Brian Holmes on Thu, 10 Feb 2011 09:28:22 +0100 (CET)

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Re: <nettime> The beginning of the end?

On 02/09/2011 09:02 AM, Felix Stalder wrote:

 > rather than seeing this as the peak of the [informational] paradigm, 
it's the very paradigm triumphing yet again over the previous, obsolete one.

Felix, your view is the intuitive one, which sees the hoped-for collapse 
of the Mubarak regime as a consequence, more or less, of the freedom to 
communicate: in a situation made tense by rising food prices, liberal 
informationalism finally exerts its effects. I don't have any argument 
with that as far as it goes, but my counter-intuitive view looks into 
the future and asks, What could this springtime of the Arab world mean 
for geopolitical alignments based on the hegemonic role of the US, not 
only as a military power but as the society which has defined the 
current "information era"? Responding to my post, Charles Turner makes 
the point that "fortunately, the people of Egypt don't have to 
assimilate all of this to know what to do." Still, everyone including 
the Egyptians will have to assimilate a basic change in the geopolitical 
order, equivalent in magnitude to the one that took place after 1989, if 
such a change does in fact occur. That's what seems so fascinating to me 
in the present!

I do disagree when you say that "informationalism is a particular 
organizational paradigm that enables to combine flexibility and scale at 
previously unmanageable levels of complexity, based high-speed, 
high-volume information flows. It does not relate to a particular 
political or economic program." The reason I disagree is simple 
path-dependency: that organizational paradigm DID relate to a particular 
political and economic program, which responded to an historically 
particular kind of crisis, namely the one of the 1970s. Eactly this is 
what gives a specific character to a period. In addition to the general 
decline in corporate profitability, the key factors of the crisis of the 
seventies were the self-assertion of resource-providing "third world" 
countries (such as Vietnam, the OPEC group, Iran); the uncertainties 
brought by floating exchange rates after the breakdown of Bretton-Woods; 
and domestic pressure for a more open, less repressive and materialistic 
society. The response ultimately produced a characteristic set of 
relations between financialization, just-in-time production and what's 
usually called "the revolution in military affairs." Now, I am not 
trying to say that information technology can't be used for other things 
(global civil society among them). But I am trying to say that a certain 
form of stability and order, however repressive and environmentally 
damaging, has been characteristic of the age in which information 
technology became the mainstay of the world economy, and I really think 
that is what should be called informationalism. Funny enough, this is 
exactly the way Manuel Castells sees it in what I think is his best 
book, The Informational City (1989). He defines informationalism not 
just as an organizational paradigm but as a full-fledged and specific 
mode of development:

"Modes of development emerge from the interaction between scientific and 
technological discovery and the organizational integration of such 
discoveries in the processes of production and management... The 
transition between modes of development is not independent of the 
historical context; it relies heavily on the social matrix initially 
framing the transition, as well as on the social conflicts and interests 
that shape the transformation of that matrix. Therefore, the 
informational mode of development will emerge from the interaction 
between its technological and organizational components, and the 
historically determined process of the restructuring of capitalism."

For Castells, this emergence of informationalism as part of economic 
restructuring clearly occurred under US hegemony. He goes on to talk 
about the shift from the "urban welfare state" to the "suburban warfare 
state," detailing Reagan's historic increase in defense budgets devoted 
to information technologies (Star Wars). In his analysis, military 
investment became the driver of ICT development in the eighties. Quite 
interestingly, the USA's first joint military production project with 
Israel was in the mid-eighties, and it was for a tactical drone, which 
the Israelis had started working on after the Yom Kippur War. With real 
insight into what was going on, Castells writes:

"The political crisis suffered by the American state both domestically 
(Watergate) and internationally (Vietnam; Iran; the erosion of its 
political control in Africa and Central America; increasing economic and 
technological competition from new powers, particularly Japan; strategic 
parity achieved by the Soviet Union in the arms race) called for a state 
of emergency in which the greatest power on earth would flex its muscles 
to show, in a responsible yet determined manner, that it was ready and 
willing to engage in sharp confrontations to preserve its status and 
power. Business interests, both in the US and internationally, 
redeploying themselves on a planetary scale in the aftermath of the 
crisis, welcomed this newfound resolution in the leader of the free 
world, both for its symbolic value and for its global practical concerns."

Castells must have often thought of this sentence while the great 
coalition for the first Gulf War was being assembled in 1990, in the 
immediate wake of the fall of the Berlin Wall in 1989. He was right: 
America was definitely making a bid to guarantee the stability and 
security of the world-system for the tremendous period of capitalist 
expansion that was to follow. And it was doing so with smart bombs and 
laser-guided missiles in the Middle East.

The historical relation between financialization and the spread of 
networked technologies seems obvious to me: not only in the tech boom of 
the 1990s, when capital was raised and allocated by the financial 
markets for the cabling of the entire planet; and not only in the 
tremendous expansion of the financial markets that this global 
installation of IT allowed, till the point where by mid-2008 you had a 
notional $683 trillion of derivatives contracts circulating around in a 
seemingly infinite electronic financial sphere. Finance also mattered 
culturally: the dematerialization of labor, the slosh of funny money in 
the job markets and the expressivity allowed by a personalized media 
system absorbed most of the lingering middle-class complaints about the 
repressiveness of American society, at least for a while. In addition to 
that, the really amazing thing has been the development of just-in-time 
production (originally used by Toyota for automobiles) into a modus 
operandi for globalized industry and distribution, under the new name of 
"global supply chain management." The biggest corporate database is now 
Wal-Mart's (70 terabytes). Global supply chain management is what 
allowed the almost complete delocalization of the US low- and 
medium-tech manufacturing sector, through the creation of the mysterious 
bicontinent "Chimerica," or what's also called "Wal-Mart world" (and of 
course I agree with Joseph Rabbi, this was done by Western corporate 
elites who are the real yellow peril). Now, all that forms a densely 
interrelated complex of capital expansion, a "mode of development" as 
Castells would say. The question is, what's gonna happen as that mode of 
development goes into crisis?

The financial meltdown is a serious contradiction, because it was the 
networked financial system (first currency futures, then through a vast 
panoply of derivatives) that made global just-in-time production 
possible, by offering insurance against the fluctuation of exchange 
rates in the post-Bretton Woods currency system. The dates on this are 
very precise: the Reuters Monitor, which is the first networked trading 
platform, came out in 1973, and networked finance has grown 
exponentially ever since, all the way to today's high-frequency trading. 
Nothing serious has been changed in this system since the meltdown, so 
its wild gyrations will continue to throw the whole globalized economy 
into danger. Another, even more extreme contradiction is climate change, 
intensified by massive industrial development of just-in-time 
globalization: that's a central factor in the current spike of food 
prices, and it will get worse, creating havoc in a world where food 
production is totally commodified and everyone depends on the global 
market to eat. Then, a third contradiction is that with the 
transnationalization of US hegemony, the formerly "domestic" resistance 
to oppressive practices goes global as well, facilitated by IT. The 
combination of all this instability produces an outright geopolitical 
crisis: a potential change in the whole structure of US military 
alliances in the Middle East. Are we not looking at a possible 
transmutation of the military-informatic-financial mode of development 
that emerged in the US in the 1980s, and then went on to play the 
central structuring role in the post-1989 world system?

The US has thrown in its stake with repressive Arab regimes (Egypt, 
Jordan, Saudi etc) because they apppear to guarantee the flow of oil 
while accepting to coexist with the great American ally in electronic 
warfare, Israel. The military fear  is now destabilization of the 
region, refusal to stand idly by at the next Israeli invasion of Gaza or 
Lebanon, and possible war on a large scale. But America loves to focus 
on this kind of military fear, because that is how it has built up its 
linchpin role in globalization. What actually seems more likely to me is 
a democratization of the region, spurred by the demands of people who 
have been cut out of global development, with attempts to overcome some 
of the inequalities and allow people to engage in more productive 
activity. Yet to the extent that the US goes on supporting Israel and 
Saudi, it clearly cannot shape this transition. What you see in Latin 
America, East Asia and now the Arab world, is a serious decline of 
hegemonic influence. This can only bring a deep reconfiguration of 
social relations, including the relations to information technology and 
its associated organizational forms.

By 1989, Castells, Harvey and others were able to explain in detail the 
shift from the Keynesian Fordist industrial economy to Neoliberal 
Informationalism. Good for them. What's more difficult is to try to look 
from a position within the current crisis and see the beginning of the 
end of the technopolitical paradigm of Informationalism. I think it's 
worth trying to do this, because it's almost sure that the generations 
growing up in these tumultuous years are going to be part of deep 
technological, social, cultural, geopolitical and ecological change. In 
short, they will face the conditions of a paradigm shift. Hopefully they 
will be able to guide it in a more positive way than the last time 
around, where the hopeful and generous revolutions of 68 ultimately 
helped produce neoliberalism and financialization (but some other good 
things too: the global civil society you mentioned). When you look at it 
from a world perspective, these years since the financial crisis of 2008 
have been incredibly agitated, and this is only the beginning. Big 
things will happen and great things can be achieved. May the Egyptian 
people -- including the young leftists who helped spark this revolution 
-- find fulfillment on their path to a more just and more egalitarian 

utopistically yours, Brian

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