Media and New Capitalism in the Digital Age The Spirit of Networks

COMP_LEXITY AND INCA_LC_ULABI_LITY

According to Kelly, the “link[ing of] the distributed bottom” (14) in the economic sphere renders the network economy a system so complex that it yields nonlinear, and therefore unexpected, incalculable results. This is in contrast to the industrial economy. In the industrial age, Kelly writes, “success was in proportion to effort” (31), and the future was therefore easy to predict: “To imagine the future of an enterprise or innovation one needed only to extrapolate the current trends in a straight line” (31–32). This simple algorithm fell by the sidelines “with the advent of large-scale electronic media networks in the mid century” (32). These technological systems no longer work as if they were man-made systems—which would make them easier to control—but rather as if they were living things. “Everyday we see evidence of biological growth in technological systems. This is one of the marks of the network economy: that biology has taken root in technology. And this is one of the reasons why networks change everything” (32). And now that biological principles took hold of the economy, its workings become more volatile and chaotic and hence less predictable.

The new economic rationality, spontaneously emerging from the nature of technological networks, is presented in the digital discourse as a mirror image of the instrumental rationality that was the backbone of the modern economy. Industrial economic rationality, succinctly encapsulated by Max Weber at the beginning of the twentieth century, entailed calculability, control, and predictability. The digital discourse heralds the emergence of a new rationality that features precisely the opposite symptoms: unpredictability and incalculability.

I have mentioned above the role that the biological imagination takes in forming the digitalistic worldview: information and communication technologies are seen as biological-like systems, which in turn create biological-like social systems. Here Kelly explains the fluctuating, unstable, turbulent new economy as inherent to the nature of networks, by using insights from biological systems: “As networks have permeated our world, the economy has come to resemble an ecology of organisms, interlinked and coevolving, constantly in flux, deeply tangled, ever expending at its edges. As we know from recent ecological studies, no balance exists in nature; rather, as evolution proceeds, there is perpetual disruption as new species displace old, as natural biomes shift in their markup, and as organisms and environments transform each other” (108, emphasis mine).

The argument is that as technologically enabled networks become the central axis of social activity, the economy has come to resemble nature: both are evolving progressively and are in perpetual imbalance. In fact, Kelly ties together those two processes—chaos and progress—to account for the realities of the new economy. Using an evolutionary framework, Kelly proposes that economic progress comes about through constant flux and disruption. These are not by-products or side effects of economic rationality and growth but the motor thereof. “Harmony in nature,” Kelly asserts, “is fleeting” (108), and so it is in the new network economy: “Companies come and go quickly, careers are patchworks of vocations, industries are indefinite groupings of fluctuating firms” (108). Kelly implicitly directs his arrows of critique not toward these new realities but rather toward the outdated language used to describe and explain them. Thus, Kelly’s description should be read as offering us a new lexicon, where new definitions, more appropriate for the new economy, substitute for traditional, industrial-age terms: “Careers are patchworks of vocations” (108, emphasis mine)—not the construction of tenured, stable, secure, progressive, lifelong professional tracks; “industries are indefinite groupings of fluctuating firms” (108, emphasis mine)—not demarcated, stable units and businesses. To treat careers and businesses as stable, in Kelly’s view, reflects an imposition of an anachronistic framework (entailing linearity, stability, predictability, and harmony) of a bygone era on the new digital reality. The new economy is a network economy, and “networks are immensely turbulent and uncertain” (111).

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F_LEXIBI_LITY AND ADAPTABI_LITY AS REACTIONS TO CHAOS

Chaos is not a disruption of an otherwise stable network; rather, it is one of its chief characteristics. Chaos, in fact, becomes the new sine qua non of the economic environment to which economic actors need to react with flexibility and adaptability. As the title of another Wired article proclaims “Chaos Is the Form” (Hughes 1994), a title that alludes to the turbulent, unexpected form of technological advance. In this realm, the article says, “things are not the way they seem.” Chaos and unpredictability are the only constants in the network economy, so much so that the best sign that something goes wrong is if everything seems to be going right: “Anyone in a business who understands it completely is probably already failing.” This, according to the article, is particularly true to businesses in the technological field, where the success and failure of technological innovations is completely unpredictable. The article gives an example of a “bulletin board system operator, whose BBS operates out of his basement, grossed more than US\$5 million last year. That BBS will probably be gone next year, but the operator had recovered his investment in the first two weeks of operation.” On the other hand, “a lot of smug businesses, organizations, and implementations built around technology are going to be bypassed in the next few years—so fast it won’t even be funny. I’ll bet the Internet as we know it will be passé in five years—just as the largest number of people are waking up to it and making investment decisions about it. They will soon look foolish” (Hughes 1994).

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This environment—chaotic, unpredictable, and formless—is emblematic of technological progress to such a degree that it in fact defines the new form of technological and economic activity. As the article concludes, “Change is driving everything. Chaos is the form” (Hughes 1994). In the same vein, Kelly addresses the increasingly chaotic and unstable working arrangements that characterize the network economy. The trend whereby full-time, long-term careers within organizations are substituted by an increasingly unstable and chaotic employment environment is interpreted by Kelly through the notions of flexibility.

Flexibility, according to the digital discourse, is a key dynamic in the network society, specifically in the network market. Flexibility entails two interlocking sets of meanings: reactive and proactive. The reactive set of meanings sees flexibility as the prime mechanism to cope with the chaotic nature of network markets and to adapt to it. It is in essence a defense mechanism of individual nodes (workers, companies, states, and so forth) against the fluctuating, chaotic nature of network market. In the proactive set of meanings, flexibility is seen as beneficial from the point of view of individuals, allowing them more degrees of freedom in their professional and creative life and increasing personal choices and freedom. I treat the proactive meanings of flexibility in the digital discourse in Chapters 4 through 6. In what follows, I focus mostly on the reactive set of meanings.

Kelly uses the employment schemes of the entertainment industry as an example for a healthy adaptation to the chaotic market through flexibility. In the entertainment industry part-timers, subcontractors, outsourced workers, and freelancers—all “convene as one financial organization for the duration of the movie project, and then when the movie is done, the company disperses” (Kelly 1998, 111). And the workers, one might ask? According to Kelly “after the [movie] gets slotted to video, everybody just vanishes” (111). In what sounds like a fantasy of employers in the flexible economy, once workers do what needs to be done for the ad hoc project, these “Hollywood film ad-hocracies” (111) just vanish. Flexibility, in this case, entails the construction of workers as atomized, individualized nodes who are required to adapt to the dictates of a network economy.

Indeed, flexibility is the key to success in the new economy. Information-based businesses—in sectors such as high tech, knowledge, and service—“rely on speed and flexibility to survive in a self-made speedy and flexible environment” (111). Such industries, according to Kelly, can only be managed with a “flattened, atomized” (111) business model. That is, they require the atomization of workers and their flexible and temporary employment arrangements. Here the model of the network economy as the space where individual nodes swarm together in bursts of rationality can be looked at from the opposite angle. The rationality of the network requires that nodes (specifically, in this case, workers) remain as atomized as possible so that their overall levels of flexibility and adaptability can be augmented. What might look like insecurity and instability from the point of view of workers is seen as a positive trend from the point of view of the functioning of the system.

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It is precisely in this context that Peter Drucker—one of America’s foremost business gurus—compliments American workers for their flexibility and adaptability (incidentally uncovering the economic structure that underlies such “virtues”). Referring to deep measures of economic restructuring entailed by the transformation from industrial to information economy, Drucker says, “In Germany, you have a social compact of the social market economy. Therefore, to lay off people, even to shift them, is very difficult . . . In those countries [Germany and Japan] it’s very much a social rather than an economic problem . . . In this country [the United States], the restructuring has caused amazingly few social problems because our labor force is so mobile, so adaptable. Our disorder is a great advantage” (Schwartz and Kelly 1996). Here again, adaptability to market demands is seen as an asset—something that American workers posses and on which a network economy thrives.

The digital discourse does not simply describe the chaotic nature of the digital economy but also insists on the inevitability and benevolence of chaos. It suggests that since chaos is part and parcel of the network economy, it would be worthless and even dangerous to react to it defensively and try to counter this economic reality with a political and social action. In this context, Kelly invokes the anti-Luddite maxim that perceives any opposition to technologically induced change as a reactionary and futile struggle waged by shortsighted people. Such reaction, Kelly explains, is a symptom of “future shock,” a term Kelly borrows from futurist Alvin Toffler, who coined it in 1970 to describe what he considered to be a natural human response to accelerating technological change. Only now the “shock” is even greater, since “the network economy has moved from change to flux” (Kelly 1998, 109). It is no longer the same type of “domesticated,” linear change we became familiar with during industrialism. Instead, the nature of change itself has been paradigmatically transformed. It is a change that accelerates and morphs into creative destruction, a change that “overturns the old ways of change” (115). In the face of such radical change, shock may be a reasonable personal reaction, but in no way, Kelly suggests, should it guide any social action; our reaction should ultimately be to adapt to the new reality.

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This moral imperative is brought home in an article that compares the culture of technological change in the United States and Europe (Glenny 2001). Europe, the article argues, shows a lack of interest in the new network economy: “Change is happening. But Europe’s innate conservatism has made it a recalcitrant host to the rapid transformation sweeping the globe.” This innate conservatism, he contends, involves “veneration of the state, and obsession with national identities and borders, and . . . a suspicion of—not to say hostility toward—science and technology” (Glenny 2001). At the heart of the author’s critique is Europe’s unwillingness to surrender to what are, according to the digital discourse, the determining and inevitable effects of network technology on the economy—chaos, acceleration, unpredictability, and instability—and her insistence on mitigating them by recourse to political means—that is, through state actions.

The Europeans, he says, tend to examine past “episodes of destruction [brought about by technology] that could easily be repeated.” Their American counterparts, by contrast, are future-oriented and optimistic (Glenny 2001). But what does it mean to be future oriented and optimistic? To put the question in Toffler’s terms, if, after the initial shock, we should adapt to the future, what is it that we should adapt to? On this question, Kelly cannot be more unequivocal. The economic instability and uncertainty that we now experience, he says, is here to stay. What might have been called in the past “change” has turned by now into “flux.” And flux, unlike change, is no longer a road to stability, a difficult phase, or a bump en route to a solid ground but a permanent reality. Flux, in Kelly’s words, is a constant state of “destruction and genesis. Flux topples the incumbent and creates a platform for more innovation and birth. This dynamic state might be thought of as ‘compounded rebirth. And its genesis hovers on the edge of chaos” (Kelly 1998, 109).

CHAOS AS A CREATIVE FORCE IN THE ECONOMY

But flux is not simply a new force to be reckoned with, an inconvenient “bad” we must now adapt to in order to enjoy the “good”; instead, it is a positive thing in itself. Hence, not only should flux not be tampered with or mitigated, but also, more than that, it should be encouraged. Thus, for example, instead of lamenting the loss of job security in the new economy, Kelly suggests we simply revoke our perception of what jobs are, “rather than considering jobs as a fixed sum to be protected and augmented . . . the state should focus on encouraging economic churning—on continually recreating the state’s economy” (109). By employing outdated categories of economic life (such as predictability, calculability, security, and stability), Kelly implies, we might end up misjudging the benefits of a new network rationality. Rather than resorting to an industrial-age framework to evaluate the present, Kelly suggests we should come to grips with the chaotic and fluctuating characteristics of networks.

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More than that, chaos and flux should be actively sought and encouraged. Taking his cue from nature again, Kelly reports what ecologists, familiar with the notion of constant flux, have learned: “The sustained vitality of a complex network requires that the net keeps provoking itself out of balance” (110). Rather than seeking stability and certainty of the economy, and rather than attempting to work toward harmony and balance, network societies should encourage and provoke conditions of flux and chaos in their economy. Flux is quintessential to the health of the network economy; the network economy, he says, thrives on its own destruction, and our goal should therefore be “to sustain a perpetual disequilibrium” (110) rather than to mitigate it. He wraps up this lesson with the Stalinist-sounding slogan: “constant innovation is perpetual disruption” (110).

As I have argued in the Introduction, the digital discourse offers not just a new worldview that replaces an old-fashioned one, but one that constitutes a critique of Fordist definitions of economic life. This is succinctly exemplified in the “Encyclopedia of the New Economy” (Browning and Reiss 1998). Chaos, according to the entry in the encyclopedia, means not disorder but quite the opposite. It is order without ordering, order without central oversight, without planning, but an order nonetheless, order that does not follow “a strict rule book,” which characterized the top-down, centralized, planned industrial economy, but that represents “an evolving collection of shared goals” (Browning and Reiss 1998).

Lastly, we have already seen the careful construction of the technologistic argument, which explains why the network economy—a decentralized, self-regulating system built on disparate and atomized nodes, working together through mechanisms of spontaneous order—is inherently chaotic and in constant flux, demanding flexibility and adaptability on the part of nodes. But even if one accepts this premise, another question remains to be answered: Why should we accept and even encourage such flux if it leads to a constant state of uncertainty and even “hovers on the edge of chaos” (Kelly 1998, 109)? Why, in other words, should we not control and mitigate it?

The answer, according to the digital discourse, is that this chaos is at the heart of the most important factor of economic growth in contemporary society: technological innovation. Chaos is both a breeding ground for technological innovation and the product thereof. Flux is a precondition for technological innovation: “Innovation,” says Kelly, “is the productive and desirable moment between ordinary and insignificant change on the one hand, and a change too radical to be implemented on the other hand”; it is located on the borderline between “the rigid death of planned order and the degeneration of chaos” (113). To foster technological innovation, the motor of economic growth in the network society, we need to willingly occupy the space at the edge of planning and order, the space at the intersection of complete disorder. This place is precisely the network: “The ideal environment for cultivating the unknown,” Kelly says, “is to nurture the supreme agility and nimbleness of networks” (Kelly 1997). The “trick” to fostering innovation, according to Kelly, is to have an environment favorable of change with as little paralyzing rules as possible and as little friction as possible. Rather than wanting to mitigate and curb flux and chaos, we need to accept that “the price of progressive change in maximum doses is a dangerous (and thrilling) ride to the edge of disruption” (Kelly 1998, 114). Hence, technological innovation, the new dynamo of economic and indeed human progress, makes the network economy inherently chaotic. Chaos and progress are inextricably tied.⁴

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The digital discourse expects that the network economy will be much more turbulent than the industrial economy. What is left out of this representation of reality is the fact that the stability and predictability of industrial economy was not merely the product of its different nature, as implied by the digital discourse, but precisely a product of the political and social barriers put forth by governments on markets. Stability through the curbing of flux and chaos was precisely what governments tried to achieve through the construction of social democracies. The welfare state, the New Deal, Keynesianism, corporatism, embedded liberalism—all were varied attempts to reduce the instability associated with laissezfaire economics and to provide at least minimal protection to individuals against unpredictable markets.

It is precisely against this historical backdrop that Kelly makes a revealing statement regarding the underlying political (rather than merely technological) project entailed in the construction of the new economy: “In a poetic sense,” Kelly says, “the prime goal of the new economy is to undo—company by company, industry by industry—the industrial economy” (112). It is precisely the undoing of the political constraints put on markets and the layer of social arrangements that were constructed throughout the twentieth century in order to insulate individuals from an unforgiving, unpredictable, and irrational markets (in the broader sense of substantive rationality) that the digital discourse is calling for and legitimates through a naturalization and technologization of flux and chaos. What the digital discourse constructs is a structure of the network market as a chaotic but self-regulating mechanism, the operation of which is best achieved by leaving it to its own devices and in no way regulating it politically.

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Spontaneous Order and Chaos in Neoliberal Theory

The digital discourse presumes to decipher contemporary society in terms of the revolution of network technology. Dumb nodes, spontaneous order, smart mobs, decentralization, flexibility, adaptability, chaos, and flux—all these underlying characteristics (or rules, in Kelly’s terms) of the network economy are presumed to be predicated on and flow from the dominant technological form. In this sense, these characteristics are also presumed to be a technical, neutral, and apolitical representation of the network market. But as we delve deeper into the digital discourse’s representation of the network society, another source emerges as its conceptual toolkit. The digital discourse on the network market has an uncanny resemblance to the dominant political culture of post-Fordism: neoliberal theory.

This part of the chapter explores this resemblance, highlighting both similarities and differences between the digital discourse and the neoliberal discourse. The purpose of such comparison is to delineate in clearer terms the political sources, or the “political unconscious” (Jameson 1982) of the digital discourse on the network market. In other words, it points to the homology of the digital discourse’s technologistic discourse and neoliberalism’s economic discourse.

SPONTANEO_US ORDER

The scope of neoliberal theory is wide, from its roots in neoclassical economics (Adam Smith) and liberal thought (David Hume), through its reincarnation as neoliberalism in the 1960s (Friedrich Hayek and Milton Friedman), and its political implementation as Thatcherism and Reaganism, to its current popular articulation in the context of globalization (Thomas Friedman and Francis Fukuyama). At the risk of oversimplification, let me present some of the core tenets of neoliberalism through the concepts of spontaneous order and chaos, especially as these are developed in the work of Friedrich Hayek, arguably the most distinguished figure of this school. More forcefully than other key concepts, spontaneous order and chaos seem to bridge neoliberal theory and the digital discourse and can serve as points of entry for our discussion here of the mediation of neoliberal theory into digital discourse in particular and the mediation of politics through technology in general.⁵

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Spontaneous order is arguably the single most important theoretical concept in neoliberal theory (Petsoulas 2001; Sally 1998). Neoliberalism argues that, perhaps contrary to our intuition, social order is not necessarily a result of a conscious, planned design, but springs spontaneously. An exemplary case in point, and indeed the epitome of all social orders, is the free market. There is no directing hand designing the market, but order nevertheless comes about through the interaction of disparate units. Each of these units—in the case of markets, individuals—follows its own selfish and narrow rationale and adheres to its own interests. According to this theory, markets are “developed spontaneously by individuals as a mechanism for the efficient satisfaction of their desires” (Ashford and Davies 1991, 170–73). But in the aggregate, the multiplicity of selfish and disparate actions results in an overall order, which is socially rational and benevolent. Spontaneous order, and specifically the market, is superior to any human-planned order for a number of reasons. It is universally rational and beneficial, apolitical, and, most significantly, it is a self-regulating mechanism. In fact, attempts to regulate or plan the market are likely to interfere with its self-regulating, spontaneous mechanisms and cause more damage than help. Therefore, neoliberal theory strongly advises that markets be insulated from the interference of planned and centralized orders, such as the state (with its regulations, legislation, and so forth), as well as civic organizations such as trade unions.

The central narratives of the digital discourse regarding technologically enabled networks as examples of spontaneous order are nearly parallel to the neoliberal treatment of markets. Likewise, the digital discourse’s advocacy for the superior rationality of the network market is very much akin to Hayek’s advocacy for the superior rationality of the free market. The genius of the market, according to Hayek, is anchored in the characteristics of spontaneous order. The principle idea behind the theory of spontaneous order “is that society and its institutions are neither ‘natural’ formations nor the outcome of human design; instead, they originate in the unintended and unforeseen spontaneous coordination of a multiplicity of actions by self-interested individuals” (Petsoulas 2001, 2).

As in the digital discourse’s notion of networks, in Hayek’s notion of markets, too, rationality emerges out of irrationality. Rationality is both unintended and unforeseen; it is impossible to predict much less to design and direct. Rationality and order, however, are possible to be recognized by evaluating the pragmatic results of spontaneous formations: “A spontaneous formation can be characterized as order when it has a structure, and also when it is beneficial for the individuals involved” (12). At the heart of both networks and markets is not a conscious effort to design order according to plan but simply the unforeseen beneficial outcome of the coordination of multiple and disparate actors.

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The digital discourse does not simply reiterate neoliberal tenets but digitize them, so to speak—that is, render them technological. Thus, the comparison of the two discourses can be likened to laying two nearly identical slides on top of each other, thereby revealing both similarities and differences. This is evident, for example, in the discussion of the status of individual nodes vis-à-vis the network. In the digital discourse, individual nodes are perceived as inherently inferior in rationality and smartness compared with those of the network as a whole. It is only through the decentralized, self-regulated interaction of “dumb nodes” within a network that superior rationality can emerge. In the digital discourse spontaneous order is inextricably linked with the limited rationality of nodes vis-à-vis the rationality of the network as a whole.

These ideas receive a similar articulation in neoliberalism, where markets and ignorant individuals substitute for technological networks and dumb nodes, respectively. However, in the absence of technologistic argumentation, the underlying explanations for the same surface assertions are somewhat different in neoliberalism. According to Hayek, the key reason that the market ends up yielding the most rational results stems from the status of knowledge and information in society. Like computer chips or nodes in networks, so is each individual in society—dumb; more eloquently, Hayek refers to the “constitutional limitations of the human mind” (Petsoulas 2001) or to individual’s “constitutional ignorance” (Sally 1998, 19): “Knowledge of relevant facts for market exchange is highly fragmented and highly dispersed among millions of individuals in complex societies” (19). No one person has the capacity to muster the complete knowledge required to come up with an intelligent design of the economy. Spontaneous order is the means by which dispersed and tacit knowledge, fragmented among millions of individuals, is processed and rendered so that it yields the most rational results: “Compared to designed orders, spontaneous social orders are more complex, and utilize knowledge which no single individual or even a group of individual minds would ever be able to grasp, let alone control. Such knowledge would be impossible to centralize because it is of a practical nature, depending on the particular circumstances in which individual participants find themselves” (Petsoulas 2001, 2). For Hayek, the problem of fragmented and partial knowledge of each individual in the marketplace—the “epistemic problem” in his words—is answered best by reliance on “the spontaneous ordering forces of the market” (2).

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