A financial explosion occurred in the 1980s. Business Week called it, “The Casino Society,” citing new gambling games such as futures and stock options that made it more an arena of speculating than a conduit for investment. The financial system began to operate as an “autonomous subsystem” of the broader world economy. It was fueled by a widening array of negotiable instruments such as commodities, currencies, government bonds, options, and over-the-counter stocks.

The fire was fanned even more by the new Reagan administration. It added billions of dollars of new debt to the casino. Fearing further economic stagnation, the Reagan administration was hesitant to enact legislation that might intervene and further regulate the financial environment.

Money markets have always sold themselves as vehicles for capital movement. Stock exchanges for shares aggregate wealth at a fixed point for investment. At the same time, they also provide liquidity, the ability to let investors withdraw their money when they need it. Wall Street is the primary intermediary in this movement of electronic wealth.

Stone’s story merges this financial backdrop with a story about an ambitious young newcomer (Bud Fox) who comes to the “Big Apple” in search of fortune and recognition. He ultimately joins up with a seasoned corporate raider (Gordon Gekko) whose deal-making thrives on inside information. Tired of analyzing operating statistics (relative price-earnings ratios, divisional breakup values, credit coverages, etc.), Fox attempts to use some privileged information to his advantage. He teams up with Gekko to use the information to buy the airline where his father works.

Troubled by an FAA (Federal Aviation Administration) investigation that is blocking route expansion and the purchase of vital new equipment, Bluestar Airlines looked to remain stagnant if not go into the red. Bud inadvertently gets the insider information because his father is the shop steward of his union at the airline. With the aid of Gekko, he attempts to raid the company’s stock and become its president only to find that his mentor has plans to dissolve the airline.

The study of the gangster film gained notoriety with Colin McArthur’s Underworld USA (1972) in which he laid out the iconographic elements of the genre — the “patterns of visual imagery, of recurrent objects and figures in dynamic relationship.” Three categories were delineated to lay a foundation for an active, intelligible account of the genre. The first was the physical presence or denotative attributes, such as the dress of the characters. The second consisted of the “urban milieux” in which the fiction was played out. The last was the technology used by the characters, primarily, guns and cars.

Stone’s iconographics place his main characters as outsiders within the urban cathedrals of modern power. Its main characters are creatures of desire facing a world that denies them. They adhere to the strictest bourgeois codes, yet their business consists of an underground network of shady transactions outside the official economy. Their aggressions propel them towards the rational economy while their pasts repel them. From their lofty towers, they plot electronic raids on unsuspecting companies. Stone replaces the guns and cars of the traditional genre with spreadsheets and cellular telephones to expand the sphere of their influence or hostage others for greenmail.

The gangster character-type with its propensity towards dramatic action and individualistic profiteering has long been a favorite of in American popular film. Its aggressive, yet misguided personas fit well into tragic and moralistic tales which the emerging Hollywood studios were quick to exploit during the Great Depression. Warner Brothers, in particular, drew on new developments in sound and picture quality. It positioned these new identities in a contemporaneous social realism markedly different from fantasy films such as King Kong, and Dracula, which dominated the period.

The attraction of the early gangster, despite this villainy, was tied mainly to his position as an outsider. The populist criticism of liberal capitalism saw in the gangster genre a vehicle for politicizing the current problems of the time — alienation, greed, poverty, and unemployment. Criminality was seen as resulting from socioeconomic factors such as the Prohibition and the unequal distributions of wealth. Films such as The Public Enemy(1931), stressed the gangster’s working-class roots and markers such as unfashionable clothes and ghetto dialects. The Warner Brothers studio itself was identified with the Democratic New Deal, and its economic success left it relatively independent from the Morgan/Rockefeller banking empire.

Stone clearly figures his main characters in Wall Street from this early genre and its iconography. Gordon Gekko and Bud Fox both hail, quite energetically, from working-class conditions. Gecko’s father sold electrical supplies in Campsville, Arkansas, after the government foreclosed on the family farm. Carl returned nightly to a home in Queens after a day’s work fixing aircraft for the Bluestar airline. Like Stone’s award-winning film, Platoon, Charlie Sheen plays a “coming to age” character trying to reconcile his subjectivity among capitalism’s competing myths.

The film’s narrative acts out the tensions between two discourses that structure the acts of criminality but bring in a set of conflicting interpretations. On the one hand, it presents good sound capitalism, the kind Marx thought might lead to communism one day. Three supporting characters reinforce this discourse: Bud’s father, a union leader; Sir Lawrence Wildman, a reconverted raider; and Lou Mannheim, who works at the same brokerage firm. Lou, a potential mentor, cautions Bud, “You’re part of something here; the money we invest creates science, jobs, goods, and services.”

The other discourse is entrepreneurial greed — competition with no holds barred. Gekko, as anti-hero, was its main representation in the film, but it was also the dominant Wall Street coda. The securities inflation of the 1980s was one of the decade’s major media stories and a lasting legacy of the Reagan Era. The Dow Jones and Nikkei indexes were the smiling faces of the new age of electronic predatory capitalism. Share price aggregates broke one numerical milestone after another as the world turned its attention to the new liberal prosperity.

The “Masters of the Universe,” as Tom Wolfe called them in his book, Bonfire of the Vanities(1987), fascinated the American public. As a new breed of “robber barons’, they saw themselves as having the ability to re-energize American industry and drive out the bureaucratic corpocracy that had stagnated in the 1970s. Managerial capitalism was accused of letting American competitiveness slide in favor of its former World War II enemies and it needed to be broken up this new class of raiders.

One of the most celebrated and later reprimanded of these new money mandarins was Michael Milken. Milken was credited with developing the infamous “junk bond” market. These high-interest bonds for the less creditworthy companies attracted money from around the world. Insurance companies, Mutual funds, Savings and Loans, among others, were the first to purchase these high return notes. Junk bonds provided a quick but expensive way to raise large amounts of capital for buying vulnerable companies. Cable and satellite TV, fiber optics, and wireless industries used junk bonds for the communications revolution that would follow.

Unfortunately, the high costs of procuring financing, in many cases, made breaking up these companies the most profitable strategy for the raider. Assets such as buildings, equipment, and intellectual property were sold off for quick profits. T. Boone Pickens, a sort of real-life J. R. Ewing of the TV show Dallas, made US$107 million at one point from raiding big companies like the now extinct Gulf and Philips Petroleum.

To Bud Fox’s horror, he realizes that his mentor Gekko had planned all along to break up the airline company that employs his father and many friends. Bud’s enthusiasm to restructure the Bluestar airline and save it financially plays into the hands of the major gangster and sets the company up for the fall.

Stone’s myth and characterizations were contemporaneous with New York’s emergence as the world’s numispolis and the transition to a transnational system for arbitrage and the movement of electronic money. New York’s dominance had been complete with the first defeat of Germany in 1919, but it emerged even stronger with the financial destruction of the US government in the 1980s. The country’s burden was Wall Street’s bonanza. The city that needed a bailout in the seventies was soaking up the world’s cash reserves a year later. Packs of transnational Eurodollars, abandoning the dream of a newly developed Third World, returned to yuppiedom to feast on an unsuspecting corporate infrastructure. The IMF had put out the yellow light on Brazil, Venezuela, and the Philippines.

A national government may not go bankrupt, Walter Wriston proclaimed in the mid-seventies when bankers were searching out new markets for their coffers of petrodollars. However, they had unfathomable appetites for foreign currencies. As prospects for rich returns diminished, new calculative strategies, enriched by the computer and new software algorithms, took aim at corporate America.

While villainy is a stable in narrative structure, the moral space created by the text frequently situates the criminal character outside this traditional function. 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. The gangster, amidst the legal and social conditions of the early thirties, violated the system of rules and bureaucracy in the name of tragic individualism.

The corporate raider became a new socio-economic caricature to which Stone has made his contribution by intertexting the gangster genre into his filmed critique of the contradictions of modern capitalism. The new gangster, represented by Gekko and Fox in Wall Street, is figured heavily by the sympathies Americans have for the criminal who fights the bureaucratic barriers to opportunity and advancement but who must ultimately take a tragic downfall in the name of justice.

I have followup post on Stone’s Wall Street: Money Never Sleeps (2010). He takes up the story of the 2007 financial crash and the resultant “Great Recession.”

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Anthony J. Pennings, PhD has been on the NYU faculty since 2001 teaching digital media, information systems management, and global communications.

How IT Came to Rule the World, 1.9: Early Internationalization of the Internet

Posted on | April 28, 2010 | No Comments

This is the 16th post in the mini-series How IT Came to Rule the World and addresses some of the earliest attempts to privatize and globalize the Internet.

A conference was being organized in 1972 to determine the future of the Internet and its packet-switching data communications technology. It was to be held in Washington DC and would primarily provide a showcase for the ARPANET. ARPA was struggling with the operational costs of the network and was looking to sell it off. Meanwhile, it was attracting the attention of the research community so the plan was to bring network engineers and computer scientists from around the world together to discuss the future of data communications.

In October 1972, the IEEE’s First International Conference on Computers and Communications was held at the Hilton Hotel to show off the ARPANET’s capabilities and perhaps unload the network that was becoming somewhat of an albatross for its handlers. ARPA was under some pressure to avoid paying for its operational costs. Organized by Bob Kahn of BBN and supported by Larry Roberts at ARPA, the conference sparked a major discussion of where the ARPANET was going and what it could do.

A number of ideas were discussed concerning future uses and implementation of the ARPANET, including its integration with other networks around the world. ARPA was looking to sell off its packet network, but a demonstration to AT&T resulted in a computer crash and Ma Bell left the conference unimpressed. Although the network would continue to be underused, the conference sparked a number of initiatives that would have longstanding influences on the future of the Internet.

Researchers from many countries eagerly attended the conference. One of the major concerns was voiced by representatives from those nations who wanted to implement their own packet-switching networks. French representatives for example were planning their own packet-switching network called CYCLADES and the British had their own independently designed NPL network. Even in the US, a group of disgruntled employees had left BBN in July 1972 and formed Packet Communications Incorporated, expressing concerns that BBN was commercializing too slowly.

Like most conferences, graduate students were crucial to its success. Bob Metcalfe was a graduate student at Harvard (and future inventor of Ethernet and founder of 3Comm) assigned the task of compiling a list of uses for the ARPANET. He queried the administrators of ARPANET, many of which he knew because of his own participation in the project. He then wrote a manuscript called Scenarios, which listed 19 things to do with the ARPANET. The list included activities such as Remote Job Entry (RJE) as well as games and symbolic manipulation of mathematical formulas. Many of which would be demonstrated at the conference.

The ICCC of 1972 was the first major demonstration of ARPANET and Metcalfe was an obvious choice to demonstrate the fledgling computer network at the conference. An IMP was set up in Georgetown Ballroom of the Hilton Hotel and terminals were set up around the room. Kahn had requested participation from the various nodes of the network and universities which ARPA was funding. Together they included some thirty universities such as Carnegie Melon, Harvard, Hawaii, Illinois, MIT, New York University, USC, and Utah, as well as AMES, BBN, MITRE, and RAND. One major objective of the conference was to shop the network to interested private concerns and/or unload the operational aspects of the facilities. ARPA and BBN were looking for a commercial operator to run with the new technology that was becoming somewhat of an albatross for its handlers. They saw its potential as a commercial operation licensed with the FCC as a specialized common carrier and providing packet-switched data communications to corporate and other clients.

An obvious candidate for taking over the ARPANET was AT&T. Ten executives from AT&T scheduled a meeting with Metcalfe that he recounts with visible anger. Partway into the demonstration, the IMP crashed. The AT&T executives appeared visibly pleased and laughed, reassured that this new technology would be no threat to the largest network in the world. Bob Metcalfe never forgave them. He went on to Hawaii to learn the AlohaNet system and then incorporated those ideas into Ethernet at Xerox PARC.

It would was the International Telecommunications Union (ITU) that would play the next important role in the adoption of packet-switching technologies.

To get some perspective of what the Internet has transformed into, view this video by whoishostingthis.com.

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Anthony 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.

Category: global communications, how IT came to rule the world
Tags: ARPANET > BBN > Bob Kahn > CYCLADES > IEEE’s First International Conference on Computers and Communications > Larry Roberts > Ma Bell > Robert Metcalfe

What does it mean to live in an IT-ruled society?

Posted on | April 25, 2010 | No Comments

What does it mean to live in an IT-ruled society? What can the trajectory of information and communications technologies tell us about democratic participation? Below are some questions that are worth considering as we continue this unprecedented journey into a net-centric governed and managed society.

About sovereignty and control? About the conditions of play and creativity in our lives? What are the rules, procedures, and degrees of freedom structured in modern life by the preponderance of networked information machines? To what extent can voices be heard? What is the future of censorship and the protection of speech and the “press” in a digital age? How is information produced and distributed?

Can people recognize, critique, and participate in the conditions of their lives? What is the future of voting? Of electoral representation? Of constitutional parliamentary and presidential systems? Of the control and conditions of ownership of property? What is the role and future of bureaucracy? What are the conditions of eligibility in entitlement systems for health, education, and welfare?

Under what conditions and leadership can people be mobilized for collective action and reflection? How can media facilitate the engagement of people in recognition of social problems and their resolution? What media practices can garner the will of significant collections of people and direct their energies towards constructive and peaceful problem solving?

How can tensions between centralization and decentralized forms of authority and control be reconciled? What organizational forms can facilitate economic growth, maintain sustainable environments, and provide abundant opportunities for creative participation and productivity? How will IT monitor environmental conditions and identify hazards to human living? Remote sensing satellites already produce a large amount of data on crops, floods, droughts, forest conditions, and the location of natural resources.

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Anthony J. Pennings, PhD is Professor 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.

Category: democratic political economies, how IT came to rule the world, social media
Tags: cybernetic conditions for democracy > economic growth > participation

How IT Came to Rule the World, 2.1: Data Technology and Money

Posted on | April 25, 2010 | No Comments

This is the 15th post in the mini-series How IT Came to Rule the World. Section 2 deals with the rise of electronic money and transactions.

The telephone, telegraph, and telex were all important parts of the international financial system prior to the 1970s, but political and technological changes initiated a major transformation in the speed and versatility of financial transactions. Data communication systems moved quickly from military experimentation to commercial exploitation as banks, news agencies, and other corporate actors who were moving branches and factories offshore utilized these new technologies. NASDAQ began transacting its first computerized equity trades in 1971 and Reuters had begun using computers and telephone lines to provide stock information internationally with its Stockmaster technology.

Reuters, a major international news agency long involved in the circulation of financial information, also moved quickly to develop a new computer system for sending out currency prices. Using leased telecommunication lines to banks and other customers, Reuters created the beginnings of a virtual international currency exchange market. Banks paid for receiving currency price quotes and news and could also pay to list their prices with the service. With floating currency values due to the breakdown of the Bretton Woods gold-dollar standard, exchange rates became very volatile, especially after the Arab-Israeli war broke out in late 1973.

Reuters’ new system called Monitor displayed monetary values on computer screens in banks around the world and created a new dimension to the electronic marketplace that had been created initially by the introduction of the telegraph and the ticker tape machines.

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Anthony J. Pennings, PhD is the Professor of Global Media at Hannam University in South 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: financial technology, how IT came to rule the world, telegraphic political economy
Tags: Bretton Woods > NASDAQ > Reuters Monitor > Stockmaster > ticker tape

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