The silent offensive

While ICANN has become the focus of "netizens", it has also diverted attention away from other efforts pursued by both government and the computer industry

As the battle for the privatization of the Internet continues, corporate interests have been silently laying the foundations for their offensive strategy. Thus, while people focus on the ignominious activities of ICANN, a second front has been out-flanking those wishing to shield the new media from the abuses of commercialization and privatization.

An example of this second front was the High Tech Summit organized by the Joint Economic Committee in the US over a month ago. A series of high-tech executives went before Senators and Representatives to sell them the benefits of emerging computer technologies, to plead for particular legislative preferences, and to encourage the government to maintain its "light hand" in intervening in the high-tech sector.

According to Focus on the Corporation, the computer industry in the US has begun to escalate its political contributions, which totaled about $9 million in the 1997-1998 federal election cycle. What is more, they have forged a powerful lobby force called TechNet. Headed by former Netscape General Counsel Roberta Katz and made up of various computer executives, TechNet specializes in bringing politicians to Silicon Valley and wowing them with their latest innovations.

Both the computer industry and governments have come to realise the powerful symbiosis that presently exists between technology and politics. As Mokhiber and Weissman explain, the computer industry has "graduated from the adolescent view that they could ignore government to the more ‘mature’ understanding that they should take advantage of the fact that money and economic power translates easily into political power and influence on Capitol Hill."

As for government, the computer industry has been the engine of growth for neo-liberalism’s otherwise bankrupt economic policies. Many have pointed out that the spectacular productivity gains in the US are happening mainly in the information technology (IT) sector. Conversely, productivity in other sectors of the US economy are actually declining.

As a recent Economist report laments: "It seems to be a sad case of the irresistible story meeting the immovable statistic … The figures for manufacturing productivity say that little if anything has happened except in the 1.2% of the economy that makes computers. Every other sort of evidence says that the world has been turned upside down."

While ICANN has become the focus of "netizens", it has also diverted attention away from other efforts pursued by both government and the computer industry — collaborative efforts which run counter to the public interest. An example is the Y2K Immunity Bill recently passed by the US Congress, a precedent that surely will be taken up by governments elsewhere. This piece of legislation gives special protection to companies from lawsuits related to the inability of a computer system to process year 2000 dates properly.

The Y2K problem not only epitomizes the narrow-mindedness of industry, it also attests to their reluctance and inability to face up to enigmatic challenges. Companies had advanced warning of the problem but failed to act promptly, only at the last minute deciding to do anything about it.

Like Y2K, neo-liberalist governments are facing a similar time-bomb in the form of what has been often termed "the Internet Bubble". As with IT executives, political leaders have preferred to procrastinate when dealing with an enigmatic situation. Yet unlike the computer industry — which relies on legislation for protection — governments are relying on the evangelical promises offered by e-commerce enthusiasts.

Subsequently, this has led to an ever closer bond between government and the computer industry: in order for IT executives to deliver on the promises of e-commerce, they are demanding a freer hand as well as the necessary political support and legislative protection. In turn, by fulfilling these needs and requests, neo-liberalist politicians can "demonstrate" the correctness of their policies by pointing to seemingly positive economic indicators provided by the high-tech sector.

As a result of this, the computer industry is taking over an ever larger portion of the economy, especially as more and more commerce heads to the Internet. Consequently, this raises some very fundamental questions as to regulations to ensure privacy, antitrust and pro-competition rules to prevent monopolistic behavior, and liability rules so as to protect consumers — both online and offline.

Equally as important is the future of a society built on ether. While the symbiosis of government and technology provide results that seem to transcend present economic theories and expectations, there is nevertheless a latent fear of the Internet Bubble bursting. Economics is not static; when productivity in the IT sector is no longer able to counter the declining productivity of other sectors, the "Emperor’s Clothes" of neo-liberalism will be in full view.

Still, there are many caught up in the hype who attempt to deflect such criticism. "People, not technology, will drive success in the digital age. In ‘The Caring Economy’ Gerry McGovern presents a radical vision of Internet business with a surprisingly human face," writes Amazon.co.uk in its ‘What We’re Reading’ section. It’s closing line "are you ready to connect with the new digital-age economy??" puts the onus of success not on the present eco-political framework of neo-liberalism, but on the individual.

Similarly, "net-entrepreneurs" attempt to explain away the Internet Bubble. In the latest ie of Business 2.0, Esther Dyson argues that the problem is there’s too much money chasing too few really good ideas. What is more, many businesses are not healthy, "stand-alone" units but more like body parts waiting to be grafted onto industry giants like Microsoft and AOL.

The problem with Dyson’s analysis is it avoids a nagging dilemma that proponents of the "knowledge" economy have yet to overcome. This dilemma has to do with the very framework of a knowledge economy — one which runs counter to all forms of capitalism. Knowledge (or ideas) are most efficient when there are no restrictions on its use (i.e., it’s free); on the other hand, producing knowledge can be expensive, sometimes very expensive. In addition to this, knowledge is a cumulative commodity: existing knowledge is the most important element in producing new knowledge. Limiting its use, therefore, by putting a price on it and/or delimiting its use through the vehicles of patents and user licenses, stifles innovation (that is, the application of numerous combinations of different kinds of knowledge). Hence, not only is knowledge most efficient when it’s free, but the fast and full dissemination of knowledge indubitably raises its economic value.

Unfortunately, this dilemma is totally ignored by the likes of Dyson. Instead, the "good ideas" usually referred to is merely new ways to sell books, stocks, news, travel, and the like. Little do they realize that such an electronic economy already has a precursor in the form of the Minitel. As one observer on the Online Europe list noted, although the Minitel has nothing to do with the Internet and is a simple terminal with no multimedia possibilities, by focusing on the content and the services offered and not the infrastructure the similarities are apparent:

"Nowadays, one can say that the Minitel has gone through a proper business cycle, in the beginning attracting many entrepreneurs with new ideas, and over time filtering out the services that work. And what works on the Minitel? Sex, stock quotes, news, buying tickets, e-commerce. Like the Internet today … Maybe we are out of good ideas. And once the investors will notice it (I think that this moment is near), it will let some of the air out of the bubble."

For both governments and IT companies alike, however, letting any air out of the bubble would prove disastrous to their interests. For this reason, every attempt is being made to keep the dream alive — no matter how unrealistic — much to the detriment of those who will have to live through the nightmare.

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