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T H E N E T W O R K O B S E R V E R
VOLUME 3, NUMBER 3 MARCH 1996
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"You have to organize, organize, organize, and build and
build, and train and train, so that there is a permanent,
vibrant structure of which people can be part."
-- Ralph Reed, Christian Coalition
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This month: Efficient markets on the Web
Communications technology and the Constitution
More fallacies of neoclassical economics
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Welcome to TNO 3(3).
This issue Ramin Zabih reflects on an experiment in creating an
efficient market in computer peripherals on the Web. I do not
regard efficient markets as an end in themselves. But I do think
that everyone needs to learn their ways, and the Internet can
make the process of market rationalization particularly visible.
In particular, we must be aware of what happens as computer
networking makes it cheaper to gather and distribute price
information. You would think that this topic has been thoroughly
investigated by economists. But even though some good work
has been done, much more often they simply assume that price
information is free. Such is obviously not the case, and a large
number of social phenomena, both good and bad, depend on the
resulting economic friction and hysteresis. Yet even as computer
networking helps make some markets more efficient, it also tends
to create highly nonclassical markets through the externalities
inherent in information technology; this month's "follow-up"
continues my discussion of such things.
Now that the Communications Decency Act has become law and the
resultant litigation is under way, it's time for an industrial-
strength post-mortem on the failed campaign to stop it. This
issue of TNO offers my own small contribution to this sad task,
in the form of an account of the political value of the Internet.
Why would someone want to impose such extravagant burdens on
such a promising medium? Part of the answer, I want to suggest,
was already evident to the folks who wrote the Constitution.
A footnote. When civil libertarians upset at the passage of the
CDA called for web pages to be inverse-videoed, the Christian
Coalition's Mike Russell had this to say: "This is a predictable
response from the left. They're trying to overturn the same
indecency provisions and guidelines that radio and TV have been
following for years" (New York Times, 2/8/96). Never mind the
sophistry by which radio and TV are conflated with the Internet.
The more important consequence, I think, is that supporters of
communications freedom will now have to get used to the idea that
the largest organized constituency in the majority Congressional
party regards them as leftists.
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The political value of the Internet.
These days one often hears questions such as: What effect will
the Internet have on politics? What effect will the Internet
have on the economy? What effect will the Internet have on
relations between men and women? The questions always make it
sound like the Internet is in charge here, as if the machines
have finally taken over the world and are only going to keep us
around as long as we continue to amuse them. Although a high
level of public interest in the Internet is certainly justified
by its remarkable growth and promise, at the same time I think
that the Internet also serves as a *symbol* -- a symbol of a loss
of control that people feel over their lives. In the economic
realm the Internet is simply the most visible element of a much
more extensive technological change that is facilitating rapid
global restructuring. And in the cultural realm the Internet
symbolizes the anxieties that arise as a great diversity of
people find themselves being rapidly interconnected through a
whole variety of means. To reason rationally about the Internet,
we have to take care to evaluate the cultural constructions of
technology, neither dismissing the deeper and very legitimate
concerns that people have nor permitting these concerns to be
channeled into unwise policy responses that may endanger other,
equally important social values.
The Communications Decency Act is a case in point. We have
to acknowledge the legitimate concerns that motivated it.
Pedophilia, for example, is real. Children really should be
protected from exposure to disturbing material. Some people
really do have sick minds. Yet very significant questions have
been raised about the approach that the CDA takes to addressing
these concerns.
It helps to put the matter in historical context. When any new
technology comes along, people understandably try to interpret it
through the analogies and precedents provided by other, existing,
familiar technologies. Debates about the new technology
regularly take the form of conflicts over which *old* technology
provides the appropriate precedent. In the early days of the
telephone, for example, businessmen regarded the phone as a means
for speeding up orders for goods, which were formerly conveyed
on paper, and they complained at great length about women who
insisted on using the telephone for extended conversations.
Phone books were even amended to explain that extended chatting
on the telephone was not a proper use of it. There is little
evidence that the women in question paid these instructions any
mind, and soon enough the phone companies -- which were numerous
then and mostly small -- figured out that the women were actually
a promising market for phone services. (See Michele Martin,
Hello, Central?: Gender, Technology, and Culture in the Formation
of Telephone Systems, McGill-Queen's University Press, 1991.)
Similarly with the Internet -- is it like a telephone, like
a newspaper, like a radio, like a postal system? The warring
parties in any given conflict over the Internet (intellectual
property protection is another example) will often be found
choosing the precedent that suits them best. The trouble,
of course, is that the Internet is quite capable of being all
of those things, all the time, in any combination. So strange
and unruly is the Internet that a remarkable myth has arisen
and entrenched itself in public discourse -- the myth that the
Internet is unregulated. In the Washington Post, for example,
I recently read of "the vast and unregulated Internet". The
problem is that, quite aside from the CDA, the Internet is not
unregulated at all. Virtually all conduct that is illegal or
actionable in other media is equally so on the Internet. Libel,
threats, conspiracy, insider trading, espionage, obscenity,
fraud, solicitation or luring of minors -- you name it -- if you
do it on the Internet and you get caught then you get arrested
or you get sued. Are any crimes even possible on the Internet
that are so original, so undreamt-of, that they are not covered
by existing law? No doubt there are, but they have to involve
technical capacities of the net that have no precedent -- that
make actions possible or practical that are seriously wrong
and that were not possible or practical in the past. One such
technical capacity might be strong cryptography, though that's
a matter that's largely independent of the Internet. Some would
say that another is the capacity to leave communicative materials
such as texts and images in places where people can come and
find them. Yet the vast majority of serious wrongs that can be
undertaken in that fashion are illegal already because the same
materials would be illegal to make available in *any* medium.
Some legal issues *are* left over after all this whittling down,
but they are primarily matters of jurisdiction and evidence --
hardly the stuff of moral panic.
The whole purpose of the CDA, then, is a bit of a mystery. This
was entirely evident at the Senate Judiciary Committee hearing on
the CDA that I attended in January 1995 -- the one at which the
presiding Senator of the majority party announced in his gravelly
voice that Mr. Marty Rimm would not be appearing as a witness
after all. The witnesses who did appear, all well-meaning and
mostly very nice, recited a series of undeniable horribles, all
of which involved activity that, notwithstanding the involvement
of computer networks, was quite clearly illegal under existing
law.
The bill that emerged from these hearings, moreover, is
remarkably ill-fitted to the evils it seeks to combat. Above
all it is straightforwardly unconstitutional, both for its
vagueness and for its failure to employ the least restrictive
means available for pursuing a compelling government interest.
Any number of less restrictive schemes are available. It is very
easy indeed to build a Web browser that will not display any page
that does not certify compliance with this, that, or the other
organization. Technically this is a no-brainer, and if necessary
false claims of certification could reasonably be criminalized.
Parents could choose which organizations reflect their values,
and Internet content providers who want children to access their
pages would be motivated to seek certification according to
the standards and procedures that each organization establishes.
Given these simple facts, the mystery of the CDA deepens. What
is the problem?
Part of the problem is that the idea of the vast and unregulated
Internet provides something for everyone. Cultural conservatives
get a den of iniquity to combat, libertarians get to imagine a
nirvana free of regulation and restraint, and liberals get to
shudder at the idea of something being vast and unregulated.
But I think the problem goes deeper that that, and if we really
want to preserve those aspects of the Internet that really do
hold significant promise for society then we need to be able to
explain a lot better what they are. We can approach this matter
in several ways, but I would like to approach it by asking, what
is the specifically political value of the Internet? What does
the Internet contribute to a democratic society?
I want to propose that the political value of the Internet
lies in part in the powerful support it provides for the
lateral institutions of society. Lateral institutions are those
created by and for people who occupy analogous locations in
society. Professional societies and support groups are examples
of lateral institutions because they are composed of people
in a common situation and provide a forum to share experiences,
pool knowledge, shape strategies, and anticipate the future.
Lateral institutions, both formal and informal, are crucial
to the economic and political health of any society. Lateral
institutions can be contrasted to hierarchies in several ways.
Lateral institutions are compose of equals, or at worse newcomers
and oldtimers, whereas hierarchies institute chains of authority
and control. People are usually participants in several lateral
institutions whereas hierarchies tend to lay their claims to the
exclusion of other involvements and commitments. And whereas
lateral institutions create a type of social capital in the
form of far-flung networks of social relationships, hierarchies
encourage an orientation to relationships up and down a ladder
that create isolation and dependency.
It is commonly held that the Internet is relentlessly creating
a decentralized society in which hierarchies break down. But
the real picture is more complicated that this. The Internet
can be used in a lot of different ways, and the Internet is
hardly the only technology that is advancing at a rapid rate.
The fact is that computer and communications technologies provide
the tools for the strengthening of both lateral institutions and
hierarchies. The genuine tension between these two principles
of social organization will be negotiated on a variety of levels,
not just as a matter of technological inevitability.
As a rough generalization, though, in the political realm
technologies really are fitted to forms of social organization.
The Internet is extraordinarily good at supporting lateral
institutions. A large proportion of the discussion groups on
the Internet, for example, particularly if we exclude Usenet
and focus on Listservs, are precisely forums for shared thinking
among members of lateral institutions -- people in common
situations, common occupations, common difficulties, or whatever.
Broadcast technologies, on the other hand, encourage hierarchy:
they originate from a center, which creates or filters the
contents, and they go out to a mass of otherwise unrelated
people. The Internet knits people together in terms of their
shared involvements in the world; broadcast disregards the
particularities of people's lives and draws them into an abstract
relationship with artificially constructed personae, be they
movie stars or reporters or experts or radio announcers.
I should emphasize that my view of the political value of
the Internet is controversial. It should be contrasted with
two other views. One view holds that cyberspace is a wholly
different realm from that of corporeal, territorial life, so
that it makes sense to imagine cyberspace seceding as a sort of
rebellious colony aboard a digital spaceship. Another view holds
that the Internet is producing a society of pure individualism,
a sort of beehive whose orderliness is entirely epiphenomenal,
incapable of being shaped or regulated from the outside. I find
these two views not only politically disagreeable but totally at
odds with the reality of the Internet's complex intertwining with
the rest of our affairs.
What does this mean for American society? In the 10th Federalist
Paper, Madison argues that the republican form of government is
an improvement upon majoritarian democracy on the grounds that
it is better able to resist the evils of faction. This was very
much a live concern in those days: the idea that an organized
segment of the society might organize to illegitimately impose
its way of life on the others. The two approaches to government,
as he puts it, differ
... in the greater number of citizens and extent of territory
which maybe brought within the compass of republican than of
democratic government; and it is this circumstance principally
which renders factious combinations less to be dreaded in the
former than in the latter. ...
The influence of factious leaders may kindle a flame within
their particular States but will be unable to spread a
general conflagration through the other States. A religious
sect may degenerate into a political faction in a part of the
Confederacy; but the variety of sects dispersed over the entire
face of it must secure the national councils against any danger
from that source.
It seems clear in reading this that Madison did not anticipate
the rise of telecommunications, or at least the uses to which
telecommunications could be put in constructing a political
organization. The idea that a faction might coordinate its
opinions and strategies across great distances never seems to
have occurred to him.
These assumptions were challenged, obviously, by the rise of the
mass media, through which political opinion could increasingly
be shaped on a national basis rather than through the loosely
coordinated debates of disparate regions. This development
was gradual enough that each increment, for example that
which followed upon television, can be put into perspective.
I want to argue, though, that the last several years have
brought challenges to Madison's assumptions that we are still
underestimating. Emerging communications technologies -- not so
much the Internet as the video downlink, the cheap VCR, the fax
machine, and targeted mass mail -- have facilitated entirely new
practices of political organizing. The elections of 1994, for
example, demonstrated that hundreds of campaigns could be run in
a tightly coordinated fashion by a disciplined organization that
could send out practical and ideological materials to candidates
and their staffs through a variety of media -- none of them
remarkable in itself, perhaps, but revolutionary when employed
within a coherent strategy.
The same holds true for other kinds of political organizations.
Madison could not imagine a nationally organized religious
sect degenerating into a political faction, but such a thing
is altogether imaginable today. Those who find the phenomenon
mystifying often do so because they cannot imagine religious
people having their act together to employ modern technology, or
else because they do not know very much about the practical work
of political organizing.
It is here, I think, that we can find the larger meaning of
several conflicts over the nature and meaning of the Internet.
Those organizations that continued to promote Marty Rimm's
research after it had been refuted, and who continued to promote
a vague and unconstitutional law after less restrictive means
were demonstrated and publicized, effectively discredited an
important new set of political tools in the eyes of a large part
of the citizenry, who have access to no other information beyond
the hype about obscenity that spills out of your computer at the
push of a button. The fundamental issue here is a conflict of
social visions between hierarchical organizations seeking to trap
people in a closed world of fear and danger and authority, and
spontaneous associations, heterogeneous and dynamic, among people
who share common life situations and get together of their own
accord to make their own meanings out of them. The Internet
is no more a guarantee of freedom than the video duplication
machine is a sentence of authoritarianism. But communications
technologies have political affordances, and if we wish
to preserve the possibility of an open, tolerant, humane,
pluralistic society then we must articulate and defend the
political value of the tools that may yet make these ideals
possible.
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Creating an efficient market on the WorldWide Web.
Ramin Zabih
Computer Science Department
Cornell University
rdz@cs.cornell.edu
Consumers often purchase mass-produced items that are available
from many different vendors. These different vendors usually
charge different prices. If it were easy to compare prices,
consumers would benefit substantially, and every consumer could
get the best price. This would create what economists call
an efficient market. Until recently it was too expensive to
make pricing information widely available. With the World-Wide
Web, the cost of publishing information has fallen dramatically.
Because of the Web, it may now be possible to create an efficient
market for many mass-produced consumer items.
As an example, consider the market in computer peripherals
(such as printers, modems, etc). In December 1995, the cheapest
nationally advertised price I could find for the Hewlett-Packard
HP660C printer was $330, while the most expensive price was
$490. But it took many hours of reading advertisements to
obtain this information. Several hundred vendors sell mail-order
peripherals, and it isn't easy to compare prices.
Several efficient markets exist, including the stock exchange and
the commodities market. Items on these markets (such as stock
in Hewlett-Packard) are available for a single price at any given
time, and that price is widely known. Consumers rarely benefit
from these markets because they do not trade consumer goods.
The PriceWeb Experiment
Together with some friends at Cornell I have begun an experiment
called PriceWeb (http://www.priceweb.com). PriceWeb is an
attempt to create an efficient market in computer peripherals.
For a given peripheral, PriceWeb's web site provides a list of
nationally advertised mail-order prices, listed in increasing
order. This makes it simple to find the lowest-priced vendor.
If PriceWeb becomes widely used, it will have a major impact
on the way that computer peripherals are purchased. Mail-order
vendors would have to charge a single, uniform low price,
unless they can offer customers some additional value. Computer
peripherals are sold with fairly standardized warranties
and return policies; vendors compete primarily on price and
availability. This makes product differentiation difficult.
In an efficient market, most vendors would have to lower their
prices. Short term, PriceWeb works to the advantage of consumers
and to the disadvantage of most vendors. But in the long term
there are advantages for vendors as well. Consumers will be able
to buy items without worrying that they are over-paying (this
argument is similar to Saturn's no-haggling policy for new car
buyers). And, of course, prices should fall. These effects
should lead to more customers
An on-line service like PriceWeb could have additional
advantages for vendors. For instance, sometimes vendors
wish to clear out inventory by selling an item very cheaply.
(See http://www.onsale.com for an example.) On-line pricing
information can eliminate the delays involved in print media
advertising, thus allowing vendors to more rapidly adjust their
prices. Also, the Internet users who monitor pricing information
will presumably be quite price-sensitive, so listing an item at a
low price should generate a large response. These advantages to
vendors have to be balanced against PriceWeb's negative effects
on vendor margins. If the negative effects are larger, vendors
will consolidate.
How much would consumers save in an efficient market? One might
expect mail-order prices on peripherals to be nearly identical,
but they aren't. The average price spread on items that PriceWeb
covers is $130, and some items have large price spreads. For
example, the HP OfficeJet is advertised for as little as $377 and
as much as $769.
If the vendors wished to avoid an efficient market, they
would have several options. For instance, each vendor could
sell slightly different items. If every HP660C printer were
significantly different from every other HP660C printer, it would
be impossible to compare their prices. But this would increase
manufacturing costs and confuse potential customers, thus
reducing HP's market share. This effect is illustrated by the
American automobile industry, which for years offered an enormous
range of options, partly to prevent consumers from comparing
prices. The Japanese offered very few option packages, which
gave them a price advantage in manufacturing. In the computer
industry, almost everything is mass-manufactured, due to
extensive standardization (see TNO 3(1) for a discussion of the
economic impacts of standardization). So this option is not
viable, because of opposition from the manufacturers.
An efficient market could also be thwarted by punishing the
lowest-price vendor. For instance, suppose that all the higher-
priced vendors refuse to carry Hewlett-Packard printers unless
the lowest priced vendor is forced to raise its prices. HP could
in turn raise the price that it charges that vendor, or cut that
vendor off completely. But this probably would not be in HP's
interests. More importantly, such actions would violate a number
of laws against price fixing, such as the Robinson-Patman Act (an
excellent overview can be found at the Federal Trade Commission's
web site in http://www.ftc.gov/opa/speeches/patman.htm). These
laws make it illegal for a manufacturer to fix the price that
vendors charge.
An on-line efficient market would also be easier for the
Government to monitor. Price-fixing in efficient markets is
more obvious than in markets with multiple prices. For example,
suppose a vendor cut its prices below costs to drive rivals out
of business, and then raised its prices. This pattern would
be fairly easy to spot in an efficient market with pricing
information available on-line. The recent SEC investigation of
NASDAQ trading practices was motivated by an academic study of
pricing trends in this market; if this data were not available
electronically, anti-competitive behavior would be harder to
detect.
Challenges
A number of challenges will need to be overcome in order to
create an efficient market. One potential difficulty concerns
updating price information. PriceWeb's information comes from
printed national advertisements. In a market where prices change
rapidly, advertised prices may be out of date before they appear
in print. The obvious solution would be to use on-line prices
from vendor's Web sites, but there are some obstacles. While a
few vendors (such as Computability, http://www.computability.com)
provide on-line pricing information, most do not -- in fact,
surprisingly few vendors have Web sites. Also, a price that
appears in a printed ad comes with legal protections against
false advertising. These guarantees may not apply to Web-based
advertising.
Even if most vendors put their pricing information on-line, it
may be hard to compare prices. For instance, consider Andersen
Consulting's BargainFinder (http://bf.cstar.ac.com), which helps
consumers buy audio Compact Discs cheaply. BargainFinder queries
9 on-line vendors that sell CD's via mail-order. Unfortunately,
3 of these vendors currently block BargainFinder from accessing
their sites. Because BargainFinder actively queries on-line Web
sites, it exists at the pleasure of the vendors. In the short
term, they may not wish to cooperate.
PriceWeb will need to become economically self-supporting,
which is a challenge. On-line pricing information is what
economists call a public good (like, for example, a lighthouse).
It is notoriously difficult to get the beneficiaries of a
public good to pay for it. In addition, the Internet's culture
makes it hard to charge users for information. I believe that
consumers will not use PriceWeb if they have to pay for it.
Some companies think consumers will pay for such a service --
http://cybersave.com/shop.htm, for instance. If these companies
are correct, they will create a market in pricing information.
Mark Casson's chapter in Information Acumen (Routledge, 1994)
discusses the effects on markets of information. An efficient
market requires perfect information; as the costs associated with
information fall, the market can become more efficient. Costs
are associated with obtaining pricing information for computer
peripherals. PriceWeb does not reduce the costs of obtaining the
information, but instead collects the information centrally and
makes it freely available.
PriceWeb might be viable simply because the cost of running
the experiment is so low. Placing information on a Web page
costs almost nothing, and the costs associated with gathering
and entering data are also small. Even a small amount of
revenue (from advertising, for instance) could make PriceWeb
self-supporting. In addition, that PriceWeb could provide
a number of services for vendors that would generate revenue.
For instance, vendors could be automatically notified if a
competitor beats their advertised price.
Will the Web Eliminate Retailers?
A web-based efficient market could also affect the relationship
between vendors and manufacturers. Most manufacturers do not
sell directly to customers, but via retailers. Retail stores
carry products from multiple manufacturers, so a customer can
compare products side by side. Manufacturers attempted to
protect their retailers by various means; for example, the
Manufacturer's Suggested Retail Price is usually quite high, so
that every retailer can charge less than MSRP. Manufacturers
protect retailers to ensure that retailers carry their goods.
But with the growth of mail-order, the value provided by
retailers could diminish. It may become profitable for the
manufacturers to enter the mail-order business themselves.
An efficient market could eliminate many middlemen.
An efficient market in consumer goods would have a substantial
impact on society. For example, it could eliminate many retail
stores in favor of mail-order vendors, who can locate in areas
with low fixed costs. This could have massive consequences
for many communities, which have downtowns built around retail
shopping. Of course, consumers shop for other reasons than
obtaining the lowest price. For some items (such as Tylenol),
the savings may be so small that it isn't worthwhile to find the
best price. However, large supermarkets spend a great deal of
effort trumpeting small price advantages. It is possible that
many shoppers are price-sensitive, and would prefer an efficient
market. If the Web creates such a market, its impact on society
will be far greater than any effects we have witnessed thus far.
While many retailers might disappear, some new businesses will
also come into existence. For instance, it will become much
cheaper to establish the kind of specialty businesses that
traditionally only flourish in large cities. A business that
only appeals to a small percentage of the population can flourish
on the Web, because it can be easily reached by potential
customers.
Conclusions
Several previous experiments in Web-based consumer empowerment
have been similar in spirit to PriceWeb. One example is the
BBN Auto Mechanics List, profiled by Rich Lethin in TNO 2(8),
August 1995. This site lists local auto mechanics in the Boston
Area. Besides providing names and addresses, it also includes
customers' comments on their experiences with each shop. The
comments are summarized by the moderator to provide an overall
grade for the repair shop. A potential customer can view the
comments of other customers, and can also add their own comments.
Another example is http://thelist.com, which performs a similar
service for Internet Service Providers. Like Consumer Reports,
these sites focus on giving consumers useful subjective
information.
The Web has made an efficient market in consumer goods possible,
because it has dramatically lowered the cost of publishing
information. Until recently, only big corporations or a few
unusual individuals could reach a large audience. The Web
has changed this, and we are just beginning to understand its
implications.
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Wish list.
Lots of people assume that books will soon be supplanted by
digital media. These people are not deterred by the simple fact
that it is still physically painful to read a long text on a
computer screen; they simply assume that all technical barriers
will inevitably be overcome. But things do not necessarily work
that way. For many purposes, for example, operating systems
have gotten worse rather than better over time. And the price
of personal computers hasn't gone down all that fast -- as the
hardware speeds up, the software bloats. I wish that computer
screen technology would improve enough that one really *could*
read a long text comfortably, given that my eyes already hurt
from the relatively small amount of reading I do online. But
what if that result is not inevitable? What if the technology
exists in the laboratory, or in fancy niche applications, but no
incentive exists to invest all of the money that would be needed
to get the price down for the mass market? I hope I'm wrong.
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This month's recommendations.
Turning Wheel: Journal of the Buddhist Peace Fellowship, theme
issue on Fundamentalism, Fall 1995. This issue includes eight
fairly short but enormously humane articles about fundamentalism,
Christian and otherwise, from a Buddhist perspective. Single
copies are $5 postpaid from BPF National Office, PO Box 4650,
Berkeley CA 94704, (510) 525-8596, bpf@igc.apc.org.
infoActive. Nonprofit organizations know in a general way that
new communications technologies will enable them to completely
change the way they do business, eventually reshaping all of
their relationships: with members, donors, clients, press, and
one another. This process is partly a matter of experience and
know-how, but it's also going to require active participation in
the policy process. InfoActive, a monthly publication on telecom
issues for nonprofits, is a good continuing source of background
information from a nonprofit perspective. Each issue is focused
on a specific topic (kids online, privacy, intellectual property,
cities, Washington politics, etc); the coverage is concise and
intelligent and includes lots of pointers to useful resources.
$35/year (8 issues) for individuals, nonprofits, and government;
$100/year for for-profit organizations from Center for Media
Education, 1511 K Street NW Suite 518, Washington DC 20005, (202)
628-2620, infoactive@cme.org.
Donald G. Dutton, The Batterer: A Psychological Profile, Basic
Books, 1995. Some men beat up their wives or partners, going
through a cycle of sudden extreme violence, profound contrition,
escalating tension, and more violence. Having treated numerous
such men the author explains in some detail how they get that
way. The primary factor, he suggests, is suppressed anger and
shame originating in severe emotional abuse by a father; the
secondary factor is ambivalent attachment through a disturbed
connection between the boy and his mother; and then the final
factor that makes the cyclical pattern of shame and violence
difficult to reverse is exposure to a culture that tolerates,
rationalizes, and ignores domestic violence. Domestic violence
has been going on for a long time, and yet it has taken until now
for somebody to describe the phenomenon in clinical terms. Why?
One answer can be found in Judith Herman's "Trauma and Recovery",
which I recommended in TNO 1(1): victims of serious trauma can
only articulate and legitimize their pain -- that is, they can
only achieve public recognition that the trauma even *happened*
-- when political conditions permit. In the case of domestic
violence, men who batter only became a public issue when feminism
*made* them into an issue. Then they could only become a topic
of clinical psychology when many such men were -- unlike the
old days -- actually arrested, actually treated as emotionally
disturbed criminals, and actually ordered by courts to undergo
treatment at the hands of psychologists who can treat batterers
as wounded human beings without putting up with any of their
self-serving bullshit. And this book only exists because the
OJ Simpson trial forced domestic violence onto the media agenda
long enough to convince a publisher to hire a writer to turn
a clinician's prose into mass-market English. (I persist in
regarding the circus of OJ Simpson's trial as overall a positive
influence on society because of the many important conversation
topics it provided.) Will all of this previously suppressed
knowledge be driven back into the shadows by the current fashion
for stigmatizing "victims" and all the nonsense about men as
an endangered species? You can't return to the past without
forgetting all the stuff that made us want to leave it behind.
This book will make that forgetting harder.
The April 1996 issue of Upside magazine (recommended in TNO 1(6))
is a good overview of the Internet industry.
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Follow-up.
In TNO 2(5), I complained about the sudden decline of the New
York Times' business section. After what seemed like a period of
real confusion, the daily business section recovered reasonably
well and the new Monday section on "the information industries"
even became essential reading. The Sunday business section,
though, went through a long, dark night that was still under way
when I left for a few months overseas in the fall. The basic
theme was a shift from serious reporting on industry structures
toward a "lifestyle" orientation fitted to the demographics of
their upscale readers. The format seemed to be: one serious but
not very good article about some topic that is directly visible
in the lives of their readers, together with a bunch of personal
finance material of the sort that magazines like Money and
Kiplinger's are already doing. For a while it was just awful --
imagine People magazine where all of the people happen to operate
mutual funds. When I got back to the country in November, things
seemed to have picked back up somewhat. Nonetheless I now spend
at most a fifth of the time reading the Sunday business section
that I did a year ago. At a time when everybody desperately
needs to understand the massive global transformations going
on in virtually every industry, this is a real tragedy. Perhaps
readers in the Times' target demographic figure that they are
immune to such things, and no doubt the top ten percent of them
really are. But the rest of them -- the whole professional class
that the right now refers to darkly as "elites", notwithstanding
their supposed supremacy under the title of "knowledge workers"
-- are headed for a fall, if they haven't already taken it, and I
like to think that they would benefit from some serious analysis
of what's about to hit them. I don't suppose that the New York
Times would ever consciously set out to provide such analysis,
but something would be better than next to nothing.
In my discussion of network economics in TNO 3(1) and TNO 3(2),
I neglected to include this quote from Cristiano Antonelli, in
the introductory chapter to his edited volume on the economics
of information networks, cited in TNO 3(1):
The novelty of network economics is the general effort it makes
to incorporate into the microeconomic tradition the study of
consequences of externalities on the behaviour of agents who
are strategically aware of the role played by externalities in
their decision making (page 16).
Underneath the esoteric vocabulary here is a profound statement.
The industry that is perhaps the most significant driver of
global economic change in history does not come close to obeying
the laws of classical economics, and it is extremely difficult to
repair classical economics to fit the emerging reality. Yet most
of our current public policy discourse about economy and society
employs the simplest version of neoclassical economic rhetoric,
which presuppose the whole long list of assumptions behind
"perfect markets" in a whole long list of hidden or unexamined
ways. Among the many pathologies that result is the insistence,
among people who know enough economics to be dangerous but not
enough to be useful, that the market dominance of Microsoft
Windows ipso facto entails that Microsoft Windows is the highest-
quality product in its category. This conclusion flies in
the face of all evidence and reason. It satisfies the purest
definition of dogma: the theory is no longer tested against the
evidence provided by reality but is instead used a priori to
define reality. Microsoft people often speak in terms of the
"popularity" of their products, but this word is surely precisely
wrong. Hardly anybody actually *likes* Windows, the way that
many people genuinely *like* the Mac OS or IBM OS/2. They
buy Windows because it runs on cheap open-standard hardware
platforms and because more applications are available for it.
These are real economic advantages, but in their origins they
are nonclassical advantages that depend on market externalities.
It's an urgent matter to understand the laws of economics, if
any, that affect the emerging world of information technology.
But before we can act on any of these hoped-for understandings,
we're going to have to clear our heads and our language of the
hidden assumptions of an outdated economic worldview.
My bibliography on the economics of standards also neglected to
mention the work of Michel Callon. See, for example:
Michel Callon, Techno-economic networks and irreversibility,
in John Law, ed, A Sociology of Monsters: Essays on Power,
Technology and Domination, London: Routledge, 1991.
Although much more abstract and intellectually demanding than the
economic theories, Callon's analysis is also more sophisticated
in sociological terms. He develops a difficult but powerful
vocabulary for talking about the networks of people and artifacts
that congeal over time into irreversible infrastructures and
institutions. Irreversibility is a relative matter, of course,
given that extreme contingencies such as earthquakes, wars, and
profound technological changes can loosen the most entrenched
sociotechnical network. But, at the risk of repeating the point
once too often, the fact is that modern societies are full of
phenomena that fly in the face of the "equilibrium" metaphors
that are central to neoclassical economics and the world of
political rhetoric surrounding the price system. Callon's theory
provides the elements of an alternative, in which the economic
phenomena of resource allocation and money are fully mixed in
with a range of other phenomena grounded in the relationships
between people and the intermediaries, particularly texts and
technical artifacts, that organize so many of those relationships.
Web picks.
"Teaching Social Issues of Computing: Challenges, Ideas,
and Resources", by Tom Jewett and Rob Kling, is on the Web
at http://www.engr.csulb.edu/~jewett/teach/teach.html
Information on the bizarre case of Randal Schwartz, convicted of
multiple felonies for actions taken as part of his work for Intel,
can be found at http://www.lightlink.com/spacenka/fors/intro.html
Feed is a pretty good newsletter about politics and culture; its
URL is http://www.feedmag.com/
Adbusters is now on the Web, disrespecting commercial culture and
hyperlinking to the worst offenders and their e-mail addresses:
http://hoshi.cic.sfu.ca/adbusters/
A very interesting document from an Oklahoma anti-pornography
group about prosecuting pornography on the Internet can be found
at http://www.bway.net/~dfenton/noporn.html
"Making Intelligence Smarter: The Future of U.S. Intelligence,
Report of an Independent Task Force Sponsored by the Council on
Foreign Relations" is at http://www.tc.umn.edu/~klp/CoFR.txt
You know you're in trouble when a report on the CIA begins:
The U.S. intelligence community faces major challenges,
including a widespread lack of confidence in its ability
to carry out its mission competently and legally.
One consequence of this perception is that reform of
intelligence policy and capabilities will not be left up
to the intelligence community itself. Other parts of the
executive branch and Congress will certainly be involved.
Watch out for the words "confidence" and "perception". On the
surface they might sound like they're acknowledging the problems
with the intelligence community. But the point is to treat the
*perceptions* as the problem. So far as this quintessentially
establishmentarian report is concerned, we should be talking
about *broadening* the powers of this "community", not about
shutting the whole thing down. The President's Commission on
the Future of Intelligence, composed largely of intelligence
community insiders, is also certain to overlook the profound
problems. For some details see
http://www.fas.org/pub/gen/fas/irp/offdocs.html#aspin
Last November the Cross-Industry Working Team (XIWT) of the
Corporation for National Research Initiatives (CNRI) held an
informal workshop for industry research people on medium-term
prospects for broadband access to the home. The workshop notes,
available on the Web are a very good representation of industry's
current thinking in this area: http://WWW.CNRI.Reston.VA.US:3000/
XIWT/documents/Workshop_Notes/IEEE-XIWT.html
(I've broken the URL into two lines.) XIWT's executive director,
Chuck Brownstein, formerly of NSF, is an interesting guy. He
has a background in political science, so he is more reflective
about the whole technology and policy process than many others.
The FCC Telecom Act page is at http://www.fcc.gov/telecom.html
Information on the conference on Information Technology in the
Human Services can be found at http://www.stakes.fi/husita.html
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Phil Agre, editor pagre@ucla.edu
Department of Information Studies
University of California, Los Angeles +1 (310) 825-7154
Los Angeles, California 90095-1520 FAX 206-4460
USA
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Copyright 1996 by the editor. You may forward this issue of The
Network Observer electronically to anyone for any non-commercial
purpose. Comments and suggestions are always appreciated.
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