From Carey and his study of the Telegraph…..to Current Communication Technologies and Globalization.

Why and how are communication technologies different and more central than other technological inventions and discoveries such as the railroad, electricity, automobile, industrial production techniques, to name just a few?

Electricity allowed for the availability and distribution of power to “anytime, anywhere, and always on.” The automobile allowed for the flexibility and individualization of transportation. Industrial production and production processes allowed for the mass production, standardization, and dramatic reduction of costs of “consumer” products, among others. These technological inventions and their subsequent innovations had a tremendous effect from trade, to economics, to urbanization and education and most importantly to culture, society and politics.

Can we single out communication technologies as having a higher impact and a more central effect on society and culture than the above as well as other technologies?

Many of our answers can be found in James Carey’s writings and in particular in the essays that were put together in “Communication as Culture.” While Dewey, Innis, and McLuhan named communication as central to shaping society and culture, it was Carey who, with his original work, made media and communication “a prime mover” of societal and cultural developments. In his study of the telegraph, Carey says “…there were other technological marvels of the mid-nineteenth century, but the inscrutable nature of the telegraph made it seem more extraordinary than, and qualitatively different from, other inventions….”

Carey gives us convincing evidence of the centrality of communication technology when he describes how the telegraph effected change and

 “….altered the spatial and temporal boundaries of human interaction, brought into existence new forms of language as well as new conceptual systems, and brought about new structures of social relations, particularly by fostering a national middle class. These consequences were also displacements: older forms of language and writings declined, traditional social interactions waned, and the pattern of city-state capitalism that dominated the first half of the nineteenth century was broken up.”

We could argue that the power and centrality of communication has a lot to do with its ability to “break up” existing structures in society and create new ones by dismantling existing “monopolies” and by dramatically reducing “transaction costs”. We have seen the same effects in our study of the printing press and its effects in 15^th century Europe and afterwards. It is the nature of communication as an enabling technology that makes it so important and critical.

The telegraph, as Carey says “…permitted for the first time the effective separation of communication from transportation….the telegraph freed communication from the constraints of geography.”

Carey believed, as his work on Innis and McLuhan indicates, that mass media communication “shapes decisively the character of social order.” But he resisted assigning technological determinism or causality to communication technologies as we can see from his essay “Technology as a Totem for Culture, and a Defense of the Oral Tradition.”

I am intrigued by the fact that a communications theorist, Carey, would start his career by studying the relations between economics and communications (his Ph.D. Dissertation.) In his interview with Professor Moretti, Carey talks about why and how he decided to study the telegraph. He says that his interest was in studying the contemporary, Satellite broadcasting and computers and their effects, so he decided to look at the historical, telegraph and its effects, for insights and understanding. The critical element or mechanism by which the telegraph “reconfigured culture and society” and “created a borderless world within the US,” was the dramatic reduction on transaction costs. What is the best way to study the effects of the telegraph or any technology?

“I think the best way to grasp the effects of the telegraph or any technology,” Carey says, “is not through a frontal assault but, rather, through the detailed investigation in a couple of sites where those effects can be most clearly observed.”

Then by extension of Carey’s methodology, if we were to look at the effects of today’s communication technologies, where do we start? I would argue that, today, globalization is among the most prevalent forces of societal change on a global scale if we were to jugde by the passion and intense debate it arises both in the media and in the streets!

Globalization is not new and many scholars call the one we are experiencing Globalization II. The first one was back in late 19^th and early 20^th century. It did end really badly and many argue that it had a lot to do with the two world wars we had in the past century. In some ways, I see many parallels with that era starting with the global financial crisis that was caused to a great extent by the global economic imbalances that exist in the world economy today. It’s not my intent here to discuss globalization and where it’s leading us today but borrowing from Carey, I want to look at the communications infrastructure of today and try to show how it allows or even dictates the globalization of production of both tradable and non-tradable goods (used to be non-tradable) like services. Additionally, because of globalization and the new communication technologies, we observe, among others;

·         Dramatic reduction in production and transaction costs,

·         Shortened time form inception of an idea to a final product,

·         Increased innovation and growth in emerging markets

·         The creation of a huge middle class in countries like India and China and a huge transfer of wealth form West to East

·         Huge and, I am afraid, permanent job losses, economic uncertainty and stagnation in the Western developed markets,

·         Trading tensions and emerging geopolitical rivalries and concerns,

I would like to start with a top down approach and first look at what is happening today.

Obviously, at the top we have the forces of globalization, the emerging (production) Asian markets, and the leisure society (consumers) in the West. We have open markets, competition, and, in addition to products, marketable services. Marketable services gave us the outsourcing business and helped wake up India, in particular, but are also helping many other countries like Pakistan, China, and others. The next obvious question is why now? Assuming all else equal, could we have the offshore production, to the extent we have it today, and the marketable services of today, 30 or 20 or even 10 years ago? Again, obviously, the answer is no.

The reason globalization, and competition and outsourcing have taken off is because of Computing, and IT, and cheap and plentiful bandwidth.

It’s the global fiber optics communications network, the IP/Packet technologies, and the advances in Computing and IT that allows the Indians to perform all the back office work for Goldman as if they were in the “back office” section of Goldman’s downtown building. It’s the same that allows a “consumer gadget” company in California to buy ASICs (application specific integrated circuit) and SoC (system on a chip) and other highly specialized electronic designs from an IP (intellectual property) company in the UK, have its engineers reassemble them to create its product on paper, send the design to Singapore for proof of concept and testing and sampling, then send it to a Taiwanese foundry for production, from there to a Chinese contract manufacturer to assemble it, while at same time hire an Indian company to perform product marketing (in the future it will be the same company that had been hired in the first place for product R&D and which had given the idea of the gadget to the California company in the first place) and finally hire a distribution company in Eastern Europe or US to sell the product to the consumers. It used to take up to two years from the time an idea was generated to the time a prototype was produced. Now a idea can be turned to a prototype in just a month and in another month the product is in full production.

The pace of change, competition, and innovation in every area, including the new communication technologies themselves, is unprecedented.  

Which brings me to the most important effect of the above advancements; that is, the effect on culture and society!

Beyond business, Information and Communication Sciences and “Bandwidth” created the knowledge society. Someone with “smarts” can produce and sell products to a world market without spending a dime on employees, factories, marketing and distribution. Close home and to my business (Hedge Funds), twenty years ago a fund manager had to spend a fortune to be on equal footing with the “big guys” on Wall Street, now $50 K will get you the best technology and information and level the field with the “behemoths of the industry.” The barrier to entry in the investment and financial services, at least from a startup business capital cost point of view, is zero.

In summary, we have 1) the forces of globalization, the emerging (production) Asian markets, and the leisure society (consumers) in the West Computing, 2) the “enablers”, Computing, Communications, and Ubiquitous Connectivity, and 3) their creation, the Knowledge and Information Society. It is the interaction on 1) and 3) that put extreme demand and pressure on 2) the enablers and where the new, emerging trends in Computing, Information Technology, and Telecommunications are based on.

The “enablers” are in urgent need for an overhaul, if they are to meet the demands of 1) and 3). We are entering the second phase of the Information and Communication era where we will see the converging and the “maturation” of IT and Communications which will turn them to a service like electricity. The evidence of that is the emergence of cloud computing which is enabled by the many technological advancements, but primarily, by the modern and  global fiber optics communications infrastructure.

The science of Electromagnetics was fully developed by Maxwell 1876, and by the early 1920s you had more than a few thousands of companies trying to figure out how to produce, distribute, and apply electricity and invent devices for it. At that time, there were several hundred companies trying to figure out how to transmit electricity alone. It was only until the late 40s and early 50s when these questions were settled and you needed only GE, Westinghouse, and a few niche players.

My view is that the second phase of technologies will settle the way software is developed, computers are built, and business processes are transformed around technology and not the other way around, and how all these are tied together and interact and over what type of a communications fabric will run on and interconnect. Not only I do not see a slowdown in outsourcing of production but I do also believe outsourcing is/will be expanding in business process areas like finance, accounting, law, and into product R&D, product marketing, product localization and areas like business and competitive analysis, pure research, and so forth. In passing, I should mention the competition and “rush” of American elite universities in establishing presence and collaboration with local universities in China, India, Middle East, Singapore and elsewhere.

What will stop these trends?

Outside politics, trade and currency “wars” and closing of national markets, and the actual prospect of war, there is nothing in sight to stop these trends. In the long run, we will have a painful adjustment in the standard of living in the West and rising standards of living in the East until the standards of living become more or less equal. Transaction costs will have been equalized and globalization would have run its course.

We already have the globalization of culture. What Carey said about the telegraph and the effect it had in creating “a borderless world within the US,” we see it in many respects happening on a global scale. I would also argue that we can discern the effects of today’s communication technologies on the creation of a global society and culture to be along the lines and similar to what Carey said about the effects the telegraph had on the US.

It will be interesting to see if a future communication theorist will borrow from Carey to say that the communication technologies of late 20^th and early 21^st centuries “altered the spatial and temporal boundaries of human interaction on a global scale, brought into existence new forms of language as well as new conceptual systems, and brought about new structures of social relations, particularly by fostering a Global middle class. These consequences were also displacements: older forms of language and writings declined, traditional social interactions waned, and the pattern of nation-state capitalism that dominated the 20^th century was broken up.”

I only hope that Carey and others who made the case for the centrality of communication to “shape society and culture” are right and the current communication technologies will help humanity to elevate itself into a global knowledge-based culture and society!

Church and the Printing Press….Capitalism ….Nationalism ….Future Supranationalism?

In my previous blog I argued that it was the use, by the 14^th century Christian Scholars, of critical reasoning and Aristotelian logic that discredited the theological doctrines of the earlier era. The Church’s objective to subjugate philosophy and its tools for its own advantage had exactly the opposite effect. While Ockham and his followers had reason on their side, their actual effect on the Church and the Institutions of Europe was rather limited. The Church had two major advantages on its side;

1.       Latin language – It was defined the “truth-language” for the mass and for communicating God’s word.

2.       Manuscript production - The church controlled not only the language but most of the production of manuscripts and what it was to be written and translated from Greek, Hebrew, and Arabic.

In essence the Church controlled the communication and exchange of ideas with its hub and spoke network and with control over the Latin language. Anderson writes,

“…writing of mediaeval Western Europe, Bloch noted that ‘Latin was not only the language in which teaching was done, it was the only language taught …but by the sixteenth century all of this was changing fast.”

The invention of the printing press destroyed the Church monopolistic control of the existing communication medium and also gave rise to the vernacular languages as an alternative to writing, printing, and communicating in Latin.  The printing press created a decentralized, horizontal, communication network for the exchange of ideas with no defined center of gravity. But the Church played an instrumental and positive role in developing it because the Church, initially, represented the biggest market for printed books. According to Leonard Dudley[1], an economics professor at the University of Montreal, the Cardinal Nicholas of Cusa (Dudley calls him “one of the rare Germans to be appointed cardinal in Middle Ages) had a deep understanding of the problem of Christian society;

“The problem of Christian society, Nicholas of Cusa felt, arose from the great gaps in awareness between the educated and the uneducated. The principal difficulty of the Christian world, he believed, was the limited circulation of ideas beyond the universities….ideally, there should be some way of reproducing information cheaply so that all agents of the Church, down to the humblest parish priest, could be considered educated…..”

Dudley says that Gutenberg and the Cardinal probably met in Mainz in 1424 or after Nicholas learned of Gutenberg’s successful experiments with the printing press.

“Nicholas de Cusa was one of the few scholars of his time who were capable of imagining the social impact of the revolutionary technology that Gutenberg was developing…By allowing all Christians across Europe to read the exactly the same texts, such a technology alone would bring about the unity required to restore the former glory of the Church.”

The irony here, again, is that the Church might have helped to develop a technology, which, probably, was instrumental in breaking apart both the Church and Europe.

Eisenstein views the printing book as an agent of change. I would argue that we should see it as enabler of change similar to Information Technologies of today. I would also think that we should view (Benedict Anderson, Ernest Gellner, and the other modernist theorists of nation and nationalism, view capitalism together with the printing press as the major forces for the emergence of the nation) the printing book through the prism of an emerging capitalist society across Europe. Recent advances in innovation theory would not qualify the printed book as a revolution but as a radical or disruptive innovation in written communications. Eisenstein is correct when he outlines the advantages of the printing press to be; low reproduction costs, freeing of time for the scholars, standardization, and organization of knowledge.

How and in what way the printing press was an enabler of change?

It was the economies of scale and the industrialization of production that allowed for the mass market of the written communication as represented by the printed book. The cost of storing information was reduced by orders of magnitude. It allowed for rapid standardization and organization of knowledge and with the usage of the vernaculars it decreased “the cost of coding and decoding the information.” Up until the advent of the printing press, written communication was in Latin. But only a small group of people could read and write Latin “making the coding and decoding of information costly.” Capitalism thrives on new and growing markets so always looks for new markets to expand. The development of a mass market had a positive feedback on the printing industry. As the market expanded the industry was able to bring costs further down thus making books cheaper which in turn helped expand the market. The cost of printing an extra book is lower – what economists call marginal cost – and continues to drop until it becomes just the variable cost of printing the extra book which is just the material of the book. This is the virtuous cycle of an expanding market coupled with constant innovations and increasing profits. Thus the printing press industrialists of that era had every reason to expand and push for new markets. As the market for printed books in Latin got saturated, these industrialists had to look for a new market and that was the market for printed books in the vernacular languages. At the same time we have Lutheranism and Protestantism in pushing publishing in the vernacular languages. The reformers, Luther being among the first of them, in their fight with the Church for control of communicating with the masses used the printing press to publish their critical views of the church in the vernacular languages. 

Again, according to Dudley, Luther had a lot to do with the standardization of the German language. He used the Germanic language of the Saxons, used by all the Princes and local rulers throughout Germany, to publish his bible in 1535. We see the same happening in France, England and Holland, among others. By the end of the sixteenth century the majority of publishing was in the vernaculars. This set the stage for standardization of the languages and was the precursor of the European States and their national identities. The Institution of the Latin language and the Church and their control and monopoly on information and communication fell apart.

But how exactly did the communication revolution of that era brought about the creation of nations and nationalities?

I think we can use the creation of a “national” German language to illustrate the link between the printing press and language which led to the creation of the German identity. By extension, we can use the same logic to explain the creation of the other European “nations and nationalities.”

As I said above, Luther printed the Bible in High German in 1535 because he wanted to capture as big an audience as possible. The capitalists of the time understood the importance of publishing in a language that can be understood by the literate public across all regions and dialects of Germany. This effort led to the standardization of the German language – vocabulary and grammar - so that more people can understand it and more people started studying the language so that they can have access to all this new knowledge that was becoming available. In the end this became a self-reinforcing process with the result being a common German language for communicating and exchanging information. Literature, cultural, historical, political, scientific, and other writings helped create a “historical memory” for the German nation. At the same time we have political, economic, and religious developments in Germany, and across Europe, which are interacting and are propagated through the printed book in a common standardized language. We also have a growing and prosperous middle class of merchants and early capitalists. For example, the local rulers in many German states had all the reasons to help Lutheranism gain ground because it meant “taxes will not be going to Rome.” At the national level, we have the drive for centralization of power and the development of the concept of “first we are Germans and then Christians…and actually better Christians than the rest so we might think of ourselves as exceptional and different,” which probably used in a Machiavellian way to establish a political base. This probably marked the beginning of the end of the Feudal political structure of Europe. We could argue that the religious wars that followed the emergence of Reformation and lasted for about a hundred years had a devastated effect on the unity - as a Christian Nation - of Europe, they further reinforced the creation of identities across ethnic and common language groups. We should also look at the creation of the nations and nationalities through the prism of group social theory and psychology. The moment you have the creation of a group, no matter how you define it, you create rules of inclusiveness and exclusiveness. It’s easy to see how the ones that are excluded from a group would feel threatened. The immediate reaction would be for them to “define” their own group and defend their “turf.” For example in the Austrian-Hungarian Empire in the 19^th century, when the German language became the communication language of the State, automatically, people who couldn’t speak German, probably would had to be excluded from the echelons of power of the Empire. Anderson tells us that, as the empire pushed for the use of German throughout its territory, it seemed, from the view of the others groups that the central ruler was siding with the German speaking population. It’s easy to see how other groups with shared cultural and ethnic characteristics were formed as a response to real or perceived threats by the emergence of a power controlling German ethnic group.

It’s clear that the Church had played a positive unifying role in Europe and somehow held the “slaughtering” at low and local level. Once this unifying factor was gone Europe went on to see some of the most devastating wars that our planet has seen. But maybe we should look to Europe now and the European Union as a model in dealing with the “problem” of nations and nationalism. The EU has made war, say, between France and Germany, totally unthinkable. EU is based on the rule of law, process, and voluntary acceptance of its membership and its laws, major decisions must be unanimous, and it has strong laws in recognizing and protecting minority groups. It still hasn’t passed the test of time but judging from the club’s response, so far, to the financial crisis of members like Greece, Ireland, Italy, Spain, and Portugal, we should feel very encouraged about its cohesiveness and its future. As giants like China and India are emerging as the future political and economic superpowers of the planet and the US is turning its attention away from Europe and into Asia, the Europeans have one more reason to grow even closer. Would we ever see a United Sates of Europe? For many Europeans this should be the end result of the European project while others consider it a heresy even to mention the thought!

Economic and political “necessities” together with a shared culture, history, religion, and values were behind the forming of the EU (these are mentioned in the pre Treaty of Europe but religion was dropped in the final text.)  From an “economic necessity” point of view, how a France or a Germany can stand alone in a world that, most likely, will be dominated by China and India where mere provinces are much larger than France or Germany?

Certainly group dynamics on a global scale will have a great role on EU but equally important should be the Information Revolution of our time in bringing people and defining virtual groups and communities based on other than nationality characteristics. Can the barrier of language in the EU (25 official languages and about 150 regional and minority languages) be overcome with time and technology? What is the role of the European institutions and can they help form a European citizen above and beyond a “Greek” or a “German” or a “French”? The grouping of Europe has created interest and produced mimicking all around the world with initial focus on economics and trade. We see this in Asia with ASEAN and in North America with NAFTA. The danger here is that, in our effort to solve and/or deal with economic and political “necessities”, we will end up in forming supranational entities (as defined now) which eventually fight each other for the same reasons that the nations of the past fought. It’s worth mentioning here the ideas of Amartya Sen as they relate to Justice on a global scale. His ideas offer pragmatic hope in dealing with future “supranational identities” and a future ideology of “supranationalism.”

What would be the role of the communication technologies of our time in forming these identities? Will we witness the undoing of nationalism with the help of the new communication and information revolution that the printing revolution of the 15^th century helped create?  I hope there would be no professor Frank a hundred years from now lamenting on the “horrors” of a supranational ideology, assuming that there would be anything left of the Human Race in such a scenario.

I am optimistic that we can reach a Global governance state of affairs but we have to start on principles of Justice on a global scale, as advocated by Amartya Sen and others, now!

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[1] Leonard Dudley, “Information Revolutions in the History of the West”, (MA, USA: Edward Elgar Publishing Limited.)