Richard Barbrook on Wed, 18 Jun 1997 00:40:23 +0200 (MET DST)

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<nettime> The Digital Economy


Richard Barbrook
Hypermedia Research Centre

The Net is now the iconic technology of our age. From
California, Wired magazine has achieved global
notoriety through its claims that the Net will create
the sort of free market capitalism until now only
found in neo-classical economics textbooks. Everyone
will be able to buy and sell in cyberspace without
restrictions. States will no longer be able to control
electronic commerce which can cross national borders
without hinderance. The Net will allow the whole world
to realise the American dream of material riches.
Coming from California, this neo-liberal fantasy has
even acquired a mystical dimension. By releasing the
supposed laws of nature immanent in unregulated
capitalism, the information technologies will
allegedly lead to the birth of a new race of 'post-
humans': cyborg capitalists freed of the restrictions
of the flesh. Like Victorian factory-owners, hi-tech
neo-liberals believe that their narrow self-interest
represents the pinnacle of Darwinian evolution.

The Californian ideology is the fantasy of the
'virtual class': the West Coast entrepreneurs and
engineers who hope to make their fortunes out of the
Net. Yet, Europeans are not immune from the influence
of this Californian dreaming. With the collapse of
Stalinism, many intellectuals have adopted a stance of
post-modern nihilism which offers no alternative to
neo-liberalism. Some on the Left even take a
masochistic pleasure in seeing all forms of
technological innovation as the triumph of capitalist
domination. According to these pessimists, the cause
of labour is lost in cyberspace. Yet, the hi-tech neo-
liberalism championed by the Californian ideologues is
itself an attempt to control the Promethean power of
human creativity. As global communications have
improved, the wider availability of capital and
materials has undermined social power based solely on
the monopoly control of wealth. Above all, constant
technological innovation makes success in the
marketplace increasingly dependant on the skills and
enthusiasm of the workforce. In the emerging digital
economy, nothing is more precious than human

For over two hundred years, the boredom and discipline
of the factory system were accepted as the only
possible methods of increasing our material wealth.
Under Fordism, workers could live better than medieval
aristocrats. However, once the consumer society was no
longer a novelty, many people started looking for
something beyond money. Ever since the '60s, workers
have been seeking more autonomy in their jobs and more
freedom in their personal lives. Abandoning
traditional conservatism, neo-liberals have used
marketisation and privatisation to recuperate these
aspirations. For instance, talented workers within the
hi-tech industries are promised the possibility of
running their own companies and enjoying the
independence bought by great wealth. If you have a
good idea and lots of luck, you too can become a
member of the 'virtual class'.

However, this hi-tech neo-liberalism is a false dream
for most people. In the USA, average wages have been
falling for twenty years. In the EU, mass unemployment
has become a permanent phenomenon. Even the lucky few
of the 'virtual class' cannot completely isolate
themselves by hiding in their gated suburbs and
encrypted cyberspace from the social and ecological
problems exacerbated by neo-liberalism. Above all,
free market solutions cannot remove alienation within
the workplace. Under neo-liberalism, individual
autonomy is only expressed through deal-making rather
than making useful and beautiful artifacts. The
history of computing and hypermedia is filled with sad
tales of engineers and artists who have sacrificed
their creativity to the demands of paper-shuffling. In
place of the Californian ideology, what is now needed
is a more profound understanding of the impact of the
Net on our society. For, instead of being the
technological expression of neo-liberalism, the
emergence of the digital economy demonstrates the need
to create a twenty-first century form of social

The origins of the Net itself exposes the fairy tale
quality of the Californian ideology. Far from being
the product of the free market, it was created as one
part of a huge military research programme funded by
American tax-payers to counter the threat posed by the
launch of the Sputnik satellite by the Soviet Union.
Like many Cold War inventions, the Net could have
remained a official secret. However, when it was being
developed within the universities, academics and
students hijacked the new technology for their own
purposes. From on-line discussion groups through
electronic mail to the Web, the most popular features
of the Net were developed by enthusiasts. This non-
commercial ethos attracted others who began to develop
the Net as a new form of community media. Even today,
the majority of the material available on the Net is
made by amateurs. Although they have produced much of
the hardware, it is the entrepreneurs who were the
last people to comprehend the potential of the Net.
The reason that Microsoft and other corporations are
pouring billions of dollars into cyberspace is
precisely because they have to catch up with the
widespread use of the Net by state-funded institutions
and by d.i.y. culture.

The Net, therefore, is not the harbinger of a
globalised unregulated marketplace. On the contrary,
its profane history exemplifies the miscegenation of
state, commercial and community interests within the
emerging digital economy. Each sector will have its
part to play and each cannot exist without the other.
For example, public intervention is needed to ensure
that a broadband network linking all households and
businesses is built. If left to unregulated market
forces, universal access to the new information
services will be very slow in arriving. Yet, the
commercial potential of the Net can only be fully
realised through the construction of the fibre-optic
grid which covers the whole population. As with
earlier types of utilities, profitable on-line
businesses will only flourish through state regulation
- and even ownership - of the digital infrastructure.

Similarly, the further development of d.i.y. culture
is also necessary. As the history of the Net
demonstrates, hacking, piracy, shareware and open
architecture systems all helped to overcome the
limitations of both state and commercial interests.
Whether for political or profit-making reasons, large
institutions are still trying to impose their own
proprietary controls over cyberspace. Yet, one of the
major attractions of the Net for its users is that it
is not tightly controlled by any major public or
private bureaucracy. Already, a minority of the
population can use the Net to inform, educate and play
together outside both the state and the market. Once
a broadband network is built, everyone will have the
opportunity to join this hi-tech gift economy. Most
current Net users don't simply download other people's
products. They also want to express themselves through
their own web sites or within on-line conferences.
Unlike traditional media, the Net is not a spectacle
for passive consumption but a participatory activity.

Ironically, this d.i.y. culture is also one of the
essential preconditions for the development of a
successful commercial sector within the Net. By
allowing people to acquire some basic knowledge of
making hypermedia, the hi-tech gift economy is helping
to create a skilled and innovative digital labour
force. However, it is very difficult to adapt the
traditional factory system to managing these new
workers. The rapid spread of personal computing and
now the Net are the technological expressions of the
desire of many people to escape from the petty
controls of the shopfloor and the office. Despite the
insecurity of short-term contracts, they want to
recover the independence of craft labour which was
lost during the process of industrialisation. Because
of rapid technological innovation, skilled workers
within the hypermedia and computing industries are
precisely those best able to assert this desire for

While neo-liberals can only can promise success to a
privileged few, the reemergence of artisanal methods
offers a way of working within the commercial sector
which most creative labourers can adopt. Already,
digital artisans are the people pushing the cultural
and technical limits of hypermedia as far forward as
possible. Crucially, their virtual artifacts can be
easily reproduced and distributed through the Net. For
the first time, artisans can take advantage of the
economies of scale up to now only enjoyed by factory-
owners. Far from being a return to a low-tech and
impoverished past, the contemporary revival of
artisanship is therefore at the 'cutting edge' of the
development of post-Fordism.

The evolution of capitalism has been reflected through
the process of technological advance. While classical
liberalism depended on coal-mining and metal-working,
Fordism produced electro-magnetic and chemical
technologies. At the end of the twentieth century, it
is now claimed that the Net is creating a new economic
paradigm. However, the full benefit of an innovative
technology can only be realised by changing the ways
of working. The rise of Fordism didn't just depend on
the invention of the motor car and other mass consumer
goods. Above all, this form of capitalism relied on
the adoption of assembly-line methods of production.
Even the Californian ideologues argue that the
expansion of the Net depends upon the subordination or
cooption of workers by unregulated markets. Despite
their overt technological determinism, they implicitly
accept that the organisation of labour is at the
centre of the emerging digital economy.

However, in practice, hi-tech neo-liberalism is
hindering the development of a thriving digital
economy. For instance, only a small minority can be
lucky enough to become members of the 'virtual class'.
The creative potential of most makers of hypermedia
will still be limited by Fordist methods of
production. This is why we should not be intimidated
by simple-minded slogans from California. Instead, we
need to comprehend the complexity of the mixed economy
being produced by post-Fordism. Above all, we have to
recognise that human ingenuity is the most important
feature of this emerging digital economy. The state,
commercial companies and d.i.y. culture are all
different ways of realising the Promethean spirit of
human creativity. Under Fordism, the factory worker
was seen as a heroic figure - the embodiment of hope
of a better future. In contemporary society, the
digital artisan has taken over this role. Whether
producing inside the public, money-commodity or gift
economies, digital artisans represent a future centred
on skilled, creative and autonomous labour. The
promise of the digital economy lies not just in the
practical potential of the new information
technologies, but, more importantly, in the emergence
of this new type of worker. This is why the digital
artisans are pioneers of a social democracy fit for
the twenty-first century.

A translated and edited version of this article will be appearing in the
forthcoming issue of 'Freitag'.
Dr. Richard Barbrook
Hypermedia Research Centre
School of Design & Media
University of Westminster
Watford Road
Northwick Park

+44 (0)171-911-5000 x 4590

"...the History of the World is nothing but the development
of the Idea of Freedom." - Georg Hegel

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