[governance] FW: [csisac-members] MEASURING the Internet Economy

[Milton L Mueller]

Here's my original reply to Michael G. which went to the CSISAC list.

 -----Original Message-----
 From: Milton L Mueller
 Sent: Tuesday, August 30, 2011 10:36 PM
 To: 'michael gurstein'; csisac-members at csisac.org
 Subject: RE: [csisac-members] MEASURING the Internet Economy
 
 Michael
 I appreciate your enthusiasm and look forward to participating in the
 meeting with you.
 As a social scientist I do have trouble with some of your assertions. I
 have no problem when you point to the inadequacy of GDP measurements or
 the System of National Accounts. What bothers me is that you seem to
 have already hard-wired into your mind what you want to find, and you
 are just casting about for some method or definition of "measurement"
 that will produce the results you want. Here's an example:
 
> > The value of such an argument from a civil society perspective I
> > think, is that it links overall economic activity (GDP) with the
> > Internet, and links the Internet with the production of social capital
> > which in turn becomes something of a backdoor way of arguing that
> > investment in ICT should be as much focused on education, health, and
> > social support as it is on bits and bytes--hardware and
> > software--something I'm assuming we all agree with but also something
> > which is not taken as a necessary given by those folks managing
> current economic policies.
> 
 I am eager to see challenging new ideas about how to measure or what to
 measure, but I don't see any here. Indeed, I don't see the above as an
 argument about measurement at all. What I do see is a normative policy
 argument that "investment in ICT should be as much focused on education,
 health, and social support as it is on bits and bytes--hardware and
 software." (Oddly, the policy conclusion is not all that controversial.
 Western democracies have invested vast sums in education and research,
 and everyone knows it's feeding into the Internet economy in important
 ways and I don't know of anyone who believes that it's all about
 hardware and software exclusively - although those things do get
 prioritized, I admit.)
 
 To my mind, the whole point of good measurement techniques is that we
 don't know in advance the results they will produce; they tell us
 something new - and something real - which may or may not conform to
 what we want to find. Indeed, any system of measurement that is
 deliberately designed to confirm our pre-existing political views is a
 disgusting form of self-delusion and propaganda. So the real trick is to
 figure out new ways of "how" to measure new things that are unmeasured
 that actually work.
 
 Think of Galileo peering into the telescope he invented for the first
 time, and looking at the moon and other planets, which helped lead to
 the rejection of the geo-centric concept of the universe. He did that
 because he was after the truth, not because he wanted to overthrow
 Christian cosmology. He may have ended up doing that, but that was a
 secondary consequence of honest inquiry.
 
 Many economists are a more sophisticated about these issues than you
 give them credit for. Are you familiar with the earlier debate on some
 of the measurement issues of the information economy? The first
 economist to really pursue this was Fritz Machlup, an Austrian economist
 who became fascinated with measuring what he called "the knowledge
 economy." This was 1962 or thereabouts. How did he get to that point? He
 was trying to figure out whether society was investing too much or too
 little on education. You might take a look at that. Here is a Google
 books link:
 http://books.google.com/books?id=kp6vswpmpjoC&printsec=frontcover&dq=Mac
 hlup+Production+and+distribution+of+knowledge&hl=en&ei=r5ZdTvHaEKbK0AG8z
 MXQAg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCoQ6AEwAA#v=onepage&q
 &f=false
 
 Your own comments however, point to one of the seemingly inherent
 contradictions of economic measurement. You want to argue for increased
 investment in health, education, social support, and by "investments" I
 believe you mean real money, quantifiable sums of cash. Am I right? You
 are not saying that we should all think favorable thoughts or aim
 harmonious, warm vibes at our schools.. You want us to put tangible
 resources into them. But at the same time you seem to be arguing that
 monetary measures are worthless as indicators of value. Or maybe I am
 not getting your position.
 
 This is a well-recognized problem in economics, actually. Everyone knows
 that there are all kinds of things that are valuable and important but
 are outside of the price system and thus difficult or impossible to
 measure. Until and unless these activities/things somehow engage in or
 touch upon the exchange economy, we simply don't know how to inter-
 subjectively calculate or measure their value. This is not some
 capitalist plot, it's just a basic fact about the human condition. You
 can't objectively assess the value of something except by looking at
 what people are willing to give up to get it. And when the unit of
 exchange is non-monetary (horses, cowrie shells, flowers, land, songs)
 it's really hard to make sense of it at the scale of a national or
 international economy. So money, as homogenous and fungible units of
 value shared by millions of people in an integrated transnational
 economy, becomes the basis for such measurements.
 
 If you can think of some simple way around this problem, more power to
 you. You'll get the Nobel prize. But please don't trivialize the
 difficulty of this problem, or attribute it to a conspiracy of evil
 neoliberals. (In fact, Chinese and Soviet Marxists are famous for
 putting the most emphasis on the production of physical goods and
 touting such statistics as proof of the superiority of socialism).
 
 --MM
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