Felix Stalder on Tue, 24 Jun 1997 07:12:52 +0200 (MET DST)

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<nettime> New Environment--Old Story

[This is a talk I gave at the Local Knowledge / Global Wisdom Conference
held yesterday in Toronto, Canada. It ties somewhat into the "economy is
nature" thread here on nettime. Felix]

New Environment--Old Story

I would like to address briefly the question of what is new and what is
old admits an “information revolution”  and a fury of globalization and
then probe into the effects of this combination of new and old on
everyday, physical life. I will take most of my examples from financial
markets simply because they are the most extreme and at the same time
the dominant segment of a global economy. I will develop my ideas along
three themes:
- Connection
- Translation, and
- Disconnection

_Connection_ leads us to the new part of the story, the information
networks that underpin the globalization of the economy. Those
information networks provide the environment for an economy that
increasingly is dependent on and shaped by massive, real-time flows of
information on a global scale. Accelerated and expanded through the rise
of  computer networks such flows have developed distinct properties that
influence the character of this new environment and the economies (and
culture) embedded therein.

One of the principal  properties of the information environment is
_Interdependency_: this means simply that nothing can stand for itself,
all elementsæthe information itself as well as the institutions built
for managing and directing the flows of informationæare connected to
each other and their meaning or actual value depends on what they are
connected to. A typical example is the rise of the stock price of a
small company when its bought by a large one, as Microsoft does it all
the time. While company itself doesn’t change, being connected to the
industry leader boost its value and can rearrange a market segment in a
very short time. Marshall McLuhan--to bring this back home--expressed
that quite some time ago when he said: “The ‘meaning of meaning’ is
relationship.”  These relationships are built through the flows of
information themselves--Microsoft channeling some money into the pockets
of shareholders of the company it wants to buy. The direction of these
flows determines how the different elements in the environment are
connected, whether they have a close and strong relationship or whether
their connection is difficult to see or only remote. However, the
direction of the flow is highly fluid and can change quickly.

This leads to the second property of the environment besides
interdependency:  _Change_. The flows of information do not simply
connect two sides; by connecting they change both of them. A bridge, for
example, does not simply couple two independent villages across a river
but it creates a new city or a new war.

The flows of information are infinitely malleable. It is their intrinsic
property to change their direction and quality instantaneously, a
characteristic made very explicit by electronic media. Out of such
changes new relationships are created that bring supposedly independent
elements into a sudden interdependency. Out of this out of his changed
relation new meaning arises that potentially redirects the flows of
information: in short the information environment is in constant change
because that change feeds upon itself. This change, however, is neither
additive nor subtractive in an integrated environment. It is, to use a
somewhat fashionable expression, ecological. This does not mean that it
is good or harmonious, it simply stresses the fact that even small
changes can trigger massive chains of adaptive reactions: unlike a
machine that simply breaks down and stops functioning if something out
of the order happens, flows of information can rearrange themselves
according to new conditions. 

The networks in which these properties--interdependency and adaptive
change--arise have become so complex and the behaviour they produce so
difficult to predict that it becomes increasingly fashionable to
describe them in biological terms and attribute them a certain life-like
autonomy: complex networks are presented as an ‘out of control’
“hyperorganism”. Hyper in this context means nothing else that it is an
entity that his composed of smaller entities that are highly connected.
Organism means here little more than that the entity is self-steering
without a dominant planning center.

And indeed applying such an view to financial networks--the most global
and complex network currently running--can be very profitable. A small
number of companies is trying to decipher these markets in the same way
that meteorologist try to predict the weather, another highly complex
system without a central controlling agency.  To understand the market
behaviour they are feeding massive amounts of information into computer
models that extrapolate, based on past experience, the future
development purely based on the internal network logic: these models
exploit the autonomy that the complex networks has gained from any
individual action and that they develop “individual” characteristics.

Such complex, highly interdependent systems that connect actors around
to globe instantaneously and integrate them into an entity that acts
coordinated but without a central control is certainly something rather
new and directly related to the expansion of information technology.

However, this is only half of the story, it is the view from the inside
of the networks. When we look from the outside what those networks,
especially the financial markets, do we come to the second, to the old
part of story. While connection described the character of the new
environment, _translation_, my second theme, describes what this
environment does.

Around the financial markets there is a huge industry that produces
information and analyzes it. Reuters, for example, produces roughly ten
times more information for the financial markets than for political or
economic sections of other media. This vast amount of information is
analyzed and brought into a form that is it allows to act in the
financial markets where one can do only two things: buy and sell which
means move information either in one direction or the other.

In effect this means that the incredible diversity of decisions and
motivations, political as well as economical, regional as well as
national, is translated and channeled to answer one questions: does this
hurt or help a certain financial product. However, it is important to
make it clear that this is a process of translation and not just of
transmission: the difference being that the influence the of news and
other information is indirect because it is filtered through a very
specific set of assumptions that allow to bridge the gap from a factual
statement such as a new government has been elected in a country, to the
qualitative one such as that is be good for the economy, let’s buy!

These assumption--are constantly adapted and homogenized in the feedback
loop of the closed system of the markets form the dominant logic of the
global economy, which is-- and there are at the core of the old
story--the radicalized neo-liberal world view reduced to one variable:
corporate profit.

In that dominant logic--a world view reduced to the measurement of real
or expected corporate profit--are the new and the old combined which
leads to the last theme that would like to mention: _disconnection_ as
the effect of that logic in everyday life.

It might seem somewhat paradox that a technological environment that is
so deeply characterized by connection results in disconnection. However,
it is not. The connections take place primarily on an extremely abstract
and centralized level such as in financial markets or in corporate
headquarters. That abstraction allows to control and connect places and
events that have from the point of view of physical everyday life no
immediately visible relationship. This has two immediate (side-)effects:
first,  it allows to pursue the dominant logic with increased
ruthlessness because the effects of that pursuit are being felt
somewhere else, totally separated from the lifes of those who take the
decisions, who guard themselves with all kinds of means against possible
physical encounter with negative effects of the logic they serve.

The second disconnecting effect is that everyday life, where experience
is gathered,  is increasingly influenced by decisions that were made on
such an abstractly level that they can hardly be connected with the
direct, physical consequences. As a result society  and its political,
social and democratic institutions are understood as being subjected to
forces that are beyond social reason and adaptation to uncontrolled
virtually natural global forces seems the only strategy possible what
ever its costs may be.


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