Jun 2, 2010

SPACE-TIME OF THE NEW ECONOMY

In this article, I would like to discuss a possible theory of the New Economy linked to the dimensions of space and time that constitute our reality. Essential to this is a preliminary distinction between a new and a old economy, because understanding the old generally helps us theorize the new.
Each of the two types of economies requires different approaches for what refers a) to the perspective of production and b) to the perspective of consumption. a) considerations are here essentially descriptive in nature, because they plainly refer to different productive articulations of the model of reference; b) considerations are here mainly symbolic in nature, because - we will see - a single commodity inevitably stands out among many others, which are perceived as less relevant from the standpoint of society and of its imaginary.

The applied categories 

What I wish to add to any notion we already consider as acquired, is that each of the two economies has also different implications when related to the dimensions of space and time, resulting in different perspectives which need analyzing. Additionaly, the category of "functionality" will be used to describe the level of sustainability/operational effectiveness of each of the two models.

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THE OLD ECONOMY

"Old Economy" is a theoretical concept in which we are authorized to include everything which is not "new". Any consideration about the accuracy of such approach can be disregarded by pointing out that since the analysis is conducted from the standpoint of the "new", then everything that cannot qualify as "new" in the light of a well identified watershed event (more on that later on) can be gathered under one single category. Any distinctions - even though legitmate, because pertaining to well-identified stages of technological progress in human History - between totally different models of production (agriculture versus industry, for instance) are irrilevant for the purposes of our analysis.
The main productive applications of the Old Economy are: agriculture, manufacture, banks, industry, extraction.


The Old Economy in space

The relationship of the Old Economy to space can be described by recurring to the category of "occupation" (of space). The production focuses mainly on material goods, with banks serving as immaterial intermediary of the productive process. The production of material commodities implies large spaces for the productive chain to develop itself (production, storage and retailing), and also a spacial network that links all the elements of the chain to each other and to the final consumer.  
Due to the criterium of space occupation, a natural outcome of the Old Economy is the pursuit of spacial expansion and, eventually, war. As a matter of fact, war gives the Old Economy more than additional territory where to perform its core activities:

1) Reconstruction. The income generated by the reconstruction of a territory battered by the bombs are among the most relevant reasons for starting a war. The building industry is a vector for many other industries, because houses generally need the work of builders, electricians, plumbers, carpenters, painters, furniture dealers, estate agencies, notaries, architects, engineers, interior designers and so on. A boom in the real estate market can jump-start the economy of an entire nation; a crash of the house market, on the other side, can cause the economy of that same nation to suffer enormous distress. As a consequence of that, interests around the building industry - and consequently around war - are vast and involve many possible participants.

2) The Defense industry. This is self-explaining. War needs weapons and ammunition. The capital-intensive Defense industry (Defense contractors + arms industry) guarantees many jobs and accumulates inventories that have to be emptied periodically. This is another major reason explaining why war - namely the occupation of a territory through violence - is so important to the Old Economy.


The Old Economy in time

As for the dimension of time, the old concept of progress aimed naturally - being in that no different than the New Economy - at reducing the time man had to dedicate to work (cars to quickly reach the workplace, automation in the production process and so on). Unfortunately, it was clear soon enough that making the production easier and faster certainly helped increase profits, but didn't reduce the overall time dedicated to work. The advantages of moving by car from one's own house to the workplace were soon pretty much vanified by the increasing problem of the frantic traffic in modern cities. This is only one example among the many possible.


The symbol-product of the Old Economy: the car

The commodity that symbolizes the Old Economy the most is the car. Since the articulation of the historical productive branches that constitute the concept of "Old Economy" is not what we are interested in, I will limit myself to saying that the car deserves to be considered the product that best evokes the characteristics of the Old Economy, because of its complexity as product. In fact, just like the house, the car is destination of many productive sectors within the Old Economy: mechanics, electronics, manufacture, chemistry, textils etc. The possible objection that the house instead would deserve this title can be rejected by pointing out that the concept of "shelter" (as a primary need of man) is something that precedes the evolution to the modern house, and thus the house retains no essential characterization whatsoever with respect to the economic model of reference. The car, on the other hand, responds to more modern needs, it hosts and conveys more modern values and interacts more dinamically with a society based on consumerism. It is therefore the essential product of our recent - though not the MOST recent - modernity.


"Functionality" in the Old Economy

The level of functionality inherent to the Old Economy is what determines eventually its obsolescence. The car is the undisputed occupant of space in modern cities. Most of the time the car is used solely by the driver and seats no more than 1 person, thus occupying city space needlessly and abusively.   

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NEW ECONOMY: the revolution is afoot

"New economy", as the most recent stage in the economic History of humanity, was engendered by the invention of the computer. This is in fact the watershed event that separates the New Economy from the old model. What was true at the beginning of the new millenium remains so as I write: the developments and possible applications of the new technologies and media (most notably the Internet) allow for changes whose extent can be investigated and theorized, but not precisely foreseen.
The main productive applications of the New Economy cannot be entirely clear at this point of its development. The most visible effect to date has been the impact of the Internet, which has revolutionized not only the old way of running businesses, but it is also in itself the core of the revolution in the so-called Information Technology, intended as the study and implementation of the technology that "helps produce, manipulate, store, communicate and/or disseminate information" (Wikipedia). A new quality of researches are being carried out in the disciplines of medicine, electronics and energy production among others, and new frontiers of research with far-ranging implications and very ambitious claims have emerged, such as nanotechnology and biotechnology. Nonetheless, the most influencial field of the New Economy has to be considered communication and the way information is produced, stored and shared.


The New Economy in space and time

The relation of the New Economy to space and time can be described by recurring to the categories of "aggregation" and "concentration", both in space - physically, with reference to the process of storing information -, and in time - socially, with reference to the process of sharing information (social networks, blogs and forums add a new social dimension to life that totally abstracts from space sharing).
Whereas the Old Economy has a tendency to the occupation and dispersion of space, the New Economy has the tendency to concentrate and aggregate its elements in a limited space. The purpose is to concentrate the biggest number of elements and functions in the least space possible. By adopting the aristotelian concept of "particular space", which cannot be thought without the object (matter) that it contains (the vacuum being inconceivable), space may be considered as one and the same with matter. The occupation (utilization) of the least possible quantity of space/matter adheres naturally to the way the New Economy operates on reality, both in terms of method and purposes.
In tune with that, the new concepts of "portability" and "sustainability" gain attention. I am going now to better illustrate these concepts and to add a new one, possily the most important of the three.

1) PORTABILITY. The new productivity tends to revolutionize the old model from within (the New Economy is itself a product of the Old Economy), and in many cases old products and activities cease to exist. Functions and tasks that were once scattered among many dedicated devices are now integrated in just few, and the concept of  "service" increasingly gains relevance over that of "production". The concept of "mobile" - which incorporates the concept of "service" -  offers a synthesis between the process of integration I have just illustrated and the constant availability of information thanks to the continuous connection to the Internet allowed by the new devices.

2) SUSTAINABILITY. The New Economy incorporates the concept of sustainability of the progress it engenders. Sustainability refers not only to enviromental issues, but it is also linked to the "democratization" (which I will be discussing right below). The tendency to the valorization of space entails a substantial reduction of the materials required for production. The example of the "cloud computing", among other virtuous developments, testifies a rationalization of space, potentially putting an end to its promiscuous use, in that all the office activities (production and storage of documents and files) of firms and individuals are moved to servers (and server rooms) as dedicated space. Journalism on paper is going to vanish, and the problem of deforestation will no longer be a problem. The environmental problems are going to worsen only as long as the Old Economy is allowed to keep the society as hostage through the arrogance of its diktats.

3) DEMOCRATIZATION. Due the cost of new technology getting lower, sophisticated devices are no longer reserved to people according to socioeconomic status. The popularization of always newer and more powerful devices contributes to democratization which is the most important social outcome of the New Economy rising victourios over the old model.
Here are some features of the democratization of productivity and consumption which happen to be closely interwined and are here explained separately only for analytical purposes.

a) Meritocracy. The process of democratization taking place in the New Economy is the result of a new emphasis put on meritocracy. The model of economy that the New Economy replaces is largely based on social status and cooptation due to the corporative organization of the main actors and to the high capital requirements of the relative businesses. To blame for the high barriers of entry in the businesses of the Old Economy is not only the capital-intensive character of these, but in fact also their corporative organization and the indefectible reliance on political connections, which in turn has created an unhealty relationship between politics and the economy, enabling conflicts of interests to spread and to contaminate the normality of our democracies.  
Thanks to the valorization of new ideas, which can be translated in the New Economy into marketable products with just a minimal investment of resources, anybody can actively participate in the economic life of their countries.
b) Genuinity of the message. The barrier between producer and consumer gets more blurred, in that the consumer is more frequently than in the past also the producer, who may feel committed to the improvement of the very same products he uses. A new request for quality and efficiency limits the evocative power of marketing, in favour of the description of the product and the plain listing of its features. Something similar happened at the onset of the industrial era, when the advertisement used to focus more on the descriptive valorization of the actual features of the product rather than on the creation of a deceptive hype hinting at a social status the possess and use of the product would give access to, or to features and functions that were downright absent in the product.
c) Consciousness. The relationship between the media and the public is progressively losing its unidirectional character. This allows for more awareness in political and economic choices. Contextually, innovative means of communications are born. Not only does the end of unidirectional communication modify the relationship between the public and the media; the public is also offered the possibility to produce their own content and potentially share it with millions of people through cost-free and extremely easy processes. 
d) Social responsability. As a consequence of c), consumers gain consciousness and can get informed feedback from their peers (in forums, social networks etc.). Correspondingly, companies get social consciousness, in that they are prompted to a more socially responsible behaviour, in terms of product quality, customer satisfaction and the abandon of deceiving or fraudulent practices. Companies are also prompted to an increased attention towards the environmental impact of their production. They are therefore forced to a new level of ethics. 
e) Affordability. Thanks mainly to advertising and to its user-generated (2.0) characterization, most of the content offered on the Internet is cost-free. To compensate users for the effort of preserving the peculiar "community" dimension of the Internet, the pre-economic and socially aggregative concept of "donation" has emerged. Nonetheless, since the public has demonstrated their willingness to pay for good quality content, the scene is set for committing the professional producers of media content to high-quality standards in their offer.


The symbol-product of the new economy: the computer

The computer has a more effectual relevance for the origin of the New Economy and for its development, than what can be said about the car in relation to the Old Economy. Whereas the car is a symbol rising from the increasing ruines of the Old Economy as an evocative reminder of our recent History, and is today an object of status much more than a functional and useful object, the computer is, along with all its applications, the REAL producer of the New Economy, both in the history of this and, in an incessant flow, in everyday life.
That clarified, it has to be added that the social pregnancy of the New Economy, with the characteristics that I have highlighted by formulating the concept of "democratization", is only rendered possible by the Internet. The Internet has to be considered the social realization of the technological revolution brought about by the invention of the computer.



The attacks to the New Economy
Attacks to the New Economy can be seen in the attempts carried out by the Old Economy to undermine the recognizable pillars of the ongoing revolutionary shift. Among the many possible examples: the attempts, perpetrated in the authoritarian regimes, to shut down undesired Internet sites; the attempts, carried out by the media enterprises of the Old Economy, to manipulate the cost-free orientation of the Internet, and so on.
Since the New Economy constitutes the new way of History, and considering the process of democratization inherent to the New Economy as I have tried to point out; given the fact, finally, that the New Economy is the new course of the economy, we can conclude by saying that any attempts to fight the changes brought about by the New Economy have to be judged as substantially anti-historical, anti-democratic and anti-economic.


 "Make love not war. 'I want YOU'."

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