Anthony J. Pennings, PhD

WRITINGS ON DIGITAL STRATEGIES, ICT ECONOMICS, AND GLOBAL COMMUNICATIONS

The Cyberpunk Genre as Social and Technological Analysis

Posted on | August 13, 2018 | No Comments

I once taught a Freshman seminar at New York University in Information System Management (ISM). The course was introductory and only two credits so I felt we needed a focused, yet comprehensive set of analytical concepts to shape our discussions and assignments about ISM in modern world. I decided to use the “cyberpunk” genre (a subgenre of science fiction) to look at the relationship between modern digital technologies and the types of societies they were engendering.

Frances Bonner’s Fiction 2000: Cyberpunk and the Future of the Narrative HAL-ICON(1992) pointed to cyberpunk’s “…frenetic pace, the excess of information, the inverted millenarianism (figured especially in various forms of decay) and the concentration on computers, corporations, crime, and corporeality–the four C’s of cyberpunk film plotting.”[1] All four “C’s” were integral components of the “Cy-Fi” literary classics such as Philip K. Dick’s Do Androids Dream of Electric Sheep (1968) and William Gibson’s Neuromancer (1984) as well as films such as Blade Runner, The Matrix and the Terminator series.

Interestingly, cyberpunk has since gone mainstream and produced major blockbusters. Tony Stark, in the Ironman series, for example, certainly embodies corporeality with the Ironman exoskeleton, the corporation with Stark Industries, and computers with networked augmented reality. Its villainy indicts several sources including disgruntled Russians and aliens – not standard cyberpunk icons but an indication of the expansion of the genre towards “cy-fi” – cyberfictions.

Let’s discuss the 4 “C’s” in more detail:

Computers could easily be replaced with “cyberspace” as the combination of digital processing and networked communications provides a convenient point of departure for an analysis of contemporary cybersocieties. ColussusComputers initially appeared in literary productions as large, dominant “brains”, such as the giant computer in Colossus: The Forbin Project (1970) or HAL 9000 in 2001: A Space Odyssey (1968), no doubt based on the SAGE computers built by IBM and MIT as a North American hemispheric defense system. By the 1980s, the network capabilities added new dimensions and thus plot devices. Cyberspace replaced the science fiction’s interstellar rocketship as the dominant literary icon.

Corporations are prevalent icons in the cyberfiction genres. Intelligent building such as Network XXIII’s HQ in Max Headroom or DieHard‘s Nakatomi Tower represent the phallic connotation of corporate vitality. In the age of the ethereality of electric digital money, the marble and steel highrise is the material representation of modern power. In the theological context, where the power is arranged hierarchically, height attains a spiritual significance. In “real” life, the corporate Majestic Tower in Wellington, New Zealand was built next to St. Mary’s Catholic church and given a mocking halo of lights as the country’s elite embraced a new corporate mentality.

Criminality is a standard literary device that was successfully applied to the cyberpunk genre. Known historically in crime fiction and especially for its use in the gangster genre. The gangster as a product of the new urban civilization confronted the contradictions of liberal capitalism with its promise of a classless, democratic society. The genre pitted desire against constraint, where the gangster violates the system of rules and bureaucracy in the name of tragic individualism. The gangster character-type with its propensity towards dramatic action and individualistic profiteering has long been a vehicle for politicizing capitalism’s perennial problems — alienation, debt, greed, poverty, and unemployment. While most cyberfiction reifies the individual neo-liberal hacker and “his” struggle against officialdom, its more politicized forms point to skill base and capital investment required of high tech corporate espionage.

Corporeality is one of the most intriguing and under researched areas of the cyberfiction domain. What is the relationship between human bodies and technologies? How do technological developments augment or replace the human body. How can the body be bio-engineered? How can the body be commoditized? Drugs, implant devices, and external aids such as eyeglasses and hearing aids are some of the ways technology has been used to augment or control the human body. Cybernetic organisms, Donna Haraway’s “Cyborgs” and Tim Luke’s “Humachines” constantly test the boundaries of what we consider human and what we consider machine.

Bonner suggested that narratives can be categorized as “cyberpunk” when they include some combination of computers, corporations, crime, and corporeality.[2] The 4 Cs of cyberpunk genre analysis provides categories to examine the technological, economic, medical and legal issues facing modern societies. They can guide the explorations of not only various imagined futures but the types of visual and auditory techniques that shape our mental constructions of worldly environments and possible speculative outcomes of current trajectories.

Notes

[1] Frances Bonner’s Fiction 2000: Cyberpunk and the Future of the Narrative (1992) (Slusser, G. and Shippey, T. eds. Athens: University of Georgia Press)
[2] ibid, p. 191.

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AnthonybwAnthony J. Pennings, PhD is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.

Java Continues to be the Most Popular Programming Language

Posted on | May 31, 2018 | No Comments

It has been a while since I reviewed the most popular programming languages. The top 10 most popular programming languages according to the statistics gathered for the TIOBE Index for May 2018 are:

  1. Java
  2. C
  3. C++
  4. Python
  5. C#
  6. Visual Basic .Net
  7. PHP
  8. Javascript
  9. SQL
  10. Ruby
  11. R

The TIOBE Index uses several search engines to calculate the programming languages in which most lines of code have been written over the course of a month. In first place is the Java language that was developed by Oracle’s subsidiary Sun Microsystems in the mid-1990s.

Java was developed for interactive TV and mobile devices but found a more immediate home in the emerging World Wide Web. Sun had open-sourced the Java language under the GNU General Public License (GPLv2) in November 2006, so anyone else could copy and use its code. Java has consistently been in the top 5 programming languages for the last 15 years as has C and C++.

Java was a source of contention between Oracle and Google due to its influence on the Android operating system. Oracle claimed Google had infringed its Java copyright by using 11,500 lines of its code in its Android operating system. In 2016 Google won the Android case that protected the idea of “fair use” for APIs (application programming interfaces). The news was welcomed by developers who rely on access to open-source APIs to develop various services.

Java is valuable for developing apps in Android and is also popular in the financial field for electronic trading, confirmation, and settlement systems. Big Data applications like Hadoop, ElasticSearch, and Apache’s Java-based HBase also tend to use Java. It is also preferred for artificial intelligence (AI), expert systems, natural language, and neural network applications, mainly because of the availability of Java code bases and Java Virtual Machine (JVM) as a computing environment. It is also used for developing driverless car technology. Java tends to safer, more portable, and easier to maintain than other C languages.

Large organizations tend to use Java more than smaller, start up companies. If you want to work in start-up locations like San Francisco or Austin, Texas you might want to learn Python or a variation of Javascript. Seriously consider Java if you want to be employed in major cities with a high concentration of corporations, government agencies or research institutes.

Having said this, programming languages like C++ and Python continue to be popular. Python is probably the easiest to learn and is popular with Google Chrome and YouTube. Here are some other indexes that monitor the use and popularity of computer programming languages.

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AnthonybwAnthony J. Pennings, Ph.D. is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. From 2002-2012 was on the faculty of New York University. Previously, he taught at Hannam University in South Korea, Marist College in New York, Victoria University in New Zealand, and St. Edwards University in Austin, Texas where he keeps his American home. He spent 9 years as a Fellow at the East-West Center in Honolulu, Hawaii.

YouTube Meaning-Creating Practices

Posted on | May 28, 2018 | No Comments

Youtube has emerged as the primary global televisual medium, attracting about 1.3 billion viewers from countries around the world with over 5 billion videos watched every day. People suck up some 3.25 billion hours of YouTube videos each month and over ten thousand Youtube videos generated over 1 billion views since they were posted. Youtube contents range from homemade DIY videos to professional high definition television productions.

Youtube also provides opportunities for new publishers or “vloggers” covering a wide range of topics. Together, the world’s 10 highest-paid YouTube stars made $127 million in the year between June 1, 2016, and June 1, 2017, almost double the year before.

One big star to emerge on YouTube is Daniel Middleton (DanTDM) who made US$16.5 million last year. Middleton is a British professional gamer, and his videos primarily cover games like Minecraft, Plants vs. Zombies, and other favorite games that DanTDM’s primary audience, young kids, enjoy. Here he reviews the massive hit called Fortnite.

What makes DanTDM’s YouTube videos successful? What does he do to keep the viewer’s interested in his content and what keeps his audience coming back for more? How does he create entertainment and meaning for those who watch his show?

This series of posts will set out to explore a crucial relationship in (digital) media studies – between cultural/technical production practices and the meanings and feelings that are produced by those practices. Media production involves a combination of equipment and processes to capture and construct various images, edit sequences, and integrate audio and sound effects to produce specific results. Can we use some of the same analytical techniques to “interrogate” YouTube channels?

A good deal of related work has been done on television and film content. By exploring camera shots: close-ups, zooms, pans, shot composition, as well as montage: cutting rates, parallel editing, reaction shots, wipes, etc., important meaning-making practices can be discerned in the realm of YouTube videos.

Social media apps like YouTube present significant new complications in understanding the power of the global mediasphere. One area of concern are the metrics associated with YouTube. Ratings were always a significant part of television services to determine the value of programming. Youtube measures “views” and adds likes, dislikes, shares, playlisting, and subscribers to measure the credibility and commercial viablity of a channel. But vulnerabilities in the system allow many of these numbers to be tweaked by the “fake-view” ecosystem that has grown around YouTube.

YouTube has become a new frontier for media studies. The opportunity exists now to pioneer strategies for understanding this intriguing visual medium and the sets of meanings they create. What techniques are used in YouTube “channels?” What types of persuasive techniques are effective on YouTube channels. How do they differ from techniques used in film and television? Who is driving the narration of the video and what voices are they using?

But there are broader issues to address as well. What are the cultural, economic, and social implications of YouTube? What new ideas and cultural forms diffuse via Youtube? What economic activities and opportunities are made available through the platform? What impact will YouTube have on existing institutions?

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AnthonybwAnthony J. Pennings, PhD is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.

Anchoring Television News

Posted on | May 8, 2018 | No Comments

“The news is privileged discourse, invested with a special relation to the Real.” [1]

The news anchor is a finely tuned instrument for television performance. Unlike print journalism where disembodied letters of information suggest an objective third person, the televisual anchor is intimate and direct. They lead the viewer through the news while “anchoring” their attention to specific topics. The anchor anchors meaning. The anchor fixes meaning, in the sense that connections are made and reinforced through the credibility of the speaker. The anchor emphasizes what’s important, and what is to be dismissed or ignored.

He or she, or both, believe in the news, and that makes all the difference. Groomed and conditioned into the voice of authority, the anchor trades in the currency of assurance and credibility.

As the anchor is a guest into the homes and offices of the viewer, they must be trustworthy, well groomed, appropriately dressed, and present the sufficient manners appropriate to such an intrusion. But as they make themselves at home, anchors engage in light banter, laughing and joking with each other, including the viewer, albeit vicariously, in their community.

The anchor pulls the viewer into the hyper-real globe of television news and establishes the link between the world and its representation. As surveillance of the world is one of the key aspects of mass media, the viewer is transported around the world, peeking in on floods and coups, hurricanes and elections, earthquakes and ethnic cleansings. The viewer is included in the sphere of politics and economics.

When the anchor reads the news, computer graphics are often used. In particular, charts give a dynamic, historical validity to the news. A graph of a company’s share price tracked over the last month gives an empirical rhetoric to the argument. A three-month chart of a company’s stock price, for example, reconfirms the anchor’s argument about the relative strength or weakness of that company.

This post introduced some aspects of a formalistic analysis of television news. By examining the “anchor” of TV news, it suggests that television news has rhetorical dimensions that influences business decisions, government policies, and personal world-views.

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Notes

[1] Morse, M. (1986) “The Television News Personality and Credibility: Reflections on the News in Transition. In Studies in Entertainment: Critical Approaches to Mass Culture. (ed.) Tania Modleski.

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AnthonybwAnthony J. Pennings, Ph.D. is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. From 2002-2012 was on the faculty of New York University. Previously, he taught at Hannam University in South Korea, Marist College in New York, Victoria University in New Zealand, and St. Edwards University in Austin, Texas where he keeps his American home. He spent 9 years as a Fellow at the East-West Center in Honolulu, Hawaii.

GLOBAL INNOVATION INDEX

Posted on | March 8, 2018 | No Comments

The Global Innovation Index (GII) signifies the key role of innovation in economic growth, competitiveness, and sustainability.

Co-published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO), the GII attempts to identify and measure key innovation drivers that assist countries in developing policies to increase employment, improve productivity, and support long-term output growth.

The index is based on data from several sources, including the International Telecommunication Union (ITU), the World Bank and the World Economic Forum. It provides key insights on a wide range of national metrics that help policy-makers develop legislation and regulations that can facilitate economic activity. It currently assesses data in 127 national economies covering over 92% of the world’s population and 98% of global GDP.

The GII Report ranks world economies in terms of their innovation capabilities and results, recognizing the need for indicators that go beyond traditional measures of innovation such as research and development (R&D).

The GII publishes its data in seven major categories called “pillars.” Five input pillars comprise the Innovation Input Index
and capture elements of the national economy that enable or enhance innovative activities: Institutions, Human Capital and Research, Infrastructure, Market Sophistication, and Business Sophistication. Two pillars called the Innovation Output Index capture actual evidence of successful innovation outputs: Knowledge and Technology Outputs, and Creative Outputs.

INSTITUTIONS

The Institutions pillar captures the political economy framework of a country. These include political environment, political stability and absence of violence/terrorism, government effectiveness, and the regulatory environment. Business confidence and flexibility is important too and includes regulatory quality, rule of law, cost of redundancy dismissal, business environment, ease of starting a business, ease of resolving insolvency, ease of paying taxes.

HUMAN CAPITAL AND RESEARCH

This pillar gauges the human capital of countries and includes education levels and expenditures on education. This includes assessment in reading, mathematics, and science as well as pupil-teacher ratios in secondary and tertiary education and rankings of universities. Also considered are graduates in science and engineering, gross expenditure on R&D, and global R&D companies.

INFRASTRUCTURE

The third pillar measures information and communication technologies (ICTs), general infrastructure, and ecological sustainability. ICT includes ICT access, ICT use, government’s online services, and online e-participation. General infrastructure includes electricity output, logistics performance, and gross capital formation. Ecological sustainability measures GDP per unit of energy use, and environmental sustainability performance such as ISO 14001 environmental certificates.

MARKET SOPHISTICATION

The Market sophistication pillar has three sub-pillars structured around credit, investment and market conditions, trade, and competition. Areas include micro-finance, and venture capital as well as the total level of transactions.

BUSINESS SOPHISTICATION

The fifth enabler pillar tries to capture the level of business ability to assess how conducive firms are to innovation activity. These include number of knowledge workers: employment in knowledge-intensive services, firms offering formal training, and females employed with advanced degrees. Innovation linkages include university/industry, cluster development and research collaboration. Intellectual property and royalty payments have become prime indicators of innovation as are high tech imports, ICT services imports, and research talent in business enterprises.

KNOWLEDGE AND TECHNOLOGY OUTPUTS

This pillar covers all those variables that are traditionally thought to be the fruits of inventions and or innovations. These include knowledge creation, patent applications by origin, scientific and technical publications, and the rate of GDP per person engaged. Technology outputs include total computer software spending, high-tech and medium high-tech output, knowledge diffusion, intellectual property receipts, high-tech exports, and ICT services exports.

CREATIVE OUTPUTS

The last pillar on creative outputs measures the role of creativity for innovation. Areas include: intangible assets, trademark applications by origin, industrial designs by origin, ICTs and business model creation, ICTs and organizational model creation. Creative goods and services include cultural and creative services exports, national feature films produced, global entertainment and media market, printing and publishing output, and creative goods exports. Another area is online creativity such as generic top-level domains (gTLDs), Country-code top-level domains (ccTLDs), Wikipedia yearly edits, and Video uploads on YouTube.

These two indicators, the Innovation Input Index and the Innovation Output Index are averaged to compute the GII. The first combines five pillars while the second includes the last two and each score is calculated by a weighted average method. The overall GII score is the average of the Input and Output Sub-Indices. Below are scores tallied for the 2017 Report.

Global Innovation Index 2017 Rankings [Top 15]
Rank Country
1 Switzerland
2 Sweden
3 Netherlands
4 United States
5 United Kingdom
6 Denmark
7 Singapore
8 Finland
9 Germany
10 Ireland
11 South Korea
12 Luxembourg
13 Iceland
14 Japan
15 France

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AnthonybwAnthony J. Pennings, PhD is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.

THE EXPERIMENT, Part I: NEW ZEALAND AS THE WORLD MODEL FOR DIGITAL MONETARISM

Posted on | February 11, 2018 | No Comments


Starting “Down Under”
One of the first “guinea pigs” for the new system of digital monetarism was New Zealand. A one time a leader in the development of the “welfare state,” the small two-island nation-state in the deep Pacific Ocean had run into economic problems by the early 1980s. It had borrowed heavily during the previous decade, and its agricultural products were increasingly excluded from the rich United Kingdom markets due to their increasing participation in the European Community. New Zealand’s attempts to industrialize also ran up against rapidly escalating inflation, especially oil costs. The economy struggled, and a financial crisis ensued that would turn the tide of the country.[2]

In 1984, a new Labour government was voted in under Prime Minister David Lange. It was also a time when an active environmentalist and pacifist movement was growing in the small country. Subsequently, the new government voted to restrict nuclear vessels from coming into their ports. The decision represented a major diplomatic problem as the country was party to the ANZUS Treaty. This treaty brought the nation along with Australia under the defensive protection of the United States. As US policy was never to confirm nor deny the existence of nuclear weapons on any of its ships, it effectively meant that no US ships could port in New Zealand.

Consequently, Reagan’s Secretary of State George Shultz traveled deep into the Pacific to meet with the leaders of the new Labour Government. Shultz had been Ronald Reagan’s first Secretary of the Treasury and one of the architects of the Reagan economic changes. The contents of the meeting are sketchy, but the result was that New Zealand could keep its non-nuclear status but needed to undergo major economic restructuring in line with what was going on in the US and in Britain under Margaret Thatcher.

Under the direction of New Zealand’s Treasury and Ministry of Finance, a new strategy for the country was developed. Their Economic Management (1984) report contained the seeds of their intended transformation from a “Welfare State” to a new kind of “Enterprise Society” lubricated by digital financial activities. The new government instituted radical reform measures to cut government spending, implement a neo-liberal regulatory regime, “reinvent” civil service and privatize many government organizations, including the Post Office. The intention was to monetarize the national political economy in conjunction with emerging global financial and trade practices.

“Rogernomics” as it came to be called, was a strategy for reviving the sluggish and debt-ridden economy by refocusing on private exchanges or what are aggregately called “markets.” Named after Labour’s Minister of Finance, Roger Douglas, the national program offered a host of measures designed to dismantle its welfare apparatus. Drawing on its strong export trade of animal and natural resource products and, New Zealand attempted to provide its citizens with free education, healthcare, unemployment insurance, and social security. The new Labour-led government would focus instead on cutting fiscal expenditures, streamline bureaucracy, sell off state assets, as well as liberalize trade and control inflation.

In 1985, the Labour Party government launched a review of the Post Office. Its final report recommended transforming the postal service into three state-owned enterprises. The government in 1986 passed through parliament the State-Owned Enterprises Act that corporatized several government agencies into state-owned enterprises (SOE).

The New Zealand Post Office’s corporatization was completed with the 1987 passage of the Postal Services Act. Along with the SOE Act, the legislation broke up the New Zealand Post Office into three corporations: the postal service New Zealand Post Limited, the savings bank Post Office Bank Limited, and the telecommunications company Telecom New Zealand Limited. Within a few years, PostBank and Telecom were privatized, and only New Zealand Post remained a state-owned enterprise. [3]

Central to the new strategy was the deregulation and privatization of the telecommunications sector. Previously, the sector was under the purview of the New Zealand Post Office (along with the national bank system) and operated like a traditional PTT. But under this new system, the telecommunications company was first valued and corporatized as a state-owned enterprise (SOE) and then sold off.

Throughout the world, the telecommunication infrastructure would be the regime of digital monetarism’s first target. The reason was twofold. First, telecommunications was identified as the main conduit for both domestic and transnational business. Digital monetarism needed the fluid movement of information and electronic money within and through national borders. The national telecommunications system, while mainly bureaucratic and voice-based, still presented the best opportunity to create a modernized data communications system. The second reason was that, because of the high level of investment needed for a modern telecommunications, a privatized “telco” would be a major listing on a domestic stockmarket and was a high priority for investment bankers.

Telecommunications companies became almost universally the largest companies by market capitalization (current share price times the number of shares sold) by the end of millennium. After a period of deregulation and modernization, New Zealand sold its Telecom SOE government to Bell Atlantic and Ameritech, two American “Baby Bells”. It also partially floated its shares on public stock markets and soon became the largest listing on the New Zealand Sharemarket. When the selloff occurred in 1989, it was announced with the expectation that it would retire 1/3 of the government debt.

The experiment was a move towards a newly liberalized market economy centered around digital financial transactions and telecommunications. It was led ideological by attacks on the Keynesian system of economic management but was driven by the global debt crisis of the 1980s. New monetary liquidity emerged after Nixon dismantled the Bretton Woods system of currency regulation and technological innovations were once again applied for financial gain. Companies like Reuters developed new computerized systems for currency trading and global news and a global “information standard” emerged that replaced the gold standard as the system for ordering the global economy.

Notes

[1] Herb Schiller quoted in his son ’s book, Digital Capitalism, p. 71.
[2] Britain had resisted joining the EEC because of its existing trading obligations with the Commonwealth, primarily former colonies including New Zealand. Also continental interests, primarily France, were suspicious of the British ties to the US. But as the post-WWII economic boom continued in Europe, it became too attractive and on January 1, 1973 Britain was admitted into the EEC. France agreed, partly because it represented a balance to Germany’s power.
[3] Patrick G. McCabe, (1994) “New Zealand: The Unique Experiment in Deregulation,” in Telecommunications in the Pacific Basin: An Evolutionary Approach. Edited by Eli Noam, Seisuke Komatsukzuki, and Douglas A. Conn. New York: Oxford University Press. Originally presented at the Pacific Telecommunications Conference.

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AnthonybwAnthony J. Pennings, PhD is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.

Characteristics of Economic Goods and their Social Implications

Posted on | January 20, 2018 | No Comments

In a previous post, I wrote about how media products can be considered “misbehaving economic goods” because most don’t conform to the standard product that is individually owned and consumed in its entirety. Economics is mainly based on the assumption that when a good or service is consumed, it is used up wholly by its one owner. But not all goods and services fit this standard model.

Media products like a cinema showing or a television program have different characteristics. They are not consumed by an individual owner, and it may be difficult to restrict non-paying users/viewer/consumers from enjoying them. Cinemas can project one movie to large groups because it is not diminished by any one viewer although it need walls and security to keep non-payers out. TV and radio began by broadcasting a signal out to a large population. Anyone with a receiver could enjoy the broadcast. Cable distribution and encryption techniques allowed more channels and the ability to to monetize more households. These variations raise a number of questions about the ownership and consumption of different types of products and their economic analysis.

The characteristics of goods and services also raises questions about how society should organize itself to offer these different types of economic products. Media products and services have required a fair amount of government regulation and sometimes government ownership of key resources. Some goods, like fish, are mainly harvested from resources like lakes, rivers, and oceans that prosper if they are protected, and access restricted from overuse or pollution.

In this post, I will outline four categories of economic goods that need to be considered in today’s digital age with its global economy and changing social systems of governance. The major issues are 1) the degree of consumption or “subtractibility” and 2) whether non-paying consumers can be excluded from their consumption. Media products tend to be non-rivalous and non-excludable and are generally considered to be either “club goods” or “public goods.” Consequently, they are a useful point of departure to talk about other types of goods.

Private Goods

The standard category for economic goods is private goods. Private goods are rivalrous and excludable. A person eating an apple consumes that particular fruit, and it is not available for rivals to eat. Yes, an apple can be cut up and shared, but it is ultimately “subtracted” from the economy. Having lived in apple country, I know you can enter an orchard and steal some fruit. Economists like to use the term households, partially because many products, such as a refrigerator or a car, are shared among a small group of people. Other examples of private goods include food items like ice cream, clothing, and durable goods like a television set.

Common Goods

Common goods are rivalrous but non-excludable. This means that they can be subtracted from the economy, but it may be difficult to exclude others from non-payment. Fishing results in catches that are consumed as sashimi or other fish fillets, but the lakes, rivers, and oceans make it difficult to exclude fishing activities. Similarly, groundwater can be drilled and piped to the surface, but it is difficult to keep others from consuming from the same source. Public libraries loan out books making them unavailable to others. Table space and comfortable chairs at libraries can also be taken up, although it is difficult to exclude people from them.

Club Goods

Club goods are non-rivalrous and excludable. In other words, they cannot be consumed with usage, and it is possible to exclude consumers who do not pay. A movie theater can exclude people from attending the movie, but the film is not consumed by the audiences. The audience doesn’t compete for the cinematic experience; it shares the experience. That is why they are often called “collective goods.” These goods are usually made artificially scarce to help produce revenue.

Software is cheaply reproduced and not consumed by a user. However, the history of this product is wrought with the challenges of making it excludable. IBM did not try to monetize software and focused on selling large mainframes and “support” that included the software. But Micro-Soft (Its original spelling) made excludability a major concern and developed several systems used to protect software use from non-licensees. It only recently moved to a more “freemium” model with Windows 10. This strategy takes advantage of network effects and makes sure it gets out to a maximum amount of people.

Public Goods

The other category to consider are those products that are not subtracted from the economy when consumed and whose characteristics make it difficult to exclude nonpaying customers. Broadcast television shows or radio programs transmitted by electromagnetic waves were early examples. Carrying media content to whoever could receive the signals, the television broadcasts were not consumed by any one receiver. It was also difficult to exclude anyone who had the right equipment from enjoying the programs.

The technological exploitation of radio waves presented challenges for monetization and profitability. While some countries like Britain and New Zealand charged a fee on a device for a “licence” to receive content, advertising became an important source of income for broadcasters. It had been pioneered by broadsheets and newspapers as well as billboards and other types of public displays. As radio receivers became popular during the 1920s, it became feasible to advertise on its signals. In 1922, WEAF, a New York-based radio station charged US$50 for a ten-minute “toll broadcast” about the merits of a Jackson Heights apartment complex. These later became known as commercials and were adopted by television as well.

Cable television delivered programming that was also not rivalrous but developed techniques to exclude non-paying viewers. They broadcast content to paying subscribers via radio frequency (RF) signals transmitted through coaxial cables, or light pulses emitted within fiber-optic cables. Set-top boxes are needed de-scramble and decode cable channels allow subscribers to view a single channel. Unfortunately, this has led to monopoly privileges and has resulted in many viewers “cutting the cord” to cable TV.

Generally recognized public goods also include firework displays, flood defenses, sanitation collection infrastructure, sewage treatment plants, national defense, radio frequencies, Global Positioning Satellites (GPS) and crime control.

Anti-Rival Goods

What happens when a product actually becomes more valuable when it is used? It is possible that an economic good not only be not be subtracted but increase in value when it is used, and increases its value when used by more people. A text application has no value by itself, but as more people join the service, it becomes more valuable. This is an established principle called network effects.

Merit Goods.

Merit goods are goods and services that society deems valuable and the market system does not readily supply. Healthcare and education, child care, public libraries, public spaces, school meals are examples. Merit goods can generate positive externalities that circulate as positive effects on society. Knowledge creates positive externalities, it spills over to some who were not involved in its creation or consumption.

These are not necessarily all public goods. While medical knowledge is becoming more readily available, a surgeon can operate on a person’s heart, and her resources are not available to others. Hospital beds are limited and medical drugs and subtracted when used. An emerging issue is medical knowledge produced through data science techniques. The notion of public goods is increasingly being used to guide policy development around clinical data.

Economic Goods and Social Policy

Market theory is based a standard model where products are brought to market and are bought and consumed by an individual buyer, whether an individual or a more corporate environment. But as mentioned in a previous post, some products are misbehaving economic goods. A variety of goods do not fit this economic model and as a result present a number of problems for economic theory, technological innovation, and public policy.

Much political debate about economic issues quickly divides between free-market philosophies that champion enterprise and market solutions on the one hand, and economic management by government on the other. The former may be best for private goods, but other goods and services may require alternative solutions to balance production and social concerns. Much of the US technological development was ushered in during the New Deal which recognized the role of public utilities in offering goods like electricity, telecommunications, and clean water for sanitation and drinking. The move to deregulation that started in the 1970s quickly became more ideological rather than practical. Digital technologies emerged within market philosophies, but practical questions have challenged the pure free enterprise orthodoxy.

Summary

Media products are misbehaving economic goods in that they do not fit the standard model of a market with products that are consumed by an individual consumer. Modern economics is largely based on the idea that goods are primarily private goods. But as we move towards a society based more on information and digital processes, we need to examine the characteristics of the goods and services we value. We need to design systems of production and distribution around their characteristics.

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AnthonybwAnthony J. Pennings, PhD is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.

Ensuring Successful Democratic Political Economies

Posted on | January 11, 2018 | No Comments

The recent election of Donald Trump, the US Republican Party candidate, over the Democratic candidate Hillary Clinton, for US president, has called into question the conditions and competences for leading a thriving democratic political economy (DPE). This post examines the roles of the public sector and the private sector in ensuring macroeconomic success. Government and business, while often sharing the common objective of a thriving economy, have differing motivations and strategies for reaching these aims.

One recurrent issue is whether a career politician is a better choice to ensure a prosperous national economic environment or is a candidate with extensive business experience more likely to create the conditions for political and commercial satisfaction and growth? This issue received recent currency with media attention on self-made billionaire Oprah Winfrey after her talk at the 2018 Golden Globes Award. The issue also calls into question the relationship between government and the private sector and what each contributes to economic activity in a democratic environment.

Historically, presidents from the business sphere have performed below average when it comes to U.S. economic activity, although the sample is statistically small. Jimmy Carter turned around his father’s farm but struggled during the stagflation of the 1970s. George H. Bush was a successful oilman but had difficulties managing the economy after taking over from Ronald Reagan. His son, George W. and the first president with an MBA, made a fortune with the Texas Rangers baseball team but left the country with the “Great Recession” of 2008 and massive debts due to war in the Middle East. Herbert Hoover, who was elected 1928, was engineer and silver mining magnate but failed to ward off the Great Depression. More successful was Warren Harding, a newspaper publisher, who presided over “the roaring twenties” and Harry Truman, who, although a failed businessman, saw the country through the end of World War II and the post-war economic boom.

Trump inherited a fortune from his real estate father and developed an international chain of luxury condos and homes targeted at global elites. Although a media celebrity throughout his career, he never held a government position or ran for office. His first year as US president saw the extension of the seven-year economic recovery from the Great Recession, primarily due to advances in asset prices.

But rather than address the capabilities of Trump directly, I will examine some of the structural characteristics that make the success of the economy, a priority for political leadership in democratic political economies. DPEs are republics that have politicians represent the populace in managing governments and their public administrations. This blog post expands on the notion that a division of labor has emerged in DPEs and examines the structural pressures which drive both the public and private sectors towards a common objective – success at the macroeconomic level – despite differing approaches and competences.[1]

Companies drive economic activity by investing in potential profit-making activities. Failure to invest within a national boundary can raise significant difficulties for a government and its internal populace. The globalization of commerce and finance since the 1970s has created new forms of competition for capital by national and even regional governments. This trend has challenged the tax base of these governments as they offer better tax deals to multinational capital. The competition for jobs has also reduced wage rates, further eroding tax revenues.

While capitalists are often quite capable of success at the microeconomic level, they are not in a position to manage the economy as a whole. Towards procuring that success, corporations lobby governments and conduct other activities to influence government actions that will help their companies and industry.

Entrepreneurs and other people in business and professional services tend to be highly focused on their own profitability and while spending only limited resources on community and civic affairs. Private activities are insufficient to maintain parks, libraries, roads and other public goods that enhance the quality of life. As a result, democratic political economies tend to divide the responsibilities for modern economic life. Each shares an interest in robust commercial activities, albeit for differing reasons.

When it comes to ensuring a successful and prosperous political economy, democratic societies have certain structural conditions which guide the emergence of their particular form of capitalism. Neither the public nor private sector in modern democratic societies have sufficient managerial or policy competences to ensure a successful economy. Both rely on a vigorous economy for their success. Each needs economic success to satisfy their respective electoral and fiduciary constituencies. Despite the division and differing reasons, the goal is the same, a vibrant economy that will ensure both profits and political success. The political and commercial spheres both have an interest in macroeconomic success.

Governments look to the fruits of a growing economy to pay for debt interest, defense, and other services, including welfare. Their goal is to maintain a happy populace that will keep them in office. They want a prosperous economy to keep people employed, keep share prices high, and investment flowing into productive activities that will not only keep people feeling economically secure, but provide tax revenues.

The private sector, in general, is unable to ensure overall capitalistic growth on its own. It lacks sufficient organizational and policy consciousness to ensure success at the macroeconomic level. While corporations are often quite capable of success at the microeconomic level, they are not in a position to manage the economy as a whole.

The private sector wants growth and profits as well. Corporations strive to fulfill their fiduciary responsibilities – maintaining high profits for owners and shareholders. Towards procuring that success, they lobby governments and conduct other activities to influence government actions that will help their companies and industry. However, while these attempts may help individual companies or industries, they are insufficient to ensure the success of capitalism as a whole.

An interesting situation emerged with President Obama’s “You didn’t build that” statement during the 2012 presidential election campaign.

    “If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”

The statement quickly received criticism by Governor Romney, a successful businessman, and others as an example of government encroachment in the private sector. The criticism echoed a similar critique against Vice-President Al Gore’s “I took the initiative to create the Internet.” Certainly, the Internet has progressed to be a major medium of global commerce due to entrepreneurial initiatives and accomplishments. However, much of the initial research and development, as well as the policy framework, was created by a wide range of government actions that transformed what was essentially military technology into commercial products and services.

The Republic’s Interest in the Economy

In the first of the major structural mechanisms that Fred Block proposed to explain why government officials pursue policies that are in the general interest of capitalism, he draws on the work of Claus Offe (1976). The officials of the government, according to this view, are to some extent dependent on the level of economic activity that: 1) allows the state to finance itself through taxation or borrowing; and 2) maintains popular support among the voting citizenry. Significant business investment, high levels of employment and minimal amount of government competition for surplus capital make up the most common strategies for ensuring high levels of tax receipts while keeping the voting public relatively contempt.

Governments require a tax base to fund their activities, whether meeting the bureaucracy’s payroll, building infrastructure or funding defense. They tax a combination of capital gains, income, sales of goods and services, etc. Taxes are policy decisions that affect different people, advantage different groups, make possible certain governmental directions. Inheritance taxes for example, are meant to not only collect revenues, but impose a cost on the transfer of wealth and limit familial privilege and class divisions.

Administrations also produce debt instruments that help finance government activities. In the global digital financial economy, debt produced through government securities increasingly fund a significant amount of education, healthcare, military, research and other expenditures.

These instruments also provide an important hedge for the financial sectors. The global trading environment requires constant trading in a large variety of financial instruments. Government debt allows traders to increase trading activities by allowing them to hold government securities in their portfolios and trade them constantly. Common economic doctrine argues that governments compete with the private sector for capital but in reality, the increase in government spending increases the financial sphere by expanding the trading environment and providing instruments for risk reduction. This is a dangerous trend for governments, but financial institutions apply pressure to increase the amount of debt in circulation.

Elected officials also need to keep the voting populace materially happy to stay in office. Economic indicators play a vital role in the public’s perception of the economy. These indexes provide numerical representations of various states of the economy, from consumer confidence, to price levels and the latest unemployment rates. In an age when pensions and retirement accounts are invested in the financial markets, the public also follows such indicators as the Dow-Jones Industrial Average and NASDAQ to gauge their personal wealth. Policies that increase corporate wealth, such as tax cuts, are seen by many voters as more valuable than government expenditures on food stamps or other forms of personal welfare as they increase stock prices.

Significant structural relationships make the business of the economy, the business of government. For one, modern democratic governments have significant fiscal determinants that compel them to establish a major stake in the economy. Relying on taxation and borrowing to propel their activities and programs, they need to ensure a robust commercial sphere in order to obtain the needed financing to run the government, provide for the national defense, monitor the economy, and conduct special programs.

The business class is acutely aware of the influence government has on their interests and work towards shaping that influence, whether it be depressing minimum wage, alleviating environment restrictions, or shaping tax policy. Many critics of democratic political economies
argue that influence gives capital concerns sufficient control over the state. For Block however, it is the first of several reasons, the “icing on the cake.” Other structural factors are at work and need to be considered.

Influence Channels and Cultural Constraints

Two “subsidiary structural mechanisms” are also important when it comes to shaping the actions of public administrators towards economic growth. These are influence channels and cultural hegemony.

The first of the subsidiary structural mechanisms are the influence channels. The private sector can exert significant pressure on the state through its ability influence politicians, especially in a media age requiring significant expenditures on TV and other mediums for advertising. The aims of this influence have generally been oriented towards the procurement of government contracts, favorable legislation, tax cuts, regulatory relief, labor control, and specific spending in certain areas. They are most often lobbying activities, campaign contributions, and other favors. The high costs of elections, particularly media buys for procuring elections, have tied government officials to the influence of economic concerns.

Undoubtedly, issues related to bribery, coercion, and the revolving door into higher paying jobs may be factors that influence policy actions, however, this does not discount larger structural factors at work.

Cultural hegemony was cited as a second subsidiary structural mechanism. Unwritten rules infiltrate democratic political economies, which tend to indicate what is and what is not acceptable state activity. “While these rules change over time, a government that violates the unwritten rules of a particular period would stand to lose a great deal of its popular support. This acts as a powerful constraint in discouraging certain types of state action that might conflict with the interests of capital.”[2]

A contemporary example is the cultural divide over the idea of “liberalism.” This term was recoded during the 1970s and 1980s as an attack on conservative culture, specifically religion and the belief in work and entrepreneurial activity. This attack was also located in the work of the US government. President Ronald Reagan was a strong voice in the articulation and critique of “liberalism” and promised to “get government off our backs.” This divide has been a dominant cultural characteristic of the modern US political debate.

More recently, President Trump withdrew the US from the Paris Climate Accords. While not as popular as Reagan, Trump appealed to a growing backlash against the calls for government action to address the consequences of climate pollution influencing weather effects around the world. Many were convinced that such actions would too expensive and hurt economic progress. Others refused to believe the scientific discourse on the topic. But mostly, strong interests in petrochemical-related industries drive the discussion on climate change through media technologies such as astroturfing to avoid a major “carbon bubble” collapse. For the most part, liberal progressive movements have embraced sustainable technologies and renewable energies such as hybrid cars, solar panels, and vegetarianism.

Summary

Government and corporations, while sharing broad common objectives for a robust political economy, have differing motivations and strategies for reaching these aims. Despite the division and differing reasons, the goal is the same, a robust economy that will ensure both profits and political success. Neither can, by themselves, ensure successful economic growth, but by recognizing this division of labor, and the structural properties that guide each sector, democratic political economies can guide government and corporations towards mutually reinforcing successes.

Notes

[1] Claus Offe and Fred Block have been particularly influential in examining these relationships. When I was in grad school one of my minors was public administration. One the authors that interested me was the sociologist Fred Block. He delineated a set of structural mechanisms that determine the relationship between governments and the private sector in modern economies.
[2] I originally wrote a version of this essay in graduate school. I was reading a lot of public administration as well as neo-Marxist state theory. Fred Block’s work was particularly useful and much of the ideas of a structural division of labor is based on his work, including this quote on p. 14.

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AnthonybwAnthony J. Pennings, PhD is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.

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    Professor and Associate Chair at State University of New York (SUNY) Korea. Recently taught at Hannam University in Daejeon, South Korea. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, media economics, and strategic communications.

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