[governance] Dan Schiller: The Communications Revolution

Thu Dec 17 05:23:57 EST 2009

I'm not sure about all the details but an interesting brief global overview
of the political economy of ICTs 

> http://www.counterpunch.org/schiller12162009.html
> 
MBG


> The Communications Revolution 
> 
> It's a Wired World 
> 
> By DAN SCHILLER 
> 
> Citigroup bank employed 25,000 software developers and spent an estimated
> $4.9bn on information and communication technologies  ICT --  (exclusive
> of operating expenses) in 2008  just before it had to accept a $45bn
> bailout from the US government. Before Lehman Brothers collapsed in
> September 2008, that firm ran 3,000 applications on 25,000 servers on
> several continents. So when the financial crisis erupted in an obscure
> corner of the market systems core, there were network linkages ready to
> pulse its death-ray out to what we used to call the periphery. (See the
> IMFs  April 2009 study, How Linkages Fuel the Fire: The Transmission of
> Financial Stress from Advanced to Emerging Economies.)
> 
> The role of the communications industry in the global economic crisis of
> 2008 is still largely overlooked. So also is  the way finance and
> communications are profoundly interrelated.
> 
> In response to a prior downturn in the early 1970s, elites seized upon
> information and communications as an element in what David Harvey calls a
> spatio-temporal fix. The purpose was to help capital find a means of
> reigniting profitable market growth. Massive growth in and around the
> information sector was an effect before it began to function as a cause.
> Profit-seeking investment flooded into ICTs and the idea that we were
> transitioning into a benign information society was the new common sense.
> 
> But ICT investment was not merely a function of finance. After the 1970s
> profit squeeze, capital accelerated its reorganization of the system of
> production through sustained growth of foreign direct investment: capital
> outlays to purchase factories, offices, mines and plantations outside a
> companys domestic market. This imperative again gave information and
> communications a primary role.
> 
> To restructure production, transnational corporations spent heavily on
> ICTs: networks made their cross-border supply chains function. Corporate
> information systems were repeatedly re-engineered with continual shifts in
> corporate strategy, public policy, market access and networking
> technology. From the late 1980s, ICT and software expenditures accounted
> for half of overall corporate capital investment. Prodigious sums are
> involved: in 2008, US companies and governments spent $1.75 trillion on
> technology.
> 
> As communications and information came to lead growth of capitalist
> development, technological advances wiped out entire spheres of commerce.
> Skype, which provides an internet phone service for free (and better
> quality for a fee), claimed 400 million users in 2009. In five years,
> Skype has become the worlds largest supplier of cross-border voice
> communications. With other VoIP services, Skype puts fierce competitive
> pressure on existing carriers that no longer find much profit by
> completing telephone calls. Their focus has turned to broadband and
> mobile; specialized network offerings aimed at business users also remain
> important.
> 
> Cheap network service is supporting a partial re-centralization of
> computing and software services, and these challenge the autonomously
> configured desktop and notebook computer. Mobiles threaten the growth of
> computers and television. There are roughly 4.5bn mobiles, and they are
> beginning to function as a ubiquitous and strategic third screen. In the
> nine months after Apple opened its first iPhone App Store, 25,000
> applications were published for the iPhone and iPod Touch, and there were
> 800m downloads. (That has increased substantially with Apples conquest of
> China and South Korea.)
> 
> Apple, Amazon and Google are demolishing longstanding oligopolies in
> music, book, gaming and film markets. Digitized texts and audiovisual
> commodities, and new devices (iPods and e-book readers), draw this
> inter-corporate rivalry. As CD markets collapse, the four transnational
> conglomerates whose music subsidiaries channel most global musical
> recording are being compelled to cede profits to Apple. The half-dozen
> transnational conglomerates whose film subsidiaries control global
> distribution contend with Googles YouTube.
> 
> If this seems chaotic, thats because it is. Our communications and
> information system is being thoroughly transformed. Both its quantity and
> quality contrast with prior historical patterns, characterized by small
> avant-garde projects to revolutionize painting, or the novel, or film; and
> by the market-based assimilation of individual new media, such as radio.
> Today, the system of information and communications overall is being
> reordered. Unlike the pattern set by social revolutions in individual
> countries in 1789, 1917 and 1949, patterns of cultural change are being
> worked out internationally and, so far, the leading role has been taken
> not by popular social movements but by capital. Oppositional impulses have
> only occasionally become organized at a politically meaningful level.
> 
> As the technologies of message processing and communication are
> revolutionized, wage labor and markets are driven ever farther into
> society and culture. The internet is the most important enabling mechanism
> for these enlargements of capitalist social relations. That is one reason
> why power over the internet is both jealously coveted and fiercely sought.
> 
> Role of the state
> 
> The US role remains disproportionate. Although, in an arresting
> development, the Obama administration has recently ceded some authority
> over the internet, giving other nations a measure of participation [and to
> outflank potential breakaway internets], it would be unwise to conclude
> that its power over this crucial infrastructure has been neutralized.
> Ultimate decision-making over the domain name system is exercised by a
> shadowy mix of US military and state agencies working with a
> non-governmental organization and private corporations.
> 
> With some qualifications, Cisco leads the transnational supply of
> corporate routing equipment, Google leads on search engines and online
> video, Facebook social networking and Apple totemic consumer appliances.
> Intel dominates semiconductors, Microsoft desktop operating systems.
> 
> Of the top 25 global IT services/software/internet companies in 2004-5,
> only six were not American. (See Catherine L Mann with Jacob Funk
> Kirkegaard, Accelerating the Globalisation of America: The Role for
> Information Technology, Institute for International Economics, Washington
> DC, 2006.)
> 
> The US spares no efforts to spearhead the technologies of cyber-war: more
> than half of the 800-odd active satellites orbiting the globe are from the
> US. US-based companies not only lead supply, but also demand and use: from
> Wal-Mart to General Electric, US corporations integration of
> internet-based systems and applications set a global standard.
> 
> Those efforts continue to deploy information and communications as a
> pathway to renewed US global dominance. Structural change points the other
> way: the transition to a more multi-polar political economy will continue
> to generate more effective challenges to US dominance, in general and in
> communications.
> 
> If we encompass the top 250 ICT companies, there are fewer US-based firms
> in the 2006 top 250 panel than in previous years, and more from China,
> India, Taiwan, Korea, and Singapore, Brazil, South Africa, the Russian
> Federation, Egypt and other countries. Impressive units of non-US capital
> have been built in Europe, Japan and beyond: Samsung, Nokia, Nintendo,
> Huawei, Tata, SAP, Telefonica, DoCoMo, America Movil, Vodafone, China
> Mobile. Significant transnational network assets have passed for the first
> time in history to capitalists based in countries of the South: Mexico,
> India and China.
> 
> US leaders still turn to communications in their bid to renew US global
> power, and so the influence of the industry in US policymaking grows.
> Barack Obama is called the Silicon president , and his first major
> domestic initiative, to push through Congress a big fiscal stimulus
> package, built political momentum before his election by winning support
> from executives at Google, IBM and the Information Technology Industry
> Council. This group put information in the foreground of the recovery
> program. Its members lobbied to include in the stimulus legislation money
> for broadband deployment, computerized healthcare records and an
> ICT-intensive (smart) power grid, all likely to boost their own profits,
> and all provisions of the law signed by Obama in February 2009. Dean
> Garfield, president of the Information Technology Industry Council, said
> afterwards: It is good to be heard.
> 
> The question is what will be the global growth engine? asked Dominique
> Strauss-Kahn, the head of the IMF, in September  adding that there is no
> easy answer. Do communications have more potential to rejuvenate global
> capitalism as they did a generation ago?
> 
> For all the ballyhoo about a recovery, many of the worlds largest
> financial institutions remain on government life support. The US
> government has a controlling interest in two-thirds of the US automobile
> industry, and consumption and employment are not recovering. The crisis is
> biting deeply, but unevenly.
> 
> While corporate profits are beginning to lift, automobiles, financial
> services, agricultural raw materials, metals, electronics and minerals are
> still down.
> 
> What about communications? From October to December 2008, consumer and
> business markets for ICT collapsed. But within this gigantic industry, the
> pattern of impact has been uneven. Some top companies remain surprisingly
> strong. Early in 2009, Cisco had a cash hoard of close to $20bn; Microsoft
> $19bn; Google $16bn; Intel $10bn; Dell $6bn; and Apple $26bn. This list is
> top-heavy with US-based transnationals, although the only really flush
> major telecoms operator, with net cash of more than $18bn early in 2009,
> is China Mobile. These liquid assets give maneuverability, beyond reach
> for capital based in less fortunate market segments, economic sectors and
> geographic regions. Eventually, some of the money will buy struggling
> competitors.
> 
> Information and communications regenerative investment and profit
> potentials have not been exhausted. In 2008, total US media spending
> actually increased marginally (2.3 per cent) to $882.6bn, and the media is
> projected to be the third-fastest growing economic sector in the next five
> years. All the way through the recession, international internet traffic
> continued to surge, by 55 per cent in 2008 and by a projected 74 per cent
> in 2009. Network systems and applications permit corporations to prepare
> socio-cultural practice (education, agricultural biotechnology etc) for
> intensified exploitation, and to remake other sectors, such as medicine
> and energy distribution, around a comparable profit impulse.
> 
> Dan Schiller is professor of communication at the University of Illinois
> at Urbana-Champaign, and author of How to Think About Information
> <http://www.counterpunch.org/0252031326/counterpunchmaga> , University of
> Illinois Press (Chicago, 2006)
> 
> This article appears in the December edition of the excellent monthly Le
> Monde Diplomatique, whose English language edition can be found at
> mondediplo.com. <http://www.mondediplo.com/>  This full text is featured
> here by agreement with Le Monde Diplomatique. CounterPunch features one or
> two articles from LMD every month. 
> 
>  
> 
>  
> 
> 
> Michael Gurstein, Ph.D.
> Director: Centre for Community Informatics Research, Development and
> Training (CCIRDT)
> Vancouver, CANADA
> http://www.communityinformatics.net
> 
> Cape Town, SA (in conjunction with Izandla Zethu SA) 
> http://www.izandlazethu.co.za/
> 
> Now blogging at http://gurstein.wordpress.com/
> 
> 
> 
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