to speak to that at some point later. But I'm I'm I'm curious about okay, there is a choice, there's a choice point. Maybe it's past that choice point. We're we're just sliding into dystopia, but utopia flourishing, the common good. All of these concepts have been around for much longer. And I think they they need to be excavated or newly put into place. And I think some of your work of the financialization shows us how, okay, this is how it actually was designed to go wrong. That means we can actually redesign it to go right or better. Maybe it's just better. But what's your take on that? Like, what do you see there?

SPEAKER_01 12:53

Yeah, no, I love that it's it's interesting that we have equipped so much of the population with a mindset that's oriented towards financial markets and the stock markets as this sort of unerring bearer of truth. So, but in some sense, like um 60% or more of American families are invested in the stock market. And there's there's a lot of evidence, and I've contributed some of this to the idea that when people start like paying close attention to the stock market, if they buy an index fund and they actually start checking how they're doing, it starts to influence their behaviors uh and their worldviews in a sense. So, since I know my sister will never live, uh will never listen to this, I could share the story. Uh, so she um she had a sort of uh she was widowed pretty young and ended up with a settlement that got invested in the stock market. And so, you know, she's a widow with three kids and had to take care of herself. She had to go get a new job, which is, you know, pretty, pretty horrific. But she had this endowment, in a sense, invested in the stock market. And I said, it's great, but whatever you do, just don't check it more than a couple of times a year because it will drive you crazy. And what she did was the opposite. You know, she went back to work as a school teacher every morning. She'd come out to the kitchen, put on the coffee, fire up her computer, look up her fidelity account, and see how much it had changed, you know, from yesterday to today. And if the market was up, you know, it was red lobster for lunch. And if the market was down, it was tuna sandwich at her desk. So this is known as, you know, as the wealth effect, that one way that you can make decisions about consumption and how you spend your money is based on your wages. You know, what comes in every week or every month, that's that's what your budget should look like. The wealth effect is the idea that people's consumption can also be shaped by their ownership of financial assets. And so if I say, Michael, I see that you bought this apartment on the upper west side, and when you bought it, it it cost, you know, $100,000 and now it's worth $3 million. And if you're going out every night for caviar and veuve cliqueaux, um, that would be the wealth effect. But it's not based on your meager salary as a college professor because we're all underpaid, but but that it's based on your holdings of real estate uh or the stock market. Well, imagine you get to this point where 60% of the population is invested in the stock market and they care. It's not just, they don't like like my sister, they pay no attention to me. They don't just look every, every couple times a year, they look every day. So when they say, invasion of Iran, market is up, they say, hooray, let's invade somebody else, or market is up, you know, that that um that it's almost like people have grown this additional sense organ that connects them to the stock market to tell them how they're doing. They've got this external indicator that tells you your wealth is up, your wealth is down. And so they become attuned to things like what kind of policies are good for the stock market. So if I look out and I say, I'll be damned, every time Facebook does a layoff, their stock price goes up. So I guess layoffs are great. Maybe unemployment is a good thing. It it can it can sort of change the way that you evaluate events in the world by having you might not be old enough to remember mood rings, or you might have grown grown up in a francophone country. Yeah, yeah, yeah. I I yeah. Mood ring is like this this thing that's supposed to show the color is supposed to show what your mood is. And so they were a popular thing in the 1970s back before you were born. But I think they probably made a comeback among hipsters if there's any still around. But but that but uh in some sense the stock market is like a mood ring for the economy. Are things going well or badly? So you notice that Trump, every time people want to say, wow, you're not creating any jobs, uh, you know, gas prices are up, he says, look at the stock market, as if that should be the report card. That should be the sign of whether he's good or bad at his job, is how the stock market is doing. So in any normal world, you'd look at that and say, well, that's just insane. Like, why would you look at the stock market? But if 60% of the population, their retirement savings or their college savings are invested in the stock market, I mean, that maybe that is the right thing. You know, in some sense, that becomes this boundary object that that provides like an invisible dog fence for public policy. If the thing that I announce makes the market go up, that's a good policy. Otherwise, bad policy. And there's something about the way that people in finance think about the world that if you just look at the market going up and down, that's one layer of being managed by the markets, as one book might call it. So one one way is just paying attention to is it going up or down and then trying to connect it to events in the world and having a causal map in your head. These things are good because they made the market go up. Privatizing Social Security, great, market will go up, even though it would be a disaster and destroy civilization. But but there's another layer which our colleagues in finance would have, which is many of them are very true believers in the efficient market hypothesis. So the idea that the stock market, it isn't just that it goes up or down to rent like a report card for the president or something. It's that the market is really good at predicting the future value of that thing. So you buy a capital asset, and this is the best possible guess about the future income streams that come from owning that thing. And people in finance tend to be very much true believers in this. I have a colleague who possibly, like some of your colleagues, a very sincere Catholic and a finance professor. And I asked him, okay, I had you up against a wall and said, belief in God, belief in efficient markets hypothesis, you can only pick one. And he said, Oh, efficient markets. And I felt like that perfectly conveyed, you know, a worldview that the efficient market, it's like it's so true that they, you know, they, it's it's the most true thing they can think of. Well, then you end up, you can sort of start applying that to other things in your life. Like if you think of your friends and family as social capital, then should you be using the social capital asset pricing model and you know, going long on some relationships because of their future benefits and shorting other relationships, trying to do like network surgery and jettison people or going to college? Should we be judging it not on whether it makes us have an enriched life of the mind and a make us better citizens in a democracy and just, you know, having a better life? That's what we imagine college is supposed to be, some of us imagine colleges to be. But the way that we're talking about it now is the only purpose is job skills. It is 100%, does this improve your salary? The way you evaluate a college should be how much is your income going to go up? And then you should make a sort of human capital asset pricing model valuation. And I think that you and I might believe that certain things are sacred, that we should not be evaluating things like college education entirely on the basis of its future economic benefits. We shouldn't be calling our kids our social capital and confusing them as an investment rather than something more sacred. So that's that was another lengthy rant. You asked me a short question. I talked for two.

SPEAKER_00 20:49

No, no, no, no, no, no, no. It's it's it's very interesting. And I think, I mean, it's it's it's fascinating because in those answers, I think you're sort of also laying the space for what could be done differently, right? And we're talking about markets and you're talking about the finance people as this is not actually science. This is already faith. They have faith, they have a dogma, they have a religion, and it's that. It's all that which we thought with the Enlightenment, we sort of at least didn't discard, but put in its place. But right now it's rearing its head. So there's a fundamental need for people to have these certainties, to have this, I don't know, worldview paradigms uh and and and faith-based assumptions about life. And when it's not God, it may be the market. But also for other people, it could be community, it could be tribe. I think we've seen that come up as like the deficiency of the market hypothesis, right? It's like even in the United States, so wedded to the market, you now have people on the that were market proselytizers, embrace authority newly, embrace the government newly. It's their government, their tribal government, but it's like tribal. Community replacing the market when not really aware that they're actually contradictory. Now, that's just me coming up with some explanatory thing where I feel like the market has outlived, I think, its power in many ways to coordinate. And you have described that also the corporation is actually vanishing. But we still pay attention there when what we potentially need for a flourishing society is to revive some of these grammars, I think other people call it, the grammars of organizing that are actually maybe older, more fit for purpose in some of the context that we're in, like hierarchy or authority, like community or communal sharing and or other forms of organizing. What's your reaction to that? And I think you've done work on also these alternatives. Maybe you can speak to that however it resonates.

SPEAKER_01 22:54

Yeah. So so you alluded to corporations disappearing, since I wrote a book called The Vanishing American Corporation, which was kind of non-obvious, I think, at the time. There's about half as many companies listed on the stock market now as 30 years ago. And that feels weird. And it's not just because they're all merging and acquiring each other. Like, who the hell knows what happened to GE or Xerox or Bethlehem Steel or Woolworth, like all these Westinghouse companies that used to be, it's not that they bought up all their competitors, like something else is going on there. Um and the answer that I give is that it's now a lot cheaper to use markets rather than hierarchies for a lot of things that organizations do. So I can I can hire, like there's a car company called Fisker, the guy that designed this beautiful BMW convertible, the X5, and then started a car company, an electric car company a few years ago. It ended up listed on the New York Stock Exchange, but they hired a vendor named Magnet International to actually manufacture the car. And this, the founder and CEO said only an idiot would build a new car factory. Like, why would you do that? There's lots of car factories in the world. My what we're good at is design and making a really cool vehicle. So it's like the Nike model applied to cars. Well, that's spread pretty broadly. You can find vendors to do an awful lot of what companies did. It's no longer necessary to do them all within one boundary. But then, as you said, where's where does the community go? In some sense, you could imagine a world that looks like Hollywood, where it's not really the ongoing company. It's like the film production gathers together a crew and they've all got their roles and their expertise and their talents. They're brought together for the purpose of a project, they make avatar or whatever it is, and then they go back to, you know, back into the pool, and then they might join together on the next project. So like the garment industry in New York on Seventh Avenue is still like this, that there's specialists that gather together, but there's a community that holds them in one place. You know, that that there's like a literal, there's a reason why we talk about Wall Street or Detroit or Hollywood is that they're part of sort of a district or a community. Yeah. And like, and so what is that that doesn't feel as necessary now, like in a world that looks like Jean-Luc Picard saying accounting software, hot, that um that it's not really necessary that we be contiguous with each other. And I've actually written something recently about the zero person corpor, you know, the zero-person billion-dollar corporation where you could have a gentic AI that does the core functions of the organization, setting prices and marketing, negotiating with labor uh and vendors, and even maybe taking over the executive function. Just give it a uh give it a set of rules and set it free to go off and make money for you. And so that sends up potentially atomizing communities. Like if the the um I don't know if you're familiar with the Uber for nursing apps. Oh, it's kind of horrifying. You should Google it and then but make sure that you're you've have a calming beverage nearby. Okay, okay. So it's it's a set of apps where nurses are employed by the shift and they actually put in bids and the low bidders win the shift subject to a quality constraint. And so this is you know, I wrote about that 10 years ago, this dystopian nightmare where people are bidding for jobs and where your wage goes up and down every day, or maybe you don't get selected that day and and you go without compensation. I mean, this is not a world that we expected ourselves getting into. So clearly we need to be creating some institutions that are managing these needs that used to be taken care of by think by communities, by employers, by government. The U.S. is now heading into, we're we've sort of we're already doing everything we can to make it easy for companies not to hire anybody as employees who expect to get health insurance. You know, companies like Google have more contractors than employees, because I don't want to have to pay, you know, the $27,000 a year it costs to provide health insurance. And so we're we're companies are doing their best to offload the expectations of what an employer has. Um, and in any civilized country, like in Canada or Europe, it's the government's job to provide things like health insurance and wage stability. And the U.S. is moving away from that as well. That the programs that are made to support people that don't have access through employment to either health care or food security, those are being pulled back as well. And so the two institutions that that might be seen as providing stability, corporations as big employers and these stable entities, that's going away. But governments as stable entities that can be relied on to pay its debts and to provide support for people, that's falling apart. So finding another basis of community, that's becoming, you know, a really live issue right now. Like, what do you do when you don't get food stamps anymore? I mean, I'm going to a I'm involved with the the the uh local United Way and the situation at food banks now is really pretty stark. So I'm not sure if that's in any way addressing your question, but it's it's getting at, you know, what is it like we're used to big institutions like corporations or government providing for certain basic needs and providing us the stability to be able to plan for the future and to make a life and raise families and you know do what it is that we think humans are supposed to do. And those it feels like those supports are are are disappearing on us. And in some sense, um uh Toby Stewart has an article in the in a recent HBR, which I never read to HBR, but this one was pretty good, talking about the fog of AI and saying, we just have so little ability to predict where this thing goes. And he said something like, uh, well, if you can plan for 30 years, you build trains and skyscrapers. If you can plan for a week, you get tents and bicycles, like you remain provisional. Well, how do you build a society if you can't predict what what the next anthropic announcement is going to be? Oh, we've created a tool so potent that it's actually found fatal flaws in Linux, which is used on every server on the web. It's like, ah, what um how do we create sort of stability to be able to plan and work together as a community when there are these fundamental uncertainties that we're not sure what to do about?

SPEAKER_00 29:38

Well, so I mean I'm curious because I feel maybe I'm challeng I want to challenge that assumption that you're proposing here, because I think it's pretty clear where it's going, right? We have the patterns in place, we have the dominant patterns in place, unless we rupture them, unless we redesign some of the foundation of what we're organizing for, even within markets, even the constraints of markets, even the constraints of authority structures, right? I think right now it's sort of in this Shiva-esque moment. We we live through a great destruction, which allows for a new construction at some point, like a civil war type of intervention. We don't know what kind of disruption is coming, but there's so many polychrisis sort of effects that we can already pinpoint, I think, or predict if we're gonna use the mindsets of the 70s or whatever you want to call them, right? But you are also working on like what else is possible, right? You mentioned these other authors that are sort of writing dystopian but also pro-topian or utopian kind of versions. Where do you think we can interrupt? Where if you were, and I'm from Germany originally, so I always bring this. Yeah, it was pretty clear that with this kind of government, this wouldn't work for long. So people got together in 42, 43, even earlier. It's like, hey, what else needs to be there once this is crashing? We don't know when it's crashing. But we can pretty much be clear that this kind of model that we're experiencing right now is crashing, right? We may be falling and pretending or thinking it's flying, but it's crashing some point. What else is there? What do we need to think about already now to rebuild for this post crash world?

SPEAKER_01 31:24

Yeah. Uh I I that was an excellent throwback Thursday. So uh I feel you're alluding to like the Beverage report in the UK, where in the in the depths of the war, they were saying, well, when we come out of this, everybody gets health care, everybody gets a noble retirement. And uh Beverage, not like the drink, but B-E-V I B-E-V-E-R-I-D-G E. So if you don't know it, Beverage reports, well, you know it, of course, because but but that idea that in the depths of war, people were saying, this won't last forever, we're gonna come out of it. What is it that we want when we get out of it? So I love that question. I think that's that's exactly the question to ask. I'm in my more optimistic moments. I feel like that some of the problems that we need to address are on such a scale that you really need nation states of the sort that we have now. So climate change, that's gonna be really hard to tell. I don't think you can do that household by household. No, the the threat and and the potential to mediate it are on such a scale that that really needs to be done at a grant, really at a global level, but certainly at a nation-state level. Um with the problem being that 17 of the 20 biggest emitters are government-owned oil and gas and coal companies. And I don't think those governments are gonna say, you know what, now that I think about it, we really shouldn't be burning putting this much carbon into the atmosphere. So that that's that's a little bit tricky. But what would a sort of a you could imagine using the technologies that we have now to create more self-reliant communities where basically that the community that you try to address things at looks more like, I don't know, Renaissance city-states, something like that. So if you wanted to not rely on large-scale shipping and you know, flights from country to country, what what might that look like? Could you create a more self-reliant, more autonomous community? And I'm I'm inspired a lot by what happens in Detroit. So it's the nearest big metropolis for me. And we we bought a place in Detroit in 2013, actually the month of the bankruptcy. And I think it's it's has a very long history of uh radical, sort of grounded utopian thought. So it's not, you know, crazy utopian, it's like grounded in very working class realities about how do we create something where we're all able to live with dignity and thrive. So there's a very strong food sovereignty movement in Detroit. There's urban farms all over the city, some of them are pretty large. And one of the aspirations is could we get to a point where some 80% of the food that people ate came from within the city limits? That's an extreme aspiration, but it's not impossible. There are innovations in farming like hoop houses and other things that make that seem like, yeah, that's actually maybe not impossible. If you could be self-reliant for food, you could be self-reliant for bookshelves for sure. You know, you could have a computer numerically controlled router and use that thing to carve up local wood and you know, make your own bookshelves and other kinds of furniture. Well, how far can you push that idea? Like if you had 3D printers with reusable kinds of plastic that get used over and over, like, is is there a way that you could create institutions for more local self-reliance? I'm optimistic about Detroit being certainly the spiritual home of this. Like people have, like right now, there's reading groups uh where people are reading Jessica Gordon Demphard's book, Collective Courage, about um basically uh African American collectivist thought and the role that co-ops have served in communities and trying to recapture what what was it that enabled that to happen? What are the values and institutions that would allow for more local self-reliance? So I'm sort of cautiously optimistic that people who have had so much taken from them and have always been in this situation of like we have to provide for ourselves, we have to figure out how to do this for ourselves. There's so much good thinking going on there, intriguing sort of literature and and conversation, as well as more concrete institution building. Like there's now a people's food co-op about two miles from my house. I'm a member, of course, and it's great. It's got portraits of the ancestors from the co-op movement, and it all focuses on locally, you know, local foods. So that's if, and I'm I'm a bit of a I don't know if it's hypocritical or just optimistic, is all of this would work a lot better uh as long as we get to keep the internet and the ability for for communities to communicate with each other and share good ideas so that if you write a brilliant paper and you publish it in the Fordham Law Review, I can still read that thing. And if you come up with a really interesting design for 3D printed sneakers uh that's lightweight and strong, that I that you can ship me that file on the internet and I can print it in in my local universal fab facility or something like that. So, you know, in the same way that you can cook Thai food uh in Detroit without going to Thailand, you know, there's a lot of ideas that could exist in a global way. So you want to keep the cosmopolitanism of global connections, but also the the benefits of community through things like uh production, like the ownership of local AI, the ownership of productive capacities. So that would be my we we head straight from collapse of the Roman Empire to the height of Florence.

SPEAKER_00 37:09

Yeah, well, I mean, yeah, the height of Florence and in multi multiple geological bioregions, etc., etc. Yeah. And connected or coordinated. I think that's what you're mentioning. It's not like the isolated retreat option, right?

SPEAKER_01 37:24

Yeah. What what worries me is you just can't grow cacao or coffee in Detroit. And I just really love chocolate and coffee. And the wine is you know not as as great as it might be here. I'm gonna say I was.

SPEAKER_00 37:37

With climate change, it might all change, you know, but I'm maybe everybody has to move to Detroit in the future. But um so I'm but I'm what I'm hearing is okay, well, we have this blueprint of organizing that's actually deeply rooted in human connection and memory. You say the legacy of the cooperative movement, right? The cooperative movement before it was a cooperative movement, was local communities supporting each other. That's how we have survived as a species. We just oftentimes seem to forget and think now we're sort of so advanced, we can do everything by ourselves. And which is a delusional approach, right? And and now you're bringing back place, which was part of the neoliberal market fantasy that we don't have to have place, or don't we don't have to have communities. We can replace everything with transactions. And you still see that that is actually still the dominant operating logic in most places. But removing that, maybe adding it, is what I'm hearing from you. It's like, okay, well, let's not throw the baby out with a bathwater. Let's let's keep some of those functioning market mechanisms where cocoa and wine can still be traded with comparative advantage or whatever it may be. And then we still have our reliance, 80%, you're saying, in our bioregion. So we're not completely reliant on some kind of tycoon. Another point that I think you mentioned before, which I find is overlooked completely, is like ownership of information. Ownership of information as the source of wealth or or your source of uh potential stability. I don't know what what your take is on on either of that.

SPEAKER_01 39:16

Yeah, this is uh this is where I go straight for the Black Mirror approach is we have a very consolidated information sector. Just thinking about the level of information that a half dozen companies on America's West Coast have if they chose to use it for evil instead of good.

SPEAKER_00 39:34

Which they will, they are already doing it, and and and governments are doing the same thing. And so that that yeah, dystopia is is most likely happening already, right?

SPEAKER_01 39:44

Yeah. I I think about it because I hang out in a business school. Um, think about it in the context of algorithmic pricing, or you know, sometimes called surveillance pricing and algorithmic wage setting. So, like imagine that uh Apple ends up buying Uber for some reason, and uh and you call a taxi, you call an Uber, and Apple checks your watch and says, Looks like his heartbeat is not doing very well, and he's calling for a ride to the hospital, charge him 300 bucks, you know. This is Yeah.

SPEAKER_00 40:18

Offering all kinds of other services at a at a at a what do you call that surge price.

SPEAKER_01 40:24

Yeah, I mean it's and they will do it. I mean, this is already happening with uh I mean, the look the the population doesn't love it. When Wendy's was perceived to be offering surge prices on burgers, that did not go well for them. That was like, wait a minute, you're not just gonna have one price, you're gonna have the price vary over the course of the day. But the, you know, the the more horrifying possibility is not just that it varies over the day, but that everybody's phone gives them a different price for the same thing.

SPEAKER_00 40:56

That's already.

SPEAKER_01 40:58

I mean, our our colleagues in marketing, so I talked about the efficient market hypothesis, which is the uh sacred text in in finance and in marketing, it's willingness to pay. Like, how do you find out what's the maximum amount someone was willing to give you for whatever you're selling? Because it's all profit. Like once you've gotten to a certain level, the more you can trick them into giving you for whatever you're selling, your candy-flavored vape pods or uh uh or oxycontin, you know, the the the the better off your company is. And that's really an information problem. If if I only know the price that I'm getting, you think about how many different prices are passengers on an airplane paying for exactly the same ride. Um and I saw recently on social media someone had had done a search for a plane ticket and then they didn't buy it, then they came back later and the price had gone up $100 or something. They said, wait a minute, I was quoted this price. They contacted the airline, they said, clear out your cash and try again. And then they search for it again. And the reason was that the airlines take your history of searching to know how desperate are you to buy this thing. And so the the fact that big tech is being advised by economists on these things does not make me more comfortable with it. Like, how do how do you charge people the absolute maps maximum? Uh-oh, well, you you know, your your uh your phone suggests that you might be going into labor. You're gonna pay a thousand bucks to get to the hospital. Or you are you are bidding for a shift, you know, on this company's app, um, but your uh, you know, your healthcare provision app notices that you haven't been taking your high-priced medicine. So you must be desperate for money. So here's what your offer is gonna be. You know, it just doesn't take a lot of imagination to think through how consolidated access to private information plus pricing leads to misery.

SPEAKER_00 42:58

Right. So it leads to misery, which is very clear, and we see this happening in the extraction economy, is gonna get worse, most likely. But you're also speaking like what would be a model that could allow this, right? And surveillance capitalism and all of those books, Shoshana Subov and others, I think make a very good case in terms of, and I I I at the time thought this is the new Marxist uh uh sort of moment where it's like, hey, this is the foundation of this current setup and the power structure that actually will not serve humanity. So how can you break it? And we've broken those monopolies. We've broken them before. We could be intentional about breaking this one, and it seems to be the most obvious that your information belongs to you, others pay for it, rather than you being charged for your own information and the app use of that.

SPEAKER_01 43:47

Yeah, so I I love the optimism. I I I could imagine it working in Europe for a small number of apps. Maybe it'll work for SAP, that's the only information company on the entire continent, as far as I can tell. But my thought many years ago would have been when you get to this level of sort of private information and this level of centralization, it really needs to be controlled by the government because they're democratically accountable. And so we really want to have Are they we we really want this to be in the hands of the government because they're the only ones we can trust to not misuse it. But then we had a couple of elections and now I'm um now like what's the worst place it could be? Like, I'm now going to use this information to persecute my enemies or to revoke your nonprofit status or to sue you for XYZ. And so if you can't trust your government to have access to centralized information, you know, if if I were in Denmark, I'd say, fine, let's let the government do it. But there's other countries we're familiar with where we might not feel quite as comfortable with their our elected officials using it for public benefit. But then you mentioned, well, what about we break up the monopolies? Sounds good in principle. But like, imagine a scenario where Google search is entirely replaced by OpenAI's product or something like that, or or Anthropic comes up with just much better search and gives you better answers, and Google search plummets and they can't sell any ads anymore, and they're desperate for revenue, and they're on the verge of bankruptcy. So, what do companies do when they're on the verge of bankruptcy? Like imagine that you're 23 and me, and you've got genetic information about millions of people, extremely private information, and the only asset you have as you're headed into bankruptcy court is piles of horrifyingly personal data. Um I'm not sure that's going to go in an optimistic direction. Like, like, imagine that your university uses Gmail and Google Drive, and everything you've ever written, and every email you've written, and every class that you've done is you know captured on videos, and they're all stored in the hands of this one company that's now desperate. So this is where I'm not sure what's the good option.

SPEAKER_00 46:17

Uh you're describing a reality that is almost stuck, right? There is not much possibility in that. At the same time, I I think the intellectual honesty requires to look at, okay, you know what? There are possibilities almost always. The question is, are we able to imagine them, see them, etc.? But you have done some work, but like I'm curious, like what gives you actually hope? Because you're like nobody can live without hope, right? I'm saying so, so so what gives you grounded hope? You said Detroit, the way that you live there. I remember actually you telling me when you made that decision of buying a home there, which was sort of like, wow, that's a bet on something. So that gives you hope, but what else gives you grounded hope? Like there's lots of reasons to despair, but I don't think you you can live on that.

SPEAKER_01 47:06

Yeah, no, exactly right. I'm we have all the technologies we need to solve almost every problem. They're all just sitting there. That that's the thing. So when the future's already here, it's just unevenly distributed. And that it's doubly true for the technologies. We've got all the damn solutions sitting around waiting to be used. And it's sort of the the orientation of our system towards shareholder value maximization that makes us not pick that right answer, is my concern. So there's a lot of things that that are spiritually profitable, but not economically profitable. So, what would it take for us to assemble those things into the right format? So there's already states that are saying no surveillance pricing. If you're going to do business in our state, you're not doing this. You have to post one price that applies to everyone. We've got laws on the books that can be used to keep corporations behaving. If you've got a justice department that's indifferent to those things, it doesn't help. But we have a lot of the tools in place. So it's like, how do we build institutions that are robust to those to those concerns? And, you know, you have a colleague not so far from you at uh the new school for social research named Trevor Scholz. I hope you'll meet him and interview him for your show. He's been uh a big proponent of platform cooperativism for the past 10 years or so, and basically takes that idea and says, look, co-ops have a long and glorious history. There's parts where they don't work well, but you know, one of the things that makes co-ops tricky is that people spend 20% of their time in meetings, which for faculty would be, you know, less than usual, but for normal people, spend 20% of your time in meetings is kind of a lot. But you don't have to have so much time spent in meetings if we all have access to certain technologies for input and democracy. So I'm a big fan of Trevor's sort of movement around platform cooperativism. He is hosting a big conference this fall in uh Bangkok about AI and you know, how do you incorporate the ideas of cooperativism into a world of AI? And thus far, Trevor has always seemed right to me. I think he's very smart and visionary, and I'm very impressed by what he's doing. And one of the one of the fun things I discovered was getting to know the founder of Drivers Co-op in New York City. Eric Foreman is the founder of the Driver's Co-op in New York, and and uh the insight was the drivers are the ones that contribute all the value at Uber. Uber is just some software that connects people up and then takes a pretty big fee from it. But all of the work is being done by the drivers, almost all of the value is being created by the drivers. So could you create a version of Uber that's owned by the drivers themselves? And the driver's co-op is an effort to do something like that. What I found most intriguing when when I um spoke with with Eric was that the software necessary to put together an Uber competitor of like $10,000 was surprisingly cheap to buy the software that if people download it and drive, you know, you can do a version of what Uber does. And so it's not that, you know, if if you have proof of concept, which is the name of your show, right? If you know that it's possible to have an app that connects drivers and riders, then it's just uh pretty trivial to come up with a version that's owned by the people. And so if we could default to that, that if we could create the tools, we what when when uh some of us saw what you could do with Claude Code and said, holy crap, you can speak into existent software. You can say, make me a CRM program so I don't have to pay for Salesforce anymore. It's like, wow, this could be really empowering for small businesses in Detroit, where we're where I do some work with the Detroit Neighborhood Entrepreneurs Project. So you have University of Michigan students helping small businesses grow and thrive with accounting and legal and other support. We thought, well, could we find some way for that the for the entrepreneurs in Detroit and the Michigan students to cooperate, to collaborate, to create business software that's specialized to their need, that's directly rooted in their own experience and what they want to see. So they're part of the design process, and the students are helping figure out the nerd part, but that we create essentially free software, and my kind of like Odoo, but free is the working hypothesis here that's you know, specialized to Detroit, so it's got the relevant laws and regulations built into it, right? That it makes sense within that particular terroir. My secret agenda, which I'm now revealing on a podcast, is that you build the software in a way where the default is uh work and control and optimistically ownership. So that you build the software, not, and here's a way to hide from your your workers how much they're contributing, but that it's open, that you that you have access to that information, um, and that the people involved in the business have the information they need to be able to make good business decisions. And if they're also owners, they have the incentive to do that as well. So could we create business tools that that tilt in a direction of more democracy, more collaboration, more worker ownership? So if we're going to be creating these tools to wipe out a layer of legacy businesses that suck and uh and create businesses that are more democratic, more you know, more community-oriented, enable community wealth building and and and workers to have you know more security. Well, that sounds pretty good. Like if that's something that that now we've got that they're raining down from above these new tools that enable us to create different kinds of software, like let's use it for good instead of evil.

SPEAKER_00 53:14

That's a reality, right? And that's functional. That reality is also possible, right? And you're doing that with the Detroit context, but this is something that may now be, as you said, a distributive moment where all of the solutions that we have to address all the big issues are basically the challenge is managerial, right? It's not it's not technical. So how do you respond to that? What can we do in terms of like the business school is sort of the supposed to be providing solutions to the biggest issues and blah, blah, blah, and leadership and yada yada. What what do you see?

SPEAKER_01 53:50

Yes, I I'm I'm as sincere in hearing that as you are. I'm gonna be uncharacteristically optimistic here. I also have one or two qualms about business schools. Um like we got a lot to answer for. But the the thing is that I think what business schools are uniquely able to do is design institutions that are survivable outside the wall of a business school. So what I mean by that is like if you need to start a business or a nonprofit, if you need to create some kind of enterprise, like we're like Home Depot here. We've got all the tools sitting on shelves. We've got like I need to give, I need somebody to give me money so that I can build this thing. Well, that's corporate finance. Like they've got a bunch of tools, and you don't have to go to venture capital. You could use an online democratic crowdfunding platform where your neighbors do it. And it doesn't have to be equity or debt. If you don't want to give up control, you want workers to maintain control, you could use a revenue share agreement. And so there's innovations in finance. How are you gonna explain to people how you're using their money? Well, we still need accounting and we still need uh managerial financial accounting, and we're pretty good at that. We got people who are really smart at figuring out how flows happen within organizations and how to explain them to the world so that they're legible to people. So accounting's great at that. How are you gonna organize like the workflows and deal with suppliers or processes of bringing things in and transforming them? Like, yeah, we got an operations department. They're really good at stuff like that. How are you gonna get things into the hands of people who need it? Well, marketing, they've got the distribution channels, they know how to convey the value. Management, we're really good at thinking through all how all the parts fit together and coming up with designs that are optimistically good for the community and democratic, planet saving rather than planet killing. So, so we've kind of the business schools are really good at creating institutions, like and nobody else does that. Like they might be good at parts of it, but I don't think the public health school is gonna have, you know, great accountants and finance and marketing. Like, like we we kind of are the people whose task is assemble institutions to get things done, to generate value and and uh and make things that people need. So, you know, maybe we've got what it that takes, and it's a matter of training students in what those tools are.

SPEAKER_00 56:15

Yeah, and maybe that that blueprint, that perspective that underlies it, that uh design, the core kernel coding of what we're doing, what is a organization for, and how is maybe your own quote unquote notion of success connected to that rather than it's separate or connected to the financial markets.

SPEAKER_01 56:35

Yeah. I'm just hoping that the current entering first years, they're about to, you know, write us some fairly sizable checks in the expectation that they're gonna get a well-paid job on the other side. And I do want that to happen. I I do want them to use their talents to bring about this, you know, uh more democratic and productive and community-oriented world. And so I think that's that's our challenge for now is like, how do you teach people how to navigate this world? It doesn't sound like a world that we're familiar with, but the world we're familiar with is not going to be there in two years. Um that's you know, I always told my kids, uh, you know, they went to both went to liberal arts colleges, and I said, You can study whatever you want, but if you don't learn to code, you will die penniless, homeless, and alone. I want to make sure, yes, you should you should study soprano opera performance like my daughter does, but at least learn accounting and learn how to code. Well, that was bad advice. Now I'm a sucker. Like, why learn to code if you can use Claude code? You know, and whereas the opera enables you to better understand your world and navigate and you know, so so I I was I was wrong about that part. I don't know what to tell people to do.

SPEAKER_00 57:48

Well, and maybe that's sort of the new humility that we can live with or be in in that exploration. It's like, hey, there experts don't exist. But maybe there is some kind of benefit of road mapping or scenario planning or working with options and and scenarios of some sort. I don't know. You've talked about this before, and I I feel like there there is probably, I mean, there's definitely lots more we can talk about. I I want to like continue this conversation, also invite you to some of the conversations that we're hosting around transforming business education specifically. Oh, that would be amazing. Yeah, there there is, I think this is a moment where our schools have an option, where everybody, every institution has an option to choose. Luckily well, luckily. In a very positive positive spin, this is luck, right? We have an option now to really face the hard truths that you're describing in the beginning, where you know, that's that's like a moment of decision. Where do we go? And artificial intelligence can replace us, but what is the human intelligence component and how do we deploy that with the institutions that we have and maybe build new ones? So I don't know if you have a final reaction to that before I get you the sort of extra.

SPEAKER_01 59:07

No, I love I love that so much. We're completely aligned in thinking about that. I do want to give a shout out to Institute for the Future in Palo Alto, California. My buddy Marina Gorbis is the uh the the uh executive director or CEO of Institute for the Future. And I just had a lovely podcast conversation with her last week about some similar topics, but they're really good at structured tools, systematic ways to think about the future and act on it. Like their thinking is you'll be a lot better at acting on the future if you've tried it out a couple of times rather than encountering it. And she uses this phrase we're all immigrants to the future. Like we're all landing in a strange place where we might not speak the language, and we're all having to orient toward this. It's like, wow, immigrants to the future, that's a really smart, um, uh smart way to think about it. And I'm I'm now involved at my own school and helping redesign our core management class for the fall. And uh, you know, my chunk is basically all AI and like how do you survive this and orient in it? And it's actually been really fun. I thought I was thinking about designing another class, but it's actually being forced to engage with what's happening right now. You know, what are what are the terrible things happening? What are the risks, but what are the opportunities? There's something engaging about that. I think it can help. I think we are uniquely well placed to think through how to address this. Or put another way, the last person that I want figuring this out is Peter Thiel, Elon Musk, Mark Andreessen. I I don't want those people deciding what our future looks like. I want you deciding because I want humanistic management to be deciding.

SPEAKER_00 1:00:50

And I think that's a collective effort and a collective possibility, right? And I think right now we're delegating and we're allowing. I think the thing is that what's happening right now is we're relegating the decision about the future to crazy psychopaths, maybe not all of them diagnosable, but in many ways, like operating as if they can just not care and serve their own patterns of behavior that made them quote unquote successful. And I think that's really what society's blueprint is allowing for now, until it won't, right? And it won't because there is a historical pattern of that is just not functional. So anyway, last maybe comments about reality that proves possibility that get you excited because I I saw your energy lift up there. It's like, yeah, we can do a lot. We can do a lot more, and we can design and we can bring the future and immigrate and and be intentional and and and at least try. Any last reactions before I get you to the existential mussel proust.

SPEAKER_01 1:01:52

Ultimately, I am a bouncy and optimistic person, which seems weird because I always immediately think here's how this can go wrong. And yet, sometimes we do it right. And I think that just knowing that we've got all the tools here, we've got all the goodies we need, and that we've done this before. I mean, there's a lovely book by a sociologist, embarrassingly forgetting her name, um, about how do people respond to disasters. And it's called something like, you know, paradise out of disaster. Yeah. So the the premise of this investigation is that if you look at how people if you predict how will people respond to hurricanes or tornadoes or floods or earthquakes, you imagine everybody runs to the basement and grabs their guns and steals their neighbors' water and food. But in fact, it's the opposite. People respond to disasters by coming together. So I mean, Hurricane Sandy was probably the best thing that ever happened to Brooklyn. I don't know. So people don't like fall apart and start shooting their neighbors, or maybe they do in Texas. Maybe there's reasons for hope there that sometimes we can find ourselves collaborating with our neighbors and using these tools, discovering like a stone soup, finding the ingredients that we need to make a delicious, nourishing meal.

SPEAKER_00 1:03:14

Like trap. I think if that's act that's that's fantastic. That's that's great. I think that is the evolutionary reality. We have survived because we collaborate, not because we compete. And so maybe that's a moment for us to experience that newly at at that unprecedented global levels to be determined, to be confirmed. Nice. I love it. Very humanistic of you. Yes, yes, yes, yes, yes. Trying to to play my my role here. All right. Well, let me let me just end and thank you. Just this is fantastic. This we could go on. I and I want to do more of that. Give me a number from one to thirty-five so that I can give you dang. Twenty-eight. Twenty-eight. Okay, so who is your hero of fiction?

SPEAKER_01 1:04:05

That's a tough one. But the one that occurs to me because it's everybody's favorite movie, is Wesley or the Dread Pirate Roberts from The Princess Bride. And I'm gonna say The Princess Bride is although unlikely, ends up being one of my absolute favorites, and everyone in my household will watch it at any moment if it comes up as an opportunity. And it's full of insights, is both funny and swashbuckling, but it's actually got layers of wisdom in it that I think after the 50th, uh, after the 50th viewing you get. But you know, this guy has learned sword fighting and weightlifting and knowledge about the world and surviving poisons of various sorts. He's done, he's done all of this preparation through the life of a pirate so that he can rescue his um his true love. It's a great um he's a great hero because he's uh sly and can do everything, but is also um just very charming.

SPEAKER_00 1:05:09

So that works for me. Fantastic, fantastic. Thank you. I'm getting the Americana culture annually. That's that's fantastic. Thanks so much for that education. My pleasure. Great to talk to you. Thanks so much again for being here and to be continued. And I'll I'll share some more information with you in a moment. So let me pause here.