The regime of digital monetarism emerged in reaction to containment capitalism and involved releasing the powers of finance capital and creating transnational flows of electronic information, news and money. The containment regime was state-centric and involved elaborate regulatory structures to suppress domestic and international flows of money and also channel excessive economic surpluses into government activities.

While the idea of a regime is meant to be fluid, digital monetarism can be given a start date: On August 15, 1971, President Nixon shocked with world with his surprise television announcement that he was “closing the gold window” and no longer honoring the redemption of dollars for gold. Too many dollars had been created by the international financial system and they threatened the gold stockpiles at Fort Knox. Meanwhile, Nixon was preoccupied with economic battles with Japan and West Germany while also wanting to “print” more money to pay for the Vietnam War. After convening a secret meeting at Camp David among his top advisors, Nixon decided to renege on the country’s international agreements created at the Bretton Woods conference on dollar convertibility and sought to free up the US so it could create a more fluid regime of currency transactions and capital flows.

Nixon’s decision came at a unique time in computer and communications history. Silicon “chips” had recently become commercially available with integrated circuits being used in minicomputers and the revolutionary “microprocessor” on the verge of widespread availability in “microcomputers” such as the Altair and the Apple II. The FCC had been holding hearings on computer communications since 1966 in order to facilitate public-switched data networks and timesharing systems were in regular use. ARPANET was primitive, but online, and about to become the Internet with the development of the TCP protocols. An international satellite communications system was recently available and Nixon himself had made the longest phone call in history to the first astronauts on the moon in 1969. Furthermore, the Nixon administration created the Office of Telecommunications Policy (OTP) in 1970 that was quite active in a number of telecommunications deregulatory measures that opened up AT&T’s network and allowed companies such as MCI to compete. The time was ripe for an explosion of new technologies in the financial field.

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Four Ways to Think about Democracy and Media

Posted on | April 18, 2010 | No Comments

I was lucky to have a great mentor during my graduate school days who provided a strong intellectual foundation for further study and research. Majid Tehranian, a professor of the political economy of communications at the University of Hawaii was the chair of my Masters thesis committee and also assisted me by serving on my PhD committee. Although he did his PhD at Harvard on OPEC issues, he turned his focus towards communications and information technologies during the 1980s and later towards peace studies.

Professor Tehranian (everyone called him “Majid”) was working on a book called Technologies of Power: Information Machines and Democratic Prospects during my graduate days and I even had the pleasure of doing the index for it – the old fashioned way (by hand).

As a framework to develop our understanding of communication and media issues related to concepts of democracy and development, he laid out four different ways people were writing and theorizing about them. He used a recognizable color scheme to distinguish their different polarities: Blue – Liberal Democracy, Red – Communist Democracy, Green-Ecological Democracy and Black – Counter-Democratic tendencies. These areas are contentious, dynamic, and open to a lot of debate, but they served effectively as intellectual “hangers” on which struggling graduate students could organize and “hang” their knowledge.

When our Department of Digital Communications and Media Studies at NYU decided to put on an event exploring engagement and the media, I decided to review the book and use it for my presentation as a way of starting a conversation about democracy and possibilities presented by social media.

Notes from my presentation for the ENGAGED MEDIA Colloquium at NYU on April 17, 2010

FOUR Ways of Thinking about Democracy and Social Media
Anthony J. Pennings, PhD
Dept of Digital Communications and Media Studies
New York University

Blue Democracy

Key Words
pluralism, markets, free enterprise, balance of power, liberty, separation of powers, property rights, division of labor, interest groups, freedom of speech, assembly, and association; Fourth Estate; modernization, two-party system, privacy, ego, high accumulation

Red Democracy

Key Words
mobilization, collective will, labor, class struggle, modernization, State, progress, alter-ego, intelligentsia, lumpen-proletariat, Marxism, single-channel flows, censorship, party control, critical, equality,

Green Democracy

Key Words
grassroots participation, direct democracy, social justice, ecological wisdom, nonviolence, super-ego, decentralization, community-based economics, gender equality, fraternity, networking flows, diversity, think globally, act locally, future focus, sustainability, environment

Black* Counter-Democracy

Key Words
racial and/or ideological purity, social transformation, corporatist, purification, ethic renewal, genetic traits, militarism, conspiracies, heroic past, political repression, “survival of the fittest”, anti-modernization, rebirth through power, acts of sabotage, marginalized social classes, ethnocentrism, marginals, fascist, totalitarian, order, identity, coups, putsch, pseudo-science, reactionary, authoritarian, monolithic media flows

Conclusion
These are dynamic times and the stakes are high: globalization, climate change, dwindling resources (oil, water, fish, etc.), national debt. Yet, we have this extraordinary technological convergence. Mass media is our base, but what we call “social media” is giving us an unprecedented ability to converse, cooperate, collaborate, and engage. The challenge for the next few decades, and perhaps more immediately than you think, is to configure a democratic system that understands the strengths and weaknesses of the social media infrastructure and its communicative possibilities.

* The color Black is, unfortunately, linked to Fascist tendencies, as well as more positive and progressive ethnic movements.

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Anthony J. Pennings, PhD is a visiting professor at Hannam University in South Korea. He recently joined the Digital Media Management program at St. Edwards University in Austin TX, after ten years on the faculty of New York University.

how IT came to rule the world, 1.8: Bell Labs and the Transistor

Posted on | April 10, 2010 | No Comments

This is the 13th post in the mini-series How IT Came to Rule the World

The transistor provided an extraordinary capability to control an electrical current which was initially used for amplifying electromagnetic frequencies and then for the switching of 1s and 0s needed for digital computing. An unlikely scenario unfolded in the 1950s when AT&T’s fear of government anti-trust action and regulation sparked the sharing of this seminal technology. This led to the solid state electronics revolution and then to the silicon semiconductor innovations that led to the rapid development of computerized information technology.

The transistor emerged from the research efforts of AT&T, the corporate behemoth that was formed by JP Morgan and guided by US policy to become the nation’s primary telecommunications provider. In 1913, AT&T settled its first federal anti-trust suit with the US government. The agreement established the company, started with Alexander Graham Bell’s technology, as an officially sanctioned monopoly. A document known as the Kingsbury Commitment spelled out the new structure and rules of interconnection in return for AT&T divesting its controlling interest in telegraphy powerhouse Western Union.

Both companies had a history of consolidating their market domination through patent creation or purchase. For example, AT&T purchased the patents for the De Forest vacuum tube amplifier in 1915, giving it control over newly emerging “wireless” technologies such as radio and transatlantic radiotelephony, as well as any other technology that used the innovation to amplify electrical signals. Patents, as government sanctioned barriers to entry, created huge obstacles for other competitors and effectively barred them from producing and using anything close to the restricted technology. As AT&T grew more powerful, it established Bell Telephone Laboratories Inc. (Bell Labs) in 1925 as a research and development subsidiary. Fed by AT&T’s monopoly profits, Bell Labs became a virtual “patent factory”, producing thousands of technical innovations and patents a year by the 1930s. One of its major challenges was to find a more efficient successor to the vacuum tube.

After World War II, the US Justice Department filed another anti-trust lawsuit against AT&T. In 1949 it sought the divestiture of Western Electric, AT&T’s equipment-manufacturing arm. The action came after, although not necessarily because of, the telephone company’s invention of the transistor, an electronic device that regulated the flow of electricity through a small cylinder device. It operated much like the vacuum tube but the transistor however was “solid-state”: easier to use, more reliable, and much smaller as well. It worked by reducing the voltage while maintaining a strong current, ideal for a wide variety of electronic devices.

The transistor’s inception dates to December 23, 1947 at Bell Labs’ facilities in Murray Hill, New Jersey. At the time, AT&T’s famed research facility employed nearly 6,000 people, with 2,000 being engineering and research professionals. The development of the transistor was not a result of just basic research; it was the result of an all-out attempt to find something to replace the vacuum tube. In any case, the government’s lawsuit meant that AT&T would tread lightly with this new invention lest it raise additional concerns about Ma Bell’s monopoly power.

Unlike its previous history of zealously controlling or acquiring any patents (including the vacuum tube) dealing with its telephone network, AT&T decided to liberally license out the new technology. It did not want to antagonize the Justice Department over a technology it did not fully understand nor knew how to implement commercially. But some of the Bell Labs employees were already jumping ship with the technology and the anti-trust action was an indication that any patent infringement cases would be hard to defend in court.

So in 1951 and 1952, Bell Labs put on two symposiums revealing all their information on the transistor. The first was for government and military officials only, while twenty-five American companies and ten foreign companies attended the second. All were required to put out $25,000 as “a down-payment on a license.” Sensing the potential of the new device, the Department of Defense awarded a number of multi-million dollar contracts for transistor research contracts. General Electric, Raytheon, RCA, and Sylvania, all major vacuum tube makers, began working with their transistor licenses on military applications. AT&T’s Western Electric for example found in the Department of Defense an immediate market for nearly all its transistors. AT&T’s fear of the government’s anti-trust threat resulted in an extraordinary diffusion of the century’s most important technology.

In the mid-1950s the US government made a fateful decision regarding the future of the semiconductor industry when it ruled on Western Electric’s fate. In 1956, the Justice Department decided to let AT&T hold on to its manufacturing subsidiary under two conditions. First, it restricted the telephone company from computer-related activities except for sales to the military and for its own internal purposes, such as in telephone switching equipment. Second, AT&T was also required to give up its remaining transistor patents. As a consequence of the government’s pressure, the nascent semiconductor industry was released from the control of the monolithic telephone company.

Three licensees in particular, Motorola, Texas Instruments and Fairchild took advantage of AT&T’s transistor technology. Each procured valuable government contracts to refine the electronic switching technology and increase its reliability. The government contracts also helped them to develop sophisticated manufacturing techniques so they could mass-produce the transistors. In particular, two political developments, the nuclear arms race with the USSR and the goal to land on the Moon, became important for advancing the transistor technology that would propel an electronics revolution and lead to major advances in computer technologies.

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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: how IT came to rule the world
Tags: Alexander Graham Bell > AT&T > Bell Labs > Fairchild > Kingsbury Commitment > Motorola

Some Economics of Social Media

Posted on | April 8, 2010 | No Comments

There is a dynamism to the Internet and its World Wide Web that is truly extraordinary. While the reasons for their success are complex, we can start by looking at some economic factors, both market and nonmarket. Both seem to be highly relevant to the latest series of technologies and applications known as social media.

It can be argued that social networking is one of the original “killer apps” of the Internet. Its email and instant messaging capabilities, the combination of its capabilities: searching, linking, tagging, commenting, voting, authoring, etc., has allowed new platforms like Facebook, Twitter and Wikipedia to emerge, while empowering a wide number of other websites to enhance their communication infrastructure. I say communication because while social media often involves media content, it adds a new dimension by giving users a voice, either through user-generated content or/and its ability to critique, review, and comment on that content.

So what are the economic factors driving the social media phenomenon?

• Declining computing and storage costs are giving people access to the “means of production”. Computers, smartphones, video cameras, as well as audio, video, and word editing software now available at relatively affordable costs. Also, cloud computing services making possible online services such as Flickr and Gmail have aided the social media movement. Within the context of the Internet, these technologies have become more than consumer items, they are the capital goods of the social media economy. They are the goods that make other goods.
• The resources that are used are primarily informational – cultural, political, artistic. These need to be “mined and processed” in ways that are still best done by human labor. Social and cultural production is a delicate operation requiring unique human sensitivities and creativity.
• The products of social media have an unusual cost structure in that once produced, the marginal costs of additional copies are minimal. A tweet can go to four or four thousand people without incurring much additional costs.
• The “link economy” of the Internet’s hypertext environment connects like ideas and makes them searchable and accountable. Combined with the “network effects” of the web – as each person joins the network – it becomes more valuable – the link economy has had a major influence on information economics of the web by making it extraordinarily easy and historically cheap to find the information for which you are searching.

The convergence of these economic trends has resulted in social media being embraced for both e-commerce and non-market activities. It is a powerful combination that is not only enhancing e-commerce operations but giving support to all manner of social movements.

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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: digital media management, political economy of media, social media
Tags: capital goods > link economy > means of production > public goods > social media

How IT Came to Rule the World, 1.7

Posted on | April 3, 2010 | No Comments

This is the 12th post in the mini-series How IT Came to Rule the World

Within weeks of the first landing on the Moon, the foundation of the Internet was created. Government-sponsored projects implemented the theories of data communications and created the first packet-switching and packet-broadcasting network called the ARPANET.

ARPA subcontracted the design and creation of network to a small company called BBN, an important part of the emerging “revolving door” for engineers and scientists between academia, government and industry. Then the University of Hawaii’s Aloha System provided fascinating new possibilities for wireless data communications between mobile units and for satellite packet communications (and soon led to the Ethernet LANs).

The problems encountered in reconciling these different data transmission systems operating in different networks led to the Internetting Project and the development of a new data communications protocol that would link different computers operating on different computer networks.

Vint Cerf talks about his role in the creation of the TCP protocol and its implications for the global Internet.

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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: how IT came to rule the world
Tags: Aloha Systemm > ARPA > ARPANET > BBN > Ethernet LANs > Internetting Project

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