November 6, 2002

PS 138D – Governance of the E-conomy

Lecture Overview Week XI: One or Several E-conomies?

- To us, question whether “one or several e-conomies” is almost silly because the answer seems obvious (recall the poll in class); from diff. several points of view, however, the question seems reasonable and worth posing; we can distinguish normative and analytic premises that could lead to a “single e-conomy” finding:

o Normative

1. desire for simplicity – makes world easier to understand

2. economics & politics – (econ) liberalism brings together what politics have driven apart

3. “Americanization” – only Americans would ask whether there is more than one

4. Fear – U.S. academics are obsessed w/ somebody possibly being better than U.S.

o Analytic

1. Rostow’s stage theory of development (compare lecture week IV) – this is alive and well, as seen in Bush’s new National Security Strategy (i.e. democracy, markets and free enterprise as single sustainable national model)

2. Transaction Cost Economics (compare lecture week VII) – single equilibria predicted on basis of econ efficiency

3. Technology determinism; or, less strongly, the notion of the existence of “best practices” that can be diffused (compare Kantrow guest lecture, week VII; and Kevin Kelly reading week I)

o We have dealt with #1 and #2 before, so focus on #3:

3. Peter Drucker: (business) history is about new ideas and imagination, not new technologies – problem w/ new ideas is that you can’t see them until they come around

Counterfactual: had President Reagan banned U.S. funding for semiconductor research in the early 1980s (as Bush seeks now with stem cell research), would the world today be different? How?

- But question “one or several e-conomies” is silly even in context of a single country like the U.S.:

o Open source communities uses the same institutions as everybody else, but builds something completely different

1. Richard Stallman and Free Software Foundation use copyright not to restrict distribution but to require distribution in open form

2. Bruce Perrins writes constitution for the open source community (“Debian social contract”), establishing non-discrimination, transparency, reciprocity…etc. as guiding principles

o Open source experience shows how the same tools can be used to build different political economies

1. BSD license – short; creates a very free, very open, very permissive community

2. GPL license – more detailed, much more explicit and constraining; has a preamble; creates community with constraints explicitly intended to defend common good (open source code)

- Technological determinism

o very weak foundation on which to build an argument

o every generation has prominent technological determinists (Marx, Ford, Barlow…etc.)

- Relationship btw power, transaction costs and community

o if there is a “single e-conomy” argument today, why is it so obsessed with markets? why do we think digital tech will or should lead to “more perfect markets”? many institutions (e.g. marriage, representative democracy) exist not because high transaction costs have made them necessary, but because there are important (non-economic) reasons to have them => marketized vision of human interaction is a very narrow vision, and is certainly only one vision