It is easy enough to have a mental image of a virtual university. It is an institution which would grant degrees, would have an administration, students and faculties, but since all the transactions between administrators and students and faculty and between students and faculty would take place electronically, it would not exist in any place. It would be wherever there are individuals with access to the Internet. Indeed, if as we should, we think of the learning taking place asynchronically, that is, students and faculty, and students and students interact at their leisure (perhaps within a specified time frame), then even time loses much of relevance to the process.
No such image of a virtual capitalism is possible. This is the case because more than electronically transmittable "information" is essential for any economic system to exist. But the fact that something of what is essential to capitalism is electronically transmittable opens some possibilities.
There are a number of possible visions of these. One of
these, influenced by Alvin Toffler, the author of Future
Shock, was articulated by Speaker Newton Gingrich. He
More and more people are going to operate outside corporate structures and hierarchies in the nooks and crannies that the Information Revolution creates. While the Industrial Revolution herded people into gigantic social institutions-- big corporations, big unions, big government--the Information Revolution is breaking up these giants and leading us back to something that is--strangely enough--much like Tocqueville's 1830s America (Dawson and Foster, p. 40).
Now Gingrich is surely correct that electronically mediated "home work" does make possible significant shifts in work activities away from centralized work places and that this is occurring both among very low waged workers and well-paid telecommunicators. Still, it hardly clear that these tendencies will bring us back to something like, in the remotist way, Tocqueville's 1830s America. These homeworkers are not autarchic yeoman farmers who gather together in the Village Green to discuss matters of local civic life. Rather, they are much better understood under the heading of "flexible accumulation" (See Labor Markets and Recent Capitalism). That is, as is painfully obvious, the "information highway" is planted on top of the existing structure of a highly corporatized global capitalism. This means at the most elementary level, that home work will be encouraged only if it is cheaper than on-site work and only if such work can be readily controlled. Moreover, and obviously, if there are a host of functions essential to capitalism which can be electronically mediated, direct marketing, data gathering, even many forms of decision making, there will remain material production functions which will remain place-based.
Indeed, there is a pronounced tendency on the part of many writers who seem to think of capitalism, not in terms of production, but in terms of "circulation," that is, the whole range of tasks from assembling capital to marketing goods. Bill Gates's vision of "frictionless capitalism" is one of these.
Following the assumptions of standard economic theory (See Markets), Gates believes that the Internet gives us the capacity to have the "perfect" knowledge that is a condition for a perfectly competitive market. On the standard theory, if every buyer knew every seller's price and every seller knew what every buyer was willing to pay for what he wanted to buy, then we will be in a "new world of low-friction, low-overhead capitalism in which market information will be plentiful and transaction costs will be low. This is, of course, the idealization of consumer sovereignty (See Markets). But there are a number of problems with this picture. They can merely be summarized here.
First, buyers are not "rational" in the sense required. That is, they do not walk around with a demand schedules in their heads. Wants and urgencies change. Second, knowing the price is anything but sufficient information for prospective buyers. Buying from mail-order catalogues works, of course, but who has not been disappointed with what came in the mail. Third, in actually existing capitalism, not all sellers are in price-competitive markets and there is no reason to think that electronic communication will change this. Indeed, Gates rightly sees that the big difference will be in marketing. But even here there are serious issues. Gates sees one of them.
For him, the new technologies allow sellers to target buyers more effectively. "The information highway will be able to sort consumers according to much finer individual distinctions, and to deliver to each a new stream of advertising." But of course, the character and rationale of advertising is not changed by this. Indeed, after telling us that interactivity will allow buyers to purchase "custom made" products, e.g., a pair of jeans, by choosing from a menu of pre-determined alternatives, this is a highly superficial sort of consumer sovereignty. That is, as usual, the alternatives are provided for us; our ability to "choose" is mainly a weapon of mass marketing, producing additional inducements to buy. (Compare here "choices" on the new car.)
Second, given corporate domination of markets (See
Markets and Markets), there is little
reason to believe that the new technologies will give consumers
more and better information. Indeed, they may well get less. The -
New York Times recently ran a piece entitled "Why You Can't
Tell what Things Cost" (2 March 1997). It concluded:
Price confusion--the inability to figure out who's offering the best bargain, or even to know the true cost of something after you've bought it--has seldom seemed so universal. The traditional laws of supply and demand once imposed a semblance of order and clarity on prices [it was more price rigidity enforced by oligopoly which did this], but today they are being so haphazardly amended by pell-mell technological changes and new marketing wrinkles that the American marketplace now offers all the certainty of a Mideast bazaar--maybe less.
Airlines, hotels, car rental agencies offer different deals every day; mail order catalogues, corporate discount plans and direct- marketing schemes assault retail markets by offering goods and services "at reduced or `wholesale' prices whatever that means." Many of these are simply scams which allow merchandizers "to change what they want and pocket a substantial profit, with the poor consumer not the wiser."
Of course, as another recent NY Times feature
reported, retail stores "fight back," and evidently one of the
more successful ways they are doing this is precisely by doing
what electronic marketing cannot do: giving people "the pleasure
of physically being somewhere, of going to a place that was
bigger, grander and in every way more exhilarating than anything
the customer could experience at home" (NY Times Magazine,
6 April 1997). Niketown is an example.
The first thing you think of when you see Nike's new flagship store on East 57th Street in New York is that this is not a store at all. Niketown's facade is a takeoff on an old New York high-school building. You enter through turnstiles, in the manner of a sport's arena, to find yourself in a sleek, futuristic, five story atrium into which, at 30 minute intervals, a three-story high screen descends and a video softly plugging Nike products is play along with a crescendo of recorded . There are displays of sports memorabilia and a chance to hit a punching bag. Where are the sneakers?
Retail merchandizing has always sought to enhance the experience of buying, and Niketown and the Mall, now under transformation as a Disneyland for shopping, is but the latest step.
Finally, as Gates also sees, information will itself be marketed. Gates notes that there are those who think that Internet will give us unlimited free access to information. He says that while "a good deal of information, from NASA photos to bulletin board entries donated by users, will continue to be free, I believe that the most attractive information, whether Hollywood movies or encyclopedic databases, will continue to be produced with profit in mind."
Mass communication was defined by C. W. Mills. It means that a few people speak to millions and there is little ability to speak back (to raise questions, offer criticisms, point out fallacies, or produce evidence which was ignored). By contrast, he defined a public as existing where there were as many speakers as listeners and there was full opportunity to respond. The Internet could be a technology which allowed people to bypass the corporate media giants and to communicate globally with one another. But as Gates says, this is most unlikely. In the 1970s most of the world's telecommunications systems were non-profit, state owned. (The Internet was, of course, a creation of the US Defense Department.) Today, most telecommunications systems are owned by a handful of global telecom networks. Indeed, Merrill Lynch and Saloman are predicting that some 20% of all future investment banking revenues will derive from telecommunications.
TCI Chairman John Malone predicted: [T]wo or three companies will eventually dominate the delivery of telecommunications services over information superhighways worldwide. The big bubbles get bigger and the little bubbles disappear." Telecommunications giant Rupert Murdock put the matter squarely: Monopoly is a terrible thing until you have it" (Dawson and Foster, p. 43). Indeed, another writer argues that there has already occurred a dramatic shift "From being a participatory medium that serves the interests of the public to being a broadcast medium where corporations deliver consumer-oriented information." Interactivity, he concludes, will be "reduced to little more than sales transactions and email" (McChesney, p. 6).
There is one final irony to be noted. Everyone realizes that technologies can be put to many uses, some good, some bad. It does give us the capacity to create publics. Indeed, it gives us the capacity to create genuinely responsive markets in which people could have a form of consumer sovereignty. But exploring this possibility must be put off for another day. We can note here only that an essential, perhaps utopian condition, would be the overcoming of capitalism as it has evolved historically.