Democratic Companies?

When answering to Tateru Nino’s post on Massively about Linden Lab’s new choice of webpage, there was a short talk on the comments section about how little Linden Lab really listens to comments from their users.

But at least they open these kinds of things for discussion. Some Lindens even participate actively in those discussions. This is not “new”, they always did it for years: involving their customer base in the discussion — via forums, Town Hall meetings, blog comments, the Public JIRA, Office Hours, and the “SL Views” programme (where residents are invited by LL to attend a meeting “in the flesh” with them to hear their opinions).

We’re used to it, since it goes back to the days when SL entered beta testing. We’re also used to being little heard — although encouraged to do so. There is plenty of information about what Linden Lab plans to do — even if most announcements are “after the fact” published decisions. Not all, though; in some cases, we are invited to comment on policy decisions before they are officially presented.

All this is “somewhat reminiscent of democratic participation”. I put it deliberately between quotation marks — but the truth is, Linden Lab was awarded a prize for being one of the 25 most democratic workplaces in the world by WorldBlu.

This puzzled me.

What kind of democracy?

There is no question that Linden Lab, through their Tao of Linden, invites employees to discuss things a lot before the Board approves anything. There is also no question that LL is quite open with their statistics and some of their metrics — unlike any other popular Web 2.0 website, social environment, or similar “fashionable” company. I’ve often commented on how hard it is to get any sort of information from, say, Facebook, YouTube, MySpace, Twitter, or any other “successful” products out there. All I know is that they are all making a loss and often we don’t even how how much they’re losing every month. Linden Lab, by contrast, is quite open with their data — and they continue to be profitable in spite of everything.

We also have quite little information on what all those “successful” Web 2.0 sites are planning to do in the near future. For instance, why did Twitter drop GTalk integration? (Probably it was ruining their databases and infrastructure.) Are they planning to re-introduce it again? And when? We have no clue. But from Linden Lab, we get something close to a roadmap, at least as far as they know themselves what they’ll do next. The guidelines are not clear, but, say, we’ll know that by the end of 2009 they’ll launch SL Lite. And probably finish the Open Grid Protocol. Will YouTube allow us to push our channels directly into Apple’s iTunes as podcasts? We have no clue, and we can ask, but we’ll get no answer from Google.

So it’s clear that on one side, Linden Lab is more transparent with what they do and how they think, and often publishes statistics and metrics, even if we, to a degree, claim their numbers are quite useless. Well, useless they might be, but… we really have, at least, some numbers. And we can get more. We know how many employees work at LL. We know how many offices they have, how many active customers, how many inactive ones, how many hours they use per month, how many new residents log in per day (and how many never log in again). That’s quite an astonishing number of metrics we get!

We also get to propose features on JIRA and vote on them. LL’s policies are often publicly discussed with SL residents. But we also know that hardly they will ever be implemented like the residents wish. We tend to shrug it off and reluctantly admit that, at the end of the day, it’s the Board of LL that will make the decisions — not us. But it’s nice that at least they make a small effort to publish their proposals, announce the decisions, and let us know what they think. Even if we hate their decisions — most of the time.

This strange notion is not unique to Linden Lab. In fact, one other company which was awarded that prize of the 25 most democratic workplaces was DreamHost, a very popular web hosting provider in San Francisco (which originally had their servers “on the other side of the street” of Linden Lab, so to speak, and has been a popular option for residents’ web hosting due to the very low latency to LL’s grid in California). DreamHost’s Dallas Kashuba, however, explained what, in his mind, democracy actually is.

Now compare that to Wikipedia’s definition. Can you spot the differences?

A hint:

[…] There are two principles that any definition of democracy includes. The first principle is that all members of the society have equal access to power and the second that all members enjoy universally recognized freedoms and liberties.

(emphasis mine)

Key Principles of Democracy

So let’s see what type of “democracy” is proposed by DreamHost. Dallas defines the following key aspects of any democracy: Access to information, free exchange of ideas and an open dialogue, and opportunities for meaningful participation. You can see where these ideas come from: in fact, they’re enumerated by the award’s organiser, WorldBlu. You’ll also see that one of the principles is missing from both lists: the ability to have equal access to power (this is often interpreted by allowing all people in a democracy to elect and be elected, without restrictions of any sort, and that elections — specially on representative democracies — are held regularly in relatively short terms, providing rotativity which improves the ability of equal access, by giving different people the ability to get voted to power). This does not worry Dallas. In his own words,

I think a lot of people here in the US might say “Democracy is Voting”, but voting is really just an implementation detail of the representational democracy we have here.  In the workplace democracy model voting may be useful as a participation tool, but it’s definitely not necessary.

Clearly, a company is not a democracy, since the concept of employees voting on policy decisions doesn’t work at all inside the company: only shareholders vote for the board.

However, both DreamHost and Linden Lab (and very likely a plethora of other companies) will certainly claim that they involve their customers in the “democratic participation”. Linden Lab doesn’t exactly boast about it, although the Tao of Linden at least includes the motto “Walk in our Residents’ shoes”, and their appeals on blogs, forums, Public JIRA, and in-world office hours always ask for more resident participation.

So let’s step back a bit and see what we have here. First, we’re talking about the aspects of democracy (i.e. what is included as principles and what isn’t). Secondly, we’re talking about the scope of democracy (i.e. who is included as players and who is excluded from democratic participation and decision-making). There is also a strong distinction made between information, participation, and decision-making.

Of course, the word “democratic” does not only apply to countries and its form of government. You’ll find several institutions (mostly not-for-profit associations and foundations) that are fully democratic. They embody the two most important principles — that everybody has equal access to power, and that everybody has a list of duties and rights — and sometimes go much further (like the right of a fair trial, for instance, like an appeal to a Commission of Ethics or some sort of ADR inside the organisation). A typical not-for-profit association will select its management team by universal suffrage from all its members. Every member of the association — usually the ones benefiting from services provided by the association — will have certain rights as members (e.g. the right to get services; the right to vote for the board or to get elected, etc.), but also duties (e.g. paying monthly fees). But the organisation itself might also encompass much more principles usually found on democracies, like transparency, public discussion, freedom of expression, accountability of the board towards the members, and so on. And, of course, many of the decisions will be subject to the vote as well. 

Companies, however, are not democratic, in the sense that no matter how “democratic” they might appear, ultimately the board of directors is selected by the shareholders and not by anyone else. A very forward-thinking company might, of course, distribute shares by all its employees and customers, but that distribution will rarely, if ever, be “equal”, but almost always in proportion to the level of financial commitment of the shareholder towards the company. Decision-making is always made by the board (middle management obviously also makes decisions, but derives that power from the board, which can fire them — or revert the decisions — if they disagree with them), even if there is a lot of “transparency”, a lot of public discussion, and widely published views on any subject discussed. Nevertheless, there is a semblance of democratic “access to power”, to the degree that a board can be fired and replaced if their decisions are hurting the company badly.

Both DreamHost and Linden Lab tend to obfuscate the issue by mixing up the “democratic” structure of their companies inside walls (i.e. how employees are invited to participate in the decision process) and towards their customers. LL’s mission applies only to their employees, not to the relations between the company and its customers. DH is not so clear (I was unable to find their mission statement), but the article quoted clearly refers only to the workplace, not to the customers. Still, DH employs the same principles (or many of them) when including the customers: they also hear what the company is doing (transparency), they are able to freely discuss the options presented before some decisions are made (and anti-DH blogs are usually not shut down…), and there is a feature voting tool hidden on the control panel, too. Not unlike what Linden Lab provides to Second Life’s residents as well.

Democracy inside and outside

But how much is Second Life “democratic”, as opposed to Linden Lab, the company that runs Second Life? This is, of course, one of my oldest issues (already addressed on my very second post on this blog!). The major similarity between DreamHost and Linden Lab is that they are hosting providers. They don’t create content on their own. Both co-locate thousands of servers to allow their customers to create whatever content they wish. Both survive mostly because people are willing to create content and rent server space for that, instead of getting elsewhere — although, of course, DreamHost has millions of competitors, while Linden Lab, theoretically, has none (excluding OpenSim-based grids).

The major difference is contiguity of content. DreamHost’s customers, of course, all host on private areas. They don’t contribute towards a collective of content — each content is isolated and has no reference to any other content also hosted at DH (obviously, since customers share servers, and resources are finite, someone’s content can interfere with someone else’s content, for instance, by crashing a MySQL database server with too many requests and preventing other customers to use that service).

Second Life, however, is a contiguous world where everybody contributes content to the same collective. There is just one “Second Life”. We don’t live in isolated virtual worlds of our own — even when on private islands — but all our content contribute to the whole (positively or negatively). This makes Second Life quite different from almost all Web 2.0 social tools out there, where each user has a “profile”, a “page”, or a “channel”, but can’t interfere with other users’ own spaces.

Besides Second Life, perhaps the most widely known example of shared content is the Wikipedia. Sure, it’s 2D and web-based, but Wikipedia’s content is collective as well. You can always edit each other’s pages. There is perhaps even a degree further of “collectivism” at the Wikipedia, in the sense that you don’t really “own” a page (not even your own user profile!). This, obviously, required some getting-used to.

Some of you might have heard of my profound disgust of the “democratic procedures” at Wikipedia. Basically, with a profound knowledge of the Wiki syntax, and enough spare time, you can become a “wiktator” (a term allegedly coined by Eep Quirk, a former resident who was permabanned from SL some years ago) — imposing your own rules of what can be and cannot be done when submitting content to the Wikipedia. Most of them are just interested in filtering out controversies and badly-written submissions, and dealing with vandalism, but a few are just there to make sure their opinions will prevail by reverting other people’s work at whim (just take a look at the history page for Creationism to get an idea on how fast and furious the reversions are made).

There is, however, ample space for discussing articles, propose changes, clarify further subjects, and so on — hallmarks of “democracy”. There is however the shadow of censorship always looming. Step out of the way a single bit, and you’ll be brutally deleted and never allowed any of your content to be displayed. And things can get totally ironical — I get often accused of plagiarising myself! — to the point that it can become too frustrating to add content on your own. This is, of course, a characteristic of all Wikis, not just Wikipedia.

Although “anybody can become a wiktator” — at least, so far as you work together with the other wiktators; a “lone wiktator” will be the first to get excluded by the rest, of course — this is not an option for the majority of Wikipedia users. Normal people simply don’t have enough time for that. You might never be fast enough to “play the Wiki game” of reverting other people’s content and keeping your own there. So you’re limited to what you can produce — if you’re able to rewrite your articles so that every other wiktator is pleased, your content remains.

Still, Wikipedia at least has an advantage: you’re technically not limited to the content you submit by the organisation which runs Wikipedia. It’s all user-based censorship, not organisation-based.

Collective content vs. private property

And here is where we start to see the difference between Second Life and the Wikipedia. Both are collective content. Second Life has, however, the concept of content property (you can own the property rights to your own content and sell licenses to it), while Wikipedia does not (you have to forfeit your right to content property if you wish to submit anything there, as per its copyleft license). The Wikimedia Foundation does not interfere directly with the content submitted by its users, but Linden Lab certainly does that (and often!) with “unappropriate” content — as established (vaguely) on its infamous Terms of Service (basically a list of all rights you have to forfeit when becoming a resident of Second Life, although you do get one right — the right to claim your copyright over your own content, so long as you allow LL a full license for use it in the promotion of SL), and interpreted in conjunction with its Community Standards (which define “appropriate behaviour” when in-world, also to be interpreted according to LL’s whims, of course).

Thus it’s interesting to see what kind of “society” each of those models have led to. Wikipedia is quite close to libertarian socialism — a “place” where individual property does not truly exists (all information is shared and freely editable by others, and you’re not getting paid for what you contribute), there are few rules, and the ones that exist have been suggested by the whole community collectively. While “censorship” (in the form of reverting articles) exists, anyone can, in theory, become a “censor”. There is no organisation above all others which imposes their arbitrary will on the community — even things like the Arbitration Committee is created from Wikipedia contributors, not employees of the Wikimedia Foundation.

Interestingly, since this model effectively abolishes property and money (people are not paid to produce content), the only way the Wikimedia Foundation can survive is — through donations (and one the largest donations tend to come from its “sister” company, Wikia).

It’s a bit silly to talk about a “society” of DreamHost customers, since for all purposes, they don’t interact — each has its own private spot inside DH’s servers. Although some resources are shared (about a thousand users per physical server; email and MySQL database servers are shared) in practice this doesn’t influence each user individually. DreamHost runs the company (regarding their customers) as an absolutist tyranny, of course, like any other “normal” company with a “normal” product/service, and ultimately, you vote with your money — if you’re not happy with DH’s services, you move to another provider. There are plenty of them available. Granted, while you don’t reach that phase, you get enough information from DH to support your decision to continue to host with them, and can give some feedback (through the feature voting tool, on forums, on their wiki, on the blog, etc.). But there is really no feeling of a “DreamHost Community”.

Linden Lab: Absolutists of the 21st Century

Second Life, of course, is and always has been a benevolent dictatorship with a (mostly) laissez-faire economy. It is a form of autocracy: Linden Lab decides everything without significant resident intervention. However, unlike most historical benevolent dictatorships, there is a high degree of transparency and communication (remember, I’m comparing the level of communication to the one in historical political systems, not to what most residents believe to be the “right” level), there is a reasonably high degree of freedom of expression (meaning mostly that few residents have been banned when attacking Linden Lab’s “autocratic rule” on their personal blogs; using the Official Linden Forums, of course, has lead to many bans and permabans), there is a relatively high degree of consultation and invitation to provide feedback (at least when compared to other companies — most of them don’t “consult” with their clients directly, although technology-based companies very often address “user groups” regularly to improve their products and services), and a reasonably high degree of “availability” to discuss issues personally with LL employees (through in-world meetings, sometimes even one-to-one meetings, but also phone calls, emails, etc.).

The latter seem to indicate a relatively high level of “democratic procedures”, but that is merely an illusion, Linden Lab has long ago forfeited any pretension of being “democratic”. Instead, similar to the enlightened absolutists of the 18th century, they apply reason (well, most of the time) to do what they see to be “best” for both Linden Lab, their employees, and their customers — but don’t involve the customers in the decision processes through voting or representation.

Vote early, vote often!

I’m personally a great fan of the 18th century — the Baroque period, the Age of Enlightenment — and naturally all its achievements in art, science, and politics. It is indeed quite extraordinary how Linden Lab is so closely modelled on the 18th century ways of thought and action. Just take a quote from Wikipedia:

[Enlightened monarchs] tended to allow religious toleration, freedom of speech and the press, and the right to hold private property. Most fostered the arts, sciences, and education.

Doesn’t that describe Second Life almost to perfection? 🙂

The eagerness with which Linden Lab employees delight in everything user-created (“the arts”), the way they apply insanely complex technology inside SL (“the sciences”), or how residents are constantly using SL for remote learning (“education”) would make any Baroque monarch proud. Linden Lab advocates freedom of speech and expression, encourages that people write a lot about Second Life, and are ever so glad about “evangelists spreading the news” everywhere. They also encourage laissez-faire capitalism, recognise the right to property, almost never interfere in business in SL (even when residents positively beg them to do so), and earn their income mostly from taxes (tier fees) and controlling the issue of coin (the L$) — a huge proportion of which goes back into improving Second Life for all. All these are quite closely associated with societies under the enlightened absolutism of the 18th century.

But we can stretch the parallels further. You all know how the 18th century was a century of pleasure of the senses. SL is definitely that — from art to sex — and any 18th century libertine would feel at home in SL (the old Marquis de Sade would blush at what goes on in some places…). However, there are limits to what is allowed — and these are enforced ruthlessly, often without a “trial” per se, and, obviously, without appeal — pretty much how they were enforced in the 18th century as well.

So, although I tended to use the term “benevolent dictatorship” in the past, these days I prefer to use enlightened absolutism instead. To rule over SL, you have to be a Linden — be a member of the royal blood, if you wish. The absolute ruler — whether it was Philip in the past, or M today — is never chosen by the people. In fact, since LL is a private company (and does not have any intention to ever become public), this sustains the idea that Second Life is, for all purposes, a monarchy. Not an inherited monarchy, but a monarchy nevertheless, where “those of the royal blood” will pick the next absolutist ruler.

Like any good 18th century nation, the society is hierarchical and stratified. At the highest level beneath the Royal Lindens, we have SL’s nobility. Formerly known as the Feted Inner Core, a term coined by Prokofy Neva, these are the opinion-makers and strong influencers of the absolutist rulers. Oh, they don’t “rule” on their own, of course (unless they join the Royal Lindens) — but through subtle remarks, having the rulers’ ears, they whisper their wishes, which — uncannily — often get granted in some small way. Most often, however, they are ignored. Still, it’s undeniable that SL’s nobility tends to walk in the Lindens’ shadows and are often consulted and asked about their opinion. They are also — most often — the strongest supporters of this Ancien Régime.

Bye, commoners! I'm headed towards *nobility*!

Just like in the 18th century, the next layer in SL’s society is full of artists, intellectuals, scientists, merchants (content creators), and landowners. Those are the ones actually cherished by all — respected by the ones below, beloved by the ones above — and the visible part of SL’s society. They’re the upper and middle classes and most wish to become part of the nobility. These I have alluded in a previous article as “the hundred thousand”, the body of residents that actually make SL be what it is. They’re the active participants, the creative minds and spirits, the hardest workers, the ones that read and write about SL, and also the ones that make the economy work. In fact, economically, like in the 18th century, SL prospers, even in spite of some “ups” and “downs” as our dear absolutist rulers suddenly decide to change the rules. But, unlike the Wikipedia, both the residents (content creators) and Linden Lab (hosting provider) profit from their labour, ie. content creation is a business. Linden Lab does not require any “donations” to continue to operate. Residents can make a living from the content they create (just like customers of DreamHost, but not Wikipedia contributors). Prosperity for these classes, like in the 18th century, is quite high.

And then, of course, we have the lower classes — the common rabble (no offense meant; also remember, if you’re reading this, you’re not part of that class!) that has to be painfully dragged around as a sort of dead weight that drags at the heels of the Lindens. They’re the 16 million accounts registered at some time on the LL servers that rarely, if ever, log in, but still use up some resources. They’re the group of one-shot money spenders that help the middle and upper classes to get some extra income (the days are now past where newbies, being given a small amount of L$ as a stipend to start with, were eagerly targeted by the existing veterans that tried to extract as many L$ as possible from the clueless newbies, in the shortest amount if time), but, long-term, contribute little to SL overall, except very occasionally. And they’re not even vocal enough to be able to exercise their right to freedom of speech. They have little rights and often ignore them — they simply aren’t aware of them.

In conclusion, Linden Lab might have been granted the award of “most democratic workplace in 2008”, but the subtly irony is that they behave towards their customers as enlightened absolutist monarchs and subject their customers to a 18th-century type of society, not a 21st-century one.

Is democracy without voting enlightened absolutism?

Now the worrying thought is not the model that Linden Lab picked for Second Life; one can argue that modern companies were brought into existence during the Enlightenment, starting to appear and quickly become global in the late 17th century and consolidating in the 18th century (just remember the many “India Trading Companies” established by the Portuguese, the Dutch, and the British). The way they worked were pretty similar to how 21st-century companies operate — obviously there are some differences, but you’ll see a surprising amount of similarities.

No, the worrying thought is that Linden Lab has as its mission:

[…] to connect us all to an online world that advances the human condition.

One wonders, thus, if the kind of society that Linden Lab envisioned for Second Life is the ideal utopia that they imagine that will advance the human condition most. It’s a frightening thought. As much as I admire the 18th century for its novel ideas, its art, its music, its spirit, it’s also undeniable that only at the very end of it people started to matter — when democracy was introduced through revolution.

Many have claimed (Prokofy Neva at the forefront of them) that Linden Lab was imbued by the spirit of a certain left-wing political stance that has been popular throughout the US and Europe: a technologically advanced society where property is abolished to a degree, content is shared, and communities work together because it’s ethically correct to do so. The nuances at the left are far too subtle for me to figure out what exactly this kind of society might be called (“Technobolshevism”?), but one thing seems quite clear to me: that is not Second Life. Here, property is respected and to a degree protected (even in spite of the CopyBot fears); commerce is fostered, not surpressed; success is measured according to economic success; content is mostly sold, even if some give it away for free; “pressure groups” have little or zero influence over the Linden royalty, even if many claim otherwise — the FIC might exist or not, but they have far lesser power over the Lindens than it is believed; nevertheless, due to their charisma, connections, and financial status, they have a rather large degree of power over other residents, which is something entirely different. There is no “agreement through consensus” (a hallmark of leftist movements) nor even through the vote of the majority, or even of a minority!

I would definitely claim that, no matter what many have claimed, Second Life couldn’t be further away from those leftist ideals. By contrast, it follows rather closely some of the absolutist monarchies in the 18th century, even though there are some differences.

People don’t like the bad connotations with the word “dictatorship” for obvious reasons. I can imagine that they will almost immediately imagine the fascist and nazi regimes of the 1930s as examples of oppressive dictatorships; on second thoughts, they might recognise the same oppression in the Soviet regime; and thinking further, they might see all the oppressive dictatorships in Latin America, Africa, and Asia after WWII. So when we style Linden Lab as “benevolent dictators” we tend to find it as a contradiction in terms; there were not many regimes in the 20th century that considered their own dictators “benevolent” (although a few did). Dictatorship is always seen as a hideous form of government.

Similarly, we call the Ancient Régime before the 1789 French Revolution absolutism and also give that word a pejorative meaning. Like “dictatorship”, the word “absolutism” is connected with totalitarianism, and at least since Orwell’s 1984 we’ve been given ample warning about all kinds of totalitarian regimes.

However, the regimes in the 18th century called themselves enlightened — which just shows how feelings towards a certain regime are ever so changed after History’s wheels complete another turn. Enlightened absolutism in the Age of Reason was considered a better form of government since it allowed all sorts of personal freedoms and worried about the welfare of the population — because they applied reason to decision processes, unlike previous forms of government. Granted, they were nothing even remotely like utopias — and revolutions crushing those regimes created democratic processes as a replacement to create better societies. 

One wonders, thus, if that’s the kind of society that Linden Lab — and others! — might imagine as being a “better world” for us to live in. There is among the anti-democracy types a strong feeling that democracies are inneficient, politicians are corrupt, the “mob rule” does have far less “wisdom of the crowds” that one might naively attribute them, and well-placed minorities can effectively disrupt the will of the majority. Putting the decision power in the hands of the enlightened ones — while still allowing the unvoting rabble to have freedom of expression — is thus pushed forward by a certain group of people as a possible new world society, where the quibbles of politicians and the slowness of democratic processes are get rid of — mostly in the name of efficiency (getting things done). Neo-absolutism?

This is naturally worrying. Just listen to SL residents (or read the forums). Pick up one that is effectively protesting at how unfair Linden Lab is so often, and is quite vocal about it. Then ask them sincerely: “Would you prefer that residents voted on issues instead, elected a representative parliament of residents, and made the hard decisions instead of LL?” In my experience, at that point, the resident will suddenly stop their grumbling and complaining, think for a few seconds, and answer “No”. Because they’ll immediately imagine a scenario where certain residents, due to their charisma and influence, will get themselves elected to “rule over all other residents” and gather benefits for themselves (and their friends), and that is not allowed to happen. Instead, well, if the power has to be somewhere — after all, someone has to make the decisions — it ought to be in the hands of the Royal Lindens.

You can imagine that this kind of reasoning was quite popular in the 18th century in the Western world. Talk of democracy was not foreign to the great thinkers of the Age of Enlightenment. But when ultimately that meant killing the absolutist monarch and electing some troublemakers and put them in power, well, people quickly got second thoughts and preferred to continue to live under the rule of their absolutist monarchs, continue to do business as they always did, and continue to publish their complaints on the free press. Après moi, le deluge?

Well, history has shown what the legacy of those “elected troublemakers” was — the civilised, democratic world we have today. Not perfect, but just the best alternative we have devised so far. 

We definitely need another 1776.

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