Wednesday, July 24, 2002
Feeling unusually dismal, I felt moved to dash off the following to Margo Kingston's web diary (see suggested sites column - I haven't mastered this hyperlink stuff yet):

Christopher Selth joins Lyotard and a thousand other 'postmodernists' in
declaring 'the metanarrative' dead.

Proclaims he: "There is no longer a thesis as to what is happening in
the world, as to what is going on, that the everyman can embrace."

Well, I guess I'm not everyman, but I've always liked this neat
description of 'what is happening in the world':

"Constant revolutionizing of production, uninterrupted disturbance of
all social
conditions, everlasting uncertainty and agitation distinguish the
bourgeois epoch from all earlier ones. All fixed, fast frozen
relations, with their train of ancient and venerable prejudices and
opinions, are swept away, all new-formed ones become antiquated before
they can ossify. All that is solid melts into air, all that is holy is profaned."

The young blokes who wrote this (they were still in their twenties) did
in fact have a thesis as to what is happening in the world. It allowed
them to elaborate upon the tensions that produce the 'reactionary, self
serving populism' Selth bewails.

"National one-sidedness and narrow-mindedness become more and more
impossible ... The bourgeoisie, by the rapid improvement of all
instruments of production, by the immensely facilitated means of
communication, draws all, even the most barbarian, nations into
civilization. The cheap prices of commodities are the heavy artillery
with which it forces the barbarians' intensely obstinate hatred of
foreigners to capitulate. It compels all nations, on pain of
extinction, to adopt the bourgeois mode of production; it compels them
to introduce what it calls civilization into their midst, i.e., to
become bourgeois themselves. In one word, it creates a world after its
own image. The bourgeoisie has subjected the country to the rule of the
towns. It has created enormous cities, has greatly increased the urban
population as compared with the rural ... It has agglomerated
population, centralized the means of production, and has concentrated
property in a few hands. The necessary consequence of this was
political centralization."

It also allowed them to predict economic crises; not as shocks from
outside the system, but as immanent in the very system itself -
productive of falling profits, excess capacity, reluctant investors,
falling employment, concerted forays on the part of commerce into
formerly uncommoditised areas of our lives or areas of the planet, and
irresistible pressures to take over or destroy competitors:

" ... commercial crises that, by their periodical return, put the
existence of the entire bourgeois society on trial, each time more
threateningly. In these crises, a great part not only of the existing
products, but also of the previously created productive forces, are
periodically destroyed. In these crises, there breaks out
an epidemic that, in all earlier epochs, would have seemed an absurdity
- the epidemic of over-production."

All in all, the makings of a pretty compelling thesis, I'd've thought.
And all written 155 years ago! 'Globalisation' ain't the whole story.
It's part of something much bigger (a whole mode of social organisation)
and much older (entrenched as and by western common-sense for centuries)
than we're generally invited to assume.

Selth observes that, "the ideological landscape is desolate". But
that's precisely what our young fellas would've expected! Because
capital can not survive in stasis, it MUST colonise this landscape.

To survive, capital must colonise more of our lives - it must
commoditise the channels of our communication (hence the privatisation
of Telecom and the pressure on the ABC) and ever more of what is
actually said (hence the new intellectual property regime, the
redefinition of cultural production as a trade issue, and the hitherto
halting attempts to turn an anarchic internet into a commercial
entertainment source and marketing tool). Democratic politics depends
on citizens in communication. To whatever extent our communication is
commoditised, our citizenship is compromised, and Karl Polanyi's fear,
that we end up as a market-embedded society/polity rather than with a
socially/politically embedded market, that much more pertinent.

To survive, capital must colonise more of the world's surface - it must
transcend those constituents of the nation-state that now constitute
fetters to it (it can not transcend the nation-state altogether whilst
it depends on the institution for perpetuating property rights, and for
providing those infrastructural, human and hegemonic elements it can not
directly provide itself). Yet the institutions through which we may
formally and constitutionally express our citizenship, through which we
may discuss and contend (ie the actual "ideological landscape" of which
Selth speaks), remain confined to that nation-state!

So whatever the ideology of the webdiarist, I submit s/he'd be committed
to protecting political fora (ie both where we get our information AND
where we give voice) from market rule and s/he'd favour either or both

(a) an internationalist response, by way of obliging our nation-states
to combine to charge capital for the services nation-states afford
capital, thus ensuring actual people, democracy and environment an
agency and priority pure market relations can not ensure; or/and

(b) a transnationalist response, by way of constructing global
institutions, with genuine clout, that recognise not everything is
purely a trade issue. If we accept that the WTO can take care of
everything, we're admitting democracy is dead and that all that is human
can, indeed should, be made objects of commerce.

Says Selth: "extremist responses are now described as nihilist".
Perhaps we have to be as extreme as the situation in which we find
ourselves. To be any less so - to deny that the crises before us are
profound and urgent - seems the nihilistic option to me now. After all,
one of the nation-state's responses to giving up so much of its capacity
to dampen dissent and stabilise society (social safety nets, public
works, public services, guaranteed pensions and such), is to assume a
wider range of surveillance and coercion powers than once it needed.
Before 2000, it was illegal for the Australian military to fire on
Australian citizens. No more. Before 2001 it was illegal to arrest and
detain Australian citizens without charge, legal counsel and time limit.
That seems next on the agenda. So unchecked capitalism threatens
democracy through market and state alike. Stuff sure looks like it's
getting out of hand fast ...

Our young fellas suggested 155 years ago that, once the recurring crises
to which our social system is prey had become too harsh, too widespread
and too obviously unnecessary, there'd be a social revolution. But
then, young blokes are given to talking like that, I suppose. Could be
that one of them was a bit closer to the mark a couple of decades later,
when he wrote, "the advance of capitalist production develops a working
class which by education, tradition, habit, looks upon the conditions of
that mode of production as self-evident laws of nature. The
organisation of the capitalist process of production, once fully
developed, breaks down all resistance ... The dull compulsion of
economic relations completes the subjection of the labourers to the
capitalists" ...

Selth concludes, "We are searching for a new road map to guide us
through." I reckon no such map has ever, nor will ever, exist. As Tom
Paine argued in his *Rights Of Man*, democracy in the moment is
ever less tyrannical than a programme in advance. Even our ambitious
young fellas were obliged to admit they were not in the business of
writing 'cookbooks for the kitchens of the future'. All they could do
was contribute their understanding of the dynamics that marked their
present, and celebrate the impending demise of 'ancient and venerable
prejudices' by inviting us to unite across nations to ensure that
democracy, not unchecked capital, would mark our future.

Opportunists of many a stripe have contrived to confound and taint that
notion ever since. And perhaps capitalism can do what Stalinism could
not. That so many of us are more worried about, indeed angry at, 700
forsaken scapegoats in cages than we are worried about - and angry at -
the processes that really threaten our democratic relevance and material
security, suggests to me that our subjection to
communication-distorting, information-controlling, democracy-dissolving,
panic-mongering, humanity-destroying interests is dangerously near

Sorry if I over-metanarrated ...

Monday, July 22, 2002
Reckon I might chance a few thoughts on one of the complexities of our age over the next month or two. Pump out some random thoughts and quotes on information economics, telecommunications and the idea of human communication itself, and then see if any of it glues into anything down the track. Comments much appreciated throughout ...

In 1972, Kenneth Arrow framed the economics of information ‘as an effort to plug a hole’ in the theory of general equilibrium ... a major advance on the view that information could be treated as just one more commodity.'
(L 83)

For Arrow, the theory of general equilibrium, the theory upon which all mathematical economics has rested since Leon Walras, had holes in it. As Kuhn's work on scientific revolutions would have it, the inclination at such times is to plug the holes. Only if it transpires that there is more hole than there is substance, that significant chunks of reality are not caught and held by the dominant paradigm, might that paradigm give way.

'General equilibrium' theorists concern themselves with the microeconomic level - with firms and consumers - and how these act, in unconscious concert, to allocate the available resources such that no consumer could be better off without making another worse off, where firms could produce nothing more without having to produce less of something else. This happy state of affairs, where production and consumption are in balance, is considered the natural resting place of the free market. In other words, the price mechanism gets us to a state of general equilibrium.

So Arrow's explanation for the empirical shortcomings of his discipline (the fact that markets were not finding this equilibrated state) was that the distribution of 'information' was problematic, and that as firms and consumers needed information if they were to act rationally, it was high time to incorporate this concept into economic theory. In this spirit information economist Don Lamberton (1995) avers, " we need research towards a taxonomy of information based on economically significant characteristics, and clarification of the concept of capital as applied to both information and organisation."

'Information' as a whole is generally defined as that which reduces uncertainty (Shannon and Weaver 1949), an increment to knowledge (Machlup 1980: 8), and a 'closing of entropy' (Klapp 1978: 10). In itself, this is dangerously simplistic, as there is such a thing as useless, or even wrong, information. As for that of which we can not have information - an inevitability difficult for equilibrium theorists to incorporate into their model of the world - we have the notion of 'rational expectations'. As Shackle would have it: "(E)xpectational time is an aspect of a decision-maker's effort to choose a course of action in the face of uncertainty about the outcome which would flow from this course or that" (Shackle 1968:67). The beauty of 'rational expectations' is that it affords the certainty required to make the equilibrium model tick, even where 'information' is lacking (Thompson 1997). Of course, for it to serve this purpose, 'rational expectations' would need to be perfect expectations.

The idea of perfect expectations offends common sense, and ignores the arguments of those compelling, yet long-unfashionable, folk, the evolutionary economists. Summing up the reservations of such luminaries as Karl Marx and Joseph Schumpeter, Kenneth Boulding (1981) pointed out that, " Evolutionary systems, however, by their very nature have unstable parameters. They are disequilibrium systems and in such systems our power of prediction, though not zero, is very limited because of the unpredictability of the parameters themselves. If, of course, it were possible to predict the change in the parameters, then there would be other parameters which were unchanged, but the search for ultimately stable parameters in evolutionary systems is futile, for they probably do not exist." Boulding comes close here to suggesting Lamberton's proposed quest for an exhaustive 'taxonomy of information' is doomed to disappointment.

That said, if the word 'capital' is to mean anything, 'information', or at least some of it, must be considered to have some of the decisive characteristics of capital. It is, after all, at least one of the things we must use when we produce, and it is ever more actually what is produced. But information is unlike other categories of capital, too, and in profound ways. For instance, when one purchases a tonne of steel, one may rightly expect the delivery of steel in the amount of one tonne. But the purchaser of information cannot, by definition, know what she is buying. Furthermore, how may we expect that ultimate equilibrated state where information is one of the commodities in circulation? Information is never really consumed (as, say, steel is when it is committed to the production of cars). If I sell it to you, I still have it after I've sold it. Each sale adds to 'information's' tendency to spread and transform - its consequences ever unmeasurable, because never final (Babe 1995). And there are exceptional expenses associated with commoditising information. Its price is very much a function of how reliably it can be withheld from those who do not pay for it. After all, we tend not to pay for things we do not have to pay for. Information has the decisive characteristics of a 'public good', only exacerbated by the logical fact that the greater its spread, the quicker the development of more information. In this light, to withhold information (necessary to vest it with market value) is to limit its utility to society. Yet we invest much money and effort into 'scarcifying' information (intellectual property regimes, encryption etc), and devote much of our potential to produce information on the production of information which helps withhold information! So Lamberton's reservations about treating 'information' as just another commodity seem well-placed.

Information, when sold at a fixed price (which it generally is), also has a capacity to favour and promote concentrations of economic power into few large entities. Consider the racetrack. You and your hundred dollars are having a drink with Rupert Murdoch and his million dollars. A man interrupts your conversation and convinces you both that he knows the winner of the next race, that he will guarantee the veracity of the information, that the price is $50, and that the winner's current odds are 10/1. You both buy that information, and the horse duly wins at 10/1. You've won $500 and your drinking partner has won $9 999 950! Information benefits larger firms more than it does smaller firms. Furthermore, the larger your firm, the more you depend on information. A suburban newsagent may know all her employees, all her customers, all her suppliers, and have a good running impression of her accounts. The manager of a transnational firm enjoys none of this knowledge, and must rely on information channels and networks to manage. Obviously, the larger firm benefits disproportionately if the cost of transmitting information is decreased. Even more so if that firm gains control over information networks. Thus do we come to the economics - and inevitably, the politics - of telecommunications.
political economic and cultural observations in the register of dismal dilettantism

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