- I wish they would say what they propose to do about these presumably fundamental problems....
...When you invoke an unmixed catalog of horrors lurking behind the flip of a light switch, without a word of appreciations of the virtues of artificial illumination, you gotta wonder if you're heading toward Kirkpatrick Sale-land, where it's all been downhill since the invention of agriculture. Doug
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Okay, you asked for it.
Since it sounds like the US and some ad hoc allies (Australia, Canada) have managed to sabotage the Johannesburg UN summit on poverty and the environment, which was my excuse for not answering this question, let's go back to the article that started this thread. Ulhas Joglekar posted it:
Is the `New Economy' a fad, by Lawrence Summers and Bradfort DeLong, hereinafter known as Brad and Larry. The lead in reads:
``Business Standard, May, May 29, 2002. Is the 'New Economy' a fad? Goods are valued not for physical properties but weightless ideas, say Lawrence H Summers and J Bradford DeLong.
Not long ago the "new economy" was portrayed by many as having repealed the laws of economic gravity: stock prices, productivity, and employment were to go ever up, never to go down.
NASDAQ's crash and the worldwide slowdown which followed caused many to think that the much vaunted "IT revolution" was merely another speculative bubble.
So, the question we now face is this: how important will the technological revolutions in data processing and communications be in the long run? Can we really speak of a "new economy"?
No one has a crystal ball and erroneous predictions are possible. Nevertheless, we believe that the long-run economic impact of the "new economy" is likely to be huge. Some technological innovations change our lives but have no lasting effect on the economy as a whole. The revolution in illumination is a good example. In 1800, an American household spent 4 per cent of its income on candles, lamps, oil, and matches.
It now spends less than 1 per cent on lighting and consumes more than a hundred times as much artificial illumination. The real price of light fell by a thousand fold over the past two centuries, yet we do not speak of the "illumination revolution," or of a "new economy" based on streetlights and fluorescent office and store lights.
For a technological change to revolutionise an entire economy, as steam power and electricity did, its effect must not be local, but must radiate across much of the economy, so that the demand for new products grows more rapidly than the decline in their prices.
Only then can we speak of a "new economy" because only then does the share of the new sector's products in total expenditure grow, with high productivity growth in the new sector translated into productivity growth for the entire economy
Armed with this observation, let's look at the impact of the changes in data processing and communications....''
Sounds bland enough. What's the problem?
Okay, first of all I don't consider the New Economy to be restricted to data processing and communications. These are merely one piece. There are a whole swath of intellectual property and tradmark office patents that go along with DP and Telecomm, along with a long list of laws, regulations, and public policies that have enable this and other pieces of the New Economy. I would generally characterize them all as make-believe `products' and pretend `services'. They are mostly a re-regulated or so-called de-regulated sectors that were once considered a public good, or part of the public commons. Their overt materiale, their facilitating material infrastructure is primarily composed of what is loosely called `high tech' and `bio-tech', while their non-material infrastructure is primarily software: laws, regulations, rules, and polices. The balance is light on hardware and very heavy on software.
The so-called Reagan-Thatcher revolution started this process of re-defining public good as golden opportunities for private capital development, essentially handing over whole sectors of the political economy to the best political friend or lowest common denominator (ideologically imbibing graduates from the `best' economics and business schools) or whoever was first in the influence peddling line.
In the past there were several rationals for making much of these public goods either regulated monopolies or direct government agency controlled infrastructure. Part of the reasoning was these needed to be shared goods, to encourage development in the direction of a better standard of living for all. In addition the costs of developing these systems was too high, too risky, too long term, and had too little profit to be sustained by private capital at their inception. The public utility systems were a prime example of this.
Since these were developed as a total system, they had few if any meaningful distinctions between natural resources consumed, carrying infrastructure, and service delivery. Utilities like water, electricity, gas, and mass communication systems are not isolate-able objects. So when it came time to privatize these systems, they had to be artificially partitioned in order to make them a series interdependent business who sold these virtual `products' and `services'. In other words these products and services had to be invented. This was accomplished by legislation, dividing up a unified system into pieces and selling them off. Each piece was supposed to be able to claim they added `value' and therefore could charge for it. Their predominately artificial nature gave the impression that they were lighter than air, which of course they were---since they didn't exist prior to some law or policy that give them some isolated `objective' status.
The net result was a whole system of what I consider bogus, fake, virtual, and primarily artificial `products' and `services'. Even the implementing physical infrastructure has been turned into an artifice, by partitioning it into unsustainable and non-functional parts that can not exist independently of the rest of the system. What is the electrical grid system of wires for, if there is no electric generator on one end and no outlets on the other? In any event, the data processing and communication systems that Brad and Larry are addressing are part of what should be considered public utilities and were at some point in the past. These together with the entire range of similarly artificially defined `products' and `services' that have been created by the various intellectual property laws, policies and regulations compose what I consider the `New Economy'.
These were not `opened' to the `free market'. They were artificially divided up and sold by legislation, that is they were re-regulated and turned over to private, unaccountable middleman firms. It should be no surprise these systems are filled with white collar criminals, because they are essential criminal scams to begin with.
The question is first, why take this turn, and then why was this economically successful, at least in part, or for awhile?
My explanation for why, is that old capital was in a crisis prior to this re-regulation scheme of public goods (circa 70s). Old lumpy-object laden capitalism had screwed just about all the profit it could out its slowly crumbling industrial systems. In addition capital was facing a giant re-development of these industries under more heavily regulated labor and environmental standards---regulations that would only reduce profits even more. So these re-regulated public goods provided a golden opportunity to shift investment into these systems and see how long these could be screwed and milked. To meet older industrial needs, the answer (facilitated and enabled by so-called trade legislation, regulations, and policies) was predominately shipped off shore in search of cheapest labor markets available, while crushing local labor and environmental standards in the US, and developing a whole system of alternatives to high cost of first world labor markets. This brutal and life destroying process was called improving `efficiency' and `productivity'. Of course it improved the efficiency of squeezing the living shit of society for profit, and was quite productive at it too.
As far as I am concerned, the combination has been devastating to the general standard of living and quality of life and the general environment for the vast majority. However, the enabling laws and policies did save capitalism, by essentially exporting its costs and then re-importing the finished products or components, dropping or at least maintaining a crude consumer price parity with falling wages (or their value by some measure or other).
The result on the political economy has been a sort of bi-polar disease with a few very rich getting richer (those privileged by the New Economy) and a sea of slowly sinking majority, getting poorer and poorer---as well as sicker and sicker. However, trickle-down does work just a little or just enough to mask or brunt the full impact. Powerful ideological systems--the primary content of mass communications---have kept pace by the totality of its brainwashing dribble about free markets, everybody wins, all new and different, progress, etc, etc. These ideological systems manage to cover a lot of the bloody and brutal mess. The explosion of the prison-industrial complex disappeared the rest.
Now that twenty years of New Economy or the save Capitalism at any cost system, should start to experience the same problems that the old rust bucket economy did thirty years ago. The government and business answer will undoubtedly be to intensify the same disastrous neoliberal schemes by pushing off-shore industrial development even further into the reaches of the marginal labor markets of impoverished regions of the world, in an attempt to continually push labor costs down. And alternatively import cheap labor to fill domestic slots, including the professions which are also being squeezed (programmers, technicians, doctors, nurses, etc). Meanwhile the squeeze on public commons like utilities, communication, and information systems will only get tighter and also be pushed into the second tiered regions that already have some public infrastructure to exploit, rape, pillage and consume. Hence the US trashing of most international conference to address these problems.
The entire ensemble of these systems most of which have little or not very noticeable foreign looking infrastructure (hardware), together with the financial and legal systems (software) that enable these system is the US Empire. Well, adding the entire military-industrial complex to enforce it, of course.
But simply because there are few fortress like outposts manned with soldiers, and few imperial troops stationed on every frontier, and few vast viceroy like palaces and ceremonies, the whole thing tends to exist more in the mind, than in the stones, bullets, troops billeted in every hamlet, and endless native massacres---although these still exist at reduced scales or at least better hidden. So it appears to be a virtual Empire whose power primarily exists as influence peddling, both behind the scenes, and publicly proclaimed (in the name of progress or freedom or some such) manipulations of foreign governments and bureaucracies, and of course nasty so-called trade regulations, and manipulations of investment capital. But the virtual is getting more real everyday, hence the military industrial build-up. So the fortress days are coming back, vastly aided and excused by the WTC and Pentagon attacks.
Hence, my comment, the New Economy is not a fad, but a disease and it needs to be exterminated. By that I mean, this system was created by government and it can be dismantled and re-built in another way by government. The idea that this New Economy was all a free market creation is just bullshit, since it took government re-regulation and a lot of central planning to create it, enable its development, and foster its expansion into the rest of the world. It will take a lot of central planning and government re-regulation to dismantle it---as well as a lot of international cooperation between the oceans of people effected by it.
So, dismantling the NE and its Empire is not going to happen any time soon, since it would probably take a very nasty, possibly bloody revolution to move the assholes of Capital out of power. It sure won't happen by simply electing Democrats. We now know that from watching the Clinton administration's first two years in office, when they had some of the political means available. What they did was sophisticate and `improve' the entire system instead. Thanks a lot boyz. On the other hand, it still makes more sense to me to elect Democrats, because the battles that have to be fought at least afford better leverage against these quasi-liberals than that same leverage applied to reactionary thugs. And that's the choice these days: slimy neoliberal capitalists or outright thug capitalists. Take your choice.
So what is to be done? At the moment the only thing I can think of is at least defining the situation and conditions, criticizing them, and foment as much noise as possible about them, while resisting them as much as possible in all the small ways available---even if these seem to accomplish nothing in a larger context. In terms of resistance, it makes more sense to join international movements and build that ocean of cooperation as well as domestic movements---but keep both perspectives in mind. What Enron did to California, they also did to several states in India---so the fundamental nature of the foe has been internationalized and so should its resistance. This is why falling into a bogus nationalism or patriotism is a mistake, especially after the WTC and Pentagon attacks. This ridiculous surge of patriotism is just as bogus as the New Economy and its Empire, the `homeland' it is attempting to defend.
So there's the answer.
Chuck Grimes