GLOBALIZATION, NEO-LIBERALISM AND THE INTERNET

Strong claims were made for the apparently obvious association of information processing technologies with new economic structures. To understand more about this relationship we have to go back to an economic history of increased flexibility, mobility of finance, and free markets described by theories of globalisation and experienced at precisely the time the Internet was going through a huge expansion.

During the 1970s Western capitalism experienced a crisis. Increases in unemployment, the closure of production plants and the slashing of public expenditure and welfare budgets all ensued. It is with this crisis that accounts of the post-industrial economy begin. Variations of Keynesian economic models had been adopted within social democratic frameworks in the West during the postwar years as a way of managing and stabilising the capitalist industrial economies. Keynesianism, which had involved the government increasing public investment at times of low private investment, had been intended to smooth over the booms and slumps associated with the great depression of the 1930s and earlier periods of economic difficulty.

Moreover, during the 1970s low economic growth rates combined with high inflation in ways that began to demonstrate the limits of the Keynesian economic model. In particular growth prompted by government spending came to be perceived as a significant cause of inflation, which itself then undermined the value of savings and purchasing power. This underlying problem was exacerbated and elevated to crisis by sudden sharp increases in the price of oil. The policy involved the state divesting itself of publicly owned enterprises such as gas, electricity and telecommunications. This was allied with a reduction in public sector investment and tax cuts that primarily benefited the wealthy.

In addition, there was a considerable reduction in the power of organised labour achieved partly by the imposition of legal fetters on the right to strike. Overall, it involved a further intensification of the uneven distribution of wealth across society. Justified by pointing to a ‘trickle down’ effect, it was argued that the concentration of wealth in fewer hands would overcome poverty as it was reinvested in new firms and jobs. Because of its impact on public services it was characterised in a term first used by the American economist J. K. Galbraith as ‘private wealth, public squalor’. It represented a repudiation of social responsibility for every member of society. The response of owners of investment capital to the limits of growth that this crisis seemed to represent was to devise three new strategies.

• First was to seek to reduce the costs of production and to cultivate new markets.
• This was followed by the generation of a demand for the release of resources controlled by the state (e.g. energy, telecommunications, transport) into the marketplace.
• The third strategy was to produce an intensified search for cheaper sites of production as well as new markets across national borders. These developments were represented politically by the rise of a newly militant right-wing politics, based on economic monetarism, represented most clearly in the West by the Reagan–Thatcher axis of the 1980s.

The one strategy led to large-scale programmes of deregulation as part of what we might now call the ideology of neo-liberalism; that is to say, the belief that the commodity market is the best way of distributing resources, and to that end as many goods and services must be available for trading, and at as many sites and in as many markets as possible. Hence markets that had been ‘regulated’, managed or protected by state legislation were thrown open to competition, leading to large-scale transfers of capital from state to private sectors and to increases in profitability. Equally, production processes such as steel or coal that had been ‘regulated’ (that is protected through subsidy) were thrown open to an allegedly free market.

The another strategy led to what was labelled as globalisation – the rate of annual increase in investment from abroad in individual economies soared from 4 percent from 1981–1985 to 24 percent in the period 1986–1990 (Castells 1996). One of the outcomes of this process it was claimed was an economy largely freed from the constraints of national borders and local time. It was argued that this was something different, ‘an economy with the capacity to work as a unit in real time on a planetary scale’ (Castells 1996). A flavour of the period can be deduced from the claims that distinctively different, but not wholly new, forms of economic production were established in the last quarter of the twentieth century.

These have been variously described as ‘late capitalism’ (Jameson 1991), ‘post-Fordism’ (Coriat 1990), or earlier formulations such as ‘post-industrialism’ (Touraine 1969; Bell 1976), and by Castells as ‘the network society’. Castells summarised the shift:
In the industrial mode of development, the main source of productivity lies in the introduction of new energy sources, and the ability to decentralise the use of energy throughout the production and circulation process. In the new, informational mode of development the source of productivity lies in the technology of knowledge generation, information processing, and symbol communication. (Castells 1996: 17)

People are on the verge of a revolution that is just as profound as the change in the economy that came with the industrial revolution. Soon electronic networks will allow people to transcend the barriers of time and distance and take advantage of global markets and business opportunities not even imaginable today, opening up a new world of economic possibility and progress, (Vice President Albert Gore, Jr., in Clinton and Gore, 1997).

Generally; our world is changing, and communications are central to this change. Digital media have revolutionised the information society. Multi-channel television will soon be available to all. More and more people can gain access to the Internet, through personal computers, televisions, mobile phones, and now even games consoles. The choice of services available is greater than ever before. High-speed telephone lines give households access to a whole new range of communications services and experiences. Using their TV sets people are able to email, shop from home, and devise their own personal viewing schedules. This means the communications revolution has arrived.

BY MWINYIJUMA REHEMA

BAPRM III - 42686