Mistress of the World

Wriston, Walter B.

2007

Many years ago a noted historian delivered a speech entitled "How to Achieve the Inevitable." In this particular instance he was talking about the peace that would follow World War II, as it was clear that the war could not go on forever yet, even as portends of allied victory grew stronger, there was a growing doubt that we could translate victory into peace.

I was reminded of this in reviewing some of the papers that have been delivered at this center about how to achieve a national policy on Information Services. Some would argue that that policy is already in place and spelled out in the Bill of Rights in our Constitution. Americans have always wished for an open society. John Adams in his Dissertation on the Canon and Feudal Law put it this way: "Liberty can not be preserved without a general knowledge among the people, who have a general right...to that most dreaded and envied kind of knowledge. I mean of the characters and conduct of their rulers." The first great advances in information distribution had little to do with government, and everything to do with private enterprise. I refer to the idea of a public library open to all. The first libraries in this country were started by ambitious groups of young men like those assembled by Benjamin Franklin who eventually founded the Library Company in 1731. Franklin was but the first of many public-spirited citizens engaged in this pursuit. There were also many private collections like the one John Harvard gave to a small college in Boston and the combinations of private collections that John Bigelow helped assemble that became the New York Public Library. The eleemosynary tradition continued and more than 2700 free public libraries were established by Andrew Carnegie, some with matching public funds, in towns across America. To a certain extent their growth and utility was made possible by what we would now call software written by Melvil Dewey in 1876 that permitted the efficient cataloging of books.

Of course not everyone has ready access to a library, and some are still unaware of how to use one. The Library of Congress, for example, permits anyone over high school age to use its huge collection, but the harsh truth is that what the elite regards as great books are often left on the shelves and the "trashy" romantic novels have a waiting list. The elite has always believed that it knew what was good for us and could make choices for us. This concept reached its apogee in the writings and subsequent action of an Italian journalist named Mussolini: "Fascism," he said, "denies that the majority by the simple fact that it is a majority, can direct human society..."[1]  Traveling through Italy at that time one saw huge posters bearing Mussolini's picture and the caption, "He will decide." Mussolini is long gone but the urge to decide for others remain.

The good news is that the information age is making this kind of mind control impossible because there are just too many pathways for news and data to find their way to us. Some worry about this. Leo Bogard, for example, complains that "the information highway might be jammed with the likes of Jimmy Swaggart, Madonna and Ice T..." and that "knowledge is not distinguished from fact, lies from truth, the real from the imaginary."[2]  Just who is to make these judgments is left unsaid. He might have been describing a modern bookstore featuring a book on the conspiracy theory of President Kennedy's assassination, or how the American mind has closed, or even Madonna's contribution to our culture. This attitude in its extreme form can result in Nazi book burning, or closer to home, the quaint New England practice known as "Banned in Boston," or what is now called "political correctness" on some college campuses. Sometimes it is the Government that picks out what is good for your mental health. Rupert Murdoch in his brilliant lecture at the Manhattan Institute put it this way: "While a lot of British TV is of high quality," he said, "I don't know how many of you want to watch 350 to 400 hours of snooker...or 60-70 hours of darts," but, he said, "I doubt you'd like being compelled to pay $110 annual license fee on your television to finance BBC." Fortunately, Mr. Murdoch has given the British many channels to choose from, and they are exercising that right in increasing numbers. Often what they choose to watch does not sit well with the BBC establishment that complain about the invasion of American TV programs that, in their view, have little redeeming value. In the meantime the TV police move around in their vans stuffed with electronic gear looking for a TV viewer who is watching without having paid the license fee.

In this country we need a whole new look at the regulatory framework built by Judge Green, the FCC, the Public Utility Commissions, Congressional Committees, the various cable laws and tax code depreciation schedules. Technology is moving much faster than the processes of government. While bureaucracies hunt for distinctions that technology has erased, alert political leaders use the technology for their own purposes. In the midst of one of the recurring crises in the Middle East, when King Hussein wished to reply to some statement made by Secretary of State George Shultz, he did not summon an ambassador to launch a formal protest but rather booked himself onto CNN. At the same time that the President appears on Larry King Live, other branches of his government regulate many phases of our society as if we still lived in the Industrial Age. Fortunately for us all, the market has a way of supplying what people need or want if the government gets out of the way or sometimes even if it doesn't.

The original reason advanced for the regulation of the airwaves by the Government was that it was believed that a limited number of broadcasters could use the air at one time. There was, we were told, a spectrum shortage, so the public interest would be served by regulating the airways in such a way as to assure access to all. Apparently, the government believed that there was no shortage of newspapers, so they would not be subject to the so-called fairness doctrine, now happily retired but not dead in the hearts of the Congress. Technology soon obsoleted the premise on which the regulation was built. We are currently using the spectrum at frequencies deemed impossible a few years ago, and doubtless this is just the beginning. In addition, the advent of cable, fiber, and satellites all taken together have overwhelmed the regulators. Information technology is moving data and information, in Mike O'Neill's words, "across the barriers of space, illiteracy, and national sovereignty to reach virtually all of the inhabited earth...Equally significant, much of the information is being delivered in an oral- visual form that breaks the monopoly of the world's literate classes."[3]  This has permitted what I call a global conversation.[4]  The implications of a global conversation are about the same as that of a village conversation, which is to say, enormous. In a village there is a rough-and-ready sorting out of ideas, customs, and practices over time. A village will quickly share news of any advantageous innovation, and if anyone gets a raise or a favorable adjustment of his or her rights, everyone similarly situated will soon be asking for the same. And why not. These people are just like you and me, I can see them and hear them every day. Why, the villagers ask, should I not have these things, and so the virus of freedom travels on the global network. And no matter what governments do, the word will get through. All of this creates huge problems for established power structures. In the past the educated elites could read about democracy or capitalist prosperity. But hearing or reading of such things is not at all like having them happen in your village, happen to people you can see and hear, people just a few streets or broadcast frequencies away. A global village will have global customs. In a global village, to deny people human rights or democratic freedoms is not to deny them an abstraction they have never experienced but the established customs of the village. It hardly matters that only a minority of the world's people enjoy such freedoms or the prosperity that goes with them. Once people are convinced that these things are possible in the village, an enormous burden of proof falls on those who would deny them.

Despite the fact that television reaches hundreds of millions of people on our planet, and that the law of technology is the law of convergence, each sector of the industry here at home has dug in to protect his or her turf. This is only human nature as people resist changes that threaten their pockets or their beliefs. Whatever the future brings, and it will contain more surprises than anyone could ever project, what is clear is that the ability of government or elites to control what you and I hear and see is long gone. Those who know what we should see and hear for our own good will fight a rear-guard action to protect us from ourselves. We have, for example, the complaint of Tom Lewis writing in the journal of this organization lamenting the success of the Limbaugh show. "Is," he inquires, "our Doctor of Democracy really serving us? Does his success signal a triumph for our free expression? Is this glut of hot air really our victory in electronic democracy, or should we, like Pyrrhus say, 'Another victory like that and we're done for?"'[5]  In calling the program a glut of hot air, a value judgment is passed. One person's hot air is another's wisdom. Is this not the age old cry in modern electronic dress of people complaining that the world is in danger because my particular viewpoint is not demonstrating the same ability to get accepted in the marketplace of ideas as the views of my enemy's?

One of the keenest observers of the American scene, de Tocqueville observed many years ago: "The nearer men are to a common level of uniformity, the less they are inclined to believe blindly in any man or any class. But they are readier to trust the mass, and public opinion becomes more and more mistress of the world."[6]  All of this I would argue is good news for freedom. Democracy is an act of faith, but it is also based on individual responsibility, and the more information that can be supplied the better the judgments should be, although it does not always work out that way as today's scientific truth may be tomorrow's laugh. Sometimes passions of the moment subsume good judgment. But as the concept of freedom travels on the network at near the speed of light, and as more and more of the world's population knows there is a better way to be governed, public opinion, in de Tocqueville's words, becomes "the mistress of the world." While people worry, sometimes with good reason about the extremes of the right or the left, one experienced talk show host has written "Given a variety of opinions on any given subject, people will sort through what may be conflicting ideas and find a way to make sense of the most complicated issues."[7] 

In addition to the myriad TV images that span the globe, new private computer networks proliferate. While various experts debate the shape and structure of tomorrow's data networks, the number of computers connected to some network grows at an exponential rate. Some argue that one day the software in a terminal will tell the network how much bandwidth it will need for a given transaction. George Gilder has advanced the case that Ethernet is the once and future network since it now links more than half of the world's 40 million networked computers. Since the intelligence is entirely in the computer, he believes the law of the microcosm will operate. On the other hand one of the inventors of Ethernet, Robert Metcalfe, is said to believe that ATM is the future. With the world moving so fast, it is also possible that a whole new paradigm may appear. Whatever system of communication is used, almost everyone agrees that the future almost inevitability is one in which most of the world's multimedia terminals can be connected to each other. While some in government draw up grand multi-billion plans for a superhighway of information, many different companies and universities are already building one. The principal impediment to building the information highway is the government itself. The Baby Bells, with huge cash flow are still laying hundreds of thousands of miles of copper wire at home, but abroad bid to install long-distance fiber cable. Congress has awarded cable TV monopolies in every city and then passed laws designed to lower the rates to consumers, but has succeeded in creating even higher tariffs. In the meantime, the struggle for Paramount Communications is making allies of book publishers, home shopping networks and Baby Bells. This list goes on and on. The national planners, past and present, of the fading socialist age have never understood the answer to Carl Menger's question: "How can it be that institutions that serve the common welfare and are extremely significant come into being without a common will directed towards establishing them?" Perhaps a modern-day economist might even be thinking of the thousands of bulletin boards on the network that, like Topsy, just grew.

In America the well-founded fear of concentration of power helped structure the regulatory framework that was designed to prevent media monopoly. Technology has shattered that monopoly. In simpler days newspapers competed with each other and with radio and television. Newspapers for all practical purposes were almost immune from government interference while TV and radio were heavily regulated. Today the distinction between all forms of purveyors of news and data is being erased by technology while at the same time, even more important, information and intellectual capital have become the most important factors of production in our global economy. Knowledge which at one time was a kind of ornament for the rich and powerful to display at conferences is now combined with management skills to produce wealth. The vast increase in knowledge in the last decade has brought with it a huge increase in our ability to manipulate matter, increasing its value by the power of the mind, generating new substances and products unhinted in nature and undreamed of a few years ago.

The world is changing not because computer operators have replaced clerk typists, but because the human struggle to survive and prosper now depends on a new source of wealth; it is information applied to work to create value. Information technology has created an entirely new economy, an information economy, as different from the industrial economy as the industrial was from the agricultural. And when the source of the wealth of nations changes, the politics of nations change as well.

The transition from one form of wealth creation to another is usually at first denied by the establishment that sees it power eroded, and only reluctantly accepted when it is clear to all that a change has occurred. For thousands of years men were nomads wandering from pasture to pasture. Land was not regarded as an asset, and wealth was counted by the number of cattle one owned. When village agriculture began to appear, land became a form of wealth. Rules were laid down about ownership and water rights, and power moved away from tribal chieftains toward territorial rulers. Later, with the advent of the industrial society, making things in a factory was perceived as creating wealth, but as usual the establishment fought it. Even so sound as person as Benjamin Franklin dismissed such a notion, "Agriculture is truly productive of new wealth; manufacturers," he said, "only change forms, and whatever value they give to the materials they work upon, they in the meantime consume an equal value in provisions."

Today with the emergence of information as the preeminent form of capital, once again the establishment is threatened. This change affects not only the creation of wealth, but also military power, the political structure of the world, and how business must be structured and run. Today conquest and control of territory is rarely worth the cost. When natural resources were the dominant factor of production, control of land seemed a good way to enhance sovereign power. Today war tends to destroy or smother intellectual capital because is totally mobile. Indeed the advent of World War II drove out of Germany the people with the intellectual capital crucial to the construction of the atom bomb which ended the war.

The pathways open to the transmission of data and information are now so prolix as to make national borders totally porous and old regulatory distinctions meaningless. Intellectual capital will go where it is wanted and stay where it is well treated. Any teen age computer nerd knows this, but a Federal bureaucracy spent around seven years trying to decide where computing stopped and telecommunications started. In the end they gave up.

As both the speed and bandwidth at which data is transmitted have increased to near the speed of light, the value of some information has an increasingly short shelf life. What might be called the time value of information now is reduced in some instances to a few seconds. Foreign exchange is a case in point. Literally seconds after the President makes an announcement, or the Prime Minister speaks in Parliament, or coffee futures in Brazil take a dive, over 200,000 screens light up in the trading rooms of the world and traders buy and sell based on their calculation of the effect the new policy will have on the price of currency.

In today's world, the value of a currency is determined by the price the market will pay for it in exchange for some other currency. Indeed the market is no longer a geographic location, it is more than 200,000 computer screens all linked together. This network has created the Information Standard that has replaced the Gold Standard. Unlike all other previous international arrangements, governments cannot call a press conference and resign from the Information Standard - regardless of what they say, the screens will light up and the giant vote counting machine which is the global market will render judgments on the value of a currency. Central bank intervention is doomed to expensive failure as the size and speed of the market overwhelms governments. Governments do not welcome the Information Standard any more than absolute monarchs embraced universal sovereignty.

Sometimes technology that is derided at home has profound effects abroad. There were not many takers when President Reagan announced his vision of S.D.I., which was promptly dubbed Star Wars, and judged to be unattainable by many. A close reading of Secretary Shultz' s book, Turmoil and Triumph, makes clear the Soviets who had watched America put men on the moon a decade earlier took the possibility of American success with great seriousness. In myriad conversations the General Secretary referred again and again to S.D.I. and reiterated his absolute insistence that America abandon the program. The President saw the program as a threat to no one, but a way out of the balance of terror that had prevailed so long. It is one of the few documented instances in history where a technology not yet in existence - and problematical at best - furnished a powerful lever to move the world toward peace.

Information technology has, I would argue, forever changed the way the world works. It has changed the way wealth is created, it has changed the concept of sovereignty as borders become totally porous, it has changed the way politics is practiced, and the way we all live and work. The process by which governments will come to terms with pluralism and the twilight of sovereignty will be slow and halting and neither smooth nor costless. Any such profound change causes disruption in the lives of nations and individuals. Instant communication does not in and of itself create understanding. Advanced technology does not produce wisdom; it does not change human nature or make our problems go away. But with much trauma and dislocation, it does speed the world on its journey to more freedom for more people.

 
 
Footnotes:

[1] Chandler, Albert R., The Clash of Political Ideals, D. Appleton-Century Company, p 206

[2] Media, Democracy and the Information Highway, A Conference Report

[3] 0'Neill, Michael J., The Roar of the Crowd. Time Books, p 23

[4] See Author's Twilight of Sovereignty. Charles Scribner's Sons, 1992

[5] Lewis, Tom, "Triumph of the Idol-Rush Limbaugh and the Hot Medium," Media Studies Journal, Summer 93, p 61

[6] de Tocqueville, Alex - Democracy in America, Anchor Books, p 435

[7] Rehm, Diane, "Talking Over America's Electronic Backyard Fence"' Media Studies Journal. Summer 1993, p 68

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  • The document was created from the speech, "Mistress of the World," written by Walter B. Wriston for the Freedom Forum on 25 October 1993. The original speech is located in MS134.001.011.00005.
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