In Our Time - Information Technology

Episode Date: January 13, 2000

Melvyn Bragg discusses the social and economic consequences of the information revolution. There are now more than 200 million people connected to the internet world-wide. The world’s biggest ever merger has just seen Time Warner united with the internet service provider America Online, and in the United States alone it is predicted that transactions conducted in cyberspace will account for 327 billion dollars worth of business by 2002. Should we be pleased? Is it the ‘third wave’ as Dr Toffler predicted in 1980 - after the first wave, the agricultural revolution about 8000 BC and then the second, the Industrial Revolution three centuries ago.Is this change going to alter our society radically, empowering the individual and offering greater choice, or will information technology lead us into a dark age for society that destroys democracy, the work-place and family life? With Charles Leadbeater, Demos Research Associate and author of Living On Thin Air: The New Economy; Ian Angell, Professor of Information Systems, London School of Economics and author of The New Barbarian Manifesto: How to Survive the Information Age.

This BBC podcast is supported by ads outside the UK. Thanks for downloading the In Our Time podcast. For more details about In Our Time and for our terms of use, please go to BBC.co.com.uk forward slash radio 4. I hope you enjoy the program. Hello, there are now more than 200 million people connected to the internet worldwide. The world's biggest ever merger has just seen Time Warner, united with the internet service provider American Online.

And the United States alone, it's predicted that transactions, conducted in cyberspace will account for $327 billion worth of business by 2002. Some shattering statistics. Is this change going to alter our society radically, more importantly, empowering the individual and offering greater choice, or will information technology lead us into a dark age for society that destroys democracy, the workplace and family life?

There are arguments on both sides. Profound arguments, and with me, are two leading players. Charles Ledbeter, Demos Research Associate, and author of the influential book, Living on thin air, the new economy, an Ian Angel, Professor of Information Systems at LSE, an author of a new book called The New Barbarian Manifesto, How to Survive the Information Age. Ian Angel, you say in your book that you think the future ages will brand this as a time of revolution. Can you briefly say why you see it in such great terms?

Well, you've just mentioned the fact that transactions are taking place in cyberspace. The problem is that in cyberspace, transaction costs are much. much lower. And this is having an enormous effect on the institutions of our society that are based on the way we used to do transactions during the industrial age. But you use, the word revolution is big, especially the way you use it, because you refer back to Toffler. And in 1980s said there were three waves of revolution, the revolution, the revolution which came in about 8,000 years ago, when we became agricultural, and two or three centuries ago when we had the Industrial Revolution, and now the third one, the information revolution.

So you're putting it, you're pegging it high. Can you justify that? Well, it's better than evolution because evolution makes whole species extinct. There are fundamental changes. Look at jobs. Jobs are being transferred to the Far East. Marks and Spencer's just yesterday, moving their clothing manufacturing, outsourcing it to the Far East. This has the effect of making everyone feel insecure.

But is this enough to make it a revel? I'm just trying to get this enlisting. Listener's minds right. You claim hugely for it in your book. I want you to claim a little bit more hugely for it on now than you've been doing so far. Well, the fact is that there are now one billion workers worldwide who are available. Now, this is an enormous workforce. What I'm saying is that labor has become a commodity. And that is a revolutionary idea. So we can switch to Bangalore in southern India. Bangalore to China.

As a lot of American firms do, our student loan scheme goes to Sri Lanka. Sri Lanka, yes. It runs it from there. And that is going to lead to... And so now the first thing any businessman does is to say, let's look at the transaction costs. Is the costs of doing it in the UK greater than doing it somewhere else? And if it is, we'll go somewhere else. So that's the base of your revolution.

Charles Ledby, did you agree with that? Is it as groundbreaking and as big as that? I think there is a revolutionary change going on. I think it's the conjunction of a series of forces that have developed over a long time and are coming together now. And it's not just information. It is that basically value in our economy now

is generated out of thin air. It's generated out of ideas, knowledge, innovation, creativity. If you look at the most powerful, largest companies in the world now, their value really lies in their ideas, their knowledge. It's not in the things we dig out of the ground. We can't load. them on trains, they don't sit in warehouses, they're not transported

through ports. So there's a huge shift in the knowledge, in the asset base of the economy, from the old assets of the industrial economy of land, labour, machinery, to these new assets, which are based on human capital, knowledge, ideas and creativity. Wasn't the Industrial Revolution to do with knowledge

to do with how, who got to know how to smelt steel first and who got to, I suppose, the agricultural revolution who got to know how to plow the field and scatter first and so. Isn't that knowledge? It is knowledge. But what I'm saying is that knowledge has always been a key factor in production,

but now it's taking on an entirely new significance. What's the new significance? Well, the new significance is that if you look at one of the leading companies of the world like Intel, it makes a physical thing, a chip. But actually the silicon is completely worthless. The material is completely worthless. The value lies in the logic that's inscribed upon it. If you look at Microsoft, it's the largest, most powerful,

corporation in the world. Look at its balance sheet, of course, it's got buildings, land, machinery on it. But actually its value is entirely and intangible things in sort of software and recipes. Now this is a completely different change. We're not trading physical commodities. We're trading ideas, information, images and other things. And that has very big implications. Just before I turn away from being, sort of try to prod this revolution idea a bit further, is it different in kind, even from what you've said, Charles, and now I come to you, back to you in, from say Caxon's introducing the printing press

at the end of the 15th century and releasing oh god we've got the demon knocker in the next studio, never mind. I'm sorry to be blasphemous, never mind. Caxon releasing a printed material onto a huge market. Is it different in kind

from that? I think it is different in kind because I think it's global in reach. It's moving very fast and we now systematically invest in change in our societies. This is one of the key things. In the 19th century, change may have come about through accident. Harold Perkin discovered the chemical industry, almost by accident, in a laboratory at home. We now invest huge amounts in systematically generating new ideas and new knowledge,

and information and communication technologies allows us to distribute that knowledge much more quickly worldwide. That is a very, very big change in the nature of our societies. Change isn't accidental, it's systematic. So what world do you see briefly in Angel, this new revolutionary world? You could have said before agriculture, people hunted and scavenged, then agriculture, they settled down and they therefore created leisure, therefore created armies, therefore can build cities, and so that happened. Industrial revolution brought in masses of people who had uniformity, you had product, we can say that happened. So what is this revolution going to bring? It's not just about being different, it's also about being the same.

You mentioned Kaston. What he did was introduce a new way of communicating. and either side of that idea became two totally different societies. Now we have another way of communicating, but it's a global communication, an instantaneous communication. And it's bringing into question all forms of loyalty. So who can I communicate with? Who do I feel attached to?

And because I am able to talk to anyone in the world instantaneously, it means that I am no longer committed to being forced, forced to the main way of thinking that is orthodox in my particular society. I can choose to leave my society. Can't you do that anyway by reading a book? But not in the same response. You don't get the instantaneous response. You don't have the contact and the immediate response and the feedback.

There's a time lag with the book. It's instantaneous with new technology. Charles Labrudeau. Why has this global proliferation taken place on such a scale? Let's say at the computer. there were a couple of hundred million, there were a couple of hundred million two years ago, and the snap over fingers there's going to be 500 million.

Why, this speed of this is astonishing, isn't it? Well, I think there are a number of reasons. One is the rapid advance of computing power. It's got a lot cheaper, it's got a lot smaller, it can be incorporated a lot more objects. But secondly, I think it's the arrival of all this new technology with the erosion of, tariff barriers, the globalisation of trade, the collapse of the Cold War and communism,

has created an opportunity in which this technology can spread and migrate. And the most powerful reason is it's useful for people. People can do things with it. Not necessarily use things, but things they used to do more effectively. So when a technology allows people to do useful things and it's cheap and it's available, it spreads very rapidly. Add to that that it's driven by software. and the thing about software is that it's like a recipe.

If you come up with a perfect chocolate cake recipe, you can replicate it worldwide almost instantaneously. If you come up with a perfect chocolate cake, only you and I can eat it in this room. So if we're in a world of recipes, recipes can spread the world over very fast. And so the recipe of Windows is now a world recipe for software. And that's allowed the product to spread much more quickly.

When Ford created his Model T, he could only ship them in units of software. of one, Bill Gates can spread windows around the world like a virus. There is a problem here because computing deals with detail and the moment this software is let loose in society, it creates

a complexity. Can you just open that up a bit? Well, the idea, the computers deal with specific problems. It's a black box. Inputs, outputs, well-defined. But the problem is that once it moves into society, they are misused, abused, used

in different ways. People misunderstand, misinterpret the data. People take the data as being truth. They take the data as though it's information, not realizing that there's an interpretation going on. What the machine does is just generate text and numbers. But the complexity of the interpretation, the misinformation, the disinformation is what causes complexity in society. So what are you saying there? What does that lead to? It means it is extremely difficult to have any sense of control. It's the idea that computers are controllable is naive. I see.

This business of the globalisation, which you touched on before, and said industries are huge American industries, are moving to southern India, to Bangalore, one of the fastest growing technical centres in the world at the moment, with American industries. But it's not just the big companies. You see, small companies are doing it as well. But again, is this very different.

I mean, Benjamin Franklin, whom you quote in your book, said, merchants of no country, the mere spot where they stand does not constitute so strong an attachment as that from which they draw their gain. So again, are we talking about something... We are talking about people, politicians talk about British industry. Whereas Franklin is saying there's no such thing as British industry. Traders will go where they see their gain. They become not multinational, they are transnational.

They are beyond nationality. What consequences does this have? What you call in your book Charles Ledbeter the knowledge-based economy? What role does information technology have in these developments? Well, I think it's a key driver of that, and the driver is to go back to this question of globalization, if we live in a world where basically you can make any product anywhere in the world and ship it to any market,

then it's entirely rational for manufacturers, for instance, to make China the world's factory, the place where all the physical products are made or Southeast Asia more generally. But that means that if you live and work in an economy like this, then you can't base your competitiveness. Like ours you mean? Yeah.

You can't base your competitiveness and earn your living on the basis of your access to raw materials or cheap labour or what have you. You have to generate some distinctive competitive advantage. You just said like ours, of course, that's the problem. What is ours? What is us? and that is the difficulty. New technology is actually creating a class, an elite class,

that is actually separating itself from nationality. This is rather heady stuff. I'd just like to be a bit more concrete. Let's talk about social change. Starting with, as it were, the bottom rung, in, Angel, to you first, how do you think this is going to affect the nature of work and normal life, shopping, getting around the place, all that? Well, what is work? That's a problem.

Work, we use the word, as if we understand what it is. In the age of the factory, we knew exactly what it meant. But now it's much more complex, because a factory is basically run by machines with a few security guards. What do people do? And that is a huge problem. There are six billion plus. people on the planet. If most of the physical,

semi-skilled and unskilled work is done by machines, what do those six billion people do? What do they do, Charles Lebedee? Well, I think that work becomes increasingly differentiated and in many ways unequal. I think that there is... People still have to build buildings. They still have to clean buildings. They self to stuff like that. They will indeed do stuff like that, although even if you look at buildings, I mean that's a knowledge revolution. We now enclosed space with fewer materials, much more quickly with intelligent materials.

I mean, the buildings of today are much more intelligent and clever than the buildings of 100 years ago. In what sense, a lot of people are reaching for their telephones and their pens, as you say that, and thinking the buildings of 100 years are a lot more intelligent than buildings now. Well, we enclose, if buildings enclosed space, if you look at them in purely utilitarian terms, which is a very narrow perspective, and look at it. at the building is being put up in the city of London, we enclose space much more quickly with materials which are lighter, less energy intensive,

and having technology embedded in them. And in that sense, the whole direction of a building is a much more knowledge-intensive process than it used to be. And the cost of maintenance is lower, therefore there's less work to maintain the building? But the key... I like to this working, so. Well, I think there are a series of, you know,

criss-crossing and different impacts at play. In ways, I think work will become more creative for some time. people because they'll be more liberated by it. More people who will be able to work at home. The costs of entering into self-employment will fall. There'll be new working patterns within corporations. But at the same time, I think there'll be ways in which there'll be the call centre culture in which people are under more pressure.

This technology will use to supervise people more. And there's also, I think, an absolutely huge problem of social exclusion. If you go to some of the places which were heavily dependent on the old economy, Preston Park estate in Hull, which was built around chemicals and engineering, those people there have absolutely no stake in this new economy whatsoever. And that is a social consequence which we can't bear for long without having some major cost in the future. We find that all over Britain, don't you?

Places built around industries, which for one reason or other, we need even go to that at the moment, for good, reasons which can be understood and reasons which define belief of being wiped out in the last year. Yeah, and the inequality in the way. the old economy will translate itself. This is the danger into even greater inequality in the new economy because those places lack the social and human and intellectual and knowledge capital

that are needed to give people a chance. So the revolutionary future you see, you don't see it through, Rosie, the social impact you see as being more destructive than... No, not necessarily. As I said, I think the social impact depends on our social creativity. The thing that stands out for me about the Victorians as radicals and revolutionaries was their ability to combine science and technology with social and political innovation.

Philanthropy, insurance. Not just philanthropy, but a lot of the institutions that we currently live with, local government, research universities, trade unions, welfare societies, building societies, so on and so forth, come from radical Victorian social innovation. And what stands out for me about our era

is that we are radicals in science, technology and commerce, but conservatives and timid in our social institutions, and our political institutions, and how we adapt to this, change. And that is why the people on the Preston Park Estate in Hull don't have a chance. It's because we're social conservatives and timid where we should be radical,

imaginative and bold. We can send trade whizzing around the world, Bangalore and all points east, but we can't solve the Preston State of Holland. The city of London finds it easy to transfer billions of dollars a day around the world. Why can't we get 5,000 pounds to a social entrepreneur in Preston Park Estate in Hull?

That we find difficult to do, but complex tasks we find easy. This is a paradox. Yes. The tone of what you say, despite your sort of claiming that this is not necessarily pessimistic, does strike me as pessimistic. Do you agree with that, but you go rather further. I mean, you see it the future as a great, in fact, just quote you back yourself, as a great threat to humanity. Your guru, Toffler in 1980, talks about this third wave, this third revolution, which we started a program with, tearing families apart, rocking the economy. I'm quoting, rocking the economy, paralyzing our political. systems, and I can't rid my own writing for the best. Oh, leading to great violence, something like that. I mean, you seem to be of that camp. But Charles has just said.

He said, we can't get 5,000 pounds to Preston, but we can send trillions of dollars around the world. Assuming that sending trillions of dollars is more complex than sending 5,000 pounds to Preston. That's the whole point. It is more complex

to get 5,000 to Preston, than to send large amounts of money around the world. That's an assertion. How would you prove that? Well, the fact is that there are institutions worldwide that have been set up that will actually allow this to happen. The problem, as Charles said, the social institutions are not in place, the social innovation is not in place to make that £5,000 available. I'm just saying what Charles has just said.

Did you see any signs? I think that the distinction you made is crucial and is very, very clear and good that we're radical in technology and conservative in institutions. This seems to me a fair old recipe for disaster, isn't it? It's either recipe for disaster or it's a recipe for some really radical politics and some really radical redesign of our institutions. What sort of really radical politics would meet the occasion?

Well, I think a radical, completely radical rethink of education when it starts, how it's delivered, how it's funded, where it takes place, so on and so forth. We've only started scratching the surface at the moment. I mean, the current government's agenda, which I support on standards and all the rest of it, is about correcting past failure. It's not about creating an education system of the future yet. So, for instance, give you an example. Two examples.

Education, growth industry, huge demand for it. Why should it be difficult to set up a school? We should have schools being set up all over the country by new people. Why should the state completely control that? Second example, education is going to be a global industry. Well, what's the future of the university in a global marketplace? Shouldn't universities be freed from state control and be privately funded and run? So we've got to embrace.

a much more radical agenda around education, welfare and these other areas if we're going to give people who don't have lots of personal resources a chance in the new economy. Can I come back to your sense of, I mean, your book The New Barbaria Manifesto, it's not a cozy read. You do see the future in the hands of the knowledge holders who seem to me to be just as elitist and just as, in command as any elite we can look back on for the last three or four thousand years with the added thing that they, and I'm going to bring this in as well for both of you to talk about

the added thing that they control the money and since they've got the money they always have that's no other different there but just finish and you two can do but they can move that money anywhere so they need not be taxed anywhere therefore the income to the old states is in under serious threat and this isn't only the super rich this is lots and lots and lots of people who can shift it now, putting it all over the place, and they can evade that, and then it can become part of what they do. The super rich have always evaded taxation, but now what's happened, there's a new group of people

who are international businessmen, who are not earning huge sums of money, but increasingly they are available, they are capable of bypassing taxation. But you say that Toffler's my guru, Nietzsche is my guru, and it's human, all too human. You've obviously not enjoyed it like I did, The idea is that it is humanity we're talking about.

And the use of the word our, us, we, these are problems, because we are using them as if we understand what they mean. The whole point of a revolution is it's actually changing the nature of what group do I choose to belong to. It's no longer a geographical accident of birth. Now I can actually choose to go somewhere else. I belong somewhere else. From what you say in your book and for what you said, it seems to me that what you are saying is watch out,

we're heading for a society where the knowledge holders, those who really know, are going to be so far ahead of the rest and so independent that they're just going to walk the world. And then I'm quoting you back. You say the rest will resort to racism, socialism, yes, socialism. Fundamentalism and something else that's terrible. You're saying much the same.

You're sort of qualifying it, and you're putting in shards of optimism, but not very convincingly. Oh, well, let me be a little bit more optimistic then because I think there are these tendencies at work, but I think that this technology is enormously enabling. I mean, my kids will not have to work in a factory or work down a mine or hue from the ground or bee farmers.

They will work with their brains. And that will be true of most of our kids. And this is a huge social change. Technology is migrating towards people, and it will enable, I think, an unforefore. a sort of unfolding of a much more democratic approach to life. But can I ask you two things? One is how many people is it migrating to?

And be, to will those people be prepared to support what Ian thinks of as, I don't know whether you use the word romp and it's a rude, the rest who are not going to be up to speed, who are going to be left to pay whatever taxes are to be paid and so on. How are they going to stop this to be? A, I think it's migrating to a lot of people that I think, especially this is a huge generational change going on. And I think amongst younger people,

it's an absolutely kind of reflex action, this technology, and this way of thinking. Second, Ian is absolutely right. It does raise these huge political questions about loyalty, belonging, and attachment. But that's down to politics. I mean, it depends on our ability in our political institutions

to devise new senses of collectivity and social contract. And that means, you know, embracing this technology to strengthen democracy, to find new, ways of connecting people. And I think actually people quite strongly do need

forms of connection and they will use this technology partly to create that. So I don't think it's a sort of entirely fragmentary, individualising, destructive force. Actually new forms of collectivity will emerge out of this to solve social problems. But you see democracy as an error now. You think democracy

will be seen to have been an error? Democracy, it was an experiment that came out of the industrial age. It was a natural form because the mass of people within society had power because they were needed to be part of the factory they were needed for the military. They were needed to be the market. But as the nature of production changes, in societies that are right-sized,

where there's sufficient wealth, then forms of democracy may continue. But I'm convinced where societies are wrong-sized, where there's not enough wealth generators in society, then the rich will not support the poor by paying all of their wealth just to keep society going. They will run away. A new technology gives them the ability to run away. It tells them where to go. They have already got contacts

because they have networks all around the world. Their ability to generate wealth will be known and country, states will say, come on in. The Americans are doing it already. We're doing it with German industry, aren't we? Sorry, German business and what's up. Germany, which most people think of as the most loyal of countries, and yet they have police cars on the borders,

intercepting people with bags full of money. I know these are not the super rich, these are school teachers, hairdressers, getting the money out of the country in case they will be taxed on it. Well, they will be taxed on it. And that's causing problems. Yes, well, you're getting ahead of steam,

which is more like your book. It took you a long time to own, because your book is a bit like that, and it's taking you 25 minutes to get that. Charles Ledby. I think that Ian's overstressing how mobile and global this world will be. I mean, in some ways it will be, but people will still need to work in places.

And actually tacit knowledge, located in particular places, arguably become more important. And so the social problems of how you generate tacit knowledge in particular places like Silicon Valley or Cambridge or wherever will press on these people, and they will need social solutions which are geographically located. And secondly, of course,

it depends on your ingenuity over things like tax and what have you. We can devise new ways of binding people into tech contract. But also, how much is the individual allowed to keep? That is the big issue. Yeah, but Ian, the other problem is that actually I think there's a huge democratic impetus in this change that's actually empowering people with information, education and choice. And that's the democratic impulse. Well, I must be a Marxist then, because to me, technology is about alienation.

The particular form that democracy took out of the 19th century in a representative form, I think, is indeed passing. Actually, our societies, I think, will become far more democratic as a result of this because the citizen and the consumer will be empowered with more choice and freedom. I agree with you that it will become more democratic and also it will become more vicious because it will be the majority intimidating the minority. I can see the end of representative democracy. And so what you'll have will be the majority bullying minorities. I think that in time...

And using the sheer bulk of numbers as the justification, as the morality for intimidation. I think that entirely depends on the nature of politics and social institutions. That may be a future for America, and if we're not careful, it may be a future for the UK. It's not a future for France. It's not a future of Sweden, Holland or Germany. I've got to blow the whistle now.

I'm sorry about that. You can take a choice between Charles Led Beater's Living on Sinner or Ian Angels the New Barbarian Manifesto. I'll be back next week with Martin Amis and Cora Kaplan talking about images of men. on masculinity. Thanks for listening. We hope you've enjoyed this Radio 4 podcast.

You can find hundreds of other programmes about history, science and philosophy at BBC.com.com.uk forward slash radio four.