Saturday, December 01, 2007

Property, on the decline

The implications are enormous and far-reaching. The capitalist economy was founded on the concept of possessing and exchanging property in the market. The word market first appeared in the English language in the twelfth century.

It referred to the physical space set aside for the sellers and buyers to exchange goods and livestock. By the late 18th century, the term came to be used to describe the abstract process of selling and buying.

The marketplace was a pervasive force in the lives of people. From their childhood years, people learnt that in the marketplace everything was for sale and that everything had a price. When people came of age, they were inducted into the dark side of the market with the warning caveat emptor, meaning �let the buyer beware�.

Buying cheaper, selling dear

People learnt to live by the rules of �the invisible hand� of the market; and they continually honed their lives to the task of buying cheaper and selling dear. People were indoctrinated to believe that their status in the society was determined by the extent of the property they possessed.

Now, the foundation of modern life is beginning to disintegrate. The institution that once drove men to ideological battles is slowly ebbing away in the wake of a new constellation of economic realities. In the new era, markets are making way to networks. Ownership is gradually being replaced by connectivity. The physical exchange of material goods is yielding place to the network access. Ownership of physical capital is increasingly being marginalised by the emerging economic process. Intellectual capital is the driving force of the new system. Concepts, ideas, and images - not things - are the intrinsic items of value in the new economy. Wealth is no longer related to physical capital. It lies and lives in human imagination and creativity. Businesses are already well along the way towards the transition from the collateral to connectivity. They are selling off their real estate, shrinking their inventories, leasing their equipment, and outsourcing their non-core activities in a race to rid and reduce needless and inessential physical property.

Owning things is outdated and out of place in the more ephemeral and fast-paced current economy. In the contemporary commercial world, most things required to run the business are borrowed. In the era of markets, people who amassed physical capital exercised control over the exchange of goods between sellers and buyers. In the era of networks, people who amass intellectual capital exercise control over the terms and conditions by which consumers secure access to critical ideas, knowledge, and skills.

Possession makes no sense

Perhaps, a few years from now even the very idea of property may become anachronistic. Ownership is inadequate to adjust to the lightning pace of the nanosecond culture. In a world of customised production, continuous innovation, constant upgrades, and ever narrowing product life-cycles, everything becomes obsolete and outdated almost as soon as it enters the market. Possession and property in an economy characterised by perpetual change make no sense. The time has come for business to realise and reconcile to the declining role of property.

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