Have you ever stopped to think about what ownership means to us as a culture? Many of us see it as an artifact of the legal system or something that’s decided in courts. We believe it is a self-evident concept that lives outside of us and isn’t really part of who we are, but rather a set of rules that affects our mortgages and our car payments.
But ownership is in fact very much a part of what makes us human.
Today and throughout history, a mere six competing stories of ownership have dictated how everything in the world is distributed. As resources have become scarcer, everyone from American homesteaders and ranchers, to tech leaders and consumer brands, have created ways to impose their own preferred ownership story in a world where what it means to “own” something is constantly evolving.
We speak with Michael Heller and James Salzman, two of the world’s leading scholars and authorities on ownership, and co-authors of the book Mine!: How The Hidden Rules of Ownership Control Our Lives to understand how the concept of ownership has been upending the brand landscape.
They explain to us how the rules of ownership change in every generation, and how those changes reveal the true brand frontier, the role of business, and most importantly, a society’s shifting values.
JUNE 15, 2021
66 min read
OWNERSHIP ANXIETY, BRAND STORYTELLING, AND THE HUMAN CONDITION
Welcome to Unseen Unknown. I’m Jasmine Bina. Have you ever stopped to think about what ownership means to us as a culture? Many of us see it as an artifact of the law, something that’s decided in courts, a self-evident concept that lives outside of us and isn’t really a part of who we are, but rather a set of rules that affects our mortgages and our car payments. But let’s take a moment to consider this through the lens of a familiar story in the Bible.
…. the fourth river is Euphrates, and the Lord God took the man and put him into the garden of Eden to dress it and to keep it. And the Lord God commanded the man saying, “Of every tree of the garden, thou mayest freely eat. But of the tree of the knowledge of good and evil, thou shalt not eat of it, for in the day that thou eatest thereof, thou shalt surely die.”
We all know what happens next. Adam and Eve eat the forbidden fruit from the tree of knowledge and they’re kicked out of the garden of Eden. But what’s interesting is that if you listen closely, there is an ownership story at the heart of this passage. God says, “That fruit is mine and mine alone. You can’t have it. And if you take it, there will be consequences.” That ownership story is how humanity begins.
Ownership is in fact very much a part of what makes us human. It is not a system relegated to the law. As resources have become scarcer, everyone from early American homesteaders and ranchers, to today’s tech leaders and consumer brands, have created ways to impose their own preferred ownership stories. In this week’s episode of Unseen Unknown, we’re speaking to Michael Heller and James Salzman, two of the world’s leading scholars and authorities on ownership, and coauthors of the book, Mine! How the Hidden Rules of Ownership Control our Lives.
They reveal to us how the rules of ownership change in every generation and how those changes reveal the true brand landscape, the role of business, and most importantly, the society’s shifting values.
Think when was the last time you were in an airplane. For me, it was a while ago. When you lean back and the person behind you says, “Hey, you’re in my lap.” What’s going on there? You’re both claiming that wedge of space behind the airline seat. When you’re each saying, “That space is mine,” what each of you are doing, the person in front leaning back and the person behind you who is squished, you’re each relying on, it turns out, one of six simple stories that everyone uses to claim everything in the world.
When I lean back, when I press that button, I’m using the attachment story. It’s mine because it’s attached to something mine, the back of that seat’s attached to my seat and that space is mine. The person behind is saying, “Hold on a second. I had the space first.” First in time. That’s the second primitive powerful story. The person behind is also saying, “I possess that space. That’s where my laptop is. That’s where my knees go.” Possession is nine-tenths of the law is a third of those six simple stories.
So right there, when you lean back on an airplane, that’s already three of the six simple stories that everyone uses, attachment, first, and possession. The fourth story is labor. It’s mine. Why? Because I worked for it. You reap what you sow. Fifth story, it’s mine because it comes from my body, our bodies ourselves. The sixth and final story, it’s mine because I’m in the family, birth and death, marriage and divorce. That’s when big amounts of property really move.
That’s it. The three simple stories when you lean back, labor, our bodies, and our families. And that’s it, all ownership conflicts. Everyone fighting over everything is a fight among those six simple stories.
What’s interesting is that you call them stories. There doesn’t seem to be any innate, fundamental truth behind ownership. These are all competing stories, the way you describe it.
Ownership is really a storytelling battle. One of the real message, one of the real points for us to write in this book is to have people realize that ownership and who gets what, basically, who gets what in the world isn’t something for lawyers. 99.99% ownership disputes, who gets what and why, happen outside of the law. What’s going on there is I’m telling a story for why it should be mine, and you are saying another story for why it should be yours.
Our kids are saying stories in the playground. “The shovel is mine because I had at first.” “No, I’m holding onto it.” And that’s always what’s going on with every battle, not just in the playground, but also for climate change and who owns wealth in America. It’s the same simple stories. They really are that, just attempts to be persuasive over who gets what and why.
The other thing to realize is that this goes way back. Really what we’re talking about is who gets access to scarce resources. It’s not just humans. I mean, birds. When you go out and you hear the wonderful birds chirping, they’re not saying, “Oh, wonderful. So happy to see you, Jasmine.” It’s not like a Disney film. What they’re actually saying is, “Back off, buddy. This territory is mine.” And it has to be that way.
Yeah. It’s interesting when you bring up the airline story because, as you guys have described in the book, the airline is really selling that space twice. And they could easily just make a rule, like who does that space belong to? But they choose not to do that. What are some ways that brands play with ownership stories, or manipulate ownership stories, or maybe don’t even tell ownership stories in order to create the behaviors that they want among their consumers?
Let’s take another airplane story, and that’s Southwest. Southwest has open seating. Basically, it’s first come, first serve. Depending on when you sign up, 24 hours, you’re either group A, B or C, or you can just pay a little money and be in the early bird. There’s this huge debate that’s arisen, really conflict that’s arisen over what happens when someone in group A goes in and then saves a seat for riff-raff in group C. Fights break out over this. They’re actually on the bulletin board for Southwest. There are these raging back and forth. USA Today has written about this.
Southwest knows this is happening. They tell the attendants, “Don’t get involved.” They could clearly solve this. They could have a rule that says, “No saving seats.” They could rule, “You can save seats. No saving seats in exit rows.” They could do any of this. They don’t. Why don’t they? They don’t because they expect that us, the passengers, are going to work it out amongst ourselves. We’re going to rely on politeness, and customs, and good manners, and such, except when we don’t.
But thing that’s fascinating, and it’s true both for Southwest and for that example we started with, with the reclining airline seat, the one actor you don’t blame is the airline, when in fact they’re the ones who are creating this problem in the first place. It’s even worse, to go back to the original reclining seat, because the airlines have reduced what’s called pitch. That’s the distance between the seats. One inch of saved space is equivalent to adding an entire row the airline. It’s real money that’s involved.
We didn’t use to have fights of whether you can recline your airline seat, in part because the seats weren’t so close together, and in part because the space itself wasn’t so valuable. Now it is. We use the space differently. Laptops are now our entertainment centers, our workspaces. And so, the space is more valuable, it’s tighter. But we blame each other. We don’t blame the airline.
From the ownership perspective, what’s going on here is that airlines are using one of the most advanced tools of ownership design that we reveal. This particular tool is called strategic ambiguity. Ownership is ambiguous a lot more often than people realize because there are these competing stories. People don’t realize ownership is up for grabs. And the airlines know this. They take advantage of our innate feeling that we want to just work things out. We don’t want to be the bad guy.
So it’s that wanting to work things out that lets them sell that space, sell that wedge of space twice at every seat on every flight. Strategic ambiguity is just one of the really important tools that we’ve identified that leading edge brands use to profit from what we call ownership engineering.
That’s so fascinating. We’re all competing over scarce resources, but I think people like me feel like, “Well, we’re living in modern times. Resources aren’t scarce like they used to be.”
Well, if you think back to the origins of America, the discovery by Europeans of the continent, and then the conquest of the people that were already living here, all ownership in America, every single piece of land, the place that you’re standing right now, place that you live, every plot of land in America traces back to a seller who sold it to you, who bought it from someone else who sold it to them, and then traces back ultimately to conquest.
So what you see in America, and what you see actually for every piece of land everywhere in the world is the playing out of these ownership stories, “It’s ours. Country is ours. The land is ours,” versus, “Land is ours because we labored in a particular way to make it ours. We labored to cut down trees, to clear the fields, to plant in rows, to basically make new England look like old England.” So the origin of ownership in America, the origin of ownership in the world always traces back to these same few simple stories.
As land, or airplane seat space, or your online clickstream, the record of your likes and looks online, whenever any resource becomes scarcer, anything, and that is everything, people fight over it.
One of the other aspects of this that I think is fascinating is how technology changes this. Think back to the Westerns we all love to watch the limitless vista of cattle, with the cowboys and the doggies and stuff, that only existed for a few decades in America. Actually, those cattle drives were over private land, going from the ranches to the railway stations. They could basically ship them off Chicago and such.
Why was it over private land? Well, because there was no way for the private land owners to keep the cattle out. Cattle don’t care. Cowboys probably couldn’t read, or if they could read, they’re not going to care anyway. What changes all that? Very simple invention, barbed wire. Joseph Glidden invents this. All of a sudden, you have a way to inexpensively enforce your property rights.
Barbed wire really is the fundamental reason that we see so much agriculture in places that used to be pure ranching. They’re the range wars that they talk about. These were very real and dangerous fights, and technology, ownership technology was at the heart of it.
What is the equivalent of barbed wire for our age today? Have we seen something as impactful as that?
Yes, very much so. I think of our cell phones as being the barbed wire of our day. Barbed wire is what created the “No Trespassing” version of ownership in America, the version that said, “The attachment story wins over the possession story of the ranchers.” Your cell phone is the technology today that lets you buy a stream of services. You press the button and a car comes, or you press a button and you get an apartment. So that shift to the micro payments, to being able to track things, that whole ability to organize our lives around a new technology of ownership.
The cell phones are important in the sense that they’re quite a lot of actual technology in there. But what’s under-appreciated is the transformative effect they have in the kinds of ways that we can fight over and divide scarce resources. We can divide them up in ways that we never could have done even a few years ago.
It’s so interesting to see over and over again that it’s the same laws, no matter how much the world changes, that we always go back to, to figure out how we’re going to deal with this brave new world. I know that you guys talk about how a lot of our ideas around ownership are changing. They’re under attack. Culturally, why, as a group, are we starting to renegotiate these six laws?
They’re all in flux, and they always have been, all the way back to the Bible and they are still today. But one of the thing that’s most visible right now is the change in possession. Possession is nine-tenths of the law. We’re wired to have a very actual physical, tangible reaction in our brains when we hold on to something tangible and physical. You hold a mug, it becomes worth more to you than that same mug was worth just a moment before.
That’s why the Apple stores are these open scenes of tests. They want you touching this stuff because you’re actually willing to pay more once you touch it. It’s why car dealerships have test drives. They want you to be physically connected with the stuff. So retailers already know the importance of physical connection. What’s changing most rapidly of the six stories today is the move to an online world where retailers want to evoke that primitive feeling of connection.
But it’s very hard to do in the online world. So that’s why, for example, Amazon has that little shopping cart and why they have this “Buy Now” button that’s highlighted. What they’re trying to do is to basically have you have that feeling of when you actually buy a book and bring it home. They’re saying downloading a book is the same. You can buy it now. The reality is that your online life isn’t what you actually think it is. The “Buy Now” button doesn’t mean what you think the “Buy Now” button means.
When you click that to download a book, Amazon can, and indeed has, deleted books right off of people’s Kindles, just like Apple has deleted movies right off people’s devices. Online you actually own more like one-tenth. Possession is not nine-tenths anymore. That gap between nine-tenths of the law, that feeling that we have, and the reality of what you actually have, it’s one of the biggest shifts that people don’t realize about what it means to move to an online world.
About 90% of people believe that buying something online is the same as buying the physical version of it, and that’s not true. Because of that gap, Amazon and Apple, they each earn an unearned, an extra premium and extra profit on every single download because we think we own more than we actually do in the online world.
Take one example. If you hold up your iPhone, I mean, this is pretty amazing. What you actually own, you actually own a plastic brick. But what makes the iPhone valuable is the operating system. You don’t own that. It’s the data on your phone. You don’t own that either. It’s stored for you. As Michael said, we’re not wired to think in terms of ones and zeros, so these intangible forms of ownership. We’re used to thinking about horses, and horse shoes, and the clods of earth they run on.
And so, there’s this real shift that’s taking place, and folks don’t get it, in the sense that we’re just not wired to think that way, and retailers obviously realize that and try to make the online experience, as Michael said, as similar as possible in the setup to actually just being in a store.
Yeah. Also in the book, you guys roll the dice forward and you say, “I mean, what happens in a world where we don’t own anything?” And if you think about it, so many of our communities historically have been focused around shared ownership of something, I own a home, you own a home. We’re in the same neighborhood. There’s a camaraderie there. What’s your take on where this is all going in terms of the culture around community and how we gather?
I was in a Airbnb two summers ago in Barcelona, downtown Barcelona. It was wonderful. I loved… So a wonderful city. But what I realized, on the streets, was that nobody spoke Spanish, or Catalan, which is actually the language in Barcelona. But what they were all speaking was German, and French, and English. Basically, downtown Barcelona has been taken over by Airbnb so that the ability to have a neighbor who is going to help you out when you’re sick or someone whose door you can knock on and borrow a cup of sugar, intact communities, is disappearing, that we’re moving to a new kind of living together world where the strength of ties that underlies…
The little league team, or the Cub Scouts, or the Brownies, the sense that we’re more than just ourselves, that we’re part of a community is starting to fray, not because of big partisan politics, but because of the hypermobility that comes from living in a streaming world, a world where you stream residences rather than in a stock world, the world where you own and stay put for some longer period of time.
There’s an optimistic and a dystopic version of where we’re going with the move to an online ownership. The six simple stories don’t change, but the technology does change and the culture changes with it.
Do you think people realize that we’re actively making this trade-off every time we buy into these shifting notions of ownership, or not quite?
No one realizes this. So much about ownership is that it’s a language that we speak. It’s a language that we’re socialized into as small children, and we don’t even realize. We are like fish swimming in the ocean and we don’t realize that we’re actually in water. The water are these rules, these stories, these practices about who gets what and why, the way we defer to each other, all of that shapes every minute of our lives.
It’s how you stand in the line to get a cup of coffee. It’s how you line up to get gas for your car. It’s where you live. It’s what you drink. It’s the medications you take. Everything always, all around you, is being shaped actively by people who know how to use these simple stories to get what they want. It may or may not be what you want.
Let’s talk about ownership of communities in the digital sphere. A lot of interesting things have happened recently. The New York Times abandoned their Facebook cooking group because the culture got so toxic, they decided to just throw their hands up and walk away from it. You have apps like Telegram famously picked off the app store and then sued for not kicking them off the app store sooner.
New apps like Clubhouse, where there’s been a lot of chatter about ethically and morally, what does a platform or a brand like that owe to the safety of its users? A lot of this is signaling, how much does the brand really own when it comes to community? What’s your thought on that? Where is this going?
The baseline here is that the app or the service that’s selling you that service owns the content on it. So it’s not a first amendment issue. It’s not a free speech issue. If Telegram says, “You can say this,” then do your complaint is with Telegram. They say you can’t be on it, your complaint is with Telegram. If they delete your tweets, you didn’t own them in the first place. So online, it turns out, you own much, much less of your digital life, which for many of us is our real lives, than people believe that they own.
All those Facebook posts and likes that you’re making, Facebook owns them and Facebook profits from them. You don’t pay to use Facebook. The reason is that you are the product. You’re not the consumer. They’re selling everything about you to advertisers, so they can target you more effectively to sell you stuff you may or you may not want. So who owns communities online? Not you is the answer.
That has a very profound consequence for what your life is going to look like. When people used to pass away, they would leave a trunk of old love letters or diaries, some tangible record that they had lived a life and they had loved, and they had been connected to people. Today, all of that potentially disappears. There’s no tangible record of the most intimate thoughts that you had beyond those controlled by companies that may well not have your interests foremost in their minds.
There are these shifts taking place. I remember very well I moved about five years ago. I’d been at Duke for over a decade and then moved out to the University of California, Santa Barbara. I remember going through my Duke account, which is going to close, and printing out some of the emails. It just felt weird to do that because I don’t have the journals or the letters. There’s this very incomplete and awkward attempt to recreate what Michael is talking about.
On the other hand, there’s also a panopticon, this notion of the all-seen eye, which is that much more of our lives are being recorded online than ever would have been put into our diaries. What that means is potentially, if you do pass away, for example, whoever does have access to your Facebook account can learn all sorts of intimate details, not just about you, but about all the third parties that you were interacting with, whose privacy would very much have been protected in a pre-online world.
Because was one of the questions for our day is, how do we think about this enormity of information that is being kept around for us? Not just the specific letters that we want to write, but every email, every tweet, every direct message, all of it is being saved in ways that are very much outside of our awareness, and to some extent, outside of our control.
This leads me to another thing that I thought was very interesting in the book, which is this quote. “There’s an important difference between natural and virtual resources. So far, governments have not been driving ownership online.” Can you describe that a little more?
Right. Think about kids fighting a playground. They’re saying, “Mine, mine, mine.” Psychologists have studied those fights and it turns out that whenever you hear that, toddlers four-year-olds, five-year-olds, they’re fighting about a shovel, or some food, something tangible. They’re never saying, “Mine,” about a joke or a story. That division goes back to the notion we were talking about before about the change in the idea of possession from nine-tenths to one-tenth.
The online world was never thought to be property. We had things called patent law and copyright law. The notion that there’s something called intellectual property, it’s actually a fairly recent ideological invention by patent lawyers and copyright lawyers to try to get people to think about our intangible lives, our online lives as being like our tangible ones. Most people wouldn’t ever shoplift a CD or a DVD, but when Jim and I poll our students, these are law students. 100% of them illegally download and stream books and movies and music.
So we have a really different sense online about what it means to own things. That’s been driven substantially outside of law. Governments really have not taken the lead in trying to think through what ownership should look like in the online world. It’s been driven much more by businesses trying to tell these stories about labor, “We worked for it, and therefore it’s ours.” Or sometimes the opposite, “It’s ours, but we want you to steal it.” That’s the magic of HBO. HBO actually lets… It tolerates, even encourages, people to steal their passwords.
All of our students use passwords that mostly aren’t theirs. They’re using somebody else’s HBO account. It turns out HBO can find you. They can find out who you are. But they choose not to. They actually far prefer for people to be stealing because it builds future consumers. HBO uses password stealing as another advanced tool of ownership design. Like strategic ambiguity for airlines, they’re using a tool there called tolerated theft, because tolerated theft helps build their business. This is mostly happening outside of the law.
What’s fascinating is that Netflix is having second thoughts. Some of your listeners may have noticed on Netflix recently, there are messages coming up saying, “Just to remind you, you’re only supposed to use this within the same household.” And it’s a beta. They haven’t decided yet whether they want to crack down or not.
Yeah. HBO and Netflix, they’re long-term players, and they’re thinking ahead. What they want is for you to feel that you’re stealing just a little. Like when people use somebody else’s passwords, all our students, we know it’s wrong. We know we shouldn’t be doing this. That’s the feeling that HBO wants you to have, is to… People do it. They don’t want to pay right now, but they know that they’re doing something wrong. What they’re actually doing is actually committing a federal crime. It’s actually punishable by up to a year in jail to use somebody else’s password.
But HBO wants you to be vaguely aware that something is a miss, which is part of this longer term strategy to have you feel, to have your brain react, if this is possible, in the same way it reacts to the mug that you’re holding onto, to light up in the same way, to feel that copyright is like property, not just some ephemeral construction in American law. It’s an uphill battle for them. It’s why they have those… When the movie starts, the lights go down and says, “Piracy is not a victimless crime,” those scary Interpol badges.
What they’re trying to do is get you to feel that what you’re doing is stealing. That’s part of trying to have you assimilate or to analogize intellectual property, intangible property, to good old-fashioned hard, physical stuff. So they’re trying to figure out how do they activate those ownership instincts in an intangible world.
Going back to the intellectual property thing that you were talking about, patents are being filed at a dizzying rate. I think the patent office in the US is struggling to keep up with tech eating the world. It seems like IP is never going to slow down. What’s the end game here? Where is this going to end up?
Well, there is a phenomenon, actually, that I discovered about 20 years ago, which is a concern. I call this phenomenon gridlock. Gridlock arises when there are too many owners of the same thing. Paradoxically, when there are too many owners, it means scarce and valuable can be wasted, can be destroyed by being underused. The most important examples of this out in our economy today turn out to be in the area of patents.
It used to be the case that when a scientist figured something out in their university lab or government funded project, they just published it. The way that they got rewarded was that they got famous, maybe they won a Nobel prize, they got tenure. But all the basic knowledge you needed to make to put pills in bottles, all that basic knowledge was available for free. The scientists didn’t patent their discoveries, by and large. The drug makers did. But the basic tools they used to make drugs were all available to everyone. We all built on each other’s shoulders when we created.
Starting about 40 years ago, America switched to a new strategy, which let people patent really basic tools for science, all the stuff that we need to actually do research. Now if you want to put a pill in the bottle, you have to collect potentially dozens, or hundreds in many cases, of separately owned patents, and each one of those patent owners can block you
Why did we make that switch 40 years ago? What happened?
It was an illogical moment. That was when President Reagan was elected after Carter, and it was right at the very end of the communist countries regime as they were starting to fall apart. There was a real push in this country, a very heavy ideological push originally, but eventually it became an American push towards privatization, the notion that government couldn’t fix things and people should be more incentivized, motivated to do them on their own.
But if you really want scientists to be turbocharged and do basic science, the way to do that isn’t to have university science, is to have private science, to have biotech companies pair with professors as they’re doing their research. Indeed, the biotech revolution was started in this country. So having more patents available did lead to hundreds of billions of dollars of private money pouring into basic science research. So there was a tremendous amount of value from having that.
But what was missed, what was overlooked in that rush to privatize was one of the hidden rules of ownership, which is that too much ownership can be as costly as too little. So we ended up with, in the ’90s and the last several decades, is having way, way more patents, way more ownership of upstream or basic, the basic tools that you need to do science. But that’s led to actually fewer pills in bottles, fewer downstream, fewer actual treatments for disease, because all those upstream owners in certain areas block each other.
They each want to get a share of the profits from the ultimate treatment. If everybody wants the full profits from that treatment, there’s no deal to be made and the resource never gets discovered.
I think one of the bigger questions around ownership lately, that’s been top of mind for people like me is NFTs. Like what do you actually own with an NFT? Why is this a phenomenon now? I feel like it signals a lot about our culture, but I’ve never really thought about it from an ownership perspective. What does an NFT mean about our beliefs about ownership, especially since you could argue the most valuable NFTs are the ones that have been already the most consumed by our culture?
Just to explain to your listeners, an NFT stands for a non-fungible token. Your Bitcoin or your Ethereum, those are fungible tokens. One Bitcoin’s the same as any other one. A non-fungible token, an NFT, is a unique identifier. It uses the same blockchain technology that Bitcoin does. But it uniquely identifies something out in the world. What that thing often is, is some digital image. Could be the Beeple image that sold for $69 million, or LeBron dunking from an NBA top shot image.
And then NFT says, “I, the owner of this NFT,” on the quote unquote… I’m putting this in air quotes for your listeners, “The original of that image.” Now, all of us right now can go and download the Beeple image, or the LeBron dunk. One of the things about online art is that it’s exactly perfectly copyable down to the pixel. There’s one original Mona Lisa and a lot of college dorm posters. For online art, every image is exactly identical to every other one.
This has meant that online art has been one of our most democratic and innovative spheres of artistic endeavor. What NFTs do is they basically are designed, I think, are laser targeted on killing the creativity and value of digital art. For me, what NFTs do is bring together the worst of art and the worst of blockchain. They’re enormously energy consuming to prove that this is the original, all for the purpose of making art worse.
What NFTs, I think, emerged from is partly a response to the pandemic. It’s the attempt to impose artificial scarcity. It’s creating the artificial scarcity not for the benefit of art, but for the benefit of a handful of early adopters, the traders who got in first. Here would be my question for those of you who are thinking about investing in NFTs. Is there a secondary market for NFTs? That is, does anybody buy a used NFT?
The answer I believe is going to be that we’re not going to see that kind of secondary market. And I worry about being the person left holding the bag when this NFT market collapses, which I believe it will.
Yeah. Talking about things born of the pandemic, I want to know how you guys have seen the pandemic possibly change our thinking around ownership, or forced questions around ownership. One thing that came to mind for me was a lot of companies are asking their employees slowly to start coming back to the office. You hear stories about employees saying no in large numbers and putting pressure back on their employers.
It raises this question of, who owns or how do you own the employee’s time? What are you seeing either in there, in that example, or anywhere, anything that’s happened in the pandemic, that shows pressure or change around our ideas of ownership?
Well, part of it, I think, you can see in the commercial real estate market, the idea that do you actually, if you’re a company, do you have to own physical space for your employees to get together? I think there’s going to be, as these leases end over the next few years, there’s going to be a real shake-out, I think of what commercial real estate even looks like.
I mean, I’m seeing with law firms right now, they’re moving to shared office spaces. In a sense, you get this Tuesday, Wednesday, the other person gets it Monday, Thursday. Someone else gets it Friday. So this notion that we have to have this communal meeting place in very high-price location, I think is up for grabs. Now, as we said a number of times in this shift to the virtual economy, something is lost. I feel for young professors who are just starting to teach right now because they’re not making personal connections.
I mean, Michael and I met at a workshop I don’t know how many years ago in Montana, and that formed this lifelong friendship. That wouldn’t have happened if we had basically been relating to each other via zoom. So some something is lost. But my view is the whole notion of the workspace as something that a company has to own because they’re a company, I think that’s up in the air.
When I look at the way you guys describe ownership. I see it as an image of resources going into the hands of many to the hands of the few, then back to the many hands. It just feels like ownership moves resources in the world between the many and the few. I think that’s what’s happening on a cultural level when it comes to work, because you’re seeing more and more things where employee groups, activists, and playgroups, like what happens at Google pretty often, where people arise up and say, “Hey, we don’t appreciate this part of corporate culture.”
When the pandemic happened and Google was treating their full-time employees and their contract employees very differently, like two classes of employees, full-time employees stood up and protested that and they caused change. It’s why we’re seeing a lot of unions forming too in a lot of places that you wouldn’t expect, like in the tech world. It feels like they are working to take culture back from the corporation, like, “You don’t get to determine the corporate culture here. We get to determine it.” I see ownership changing on the social plane like that.
One change or one deep battle in the world of the corporation and corporate culture, is who the corporation ultimately is intended to serve. In the last generations, we’ve moved, in this country, very strongly towards a stockholder value model of who owns the company. Who is the ultimate owner? It’s the people who’ve got the leftover money, the people who have the leftover money after salaries are paid and after rent is paid, and those are the stockholders.
The theory of the American corporation has largely been the theory of the stockholder owner. And there’s been real pushback against that, which I think the pandemic is highlighting. The move towards more employees’ say and what their workspace looks like is a different model of ownership. Sometimes it’s called a stakeholder model. That’s been much more of the model in Europe historically. In Europe, a lot of decision-making around the flow of work that affects workers is made by a council that includes both representatives from the management and representatives from labor. So they decide together.
You’re beginning to see more of that in this country as well. Not that long ago, a new form of company was created called a B corporation, a benefit corporation. You sometimes see a little B on the side of your organic milk bottle. That’s a new form, a new structure of ownership where the company is explicitly committing to a stakeholder model, to a model that concerns neighbors, and workers, and the community, and the planet, along with the residual shareholders.
What we’ve seen in the world of corporations of series of shifts, historically, from old British shipping companies that were organized a certain way 15, 16, 1700s, up through the stock corporation. Now you’re seeing versions of corporations that have more attention to employee concerns. You see that with employee stock-owned companies, ESOPs, they’re called. You see that with cooperatives, companies. There’s been a lot of, for example, dairy farmers are organized in cooperatives.
You see that in benefit corporations. But you also see that even in the core American corporation, the Exxons and the Googles, that are having to compete in an environment where ownership of the firm has a range of models. They have to compete for employees against firms that have a different notion from the stock notion. That is part of what creates the pressure to be more responsive to the ownership of our most valuable resource, the most valuable resource that each of us has, which is our time and attention, like what we do during our day.
People are beginning to realize that they’re often selling that out too cheaply and giving up too much control compared to the life they actually want to lead. That sense of like, “What does your day look like? What does your work day look like?” That’s structured entirely by the ownership rules of the workplace that you’re a part of.
Something that keeps coming up for me is, what comes first? Does culture change first and then the law is an output of that, or does the law change first and then culture adapts? Especially when I think of things like the experience economy, which I think was coined over 20 years ago now. As millennials started to focus more on experiences over ownership of things, and this was well-documented and we de-emphasized the value of ownership.
Then you start to see new models like the sharing economy, like what is it? Is it the chicken or the egg, especially in the digital world where you have companies that are basically playing in the clay of the law unhindered because there’s no government interception there. What do you think the order of this is?
It’s an excellent question. The answer’s both. In many instances, law reinforces and reflects norms and customs, and that’s why the law usually… We know usually what the law is, actually. And it’s not because we studied statutes. It’s because we know that’s just the way we operate. However, laws are written by legislators, and legislators can be influenced. And so, there are a lot of examples. We talk about them in the book in terms of how copyright extension keeps going on and on and on and on. The lawmakers, I want to say, bought and sold, but lawmakers can be influenced, and they’re setting these rules.
For example, turns out there are separate rules for if you’re super wealthy, or if you’re not. If you’re super wealthy, you put your money in South Dakota because South Dakota’s legislators have essentially been told, “These are the rules the super wealthy want in order to park their money there.” We don’t know about it. What you want to call it, the chicken or the egg, is up to you, but that’s the model of basically the rules of ownership being written by very few for their specific benefit. And there are a lot of stories like that.
Then there are the other stories, the basic reflect, first come first serve, possession’s nine-tenths of the law, aphorisms that we learn as small kids, and then by and large tend to be reflected in the rules that we have around us.
I would push back a little bit against your question as well, the notion that younger folks are done with ownership and they’re all about sharing. Oh, that’s not right. That’s very much what the sharing economy companies want you to believe. But the truth is not that we’re at the end of ownership. What we have moved to in this country is the hyper concentration of ownership. When you’re streaming something, it’s a handful of companies that control access to those resources, whether it’s Rent the Runway for a wedding dress, or your Uber or Lyft, or Apple or on Amazon.
What we’re seeing is the hyper concentration of the ownership of the resource and the control and the decision-making around that resource. And then the giving out some little twigs and branches and little bits and little leaves of ownership license to you. But it’s a license that they can pull back and they can say, “You can’t have this book anymore. We’re not going to offer it anymore. No, you don’t pay your bill, all your photos disappear.”
So it’s not the end of ownership. It’s the end of you having ownership. What you have is a stream of services so long as you can continue to pay.
A big question that I had in my head while I was reading the book was, what do you guys think about suspending vaccine patents?
This is the long-standing debate. I work in the environmental field and you can go back to the 1980s when the ozone hole was a huge concern. These companies like DuPont were developing these refrigerants, chemicals that would still run your air conditioner and your aerosols and such, and your freezers, but that didn’t destroy the ozone layer. A treaty was developed to address that. One of the sticking points was, should those patents be shared on a non-commercial basis with other countries, with developing countries?
The treaty kicked the can down the road. The companies basically said, “Hey, we’re not charities. We have business models that we have to meet.” Same thing with climate change. Renewable energy technologies. There’s other low-emission technologies. Shouldn’t we make them much more available, much cheaper, much more accessible to developing countries? It’s the exact same conflict. It’s the same thing we see right now. With the COVID vaccine, it’s not clear they’ve lost. Biden said this should happen. It’s not clear what’s going to happen.
But this is the first time that they’ve really been challenged seriously in the United States on this. Internationally, it’s always with environmental, India, Brazil, China, to a degree saying, “Give us these technologies on a preferential basis. You want us to help prevent ozone depletion, you want us to help battle climate change? Okay. But help us.” Companies, US, European, say, “Not so fast. That’s not our job.”
This goes back a long time in the biomedical patent area as well, when retrovirals were discovered to treat AIDS. They were very expensive and AIDS activists said, “Those patents should be available to everyone on a non-commercial basis. No one should be dying of AIDS anymore.” The pharmaceutical companies were able to fight it off and a lot of people died. The overall American patent system is mostly wealth destroying.
When you talk to Elon Musk about his patents on all his incredible space gizmos, he says, “I have no patents.” He hasn’t patented anything. He’s like, “If we patent it, people just copy it.” For Tesla, for his electrical car patents, he says, “I want GM and Ford to use them. They all can use them for free.” He doesn’t use his patents as a way to block. “We need to move to a electric car economy, and I’m going to make my patents available for that.”
Overall, the patent system basically lets you create a fence, like remember barbed wire where we started the conversation. Patents are the barbed wire of the intellectual property world. Keep a fence to keep people out. For the most part, they actually destroy wealth in this country. If we basically eliminated patents altogether, America would be much wealthier. There’s one area where potentially patents actually do create wealth, and that is in pharmaceutical patents, because it takes so many hundreds of millions of dollars to create a drug to get through the FDA pipeline, to prove that it’s safe.
And then, once you create it, you can reproduce it for a penny a pill. If you had no patents or no protection for pharmaceutical patents, you wouldn’t have any reason to invest to create them in the first place. That’s the justification for the patent system as a whole. And then, particularly, it makes sense in the pill area. That counts against President Biden’s move, to some extent.
But I’m skeptical in this particular context, and for a couple of reasons. One is that most of what it takes to make these drugs is really deep technical know-how. The patent itself is disclosed. That isn’t particularly hard to reproduce. But they wouldn’t have the know-how to prove these very, very complicated drugs. Even that company in Baltimore that was producing the vaccines and wasn’t able to do it properly. That was a very high tech company and it was having a hard time.
So this is an area where the patents are somewhat overrated. The patent isn’t the real protections. Protection is the know-how that these firms have for producing these very, very sophisticated RNA drugs. But the notion that we should be able to patent a lot of very basic technology around biomedicine should be more controversial in this country than it is. And it is very controversial in a global perspective, and it’s a conversation we really haven’t been having.
On the sky is falling concern of the pharmaceutical companies that you hear around, if you lift the patents for the COVID drugs, research will grind to a halt, I don’t believe that that’s true.
Ultimately, why are there only six rules of ownership? Why aren’t there more? Why these six? Do they really cover everything?
We’ve been talking about this book with law professors and students for many years. We always actually ask that question as well. And so far, no one’s told us otherwise. We are the gurus of ownership. There’s a bunch of people teaching this stuff, but we would count ourselves among the people who thought about this. This is what our careers are largely about. We think back in history. We think what the online world is going to look like.
Ownership looks very different in different cultures. There’s tribal cultures, there’s customary cultures. There’s more social welfare, European legal systems versus America. There’s lots of differences around ownership around the world. But even with all those differences, you’re still, it turns out, fighting among those same six simple stories. The original claim to ownership seems to trace all the way back and all the way forward. So far as we can see.
That isn’t an absolute claim. It can’t be. The world can change in ways that we can’t predict. But looking in our crystal ball and looking back through a historical lens, pretty much it reduces down to that and every ownership battle that we can look at, and that’s everything. That’s every ownership battle that as you’re walking down the street, as you are thinking about climate change, as you’re thinking about wealth inequality in America, who owns your online life, or who owns your genetic data, it’s the same few stories that pop up again and again and again.
I think, actually, as Michael said, I’ll be surprised if a seventh pops up. I think it’s actually hardwired. I mean, I think it’s no coincidence that many of the great cultures creation myths, try ownership. The Greeks, Prometheus steals fire from Mount Olympus. Garden of Eden, the fruit. It’s not yours, but they take it and they’re evicted literally from the garden. And so, I think that, basically, we’re clearly hardwired to care about ownership. And ultimately, the stories that are in play are remarkably, remarkably few.
Looking back at all of this, you’ve written the book. Your careers have been dedicated to this. On a gut level, looking at the world through these six lenses of ownership, how do you feel about where we’re going?
I think that our culture with ownership is essentially where we were 500 years ago, a thousand years ago, and 3,000 years ago. Whenever there’s scarce resources and more people want them than there are to go around, there are going to be competing stories. Whether it was in Babylonia, or Sumeria, or Victorian England, or 21st century America, it’s a small number of stories that are taking place. And the question always is going to be, which story is more persuasive? And how are we going to decide which story is more persuasive? That really, to me, is the story of the human condition. Ownership, to me, is timeless.
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Interesting Links & More Reading
- Mine!: How the Hidden Rules of Ownership Control Our Lives:
- Drinking Water: A History:
- The Hidden Rule of Ownership (Reason Magazine)