Of particular interest is the transformation of public-switched networks for Internet Protocol (IP)-based services and then WiFi and mobile use. Data-intensive solutions are beginning to address many development issues. However, a growing concern is that data is being collected extensively and used intrusively to manipulate behaviors.

The stages are categorized as:

1) Containment/Development/Modernization; 2) New World Economic and Information Orders; 3) Structural Adjustment and Re-subordination, 4) Global ICT Integration, and; 5) Smart/Sustainable Mobile and Data-Driven Development.

Using a techno-structural approach, the explication of these stages will provide historical context for understanding trends in ICT innovation and implementation. This approach recognizes the reciprocal effects between technological developments and institutional power and a “dual-effects hypothesis” to illustrate the parallel potentials of ICT4D as both a democratizing and totalizing force. This research will also provide insights into the possibilities of ICT diffusion in developing environments.

1) Containment/Development/Modernization

The US emerged as the primary economic and military power in the aftermath of World War II. Arms and materiel sales before the war had transferred much of the world’s gold to the US, which was wisely transferred inland to Fort Knox, Kentucky. Franklin Delano Roosevelt (FDR) had sought to limit finance in the aftermath of the “Crash of 1929” and continued it globally with the initiative at Bretton Woods Hotel in New Hampshire. “Bretton Woods” created the International Monetary Fund (IMF), the World Bank, the International Trade Organization (rejected by Congress), and also instituted a dollar-gold standard that tied the US dollar to gold at $35 an ounce (oz) and other international currencies to the US dollar at set rates. This system was designed to “contain” financial speculation and encourage trade and development.

The other aspect of containment, more widely known, is the containment of Communism. The painful success of the USSR in World War II in countering the Nazis on the eastern front and their appropriation of German atomic and rocketry technology presented an ideological and military threat to the US and its allies. The USSR’s launch of Sputnik satellites in 1957 resulted in the US’s formation of NASA and ARPA. The Communist revolution in China in 1949 and their explosion of an atomic bomb on Oct. 16, 1964, spurred additional concern. The resultant Cold War and Space Race spurred technological development and competition for “developing countries”worldwide.

“Development” and “modernization” characterized the post-World War II US prescription for economic development around the world, and especially in newly decolonized nation-states. Modernization referred to a transitional process of moving from “traditional” or “primitive” communities to modern societies based on scientific rationality, abstract thought, and the belief in progress. It included urbanization, economic growth, and “psychic mobility” that could be influenced by types of media. Scholars talked of an eventual “takeoff” if the proper regiment was followed, particularly the adoption of new agricultural techniques termed the “Green Revolution.”[1] Information and Communications Technologies (ICTs) were rarely stressed, but “five communication revolutions” (print, film, radio, television, and later, satellites) were beginning to be recognized as making a contribution to national development.

Communication technologies were beginning to spread information about modern practices in agriculture, health, education, and national governance. Some early computerization projects continued population analysis, such as the census that had started with tabulation machines, while mainframes and minicomputers were increasingly utilized for statistical gathering by government agencies for development processes.

Telegraphy and telephones were strangely absent from much of the discussion but were important for government activities as well as large-scale plantations, mining operations, transportation coordination, and maritime shipping. Because of their large capital requirements and geographic expanse, countries uniformly developed state-controlled Post, Telephone, and Telegraph (PTTs) entities. Organized with the help and guidance of the International Telecommunications Union (ITU), the oldest United Nations entity, PTTs struggled to provide basic voice and telegraphic services. However, they provided needed jobs, technical resources, and currency for the national treasury.

Wilbur Schramm’s (1964) book Mass Media and National Development made crucial links between media and national development. Published by Stanford University Press and UNESCO, it examined the role of newspapers, radio, and television. Its emphasis on the role of information in development also laid the foundation for the analysis of computerization and ICT in the development process. I had an office next to Schramm for many years at the East-West Center’s Communication Insitute that he founded while I worked on the National Computerization Policy project that resulted in the ICT4D benchmark study Computerization and Development in Southeast Asia (1987). Herbert Dordick, Meheroo Jussawalla, Deane Neubauer, and Syed Rahim were key scholars in the early years of ICT4D at the East-West Center.[1]

2) New World Economic and Information Orders

Rising frustrations and concerns about neo-colonialism due to the power of transnational corporations (TNCs), especially news companies, resulted in a collective call by developing countries for various conceptions of a “New World Economic and Communication Order.” It was echoed by UNESCO in the wake of OPEC oil shocks and the resulting Third World debt crisis. The issue was primarily news flow and the imbalanced flow of information from North to South. Developing countries were concerned about the unequal flows of news and data from developing to developed countries. In part, it was the preponderance of news dealing with disasters, coups, and other calamities that many countries felt restricted flows of foreign investment. The calls caused a backlash in the US and other developed countries concerned about the independence of journalism and the free flow of trade.[2]

It was followed by concerns about obstacles hindering communications infrastructure development and how telecommunications access across the world could be stimulated. In 1983, UNESCO’s World Communication Year, the Independent Commission met several times to discuss the importance of communication infrastructure for social and economic development and to make recommendations for spurring its growth.

The Commission consisted of seventeen members – communication elites from both private and public sectors and representing a number of countries. Spurred on by the growing optimism about the development potential of telecommunications, they investigated ways Third World countries could be supported in this area. They published their recommendations in The Missing Link (1984) or what soon was to be called the “Maitland Report” after its Chair, Sir Donald Maitland from the United Kingdom. This report brought recognition to the role of telecommunications in development and opened up resources by international organizations such as the World Bank.

The transition from telegraph and telex machines to computers also resulted in concerns about data transcending national boundaries. The Intergovernmental Bureau for Informatics (IBI) that had been set up as the International Computation Centre (ICC) in 1951 to help countries get access to major computers, began to study national computerization policy issues in the mid-1970s.

They increasingly focused on transborder data flows (TDF) that moved sensitive corporate, government, and personal information across national boundaries. The first International Conference on Transborder Data Flows was organized in September 1980, followed by a second held in 1984; both were held in Rome (Italy). The increasing use of computers raised questions about accounting and economic data avoiding political and tax scrutiny. The concern was that these data movements could act like a “trojan horse” and compromise a country’s credit ratings and national sovereignty, as well as individual privacy.

3) Structural Adjustment and Re-subordination

Instead, a new era of “structural adjustment” enforced by the International Monetary Fund emerged that targeted national post, telephone, and telegraph (PTT) agencies and other aspects of government administration and ownership. Long considered agents of national development and employment, PTTs came under increasing criticism for their antiquated technologies and lack of customer service.

In the early 1970s, Nixon ended the Bretton Woods regulation of the dollar-gold standard, resulting in very volatile currency markets. Oil prices increased, and dollars flowed into OPEC countries, only to be lent out to cash-poor developing countries. The flow of petrodollar lending and rising “third world debt” pressured PTTs to add new value-added data networks and undergo satellite deregulation. Global circuits of digital money and news emerged, such as Reuters Money Monitor Rates and SWIFT (Society for Worldwide Interbank Telecommunications). These networks, the first to use packet-switching, linked currency exchange markets worldwide in arguably the first virtual market.

A new techno-economic imperative emerged that changed the relationship between government agencies and global capital. PC-spreadsheet technologies were utilized to inventory, value, and privatize PTTs so they could be corporatized and listed on electronically linked share-market exchanges. Communications markets were liberalized to allow domestic and international competition for new telecommunications services, and sales of digital switches and fiber optic networks. Developing countries became “emerging markets,” consistently disciplined by the “Washington Consensus” stressing a set of policy prescriptions to continue to open them up to transborder data flows and international trade.[3]

4) Global ICT Integration

Packet-switching technologies standardized into the ITU’s X.25 and X.75 protocols for PTT data networks, transformed into ubiquitous TCP/IP networks by the late 1990s. Cisco Systems became the principal enabler with a series of multi-protocol routers designed for enterprises, governments, and eventually telcos. Lucent, Northern Telecom, and other telecommunications equipment suppliers quickly lost market share as the Internet protocols, mandated by the US military’s ARPANET, and later by the National Science Foundation’s NSFNET, were integrated into ISDN, ATM, and SONET technologies in telcos around the world.

The Global Information Infrastructure (GII) introduced at the annual ITU meeting in Buenos Aires in March of 1994 by Vice President Gore targeted national PTT monopolies and government regulatory agencies. He proposed a new model of global telecommunications based on competition, instead of monopoly. He stressed the rule of law and the interconnection of networks to existing networks at fair prices. Gore followed up the next month in Marrakesh, Morocco, at the closing meeting of the Uruguay Round of the GATT (General Agreement on Tariffs and Trade) negotiations which called for the inclusion of GATS (General Agreement on Trade in Services) that include everything from ciruses, to education, radio and television, and telecommunications services. And, at this meeting, they called for the creation of the World Trade Organization (WTO).

Formed in 1995, the WTO had two meetings in 1996 and 1997 that created a new era of global communications and development. Members party to the new multilateral arrangement met quickly in Singapore in 1996 to reduce tariffs on the international sales of a wide variety of information technologies. The Information Technology Agreement (ITA) was signed by 29 participants in December 1996. The agreement was expanded at the Nairobi Ministerial Conference in December 2015, to cover an additional 201 products valued at over $1.3 trillion per year. A agreements allowed Korea to successfully market early CDMA mobile handsets and develop a trajectory of success in the smartphone market.

In 1997 the WTO met in Geneva and established rules for the continued privatization of national telecommunications operations. Sixty-nine nations party to the WTO, including the U.S., signed the Agreement on Basic Telecommunications Services in 1997 that codified new rules for telecommunications deregulation where countries agreed to privatize and open their own telecommunications infrastructures to foreign penetration and competition by other telcos.

The agreements came at a crucial technological time. The World Wide Web (WWW) was a working technology, but it would not have lived up to its namesake if the WTO had not negotiated and reduced tariffs for crucial networking and computer equipment. The resultant liberalization of data and mobile services around the world made possible a new stage in global development.

Hypertext, Ad Markets, and Search Engines

The online economy emerged with the Internet and its hypertext click environment. Starting with advertising and the keyword search and auctioning system, a new means of economic production and political participation based on the wide-scale collection and rendition of surplus behavioral data emerged for prediction products and services.

As Shoshana Zuboff points out in Surveillance Capitalism (2019), the economy expands by finding new things to commodify, and the Internet provided a multitude of new products and services that could be sold. When the Internet was privatized in the early 1990s and the World Wide Web (WWW) established the protocols for hypertext and webpages, new virtual worlds of online media spaces were enabled. These were called “inventory.” Or you can can them ad space.

Behavioral data is the information produced as a result of actions that can is measured on a range of devices connected to the Internet, such as a PC, tablet, or smartphone. Behavioral data tracks the sites visited, the apps downloaded, or the games played. Cloud platforms claims human experience as free raw material for translation into behavioral data. Some of this data is applied to product or service improvements, the rest are declared as proprietary behavioral surplus, and fed into advanced manufacturing processes known as ‘machine intelligence.’ Automated machine processes can capture knowledge about behaviors but also shape behaviors.

Surplus behavioral and instrumental data is turned into prediction products such as recommendation engines for e-commerce and entertainment. These anticipate what people will do now, soon, and later. Prediction products are traded in a new kind of marketplace for behavioral predictions called behavioral futures markets. These are currently used primarily used in advertising systems based on CTR, Pay-Per-Click (PPC), and real-time bidding auction systems.

5) Smart/Sustainable Mobile and Data-Centric Development

The aggressive trade negotiations and agreements in the 1990s significantly reduced the costs of ICT devices and communication exchanges worldwide, making possible a wide variety of new commercial and development activities based on ICT capabilities. We are at the halfway point for the sustainable development goals (SDGs) outlined by the United Nations in 2015. The SDGs are providing an additional impetus for ICT4D as it encourages infrastructure building and support for key development activities that ICT can assist, such as monitoring Earth and sea resources and providing affordable health information and communication activities.

A key variable is the value of the dollar that is the world’s primary transacting currency. A global shortage of dollars due to high interest rates or political risk means higher prices for imported goods, regardless of lower tariffs. The post-Covid crisis in Ukraine has stressed supply chains of key materials and raw Earth mineral from Russia and Ukraine further adding to potential costs and geopolitical risk. ICT4D is highly reliant on global supply chains making digital devices readily available at reasonable prices.

The near-zero marginal costs for digital products make information content and services more accessible for developing countries. Books, MOOCs, and other online services provide value to a vast population with minimal costs to reach each additional person. Platform-based services providing agricultural, health, and other development services provide low-cost accessibility and outreach. They allow new applications to scale significantly with low costs. Incidentally and significantly, renewable energy sources like solar and wind also provide near-zero marginal costs for producing electricity. Like digital products, they require high initial investments but output product at low costs once operational.

Mobility, broadband, and cloud services are three significant technologies presenting positive prospects for ICT4D. Mobile broadband technologies that bypass traditional wireline “last mile” infrastructure have been a major boost to the prospects for ICT4D. They provide significant connectivity across a wide range of the population and with key commercial and government entities. 4G LTE technologies currently provide the optimal service, as 5G towers consume nearly over 60% more power than LTE and also require more stations as their range is lower.

Enhanced connectivity strengthens network effects. Blockchain technologies and cryptocurrencies, the Internet of Things (IoT), and the proliferation of web platforms are some of the current conceptions of how reduced costs for communications and information analysis are enhancing network effects and creating value from the collection and processing of unstructured data.

This project will expand on these stages and provide a context for a further investigation of ICT for development drawing on historical and current research. Of particular concern is the implementation of policies and practices related to contemporary development practices, but commercial and monetization techniques are important as well.

Notes

[1a] Dordick, Herbert S. and Deane Neubauer. 1985. “Information as Currency: Organizational Restructuring Under the Impact of the Information Revolution.” Bulletin of the Institute for Communications Research, Keio University, No 25, 12–13. This journal article was particularly insightful into the dynamics of the PTTs that would lead to pressures on them to adapt IP technologies leading to the World Wide Web.

[1] Rostow, W.W. (1960) Stages of Economic Growth: A Non-Communist Manifesto. Cambridge: Cambridge University Press. See also Rostow W.W., (1965) Stages of Political Development. Cambridge: Cambridge University Press.
[2] An excellent discussion of the various development and new world communication and economic order discourses can be found in Majid Tehranian’s (1999) Global Communication and World Politics: Domination, Development, and Discourse. Boulder, CO: Lynne Rienner Publishers. p. 40-41. Also, see Jussawalla, M. (1981) ) Bridging Global Barriers: Two New International Orders. Papers of the East-West Communications Institute. Honolulu, Hawaii.
[3] Wriston, W.W. (1992) The Twilight of Sovereignty : How the Information Revolution Is Transforming Our World.

Citation APA (7th Edition)

Pennings, A.J. (2020, Feb 19). Five Stages of ICT for Global Development. apennings.com https://apennings.com/how-it-came-to-rule-the-world/planting-to-platforms-five-stages-of-ict-for-global-development/

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Anthony J. Pennings, Ph.D. is a Professor in the Department of Technology and Society, State University of New York, Korea. From 2002-2012 he was on the faculty of New York University. Previously, he taught at Hannam University in South Korea, Marist College in New York, andVictoria University in Wellington, New Zealand. His American home is in Austin, Texas and taught there in the Digital Media MBA program atSt. Edwards University He joyfully spent 9 years at the East-West Center in Honolulu, Hawaii.

Category: data analytics and meaning, democratic political economies, digital geography, digital media economics, digital monetarism, electric money, enabling frameworks, global communications, how IT came to rule the world, journalism, sustainable development, telegraphic political economy, the cold war
Tags: Computerization and Development in Southeast Asia > five communication revolutions > ICT > ICT4D > Maitland Commission > Wilbur Schramm

Digital Spreadsheets – Part 5 – Numeracy and the Power of Zero

Posted on | February 17, 2020 | No Comments

Previously, I explored the digital spreadsheet as a meaning-making application that was central to the financial explosion of the 1980s and its economic aftershocks. Spreadsheets framed and produced information and meaning consequential to monetary and organizational practices as they became part of the daily routines of the new class of professional and managerial information workers. Initially the purview of accountants and bookkeepers, spreadsheet usage became ubiquitous throughout work practices in conjunction with word processing and databases. The spreadsheet incorporated numerical formulations and innovations with systems of categorization and inventorying to become a tool for productivity and power over people and resources.

In my last post, I explored the importance of symbolic representation systems, mainly writing, in the workings of a spreadsheet. Written alphanumerical symbols have shaped Western society. For example, tables and lists are epistemological technologies that have historically organized administrative knowledge in castles, military camps, and monasteries. With the invention of ASCII characters, the facility of the PC-based applications, including the spreadsheet, became powerful tools for organizing written and numerical facts in modern corporations and other organizations worldwide.

In this post, I will focus specifically on the power of numeracy, with a special emphasis on the role of zero. The zero is an extraordinary cognitive invention that has been central to the quantitative workings of the spreadsheet. In conjunction with Indo-Arabic numerals and double-entry accounting techniques, the spreadsheet has been crucial to the rise of modern capitalism and that peculiar historical manifestation, the corporation.

Although still used on occasion for style, Roman numerals have been mathematically obsolete for several hundred years. Initially based on scratching or tallying systems for sheep and other items, Roman numbers most likely represented hand figurations or gestures. For example, the number 10 or X probably represented two thumbs crisscrossed. Addition and subtraction were relatively straightforward, but division and multiplication were not as “easy or obvious.” Roman numerals included thousands (“M”) but they never developed a representation for million or beyond.

The modern system of numeration is based on representations using ten different digits 0, …, 9 imported from the Middle East and Asia and will be called Indo-Arabic in this post. These numerals are said to have been designed based on the number of angles each numeral contained and over the years the way they are written have rounded out. The Arabian interest in Indian numerals based on zero arose to solve practical problems such as inheritances, purchases, sales contracts, tax collection and wills. Indo-Arabic numerals moving from India to the Middle East and finally to Europe were crucial for accounting and financial systems that have since become global standards and key ingredients in spreadsheet formulations.

Evidence dates the zero (also known as the naught, or nil) back some 2000 years to the Angkor Wat civilization in Cambodia; although it is generally recognized that India refined its use around 500AD, and it came to Europe in the early 1200’s from Arabia. Muhammed ibn-Musa al-Khwarizmi, or “Algorismus,” as his name was Latinized, was probably one of the most influential mathematicians in the transfer of this knowledge to the West. The Persian scholar taught in Baghdad sometime between 800 and 850. He wrote a book on the Hindu number system that was translated into Latin as De numero indorum or “On the Hindu numbers.” He later wrote another seminal book, Al-jabr w’al muqabalah, which became known in Europe as Algebra, based on the author’s Latin name and is the root of the English word “algorithm.”

One of the mathematicians who introduced these numbers to Europe was Leonardo of Pisa or Leonardo Pisano, famously known as “Fibonacci.” It is short for filius Bonacci, the son of Bonaccio. In his book, Liber abaci (Book of the Abacus or Book of Calculating) completed in 1202, he showed how the Indo-Arabic numbers could be used. The book was divided into four parts. The first introduced Indo-Arabic numbers, especially zephirum, which became zefiro in Italian, zero in the Venetian dialect. The second section showed how calculations dealing with currency conversions, compound interest, and the determination of profit could benefit businesses. The third and fourth sections addressed a number of mathematical problems including irrational numbers and the Fibonacci sequence that the author is most known for today. The video below introduces his relevance to commercial activities.

It was the development of the zero and the related positional system that made modern “Western” calculation systems so effective. It has become necessary for a variety of mathematical purposes including decimals, sets, and quite significantly, the mathematical systems that makes it easier to work with larger quantities. Using the place holding system, nine numbers plus zero can represent an infinity of figures. The same symbol, such as 7, takes on different meanings (7, 70, 700, etc.) depending on its location within the representation of the number. The positional base-10 system using ten different digits 0, …, 9 has been globally accepted as the primary mathematical standard for human calculation.

The base-10 positional system probably emerged from counting on our fingers, but it is adequately suited to arithmetical computations as it needs only ten different symbols and uses the zero to mark the place of a power of the base not actually occurring. Think of a car’s odometer that every ten miles causes the dial to turn and milestones such as 10,000 and 100,000 are markers of a car’s age that we often subscribe significance.

One of the strengths of the spreadsheet is its ability to combine complex calculations with human understanding of the base-10 mathematical system. While the “alien intelligence” of computers can now handle more complex base systems such as the duodecimal (base-12) and sexagesimal (base-60) place-holding systems used in time and geographic calculations, base-10 is useful because, quite frankly, humans are used to it. Although computers use a base-2 system with nearly infinite combinations of 1s and 0s, the positional base-10 system has been globally accepted as the mathematical standard for human calculation and a key component of spreadsheet usability.

The calculative abilities of zero with other Indo-Arabic numbers brought new levels of certainty and confidence for commerce and eventually science in the West. By 1300, zero-based accounting and other numerical techniques were being adapted by the merchant classes. Double-entry accounting techniques emerged first for tracking resources and checking for errors, but later resulted in the conceptual separation of a business from its owner, a precursor condition for the emergence of the modern corporation.

The spreadsheet drew on this history of numerical innovation to become a tool of organizational productivity and power. As part of my “formulating power” project, I will continue to examine the ways spreadsheets construct techno-epistemological knowledge using combinations of algorithms and other meaning-making practices.

Citation APA (7th Edition)

Pennings, A.J. (2020, Feb 17) Digital Spreadsheets – Part 5 – Numeracy and the Power of Zero apennings.com https://apennings.com/dystopian-economies/electric-money/lotus-spreadsheets-part-5-numeracy-and-the-power-of-zero/

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Anthony J. Pennings, PhD is Professor at the Dept of Technology and Society at the State University of New York (SUNY) in Korea. Previously, he taught at St. Edwards University in Austin, Texas and was on the faculty of New York University from 2002-2012. He also taught at Victoria University in Wellington, New Zealand and was a Fellow at the East-West Center in Hawaii in the 1990s.

Category: data analytics and meaning, digital spreadsheets, electric money, financial technology
Tags: Algebra > Angkor Wat > Anthony Giddens > base-10 positional system > De numero indorum > Double-entry bookkeeping > Indo Arabic numbers > Lotus 1-2-3 > Muhammed ibn-Musa al-Khwarizmi > Roman numerals > state-istics > VisiCalc > zero

“It’s the Infrastructure, Stupid”

Posted on | February 9, 2020 | No Comments

“Infrastructure, at the deepest level, is a techno-socio bond that brings together new communications technologies, new energy sources, new modes of mobility and logistics, and new built environments, enabling communities to more efficiently manage, power, and move their economic activity, social life, and governance.“ – Jeremy Rifkin, The Green New Deal.[1]

The 1992 US presidential election was notable for the phrase, “It’s the Economy Stupid” as William Jefferson Clinton attacked incumbent president George H. Bush for ignoring economic and social problems at home. President Bush had a dramatic military victory that drove the Iraqis out of Kuwait with “Desert Storm,” but the economy at home lingered with high unemployment and unprecedented debt. After the election, the new Clinton-Gore administration implemented the Global Information Infrastructure (GII) that helped the obscure data networks used by academia and research institutes blossom into the Internet and its World Wide Web.

The framework combined with the rapidly emerging technology and financial resources to create the famous “Bull Run” economic revival of the late 1990s. Starting with the Netscape IPO in August, 1995, investment poured into “dot.coms” and telecoms. This information infrastructure continues as the dominant economic engine and social dynamic of the 21st century. However, opportunities exist to scale the networks, and include energy and mobility.

This week, I had a chance to attend the Japan-Texas Infrastructure Investment Forum in Austin. Texas and Japan are prolific trade partners and got together to discuss more “public goods” like transportation, water, and the possibilities of “smart cities.”

In this post, I want to connect the current imperative to build infrastructure in the US with green and smart technologies and this series’ emphasis on the New Deal. New thinking and infrastructure investments offer the opportunity to create enabling environments for sustainable and replenishing economic activity. These frameworks require examining political and juridical structures to open up avenues for new investments and evaluation systems. We may not want to reinvent the New Deal, but it’s a point of reference for examining the way forward.

If Texas were a country, it would have the 10th largest economy in the world. Bigger than Australia, Canada, and even Russia. Japan, of course, is number 3, after the US and China. Japan is moving many of its US operations to Texas due to the Lone Star state’s business environment, rich resources and cosmopolitan cities. Texas exports chemicals, food, oil and gas, and electronic products.

I was primarily interested in seeing the presentations on Smart City developments, but was intrigued by the talks on water management in Texas (I’m Dutch, it’s in my genes) and transportation. I didn’t know, for example, that Texas desalinates over 150 million gallons of water every day. Also, Texans drive over 550 million miles a day. What would be the implications of renewable-powered desalination for agriculture and general water needs? How do you manage that much road maintenance? What alternatives are available to the traditional internal combustion vehicle? Just a few tidbits that set the context for the day’s presentations on building infrastructure in Texas.

One of the objectives for Japan was to pursue contracts for their Shinkansen, the high-speed railroad that makes Japan fairly easy to traverse. It’s only a matter of time before Dallas, Austin, and Houston are connected with more efficient lines, and Japan wants to get in on that.

They even brought in the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) and the Japan Bank for International Cooperation (JBIC) to support the funding of the operation. Having both driven the routes to Dallas and Houston as well as taken the railroad in Japan, I certainly would enjoy the Shinkansen bullet train for my next Texas trip.

Texas is unique because it is a major carbon-extracting and exporting state. But like Saudi Arabia, it recognizes the importance of pursuing infrastructural projects with a green tinge. Growth in Texas is expected to increase substantially over the next several decades, and that means new strategies for mobility, water availability, and disaster risk reduction.

Now we have to confront and analyze the implications of a post-petroleum age. Exploring the New Deal gives us a better perspective on the size of that task, how deep and sometimes intrusive the process will be. The New Deal was a monumental, multi-decade endeavor that made American great and will not be easily matched.

Roosevelt’s New Deal was primarily an infrastructure program. Facing economic collapse and massive unemployment, FDR promised “a new deal for the American people.”[2] In the first 100 days of the FDR administration, some 15 bills were passed to assist the recovery and put people to work. Some of the major projects were the Civilian Conservation Corps (CCC), the Public Works Administration (PWA), the Tennessee Valley Authority (TVA), and the related Rural Electrification Act. These were all designed to get people back to work and build an infrastructure that would support the new energy paradigm – hydrocarbons and electricity.

While economic recovery sputtered throughout the 1930s,
federally-funded infrastructure projects built the roads, tunnels, and bridges for cars and trucks, the dams and coal-fired utilities for electrification, and some 125,000 public buildings including schools, hospitals, and government facilities. Even airports like LaGuardia outside Manhattan were a product of the New Deal.

The Hoover Dam tapped the Colorado River and provided electricity for the entire Southwest, including Los Angeles and a small town called Las Vegas. When the dam was completed in 1936, it was the most extensive electricity producing facility in the world, providing power to Arizona, California, and Nevada. It electrified homes, entertainment, industry, and agriculture.

Another big infrastructure project for the New Deal was the Interstate Highway System of 1938 that eventually laid down almost 47,000 miles of public roads. Before the attack on Pearl Harbor Roosevelt appointed a National Interregional Highway Committee to study the need for several cross-country inter-state highways. The building of the “Autobahn” in Nazi Germany was a major source of motivation. In Interregional Highways, the committee recommended constructing 40,000 miles (64,000 km) interstate highway system. It was an extraordinary push for the mobilization and motorization of the US. It provided extraordinary interconnection between cities and was the “killer app” for the automobile.

Vice-President Gore was influenced by his father, Senator Al Gore Sr., who co-authored the Federal-Aid Highway Act of 1956 infrastructure program during the Eisenhower Administration. Dwight Eisenhower had studied the German Reichsautobahnen as he plotted the invasion of Europe during World War II and was committed to building the nation-wide highway in the US. It created a network of roadways that sparked the US economy, eventually reaching some 46,000 miles. The son used the inspiration to conceptualize the National Information Infrastructure plan that turned the NSFNET into the Internet.

Citation APA (7th Edition)

Pennings, A.J. (2020, Feb 9). It’s the Infrastructure, Stupid. apennings.com https://apennings.com/democratic-political-economies/from-new-deal-to-green-new-deal-part-3-its-the-infrastructure-stupid/

Notes

[1] Quote “It’s the Infrastructure Stupid” in the title is also from Jeremy Rifkin, The Green New Deal. “It’s the Economy, Stupid” was coined by campaign strategist James Carville during the Clinton-Gore 1992 presidential campaign during the 1992 election to counter George H. Bush’s success with the first Iraq War.
[2] Blitz, M. (2017, November 20). When America’s Infrastructure Saved Democracy. Retrieved February 8, 2020, from https://www.popularmechanics.com/technology/infrastructure/a24692/fdr-new-deal-wpa-infrastructure/

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Anthony J. Pennings, PhD is a Professor at 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.

Category: automatrix, democratic political economies, smart new deal
Tags: Global Information Infrastructure > Green New Deal > New Deal

FROM NEW DEAL TO GREEN NEW DEAL, Part 2: The Failure of the National Industrial Recovery Act of 1933

Posted on | February 6, 2020 | No Comments

This is the second of an ongoing series about how the New Deal restructured the American political economy and what lessons it has for transiting to a Green New Deal. The first one dealt with the New Deal emerging from the wake of the Great Depression and the immediate policy responses by the Roosevelt administration to deal with the banking and financial crisis. This post looks at a failure, the National Industrial Recovery Agency’s (NIRA) attempts to administer a wide range of codes and practices for business and industry. What are the lessons of the NIRA for the Green New Deal?

The green energy revolution strives for zero emissions of harmful carbon by-products and near-zero marginal costs after installation. Hydrocarbons from coal or oil are incredible sources of energy but emit deadly carbon monoxide and climate threatening carbon dioxide. They are also used up in consumption and require constant replenishment. Good for petro-states like Russia and Saudi Arabia but a constant currency drain for the rest of the world. Renewables produce a constant supply of energy. They don’t last forever and eventually require replacement, but their economics are extraordinary and will make possible exciting new opportunities like desalination and purification of saltwater, for example.

The Green New Deal will reach deep into the commerce and industrialization of the global economy. While the movement is gaining momentum, a few sold Teslas, and some homes with solar panels do not a revolution make. Although I recently had my first ride in a Tesla and it was awesome.

The Green New Deal will need to continue to technologically build the Smart Grid while regulatory changing the utilities to allow smaller microgrids that can utilize local resources, including buying energy from residences and small businesses. Broadband networks and the Internet of Things (IoT) will be crucial to the convergence and providing the “smart” aspects of the grid. Other industries that will be affected include agriculture, architecture, automobiles, construction, supply chain logistics, military, etc. [1]

How will they all work together? Not only between different industries but different companies within the same sector. How will winners emerge? What will happen to losers? Solyndra, for example, became a major political issue when it filed for bankruptcy in 2011. It was a manufacturer of innovative thin- film solar cells based in Fremont, California. Solyndra received significant subsidies in guaranteed loans from the Department of Energy as part of the economic stimulus plan. But it still couldn’t compete with more traditional solar cell technology companies, especially from China. What are we to make of situations like this?

The Green New Deal faces many significant and complicated issues. What are the electrical standards, for example, the building codes? The sewage interconnections? Establishing networks of automobile recharging (or hydrogen refueling) stations? Can prices within an industry be regularized without penalizing consumers? Does labor organization need to be revived from its decimation during the Reagan years?

A step back for the New Deal…

In his larger attempt at industrial structuring, President Roosevelt sent a plan to Congress that became the National Industrial Recovery Act of 1933. Congress passed it into law on June 16 of that year. The Act created the National Industrial Recovery Agency (NIRA) to administer codes of practice for business and industry. The Act was “a clear victory for the many prominent businessmen who were backing cartelization as a solution to the nation’s industrial problems.” [1]

The Act allowed industries to create “codes of fair practice.” By suspending antitrust laws, these codes allowed corporations in particular sectors to set prices, restrict output, and increase profits. These were agreements that enabled the NIRA to administer, with the dominant trade associations, what were in effect national cartels. Although it was later declared unconstitutional by the Supreme Court, the codes became part of later legislation and became part of the national restructuring of the US economy.

While Hoover had limited his activism to the establishment of the Reconstruction Finance Corporation that served as a lender of last resort to banks and the railroads, he opposed cartelization and thus alienated himself from many business leaders. The NIRA placated most of the big business concerns. However, for political reasons, Roosevelt’s plan was designed to serve many other constituencies. He had made concessions to liberal conservatives to reassure them that socialism was not anywhere near the path he was taking, nor was he forwarding “monopoly.” But opposition did mount from small business people and farmers who saw the codes being dominated by big business.

Finally, the Act started to antagonize large corporations because of Section 7a, which encouraged labor organization. and had led to a series of violent strikes.

A poultry company from Brooklyn, NY, sued the NIRA and the case went all the way to the Supreme Court. In Schechter Poultry Corp. v. The United States, the U.S. Supreme Court, rejected the compulsory-code system. SCOTUS argued that the NIRA improperly delegated legislative powers to the executive and that regulating poultry codes did not meet the standards of interstate commerce, a constitutional requirement for Federal regulation. By May of 1935, the Supreme Court declared the Act unconstitutional.

The New Deal shows us how massive and complicated a major economic reorganization can be. The Green New Deal should seriously study the issues that FDR confronted to revive the economy and chart a new course for the US that avoided revolution. The case of the NIRA gives us some idea of the scale of the transition and the challenges of government intervention in the economy.

Notes

[1] Rifkin, J. (2020) Green New Deal. Retrieved from

McQuail, K. (1982) Big Business and Presidential Power. NY: William Morrow and Company. p. 27.

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Anthony J. Pennings, Ph.D. is Professor 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. He keeps his American home in Austin, Texas and has taught there in the Digital Media MBA program at St. Edwards University He joyfully spent 9 years at the East-West Center in Honolulu, Hawaii.

Category: democratic political economies, smart new deal

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