Example of How the Web Neutralizes Propaganda

At the Library of Economics and Liberty Blog, Professor David Henderson writes about the psywar recently employed by the US government through the New York Times.

He writes,

Glenn Greenwald has an excellent piece telling us what the New York Times essentially told us if anyone cared to notice: the New York Times admits that it enabled the U.S. government's lying about a CIA agent in Pakistan named Raymond Allen Davis.

The U.K. newspaper, The Guardian, broke the story but stated that some U.S. newspapers were aware of the facts too but hadn't disclosed them. The New York Times fessed up. Its reporters, MARK MAZZETTI, ASHLEY PARKER, JANE PERLEZ and ERIC SCHMITT, wrote:

“The New York Times had agreed to temporarily withhold information about Mr. Davis's ties to the agency at the request of the Obama administration, which argued that disclosure of his specific job would put his life at risk. Several foreign news organizations have disclosed some aspects of Mr. Davis's work with the C.I.A.

This exactly is what we talked about in The Web As Foundation To The Knowledge Revolution. I noted that

1. Government’s traditional medium in disseminating its political agenda has been through mainstream media. (Here, the New York Times)

2. Government will try to censor and manipulate information flow but will be negated by competing sources. (here, UK’s Guardian exposes the New York Times)

3. Democratization of knowledge or competing sources through the web has been responsible for the neutralization of propaganda.

Professor Henderson opens with this striking statement:

“Thank goodness for international trade and the web.”

We will see more of this in the future.

Incentives Driving People To Social Networking As Facebook

Adam Hartley at the MSN says that having thousands of Facebook friends don’t reflect on the friendship in the traditional sense because our capacity to have friends is limited.

Mr. Hartley who calls Facebook friend acquisition as “Friend Farming” writes,

According to evolutionary anthropologist Robin Dunbar, 150 is the largest number of people that you can share trust and obligations with, explains psychologist Dr Rebecca McGuire-Snieckus.

That magic number of 150 friends is thought to be a cognitive limit to the number of friends we can maintain, the psychologist adds. "While people can boast hundreds and thousands of friends on Facebook, Dunbar would say that it is impossible to feed and nourish all of these relationships."

So having friends in excess of the Dunbar 150 suggests that social networking has hardly been about friends but about something more.

Mr. Hartley adds, (bold highlights mine)

Recent academic research suggests there are four primary motivations for going on social networking - social (meeting friends, having an online community); information (finding jobs and useful knowledge); entertainment (FarmVille!) and self-status seeking. It is this latter urge that drives friend farming.

Well different people have different incentives to join Facebook or other social networks.

To my account, some of my non-traditional friends, who shares the same ideas, ideals, values or philosophy as I, have been a fountain of informational wealth. In short, I learn alot from them and I am very appreciative of that.

Of course shared interest also means an online community, which is what I have been saying all along as the vertical flow of communication and knowledge dispersion. People with shared interest can exchange ideas directly which results to increased knowledge. Local knowledge is now globalized through Facebook and Twitter. Our personal interests are channeled by niches or by specialization. We form tribes despite the geographical distance.

And there are others whom I also gladly got to know through online games.

And importantly, they connect me real time to my family wherever they are.

While it may true for some or for many where adding or farming friends could be a form of status signalling, I find the zeitgeist of social network sites as expanding the human experience.

And it is why social networking will change the way we live.

Knowledge Revolution: Globalizing Education

Technology enhanced globalization forces are likewise enveloping the education industry.

This from Ben Wildavsky at the Foreign Policy (bold emphasis mine)

But over the long term, exactly where countries sit in the university hierarchy will be less and less relevant, as Americans' understanding of who is "us" and who is "them" gradually changes. Already, a historically unprecedented level of student and faculty mobility has become a defining characteristic of global higher education. Cross-border scientific collaboration, as measured by the volume of publications by co-authors from different countries, has more than doubled in two decades. Countries like Singapore and Saudi Arabia are jump-starting a culture of academic excellence at their universities by forging partnerships with elite Western institutions such as Duke, MIT, Stanford, and Yale.

The notion of just how much a university really has to be connected to a particular location is being rethought, too. Western universities, from Texas A&M to the Sorbonne, have garnered much attention by creating, admittedly with mixed results, some 160 branch campuses in Asia and the Middle East, many launched in the last decade. New York University recently went one step further by opening a full-fledged liberal arts campus in Abu Dhabi, part of what NYU President John Sexton envisions as a "global network university." One day, as University of Warwick Vice Chancellor Nigel Thrift suggests, we may see outright mergers between institutions -- and perhaps ultimately the university equivalent of multinational corporations.

In this coming era of globalized education, there is little place for the Sputnik alarms of the Cold War, the Shanghai panic of today, and the inevitable sequels lurking on the horizon. The international education race worth winning is the one to develop the intellectual capacity the United States and everyone else needs to meet the formidable challenges of the 21st century -- and who gets there first won't matter as much as we once feared.

Read the rest here

Two comments

In terms of education, people should focus on the general or macro trend more than just looking and interpreting localized developments. With the introduction of the internet, what used to be local has increasingly become global.

I’d also say that there is more to expect than just the above. We’re likely to see an explosion of web based education that would bring down the cost of education, which subsequently should increase demand for it. The vertical flow of knowledge and communication process will enhance the Hayekian Knowledge revolution, education will be part of it.

Moreover, the web will possibly rearrange or restructure many aspects in the education-job process such as decentralization and more diversification (curriculum), more specialized jobs, reconfigure recruitment and hiring process, adaption of new certification or recognition standards and etc….

Maria Lourdes Aragon: Another Celebrity Sensation From Globalization?

Just like Charice Pempengco and Journey’s Arnold Pineda before her, Canadian based 10 year old Filipina Maria Lourdes Aragon looks likely the next celebrity sensation as a result of the web enhanced globalization evolution.

This from OMG.yahoo

Lady Gaga was overcome with emotion after a video of a 10-year-old fan performing a flawless rendition of "Born This Way" hit the internet and Access caught up with Maria Lourdes Aragon to bring you all the details on this budding web sensation! …

Thanks to the wonders of modern technology, the Grammy Award-winning singer saw Maria's video tribute less than 24 hours after the young fan had posted it. Gaga then re-Tweeted the video to her followers early Thursday, writing, "Can't stop crying watching this. This is why I make music. She is the future."

The reason I have been pressing on this is to demonstrate how the web has virtually cut the geographical distance and directly connected people or increased social interactions without the traditional layers that would have limited discovery and access to required information.

And this isn’t just in seen in celebrities. Goods and services and most importantly ideas have likewise fluxed in such a horizontal manner where knowledge, which used to be localized, has now been globalized. In terms of knowledge, the world is now everyone’s oyster.

And this is why, in contrast to the obstinate views of top-down analysts and the ideological neo-luddites, the unprecedented spread of the People Power phenomenon in the Middle East and Africa, have caught almost everyone by surprise.

The internet, like the printing press, has and will serve as the most critical instrument for the spread of the Hayekian knowledge revolution or Alvin Toffler’s Third wave, as epitomized by the newly discovered celebrities bypassing traditional talent recruitment channels or as seen in the People Power near synchronous phenomenon in MENA.

These are structural changes occurring at the fringes which people hardly notices (yes they see the changes but they hardly understand its mechanics and implications).

Like it or not, these changes will inevitably shape our future (commerce, lifestyle, culture and politics).

Knowledge Revolution: Creators and Servers

The transition towards Toffler’s Third Wave or the Hayekian knowledge revolution isn’t just my outlook. It is likewise shared by some, who like me, sees things evolving from the fringes.

Author Andy Kessler predicts that people will play starkly different roles from that of the past, and where technology (and not the Yuan) will eat alot of jobs.

In promoting his latest book Eat People, Andy Kessler writes at the Wall Street Journal, (bold highlights mine, italics his) [my comments]

There are two types of workers in our economy: creators and servers.

Creators are the ones driving productivity—writing code, designing chips, creating drugs, running search engines. Servers, on the other hand, service these creators (and other servers) by building homes, providing food, offering legal advice, and working at the Department of Motor Vehicles. Many servers will be replaced by machines, by computers and by changes in how business operates. It's no coincidence that Google announced it plans to hire 6,000 workers in 2011.

But even the label "servers" is too vague. So I've broken down the service economy further, as a guide to figure out the next set of unproductive jobs that will disappear. (Don't blame me if your job is listed here; technology spares no one, not even writers.)

• Sloppers are those that move things—from one side of a store or factory to another. Amazon is displacing thousands of retail workers. DMV employees and so many other government workers move information from one side of a counter to another without adding any value. Such sloppers are easy to purge with clever code.

• Sponges are those who earned their jobs by passing a test meant to limit supply. According to this newspaper, 23% of U.S. workers now need a state license. The Series 7 exam is required for stock brokers. Cosmetologists, real estate brokers, doctors and lawyers all need government certification. All this does is legally bar others from doing the same job, so existing workers can charge more and sponge off the rest of us.

But eDiscovery is the hottest thing right now in corporate legal departments. The software scans documents and looks for important keywords and phrases, displacing lawyers and paralegals who charge hundreds of dollars per hour to read the often millions of litigation documents. Lawyers, understandably, hate eDiscovery. [Yes, this should diminish the brains for interventionists-Prudentinvestor]

Doctors are under fire as well, from computer imaging that looks inside of us and from Computer Aided Diagnosis, which looks for patterns in X-rays to identify breast cancer and other diseases more cheaply and effectively than radiologists do. Other than barbers, no sponges are safe. [According to Marketingcharts.com ‘8 in 10 Web Users Look for Online Health Data’-Prudentinvestor]

• Supersloppers mark up prices based on some marketing or branding gimmick, not true economic value. That Rolex Oyster Perpetual Submariner Two-Tone Date for $9,200 doesn't tell time as well as the free clock on my iPhone, but supersloppers will convince you to buy it. Markups don't generate wealth, except for those marking up. These products and services provide a huge price umbrella for something better to sell under.

• Slimers are those that work in finance and on Wall Street. They provide the grease that lubricates the gears of the economy. Financial firms provide access to capital, shielding companies from the volatility of the stock and bond and derivative markets. For that, they charge hefty fees. But electronic trading has cut into their profits, and corporations are negotiating lower fees for mergers and financings. Wall Street will always exist, but with many fewer workers.

• Thieves have a government mandate to make good money and a franchise that could disappear with the stroke of a pen. You know many of them: phone companies, cable operators and cellular companies are the obvious ones. But there are more annoying ones—asbestos testing and removal, plus all the regulatory inspectors who don't add value beyond making sure everyone pays them. Technologies like Skype have picked off phone companies by lowering international rates. And consumers are cutting expensive cable TV services in favor of Web-streamed video. [crony capitalism under pressure-prudentinvestor]

Like it or not, we are at the beginning of a decades-long trend. Beyond the demise of toll takers and stock traders, watch enrollment dwindle in law schools and medical schools. Watch the divergence in stock performance between companies that actually create and those that are in transition—just look at Apple, Netflix and Google over the last five years as compared to retailers and media.

Two things:

One, this makes investments in the technology sector very compelling, despite the applied inflationism by global central banks.

Proof of this has been the steady ‘top’ ranking of the technology sector in the distribution of the sectoral weightings in the US S&P 500 over the years. And the technology sector remains a solid outperformer today.

Two, political opposition would likely emanate not only from anti trade/mercantilists but likewise from neo-Luddites.

Frederic Bastiat in his magnificent classic That Which is Seen, and That Which is Not Seen rebutted a similar objection as seen through this: "A curse on machines! Every year, their increasing power devotes millions of workmen to pauperism, by depriving them of work, and therefore of wages and bread. A curse on machines!"

Libertarianism And The Internet

The ever brilliant GMU Professor Bryan Caplan notes that the social skills of libertarian students have materially increased over the past few years due to the internet.

Professor Caplan writes,

The best explanation I've got so far: the Internet. Back in the old days, libertarian students spent a lot of time alone with their books. It was awfully hard to meet others with a shared interest in liberty. This social isolation had two effects. The first was a treatment effect: Libertarians got a lot less practice sharing their ideas in a civilized and constructive way. The second was a selection effect: Few "people people" became libertarians because it was too depressing. As the Internet - and social networking, its favorite child - blossomed over the last two decades, these effects of libertarian isolation largely faded away. Nowadays, almost no libertarian is isolated unless he wants to be. As it turns out, few do.

Aside from linking or connecting shared interests in real time and across diverse geography, the internet offers a wealth of informational exchange, at diminishing costs, from which libertarians use to solidify their convictions, grounded mostly on philosophical, political and or economic reasons.

So convictions are not only backed by what marketing guru Seth Godin would call as ‘tribes’, but also by increased knowledge that provides confidence to libertarian adherents. And this helps increase social skills and the number of enthusiasts which likewise help reduce libertarians from isolation.

Besides, in what I would call the unfolding Hayekian knowledge revolution brought about by democratization of knowledge through the internet, libertarian philosophy blends smoothly with horizontal flow of informational exchange as previously discussed here.

In other words, my bold forecast is that the philosophy of libertarianism and classical liberalism is bound to go mainstream.

The Web As Foundation To The Knowledge Revolution

``The economic problem of society is thus not merely a problem of how to allocate "given" resources—if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.”- Friedrich von Hayek

Dictators of Tunisia and Egypt have recently been toppled. Autocratic leaders of Yemen, Jordan and Algeria have likewise been under political pressure.

The web’s real time connectivity coursed through social media has allowed for a widespread diffusion of information...and knowledge. And this has lowered the cost of organization and mobilization that has apparently increased the demand for political spontaneous actions in the form of “people power” political movements.

In short, the economics of the web has been transforming the political order[1].

But when we read social media sceptics like such as Stratfor’s Marko Papic and Sean Noonan, who writes[2]... (bold highlights mine)

Social media alone, however, do not instigate revolutions. They are no more responsible for the recent unrest in Tunisia and Egypt than cassette-tape recordings of Ayatollah Ruholla Khomeini speeches were responsible for the 1979 revolution in Iran. Social media are tools that allow revolutionary groups to lower the costs of participation, organization, recruitment and training. But like any tool, social media have inherent weaknesses and strengths, and their effectiveness depends on how effectively leaders use them and how accessible they are to people who know how to use them...

The key for any protest movement is to inspire and motivate individuals to go from the comfort of their homes to the chaos of the streets and face off against the government. Social media allow organizers to involve like-minded people in a movement at a very low cost, but they do not necessarily make these people move.

...we understand that such objections have been founded on superficial premises-mostly from underrating the importance of knowledge and the continued the expectations that political developments flow from top-down dynamics.

Hayek’s Knowledge Revolution

Knowledge, according to the great Friedrich von Hayek[3], never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.

This simply means that everyone’s unique perspective represents as dispersed knowledge. When dispersed knowledge are combined, exchanged, mimicked and improved upon these interactions result to fresh or innovative ideas.

Prolific author and writer Matt Ridley calls such phenomenon as Ideas having Sex[4].

Professor Don Boudreaux expounds[5] on Matt Ridley’s intellectual intercourse.

The easier it is for ideas to get together, check each other out, and jump into bed with each other, the greater will be the number of newly created ideas — ideas that would not otherwise be conceived.

Copulating ideas has also another very important role: coordination of diversified information into the production of goods and services. And this has been the path to our (human) progress.

Matt Ridley, author of the very impressive book the Rational Optimist writes[6]

``the sophistication of the modern world lies not in individual intelligence or imagination. It is a collective enterprise. Nobody—literally nobody—knows how to make the pencil on my desk (as the economist Leonard Read once pointed out), let alone the computer on which I am writing. The knowledge of how to design, mine, fell, extract, synthesize, combine, manufacture and market these things is fragmented among thousands, sometimes millions of heads. Once human progress started, it was no longer limited by the size of human brains. Intelligence became collective and cumulative.

And that’s exactly what the web has been facilitating—an unlimited orgy of ideas—Hayek’s knowledge revolution is essentially being realized through social media.

From Vertical To Horizontal Flow

In the past the flow of information reflected on how economic production had been organized: the industrial age marked by mass production and thus a top to bottom dynamic. This holds true even with the political framework. From the top down economic structure emerged the grand experiments with centralized form of governance in the form of communism, socialism, autocracy, fascism and totalitarianism.

The traditional medium of information for the consuming public had been mostly through TV, radio and newspapers. Because of the limited networks, these institutions discriminated on the information it chose to broadcast, thus the exchange of ideas had largely been constrained.

Governments easily resorted to information control via political censorship in order to regulate “the moral and political life of the population[7]” or when political leaders felt the need to advance their interests.

Controlling the flow of information meant controlling the medium. Thus, political leaders throughout history have attempted to control the medium to preserve political power.

This time is proving to be different.

Today information flows real time and horizontally, enabled by the web.

People can simply self publish their thoughts, unedited, via the blogsphere (which incidentally accounts for an estimated 133 million[8] bloggers and growing) or through privately owned websites.

People can send messages via email or even by text messages via mobile phone.

People can also air blips of short messages or comments via the online community as Facebook and Twitter.

Or produce videos via podcasting and youtube that are being broadcasted via blip.tv or vimeo or video aggregators which has been posing a threat to TV.

And investors have been following the money trail.

As more and more people get wired or become netcitizens AD money spent on the internet has substantially been growing[9] see figure 6.

Figure 6: AD Spending Follow the Money Trail (Morgan Stanley)

Morgan Stanley’s Mary Meeker predicts of the explosion of mobile internet as the major source of growth for the web[10].

Even some TV programs today try to interact with the web by publishing tweets or facebook comments of audiences on air!

The democratization of information from the web or cyberspace has dramatically altered the complexion of knowledge distribution.

Gossip And The Transition To A Horizontally Based Political Order

In the hunter gatherer society, where our ancestors wandered in small tightly knit groups, gossips were used as a tool to evaluate relationships and as form of social discipline.

Aside from useful information, gossips, according to David Brooks of the Biorational[11], served to ``maintained social bonds and enforced social norms. In small groups like our ancestors' hunter-gatherer bands, in which everyone talks to everyone else regularly, liars and social cheats were found out quickly and were dealt with quickly. So lying and social cheating were relatively rare.”

The introduction of the web has basically brought back the traditional role of gossip.

For instance, Wikileaks has spilled the beans on many stealth government activities, and wikileaks has been instrumental in unleashing the popular “Jasmine” revolt in Tunisia[12].

Despite governments attempt to harass and control the founder of wikileaks, the success wikileaks has prompted for the broadening of competition.

As Professor Gary North rightly observes[13],

WikiLeaks has taken this to a new level. Now a disgruntled former WikiLeaks employee is branching out on his own. He has started a new organization, OpenLeaks. This is the kind of competition I love to see. A Reuters story describes what is about to happen. "All across Europe, from Brussels to the Balkans, a new generation of WikiLeaks-style websites is sprouting."...

As the number of these sites increases, it will become more difficult for governments to contain the leaks. The desire of leakers to become important overnight will grow.”

Of course governments can initiate countermoves such as instituting “firewalls” (as in the case of China) or kill-switch strategy[14] or the shutdown of ISP providers or disseminate counterpropaganda.

Cuba’s government for instance has designed a campaign to counter the web. Unfortunately this was again exposed, according to Wall Street Journal’s Mary O’Grady[15]

Last week a leaked video of a Cuban military seminar on how to combat technology hit the Internet. It demonstrates the dictatorship's preoccupation with the Web. The lecturer warns about the dangers of young people with an appealing discourse sharing information through technology and trying to organize.

As in the case of Egypt, the kill switch strategy has ultimately failed[16].

Circulating political propaganda or spreading disinformation can easily neutralized by “local based” knowledge or by speciality sites (e.g. snope.com).

One important development from the web is that it has altered the way governments have been behaving, as governments seemingly become more cautious and possibly less repressive in dealing with transgressors or with the political opposition, as in the case of China.

Borje Ljunggren of Yale Global notes of several incidences and sees[17] that

In case after case since 2004, the internet has dramatically changed the course of an event, forcing the party to maneuver between response and repression.

Mr. Ljunggren further notes that Chinese state control of information has also been under pressure,

He further writes, (bold emphasis mine)

Censorship is an organic part of the party-state and will no doubt remain a crucial weapon, but its usage is increasingly exposed as the Chinese internet society becomes aware of the extent to which entrenched party interests determine their access to information. As a consequence, an idea of a “right to know” is taking shape in China’s rapidly growing online civil society and this could, in Shirk’s analysis, become “the rallying cry of the next Chinese revolution.

While internet freedom clearly is not about to be declared, civil society and new technology will over time push limits beyond the axiomatic boundaries of the party-state.”

As one would notice the vertical-hierarchal structure of governments are constantly held under pressure by the democratization of knowledge.

And this should apply with political ideology too.

Political and economic ideology latched on a vertical top-bottom flow of power will be on a collision course with horizontal real time flow of democratized knowledge.

This would likely result to less applicability of ideologies based on centralization, which could substantially erode its support base and shift political capital to decentralized structure of political governance that would conform with the horizontal structure of information flows.

People will know more therefore control from the top will be less an appealing idea.

The final word from futurist Alvin Toffler[18], who predicted this Hayekian Knowledge Revolution which he molded through as his Third Wave concept.

``Computers can be expected to deepen the entire culture’s view of causality, heightening our understanding of the interrelatedness of things, and helping us to synthesize meaningful “wholes” out of the disconnected data whirling around us....The intelligent environment may eventually begin to change not merely the way we analyze problems and integrate information but even the chemistry of our brains.”

---

[1] See The Web Is Changing The Global Political Order, January 29, 2010

[2] Papic Marko and Noonan Sean Social Media as a Tool for Protest, stratfor.com February 3, 2010

[3] Hayek, Friedrich August von The Use of Knowledge In Society, Individualism and Economic Order, Mises.org, p.77

[4] See Matt Ridley: When Ideas Have Sex, August 11, 2011

[5] Boudreaux Donald J. Promiscuous, Productive Ideas, CATO Unbound, September 10, 2010

[6] Ridley Matt, Humans: Why They Triumphed, Wall Street Journal, May 22, 2010

[7] Newth, Mette Newth The long history of censorship Beacon for Freedom of Expression, 2001

[8] Bradley Phil, Great Blog statistics, Phil Bradley’s Weblog

[9] See The Deepening Of The Information Age: News Sources And Ad Spending, January 7, 2011

[10] Meeker, Mary Internet Trends 2010 by Morgan Stanley Research, slideshare.net 2010

[11] The Bio-Rational Institute Pleistocene brain, mobile phone, May 26, 2006

[12] International Business Times, Wikileaks helped spark Tunisia revolt : FPJ January 29, 2011

[13] North Gary When the Insiders Lose Control, February 3, 2011

[14] Cowie James, Can the Internet Tame Governments? – Part I, Yale Global, February 9, 2011

[15] O’Grady, Mary Anastacia Will Cuba Be the Next Egypt?, Wall Street Journal February 7, 2011

[16] See Egyptian Revolt: Web Censorship Fails, February 1, 2011

[17] Ljunggren Borje Can the Internet Tame Governments? – Part II, Yale Global February 11, 2011

[18] Toffler, Alvin The Third Wave p 175

Politics Of International Bailouts

One major development that has offset such policy mistakes has been globalization. But of course, while policies from fiat currencies tend to likewise distort trade, the fact is that globalization has mushroomed in spite of fiat currencies.

Google Public Data: Global Merchandise trade has Doubled Since 1971

Global merchandise trade has more than doubled since the Nixon shock which closed the US dollar-gold convertibility in 1971 or the Bretton Wood standard.

Yet even when I harbored or expected a tinge of possible policy responses similar to that of the Great Depression, as it has been the natural impulse by governments to use crisis to usurp or expand the reach of political power, or in the words of former White House Chief Emmanuel Rahm[1], "Never let a serious crisis go to waste. What I mean by that is it's an opportunity to do things you couldn't do before", this did not happen.

Well, not for most of the world.

DLC.org[2]: 155 temporary tariffs in 2008

In short, most nations opted to keep trade channels open in spite of the crisis.

Alternatively this means that nations have not responded in the same way as in the past or that most of the world has remained receptive to globalization to the disappointment of the protectionists.

And today, globalization isn’t only on trade but also in terms of bailouts. Not only that the US has been bailout the Europe[3] and the world, but also China[4] and Japan[5] as earlier stated have offered to bailout the Eurozone by buying the Euro debts.

Why then the international bailouts?

Bailouts always have political dimensions whether it is local or international. And the likely answer is that globalization has become a huge political influence from which the present crop of political leaders has latched on.

Where trade levels should diminish and magnify poverty levels, unsustainable political structures, like China and other autocratic regimes, could be exposed and risk destabilization that would result to the overthrow of the incumbent political leader or the system.

And considering that political dynamics have likewise been substantially affected by trade enabled innovations on technology, as evidenced by the recent People Power in Tunisia[6], rigid vertical government structures would be challenged by the political influences based on real time “flat world” connectivity, thus likely resulting to a new political order.

It’s either global governments prevents further advances of trade and technology, or governments adapts to the new political realities of the information age.

And given that people continually adjusts to the state of government affairs by circumventing policies or regulation, my bet is one of the latter.

Even the despotic regime of North Korea hasn’t stopped people from engaging in voluntary trade underground. North Korean authorities attempted to inflate the currency[7] in order to wipe out savings and stop the informal economy but this resulted to a huge backlash which the North Korean government eventually backtracked.

So while the politics of international bailouts may be meant to keep trade channels open, the longer term effects is for the mass distortions that could risks future trade via frictions from boom bust cycles or “super” inflation.

Nevertheless, one of the major fundamental positive developments is that connectivity enabled by technology would certainly pose as continuing hurdle to the advances of governments.

---

[1] Wall Street Journal Editorial A 40-Year Wish List, January 29, 2010

[2] DLC.org Governments imposed 155 temporary tariffs in 2008, September 23, 2009

[3] See The Phisix And The Boom Bust Cycle, January 10, 2011

[4] Los Angeles Times, China moves to prop up Europe's economy, January 15, 2011

[5] Wall Street Journal Japan To Buy Eurozone Debt To Help Europe Tackle Debt-Crisis, January 10, 2011

[6] See Tunisia’s People Power: A Combination Of Creative Destruction And The Politics of Obedience January 16, 2010

[7] Will North Korea's Version Of The 'Berlin Wall' Fall In 2010? January 3, 2010

Tunisia’s People Power: A Combination Of Creative Destruction And The Politics of Obedience

The New York Times reports,

The fall of Mr. Ben Ali marked the first time that widespread street demonstrations had overthrown an Arab leader. And even before the last clouds of tear gas had drifted away from the capital’s cafe-lined Bourguiba Boulevard, people throughout the Arab world had begun debating whether Tunisia’s uprising could prove to be a model, threatening other autocratic rulers in the region….

Because the protests came together largely through informal online networks, their success has also raised questions about whether a new opposition movement has formed that could challenge whatever new government takes shape. (emphasis mine)

This represents another validation of our prediction when I wrote,

The growing friction between technology and the old political society is definitely taking shape; eventually one has to give. My bet: creative destruction will win.

Aside from the first People Power at an Arab nation where the changes in the political order appear to be significantly influenced by the rapidly diffusing adaption to connectivity based technology platforms, the Tunisian experience suggests that People Power as a political concept as presciently advanced by the founder of modern political philosophy in France, Etienne de la Boetie, will become more accepted from the grassroots levels or become more widespread globally as more people will learn about their inherent power over governments.

To quote Etienne de la Boetie in the Politics of Obedience

Obviously there is no need of fighting to overcome this single tyrant, for he is automatically defeated if the country refuses consent to its own enslavement: it is not necessary to deprive him of anything but simply to give him nothing; there is no need that the country make an effort to do anything for itself provided it does nothing against itself. It is therefore the inhabitants themselves who permit, or, rather, bring about, their own subjection, since by ceasing to submit they would put an end to their servitude. A people enslaves itself, cuts its own throat, when, having a choice between being vassals and being free men, it deserts its liberties and takes on the yoke, gives consent to its own misery, or, rather, apparently welcomes it.

In short, people power and the web would make a mighty combination over the tyranny of governments.

So governments will try to fight these via the introduction of regulations and control of the web which would limit the democratization of information.

As one of the five things we should worry about in 2011 Cato’s Dan Mitchell rightly observers, (bold emphasis mine)

The Federal Communications Commission just engaged in an unprecedented power grab as part of its “Net Neutrality” initiative, so we already have bad news for both Internet consumers and America’s telecommunications industry. But it may get worse. The bureaucrats at the United Nations, conspiring with autocratic governments, have created an Internet Governance Forum in hopes of grabbing power over the online world. This has caused considerable angst, leading Vint Cerf, one of inventors of the Internet (sorry, Al Gore) to warn: “We don’t believe governments should be allowed to grant themselves a monopoly on Internet governance. The current bottoms-up, open approach works — protecting users from vested interests and enabling rapid innovation. Let’s fight to keep it that way.” International bureaucracies are very skilled at incrementally increasing their authority, so this won’t be a one-year fight. Stopping this power grab will require persistent oversight and a willingness to reject compromises that inevitably give bureaucracies more power and simply set the stage for further demands.

Power of Slow Change: Dying Mass Media, Endangered Traditional Politicians

Another marvelous stuff from marketing guru Seth Godin (all bold highlights mine)

Now, though...When attention is scarce and there are many choices, media costs something other than money. It costs interesting. If you are angry or remarkable or an outlier, you're interesting, and your idea can spread. People who are dull and merely aligned with powerful interests have a harder time earning attention, because money isn't sufficient.

Thus, as media moves from TV-driven to attention-driven, we're going to see more outliers, more renegades and more angry people driving agendas and getting elected. I figure this will continue until other voices earn enough permission from the electorate to coordinate getting out the vote, communicating through private channels like email and creating tribes of people to spread the word. (And they need to learn not to waste this permission hassling their supporters for money).

Mass media is dying, and it appears that mass politicians are endangered as well.

As the information based economy deepens, knowledge will likely be more dispersed, aided by the web. And that the power of traditional influences will get diminished, as the public’s attention gravitate towards niche based interest groups, founded on fragmented and specialized knowledge.

And as we long been saying, politics is NEVER static, they always evolve. The reshaping or the ‘digitalization’ of the economy will likewise reconfigure politics. Perhaps, seen in the line of niche marketing which could likewise evolve into realm of niche politics.

Technology And The Growing Dysfunctionality Of The Political Institutions Of The Old Order

In the book Revolutionary Wealth, Alvin and Heidi Toffler writes,

``It becomes clear that what America world [strikethrough mine] confronts today is not simply a runaway acceleration of change but a significant mismatch between the demands of the fast growing new economy and the inertial new institutional structure of the old society. Can a hyperspeed, twenty-first century info-biological economy continue to advance? Or will society’s slow paced, malfunctioning obsolete institutions grind to a halt? Bureaucracy, clogged courts, legislative myopia, regulatory gridlock and pathological incrementalism cannot but take their toll. Something it would appear, will have to give. Few problems will prove more challenging than the growing dysfunctionality of so many related but desynchronized institutions." [bold emphasis added]

Some recent examples where such conflict applies (hat tip David Boaz)

From the Washington Post, (bold emphasis mine)

A satellite TV station co-owned by Rupert Murdoch is pulling in Iranian viewers with sizzling soaps and sitcoms but has incensed the Islamic republic's clerics and state television executives.

Unlike dozens of other foreign-based satellite channels here, Farsi1 broadcasts popular Korean, Colombian and U.S. shows and also dubs them in Iran's national language, Farsi, rather than using subtitles, making them more broadly accessible. Its popularity has soared since its launch in August...

Satellite receivers are illegal in Iran but widely available. Officials acknowledge that they jam many foreign channels using radio waves, but Farsi1, which operates out of the Hong Kong-based headquarters of Star TV, a subsidiary of Murdoch's News Corp., is still on the air in Tehran.

Viewers are increasingly deserting the six channels operated by Iranian state television, with its political, ideological and religious constraints, for Farsi1's more daring fare, including the U.S. series "Prison Break," "24" and "Dharma and Greg."

From the Wall Street Journal,

A move by Pakistan to begin monitoring for anti-Islamic content on major websites—including those run by Google Inc. and Yahoo Inc.—is the latest sign that censorship looms as a threat to Internet companies in a number of countries.

The Pakistan announcement on Friday came a day after a communications minister in Turkey, which has blocked thousands of sites including Google's YouTube, said the video site was "waging a battle against the Turkish Republic" and suggested that the situation could change if Google were to register and pay taxes.

Authorities in Pakistan on Friday said they would start monitoring major Internet search engines, including Google and Microsoft Corp.'s Bing.com, as well as the e-commerce giant Amazon.com Inc. The move follows an action last month against social-networking site Facebook Inc., which Pakistan blocked for several weeks after it hosted a page in which users could post pictures of the Prophet Muhammad. The portrayal of Muhammad is forbidden by Islam, and the ban was lifted when the site removed the page...

Earlier this year Turkey's communications ministry extended the ban to other Google sites, a move that appeared to be triggered by a separate tax battle with the U.S. giant. As a result, Turks suddenly lost direct access to GoogleMaps and other sites, as well as to YouTube. However, many ordinary users have been able to circumvent the closures.

The opposition People's Republican Party, usually a fierce defender of Ataturk's honor, on Thursday attacked the government in parliament for creating what one parliament member called a "culture of censorship" in the country, including Internet censorship.

Some of Turkey's top leaders have sought to distance themselves from the Internet closures. President Abdullah Gul earlier this month sent out a public message through his account on micro-blogging site Twitter.com, saying he "cannot approve of Turkey being in the category of countries that bans YouTube [and] prevents access to Google."

The growing friction between technology and the old political society is definitely taking shape; eventually one has to give. My bet: creative destruction will win.

Updated: Democratizing Knowledge Revolution Via $10 Laptops (Still A Dream)

India recently announced that it would be introducing $10 (Php 500) laptop computers soon.

Although it is still unclear as to the real offering price as reports vary, BBC says ``Early reports of the cheap laptop suggested that it would cost only 500 rupees (£7). However, this could be a mistranslation, because transcripts of the speech, in which it was unveiled, mentioned it costing $10 (£7) but this was later corrected to $100 (£70)”.

Albeit the physorg.com says, ``The $10 laptop project is the product of a collaboration among institutions including the Vellore Institute of Technology, the Indian Institute of Science, and IIT-Madras. The project began about three years ago in response to the proposed $100 laptop (the "One Laptop Per Child" project), an idea from MIT's Nicholas Negroponte, which was going to cost $200. Currently, the $10 laptop is projected to cost $20, but India's secretary of higher education R. P. Agarwal hopes that price will come down with mass production. The $10 laptop will be equipped with 2 GB of memory, WiFi, fixed Ethernet, expandable memory, and consume just 2 watts of power.”

The goal of the $10 laptop is ideally meant to broaden the access of computers for ‘poor’ school children around the world. However, considering the onus from the heavy doses of stimulus being applied today to prop global economies, subsidies from governments to finance its distribution would probably be limited. This means successfully bringing prices to this level can only be achieved if it will be driven by the markets.

Nonetheless, the positive outcome from a market based distribution of these inexpensive “socialized laptops” is likely to have a huge impact on laptop and PC prices and sales globally. Notwithstanding the prospects of exponential growth of web based usage.

To give you an idea of the existing industry penetration levels, according to comScore World Metrix, ``global Internet audience (age 15 and older from home and work computers) has surpassed 1 billion visitors in December 2008”.

The breakdown of global audience by region as follows:

Again from comScore World Metrix, ``The Asia-Pacific region accounted for the highest share of global Internet users at 41 percent, followed by Europe (28 percent share), North America (18 percent share), Latin-America (7 percent share), and the Middle East & Africa (5 percent share).”

So based on geographic distribution, growth is likely to favor Asia.

And which country holds the most users?

According to the Economist, ``THE number of people going online has passed one billion for the first time, according to comScore, an online metrics company. Almost 180m internet users—over one in six of the world's online population—live in China, more than any other country. Until a few months ago America had most web users, but with 163m people online, or over half of its total population, it has reached saturation point. More populous countries such as China, Brazil and India have many more potential users and will eventually overtake those western countries with already high penetration rates. ComScore counts only unique users above the age of 15 and excludes access in internet cafes and via mobile devices.

To quote Forbes Nanotech's brilliant Josh Wolfe in Airbrushing Airwaves & The Adjacent Possible ``The history of technology has been one of displaced labor. New jobs are birthed as old ones die. Talent is embedded in technology. And technology gets further embedded in advanced materials."

The $10 laptop is likely to democratize the knowledge revolution globally.

Update: From hype to dud, the supposed 'laptop' turns out to be another computing device....

This from the Times of India ``The hype surrounding the $10 laptop ``prototype'' with two GB RAM turned out to be a joke when the department of Human Resources Development announced — during its inauguration in the temple town of Tirupati — that it wasn't a laptop at all but a computing device.

While the world eagerly waited for the launch of the $10 laptop — designed by students of Vellore Institute of Technology, scientists in Indian Institute of Science, Bangalore, IIT-Madras, UGC and MHRD — it wasn't a patch on the $100 laptop made by MIT.

The MHRD officials said the price was working out to be $20 but with mass production it was bound to come down to $10 (Rs 500) and thus become affordable for every student in India.

But netizens were disappointed when the ``laptop'' turned out to be nothing more than a computing device along with a hard disk with e-books, e-journals and relevant educative material through the state-art-of-the-art ``Sakshat'' portal.