You may think that my comparison is unfair. The household appliances that I mention have had at least a few decades, sometimes a century, to work their magic, whereas the internet is barely two decades old. This is partly true. As the distinguished historian of science, David Edgerton, said in his fascinating book The Shock of the Old – Technology and Global History Since 1900, the maximum use of a technology, and thus the maximum impact, is often achieved decades after the invention of the technology. But even in terms of its immediate impact, I doubt whether the internet is the revolutionary technology that many of us think it is.
Just before the start of the trans-Atlantic wired telegraph service in 1866, it took about three weeks to send a message to the other side of the ‘pond’ – the time it took to cross the Atlantic by sail ships. Even going ‘express’ on a steamship (which did not become prevalent until the 1890s), you had to allow two weeks (the record crossings of the time were eight to nine days).
With the telegraph, the transmission time for, say, a 300-word message was reduced to 7 or 8 minutes. It could even be quicker still. The New York Timesreported on 4 December 1861 that Abraham Lincoln’s State of the Union address of 7,578 words was transmitted from Washington, DC to the rest of the country in 92 minutes, giving an average of 82 words per minute, which would have allowed you to send the 300-word message in less than 4 minutes. But that was a record, and the average was more like 40 words per minute, giving us 7.5 minutes for a 300-word message. A reduction from 2 weeks to 7.5 minutes is by a factor of over 2,500 times.
The internet reduced the transmission time of a 300-word message from 10 seconds on the fax machine to, say, 2 seconds, but this is only a reduction by a factor of 5. The speed reduction by the internet is greater when it comes to longer messages – it can send in 10 seconds (considering that it has to be loaded), say, a 30,000-word document, which would have taken more than 16 minutes (or 1,000 seconds) on the fax machine, giving us an acceleration in transmission speed of 100 times. But compare that to the 2,500-time reduction achieved by the telegraph.
The internet obviously has other revolutionary features. It allows us to send pictures at high speed (something that even telegraph or fax could not do and thus relied on physical transportation). It can be accessed in many places, not just in post offices. Most importantly, using it, we can search for particular information we want from a vast number of sources. However, in terms of sheer acceleration in speed, it is nowhere near as revolutionary as the humble wired (not even wireless) telegraphy.
We vastly overestimate the impacts of the internet only because it is affecting us now. It is not just us. Human beings tend to be fascinated by the newest and the most visible technologies. Already in 1944, George Orwell criticized people who got over-excited by the ‘abolition of distance’ and the ‘disappearance of frontiers’ thanks to the aeroplane and the radio.
Who cares if people think wrongly that the internet has had more important impacts than telegraphy or the washing machine? Why does it matter that people are more impressed by the most recent changes?
It would not matter if this distortion of perspectives was just a matter of people’s opinions. However, these distorted perspectives have real impacts, as they result in misguided use of scarce resources.
The fascination with the ICT (Information and Communication Technology) revolution, represented by the internet, has made some rich countries – especially the US and Britain – wrongly conclude that making things is so ‘yesterday’ that they should try to live on ideas. And as I explain in Thing 9, this belief in ‘post-industrial society’ has led those countries to unduly neglect their manufacturing sector, with adverse consequences for their economies.
Even more worryingly, the fascination with the internet by people in rich countries has moved the international community to worry about the ‘digital divide’ between the rich countries and the poor countries. This has led companies, charitable foundations and individuals to donate money to developing countries to buy computer equipment and internet facilities. The question, however, is whether this is what the developing countries need the most. Perhaps giving money for those less fashionable things such as digging wells, extending electricity grids and making more affordable washing machines would have improved people’s lives more than giving every child a laptop computer or setting up internet centres in rural villages. I am not saying that those things are necessarilymore important, but many donors have rushed into fancy programmes without carefully assessing the relative long-term costs and benefits of alternative uses of their money.
In yet another example, a fascination with the new has led people to believe that the recent changes in the technologies of communications and transportation are so revolutionary that now we live in a ‘borderless world’, as the title of the famous book by Kenichi Ohmae, the Japanese business guru, goes.[6] As a result, in the last twenty years or so, many people have come to believe that whatever change is happening today is the result of monumental technological progress, going against which will be like trying to turn the clock back. Believing in such a world, many governments have dismantled some of the very necessary regulations on cross-border flows of capital, labour and goods, with poor results (for example, see Things 7 and 8). However, as I have shown, the recent changes in those technologies are not nearly as revolutionary as the corresponding changes of a century ago. In fact, the world was a lot more globalized a century ago than it was between the 1960s and the 1980s despite having much inferior technologies of communication and transportation, because in the latter period governments, especially the powerful governments, believed in tougher regulations of these cross-border flows. What has determined the degree of globalization (in other words, national openness) is politics, rather than technology. However, if we let our perspective be distorted by our fascination with the most recent technological revolution, we cannot see this point and end up implementing the wrong policies.
Understanding technological trends is very important for correctly designing economic policies, both at the national and the international levels (and for making the right career choices at the individual level). However, our fascination with the latest, and our under-valuation of what has already become common, can, and has, led us in all sorts of wrong directions. I have made this point deliberately provocatively by pitting the humble washing machine against the internet, but my examples should have shown you that the ways in which technological forces have shaped economic and social developments under capitalism are much more complex than is usually believed.
Thing 5
Assume the worst about people
and you get the worst
6
K. Ohmae,