the price of progress
Normally, I don’t go near political issues here, but today I will make an exception
And I am not getting political.
I am only making an observation about technology.
The protests on Wall Street #OWS are spreading, gaining media attention an apparently catching on around the world.
This is, in no small part, a function of digital technology – the web more than anything else, and social networks.
In the photo above thousands are illuminating their protest by holding aloft cell phones.
Good.
Most protesters are highly digitally literate. They organize online and they broadcast and webcast their protest worldwide with CNN or wihtout it.
And they are right to be angry.
Unemployment is at an all time high and seems likely to stay there for some time.
They grow poorer while Wall Streeters grow wealthy.
And, if Michael Lewis is right in his new book Boomerang, (which I am about half way through) we are only at the very beginning.
The irony here (note title) is that most of what the people on Wall Street are suffering from is right there in the palm of their hands.
The web.
More than bad investments on the part of the banks (and they are legion), and more than unfair government bailouts of those failed banks whne by all the rules of the game they should have gone bankrupt – at the heart of this lies the invention of the web.
As economist Joseph Schumpeter pointed out in the 1950s, what we are experiencing today is a massive Creative/Destructive impact of a powerful new technology.
These things happen all the time.
Invent the motor car and you get Detroit but the horse carriage industry faces mass unemployment.
Now, with the web, this dislocation is everywhere.
Gone Borders, Tower Video, many newspapers, soon the Post Office – the list is endless.
And when those industries go, so too do the jobs. And those are jobs that are not coming back.
The web makes the world more efficient, but it also takes away employment.
Classified ads in newspapers used to employ about 10,000 people nationally directly and another 30,000 or more in ancilliary roles.
Craigslist employs 20 people.
And it’s more efficient.
Get the concept?
On top of that, Wall Street trading which used to be done with scraps of paper is now done by computers in a nanosecond. It makes the trades more efficient but it also makes everything bigger, faster and largely out of control.
When Wall Street went web, a lot of control (both government and human) went out the window.
Bad loans, bad instruments, massive numbers.
All of this is the impact of the web more than any single ‘evil entity’.
And those kinds of technology driven dislocations that turn over the economic applecart are not so easy to correct
Just ask the Monks who had their lives vested in the Medieval world of the Feudal Economy.
When the printing press came along, all bets were off, and the Medieval world vanished.
Probably for good, but I bet there were a lot of Monks and Peasants out in the streets protesting as well.
They, of course, were not waving copies of Gutenberg’s bible in their hands – the instrument of the demise of their world.
That the protesters on Wall Street are consciously waving iPhones, the instrument of the destruction of their world, is to me, the height of irony.
One thing that struck me as rather touching:
When the Wall Street protesters published their own ‘community’ newspaper, the ‘Occupied Wall Street”, they did it as a paper.
not online. Not on the web.
Perhaps subconsciously they understood the root cause of their problems.
