Sunday, December 12, 2010

The New Communications Technologies, the Creation of the Commons, and the Potential of Shaping a Global Culture and Society

One of the most unpleasant, even disturbing, realizations in our study of the history of communication is that, throughout human history, every new communications technology ended up being centralized, monopolized, and controlled by a few[1].

Should we have any hope that this time the new communications technologies might escape Gitlin’s “culture producers” and “their masters”? And if the answer is a “possible yes”, where we should look for any evidence for this liberating potentiality for the “masses”?

James Carey[2] was a strong advocate of the communication technologies as a “prime mover” in shaping culture and society. Gramsci, Girtin, and Marcuse described, very eloquently, how communications has/is been used to “control” us while at the same time it gives us the illusion of freedom, liberty, justice, fairness, and opportunity. Gitlin argues, convincingly, that “no technological fix” can alter the fact that culture will always be produced by “organic intellectuals” and the rest of us will, willingly or unwillingly, will be shaped by them.

My challenge is this essay is to look for, and provide, as much evidence as possible, in support of my argument that we might have a chance to get rid of, even partially, of the top-down culture shapers, and engage and become active participants, through virtual communities, in shaping not only the culture, rules, and norms of these communities, but more importantly, in creating and shaping a global society and culture and being shaped by it.

If experiments like Wikipedia and the Open Source Foundation movement are any guide, humanity, enabled by the Internet/Information Technologies, as a whole could be redirected, and shared at the same, by a vast majority of its participants (probably a 3 billion or more by 2030) towards a more democratic, fair, and just world, with the “few” having much less control over the lives of the many, for the first time in human history.

First, let’s review our argument about the centrality of communications and what it makes it so critical and sets it apart from all other technologies. Throughout this course we have examined the centrality of communication, from the oral culture to the invention of language, the printed world, the mass media of Radio and TV, and now the Internet. From a conceptual point of view, we could, arguably, reduce everything, even human or any other organic life, to information. Life, in its simplest form, is coded in the DNA strand and as long as it can be “stored, communicated, and decoded”, we could argue that life is immortal![3] Therefore in Biology, technologies that communicate and “enable” expression of DNA could be seen as critical and central. Communication in the future will be seen in a much broader sense and it will include concepts like the reading, storing, manipulating, and decoding DNA, in other words, creating life[4][5].
How do the new communication technologies could change the shaping of society and culture, where each of us shapes and is shaped by them?

A non-exhaustive summary of the impact of the new communication technologies,[6] and of their centrality – they must be open, flat, and free - should include the following:

·         They enable the free exchange of ideas, information, knowledge, experience, and wisdom.
·         They enable participation, democracy, freedom, justice, fairness, and true opportunity
·         They enable collaboration, openness, engagement, problem solving, innovation and competition
·         They break down old monopolistic structures in society, reduce, dramatically, transactions costs, and foster competition by bringing down the barriers to entry, even making them nonexistent, into, but not only, knowledge and creative based business enterprises.[7]
·         They enable a better and more transparent government and more powerful and activist citizens.
·         They enable flat, open, and loose organizational structures of business and non-business enterprises.
·         They enable a new conceptual and alternative system, The Commons, that turn upside down such fundamental concepts as social organization of cooperation and production, copyright law, property, collective action, the management of Common property otherwise known as the tragedy of the Commons,

While some of the above statements, or claims if you will, represent prerequisites for some of the others, the last statement, that is – the Internet redefines, in a radical and completely opposite way most of our fundamental concepts we have come to know through Gitlin’s definition of “common sense”,[8] is the most profound one.

How did the open source movement, championed by organizations such as the Open Source Initiative (OSI)[9] and the Free Software Foundation (FSF)[10], come to represent such a radical departure from “common sense” thinking? What is Open Source?

According to Wikipedia[11], Open source describes practices in production and development that promote access to the end product's source materials. Some consider open source a philosophy, others consider it a pragmatic methodology. Before the term open source became widely adopted, developers and producers used a variety of phrases to describe the concept; open source gained hold with the rise of the Internet, and the attendant need for massive retooling of the computing source code. Opening the source code enabled a self-enhancing diversity of production models, communication paths, and interactive communities.[1] Subsequently, a new, three-word phrase "open source software" was born to describe the environment that the new copyright, licensing, domain, and consumer issues created.”

The philosophy behind the Open Source software movement has spread to other fields and there is hardly any creative and scientific endeavor that is not affected by it. The Wikipedia quote below captures these effects,
“Many fields of study and social and political views have been affected by the growth of the concept of open source. Advocates in one field often support the expansion of open source in other fields. For example, Linus Torvalds said, "the future is open source everything."[14] But Eric Raymond and other founders of the open source movement have sometimes publicly argued against speculation about applications outside software, saying that strong arguments for software openness should not be weakened by overreaching into areas where the story is less compelling. The broader impacts of the open source movement, and the extent of its role in the development of new information sharing procedures, remain to be seen.The open source movement has inspired increased transparency and liberty in other fields, including the release of biotechnology research by CAMBIA,[15] Wikipedia,[16] and other projects. The open-source concept has also been applied to media other than computer programs, e.g., by Creative Commons.[17] It also constitutes an example of user innovation (see for example the book Democratizing Innovation).[18] Often, open source is an expression where it simply means that a system is available to all who wish to work on it.”

The notion of sharing creative ideas and products is not new. I am certain that the poets of the Oral Culture era of Ancient Greece were “copying and remixing” the stories about the Gods without having to pay royalty fees to Hesiod or Homer. The Internet Protocols were developed through a similar process known as Request for Comments. Neither the concept of cooperative management and consumption of “limited or public resources” is new.
Elinor Ostrom,[12]a leading scholar in the study of common pool resources and the recipient of the Nobel economics prize in 2009, has done pioneering work that tore apart the “common sense” view as it relates to a centuries-old problem, known as the “tragedy of the Commons, that is – how to treat and manage the over exploitation of “public resources.” The Nobel Committee awarded her the Nobel economics prize "for her analysis of economic governance, especially the commons." The Nobel committee’s statement speaks to the profound, if not radical, implications of her work, and I quote,[13]
Elinor Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories. She observes that resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest, and she characterizes the rules that promote successful outcomes.
Steven Weber[14], a professor of political science at UC Berkley, in his fascinating book the “Success of Open Source” provides an excellent historical account of the open source movement and how concepts and ideas, that on first look would be dismissed as non-sense, became successful beyond everyone’s wildest imagination and now encompass areas, like property rights and copyright law, that I have previously described. He writes,

“….(open source) by experimenting with fundamental notions of what constitutes property, this community has reframed and recast some of the most basic problems of governance. At the same time, it is remaking the politics and economics of the software world. If you believe (as I do) that software constitutes at once some of the core tools and core rules for the future of how human beings work together to create wealth, beauty, new ideas, and solutions to problems, then understanding how open source can change those processes….”

Professor Weber says that open source turns upside down the conventional notions of property rights, political economy, management of a large, diverse and virtual group of people for producing a highly complex product for no direct pay, management of complex organizations, the division of labor and the management of knowledge, problems of social cooperation, and the management and conflict resolution of political organizations.

Where the conventional concept of property is that of exclusion of everyone except the owner, open source defines property rights as distribution rights. In the area of political economy and management of organizations and knowledge and division of labor open source relies on human motivation, cooperation, creativity, a few basic and simple first principles and an evolving and adaptive organization to coordinate the efforts of its members and achieve its objectives. This is exactly the opposite of what “common sense” practices hold for the management of public and private enterprises. While a political organization with the typical rules, norms, interests, power conflicts, agendas, and decision–making and conflict resolution procedures, open source is “not a political organization that looks familiar to the logic of an industrial-era political economy.”
Open source ideas have spread and influenced a philosophy of Commons to a variety of fields. Lawrence Lessig, the highly influential legal scholar and founder of the Stanford Law School’s Center for Internet and Society, borrowing from open source, has founded, and chairs, the Creative Commons, a nonprofit organization that allows “copyright holders, from musicians to engineers, grant flexible use of their work.”[15] In his book, Free Culture[16], Lessig states,
 "…there has never been a time in history when more of our 'culture' was as 'owned' as it is now. And yet there has never been a time when the concentration of power to control the uses of culture has been as unquestioningly accepted as it is now." (pg. 28), concluding that “…as society evolves into an information society there is a choice to be made to decide if that society is to be free or feudal in nature.”
MIT is “The” leading institution in the area of open source philosophy and created “waves” in the academic community when it established the MIT OpenCourseWare. Cecilia d’Olivia et.all[17], in a recent article in Science, described how the Open CourseWare idea came about. They write that in response to the questions “How will the Internet change education” and “What should MIT do about it?” MIT followed the counterintuitive suggestion that “should simply take the core academic material already created on campus – the syllabi, lecture notes, assignments, and exams – and share them with the world…to facilitate use of this content, the committee proposed publishing the materials using open licenses like those that had allowed open-source software to flourish.” MIT has extended the open source concept, for example, to biology, among other fields, and it has assembled a standard registry of biological parts: people can get open-source proteins, DNA, RNA, regulators and so forth.
Columbia’s Jeffrey Sachs,[18] a leading scholar, is a big proponent of global cooperation and responsibility in dealing with world’s most complex problems like climate change. In an excerpt[19] from his book, Common Wealth, he writes eloquently that,

 “The twenty-first century will overturn many of our basic assumptions about economic life…the challenges of sustainable development – protecting the environment, stabilizing the world’s population, narrowing the gaps between the rich and the poor. And ending extreme poverty – will take center stage. Global cooperation has to come to the fore. The very idea of competing nation-states that scramble for markets, power, and resources will become passé.”

Where Professor Sachs believes that global cooperation will become reality “because well informed national electorates support cooperation when they understand that it is in their own enlightened self-interest” I argue of the potentiality that the new communication technologies will shape a global pool of “billions of global citizens” and a pervasive global culture and society of collaboration and participation.

“How a Bunch of Nobodies Created the World’s Greater Encyclopedia?” is the subtitle of a book that chronicles the fascinating story of the creation of Wikipedia[20]. The phenomenon of Wikipedia[21] goes against every notion we have about creating “authoritarian and expert” work and against the concepts of markets, individualism, and property rights, among others.  It is created by “largely anonymous Internet volunteers”, ordinary people, not experts, and without financial reward, it is free of use, and it is run by an open, non-hierarchical and loose organizational and anonymous group.
Obviously, the concept of Wikipedia is not something that was created by the Internet but was rather enabled, in its current form, by it.
H. G. Wells[22], a leading British intellectual of the first half 20th century, in his book Anticipations,[23]envisioned the development of a global encyclopedia of all human knowledge free for all to use it. Many leading intellectuals, throughout history, conceived and advocated the notion of a global repository of human knowledge. We could strongly argue that Wikipedia, the global free encyclopedia was enabled both by the physical infrastructure and by the intellectual, creative. The Internet, as I said on many occasions, has altered the laws of economics on traditional concepts such as diminishing returns and marginal costs. David Bollier, the editor of OnTheCommons.org, calls the shift to “Wikipedia phenomena” the “Great Value Shift.”
He captures both the spirit and the essence of the new “conceptual system” when he writes that,

 “….we are moving away from a world organized around centralized control, strict intellectual property rights, and hierarchies of credential experts to a radically different order. The new order is predicated upon access, decentralized participation, and cheap, easy sharing…this is primarily because ‘the people formerly known as the audience,’ as media scholar Jay Rosen puts it, have acquired the capacities to be active participants in their own culture. ….the creative works and information that we post on the Web are not depletable resources or rivolrous. They can’t be used up. Moreover, the participation of more people not only doesn’t use up an online resource, it creates more value!...I call the epochal changes in economic and cultural production The Great Value Shift. In the networked environment that is becoming pervasive we are forced to recognize that markets, or at least traditional hierarchical institutions such as the corporation, do not have a monopoly on the ability to generate value. It is evident that a great many Web 2.0 platforms have created enormous value by coordinating all sorts of decentralized talent that can only thrive in communities of social trust – places where you can contribute to something larger than yourself, build a reputation, and make an impact.”

Clay Shirky, a highly influential scholar of the Internet, in his new book Cognitive Surplus[24] describes how the free time we all have, enabled through and by the Internet, could be transformed into “a general social asset that can be harnessed for large community created projects rather than as a set of individual minutes to be wiled away one person at a time.”
The concept of Wikipedia, enabled by the pervasive Wiki technology, has spread to a multitude of sites such as Wikiversity, Wikimedia, Wikibooks, to Intellipedia (private national security implementation), Wiki Government and Data.gov Wiki, and to implementations in the corporate world. It also has influenced the for-profit software development sector and many companies came out with commercial implementations of wiki-type collaboration   and information sharing platforms like SharePoint from Microsoft.
Jonathan P. Allen, in a recent research paper[25], provides evidence of the success of Knowledge Sharing in Web 2.0 Communities. His conclusion is that,

 “Thanks to the Web and its Rapid Socio-Technical Evolution…knowledge sharing in the Web 2.0 communities suggests that the public goods problem has been solved by leading Web 2.0 sites. The main knowledge-sharing challenge these communities still face is how to deal with ‘incorrect user behavior, both destructive and deceptive…how exactly they solve this key knowledge-sharing problem holds important lessons for knowledge management as it moves away from its traditional closed repository model, and more toward the kinds of open knowledge sharing found in Web 2.0 communities.”

One of the great advantages an unlikely organization like Wikipedia has compared to a highly efficient and well-run corporation is that it behaves like a “biology-based” system. It’s a not a perfect system but it constantly evolves and improves itself. It’s this evolutionary design of organizations like Wikipedia which makes them highly flexible, adaptable, and evolving.

Another great promise that organizations like Wikipedia offer is in the area of bridging cultural and political differences. In a fairly recent research paper[26], Han-Teng Liao, of Oxford University, postulated and studied some profound questions in the creation of a new Chinese version Wikipedia. The Chinese Wikipedia (CW) includes four regions; Mainland China, Hong Kong, Taiwan, and Singapore. I found his research fascinating and I believe the results of his study bolster my main argument in this essay. He writes,

“…the polity of CW is a work in progress. Ahead of state and market players, it has turned the linguistic differences among regions into a collective asset that is open to ongoing contributions. It remains to be seen as to whether the same phenomenon can be duplicated in larger cultural and political arenas. In other words, can CW turn the political differences among regions into a collective asset?...hence CW has shown some of the potentials of remixing citizenship or media citizenship that are not only enabled by the Internet but also unmatched by other state and market players. CW’s attempt to create an ‘unbounded citizenship’ based on shared yet different Chinese language and knowledge through cross-boundary discussion is arguably unprecedented. In conclusion, participatory user-generated culture has the potential to reconnect participants across the existing polity boundaries within a linguistic space.”
These are nothing sort of strong statements reminiscent of James Carey’s findings in his Telegraph as an Ideology essay about the effect of the Telegraph on the American language, social relations, and culture.

At this point I could be blamed, and rightly so, as a utopian that can’t see anything wrong with the Internet. Are there any negative and troubling influences of the Internet? My immediate answer is, Plenty! I could fill books but there many people out there who, already, have done it. The list is long and includes well-known critics[27] like Nicholas Carr, Robert McHenry, a former editor of the Encyclopedia Britannica, Andrew Klein, and even the co-founder of Wikipedia Larry Sanders.

“I do not trust what I ingest on the Internet because I know how the digital sausage is made” wrote Sanders in an article for BBC Knowledge.[28] There is a great potential for errors and omissions, willingly or unwillingly, as well as for vandalism and misinformation by the usual suspects. I would propose another test; compare the accuracy of Wikipedia entries (a random sample will be sufficient to prove the point) with the accuracy of data in the well-respected, peer-reviewed journals. Although I am not aware of any such research study, I would like to mention a highly publicized study by John Ioannidis, initially published in the respected online journal of Public Library of Science[29]. Dr. Ioannidis, a Greek epidemiologist at the University of Ioannina and with tenured positions at Tufts and Stanford Medical Schools, shocked the Medical profession by reporting that over 50% of the most highly regarded, peer-reviewed, research papers in medicine, “were shown by subsequent research to be either completely wrong or exaggerate.” If 50% accuracy is the best the experts in medicine can offer, and these are the best-of-the best, then we should be quite happy with the accuracy and data quality of Wikipedia.

In conclusion, I have argued here that the new communications technologies offer us the potential of a “new dimension” in thinking about such fundamental concepts such as social organization of cooperation and production, copyright law, property, collective action, and the management of Commons. This new thinking offers us an alternative to markets and to government regulation. There exists research supported evidence in the works of Nobel laureate Elinor Ostrom, Lawrence Lessig’s work on Internet and copyright law, and in the philosophy and practice of communities like Wikipedia and Open Source that supports a shift to a new collaborative and participative culture. The Internet “enables” them on a global scale, by reducing the transactions cost to zero and by offering a flat, open, and free platform for the exchange of ideas and information. It enables the creation of a “culture” of ideas.[30]

The biggest threats to the Internet, as I see it, in democratic societies, would be:

·         Its compartmentalization and its breaking up into “islands” interconnected through “gatekeepers”
·         Privacy abuses, where our data and our private lives are dumped on the Internet for everyone to see and exploit, without our consent.
·         Abuses of Internet “free speech” and openness in the name of national security, and commercial and monopoly interests.
·         Copyright laws which impede the free exchange of ideas and information while still maintain the illusion openness and free flow of information.

It becomes imperative for everyone who believes in democracy, freedom, free exchange of ideas and information, and the empowerment of the people, to defend an open and free Internet.

Humanity, for a first time, has a unique potential to develop a collaborative and collective perspective in dealing with its major issues and to reconnect and join forces in improving its condition through the contributions and participation of the majority, if not all, of its member and alter and shape (and be shaped by it) the world into a global society and culture.




[1] Tim Wu (2010), The Master Switch: The Rise and Fall of Information Empires, Knopf: USA
[2] James W. Carey (1989), Communication as a Culture, Rutledge: NY
[3] As wild and controversial as it might sound, this is a hypothesis that a well-known physicist, Frank J. Tipler, has argued in his book, The Physics of Immortality, (Anchor:1997)
[5] In the realm of Physics, we have discovered that black holes represent “sink holes” of matter. Initially, it was believed that nothing can escape a black hole. In the event that a whole universe, and all information about it, is “consumed” by a massive black hole, then there would be nothing left of that universe. But now physicists have evidence to believe that black holes radiate energy. Then a communication technology that could encode information in matter going into a black hole and then decode it from the energy (Einstein taught us that energy and matter are the same thing) that comes out of the black hole, allowing  us to recreate the “world” that was consumed by the black hole, is arguably of paramount importance.
[6] My definition of the new communications technologies is a broad one; it includes the global fiber optic infrastructure, the technologies that run on top of it such the Internet and its related technologies, tools and concepts that give meaning to the Internet such as computer languages, software and applications, information sciences and technologies, applied engineering concepts that are related to the Internet, and all devices that are connected and allow us to interface with the global infrastructure such as computers (of any size) and mobile devices but also any device that is a node in the global network and can be managed through the network but also any device that is a node and can provide intelligence to the global network. When I say Internet throughout this essay I mean all of the above!
[7] Carey, in his “Technology and Ideology: The Case of the Telegraph” makes the case, building on the work of Harold Innis, that the telegraph “spread a uniform price system throughout space so that for purposes of trade everyone was in the same place.” By contrast, and in addition to the elimination of geography, my point here is that the Internet eliminates the barriers to entry to most business enterprises allowing the new creative class to enter any field or create a new field altogether, whether for-profit or non-profit, and compete on an equal footing, if not from an advantaged position, with existing monopolistic structures. Nothing exemplifies this point more than the creation of Google, Facebook, and YouTube in the private space and Wikipedia in the Commons space. None of them would have been existed without the Internet and the associated information technologies. In a previous posting I mentioned the flattening of the barriers to entry in the financial markets as well as in the production of physical products. Every creative person can produce anything as long as she has an idea that has merit and it meets a “need.” The Internet allows her to utilize the “Commons” of the private sector, from financing and consulting, to prototyping and marketing and to the actual production and distribution of the products. Everything can be contracting out. One point economists miss when they talk about the future potential inflation and skyrocketing production costs is the fact that the private sector has created a “Commons” structure where, say in electronics, the capital investment costs are prohibitively high for all companies in the sector, outside Intel, Samsung, Sony and few others, the companies share the capital costs through the outsourcing of fabrication and production of their products, a concept that is known as crowd sourcing.
[8] Tod Gitlin, in his “Hegemony in Transition” offers a superb explanation of how acceptable views or “common sense views” are formed…..He tells us that “ideology is generally expressed as common sense – those assumptions, procedures, rules of discourse that are taken for granted. …”
[9] Open Source Initiative definitions can be found here: http://www.opensource.org/osd.html
[10] FSF was founded in 1984 by software pioneer Richard Stallman. FSF wants software to be: free from restriction, free to share and copy, free to learn and adapt, free to work with others. For more information go to http://www.fsf.org/
[11] Open Source Wikipedia entry http://en.wikipedia.org/wiki/Open_source
[14] Steven Weber (2006), “Success of Open Source”, Cambridge, MA: Harvard University Press.
[15] Editorial (2006), Resources, Institute of Electrical and Electronics Engineers Magazine, March Issue.
[16] Lawrence Lessig (2004), Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity, Penguin Press: USA
[17] Cecilia d’Oliveira et. all (2010). MIT OpenCourseWare: Unlocking Knowledge, Empowering Minds, Science, Vol. 329, 525-526.
[18] Jeffrey D. Sachs (2008), Common Wealth: Economics for a Crowded Planet, Penguin Press: USA
[19] Jeffrey D. Sachs (2008), Excerpt from “Common Wealth: Economics for a Crowded Planet”, Kosmos, Fall-Winter
[20] Andrew Lih (2009), Wikipedia Revolution, The: How a Bunch of Nobodies Created the World's Greatest Encyclopedia, Hyperion: New York
[21] From Wikipedia The fundamental principles by which Wikipedia operates are the Five pillars. The Wikipedia community has developed many policies and guidelines to improve the encyclopedia; however, it is not a formal requirement to be familiar with them before contributing Since its creation in 2001, Wikipedia has grown rapidly into one of the largest reference websites, attracting nearly 78 million visitors monthly as of January 2010. There are more than 91,000 active contributors working on more than 17,000,000 articles in more than 270 languages. As of today, there are 3,499,017 articles in English. Every day, hundreds of thousands of visitors from around the world collectively make tens of thousands of edits and create thousands of new articles to augment the knowledge held by the Wikipedia encyclopedia.”  http://en.wikipedia.org/wiki/Wikipedia:About
[22] H.G. Wells, who, arguable influenced science, literature, biology, and education, is largely remembered for his science fiction works – The Time Machine is one of his works – and considered, with Jules Verne, as the father of science fiction.
[23] H.G. Wells (2009), Anticipations of the Reaction of Mechanical and Scientific Progress Upon Human Life and Though, Dover Publications: NY
[24] Clay Shirky (2010), Cognitive Surplus: Creativity and Generosity in a Connected Age, Penguin Press: USA
[25] Jonathan P. Allen (2010), Knowledge Sharing Successes in Web 2.0 Communities, IEEE Technology and Society, Spring
[26] Han-Teng Liao(2009), Conflict and Consensus in the Chinese Version of Wikipedia. IEEE Technology and Society, Summer
[27] For a complete report on Wikipedia critics and the organization response to the main points of criticism see http://en.wikipedia.org/wiki/Criticism_of_Wikipedia. A statement of note is In August 2007, a tool called WikiScanner developed by Virgil Griffith, a visiting researcher from the Santa Fe Institute in New Mexico, was released to match anonymous IP edits in the encyclopedia with an extensive database of addresses.[59]News stories appeared about IP addresses from various organizations such as the Central Intelligence Agency, the Democratic Congressional Campaign Committee, Diebold, Inc. and the Australian government being used to make edits to Wikipedia articles, sometimes of an opinionated or questionable nature. Another story stated that an IP address from the BBC itself had been used to vandalize the article on George W. Bush.”
[28] Larry Sanders (2009), I do not trust what I ingest on the Internet because I know how the digital sausage is made, BBC Knowledge, Sept/Oct Issue.
[29] John Ioannidis (2005). Why Most Published Research Findings Are False. Public Library of Science Medicine 2(8):e124 http://www.plosmedicine.org/article/info:doi/10.1371/journal.pmed.0020124
[30] Nicholas Negroponte (2003), Creating a Culture of Idea, MIT Technology Review, February.

Saturday, December 4, 2010

Deregulation, the Financial Crisis, and the Ideology of “Common Sense”
“Obama knows what is going on in Iraq and in Afghanistan and how many people are getting killed” said professor Moretti in the beginning of this course (or something along these lines) “so why he doesn’t say something”?
U.S. and UK officials as well as the media in these countries knew that the embargo on Iraq during the 90s might have caused between 200,000 to 400,000 thousands kids to die (UN sources) but no one said anything! You couldn’t find any stories on US media despite the fact that these numbers were coming from UN agencies and other reputable non-profit organizations.
“How come no one saw it coming” quipped the Queen of England in a speech to London School of Economics referring to the financial crisis that still threatens the stability of the global financial (and political) system.
What was the point that Professor Moretti was trying to make? He went to say that it seems to be an “invisible gatekeeper” controlling what it can be said and what it can’t.
I would like to use the role of government regulation or, to be exact, absence of it or bad regulation, to illustrate the “acceptable” views on regulation and government intervention. Starting in the early 80s, and with more intensity in the 90s, the acceptable view on government regulation became that “regulation and good” do not fit in the same sentence. The fervor against regulation reached its apogee during the Bush administration and it became “common sense” that regulation is by definition bad. You could hear people talking on CNBC about the economy and if a guest dared to mention “regulation” the anchors would dismiss her with something like “…we all know that regulation is bad so no need to waste our time in the subject..” If she somehow insisted on the subject, she wouldn’t be invited back on the show ever again. You would expect, after a financial crisis, never seen since the great depression, which threatened to throw our country and the world in a chaos and even civil unrest, people would change their views about government regulation and intervention. Admittedly and by any measure, it was the government that saved the economy – as controversial as its actions might had been by saving the banks with public money. The unemployment rate could have gone up to 11, 12, or even 15% in the next several years and the economy would have contracted much more dramatically than the 6.5% it did in the first quarter of 2009. The $800 billion stimulus package, which was submitted by the Bush administration and passed by Congress after many bitter and emotional fights in the height of the crisis and which the Obama became responsible for dispensing it, has helped reduce the unemployment rate between 0.8 and 1.7[1] per cent. These numbers come from the Congressional Budget Office an independent and nonpartisan agency. Surowiecki writes, in The New Yorker, that “a recent study by Mark Zandi and Alan Blinder, economists from, respectively, Moody’s and Princeton, argues that, in the absence of the stimulus, unemployment would have risen above 11% and GDP (gross domestic product) would had been almost  half a trillion lower.” I, personally, have seen Wall Street research by several economists which argued that the stimulus added somewhere between 2 and 3 per cent to GDP growth.
But you wouldn’t know it by watching CNBC or other financial news networks or reading mainstream news and financial media like Washington Post, WSJ, Investor’s Daily, not to mention the multitude of financial sites. The “acceptable view” that stimulus was/is very bad for the economy, despite all the clear evidence to the contrary, is so strong out there that even the President and other officials of his administration stopped using the word “stimulus.” I do not agree with many of the Administration’s financial policies, but “facts should be the same for everyone” and as Surowiecki, writes in the same article, the “weight of the evidence suggests that fiscal policy softened the impact of the recession, boosting demand, creating jobs, and helping the economy start again…politically, however, none of this has made any difference. Polls show that a sizable majority of voters think that the stimulus either did nothing to help or actively hurt the economy, and most people say that they are opposed to a new stimulus plan.”
Matt Taibbi, who became famous for calling Goldman Sachs “a vampire squid wrapped around the face of humanity”, in his new book Griftopia, devotes a full chapter on how the public has been convinced that total deregulation is the best way to deal with the financial crisis. In academia but also on Wall Street, everyone is turning to Hyman Minsky and his theory of financial fragility hypothesis.  A debt induced financial crisis has come to be known as “Minsky Moment.” The Levy Institute at Bard College, where Minsky was an economics scholar at the time of his death in 1996, has published numerous research and policy papers about the financial crisis using Minsky’s theory to explain the financial crisis. Randall Wray[2], a scholar at the Institute, in a paper published in 2008,  “explained the historical development that led to today’s complex and fragile system and how the seeds of crisis were sown long ago by lax oversight, risky innovations, and deregulation during a lengthy period of relative stability.”
Fukuyama[3], not a liberal by any sense, in a Newsweek article at the middle of the crisis wrote “…under the mantra of less government, Washington failed to adequately regulate the financial sector and allowed it to do tremendous harm to the rest of the society. In The Gods that Failed,  Elliot and Atkinson write that “blind faith in unregulated and free-for-all markets has cost us our future.”[4] In the afterword of their book they argue that “the collapse of the free market and the validation of state intervention have opened up the possibility of real and radical reform of the global financial of the global financial system. …(policymakers) need to bear in mind a truth that was forgotten during the years of free market excess: economies and markets exist not for their own sake but in order to promote the fullest possible development of the human person.”
Little did they know how wrong they would be on these last observations! As I have outlined above, exactly the opposite has happened. If we were to run a Google search for “Deregulation and Financial Markets” we will get pages after pages with articles on “how deregulation had nothing to do with the crisis and that…We need complete deregulation of the financial markets.”[5] The link to Fukuyama’s article was number 103 while I could count many from the Cato Institute before it.
So what we are missing here? Throughout this course we have been talking about critical thinking and rational thought and the need for justice and a sense of equality. Could it be that inequality and injustice have something to do with the financial crisis? It would be a heresy to hear anyone on CNBC or read on WSJ that inequality even exists in this country.
No other than an economist from the University of Chicago, the citadel of financial conservatism at the center of “the accepted view” on regulation and government intervention[6] for more than a half a century, Raghuram Rajan, cites rising income inequality as one of the root causes of the financial crisis. Ragan, who calls himself a pragmatic, is an exception among economists in calling for attention to income inequality as a destabilizing factor of the financial markets. In his recent book, Fault lines, says that “…we need to worry about inequality not just because it upsets our sense of fairness but because it creates dangerous political dynamics.”[7]
How is it possible, in this era of unparalleled access to information and knowledge and expertise, not to mention that everyone receives a minimum 12 years of formal education (whatever we teach the kids is not to be critical thinkers or question authority), we, as society, are so blindsided and not being able to distinguish the facts from opinions and ideology and formulate reasoned views as opposed to going with the “common sense”?
We should look no further than Gitlin’s “Hegemony in Transition” for a superb explanation of how acceptable views or “common sense views” are formed and defended by the “system.”  He tells us that “ideology is generally expressed as common sense – those assumptions, procedures, rules of discourse that are taken for granted. Hegemony is the suffusing of the society by ideology that sustains the powerful groups’ claims to their power by rendering their preeminence natural, justifiable, and beneficent. The decisive point is that hegemony is a collaboration….. Hegemony is a process of organization in which cultural elites occupy top positions and supervise the work of subordinates in such a way as to draw their activity into a discourse that supports the dominant position of the elites; at the same time, hegemony cannot operate without consent of those subordinates. Hegemony takes places behind the backs of its operatives; it is a silent domination that is not experienced as domination at all. Hegemony is the orchestration of the wills of the subordinates into harmony with the established order of power.”  Although his discussion is centered on entertainment and not news, he doesn’t see much difference so that “…the workings and functions of the hegemonic news-selecting and –distributing industry are not essentially different from those of entertainment. ……Hegemony in news as in entertainment takes notice of alternatives to the dominant values, descriptions, and ideals, and frames them so that some alternative features get assimilated into the dominant ideological system, while most of that which is potentially subversive of the dominant value system is driven to the ideological margins.”
In his conclusion, Gitlin argues that,
 “by themselves, new forms of distribution signify nothing momentous. By no means do they guarantee that substantive alternatives will emerge; they might simply circulate new assortments of the standard ingredient. Genuine innovation can never be reduced to a technological fix. What develops in popular culture depends on the practitioners, on the degree to which they generate culture that matches the desires of publics in distinguished ways….the sway of the culture industry presupposes two elements; audiences that it satisfies …and cultural producers who are willing to work within the going conventions, under oligopolistic constraints.”
What could negate Gitlin’s conclusion as it relates to a technologic fix through the new communication technologies known collectively as “Internet and Information Technologies and Sciences?” What if this new medium could eliminate the two key assumptions in Gitlin’s argument, that is, 1) practitioners are the cultural producers and 2) oligopolistic constraints? I might add one on my one; transaction costs, which relate to oligopolistic constraints, for consuming and producing “culture” that soon will approach from negligible to zero!
Yes, somehow hegemony has a way to prevail in the end and history is in its side. But as I survey the history of mankind and all we have read, discussed, and learned in this course, I see for a first time that the “lay” and freedom and justice loving people, have a chance of liberating themselves from “Gramsci’s organic intellectuals.”
This is not an easy argument to make and it will be long before we will know how far the “Internet” can take us. It will be a generation or two before we see any concrete results but these results will be built on the dreams of people like the ones who established the Open Source movement, The Wikipedia,  and, why not, WikiLeads[8].
 I will take up that challenge in the next and final essay for this course.



[1] James Surowiecki, The New Yorker, September 20, 2010
[2] Randall Wray, “Financial Markets Meltdown: What Can We Learn from Minsky?,” The Levy Economics Institute of Bard College, Public Policy Brief No. 94, 2008
[3] Francis Fukuyama, “The Fall of America, Inc.” Newsweek, April 2008
[4] Larry Elliot & Dan Atkinson, The Gods that Failed (New York: Nation Books, 2009)
[5] Someone would expect to see a balanced output of articles in the Google search output and that the Internet is a way for ordinary people to reach views outside the censored “acceptable views” of hegemony. I am a strong believer in the “Internet” as an enabler in allowing people to bypass the “allowed views of the Hegemony” so how come that the Internet offers us pages after pages of articles arguing for “acceptable view” of deregulation and markets? This is something that I am going to explore in my final write up, but I should point out here that if we check all these articles, they are all pointing to sites associated with free market ideology such as Cato, National Review, AEP, and many “tea party” associated .org sites. In order to get academic research papers either you have to go beyond the 10 or 20 pages count or to know how to write complex queries in your searches, something only a “critical thinker” would do (she would learn how to write the query because it’s an indispensable tool in using the Internet to access varied information and form reasoned, and based on facts, opinions). Most people will just check the first or two pages of results, will glimpse through a few articles and they will form the “acceptable” opinion that deregulation is “Good and Government Intervention is bad.” The quick answer why we get these results is that the results are manipulated (The Atlantic, November 2010, provides an excellent account how groups manipulate the rankings in searches so that opposing views are literally “buried”).  
[6] Obviously, deregulation and bad regulation don’t relate only to financial markets but to all markets and economic activities. In passing we should mention the catastrophic oil spill we observed this past spring in the Gulf of Mexico because of an oil rig blow up. The New Yorker most eloquently wrote that “…during the past decade MMS (Mineral Management Service) officials had let oil companies shortchange the government on oil-lease payments, accepted gifts from industry representatives, and, in some cases, literally slept with the people they were regulating. When the industry protested against proposed new regulations (including rules that might have prevented the B.P. blowout), MMS backed down.”
[7] As an insider (I started out my career working for a legend in the Hedge Fund industry, have spent over 20 years in finance and technology, and have been a partner for over 7 years at $1.3 billion Hedge Fund) I know firsthand the twisted logic that is used by Hedge Fund and Private Equity partners to justify why they should only pay 15% of their earnings in taxes while their secretaries and the people who clean their offices pay 20, 25, and 30% of their salaries in taxes. It is mind boggling how the finance industry has lost any sense of fairness and decency for the people that (the taxpayers) had to put their money and save them! It seems, as a Hedge Fund manager observed in an investment forum before the crisis (a Russian living and working in the UK after all), that Wall Street has hijacked America.

[8] It was said in the class that WikiLeads is like the Pentagon papers. Yes, but with a very distinct difference. WikiLeads represents a movement which is turning itself into an institution. It’s an “enabler” Institution for everyone out to other to bring out, expose if you want, the hypocrisy and secret and illegal agendas of the various governments and commercial and noncommercial “hegemonic institutions” around the world. In a recent article, The New Yorker argues that it doesn’t understand how WikiLeads adds value by dumping all these documents for all to see! How the public gains anything from them without “a moderator” asks The New Yorker? Probably by a moderator, the New Yorker means the “organic intellectual”. My response is that “did it occur to them that it might, at some point with the help of the Internet the public will be both the producer and the consumer of ‘culture’ and that it will have no need for Organic Intellectuals? “ For every node in the flat and distributed network, the Internet, we have both a consumer and a producer. This is not to say that the Internet will overcome Hegemony (the question becomes what it will replace it) or that it will not create as many problems as it will help to solve (not everything is bad with hegemony.) It’s a Wild, Wild, Internet out there!