Interdependence in a capitalist model?

By devin, 23 March, 2015

I have a thought, but I'm not well equipped to model the economics of it. I want to investigate it further.

When your cell phone can't be trusted - maybe the NSA has put on a virus, or another app - then you're in trouble. How can you be sure your data is not being modified? One way that Google and Apple accomplish this is through cloud sync. If your data is synced to the cloud, it can be modified, but it goes via Google or Apple, with logging included.

Bruce Schneier calls this digital feudalism, and there are plenty of positive things about this model. The negative part, though, is that all your data is stored in California on Google's servers (or Georgia; whatever).

I can imagine a future where there is an Owncloud server for every 40-50 people. You would know the person administering your Owncloud server personally, and they'd almost certainly live within driving distance. This is a pretty cool model - people can develop local skills and knowledge at protecting and repatriating the data of their friends and family.

But there's a problem with this model too! Hackers, instead of needing to just hit one server (Google), instead have the chance to exploit flaws in the same technology (Owncloud). I propose as a solution that we need 2-3 technologies that a) are interoperable b) have different codebases and architectures and c) are all viable and well-known.

The internet was built on network effects though, so this is hard to implement. Any entrant would have an uphill battle against Owncloud. But if they had superior feature sets, better graphic design, or some killer feature, they might obliterate Owncloud altogether. Disruptive innovation has a way of wiping out old incumbents.

What if we had two interdependent companies? That is, both are free to compete on their merits, but we had each company own 10% of the other company's stock. Then they would get 10% of the dividends of the other company. An even more radical and effective method would be to enshrine some corporate structure wherein each company earned 10% of theĀ revenue of the other company. Then great successes in one company would buoy up the other.

Note that there is still room for one company to totally eliminate the other if it isn't competing well, but as long as both companies remained energetic, they would be free to explore creative ways to sustain each other through free-spirited competition.

I may be much too utopian, though. It would be very interesting to model this and see what the benefits and flaws would be!

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