How to

Think about
INFORMATION
It's common wisdom that the U.S. economy has

continued to thrive despite the loss of industry

because of the booming information sector, with

high-paying jobs for everything from wireless

networks to video games. We are told we live in the

Information Age, tn which communications networks

and media and information services drive the larger

economy. While the Information Age may have

looked sunny in the beginning, as it has developed

... - " - - * ' f \

it looks increasingly ominous: its economy and

benefits grow more and more centralized — and in

the United States, it has become less and less

subject to democratic oversight.

Companies around the world have identified the

value of information, and are now seeking to control

its production, transmission, and consumption.

In Howto Think about Information, Dan Schiller

explores the ways information has been increasingly
commodified, and how it both resembles and differs

from other commodities. Through a linked series

of theoretical, historical, and contemporary studies,

Schiller reveals this commodification as both

dynamic and expansionary, but also deeply

conflicted and uncertain.
✓
 How to Think
about Information
 Digitized by the Internet Archive
in 2020 with funding from
Kahle/Austin Foundation

https://archive.org/details/howtothinkaboutiOOOOschi
 ✓
How to
Think about
Information

DAN SCHILLER

UNIVERSITY OF ILLINOIS PRESS

Urbana and Chicago

© 2007 by Dan Schiller
All rights reserved
Manufactured in the United States of America

c 5 4 3 2 i
@ This book is printed on acid-free paper.

Library of Congress Cataloging-in-Publication Data

Schiller, Dan, 1951-
How to think about information / Dan Schiller,
p. cm.
Includes bibliographical references and index.
iSBN-13: 978-0-252-03132-8 (cloth : alk. paper)
ISBN-10: 0-252-03132-6 (cloth : alk. paper)
1. Information—Economic aspects.
2. Telecommunication—Economic aspects. I. Title.
HC79.155S35 2007

303-48'33—dc22 2006011275
 For Zach
and
in Memory of
Dr. Aaron Rosenbaum
 Contents

Acknowledgments ix

Preface xiii

Part 1: The Roots of Informationalized Capitalism

1. How to Think about Information 3

2. Culture, Information, and Commodification 17

3. Accelerated Commodification 36

Part 2: Vectors of Commodification

4. Business Users and U.S. Telecommunications-System
Development 61

5. The Crisis in Telecommunications 80

6. The Culture Industry: Convergence and

Transnationalization 101

7. Parasites of the Quotidian 145

8. Mobilized 162
Part 3: Poles of Market Growth, or a Deepening Crisis?

9. Open Questions about China, Information, and the

World Economy 177

Notes 199

Index 261
 Acknowledgments

The spirit of this work, and three of its chapters, germinated in writ¬
ings undertaken for Le Monde diplomatique. Warm thanks to the creators of
this great voice of critical reason and, especially, to Serge Halimi and Ignacio
Ramonet.
Intellectual nourishment came from an extended community of colleagues
at the University of Illinois at Urbana-Champaign. I am especially grateful
to Chip Bruce, Noshir Contractor, Leigh Estabrook, Kirk Freudenberg, Bob
McChesney, Maria Mastronardi, John Nerone, Jan Pieterse, Boyd Rayward,
Christian Sandvig, Linda Smith, Inger Stole, John Unsworth, and Bruce
Williams.
Three research assistants provided invaluable aid: Jason Kozlowski, Dr. Dal
Yong Jin, and Yu Hong. Graduate students, especially Han Dong, Dr. Kelly
Gates, Dr. Marie Leger, John Martirano, Victor Pickard, Ben Scott, and Dan
Wright, were generous in sharing their thinking.
Exchanges of different kinds with Andrew Calabrese, Edward Herman,
Steve Jackson, Rick Maxwell, Toby Miller, Vincent Mosco, Zaharom Nain,
Manjunath Pendakur, Lorna Peterson, Greig de Peuter, Ellen Seiter, Lora
Taub, Pradip Thomas, and Janet Wasko were indispensable. Yuezhi Zhao’s
suggestions and advice clarified basic issues and helped gain for this book a
wider readership.
It is a pleasure to thank Dr. Willis Regier, director of the University of
Illinois Press, for the generosity and care with which he has tended this
project.
X • ACKNOWLEDGMENTS

Family members strengthened the work of writing, as always. Thanks to

Susan Davis for inspiration and supportive criticism. Thanks to Lucy Schiller
and Ethan Schiller for making room for me to finish and for giving me so
many important things to think about. Thanks to Anita Schiller for com¬
ments on portions of this text and for bibliographic suggestions. Thanks to
Zach Schiller for news clippings and for a bottomless well of enlightening
and sometimes hilarious stories.
Scholarly research presentations resulted in valuable clarifications, even
as they also helped me to relate this work to the wider world. I am grateful
for invitations proffered by Andrew Calabrese, Zhenzhi Guo, Max Duenas-
Guzman, Jyotsna Kapur, Melanie Kimball, Raffaele Laudani, and Lora Taub
to present research at the University of Colorado at Boulder, the Beijing
Broadcasting Institute, the Central University of Tijuana, Southern Illinois
University, SUNY Buffalo, the University of Siena, and Muhlenberg College.
Valuable also were presentations to the University of Illinois Institute of
Communication Research Seminar on Communications, Culture, and Pol¬
icy; and the University of Illinois Program on Arms Control, Disarmament,
and International Security. Appearances as a guest on Bob McChesney’s
WILL-based radio show, “Media Matters,” helped crystallize my views about
telecommunications.
Chapter 1 is a slightly revised version of “How to Think about Informa¬
tion,” in The Political Economy of Information, ed. Vincent Mosco and Janet
Wasko (Madison: University of Wisconsin Press, 1988), 27-43.
Acknowledgment is made to Critical Studies in Mass Communication for
permission to use material from “From Culture to Information and Back
Again: Commoditization as a Route to Knowledge,” Critical Studies in Mass
Communication 11.1 (March 1994): 93-115. See www.tandf.co.uk/journals.
Chapter 3 draws on “Digital Capitalism 2001: The Corporate Common¬
wealth of Information,” in A Companion to Media Studies, ed. Angharad N.
Valdivia (Oxford: Blackwell Publishing, 2003), 137-56.
Acknowledgment is made to Hampton Press for permission to use a modi¬
fied version of “Business Users and the Internet in Historical Perspective,”
in The Media and Marketization, ed. Graham Murdock and Janet Wasko
(Cresskill, N.J.: Hampton Press, forthcoming).
Chapter 5 draws on “Telecommunications, les echecs d’une revolution,”
Le Monde diplomatique 50.592 (July 2003): 28-29; and “The Telecom Crisis,”
Dissent (Winter 2003): 66-70.
Chapter 7 draws on “Des parasites dans notre quotidien,” Le Monde diplo¬
matique 48.566 (May 2001): 12-13.
 ACKNOWLEDGMENTS XI

Chapter 8 draws on “Esclaves du portable,” Le Monde diplomatique 52.611

(February 2005): 1, 22-23.
Acknowledgment is made to Sage Publications for permission to use mate¬
rial published in “Poles of Market Growth? Open Questions about China,
Information, and the World Economy,” Global Media and Communications
1.1 (2005): 79-103-
.
 Preface

Through a linked series of theoretical, historical, and contemporary

studies, How to Think about Information engages transformative political-
economic changes occurring throughout the realm of information technol¬
ogy and culture.
What justification is there for such a project? Is it not passe? “Informa¬
tion,” after all, was such a nineties thing, and the Internet bubble is but a
fading memory. A glance at the New York Times confirms that the subject
has diminished in significance; in 2005, the nation’s journal of record ceased
titling its Monday business section “The Information Industries.” Official
discourse has evidently moved on.
Interestingly, however, information has not merely been forgotten but
explicitly rejected. Where pundits a decade ago insisted that information was
the new fulcrum of corporate strategy, by the mid-2000S they are emphasiz¬
ing with equal certitude that such claims were misplaced. Nicholas G. Carr,
the former executive editor of the Harvard Business Review, inquired: Does
IT Matter?x His answer is a resounding, “Not any more.” From the other
direction, the Left, a strangely congruent revision has materialized. After
the New Economy bids emphatic good riddance to the seeming pipe dreams
offered by adherents of the so-called information society.2
Skepticism is warranted, and revisions of accepted wisdom are needed;
this book contains both. However, I contend that, just as the earlier embrace
of information was facile, its dismissal has been too hasty. If we wish to
understand the motive force and direction of contemporary society, it is still
necessary to think about information carefully and in an extended way. The
XiV PREFACE

status of information continues to be elusive because it was never adequately

apprehended, either by proponents of information-society theory or their
mainstream critics. Questions about information’s contemporary structural
role therefore remain as significant, and problematic, as they did before the
deflation of the Internet bubble.
I argue that, for definite reasons, political and economic elites assigned
mounting strategic importance to information beginning around 1970. This
was nothing less than an endeavor to renew the encompassing process of
market expansion by generating around information a new and expansionary
pole of growth for capitalism. If information’s significance for this project
has dimmed—which is debatable—we should try to learn why. And if it has
not, what then? In either case, changes occurring around information have
worked their way deep into the economy and society, and these changes
demand to be surveyed.
By now it should be apparent that, in this work, “information” operates as
a kind of shorthand to include the converging fields of culture, media, and
telecommunications. These areas are not identical. In the pages that follow,
I untangle some of the semantic intricacies that bind and separate “culture”
and “information,” and I detail aspects of the process of convergence that is
bringing them together. I argue throughout that this inclusive perspective
on information holds out the prospect of crucial insights.
We are living through a transition into an informationalized capitalism. As
a consequence of policies adopted beginning around 1970, a long-standing
process of commodification—the growth of wage labor to produce com¬
modities and of market mechanisms to distribute them—has gripped the
global information and communications sector. At the same time, com¬
munications and information have come to infuse the more encompassing
process of capitalist development.
Basic questions must be asked about this process. What provoked this his¬
torical phase-change? How are culture, communications, and information
being restructured and repositioned, and how have these changes impacted
the overall political economy? What are the political ramifications of the
emergent informational emphasis? Will information succeed in rescuing the
market economy from stagnation?
How to Think about Information offers, in part 1, an initial explication
of the complex process of commodification that now weaves through the
informational and cultural realm. Chapter 1 frames contemporary think¬
ing about information in the context of political economy. In chapter 2,
arguments about information are further specified and situated historically;
 PREFACE XV

here it becomes important to examine the overlaps and differences between

“information” and “culture.” Chapter 3 extends the analysis by locating the
contemporary political and economic importance of information specifically
in the accelerated commodification that commenced around 1970. Acceler¬
ated commodification unleashed dramatic policy changes in intellectual
property law, ownership and control of information resources, and telecom-
munications-system development to sustain rapid growth of private property
in information. It also helped deepen an already worrisome antidemocratic
tendency. ✓
In part 2,1 analyze the commodification process in several specific contexts.
Chapters 4 and 5 focus on telecommunications networks and services, to lay
bare how these “critical infrastructures” have been altered and to what effect.
Established opinion notwithstanding, this history cannot be read solely from
the supply side—that is, as a straight-line function of the telecommunications
carriers’ strategy and structure. Nor has the logic of network reorganization
been benevolent or free of conflict. After detailing the neglected but pivotal
role played by business users in telecommunications-system development
in chapter 4,1 show in chapter 5 that the liberalized policies they demanded
led to a damaging political-economic crisis.
Chapters 6 and 7 redirect attention to the more widely familiar domain
of culture. Through an extended appraisal of the rapidly changing culture
industry, transformative developments in technology and political-economic
structure are assessed. Accelerated commodification in this sphere has engen¬
dered not only growing “convergence,” which erodes divisions between media
long separated as a matter of deliberate policy, but also a transnationalizing
capital logic. Far from deviating from these trends, Internet systems and ser¬
vices incarnate them. New directions of growth in the sponsor system, the
culture industry’s long-established institutional patron, are then canvassed.
Chapter 8 takes up the explosive growth of wireless technology. I show that,
drawing alike on necessity and desire, wireless extends a long-standing and
often disabling trend in our social organization that Raymond Williams calls
“mobile privatization.”
In chapter 9, many of these themes are united in a different context, through
analysis of the reintegration of China into the world market system. Examin¬
ing how the most dynamic region of the world economy has combined with
its most dynamic industry sector allows us to return to an overarching ques¬
tion: Has a solution been found for one of capitalism’s most deep-seated and
intractable problems, its continuing tendency toward economic stagnation
as a result of overproduction?
XVI PREFACE

This book, which synthesizes work produced over a period of twenty years,
engages processes that continue to be alive, incomplete, and fraught with
conflicts and contradictions. I have simply attempted to frame some of the
key issues and to sketch some provisional answers. For better or worse, how
to think about information remains in vital ways an open question.
 How to Think
about Information
 PART 1

The Roots of
Informationalized
Capitalism
 1
How to Think
, about Information

In 1982, the American Express company heralded its elevation into

the select group of thirty corporations that comprise the Dow Jones Indus¬
trial Index as follows:

Our product is information—information that charges airline tickets, hotel

rooms, dining out, the newest fashions, and even figures mailing costs for a
travel magazine; information that grows money funds, buys and sells equi¬
ties, and manages mergers; information that pays life insurance annuities,
figures pricing for collision coverage, and creates and pays mortgages; infor¬
mation that schedules entertainment on cable television and electronically
guards houses; information that changes kroners into guilders, figures tax
rates in Bermuda, and helps put financing together for the ebb and flow of
world trade.1

American Express was not unique. Companies engaged in making and sell¬
ing entertainment, banking, communications, data processing, engineer¬
ing, advertising, law, and other information-intensive services have played
an increasingly critical role in overall U.S. investment, employment, and
international trade. Major manufacturers such as General Motors, McDon¬
nell Douglas, and General Electric were diversifying into information either
through in-house activities, commercial provision, or both. An administra¬
tive discipline known as “information resource management” was finding
broad application across the business world. This discipline treats informa¬
tion “as a resource like other resources such as money, personnel, and prop¬
erty, which have values and costs and are used in achieving program goals.”2
4 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

In short, as one authority declared, we “can no longer deny that information

is becoming a commodity.”3
Not just any commodity, either, but a fundamental source of growth for
the market system as a whole: information, many proclaimed, had become
the essential site of market growth. Yet the source and true character of this
general shift in the social definition of information remain obscure. Where
is the common ground shared by a college course in anthropology and com¬
puterized credit data, or between a newspaper account of a city council meet¬
ing and genetically coded messages? How, when, and why does information
become economically valuable?
Throughout the postwar era, many writers have grappled with such ques¬
tions. At least three broad, often overlapping conceptual approaches to the
subject have emerged. In spite of serious flaws, each tradition may be utilized
critically as a means to explore how to think about information.

Informational Theories
As late as 1933, the Oxford English Dictionary gave no hint of the profound
shifts beginning to occur in the conceptualization of information. The dic¬
tionary revealed only that “information” had been in currency in English
since Chaucer, when it denoted an item of training or an instruction, and
that the word then accrued several additional meanings: an idea, the com¬
munication of news, or a complaint against a person presented in court.4
By the end of the 1940s, however, mathematicians and engineers had forced
a radical break with these past usages.5 Their development of statistical for¬
mulae for measuring the amount of “information” within a system proved
of immediate utility to communication engineers trying to design cost-effi¬
cient transmission channels of appropriate bandwidth, or information-car¬
rying capacity.6 Yet the “mathematical theory of communication” depended
upon a dramatic redefinition that formalized the ongoing transformation
of “information” into an encompassing category of apparently sweeping
relevance and explanatory potential.7 Information, these theorists asserted,
is a measure of organization, pattern, structure, or—in Klaus Krippendorff’s
more recent treatment—-of a potential for organizational work.8 “[Tjhere is
a widespread feeling,” wrote one scientist receptive to information theory’s
universalistic ambition, “that information theory is basic to a thoroughgo¬
ing consideration of all organized systems.”9
“Information theory” promised to unlock the inner workings of diverse
systems—collections of related entities—“from steam engines to human
 HOW TO THINK ABOUT INFORMATION • 5

societies,” as one of the eminent participants in a conference underwritten

by the Macy Foundation put it.10 In 1950, for example, an article in American
Scientist declared that “consideration of the effects of information storage
and information transfer on physical, chemical, biological, psychological,
and sociological systems” might “help in understanding and predicting many
of the aspects of our universe.”11 Early confirmation of the value of this
approach appeared evident in a contemporary breakthrough in biology: the
discovery of the precise sequence of the DNA molecule, which forms “the
code which carries the genetical informatiqn.”12 A hitherto undetected but
potentially vital informational component of physical, chemical, biological,
and even social systems could be sought after and, it was believed, explicitly
specified.13
However, despite significant refinement and conceptual augmentation
(such as Ludwig von Bertalanffy’s “open systems” concept), information
theory encountered difficulties when applied to social processes. These dif¬
ficulties were due largely to a tendency, common then and still evident today,
to operationalize the system concept. Systems, it was held, require rigorous
codification of input and output “variables,” their “values,” and above all,
their behavioral relationships. This process of operationalization tends to
impose a formal, mechanistic order on the contingent, conditional, and often
unclearly interrelated historical realm of human social agency.
Compared with telephone networks and even biological organisms, soci¬
eties appeared to be “exceedingly complex systems,” whole chunks of which
had, of necessity, been relegated by theorists to “black boxes” whose internal
workings “cannot be comprehended” but should be explained at some point
further along.14 This point, however, never arrived. Even more damaging,
any possible social determinants of information tended to drop out of the
analysis. “ [ W] ithout materials there is nothing, and without energy nothing
happens,” one borrower from this tradition wrote. “But without information,
nothing has meaning: materials are formless, motion is aimless.”15 Are there
really no irreducibly social agencies and historical relationships conditioning
the organization and use of information, energy, and matter? Information
theorists implicitly identified the essential structuring agency of all systems
in information itself. They not only sought an informational component of
organized systems but also hoped to develop a unique informational plane of
analysis to explain its operative features. Therefore they sidestepped the pos¬
sibility that information—at least in social “systems”—might be a product of
social institutions. Though matters of indifference to information theorists,
the following questions are critically relevant: What social forces structure
6 THE ROOTS OF I N FO R M AT IO N A LI Z E D CAPITALISM

information? How have they developed? Over what range of “systems” do

they operate?
A quite different school of thought did attempt to elucidate a social
framework for information. By the late 1960s and early 1970s, theorists of an
emerging “postindustrial” or, later, “information” society became promi¬
nent. Postindustrialists argued that new “intellectual technologies”—above
all, the computer—were dramatically discontinuous with earlier systems
of information processing and control. The new technologies would be
as central to the emerging society as “machine technology” had been to
its industrial predecessor. Postindustrialists often claimed to find a “new
class” of office employees—“knowledge professionals” or “information
workers”—constituting the preponderant segment of the employed work¬
force in the developed market economies. Finally, they argued that infor¬
mation itself had become the transforming resource of social organization.
For Daniel Bell and those generally lesser thinkers who followed him, the
postindustrial society broke with and transcended the elemental relations—
including, most crucially, the opposition between capital and labor—that
had shaped its antecedent.16 Knowledge was supplanting capital and labor
as the decisive factor of production.
There were ideological advantages to declaring that postindustrial society
constitutes a radical break with the past. By emphasizing discontinuity, how¬
ever, it was the rather dismal visage of the present that was obscured. The
selective silences in the writings of the postindustrialists and their successors
are notable: about the crisis of empire occasioned by the devastating politi¬
cal and economic impacts of the U.S. war in Vietnam; about the economic
slowdown—to which intensifying international competition contributed
and responded—that threatened to undercut the brief “American century”;
and about the unprecedented transnationalization of the entire market sys¬
tem. Rather than attempting to contextualize the important changes in the
information sector that they did identify within these determining historical
circumstances, the postindustrialists chose to abstract from them. Infor¬
mation society analysts such as Harlan Cleveland carried this tendency to
even greater lengths. Ironically, Cleveland even criticized Daniel Bell for
his coinage, the “postindustrial society,” on the grounds that the term put
too little distance between a promising future and a rusting past: “Can’t we
find a term for the future that goes beyond saying it comes after the past?
Surely postindustrial is too reductionist a tag for so different and exciting
a prospect, and too economic a name for a period in which the discoveries
of science, the innovations of technology, and integrative thinking about
 HOW TO THINK ABOUT INFORMATION • 7

politics, culture, and psychology will be at least as important as economic

analysis to an understanding of what’s going on.”17
Yet an even more basic conceptual flaw is evident throughout the writ¬
ings of the postindustrialists. They commonly pinpoint the source of infor¬
mation’s economic value in supposedly intrinsic attributes of information
itself. ‘The information resource,” claimed Cleveland, “in short, is different
in kind from other resources”—as if, in finding that a shoe is not a table, he
had somehow fixed at last on the former’s essential economic nature.18 Not
subject to the laws of thermodynamics, information is “expandable, com¬
pressible, substitutable, transportable, leaky, shareable.” These “inherent
characteristics,” Cleveland declared, divulge the vital clue to information’s
mounting economic importance.19 Such claims grew wearisomely frequent
within mainstream economic arguments, as did the warning that because
information is a public good,20 “markets for information products may not
operate in the same ways as markets for tangible commodities.”21
This reasoning resurrected a long-standing economic fallacy. As Rudolph
Hilferding pointed out at the beginning of the twentieth century, such a
theory of economic value invalidly relies upon categories that “are natural
and eternal entities.”22 It substitutes for the historical development of social
relations among persons the purportedly immanent qualities of things. Why
was the status of information not a major topic of economic theory in 1700,
1800, or 1900? Why was it only after World War II that the economic role and
value of information took on palpable importance? The advocates of infor¬
mation’s innately distinctive economic role were necessarily unconcerned
with such questions. They found it difficult to explain the history of their
subject without retreating into technological determinism: the “computer
revolution” thus was charged with responsibility for the unprecedented vis¬
ibility and economic significance of information. But this is not a satisfactory
answer. Why was there a “computer revolution”? Why only in the postwar
era? Why predominantly in the developed market economies? And what
kind of an upheaval did this “revolution” actually portend?
We will not comprehend why and how information becomes economically
valuable by beginning from its supposedly intrinsic attributes; we cannot
uncover its real social framework in this fashion. What if, however, we sup¬
pose that information is not inherently valuable? What if only a profound
social reorganization can permit information to become valuable? What sort
of historical changes would be required for such a sweeping and dramatic
revaluation?
To answer these questions we will introduce a key distinction between infor-
8 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

mation as a resource and information as a commodity. Using this elemental

distinction, we may begin to grasp the nature of information in contemporary
society.
A resource is something of actual or potential use. That is all. The soil, the
sea, and the spectrum are resources. But all resources are not commodities.
Only under particular conditions can they be transformed into commodities.
A resource is anything of use, anytime, anywhere, to anyone; but a commod¬
ity bears the stamp of society and of history in its very core.
Lacking this distinction, information-society theorists pursue an erro¬
neous consideration of how information is innately different from other
resources. Employing it, however, permits us to consider how information
is socially identical to other commodities. When we begin to study the pro¬
duction and use of information resources within history, we find that they
have experienced the same series of changes in social organization as other
resources claimed by capitalism and transformed into commodities: all are
produced increasingly by wage labor within and for a market. Oblivious to this
social transformation, information-society analysts evince an implicit will¬
ingness to treat all resources, including information, as commodities. With
the commodification of information in mind, however, we enter the domain
of political economy, which seeks to comprehend the historical evolution of
the market system itself.
It might have been assumed that political economy would be at the fore¬
front of the social analysis of information. Yet the third major way of think¬
ing about information, stemming from political economy, paradoxically
dismisses an economic role for information altogether. This line of reason¬
ing holds that activities such as advertising, market research, law, financial
services, and other information-intensive pursuits are simply not productive.
As with the two previous schools of thought, this theoretical tradition yields
useful insights upon investigation.
Advocates of this view assert that informational functions such as adver¬
tising are unnecessary—even harmful—and that therefore they should not
be treated in the same fashion as such clearly beneficial pursuits as farming,
bauxite mining, steel smelting, and automobile assembly. Prominent expo¬
nents of this position are Paul Baran and Paul Sweezy, who, after arguing
trenchantly that advertising “constitutes as much an integral part of the
system as the giant corporation itself,” go on to claim that, nonetheless,
advertising expenses “are manifestly unrelated to necessary costs of produc¬
tion and distribution—however broadly defined.”23
Baran and Sweezy justify their argument on moral and theoretical grounds.
 HOW TO THINK ABOUT INFORMATION • 9

They echo a long-standing concern with differentiating and supporting

useful” against “unuseful” social labor. Such a distinction was essential
for nineteenth-century journeyman artisans who contrasted their own pro¬
ductive crafts with the connivings of “monopolists” and “speculators.” The
latter, personified by bankers and lawyers, were hastening the expansion and
rigidification of wage relationships.24 But the distinction between produc¬
ers and nonproducers has persisted down to the present as a widespread
mistrust of “parasitic” paper-pushers and other members of information¬
intensive occupations. ✓
A theoretical argument seems to lend this suspicion credibility. When
reduced to essentials, the argument runs as follows: no matter how impor¬
tant to the functioning of the market economy, virtually all information¬
intensive employments fall within the sphere of circulation of capital and
not of production. Once assembled, a car must be advertised, marketed, and
financed, but these functions are ancillary to the production of the automo¬
bile itself. They add no new value in their own right. To the older strata of
“surplus eaters”—unproductive participants in the economy—are added
a host of new ones: “corporate and government bureaucrats, bankers and
lawyers, advertising copy writers and public relations experts, stockbrokers
and insurance agents, realtors and morticians, and so on and on seemingly
without limit.”25 All are part of a vast social wastage created by the need to
dispose of a mushrooming economic surplus under conditions of monopoly
capital.
This logic, however, is flawed on three counts. First, the occupations con¬
signed by Baran and Sweezy to the category of circulation clearly do not
constitute the entire information sector. Scientific research and engineering
spring to mind in this context; and what about the differently situated labor
of teachers and librarians? The information-intensive occupations are sim¬
ply mischaracterized if they are said to function solely within the domain
of circulation. Second, the distance between circulation and production has
narrowed dramatically. Advertising, market research, industrial research,
and development have grown ever more tightly coupled to production and
distribution, particularly in the consumer goods and services sector. Tooth¬
pastes, detergents, breakfast cereals, and video games, for instance, are not
produced until exhaustive research has identified which product features,
market locations, and demographic groups should be targeted to facilitate
maximum profits. It is therefore increasingly impossible to disentangle “cir¬
culation” from “production.” Finally, the occupations consigned to circula¬
tion by these analysts have changed fundamentally since the mid-nineteenth
10 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

century, when the dichotomy between productive and unproductive labor

played a more valid role. This crucial point requires amplification.
“For labour to be designated productive,” wrote Karl Marx,

qualities are required which are utterly unconnected with the specific con¬
tent of the labour, with its particular utility or the use-value in which it is
objectified. Hence labour with the same content can be either productive or
unproductive.
For instance, Milton, who wrote Paradise Lost, was an unproductive worker.
On the other hand, a writer who turns out work for his publisher in factory
style is a productive worker. Milton produced his Paradise Lost as a silkworm
produces silk, as the activation of his own nature. He later sold his product
for £5 and thus became a merchant. But the literary proletarian of Leipzig
who produces books, such as compendia on political economy, at the behest
of his publisher is pretty nearly a productive worker since his production is
taken over by capital and only occurs in order to increase it. A singer who sings
like a bird is an unproductive worker. If she sells her song for money, she is
to that extent a wage-labourer or merchant. But if the same singer is engaged
by an entrepreneur who makes her sing to make money, then she becomes
a productive worker, since she produces capital directly. A schoolmaster who
instructs others is not a productive worker. But a schoolmaster who works for
wages in an institution along with others, using his own labour to increase the
money of the entrepreneur who owns the knowledge-mongering institution,
is a productive worker.26

Labor is productive, in other words, if it creates a surplus for a capitalist over

and above the wealth that it consumes in order to be capable of producing
at all.27 No matter how repellent the function of a given kind of labor, it is
productive if it “is taken over by capital” so as to contribute to accumulation
by means of the wage relationship and market exchange.
Toward the end of the nineteenth century, the majority of the information¬
intensive activities dismissed as unproductive by Baran and Sweezy were per¬
formed, if at all, by self-employed individuals. Law, accounting, advertising,
research and development, and so forth were neither organized as autono¬
mous capitalist enterprises nor yet assimilated within the division of labor
of the giant firm. They were carried out almost exclusively by individuals or
partners brokering their services to capital in exchange for money; no capital¬
ist directly appropriated their own surplus, and thus they did not contribute
to capital’s productive self-expansion. For this reason Marx dismisses them
as “peripheral phenomena that can be ignored when considering capitalist
production as a whole.”28
 HOW TO THINK ABOUT INFORMATION • 11

Information services were not, however, to be left permanently to the

realm of self-employment.24 Marx left open the possibility that the defi¬
nition of productive labor could broaden with the historically expanding
arena of capitalist production: “[F]or the most part, work of this sort has
scarcely reached the stage of being subsumed even formally under capital,
and belongs essentially to a transitional stage.”30
Today, these once “peripheral phenomena” have become profoundly
important. Complex historical processes have empowered capital to impose
wage relationships on many formerly exejnpt categories of social labor.
Technical innovation, including innovations in the areas of information
storage, processing, replication, and distribution, hastened the separation
across a growing range of employments of the producer from the product
and the process of production. The expanding scale of capitalist enter¬
prise demanded and made possible continuing innovation in information
technology and a colossal expansion of the gamut of business services per¬
formed by Baran and Sweezy’s “surplus eaters.” These, however, were not
surplus eaters at all. Drawn into the giant firm or entering the employ of
specialized service corporations, formerly self-employed professionals were
instead increasingly transformed into directly productive wage laborers.
Their labor not only contributed to the value of the automobile, to put it
another way, but also, more importantly, produced a surplus for the own¬
ers of accounting firms, advertising agencies, research and development
laboratories, public relations companies, and corporate marketing depart¬
ments. This trend is continuing—indeed, accelerating—across the fields of
education, librarianship, and medicine, among other areas of social labor
being taken over by capital.
In contrast, Baran and Sweezy abstract from the elemental and histori¬
cally dynamic relationship that is capitalism—the wage relation—in favor
of a Sisyphean attempt to distinguish productive from unproductive labor
in terms of a hypostasized set of productive activities. They first confuse
socially useful or desirable activity with economically productive labor and
then try to determine whether a given pursuit is productive on the basis of
its contribution to an arbitrarily truncated “basic” sector of the economy.
Their argument is thus ahistorical and comes perilously near to advancing
a modern variant of the fallacy introduced by the economists known as the
Physiocrats in the late eighteenth century: that only labor that works on the
land, in agriculture, is productive. In its modern form, the argument stresses
not only agriculture but also mining and manufacturing; it may even allow
that the zone of productive labor comprises the “material” production of
12 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

goods per se. In either case, it is only by fiat that information-intensive (and
a range of other) labor is consigned to the unproductive realm. Such a view
takes insufficient account of the fact that capitalism, in its essence a dynamic
form of social organization forever dependent on identifying and exploiting
new areas of social labor, has moved from agriculture to manufacturing and
beyond over the course of its history.
Such an argument, finally, also engenders a profoundly misleading approach
to the changes unfolding in the contemporary political economy. To expli¬
cate this point, it is helpful to examine an analysis of the so-called strange
recovery of 1983-84 by the editors of the Monthly Review.31 Paul Sweezy and
Harry Magdoff’s article presents data on investment in producers’ durable
goods—the machinery, equipment, and transportation apparatus as well as
structures whose use undergirds the entire U.S. economy. The data showed
that investment in “high-tech” products, including computing, accounting, and
office machines, communication equipment, and instruments, far outstripped
investment in traditional agricultural and manufacturing equipment over the
1979-84 period.
This portrait of capital investment trends cannot be challenged. By 1985,
in aggregate (1982 dollars), corporate outlays for such high-tech products
made up an astounding 36 percent of nonresidential purchases of produc¬
ers’ durable goods; this proportion had increased steadily since the 1940s but
accelerated markedly in the wake of the 1974-75 recession.32 Electronic prod¬
ucts moved ahead of factory machinery and mobile equipment to become
the largest single category of capital equipment spending in 1985—which they
have remained.33 The question is, What to make of these striking facts?
Sweezy and Magdoff view this spectacular change in the overall character of
capital investment as “for the most part concerned with making money rather
than with making goods.”34 The billions upon billions of dollars invested in
computers, telecommunications networks, office equipment, and advanced
instrumentation of every kind “have less to do with production than with
finance” and merely “sustain and foster speculative fevers in the process of
servicing customers, designing strategies for investment and speculation,
and inventing new instruments for speculation.”35 In contrast to some of
the technological revolutions of the past, which “have served to lift capitalist
economies out of a stage of stagnation and to set in motion a long period
of rapid growth,”36 information technology yields scant economic promise.
This is because the new electronic and communication technologies osten¬
sibly have had only “minor secondary effects” in the areas of manufacturing
and construction, “the basic industries.”37 Far from heralding a new wave
 HOW TO THINK ABOUT INFORMATION • 13

of capitalist expansion, information technology in this view betokens only a

more serious phase of stagnation giving rise to rampant speculation.
Neither the general tendency to chronic economic stagnation nor the spe¬
cific speculative fevers” so much in evidence today, both of which the editors
of the Monthly Review did so much to document and analyze, can be doubted;
indeed, we will see in chapter 5 how deeply they have engraved themselves
into what I call “informationalized capitalism.” However, owing to their a
priori assignment of productive labor to one historically antecedent segment
of the overall economy—the “basic industries” of agriculture, construction,
and manufacturing—Sweezy and Magdoff refuse to recognize the empiri¬
cally observable and continually escalating contributions of the new informa¬
tion technology across and throughout all economic sectors. This refusal is
made simpler and more palatable because the authors treat the U.S. economy
strictly in national terms. That the prime unit of economic activity is today
the transnational corporation—a fact of which these authors are well aware,
having written eloquently about it elsewhere—in this analysis disappears from
view. So too does the fact that these transnationals, by far the most important
source of demand for the high-tech capital investments described above, are
employing these investments precisely to unify, control, and further expand
their productive profit-making activities on a global scale.
By the 1980s, satellites were being used to interconnect computerized print¬
ing facilities of newspapers such as the Wall Street Journal, USA Today, the
Toronto Globe and Mail, and the Financial Times, permitting them to garner
advertising revenues in national and transnational markets. Research and devel¬
opment laboratories shared data and sophisticated information-processing
capabilities across borders by means of packet-switched computer networks.
Book publishers deployed computer systems to facilitate tighter inventory con¬
trol and to expedite distribution among publishers, wholesalers, retail chains,
and libraries. Credit reporting and financial information services migrated to
electronic networks to deliver data, “treasury management” programs, and
money itself to corporate subscribers. Manufacturers like General Motors and
Boeing moved to link engineering and design directly to production and to
integrate “islands” of automated machinery through transnational computer-
communications systems. Agribusiness combines and energy companies relied
on satellite remote sensing to monitor global harvests and to search out oil
and mineral deposits. Is this manifold evidence of the integration of informa¬
tion technology into production and distribution simply to be dismissed as
economic waste?
And what about the labor of the millions of wage earners who are today
14 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

engaged, directly and indirectly, in the use of these new information tech¬
nologies? Utilizing the new productive processes supported by continu¬
ing massive capital investments in such technology, these workers create
conventional manufactured, mined, and farmed commodities and infor¬
mation products and services. Heavily concentrated in the United States
and other developed market economies, information-services employment
became one of the fastest-growing segments of the labor force. Employment
in computer and data processing services more than tripled between 1974
and 1984; job growth in advertising—a comparative laggard in the area of the
economy known as business services, which includes most contract infor¬
mation services—was still more than twice as large as the overall industrial
average.38 Over this same decade, the number of nonsupervisory employees
in the entire business services industry doubled, to just over four million,
showing a rate of growth four times that of the nonagricultural economy
as a whole.39 And this does not include the additional information-service
workers laboring within diversified transnational corporations as in-house
employees. Can these millions of wage earners continue to be thought of
merely as unproductive laborers?
First in agriculture, then in manufacturing and other areas, capitalist forms
of economic organization have continued to take hold of production.40 To
claim otherwise is to reveal an arbitrary blind spot to the fundamental trends
within the political economy, centering on the crucial role of communica¬
tions and information, that Dallas Smythe identified years ago.41 Although
the prospect of a national economy whose role in the emerging transnational
division of labor centers on services (and military industries) maybe abhor¬
rent, that economy has only extended capitalist commodity production to
new spheres. To that extent, it remains economically productive. Indeed, it
could be argued that, despite and in vital ways because of the tendency to
stagnation so evident today, an emerging information industry has acquired
exactly those features characteristic of previous leading-edge sectors, such as
the railroad, electrical, and automotive industries, each of which spearheaded
sustained economic expansion in its era.

Conclusion

Wage labor and markets are always incomplete products of human social
organization. Neither bursts suddenly on the scene in finished form; their
constant expansion has been a chief task confronted by capital. Wage relations
emerge unevenly, often the result of protracted struggles over the charac-
 HOW TO THINK ABOUT INFORMATION • 15

ter and control of production in particular trades. The development of the

market into an increasingly encompassing and integrated mechanism for
commodity exchange has also been a slow process. The state, communica¬
tions and transportation technologies, and an intensifying need to dispose of
surpluses have decisively contributed to it. The penetration of capitalism has
thus always been and continues to be a dynamic and unfinished process.
It is a process that has two basic dimensions: as new peoples are brought
under the wage relationship, new products, services, and productive pro¬
cesses facilitate the self-expansion of capital ^throughout growing segments
of social life. In principle, its endpoint, assuming that neither Armageddon
nor basic social transformation intervenes, arrives only when all social labor
is waged and all products and services are exchanged as marketed com¬
modities. What is significant today is the “progress” toward this theoretical
endpoint. The wage form is far more universal than at any previous time, the
impact of automation notwithstanding; over the course of the present cen¬
tury it has been imposed globally, making especially impressive inroads into
the so-called less-developed countries and, most spectacularly, in the for¬
mer Soviet bloc and in China. The profound importance of this expansion
was recognized by Alan Greenspan, then chairman of the Federal Reserve,
who testified in 2005 that the “addition of these workers plus workers from
India—a country which is also currently undergoing a notable increase in
its participation in the world trading system—would approximately double
the overall supply of labor.”42 Within the developed market economies the
wage has also continued to advance, extending lately to embrace formerly
independent professionals and an unprecedented proportion of women.
Over this century, at the same time, the world market has been woven ever
more tightly, to the point where now it is made extraordinarily difficult—
politically, economically, and often militarily—for any country or region
to extricate itself or to maintain itself after its initial extrication.
This is the historical and analytical matrix within which the contempo¬
rary transformation of information must be situated. To the information
theorists’ claim that information denotes organization, we say yes, but infor¬
mation itself is conditioned and structured by the social institutions and
relations in which it is embedded. These social relations are today creating
a specific form of capitalist organization across an unprecedented range. To
the postindustrialists’ assertion that the value of information derives from
its inherent attributes as a resource, we counter that its value stems uniquely
from its transformation into a commodity—a resource socially revalued and
redefined through progressive historical application of wage labor and the
16 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

market to its production and exchange. The wage has been imposed continu¬
ally on new fields of social labor, including information. Markets have been
developed as the determining exchange mechanism for an ever-expanding
spectrum of commodities, again notably including information. For these
reasons, finally, as against those political economists who dismiss the infor¬
mation sector as unproductive, we suggest that the information commodity
has become the prime site of contemporary expansion—such as it is—within
and for the world market system.
 Culture, Information,
and Commodification

This chapter extends and deepens our conceptual engagement with

information. Its point of departure lies in the acknowledgment that the study
of information is uncomfortably disparate. The term refers to diverse phe¬
nomena in library and information science, engineering, communication,
sociology, law, economics, literary criticism, history, and other fields. And
the contemporary concept of information stems from two distinct traditions
of intellectual engagement.
One of these traditions was gestated during the first half of the twentieth
century, mainly within the context of engineering complex, high-technology
control systems. Although some early developers of what was formalized
mathematically as “information theory” questioned whether it held broad
applicability,1 most did not,2 and influential figures such as Warren Weaver of
the Rockefeller Foundation emphasized the theory’s multifarious potential.
Other academic luminaries likewise celebrated its prospectively sweeping con¬
tributions; Wilbur Schramm, for example, led the attempt to import informa¬
tion theory into communication study, declaring, “We have every reason to
suspect that a mathematical theory for studying electronic communication sys¬
tems ought to have some carry-over to human communication systems.”3
Schramm’s optimism was not altogether misplaced. As the historian
David A. Mindell shows, information theory did not develop in the asocial
context of strictly physical systems.4 It originated in programs of innova¬
tion aimed at controlling the behavior of complex processes, containing
physical and human components, such as telephone networks, electrical
grids, and naval artillery-fire control systems. A powerful, formal concep-
l8 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

tion of signals was born of these initiatives—a conception within which

speech, image, and text began to merge, for engineering purposes, into
what could begin to be apprehended as a common electronic informa¬
tion stream. A comparably inclusive ambition converged in attempts to
build stored-program electronic computers as (mostly) general-purpose
systems. As early as 1948, for example, a promotional brochure declared
that the UNIVAC computer—not yet on the market—could be used for
“air traffic control, census tabulations, market research studies, insurance
records, aerodynamic design, oil prospecting, searching chemical literature,
and economic planning.”5
However, in a key respect, information theory’s generalization after World
War II is widely seen today to have been facile. The theory was maladroitly
transposed from processes of signal transmission to socially grounded
exchanges of semantic content—that is, to the meaningful realm of culture.
Processes of communication were thereby stripped of any constitutive social
significance, so that, as L. David Ritchie explains, “the statistical characteris¬
tics of a code” were confounded “with the cognitive and social processes of
communication.”6 As Ritchie underscores, “Even the most routine forms of
human communication can be understood only in the context of the social
relationships in which they take place.”7
Despite, or perhaps because of, this confusion of “information” and “cul¬
ture,” information theory contributed to the reorientation of the social sci¬
ences. During the Great Depression, topical issues of profound importance—
the sources of economic stagnation and growth; the role of corporate capital
in politics and culture; the functions of the state; the changing status of social
science itself—had been engaged. With the onset of the cold war, however, the
widening assimilation of information theory played a role in displacing these
still-vital concerns. As communication study, for example, bid for legitimacy,
information theory was incorporated at the expense of a prior emphasis on
mass persuasion—the power of radio, film, and other new media, often in con¬
cert with interpersonal networks, in conducting modern propaganda—and on
the dominative processes that underlay and infused this function. The field’s
chief intellectual concerns turned instead toward abstract, formalized discus¬
sions of information senders, receivers, and channels, within which attention
was focused on measures of attitudinal and behavioral change among indi¬
viduals and networks of individuals.8
That information constitutes an inclusive and perhaps transcendent dimen¬
sion of varied “systems,” however, has widely continued as an article of faith.
Information’s ostensible field of reference came to encompass physical, psy-
 CULTURE, INFORMATION, AND COMMODIFICATION • 19

chological, biological, and social phenomena.9 The definition of “informa¬

tion ’ was similarly extended as “the ability of a goal-seeking system to decide
or control,”10 or, as Klaus Krippendorff eventually framed it, a potential for
organizational work.11 Conceptions of information (which might remain valid
in the context of traffic control but were mere placeholders when applied to
socially encoded processes) were rendered in inclusive but essentially formal¬
istic terms: messages, patterns, “the communication of relationships.”12 Such
a conception was adopted by the influential theory of “postindustrial society,”
in which information also came to be accorded decisive significance.
“By information,” writes Daniel Bell, “I mean data processing in the broad¬
est sense; the storage, retrieval, and processing of data becomes the essential
resource for all economic and social exchanges. These include: data process¬
ing of records ... data processing for scheduling ... data bases.”13 For Bell
and most of the lesser analysts who drew on his conception to promulgate
theories of information society, information again is used to encroach upon
and to render irrelevant the socially encoded processes of semantic meaning
that permeate human experience.
Viewed as “data processing in the broadest sense,” “information” might
have been seen to broadly overlap with “culture.” Instead, “information”
simultaneously encompasses and conceals much of what is referenced by the
anthropological sense of “culture.” Where is the boundary between infor¬
mation as “data processing in the broadest sense” and culture as the realm
of patterned meaning? Are computer programs not cultural artifacts? Do
expressive forms not possess an informational potential for organizational
work?
As Bell developed postindustrial theory, the concept of culture was also
undergoing a complex process of revision. On one side, the humanistic con¬
notations of “culture” skewed in a different direction than the scientific
accents of postindustrialism. On the other side, more direct difficulties were
posed by an ongoing reorientation of “culture” toward the conflicts and
struggles that shape ordinary human experience.14 In the United States, the
civil rights movement, the anti-Vietnam War struggle, and the 1960s coun¬
terculture indicated that conflictive elements figure deeply in culture. From
the global South, Mao’s Cultural Revolution and the rising antagonism to
“cultural imperialism” comprised additional signs that “culture” no longer
could be used to denote an apparently unbroken traditionalism. Such usages
moved actively against postindustrialism’s benign prophecy of progress.15
Bell himself consistently accepts that “culture” signifies the expressive
symbolization of experience. But between this and what he sometimes terms
20 • THE ROOTS OF I N FO R M AT I O N A LI Z E D CAPITALISM

the techno-economic order, he postulates an unbridgeable gap. Bell sought

to portray culture, politics, and the economy as disjunctive domains, existing
on separate planes and operating on mutually independent and sometimes
even antagonistic principles.16
“Information,” in this scheme, operates discursively to establish a vital and
unremarked distance from experience and consciousness. Its scientistic aura
of objectivity lends itself to overarching reifications; the absence of any clear
distinction between the terms “information society” and “information econ¬
omy” is telling. “Information” thus directed analysts away from “culture’s”
rich debates—employing references to “high culture,” “mass culture,” and
“popular culture”—over whose experience could be normative and whose
should be made general. In these ways, “information” abstracted from social
life; it requires a contextualizing noun—“information society”—to expand
its field of reference in this direction. “Culture,” in contrast, generalizes on
its own to a whole, though perhaps problematically shared, way of life. In
shifting discussion onto what they presented as new terrain, the ideologists
of “information” thus created analytical distance from lived, often socially
conflicted, experience.
Despite their unobserved convergence, it remains crucial that the two
concepts remain distinct. If “information” constructed a scientistic fantasy,
it also instigated and rewarded a search for new conceptual entry-points
into the social process: the reorganization of work within modern industry,
shifts in the international division of labor, and the history and applications
of information technology. Most important, perhaps, for critical analysts,
“information” enabled a resurgence of analysis and debate over the encom¬
passing principles and practices of societal evolution and over the place of
a changing accumulation process within this larger history.17
While the intellectual extensions occurring around new usages of “infor¬
mation” must not be abandoned, neither must “culture” as conflicted human
experience be traded away. Rather than searching for a mechanical convergence
between “culture” and “information,” we must try to make more explicit the
problematic links between information as the potential for organizational
work and culture as the experience of capitalist society’s divided population.

The Commodification Process

We may begin by thinking afresh about information as a commodity in an

attempt to constitute a more satisfactory approach than ensconced postin¬
dustrial theories permit. Whereas these theories begin with industrial society.
 CULTURE, INFORMATION, AND COMMODIFICATION • 21

which they then claim is being transcended, information-commodity theorists

begin with capitalism, which they argue is not being transcended. Postindus¬
trial analysts build their work on the premise that information is intrinsically
anomalous and informational labor innately dichotomous with other forms
of work. Information-commodity theorists assume instead that information
can be compared usefully with the vast range of other commodities whose
production depends on common capitalist relations of production.
What is a commodity? This crucial concept allows historically patterned
and conflicted social experience to be reintroduced into the discussion. In
chapter i, I argued for an explicit, restricted definition of “commodity,” one
lodged specifically in social relations rather than, for example, individual
preferences and predilections. A commodity is not merely a product or a
resource, a thing of use to anyone, anytime, anywhere; it also may be distin¬
guished from another current usage: a staple or mass-produced (as opposed
to a custom-made or handcrafted) product.18 A commodity is a resource
that is produced for the market by wage labor. Whether a tangible good or
an evanescent service, universally enticing or widely reviled, a consumer
product or a producer’s good, a commodity contains defining linkages to
capitalist production and, secondarily, to market exchange.
In the present context it is helpful to focus not on the commodity in itself
but rather on the commodification process.19 An uneven but ongoing process
of commodification is foundational to capitalist development; its histori¬
cal generalization throughout the informational sphere constitutes a land¬
mark of the contemporary political economy. With regard to information,
commodification covers two cases or aspects. First are those instances where
information is the final product; second are those in which information is an
intermediate component of production. In either case, as various analysts have
suggested, we should scrutinize especially the means whereby capitalist social
relations are insinuated or accepted into what had earlier been noncapitalist
forms.20 This encompasses interrelated and often conflicted historical tenden¬
cies toward production by wage labor and private appropriation; exchange
via capitalist markets; creation of new means of producing and distribut¬
ing information and cultural commodities; attendant restructurings of the
labor process; and widening acquiescence to the idea that particular genres
of information should have not only costs but prices (to take a contemporary
example, cable television supplants “free-to-air” broadcasting with subscrip¬
tion television services and pay-per-view programs).
Again, there are no intrinsic, transhistorical reasons why any particular
field of labor should unfold in this direction at a particular time, let alone
22 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

end there. The social field is structured by other, equally important processes
that often intertwine with commodification in complex ways. It is impor¬
tant to underline that specific conditions and pressures exerted by a capi¬
talist political economy, forever requiring new markets, new materials and
production processes, and new and cheaper sources of appropriately skilled
or deskilled labor, engender the commodification of particular practices of
information and culture production. A four-cell diagram indicates the pos¬
sibilities, together with illustrative examples:

Wage and Market Wage Non-Market

TV Cameraperson Federal Census Statistician

Unwaged Market Unwaged Non-Market

Bestseller Writer Bedtime Storyteller

The commodification process is not best studied within any particular

occupation. Usually it is appropriate to think in terms of the range of labor
processes and interlinked industries needed to produce and distribute a partic¬
ular commodity.21 A book thus becomes a commodity not necessarily because
its author works directly within a wage relationship; usually he or she does
not. The book becomes a commodity during the production process because,
within the overall organization of the publishing industry, wage labor and
market exchange are the norm. This does not mean that all segments of the
division of labor in publishing must be bound up in wage relations or that
all exchanges must be organized as markets.
Writers often continue to be nominally independent craft workers, exchang¬
ing the product of their labors for money or promises of money in the form
of royalties. Similar arguments might be made for many musicians, actors,
and sports figures. In the industries of cultural production, as John Clarke
and Nicholas Garnham have observed—and in areas of information produc¬
tion as well—corporate production and distribution typically interlock with
the creative labor of “semi-autonomous or petty commodity” producers.22
But the capitalist enterprises with whom writers, actors, and such make their
contracts employ tens of thousands of wage earners as well.
“Uneven development” refers to the historical fact that the process of
capitalist production did not simultaneously seize hold of all social labor
everywhere.22 Considered in both its geographic-territorial and social aspects,
historical capitalism must perforce take hold progressively within particular
places and spaces. Specific segments of the division of labor in households,
communities, regions, and entire cultures were commodified before others.
Processes of commodification also have repeatedly surrounded new means
 CULTURE, INFORMATION, AND COMMODIFICATION • 23

of information production: the succession of technologies of information

objectification, beginning with printing and continuing through lithogra¬
phy, photography, film, audio and video recording, digital signal processing,
and biotechnologies of genetic recombination. The suggestion that such
technologies can be put to other uses must be carefully posed. In historical
terms-—the only terms that matter—such technologies have provided indis¬
pensable sites of capitalist accumulation. Struggles to develop alternative
and oppositional uses have been undertaken more often and with greater
historical importance than is typically recognized. In such instances, capital
and/or states have made recurrent attempts at coercion, containment, and
cooptation.24 There have also been repeated mistakes, misjudgments, and
miscues. Despite strong corporate backing, for example, the home market
for videodiscs did not initially materialize as expected.25
Within the wider context of uneven development, the success of specific
efforts to renew and extend the accumulation process is never foreordained.
Successfully harnessing new technologies of objectification to extend the
commodification process has typically required capital to negotiate with
the social experience of target audiences or groups of users. Many cultural
commodities, including, in the United States, urban daily newspapers, dime
novels, films, and rock music recordings, have been carefully and produc¬
tively studied with an eye to charting this complex negotiation. The social
positioning of cultural commodities has repeatedly been shown to involve
contingent overlaps and antagonistic refractions of shared experiences of
class, gender, and race.26
In the late twentieth century, the first cell—production by wage labor for
the market—grew to comprise an ever-increasing share of overall informa¬
tion and cultural production and exchange: “ [T] he last fifty years have seen
an acceleration in the decline of nonmarket-controlled creative work and
symbolic output.”27 Commodification has become strikingly visible in sec¬
tors wherein previously it played only a limited or indirect role. For all its
merits, Harry Braverman’s description of the “universal market” is unhelp¬
ful in this context because it implies that the dynamic, uneven processes of
market expansion are complete.28 Capitalism has been sustained by ceaseless
enlargement of markets for commodities, and this trend continues today in
information and culture.
The commodification process is not restricted to cases in which informa¬
tion is the ultimate product or service. We must also consider information’s
role as a capital or producer’s good. Here again, the historical importance of
ever- enhanced and enlarged technical means of information production can-
24 • the roots of informationalized capitalism

not be overemphasized. An increasingly intense corporate focus on “knowl¬

edge in production,” often expressed in jargon like “information resource
management,” or “knowledge management,” signifies that the prospective
contributions of information to profit levels have been routinely subject
to meticulous study by corporate planners and systems analysts.29 This is
true of companies producing noninformational goods and services such as
automobiles and toothpaste as well as more overtly “informational” busi¬
nesses. This scrutiny is widening and intensifying partly as a consequence of
the enormous continuing corporate investment in information technology.
Maps of the installed base of computing power in the United States in the
1980s reveal major aggregations not only in office-heavy cities like Washing¬
ton, D.C., and New York but also in industrial cities such as Chicago, Detroit,
and Philadelphia. Throughout this book, I emphasize that, often supported
by telecommunications infrastructures, information has become an increas¬
ingly significant factor of production across all economic sectors, including
agriculture and manufacturing as well as high-tech services.
The expanding and intensifying exploitation of information as a capital
good expresses and adds to the larger process of commodification. The cor¬
porate search for a metric with which to measure the value and output of
information production antedates the digital computer; it is nearly as old
as the application of the corporate form to business enterprise.30 Processes
of corporate rationalization and work reorganization, through a steadily
expanding series of applications beginning around a century ago, were based
on and generated new information for management about how produc¬
tion occurs.31 From a different direction, scientific and technological infor¬
mation grew more and more crucial to production processes and product
development.32 As described in chapter 1, these informational inputs, which
in an earlier era of capitalism tended to be produced by petty proprietors,
gravitated increasingly toward wage labor and market exchange. Where once
they labored as independent merchants of their own labor (or sometimes as
in-house employees), accountants, public-relations practitioners, bankers,
lawyers, and other information-service workers became employees of giant
capitalist firms.33
We may grasp additional attributes of the commodification process by
engaging one of its most significant contemporary sites: biotechnology. Genet¬
ics and cognate fields of biology have been progressively redefined over the
past half-century to accept a growing emphasis on information. “The decisive,
energising perception of biology since the Second World War, the key to its
strength and vigour,” writes Edward Yoxen,
 CULTURE, INFORMATION, AND COMMODIFICATION • 25

has been one that treats organisms as information-processing machines. They

begin as packets of information; they organise themselves through a process of
programmed self-assembly; they operate on their environment in a controlled
manner according to genetic instructions; they reproduce by condensing their
structure and functional coherence into a transmittable form—that carries a
message containing the instructions in a code that organisms can “read.” To
think of life in this vocabulary is basic to modern biology.34

For molecular biologists, Yoxen continues, “biology has become a kind of flat-
land in which the only activity is the processing and transmission of genetic
information.” Tersely put, “ [B] iotechnology is the projection on to an indus¬
trial scale of a new view of nature as programmed matter.”35 Innovations by
and around contemporary biotechnology constitute a domain of far-reaching
relevance for commodification.
The transition to information capitalism does not depend on or equate
with a narrow sector of media-based products. It is coextensive with a socio¬
economic metamorphosis of information across a great (and still-undeter¬
mined) range. As commodity relations are imposed on previously overlooked
spheres of production, new forms of genetic and biochemical information
acquire an unanticipated equivalence with other, more familiar genres. Agri¬
businesses, pharmaceutical giants, energy and chemical corporations, and
medical companies—all essentially concerned with diverse genetic and bio¬
chemical information streams—are in the midst of a continuing technologi¬
cal transformation of the means of information production that is every
bit as relevant to our understanding as the parallel trend toward “conver¬
gence” between television, computing, and telecommunications. The con¬
nections and overlaps between genres traditionally of interest to communi¬
cations research—television shows, newspaper reports, computerized data
streams—and genes now subject to unprecedented manipulation and control
via biotechnology compel consideration as parts of a single conceptual and
historical process.
Martin Kenney made this connection explicit twenty years ago: “Biotech¬
nology is an information-intensive technology and will very easily fit into
a restructured economy based on information. Indeed, biotechnology will
provide one of the new economy’s crucial underpinnings.”36 Other analysts,
including Jack R. Kloppenburg Jr. and Manuel Castells, have made this claim
more familiar; and Bronwyn Parry has insightfully and extensively analyzed
how biotechnology acts as a new information technology by virtue of “its abil¬
ity to decode and reprogram ... genetic and biochemical ‘information.’”37
Biotechnology is the creature of a full-blown corporate capitalism. Within
26 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

what Kenney calls the “university-industrial complex,” the social relations of

production are rapidly shifting toward market imperatives, while strictures
of proprietorship mandate a continuing effort to move away from notions
of science as a form of necessarily “public knowledge.”38
This characterization, however, remains incomplete without emphasizing
the profound tension between information and culture that again surfaces in
biotechnology discourse. Active technical and theoretical intervention into
biological information pathways resurrects an ancient usage of culture, in
the sense of cultivation, “the tending of natural growth” in crops and ani¬
mals.39 Yet this usage in biotechnology is rendered profoundly problematic.
What is “natural growth”? The phrase, like the passive “tending,” sounds
incongruous or naive in the context of aggressively invasive programs of
genetic recombination and new reproductive technologies. Biotechnology
thus raises the age-old boundary between nature and culture far above the
threshold of habitual response.
Contending groups and interests seek control over the direction and mean¬
ing of this portentous line of demarcation, but the pace and range of this
vector of information commodification are already impressive. Genetically
modified food first came to U.S. supermarkets in 1994; by 2005, 75 percent
of processed foods in the United States, including boxed cereals, other grain
products, frozen dinners, and cooking oils, contained some genetically modi¬
fied ingredients, according to the Grocery Manufacturers of America, and
nearly all products using corn or soy featured genetically modified elements.
The United States is home to about two-thirds of the world’s 200 million
acres planted with biotech crops.40 Of course, there are many other appli¬
cations in the pharmaceutical and medical industries. In and around these
emergent sites of private accumulation, not only has capital sought to rework
culture to further self-interested objectives, but others, opposed on varying
grounds to specific biotechnology applications, have tried to make the issues
amenable to political rather than purely proprietary determinations.
Biotechnology connects in other ways with more familiar domains of schol¬
arship in culture and information, for example, by allowing us to remember
that attention to agriculture and farmers informed influential early commu¬
nications research into the diffusion of innovations. Kloppenburg’s path¬
breaking study, First the Seed, may center on an unfamiliar site of informa¬
tion commodification—plant germ-plasm—but its documentation reveals
interesting and significant connections with better-known fields of commu¬
nication study.41 Intense international struggles commenced during the 1980s
 CULTURE, INFORMATION, AND COMMODIFICATION • 27

over the commodity status of the seed, the basic information-carrying unit of
agricultural production. Specifically, UN-affiliated agencies such as the Food
and Agriculture Organization became embroiled in strife over the terms of
trade between developed market economies and less-developed countries in
the global South. Giant transnational pharmaceutical and agricultural cor¬
porations demanded continued free access to plant germ-plasm located in
gene-rich equatorial zones, while at the same time insisting that international
laws of intellectual property be strengthened and harmonized to protect the
profits from the hybrid seeds and drugs they-sell back to these same regions.
This debate carries over into debates over public health and evinces a sugges¬
tive parallel with a controversy familiar to communication researchers over
the New International Information Order (NIIO).
The NIIO debate, discussed further in the next chapter, centered on the
unbalanced terms of transnational production and distribution of immedi¬
ately recognizable media genres: news, telefilms, sound recordings, and com¬
puter data flows. After years of effort by the United States, by the mid-1980s
the movement for an NIIO was defeated. But knowledge of the development
of a parallel struggle over plant germ-plasm allows us to inquire whether the
NIIO defeat signals a lost war or only a lost battle. Perhaps it constitutes a
preliminary phase of a more multifaceted, long-term conflict? May we not
entertain the possibility that, though its ostensible subject and organiza¬
tional context have shifted, the NIIO movement’s underlying concerns—the
systematically inequitable consequences attending capitalist exploitation of
information—have simply resurfaced in what is actually a related field? I do
not offer a conclusion concerning these issues; I have a different aim. The
newly inclusive concept of “information,” which now must be stretched to
cover bioinformatics databases, and its convergence with familiar “cultural”
genres such as television programs, offers a basis for analyzing unsuspected
historical linkages, which may carry theoretical as well as practical political
implications.
An example may be found in another apparent connection: between relent¬
less attempts by agribusiness to turn seeds into commodities and the repeated
historical success of media businesses at utilizing technologies of mechanical
reproduction to enlarge the commodity sphere.42 The crucial insight here
actually lies in the contrast between these patterns of exploitation. In conven¬
tional media fields—video, musical recordings, and computer software—the
attempt is to reproduce and distribute millions of copies of a standard text. In
biotechnology, however, the effort revolves around supplanting a “text” with
28 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

the inborn capacity to reproduce itself without human intervention—normal

seeds—with one that is sterile and thus cannot do so. This difference suggests
a theoretical point: mechanical reproduction per se should not be employed
as an analytical fulcrum because it is reproduction in the service of capital
accumulation that is crucial.
However portentous, posing the issue of commodification solely in con¬
temporary terms is to accept, at least implicitly, the postindustrialists’ claim
that the social discontinuities in which we are ostensibly enveloped can lay
claim only to a grotesquely brief history, beginning with the postwar rise
of digital microelectronics. The technological determinism underlying this
formulation is insupportable and comprises a point of considerable vul¬
nerability. Postindustrialism’s proponents and sympathizers have tacitly
acknowledged as much by making repeated efforts to tone down or mitigate
the theory’s overriding emphasis on the suddenness of the supposed con¬
temporary socioeconomic break. Lacking such a historical foundation, Bell
again provides a seemingly authoritative, but actually evasive, disclaimer:
“The postindustrial society is not a projection or extrapolation of existing
trends in Western society; it is a new principle of social-technical organiza¬
tion and ways of life.”43
Despite these inadequacies, no satisfactory historical formulation has been
reached. Even scholars who work with ideas of information commodifica¬
tion have tended to limit their studies almost exclusively to contemporary
(postwar) society. Understanding what is at stake in trying to specify the
historical character of the process therefore is difficult. If information com¬
modification can be shown to have an identifiable history, then the massive
discontinuity invoked by postindustrial theory collapses. More important,
it becomes possible to use knowledge of how, often in hitherto undetected
ways, information commodification has contributed to and become inter¬
connected with continuing processes of capitalist development. To work
toward this more encompassing historical revision, we need to ask why, how,
where, and when have wage labor and the market taken hold within informa¬
tion and cultural production as well as in agriculture and manufacturing?
If the goal is to integrate information fully into the history and theory of
capitalist development, moreover, then what sort of periodization scheme
will allow us to shed the most light on the multifaceted and uneven process
of commodification? The remainder of this chapter shows that attempts to
grapple with this hidden history are likely to engender substantial revisions
to received historiography.
 CULTURE, INFORMATION, AND COMMODIFICATION • 29

The Longer Revolution: Historical Origins of

Information Commodification
Received scholarship locates the origins of information and cultural com¬
modification in eighteenth-century England. This chronology emanates from
long-standing research traditions, repeatedly reaffirmed most influentially,
and proximately, in studies of authorship and copyright law. This dating will
not prove satisfactory. But this scholarship is of arresting interest in its own
right and opens vital entry points for consideration of basic conceptual and
periodization issues.
Studies focusing on the emergence of European copyright law and linking
its rise to changing conceptions of authorship often cite Michel Foucault as
an inspiration.44 They were no doubt also influenced by the rapidly increas¬
ing visibility of “intellectual property” and the policy conflicts around it.45 In
any case, the historical bond between author and work became freshly prob-
lematized. Jane Gaines summarizes this research by observing that originality
in the work—the basic prerequisite for extending legal protection—began
to be “guaranteed by the notion of the individual as subject”; copyright was
based on the author’s ostensible “singularity, his separateness from other
humans.”46 This shift had been dated, by Martha Woodmansee, to the mid
eighteenth century,4 when ascending romantic notions of authorship as
poetic genius began to offer what the legal scholar James Boyle terms “a
conceptual basis and a moral justification for intellectual property.”48 Mark
Rose details how copyright law could then bind together the newfound sub¬
jectivity of the author with the emergent objectivity of the literary work.49
This shift in the literary system harbored far-reaching implications. Sub¬
sequent practices of cultural production, often overtly collective rather than
individual, nonetheless were channeled repeatedly by their proprietors, espe¬
cially when they could rely on accepted systems of notation, into this legal
vehicle for the protection of individual private-property rights. Thus, as Boyle
emphasizes, “[T]he romantic vision of authorship continues to influence
public debate on issues of information—far beyond the traditional ambit
of intellectual property.”50 Jeanne T. Allen argues that at least some cultural
practices that were unable to lay claim to strong copyright protection met
with adverse consequences in the marketplace.51
In truth, however, the significance of this newfound chronological link
between copyright and altered conceptions of authorship, goes far beyond this.
Originating in and around the book trade, the legal right to private property in
30 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

information emerged first in England, where modern copyright statute dates

to 1710.52 Mark Rose has adeptly shown that issues raised but left unresolved
by the r7io act triggered a protracted literary property debate, which reached
a definitive culmination only in 1774.53 This periodization possesses a much
larger, if mostly implicit, importance: it appears to signify that author and
work came to interlock in an enduring system of institutions, legal forms, and
literary practices—the substrate of modern culture industry—at a formative
historical moment, the moment of industrial capitalism’s rise in England.54
This argument, which had already long since been made explicit, exhib¬
its considerable virtues. The fiction of individual authorship helped enable
the culture industry to grow beyond its modest beginnings on Grub Street.
Not books alone but, through an uneven progression that has consistently
enlarged their scope and significance, drawings, theatrical performances,
photographs and films, sound recordings, videos, and computer software,
to mention only some of the most prominent forms, came to bear the legal
impress of copyright. Private ownership rights were thereby fixed in particu¬
lar cultural commodities, not only helping capital to exact monopoly rents
from consumers but also to siphon surpluses from the wage earners and inde¬
pendent contractors whose collective labors produced these commodities.
Analogous historical arguments for patents,55 trademarks, and trade secrets
have not yet been merged in a full-scale economic history of intellectual
property, but work in exactly this direction is beginning to appear.56
The growing prominence of copyright over the last two centuries is incon¬
testable. This alone provides a salutary reminder that information and cul¬
tural commodification extends farther into the past than the postindustrialist
account allows. However, does the law of copyright, or even of intellectual
property in general, actually comprise the decisive, let alone the exclusive,
basis for commodification? Is today’s sprawling culture and information
industry essentially the result of a newly conducive legal or authorial regime?
Does a focus on the law and the author provide sufficient analytical room
for capital—for the publishers, film studios/distributors, television networks,
software firms, and biotechnology companies that control the means of cul¬
tural and informational production? What about the workers, whose skills
are engaged by these capitalists to create this unfolding range of goods and
services? To what remote corner does a formal fixation on law consign the
relations of cultural and informational production?57
One reason for questioning attempts to locate the origin of decisive change
in eighteenth-century English law is that capital accumulation in the book
trade had already ripened for over two centuries previous to passage of Eng-
 CULTURE, INFORMATION, AND COMMODIFICATION • 31

land s copyright law, generating for individual publishers estates rivaling

those of nearly any field of capitalist endeavor.58 The law is better seen as one
moment in a still unchronicled longer history, than as the essential vector,
or primary site, of transformation.
I am not asserting that law is merely an epiphenomenal superstructure.
“Intellectual property” law possesses a crucial function; absent these state sanc¬
tions, it would be far more difficult for capital to restrict the uses and users of
information and to expropriate surpluses from at least some groups of pri¬
mary producers. As Allen argues, “[T]he legal structure’s support for certain
entertainment commodities” over others has repeatedly proven significant for
their success or failure.59 Explaining the victory of the early U.S. film business
over its rivals in vaudeville and live theater, she poses the issues this way:

In the competition for business success, mass culture industries sought and
responded to legal decisions which determined what aspects of their property
could be controlled and defended and hence what pursuits might reward the
considerable financial investment required. Did one form of mass entertain¬
ment offer greater control? greater opportunity for monopoly protection?60

I step back from further consideration of these questions to return to peri¬

odization. A focus on relations of production in culture and information
rather than only on law allows us to ask, Should eighteenth-century England
be construed as the historical launchpad of the commodification process
with respect to culture and information?
Early and enduringly influential postwar studies explicitly lodged the rise
of characteristically modern genres in eighteenth-century England;61 they also
identified modern-sounding debates over the forms and meanings of these
concurrently changing cultural practices.62 In Raymond Williams’s phrase,
a “long revolution” unfolding in culture and communication—education,
drama, the press, and language—was related to transformations commencing
simultaneously in the English economy and polity: the Industrial Revolution
and the bourgeois democratic revolution.63 The practices and forms of culture
thus comprised for him a third profoundly formative and intertwined but
neglected dimension of secular change.
Stuart Hall later furnished this seemingly comprehensive sketch in an
attempt to specify a historical basis for the characteristic forms of bourgeois
cultural hegemony:

The modern forms of the media first appear decisively, though on a compara¬
tively minor scale as compared with their present density—in the eighteenth
century, with and alongside the transformation of England into an agrarian
32 • THE ROOTS OF I N FO R M AT IO N A LIZ E D CAPITALISM

capitalist society. Here, for the first time, the artistic product becomes a com¬
modity; artistic and literary work achieves its full realization as an exchange
value in the literary market; and the institutions of a culture rooted in market
relationships begin to appear—books, newspapers, and periodicals; booksellers
and circulating libraries; reviews and reviewing; journalists and hacks; bestsell¬
ers and potboilers. The first new “medium”—the novel, intimately connected
with the rise of the emergent bourgeois classes (cf. Watt, 1957)—appears in
this period. This transformation of the relations of culture and the means of
cultural production and consumption also provokes the first major rupture
in the problematic of “culture,” the first appearance of the modern “cultural
debate” (cf. Lowenthal, 1961).64

Raymond Williams was equally certain of the eighteenth-century chronology

in a discussion of the drama: “The eighteenth-century middle class broke up
the old forms, which rested on meanings and interests that had decayed. Alter¬
native forms were created, but were relatively isolated or temporary in their
success. Only much later, when the class had built its major social institutions,
was there an effective turning towards the making of a distinctive cultural
tradition, at all levels of seriousness.”65 This received view was powerful in
part because it was positioned as a necessary supplement to an already well-
embedded historical conception. Belief was widespread that a “dual revolu¬
tion” erupting in the late eighteenth-century economy and polity rendered
Europe, as represented first and foremost by England, a prototype or paradigm
of the modern process of development.66 Industrialization and democracy,
in this view, comprised the established twin pillars of modern society. The
cultural realm, in revisions offered by critics such as Williams, constituted a
third—necessary, but in this sense supplementary. A sustained emphasis on
the eighteenth century seemed only to strengthen this formulation.
If we rely on this periodization, capitalism itself could appear, with seem¬
ing rectitude, mainly through the ubiquitous and well-established figure of
the ascending middle class, the hegemonic bourgeoisie, or, as for Ian Watt,
the growing primacy of economic individualism. Additionally sensitized by
their sometime awareness of neighboring France, critics endeavored with
greater or lesser explicitness to frame English cultural practice within the
terms of a presumed governing conflict between this emergent social class
and a sharply differentiated, declining aristocracy.
There can be no question that this ensconced critical tradition generated
potent insights. And it has been extended to a broadening array of eighteenth-
century cultural practices, including sports, commercial amusements, and
consumer goods.67 Unquestionably, eighteenth-century England witnessed
 CULTURE, INFORMATION, AND COMMODIFICATION • 33

a significant reorganization and growth of capitalist cultural production.

Yet the analytical and historical roots of this efflorescence are insecure. Its
chronological placement requires reexamination, as does its portrayal of
the class dynamics of historical change around information and culture and
more generally.
The metamorphosis of England into an “agrarian capitalist” society—to
which Hall rightly refers in attempting to contextualize the emergence of
culture industry—began not (as he states) during the eighteenth century
but, according to an influential body of historical scholarship, much earlier.68
It was from the fifteenth to the eighteenth centuries that the crucial triadic
relationship between landless wage laborer, capitalist tenant, and commercial
landlord powered its way into English agriculture. During the eighteenth
century the long transition was completed, as agrarian capitalism attained a
triumphal maturity.69 A thoroughly capitalist foundation actually preceded
subsequent capitalist industrialization.70 Presiding over the development of
English agrarian capitalism, therefore, was not an emerging metropolitan
bourgeoisie but a fluid social amalgam of improving landlords and propri¬
etors, whose membership drew on aristocratic as well as bourgeois elements.
The pivotal social relationship was not the storied contest between aristocracy
and bourgeoisie but that between agrarian capitalist landlords and improv¬
ers, on one side, and exploited agricultural wage labor, on the other side.
This historiographic shift has yet to be integrated into the received account
of English cultural development.71 The received account’s effort, often laud¬
able, was again to trace the historical sources of hegemony: how culture
industries built outward in their effects toward other social groups, from
their initial foundation within the subjectivity of the eighteenth-century
metropolitan bourgeoisie.72 The reality of capitalist hegemony is not at issue;
but its historical basis, social origins, and developmental dynamic must be
opened to question. Are we not foreclosed from any simple equation between
commodification across its range and the class interests, cultural prefer¬
ences, or consciousness of an already formed metropolitan middle class?
New emphasis must be placed and fresh evidence gathered on the neglected
social relations of production, through which capital’s own prior develop¬
ment occurred.
Adherents of the standard view proved no more attentive to the specific
conditions of cultural practice than to the overall social relations of produc¬
tion they helped constitute. They typically emphasized form and genre. Hall,
for example, is quick to generalize to the artistic product, but his examples
of a culture rooted in market relationships connect the commodification
34 • THE roots of informationauzed capitalism

process exclusively with literary work and the literary market, and even with
specific genres, the novel and journalism. Both these genres, far from coin¬
cidentally, tended at this stage to be associated by scholars overwhelmingly
with the middle class. All this resulted in serious errors of omission.
Vast reservoirs of culture and information are tacitly marginalized through
a reliance on conventional literary notions of genre: cadastral maps, scien¬
tific illustrations, popular magic, and government records. Overtly collective
practices of performance likewise tend to be neglected. Had Hall chosen, for
example, to analyze drama—the subject of an especially nuanced chapter
by Williams73—his depiction of the origins of modern media would have
required significant revision. By the Elizabethan era (the late sixteenth cen¬
tury), with the arrival of permanent performance spaces (theaters), Laura
Taub shows that capitalist commodity relations began to penetrate and trans¬
form the drama.74 If we step back from the novel and foreground publish¬
ing as a whole, we find that it too was organized on decisively expansionary
capitalist lines from its inception in late fifteenth-century England and else¬
where.75 Important cultural forms were not simply in the wings, awaiting
the eighteenth-century triumph of the urban middle class; centuries earlier,
they had already begun to forge new circuits for capitalist commodity pro¬
duction. In the case of drama, as Taub relates, they may even be considered
spearheads of capitalist development.76 Through this neglect, therefore, the
received view truncates and miscasts the history of culture and information
and of capitalism itself.
Williams came to acknowledge that he had previously underestimated
the role of news organs in the revolutionary era of the seventeenth century.
In 1965, he shifted his periodization somewhat, but still hedged, presum¬
ably with a view to the weight of accepted historical evidence: “The decisive
social origin belongs there, but, as with so many other initiatives of that time,
development was thwarted by the whole political and economic situation,
and something like a new beginning had later to be made.”77 Later research
raises additional questions about whether such genres as the newspaper or the
novel—long understood as congealed expressions of instrumental need and
class subjectivity among a self-determining bourgeoisie—may themselves
have sprung from earlier and more multifaceted and conflicted origins.78
Cultural and informational commodification commenced not after but
within the acute social struggles marking the transition to capitalism. It trans¬
pired not as a benchmark of an already secure mode of production, as the
eighteenth-century periodization implies, but within the context of turbulent
and often ambiguous and overlapping social class relations, accompanying
 CULTURE, INFORMATION, AND COMMODIFICATION • 35

the earlier ascent of capitalist commodity production within English agricul¬

ture. The class origins and affiliations and the consequences of commodified
cultural and informational practices were almost certainly more complex and
more contested than the customary account suggests.79
The established association of commodified culture and information
production with capitalism’s emergence has been placed in question. If we
accept the received view, we must try to explain why the culture industry
lagged behind the emergence of capitalism by hundreds of years. If we reject
the standard view, other evidence must be adduced that will link commodi¬
fication of cultural production more fully to that long moment of transition
and the social relations that circumscribed and animated it. Commodifica¬
tion must be situated in terms of the dominant relationship of exploitation
within contemporary English society: that between agrarian capitalists and
landless wage laborers. We should expect this paramount social relationship
to be expressed, refracted, and referenced in multiple ways and at a range
of sites. The work of making these connections, however, largely remains
to be done.
I have criticized postindustrial theoryTor substituting a misconceived
focus on the transcendence of industrial society for what in fact has been a
historically continuing process of commodification. Now I will add that the
received stress on industrialism is doubly flawed because it also misconstrues
the origins of the phenomenon it purports to study. The commodification
of culture and information has been a continuing, if uneven and conflicted,
process throughout the duration of capitalist development. With this insight,
it should be possible to glimpse in bold relief how the commodification of
culture and information accelerated during our own historical epoch.
 Accelerated
Commodification

Though perhaps not the first such historical moment, a protracted

episode of accelerated information commodification commenced around
1970. We have long known that the key impetus to this rapid enlargement
of wage and market relations came from a systemic crisis.1 Throughout the
United States and, to a varying extent, the rebuilt economies of Europe and
Japan, surplus productive capacity and resurgent competition overtook a
series of often unionized manufacturing industries, from steel and auto¬
mobiles to TV sets, chemicals, and textiles.2 The U.S. share of global steel
production declined from nearly 50 percent in 1950 to 20 percent in 1970,
part of a continuing relative decline in the U.S. share of global manufactur¬
ing output.3 A profit slowdown and creeping stagnation were the portentous
results.
Recognizing a need to develop new profit sites, corporate executives and
politicians mobilized to craft a response. This was not the first time that
overproduction and competition engendered efforts by elites to rejuvenate
the market system, but the pivotal role accorded to information and com¬
munications as a solution was unprecedented.
As a result of its hothouse growth throughout the early postwar era, by
around 1970, the dynamism and the mounting economic and strategic impor¬
tance of this sector were increasingly acknowledged. Deliberating in 1970-
71, the Senior Executives Council of the Conference Board—a leading U.S.
business policy organization—concluded, “The information ‘industry’ in its
broadest sense could soon become the leading edge of many economies.... It
is now a matter of highest priority that we begin to perceive and conceptual-
 ACCELERATED COMMODIFICATION • 37

ize information technologies, industries, and resources in comprehensive, or

what might be called strategic, terms.”4 A congressional committee in 1980
reiterated what had become common wisdom, declaring that, in the context
of an unabating economic slump, “computers, telecommunications, and the
services which grow out of or depend on those technologies ... are the criti¬
cal industries for continued economic growth.”5
What special features did communications and information possess, how¬
ever, that qualified them for the task of lifting the market system out of its
lethargy? If the need was to break the slide intp stagnation by identifying fresh
fields of market development, then the question becomes: How could infor¬
mation and communications be reorganized to establish a new wellspring
for the accumulation process by reviving profitable corporate growth?

Undercutting Demands for a New International

Information Order

As these questions were fully engaged, elites concurrently had to grapple with
a related problem: an international political challenge to the existing, already
skewed, arrangements for global information provision.
Led by India and Indonesia, more than a score of newly independent
nations in Asia and Africa joined together at Bandung, Indonesia, in 1955
to promote “world peace and cooperation,” to consider “problems affect¬
ing national sovereignty and of racialism and colonialism,” and to develop
forms of cooperation in their common interests.6 Subsequently joined by
dozens of other poor nations, including many Latin American countries,
this “Third World” bloc began to press for basic changes in the structure of
the international political economy. During the 1970s, it fed into the Non-
Aligned Movement (NAM)—so called because members tried to create
space for national development between the United States, on the one side,
and the Soviet Union,on the other side—and the NAM’s reform agenda
assumed mounting visibility and importance. In this wider context, the
NAM (often supported by the Soviet Union) fastened increasingly on com¬
munications, culture, and information as a vital problem. A New Interna¬
tional Information Order (NIIO) was needed, NAM countries began to insist
in the United Nations Educational, Scientific, and Cultural Organization
(UNESCO) and other forums, to help remedy dominative structures and
unequal relationships. Absent fundamental changes in the system of global
information provision, the chances of attaining the NAM’s preeminent
goal—a New International Economic Order—were lessened dramatically.
38 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

An array of inequities was ultimately identified: mass distribution for

global audiences of news full of false or distorted images of poor nations and
peoples; the virtual monopoly over the electromagnetic spectrum exercised
by the developed market economies; the imposition of copyright charges on
publications entering Third World countries; the lack of anything approach¬
ing inclusive communications infrastructures and services; the undermining
of indigenous audiovisual production through the dumping of U.S. televi¬
sion programs and films; systematic violation of sovereignty via emerging
supranational communications systems, principally satellites, and networked
transborder data flows controlled by foreign states and supranational cor¬
porations; and, decisively, cultivation through the introduction of corpo¬
rate-commercial media systems of consumerism in place of development
priorities that would improve access to education, food, and medical care.7
Without profound changes in international communications and informa¬
tion to remedy these faults, NAM countries insisted that no path toward
genuine political independence and economic development could be cut.
This confrontation sharpened during the first half of the 1970s.8 To sim¬
plify a complex history, a key point in the Non-Aligned countries’ plat¬
form—articulated by Mustapha Masmoudi, the information minister of
Tunisia—was that “ [i] nformation must be understood as a social good and
cultural product, and not as a material commodity.”9 The U.S. policy stance
was directly contradictory: ‘Tn international commerce, information and
communication are commodities, whose value is rising as the recognition
of their importance grows.”10
Were the demand for an NIIO to prevail, the result would be to divert and
potentially to block attempts by the United States, then unquestionably the
world’s paramount economic, military, political, and cultural power, to recast
information into a general foundation for profit-seeking market expansion.
By around 1980, as they became less preoccupied with Vietnam and Water¬
gate and increasingly cognizant of the need to combat stagnation, U.S. elites
moved from defensiveness to confrontation. President Reagan, sychroniz-
ing this offensive with Britain, pulled the United States out of UNESCO at
the end of 1984. Debt crises in many countries and structural adjustment
programs imposed by the International Monetary Fund on dozens of poor
nations throughout the 1980s and 1990s granted new leverage 'to U.S. lead¬
ers. Dramatic geopolitical changes bequeathed windfall opportunities to
exert further pressure and to extract additional concessions. The abrupt
fall of Soviet Socialism and the more gradual reintegration in the transna¬
tional market system of Communist China and nationalist India stripped
 ACCELERATED COMMODIFICATION • 39

away critical support for the NAM countries’ attempt to pursue alternative
developmental directions. In short, the NIIO movement was defeated, and
the shifting framework of global power relations became conducive to a
sustained counterthrust by the leaders of the developed market economies
(DMEs)—at the center of which was a drive to broaden and accelerate infor¬
mation commodification.
Before turning to inspect leading features of this multipronged strategy,
two basic points merit emphasis. First, policy moves to cultivate informa¬
tion’s profit potential in hardware, software, and services were opportunistic,
not executed according to some preconceived blueprint or long-range master
plan. Second, however, the corporate focus on information was broad-based
from the beginning, encompassing more than the industry sector that was
burgeoning around the supply of communications and information. The
power of the corporate state’s push into information and its attempts to use
information as a new basis for profitable growth expressed a general impera¬
tive. Information organization, processing, storage, packaging, and distri¬
bution comprised ubiquitous corporate functions, and companies engaged
in information production and use spanned every economic sector, declin¬
ing and emergent, from agriculture and mining and manufacturing to ser¬
vices.11

Government’s Foundational Role

In the supply of innovative information and communication technologies

(ICTs), as opinion leaders in other developed countries perceived with alarm,12
throughout the early postwar decades U.S. big business built up a command¬
ing comparative advantage. Continuing torrents of government research and
development funding for military contractors underpinned virtually all U.S.
corporate ICT development.13 Technological innovations by the military-
industrial complex during and after World War II were incorporated into a
succession of systems for capturing, storing, sorting, sharing, and measuring
information, increasingly in real time.14 Computer hardware and software,
satellites, packet-switching, and online information-retrieval services (such
as DIALOG, Lexis-Nexis, Orbit, and BRS [Bibliographic Retrieval Services])
all originated largely in military and NASA space contracts.15
As the class power of an ascending fraction of capital increased, the corporate
chieftains of informationalized capitalism pressed new demands on the state,
and the government responded by documenting, elevating, and projecting
these policy preferences domestically and internationally. Widely hailed as a
40 • THE ROOTS OF I N FO R M AT I 0 N A LIZ E D CAPITALISM

return to the supposed natural logic of the free market, therefore, accelerated
commodification was anchored for strategic purposes by the state. Govern¬
ment intervention was pivotal and sustained: not only in procuring continued
research and development funding but also for telecommunications industry
liberalization; privatization of what had been public information; strengthen¬
ing legal rights to private property in information; and shifting global trade
and investment rules to favor services. Each of these initiatives contributed
importantly to a sweeping process of accelerated commodification.

A New Capital-Logic for a Modernized

Information Infrastructure
Let us look first at network infrastructures, which had to be continually built
out, upgraded, and modernized for informationalized capitalism to prog¬
ress.16 On what institutional basis did this metamorphosis proceed?
Changes in and around computer networks unfolded as part of a multifac¬
eted transformation of the ground rules that structure telecommunications
and electronic media systems. Generating massively enlarged informational
inputs and outputs alongside an enlarged need for coordinating complex
business processes across dozens of locations, big corporations’ active inte¬
gration of ICTs to support ever extending production chains was the predi¬
cate of supply-side market growth by vendors like IBM, MCI, and Cisco.17
Corporate expenditures on network hardware, software, and personnel cor¬
respondingly rocketed,18 from Citicorp’s ATM networks to Wal-Mart’s inven¬
tory database19 to Nestle’s toll-free hotlines, which were installed in 1992 to
compete with rival Procter and Gamble and by 2003 generated 880,000 calls
a year.20 As ICTs grew to become the largest category of corporate capital
investment—depending on how they are tallied, between 35 and 60 percent
of the U.S. total by the early 2000s—surging corporate ICT outlays began
to drive overall economic growth.21
Cascading corporate ICT investment also engendered an incremental but
ultimately radical overhaul of the structure and policy of telecommunica¬
tions. In chapter 5,1 scrutinize the contradictory nature of this new trend;
here, I simply survey its aim and general contours. Beginning jn the 1970s,
U.S. policy makers targeted the arrangements for controlling global tele¬
communications infrastructures. “Services-related industries are informa¬
tion intensive,” noted a Reagan-era U.S. report, “and thus depend heavily
on advanced communications and computer systems to provide necessary
access to and transfer of information. The strong tie between the information
 ACCELERATED COMMODIFICATION • 41

and telecommunications sectors extends beyond the domestic sphere ... to

international markets as well.”22 To open a vast new field to capital, to advance
and enlarge markets for new information technology hardware, software,
and services, and to develop and extend networked business processes, the
United States worked to transform global telecommunications.
Elites worldwide increasingly shared these goals. Policy makers throughout
the developed market economies of Western Europe and Japan—which had
long organized and operated their telecommunications systems as govern¬
ment ministries of posts, telephones, and telegraphs—were cajoled, and some
arms were twisted; but they proved ready and willing to embrace privatiza¬
tion and liberalized market entry as prerequisites of economic “competitive¬
ness.” Throughout the global South, more aggressive tactics were employed.
After decades of indifference, DME policy institutions now elevated to the
status of orthodoxy the tenet that national economic development was being
stifled by inadequate telecommunications. The World Bank, the Interna¬
tional Monetary Fund, the World Trade Organization, alongside the U.S.
Trade Representative, the Federal Communications Commission, and other
apostles of neoliberalism, used multiple levers to pry open global networking
to corporate-commercial investment.
During the 1980s and especially the 1990s, the largest and fastest sectoral
reorganization of productive assets in world business history took place,
loosely synchronized to make-over what had been a (typically inadequate)
public service into a corporate-commercial function. Privatizations by the
dozen were undertaken, with the U.S. service sector—banks, law firms,
accounting companies, and public relations agents—capturing a dispropor¬
tionate fraction of the fees dispensed for managing the process.23 Immense
sums of capital were mobilized and directed toward this fresh investment
outlet. Sectoral stagnation gave way to astonishingly rapid network build¬
outs around advanced digital technologies, including, by the mid-1990s,
the Internet. By 1997-99, fully half of global telecom investment was being
absorbed by “developing and transition” countries—that is, countries not
included in the Organization for Economic Cooperation and Development
(OECD).24 By 2002, 49 percent of the world’s wireless and wireline con¬
nections were located in the less-developed countries (still a dispropor¬
tionately low figure, because they possess nearly three-quarters of world
population).25 Investments in capacious transoceanic systems were a vital
complement, as they permitted transnational corporations to reach deeper
into newly networked national economies in search of markets, natural
resources, and cheap labor.
42 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

Contemporary “globalization” stemmed in no small part from the inno¬

vation of networked business functions, which underlay lengthening trans¬
national supply chains that took profit-maximizing advantage of low-wage
labor pools. The continuing relocation of manufacturing to the global South,
especially to China, was the earth-shaking result; between 1980 and 2000, as
corporations developed networked global supply chains, their direct invest¬
ments in plants located in less-developed countries helped push the share of
world manufacturing value added in less-developed countries from 14 to 24
percent.26 Enhanced transnational corporate profitability was the object—
and, of late, the result. U.S. transnationals, for example, took in $315 billion
of profits from overseas operations in 2004, up 26 percent from 2003.27 The
movement of manufacturing to the global South has showed little sign of
slowing; in 2005 transnational corporations continued to look to China,
India, Latin America, Eastern Europe, and the Middle East to build markets,
and General Electric expected as much as 60 percent of its revenue growth
over the decade beginning in 2005 to come from less-developed countries—
up from 20 percent in the previous decade.28 Foreign direct investment into
selected poor countries surged.29
The gale of creative destruction that blew through telecommunications
comprised only one aspect of a wider metamorphosis. U.S. policy makers,
according to a Reagan-era report, would “strongly oppose any actions that
would interfere with the ability of producers and users to make optimum use
of information as a productive resource.”30 In this formulation, “producers
and users” means corporate—above all, transnational corporate—producers
and users of information. Turning next to the supply of information soft¬
ware and services, let us revisit the question: How was it that informational
activities offered a singular potential for profit making, and how has this
potential been realized?

Expropriation of Nonproprietary Information

The major route to profitability was—as the case of telecommunications

shows—by annexing existing areas of social investment, clawing them into
the corporate-commercial domain, and, concurrently, transforming their
character. This historical movement was nothing less than a sweeping and
multifaceted process of expropriation.
The huge scale on which the world’s information resources already were
being cultivated is typically forgotten. Institutions for information provision,
however, had been widely formalized, built up at collective expense, and put
 ACCELERATED COMMODIFICATION • 43

in motion by skilled social labor. Schools and colleges, government agencies,

post offices, museums, and libraries collectively constituted one axis of this
system. Family and local community-based stocks of indigenous, vernacular,
or traditional knowledge about farming, healing, and learning constituted a
second axis throughout the global South. These information programs and
traditions, taken together, existed as an enormous collective reserve of not-
for-profit activities, and they played indispensable roles within their home
cultures.31
If parts of this assemblage could be reorganized along proprietary lines,
then corporate capital could expand into a largely untapped but often highly
developed realm of sociocultural labor. Elite programs of political-economic
reconstruction thus turned increasingly around the objective of enclosing the
immensity of global communications and information provision, a project
that—though it remains unfinished—should be seen as a species of what
David Harvey calls “accumulation by dispossession,” the paradigm for which
was set via enclosure of common lands in England during the epochal tran¬
sition to agrarian capitalism hundreds of years ago.32
Accumulation by dispossession for informationalized capitalism dates
back at least to the First World War, as Michael Perelman points out.33 Dur¬
ing the war, several thousand industrial patents held by German firms—
notably, in the chemical industry, which German capital then dominated—
were expropriated by the U.S. state and turned over to burgeoning U.S.
rivals (via the American Chemical Society).34 The formation of the Radio
Corporation of America as a high-tech “chosen instrument” of U.S. state
policy, similarly, was based on the takeover of German patents and British
radio-system assets in the United States.35 The Second World War witnessed
the development of a more systematic approach, relying upon what one
participant called “vacuum-cleaner methods.” Beginning immediately after
Germany’s defeat in 1945, as authorized by executive orders by President
Truman, vast quantities of proprietary German industrial, technical, and
scientific information were expropriated—and hundreds of German scien¬
tists brought to the United States—by U.S. occupational authorities working
hand in glove with representatives of large, high-tech U.S. companies.36 The
overall value of this booty has been estimated by the historian John Gimbel
at around ten billion in 1945 dollars—an immense sum.37
After around 1970, original accumulation for informationalized capital¬
ism was pursued in the increasingly encompassing context of neoliberalism:
through systematic preferment of corporate commercial interests, especially
over earlier state programs for social welfare. Funding and service cutbacks
44 • THE roots of informationalized capitalism

were mandated for public-sector institutions such as schools and libraries,

while privatization of not-for-profit service providers and widespread out¬
sourcing bolstered corporate capital. Year after year, government informa¬
tion programs were raided and shut down by would-be private suppliers.38
The U.S. Postal Service, which attempted to develop a form of electronic
mail and to offer it within a more-encompassing system of public provi¬
sion, was preempted as corporate carriers targeted emerging markets for
electronic communications.39 Schools and universities were caught up in a
complex and unfinished commodification process, which undercut the mech¬
anisms for providing this public good; symptomatically, by the early 2000s,
more students were enrolled at the University of Phoenix, a for-profit edu¬
cation provider, than at any other U.S. institution.40 Museums and archives
acquiesced to mushrooming corporate sponsorships and direct marketing
initiatives—or sometimes simply auctioned off pieces of their collections to
private collectors, such as the Wal-Mart heiress who was the high bidder for
an Asher B. Durand painting sold by the New York Public Library.41 The U.S.
Government Printing Office’s long-standing and hard-won role in producing
and distributing government documents, already eroded by prior campaigns
against it, came under renewed attack. The executive branch wanted the GPO
to adopt a policy of permitting individual departments and agencies to let
contracts to commercial bidders—a policy that would return the nation to
the crazy-quilt of often corrupt practices that prevailed before the U.S. Civil
War, to which the GPO was the historical solution!42 Libraries experienced
repeated incursions by for-profit rivals, who try to take advantage of them
as a captive market.43 Scientific and technical journals were acquired from
professional societies or freshly established by information conglomerates
such as Reed-Elsevier, companies that then sabotaged the practice of public
science by imposing exhorbitant charges on libraries and other subscribers.
Efforts to confer windfall profits on private satellite companies by doling
out government contracts for the space imagery they generated commenced
during the 1970s and continued intermittently thereafter.44
These initiatives represent a consistent attempt to discredit, to attack as ille¬
gitimate, the very principle of nonproprietary information provision. More
than twenty-five years ago, the director of what was then called the Informa¬
tion Industry Association made the startling—but deeply revealing—asser¬
tion that libraries had imposed “an iron curtain of free information” over the
land.45 Albeit often inadequately, the existing system still demonstrated the
feasibility of attempting to supply society’s information needs as collective
goods offered on public-service lines. For commodification to proceed, the
 ACCELERATED COMMODIFICATION • 45

principle of social provision had to be supplanted—albeit, in practice, only

where profitable—by the idea that commodity exchange should dominate
in the construction of new consumer and business information markets.
When a government information function or service was charged with
“competing with the private sector,” this was characteristically because cor¬
porate-commercial suppliers had newly decided to target the function for
profit making. The decision to privatize what had been built up and paid
for as public information might be made by an affiliate of one of the trade
associations that serve the corporate informatjon business—the Software and
Information Industry of America, the Business Software Alliance—or simply
by an individual corporation. A proceeding was then undertaken to determine
whether unfair competition actually existed, in which corporate representa¬
tives had a strong say while the larger public was kept almost entirely in the
dark; in some cases, public opposition to a corporate takeover was simply
ignored. Once dissent was preempted or finessed, the government service
was folded, sometimes by handing it over to its newfound corporate rival.
In these diverse contexts, not only products or services or even whole
organizations but social labor was commodified. As capital took over and
redirected this previously uncommodified social labor, a further effect was
to weaken and destabilize the public sphere. As Frank Webster specifies, not
principles of social well-being or democratic rights but “market criteria,
i.e., whether something makes a profit or loss, are the primary factors in
deciding what, if anything, is made available.”46 This was not simply a shift
in organizational practice, therefore, but an expropriation animated by a
basic transformation of priorities. This entire process was then bolstered
and ratified through an equally radical transformation of law.

Extending and Enlarging Private-Property Rights

in Information
Laws of copyright, patent, and trademark were presented by state authori¬
ties as entirely benevolent. In actuality, however, their function is far from
innocuous. As Michael Perelman and others have argued, it is to permit
business to assert legal forms of monopoly power.47 Seventy years ago, this
function was viewed with considerable mistrust and antagonism; patents still
were widely viewed as a privilege granted to inventors by the commonwealth
with the expectation that this limited monopoly grant will generate recipro¬
cal improvements for society as a whole. As an official government report
emphasized in 1941, “c[T]he patent derived its value from the contribution
46 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

which the invention made to the general welfare ... privilege was the instru¬
ment of policy.’”48 Because unworked and opportunistically licensed corpo¬
rate patents were widely seen as having contributed to the Great Depression,
reformers sought to break the hold exercised by major corporations over
them. At least some restraints were imposed. It is profoundly ironic that the
rise of informationalized capitalism was predicated on the New Deal welfare
state’s nonproprietary patent-licensing policies, which among other things
ensured that the transistor, a key building block of microelectronics and
ultimately of the Internet, was free for all to use.
In contrast, during the 1980s and 1990s corporations advanced increas¬
ingly systematic claims to what they now succeeded in relabeling “intellectual-
property rights.” These “rights” were then strengthened and generalized spa¬
tially, to cover the earth, and socioculturally, to confer additional corporate
control over an expanding array of products and labor processes.
Again, political intervention by states was required. A U.S. trade diplomat
conceded that, as late as the 1980s, “few of the world’s developing countries
even had intellectual property laws.”49 To address this perceived deficit, the
U.S. government and corporate leaders mobilized, to shift an arcane legal
field to the forefront of global economic policy making.50 The world then wit¬
nessed “the greatest expansion ever in the international scope of intellectual
property rights,” as, during the 1990s, “dozens of countries strengthened their
intellectual property laws and regulations (often under pressure from the
United States).”51 Susan K. Sell relates that the global regime that was estab¬
lished to legally constitute private property in information (mostly via the
General Agreement on Tariffs and Trade and its successor, the World Trade
Organization) was not the result of mutually sought multilateral agreement
but of activism originating with a mere handful of determined executives
representing pharmaceutical, entertainment, and software companies.52 But
the range of corporate beneficiaries is encompassing.
Intellectual-property laws stake out and seek to enforce artificial informa¬
tion scarcities; they constitute not defensive but preemptive claims. Copy¬
rights afford corporate owners monopoly power for a span of many decades
over an ever increasing list of cultural properties; a onetime president of
Viacom, a top multimedia conglomerate possessing thousands of copyrights,
boasted that “‘Viacom is fundamentally a software and copyright-driven
company.’”1'3 Trademarks brand consumer goods and services with propri¬
etary insignias, hoping to play on consumers’ brand loyalties to generate
outsized corporate profits especially coveted during periods of stagnation;
Time Warner has registered two thousand trademarks connected to licensed
 ACCELERATED COMMODIFICATION • 47

merchandising around the Harry Potter brand.54 Corporate trademark own¬

ers achieved an especially noteworthy success when, at the expense of non¬
proprietary interests and concerns, they were able to remake the Internet
domain-name process into a trademark owner-friendly function.55 Pat¬
ents grant to their corporate holders a third species of monopoly power,
deployed far more extensively—and unevenly—than would have been true
had they been used only for the “useful” inventions of a disinterested sci¬
ence.56 Corporations producing everything from seeds to television shows,
from sneakers to networking software, have joined a pan-corporate scramble
to patent, copyright, or trademark anything in sight.
In 2001, the U.S. issued around 160,000 patents; Brazil issued around
3,500." By comparison, in 2001, IBM (the U.S. patent leader) obtained 3,411
U.S. patents—nearly ten times as many as were issued to people in Arab
countries during the two decade interval 1980-2000 (a total of 370 industrial
patents).58 The United States and other rich industrialized nations hold 97
percent of worldwide patents.59 Some 80 percent of the world’s research
and development and a similar share of its scientific publications come
from the developed nations.60 The newly widened forms of privilege and
power that underlay these disparities have produced what economists call
“comparative advantage,” but this comparative advantage must be seen as
a systematic political-economic achievement.
Once more, this constitutes active expropriation: Efforts to cement pri¬
vate-property rights in information are essential to realizing profit from
the new commodities. Editorially attacking the European Commission’s
ongoing investigation of Microsoft’s market power (in the aftermath of the
Bush administration’s sellout settlement of an antitrust case against the soft¬
ware giant), the Wall Street Journal supplied a sense of the hard edge of U.S.
policy on this vital issue: “Somehow the U.S. government has to draw a line
in the sand here. Intellectual property and services are the growth engine of
the modern economy, of which Microsoft is a crown jewel.”61 Strengthened
intellectual-property rights continue to function as a prime objective of big
business as a whole. As long as they are seen as contributing to accelerated
commodification, however, policy actions tend to be framed as if they are
occurring in some neutral technocratic space, beyond the play of corporate
and state power. As I write, for example, news reports observe that India,
often an opposing voice in debates over private property in information,
has altered its national patent laws to allow greater proprietary control by
corporations as a condition of entry into the World Trade Organization.62
The profits for legally constituted private property in information are
48 • THE ROOTS OF I N FO R M AT I O N A LIZ E D CAPITALISM

high. Sales of drugs developed from natural compounds sourced mostly in

less-developed countries, for example, recoup to pharmaceutical companies a
murderous $75-150 billion annually.63 Over half a century, between 1950 and
2002, the profitability of the U.S. brand-name pharmaceutical industry has
tended to exceed the average for all industries by a large margin; between 1998
and 2002—admittedly, a high point—its average net earnings as a percentage
of sales was about 16.8 percent, compared to 5.6 percent for all industries.64
However, via inflated prices, patents, copyrights, and trademarks extract a
variable and indeterminate, but assuredly huge, surplus going straight to the
bottom line of companies representing every sector of the economy.

* * *

By these means, capital was freed to devise accumulation strategies for appli¬
cation across a much-widened domain. This achievement did not unfold,
however, as a straight-line reflex of capital’s strength; on the contrary, it
originated in the corporate state’s mobilization to address capital’s growing
economic vulnerability. As it took hold, moreover, accelerated commodifica¬
tion has fostered instabilities and contradictions as well as profits.

Information and the Crisis

In 1984, Herbert I. Schiller observed, “The likelihood of achieving a stable world

system—the prerequisite for the successful operation of an information-based
global order under transnational corporate direction—recedes measurably
with each initiative in the construction of that order.”65 A brief inventory of
relevant recent trends confirms the prescience of this forecast.
One crucial change was that the world political economy became increas¬
ingly multipolar, in the lead-edge area of information and communications
as well as in more traditional fields, notably, manufacturing. Capital’s inter¬
national embrace of accelerated commodification may have aided prof¬
its, therefore, but it did not restabilize U.S. dominance. Instead, it led to
heightened intercapitalist competition. Formidable transnational suppliers
took root in Europe (Nokia, SAP, Telefonica, Reea-Elsevier), Japan (Fujitsu,
NEC, Hitachi, Matsushita, Sony, DoCoMo) and—as we will see later in this
book—also in some less-favored areas. Non-U.S. capital even acquired the
mantle of leadership in selected information and communications technol¬
ogy markets. To the surprise and chagrin of U.S. policymakers, for example,
in 2002 Japan’s NEC claimed momentary technological supremacy in super¬
computing.66 Nokia had already overpowered Motorola in global sales of
 ACCELERATED COMMODIFICATION • 49

cell phones. Such contests continued. In 2005, “in a direct challenge to rival
U.S. satellite manufactures,” Europe’s top satellite makers, EADS and Alcatel,
joined with government space agencies, hoping “to create a new generation
of high-powered spacecraft featuring the latest onboard signal-processing
technology.”1" The erosion of U.S. dominance over science-based industry
was widely recognized and assailed by corporate captains of the informa¬
tion industry.68
A second trend, meanwhile, was that uneven economic development took
new forms. By the mid-1990s, stagnation ha^ not disappeared in the seven
leading industrialized countries, where the number of unemployed nearly
doubled between 1979 and 1995, from thirteen to twenty-four million.69 Debt
crises and structural adjustment programs continued to ravage scores of other
distressed nations throughout the global South. Meanwhile, some East Asian
countries—above all, China—experienced strong growth. In the United States,
too, the clouds seemed to lift. Never letting their eyes stray too far from the rock¬
eting stock market, cheerleaders trumpeted that the Internet constituted the
epicenter of a “New Economy.” “The business of America is... information,”70
expostulated one cheerleading newspaper. Before the Internet frenzy reached
its apogee, however, in 1997-98 an Asian financial crisis boiled up, seemingly
out of nowhere; and the world economy again began to stagger. As high-tech-
stock speculation careened to a stop midway through 2000, and the pundits
shifted from talking about a “long boom” to a “burst bubble,” the business
cycle reached capitalism’s industrial frontier. A devastating slump hit the very
industries that were being heralded as the New Economy’s poster-child.
Ironically, capital’s success in extricating itself from an earlier round
of stagnation by opening communications and information to corporate-
commercial investment laid the basis for this outcome. Confirming that
accelerated commodification was not a sectoral phenomenon but a more
general political-economic metamorphosis, the popping of the Internet
bubble triggered a wider slowdown.
Robert Brenner explains that the underlying problem lay in the recur¬
rence—on an expanded scale—of the stagnation that had emerged during
the late 1960s.71 The scourge was again overproduction, not only in network¬
ing hardware and software but in every area from aircraft manufacturing to
airline seats, papermaking and steel and automobile manufacturing to cell
phones and PCs and fast food.72 Again, overproduction was not confined
to the domestic U.S. economy. The Wall Street Journal declared in 2003 that
“countries everywhere are struggling to reduce excess capacity.”7'
How deep does the problem go? Europe continues to experience chronic
50 • THE ROOTS OF I N FO R M AT IO N A LIZ E D CAPITALISM

stress, while in 2005 Japan was only beginning to put behind it years of defla¬
tion.74 The United States remains afloat only by virtue of intensified consum¬
erism and deficit spending, sustained by what is in effect a trillion-dollar loan
from Japan and China.75 Absent this hot money, about which first private
investors, then central banks grew anxious,76 huge U.S. current account and
federal budget deficits, against a background of unremitting financial specu¬
lation, pose unpredictable—but grave—risks.77
Seemingly, therefore, the question reverts to what it was in 1970: Where
to find new sources of market dynamism? Specifically, might a new surge of
accelerated information commodification again act as a rejuvenating pole
of growth for capital?
This is not an adequate formulation of the question. Whether accelerated
information commodification continues to harbor the prospect of profitable
growth or whether it turns out to be a spent force, two additional aspects
of structural change within the contemporary political economy require
consideration.
The first is, Who will lead and recoup the unique benefits that accrue to
leadership of the global capitalist system? The political economy’s grow¬
ing multipolarity in information and in general has not rendered states less
important; far from it. The very fact that transnational capital’s produc¬
tion, distribution, and marketing activities now vastly exceed the bounds
of even the largest national markets ensures that states must continue to
play a crucial role in coordinating its operation and growth—setting the
ground rules for accumulation, as Ellen Wood puts it.78 But multipolarity
has contributed to placing new strains on the interstate system.
Though its potential vulnerability has not yet been exposed, let alone
exploited, U.S. international dominance is not permanently guaranteed.
Helping to render the deteriorating position of the United States opaque are
the concurrent economic difficulties of Western Europe and the continuing
political deference exhibited by Japan. Moreover, the United States’ high-tech
capabilities, the size of its domestic market, and its global military reach still
vastly exceed those of any other nation. U.S. policymakers have responded
to multipolar competition by pumping up research-and-development and
weapons spending to apocalyptic levels and have continued to exact tribute
from the rest of the world.79 The impression thus remains that' U.S. primacy
is secure; indeed, declarations abound that U.S. supremacy has never before
reached such heights. But such exhortations must be placed in the context of
an undeniable economic decline. The United States has ballooned into the
most indebted nation in world history, while many of its blue-chip corpora-
 ACCELERATED COMMODIFICATION • 51

tions have capsized in the storm of transnational capitalist competition. As

U.S. economic imbalances and instabilities persist, however, aspiring rival
states are beginning to emerge from the wings. Might growing economic
multipolarity attain a political expression? It is no longer simply fanciful to
imagine a challenge to U.S. global hegemony issuing from within the capital¬
ist interstate system.80 A day may come when a segment of an increasingly
transnational capitalist class may choose—likely compelled by crisis—to
throw its weight behind a different state or consortium of states.
In the second place, whatever economic dynamism may be triggered by
a further round of accelerated commodification must be weighed against
a record of harshly regressive social changes. Several factors help account
for this debacle. A ferocious political offensive on behalf of capital has been
ongoing for thirty-five years. President Reagan’s 1981 decision to fire thou¬
sands of striking air-traffic controllers declared an open season against col¬
lective bargaining rights; the decline of trade unions has intertwined with
the rise of anti-union high-tech employers, such as IBM and MCI on the
supply and Wal-Mart on the demand side. While huge tax cuts benefit cor¬
porations and wealthy individuals, they also appear to justify cutbacks in
government support for education, public health, unemployment insurance,
and environmental protection. The results are environmental despoliation,
threatening epidemics, and worsening poverty and inequality. These results
are compounded by the state’s swelling military expenditures, as the United
States attempts to renew its global paramountcy. Alongside the other grim
consequences of surging U.S. spending on war and repression have been fla¬
grant and covert attacks on democratic ideals and practices: “blowback” from
a corrupting imperialism comprises one of “the sorrows of empire.”81
Though typically unrecognized, changing property relations in informa¬
tion are profoundly implicated in this wider social and political regression.
Property rights in information, as in other industries, depend on the ability
to exclude and penalize unauthorized—that is, nonpaying—users and forms
of access, as Michael Perelman explains:

We know that property rights require the exclusion of others from accessing
property without the consent of the owner. But how do the owners of infor¬
mational property rights keep others from accessing their information?...
[Protection of the commodity status of information requires more intrusive
protection of property rights.... We can be certain that the police powers of
the information economy will be stronger than anything we have yet expe¬
rienced. Consequently, we can assert that, given the class structure of our
economy with its highly unequal division of property, including intellectual
52 • THE ROOTS OF I N FO R M AT I O N A U Z E D CAPITALISM

property, the information technologies, which have an enormous potential

to expand our freedom, will be applied in ways that seriously diminish our
actual freedoms.82

Consider the technological transformation of communications and infor¬

mation processing. Digital media, from DVD burners, MP3 players, personal
computers, and mobile phones to file sharing and other evolving uses of the
versatile and capacious Internet, offer unprecedented mechanisms for creat¬
ing and exchanging information. In economists’ terms, these systems have
greatly enlarged our capacity to develop information as a public good. Has
the institutional response to these technical potentialities been to maximize
and build on the newfound ability to enlarge the scope of information as
shared resource?
Hardly. As capital has grown ever more dependent on information and
information systems, it has mobilized to guard the emergent forms of prop¬
erty. According to one 1998 tally, not only Hollywood but over 80 percent of
Fortune 1000 companies overall “are victims of copyright and trademark
abuses on the Internet.”83 During the early 1980s, there existed perhaps
twenty-five U.S. companies in the shredding business; by 2002, after curiosity
was piqued by the Enron scandal, a journalist was moved to find out that
they had mushroomed to around six hundred, and that a trade group—the
incredibly named National Association for Information Destruction—now
caters to the policy needs of corporate data trashers.84
This might be amusing, were it not one of many disturbing signs that
exclusionary corporate control over information as private property is predi¬
cated on interweaving police powers throughout the tissue of social life. “ [T] o
find illicit activities it is necessary ... to examine all digital behavior,” writes
one knowledgeable observer.85 In turn, nonproprietary and uncompensated
sharing often have been relabeled as criminal actions, and novel categories
of felonious behavior have been proscribed. The U.S. Digital Millennium
Copyright Act, for instance, makes it a crime to use or circulate technology
that could circumvent systems used to “protect” intellectual property. The
Supreme Court’s 2005 ruling that file-sharing companies may be held liable
for copyright infringement furnishes another example, as does the rapidly
growing practice of so-called “digital rights management.” A publication of
the American Library Association explains that digital rights management
employs a “range of technological tools and strategies aimed at restricting
the ease with which the resources collected and maintained by libraries can
be used, circulated, excerpted, and reproduced.”86 Libraries are a bellwether
of the general condition of democratic information provision; their assimi-
 ACCELERATED COMMODIFICATION • 53

lation of digital rights management systems thus possesses ominous wider

implications.
To police a society in which information is treated as private property,
capital needs more comprehensive mechanisms of oversight and control.
Corporate security requirements, symptomatically, mandate ever-increasing
reliance by employees on computer passwords; one 2005 survey found that
nearly one-quarter of respondents had to enter nine or more passwords to
use computers in the workplace.8' Ever-expanding corporate and government
databases, together with technologies for watching, from global-position¬
ing-system-equipped mobile phones to radio-frequency identification tags
and new data-mining techniques, testify to the proliferation of invasive and
extensive mechanisms of surveillance. Much is made of new vulnerabilities,
as corporate media label viruses, worms, and hacker incursions a major threat
to network systems and thereby attempt to justify the response—escalating
control measures—as ostensibly in the general interest.88
The “War on Terrorism,” as Robert O’Harrow Jr. shows, provides new
ideological cover for elevating the threat of security breaches into a conve¬
nient general pretext for repression. Overstepping prior restraints on exactly
this type of transgression, state agencies either have empowered themselves
or contracted with obliging corporations to access huge pools of electronic
data to track individuals through their daily rounds.89 New mechanisms have
been established for public-private coordination, and arcane new technolo¬
gies for access control, system integrity, cryptography, audit and monitoring,
and configuration management and assurance have been devised “to protect
the computer systems that support our nation’s critical infrastructures.”90
As I write, disclosure of a vast domestic surveillance program centered in
the National Security Agency suggests that corporate-state cooperation is
being rapidly institutionalized. “Senior government officials,” reported the
New York Times, “arranged with top officials of some of the nation’s largest
telecommunications companies to gain access to important switches that
act as gateways at the borders between the United States’ communications
networks and the international networks.”91 Grants of access to national and
international telephone and Internet traffic, however, seem unlikely to have
been a by-product of the 2001 attacks. Under the aegis of the National Secu¬
rity Telecommunications Advisory Committee, annual meetings have been
held for years between government intelligence officials and leading corporate
telecommunications and Internet executives. So, too, the effects of the Com¬
munications Assistance for Law Enforcement Act of 1994 (CALEA) have taken
shape over a protracted interval. CALEA mandated creation of an eavesdrop-
54 • THE roots of informationalized capitalism

ping capability for government over every new telephone technology, and trig¬
gered what the New York Times calls “a thriving ‘lawful intercept’ industry for
technology to make eavesdropping easier.” Commercial conferences devoted
to the technology and practice of systematic snooping are mounted regularly,
and a trade association—the Global Lawful Intercept Industry Forum—has
formed. The forum’s president, Anthony M. Rutkowski, claims, “I don’t know
of a vendor anywhere that hasn’t built intercept capability into its equip¬
ment.”92
Comparatively early on in the era of accelerated commodification, it could
be seen that the political economy was diverging sharply from the forecasts of
postindustrial theorists. Their prognostications bore the traces of the more
benign welfare state that then governed. This divergence was well-captured
by one critic in 1981:

The stagnation in the world economy in the last few years has changed rapidly
and dramatically the context of the discussion. The expectations of increased
social services and education, the high and unfounded hopes for the auton¬
omy and social contributions of a “new class” of mind workers are being set
aside if not buried, with few signs of embarrassment.
Wage cuts and freezes, speedup, packaged as “productivity,” unemployment,
the emergence of a politics using the language of “moderation” at the same
time as it is slashing the living standards of the population and financing
an almost out-of-control armaments expansion, and the intensification of
intercapitalist rivalries, are the features of the early 1980s, likely to be extended
indefinitely.93

Indeed they have been; moreover, the era of accelerated commodification

has generated new vulnerabilities. In addition to having to defend a world sys¬
tem of power, U.S. elites also must oversee and police a qualitatively enlarged
terrain of private property in information. Faced with mounting economic
instability and financial strain and prospective geopolitical threats to U.S.
world power, elites’ room for maneuver has been cut. Crisis management
therefore continues to be their main recourse.
By 2005, elites were divided in particular over what to do about unprec¬
edented U.S. deficits, and authoritarian “solutions” commanded at least some
open expressions of support. Peter G. Peterson, chair of the Blackstone Group
(a leading private equity investment company) and of the Council on For¬
eign Relations, declared that, in respect of the mounting U.S. debt crisis, “We
have reached a point in this consumption-obsessed country where if we want
people to save, we’re going to have to make it mandatory. This, I know, is
 ACCELERATED COMMODIFICATION • 55

very controversial. We’re going to have to do what Singapore and Chile and
Australia did.”44 “We must change policy direction,” agreed Robert E. Rubin,
Treasury Secretary under President Clinton and a director of Citicorp, because
the fiscal and entitlement holes are now so deep”: “Everything should be on
the table.”9- That such powerful figures can publicly voice these views—which,
boiled down, seek to compel the working population of the United States
to undergo a savage “structural adjustment,” comparable to those imposed
on numerous less-developed countries by the International Monetary Fund
and the World Bank—is suggestive. One of tfie things that it suggests is that
informationalized capitalism carries a strengthening impulse toward a full¬
blown authoritarianism. As policymakers grant public and private power
broad license to fuse, the historical tension between capitalism and democracy
appears to be in danger of metamorphosing into a stark opposition.
But the prospect before us contains more than any mere top-down will-
to-power.

Intensifying Social and Political Struggle over

Informationalized Capitalism
Informationalized capitalism has been neither completely nor securely estab¬
lished. A harsh regimen, it remains open to contestation and change. Social
struggles not only persist, they too have become more informationally focused
and centered. Desire and necessity, dreams and duress, have been imbued with
informational elements. The hope of developing information and culture as
shared resources essential to democratic reconstruction has fired diverse initia¬
tives, while the regressive character of informationalized capitalism combines
with escalating intercapitalist rivalries to render likely sharpening conflicts
over information and culture. A summary inventory gives some sense of the
range and variety of contemporary struggles over information.
Probably the most visible struggle within the U.S. has been over “media
reform.” A popular mobilization to roll back corporate-state domination of
the channels of public expression, which have been continually diminished
by economic concentration even as they were also clogged by a deluge of
commercial and government propaganda, has gained momentum. Of equal
import has been the growth—and not only in the United States—of oppo¬
sitional and community media, employing technologies from microradio to
cable television, wireless, and the Internet.96
There is also an urgent need, and significant public inclination, to push
back against unregulated corporate data-brokers like Lexis-Nexis, Choice-
56 • THE ROOTS OF I N FO R M ATI O N A LIZ E D CAPITALISM

point, chain retailers, banks, and others.97 It is not simply an individual right
to privacy that is being subverted, but the citizenry’s collective democratic
rights. Data protection, further advanced in Europe than in the United States
and claiming radical and conservative adherents, has become a politically
important priority.
Internet governance represents a third area of struggle. The notion that
there is no such governance because the Internet empowers the grassroots
is increasingly being seen as a delusion. At the U.N.’s World Summit on the
Information Society, a series of deliberations between 2003 and the end of
2005, no action-item was of greater importance than Internet governance.98
Criticisms of the existing system stress, aptly, that the interests of trademark
owners have been elevated above those of ordinary users; that the exist¬
ing administrative mechanism is opaque and unresponsive; and that the
U.S. government controls key functions, through its carefully camouflaged
institutional power over the domain-name system, while other governments
have been substantially excluded, so that the “universal jurisdiction” of the
Internet is effectively administered not by the international community but
by the United States.99 Perhaps remembering “the U.S. presidential threat
in spring of 1980 to deny Iran access to international communications sys¬
tems, including Intelsat,”100 in 2005 some nations (Brazil was mentioned)
“expressed concern that the U.S. government, acting through ICANN, could
unilaterally ... cut them off from the Internet.”101 Internet governance is
destined to become more controversial during the years ahead, as the func¬
tions of the Internet multiply within social life.
Private-property rights in information present another sweeping issue
that encompasses a series of struggles undertaken by community activists,
academics, technical workers, and reform groups and individuals on behalf
of freer information circulation and nonproprietary media systems. Fights
for the public domain unfolded around an impressive array of sites and under
different rubrics: “free culture,” a “creative commons,” a “public library
of science,” certain kinds of open-source software, a “cultural exception”
to World Trade Organization rules on audiovisual works (see chapter 6),
and unfettered access to cheap medicines. The common element has been
the struggle against continuing enclosures of nonproprietary information.
There is every reason to think that these seemingly desperate efforts will aim
for—and find—increasing shared purpose and organizational resolve.
Though it became less visible as a policy issue, owing mostly to public-
relations smog, the digital divide continues to animate struggles across the
world. The relevant issues go far beyond unequal social access to hardware
 ACCELERATED COMMODIFICATION • 57

such as PCs and networks. They encompass more than disparities in access
to software and services as a consequence of income inequality, unevenly
distributed computer-literacy skills, and the overwhelmingly disproportion¬
ate reliance of the Web on English (and, secondarily, perhaps a dozen other
languages). The digital divide is, most profoundly, about the distribution of
social power to make policy for the production and distribution of infor¬
mation resources. Unless that power is broadly shared, democracy itself is
threatened.
To take up these challenges and to renewstruggle for a New Interna¬
tional Information Order effectively requires careful and sustained engage¬
ment with the political-economic changes that have been reordering infor¬
mation and culture. The remainder of this book contributes further to that
engagement.
'
 PART 2

Vectors of
Commodification
 4
Business Users and
U.S. Telecommunications-
System Development

Visionary executives, brilliant engineers, and even regulators have

been credited with charting the development of the U.S. telecommunica¬
tions system, while business users of network systems and services remain
faceless and scarcely noticed as a shaping force.1 However, down through
the decades, industrial, financial, and commercial telecommunications users
have played a formative and even a determining role in the evolution of this
vital infrastructure. They have accomplished this through a combination of
private organizational action and public political activism. Their growing
reliance on networks and their rising stake in policy debates—especially over
the integration of new networking technologies—have motivated business
users to organize, so as to project their interests and needs more efffectively.
By engaging this vital but little-known history,2 this chapter lays groundwork
for one of this book’s major themes: informationalized capitalism constitutes
a general rather than merely a sectoral political-economic phenomenon.

Business Users and Early System Development

The history of telecommunications has been written largely from the supply
side, to stress the role of the carriers that provide society with access to different
network systems and services. This has been unfortunate as well as mistaken,
because it has recurrently helped to make antimonopoly principles—rather
than social need—the preferred framework for policy.
From the beginning of the American republic, the demand side of the
telecommunications equation has been pivotal; business users have repeat-
62 • VECTORS OF COMMODIFICATION

edly made critical contributions to the structure and policy of telecommu¬

nications. Prospective business-user demand helped justify rapid expansion
of an increasingly encompassing post-office system throughout the early
national period and generated momentum for continuing technical and
organizational innovation in the supply of network services throughout the
late nineteenth century.3 The fledgling telegraph was disproportionately used
by large-scale enterprises oriented toward a truly national political economy:
banks, commodity traders, news agencies, and railroads.4 Telephony too
originated largely as a business—or, better, a business-class—service.5 Ser¬
vice applications were unevenly generalized across the field of big business,
which came to prominence late in the nineteenth century in part through
the innovation of networked business processes.
Like a privileged minority of individual users, businesses employed the
public switched telecommunications network; unlike individuals, however,
businesses also came to depend on a category of service aimed solely at the
organizational market: leased lines, or private wires, as the specialized facili¬
ties proffered by carriers beginning with Western Union are called. By 1878,
private wire contracts for Morse service had proliferated to the point that one
vendor specializing in service to banks and brokerages rented three hundred
private lines with twelve hundred miles of wire in and around New York City.6
The Bell telephone system likewise quickly moved into leased-line markets.7
Provision of this specialized class of service—“the greatest source of revenue
of the telegraph companies,” reported the Wall Street Journal in 1909—was
lucrative.8 By one account, 31 percent of Western Union’s net income derived
from “sources other than toll messages” in 1896, but the proportion ranged
upwards of 60 percent by 1906-8.9 A Western Union official stated to a con¬
gressional panel (reporting in 1909) “that this business was so much more
profitable than handling messages that the company had considered a sug¬
gestion that it cease to handle messages entirely and turn its entire attention
to leased-wire business.”10
Business users of leased lines included brokers, which possessed systems
“covering the entire country.” Apart from the railroads, however, Standard
Oil was the largest individual business user, followed by “the packers,” and
then U.S. Steel, all of whose plants and subsidiaries, a newspaper reported,
“are connected by private telegraph wire.” The Associated Press was another
heavy user of leased lines.11
As they increased their reliance on telecommunications in general and leased
lines in particular, business users began to organize themselves into a pressure
group of rising importance to the structure and policy of telecommunications
provision. Early interventions proceeded on an ad hoc basis. During 1904-5, for
 BUSINESS USERS AND SYSTEM DEVELOPMENT • 63

example, private consultations were undertaken between New York Telephone,

the Bell affiliate, and a Telephone Committee established by the Merchants’
Association of New York to conduct “an exhaustive examination” of telephone
service and charges there. The committee stated in its report that New York
Telephone had obligingly “consented] to open its books and to supply the
Committee with all necessary details ot investment, gross earnings, operating
expenses, and net earnings.” The immediate result was a series of rate adjust¬
ments and service changes.12 But the more important consequences were the
beginnings of formalizing a policy-making role for business users and stabiliz¬
ing a shaky and inadequate telecommunications system.
Facilities-based competition in telephone-service provision had erupted
unevenly throughout most of the United States in the years following the
lapse of the Bell patents in 1894, so that by 1907 around half of all subscribers
accessed networks operated by non-Bell carriers. The Merchants’ Committee,
significantly, faulted this competitive system for furnishing an inadequate
and overpriced service.13 Business users thus implied their willingness to
support a bid by Bell to reestablish its monopoly, if in return the telephone
trust promised to acquiesce to legally structured rate regulation and, equally
important in the committee’s view, “consistent and reasonable publicity” for
supplier charges and services.14
Given the importance of New York City-based businesses to the entire
country’s finance, commerce, and manufacturing, this policy choice rever¬
berated widely, and business users possessed of similar intent were also orga¬
nizing elsewhere.15 In opposition to continued concerns on the part of trade
unionists, political reformers, and other groups, the committee’s rejection of
competition helped, as Alan Stone suggests, to shift “elite opinion ... defin¬
itively in the direction of local monopoly’s provision of telephone service”
and ultimately toward what Stone calls the “regulated network manager
system” that AT&T thereupon succeeded in dominating once more.16
A decade later, the role of business telecommunications users began to
extend toward international policy objectives as well. U.S. diplomats hoped
to use a post-World War I conference on international electrical communi¬
cations as a basis for projecting U.S. power more effectively in this increas¬
ingly critical sphere. The National Foreign Trade Council, representing U.S.
exporters, overseas traders, and executives, wrote to the Department of State
in November 1919 to demand that business interests be expressly represented
in these deliberations. Other leading trade associations, such as the Ameri¬
can Manufacturing Export Association, the Merchants’ Association of New
York, the National Association of Manufacturers, and the U.S. Chamber
of Commerce, met before the conference “to develop a unified position in
64 • VECTORS OF COMMODIFICATION

international communications.” They succeeded not only in agreeing upon

an agenda but also in pressing it on U.S. diplomats, who altered their nego¬
tiating positions to accommodate users’ concerns.17
It is therefore correct to claim—in contrast to those who would lay this
achievement at the door of AT&T executives—a critical role for business
users in establishing the system of U.S. national and international telecom¬
munications that began to cohere in the years around World War I and was
consolidated, with significant alterations, throughout subsequent decades.

Radio Technology and the New Deal Settlement

The next great watershed was reached around the technology of wireless
signal transmission. The story of radio has been told often, but, since path¬
breaking but now largely forgotten research by Murray Edelman and Dallas
Smythe, it is relayed without concern for the nonbroadcast, non-common-
carrier services staked out and developed by business users.18 This omis¬
sion is significant. Business users of telecommunications in fact converged
on radio technology during the 1920s and advanced unprecedented claims
on the still-forming nationwide system, especially in regard to the high-
frequency, short-wave spectrum band that was beginning to be exploited
commercially.
The Federal Radio Commission (FRC), established in 1927, made available
for assignment portions of this new band (extending between six thousand
and twenty-three thousand kilocycles), reporting that “a constantly increasing
number of applications for the use of these frequencies has flooded the com¬
mission, covering a wide variety of services and experiments.” As a result of
this discrepancy between available supply and demand, the agency determined
to undertake an extensive investigation of the properties of the high-frequency
band, “the needs and merits of the types of service seeking accommodation in
the band, and the application of the standard of‘public interest, convenience,
or necessity’ to these questions.” Absent such “a scientific and orderly plan”
for the exploitation of these higher frequencies, the commission explained,
“congestion equal to that which has been the root of all evils in the broadcast
band would obtain” here as well.19
%

A public hearing on these issues was held early in 1928. In attendance were
all of the major executive agencies with a direct and indirect interest in com¬
munications, from the Departments of State, War, Navy, and Commerce to
the Bureau of Fighthouses. Also represented, as scholars have long recognized,
were the leading radio manufacturers and the domestic and transoceanic
communication companies. But the range of organizations touched by high-
 BUSINESS USERS AND SYSTEM DEVELOPMENT • 65

frequency-allocation policy extended beyond these familiar faces. The FRC

observed that the following groups, “represented in many cases by eminent
radio engineers and lawyers, were called upon in turn and each made an
earnest plea for accommodation in the high-frequency band”:

Newspaper services....
Airplane operating companies.
Navigation companies.
Railroads.
S

Department-store chains.
Electric railways.
Interurban bus systems.
Electric power transmission systems.
Lumber companies....
Motion picture producers.
Police and fire-alarm systems.
Forest and watershed patrols.
Ranch owners.
Remote resorts and hotels.
Operators of facsimile transmission services....
Mining and oil companies.
Packers and shippers.
Geologists.

Disparate organizations and associations of business users presented them¬

selves: the American Petroleum Institute; Firestone Tire and Rubber and its
rival, Goodyear; the retailers R. H. Macey and Bamberger Company; media
companies including Universal Pictures, Hearst Publications, McGraw-FIill,
the Los Angeles Times, the San Francisco Examiner, the New York Times, the
Chicago Tribune, and other newspapers; and the American Railway Associa¬
tion. Marked disagreement ensued, as rivals vied for spectrum with which to
satisfy “such strikingly different services as transoceanic and transcontinental
communication, railroad needs for communication between locomotive and
caboose on a freight train and between office and switch engine, the claims of
oil companies not only for communication purposes but also for prospecting
for oil, and of power companies for emergency purposes.” The welter of com¬
peting interests and demands was such that the FRC determined to allocate
frequencies at first only in what it termed the transoceanic high-frequency
band, “in order that these frequencies should not be appropriated by other
nations to the disadvantage of the United States.”20
While unhappy would-be users pursued their cases in the Court of Appeals,
66 • VECTORS OF COMMODIFICATION

the following year the commission got started on allocation of the so-called
continental high-frequency band (1,500 to 6,000 kilocycles). Applications
were made by “several large concerns desiring to establish public systems of
point-to-point radio communication in the United States, duplicating the
wire systems between the larger cities.” Also considered, however, were “a
large number of applications from more or less private interests desiring to
set up a more limited system of communication, such as between chain stores,
brokers’ offices, mail-order houses and their branches, oil companies, mines,
and the like.”21 And industrial demand for radio frequencies increased. The
FRC reported in 1929 that applications had been entered “for the assignment
of literally thousands of frequencies more than are available.”22 It promised
weakly to bring “[t]he best engineering talent in the country” to bear on the
policy issues it confronted.23
In retrospect, we can see that a varied group of business users was begin¬
ning to formulate a qualitatively new demand: access to specialized commu¬
nication facilities and services, to be integrated into large business operations
as a private matter, outside the sphere of common-carrier (or broadcast)
provision. Protesting to legislators that the established carriers remained
inert, unwilling or unable to meet their dynamic telecommunications needs
at a suitable price, business users also were beginning to organize themselves
into a permanent national pressure group and policy-making force.
In 1929, the FRC responded by granting specific groups of business users
limited rights to develop specialized network services. This support was selec¬
tive and carefully delimited: it did not yet impinge centrally on or require
reorganization of the nation’s public switched telecommunications network.
But it did sustain burgeoning initiatives in the networking of productive,
distributive, and commercial activities by major corporations and industry
consortia. We possess almost no historical research into these proprietary
efforts, each of which expressed and built toward a specific industry’s efforts
to integrate telecommunications into its workaday operations. The geophysi¬
cal exploration and pipeline services innovated by oil companies comprise
one case in point; frequencies were first set aside for geophysical service in
1930, and by 1947 five hundred stations and forty-nine frequencies had been
licensed to oil companies to help them locate oil deposits.24 A second case
coalesced around the shared radio services developed by Aeronautical Radio,
a consortium of airline companies, beginning in 1929-30.25 During the 1930s
and 1940s, railroads, utilities, motion picture companies, and newspapers
were allotted radio frequencies with which they would build out specialized
intra- and interorganizational business services.
 BUSINESS USERS AND SYSTEM DEVELOPMENT • 67

It is in this context that AT&T’s mid-i920s deal with fledgling network radio
broadcasters—which granted to the telephone company a monopoly over
radio program transmission in exchange for its promise to withdraw from
radio broadcasting markets—may be seen as a privately negotiated attempt
to avert development of such special-purpose industrial radio systems. Radio
broadcast networks and the television networks that succeeded them in this
instance agreed (in the latter case, under duress) to contract for private line
service from AT&T rather than build their own proprietary networks.
For the most part, U.S. industries followed this course and leased lines from
the telephone company. During the mid-i930s, AT&T furnished around a
thousand private line systems to business users, including 250 used by banks
and financial houses; in 1936, private line toll services supplied $32,590,337 in
revenue to AT&T—10.5 percent of its overall intra- and interstate toll rev¬
enues and around one-quarter of its interstate long lines revenues.26 In New
York City at this time, private branch exchange attendants—women workers
operating switchboards in hotels, large offices, hospitals, stores, and other
businesses—outnumbered telephone company operators three to one.27
Business users thus attained an expanding political and economic status
in telecommunications, mostly—though not exclusively—within the context
of the regulated common-carrier system over which AT&T and, residually,
Western Union presided. Business users’ needs were relegated to the edges of
the evolving public switched network as a result of deliberate and considered
public policy.
This was partly because the extent of industrial demand for frequencies
was still relatively slight; networked business processes were only begin¬
ning to proliferate. A second factor was the palpable scarcity of the enabling
resource: usable electromagnetic frequencies. However, even before the New
Deal period, the FRC policy of placing business users’ demands for access to
radio frequencies after those of the common carriers expressed other impor¬
tant elements. “Those applicants proposing to engage in the communication
business serving the entire public or a particular class of the entire public, and
assuming the duties, obligations, and responsibilities of common carriers,
are deemed to be in a better position to meet the standard of public inter¬
est than any of the other applicants,” was the commission’s opinion in one
precedent-setting early case.28 In another decision, the agency expressly held
“that applications would not be granted for service which would duplicate
that already furnished by land-line companies.” The reasoning employed
in support of this finding—and the policy from which it followed—merits
extended quotation:
68 • VECTORS OF COMMODIFICATION

It may be that the commission owes the wire telegraph companies no duty to
protect them from competition by radio services. But there is a much broader
consideration than this. The commission, while encouraging the development
of radio, should nevertheless, in applying the statutory standard, take into
consideration the possibility of a radio company competing unfairly with a
wire service to such an extent that the general public may suffer....
Obviously there is no constant relationship between the capital, personnel,
and maintenance expenses of a wire circuit on the one hand and its volume
of traffic on the other. The company’s cost of a wire circuit between small
communities is not always justified by the income from traffic. The offices in
small communities must be maintained to preserve the utility of the entire
service to all the people of the Nation. The charges for message traffic over
the more profitable circuits between large centers of population must include
some charge for the maintenance of the less profitable circuits. The wire com¬
panies’ charges for their readiness to serve are thus equitably distributed.
With the wire communication companies thus situated, the commission
can not, from the standpoint of national welfare, encourage the establishment
of radio communication systems based solely upon the selection of the most
profitable points of communication. Radio companies taking the “cream”
of the business at reduced rates might impair the utility and the economic
structure of the wire companies, for the latter, in order to meet competition,
might be compelled to abandon unprofitable circuits....
Upon the same considerations, the commission must not lend itself to the
establishment of radio circuits which will rely upon the handling at reduced
rates of the bulk traffic of individual large corporations between their various
offices, to the practical exclusion of the less profitable occasional traffic of the
general public, especially under circumstances where the wire communication
companies are prevented by law or regulation from making such preferential
and discriminatory arrangements.29

Scarcity in a context of skewed and uneven demand, disproportionately

dominated by business users and urban locations, required that the national
system—the public switched network—be assigned priority in spectrum
allocation and system development. This conception would be strength¬
ened as a consequence of additional New Deal reforms. More immediately,
however, the FRC’s attempts to integrate radio technology coherently into
what was becoming a multifaceted telecommunications system suggested
a need to unify the existing fractionated federal regulatory mechanism.
The Interstate Commerce Commission exercised nominal jurisdiction over
nationwide telephony and telegraphy; the Federal Radio Commission over¬
saw radio. As the quote above makes clear, however, convergence between
 BUSINESS USERS AND SYSTEM DEVELOPMENT • 69

radio and wireline systems demonstrated that both needed to be encom¬

passed for policy-making purposes by a single regulator.
Numerous issues were raised, and many parties represented, in the attempt
to create a Federal Communications Commission (FCC). Again, however,
what stands out in prevailing accounts is the omission of business users—and
again, this slight is unwarranted. In the context of deep economic depres¬
sion and significant technological change, influential business users inserted
themselves into the endeavor to establish a more far-reaching communica¬
tions regulator. Lacking effective rate regulation for international radiote¬
legraphy, a “cable and radio users’ protective committee” insisted in con¬
gressional hearings on the need for a Federal Communications Commission
with rate-setting authority. These large users declared that the carriers were
colluding with the British Post Office to extort higher charges from them.
Rate reductions had been instituted earlier, as shortwave radio and loaded
permalloy cables were placed into use and overcapacity in turn developed
on North Atlantic routes; only by preserving these lower rates could the very
large telecommunications expenses borne by the complainants—some fifty-
odd banks, stock and commodity exchanges, and import/export houses—be
kept within restraint. But the carriers instead had ostensibly combined in
hopes of enforcing a mutually beneficial rate increase. In these depressed
times, such a predatory imposition was especially onerous. “Unfortunately
there exists in this country,” wrote the chairman of the Cable and Radio
Users Protective Committee to the chair of the Senate Interstate Commerce
Committee, Clarence C. Dill, “no tribunal with adequate powers to consider
and determine this conflict of opinion between the companies and their
customers.” “That such a body be promptly established,” the user group
concluded, “is our only request.”30 Urged on by the State Department, Con¬
gress passed the enabling legislation, and, to the chagrin of AT&T executives
(who opposed it), the FCC was established.
In the context of the Great Depression, which brought the question of
how to overcome economic stagnation to the forefront of policy making,
emboldened New Deal regulators began a top-to-bottom review of the pro¬
cess of telecommunications-system development.31 Through the so-called
Telephone Investigation of 1935-39, they began by taking a hard look at the
internal economic workings of the AT&T monopoly. In that process, they
established an important forerunner of the sweeping investigations of U.S.
industry conducted by the Temporary National Economic Committee begin¬
ning in 1939. Substantially altered policies followed hard on the heels of this
unprecedented scrutiny.
Though problems of jurisdiction frequently erupted, the FCC and existing
7O • VECTORS OF COMMODIFICATION

state public-utility commissions sought to develop an effective partnership;

only through such cooperation could they also forge a substantive capacity
for meaningful, end-to-end oversight of the nation’s telecommunications
network. The new framework’s limits narrowed as the New Deal gave way to
the cold war, but regulators nonetheless succeeded in reorienting the system
so as to place it on a limited public-service basis. By providing government
loans to build out the network and artfully rebalancing local and long-dis¬
tance rates, regulators and legislators boosted residential demand. During
the long boom that followed World War II, the chronic undersupply of local
residential telephone service at last was relieved, not only in the city but
eventually also in rural districts. Inclusive or “universal” household access to
the telephone thus became the signal achievement of the New Deal’s public-
service settlement. But other policy changes were also made.
More encompassing labor reforms, for example, impinged importantly on
telecommunications. By establishing employee associations and introducing
other welfare-capitalist reforms, for a generation after World War I, AT&T
executives held independent trade unions at bay. However, between passage
of the National Labor Relations Act in 1935, the ascent of the Left-led CIO
unions, the American Communications Association, and the United Elec¬
trical Workers during the decade that followed, and the formation out of a
massive strike in 1947 of the more conservative Communications Workers of
America, the principle of collective bargaining rights by independent unions
took firm root.32 A separate but also vital policy reform opened up AT&T’s
intellectual property. A federal antitrust case brought against the carrier in
1949 eventually resulted in restricting AT&T’s field of endeavor to regulated
telephone service markets, while subjecting its Bell Laboratories unit—the
country’s preeminent industrial research operation—to a new regimen of
compulsory patent sharing.
Public service was not all it was cracked up to be; there were substantial
areas of practice into which it was never extended. Gender and race dis¬
crimination in telephone-industry employment practices were one such field.
The power of the Pentagon over telecommunications policy was another.
The fact that regulators remained frustrated in their attempts to exercise
real oversight of AT&T’s unregulated manufacturing subsidiary, Western
Electric, constituted a third prominent limit on public service. The FCC’s
unbroken support for what it began to term “industrial” radio applicants
denoted a final, increasingly vital, restriction over common-carrier system
development.33
At first, the need seemed to the FCC to be merely to formulate require-
 BUSINESS USERS AND SYSTEM DEVELOPMENT • 71

ments and make recommendations pertaining to “the increased demands

for frequency use for all purposes which would follow the conclusion of
the war.”34 Dampened demand by businesses for special-purpose networks
during the Depression, followed by the overarching focus on wartime com¬
munications requirements, had permitted the agency to defer policy making
in this area. But the FCC’s premonition that it would have to grant more
attention to the needs of industrial telecommunications users turned out to
be insufficient to the task at hand. Spiraling business demand and hothouse
network technology development during the cold war would compel the FCC
repeatedly to revisit the question of specialized communications systems
for corporate users to help integrate another and even more fundamental
innovation: the electronic digital computer.
In this drawn-out process of policy change, the New Deal emphasis on
public-service telecommunications was placed under increasingly fierce pres¬
sure. Technological revolution around networks thus occurred by way of
increasing political regression.

Reactionary Modernization: Business Users and

Computer Communications
World War II and the cold-war mobilization that followed it powerfully
spurred innovation in electronics, telecommunications, computers, and
aerospace. System development across the field of networking gained a more
discrete, though less well-known, boost from the settlement in the late 1950s
of antitrust cases against AT&T, IBM, and RCA.35 The Justice Department
thereby succeeded in what Stanley N. Barnes, its antitrust chief, called a
“program to open up the electronics field” by compelling AT&T, IBM, and
RCA to license their patents on easy terms.36
Building not only on “cost-plus” contracts for cutting-edge computing
technologies from military agencies but increasingly on demand for cost-
efficient applications by a diversifying base of industrial, commercial, and
financial users of punched-card data-processing equipment, during the late
1950s and 1960s the U.S. computer industry took off. Revenues garnered by
IBM—the industry leader by a long shot—for its newer electronic computer
systems exceeded those from conventional punched-card systems in 1962,
prompting executives to bet the company on a new generation of electronic
computers (the 360 line, introduced in April 1964b3' Again, however, it was
not only conducive policies on the supply side that produced this boom.
“The return to a ‘peace-time’ economy” after World War II “opened a flood
72 • VECTORS OF COMMODIFICATION

gate of demand by industries that had been deprived of equipment during

the war, and new uses and methods devised during the war further increased
demand as customers applied them to peace-time activities.”18 Prosaic but
vital processes began to be networked, in whole or in part, reaching func¬
tions such as payroll, personnel files, insurance records, accounting, banking,
inventory control, and manufacturing production scheduling.39
Jump-started by the military’s Project Sage, an air-defense system devel¬
oped by the Massachusetts Institute of Technology in partnership with several
major corporations but targeting a wide range of existing and prospective
business applications, digital data transmission using telephone lines became
an increasingly vital focus.40 Business users in particular sought to develop
computer communications networks to spread the benefits of their central¬
ized data-processing resources more widely throughout their organizations;
and to innovate remote-processing applications, such as the cutting-edge
Sabre system developed by American Airlines in partnership with IBM.41
The telephone network had been engineered for voice applications, how¬
ever, and did not lend itself easily to data traffic. “The voice common-carrier
communications systems of today,” complained Paul Baran, one of the engi¬
neers who designed the Internet’s underlying technology of packet switching,
in 1967, “were designed primarily to provide a voice-to-ear or typewriter-
to-typewriter link between humans. Today’s communications regulation
doctrine still regards the computer merely as another user of these existing
telephone, typewriter, and telegraph networks. It isn’t merely the matter of
jamming a size ten foot into a size five shoe. The fundamental desired com¬
munications characteristics are so different that we are living on a procrus-
tean operation basis.”42
Adapting and adjusting the nation’s telecommunications system posed
basic problems of public policy. Should computer networks be incorporated
into a regulated, heavily unionized, public-utility telecommunications sys¬
tem, built around end-to-end provision of voice service and making promi¬
nent room for residential users? Under whose auspices could the vibrant and
expansive field of data communications be most adequately developed? The
telecommunications industry that was dominated by AT &T? Ora punched-
card data-processing business that was feverishly transforming itself into an
electronic digital computer industry but that was almost equally monopo¬
lized by IBM?
As we know, the answer turned out to be neither. What accounts for this
outcome? Why did computer communications including, ultimately, the
Internet, evolve in this curiously backhanded way?
 BUSINESS USERS AND SYSTEM DEVELOPMENT • 73

A report written by a staff member of the FCC self-servingly avers, “[I]n

providing fertile ground for the growth and development of data networks
over the nation’s communications infrastructure,” over a period of thirty-five
years beginning in the mid-1960s the FCC determined through a series of
proceedings “that computer-based services offered over telecommunications
facilities should not be subject to common carrier regulation”; in so doing, it
asserts, “the Commission set forth the necessary unregulated landscape for
the growth and development of the Internet.”43 Was the FCC a far-sighted
and consistent (de)regulator? '
The claim possesses nominal validity. The FCC did in fact contribute,
through an episodic series of vital decisions, to the emergence of computer
communications in general and the Internet in particular. But to leave the
matter here is to neglect the vitally relevant fact that these same FCC deci¬
sions were predicated on and, in case after case, prompted by specific, con¬
crete demands put to the agency by business users of telecommunications,
generally in alliance with a small but rapidly growing group of independent
equipment and service companies. Large business users, working together
as a super lobby comprised of trade associations and newly established lob¬
bying groups, must be accorded pride of place in explaining the moderniza¬
tion of U.S. telecommunications around data networks. The driving force
behind computer communications was thus not simply that the FCC chose
to expedite its development but that business users effectively destabilized,
and ultimately supplanted, the regulated network manager system that they
themselves had earlier helped to erect.
Why? By three vital standards—an essential role in coordinating increas¬
ingly dispersed corporate units at a moment of sweeping and protracted
economic expansion; concurrently escalating business expenditures; and a
cascade of new applications carrying vital strategic importance for further
growth—during the 1950s and 1960s network systems were transforming
into an ever more essential business infrastructure. The decision to inter¬
vene in a continuing forceful way in policy making occurred because cor¬
porate telecommunications users, who were already widely reliant on spe¬
cialized telecommunications systems, began to demand access to something
more than an expensive, voice-oriented, regulated network. As business-
user dependence on merged computer communications deepened while
AT&T continued to operate within the terms of the New Deal settlement,
consensus over development policy for the nation’s telecommunications
system shattered. Disagreements developed over the specific uses to which
the public network might be put, the need for special-purpose equipment
74 • VECTORS OF COMMODIFICATION

and services, and the prices at which different services would be provided.
Elsewhere I have traced the resulting spiral of policy change, beginning in
the late 1950s; through a series of related telecommunications regulatory
proceedings at the FCC, AT&T’s interests were pitted against those of its
biggest customers.44 Business users demanded, and the authorities made
increasing haste to provide them with, “the same latitude in the use and
implementation of [their] communications facilities that [they] enjoy in
the use and implementation of the many thousands of other tools, facilities,
and services necessary to the conduct of [their] business.”45
Business users probably generated a majority of the carriers’ overall long¬
distance revenues, and a small group of large users accounted for most of this
total.46 Such massed demand lent weight to their attempts to organize into a
pressure group, possessing power that was not available to small residential
rate payers—power that was wielded to obtain successive policy changes
from the late 1950s to the present day.47 Deliberation over the future of U.S.
telecommunications-system development, however, reached a watershed
between 1967 and 1970.
An executive-branch initiative undertaken by the Democratic adminis¬
tration of Lyndon Johnson must be credited with a decisive role in trans¬
forming business users’ demands for telecommunications liberalization into
a bipartisan political consensus. A Task Force on Communications Policy
convened by Johnson in 1967 drew together members of over a dozen federal
departments and agencies and employed research contractors at universities
and think tanks. Thus the Task Force’s endorsement of limited competition
in private line service and its more general prescription that telecommuni¬
cations policy “should seek to develop an environment always sensitive to
consumer needs” resonated widely.48
The Task Force’s chairman, undersecretary of state Eugene V. Rostow,
likewise interpreted his mandate broadly and commenced to undertake what
he boasted was “the most fundamental and broad gauged study of commu¬
nications policy in forty years.”49 His move to “rear back and look at com¬
munications as a whole” spurred intense disagreement among Task Force
members during the fall of 1967, but Rostow prevailed, gaining authority to
broaden the initially more-limited study to encompass domestic common-
carrier (and broadcasting) issues.50
Days before concluding the Task Force’s deliberations, Rostow signaled
directly to Johnson that he had succeeded in crafting far-reaching proposals
for policy change:
 BUSINESS USERS AND SYSTEM DEVELOPMENT • 75

It takes a long time to get a Task Force of this kind established and into
motion. The opportunity should not be wasted. In my view, the line of policy
laid out... is moderate, balanced, and right, and its articulation in a Task
Force Report could help to influence the pattern of decisions by the FCC, by
industry, and by Congress in a constructive way for a long time to come. Our
efforts and the discussion of the draft chapters have already had a marked
effect both on the FCC and on AT&T policy.51

The reforms the Task Force called for included all three of the most vital
initiatives concurrently under review by the -FCC.
While suggesting that “integrated provision” of domestic public-message
telephone service be preserved, the Task Force expressly recommended that the
FCC endorse “the removal of unnecessary restraints to promote innovation
and to encourage greater responsiveness to consumer needs” in the case of
“services which supplement those of the basic public message telephone net¬
work.”52 The Task Force artfully labeled “teleprocessing” such a “supplemental”
service, for which “the removal of tariff restrictions on the sharing of commu¬
nications lines, on splitting or resale of channels, and on message switching,
seems compatible with maintaining the integrity of the basic communica¬
tions network.” The Task Force also supported liberalized foreign-attachment
provisions, without which new kinds of network equipment—preeminently,
computers—could not be used in concert with telecommunications facilities.53
A third proposed policy change was also crucial to the Task Force’s agenda in
domestic common-carrier telecommunications. Inaugurating what has since
become a familiar litany, the Task Force attacked regulation in favor of com¬
petitive, or liberalized, market entry into telecommunicatons; it argued that
the FCC should approve licenses for prospective carriers such as MCI, which
had petitioned for authority to compete with AT&T in specialized business
markets.54
With these policy changes, which were all approved by the FCC, U.S. tele-
communications-system development policy was radically destabilized in two
ways. On the one hand, by treating computer networking as a supplementary
service domain, policy makers were actually creating space in which business
users and specialized suppliers could work to build and assimilate powerful
new networks and network applications across the length and breadth of the
political economy. Through episodic extensions of this policy, the “supplemen¬
tary” computer network segment was enabled to cannibalize the public-service
core of the nation’s telecommunications system. On the other hand, while
acknowledging that newly authorized carriers “could raise serious problems
76 • VECTORS OF COMMODIFICATION

for the integrated network,” the Task Force also asserted that “these problems
can be met by allowing the established carriers sufficient flexibility in rates
to meet competition, and by strengthening regulatory capabilities to prevent
destructive competition.”55 While the Task Force’s caution about problems
associated with “destructive competition” ultimately would be shown to have
been fully warranted, its assurances that these problems could be successfully
contained would not.
Business users’ prime demands for system development struck at the heart
of existing policies. First, they proposed that the cost-economies achieved by
introducing new technology into the telephone network should be passed
largely on to them instead of being directed toward other ends (such as pro¬
tecting low local residential-telephone rates): acceptance of this tenet would
dramatically destabilize the comprehensive rate structure that had been devel¬
oped to build out inclusive network access. Even more radically, they proposed
that they themselves, in partnership with emerging specialized providers,
should be accorded proprietary control over a large and increasing segment
of the networking process: agreement would subvert the New Deal norm
of comprehensive, or end-to-end, public-utility regulation of “the” public
switched network.
A renewal of the public-service conception to accommodate computer-
communications networks, contrary to what actually occurred, would have
inescapably reinvigorated that doctrine. What and whose needs should such
an emboldened public-interest principle address? How should it be updated,
and what policies should it seek to embody? Should the requirement of uni¬
versal telephone service, just coming into its own in practice, be enlarged
to include comprehensive public access to networked information services?
Should nondiscrimination mandate comparable service for all users of com¬
puter communications? Should public-utility status be conferred on the com¬
puter industry? Such were the vital questions that the FCC bypassed because
of business-user intervention in favor of devolving fundamental decisions
about ownership and control of computer networks on proprietary corporate
interests. Through one proceeding after another, regulatory controls were
pared down and market restrictions relaxed. The process of liberalization
moved from the periphery of the public switched network to its center. As
ownership and control of network technologies were lifted out of the web of
obligations that had encased the regulated network manager system, AT&T’s
own strategic thinking ultimately transformed into that of just another pro¬
prietary competitor. The federal antitrust suit that instigated the 1982-84
breakup of AT&T climaxed this trend. Curtailing the system of end-to-end
 BUSINESS USERS AND SYSTEM DEVELOPMENT • 77

general-purpose service offered by a regulated monopoly provider, as Alan

Stone underlines, the divestiture concurrently signaled “the atrophy of the
public service principles” that had infused the New Deal settlement.56
Corollary initiatives were undertaken in international telecommunications
for similar reasons. Since the buildout of long-distance submarine telegraph
systems during the nineteenth century, international networks had func¬
tioned as prized “tools of empire”57 and had been used to project political-
economic, cultural and military power outward on behalf of imperializing
elites. Control by national corporate-state interests of supranational networks
was, in turn, long deemed to be a gravely important policy objective. Vying
strategically with their counterparts in Europe—above all, England—and
Japan, U.S. officials and corporate executives worked zealously, from early in
the twentieth century onward, to erect an American system of international
telecommunications; but their efforts continued to meet with only partial
success.58 A U.S.-supplied and -controlled supranational system was finally
actualized with the establishment of the International Telecommunications
Satellite (Intelsat) consortium in the early 1970s. A study by the Depart¬
ment of Commerce summed up elite opinion that Intelsat constituted “an
unqualified, outstanding success on institutional, financial, and operational
grounds, and must be considered a triumph of U.S. foreign policy.”59
Built around the state agencies that controlled national telecommunications
networks throughout most of the world, Intelsat furthered the development
of a global satellite system by uniting dozens of national communications
ministries as signatories in a system whose major owner was a private U.S. cor¬
poration, Comsat. Through its rate-setting policies, Intelsat ensured that the
reach of its emerging network would be global. Heavy-traffic routes—notably
across the North Atlantic—paid more than would have been warranted by
cost-based pricing in support of a single coherent network granting access to
most of the world; low-density links—say, between Brazil and South Africa,
or Indonesia and India—paid less.
After considerable deliberation, the Reagan administration eventually
chose to jettison this U.S. achievement. Tipping the balance against Intel¬
sat were the prospect that the U.S. monopoly over space was being broken
by European and Japanese rivals and mounting demands by transnational
corporate users to curtail existing national controls, through which states
had been able to regulate important features of satellite service as well as
pricing.60 A third factor was also vital: new, private satellite carriers sought
to become rivals to Intelsat.
Transposing the precepts of liberalized entry to the international market,
/8 • VECTORS OF COMMODIFICATION

Reagan authorized competing private satellite systems, which duly prolifer¬

ated alongside regional networks established by other countries and foreign
capitalists. Through unflagging U.S. effort, this liberalization mandate was
substantially extended and enlarged in the 1990s, most notably through a
1997 pact on basic telecommunications acquiesced to by members of the
World Trade Organization. National flag carriers began to be supplanted by
supranational corporate-run networks, and authorized levels of foreign direct
investment in telecommunications increased, even in the United States.61
U.S. negotiators were confident that, whereas U.S. carriers would pig¬
gyback on the WTO agreement to snap up or build out new subsidiaries in
dozens of other countries, only a select group of foreign companies could
conceivably reciprocate by acquiring or building a nationally significant
U.S. carrier. This stance appears to have been justified. While U.S. carriers
and investors initially obtained stakes in network infrastructures within
scores of countries, the size and wealth of the U.S. market combined with
episodic government interventions to keep it mostly off-limits to foreign
capital. Just as the boom was ending, Deutsche Telekom—one of the largest
European carriers—had to pay fifty billion dollars to take over what was then
the eighth-largest U.S. cellular company, VoiceStream Wireless (renaming it
T-Mobile).62 However, as we will see in the next chapter, the liberalization
of international telecommunications ultimately generated sharp changes
and new instabilities.

Internet Takeoff

Through these means, a space was crafted in which a decentralized network

of networks could be sculpted. But the uses to which this space could be put
were not fully evident at any point; the idea of the Internet was not simply
waiting to be born. Nor was the eruption of the Internet during the 1990s a
function simply of the surging popularity of the World Wide Web and the
fast-paced widening of the email habit. Behind both of these lay the complex
rise of the personal computer industry during the 1980s and the subsequent
ascent of the local and wide-area networks that transformed standalone PCs
into a new communications medium.
These developments bring us back to business users. The proliferation of
PCs and the widespread competency training that went with them occurred
first on desktops in businesses.63 Throughout the 1980s and 1990s, local area
networks (LANs) connecting PCs, peripherals, and other computing resources
likewise mushroomed mostly throughout major corporations. Urs von Burg
 BUSINESS USERS AND SYSTEM DEVELOPMENT • 79

has shown how these electronic warrens were rapidly enlarged, in part owing
to a canny vendor strategy of relying upon a nonproprietary, or “open,” tech¬
nical standard for their LAN products (Ethernet).64
Under the terms of successive FCC proceedings, still in line with the recom¬
mendations of Rostow’s Task Force on Communications Policy, these LANs
constituted “data-processing” networks, developing free of common-carrier
regulation or public-utility status, by host companies and computer-industry
vendors. By 1986, as intra-organizational networks and private value-added
networks of different kinds burgeoned into a sprawling, deregulated domain,
only two-thirds of U.S. network investment was made by public network
carriers—down from nearly all as recently as 1980.65 Expenditures by large
corporate network users correspondingly rocketed.66 But this was merely a
preface to the network investment boom that crested at the turn of the mil-
lenium and transformed information technology in general and the Internet
in particular into the core of the political economy.
The proliferation of corporate LANs helped spur an accelerating demand for
cheap, wider-area interconnectivity. As Urs von Burg suggests, the Internet—
employing another nonproprietary standard, TCP/IP—offered a prospective
solution, and during the 1990s, corporate LANs “quickly became important
on-ramps to it.”67 Perhaps two-thirds of the spectacularly increased Internet
investment that occurred through the 1990s was undertaken by businesses,
principally to erect walled-off private systems known as intranets,68 while only
one-third of such investment went to the enlargement of the public Internet.69
As intranets were extended to establish new links between businesses, what
began to be termed supply chains were rapidly reconstructed to take advantage
of the new network capabilities. Not coincidentally, far and away the largest
share of Internet e-commerce flowed between businesses, rather than between
businesses and consumers.70
In the next chapter we will see that this great overhaul of telecommuni¬
cations did not occur as an orderly growth process; nor did it institute an
equitable, or even a smoothly functioning, new regime. Instead, the pan-cor¬
porate reconstruction of the telecommunications infrastructure engendered
contradiction and crisis.
 5
The Crisis in
Telecommunications

Into the second half of the twentieth century, socially inclusive

electronic telecommunications infrastructures had yet to be established;
for generations, telecommunications had tended to constitute a scarce busi¬
ness service. Haltingly and unevenly, during the decades after World War
II, access finally began to broaden.
The United States, in the forefront of this welcome historical process,
presided over unprecedented network extension between 1945 and the mid-
1960s. Comprehensive residential access to the telephone was achieved after
a delay of some seventy-five years after the telephone’s invention by insti¬
tutionalizing the expansionary policies crafted by New Deal regulators con¬
fronting a severe economic depression. Throughout war-crippled Western
Europe and Japan, inclusive network buildouts took longer to accomplish,
but by the 1960s and 1970s, welfare-state policies again were engendering
widespread residential access. Across these developed market economies,
network modernization programs incorporated important technological
innovations. As electronic switching (circuit-allocation) systems and new
transmission media were embedded in them, network infrastructures drew
ever greater capital investments.
It was another story outside the developed market economies, where
telecommunications infrastructures still languished. Throughout the global
South, with modest exceptions, into the 1980s dramatically insufficient
investment—a century-old scourge—continued to arrest development.
Patchy domestic networks, scarred by gaping rural-urban disparities and
further disabled by inadequate power supplies and technical support and
the exploitive tactics of foreign equipment suppliers, yielded long sub -
 THE CRISIS IN TELECOMMUNICATIONS • 8l

scriber wait-lists and unreliable telephone service. International connec¬

tions came at a premium and were often vexatious. Were the supply of basic
telecommunications to increase, throughout most of the world demand
was certain to materialize.
During the 1980s and 1990s, the supply ot global telecommunications
underwent a new burst of expansion. The long-standing pattern of network
investment likewise shifted. By 1997—99, perhaps half of world telecommu¬
nications investment was being absorbed by “developing and transition”
countries.1 Over a short interval, dozens 0/ national wireline networks
expanded, often incorporating up-to-date technologies. In Malaysia, the
number of residential main telephone lines per hundred households grew
between 1991 and 2000 from 36.7 to 64.3; in Honduras, from 7.9 to 16.2; in
Argentina, from 28.5 to 68.7; in Botswana, from 5.9 to 24.6; in Cape Verde,
from 11.8 to 53.7; and in China, from 1.2 to 33.9.2 Wireless phone systems
experienced even more extraordinary growth, as the world total rocketed
from eleven million subscribers to a billion during the 1990s. A survey
of Malaysia late in 2004 showed that nearly half the population used cell
phones.3 In a growing number of countries—nearly one hundred by the end
of 2001—mobile phone users outnumbered wireline subscribers.4 Scarcity
began to recede; though dearth had by no means been vanquished, it was
unquestionably diminishing.
Qualitative changes in technology—including, crucially, the Internet—
contributed new service features to this process of network growth. One
decade of commercial development found the Internet reaching most (88
percent) of the sixty million U.S. households with a PC by 2001.5 Around
the globe, hundreds of millions of people routinely use the Internet to send
and receive email,6 while very large numbers also employ the new medium
to shop and window shop, listen to music, read text, and edit and exchange
files coding photographic, musical, film, and video data.7 Broadband (high¬
speed) Internet access has proliferated, engendering new applications and
service packages from cable and telecom companies.8 As system development
proceeds, the Internet interacts across variegated sociocultural processes at
every level, from the local to the global.
During the 1990s, this telecommunications buildup and the wider pro¬
cesses of change occurring around networks were heralded in euphoric
terms. “Infinite bandwidth,” sang a poet of U.S. high-technology stocks in
2000, would eliminate the crippling bondage imposed by “immobile infor¬
mation.”9 A benevolent wired world was arriving, a luminous republic of
information predicated on newly abundant telecommunications.
These prognostications were summarily interrupted as it was recognized
82 • VECTORS OF COMMODIFICATION

that in key markets a surfeit had developed. During the spring of 2000, a
stock-market crash overtook the entire field of telecommunications, media,
and technology companies. Over the next two-and-a-half years a couple of
trillion dollars worth of capitalization in telecommunications was destroyed.
In the United States, dozens of telecommunications companies went bank¬
rupt. Lucent Technologies, the largest U.S. maker of telecom equipment, suf¬
fered thirteen straight unprofitable quarters through mid-2003 and recorded
gigantic losses. Even the Internet plumbing manufacturer Cisco (though it
did not cease being profitable) saw its stock price—which at the height of the
boom had pumped up its capital to $500 billion10—plummet by 80 percent.11
Layoffs throughout the industry—more than half a million as of August
200212—eliminated more jobs than had been created during the preceding
boom years (after 1996).
Some similar difficulties surfaced internationally. Bankrupt carriers like
Viatel and hard-pressed telecom equipment manufacturers like Alcatel tes¬
tified to the travails of the European market. As the capitalization of Euro¬
pean telecom companies dropped by $700 billion between March 2000 and
November 2002, the cumulative debt of the seven largest European carriers,
one analyst observed in July of that year, was “greater than Belgium’s gross
domestic product.”13 Early in 2003 came reports of the largest losses in the
annals of business of three major European countries: 9.5 billion Euros for
the Dutch carrier KPN; 20.7 billion Euros ($22.7 billion) for France Telecom;14
and $27 billion for Germany’s Deutsche Telekom.15 The debt loads borne
by these carriers, meanwhile, had also grown frighteningly large. Across the
globe, Japan’s high-flying mobile carrier NTT DoCoMo saw its stock shed
$180 billion in value between February 2000 and December 2002.16 The deba¬
cle’s ramifications, international as well as domestic, continue to be felt.17
Analysis of the telecommunications crisis—why it happened and what its
chief results have been—is a vital task. Prevailing accounts are inadequate.
The debacle did not originate in a group of corrupt stock analysts and errant
industry executives, despite the publicity such individuals have garnered.
Nor did it stem merely from the inflated projections of demand that moti¬
vated network operators and their backers to go ahead with infelicitous sys¬
tem-building plans. Rather, in vital ways the crisis was an outgrowth of the
same institutional policy changes that had triggered the preceding network
investment boom. The crash revealed that the market compulsions that had
been blithely unleashed over the course of a generation by an extended com¬
munity of corporate executives and investors, politicians, lobbyists, lawyers,
and business journalists harbored fierce dangers.
 THE CRISIS IN TELECOMMUNICATIONS • 83

* * *

Newly liberalized system-development policies were first forged in the United

States. U.S. government authorities began, haltingly in the 1950s and 1960s
and more systematically thereafter, to open segments of the long-restricted
monopoly telecommunications market to entry by specialized service sup¬
pliers and network operators. Terminal equipment, value-added computer
services, long-distance service, and finally, local service: at each piecemeal
turn toward “pro-competitive” policy, an additional portion of the market
was made available to new entrants. At each successive moment of liberal¬
ization, moreover, New Deal public-utility policies were further destabilized
and eroded. Giant waves of capital generated by investors hungry for new
outlets flowed into a long-closed industry, stimulating successive techno¬
logical changes.
Aggressively foisted on the rest of the world by U.S. government agencies
and multilateral institutions like the World Bank, this new regime was rap¬
idly exported. During the late 1990s it attained global paramountcy. Market
liberalization self-evidently served the interests of an enlarged group of tele¬
communications supplier companies and, not incidentally, their investment
banks; but it also catered to the evolving demands of large corporate users,
who repeatedly rebuilt their business processes and extended their markets
around networks.18 As a result, by the late 1990s, for the first time since the
nineteenth century, worldwide telecommunications-system development
was bolted to corporate-commercial foundations. Transnationally organized
and operated networks functioned increasingly as big corporate capital’s
production base and control structure.
Huge outlays were needed for this. Through the 1990s, the financial mar¬
kets answered nearly every call for capital by existing and would-be suppliers.
As a bevy of entrepreneurs obtained cheap debt financing to build out new
networks, existing giants such as AT&T and eventually newly privatized
national network operators elsewhere joined the parade. Not solely in the
developed market economies but throughout most of the world, telecom¬
munications systems drew nearly unrivaled capital expenditures, amounting
in 1999 to between 2.6 and 4.9 percent of each nation’s total capital invest¬
ment.19 In many countries, the major carrier became the biggest single com¬
pany on the national stock exchange.20 Rival network operators, domestic
and international, spent billions of dollars to build out systems with which
to link office complexes throughout central cities. Corporate network users
based in every economic sector expended additional billions on the tangle of
84 • VECTORS OF COMMODIFICATION

hardware and software they needed to enlarge and modernize their burgeon¬
ing proprietary systems. By 1993, before the Internet came into widespread
use, the business press was already showering praise on corporate America
for having lavished a trillion dollars on information technology over the
previous decade—and the real action, as we now know, was yet to come.21
Much-publicized, network-related corporate investment functioned as the
pivot of the late 1990s U.S. economic boom; its effects would be felt across
the globe.22
Industry competition also intensified rapidly. Coming after years of policy
liberalization, passage of the 1996 Telecommunications Act in the United
States, followed the next year by the World Trade Organization Basic Tele¬
communications Agreement, together unleashed competition on a new scale.
It became necessary for existing carriers to try to outflank their rivals using
various combinations of financial maneuvers and investments in techno¬
logical innovations to supply novel and/or more efficient services. Wireless
providers, long-distance companies, local-exchange carriers, and—just over
the horizon—cable television system operators, power-line companies, and
burgeoning Internet-based telephone companies sought to carve out for
themselves the largest share of the most profitable market segments.
Cross-border investment in what had been a held occupied by national flag
carriers sharply accelerated. Vodafone, the British-based mobile-phone behe¬
moth, used its high-flying stock to make nearly $300 billion of acquisitions—
as a result of which by 2002 its affiliates claimed tens of millions of customers
in twenty-nine countries.23 Throughout Europe, recently privatized national
network operators such as France Telecom and Deutsche Telekom mortgaged
their futures to pay for pricey wireless franchises within their own national
markets and to build up cross-border investments; at the height of the boom,
during 1999-2000, France Telecom spent 88 billion Euros on acquisitions.24
By comparison, the substantial outlays made by Japan’s NTT DoCoMo on
mobile phone companies outside its domestic market—$15 billion—seemed
puny.25
The take-up of the Internet transformed this global scramble by subject¬
ing it to a recurrent speculative phenomenon: market mania. The Internet,
relying on qualitative changes in the technology of switching and vastly capa¬
cious transmission media, offered unmatched efficiency gains and could be
used to support a rich array of information services. But in its volume and its
effect on investors, self-serving puffery inflamed the Internet’s development
with a wildly excessive potential. In short order, the need for an “Internet
strategy” became a corporate buzzword. Not only for carriers and equip-
 THE CRISIS IN TELECOMMUNICATIONS • 85

ment suppliers but for corporate users throughout virtually every industry,
Internet investment at any price and for seemingly any purpose began to pass
for strategic wisdom. In the most widely bandied estimate, which ultimately
was shown to have been fabricated, “total Internet traffic” was “doubling
every three or four months”26—meaning that, as far ahead as the eye could
see, the bandwidth needed to transport the projected torrents of data would
likewise have to be exponentially enlarged.
Wall Street bankers quickly calculated that such an atmosphere could be
exploited to attract additional lucrative investments to infrastructure projects.
Equipment spending by incumbent U.S. local telephone companies doubled
to around $100 billion annually between 1996 and 2000, even as technologi¬
cal breakthroughs qualitatively boosted information-carrying capacity and
efficiency on long-distance systems. Network operators continued to throng
into the market; initial public offerings of their stock made many of their
investors and executives fabulously rich. Celebrity executives broadcast via
serried ranks of industry analysts, PR staffers, and cheerleading journalists that
their state-of-the-art systems would supply ever more voluminous quantities
of bandwidth at ever lower prices. Each new entrant testified to the successful
promotion of the need for additional capital spending. And each rendered
what was already a competitive environment increasingly cutthroat.
A final, seemingly remote macroeconomic trend also played an important
part. In response to the Asian financial crisis of 1997-98, the United States
opened a flood of easy money. The result was to subject the already super¬
heated stock market—and the information-network sector that had become
its poster child—to the full force of capitalism’s “animal spirits.” Years had
been spent preparing that sector for investors, and now dollars, yen, marks,
pounds, francs, and other currencies poured in. A speculative tidal wave was
forming. Outrageous hype now passed for sagacity. Projections of exponen¬
tial increases in demand for capacity functioned as the only common coin
needed to entice further investments.
Much-ballyhooed capacity-building innovations added fuel to the fire.
One particularly significant innovation was dense wave division multiplex¬
ing (DWDM), which allows signals transmitted at many wavelengths to be
carried by existing fiber-optic networks; exalted by George Gilder and many
others, DWDM hugely expanded the capacity of existing network circuitry.
Harnessed to the institutions of speculative finance and the policies of mar¬
ket liberalization, technological innovation became a destabilizing force that
went far beyond anything imagined, or desired, by self-appointed propo¬
nents of Joseph Schumpeter’s concept of creative destruction. Because of
86 • VECTORS OF COMMODIFICATION

the sudden immense expansion in the supply of rivalrous network systems,

demand—though it never ceased to increase—simply could not keep up.
Investment became overinvestment, surplus became surfeit, competition
became destructive; but these results, even after they became undeniable,
were generally presented as a function only of mistaken demand estimates
and crooked executives.
Well before the crash it could be seen that the foundations of the system
were shaky. At the margins, a scattering of analysts began to worry that par¬
ticular market segments might be in danger of becoming overbuilt. Andrew
Odlyzko, a former AT&T researcher who had moved to the University of Min¬
nesota, publicly challenged the inflated forecasts of Internet demand. In a 1998
report for the Economic Policy Institute on WorldCom’s proposed takeover
of MCI, I forecast that, on financial and other grounds, this gigantic merger
was “a mistake waiting to happen.”27 In 1999,1 went on to “raise the question
of whether global telecommunications ... might be headed toward a market
glut, that is, a state of secular overcapacity.”28 But the “vortex” that I imagined,
when it materialized, went beyond anything I could have forecast.
At roughly this point (1999-2000), to placate investors and shareholders,
executives at several U.S. companies began to cook the books. WorldCom,
which eventually fell into bankruptcy, was found to have claimed no less than
$11 billion in spurious revenues and was forced to pay a record $750 million
fine for its malfeasance. Top management at Qwest, another important car¬
rier, engaged in what was ultimately labeled pervasive fraud by claiming $3.8
billion in nonexistent revenue, according to a complaint filed in 2004 by the
Securities and Exchange Commission; Qwest responded by agreeing without
imputation of guilt to pay a $250 million penalty.29 Sprint’s aggressive use of
tax shelters for accounting purposes forced its two veteran executives to quit;
they were soon rehired to head a Japanese carrier that had passed through a
leveraged buyout to the New York investment company Ripplewood Hold¬
ings.30 These were all multibillion-dollar carriers sitting near the top of the
industry’s food chain. Insider trading, shady financial practices, accounting
fraud, ties between commercial and investment banking services, and other
forms of corporate corruption ran wide and deep.
But the underlying problem—to which many of these tactics comprised
a response—was overcapacity within a context of market competition. Sud¬
denly, after a generation of networking the market system as a corporate-
commercial project, the profound vulnerabilities introduced by that same
project began painfully to be expressed. These, unfortunately, were not lim¬
ited to a few miscreant firms but ramified across the industry’s length and
 THE CRISIS IN TELECOMMUNICATIONS • 87

breadth. Soon enough they would threaten not only the telecommunications
system but the larger economy.
Systematic appraisal of the extent of overcapacity is problematic, but there
were estimates of 35 percent and, in some cases, of 2 percent utilization rates
for long-distance circuits. And that condition of overcapacity has persisted.
In December 2004, analysts reported that 80 to 90 percent of the U.S. fiber¬
optic circuits installed during the telecommunications boom still sat unused;
six months later, researchers estimated that “less than 5 percent of the total
transmission capacity of all the fiber lines i« being put to use—about the
same amount as in 2001.”31
The shape and extent of this overhang were raggedly uneven. Qualitative
enlargement of information-carrying capacity occurred principally along the
most profitable, high-density traffic routes. Between and within the world’s
metropoles and along major transoceanic routes, new systems added unprec¬
edented increments to available network capacity. Between 1990 and 2004,
for example, according to a knowledgeable forecast in 2001, “[N]ew sub¬
marine cables will have multiplied trans-Pacific bandwidth on the order of
15,000 times.”32 In chapter 9 we will examine some of the ramifications of
this Pacific surplus for China and the world economy. But it is not unique.
One new trans-Atlantic fiber-optic system planned to make available more
capacity than had been provided before by all existing trans-Atlantic net¬
works.33 Between 1998 and 2003, submarine and terrestrial circuits in service
between the United States and other countries leapt up by 778 percent.34
Residential access to telecommunications, however, was a different story.
Even in the United States, where 95 percent of households possess telephones,
home-based Internet access remains scanty among minorities and the poor,
as compared with whites and higher wage-earners35—yet the Bush admin¬
istration has sought to eliminate programs to subsidize Internet access for
schools and libraries, where PCs were accessible on a public basis.36 New
network infrastructures often still do not even reach poor rural districts
throughout Latin America, South Asia, and Africa. “As always,” a candid
industry analyst observed in 2001, “economically less-developed regions and
countries may have a long wait.”37 Continuing inequalities thus suffuse and
sharply limit the modernization of telecommunications systems. As Pippa
Norris observed,

In 2000, most of the world’s online community (84 percent) lives in highly
developed nations. In comparison, some thirty-five societies classified by the
UNDP with low levels of human development, such as Nigeria, Bangladesh,
88 • VECTORS OF COMMODIFICATION

and Uganda, contained about 1 percent of the online population, although

home to half a billion people.38

In 1999, an American needed to save a month’s salary to purchase a PC; a

Bangladeshi had to save all his or her wages for eight years to do so.39 The
rapid emergence of new services around the Internet have thus led to what
one study called “social exclusion on a global scale.”40 Still exhibiting tele¬
phone access levels common to the United States before 1920, the countries
of Latin America bore widespread witness to what one analyst in 2005 called
“Digital Poverty.”41
Throughout Africa, especially, residential telephone access continues to
be desperately inadequate (in some countries, perhaps one to four phones
per hundred people); but what is to be expected when even a capital city
like Conakry enjoys electricity only one day in four? In numerous countries,
moreover, charges for consumer phone service are becoming more inequita¬
ble. Long-distance rates have declined, but this mainly benefits business users
and middle-class residential callers. Local rates, in contrast, remain persis¬
tently high. In Indonesia, with forty million unemployed out of a population
of 212 million late in 2002, sharp increases in telephone rates mandated by
the International Monetary Fund were only rescinded in January 2003, after
tens of thousands of workers and students took to the streets in protest.42
From Brazil and Argentina43 to South Africa44 and Southeast Asia, the global
crisis in telecommunications has halted the enlargement of access that had
commenced during the 1990s; millions of subscribers have actually dropped
off national networks. And, again provoking protests, as a result of deliberate
U.S. policies, international telecommunications revenues flow increasingly
out of the countries of the global South and thus cease to be available for
national development.
Even where telecommunications exist in surplus, however, the effecrs of
previous policies are now punishing. The press focuses with fawning concern
on one affected party: the industry’s corporate participants. No segment of
the telecommunications industry has emerged unscathed.45 Giant equipment
manufacturers such as Lucent and Nortel, some of whom have pumped up
their own sales by helping to finance unknown startup carriers, are now suf¬
fering calamitous revenue declines. Lucent Technologies, which had loaned
$7.5 billion to its customers and lost $29 billion between 2001 and 2003, cut its
payroll from 157,000 in 2000 to 32,000 in 2004 and has sold, closed, or spun
off twenty-seven of the forty businesses it had purchased since 1996.46 Lucent’s
seeming return to profitability in 2004-5 actually reflected not improved
 THE CRISIS IN TELECOMMUNICATIONS • 89

sales of equipment but income accruing to its pension fund. During the go-
go years, Nortel had undertaken a $30 billion string of acquisitions, leaving
it with a market capitalization of $270 billion by mid-2000. Now it became
enmired in accounting scandals and was compelled continually to restate
its financial results for prior years—while it fired thousands of employees.47
Nortel took charges in nineteen of twenty-four quarters from 1998 through
2003, losing $34 billion between 2000 and 2002.48 Specialized market entrants,
which mushroomed overnight in the heady days of the tech boom, have also
met difficulties. Corning, which diversified from consumer products into
fiber-optics to profit from the boom, found its new business precipitously
wrecked. In 2000, Coming’s fiber-manufacturing revenues accounted for 74
percent of its $7.1 billion in revenue overall; by 2003, operating only one plant
and having closed or abandoned four others, fiber manufacturing made up
40 percent of total revenue of $2.7 billion.49 JDS Uniphase, a company hailed
by George Gilder in 2000 as “a potential Intel of the telecosm” for its role in
fashioning optical components, had cut its work force, which had reached
thirty thousand, to eight thousand by late 2002.50
Transoceanic fiber-optic cable networks—some only recently completed,51
others still under construction—now chase buyers. Global Crossing, a $20-
billion Bermuda-based company whose capacious, state-of-the-art subma¬
rine network had been allotted much more publicity than the equally news¬
worthy composition and political connections of its corporate board or its
lavish campaign donations, which helped it gain access to top levels of the U.S.
government, declared bankruptcy in 2002 amid allegations of chicanery.52
Dozens of new providers of local services in the United States summarily shut
down. These so-called competitive local-exchange carriers had invested tens
of billions of dollars to enter the market, in no small part because regulators,
enamored of the siren-song of “competition,” forced their rivals, the much
larger incumbent Bell companies, to lease them network facilities at a deep
discount.53 By one estimate, even as the competitive local-exchange carriers
succeeded in opening the business market to competition, their total market
capitalization (inclusive of publicly traded carriers only) dropped 96 percent
between 1999 and 2001, from $86.5 billion to $4 billion.54
However, the social damage that has resulted from the crisis exceeds the
business travails borne by individual carriers and the financial woes faced
by industry executives and investors.
Buried by the publicity accorded to a succession of business success sto¬
ries during the boom, large superfluous costs and other irrationalities and
abuses engendered by decades of liberalization have now taken their toll.
90 • VECTORS OF COMMODIFICATION

Years before the crisis erupted, the industry’s embrace of competition had
rendered it ever more dependent on advertising. Each competitor also has
had to build up a separate and mainly duplicative management and staff.
Regulators find no reason to object to these or to the regulatory costs that
come with competition, as authorities struggle to cope with the new regime.
Within the dominant policy-making discourse, these costs continue to lie
submerged.
The chairman of the Federal Communications Commission, Michael
Powell, had to eat humble pie when he conceded in February 2003 that “few
of the Commission’s actions in implementing the Telecommunications Act
of 1996 have produced identifiable benefits to the American public.”55 But
this admission still gives no hint of the fact that, virtually without excep¬
tion, federal regulators of both major parties had clamorously supported
policy liberalization, and that they continue to do so. Nor did Powell’s
speech point to a closely related trend: that lobbying and campaign-finance
expenditures by the mutually antagonistic industry segments and indi¬
vidual carriers launched by telecommunications liberalization have helped
keep the whole shell game in motion.
Fiberalization exacts its highest price from the most vulnerable populations.
Prison inmates in the United States have been turned into a literally captive
market, as carriers sign lucrative contracts with underfunded municipalities
to kick back a percentage of the phone charges they extract from the grow¬
ing ranks of the incarcerated and their typically poor families; by the 1990s,
the prison telephone industry had grown into a billion-dollar business.56 The
effects of the liberalization process on telecommunications workers—again,
inadequately covered by the press—constitute a more basic ravaging feature.
Newly created jobs at startup competitor companies are increasingly shorn
of any right to collective bargaining; the number of union workers in tele¬
phone and data services dropped by over half between 1985 and 2004, from
625,000 to fewer than 275,000. According to a different estimate, the propor¬
tion of telecommunications-industry employees represented by unions in
2004 was 24 percent.57 Pay and benefits show the effects. Millions of additional
call-center employees across the length and breadth of industry labor for low
pay in high-tech sweatshops. As international networks make such moves
more cost-efficient, call-center jobs are sent in growing numbers offshore to
India, the Philippines, and the Caribbean. With continuing layoffs by carri¬
ers, the quality of residential telephone service naturally suffers, while local
rates for residents, as opposed to business users, remain stubbornly high.58
It was cold comfort to hear one genuinely concerned FCC commissioner
 THE CRISIS IN TELECOMMUNICATIONS • 91

declaim at a lowpoint that “we must establish a concrete plan for how we
will protect consumers in the event a carrier ceases operations or otherwise
disrupts service.”59
The meltdown furnishes a grim lesson in information-age economics,
as problems within the networking sector rapidly ramified. After a decade
awash in funds, suddenly there was virtually no new capital available. Inves¬
tors grew every bit as reluctant as they had earlier been rash in doling out
funds, because they now anticipated that asset values would only continue to
decline. Existing carriers cut back sharply on network buildouts and upgrad¬
ing projects. Of course, there continued to be demand: people and organi¬
zations still needed communications, the crash notwithstanding, and on
a historically impressive scale. But the crisis created unyielding rigidities,
aggravated further by the narrow focus on quarterly profits that had come to
typify the liberalized, Wall Street-oriented industry. Pricing pressure there¬
fore remained intense, especially in crucial corporate and wholesale service
markets, where a continuing price war led to repeated reports of prices set
below cost,60 while, until 2004, equipment sales continued to stagnate.61 All
this contributed to leading carriers’ increasingly beleagured condition.
Overcapacity inflamed by free-market policies, technological innovation,
and a juggernaut of speculation now led to cannibalism. Local carriers diver¬
sified in part to devour their own existing markets, as subscribers to their
wireless subsidiaries substitute wireless for wireline service and email for
voice telephony, and as they offer high-speed digital subscriber-line services
that eliminate residential customers’ need for second phone links. The num¬
ber of U.S. telephone lines served by existing local carriers actually declined
during 2001-2 for the first time since the Great Depression; by mid-2004, the
Bell companies that dominated local service had lost twenty-eight million
lines, a drop of 18 percent since the end of 2000.62 The carnage has been worse
in long-distance markets. Whereas in 1995, the average AT&T long-distance
subscriber made 143 minutes of calls per month, by 2004 that figure had
declined to a little over sixty minutes—owing again to customers’ increas¬
ing use of wireless phones, email, and text-messaging.63 In wireless markets
throughout the developed market economies, prices began to decline as mar¬
ket saturation developed; in the United States, as wireless carriers competed
for customers, the average per-minute cost of a cell-phone call declined by
more than 65 percent over the four-year period to early 2005.64 Weakened by
price wars and continuing product substitution, the top three U.S. wireline
long-distance carriers (AT&T, MCI, and Sprint) posted multibillion-dollar
losses, fired thousands of employees, and took huge charges against earnings
92 • VECTORS OF COMMODIFICATION

to write down the value of assets.65 Even this has proven insufficient to stanch
the industry’s wounds. As its bonds were reclassified as junk and as regulators
threw their weight to the large, politically connected local-exchange carri¬
ers (mainly the four Bell companies), the long-distance carrier AT&T—for
a century the controlling hub of the U.S. telephone system—announced a
historic withdrawal from the residential service market.66
The core of the older public-utility telecommunications system is being
hollowed out. Selectively bypassed by major corporate users, the existing
system is being attacked for different reasons by big local-exchange carriers,
cable system operators, Internet service providers, and other purveyors of
new services, from voice-over-internet companies like Vonage to makers of
video-game consoles possessing Internet capabilities. Traditional forms of
rate regulation and long-standing strictures of common carriage have come
under fierce pressure from carriers and new industry participants demand¬
ing to supplant them with privately negotiated contracts for pricing and
service.67
As the industry’s room for maneuver contracted, what had originated as
a problem afflicting the networking sector triggered more general economic
worries. In one estimate, more than a third of 2002’s record $157 billion worth
of worldwide corporate debt defaults came from distressed telecom compa¬
nies. Actually, at this point the sector’s total global debt load was far greater: at
a minimum, between $500 billion and $1 trillion.68 Major banks—J. P. Morgan
Chase, Citigroup, Bank of America, Deutsche Bank, ABN Amro, and Toronto
Dominion—held huge quantities of this debt, and it bulked large in some
of their own financial losses. In June 2002, European Union banks held tele¬
communications, media, and technology debt amounting to 17 percent of
their own funds; though their exposure thereafter trended downward, the
European Central Bank remained sufficiently worried in February 2003 to
warn that careful monitoring was still required.69 How did these blue-chip
banks come to be so highly leveraged? During the halcyon days of the boom,
their investment and commercial units fell over themselves in their scramble
to underwrite stock offerings and to provide loans to the carriers.
Individual banks took measures to shield themselves. They were greatly
aided by the novel speculative instruments they and their rivals created as a
result of the interrelated process of financial deregulation; many depend in
different ways on deregulated computer communications. Enormous quan¬
tities of telecommunications debt were repackaged and sold off; through
bewildering new financial products like collateralized debt obligations, credit-
default swaps, and derivatives, and through well-established practices like
 THE CRISIS IN TELECOMMUNICATIONS • 93

bond sales and syndicated loans, banks hived off tens, perhaps hundreds of
billions of dollars’ worth of debt onto insurance companies, pension funds,
hedge funds, and other banks. In dispersing this debt, individual institutions
reduced their own risk by increasing systemic risk. It was hardly reassuring
that no one appeared to care exactly how these vast obligations had been
reallocated; “The risk is out there somewhere,” blandly conceded one finan¬
cier early in 2003.70
Despite these measures, the crisis continued to intensify during late 2002
and early 2003. In underlining its severity in his address to a Goldman, Sachs
investment conference, the FCC chairman Michael Powell employed extraor¬
dinary language: “The status quo is certain death and can no longer be con¬
sidered a viable option.”'1 A few months later, when the billionaire investor
Warren Buffett suggested that, because their effects are so little understood,
derivatives—much used by telecommunications-industry lenders—constitute
“financial weapons of mass destruction,” his remark called forth a quick,
soothing dissent from no less a figure than the Federal Reserve Bank chair¬
man Alan Greenspan.72
And then, suddenly, the urgency eased, and the crisis was over—or so it
appeared. High-visibility executives were hauled before the cameras by law
enforcement officials and charged with fraud and other crimes of corporate
looting. While their cases inched through the legal system, newly appointed
managers and special bankruptcy-court-appointed officials sorted through
the debris.73 Restructuring continued to be accomplished, however, through
ad hoc business moves taken in response to self-interested and sometimes
fractious investors seeking payouts rather than through a socially inclusive
process of system development. Executives require ratification by regulators
for large-scale changes, but in the dessicated public sphere of the post-9/11
period, meaningful debate has been virtually absent.
In another era, it is easy to imagine the crisis engendering quite another
response. Let us indulge the fantasy that a “truth and reconciliation commis¬
sion” has been formed to inquire into the origins and character of the debacle.
Such a body would need to gather testimony not only from convicted and
unconvicted telecommunications executives but also from an array of other
complicit actors: major investment banks and industry analysts; accountan¬
cies; top law firms; the legislative, judicial, and executive branches of gov¬
ernment; think tanks; regulatory agencies; business users; academic econo¬
mists; and corporate-commercial news media. Of course, our hypothetical
commission would also have to grant a public hearing to those who were
victimized: employees, pension-fund contributors, retirees, and residential
94 ' VECTORS OF COMMODIFICATION

users. The commission could thus focus a wide-ranging public debate about
the structural first principles and underlying social purposes of telecommu¬
nications. Debate would subject to careful scrutiny the liberalized system’s
chief policy premises: that networks should be built out and reconfigured
to cater to the specialized needs of transnational business users and to serve
the financial interests of the investing class, with only secondary regard for
the interests of workaday employees or ordinary residential users.
The telecommunications crisis, like the overall liberalization process that
preceded and produced it, then could be seen for what it is: not merely an
industrial and financial debacle but a crisis in social and political func¬
tion. Truly to address it, in an attempt to rebuild the sector on a sound
structural basis, would require policy makers to abandon the shibboleth
of free-market competition as a sufficient corrective to monopoly. Carri¬
ers typically leagued together with corporate users: Ford Motor contracted
with SBC to design, build, and manage a $ioo-million Internet phone
system for fifty thousand employees at no locations.74 By this means, they
contrived together to bypass and further subvert the existing regulated
network system. “Pro-competitive” policies merely sought to ensure that
Ford had a choice of suppliers in accomplishing this purpose.
If, however, the proper regulatory goal were not a competitive industry
structure, what should it be? Power to direct and shape system development
in accord with societal needs. By directly confronting the growing primacy of
corporate capital—carriers, equipment suppliers, and business users—over
other social interests, regulators could restore the accountability of the politi¬
cal economy’s networking function.
The political traction needed to establish such a radically different regula¬
tory trajectory—or to initiate even a modest public debate—remains absent.
Yet the idea is not merely fanciful. A so-called Telephone Investigation was
mandated by Congress and mounted by the FCC in 1935 in response to an
earlier crisis in U.S. telecommunications. That investigation gave rise to the
most extensive and critical public portrait of the industry ever produced and
generated sharp and enduring changes in policy for U.S. telecommunications-
system development. The contrast with this prior precedent could hardly be
clearer. Once more, organized public debate is virtually absent; nothing like
the Telephone Investigation has even been mooted.
Contemplating a different policy trajectory, one framed in an earlier gen¬
eration’s terms for thinking about representative democracy, would have to
commence with a comprehensive audit of the industry’s financial condition.
Yet, tellingly, liberalization has rendered such a review problematic: the very
 THE CRISIS IN TELECOMMUNICATIONS • 95

data on which regulators base policy are increasingly self-reported by carriers,

proprietary secrets held by business users, or supplied by the same Wall Street
analysts who helped throw the industry into crisis. The FCC commissioner
Michael Copps may be applauded merely for venting his frustration at this
state of affairs: “We must commit to doing the hard work of collecting our
own data rather than relying on potentially misleading and harmful financial,
accounting, and market information produced by corporate sources subject
to clear biases and market pressures.”75
In its apparent aftermath, recognition that the crisis was caused not by
a few miscreants but by a more basic political-economic process has rap¬
idly dwindled. It has not been effaced entirely within mainstream discourse,
but where it does surface, it is carefully canalized. The New York Times all
but pinned the rap on WorldCom CEO Ebbers’s felonies: not only had the
industry leader, MCI, been tainted in its takeover by WorldCom, declared the
Times, but WorldCom’s “phantom growth caused once-mighty telecommu¬
nications companies like AT&T to cut prices and slash costs in the crippling
race to keep up, from which they never fully recovered.”76 All true enough;
but these are symptoms—not basic causes—of the industry’s prolonged
travails.
A complementary approach has also developed. A journalistic expose of
the “broadbandits” whose plundering brought the industry to its knees and
whose depredations involved collaboration by regulatory, financial, politi¬
cal, and media institutions, concludes: “[Tjhe telecom bubble that burst was
part of a painful but necessary cycle.... [Tjhe broadband bubble will soon
become a distant memory.”7 By naming the crisis as a normal outcome
of market-based development, its wider ramifications are sidestepped and
contained. Market forces might have demonstrated their dark side, but as a
result progress once more will commence: no pain, no gain.
This view expresses a basic ideological concordance with the winners.
The economist Hal R. Varian demonstrated the familiar logic of this align¬
ment early in the gathering crisis: “Overinvestment may seem wasteful, but
then it’s always easy to identify winners once the race is over.... One of the
great strengths of American-style capitalism is its ability to finance crazy
ideas—because every now and then, those ideas have a very, very big pay¬
off.”78 The question of who obtains this payoff and who gets stuck with the
bill in the form of what mainstream economists call “externalities” (lost jobs,
a democratic deficit in policy making, and so on) is thereby evaded.
Far from offering an ideological safe harbor, the role of market forces in
the debacle might be made a matter for debate. This has not occurred. Even
96 • VECTORS OF COMMODIFICATION

as the industry again turns to lobbyists, regulators, and politicians to stem

its travails,79 it has been conveniently forgotten that the crisis itself stemmed
from a profound failure of institutional policy, and that network-system
development remains lodged in the same institutional hands and serves the
same institutional interests that it did during the runup to the debacle.
For this reason, it may be said that, far from having ended, the crisis in tele¬
communications has now merely entered a different phase. From the begin¬
ning of U.S. policy liberalization—and this constitutes the desideratum of
the entire, piecemeal initiative—proponents have demanded that corporate
capital be afforded the same ability to deploy and control telecommunica¬
tions ne tworks as it typically assumes over other forces of production. Policy
makers acceded to this demand, throwing open the telecommunications
market to hothouse innovation and expansion by competing units of capital.
The financial meltdown of the industry shows that the system-development
process that ensues from this radical policy shift has been made to incarnate
the contradictory market logic of the larger political economy: more private
control for corporate users, network suppliers, and investors translates into
less societal control and reduced democratic accountability.
No sign has been given that changes have been worked into this founda¬
tional policy doctrine. Responses by state agencies and major corporations,
purportedly redressive, have mainly comprised efforts to carry on the same
process of proprietary corporate reconstruction around networks. Rather
than engaging the essential social and political features of the crisis, they
have tried in selective and partial ways to ward off or contain some of the
destabilizing forces that liberalized system development has generated. It
is too early to judge how this new round of regulatory interventions might
further reshape the telecommunications system. The primary intentions
motivating this response, however, can already be glimpsed.
Government and business strategists are working to reduce the overhang
in network capacity or, at least, to induce capital once again to look with
favor on the industry. Significantly, both major presidential candidates dur¬
ing the election of 2004 stressed a need for ubiquitous broadband (high¬
speed Internet) service deployment.80 To aid in rationalizing this overbuilt
industry, political support cohered for a new round of previously unthink¬
able mergers by big carriers, as SBC acquired AT&T and Verizon took over
MCI. The motive that fired the two top-dog carriers to try to carry off these
colossal takeovers was merely a self-interested hope of altering in their own
favor the terms of trade with business users.81 The Wall Street Journal admit¬
ted as much in an editorial: “[Bjoth AT&T and MCI have been exiting the
 THE CRISIS IN TELECOMMUNICATIONS • 97

residential market and concentrating on big corporate customers, which is

what these acquisitions are really about.”82
Two other facets of this response stand out. Executive, legislative, and reg¬
ulatory agencies cooperate with private companies in tightening administra¬
tive oversight of what is now dubbed a “critical infrastructure.” Ostensibly
to enhance the nation’s coordinative capacities in the “War on Terror,” this
fusion of government and industry attests to an attempt to exert top-down
control—with a strengthened potential for repression and civil-liberties
abuses.83 Meanwhile, in a succession of true'emergencies, the September 11
attacks, the 2003 blackout, and Hurricane Katrina, the neoliberal network
infrastructure performed abysmally.84 Regulators also attack so-called asym¬
metric regulation for being an antiquated and hindersome legacy because it
mandates one set of rules for cable TV companies, another for telecommu¬
nications carriers, and a third for spectrum-dependent broadcasters. Using
the supposed new reality of “convergence” as a rationale for jettisoning
“the silo approach that we’ve had since essentially 1934,”85 regulators have
sought instead to allow communications companies of every kind maxi¬
mum freedom from accountability in their renewed attempts to develop
multifunctional proprietary systems, notably around Internet and mobile
services. Simultaneously, political pressure is ratcheted up to squelch or
reorient efforts to provide such systems by municipalities rather than cor¬
porate-commercial interests.86
These measures have deepened the antidemocratic tendency that has
marked liberalization from the beginning. On the one hand, remote bank¬
ruptcy courts now seek to adjudicate the contending demands voiced by dif¬
ferent classes of investors, while scanting those of the general public. On the
other hand, under the guise of homeland security, specialized agencies have
removed governmental telecommunications decision making from already
inadequate oversight mechanisms. Crucial policy powers thus devolve on
ever more obscured executive-branch agencies like the Committee on For¬
eign Investment in the United States and the Critical Infrastructure Protec¬
tion Board.
Secretive deliberations and backroom deals will do little to enhance the
security of the telecommunications system, at least if security has to do with
the workaday needs of ordinary people; nor will rate hikes for household
consumers, layoffs for employees, and continued network development on
behalf of investors and transnational business users and military agencies.
But why, we should ask, do regulators not only support further mergers but
also, paradoxically, press for policies supporting continued competitive mar-
98 • VECTORS OF COMMODIFICATION

ket entry, renewed network building, and additional rivalrous investment?

While bankrupt carriers such as MCI and Global Crossing are permitted to
reenter the market, shorn of debt and ready to compete again in a context
of declining price levels, new carriers and cheaper forms of provision—most
importantly, voice-over-internet services—also find ready authorization.87
The way has been cleared, meanwhile, for head-to-head competition between
cable system operators and local-exchange carriers.88 Does all this not make
for a glaring policy anomaly—a mistake? Is it possible that regulators have
not absorbed the lesson of the crisis: that unbridled network building and
competition were responsible for the industry’s devastation? Why try it again?
Is the authorization of escalated competition, even if prospectively ruinous,
a stark reflex of the continuing hold exercised over policy-making zealots
by free-market ideology?
In part, yes, if we add that the skids of ideology are still well-greased with
campaign donations, revolving-door corporate jobs for erstwhile regulators,
and lobbying expenditures. But complementary structural realities loom even
larger in this renewed liberalization attempt. Although a general financial
crisis has been averted, the telecommunications industry as it existed has
been irretrievably destabilized. A new system must be erected in its stead.
Ultimately, the drive to build this new system in accord with corporate cap¬
ital’s aims and priorities persists because network systems and services are
still, and are still seen to be, primary axes of whatever systemic growth there
may be. Though the process of system development may inflict additional
casualties, profitable growth for big capital overall remains superordinate as
a strategic matter.
Although George Gilder’s vaunted “telecosm,” with its promise of “infinite
bandwidth,” has turned out to be a carriers’ graveyard rather than an inves¬
tors’ cornucopia, on the demand side business users in many markets and
application areas have enjoyed unprecedentedly cheap access to a widening
field of network systems and service innovations. If supply-side instabilities
can be alleviated by authorizing previously unthinkable mergers between
carriers, good; but even if they cannot, liberalized policies ensure that the
economy-wide process of corporate reconstruction around networks will
remain free to develop as its proprietary overseers prefer. Corporate-com¬
mercial priorities rather than public-service obligations will continue to
predominate.
In the international context it has become especially evident that policy
makers are willing to risk significantly destabilizing entrenched processes
of system development. National network operators that, for one reason or
 THE CRISIS IN TELECOMMUNICATIONS • 99

another, had escaped or waited out the storm, by the early 2000s found them¬
selves suddenly positioned to exploit exceptional opportunities for trans¬
national expansion—mostly at the expense of ailing U.S. carriers and their
backers. To refocus its strategic attention on the roiling changes in its home
market, for example, BellSouth sold off the extensive wireless networks it had
established in South and Central America. Spain’s Telefonica purchased most
of its systems, adding them to its 38-billion-Euro-investment in the region,
to become by 2004 the largest regional wireless operator, with forty million
subscribers spread through twelve countries, and the third-largest carrier
worldwide.89 More striking still was the emergence of Telefonos de Mexico,
controlled by the billionaire Carlos Slim, as a transnational carrier. Telmex
had preserved its home-market dominance in Mexico despite fierce competi¬
tive pressure from units of AT&T and MCI. During 2004, however, as both
U.S. carriers staggered, Telmex snapped up distressed wireline-network assets
from MCI in Brazil, and—at around one-tenth of their initial cost—from
AT&T in Argentina, Brazil, Chile, Columbia, and Peru.90 In another case, a
consortium led by China Netcom, China’s second-largest carrier, paid $80
million to acquire a regional affiliate of the bankrupt Global Crossing, car¬
rying a book value of $1.2 billion; soon after, China Netcom bought out its
partners to become the sole owner.91 Videsh Sanchar Nigam Ltd., a unit of
India’s Tata Group, purchased a thirty-seven-thousand-mile network linking
three continents from a U.S. conglomerate; the seller, Tyco International, had
already written off its entire disastrous investment in the system and sold it
for $130 million—a discount of $3.5 billion from its initial cost.92
The passage of ownership and control of these properties to capitalists
based in the global South represents a historic sea change. As units of capi¬
tal based in Mexico, China, and India acquire supranational networks at
rock-bottom prices, previously marginal, sometimes nonexistent, corporate
interests have suddenly found means of joining what had been an exclusive
international club, akin to the possession of nuclear arms. Social movements
beyond capital are also able to selectively draw on surplus telecommunica¬
tions capacity. We will see in chapter 5 that projects that took advantage of
that surplus but were not attributable to it—like the establishment of Al-
Jazeera by Qatar—signify that the crucial field of international television
news has been destabilized.
Two mutually antagonistic trends have contributed to this dynamic, con¬
tradictory context. On the one hand, entry into international telecommuni¬
cations by Chinese, Indian, and Mexican capitals—not to speak of already
substantial Japanese and European corporate interests—is certain, at least
100 VECTORS OF COMMODIFICATION

in the short term, to confer added strategic leverage on prospective rival

powers; existing intercapitalist rivalries are therefore likely to intensify and
to engender increased multipolarity in the continuing process of capitalist
political-economic construction. This, in turn, is likely to occasion height¬
ened ideological and policy divergences as well as policy conflicts over the
swiftly changing global division of labor, as outsourced work continues to
be pushed and pulled into low-wage countries.
On the other hand, the continuing strategic depth and sweep of U.S. corpo¬
rate and state interests in telecommunications should not be underestimated.
As U.S. leaders are well aware, the newfound abundance of supranational
network systems, built around Internet technology, likely will render mere
possession of physical telecommunications circuits less important for control
of international communications than it has been traditionally. The power to
configure and reconfigure routers, the Internet’s controlling instrumentation;
to shape and alter the Internet’s logical attributes through the domain-name
system; and to develop new supranational service offerings and surveillance
and management controls remains in every case highly skewed toward U.S.
interests. Internet governance has thus bid fair to become an increasingly vital
pivot of policy and, over the longer term, of international and intercapitalist
conflicts as well.
The crisis in telecommunications occurred as part of an even more encom¬
passing transformation, as accelerated commodification gripped commu¬
nications, culture, and information. To carry forward the analysis, we turn
next to consider the culture industry.
 6
The Culture Industry:
Convergence and
Transnationalization

A hallmark of modernity has been the sustained expansion of a

technologically dynamic corporate apparatus for the manufacturing and
sale of culture. Within the developed market economies, by the early twen¬
tieth century, “art with commercial intent,” as one approving executive
calls it,1 had begun to permeate industrial design, and trademark-based
brand advertising was aimed at magazines, newspapers, and other cultural
commodities.2 Media companies’ efforts to sell directly to consumers on
a national scale likewise accelerated. Around older cultural commodities
such as books and newer ones such as musical recordings and films, they
innovated the techniques of the blockbuster hit: star personalities, distinc¬
tive genres, mass publicity and marketing tie-ins, and wide distribution.
Extruding internationally over the decades, this corporate-commercial cul¬
ture industry grew so encompassing that, as Eric Hobsbawm comments, it
“drenched everyday life in private as well as in public with art. Never had it
been harder to avoid aesthetic experience. The ‘work of art’ was lost in the
flow of words, of sounds, of images, in the universal environment of what
would once have been called art.”3
The growth of the culture industry has registered profoundly on the expe¬
rience of social collectivities and the consciousness of individuals; its effects
have been, however, historically mutable, complex, and sometimes contra¬
dictory. In this chapter, however, I will focus not on these effects but on the
political-economic processes that generate these ceaseless flows of cultural
commodities. By tracing the contours of the trend toward accelerated com¬
modification into the culture industry, we may see not only how the terrain
102 • VECTORS OF COMMODIFICATION

on which capital logic operates again has been enlarged but also how the
forms and effects of this capital logic themselves have been altered.
These changes were again predicated on struggles to neutralize or deflect
a variety of obstructions, pressures, and constraints. Three types of histori¬
cally interrelated obstacles have inhibited capital in its attempts to accelerate
the culture industry’s growth: political barriers and protests, intra-industry
conflicts over system development, and technical and territorial limits on
existing markets for cultural commodities.
Over the last quarter-century, substantial ground has been gained on
all three fronts. Contradictions and impediments—some of them newly
emergent—persist, and market reorganization remains volatile and perpetu¬
ally unfinished. However, elites have employed corporate and governmen¬
tal power to overcome political adversaries and prior market constraints.
Through these means they have gone far toward reconstituting cultural pro¬
duction and distribution on a more fully capitalist basis, a changed technical
foundation, and a transnational scale. The establishment of a global capital
logic for one of informationalizing capitalism’s leading industries has been
no mean feat. How did this momentous transformation originate? How has
it been shaped and channeled? What are the leading facets of change?

Convergence

Beginning in the 1970s, a succession of new media began to appear, often

supplementing or modifying existing forms of experience, but sometimes
offering more novel departures: VCRs and DVD players, CD and MP3 play¬
ers, game consoles, mobile telephones and other wireless devices, PCs and
notebook computers. At the same time, existing distribution networks, built
around terrestrial broadcasting and telephone infrastructures, began to be
joined by new transmission media—satellites, optical fibers, and wireless
systems—while each of these distribution systems enlarged its role as a pro¬
spective carrier of voices, images, and data rather than, as had been generally
true, only one of these modes. Tremendous techno-economic dynamism
powered a sustained expansionary surge, some of the contradictory effects of
which have been surveyed in previous chapters, across a vast field of network
systems and applications, semiconductors, and consumer electronics.
Again propelled by the United States, this combined trend toward mul¬
timedia and multifunctional networks was often seen in terms of an over¬
arching process of communications-industry “convergence.” In 1983, Ithiel
de Sola Pool offered what has become a paradigmatic explanation:
 THE CULTURE INDUSTRY • 103

A process called the “convergence of modes” is blurring the lines between

media.... A single physical means—be it wires, cables, or airwaves—may
carry services that in the past were provided in separate ways. Conversely, a
service that was provided in the past by any one medium—be it broadcasting,
the press, or telephony—can now be provided in several different physical
ways. So the one-to-one relationship that used to exist between a medium and
its use is eroding.... The explanation for the current convergence between
historically separated modes of communication lies in the ability of digital
electronics [Electronic technology is bringing all modes of communica¬
tions into one grand system.4

Twenty years later, the idea that, as a congressional committee heralded in

2004, “convergence is blurring the lines between voice, video, and data ser¬
vices” remained a touchstone in policy-making discourse.5
The idea of convergence emphasizes the importance of the technological
upheaval in communications and validly stresses that communications infra¬
structures are becoming multifunctional as they assimilate versatile digital
electronics. Prophets of convergence insisted, however, that this transforma¬
tion occurs through an intrinsic technological imperative; Pool concedes that
his argument amounts to “soft technological determinism.”61 will argue, to
the contrary, that convergence stems from a trio of complex changes linking
science and technology development, industry strategy, and public policy.
Claims for technological convergence in communications actually origi¬
nated not in the 1980s, but half a century before. They emerged after the
ability to theorize scientifically about, and alongside the ability to engineer,
networks that could carry anything that could be given the form of an elec¬
tronic signal—voices, texts, and images. Efforts accordingly multiplied to
expand the capacities of electronic networks to accommodate diverse signals.
As David A. Mindell has shown, this trend took hold well before the creation
of the first electronic digital computer.7
“The common bases of electrical communication,” a leading engineer and
communications-industry executive declared in 1935, had been gradually
discerned over the preceding sixty years.8 Frank Baldwin Jewett singled out
a pair of dramatic manifestations from 1915, when AT&T engineers instituted
transcontinental telephony by wire and experimented on transoceanic tele¬
phony by radio.9
Throughout the 1920s and 1930s, AT&T researchers amassed detailed knowl¬
edge of electronic communications, encompassing telephony and telegraphy,
radio broadcasting, talking motion pictures, sound recording, and television.
This was possible because they recognized that these seemingly disparate areas
104 • VECTORS OF COMMODIFICATION

actually possess a shared identity—they comprise what Jewett, the head of

Bell Laboratories, referred to as “variant parts of a common applied science.”
“One and all,” Jewett elaborated, “they depend for their functioning and util¬
ity on the transmission to a distance of some form of electrical energy whose
proper manipulation makes possible substantially instantaneous transfer of
intelligence.... Further, whenever and wherever we can transmit electrical
energy to a distant point for one form of communication, we can, in general,
use that same energy for all other forms of intelligence transmission.” Media
that rely on electrical energy constitute, he underscored, “integral parts of a
single common whole.”10
This insight allowed an equally sweeping perspective on future system
development. One of Jewett’s engineering colleagues declared that “ [1] ooking
to the future, the writer likes to think of radio and wire telephony as increas¬
ingly dovetailing together to form one general front of advance. The prin¬
ciples and technical tools being fundamentally the same for both, a technical
advance in one is likely to help the other.... As regards service, we observe
that radio and wire telephony are one and the same thing in respect to the
over-all result, that of the delivery of sound messages.”11 Jewett agreed that
communications-system development would increasingly pivot, in practi¬
cal terms, on this underlying identity. “From a scientific and engineering
standpoint it is apparent that our future course will result in structures and
systems by which every form of electrical communication can be given over
a plant which is largely interchangeable and readily adaptable to changing
service requirements.”12
Much remained to be accomplished, however, before integrated system
development could advance. During and after World War II, new research
began to point the way. Incorporating theoretical contributions by Claude
Shannon (also of Bell Labs) and others, digital computers, telephone switches
(circuit-allocating mechanisms), and other electronic systems began to be engi¬
neered to treat “information” as a “common currency... carrying generalized
signals and messages through the continuous world as discrete pulses.”13
For this engineering change to become the basis for system develop¬
ment, a reciprocal shift in business organization was required. Techno¬
logical convergence unfolded only as it merged with a second process of
change: a long-standing effort by communications companies to extend
their businesses across existing technological limits, industry boundaries,
and program forms—seeking vertical integration, economies of scope, risk
reduction, and higher profitability.14
From its outset, the telephone business was intermittently intertwined
 THE CULTURE INDUSTRY • 105

with the telegraph. Throughout the twentieth century, telephone executives

sought repeatedly to extend into what they saw as organically related media
businesses, arguing that the industry as it existed was irrationally and oppor¬
tunistically divided. Jewett stressed the “somewhat fortuitous way in which
the several fields of electrical communication have developed” and credited
this—alongside errors of thought and “the vested interests involved ... which
think of themselves in conflict”—for having made it impossible to unify the
industry under the aegis of the telephone company. “Possibly our worst sins
in this direction are to be found in the fields'of business and governmental
supervision and control,” Jewett hinted, in an admission that seems artfully
candid as well as studiously vague: “To some extent these wholly artificial
and misleading classifications have been and are consciously perpetuated by
those whose special interests will be served thereby.”15
Already in Jewett’s day, communications executives were targeting the
fragmented industry and the discrepant laws and regulations that had grown
up around its different segments as hindrances to the pursuit of profitable
accumulation. In this predigital era, attempts were being made to bring under
one roof various discrete systems and services via common corporate own¬
ership. That some of these systems had been unified by physical theory was,
in this context, merely an argument to support such ambitions. Industrial
convergence in communications comprised a manifestation of a much wider
organizational tendency within corporate capitalism.
Industrial convergence was driven by the omnipresent corporate need
to maintain or increase profitability in a context marked by technological
dynamism and the boom-and-bust cycle. During the 1920s and early 1930s,
for example, newspaper owners acquired ownership stakes in numerous
radio stations to defend their turf—the nation’s news markets—and to gain
a new source of advertising revenue, while RCA, the nation’s top radio man¬
ufacturer and broadcaster, extended its business by taking over the Victor
record company and investing in the Hollywood film studio RKO. Strikingly,
however, through the first three-quarters of the twentieth century, industrial
convergence in communications remained sharply limited, arguments about
common scientific principles notwithstanding. This was because the pre¬
vailing policy—the third foundational dimension of convergence—tended
to support rival companies and, to a lesser extent, employee and consumer
interests in repeated clashes over dominant corporations’ bids to cross over
into adjacent markets.
Far from being granted a mandate by policy makers to enter or establish
new industries, AT&T—the giant in U.S. communications—was consistently
106 • VECTORS OF COMMODIFICATION

prevented from doing so.16 In 1913, AT&T was forced by the U.S. Department
of Justice to divest its controlling ownership interest in the telegraph giant
Western Union. Locking horns with General Electric and Westinghouse dur¬
ing the mid-i920s over the right to control development of radio broadcast¬
ing, AT&T again was pressured by government agencies to back away not only
from broadcasting but also from other new media—sound him and musical
recording—in which it held a decided interest. Even though AT&T’s national
infrastructure continued to carry the broadcast networks’ signals, the carrier
was unable to control the broadcasting business proper. Moreover, 1934, the
year before Jewett’s public frustration over “misleading classifications” and
“government supervision and control,” saw passage over AT&T’s objections
of a federal communications act that formally divided “broadcasting” from
“common carrier” telecommunications, subjecting each domain to separate
rules and regulatory policies. Finally, in 1956, the Justice Department took
legal action to push AT&T out of the business market for computers.
Though the record shows a pattern of prospective AT&T involvement
in virtually every major subheld of modern communications, with minor
exceptions, the company was repeatedly denied the ability to participate
extensively in market-development processes outside voice telephony.1'' More
generally, as Pool emphasized, albeit with considerable unevenness, bursts
of federal rule making erected prohibitions or limits on cross-media own¬
ership by communications companies based in different industry segments
and relying mostly on separate distribution infrastructures. Into the late
1960s, regulators instead mandated a complicated and far-reaching series
of industry divisions. Regulatory walls limited computers and telecommu¬
nications, as they had earlier separated broadcasting from common-carrier
transmission. Cable-television system development was undertaken under
yet another rule-making mandate. The print media, finally, were also sub¬
stantially differentiated, in legal and policy terms.
Discrete industry segments—common carriers far more than broadcast¬
ers or cable television companies—were, furthermore, subjected to public
accountability obligations. A contradictory mix of factors provoked these
patchy forms of institutional oversight, which were imposed during the
1930s and 1940s: the state’s overarching effort to interdict the economic
crisis of the Great Depression; corporate lobbying; and political opposi¬
tion to corporate power stemming from trade unions, consumer groups,
and New Deal regulators themselves. Regulators also harbored disparate
objectives: to stimulate economic growth; to stabilize the industry within
discrete oligopolistic market segments, typically by frowning upon market
 THE CULTURE INDUSTRY • 107

entry by new competitors; and to restrain and qualify unbridled corporate

control over communications.
Common-carrier oversight was by far the most stringent, though there
were large—and lucrative—loopholes. To major communications com¬
panies, nevertheless, existing regulations eventually came to constitute
real obstructions to profitable growth. By the later 1960s, again for dispa¬
rate reasons, they recommenced their efforts on behalf of industrial and
technological convergence. The notoriously high profitability enjoyed by
commercial telecasters, at least throughoutznajor urban markets, excited
interest in market entry via new modes of distribution such as cable sys¬
tems and satellites. Growing saturation of communications-equipment
markets, slowing growth rates, prompted manufacturers to cast about for
new sites of profitable investment. Facing intensifying pressure to dispose
of the commodities they produced because of the growing global glut,
consumer-products companies experimented with the development of
new media for advertising.
Perhaps the most powerful pressure originated, however, from a seem¬
ingly remote source. Across the length and breadth of the U.S. economy,
industrial users and specialized corporate-equipment suppliers were seek¬
ing to implement new or revamped applications of computer communica¬
tions throughout workaday business processes. To gain license to deploy
data communications, they lobbied for fundamental policy changes in the
regulated telecommunications system. Absent such policy changes, their abil¬
ity to innovate around computer communications would be progressively
hindered. From within and without the existing culture industry, therefore,
came mounting demands to relax and even to withdraw legally codified mar¬
ket divisions and restrictions on technological-system use and market entry.
The unsettled relations between business and consumer markets for converg¬
ing network services continued to present difficult policy challenges.18
Rapid engineering advances in digitization were repeatedly incarnated in
product innovations by computer, telecommunications, and consumer elec¬
tronics companies. Digitized products and services in turn presented a con¬
tinually widening array of technical opportunities or entry points at which
attempts to realize new forms of industrial convergence could commence.
Matching the level of abstraction sought by Jewett fifty years before, a grow¬
ing portion of human experience now could be objectified and represented,
with varying verisimilitude, as digital signals: “the esperanto of is and os,”
as two analysts called the process.19 Digital signal coding, processing, and
transmission drew momentum from a series of equally general economic
108 • VECTORS OF COMMODIFICATION

advantages: capaciousness, flexibility, and accuracy in processes of signal

reproduction, storage, and transmission. Digital systems also were recog¬
nized for their substantial efficiency, allowing greater reliance on machine
perception and handling of information.20
But these remained abstract potentialities until technological convergence
within functioning digital networks and services could be actualized. Policy
liberalization was the sole means by which this could be made to occur. Only
through policy changes could space be created in which to deploy digital
technologies to build novel and prospectively profitable pathways between
once-separate areas of practice. Relaxing existing policy strictures was neces¬
sary even for incremental steps to be taken toward multifunctional services
provision by regulated corporate proprietors of what had been discrete infra¬
structures. Liberalized policies were again needed before media owners could
seek to merge diverse programming units, service capabilities, and distribution
systems according to executive whims, consultancy fads, or what proved to
be shrewd strategic vision. The path toward convergence was not, therefore,
a mere reflex of imperatives resident within today’s communication tech¬
nology. Before it began to be employed rhetorically as a cause, convergence
functioned as an objective—even an agenda—for policy change.
Unevenly, beginning around 1970 and gaining strength thereafter, argu¬
ments for industrial and technological convergence attained sufficient politi¬
cal traction to attack market-segmenting policies. Through episodic and
specifically bounded policy shifts, convergence began, finally, to attain limited
practical expression. This change must be understood within the context of
a much wider reversal of official priorities.
An important part of the drive to renew profitable accumulation for U.S.
corporate capital proceeded by attacking old and new government supports
for economic, social, and political welfare. Rarely adequate, sometimes domi-
native in practice, these programs nevertheless attested to at least a modest
commitment by the state to collective bargaining rights, a minimum wage,
unemployment insurance, social security benefits, environmental protection,
occupational safety, and equal employment opportunity. To the unremitting
frustration of the political Right, the communications and culture indus¬
try had graced this welfarist political order with its ideological cover—the

macy. And so, at this juncture, “convergence” served not only as a means to
overcome barriers to profitable market growth in communications but also as
an entry point for a pan-corporate assault on prevailing policy priorities.
Three specific initiatives proved most vital. First, officials began to relax
 THE CULTURE INDUSTRY • 109

rules limiting further concentration of ownership and cross-media owner¬

ship in communications; thus they created an important carrot with which
to tempt existing owners. Second, they created a stick by beginning to target
the market divisions and service restrictions that had separated the different
modes of telecasting, telecommunications, and print media. Prohibitions on
ownership and service linkages between these industry segments were epi¬
sodically withdrawn. Each of these shifts was consolidated over time; with
the AT&T divestiture, passage of the Telecommunications Act of 1996, and
the eruption of the Internet, the liberalized pojicy space became increasingly
definitive.
These twin changes in structure and practice prompted a third initiative:
a campaign to secure the new policies by developing a supportive ideological
framework within which they could appear to make sense. This effort turned
on discrediting the limited existing mechanism of public-service account¬
ability. During the initial period of piecemeal policy change, Pool began
this project by identifying convergence as a danger to freedom of speech. A
“shadow” was darkening, he argued, as the fetters of state intervention, long
evident in broadcasting and telephony, now threatened to extinguish vener¬
able liberties as they were generalized in the emerging era of digital electron¬
ics. Convergence presented policy makers with a choice as worrisome as it was
inescapable: either definitively extend the tentacles of government control,
or accede to the potentialities of the vaunted “technologies of freedom” on
which Pool placed his hopes. For Pool, the legal traditions adhering to the
print media function democratically and could be counterposed to all the
tainted forms of government regulation that had been overlaid onto broad¬
casting and telecommunications. During the years following publication of
his landmark book, however, the ideology of “convergence” evolved further.
The purported evils of regulatory intervention continued to be assailed, but
other issues associated with the technologies of a supposed informational
abundance were assigned increasing emphasis.
Presenting convergence to the public as an inexorable technological and
economic necessity, policy makers have insisted that their own supreme
function is to speed development of competing multipurpose distribution
systems, or “platforms.” “Advancing technology,” declared the president’s
Council of Economic Advisors in 2005, “is providing competitive inroads to
a number of industries once considered natural monopolies.” As satellites
converge on cable-television service providers and wireless telecommuni¬
cations converge on wireline systems, “technology-induced competition”
negates “the natural monopoly rationale for the economic regulation.”21
110 • VECTORS OF COMMODIFICATION

Well coached by trade associations, public-relations agencies, corporate

technologists, mainstream economic consultants, and industry lawyers, the
politicians and bureaucrats who produce policy as a formal matter have
equated the “public interest” in communications more and more rigidly
with the supposedly natural and desirable state of marketplace competi¬
tion. In Section 401 of the 1996 Telecommunications Act, competition is
enshrined explicitly within this industry segment as the desideratum of
the public interest.22 Contrived thereby was a clever, though spurious, jus¬
tification for marginalizing social, political, and economic concerns that
have periodically erupted into communications-policy discourse—notably,
the foundational issue that concentration in communications constitutes
a class-based threat to democracy. Convergence was to engender greater
marketplace efficiency, which in turn would obviate any further need for
public accountability.
The role that remained for regulators, for rhetorical purposes, anyway, was to
undo what they had done before—often, ironically, on behalf of direct ances¬
tors of leading culture conglomerates. Free-marketeers complained, as formerly
distinct industries and companies integrated and new rivals searched “for ways
to offer consumers a bundled set of communications, broadband, and even
media services under a single brand name,” that prevailing policies continued
to mandate that “increasingly interchangeable services ... be regulated under
different legal standards.”23 Lawyers and academic economists made much
of “asymmetric regulation” and the growing need for “regulatory parity”: no
individual communications-industry segment, they now held, should have
to abide by regulations that are not also imposed on other, now converging,
segments.
Proponents’ claims on behalf of regulatory parity seem simple: as conver¬
gence deepens, policies have to be altered to ensure that all service providers
operate within a uniform regulatory environment. We should not ask more
of a telephone company than of a cable system owner, as each scrambles to
provide consumers with a comparable basket of video, voice, and data ser¬
vices. To think otherwise is to abet discrimination. “A regulatory regime that
still treats substitutable platforms differently will distort the marketplace by,
among other things, creating artificial regulatory advantages for one set of
competitors over another.”24 As this exhortation implies (by foregrounding
marketplace efficiency), official policy deems one of the two obvious policy
options for inducing regulatory parity altogether impermissible.
I refer to the idea of reconstituting an enlarged and strengthened set of
public-service responsibilities and planting them across the length and breadth
 THE CULTURE INDUSTRY 111

of the converging industry. Merely transposing traditional U.S. common-car¬

rier tenets of nondiscrimination would only begin to make a start on this com¬
plex and difficult project, not least because the world—rather than solely the
nation—is the relevant jurisdiction. Nor would policies framed for print, or
cable, or broadcast media resources prove sufficient. The very foundations of
the public-service principle need to be reimagined and thence reapplied.25
Even under more benign circumstances, the success of such an initiative
would require radical intellectual effort and great collective political will. The
prime procedural requirement is simply stated^We need to organize workable
but far-ranging practices of democratic authority over the global system of
cultural provision. Substantive measures must include strong limits on com¬
mercially funded culture together with enlarged public funding; universal
access to systems and services; robust data protection, with guarantees of
freedom from corporate and government surveillance; and much-enlarged
rights to define and freely use common cultural resources in different for¬
mats. Each of these requirements carries beyond prior precedent.
By this emboldened standard of public responsibility the quality of actually
existing policy practice appears not merely insipid but persistently abusive.
In place of a full and fair debate to devise policies that meet social needs and
take meaningful advantage of network potentialities, there are only endless
echoes of industry’s self-serving demand to be freed of the dead hand of
government oversight. Similar attempts to discredit public accountability
have acquired commanding influence outside the United States, while in the
United States, the historical center of the convergence process, free-marke¬
teers continue to repeat their wearisome refrain:

In a world where consumers have multiple wireline and wireless options,

Congress must recognize that the old rationales for regulation have been either
satisfied or rendered moot by the relentless march of technology.... [T]he
first step Congress must take to begin seriously reforming communications
policy is to end this asymmetry, not by “regulating up” to put everyone on
an equal footing, but rather by “deregulating down.” Placing everyone on
the same deregulated level playing field should be at the heart of telecom¬
munications policy.26

The dominant approach treats with contempt the idea that networks should
be shaped, overseen, and used with regard for any substantial public interest.
The contempt has been concealed, however, by a veneer of theory that, by
equating the public interest with marketplace efficiency, purports to vitiate
the former. To take the measure of this theory it is enough to recall again that,
112 • VECTORS OF COMMODIFICATION

for all the hallowed chatter about economics and efficiency, communications-
industry convergence—like the economy-wide transformation of which it
forms a part—is actually predicated on repeated political interventions on
behalf of one special interest: business. No one should doubt that planning
and coordination are essential features of contemporary communications
systems, as they are of big business in general. Regulation, often derided and
reviled, for this reason will continue. The real question is, who will undertake
the planning, and what social purposes does regulation serve?
In the United States over the course of the past generation, the answer
has been consistent. Liberalization was freed to occur as a matter of pri¬
vate accumulation strategies rather than public service. Not surprisingly,
as liberalization has proceeded—first in the LLS. domestic market, then
internationally—capital has flooded into the culture industry, and the size
and scope of profit-taking endeavors within the sector have expanded con¬
vulsively. Convergence has entered a new phase. Through an endless and
ever-changing array of corporate accumulation strategies, digitization of
networks and network applications has extended. As turf battles continue to
be fought between rival groups of corporate suppliers and between equip¬
ment providers and users, the communications system is unevenly reorga¬
nized around long-heralded common foundations.

Bulking Up: Conglomerated Culture

In engaging with this complex and dynamic process of system develop¬

ment, existing communications- and culture-industry owners in the United
States—the world’s largest domestic market—have been compelled to grap¬
ple with two strategic business issues. Audiences are migrating away from
conventional radio, television, newspapers, and magazines, thereby erod¬
ing the mass-market, or “broad-reach,” media model that once predomi¬
nated. In the United States, average hours per person per year spent with
broadcast television declined from 867 in 1999 to about 778 in 2003; with
daily newspapers, from 183 to 173; and with consumer magazines, from 134
to 123. Meanwhile, average hours per person per year spent with cable and
satellite television increased from 720 to 949; with video games, from 53 to
75; and with the Internet, from 80 to 169.27 Unless owners can wrest control
of these and other new media, their major advertisers’ access to coveted
audiences will erode. Owners also recognize, however, that their continued
market dominance—and perhaps their very existence—requires that they
seek jurisdiction over programming assets and communications outlets.
 THE CULTURE INDUSTRY • 113

Otherwise, corporate rivals may inflict damaging new competitive pressures.

Even in advance of capacious digital-network buildouts, therefore, com¬
munications and culture conglomerates began to coalesce, as rivals sought
to control overlapping service arrays and distribution systems.
Beginning in the mid-1980s, what has proven to be a continuing round of
multibillion-dollar mergers and acquisitions commenced. In 1982, the larg¬
est U.S. media company was the American Broadcasting Company, claiming
revenue of $2.7 billion; by 1998—a couple of years before its spectacular $100
billion coupling with AOL, in what would begone of the largest mergers in
history—Time Warner already constituted the biggest U.S. media company,
with revenue of $28 billion. During 1991, U.S. media mergers amounted to $14
billion. In contrast, in the first three months of 1999—near the height of the
boom in technology and Internet stocks—$300 billion worth of U.S.-based
media, entertainment, and telecommunications deals were announced.28 The
shock-effects of the burst financial bubble that followed carried the reorgani¬
zation of the communications industry into a different phase. Now, corporate
indebtedness rather than the gravity-defying movement of share prices, vul¬
nerability rather than strength, triggered further industrial reorganization.
However, the cascade of mergers and acquisitions only recommenced.29 In
2003, after a plunge in its market value and a huge charge against earnings,
Time Warner—still the market leader—was a $40 billion behemoth.30 Though
strategies have continually shifted, and assets have been accordingly shuffled
and reshuffled, a handful of companies have emerged to dominate the process
of reorganizing culture and communications.
Qualitative organizational changes were the predicate of the quantita¬
tive shift in scale. Increasingly, each conglomerate began to develop strat¬
egies to multiply the functions performed by its distribution channel or
channels—cable systems, terrestrial broadcast systems, satellites, and wire¬
less and wireline telecommunications networks. Internet technology has
increasingly acted as the means by which to move baskets of voice, video,
and data services down each of these transmission systems. Again with the
support of regulators, investment banks, and cheerleading journalists, the
conglomerates are successfully appealing to convergence to broaden their
asset bases and to take in the most profitable program-production proper¬
ties, encompassing everything from film and television programmers, print
publishers, recorded music companies, professional sports teams, game
publishers, theme parks, and Web services.
As one index of the rapid corporate integration of programming and dis¬
tribution infrastructures, during the decade from 1992-93 to 2002-3, liberal-
114 • VECTORS OF COMMODIFICATION

ized rules allowed the four major U.S. terrestrial television networks—each
now a tentacle of a larger conglomerate—to increase their overall ownership
share of the prime-time programs they aired from 32 to 76 percent.31 In such
circumstances, not surprisingly, parent conglomerates were well equipped to
assimilate emergent areas of commodified cultural production, such as video
and computer games, that had been spearheaded and cultivated by indepen¬
dent capital. Diversified giants like Time Warner, Sony, News Corporation,
Disney, NBC-Universal, and Viacom tracked consumers across once-discrete
media frontiers, sold them a range of services directly, and offered major
advertisers access to an array of media with which to stage the sales effort.
By 2005, NBC’s mainstream television business accounted for less than 15
percent of group earnings as a subsidiary of General Electric; early in the
1990s, NBC earnings had represented more than half the total.32
Efforts to identify “business models” through which the culture industry
might pursue profits drained prodigious quantities of energy from business
schools, the financial press, and consultancies. Stripped down to the basics,
there are two familiar possibilities and two emerging potential alternatives. I
will illustrate them by reference to the Web. First, direct sales of content could
be made to organizations and/or individuals via subscriptions, site-licenses,
one-time payments, or rentals. Although reliable data are scarce, U.S. con¬
sumer spending on online content, exclusive of gambling and pornography,
by one estimate increased 14 percent in 2004 to $1.8 billion.33 Sales of content
to organizations were assuredly higher. Second, advertising could be sold to
third parties so that commercial corporate sponsors could be said to “sup¬
port” such forms of cultural practice. During 2004, U.S. online advertising
expenditures increased to around $10 billion. The third and fourth business
models are strongly linked with online systems: transaction charges imposed
for using a given service or application, and data sales, where information
about users, audiences, and customers is cumulated, categorized, packaged,
and sold to interested third parties—often, again, corporate advertisers. Across
the length and breadth of the culture industry, companies that can count
on multiple sources of revenue have begun to build up a new competitive
advantage—for example, in financing blockbuster program extravaganzas.34
The largest conglomerates have come to depend on this increasingly varie¬
gated economic base not only to help amortize the rising costs of program¬
ming but also to experiment with the market development of new cultural
commodities.
The still-unfinished unification of the industry has left a profound impress
on the language of the cultural marketplace, which has become symptomati-
 THE CULTURE INDUSTRY • 115

cally abstract. Not long ago, executives were still prone to speak of books and
films and recordings. During the 1990s, these usages began to seem quaint; the
increasingly preferred terms of reference are “content” and “product.” This
change bespeaks a strategic mission that has transformed as convergence has
proceeded: to repackage, or “repurpose,” different kinds of cultural material
across different media has become an overarching corporate goal. This puri¬
fied accumulation strategy is deliberately—strategically—indifferent to genre
and text as repositories of discrete form and meaning, often hostile to the
“moral rights” of authors, and dismissive of any larger concern for cultural
inheritance. It expresses the universalizing market ambition that has always
suffused the corporate drive for convergence.
A popular film thus routinely generates a television series, a musical record¬
ing, a video game, and/or a novelization, to say nothing of the deluge of licensed
merchandise that travels in its wake. Major publishers of trade and mass-mar¬
ket books “conceive of books as only another derivative product” and aggres¬
sively experiment with new electronic media.35 In March 2000, a milestone was
passed when Viacom’s Simon and Schuster distributed four hundred thou¬
sand copies of Stephen King’s sixty-six-page novella Riding the Bullet over the
Internet in a single day. Taking note, Bertelsmann’s Random House subsidiary,
the world’s largest book publisher, announced that it would digitize nearly its
entire list (including 3,500 current titles and more than twenty thousand active
backlist titles) to sell print-on-demand titles over the Web.36 Though the ven¬
ture proved to be premature, the intent to distribute print works electronically
has mushroomed dramatically during the mid-2000s. By 2005, the question
had shifted to which companies—publishers, or new online intermediaries
like Google, Yahoo, and Amazon—would control this new market.
Books, however, no longer functioned only as discrete products. Random
House had already established a division, RH Entertainment, “to create chil¬
dren’s properties that can be licensed for development as books, toys, films,
or in other formats.”37 As one U.S. journalist declared, “The smartest people
in the business understand a basic truth: Books are probably the cheapest
way to test an idea or a story. It costs maybe $75,000 to publish a book. You
can’t make a TV series show for less than several million dollars. Think of
book publishing in this way: as an efficient form of market testing for ideas
and for stories.”38
The consumer-marketing complex, which propelled a tidal wave of com¬
mercialism across new and old media alike, is never far from the center of
the new strategic thinking. An illustrative example may be drawn, again,
from publishing. Makers of candy bars, breakfast cereals, and baked goods,
Il6 • VECTORS OF COMMODIFICATION

including such companies as Mars, General Mills, Sun-Maid Raisins, Pep-

peridge Farm, and Nabisco, introduced “educational books” as marketing
media, either as promotions or full-price for-sale items. Two breakfast cereal
(Cheerios) books sold more than a million copies—enough to qualify them
as best-sellers—in one year following their publication in T999.39 Films and
video games are also routinely transformed into new venues for commercial
product placement.
Alongside control of conventional and new electronic distribution chan¬
nels, monopoly privileges (copyrights) undergird this cultural produc-
tion-and-distribution system. Possessed of legal rights to control cultural
properties spread across a lengthening list of media, the big culture and
communications companies have built up their holdings of creative works;
the world’s largest music publisher, EMI, possesses rights to more than one
million songs.40 Conglomerates are acutely aware of their strategic depen¬
dence on this property. During the mid-1990s, for example, the president
of Viacom declared: “‘Viacom is fundamentally a software and copyright-
driven company.’”41 Aiming to capitalize on DVD sales, in 2004 Sony paid
nearly $5 billion to acquire Metro-Goldwyn-Mayer, thereby establishing a
joint holding of eight thousand movie titles.42 Enlargement and aggressive
enforcement of these legally constituted corporate privileges comprises a
leading feature of informationalized capitalism.43 The culture industry has
been in the forefront of this police action.
The corporate abstraction of “content” and of “intellectual property” has
dovetailed with the newly versatile technical basis that the culture industry is
creating through its political embrace of convergence. During the 1990s, the
unquestioned locus of digital convergence became the Internet, which was
used to add transactional features to the distribution of an increasingly com¬
prehensive range of cultural commodities. Before sketching key features of this
still-emerging system, however, we must return to the fact that the market-
development pressures that have been unleashed quickly broke through the
confines of the U.S. domestic political economy. By the 1980s, it was evident
that the very emergence of a conglomerate culture industry betokened the
invention “of means to expand the market output to a global scale.”44

Transnationalization

At the beginning of the postwar era, Western European countries—the larg¬

est markets for U.S. film exports—had renewed earlier attempts to protect
national cultural space by imposing restrictions on the deluge of FFollywood
 THE CULTURE INDUSTRY • 117

exports. Governments forged these policies for diverse reasons and with con¬
siderable variation, but with only modest success, as Hollywood outflanked
them by turning to coproductions and foreign direct investments.45 Major
trading partners then attempted to deflect the powerful outward projection
of U.S.-dominated commercial television. As of 1959, Great Britain, which
had accepted commercial television in 1954, limited imported shows to 14
percent of the total television schedule, while Canada employed a looser
45 percent quota. Japanese authorities deployed foreign exchange restric¬
tions, which mandated a maximum payment-of three hundred dollars per
thirty- minute imported episode—far below the going market price.46 In the
changed context of the 1990s, dozens of countries continued to try to protect
national culture—or, at least, domestically based audiovisual industries—via
coproduction schemes involving subsidies, favorable tax treatment, import
quotas, and other measures.47
Less-remarked-upon but more substantial barriers to accumulation also
persisted in the implicit and explicit limits placed by many countries over
advertising and profit-seeking investment in cultural domains. Into the 1980s,
culture was typically subjected to norms of nation building and/or public-
service responsibility, however inadequately formulated and incompletely
actualized.48 Directly and indirectly, great swaths of cultural activity were
concurrently supported by government or nonprofit funding. Throughout
much of the world, legally formalized property rights in cultural commodi¬
ties remained all but nonexistent. Electronic channels of diffusion were lim¬
ited in geographic range and lashed to single-purpose distribution systems
organized within and by nation-states. Capital in general, and transnational
capital in particular, therefore had only begun to acquire direct control of
cultural production and distribution; and such control as it enjoyed was
neither comprehensive nor stable.
Of greatest urgency by the 1970s, a political movement for a New Interna¬
tional Information Order (NIIO) was gaining strength. In the United Nations
framework of multilateral agencies such as UNESCO, with contributions from
writers, artists, journalists, academics, and a variety of organizations, struggles
on behalf of democratic cultural restructuring came to comprise perhaps the
foremost barrier to accelerated commodification. Dozens of Asian and Afri¬
can states that had just freed themselves from European imperialism joined
“dependent” Latin American countries in targeting cultural domination as a
primary and persistent obstacle. Independent development priorities, these
countries insisted, should preempt claims over domestic audiovisual space
by foreign (principally U.S.) purveyors of cultural commodities.
118 • VECTORS OF COMMODIFICATION

As the 1970s waned and the 1980s dawned, U.S. government agencies and
their international institutional affiliates took aggressive countermeasures
to undercut the NIIO movement. The Thatcher government and the Rea¬
gan administration withdrew their respective countries from UNESCO; the
United States, which had comprised the largest national contributor to the
organization, did not rejoin for nineteen years (pntil 2003). This move sig¬
naled that genuinely pluralistic, multilateral discussion of global culture and
information policy was at an end: “a warning to the international community
that leading Western powers would not be outvoted by the majority of the
world’s nations,” in the apt summary of Kaarle Nordenstreng.49
Around the same time, forceful bilateral pressure on behalf of augmented
corporate freedom to invest in and use networks began to be exerted by
the U.S. Trade Representative and the Department of Commerce, as well as
by private trade associations and individual companies. The same impetus
achieved a multilateral expression in the General Agreement on Tariffs and
Trade and its successor, the World Trade Organization. Through structural
adjustment programs overseen by the World Bank and the International
Monetary Fund, dozens of countries privatized their telecommunications
systems in whole or in part. Pressure to develop new outlets for a world
already awash in surplus capital flooded the networking sector with invest¬
ment.
Privatization was accompanied by the construction of a wide variety of
supplementary network infrastructures, as a result of which proprietary
systems became available for transnational conglomerates to distribute
cultural commodities. Often self-servingly, U.S. authorities and network
equipment vendors offered donations and limited funding for corporate-
commercial system buildouts. And the International Telecommunication
Union, reshaped to confer on private corporations rights that had previ¬
ously been possessed solely by nation-state members, began to “‘advise
countries to dismantle structural regulations preventing cross-ownership
among broadcasters, cable operators, and telecom companies.’” In this
top-down synchrony, more than 150 countries introduced new telecom¬
munications legislation or modified existing regulation during the decade
beginning in 1990, and “convergence” steamrolled across the world.50
Additional research is needed, engaging diverse national contexts, to
develop a more comprehensive analysis of the profound changes that fol¬
lowed. Already, however, some of the basic patterns may be glimpsed.
Internationally, through the 1950s, television remained mostly an enclave
service for the affluent and, as one contemporary writer put it, basically “a
 THE CULTURE INDUSTRY • 119

Western monopoly, with a Japanese extension.”51 But the new medium was
growing unevenly but quickly. By 1965,176 million TV sets were in use world¬
wide. As Wilson Dizard wrote, “In a decade it has spread from a few hundred
transmitters grouped largely in the North Atlantic area to over four thousand
stations on five continents.Thirty years later, there were 1.16 billion sets in
use, and television had moved definitively beyond the rich states into virtu¬
ally all national cultures.53 TV enjoyed an especially substantial surge during
the 1990s. Between 1989 and 1998, the number of sets in Brazil leaped from
30 million to 53.8 million; in Mexico, from 11 jnillion to 25 million; in South
Korea, from 8.8 million to 16.1 million; in Indonesia, from 9.4 million to 28
million; in India, from 22.5 million to 70 million; in Iran, from 3.6 million to
10.3 million; in Morocco, from 2.3 million to 4.5 million; and in South Africa,
from 3.5 million to 5.5 million.54 In 1996, a milestone of sorts was passed when
more television sets were in use in less-developed countries (692 million)
than in developed nations (669 million).55 China, with over 360 million sets
in 1998—up from merely one million twenty years earlier56—now boasted
by far the world’s largest domestic prime-time viewing audience.57
This continuing impressive enlargement of TV equipment sales—the
reception component of the global audiovisual infrastructure—was comple¬
mented by new openings for market development throughout the system’s
production and distribution segments. After an extended interval of slower
development, and despite continuing inequalities in provision that were
most extreme throughout sub-Saharan Africa, the culture industry began
to undergo an increasingly multifaceted and frenetic reorganization. World
trade in cultural commodities, inclusive of cinema and photography, radio
and television, printed matter, literature, music, and the visual arts, qua¬
drupled from $95 billion in 1980 to more than $380 billion in 1998.58 Over
this same span, while global trade in general underwent a continuing sharp
increase, the share of cultural commodities in world imports rose from 2.5
to 2.8 percent.59 This growth was exceptional in a context of widespread
economic stagnation and crisis, especially throughout the countries of the
global South. In Latin America during the “lost decade” of the 1980s, the
communications industry was nearly unique in enjoying robust growth.60
For decades it had seemed that the international commercial expansion of
the new medium and the overarching American stewardship of this growth
were indivisible.61 As a sector previously hedged with restrictions on capi¬
talist exploitation was substantially opened to it, many new entry points for
commodification were established by, or in association with, U.S. interests.
In Latin America during the late 1980s and the 1990s, in addition to new
120 • VECTORS OF COMMODIFICATION

terrestrial broadcast stations, pan-regional cable and satellite networks owned

by U.S. conglomerates like Time Warner, Viacom, News Corporation, and
Disney were established. Not only did these transnationals succeed in expand¬
ing their subscriber bases; they also helped trigger a swift consolidation of
multichannel service provision within different national markets.62 An entire
institutional complex was refashioned, from cable systems and program net¬
works to audience measurement services and more. As John Lawrence Sul¬
livan observes, “[T]he largest buyers of advertising time on U.S.-based cable
networks are U.S. advertising agencies representing large multi-national firms
(many based in the U.S.) for a wide array of consumer products such as soft
drinks, running shoes, and cars.”63 Programming and advertising were often
coordinated out of Miami, Florida, which, Ana Fiol suggests, began to serve
as “the media capital of Latin America.”64
National capital, however, has also often claimed a significant role in
implanting and reorganizing this enlarged transnational complex. Some¬
times freshly constituted, national capital has often sought and gained substan¬
tial access to its home market and, on a more selective basis, even expanded
into foreign markets. At the capillary level, but notably accommodating
some movement by domestic capital into the ranks of the “second-tier”
transnational companies,65 a scattering of conglomerates domiciled in coun¬
tries such as South Korea, China, India, Mexico, Brazil, and Venezuela have
thereby joined those based in the United States and a few other wealthy
nations in widening and deepening the culture market—and extending the
entire industry’s transnational orientation. New media services and freshly
minted cultural commodities play a strategic part in opening venues to these
commercial actors. Computer game exports, to take an important example,
increased fourfold in value over twenty years (1980-98), and a leading role
in purveying console and game sales was wrested by companies based in
Japan, South Korea, and China.66 Like an array of other economic sectors,
the culture industry is being rearticulated to accomodate greater market
participation by non-U.S. companies based in many countries.
Interweaving with this crucial general change are other trends. To begin
with, the process of reorganization is decidedly not open on equal terms to
all units of capital. According to Richard Parsons, the chief executive of Time
Warner, the “genius” of his rival, the CEO of News Corporation, Rupert Mur¬
doch, stems from his ability to “see the whole world as the game board.”67 A
handful of transnational conglomerates is uniquely equipped to strategize
and act on this same panoptic basis. Together with dominant corporations
spread over a wide series of newly adjacent fields—a nonexhaustive tally
 THE CULTURE INDUSTRY 121

includes semiconductors (Intel), network infrastructure (Cisco), consumer

software (Microsoft), and wireless telecommunications (Nokia)—they com¬
prise the spearheads and chief beneficiaries of the entire process, as Edward S.
Herman and Robert W. McChesney have emphasized.68
A second-tier of perhaps a hundred national and regional companies also
plays an important role in the transnationalization process. National capital’s
importance is as much political as economic: under the sign of neoliberal
reconstruction, it typically allies with the leading transnationals behind a
politics stressing convergence and industrial consolidation. The terms on
which the bounty is to be shared constituted a source of endless bickering,
and, as John Sinclair has underlined, even large regional and national play¬
ers at points find their room for maneuver limited by actors “higher up on
the food chain.”69 Nevertheless, on the foundational principle that culture
should be a profit-making business, there has emerged a striking consensus
among a significantly widened global class of entrepreneurs, investors, and
executives of every stripe. As Fiol puts this in the context of Latin America,

[T] he mainstream media (press, radio, and television) took an active part in
this process of structural reform. They acted to speak up for and to legitimize
the good of changing the economic model and its new rules of the game. At
the same time, they were direct beneficiaries of new cross-ownership legis¬
lation, the privatization of state-owned terrestrial television networks, the
deregulation of the cable and satellite television business, the privatization of
telecommunication systems, and fundamentally the liberalization of foreign
investment in media operations.70

This alliance between national and transnational capital provides a crucial

basis for attempts to transcend prior limits on the culture industry’s accu¬
mulation process. In complex and varied ways, in consequence, accelerated
commodification reorients the institutional infrastructure through which
the audiovisual trade flows. These efforts do not necessarily generate global
uniformities in programming or in the specifics of national regulatory poli¬
cies, but they work toward an overarching congruence, in that systems of
provision are reshaped by an increasingly omnipresent capital logic. Let us
turn to survey some of its characteristic modalities.
Throughout the large, developed market economies of Western Europe,
Japan, and North America, this movement takes one major form. “One
can recognise,” Nicholas Garnham summed up the British case in 1983,
“that what is at stake in the struggle surrounding the new information
technologies is a battle between the public service and market modes of
122 • VECTORS OF COMMODIFICATION

cultural production and consumption.”71 We already saw that, in the U.S.

context, advocates of convergence and accelerated commodification took
aim at public-service telecommunications; related attacks were waged on
public-service broadcasting.
Public-service broadcasting was a development of the middle third of the
twentieth century. Its mission and formal structure varied in relation to the
strength of social class forces and the specific historical circumstances out
of which it emerged, but in general, public broadcasting was constituted as
a reformist alternative to what elites viewed as dangerous encroachments on
the social order by radical movements of the working class. Taking shape in
the interwar context, public broadcasting relied on different kinds of state-
subsidy funding to establish a vital new institutional means of broadening
access to cultural resources deemed essential for citizenship. As Graham
Murdock explains, these included “comprehensive and accurate information
about contemporary events and the actions of power holders; access to the
contextual frameworks that convert raw information into usable knowledge
by suggesting interpretations and explanations; and access to arenas of debate
where contending accounts, aspirations, and positions can be subjected to
sustained scrutiny.”72 Embodied variously in Canada, Germany, Japan, and
a number of Asian and African countries, public-service broadcasting’s fore¬
most exemplar was housed in London. The British Broadcasting Corpora¬
tion, like some of the other systems that drew on it as a model, represented
a historically developing achievement that, during the postwar period, could
be hailed by Nicholas Garnham as “a real step forward in the attempt to
create a common culture.”73 Its originating limits and the episodic political
and commercial pressures it faced, however, have rendered this achievement
massively vulnerable—not least during what we may now identify as the
historical runup to accelerated commodification, the 1960s and 1970s.74 The
BBC’s rejection of an institutional and ideological realignment that might
have placed it on the side of the democratic and antiwar initiatives then
sweeping Britain was condemned by Garnham as a “betrayal” of public-
service principles.75
Nations face differing historical specificities, and analysts will differ in eval¬
uating the success of diverse struggles to extend common cultures through
public-service broadcasting. Throughout much of Europe, hmVever, between
the 1970s and the 1990s, public-service systems underwent transformational
change, as state television monopolies were curtailed, and competition
with newly authorized corporate-commercial broadcasters flared.76 Where
corporate-commercial rivals already existed, in Britain, Japan, and other
 THE CULTURE INDUSTRY • 123

countries, their role was often enlarged. In this environment of intensifying

commercial competition, the position of public broadcasting weakened. As
pressures on public broadcasters grew intense and new claims were advanced
as to how the common culture should represent its constituencies, the insti¬
tutional framework within which public-service provision had been set has
been comprehensively transformed.
In Italy, where the tradition of public-service broadcasting is structured not,
as in Britain, in terms of a putative independence from the state but directly
by national political parties, the rapid ascent-to dominance of a corporate-
commercial logic has nonetheless established a commonality. Private local
broadcasting had been authorized in the 1970s, and it expanded rapidly at
the national level. Media concentration became extreme, as three commer¬
cial television channels were allowed to coexist within a single conglomerate,
Mediaset. The company’s owner, Silvio Berlusconi, has twice become the
political leader of his country and is thus well positioned to influence the fate
of his rival, the state-owned broadcaster RAI. By 2004, under the stewardship
of Prime Minister Berlusconi, Mediaset had built up a 44 percent share of
Italy’s overall TV market. On the other hand, RAI, still retaining 45 percent
of the national audience, was to be partially privatized, on terms likely to
disadvantage it further in its contest with Mediaset.77
Not always accompanied by the breathtaking chicanery of a Berlusconi,
analogous processes have been widespread in other countries. National televi¬
sion systems that had been oriented toward some variant of the public-ser¬
vice principle, however limited, are being outflanked by corporate-commer¬
cial suppliers and/or infiltrated by a converging market logic. Massive new
investments are needed to participate fully in digital-system development,
while greatly increased funding reserves are also required to pay for pro¬
grams whose prices are continually inflated as a result of competitive bidding
between public-service and corporate-commercial broadcasters. Meanwhile,
the public broadcasters’ audience ratings are declining, while ideological
attacks on them intensify; their ability to rely on license fees—annual pay¬
ments by all TV users, which provide most of the wherewithal at the dis¬
posal of public broadcasters—is increasingly jeopardized. In many countries,
budget cuts are an additional menace; in some, privatization looms.78 Rather
than renewing the mandate for national public-service provision, at this
decisive moment European policy makers have trained their attention on
bids to establish corporate champions to compete in the global market for
culture.79 In addition to the private broadcasters TFi, Mediaset, and Telecinco,
regional audiovisual conglomerates such as Rupert Murdoch’s Sky satellite
124 • VECTORS OF COMMODIFICATION

consortia and Europe’s Canal Plus were authorized to take control of multiple
audiovisual platforms. In the United States, where public broadcasting was
long delayed historically and, once commenced, was only accorded a frail
and limited institutional basis, strenuous attacks by the Bush administration
during 2005 further crippled the existing system. These attacks may have been
animated by a conviction that public broadcasting is ideologically tainted
and economically wrongheaded, owing to its partial reliance on government
funds. More importantly, however, at this formative moment public broad¬
casting is being forestalled from playing a substantial part in the worldwide
transition to digital television.
Throughout the countries of the global South, the historical circumstances
confronted by the protagonists of the new capital logic for culture are quite
different. Public-service broadcasting, where it existed, tended to be weaker
and less adequate than its counterpart in the developed world. One of two
other models tended to predominate: either broadcasting operated as a cor¬
porate-commercial franchise, as throughout much of Latin America, or it
took the form of a more or less unaccountable, top-down state monopoly,
as in much of Africa, Asia, and the Middle East. Accelerated commodifica¬
tion has taken hold here as well, despite this variation, further elaborating
its expansionary capital logic.
Top-down processes of institutional change have been shepherded by for¬
eign and domestic capital in alliance with state agencies; working people, not
to mention the poor, have little say. Privatization, liberalized market entry,
relaxed limits on consolidation and cross-media ownership—deregulation
rather than democratization—are the results. Whereas, prior to the early
1980s, there had been virtually no non-state broadcasters in sub-Saharan
Africa, by 1995 there existed 137 private operators in twenty-seven countries.80
Government’s role, however, did not consequently diminish. Pradip Thomas
refers to a “control state” in the Indian context, where public-service broad¬
casting as a medium for nation building had earlier claimed a substantial
presence—and the term “control state” might be applied much more widely,
perhaps not only throughout Africa and Asia.81 State power remains critical
in granting increased treedom and material support to profit-making media
services catering to advertisers via franchise awards, mandates of access to the
electromagnetic spectrum, and loosened regulations. Like their counterparts
in the United States and Europe, newly substantial conglomerates based in
the global South, such as India’s Tata Group, with its interests in computer
hardware and software, telecommunications, advertising, and music, depend
 THE CULTURE INDUSTRY • 125

on the state to help propel convergence, further transnational initiatives, and

manage the domestic culture market.
As corporate investment powers into television, channels have prolifer¬
ated. As of early 2004, the fifteen countries of the European Union possessed
thirty-eight conventional (analog terrestrial) public-service TV channels
and forty-three privately owned conventional channels. The same group of
nations now includes an additional seventy-five publicly owned channels
with national coverage via cable, satellite, or digital terrestrial transmission,
as compared to 702 privately owned national channels of this kind.82 Movie
and sports channels show the largest gains, but news, shopping, and child¬
rens’ channels have also increased significantly.83
This trend toward corporate-commercial channel development is not con¬
fined to Europe. In India, more than 180 channels were available by 2004.84
Satellite dishes in the Middle East could access about fifty major Arabic-lan-
guage channels and many additional European and American networks.85
In the United States, by 2004 there existed 388 national nonbroadcast pro¬
gramming networks, of which cable operators had ownership interests in
eighty-nine.86 Gains by nonnational channels—that is, corporate-commer¬
cial services directed beyond domestic frontiers—are especially noteworthy
expressions of this process.
Following along the path already cut by shortwave radio, regional and
intercontinental television networking initiatives originated soon after the
emergence of television.8' Desultory movement toward “transborder TV”
continued during the 1960s and 1970s, as dozens of countries joined the U.S.-
dominated International Telecommunications Satellite Consortium (Intel¬
sat); but satellite television transmissions that crossed national boundaries
continued to “be channeled through local networks” and, with some excep¬
tions, subject to approval by nation-state authorities.88 However, a means by
which to circumvent this obstacle to commercial expansion was moving from
imagination to design and implementation: broadcasting by satellite directly
to home receivers. Through the 1970s, the movement for a New International
Information Order and continued U.S.-Soviet rivalry helped keep at bay such
supranational satellite systems. By the mid-1980s, however, direct-to-home
broadcast satellites were deployed throughout a few large-market nations
and soon elsewhere; concurrent arrangements began to be made for satellite
distribution of commercial networks—the first were forged, significantly, by
the U.S. news channel CNN.89 With these twin developments, the heavens
began to smile on transborder services.
126 • VECTORS OF COMMODIFICATION

In 2004, no less than twelve thousand satellite video channels were beam¬
ing information and entertainment to the world.90 With the collapse of the
Soviet Union, telecommunications liberalization, and the rapid expansion
of corporate satellite investment, supranational networks have begun to act
as a pivot of system development. In small European nations like Ireland,
Austria, and the Netherlands, foreign channels claimed in excess of 30 per¬
cent of the daily audience by 2002; even in the larger economies of Germany,
France, and Italy, foreign channels constitute between 14 and 42 percent of
the total offered by cable and satellite providers.91
“What are the political and theoretical implications of the apparent diversi¬
fication of media ownership and the multidirectional nature of global media
flows?” ask Yuezhi Zhao and Robert A. Hackett.92 The question is vital, its
answer complex. Most of the newly abundant commercial channels have no
aspiration to cut free of prevailing property relations or the existing interstate
system but aim instead to carve out a lucrative niche within their compass. In
exceptional instances where transborder services do pose a perceived threat
to the established order, efforts are made to claw them back into the domi-
native political economy.
Such a case occurred around the satellite news service Al-Jazeera, which
began broadcasting in 1996 in the context of the authoritarian and corrupt
states of the Middle East. Al-Jazeera was cited early in its career for offering
a fresh and welcome alternative to the region’s existing official broadcast
services.93 Al-Jazeera was sponsored by the Emir of Qatar, who continues to
sustain the greater portion of its $40 million annual budget. Why? Accord¬
ing to the journalist Hugh Miles, the decision to establish the service was a
“wily” one: “The government is savvy enough to know hosting a massive
American airbase in its heartland is never going to be wildly popular, but
it is better that any criticism be aired in public.”94 During its first few years,
Al-Jazeera even drew praise from the U.S. State Department for its critical
stance toward Arab governments.
Al-Jazeera’s success has stemmed from its unique access to the wars in
Afghanistan, Iraq, its coverage of the Israeli-Palestinian conflict, its provoca¬
tive talk shows, and its general editorial independence. But, with rapidly
deteriorating U.S.-Arab relations, these same features have also opened it
to pressure, first from Arab states and thereafter from the U.S. executive
branch. Saudi Arabia mounted—and as of 2005 still maintained—a boycott
on advertising with Al-Jazeera. Incensed that the network’s “inflammatory”
news was interfering with its campaign in Afghanistan, the Pentagon bombed
Al-Jazeera’s office in Kabul.95 Still, Al-Jazeera’s popularity only increased; by
 THE CULTURE INDUSTRY • 127

April 2003, as it covered the war on Iraq, it had become the most-watched
news channel in the Arab world, with forty to fifty million viewers scattered
not only throughout the Middle East but in Indonesia, Europe, Canada, and
the United States.96
The relationship of Al-Jazeera to processes of public-opinion formation
within the Arab countries is beginning to command the attention of scholarly
specialists.9. For present purposes, however, the more vital issue is pinpointed
by Hugh Miles: Al-Jazeera has “broken the hegemony of the Western net¬
works.” Not only has it garnered popularity'with Arab viewers and grown
to include over seventy correspondents in twenty-three bureaux on five con¬
tinents; it has also become a paid supplier of otherwise-unavailable video
footage from Afghanistan, Iraq, and Palestine to the major U.S. and British
networks, from Fox News and CNN to the BBC.98 In a region of surpassing
strategic importance to the United States, the achievement of Al-Jazeera’s
unembedded reporting thus has been to break the embargo on independent
news exercised internationally by western news agencies and networks.99 The
effect on the ability of the United States to shape and control information
circulating within and outside this strategic region has been profound. “In
Operation Desert Storm (1991), the American-led coalition was largely able
to control the information war,” writes Marc Lynch. In 2003, in contrast,
the Americans “wanted to maintain information dominance but seemed
powerless to achieve it.”100
What is the larger meaning of this change? Is Miles correct to conclude
that, “in the decades ahead we can expect only more Al-Jazeeras”?101 Does
Al-Jazeera presage a widening international movement by the media toward
ideological diversity?
Parallels certainly could be found; let us briefly examine one seemingly
congruent initiative. Televisora del Sur (“New Television of the South,” or
“Telesur” for short), was established in Venezuela in 2005 to provide a Latin
American satellite news service. Telesur was accorded scantier support than
that enjoyed by Al-Jazeera, a mere $2.5 million in seed money.102 Support
from the Argentinian government elevated Telesur into a joint venture, and
additional aid—either money or technical support—was promised by Uru¬
guay and Cuba. Telesur also signed a cooperation agreement with Al-Jazeera
itself.103 According to its director, after Telesur began broadcasting in July 2005
it would “wage battle in the mass field of television,” to promote a “Latin
American project of communicational integration.”104 The Venezuelan presi¬
dent Hugo Chavez himself declared that Telesur aims at “counteracting the
media dictatorship of the big international news networks” like CNN.105
128 • VECTORS OF COMMODIFICATION

The political sources of Telesur must be set within a context fraught with
social and political struggle. Bitterly opposed not only by the United States,
which laid plans for its own counter-satellite service to broadcast into Ven¬
ezuela,106 but also by Venezuela’s own capitalist class, Chavez has embarked
on a prospectively far-ranging process of economic “indigenization,” which
redistributes some of the nation’s substantial oil revenues to address the
needs of the poor. As a result, international news media have painted him
as a tub-thumping despot and Venezuela as a rogue state. Recalling Chile
in 1973, where commercial media interests helped topple the democratically
elected socialist president Salvador Allende in a bloody coup, Venezuela’s
corporately owned media (led by the Cisneros Group and Radio Caracas
Television) acted complicitly with the coup d’etat that momentarily unseated
Chavez in April 2002. After two days out of power, during which U.S. leaders
quickly recognized Venezuela’s new and illegitimate government, Chavez was
borne back into office on a tide of popular mobilization.
The Chavez administration responded not only with Telesur but also by
supporting a growing movement toward community broadcasting through¬
out Venezuela. Support for Telesur has come from governments that, for
varied reasons, have distanced themselves from the United States. No matter
how these struggles are resolved, they show that ideological diversity remains
a prize to be won, not a natural condition or a default setting. In some places
and at some times, transborder services may harbor emancipatory potential.
However, within a global culture industry historically built and episodically
reorganized in support of dominative social relations—a system thoroughly
beholden to state and corporate power—diversity will not arrive as a passive
by-product of audiovisual-market liberalization, or channel proliferation,
or surplus telecommunications. Rather, it can come only by way of effective
struggles for media access by sociopolitical movements actively challenging
the dominant political-economic order.
This kind of mobilization remains exceptional. Further consideration of
Al-Jazeera suggests additional grounds for skepticism that, if it hews to its
present course, the culture industry will be redeveloped in accord with a
truly diverse ideological template.
Pressures exerted against Al-Jazeera have not relented. Evidently enraged
by its coverage, whose major sin has been to take scrupulous care to observe
the “western” journalistic ethic of independence and impartiality, the Bush
administration has rolled out rival propaganda services aimed at Muslim
countries. The BBC also announced that in 2007 it would spend $34 mil¬
lion annually to begin broadcasting an Arabic-language television news and
 THE CULTURE INDUSTRY • 129

information service twelve hours a day across the Middle East.107 Meanwhile,
the United States also worked with unusual aggressiveness to manipulate the
existing international and domestic news systems.108 An “extensive, costly,
and often hidden" information war has been undertaken by the Pentagon
in alliance with other government agencies and private contractors such as
the Lincoln Group.109 Military force has likewise been repeatedly deployed.
During the Iraq War, the United States bombed Al-Jazeera’s Baghdad news¬
room, killing a correspondent, and by April 2004, a total of twenty-one Al-
Jazeera journalists had been held and released by troops in Iraq.110 Al-Jazeera’s
reporters were eventually banned from Iraq.
A parallel initiative began to surface in 2005 and demonstrated that car¬
rots as well as sticks were available to try to bring Al-Jazeera back into the
fold.111 With the appointment to Al-Jazeera of a British national who for¬
merly worked for Associated Press Television as its new managing director,
its launch of a sports channel and additional expansion planned around
Arabic documentary and children’s channels and Al-Jazeera International,
an English-language news channel, and a commissioned study of how to
privatize Al-Jazeera’s expanding system by the consultants Ernst and Young,
more supple means of co-opting ideological threats may be in the making.
Miles speculates that, in the eyes of elites, Al-Jazeera provides a tempting
commercial target:

A more likely possibility than being blown up or shut down is that Al-Jazeera
will one day be gobbled up by one of the world’s giant media conglomerates.
In the past network spokesmen have stated that any offer would be consid¬
ered, as long as the buyer will guarantee editorial independence.... Besides,
as long as the Saudis maintain the embargo on advertising, Al-Jazeera is not
very commercially attractive. But the Middle East has a youthful population
which holds enormous promise for advertisers. If something were to happen
to the Saudi government or its advertising embargo, Al-Jazeera would sud¬
denly shoot up in value.112

Whether privatization will occur, and whether advertisers and satellite and
cable systems will sign up to support its English-language service, Al Jazeera
International, remains to be seen.113 At the time of writing, Al Jazeera con¬
tinued to act as a principled defender of editorial independence. Still, it is
judicious to remain mindful of historical precedents.114 In keeping with these
precedents, a move to corporate-commercial ownership could be clearly
designed, in advance, not only as a profit strategy but also as a means of
tempering Al-Jazeera’s news coverage. “Plenty of potential investors in
130 • VECTORS OF COMMODIFICATION

the region would like to see its coverage restrained,” muses the Financial
Times.115
Upon entry, or reentry, into the corporate-commercial culture industry, a
thick web of existing structures and practices can be counted on to reshape
and canalize overly intrepid or incautious programs and channels.116 Supra¬
national corporate-commercial TV infrastructures encompass audience rat¬
ings and related measurement companies, whose results are systematically
employed to further capital’s profit strategies over public service. Corporate
advertisers pervasively influence programming choices to ensure that pro¬
grams furnish a conducive ideological environment for their efforts at per¬
suasion; there are numerous baneful indications that the supposed brick wall
between editorial and sales departments, never as formidable as claimed, of
late has been breached regularly. Political authorities also have long cultivated
means of shaping the news to their taste. A rash of scandals in the United
States confirms that, today, the press’s complicity in its own manipulation
has become profound.117
To equate the growth of transborder television with the cause of human
freedom therefore is, in general, to miscast its importance. Early in 2000,
Asia’s satellite-delivered Star TV was watched in eighty-two million homes
in fifty-three countries; its parent, Rupert Murdoch’s News Corporation,
enjoyed the capacity to reach 60 percent of the world’s homes through sat¬
ellite systems reaching five continents—Australia, Asia, Europe, and North
and South America.118 The communication scholar Daya Kishan Thussu
shows how the program services that piggybacked on Murdoch’s and other
conglomerates’ transborder satellites—MTV, ESPN, CNN, Discovery, BBC
World, and a scattering of others—routinely amass the largest audiences.119
As Miles points out, “[I]t is easy to forget that the most popular shows on
Arab television are Egyptian and Lebanese soap operas and films, as well as
imported Western game shows. Who Wants to Be a Millionaire? is one of the
biggest hits of recent years, presented by a debonair Lebanese sex symbol.”120
Owing to the expansion of corporate-commercial media systems, the same
point could be made with respect to almost any country.
The power of the culture industry does not translate directly into control
of human subjectivity per se, and its assimilation into popular conscious¬
ness and experience remains a complex matter. And programming is also
undergoing complicated processes of recomposition. Control over system
development and programming and scheduling decisions, however, is gravi¬
tating not to viewers but to capital, directly via the new capital logic with
which it is being suffused. For the moment, there turns out to be room for
 THE CULTURE INDUSTRY • 131

an Al-Jazeera. But one, two, or many Al Jazeeras? There is considerable rea¬

son for doubt, unless and until countervailing sociopolitical forces become
strong enough to make the radical reconstruction of the culture industry a
major objective.
Again, this is not to suggest that cultural programming is not undergoing
complex changes. Corporate-commercial development and channel prolif¬
eration have fueled a surge in worldwide demand for audiovisual product,
and this growth in turn has provoked apparently contradictory trends on
the supply side. Local cultural production has gained visibility and at points
real strength, even as U.S. cultural exports in particular and the role of trans-
nationally organized distribution networks have expanded around it.
The U.S.-based culture industry has long been the paramount purveyor
to the global market; during the 1920s and more extensively during the 1960s
and 1970s, the extent of this skew and its strategic importance in reintegrating
the global market under U.S. stewardship engendered widespread charges of
threats to national sovereignty or cultural imperialism. This structural imbal¬
ance in the audiovisual sector has persisted. Exports by U.S.-based mega¬
media companies have surged, and Europe’s negative trade balance with the
United States in films, television programs, and video has increased; one U.S.
report crowed in 2000 that “U.S. movies continue to dominate international
trade in motion pictures, including film rentals ... videocassette rentals and
sales, and sales of television rights (including pay television).”121 In 2000, the
United States enjoyed an $8.1 billion surplus in its audiovisual trade with
the European Union, divided equally between television and film rights.122
Through early 2004, the ten top-grossing films of all time at the international
(non-U.S.) box office were all U.S. films. In testimony to the new marketing
muscle available to Hollywood, these were all recent blockbusters; the oldest
of the ten—Jurassic Park—was released in 1993, and no fewer than six came
out after 2000.123
However—and taking due note of substantial unevenness by country
and by medium—“local” cultural production has also increased through¬
out much of the world. This still-fluid and complex movement to local
production must be situated with respect to the culture industry’s chang¬
ing accumulation process. There are good reasons to suppose that it often
denotes shifts in audiovisual product sourcing and therefore paradoxically
constitutes a further development in the ongoing transnationalization of
the political economy of cultural production.
Major advertisers and their agencies develop campaigns and purchase
media time and space on a global basis; this involves placing pressures on
132 • VECTORS OF COMMODIFICATION

media companies to act in concert with their supranational designs. Oblig¬

ingly, the leading culture conglomerates themselves increasingly strategize
and act on a transnational scale. But the advertising industry and the media
system they depend on are reconfiguring themselves around segmented
and differentiated audience groupings. Symptomatically, some—not all—
efforts at “local” cultural expression come in the form of such audience-
segmentation initiatives. In 1999, Sony expected to create no less than four
thousand hours of TV programming in foreign languages—more than
twice its output of English-language programming—for its own foreign
channels and for sale to other groups.124 Sony produced thirty-three hours
a week of Hindi-language programming and transmitted it not only to
India but also to Africa, Britain, North America, and the Middle East; it
also produced or coproduced thirty-five weekly hours of Mandarin-lan¬
guage programming, mostly for its Super TV channel that reaches most
Taiwanese households, but with an eye on mainland China.125 Time Warner
is increasing the number of non-English-language films it produces from
thirty-two in 2005 to forty-four in 2006.126
What passes for local culture is, in addition, selective and perhaps newly
malleable. Within the United States, where laws capping group ownership
of radio stations at forty nationwide were eliminated in 1996, Clear Chan¬
nel Communications was operating over twelve hundred stations by 2002.
A dominating presence among the handful of giant new radio chains, Clear
Channel has moved quickly to “perfect the art of seeming local,” deploying
a technology called “voice tracking” to customize programming. By piping
in voices and inserting references to local events, people, and landscapes, the
technology makes it sound to listeners as if each station’s disc jockeys actu¬
ally work within their community; in fact, the same songs are being played
on stations with similar formats nationwide.127
Centrally orchestrated “localization” strategies are now a staple in a grow¬
ing range of geographic and media-product markets. The largest culture-
industry conglomerates, wrote a business analyst, “may well maintain their
leadership roles, but they will have to adapt to local audiences and include
local content. Moreover, foreign content will begin to nudge its way onto
the global hit parade.”128 “What we’re seeing,” concluded an observer of the
international film industry, “is the emergence of a two-tiered global system.
English is the language of the international blockbuster, but lower-budget
pictures can be made in almost any language for the home market, and a
few ... will even become international hits. Hollywood, with its vast corpo¬
rate resources, can call the shots in both tiers.”129 “‘Twenty years from now,’
 THE CULTURE INDUSTRY • 133

says Time Warner’s CEO Richard Parsons, this two-tiered model “‘is going
to proliferate across the spectrum of things we do.’ Doing it right, he adds,
‘is probably the biggest challenge facing the company.’”130
A growing fraction of local programming testifies to innovations in cor¬
porate structure and function, which link transnational and national capi¬
tal in a warren of coproductions, joint-ventures, and other partnerships.
Ownership changes and new financing patterns have likewise gripped the
command centers of the global system of marketed cultural provision.
“Hollywood” itself, long a symbol of U.S,, global cultural domination,
has been substantially transnationalized in structure, even as it continues to
parlay its dominance of the U.S. audiovisual economy and its control over
global distribution into a commanding share of the world market. Only one
of the six major U.S. film producers is owned by a non-U.S. culture-industry
conglomerate: Columbia (Sony). But two others have shifted out of U.S.
ownership at least once over the preceding fifteen years: Fox, owned by News
Corporation, altered its legal home to concord with the preferences of its
major owner, the Australian Rupert Murdoch; and Universal moved from
U.S. to Japanese to Canadian to French and back to U.S. control. Foreign
capital has likewise flooded in to the second-tier units of “domestic” U.S.
cultural production. A series of allied structural changes have contributed
to the same trend.
U.S. film studios routinely presell the foreign rights to a film before pro¬
duction is authorized. “For a $50 million film, a U.S. producer might seek
10% to 12% of the total budget from a distributor in Germany, 7% to 9%
from France, 6% to 8% from Italy, and 4% from Spain, amounting to nearly
a third of the movie’s budget from the major continental European coun¬
tries.”131 Across the matrix of preproduction, production, and postpro¬
duction activities, shifts are also occurring in the location and function of
audiovisual production. “Global Hollywood” constitutes not merely a U.S.
phenomenon but the activating core of a “new international division of
cultural labor”—an unequally shared and dominative projection by cultural
capital, especially transnational capital—at large.132
While the huge U.S. domestic market—far bigger than any other national
market, and even bigger than the combined markets of Europe, the Middle
East, and Africa133—continues to exert sustained gravitational pull over the
roiling global audiovisual system,134 its role is also changing. Partly akin to
what are aptly termed “Japanese-owned but U.S.-oriented multinationals
like Nintendo and Sega, the French video-game makers Ubisoft Entertain¬
ment and Infogrames Entertainment “publish Americanized games, rely on
134 ' VECTORS OF COMMODIFICATION

North American game designers, and are very dependent on the U.S. market
for their sales.”135 As in other consumer-product sectors, the United States
culture industry is functioning increasingly not as a forum for the expression
of national culture but as a pivot of global demand.
In the emerging political-economic system, the role of the conglomerates
is thus increasingly to pool transnational capital, to produce commodities
within the new international division of cultural labor and propel them
outward into the world market—at least when they are deemed to possess
a lucrative crossover potential:

While the U.S. still produces many of the latest models, more and more it
serves as a kind of cultural chop shop, retooling offerings from afar. It has
a lot to choose from, as there has been an explosion in both the quality and
volume of entertainment generated abroad. The privatization of the televi¬
sion business in Asia, Europe, and Latin America and the advent of cheap
production technology has helped spawn a generation of ambitious young
artists and producers who believe they can conquer the world....
The big U.S. entertainment conglomerates, and the foreign-owned compa¬
nies like Sony that run their entertainment operations almost entirely from
the U.S., are embracing this phenomenon. The companies found in recent
years that it was getting tougher to just jam American-made product down
the world’s throat—as when MTV learned that it needed to mix in more local
acts on its international channels. So in response, the media giants are increas¬
ingly flipping the equation on its head, scouring their overseas operations for
talent that can be buffed up for the big U.S. market. Success in the U.S., in
turn, can open the door to even greater success in the rest of the world.136

Repelled by slowing growth rates in the United States, tempted by higher

ones in China, India, and select other countries, and always trying to spread
their risks across multiple media and product markets, major U.S.-based
culture conglomerates continue to shift away from simple exports of U.S.
cultural commodities. Exports, as the Financial Times delicately underlined,
“particularly if the current geopolitical climate persists, will not be a long¬
term grown engine. Instead, companies have to take their business models
and, in effect, dress them up in local costume.”137
There is no question, therefore, that the culture industry is altering in light
of proliferating product markets and transnationalization.138 It is becoming
more multipolar: units of capital domiciled not only in the United States but
also in Japan, Western Europe, South Korea, China, Mexico, India, and other
nations have acquired substantial roles, sometimes even leading roles, in the
 THE CULTURE INDUSTRY • 135

continuing process of commodification. Although I have argued that this

changed structural foundation does not itself propel a new ideological open¬
ness, at least with regard to the question of capitalist control of the political
economy, it remains important to ask whether it affords a greater measure
of cultural pluralism. Does increased multipolarity vitiate the long-standing
U.S. dominance over the system of global cultural provision? Does it signify
that the United States is losing the ability or inclination to put culture to
imperial ends?
On the evidence of the period since September 2001, the inclination has
not diminished; however, U.S. dominance faces some new political chal¬
lenges. General endorsement of a UNESCO declaration in favor of protecting
cultural diversity constitutes one recent counter-thrust by the international
community; suddenly pointed opposition to U.S. power over the global Inter¬
net represents another. These challenges need to be situated briefly in their
historical and conceptual context.
Control over international cultural production and distribution constituted
a prize wrested from Great Britain by the United States during the first half
of the twentieth century. In multiple ways, analysts have long known that this
control contributed in crucial ways to the rise of dominance of the United
States. As I and my co-authors put this in 1992, “From the ability to frame the
international news agenda, to the deployment of high-technology weaponry,
to the cultivation of an unremittingly commercial ethic of mass consump¬
tion, communications has become an essential dimension of power.”139 These
functions continue to be performed. But the U.S. government’s strivings to
function as the chief steward of the culture industry’s transnationalization
occur within a profoundly changing context.
Power to develop culture as a commodity on a transnational scale has
transferred over the course of a generation to corporate capital, as priva¬
tization and commercialization have proceeded and as new distribution
systems have been consecrated to the circulation of commodities. At these
points and others, commodification has been expedited and sustained not
merely through the exercise of economic power but also—sometimes pre¬
eminently—through political power. That states defer so often to capital,
and even that national sovereignty is continually transgressed, thus does not
signify that states have ceased to be important. Far from it. States remain
crucial to the project of commodification, within the unfolding context,
as Ellen Wood emphasizes, of capitalist transnationalization.140 “The very
fact that ‘globalization’ has extended capital’s purely economic powers far
beyond the range of any single nation state means that global capital requires
136 • VECTORS OF COMMODIFICATION

many nation states to perform the administrative and coercive functions that
sustain the system of property and provide the kind of day-to-day regularity,
predictability, and legal order that capitalism needs more than any other
social form,” writes Wood; today, therefore, the global political economy is
“administered by a global system of multiple states and local sovereignties,
structured in a complex relation of domination and subordination.”141
This process is anything but conflict-free. States confront not only differ¬
ent interests and environing constraints but also distinct “internal needs and
pressures” as they negotiate with other states.142 Growing economic multi¬
polarity generates significant added potential for political friction. During
recent years, international political conflicts over culture and information
have been sharpening.
In deliberations over trade in cultural commodities, the transnational
culture conglomerates continue to demand, as they have for decades, that for
policy-making purposes audiovisual trade should be treated like other cross-
border commercial transactions.143 Any kind of barrier or constraint imposed
over national audiovisual space, they insist, is obsolete, unjust, and even
irrational. Their initiatives to promote the capital logic of transnational com¬
modification, either via monocultural blockbusters or by selectively appro¬
priating and exploiting cultural difference to segment audiences, must be
untrammeled. The free flow of cultural commodities—their commodities—
should not be interdicted.144 Again confirming a long-standing pattern, these
companies have been strongly supported by the executive branch of the U.S.
government. One strategic objective is to limit and, if possible, to reverse
cultural exception clauses mandated by existing trade treaties (of the General
Agreement on Tariffs and Trade and its successor, the World Trade Organiza¬
tion, and, regionally, of the North American Free Trade Agreement)—clauses
promulgated in the early 1990s, putatively to protect national cultures, in
response to a prior phase of U.S.-led commodification.145
On the other side of this issue stands the rest of the world: the European
Union, Canada, numerous African and Latin American nations including
Mexico and Brazil, and, interestingly, Japan and India as well as China. In
2005, these states officially endorsed a plan to strengthen the protection of
cultural diversity through a legally binding UNESCO convention, which they
hope will be accorded priority over the jurisdiction claimed by the World
Trade Organization. The United States position opposing the effort to defend
cultural diversity was backed by only one other nation—Israel—while no
fewer than 148 countries approved the “Convention on the Protection of the
Diversity of Cultural Contents and Artistic Expressions.”146
 THE CULTURE INDUSTRY • 137

Although the convention on cultural diversity does not comprise an incen¬

diary document, although it does not supplant the dispute-settlement mecha¬
nism offered by the World Trade Organization, and although it will likely
exercise at most a modest restraining influence rather than a more basic form
of control over commodification, the battle was joined—and the United States
lost by an overwhelming margin. This result occurred despite the fact that the
United States seems to have expected political support to issue from nations
that now host significant units of culture-industry capital: Mexico, Brazil, South
Korea, Japan, and India, for example.147 Nations backing “cultural diversity,”
however, do so out of disparate motives: some based on a principled convic¬
tion, some attempting to secure commercial advantages for domestic capital.
In this instance, growing economic multipolarity translated into a significant
political reversal for the United States within the interstate system.
Might this reversal portend a tectonic change? A suggestive indicator derives
from initiatives pertaining to Internet governance, initiatives that culminated
at a 2005 World Summit for the Information Society (WSIS) conference in
Tunisia.
International anxieties about U.S. power to shape and control the global
Internet have formed a subterranean policy current for years.148 One par¬
tial expression of this concern are some of the various initiatives to estab¬
lish alternative domain-name authorities outside the purview of the U.S.
Internet Corporation for Assigned Names and Numbers (ICANN), which
runs the master address system used to direct traffic on the global Inter¬
net.149 During the summer of 2005 these fears about U.S. power over the
online world crystallized. Late in June, notwithstanding appeals from vari¬
ous countries for a new multilateral governance structure for the Internet,
and reneging on a Clinton administration promise that it would bow out
of the picture, the U.S. Department of Commerce announced that it would
indefinitely retain its existing oversight authority over ICANN.150 Then,
in August, apparently for the first time, the U.S. government interceded
overtly with ICANN: the Commerce Department asked that ICANN delay
its approval for a much-bruited “.xxx” domain name.151 This act offered
fresh evidence, even to nations in agreement with the Bush administration
that “adult” Internet sites should not be accorded any added legitimacy, that
U.S. veto power over ICANN constitutes an unacceptable transgression. As
the Chicago Tribune explained in an editorial, it also “put the U.S. in the
awkward position of opposing more international control of the Internet,
while engaging in its own political meddling on the Internet.”152
A concurrent initiative by the International Telecommunications Union,
138 • VECTORS OF COMMODIFICATION

an agency affiliated with the United Nations, offered a proximate opportu¬

nity for redress by the international community. Most of the action actually
unfolded during the weeks leading up to the World Summit on the Informa¬
tion Society convening in Tunis in mid-November 2005. China, Iran, and
other developing nations renewed their arguments in favor of opening up
control over the Internet to wider participation by non-U.S. states. But a
crucial realignment came in October, when the European Union unexpect¬
edly proposed a “cooperation model” that would grant countries besides the
United States a formal role in guiding the Internet domain-name system and
governing Internet policy.
Howls of protest at this betrayal issued from the U.S. press. These are
noteworthy, first, for their undisguised assertion of a U.S. right to preside
over the Internet’s global jurisdiction. A New York Times op-ed declared that,
on economic and national security grounds, “the United States should keep
control of the Internet”: “The Web of the Free,” it trumpeted, is rooted in
“American values.”153 “Mitts off the Internet,” added a writer in the Chicago
Tribune: “Is the Internet so broken that it needs to be fixed by the likes of Iran,
Cuba, China, Ghana, and France?”154 Taking aim specifically at “our friends
at the European Union, who last month turned against the U.S.,” the Wall
Street Journal nonetheless portended that “Washington doesn’t hold all the
cards here.”155 The Information Technology Association of America likewise
singled out the European Union for “compromising Internet governance
in catering to China and other smaller countries” through its “anti-busi¬
ness position.”156 Senior U.S. lawmakers snapped into action as a bipartisan
group of congressional representatives wrote to the U.S. Departments of State
and Commerce to urge that, by refusing to cave to international pressure,
“the United States should maintain its historic role.”157 The issue of Internet
governance then ascended to the topmost ranks of the country’s political
leadership. “In a sign that traditionally obscure discussions about Internet
control have taken on new prominence,” a story confined to a specialized
online news service reported, “President Bush broached the topic in a White
House meeting ... with European Commission President Jose Barroso.”158
When the dust settled after the WSIS deliberations in Tunisia, the hard¬
line U.S. policy had prevailed; the United States retains its grip on the day-
to-day management of Internet domain names via ICANN. But the status
quo in fact has been altered. In deference to the international community,
though barely noticed by the U.S. press, a multifunction “Internet Gover¬
nance Forum” was also established. U.S. leaders crowed that they had won
the day, but a European Union spokesman could declare, equally validly, that
 THE CULTURE INDUSTRY • 139

the agreement "represents a clear commitment to a more multilateral and

transparent approach to internet governance.”159 Issues associated with the
control structure and policy of the global Internet remain in flux and very
much alive. The possibility is real that growing economic multipolarity will
translate into significant political change.
Even as it is reorganized around more multipolar political and economic
axes, how is the capital-logic of the transnationalizing culture industry con¬
currently altering in the vortex of technical change?

Toward a Universal Product Market for Culture

By 2006, news stories heralded, convergence had finally become palpable: tele¬
vision is being conjoined with computers, wireline, and wireless broadband
networks to engender a raft of new devices and program forms—video on
mobile phones, iPods, TiVos, Web sites, blogs. This “bubbling digital stew” in
turn works to “give consumers more control.” Ted Leonsis, vice chairman of
America Online, elaborated: “There is this primordial digital soup brewing
of more bandwidth, more storage, more devices, and more people creating
content.... The lightning that struck is that the people have rapidly adopted
all this even faster than we in the industry conceived, and bypassed the tradi¬
tional media.”160 In this new “anything, anytime, anywhere paradigm,” as the
media impresario lohn Malone called it, everything is up for grabs.161
Everything? By opening the doors to profit-seeking investment in net¬
works—including terrestrial, cable, and satellite broadcasting—capital obtains
access to tempting new tracts. Internet systems and services and mobile tele¬
communications, each progressively augmented by broadband capabilities,
comprise further investment nodes. Although this process of reorganization
is complex and wide-ranging in scope, and though it remains volatile and
incomplete, it continues to be shaped by the abiding principles of the capital¬
ist political economy.
The genres and practices that will animate a digital culture industry are
in flux, and the technical basis for this massive reorganization of cultural
production and distribution has not yet stabilized.162 As a condition of their
continuing self-assembly in this dynamic context, the conglomerates are
attempting to absorb and assimilate digital technology and program forms.
Thus commences what is certain to be a long-term metamorphosis, replete
with contentious and complex political-economic and cultural elements.
Again, however, as against the gamut of market-churning consumer-elec¬
tronics hardware and network infrastructures and the eruption of novel
140 • VECTORS OF COMMODIFICATION

expressive genres and forms of information access and exchange, we must not
lose sight of the emphasis on which corporate conglomerates are themselves
intransigent. From the standpoint of capital, new technologies and services
offer mere means.
The end they serve is the enlargement of profitable revenue extraction.
This takes two major forms, with two others that might become more con¬
sequential: advertising, or selling commercial access to audiences and users;
selling content and services to institutions and individuals via a practically
endless variety of fees, rentals, site licenses, and subscriptions; data sales;
and transaction charges (think of Ebay). As the Internet has emerged as the
supreme incarnation of convergence on a global scale, it has likewise become
the overarching object of commercial desire. Over the course of a single
decade, the Internet has been transformed from an utterly noncommercial
to a pervasively profit-oriented system.
Again, however, the present is more deeply rooted than is often appreci¬
ated. By the 1970s, it was already evident to U.S. policy makers that, owing to
their great economies of scale—“high fixed costs and low variable costs”—
database services were likely “to exhibit tendencies toward monopoly.”
Ithiel de Sola Pool and Arthur B. Corte projected this trend: “It seems clear
that worldwide need for information will be met by remote access to com¬
puter databases; that in many instances there will be only one or few large
databases in a field; and that, therefore, the countries and organizations
that take the lead in creating the databases and the communication system
for accessing them will gain substantial influence in world affairs.”163 Is it
mere coincidence that, by around 2000, fewer than 5 percent of the world’s
publicly accessible databases were produced in Asia, Africa, the Middle
East, and South America?164 Is the prominence of Google and other U.S.-
based Web companies—whose existence could not have been imagined
in 1975, but which in 2004 made up all of the top five Web destinations in
Europe—simply fortuitous?165
Much cultural and political-economic work was needed to effectuate this
result. The reconsecration of the Internet as a commercial system has occa¬
sioned repeated intervention as well as important attempts at coordination
by elites. In Paris in September 1999, twenty-nine of the world’s most power¬
ful technology and media executives, including Steve Case of XOL, Thomas
Middelhoff of Bertelsmann, Louis Gerstner of IBM, Michael Eisner of Disney,
and Gerald Levin of Time Warner, met behind closed doors “to debate how
to turn the wild Web into a family-friendly place to do business.”166 Many
 THE CULTURE INDUSTRY • 141

of these executives (all five of those named above) have retired or became
casualties of the media and technology bubble; their visions of how to com¬
mercialize the Internet competed and clashed as the structural interests they
represented fought for market dominance. Yet the goal they shared endures:
A dynamic Internet infrastructure has been increasingly colonized by and
for capital.
At a basic social level this endeavor has been thoroughly, even neces¬
sarily, uncreative. Leading features of today’s Internet have been recast to
act merely as extensions of long-standing cojporate-commercial practice.
First, the Internet embodies and further extends the tendency toward trans-
nationalized corporate production and distribution. Second, the Internet
simultaneously supports a deepened effort to market to consumers by dif¬
ferentiating and segmenting them into target groups. Third, as a “control
utility,” as Darin Barney labels it, the Internet sustains a trend toward more
comprehensive corporate monitoring and metering of transactions.167
New digital cultural commodities (videocassettes and DVDs) and elec¬
tronic distribution channels (satellites) have been deployed strategically for a
generation to evade or end-run around existing regulations and restrictions
by forging new modes of access to national markets worldwide. In 1996, as the
Internet was exploding as a world-scale commercial system, a top organizer
and strategist for the U.S. transnational audiovisual industry, Jack Valenti,
called the emerging media “the new centurions of the digital age, march¬
ing over continents and across geographic borders, breaking down artificial
government barriers, the most powerful audiovisual armies ever known.”168
Akin to other new media, the Internet has provided capital a long-desired
means with which to press forward with its accumulation strategies, offensive
and defensive, across a much enlarged technical, geographic, cultural, and
political range. Its signal achievement has been transcending prior limits to
the transnationalization of cultural production, distribution, and consump¬
tion, enabling nationally denominated markets to be further reconstituted
and national political accountability to be further undercut.
Diversified cultural conglomerates and their advertiser patrons and tech¬
nology suppliers also have been empowered to make the World Wide Web
a more effective sales apparatus—by turning it into a self-service vending
machine of cultural commodities. The prize is not a liberated zone beyond
the market but merely new and effective channels through which to target
and track desirable groups of shoppers. Even as traditional broad-reach
media, especially print media, flail and flounder in search of commercial
142 • VECTORS OF COMMODIFICATION

support and give up any pretense of public service, the Web is claiming
increasingly substantial corporate advertising expenditures—around $10
billion in the United States by 2004.169
Well-capitalized companies rather than upstarts continue to have the edge
in bankrolling carefully calculated versions of diversity. Internet navigation
services, reports the U.S. National Research Council, “open an international
audience to purveyors of content and services, no matter where they may be
located.”170 They do so, however, not only via a process of “monetized search,”
in which search results may be sharply distinct from those produced by the
carefully neutral practices of conventional librarianship, but also by extending
the process of commercial localization from above. Yahoo possessed opera¬
tions in twenty-two countries and thirteen languages by the spring of 2000,
with 120 million users (and 3,500 advertisers) worldwide. The directory/portal
boasted no less than 350 content partnerships across Europe alone, helping
it to offer country-specific content and advertising.171 By November 2004,
Yahoo operated portals customized for thirty-two national and/or language
groups.172 Google’s search engine was by this time even more accessible lin¬
guistically, permitting navigation to proceed in over a hundred languages and
dialects.173 How soon will one or the other of these engines of commodifica¬
tion pose a political challenge, under the rules of the World Trade Organiza¬
tion, to libraries as a public-service institution?174
In the heady days prior to the popping of the Internet financial bubble,
enthusiastic projections of the Internet’s transnational commercial potential
were frequent; according to one writer, two-thirds of all e-commerce spend¬
ing by consumers soon would take place outside the United States.175 Another
commentator suggested that, by 2003, more than half of the content on the
Web would be offered in a language other than English, up from 20 percent
in 1999.176 These estimates proved to be inflated. The dominance of English
as a global language is due to more than only the Internet. English-language
Web pages still accounted for over two-thirds of the total counted by one
survey in 2001, and although the preponderance of English was declining,
as David Block underlines, “[Gjreater diversity does not necessarily mean
that all languages are equal: bigger is still better in the pecking order of world
languages as much of the proportional weight wrested away from English has
been in favour of a few major national languages.” The top eleven languages
represented by Web sites counted in 2001 accounted for 96 percent of the
total, while only 9.3 percent of the online population of 619 million counted
in 2002 did not fall within the compass of these eleven language groups.177
Content providers have for several years concertedly sought to develop
 THE CULTURE INDUSTRY • 143

“localization” market strategies. Discovery Networks’ Argentinian Web site,

boasted an executive, posted “‘an article on the condor which was sourced
in Spanish in Argentina but has also been translated into Portuguese for the
Brazilian site, and we’re hoping to offer that back to the U.S. site_[Y]ou
will not see us act as some companies do in the sense of rolling something
out from a U.S. headquarters for the world.’”178 Mainly to reach the huge
Chinese diaspora, in 2005 Apple and Universal Music announced that more
than a thousand songs by top Chinese musicians would be made available
for downloading from Apple’s iTunes stores in fifteen North American and
European countries.179 Darin Barney sums it up this way: “Global cultural and
media giants have quickly gobbled up internet content and carriage enter¬
prises because they understand that whatever threat the internet’s technicality
might pose to the reach of mass culture and the integrity of the mass audi¬
ence, this threat signals a much greater opportunity to increase and diversify
their hold on the cultural universe.”180 Yuezhi Zhao and I have put the point
more sharply: capital is learning to parasitize cultural difference in order to
profit from it.181 A considerable further advantage of this market-develop¬
ment strategy is that it may help to deflect charges of cultural imperialism.
The Internet has carried to a new level a general tendency toward inva¬
sive corporate monitoring and metering of audiences/users. Digital media
of many kinds are converging on social interaction across a fantastic range;
as they do so, data are produced about that interaction. The data are then,
increasingly, fed back into the system to engender what Kevin Robins and
Frank Webster, nearly twenty years ago, presciently envisaged as “cybernetic
capitalism.”182

Conclusion
Transnational market development has made at least some room for the
expanded circulation of local and vernacular cultural forms. Not all of this
effort will or can be canalized by capital’s designs. Intercorporate rivalries
in securing popular programming and increasingly extensive market experi¬
mentation engender openings for at least some alternative programs. The
technical skills needed to produce for the new media, though segmented by
dominative class, gender, and race relations,183 are not monopolized by the
culture industry; Internet-based means of production are not the preserve
only of wage labor. The declining cost of digital production continues to
open avenues of expression to individuals and groups effectively barred from
the commercial mass media. The replacement of U.S. stewardship by some
144 ' VECTORS OF COMMODIFICATION

agency of internationalized control over the Internet remains a simmering

political issue. Although efforts to contain and suppress these countertenden¬
cies should not be underestimated, corporate-state control over the Internet
remains thankfully incomplete.
In our emerging era of digital capitalism, struggles for justice persist. But
they do so in the context of a still expanding and globally powerful culture
industry. In the wealthy countries, and to a lesser extent elsewhere, back¬
ers of commercial interactive services are rapidly grafting them onto cable
television, landline telecommunications, and wireless media systems. Dialup
modem-based access limits the speed and constancy of service; thus it con¬
strains the market-development process. To get around this—at least for
most-desired groups of well-heeled consumers—culture-industry compa¬
nies are building out capacious, high-speed, broadband PC access within the
home, on tap day and night. The Internet is at the threshold of a further insti¬
tutional metamorphosis, whereby it will transition into a control mechanism
for digitally reconfigured devices and services of every kind, from washing
machines and ovens and toasters to finance, power, lighting, and water. Even
advocates of convergence have not yet widely recognized the sweep of this
process. Corporations based in many different sectors—not merely in the
audiovisual area—have deployed information and communications tech¬
nologies to enlarge their scale and scope.184 Adjacent initiatives, chronicled
in an endless bombardment of business news reports, bid fair to transform
the market into a 24/7 operation, anywhere and everywhere. Mobile Web-
access devices allow the continued usurpation of sites outside the home,
prominently including automobiles and airplanes, public spaces and shop¬
ping malls. The culture industry is thereby enabled to build—though only by
continually tearing down or “repurposing” what already exists—an almost
innumerable array of commercial platforms. The unfolding of the culture
industry throughout daily life is the subject of chapter 6.
 7
Parasites of
the Quotidian

“[I]t is never safe to conclude that puffing has reached its maximum
distention,” asserted Raymond Williams more than forty years ago.1 Just
so: more than a century after the advertising industry took over the job of
fronting for a new brand of consumer capitalism, today the sponsor system
is experiencing a renewed developmental surge.
How can this be? What fields are left to conquer? Advertiser sponsorship
constitutes one of the basic business models on which today’s privatized,
deregulated culture industry is predicated; the main other model is direct
sales and rentals of programs and services to consumers. Both models have
been increasingly widely employed to preempt earlier forms of cultural pro¬
vision based on government funding. Advertising possesses considerable
room to expand, owing not only to newfound technological and institutional
capabilities but also to the continuing rollback of prior limits.
Whole fields of practice funded and operated largely by state and non¬
profit agencies long restricted advertising, for example, in education and
much of public broadcasting. Other segments of the cultural field, notably
art museums and public libraries, were rendered inaccessible to corporate-
commercial inroads because of their long-standing role in socializing elites
within processes of class reproduction. Within divided societies, vernacular
and informal cultural practices associated with workers, the poor, and racial
and ethnic minorities often flouted middle-class sensibilities; by turns feared
and disdained, these sometimes became objects of suppression. Only halt¬
ingly and selectively were they appropriated and transmuted into public
imagery by the sponsor system.
146 • VECTORS OF COMMODIFICATION

Was this rollback a function of the advertising industry’s sheer institutional

power? Escalating advertising expenditures seem to suggest as much. Global
advertising spending increased sevenfold between 1950 and 1996, growing
one-third faster than the overall world economy. In absolute terms, stagger¬
ing sums were allocated. At the height of the Internet bubble in 1999, world
advertising revenues were estimated at $429 billion.2
However, absorbing the punishing effects of the Asian financial crisis and
the deep downturn of 2001, when U.S. ad spending declined for the first time
in forty years and by the largest percentage since the Depression year of 1938,
industry growth slowed.3 It did receive further boosts from corporate mar¬
keting tied to the Olympic Games and from television advertising outlays for
elections in the United States and Japan. Global advertising expenditures for
2004 were expected to break the half-trillion-dollar mark for the first time
(reaching $519.4 billion), with the United States accounting for just over half
of the world total ($263.3 billion).4 Between 1992 and 2004, moreover, after
accounting for inflation, the U.S. population doubled its household debt to
more than $10 trillion.5 But this ballooning indebtedness testifies not only
to the success of the sales effort but also to encroachments on the standard
of living that made it harder for many to avoid running up their credit-card
balances.
Underlying these complex quantitative trends are propulsive shifts in the
institutional character of the sponsor system. These changes have come not
only as a result of that system’s formidable institutional strength but also,
paradoxically, because of the fresh uncertainties and difficulties with which
it has been forced to contend.

Advertising’s Role in Consumer Capitalism

Selling constitutes a basic imperative of the market system—a necessary

step in the cycle of capitalist production. The corporations that underwrite
the system that has evolved to perform the selling function gain, in return,
a commanding role in shaping and coloring not only advertisements but
the larger culture. For these companies, it is a splendid bargain—especially
when, as in the United States, advertising is treated for tax purposes as a
deductible expense.
Capitalism’s endless conveyor belt of new commodities begins with cor¬
porate research and development, continues through production and distri¬
bution, and culminates in an ever intensifying sales effort; these functions
intermingle and even merge as capital’s compulsion to subordinate consump-
 PARASITES OF THE QUOTIDIAN • 147

tion to production intensifies. Kraft Foods budgeted $800 million to fund the
marketing of a hundred new products between 1999 and 2001, products that
it hoped would account for most of the growth in its overall sales volume.6
Gillette’s introduction of a three-bladed razor for women (Venus) rested on
around $300 million in research and development and manufacturing out¬
lays; the company announced that it would spend $100 million in advertising,
plus another $50 million in '"first-year marketing expenses,” to produce and
distribute ads in twenty-nine countries.7 Novartis, whose pharmaceutical
business’s top executive came there from Pepsi-Cola, planned to spend $1.2
billion over two years launching only five new drugs, while Merck’s Vioxx
relied on nearly $50 million in direct-to-consumer advertising between Janu¬
ary and July 2004—two months before the $2.5-billion-per-year-generating
painkiller was pulled from the market in a scandal over improperly ignored
side effects.6 Procter and Gamble’s Crest products budget around a quarter
of a billion dollars for media campaigns.9
The sales effort is coordinated by a shrinking group of advertising agency
“super-groups.” Through a protracted series of buyouts and mergers, four
super-groups housing dozens of once-independent agencies were assembled:
WPP, based in London; Omnicom and Interpublic, based in New York; and
France’s Publicis Groupe. Dentsu, headquartered in Tokyo, is also a major
player, but it derives only 5 percent of its revenues from outside Japan; each
of the super-groups, by comparison, garners between one- and two-thirds of
its revenues outside its home market. The trade journal Advertising Age sug¬
gested that this “transformation of agencies from fiercely independent entre¬
preneurial enterprises to publicly held mega-giants comes in response ... to
marketer consolidation. Most clients today demand that their agencies offer
global reach and seamlessly integrated communications capabilities. Those
shops that don’t face a choice: shrink or sell.”10
As media corporations diversify to keep up with the proliferation of new
media and the increasing fragmentation of audiences into differentiated
niches and segments, they encompass a widening array of selling venues,
from magazines to television to the Internet.11 This process of industrial
reorganization is a cause of and response to the fact that it is becoming
increasingly difficult to engage consumers’ attention.
Using “convergence” as a buzzword, the media behemoths emphasize to
advertisers what they call “integrated marketing,” whereby they offer to help
sponsors target audiences with a cohesive selling message across once-discrete
media units. To rebalance the terms of trade, in response to this consolida¬
tion among media companies the ad-agency super-groups have begun to
148 • VECTORS OF COMMODIFICATION

take over what had been an independent “media-buying” function. Super¬

groups have acquired many of the specialized businesses whose function is
the bulk purchase and subsequent brokerage to advertisers of time (for the
electronic media) and space (for print media). The ad-agency groups hope
that by integrating the media-buying function they can gain renewed power
over the placement and cost of commercials and more generally over the
programming in which they are inserted.
Each super-group derives around half of its multibillion-dollar annual
revenue from services other than the design and placement of commercials:
public relations, direct marketing, sales promotion, multicultural market¬
ing, health-care marketing, interactive marketing services, consulting and
corporate branding, and market research.12
Advertising agencies continue to make much of their ability to offer one-
stop advertising and marketing services to major clients. Interpublic, hired
by Coca-Cola to help define the “brand essence” of its leading soft drink,
intended to “act as creative consultant and idea generator at the global level,
evolving core messages about the Coca-Cola brand that could be incorpo¬
rated in marketing locally.”13 The spirit of this enterprise accords well with
strategic thinking that emphasizes the establishment of ongoing “brand rela¬
tionships” with targeted customers. “It is our job to understand the relation¬
ship of products to people’s lives, how they think and feel about our clients’
products and how best to communicate the relevance of those products to
create competitive value,” declared Allen Rosenshine, a top agency execu¬
tive. To accomplish this, “ [W] e have to be media neutral in our planning and
capable of coordinating and executing creatively in any channel of commu¬
nication. ... [W]e must provide convergence at the strategic planning level
of product and design, mass and interactive advertising, direct marketing,
sales promotion, packaging, point-of-purchase display, PR, infomediaries
in one-to-one marketing, and all other yet-to-be developed forms of brand
intelligence and communications.”14
None of this, however, ensures that the triadic sponsor system will smoothly
manage the transition to what has turned out to be a jagged and volatile selling
environment. In a context of secular overproduction and transnational com¬
petition, individual consumer product manufacturers face added difficulties
in profitably selling commodities; even the vaunted brand builder Coca-Cola
has struggled to regain its corporate footing.15 Advertising agencies, even
as they bulk up into super-groups, have not managed to avoid turbulence.
Agencies sometimes voice desperation as they try simultaneously to diversify
beyond broadcast television, magazines, and newspapers into new media; to
 PARASITES OF THE QUOTIDIAN • 149

cut costs; and to keep up with rapid zig-zags in media use and cultural prac¬
tice.16 Media companies are also undergoing complex and often precipitous
transitions. In the United States and to an extent elsewhere, broadcast televi¬
sion, newspapers, radio, and magazines are being hit with varying force by
their advertiser-patrons’ growing preference for more targeted, and often
newer, media: the Internet, cable television, and direct mail.17 During the 2005
“upfront” negotiations between advertisers and broadcasters, when sponsors
make advance purchases of as much as 85 percent of the TV networks’ inven¬
tory of commercial time for the next year, drug companies like Pfizer and
consumer-products behemoths like Procter and Gamble—the leading U.S.
advertiser, spending around $2.5 billion on TV—cut back on TV commercial
buys in favor of other media.18
Institutional transformation and intensifying competition do not end
here. The buildup of proprietary communications systems by big com¬
panies of every kind already comprised a noteworthy trend twenty-five
years ago, and it has markedly deepened.19 Wal-Mart, whose legendary
computer-communications systems gave it unparalleled ability to refine its
selling mechanism by mining and sifting and exchanging proprietary data,
in 1998 added to its arsenal a Web-based TV network throughout most of
its 2,600 stores. By 2005 Wal-Mart TV reached 130 million viewers every
four weeks, making it the fifth-largest TV network in the United States after
NBC, CBS, ABC, and Fox. The network in effect competes for advertising
with these and other media companies by showcasing for shoppers “a con¬
stant stream of consumer product ads purchased by companies like Kraft,
Unilever, Hallmark, and PepsiCo.”20 Wal-Mart’s size and corporate power,
of course, render it exceptional here, as elsewhere; but the trend is much
broader. Recording companies, for example, have begun to promote bands
and albums not only via radio stations and music television but also by
piggybacking on what had previously been unrelated distribution systems.
Song, Delta Airlines’ low-cost unit, exposed various recording-company
acts “to a captive audience of air travelers” aboard its fleet of Boeing 757s.21
To the consternation of music retailers, the singer Alanis Morisette delayed
the release through record stores of her new CD by making it available
exclusively at units of the Starbucks coffee chain.22
Competition from new media, the growth of communications capabili¬
ties within nonmedia companies, and the tightly focusing need of consumer
products companies to dispose of swelling surpluses have combined to confer
on sponsors an additional edge in their dealings, as customer-patrons, with
advertising agencies (which shed seventy thousand jobs, 14.4 percent of the
150 • VECTORS OF COMMODIFICATION

industry total, between 2000 and 200423) and corporate-commercial media.

The shifting fortunes of members of the institutional triad signal that power
relations among them are also changing. As an astute analyst concluded:
“The world of advertising turns upside down when the advertisers—not
the agencies—are the ones pushing the envelope. But that is what has been
happening.”24
In this context, regardless of how valuable its contribution turns out to be
in actually selling commodities, each successive advertising campaign opens
a flank in an ongoing war of position waged by the sponsor system across
the terrain of daily life.

The Sponsor System and the Quotidian

The sales effort is undergoing a metamorphosis. Geographically, it has attained

a worldwide dominion, one from which no economy or culture is exempt.
Institutionally, it has metastasized, as new realms of emerging, or formerly
independent, cultural practice are successively tied-in or annexed. Gaining
controlled access to the quotidian, finally, requires not only the establishment
of novel selling venues but also a refreshed and expanded ability to exploit
newly available sources of strategic market intelligence. Each of these three
avenues of transformation requires analysis.
Relentless commercialization of national broadcast systems, beginning
with the United States itself during the 1920s and carrying on to Latin Amer¬
ica in the interwar period and then to Britain in the 1950s,25 gained irresistible
momentum during the 1980s.26 Campaigns waged by advertisers and their
emissaries to supplant national public-service broadcast monopolies with
corporate systems financed by advertising succeeded in establishing a new
worldwide norm.
Multinational synchronization of marketing followed. The emerging global
corporate media system pivoted around the measurement and delivery of
what advertisers call “most-needed audiences” to the consumer-product
marketers that comprise the commercial media’s chief patron. Advertisers
leap to experiment with their new freedom to develop and stabilize commer¬
cial media access to audiences on a supranational scale. Coca-Cola teamed up
with the Disney empire to market juice and milk- and water-based drinks in
packages emblazoned with Disney characters to children around the world.27
The Discovery Channel in 1999 synchronized the broadcast of a program
about Cleopatra at 9 pm across every time zone around the world.28 Viacom
tested its ability to use its MTV networks as a global promotional platform
 PARASITES OF THE QUOTIDIAN • 151

by striking an alliance with MGM to market the studio’s James Bond film
(The World Is Not Enough) to a teenage audience through the three hundred
million households the network reached in Asia, Europe, Latin America, and
the United States.29 Playing to Asian celebrations of the Lunar New Year,
McDonald’s introduced its Prosperity Burger through shared TV advertise¬
ments to nine countries, from South Korea to Indonesia; even as it did so, the
fast-food chain “united all of its markets under the ‘I’m Lovin’ It’ theme”
through a TV ad shown around the world.30 Such milestones were incon¬
ceivable in any previous era; by the 1990s they inspired continuing debates
among practitioners over the advantages and disadvantages of “global brand¬
ing”31 and whether global, local, or regional advertising is most effective.32
The structural issue, of course, is not whether commodities can be packaged
and sold more successfully through monolithic as opposed to more focused
advertising campaigns but that the sponsor system now possesses sufficient
reach and coordinating power to decide whether in a given case suppressing
or parasitizing difference is likely to be more profitable.
Although advertising spending is still overwhelmingly concentrated in the
rich triad of North America, Western Europe, and Japan, “growth has been
faster in Asia and Latin America, especially since the mid-1980s_[Between
1986 and 1996,] individual countries in these regions have shown spectacu¬
lar advertising growth: for China more than 1,000%, for Indonesia 600%,
for Malaysia and Thailand more than 300%, and for India, the Republic of
Korea, and the Philippines more than 200%.”33 In 2000, economically impov¬
erished Vietnam opened its market to foreign advertising agencies, working
with local partners; several super-groups quickly took up residency.34 Past
growth also continues in China, which, with $18.9 billion in ad spending in
2004, is sometimes projected to surpass Japan as the world’s second-largest
advertising market within a few years.35
If the sales effort has been extended spatially, within the wealthy metropo-
les of global capitalism it has intensified. The slump of the early 2000s hit
Japanese advertising, but boosted by Upper House elections and the Olympic
Games in Athens, spending on advertising in Japan came back in 2004 to
over $55 billion. Enjoying fifteen years of rapid expansion in symbiotic rela¬
tion to the decline of public-service broadcasting, television-ad spending in
Europe alone totaled around $27.8 billion in 1999.36
Developments in the United States show how, along a second vector of
industry expansion, institutional policy has been reoriented to support the
assimilation of new fields of practice by the sales effort.
The case against such enlargement of advertising’s role within the wider
152 • VECTORS OF COMMODIFICATION

culture is not finally about abstract aesthetic taste or standards, it is about

democracy. The tightly limited proprietary interests of the sponsor system are
presented as the general public interest wherever they take hold; in actuality,
however, they are an inadequate and illegitimate substitute. The standard
against which to judge new advertiser-supported media is equally clear. Each
new medium might have been made a basis for enlarging the space of free¬
dom for individuals and societies to deliberate and democratically choose
new paths of economic and cultural development. Instead, battles have been
repeatedly fought to prevent the actualization of that freedom. As Armand
Mattelart aptly puts it, the sponsor system’s governing policy admonition is
brutally simple: “No media without advertising.”37
Think, in the present context, of the Internet. Rather than becoming an inde¬
pendent, open infrastructure for the exchange of textual and audio-visual infor¬
mation resources, the Web was rapidly colonized and transformed into a new
sales instrument.38 After setbacks and much-hyped projections, online adver¬
tising increased 20 percent during 2003 to $7.2 billion and grew to $9.6 billion
in 2004.39 Marketers of junk food, for example, were able to seize upon online
games as a fresh means of selling, especially to children. A Wall Street Journal
reporter explained, “Brand-laden diversions, sometimes called ‘advergames,’
are emerging as a powerful and inexpensive new ad medium, cropping up on
dozens of sites from marketers of cookies, candy, cereal, chips, and soda.”40
More generally, a flood of unsolicited junk email has engulfed the Internet;
early in 2004 an estimated 80 percent of global email was spam.41 By compari¬
son, in 2004 the U.S. Postal Service shipped about ninety-eight billion pieces
of first-class mail, which was declining numerically, and 95.5 billion pieces of
the growing class (“standard mail”) that includes direct mail.42 By 2005, eight
million Americans were publishing blogs, or online journals, and thirty-two
million were reading them. Blogs have also begun to be deployed by corporate
marketers as “the latest channel for direct marketing.”43 Ad-supported Internet
video has begun to take off, finally, as consumer broadband access widens via
broadband cable modems and digital subscriber lines.44
Other new media are subjected to the same relentless compulsion. A com¬
munications consultancy found in a 2004 survey of U.S. cell-phone users over
age eighteen that “only 20% had received a text ad via cellphone”; Absolut
Vodka was among the companies working to redress this deficiency by spon¬
soring text messages. General Electric’s NBC Universal broadcast eighteen to
twenty video news reports designed for cell phones to some Sprint subscrib¬
ers.45 Despite disincentives (in the United States) like the receiver-pays policy,
the do-not-call list faced by telemarketers, and the absence of a cell-phone-
 PARASITES OF THE QUOTIDIAN • 153

number directory, text messages constitute a billion-dollar advertising market,

albeit one in which the United States lags behind Europe and Asia.46
Where restrictions remain on current or contemplated marketing practice,
they are resisted; where ground has had to be conceded, as with U.S. tobacco
advertising, new frontiers have been opened, as with U.S. prescription drug
advertising. Between 1996 (the year before the U.S. Food and Drug Admin¬
istration relaxed TV and radio prescription-drug ad rules) and 2003, the
drug industry’s direct-to-consumer ad spending increased from $791 million
to $3.2 billion. Its sophisticated marketing was multifaceted, spawning free
samples and product demonstrations for physicians and relying upon one
salesperson and nearly a hundred thousand dollars for every eleven practic¬
ing physicians in the United States.47 Would that teacher-student ratios in
schools were furnished resources sufficient to approach this benchmark!
Through innovations over many decades, the commanders of the spon¬
sor system have armed themselves with an arsenal of strategies with which
to guard and, if possible, advance their interests.48 Not only did advertisers,
advertising agencies, and the owners of concentrated corporate media col¬
laborate in the use of lawsuits, market pressure, lobbying, and public rela¬
tions to preempt the proliferating channels of public expression; they also
presented any and all restrictions on selling as subversive assaults on the
democratic right of free speech. Attempting to deflect advocates of govern¬
ment intervention to restrict advertising of sugar- and fat-heavy foods to
children, for example, General Mills, Kellogg, and Kraft Foods—the top three
advertisers of packaged foods to children, with combined yearly spending on
kids’ ads of nearly $380 million in the United States—formed the Alliance
for American Advertising with other industry organizations “to defend the
industry’s First Amendment rights to advertise to children.”49 As it is trans¬
formed into a corporate prerogative, freedom of speech—the preeminent
prerequisite for democratic self-government—is systemically degraded.50
My local newspaper editorialized, for example, in favor of augmenting still
further the First Amendment protections enjoyed by Nike and other corpo¬
rations: “[Cjommercial speech serves a clear public good because it gener¬
ates economic activity through the distribution of accurate information to
consumers.”51 This would be merely insipid if it did not signal a profound
encroachment on democratic procedures.
In the United States, global advertising’s heartland, relentless sales pres¬
sure, TV ad “clutter,” elusive consumers, and a cascade of new media have
prompted marketers incessantly to seek novel ways of differentiating their
sales messages, and for sponsors, product placement holds growing attrac-
154 • VECTORS OF COMMODIFICATION

tion. One survey found that songs that made it onto the Billboard Top 20
chart during the first half of 2004 mentioned fifty-nine different brands a
total of 645 times; Hennessy and Cadillac led the pack.52 Sponsorship satu¬
rates daily life so thoroughly that brand references in songs are not neces¬
sarily bought-and-paid-for by advertisers. But television, where costs faced
by program producers are much higher, is another story. Nine sponsors of
the hit show “Survivor” (on Viacom’s CBS network) purchased most of the
available advertising time in advance and received product-placement oppor¬
tunities within the text of the episodes shown during its fourteen-week run.53
A women’s talk show hosted by a long-time newscaster, Barbara Walters,
“pa[id] homage to Campbell’s soup” live on screen, for which Campbell’s
paid Disney’s ABC network an undisclosed sum. In this instance, publicity
generated a negative reaction, but the general practice continues to escalate:
“In a creeping trend on talk shows and other nonfiction TV formats,” noted a
reporter, “marketers are finding that their ad dollars have the ability to stretch
right through commercial breaks into the heart of scheduled airtime.”54 The
same trend is evident in television drama. On daytime television, Butterball
turkeys, Nascar shirts, and Kleenex tissue are assigned starring roles. Because
advertisers “are increasingly insistent that characters discuss their products,”
network programmers have told writers to incorporate such references into
their scripts. “Writers and producers,” reported the Wall Street Journal, “often
spend hours on the phone with advertisers to learn the nitty-gritty about
product-marketing plans, and some shows give advertisers plot outlines.”55
Miller Brewing Company was able to obtain product placement for its beer
brands in prime time on the FX channel’s firefighter series, “Rescue Me.” The
media-buying unit of Miller’s advertising agency, Publicis, acted as a creative
partner with the show’s writers, reviewing “scripts in advance to plot out
how and where the beer brand might be used.” It is not reassuring to learn
that, as a result, Miller’s beer brands are “excluded from scenes involving
talk about alcoholism.”56
Product placement is not an occasional or narrowly demarcated practice.
According to A.C. Nielsen data, the top ten U.S. programs used for product
placements during the first quarter of 2005 boasted 12,867 of them, more than
half the 23,526 for the top ten shows during all of 2004. The CBS executive
Leslie Moonves informed investors that more are coming: “T think you’re
going to see a quantum leap in the number of products integrated into your
television shows.’”5 Reaching into a different venue, Publicis arranged for
marketers including H. J. Heinz, Procter and Gamble, Kellogg, and McDon-
 PARASITES OF THE QUOTIDIAN • 155

aid’s to pay to have their products appear before and after intermission at
a one-time charity performance in London of the musical Saturday Night
Fever.™ “While entertainment and advertising are getting cosier everywhere,”
reported the Wall Street Journal, “in Asia they have virtually merged.” Philip¬
pine clubgoers danced to “Hello Moto,” a song commissioned by Motorola;
Wang-Leehom, a Taiwanese-American singer, offers what he calls “McHip-
hop” in a Chinese rap song called “I’m Lovin’ It,” the recording of which was
originally paid for by McDonald’s.59 In still another illustration, Hollywood
has become increasingly focused on profitable tie-ins, whereby animated
film characters are licensed to appear in advertisements.60
Attempts to co-opt governmental and public-service institutions are espe¬
cially striking. By 2004 it was increasingly common for university professors
with the gift of gab and camera-friendly hair to act as paid shills on TV for
corporations and trade associations.61 Even news broadcasts such as NBC’s
“Today” show, the top U.S. morning news program, include product plugs by
hired experts.62 More than half of a survey sample of California’s high-school
districts, meanwhile, allowed sale on campus to students of branded fast-food
items including hamburgers, fries, and pizza from franchised chains.63 While
U.S. students’ math competence trends dismally downward, primary-school
mathematics textbooks sometimes carry distracting references to brand-
name consumer products, from Nike to Disneyland.64
The sponsor system has claimed still other domains; for example, it is
routinely on exhibit at museums.65 And, in a new-and-improved version of
papal indulgences, the Vatican Library permitted corporate endorsements,
for a fee, of its Jubilee celebrations; Gruppo Telecom Italia coughed up $80
million worth of telephone and Internet services in exchange for exclusive
rights to display its logo on shirts, hats, and umbrellas worn by seventy thou¬
sand volunteers at the festivities.66 The U.S. Postal Service sells advertising
space on delivery trucks, collection boxes, priority envelopes, and inside
post-office lobbies; stamps, onetime symbols of national sovereignty, are
adorned with images of Disney’s Lion King and other commercial properties,
while Stamps.com sells print-it-yourself postage online to corporations.67
U.S. elections are also remunerative underwriters of corporate-commercial
media; in one estimate, political advertising revenues in 2004 constituted
over 10 percent of commercial broadcasting revenue, up from 3 percent as
recently as 1992. Candidates, political parties, and independent groups spent
at least $1.6 billion in 2004 on television commercials (for offices at all levels
of government), a hefty increase over the last electoral cycle.68 Although,
156 • VECTORS OF COMMODIFICATION

according to a business writer, “tradition and taste dictate that the president
refrain from product plugs ... there’s no law in the U.S. against presidential
endorsements”—and marketers try regularly to obtain them.69
Sports, long a treasured vehicle for corporate selling, continue to unfold
additional opportunities. Soccer teams throughout Europe held private meet¬
ings with U.S. advisers about how to raise corporate sponsorship cash to
build new stadiums; by 2000, ninety privately funded and corporate-branded
stadiums or arenas existed in the United States.70 The trend could give rise
to incongruity, even incomprehensibility; consider the “Portland General
Electric/Solv Starlight Parade Presented by Southwest Airlines,” which fea¬
tured an auto race, “Texaco/Havoline Presents the Budweiser/GI Joe’s 200, a
FedEx Championship Series Event.” In one estimate, during the mid 1980s,
fewer than a quarter of U.S. festivals and events had some corporate involve¬
ment; by 1999 it was up to 85 percent.71 Meanwhile, the right to air sports
programming on television remains key to commercial success, as Viacom
and News Corporation demonstrated in 2004 when they again agreed to pay
a fabulous sum—$11.5 billion between them—to retain TV rights through
2010 for CBS, Fox, and DirecTV to National Football League games.72
The consequences of annexation extend even further. The quality of infor¬
mation is systematically degraded as the sponsor system redirects the social
purpose of a given institution or medium. Across a large and growing range
of practice, this requires that cultural creativity—cultural labor—be co-opted
and reorganized on behalf of the selling mission.
In the United States, drug companies have turned with alacrity to the Web
and made “educational” grants of up to three hundred thousand dollars to
support increasingly widely used health sites to showcase their products.
As a result, for example, “On a breast-cancer site by ElealthTalk Interactive
Inc.... a panel discussion of new therapies features a lengthy section on
the drug Hercepton, made by the site’s sponsor Genentech Inc.” It is not
reassuring to learn that the Journal of the American Medical Association ran
an HIV/AIDS site funded by the AIDS-drug maker Glaxo Wellcome.73 The
New England Journal of Medicine, perhaps the world’s most renowned medi¬
cal journal, apologized in 2000 after it was revealed that it had published
nineteen articles that violated its policy barring drug assessments written
by doctors linked financially with pharmaceutical companies.74 Analogous
practices resulted in what a Business Week columnist called “the corruption
of TV health news,” corruption as deliberate as it is general.75 By threaten¬
ing to withdraw its advertising, Johnson and Johnson, one of the largest U.S.
 PARASITES OF THE QUOTIDIAN • 157

pharmaceutical advertisers, successfully pressured a major cable network

(USA) to cancel the production of a movie it deemed objectionable.76
By 2005, the same tendencies had only grown starker. To “neutralize” doz¬
ens of influential but “problem” physicians who had not been won over to
its prescription painkiller Vioxx, internal company documents revealed that
Merck officials planned to dangle before them such incentives as paid-for
clinical trials, consultancies, and grants. Though Merck insisted that these were
“educational” expenditures, it referred in the same documents to “Expected
Outcome/Return on Investment.”77 Articles reporting on the safety and effi¬
cacy of pharmaceuticals published in prestigious medical journals are now
routinely deployed as marketing tools by major drug companies. Findings
in clinical trials are reported incompletely, and results that favor a sponsor¬
ing-company’s drug are cherry-picked.78 If they seem to lack commercial
promise, treatments that might deliver considerable benefit are buried, as
one news report explained: “[I]s anybody telling depressed patients about
exercise? Unlike depression medication—which has behind it the research
and marketing clout of the pharmaceutical industry—-exercise has behind it
little research or advertising money. Consequently, the studies supporting it
are typically too small to win publication in major medical journals. Without
any marketing push, the studies are getting little attention.”79
Drug companies are only the tip of the iceberg. According to one study, no
less than one-third of surveyed U.S. local TV news directors reported “being
pressured to kill negative stories or do positive ones about advertisers.”80 In
response to what it declared to be “factual errors and misrepresentations,”
but which instead may have been vigorous pro-consumer reporting, General
Motors withdrew its advertising from the Tribune Company’s Los Angeles
Times—expenditures that had tallied $21 million in 2004.81 Fearing that major
advertisers are bypassing print media for the Internet, the newspaper and
magazine industries have organized multimillion-dollar three-year advertis¬
ing campaigns to “reposition” their brands in the eyes of their commercial
patrons.82 The time for asking whether a democratic polity can afford such
media bondage is long past.
Ignoring or sidestepping opposition, the apparatus of sponsorship has once
again deepened its hold over daily life by trespassing over obstructive social
boundaries—of class, race, gender, geography, and political ideology—to tap
previously inaccessible or forbidden realms of cultural practice. Victoria’s
Secret sends catalog shoppers images of young women dressed in under¬
wear redolent of harlotry; Nike pays graffiti artists, who, hoping to stay one
158 • VECTORS OF COMMODIFICATION

step ahead of the cops, once worked with spray paint to adorn subway cars
and tenement walls, to translate their art into “hip, retail-ready iconogra¬
phy” for the purpose of selling sneakers.83 Images of Che Guevara—a hero
of the Cuban revolution, killed by counter-insurgency forces in Bolivia four
decades ago—have become a popular marketing tool, used to retail t-shirts,
posters, books, beanie hats, and children’s clothing.84 A pregnant woman in
Pennsylvania auctioned on Ebay the right to advertise on her future son’s
clothing.85 On the wholesale level, the New York advertising agency Ogilvy
and Mather (a subsidiary of Britain’s WPP Group) entered into a market¬
ing joint venture, “Red Force,” with the Communist Youth League of China;
university students, required to attend training sessions run by the seventy-
million-member Youth League, were taught “how to sell Chinese mothers on
a new flavor of Tang.”86 Israeli Kibbutzim, communal farming communities
dating back many decades and expressing utopian socialist aspirations, have
lost their state subsidies; at Kibbutz Gan Shmuel, “help arrived in the form of
the Golden Arches,” as McDonald’s opened a restaurant.87 A space company
proposed launching “a group of large billboards into low Earth orbit” to make
them appear as large as the moon to millions of people around the planet.88
Other marketers have dared to fantasize for the record about a world in which
“advertisers will ‘narrowcast’ messages directly into consumers’ brains.”89
At the institutional level, the sponsor system is already playing a pro¬
found role in the process of cultural germination. In the video-game field,
for example, “marketing decision-making and game design collapse upon
one another,” as one careful scholarly study underscored, and “marketing
considerations work their way back into the game development process,
leading to the creation of games that are from their inception conceived as
franchises whose marketing potential can be extended into multiple cultural
spaces and constantly renewed over time.”90
A third trend—an enriched flow of data-traffic in the opposite direction,
from individual persons directly to advertisers—not only attests to the lurch¬
ing dynamism of the sponsor system but also constitutes a disturbing exten¬
sion of past practice.
Capital’s secularly expanding need to market goods and services has for
decades inspired attempts to learn systematically about consumers. Within
this context, the sponsor system’s growing dependence on the co-optation
of vernacular practices has likewise prompted sustained efforts to probe the
environing culture. However, to touch the pulse of vernacular culture—to
make music, clothing styles, popular expressions, and even slang grist for the
advertisers’ mill—requires unabating surveillance. Spying on the population is
 PARASITES OF THE QUOTIDIAN • 159

also needed, to gauge and predict buying behavior. In establishing advertising

rates, advertisers map the demographics of commercial media audiences and
chart their patterns of attention to particular programs, genres, and media.
All these forms of watching the audience have long constituted a component
of the commercial media system.91 “As public and private national surveys
of consumer expenditure multiplied into the hundreds by the early 1930s,”
writes the historian Victoria de Grazia, “Americans exposed their every nook
and cranny to probes and tests.”92
However, new exigencies have presented themselves. In an effort to define
and sustain private-property rights in culture, in a period during which the
apparatus of selling is undergoing technological modernization and when
the sales effort has to be pursued through the travails caused by surplus
production, commercial surveillance has grown increasingly invasive. In one
account, “The only way in which corporate owners of copyrighted products
can regulate ... possible infringements is to monitor the entire terrain of
media consumption.”93 While older data-collection systems and metrics are
accorded new critical scrutiny, therefore, measuring practices have plumbed
deeper and more generally into daily life.94 In 1999, Motorola garnered public¬
ity for hiring anthropologists to learn how to sell wireless telephones in Azer¬
baijan, Kazakhstan, and Uzbekistan (in one estimate, some 2,200 anthropol¬
ogy Ph.Ds worked in “applied” positions in industry, compared with about
nine thousand in U.S. academia).95 Anthropologists, declared one business
journal, “once sat in jungles recording the sexual mores of Polynesians but
today they are more likely to be in the workplace studying how staff spend
their time at the computer or watching ordinary families do the ironing.”96
Audience behavior and shopping patterns are now omnipresently tracked
by data-hungry sellers or their agents. TV set-top boxes and digital video
recorders, Web-site monitors, databases, and other high-tech systems com¬
prise components of an enveloping eavesdropping apparatus that is well on
its way to becoming a virtual sheath over social interaction.
ShopperTrak RCT, a consumer research company, watches consumers
across the United States through forty thousand video cameras placed in stores
and malls. The company merges the data it gleans from these cameras with
detailed information about consumer spending, which it obtains from credit
card companies and banks.97 Wal-Mart TV, an in-store network for advertis¬
ing to shoppers as they approach the point of purchase, reaches 133 million
people a month; according to a WPP executive, in-store ambient TV trials
were being conducted by retailers at eight thousand locations.98 Ogilvy and
Mather created a unit to produce video ethnographies of people in natural
l60 • VECTORS OF COMMODIFICATION

situations to help advertisers develop better marketing ideas; the subsidiary,

Field Brand Investigations, generated a body of work that by 2005 included
more than 250 documentaries, “depicting everyone from Thai auto enthu¬
siasts to English schizophrenics.”99 These were adaptations of what quickly
became an encompassing industry of video surveillance—an industry that,
after 11 September 2001, doubled its growth rate to between 15 and 20 percent
annually, and which especially in cities could be relied upon to yield multiple
recorded images of crime scenes, suspects, and witnesses.100
For ten thousand dollars a year, clients—the Department of Defense among
them—can obtain monthly reports on the use of the Internet by some twelve
million U.S. primary and secondary school students whose Web-surfing habits
are tracked by a private filtering software company.101 In large part to gain
access to sensitive data about users’ personal health, Omnicom, an ad agency
super-group that represents major drug companies, has taken financial stakes
in five major healthcare-related Web companies.102 Rampant use of “cookies”
(online tracking devices that generate great quantities of rich customer data
about Web-surfing habits) has even spawned fights over control of the result¬
ing data between big corporate marketers and their own Internet advertising
networks.103 For corporate planners, tapping into the new data generated by
Internet service providers and other online services holds strategic allure:
“AOL is probably sitting on a bigger wealth of information about consum¬
ers than any other entity,” enthused one advertising-agency executive when
AOT led the pack of Internet service providers.104 In the runup to AOL’s
takeover of Time Warner, business analysts expressed delight at the prospect
of gaining access to immense amounts of subscriber information, as the com¬
bined company pursued “relationships” with 130 million subscribers to its
magazines, cable television systems, pay television units, and Internet-access
services.105 Similar hopes quickly attached to the wireless technology called
radio frequency identification, which permits tiny chips attached to individual
commodities to track their use.

Conclusion

The scale on which advertising can be normalized as a cultural project con¬

tinues to exceed expectations. When Coca-Cola donated a half-century’s
worth of its TV commercials from around the globe to the Library of Con¬
gress, these turned out to number more than twenty thousand—meaning
that each day for fifty years, on average, at least one new Coke advertisement
was rolled out somewhere.106 What other social actor besides the modern
 PARASITES OF THE QUOTIDIAN • l6l

transnational corporation could claim such a ubiquitous presence? What

other cultural practice was allocated comparable resources?
The sponsor system only continues to grow, and its expansion is to be
measured not simply by the saturation of public and private life by manipu¬
lative words and imagery. Regardless of whether manipulation succeeds in
any given instance, an overarching shift in social priority is now far advanced.
It goes beyond the fact that newspapers set up sections on style, business,
and sports to bundle readers into sponsor-friendly packages, and that tele¬
vision networks rely on invariant series formats in hopes of predictably
reaching—and selling—audiences to advertisers, and that magazines and
Internet sites stir and blend editorial and advertising matter at the behest
of sponsors. It goes beyond the fact that, on behalf of advertisers, genres are
preferred for reaching “most-desired” demographic groups while exclud¬
ing others, and that the fate of individual programs and titles—indeed, of
entire media industry segments—is decided by their value to commercial
sponsors. The circuits of daily life are being set at the service of the sales
function so that virtually any area of cultural practice can be reorganized
to suit the demands of its underwriters. Captured by proprietary interests,
the culture skids and slides away from democratic development. Mobile
communications add additional distinctive contributions to the tyranny
of market compulsions.
 Mobilized

“Cutting the cord” unleashes a giddy new freedom of communi¬

cation: via wireless devices we may speak with the world even as we move
through it, giving rise to a condition that some analysts call “perpetual con¬
tact.”1 Habits of dependence, already widespread and well entrenched, are
rapidly diversifying. During 2003, over five hundred million mobile handsets
were sold worldwide; as mobile handsets in use came to outnumber landline
telephones, wireless bulked ever larger within the overall culture and within
the telecommunications sector. One-third of Japan’s population, some forty
million people, used its top carrier’s mobile Internet service; U.S. subscribers
spent 912 billion minutes on mobiles; Europeans sent 113 billion text messages
via short-message service, a shade over half the number of text messages
exchanged in China.2
It is at least vaguely obvious that the need felt by individuals for wireless
communication is of social origin. It is less obvious that, through both direct
and contradictory forms of pressure, this need has been shaped by those who
control the means of production and who are interested in extending the
trend toward individualism.

Supply-Side Pressure

In the aftermath of the Internet bust, new traces of supply-side pressure

could be glimpsed. A huge new wave of capital, incessantly searching for
new and profitable investment outlets, fastened on mobile telecommunica¬
tions.3 The offerings of informationalized capitalism’s omnipresent publicity
 MOBILIZED • 163

apparatus swiftly accomodated the new speculative emphasis. Newspapers,

magazines, television, and Internet sites reiterated, in seemingly effortless
synchrony, the theme that wireless constituted the next new thing. The boom
that would materialize around wireless, opined L. John Doerr, a veteran
venture capitalist who learned his craft by backing Netscape and Amazon
during the go-go years of the Internet bubble, would be “‘ultimately more
important and will likely offer a larger wave of investment opportunity than
the personal computer.’”4
Behind the hoopla, corporate capital was mobilizing to make the most of
whatever opportunities might be presented. QualComm, Motorola, Intel,
Nokia, Sony Ericsson, Samsung, Vodafone, Hutchison Whampoa, NTT
DoCoMo, Microsoft, and other high-tech corporations have placed stu¬
pendous bets on competing wireless gizmos and services. Within every iden¬
tifiable niche of the growing mobile economy, market-development efforts
have taken hold, from specialized microelectronics and operating-system
software to network services and new applications. In 2005, no less than
twenty companies were vying to sell high-speed wireless equipment to the
U.S. residential market alone.5 With 170,000 cell-phone towers jutting into
U.S. landscapes—evidently still an insufficient number to ensure adequate
service—independent investors have built additional towers on speculation,
hoping for profitable sales to one or another of the carriers.6 Wireless incur¬
sions into daily life are duly proliferating.
The publicity apparatus pounces upon fresh evidence that wireless markets
are being successfully cultivated, to test it for signs that high-tech’s former
exuberance might be resurrected. During 2004, U.S. subscribers purchased
$4 billion worth of wireless data services (chiefly to send text messages).7
Might this signify that risky, multibillion dollar rollouts of “third-generation”
networks to furnish high-speed data services will pay off? It has been prog¬
nosticated that cell phones in use worldwide “could rise 40% to more than
2 billion in three years.” Is this a portent of continued stable growth for
carriers?8 Wi-Fi and WiMAX, new wireless technologies promoted by Nokia
and Intel and other major vendors for use with notebook computers and
other handheld devices,9 offer another conundrum: which is likely to win
out among consumers? People carry cell phones more than any other device,
according to one U.S. survey. Is the destiny of wireless to steal the market
for mobile music away from Apple’s iPod?10 (As this book went to press, it
did not seem so.) Two of the world’s largest recording companies, Universal
Music and Sony Music, are asking star musicians to remix songs into ninety-
second versions designed for sales through mobiles.11 What about TV shows,
164 • VECTORS OF COMMODIFICATION

video games, other types of “content”?12 How might their financial prospects
and business models be affected by the tools of electronic mobility?
Once again, we are witnessing a breathless promotional effort and a debili¬
tating social regression. The marvel of mobile connectivity, another product
of corporate-led reconstruction, has incarnated predatory and chaotic ten¬
dencies.
Incompatible networking standards developed by rival corporate consor¬
tia, by locking in subscribers, have balkanized world wireless markets, mak¬
ing it more difficult for travelers to make calls or access data from a single
device. Competing approaches to next-generation mobile technology stand
to multiply these difficulties.13 In the United States, the consolidation of the
wireless phone sector is already compounding the problem of incompatible
technical standards, as Cingular, the nation’s largest carrier, tries “to push
former AT&T wireless customers to move from their old TDMA network to
Cingular’s newer GSM network, which requires those customers to upgrade
their phones.”14
Rapid obsolescence is hardwired into the mobile phone market at several
levels. During the 2004 season, sharp color-screen clamshell designs vied
with candy-bar-style models and slide phones; fads included a push-to-talk
feature, built-in cameras, and faster speeds. “Top players such as Sprint PCS
Group and Verizon Wireless in the U.S., Vodafone Group PLC in the U.K.,
and Hutchison Whampoa in Hong Kong demand the best or hottest product
that’s available anywhere in the world. They stand to gain because more-
sophisticated phones can be used to access the new services that operators
are heavily marketing to customers these days. That increases traffic and
profits for the network operator.”15 Competing phone manufacturers thus
pay a heavy price for missing the latest fashion, and large vendors such as
Motorola habitually launch fifty to sixty handset models each year.16 But
this profligacy exacts an even steeper price from society at large; as their life
span contracts (down to around eighteen months by 2004), toxin-filled cell
phones become disposable items. With no regulations mandating recycling,
in the United States alone subscribers are trashing at least twenty-five million
handsets annually.17
East Asia, significantly, functions as global mobility’s pacemaker, at least
in the consumer market. In Japan, fierce rivalry between the ifidustry leader
DoCoMo and the upstart KDDI helps propel ceaseless experimentation.18
During 2003-4, 20 percent of DoCoMo’s revenue—about $9 billion—was
generated from the transmission or downloading of data by forty-two mil¬
lion users of its “I-mode” Internet service; by 2005, it was garnering nearly 26
 MOBILIZED • 165

percent of its revenues from data services. What types of content drove this
growth? Horoscopes, songs, games, ring tones, movie clips, and email.19
But the more basic spur to enlarge and extend wireless service markets
worldwide has come from what is, for the telecommunications industry, a
wearisomely familiar source: slowing growth. The existing market for wire¬
less voice calling is growing increasingly saturated.20 As the journalist David
Pringle commented aptly in 2005, “While handset sales are booming thanks
to the addition of cameras, music players, and fancy software, cellphone
voice services are fast becoming a basic commodity distinguished primarily
by price.”21
In chapter 5,1 traced key features of the crisis in telecommunications; wire¬
less-system development shares some key traits with its wireline cousin. A
familiar progression has etched itself into the wireless field: rivalrous invest¬
ments by carriers in the most tempting national markets has led first to rapid
expansion, then to a slowdown in revenue growth, and then to rate-cutting,
consolidation and an increasingly intense profit-scramble.
As saturation develops in Western Europe and Japan, which together make
up nearly half of the global market for cell-phone service, wireless compa¬
nies are racing to develop new services. Operators were already pressing into
multimedia applications early in the 2000s.22 With a further wave of network
investments by a diversifying group of service providers and manufacturer
rollouts of devices designed for multimedia data exchange, corporate experi¬
mentation to learn what would sell had grown more intense and pervasive
by 2004.23 One old standby, a staple of each new medium from printing
onward, again demonstrated potency; by 2005, worldwide spending on video
downloads of pornography to over fifty million mobile phones equipped to
receive it was projected to top $1 billion.24 Other vices also evinced promise.
In 2005, Nevada was on the verge of permitting gamblers at resorts to play
video poker, blackjack, and other games on personal digital assistants and
other handheld devices.25 Industry executives, explained David Pringle, are
well aware that “the industry must find new hit services to go alongside
voice- and text-messaging in order to persuade people to spend a greater
chunk of their income on cellphone services.”26
The ferocity of the economic forces driving this later phase of system
development is confirmed by another, seemingly disparate, trend. Hoping
again to obtain growth, major equipment vendors and carriers have turned
increasingly to less well-endowed regions. Motorola and Nokia are build¬
ing low-end handsets for sale in “emerging markets” such as China and
India, where growth rates continue to be higher; the same motivation has
166 • VECTORS OF COMMODIFICATION

impelled service providers such as Vodafone to acquire systems in Eastern

Europe, China, and even Africa.27 This is usually presented in quite dif¬
ferent terms, of course. Africa, for example, found itself heralded in 2005
for having become the world’s fastest-growing mobile-phone market, and
carriers were patted on the back for delivering the continent—albeit on a
prepay model for customers concentrated in only four countries (South
Africa, Morocco, Nigeria, and Egypt)—from having to route calls through
former European colonial capitals.28
No guarantees can be offered that this strategy will succeed. Midway through
2005, third-generation systems and multimedia applications appeared to be
catching on in some places. Far from making good the shortfall that is emerging
in voice-service markets, however, the new offerings appear equally likely to
cannibalize their forebears, as subscribers substitute email and text messages
for voice calls.29
Wireless-system development therefore remains fundamentally unpredict¬
able and contingent. Its spectrum-dependence—its need for access to huge
chunks of the electromagnetic spectrum, the invisible resource on which
free-to-air broadcasting, satellites, and other forms of electronic commu¬
nication rely—has already engendered other market instabilities. During
2000 and 2001, at the height of the high-tech bubble, panicky wireless car¬
riers ponied up huge sums in government spectrum auctions—$33 billion
in the United Kingdom, $48 billion in Germany, $17 billion in the United
States—to guarantee that they, rather than rivals, would be enabled to build
out next-generation wireless networks. The debt many of these companies
assumed to do this, coupled with astronomically priced buyouts of competi¬
tors (notably, Vodafone’s $181 billion hostile takeover of Mannesmann in
2000), helped trigger the telecom industry meltdown of 2001-2.
In the aftermath of that debacle, tens of thousands of jobs were eliminated,
disproportionately based in the more heavily unionized telecommunications-
manufacturing and wireline-service segments. And owing to rival network
expansion, overcapacity continues to burden the field. Ruinous competition
within a glutted market carries other negative consequences, in addition to
mobile operators’ sharply reduced ability to set prices.
In the United States, complaints about poor service quality and question¬
able billing practices have persisted.30 Hidden fees and surcharges disguised
as government-imposed taxes are tacked onto bills by major U.S. carriers, so
that 11 percent of respondents to one 2003 survey said they had experienced
serious or continuing billing problems.31 Another study reported that no
less than three-fifths of all U.S. wireless subscribers called customer-service
 MOBILIZED • 167

centers at least once during 2002 to complain.32 A U.S. government report

described lack of coverage, static, network overloading due to insufficient
capacity, and dropped calls as frequent sources of complaint; one-fifth of U.S.
users were unable to complete 10 percent or more of their calls.33 A survey of
21,700 wireless customers by J. D. Power in 2004 showed no change from the
previous year: around one of three cell-phone calls suffered quality problems
of one kind or another.34
Is this merely the price of progress? A New York Times correspondent claimed
that “Americans’ use of cellphones has increased so quickly that wireless net¬
works are becoming overloaded, causing a growing number of customers to
complain.”35 But this is only a secondary factor. Service problems actually stem
from the fact that, in the United States, as befits the historical source and global
center of neoliberal reconstruction, “wireless phones [are] much less reliable
than their wired ancestors.”36 Even during emergencies (wireless companies
make safety a selling point when advertising their services), mobile-phone
networks’ performance is often inferior to that of landline systems.37 Though
often derided by well-placed devotees of the new new, the old landline network
was engineered to reliability standards that exceed those used to build out
wireless systems and fiber-optic cable systems.38 In the United States, at least,
it is difficult not to conclude that the younger generation is being trained to
accept lower- quality telecommunications service.39
The institutional basis of the wireless industry is to blame, not its grow¬
ing pains. U.S. wireless networks typically lack adequate backup power gen¬
erators, unlike the earlier landline telephone system, which carried its own
power along with conversations. Moreover, U.S. wireless networks have been
typically underbuilt; they are not constructed to handle great surges in call
volume, as was demonstrated when the attacks on 11 September 2001 over¬
whelmed them.40
Both flaws are remediable. By establishing backup power sources and
improving network coverage and capacity, mobile-service providers could
come closer to approximating the renowned “five nines” reliability of older
U.S. landline networks, which afforded call completion 99.999 percent of the
time. But this would require large increases in capital expenditures. And, as
one industry consultant explained, “A service provider can’t do that and stay
in business.”41 Here we arrive at the underlying problem. The competitive
market beholden to neoliberal policy makers has engendered overcapacity
across the greater telecommunications industry and—paradoxically, but
predictably—inadequate network investment by individual carriers.
Government overseers offer feeble assurance of relief, as the wireless
168 • VECTORS OF COMMODIFICATION

industry remains much more lightly regulated than its wireline forebear.42
Although the Federal Communications Commission possesses jurisdic¬
tion, it is characteristic that, after fifteen years or so of explosive growth
for mobiles, as of 2003 the FCC hadn’t even established a minimum level
of wireless call quality.43 Nor are there federal regulations requiring carriers
to maintain a certain amount of backup power. The comparatively poor
reliability of wireless networks is a harbinger of a wider problem, because
wireline carriers, as they have invested in fiber-optic networks, have also
begun to rely on commercial power providers rather than on their own
electricity.44
The industry sails on, but it moves atop a thin skin of ice that places users
in danger of falling through. For all the hue and cry about homeland security,
emergency service for mobile-phone callers trying to reach help through 911
remains woefully inadequate. Though cell-phone callers originated more
than one-third of the 190 million 911 calls in 2005, only two-fifths of the
country’s six thousand emergency call centers could locate the source of
these calls. This is not a mere developmental lag; in 1996, the FCC asked the
increasingly fragmented industry to devise a remedy, calling on carriers to
install upgraded emergency service on a comprehensive nationwide basis.
Flowever, according to Anthony Haynes, the executive director of the Ten¬
nessee Emergency Communications Board, wireless companies successfully
resisted, falling back on the characteristic neoliberal argument, “‘We can’t
do this, our industry is in its infancy, and these costs will stifle growth.’”45
A different factor helps explain why there exists no directory of wireless
subscribers: too many subscribers don’t want one. Users of the nation’s 182
million cell phones are thus forced back on their own resources when they
want to obtain telephone numbers they do not already possess. Citing privacy
concerns, consumers have said that they prefer not to be available to callers
apart from those to whom they have given their number privately—not least
because they usually pay for incoming calls. An additional disincentive springs
from consumers’ experience with the National Do Not Call Registry, estab¬
lished to rein in telemarketers using the wireline network. After two years,
the registry had enrolled over a hundred million numbers, meaning that with
some exceptions, telemarketers were supposed to cease calling them. However,
half of registered consumers said they continued to receive calls they think
the list should block, and they lodged fully one million complaints with the
Federal Communication Commission.46 Consumer resistance and wariness
thus have helped stymie development of an everyday shared resource of obvi¬
ous utility. “‘People would love to be able to contact each other,”’ explains
 MOBILIZED • 169

the communications scholar James E. Katz, “'But they are very reluctant to
be reached. ’4 Perhaps no other indicator so reveals the social wreckage on
which the marvel of mobile communications is being erected.

The New Face of Mobile Privatization

The massing of corporate power does not explain everything. To get at other
aspects of the phenomenon, it needs to be underlined that the global love
affair with wireless signifies a volcanic release of a pent-up demand. Whence
this urgency? Why, over merely fifteen years, have wireless handsets come to
outnumber landline telephones?
Some have suggested that surging demand arose as a reflex of the compara¬
tive historical scarcity of landline telecommunications investment, especially
but not only throughout the global South. When, beginning in the 1980s,
capital at last commenced to modernize world telecommunications, demand
therefore naturally eclipsed any prior estimate. True enough. But why did
this demand channel so impressively into wireless? Wherein lay the need for
mobile connectivity?
This need, again, is socially established; there is no innate human prefer¬
ence for “perpetual contact.” Historically changing social relations comprise
the crucible in which specific technological potentials are forged or allowed
to fail.
The need for constant connectivity, in all its multiformity, signifies a tran¬
sition into a new phase of “mobile privatization”—a trend identified in 1974
by the great Welsh cultural critic and theorist Raymond Williams. Williams
gave this name to a complex of interweaving processes involving movement
away from smaller-scale production and settlement and the rise of the family
home distanced from places of work and government. Mobile privatization
is no mere mechanical outcome but a complex and contradictory result of
social struggles; necessity and desire have no obligation to separate them¬
selves out in neatly opposed arrays.48
Urban and suburban sprawl is the built environment engendered by mobile
privatization. To make such a landscape, alongside automobiles and shopping
malls and endless parking lots, new forms of communication are vital. Wil¬
liams employed the idea of mobile privatization to analyze the development
of broadcasting, which provides a means of keying millions of individual
households into central sources of shared news and entertainment.
The wireless phenomenon constitutes a wrenching extension of this deep-
rooted historical tendency. Wireless accomplishes this in part by building
170 • VECTORS OF COMMODIFICATION

upon foundations laid by its landline ancestor. At least within developed mar¬
ket economies, landline telephones offered a key element in living arrange¬
ments built around private households that could remain “in touch” with
surrounding communities. More than a century ago, the rules of etiquette
for telephone usage began to be worked out, and the contours of daily life
actively redrawn, to accommodate what appeared to be the useful, pleasur¬
able, and yet also invasive and irritating telephone.49 This necessitated cultural
work beyond any mere carryover of conventional decorum or the crafting
of functional codes for telephonic conversation: beginnings, closings, turn¬
taking cues, and sequences. Deeply felt alterations in the social distances
between home and work, between male and female, and between class and
class had to be renegotiated to incorporate the new medium.
A comparable process can be glimpsed around wireless. How frequently
we hear the complaint that cell-phone users are loudmouths, or that they
make the rest of us into involuntary eavesdroppers. But more importantly, on
the street, in schools and offices, on the highway, in restaurants, and across
the varying milieux within which mobiles are used within culturally distinct
national environments, our daily social life is being twisted and reshaped.
Advertisements endlessly enthuse over how mobiles enhance individual
freedom by breaking with arbitrary, or at least stuffy, limits. News accounts
tend to focus on the other side of the same thing: how wireless is used to
subvert conventional expectations. Press portrayals cite school children using
mobiles to flout their teachers’ admonitions; prison inmates using mobiles to
plan felonies; dissemblers of all sorts wirelessly transgressing cultural norms
and undercutting prevailing institutional practices.50 But the pleasures and
perturbations of an expanded individual freedom are the medium, not the
essential analytical benchmark, for evaluating how demand for mobiles is
anchored.
Opportunities for individual and family empowerment motivate innu¬
merable decisions to integrate wireless into daily routines. But this freedom
is layered and molded by gross inequalities and other forms of compulsion.
When work and leisure are unevenly distributed, when longer working hours
are coupled to high levels of unemployment; and when deliberately dimin¬
ished social-service provision adds measurably to the hours and energy that
must be expended on getting through daily life, then, in innumerable ways,
for most people the take-up of mobiles constitutes an attempt to solve pri¬
vately what appear as intractable problems of reality.
Underlying this extension of mobile privatization around wireless is also
the changing social experience of wage labor. This is no simple or uniform
 MOBILIZED • 171

process; the wage relation contributes in complex and contradictory ways to

the social patterning of “perpetual contact.” Mobiles enable us to seize time
within the workday for personal purposes, even as they also make us newly
accessible to the boss. Mobiles allow us to more efficiently exploit what time
remains after work. They thus contribute to sensations of freedom even as
they concurrently assist incursions and constraints on that same freedom.
Consider wireless development in China, which, with 269 million sub¬
scribers in 2003, has become the world’s largest wireless market, and where
the social need for mobiles is bound up not only with the rapid growth of
an urban middle class but also with internal migration on an unprecedented
scale. This is widely driven by the newly reorganized need for paid work and
by the superexploitation of long working hours. According to the deputy
director of the State Administration of Work Safety, during 2004, “Only 30
percent of workers work eight hours a day in the Pearl River Delta. Some 46
percent work fourteen hours a day.”51
In the United States, by comparison, the workday and the work week are
shorter; but working hours have lengthened by one-fifth since 1970, chiefly
as a result of falling real wages.52 The linked trend for women increasingly
to enter the paid labor force has ramified, as women continue dispropor¬
tionately to perform household labor, within larger and larger homes, on
a “second shift.”53 Within the United States, wireless use has been widely
stimulated and conditioned by these developments, as well as by the decline
of social supports—a decline that could not fail to complicate and enlarge the
field of responsibilities for dependent care and household management.
That this has occurred atop dispersed landscapes of work and consump¬
tion adds further momentum to mobile privatization. Through mobiles, as
in the converging area of computer technology, it is often observed that work
has been freed to expand into what used to be nonwork time. The automo¬
bile is especially crucial here. Americans make 405 million domestic busi¬
ness trips annually to destinations at least fifty miles from home, four-fifths
of which are by automobile.54 Add household shopping, trips to the doctor,
errands, social and recreational visits, and commuting, and Americans take
1.1 billion trips a day, 87 percent of which rely on private vehicles.55 (Walk¬
ing, in contrast, accounts for less than 9 percent of the total, while public
transportation, including school busing, claims just over 3 percent.56) Every
day, on average, each American driver spends nearly an hour behind the
wheel.57 One study found that U.S. rush-hour drivers spent three times as
long stuck in traffic in 2003—forty-seven hours—as they did in 1982.58 It is
therefore not a coincidence that 40 percent of all U.S. wireless use—during
172 • VECTORS OF COMMODIFICATION

2003, four hundred billion minutes’ worth—takes place in the cars steered
by our millions of “road warriors.”59 At any given moment in 2004,1.2 mil¬
lion drivers were talking on a cell phone.60
Automobile-based transportation constituted previous generations’ endur¬
ing “achievement” in furthering mobile privatization. The car was not a tech¬
nological complement of our social arrangements; in its own right, it became
a structuring force. Wireless has built on this irrationality.
Public health has been a casualty of mobile privatization thus reconfigured;
think of the highway carnage that now must be attributed to the telephone.
In 2002, a Harvard University study estimated that U.S. drivers talking on
mobiles were responsible for about 6 percent of auto accidents, killing as
many as 2,600 and injuring 330,000 others.61 More conservative analysts have
charged that these figures are inflated and attempted to prove that wireless
use does not unsafely distract drivers. But when studies show that drivers
with handheld phones have both hands on the wheel less than 1 percent of
the time (hands-free headsets increased this figure to 16 percent), it is hard
to deny that substantial death and destruction might be attributed to driv¬
ers’ use of mobiles.62 Thankfully, numerous countries, three U.S. states (New
York, Connecticut, and New Jersey), and many municipalities have banned
the use of handhelds by drivers anyway. Government agencies or advisory
groups in Britain, France, and Germany have discouraged children from
using mobiles because of health concerns about sustained exposure to elec¬
tromagnetic emissions from handsets.63
The frenzied global take-up of wireless signifies nothing other than an
attempt to rationalize the irrational by attempting to wrest a measure of
personal control in a social world that continues to spin out of control. Wire¬
less does not exist merely on one side of this equation. Means of anchoring
mobile connectivity to an increasingly authoritarian capitalism via location-
based tracking of individuals and things for marketing and surveillance have
already been glimpsed. Mobile commerce, for example, intends to trans¬
form the handset into an formidable instrument of the sales effort. Wireless
companies like Vodafone hope “to provide location-specific information to
a person’s mobile device, wherever he may be.” Some of this data-stream
may be traffic, weather, or news; however, a growing share, if the carriers
get their way, will be telemarketing messages.64 Already by 2005 a California
consumer organization relayed customer complaints sparked by their hav¬
ing been billed by their carriers for unwanted advertisements.65 Australian
subscribers to Telstra wireless service are harnessed even more directly to the
sales effort: they can call the “Dial-a-Coke” phone number posted on many
 MOBILIZED • 173

vending machines, wait for their purchase of a soda to be authorized, and

find the charges—for the drink and the call—on their next wireless bill.66 In
Europe, wireless carriers have established a consortium, Simpay, to provide
a standard means of using mobiles to pay for goods and services across the
continent. A comparable initiative in under way in the United States.67
Surveillance practices are likewise being chillingly extended and normal¬
ized. Mobiles are praised for allowing parents to put their children on a
wireless leash; in South Korea by 2005,3.6 million subscribers to the “Find
Friends” commercial service could track th§ location of a mobile-phone
user to within ten meters.68 Fess has been heard about how police agencies
and employers are adapting technology created to track soldiers and prison¬
ers to generate torrents of mobile-phone-based customer-location data.69
A study of Samsung’s own proprietary deployment of wireless technology
underlines that the scale of surveillance is expanding from spatially restricted
workplaces to the society and the population at large.70 Consumer goods
tagged with radio frequency identification (RFID) technology promise to
accomplish a similar feat for commodities. Big users, led by Wal-Mart and
the Defense Department, hope to use RFID to gain enhanced control over
their vast supply chains; suppliers, including IBM, Microsoft, Oracle, and
SAP, look to these “sensor networks” as a new market. “‘We are moving
from batches of information about operations to continuous visibility,”’
explained IBM’s manager of its “pervasive computing group.”'1
The world of wireless was not created to deliver us into an era of play¬
fulness and personal freedom. It came to us, rather, as a complex histori¬
cal extension of the domination and inequality that continue to define our
divided societies.
 PART 3

Poles of Market Growth,

or a Deepening Crisis?
 9
Open Questions about
China, Information, and
the World Economy

Two vectors of change converge on a final, and vital, entry point

for analysis. First, despite the bursting of the high-tech financial bubble, a
global communications and information industry continues to function
as a fountainhead of economic transformation. Second, with its embrace
of capitalist social relations, China has become “the fastest-growing large
economy in the world” and an engine of market renewal.1 Are these two
poles of growth related? What links are being forged between capitalism’s
most dynamic sector and its most expansionary growth zone?
Let us begin to explore this issue by reviewing Chinese initiatives in infor¬
mation and communications that have unfolded across a wide array of manu¬
facturing, content, and service markets.

Chinese Initiatives

China’s media content and hardware industries and Chinese media advertis¬
ers are establishing transnational affiliations and using them to broaden and
reorganize the domestic market—and vice versa—at a furious pace. In 2002,
Xinhua Financial Network, a Hong Kong joint venture in which China’s state-
owned Xinhua News Agency claims a minority stake, purchased the Asian
business-news operations of Agence France-Presse.2 In 2001, China allowed
AOL Time Warner and News Corporation to transmit Mandarin-language
television entertainment channels into Guangdong Province via Chinese
Entertainment Television Broadcasting (CETV) and Star TV in exchange for
the two media conglomerates’ agreement to carry China Central Television
178 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

(CCTV) 9’s twenty-four-hour, mainly English-language channel over U.S.

cable systems.3 In 2003, however, after falling from its comfortable perch in
the aftermath of the Internet bubble, a straitened AOL Time Warner sold a
controlling interest in CETV to Tom.com, a Hong Kong-based media group
controlled by Li Ka-shing.4 In 2004, Chinese policy makers lifted the ban on
foreign investment in the domestic TV-program industry, allowing joint ven¬
tures in which Chinese companies possess a majority stake to be formed. An
important additional requirement is that these partnerships create a unique
logo to ensure that they did not simply promote foreign media brands within
the domestic market.5
Chinese production lines, meanwhile, are generating a torrent of televi¬
sion sets. Springhoarding from China’s domestic market, the world’s largest
with sales of thirty-three million sets in 2002 (compared with twenty-five
million in Europe and twenty-six million in the United States),6 half a dozen
domestic manufacturers have set their sights on exports—which accounted
for around fifteen million sets a year—to three dozen countries. In 2003,
this export strategy was coupled with foreign direct investment. At the for¬
eign company’s initiative, China’s second-largest set maker, TCL, originally
established by the Chinese government and subsequently privatized, part¬
nered with Thomson (the French electronics manufacturer that owns the
RCA brand) giving majority ownership and control of the world’s largest
transnational TV manufacturer to the Chinese company.8 With some twenty-
nine thousand employees and a dozen factories scattered throughout China,
France, Mexico, Poland, Thailand, and Vietnam, TCL-Thompson Electronics
was manufacturing around twenty million sets annually by 2004.9
Other linkages have been forged to extend and enlarge the reach of the
transnational sponsor system. A Chinese company, Yanjing Beer Group,
sponsored a U.S. National Basketball Association team in 2003, the Hous¬
ton Rockets, which, not coincidentally, showcased the the Chinese-born
center Yao Ming. About thirty Rockets games were broadcast in China dur¬
ing 2003, so tens of millions of TV viewers saw Yanjing’s billboards, which
encircled the Houston arena. Yanjing Beer was only one of several Chinese
merchandisers to craft sponsorship deals with U.S. and European sports
teams.10 But Yao Ming began to function as a center not only for the Rockets,
and Yanjing, but also for the Chinese-U.S. consumer-marketing complex.
Working through the National Basketball Association, which by 2004 had
crafted deals to broadcast eight games a week into three hundred million
Chinese households, Rockets games played in China also drew Eastman
Kodak, McDonald’s, and Anheuser-Busch as sponsors at nearly $10 mil-
 CHINA, INFORMATION, AND THE WORLD ECONOMY • 179

lion each. Reebok, opening a new store in China every other day in a bid
to catch up to Nike, launched Yao Ming’s signature shoe in Shanghai in
2004, occasioning a near-riot by his fans, an event likened by an observer
to the Beatles’ U.S. tour of 1964.11 However, the undoubted centerpiece
of China’s burgeoning effort to insert itself into the circuits of a transna¬
tional marketing complex will be the 2008 Olympics, which some believe
will transform China into the world’s second-largest advertising market,
surpassing Japan.12
The cultural and economic power of this quickly forming sales complex is
amplified by a reciprocal development of the consumer payment and credit
mechanism. Prior to further liberalization in 2006, after which foreign banks
will be permitted to make loans directly to Chinese customers, transnational
financial services companies were required to market to consumers through
a local partner. Banking giants, including HSBC Holdings, Citigroup, and
American Express, duly acquired stakes in Chinese affiliates—the Bank of
Communications, Shanghai Pudong Development Bank, and the Industrial
and Commercial Bank of China, respectively—so as to enter the domestic
market for financial services. By 2005, an estimated twelve million credit
cards were circulating, mostly among the fifty million individuals earning
more than five thousand dollars a year, alongside eight hundred million
debit cards that could not be used to purchase goods on credit. Occasioning
rose-colored prognostications concerning the future size and buying power
of the country’s middle class, the value of bank-card transactions has grown
rapidly. There is little question that a formidable new system of consumer
debt-finance is being erected.13
Comparable trends are apparent in telecommunications, where profit¬
making opportunities around new technologies have combined with stra¬
tegic leverage over the domestic market to support entry into transnational
markets by expansion-minded Chinese equipment suppliers and system
operators. By producing more than twenty-three million handsets built using
components from dozens of outsourcing companies, twenty to twenty-five
Chinese mobile-phone manufacturers, including TCL, Ningbo Bird, and
Haier Group, acquired control over one-fifth of domestic sales by 2002; by
the end of 2003, Chinese companies controlled an estimated 40 percent of
an enlarged home market.14 Foreign wireless companies recaptured some
of the domestic Chinese handset market during 2004, but what the Wall
Street Journal called “explosive growth” by Chinese phone companies is “set
to overflow onto the world stage.”15 Again, this is part of a larger pattern.
In a simultaneous bid to shape domestic-market development and to use
l80 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

this base as a launchpad into the world market, Chinese policy makers are
encouraging the development of homegrown technical standards for tele¬
communications and media products. To the dismay of U.S. corporate rivals
and, it is important to add, again with mixed success, this strategy has been
adopted not only for mobile phones but also for next-generation wireless
networking gear, high-definition television, electronic imaging technologies
for the digital home market, and DVDs.16
Other initiatives in international telecommunications have attempted
to take advantage of important historical contingencies. On the one hand,
depressed market conditions continue to predominate throughout this sec¬
tor as a consequence of the huge (albeit uneven) buildup of network facili¬
ties in the 1990s. Major international network assets thus remain on offer at
bargain-basement prices. China’s own home telecommunications-services
market, however, is atypical, even—given its size—unique in that it remains
in the hands of domestic capital and the party-state. Averting market entry
through the go-go years of the 1990s, when dozens of national telecommu¬
nications markets were reorganized by outside interests, China hardly began
to allow foreign investors to participate in the development of its national
telecommunications infrastructure until after it concluded negotiations to
enter the World Trade Organization in 2001. Its major carriers were thus not
only able to emerge unscathed from the turmoil that engulfed global tele¬
communications during 2000-2001; they also continued to be sheltered from
competition by foreign carriers because carriers headquartered in the United
States, Japan, and Western Europe were intensely preoccupied with paying
down their own inflated debts and escaping from ruinous competition in
their own home markets and thus no longer in a strong position to invade
the Chinese market. Although Chinese authorities have licensed a succession
of rival carriers, and competition in domestic mobile and wireline services is
intensifying, China’s telecommunications operators enjoy a privileged role
in developing what has suddenly materialized as the world’s largest national
telecommunications market (by subscribers). After two decades of unbroken
and unprecedented expansion, China’s carriers serve an estimated 214 million
wireline and perhaps 250 million wireless subscribers (the number of wireless
subscribers is difficult to measure because members of well-off social strata
frequently pay for multiple services); additionally, there are a'hundred mil¬
lion cable TV subscribers.17 When China’s leading network operators train
their attention on the exceptional opportunities for transnational expansion,
therefore, they do so from what historical circumstances have rendered a
relatively strong domestic position.
 CHINA, INFORMATION, AND THE WORLD ECONOMY • l8l

In this regard, they are not completely unique. As we saw in chapter 4,

Mexico’s Telmex, which likewise managed to hold on to its dominant domes¬
tic-market presence, snapped up distressed network assets throughout Latin
America, while thriving Indian telecommunications companies purchased
international networks built by U.S. interests.18 But Chinese carriers’ trans¬
national expansion is still noteworthy. A consortium led by China Netcom,
the country’s second-largest wireline carrier, paid an initial $80 million to
acquire a partially owned affiliate of the bankrupt Global Crossing—a unit
whose book value was $1.2 billion. After China Netcom bought out its part¬
ners early in 2004 to become sole owner, this regional system, renamed Asia
Netcom, passed entirely into Chinese hands and began to compete for traf¬
fic.19 Another telling indicator of the carrier’s growing transnational orien¬
tation came as China Netcom listed its stock in Hong Kong and New York
during 2004—a move managed by Goldman Sachs and China International
Capital—with a further suggestion that Netcom might deploy the proceeds
from its billion-dollar initial public offering of stock to finance additional
transnational growth. In this case, however, the depressed state of the tele¬
communications industry worked against the Chinese company’s ambi¬
tions, as investors remained skittish.20 Hutchison Whampoa, based in Hong
Kong and controlled by the billionaire Li Ka-shing, acquired mobile-telecom
network assets in nine (mostly European) countries and built out third-
generation mobile-phone services there in advance of rivals. Hutchison’s
third-generation services claimed nearly six million subscribers by the end
of 2004 and drew on overall capital investment of a reported $25 billion but
has thus far achieved only mixed results.21
In semiconductors and computing, dynamic interactions between home-
market development and the transnational industry are again uppermost. In
one estimate, Chinese demand for semiconductors, for products fashioned to
satisfy domestic demand and for exported commodities, soared from less than
$7 billion in 1997 to more than $28 billion in 2003. (China housed 4 percent
of global chip-making capacity in 2003, compared with 18 percent for North
America.) To tap into this demand, several Taiwanese-backed startup chip
manufacturers set up shop in China, sustained by investments of nearly $10
billion over the past three years, with an additional $5 billion pledged.22 But,
boosted by state subsidies, perhaps as many as five hundred startup chip-
design companies have proliferated.23 China’s policy of supporting domes¬
tic capital’s entry into chip making through tax rebates was withdrawn in
response to protests within the World Trade Organization by the United States
and other foreign producers, but its commitment to developing a WTO-
182 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

compliant national semiconductor industry remains apparently robust.24

Meanwhile, the Lenovo (formerly Legend) Group, another partially priva¬
tized, state-owned company (its largest originating shareholder is the Chinese
Academy of Sciences) boasted $3 billion in revenue and a 30 percent share of
China’s PC market by 2003.25 This domestic market, which in 2004 became
the world’s second-largest after the United States, was beset by intensifying
competition and declining profit margins, so Lenovo was forced to look for
growth farther afield. Already the world’s eighth-largest computer maker,
although overseas sales comprised merely 7 percent of revenues in 2002, the
company formulated plans to push more aggressively into foreign markets.26
In its home market as well as abroad, Lenovo faced a pack of well-established
transnationals: Dell, Hewlett-Packard, IBM, Fujitsu, and Toshiba.27 Although
there is no certainty of success, Lenovo’s next move was to acquire IBM’s
personal computer unit at the end of 2004. At a stroke, this granted Lenovo
a worldwide presence and turned it into the world’s third-largest computer
maker.28 Lenovo would continue to sell PCs under the IBM brand and was to
relocate its world headquarters from Beijing to Armonk, New York, adjacent to
IBM’s own base. Lenovo’s new CEO was also transferring from IBM—which,
doubtless in hopes of leveraging the transaction to attain a more substan¬
tial presence in other Chinese information technology markets, acquired a
minority ownership stake in Lenovo.29 In the strategically important field of
high-speed supercomputing, finally, Chinese progress again was striking. By
2004, China ranked with Germany as the world’s fourth leading country in
number of supercomputers.30
In Internet systems and services, efforts to build up leverage in the domestic
market have once more combined with a new ability to raise capital via for¬
eign stock exchanges to support increasing market power and transnational
ambition. Huawei Technologies, a Chinese networking-equipment maker
with twenty-four thousand employees and sales of $3.8 billion in 2004, is the
most resounding success story. Huawei began “a significant U.S. push” in 2002,
“touting its products’ similarity to Cisco’s market-dominant gear, at lower
prices.”31 In 2003, Huawei teamed with 3Com to produce and sell networking
gear to the business market;32 and Huawei also announced its first contract,
worth $900 million, to provide a commercial third-generation wireless net¬
work for multimedia services to Sunday Communications of'Hong Kong.33
Surviving a challenge from Cisco over intellectual property, by 2004 Huawei
was selling its products in seventy countries, winning major contracts from
Brazil to Sweden; it constitutes a serious competitor for beleagured telecom-
 CHINA, INFORMATION, AND THE WORLD ECONOMY • 183

munications manufacturers based in Europe and the United States.34 Tom

Online, a portal and purveyor of wireless content and online advertising in
China, sought to raise $195 million on the Nasdaq Stock Market in the United
States in March 2004; the top three Web portals at the time, Sohu.com, Sina.
com, and Netease.com, were all profitable Nasdaq-listed companies.35 A some¬
what greater measure of international recognition has followed in the wake
of China’s Internet initiatives. ICANN, the U.S. organization that controls the
naming of Web sites through the Internet’s central registry, reconstituted itself
in late 2002 in part to allow a Chinese representative onto its new advisory
board. Whether or not China has found it feasible to “wield more influence
over the Internet” as a result, as the Financial Times reported,36 there is little
question that it is trying to promote Internet-address standards that are less
dominated by the United States.37 China’s fifty-nine million Internet users by
the end of 2002 had already made it the world’s fourth-largest Internet mar¬
ket, giving further assurance that its voice would be heard by policy-making
bodies.38
In software and services, policies again are crafted to link transnational
market expansion to domestic economic growth and continuing corporate
reorganization. In March 1998, acting on general secretary Jiang Zemin’s
edict that “none of the four modernizations would be possible without
informatization,” China established a new “superministry” to promote
information industries as a “new point of economic growth.”39 Individual
Chinese software and services companies evince a protean character, as they
seek to benefit from the process of “creative destruction” that the economist
Joseph Schumpeter identifies with market forces. Chinadotcom, a continu¬
ing corporate experiment in information-market development, began as a
Web service for the Xinhua press agency in 1997, then as an Internet portal
partnership with AOL and a Nasdaq listing, and then sought to carve out
a niche by purchasing distressed software companies in North America
and Europe to develop a basis for selling software products to Chinese
manufacturers.40 China’s software and services industry reportedly gener¬
ated revenues of around $4 billion in 2003 (compared with $12 billion for
its more visible Indian counterpart), with exports growing rapidly. “To
spur the development of the software outsourcing industry,” reported the
Financial Times, “China has set up 15 national software industrial parks
and is encouraging tertiary institutions to emphasize software development
and applications in their curriculum^.”41
This leads us to yet another, increasingly important information market.
184 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

Private investment in China’s schools and colleges commenced during the

late 1980s and expanded alongside an explosion in demand for distinction-
conferring educational services for middle- and upper-class children. In 2002,
Chinese consumers were reported to have spent out-of-pocket $40 billion
on education.42 Further market growth is expected in the higher education
segment, where, beginning in 1999, a “fee-increase mania” has set in. College
administrators exploit every possible pretext to increase student fees, resulting
in what one analyst calls “bottomless corruption, of a kind probably without
precedent in the history of world education.”43 China’s National People’s
Congress nevertheless ratified the shift by approving a law in December 2002
to grant private colleges parity with publicly supported institutions in pos¬
sessing a right to make a “reasonable profit” on operations.44 By 2005, Chinese
universities were filing about six thousand patents annually—around the same
total as U.S. universitites.45
These initiatives are too diverse and substantial to be mere happenstance.
Do they possess an underlying political-economic coherence?

China’s Rise: A Threat to U.S. Power?

Distinctions among different market segments are not only economic but
also political, especially for the content industries and most particularly
for urban press and broadcast news. In what Joseph Man Chan and Jack
Linhuan Qiu call “a partially liberalized authoritarian media system,” even
as commercial and market pressures deepen their hold, the Chinese party-
state continues to impose a formidable array of political and ideological
controls.46 The question we are engaging here, however, cuts in a different
direction: do Chinese initiatives in communications and information pos¬
sess any overarching pattern or directionality for the political economy of
transnational capitalism?
Chinese officials are prone to cast these initiatives as a poor country’s boot¬
strapping attempts at economic development; they claim to be merely redress¬
ing the glaring imbalances that continue to scar global society, including world
communications. For example, the State Council information minister Zhao
Qizheng has argued that ‘“Asian countries should set up their own strong
media for the sake of speaking for themselves, reporting the facts about their
countries, and speaking out to safeguard their national interests.’”47
Although China’s leaders should not be praised for acting in principled
support of democracy and equality, this perspective expresses an impor-
 CHINA, INFORMATION, AND THE WORLD ECONOMY • 185

tant tmth: its far-ranging endeavors in this sector notwithstanding, China is

nowhere near upending U.S. political-economic power, either in communi¬
cations and information or in general. This does not signify, of course, that
U.S. power will not decline for other reasons.
If Chinese leaders typically minimize their challenge, then U.S. policy
makers are prone to overstate it by downplaying Chinese capital’s mixed
record of success to emphasize instead a looming threat to U.S. hegemony.
"Thanks to dramatic progress in technology, transportation, and commu¬
nications systems, China will wield far more power in the global economy,”
declared one of the milder statements of this kind in the influential journal
Foreign Affairs.48 What George J. Gilboy calls a new “mercantilist economic
superpower” is said to be forming.49
U.S. state agencies, moreover, act consistently to neutralize or outflank
what they deem to be incursions within the strategic information sector.
It is significant that these state interventions are aimed not only at Chinese
but also at U.S. capital. Important instances include prosecution by U.S.
authorities of the U.S. aerospace companies Loral and Hughes Electronics
for passing technical information about satellites to the Chinese;50 locking
out the successfully expanding $2 billion-per-year Chinese space program
from the U.S.-dominated International Space Station;51 rebuffing the Hong-
Kong-based Hutchison from participating in the takeover of a global interna¬
tional telecommunications system possessing U.S. assets;52 sending a strongly
worded official letter protesting China’s attempt to use technical standards to
gain traction for its domestic companies in next-generation wireless-system
markets;53 and bringing a trade action against China for supposedly unfairly
taxing semiconductor imports.54
Analysis must extend, however, beyond our list of initiatives and beyond a
merely instrumental explanation of action and counteraction. Much of the
significance of these events lies elsewhere, beyond any putative zero-sum
game between current global hegemon and would-be rival. It is not merely
that Chinese capital has achieved at best partial success in its early efforts to
transnationalize, or that the U.S. authorities retain powerful forms of lever¬
age over the global system. China’s rise is profoundly intertwined with larger
structural issues. The question becomes not simply how comprehensive or
immediate a challenge one nation poses to the other, but what ongoing trends
betoken for the structure and function of a more encompassing transnational
capitalism. This vital point may be explicated by turning again to changes in
telecommunications.
186 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

Telecommunications and China’s Reintegration

into Transnationalizing Capitalism
The Federal Communications Commission has documented the “steady
growth in use of U.S. international facilities for international... private line
services from the United States.”55 This bland formulation understates the
significance of what has occurred. The pace of growth in international pri¬
vate-line services and the scale of the resulting reorganization of transna¬
tional business around them are unprecedented.
FCC data shows that, at the end of 2000, the number of activated circuits
(measured in terms of sixty-four-kilobit-per-second equivalent circuits)
was 2,178,926—a 121 percent increase from 199956—and that it increased to
2,844,862 by the end of 2002.57 The category of business-dominated leased
circuits called International Private Line Services accounted for 70 to 74 per¬
cent of the total for each of the three years between 2000 and 2002, after hav¬
ing experienced disproportionately rapid growth over the preceding period
at the expense of International Message Telephone Service—telephone calls
transiting the traditional public switched network.58
In the case of individual country routes, the overall pace of network growth
and the shift toward private lines are noteworthy. A longtime major U.S. trad¬
ing partner, the United Kingdom, for example, became the United States’s
topmost telecommunications destination in 1999 (it was the third-largest in
1997) and has remained so; the number of activated circuits increased between
1997 and 2002 from 41,739 to 694,019, even as the proportion of voice-oriented
public lines to private-line (inclusive of “other”) circuits declined sharply,
from .77 to .07.59 For Canada, again a long-standing trade partner and the
second top destination for U.S. callers, 95,481 activated circuits in 1997 became
391,449 in 2002, even as the ratio of public to proprietary lines declined from
1.12 to .32.60 For Mexico, activated circuits increased from 60,555 to 233,261,
while the public-private line ratio decreased from 1.57 to .36. And, exclusive of
Hong Kong, activated circuits between the United States and China increased
from 1,927 to 54,809, as China became an increasingly important country node
(ranking between tenth and twelfth) for U.S. international telecommunica¬
tions; the ratio of public to private circuits in this case declined especially
precipitously, from 3.52 to .03.61
In China’s case, this change was especially radical, as a brief retrospective
look confirms. China detached itself from the U.S.-dominated international
telecommunications system following the 1949 revolution. A small satellite
station connecting the country to the Intelsat satellite network went into
 CHINA, INFORMATION, AND THE WORLD ECONOMY • 187

operation on a temporary basis during Richard Nixon’s historic visit in 1972.

Soon afterward, the Chinese signed multimillion-dollar contracts with three
U.S. companies—RCA Global Communications, Communications Satellite
Corporation, and Western Union International—to build a series of satel¬
lite ground stations, thereby kicking off the trend to increase the number of
international links. At this juncture (early 1973), China was said to possess
a mere eight telephone circuits to the United States, with telephone calls
between the two nations running at about sixty-five a month. As recently
as 1995, China and the United States were connected by only 1,114 activated
circuits, of which private lines accounted for merely fifty-four—making the
ratio of public to private circuits 19.59“ The spectacular buildup of interna¬
tional links to China—and, indeed, to much of the world—took place only
as a consequence of the unprecedented telecommunications boom during
the second half of the 1990s.
All told, for the top thirty international destinations that collectively claimed
around 96 percent of total active circuits after the turn of the new century, the
ratio declined from 1.03 in 1997 to .16 in 2002.63 And these figures substantially
understated the growth of proprietary lines, mainly because non-common
carrier private cables were also newly authorized and built; their owners tried
to sell the bulk of their capacity to end-users, notably Internet service pro¬
viders and foreign carriers. These carriers were not required to report cable
capacity to the FCC.64
Two trends combined to produce this sharply changed pattern. First, data
applications carried by Internet service providers over leased or owned pri¬
vate lines grew markedly, at the expense of the traditional technology used
for voice calling. Second, inhouse proprietary network applications prolif¬
erated among and between large organizations, principally transnational
corporations.
While skyrocketing use of the Internet has contributed to this shift, it should
be stressed that, during the overall network-building binge of the 1990s, per¬
haps two-thirds of total Internet investment was undertaken by businesses,
to erect walled-off private systems.65 These corporate-commercial intranets,
as they were called, carry two types of information that together probably
account for a substantial fraction of the hugely enlarged total of international
private-line circuits: first, intra- and intercorporate data streams about pro¬
duction scheduling, inventories and supply chains, accounting, payroll, and
research and development; second, an overlapping series of tradeable busi¬
ness services in finance, law, advertising, training, and other areas, which
incorporate telecommunications as an intermediate input. These twin appli-
188 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

cations mostly did not fall within the domain of the open Internet—hence
data concerning them were typically privileged—but rather within an explo¬
sively growing sphere of specialized, proprietary or quasi-proprietary network
operations.
An additional point also needs to be made. In the Chinese context, the
growth of international private-line circuits should not be seen as a purely
instrumental projection, whether enacted mainly by foreign capital or by
Chinese elites. Beyond the specific social agency that spearheads the buildout
of any given private-network system lies the question of how this buildout
structures or restructures the broader and more multifaceted market-expan¬
sion process.
Telecommunications networks function as a critical coordinating mecha¬
nism for dispersed corporate production and distribution chains. In this way,
they also constitute a basic infrastructure for accelerated corporate trans¬
nationalization. Improved corporate access at lowered cost to international
fiber-optic networks is a key historical prerequisite for reassimilating par¬
ticular territories and reorganizing segments of the division of labor within
a production system that is expanded by the same token: outsourced manu¬
facturing and the offshoring of business and commercial services contribute
to this process.66
The takeover of the regional network Asia Global Crossing by China Net¬
com must be seen not only as a direct bid for power by “China” but also as
an attempt to participate profitably in the structural reorientation of the
Chinese economy toward transnational capitalism. China Netcom displayed
comparable ambitions by negotiating with PCCW to purchase a stake in the
latter’s HKT Telephone system in Hong Kong; the revealing strategic plan
was to enlarge Netcom’s market presence in adjoining Guangdong Province,
where foreign-owned manufacturing plants are concentrated.67 Struggles
over the terms of China’s accession into the World Trade Organization like¬
wise must be interpreted on these same two planes: one that involves the
play for advantage between particular industrial interests and states, and
another that signifies programmatic expansion of linkages between China’s
domestic political economy and the transnational capitalism into which it
is reintegrating.68
Processes of structural change are co-evolving with instrumental actions
taken by a power bloc consisting, as Yuezhi Zhao specifies, “of the bureau¬
cratic capitalists of a reformed Party state, transnational corporate capital,
and an emerging urban middle class, whose members are the favored custom-
 CHINA, INFORMATION, AND THE WORLD ECONOMY • 189

ers of both domestic and transnational capital”—and, for some important

purposes, also of foreign state managers and policy makers.69 On some of
the most fundamental issues, crucially, these actors broadly agree, binding
the Chinese national economy and its domestic social strata more and more
comprehensively to the vicissitudes of a transnational market system.70 Only
the terms and conditions of this process of integration, and not the process
itself, are objects of negotiation.
Viewed from the Chinese side, two interrelated dimensions of this struc¬
tural metamorphosis stand out. First is the party state’s somewhat undisci¬
plined attempt to secure advantages for domestic capital, as its representatives
broker transnational corporate access to the country’s great reserves of cheap
labor power and to its expanding domestic market. Second is its selective
effort to build up individual domestic enterprises into effective transnational
corporations.71
The first of these strategies is anything but novel. China is not the first
country to try to leverage state control over the terms of entry into its domes¬
tic market in an effort to build up its economy and develop domestic capital.
This strategy echoes a time-tested practice, pursued throughout prior decades
with varying success by countries such as India and South Korea and earlier
by Japan and the United States.72 Inward foreign direct investment in China,
however, is also being tied to a second strategic endeavor: to expand Chinese
companies’ outward foreign direct investment. In this respect, the contrast
with earlier development plans is telling.
Economic-development initiatives of the mid-twentieth century limited
inward and outward foreign direct investment and relied on import substitu¬
tion (though sometimes more for rhetorical purposes than in reality73) and
strategic linkages between emerging home industries on the grounds that
national self-determination is best served by systematically reserving the
domestic market for such guided initiatives. Whether state- or corporate-
led, the endeavor was always framed in terms of national development. The
$24 billion Three Gorges Dam project, and the nationalism that rhetorically
infused it, might be cited as evidence of such an effort. But even this gigantic
project must be set in the context of China’s reliance—unparalleled for a
poor country—on foreign direct investment, as Gilboy explains:

Since it launched reforms in 1978, China has taken ... ten times the total stock
of FDI [foreign direct investment] Japan accumulated between 1945 and 2000.
According to China’s Ministry of Commerce, U.S. firms have invested more
than $40 billion in more than 40,000 projects in China. Given its openness
190 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

to FDI, China cannot maintain its domestic market as a protected bastion

for domestic firms, something both Japan and South Korea did during their
periods of rapid growth. Instead, it has allowed U.S. and other foreign firms to
develop new markets for their goods and services, especially high-value-added
products such as aircraft, software, industrial design, advanced machinery,
and components such as semiconductors and integrated circuits.'4

Assimilating the structural logic of today’s supranational market system

requires China’s policy makers to employ a conception of the national economy
that holds hostage the social needs of the vast majority of the population to
capital’s demands for accumulation on a transnational scale. This tends to
undercut any prospect of self-determination in the older, nation-bound sense
and, nationalist rhetoric notwithstanding, to render this ideal less relevant.75
Because developing communications and information infrastructures have
come to constitute a leading edge of transnational capital’s overall accumula¬
tion project, this same strategic goal has likewise come to be internalized by
Chinese leaders. The unprecedented buildout of a high-tech telecommunica¬
tions grid—requiring larger capital investments than those funneled into the
Three Gorges Dam—is a primary exemplar. Another was announced in 1997,
when president Jiang Zemin stated, “Science and technology being a primary
productive force, their progress is a decisive factor in economic development.
We must... make the acceleration of their progress a vital task in economic
and social development... strengthen basic research and research in high
technology and accelerate the pace of applying high technology to produc¬
tion.”76 According to this developmental vision, incorporated into the Con¬
stitution of the Chinese Communist Party five years later at the Sixteenth
Party Congress in November 2002, the party “must persist in taking economic
development as the central task [and] give full play to the role of science and
technology as the primary productive force.”77
The obstacles in the way of building a high-tech informational basis for
transnational capital—whether of Chinese or foreign origin—remain great.
In one estimate, based on the number of original research papers published
by biologists in internationally refereed “high-impact” journals, there were
a mere five hundred productive biologists in China in 2003, compared with
three thousand productive biologists of Chinese descent and forty thousand
overall in the United States.'6 China’s research and development budget for
2001 was $12.5 billion, when that of the United States was $281 billion.79 And
China continues to run a deficit on its technology trade with the world.80
But changes are apparent. Between 1981 and 2003, China increased its pub-
 CHINA, INFORMATION, AND THE WORLD ECONOMY • 191

lications in international scientific journals twentyfold, accounting for over 5

percent of the world’s scientific publications; in selected fields such as materi¬
als science, mathematics, and physics, its share was higher.81 In the early 2000s,
U.S. colleges graduated sixty thousand engineers each year; China’s universi¬
ties graduated two hundred thousand.82 Again akin to India, China is making
increasing efforts to entice foreign transnational corporations to send offshore
to China back-office information services, as well as basic research, engineer¬
ing, and design, and even financial analysis. Philips has shifted research and
development on most televisions, mobile phones, and audio electronics to
Shanghai, where General Electric performs important research and develop¬
ment work as well. Microsoft is spending $750 million over three years on
research and development and outsourcing in China.83 Intel, Motorola, and
other high-tech transnational corporations set up over a hundred research
and development centers, mostly in Shanghai and Beijing, to draw on the pool
of technical and research talent and to sell more effectively into the Chinese
domestic market.84 Drug and biotech companies such as Roche and Pfizer
have likewise found in China a quickly developing infrastructure, replete with
“highly educated scientists who work for a fraction of what their Western
counterparts are paid.”85 According to an official source, the world’s largest
transnational companies had established nearly four hundred research and
development centers in China by 2001.86 From the perspective of foreign
capital, the lure of domestic demand and the availability of cheap scientific
labor, linked by networks to transnational production chains, accounts for
these moves.87
On the Chinese side, in contrast, the effort is to leverage control over
inward foreign direct investment to build a globally competitive Chinese
capitalism that can hold its own in the global information industry. In a
progress report offered to the Davos World Economic Forum in January
2003, the president of China Netcom, Edward Tian, emphasized that the Chi¬
nese Communist Party Congress of November 2002 had adopted a “‘very,
very important policy—that in the next ten years China has to build ... an
information-led new economy.’ ”88 Declaring that “ ‘China can soon become
the world’s largest Internet and information economy,’ ” Tian asserted that,
over the next decade, Chinese investment is likely to focus “‘more to the
software side and service sector,’” with the intention to “‘export not only
low-cost labor-intensive goods but... software and services to the Western
world.’”89 This formulation prompts additional questions about the sys¬
temic character of the structural transformation that is under way.
192 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

Regional or Global Integration?

Foreign transnational corporate contributions to the Chinese economic mir¬
acle have been manifold. China’s export growth is remarkable not only for its
scale—from $26 billion in volume in 1985 to $380 billion in 2003—but also
for its strong linkages to foreign direct investment. Imports, particularly from
Asian countries, are also strongly linked to foreign direct investment, as they
are used for the reprocessing and export of finished goods.90 From virtually
none in 1984, foreign direct investment had cumulated to around $400 bil¬
lion by 2001.91 Over the next two years, China attracted an additional $100
billion or more in foreign direct investment, more than any other country,
including the United States, and during 2004 and 2005 a further $120 billion
flowed in.92 By 2003, overall foreign direct investment accounted for no less
than 40 percent of Chinese gross domestic product.93
Crucial questions must be posed, however, in regard to how this invest¬
ment is aligning China within the system of transnational capitalism. Is China
a general-purpose host for foreign direct investment from anywhere and
everywhere? Is it moving into the orbit of one or another leading economic
power? Or is it successfully transitioning into a transnational economic force
in its own right?
The promise of market entry for foreign capital is tied to a buildup of select
Chinese companies into transnational corporations. The goal is to try and
transform a group of perhaps thirty to fifty state-owned enterprises, selling
everything from oil and gas to white goods, steel and aluminum to PCs, TVs,
and cell-phone service, into globally competitive units of capital by 2010.94
There is evidence that this effort has already been partially successful. Eleven
Chinese companies ranked in the Fortune 500 list of leading global enter¬
prises by revenue.95 A survey of around a hundred investment-promotion
agencies by the United Nations Commission on Trade and Development in
2004 ranked China fifth in the world—ahead of sixth-place Japan—as a pro¬
spective source of investment capital.90 Huawei is probably the outstanding
example of a Chinese company that has rapidly established itself in overseas
markets for advanced telecommunications and Internet technology.
Because a well-integrated national economy remains in doubt, owing in
part to its problematic interconnections with transnational capital, this chal¬
lenge should not be cast merely as a scramble to establish “national champi¬
ons.”9 Thus far, at least, Chinese companies have notably “failed to develop
strong domestic technology supply networks.”98 Nor should the extent of
Chinese capital’s global competitiveness be overstated. The difficulties of
 CHINA, INFORMATION, AND THE WORLD ECONOMY • 193

competing against long-established transnational behemoths are widespread

and acute. Foreign-based transnational corporations themselves, further¬
more, generate a large proportion of Chinese exports and domestic sales in
key market segments. Between 1991 and 2001, the overall share of Chinese
exports claimed by domestic affiliates of transnational corporations rose
from 17 to 50 percent." During the first half of 2003, by one estimate, no less
than 84 percent of Chinese exports, by value, were by non-Chinese compa¬
nies operating there.100 In high-technology exports, whose share in China’s
overall trading volume increased from 3 to 22 percent between 1985 and 2000,
foreign affiliates claim an especially dominant role. In electronic circuits,
foreign affiliates took 91 percent of Chinese exports in 2000; in automatic
data-processing machinery, they accounted for 85 percent of exports; and
in mobile phones, foreign affiliates claimed 96 percent of China’s exports in
2000.101 Overall, 80 percent of Chinese technology imports and exports were
controlled by foreign-owned firms.102 “In contrast,” emphasized a report
by the United Nations Commission on Trade and Development, “Chinese
domestic enterprises predominate in the low-technology sector, especially
in the export of toys, travel bags, and yarns and fabrics.”103
What about regional integration tendencies? China is certainly becoming
robustly interconnected with Japanese capital and the newly industrialized
East Asian economies. In 2000, Japan supplied 23.7 percent of China’s imports
of manufactured goods, while Hong Kong added 4.9 percent, and the rest
of Asia (excluding West Asia) an additional 33.1 percent. The United States
contributed only 12.2 percent, and the European Union 16.8 percent.104 China
ran trade deficits with Japan, Taiwan, Korea, and members of the Association
of South East Asian Countries (ASEAN).105 East Asian economies have cor¬
respondingly become more reliant on Chinese demand for their own growth,
a fact that worries policy makers in, for example, the Republic of Korea.106
Beijing has struck a free-trade pact with ten Southeast Asian nations and
established an annual East Asian summit with the ASEAN countries, Japan,
South Korea, India, New Zealand, Australia—but not the United States.107
Some strategic moves in the information sector are positioned within this
same regional matrix.
The Japan Information Technology Services Industry Association, the
China Software Industry Association, and the Federation of Korean Infor¬
mation Industries agreed in 2003 to work together and with their respec¬
tive governments to promote East Asia’s use of open-source software in
preference to continued reliance on Microsoft.108 (This regional collabo¬
ration presumably arose in part from Japan’s experience during the late
194 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

1980s, when it attempted to launch an alternative to Microsoft’s proprietary

operating system. Japan’s effort was curtailed following strenuous U.S.
government objections on the grounds that it would constitute a “trade
barrier” to U.S. companies, that is, to Microsoft.109) In a related develop¬
ment, a Chinese computer scientist employed by a Hong Kong company,
Culturecom Holdings, has developed a computer chip capable of respond¬
ing directly to Chinese and other Asian languages, thereby potentially free¬
ing the PC from microprocessors and operating systems programmed in
English and the companies—Intel and Microsoft—that benefit most from
this dependence.110
But a self-contained regional system under either Japanese or Chinese direc¬
tion will be difficult to achieve. Centrifugal forces work against such a develop¬
ment. U.S. policy for East Asia aims to prevent cooperation between the two
powers,111 while Japanese leaders’ unrepentant stance over Japanese impe¬
rial aggression throughout the first half of the twentieth century continues
to inflame resentment throughout China.112 Neither, however, do evolving
economic relationships lend themselves to such a monochromatic regional
vision. Hewlett-Packard, a leading PC manufacturer with a 17 percent share of
the global market, responded to the East Asian open-source initiative in 2004
by announcing that it would sell PCs in Asia loaded with Linux by a Japanese
software maker, Turbolinux.113 Not only did U.S. and European transnational
corporations continue to invest on an unprecedented scale in China, but
Japanese, as well as Korean, Taiwanese, and other Asia-based foreign direct
investment in China itself is based on the strategy of exporting to third mar¬
kets, including, preeminently, the United States. The United Nations Com¬
mission on Trade and Development emphasizes that the aim of foreign direct
investment in China by investors in East Asia is to “use China as an export
platform for the Western markets.”114 On the one side, China—replacing the
United States in this role—has become the biggest exporter to and, shortly
afterward, the biggest trading partner with Japan.115 On the other side, China
overtook Japan in 2002 to become the third-largest exporter to the United
States (after Canada and Mexico), sending $125 billion in exports.116 China’s
national foreign exchange reserves have undergone a concurrent and dramatic
increase to $258.6 billion by September 2002, the second-largest total in the
world, then to $416 billion by early 2004, and $600 billion by early 2005.117
China still ranks behind Japan (which increased its purchases of U.S. Trea¬
sury bills and bonds from $318 billion in December 2001 to $577 billion by
January 2004, by which time it was financing about 40 percent of net U.S.
Treasury-market borrowing), but Chinese investors have quickly become the
 CHINA, INFORMATION, AND THE WORLD ECONOMY • 195

second-largest force in U.S.-government debt markets—their purchases grew

from $77 billion in December 2001 to $148 billion by January 2004.118 In both
cases, the attempt is to shore up the buying power of U.S. consumers, which
sustains these Asian countries’ own export growth.119 There is at least some
evidence of reciprocity: in the information and communications sector, U.S.
technology companies such as Cisco, Google, Microsoft, Yahoo, Skype, and
Sun Microsystems have helped equip Chinese authorities with hardware and
software to restrict, filter, and monitor Chinese Internet users.120
Proliferating linkages between China an^ the world political economy
transcend any bipolar configuration. As was also true for the United States,
China’s regional and global market-development initiatives are proceeding
apace.121

Will China Provide an Escape Valve for the Global

Crisis of Overproduction?

The two poles of market growth with which we are concerned share a com¬
mon origin: capital’s deep-seated need, in the face of growing worldwide
overproduction throughout conventional industry, to identify and exploit
new accumulation sites.122 On the one side, the intensive cultivation of the
emerging information sector of the economy arose in response to the 19708-
era profit slowdown and stagnation throughout the existing economy. Con¬
ditioned by this underlying pressure, on the other side, is the process of rein¬
tegrating China into what has become a more fully transnational capitalism.
Because existing markets were glutted, the prospect of developing a vast new
market in China for consumer goods and services constitutes an irresistible
temptation. The competitive advantages to be derived from sourcing produc¬
tion in China’s ultra-low-wage labor market has proven equally compelling,
when rivals threaten to gain them first.
As Chinese companies and affiliates of transnational companies install
production lines and infrastructure, and as distribution systems are built,
mountains of commodities are sent out for sale into China’s own domestic
market and the greater world economy. Is China’s national market capable
of absorbing a greater share of this huge expansion of output? Or is China’s
integration likely to further destabilize transnational capitalism by worsen¬
ing an already stressful condition of global overproduction?
Chinese policy makers have tried to nourish the soil in which capital grows
by encouraging bank lending and easy credit; these constitute one of the
major props of the country’s massive capital spending and rapid economic
196 • POLES OF MARKET GROWTH, OR A DEEPENING CRISIS?

growth.123 In the consumer loan market, bank-card use has proliferated, and
transnational market entrants like Citibank have tried to enlarge the market
for consumer credit.124 China’s total debt outstanding in 2003 equaled nearly
160 percent of its economic output.125 Room for maneuver via debt- and
credit-fueled expansion therefore appears to be limited. But this does not
exhaust the issue.
In March 2004, Premier Wen Jiabao conceded, “Deep-seated problems
and imbalances in the economy over the years have not been fundamentally
resolved.”126 An astonishing 90 percent of China’s manufacturing product
lines, the financial press estimated in 2004, were “in oversupply,” “yet invest¬
ment in fixed assets ... grew by 30% and contributed 47% of GDP” during
2003.127 This continuing investment binge by domestic lenders and foreign
companies threatens to become dangerously unhinged from actual sales
and profits—by 2004, nearly 20 percent of total borrowings were officially
accounted as nonperforming.128 Existing overcapacity is all but certain to
increase, sometimes sharply. During 2003, for example, General Motors, Volk¬
swagen, Toyota, Honda, Nissan, Peugot Citroen, DaimlerChrysler, and Ford
collectively announced more than $20 billion of new investment in China,
enough to ensure that, for the foreseeable future, production of vehicles for
the Chinese market will provide nearly twice as many autos as can be sold
there.129 As China becomes “a tough place for global auto makers,” the auto
makers are joining their fledgling Chinese rivals such as SAIC, Changan
Automobile, and Dongfeng Motor (bulked up by a decade of growth via their
partnerships with different transnational auto groups) in trying to export
China-made vehicles to Europe and North America. This vital industry shift
is therefore motivated as much by the companies’ inability to expand the
sated Chinese market as by corporate strength and robust ambition.130
At the same time, the rapid reintroduction of capitalist social relations
aggravates uneven regional and social development and generates deepening
inequality, profiteering, the breakdown of social-services and public-health
infrastructure, and rising unemployment throughout this heavily agricul¬
tural nation.131 The countryside is home to seven-tenths of China’s 1.3 bil¬
lion people but only half the nation’s employment; in these rural districts,
where farmers continue to be forced from their land, perhaps two hundred
million people are “mobile”—a euphemism meaning that they'migrate con¬
tinually in search of work.132 Joining this “floating population,” additional
tens of millions of work-seekers tramp the streets of China’s cities.133 In
these circumstances, authorities are confronted by continual outbreaks of
disorder and dissent.134 In response, government policy has begun to notice
 CHINA, INFORMATION, AND THE WORLD ECONOMY • 197

rural China, and the leadership has recognized a tactical need to direct more
state spending to the countryside. Once more, however, even if the will to
do so is manifest—which remains far from clear—the room for maneuver
is limited. An unusually comprehensive review of the condition of China’s
vast peasant class found that “over half the Chinese population falls into the
World Bank’s ‘Fourth World’ category, with the per capita purchasing power
of the lowest-income countries.”135 No cohesively unified national market
yet exists, however, and although concerted efforts to create one are evident,
this is sure to take years of sustained effort, ft would be foolish to forecast
that limits placed on China’s surplus absorption capabilities by rural poverty
and a fragmented national market will be summarily swept aside.

Conclusion

Communications and information comprise a vital economic sector whose

rapid expansion reflects capital’s underlying need to arrest stagnation and
profit decline. A second growth engine, born of the same compulsion, has
materialized around China’s reinsertion into the transnational market system.
These two poles of growth are related, and their junction involves something
quite different than the sum of their parts. China’s takeoff into sustained
growth has found a substantial but also complex expression in information
and communications, while the tendency of manufacturers relocated to China
to “dictate global prices of everything from steel to microchips”136 seems
likely to accentuate the continuing problem of overproduction in China and
throughout the world economy at large. If so, then, paradoxically, the success¬
ful exploitation of these two poles of growth will contribute to a resurgence
of the very economic crisis that prompted their own prior development.
.

'
 Notes
✓

Abbreviations Used in Notes

FT Financial Times
NYT New York Times
WSJ Wall Street Journal

Preface

1. Nicholas G. Carr, Does IT Matter? (Boston: Harvard Business School Press,

2004).
2. Doug Henwood, After the New Economy (New York: New Press, 2003).

Chapter 1: How to Think about Information

1. American Express, advertisement, WSJ, 25 October 1982,11.
2. Forrest Woody Horton Jr., “Rethinking the Role of Information,” Government
Computer News (April 1983): 1.
3. Joan Spero, “Information: The Policy Void,” Foreign Policy 48 (Fall 1982): 152.
4. Oxford English Dictionary, vol. 5 (Oxford: Clarendon Press, 1933), 274,
5. Oxford English Dictionary Supplement, vol. 2 (Oxford: Clarendon Press, 1976),
300-301.
6. Norbert Wiener, Cybernetics: Or, Control and Communication in the Animal and
the Machine (Cambridge: Massachusetts Institute of Technology Press, 1961), 11.
7. Claude Shannon and Warren Weaver, The Mathematical Theory of Communica¬
tion (Urbana: University of Illinois Press, 1959); Warren Weaver, “The Mathematics
of Communication,” Scientific American 181.1 (1949): 11-15.
8. Klaus Krippendorff, “Information, Information Society, and Some Marxian
200 • NOTES TO PAGES 4-7

Propositions,” Paper presented at the Thirty-Fourth Annual International Com¬

munications Association Conference, San Francisco, 24-28 May 1984.
9. Herman R. Branson, “Information Theory and the Structure of Proteins, ’ in
Essays on the Use of Information Theory in Biology, ed. Henry Quastler (Urbana:
University of Illinois Press, 1953), 84.
10. Heinz von Foerster, Margaret Mead, and Hans Lukas Teuber, eds. Cybernetics:
Circular, Causal, and Feedback Mechanisms in Biological and Social Systems; Transac¬
tions of the 10th Conference, 22-24 April 1955, Princeton (New York: Josiah Macy Jr.
Foundation, 1956), 70.
11. Richard C. Raymond, “Communication, Entropy, and Life,” American Scientist
38 (1950): 278.
12. James Watson and Francis Crick, “Genetical Implications of the Structure of
Deoxyribonucleiic Acid,” Nature 171 (1953): 965; Edward Yoxen, The Gene Business
(New York: Harper and Row, 1984), 18.
13. Ten renowned conferences on “circular causal and feedback mechanisms in
biological and social systems,” or “cybernetics,” sponsored by the Josiah Macy Jr.
Foundation, did much to familiarize researchers from engineering, mathematics,
physiology, psychiatry, anthropology, chemistry, philosophy, and other fields with
emerging concepts of information theory. A considerable portion of the confer¬
ees’ time was spent attempting to discern the relevance of notions of control, feed¬
back, homeostasis, and other concepts associated with information theory for their
host fields. This early conviction that the search for an informational component
of analysis might be extended usefully to any system facilitated the development of
increasingly precise knowledge of the informational workings of diverse systems. To
biology, especially, information theory has proven a powerful stimulus to improved
understanding. And growing knowledge of biological information processing sug¬
gests that such “natural systems” may offer vital clues to problems currently faced
by designers of “artificial” information networks. As one researcher puts it, “pro¬
cessing is ubiquitous in natural systems,” and computer scientists seek to deepen
understanding of “architecture, data structures, and algorithms” by “viewing them in
both natural and artificial settings.” J. R. Sampson, Biological Information Processing:
Current Theory and Computer Simulation (New York: John Wiley and Sons, 19841,4,
5-
14. Stafford Beer, “The Irrelevance of Automation,” Cybernetica 1.4 (1958): 286.
“The most complex situations we have heard discussed are the stabilities engendered
by inverse feedback in social structures of isolated communites reported principally
by social anthropologists” (von Foerster, Mead, and Teuber, eds., Cybernetics, 74).
15. Anthony Oettinger, “Information Resources: Knowledge and Power in the 21st
Century,” Science 209 (4 July 1980): 192.
16. Krishan Kumar, Prophecy and Progress: The Sociology of Industrial and Post-
Industrial Society (New York: Penguin, 1978).
17. Harlan Cleveland, The Knowledge Executive (New York: Dutton, 1985), 20.
 NOTES TO PAGES 7~12 • 201

18. Ibid., 33.

19. Ibid., 25,34, 29.
20. A fourth tradition of thinking about information did in fact emerge as an
outgrowth of conventional economic theory, as more businesses began to con¬
front issues associated with markets for network systems and information services.
The idea of information as a public good may be placed within this framework.
Economists including Kenneth Arrow, Kenneth Boulding, Fritz Machlup, Marc
Porat, and Joseph Stiglitz elaborated this conception, which overlapped with the
postindustrialists’ treatment, providing added support for the idea that an emerg¬
ing information-intensive economy would incarnate “new rules” or at least require
specific adaptations of existing economic doctrine. For a recent discussion, see
Council of Economic Advisors, “The Role of Intellectual Property in the Economy,”
chap. 10 of Economic Report of the President, transmitted to the Congress February
2006, 211-30; retrieved 22 February 2006, www.whitehouse.gov/cea/pubs.html. For
an influential revision and synthesis, see Carl Shapiro and Hal R. Varian, Informa¬
tion Rules: A Strategic Guide to the Network Economy (Boston: Harvard Business
School Press, 1999).
21. Jane Yurow, Issues in Information Policy, Department of Commerce Publication
No. NTIA-SP-80-9 (Washington, D.C.: Government Printing Office, 1981), 54.
22. Rudolf Hilferding, “Bohm-Bawerk’s Criticism of Marx,” in Karl Marx and the
Close of His System: Bohm-Bawerk’s Criticism of Marx, ed. Paul Sweezy (Philadelphia:
Orion, 1984), 132-33.
23. Paul Baran and Paul Sweezy, Monopoly Capital: An Essay on the American Eco¬
nomic and Social Order (New York: Monthly Review, 1966), 125,122.
24. Sean Wilentz, Chants Democratic: The American Working Class, 1788-1850 (New
York: Oxford University Press, 1984).
25. Baran and Sweezy, Monopoly Capital, 127.
26. Karl Marx, “Results of the Immediate Process of Production,” in Capital, vol.
1., trans. Ben Fowkes (New York: Vintage, i977)> 1044.
27. Eric Roll, A History of Economic Thought, 3d ed. (Englewood Cliffs, N.J.: Prentice-
Hall, 1956), 129.
28. Marx, “Results of the Immediate Process of Production,” 1048.
29. Nicholas Garnham, “Contribution to a Political Economy of Mass-Commu¬
nication,” Media, Culture, and Society 1 (1979): 123-46.
30. Marx, “Results of the Immediate Process of Production,” 1044. See also David
Harvey, The Limits to Capital (Chicago: University of Chicago Press, 1982), 104-5.
31. Paul Sweezy and Harry Magdoff, “The Strange Recovery of 1983-1984,” Monthly
Review 37.5 (1985): 1-11.
32. U.S. Department of Commerce, Survey of Current Business 66.7 (Washington,
D.C.: Government Printing Office, 1986), 60, table 5.7; U.S. Department of Commerce,
The National Income and Product Accounts of the United States, 1929-82 (Washington,
D.C.: Government Printing Office, 1986), 234-35, table 5.7.
202 • NOTES TO PAGES 12~l8

33. Ralph Winter, “Forecast for ’86 Capital Outlays Improves,” WSJ, 30 April
1986, 6.
34. Sweezy and Magdoff, “Strange Recovery of 1983-1984,” 6.
35. Ibid., 6, 7.
36. Ibid., 9.
37. Ibid., 9.
38. Wayne J. Howe, “The Business Services Industry Sets Pace in Employment
Growth,” Monthly Labor Review 109 (1986): 29,33.
39. Ibid., 34. It should be noted that the business services category lumps together
disparate kinds of jobs, including computer experts and janitors, management con¬
sultants and security guards. Nevertheless, the segment of the business services cat¬
egory devoted to information-intensive services—and it is a substantial component,
probably more than half the total—registered employment gains generally far in
excess of those characteristic of the overall economy.
40. Ernest Mandel, Late Capitalism (London: Verso, 1978).
41. Dallas Smythe, “Communication: Blindspot of Western Marxism,” Canadian
Journal of Political and Social Theory 1.3 (1977): 1-27.
42. “Economic Outlook,” Testimony of Chairman Alan Greenspan before the Joint
Economic Committee, U.S. Congress, 3 November 2005,3; retrieved 13 January 2006,
www.federalreserve.gov/boarddocs/testimony/2005/20051103/default.htm.

Chapter 2: Culture, Information, and Commodification

1. Steven J. Heims, The Cybernetics Group (Cambridge: Massachusetts Institute of
Technology Press, 1991).
2. Abbe Mowshowitz, “On the Market Value of Information Commodities: I. The
Nature of Information and Information Commodities,” Management Report Series
no. 90 (Rotterdam, Netherlands: Erasmus University, Rotterdam School of Manage¬
ment, 1991), 5.
3. Wilbur Schramm, “Information Theory and Mass Communication,” Journalism
Quarterly 32.5 (1955): 135.
4. David A. Mindell, Between Human and Machine (Baltimore: Johns Hopkins
University Press, 2002), 136-37.
5. Quoted in Arthur L. Norberg, Computers and Commerce: A Study of Technol¬
ogy and Management at Eckert-Mauchly Computer Company, Engineering Research
Associates, and Remington Rand, 1946-1957 (Cambridge: Massachusetts Institute of
Technology Press, 2005), 185.
6. L. David Ritchie, Information (Newbury Park, Calif.: Sage Publications, 1991),
7,31.
7. Ibid., 47.
8. For this intellectual sea change, see Dan Schiller, Theorizing Communication: A
History (New York: Oxford University Press, 1996).
 NOTES TO PAGES 19-21 • 203

9. For a spectacular example, purporting to present an integrated analysis of the

roles of information, matter, and energy, in “systems” ranging from cell to society, see
James G. Miller, Living Systems (New York: McGraw-Hill, 1978). For a similar example
of shifting without apparent effort or concern across these levels, see James Beniger,
The Control Revolution (Cambridge, Mass.: Harvard University Press, 1986).
10. Mowshowitz, “On the Market Value of Information Commodities,” 6.
11. Klaus Krippendorff, “Paradox and Information,” in Progress in Communication
Sciences, vol. 5, ed. Brenda Dervin and Melvin J. Voigt (Norwood, N.J.: Ablex, 1984),
50.
12. Hans Christian von Baeyer, Information: The New Language of Science (Cam¬
bridge, Mass.: Harvard University Press, 2004), 25.
13. Daniel Bell, “The Social Framework of the Information Society,” in The Com¬
puter Age: A Twenty-Year View, ed. Michael L. Dertouzos and James Moses (Cam¬
bridge: Massachusetts Institute of Technology Press, 1979), 168.
14. An African American packinghouse worker and trade unionist, interviewed at
his home in Chicago in the mid-1960s, “walks over to the piano, removes the plastic
cover, and noodles some roughhewn blues chords as he talks. T call this culture.
That’s my best definition of culture. When people are oppressed, sometimes they
have to have some way.... [Mahalia Jackson] is a typical example of what I’m trying
to say. Like when my mother died, her music made me cry, but it gave me hope.’”
Studs Terkel, Division Street America (New York: New Press, 1993), 134-35.
15. Krishan Kumar, Prophecy and Progress: The Sociology of Industrial and Post-
Industrial Society (Harmondsworth: Penguin, 1978).
16. Daniel Bell, “The Eclipse of Distance,” Encounter 20.5 (1963): 564; Daniel Bell,
The Cultural Contradictions of Capitalism (New York: Basic Books, 1976), xi, 12; Fred
Block, Postindustrial Possibilities: A Critique of Economic Discourse (Berkeley: Uni¬
versity of California Press, 1990), 7.
17. Dan Schiller, “The Legacy of Robert A. Brady: Antifascist Origins of the Political
Economy of Communications,” Journal of Media Economics 12.2 (1999): 89-102.
18. This usage is common in journalistic references, like this one, to the purported
aversion of Japanese corporations to buying software systems off-the-shelf: “They
want a system that’s unique to them, not a commodity.” Michael Schrage, “Software
Powerhouses Remain Elusive Goal for Japanese,” Los Angeles Times, 13 May 1993,1D.
For the president of RCA, Robert Sarnoff, the emergent economic role of information
was already prominent by 1967, when he predicted that “ ‘information will become a
basic commodity equivalent to energy in the world economy,”’ able to “‘function as
a form of currency in world trade, convertible into goods and services everywhere.’”
Quoted in Herbert I. Schiller, Mass Communications and American Empire (New
York: Augustus M. Kelley, 1969), 51.
19. Vincent Mosco, The Political Economy of Communication: Rethinking and
Renewal (London: Sage, 1996).
204 • NOTES TO PAGES 21-23

20. Nicholas Garnham, Capitalism and Communication (London: Sage, 1990);

Bernard Miege, The Capitalization of Cultural Production (New York: IMG, 1990);
Mosco, Political Economy of Communication.
21. In territorial terms, it might be added, the unit of analysis has been usually
implicit—the nation state. Moreover, the site of “the information economy” has
been typically identified with the United States or, in some formulations, with the
“developed market economies”: the United States, Western Europe, and Japan. Where
is the information commodity developing most intensively today? A national unit
of analysis is inadequate to answer this question.
22. John Clarke, New Times and Old Enemies (London: HarperCollins Academic,
1991), 98; Garnham, Capitalism and Communication, 37.
23. Bob Rowthorn and Donald J. Harris, “The Organic Composition of Capital and
Capitalist Development,” in Rethinking Marxism, ed. Stephen Resnick and Richard
Wolf (New York: Autonomedia, 1985), 345-57.
24. For an especially insightful study, see James Curran, “The Press as an Agency
of Social Control,” in Newspaper History: From the Seventeenth Century to the Pres¬
ent Day, ed. George Boyce, James Curran, and Pauline Wingate (Beverly Hills, Calif.:
Sage Publications, 1978), 51-75.
25. Margaret Graham, The Business of Research: RCA and the Videodisc (New York:
Cambridge University Press, 1986).
26. See Dan Schiller, Objectivity and the News: The Public and the Rise of Commercial
Journalism (Philadelphia: University of Pennsylvania Press, 1981); Michael Denning,
Mechanic Accents (London: Verso, 1986); Elliott J. Corn, The Manly Art: Bare-Knuckle
Prize Fighting in America (Ithaca, N.Y.: Cornell University Press, 1986); Kathy Peiss,
Cheap Amusements: Working Women and Leisure in Turn-of-the-Century New York
(Philadelphia: Temple University Press, 1986); Elizabeth Ewen, “City Lights: Immi¬
grant Women and the Rise of the Movies,” Signs 5.3 (1980; Supplement): S45—65; Roy
Rosenzweig, Eight Hours for What We Will (New York: Cambridge University Press,
1983)) 191-221; Steven J. Ross, “Struggles for the Screen: Workers, Radicals, and the
Political Uses of Silent Film,” American Historical Review 96.2 (1991): 333—67; Ste¬
ven J. Ross, Working-Class Hollywood (Princeton, N.J.: Princeton University Press,
1997); George Lipsitz, A Rainbow at Midnight: Class and Culture in Cold War America
(New York: Bergin and Garvey, 1982), 195-225; Michele Martin, “Capitalizing on the
‘Feminine’ Voice,” Canadian Journal of Communication 14.3 (Spring 1989): 42-62;
Michele Martin, “Hello, Central?” Gender, Technology, and Culture in the Formation of
Telephone Systems (Montreal: McGill-Queen’s University Press, 1991); William Boddy,
“The Rhetoric and Economic Roots of the American Broadcasting Industry,” Cine-
Tracts 2.2 (Spring 1979): 37—54; Lynn Spigel, Make Room for TV (Chicago: University
of Chicago Press, 1992); Lizabeth Cohen, Making a New Deal: Industrial Workers in
Chicago, 1919-1939 (New York: Cambridge University Press, 1990); Lizabeth Cohen,
The Class Experience of Mass Consumption,” in The Power of Culture: Critical Essays
in American History, ed. Richard W. Fox and T. J. Jackson Lears (Chicago: University
 NOTES TO PAGES 23-27 • 205

of Chicago Press, 1993), 135-60; Susan G. Davis, Parades and Power: Street Theater
in Nineteenth-Century Philadelphia (Philadelphia: Temple University Press, 1986);
Alexander Saxton, The Rise and Fall of the White Republic: Class Politics and Mass
Culture in Nineteenth-Century America (London: Verso, 1990).
27. Herbert I. Schiller, Culture, Inc. (New York: Oxford University Press, 1989), 32.
See also Vincent Mosco, The Pay-Per Society: Computers and Communication in the
Information Age (Toronto: Garamond, 1989); Mosco, Political Economy of Commu¬
nication.
28. Harry Braverman, Labor and Monopoly Capital (New York: Monthly Review,
1974).
29. Jim Davis and Michael Stack, “Knowledge in Production,” Race and Class 34.3
(1993): 1-14.
30. JoAnne Yates, Control through Communication (Baltimore: Johns Hopkins
University Press, 1989).
31. Braverman, Labor and Monopoly Capital; Harley Shaiken, Work Transformed:
Automation and Labor in the Computer Age (New York: Holt, Rinehart, and Winston,
1983); S. Cohen, “The Labor Process Debate,” New Left Review 165 (September-October
1987): 34-50.
32. Tessa Morris-Suzuki, “Robots and Capitalism,” New Left Review 160 (Novem-
ber-December 1984): 120-21; David Dickson, The New Politics of Science (New York:
Random House, 1983).
33. Garnham, Capitalism and Communication, 20-55.
34. Edward Yoxen, The Gene Business (New York: Harper and Row, 1983), 198.
35. Ibid., 19,18.
36. Martin Kenney, Biotechnology: The University-Industrial Complex (New Haven,
Conn.: Yale University Press, 1986), 4.
37. Jack R. Kloppenberg Jr., First the Seed: The Political Economy of Plant Biotech¬
nology, 1492-2000 (Cambridge: Cambridge University Press, 1988); Manuel Castells,
The Informational City (Oxford: Blackwell, 1989), 12; Bronwyn Parry, Trading the
Genome: Investigating the Commodification of Bio-Information (New York: Columbia
University Press, 2004), 9.
38. Dan Schiller, Digital Capitalism: Networking the Global Market System (Cam¬
bridge: Massachusetts Institute of Technology Press, 1999).
39. Raymond Williams, Keywords, rev. ed. (New York: Oxford University Press,
1983), 87-
40. “Genetically Modified Food Items Are Common, but Little Noticed,” WSJ, 24
March 2005, D4.
41. Kloppenburg, First the Seed, 152-90. See also Jack R. Kloppenburg Jr. and
David L. Kleinman, “Seed Wars,” Socialist Review 95 (1987): 7-41.
42. Walter Benjamin, “The Work of Art in the Age of Mechanical Reproduction,”
in Illuminations, ed. Hannah Arendt, trans. Harry Zohn (New York: Shocken, 1969),
217-51.
206 • NOTES TO PAGES 28-30

43. Daniel Bell, “The Third Technological Revolution,” Dissent36.2 (Spring 1989):
i64-76.Yates (Control through Communication) makes a more illuminating, if still
conceptually problematic, effort to give postindustrial society a reputable past by
marrying Alfred D. Chandler’s managerially focused business history to the corpo¬
rate applications of earlier generations of information technology between 1840 and
1920. Beniger (Control Revolution) appropriates a thinly disguised Weberian notion
of rationalization to argue for a long historical sequence of revolutionary changes
beginning, incongruously, with a minor industrial accident in the 1840s.
44. Michel Foucault, “What Is an Author?” in Textual Strategies, ed. J. V. Harari
(Ithaca, N.Y.: Cornell University Press, 1979), 141-60; Martha Woodmansee, “The
Genius and the Copyright: Economic and Legal Conditions of the Emergence of
the ‘Author,’” Eighteenth-Century Studies 17.4 (1984): 425-48; Peter Jaszi, “Toward a
Theory of Copyright: The Metamorphosis of ‘Authorship,’” Duke Law Journal 40
(1991): 455-502; “Intellectual Property and the Construction of Authorship,” Cardozo
Arts and Entertainment Law Journal 10.2 (1992): 277-725.
45. U.S. Congress, Office of Technology Assessment, Intellectual Property Rights in
an Age of Electronics and Information, OTA-CIT-302 (Washington, D.C.: Government
Printing Office, 1986); U.S. Congress, Office of Technology Assessment, Finding a
Balance: Computer Software, Intellectual Property, and the Challenge of Technologi¬
cal Change, OTA-TCT-527 (Washington, D.C.: Government Printing Office, 1992);
Ronald V. Bettig, Copyrighting Culture: The Political Economy of Intellectual Property
(Boulder, Colo.: Westview, 1996); Chakravarthi Raghavan, Recolonization: GATT,
the Uruguay Round, and the Third World (London: Zed, 1990); Siva Vaidvanathan,
Copyrights and Copywrongs: The Rise of Intellectual Property and Flow It Threatens
Creativity (New York: New York University Press, 2001).
46. Jane Gaines, Contested Culture (Durham, N.C.: Duke University Press, 1991),
67,65.
47. Martha Woodmansee, “The Genius and the Copyright: Economic and Legal
Conditions of the Emergence of the ‘Author,’” Eighteenth-Century Studies 17.4 (1984):
425-48.
48. James Boyle, “A Theory of Law and Information: Copyright, Spleens, Black¬
mail, and Insider Trading,” California Law Review 80.6 (December 1992): 1469.
49. Mark Rose, Authors and Owners: The Invention of Copyright (Cambridge, Mass.:
Harvard University Press, 1993).
50. Boyle, “Theory of Law and Information,” 1469.
51. Jeanne T. Allen, “Copyright and Early Theater, Vaudeville, and Film Competi¬
tion,” Journal of the University Film Association 31.2 (1979): 6-11.
52. Lyman Ray Patterson, Copyright in Historical Perspective (Nashville: Vanderbilt
University Press, 1968).
53. Rose, Authors and Owners.
54. For a study that insightfully extends this tradition of analysis, see Carla Hesse,
 NOTES TO PAGES 3O-32 • 207

Publishing and Cultural Politics in Revolutionary Paris, 1789—1810 (Berkeley: University

of California Press, 1991).
55. Harry I. Dutton, The Patent System and Inventive Activity during the Industrial
Revolution, 1750-1852 (Manchester: Manchester University Press, 1984); Doron S.
Ben-Attar, Trade Secrets: Intellectual Piracy and the Origins of American Industrial
Power (New Haven, Conn.: Yale University Press, 2004).
56. Joel Mokyr, The Gifts of Athena: Historical Origins of the Knowledge Economy
(Princeton, N.J.: Princeton University Press, 2004), and especially Christopher May
and Susan K. Sell, Intellectual Property Rights: A Critical History (Boulder, Colo.:
Lynne Rienner, 2006). '
57. An equivalent criticism may be directed against the claims of those who seek
to ground parallel arguments on technology, freed, as in such cases it characteristi¬
cally is, from the complex of productive relations that necessarily encases it, thereby
allowing it to take real historical form. For an example discussed further in chapter
6, see Ithiel de Sola Pool, Technologies of Freedom (Cambridge, Mass.: Harvard Uni¬
versity Press, 1983).
58. John Feather, A History of British Publishing (London: Routledge, 1988).
59. Allen, “Copyright and Early Theater,” 11.
60. Ibid., 7.
61. Max Horkheimer and Theodor W. Adorno, Dialectic of Enlightenment, trans.
John Cumming (New York: Seabury, 1972), 120-67; Ian Watt, The Rise of the Novel
(1957, reprint, Berkeley: University of California Press, 1974).
62. Leo Lowenthal, Literature, Popular Culture, and Society (Palo Alto, Calif.: Pacific
Books, 1968), 14-108.
63. Raymond Williams, The Long Revolution, rev. ed. (Harmondsworth: Pelican,
1965). A tension exists between Williams’s avowed effort in the preface to intercon¬
nect changes in culture with these entrenched arguments for revolutionary shifts
in economics and politics and his frequent (and effective) tendency to range freely
back even to medieval times when framing specific assertions.
64. Stuart Hall, “Culture, the Media and the ‘Ideological Effect,’” in Mass Com¬
munication and Society, ed. James Curran, Michael Gurevitch, and James Woollacott
(London: Edward Arnold, 1977), 339.
65. Williams, Long Revolution, 290.
66. The historian Eric Hobsbawm helped to popularize the idea of the dual revo¬
lution. Hobsbawm, however, significantly insisted that “so profound a transforma¬
tion cannot be understood without going back very much further in history than
1789.” Yet, he concluded pragmatically, “How far back into history the analyst should
go—whether to the mid-seventeenth-century English Revolution, to the Reformation
and the beginning of European military world conquest and colonial exploitation
in the early sixteenth century, or even earlier—is for our purposes irrelevant.” Eric
J. Hobsbawm, The Age of Revolution, 1789-1848 (New York: Mentor, 1962), 18.
208 • NOTES TO PAGES 32-34

67. Neil McKendrick, John Brewer, and J. H. Plumb, The Birth of a Consumer Soci¬
ety: The Commercialization of Eighteenth-Century England (Bloomington: Indiana
University Press, 1982).
68. Ellen Meiksins Wood, The Pristine Culture of Capitalism (London: Verso, 1991);
Maurice Dobb, Studies in the Development of Capitalism (New York: International
Publishers, 1963); T. S. Aston and C. H. E. Philpin, eds., The Brenner Debate: Agrar¬
ian Class Structure and Economic Development in Pre-Industrial Europe (Cambridge:
Cambridge University Press, 1987); Rodney Hilton, The Transition from Feudalism
to Capitalism (London: Verso, 1978); Peter Linebaugh, The London Hanged: Crime
and Civil Society in the Eighteenth Century (London: Allen Lane, 1992); Edward P.
Thompson, “The Peculiarities of the English,” in The Poverty of Theory and Other
Essays (London: Merlin, 1978), 35-91; Perry Anderson, “Origins of the Present Crisis,”
in English Questions (London: Verso, 1992), 15-47.
69. E. P. Thompson, Wings and Hunters (New York: Pantheon, 1975).
70. Wood, Pristine Culture of Capitalism.
71. Or into postindustrial theory—which is perhaps predictable, given the latter
theorists’ sometime acquaintanceship with, and dogmatic aversion to, an earlier
generation of Marxist historical scholarship. Bell attributes to Marx the idea that
the working class equates exclusively with the industrial proletariat and then crows
that the transition to a postindustrial society, with its large service-sector workforce,
invalidates yet another aspect of the Marxian schema. If agricultural rather than
industrial labor constituted the first capitalist workforce, then Bell’s characterization
loses any significance. Bell, “Third Technological Revolution,” 168.
72. In Williams, we repeatedly meet versions of this progression, though rendered
with unusual care. “The newspaper was the creation of the commercial middle class,
mainly in the eighteenth century.... The fact is that the economic organization of
the press in Britain has been predominantly in terms of the commercial middle class
which the newspapers first served. When papers organized in this way reached out to
a wider public, they brought in the new readers on a market basis and not by means
of participation or genuine community relations.” Williams, Long Revolution, 197,
210 (for some equally suggestive comments on the drama, see 292). Habermas’s quite
different concern for the emergence of “the public sphere” utilizes the same genera¬
tion of scholarly sources in seeking to lodge its origins in reputedly decisive changes
occurring at a range of social locations—the bourgeois press, the bourgeois family,
and bourgeois state-society relations—again in eighteenth-century England. The
public sphere is explicitly designated a category of bourgeois—rather than capital¬
ist—society. Jurgen Habermas, The Structural Transformation of the Public Sphere
(Cambridge: Massachusetts Institute of Technology Press, 1989).
73. Williams, Long Revolution, 271-99.
74. Lora E. Taub, “Enterprising Drama: The Rise of Commercial Theater in Early
Modern London” (Ph.D. dissertation, University of California at San Diego, 1998).
 NOTES TO PAGES 34-37 • 209

75. Lucien Febvre and Henri-Jean Martin, The Coming of the Book: The Impact
of Printing, 1450—1800 (London: NLB, 1976); Feather, History of British Publishing;
Margaret Spufford, Small Books and Pleasant Histories (Cambridge: Cambridge Uni¬
versity Press, 1981).
76. Taub, “Enterprising Drama.”
77. Williams, Long Revolution, 386.
78. Michael McKeon, The Origins of the English Novel, 1600-1740 (Baltimore: Johns
Hopkins University Press, 1987); Jeremy D. Popkin, News and Politics in the Age of
Revolution (Ithaca, N.Y.: Cornell University Press, 1990).
79. Hall himself asserts, though for other reasons', that the search for a fixed inven¬
tory of cultural forms like the novel may be misguided. Stuart Hall, “Notes on Decon¬
structing ‘The Popular,’ in People’s History and Socialist Theory, ed. Raphael Samuel
(London: Routledge and Kegan Paul, 1981), 235.

Chapter 3: Accelerated Commodification

1. “The stagnation in the world economy in the last few years has changed rapidly
and dramatically the context of the discussion_The economic role of the informa¬
tion and media industries and the services they provide are now primary factors in
the maintenance of the material system of power, domestically and internationally.”
Herbert I. Schiller, Who Knows: Information in the Age of the Fortune 500 (Norwood,
N.J.: Ablex, 1981), xv. “These developments are in their turn determined by underly¬
ing economic trends and the efforts of transnationals, often backed by the economic
planning instruments of nation states such as Japan and France, to develop the market
for so-called information goods and services as a new growth sector. Since the late
’60s electronics has been one of the key sectors of the world economy.... As pro¬
ductivity leveled off and profits dropped in more traditional manufacturing sectors
and product lines the transnationals moved into the electronics sector in search of
new products, new markets, and renewed growth.” Nicholas Garnham, “Public Ser¬
vice versus the Market,” Screen 24.1 (January-February 1983): 10. “It is ... largely as
a response to systemic crisis in the world business system that the new information
technologies are being introduced into most of the developed market economies.”
Herbert I. Schiller, Information and the Crisis Economy (Norwood, N.J.: Ablex, 1984),
2. “[T]he information society concept... was an idea, devised by bureaucrats, aca¬
demics, businessmen, and politicians, as a solution to a specific crisis of capitalism.”
Tessa Morris-Suzuki, Beyond Computopia: Information, Automation, and Democracy
in Japan (London: Kegan Paul International, 1988), 58.
2. Robert Brenner, The Boom and the Bubble: The U.S. in the World Economy (Lon¬
don: Verso, 2002).
3. Peter Dicken, Global Shift: Transforming the World Economy (New York: Guilford
Press, 1998), 28.
4. The Conference Board, Information Technology Initiatives for Today: Decisions
210 • NOTES TO PAGES 37-39

That Cannot Wait (New York: The Conference Board, 1972), 1. See Vincent Mosco,
Pushbutton Fantasies: Critical Perspectives on Videotex and Information Technology
(Norwood, N.J.: Ablex, 1982), 35-36.
5. U.S. Congress, House of Representatives, 96th Cong, 2d Sess., House Report No.
96-1535, “International Information Flow: Forging a New Framework,” 32d Report
by the Committee on Government Operations, 11 December 1980 (Washington,
D.C.: Government Printing Office, 1980), 42. See Herbert I. Schiller, Culture Inc.: The
Corporate Takeover of Public Expression (New York: Oxford, 1989), 118-19; Schiller,
Information and the Crisis Economy, 2; Morris-Suzuki, Beyond Computopia; Simon
Nora and Alain Mine, The Computerization of Society: A Report to the President of
France (Cambridge: Massachusetts Institute of Technology Press, 1980).
6. Quotes from the statement of principles as given by Homer A. Jack, “Bandung:
An On-the-Spot Description of the Asian-African Conference, Bandung, Indonesia,
April 1955” (N.p.: Toward Freedom, n.d.), 2.
7. Dan Schiller, Theorizing Communication: A History (New York: Oxford, 1996),
102; Kaarle Nordenstreng, The Mass Media Declaration of UNESCO (Norwood, N.J.:
Ablex, r984), 69.
8. Kaarle Nordenstreng, “The MacBride Report: A Milestone in the Great Media
Debate,” Submission to Quadernos del CAC, Barcelona, Monograph on the 25th
Anniversary of the Approval of the MacBride Report, April 2005:1-2 (manuscript
in author’s possession).
9. Quoted in Nordenstreng, Mass Media Declaration of UNESCO, 74.
10. Quoted in ibid.
11. Vincent Mosco, The Political Economy of Communication: Rethinking and Renewal
(London: Sage, 1996), 152; James W. Cortada, The Digital Hand (New York: Oxford
University Press, 2004).
12. In France, the high point of concern developed in the interval between the
publication of Jean-Jacques Servan-Schreiber’s The American Challenge (London:
Hamilton, 1968) and Nora and Mine’s Computerization of Society (1978).
13. U.S. superiority persisted, but on a more qualified basis. In 2000, the United
States accounted for half of all rich-country research and development expenditures
in ICT manufacturing; Japan, the runner-up, claimed 21 percent. U.S. National Sci¬
ence Board, Science and Engineering Indicators 2004, vol. 1 (Arlington, Va.: National
Science Foundation, NSB, 04-r), 4-60 (fig. 4—31); Antonio Regalado, “R&D Outlays
to Rise in 2005, Driven by Military,” WSJ, 7 January 2005, A2, A6. One government
report boasted that “American-owned IT companies lead their foreign rivals in almost
every segment of business activity—from research and development to design, pro¬
duction, and marketing.” U.S. Department of Commerce, Economics and Statistics
Administration, “Digital Economy 2003,” 35; retrieved February 2006, www.esa.doc
.gov/2003cfm. Consumer electronics, which Japanese upstarts including Sony and
Matsushita had compelled an earlier generation of U.S. high-tech companies such as
RCA and Magnavox to abandon, appear to have been reopened on a selective basis
 NOTES TO PAGES 39-41 • 211

to U.S. capital. Gary McWilliams, “In Electronics, U.S. Companies Seize Momentum
from Japan,” WSJ, 10 March 2005, Ai, A10. Despite these claims, the U.S. comparative
advantage in information—and the global dominance to which it contributed—was
on the wane.
14. For a mainstream account that explicates some of the key themes, see Gerald
Brock, The Second Information Revolution (Cambridge, Mass.: Harvard University
Press, 2003).
15. Kenneth Flamm, Creating the Computer (Washington, D.C.: Brookings Institu¬
tion, 1988); Janet Abbate, Inventing the Internet (Cambridge: Massachusetts Institute
of Technology Press, 2000); Michael Fesk, Understanding Digital Libraries, 2d ed.
(Amsterdam: Elsevier, 2005), 322-23.
16. Dan Schiller, Digital Capitalism, 1-88.
17. David Harvey continues to situate this tendency chiefly in light of its contribu¬
tions to “space-time compression.” David Harvey, The New Imperialism (Oxford:
Oxford University Press, 2003), 98. For an approach that stresses the role of ICTs in
augmenting “control,” see Peter McMahon, Global Control: Information Technology
and Globalization since 1845 (Fondon: Edward Elgar, 2002). Productivity statistics are
a morass; see Doug Henwood, After the New Economy (New York: New Press, 2003).
18. For example, so-called private-line, or dedicated, international circuits leased
by carriers to corporations, government agencies, and Internet service providers
enjoyed unprecedented growth during the late 1990s. Organization for Economic
Cooperation and Development, OECD Communications Outlook 2001 (N.p.: OECD,
2001), 54 and 65 (table 3.10).
19. Via Wal-Mart’s unmatched data-warehouse and transnational-network facili¬
ties, “the previous day’s information, through midnight, on over 10 million customer
transactions is available for every store in every country before 4 am the following
day.” Prepared statement of Wal-Mart Stores, Inc., “The Role of Standards in the
Growth of Global Electronic Commerce,” Testimony before the Subcommittee on
Science, Technology, and Space of the Committee on Commerce, Science, and Trans¬
portation, U.S. Senate, 28 October 1999, 4.
20. By 2003,90 percent of big companies maintained toll-free customer numbers.
Deborah Ball, “Toll-Free Tips: Nestle Hotlines Yield Big Ideas,” WSJ, 3 September
2004, Ay.
21. Steve Lohr, “The Tech Rebound That Isn’t Quite,” NYT, 23 June 2003, Cl (cites
60 percent); Roger Alcaly, The New Economy (New York: Farrar, Straus, and Giroux,
2003), 55 (cites 35 percent). James W. Cortada references an internal IBM estimate
that ICT capital investment increased from 38 to 55 percent of all capital spending
between 1990 and 2001. Cortada, Digital Hand, 376.
22. U.S. Congress, Senate, 98th Cong., 1st Sess., S. Print 98-22, Committee on Com¬
merce, Science, and Transportation, 11 March 1983, Long-Range Goals in International
Telecommunications and Information: An Outline for U.S. Policy (Washington, D.C.:
Government Printing Office, 1983), 5.
212 • NOTES TO PAGES 41-43

23. For useful, brief, and up-to-date analyses of selective instances of privatization,
see Jochen Boekhoff, “Telecommunications in Mexico, Uruguay, and Argentina: A
Tale of Contrasts,” and Thomas Thummel and Max Thummel, “Privatization of
Telecommunications in Japan,” in Limits to Privatization: How to Avoid Too Much
of a Good Thing, a Report to the Club of Rome, ed. Ernest Ulrich von Weizsacker,
Oran R. Young, and Matthias Finger (London: Earthscan, 2005), 72-76, and 76-79.
24. Bjorn Wellenius, Carlos Alberto Primo Braga, and Christine Zhen-Wei Qiang,
“Investment and Growth of the Information Infrastructure: Summary Results of a
Global Survey,” Telecommunications Policy 24 (2000): 639, 642.
25. International Telecommunications Union, Yearbook of Statistics: Telecom Ser¬
vices Chronological Time Series, 1991-2000 (Geneva: ITU, 2001).
26. U.N. Industrial Development Organization, Industrial Development Report
2004, xxi; retrieved 17 February 2006, www.unido.org/doc/viewldocument id=2603
28danguage code=en. See Dicken, Global Shift, 27-28.
27. This figure includes profits earned in developed-country markets. Jon E. Hilsen-
rath, “U.S. Multinationals Reap Overseas Bounty,” WSJ, 4 April 2005, A2. For transna¬
tional business reliance on networks, see Dicken, Global Shift, 157; John V. Langdale,
“The Geography of International Business Telecommunications: The Role of Leased
Networks,” Annals of the Association of American Geographers 79 (1989): 501-22.
28. Kathryn Kranhold, “GE Pins Hopes on Emerging Markets,” WSJ, 2 March
2005, A3, A10; Saritha Rai, “Chief Sees Surge in G.E. Business in India,” NYT, 28 May
2005, B13. For another example, see Eric Bellman, “Nokia to Build Cellphone Plant
in India to Meet Rising Demand,” WSI, 7 April 2005, B4.
29. Organization for Economic Cooperation and Development, “FDI Outflows
from U.S. Hit Record USD 252 Billion In 2004,” retrieved June 2005, http://www
.oecd.org/document/54/0,2340,en 2649 201185 35033718 1 1 1 l,00.html.
30. U.S. Congress, Long-Range Goals in International Telecommunications and
Information, 22.
31.1 differ here from David Bollier, who asserts that a so-called knowledge com¬
mons, a species of “gift economy,” sustained communitarian moral values that were
subsequently undercut by market incursions. Yet Bollier goes out of his way to empha¬
size that the knowledge commons and the market can coexist and “invigoratfe] each
other.” David Bollier, Silent Theft: The Private Plunder of Our Commonwealth (New
York: Routledge, 2002), 37.
32. Harvey, New Imperialism, 137-82.
33. Michael Perelman, Steal This Idea: Intellectual Property Rights and the Corporate
Confiscation of Creativity (New York: Palgrave, 2002), 70-71.
34. Francis C. Steckel, “Cartelization of the German Chemical Industry, 1918—1925,”
Journal of European Economic History 19.2 (Fall 1990): 329-51. The American Chemi¬
cal Society, which annually garners as much as $375 million in fees paid to access
its Chemical Abstracts Service database, is fighting to limit free access to chemical
information via PubChem, a free database established by the U.S. National Institutes
 NOTES TO PAGES 43-44 • 213

of Health. Emma Marris, "Chemistry Society Goes Head to Head with NIH in Fight
over Public Database,” Nature 435 (9 June 2005): 718-19.
35. Hugh G. J. Aitken, The Continuous Wave: Technology and American Radio,
1900-1932 (Baltimore: Johns Hopkins University Press, 1985).
36. John Gimbel, Science, Technology, and Reparations: Exploitation and Plunder
in Postwar Germany (Stanford, Calif.: Stanford University Press, 1990), 43.
37. This figure is important because it is about equal to the sum demanded of
Germany by the Soviet Union in war reparations, which the United States opposed.
Caroline Eisenberg, Drawing the Line: The American Decision to Divide Germany,
1944-1949 (Cambridge: Cambridge University PrCss, 1996).
38. Herbert I. Schiller and Anita R. Schiller, “Libraries, Public Access to Informa¬
tion, and Commerce,” in The Political Economy of Information, ed. Vincent Mosco
and Janet Wasko (Madison: University of Wisconsin Press, 1988), 146-66, esp. 156-63;
Schiller, Who Knows, 47-78; John E. Buschman, Dismantling the Public Sphere (West-
port, Conn.: Libraries Unlimited, 2003); Dan Schiller, Telematics and Government
(Norwood, N.J.: Ablex, 1982), 191-210.
39. Schiller, Telematics and Government, 210-15.
40. Schiller, Digital Capitalism, 143-202.
41. Chin-tao Wu, Privatising Culture: Corporate Art Intervention since the 1980s (Lon¬
don: Verso, 2002); Schiller, Culture, Inc.; Carol Vogel, “Wal-Mart Heiress Is High Bidder
for a Durand Painting Sold by the New York Public Library,” NYT, 13 May 2005, A19;
Michael Kimmelman, “Civic Treasure: A Need for Transparency, Not Secrecy,” NYT,
16 May 2005, Bi, B8.
42. For the earlier campaigns, see Schiller, Who Knows, 58-65; Lauren Bayne Ander¬
son, “Printing Office Monopoly Ends in a Symbolic Victory for Bush,” WSJ, 6 June
2003, B6.
43. Anita R. Schiller, “Shifting Boundaries in Information,” Library Journal, 1 April
1981,705-9; Anita R. Schiller, “Information as a Commodity: There’s No Such Thing
as a Free Hunch,” Technicalities 2.6 (June 1982): 3-5. Herbert I. Schiller and Anita R.
Schiller identify “the turning point” as occurring early in the Reagan administration,
with the report to the National Commission on Libraries and Information Science
from the Public Sector/Private Sector Task Force in August 1981. Schiller and Schiller,
“Libraries, Public Access to Information, and Commerce,” 159. For a useful update of
this changing area, see James A. Jacobs, James R. Jacobs, and Shinjoung Yeo, “Gov¬
ernment Information in the Digital Age: The Once and Future Federal Depository
Library Program,” Journal of Academic Librarianship 31.3 (May 2005): 198-208.
44. Schiller, IYho Knows, 115-34; Jurgen Scheffran, “Privatization in Outer Space:
Lessons from Landsat and Beyond,” in Limits to Privatization: How to Avoid Too
Much of a Good Thing, A Report to the Club of Rome, ed. Ulrich Von Weizsacker,
Oran R. Young, and Matthias Finger (London: Earthscan, 2005), 79-84; Eric Licht-
blau, “U.S. to Rely More on Private Companies’ Satellite Images,” NYT, 13 May
2003, A26.
214 • NOTES TO PAGES 44-47

45. Paul Zurkowski of the Information Industry Association quoted in Schiller,

Who Knows, 47.
46. Frank Webster, “Information: A Sceptical Account,” Advances in Librarianship
24 (2000): 10.
47. Perelman, Steal This Idea.
48. W. Hamilton, “Temporary National Economic Committee Monograph No.
31: Patents and Free Enterprise,” U.S. Senate Committee Print, 76th Cong., 3d Sess.
(Washington, D.C.: Government Printing Office, 1941), 53. Thanks to Dan Wright
for bringing this quote to my attention.
49. Ambassador Charlene Barshefsky, “The Networked World Initiative: Trade
Policy Enters a New Era,” Speech before the Federal Communications Bar Associa¬
tion, Washington, D.C., 23 October 2000, 3; retrieved 18 February 2006, http://can-
berra.usembassy.gov/hyper/2000/1023/epfl 10.htm.
50. Perelman, Steal This Idea. By the 2000s, the U.S. Department of Commerce
boasted an undersecretary for intellectual property and at least one intellectual-
property attache. Neil King, Jr., “Sisyphus in China: U.S. Lawyer’s Antipiracy Task
Is Endless,” WSJ, 26 July 2005, A17, A22.
51. Keith E. Maskus, Intellectual Property Rights in the Global Economic Context
(Washington, D.C.: Institute for International Economics, 2000), 1; Barshefsky, “Net¬
worked World Initiative,” 3.
52. Pradip N. Thomas, “Copyright and Emerging Knowledge Economy in India,”
Economic and Political Weekly 36.24 (16 June 2001): 2150, 2154; Susan K. Sell, Private
Power, Public Law: The Globalization of Intellectual Property Rights (Cambridge: Cam¬
bridge University Press, 2003).
53. Paul Klebnikov, “The Twain Shall Meet,” Forbes, 27 February 1995, 74—75.
54. Toby Miller, Nitin Govil, John McMurria, and Richard Maxwell, Global Hol¬
lywood (London: BFI, 2001), 207.
55. Milton Mueller, Ruling the Root (Cambridge: Massachusetts Institute of Tech¬
nology, 2002), 231-34.
56. U.S. Patent and Trademark Office, Information Products Division Technology
Assessment and Forecast Branch, “Patenting Trends Calendar Year 2001,” retrieved
21 February 2006, www.uspto.gov/web/offices/ac/ido/oeip/taf/pat tr01.htm; Sabra
Chartrand, “Patents,” NYT, 9 February 2004, C2.
57. See official World Intellectual Property Organization statistics at http://www
.wipo.int/ipstats/en/publications/a/pdf/patents.pdf.
58. U.S. National Science Board, Science and Engineering Indicators 2004, vol. 1,
6-23. Daniel Del Castillo, “The Arab World’s Scientific Desert,” Chronicle of Higher
Education, 5 March 2004, A36.
59. Judith Miller, “Globalization Widens Rich-Poor Gap, U.N. Report Says,” NYT,
13 July 1999, A8.
60. World Bank, World Development Report 1998-99: Knowledge for Development
(New York: Oxford University Press, 1999), 27.
 NOTES TO PAGES 47-50 • 215

61. “Monti’s Wrecking Crew,” WSJ, 7 August 2003, A10.

62. Donald G. McNeil Jr., “India Alters Law on Drug Patents,” NYT, 24 March
2005, Ai, A9.
63. Bronwyn Parry, Trading the Genome: Investigating the Commodification of Bio-
Information (New York: Columbia University Press, 2004), 258.
64. Marie Claire Leger, “Clinical Globalization: Pharmaceutical Research in the
Global South” (Ph.D. dissertation, University of Illinois at Urbana-Champaign,
2004), 52.
65. Schiller, Information and the Crisis Economy, 12.
66. Simon London, “U.S. Launches Drive to Regain Top Spot in Supercomputing,”
FT, 27 May 2003,14.
67. Andy Pasztor, “Europe Aims to Make Big Satellites,” WSJ, 16 June 2005, B5.
68. “High-Tech Brain Drain” (editorial), WSJ, 5 May 2005, A14; William J. Broad,
“U.S. Is Losing Its Dominance in the Sciences,” NYT, 3 May 2004, At, A19; Vinton
Cerf and Harris N. Miller, “America Gasps for Breath in the R&D Marathon,” WSJ,
27 July 2005, A12.
69. Dicken, Global Shift, 430.
70. Randolph E. Schmid, “Information a $623-Billion Industry in ’97, U.S. Says,”
Los Angeles Times, 25 October 1999, C3.
71. Robert Brenner, The Boom and the Bubble (London: Verso, 2002). Brenner has
usefully updated his analysis in Robert Brenner, “New Boom or New Bubble,” New
Left Review 25 (January-February 2004): 57-100.
72. Shirley Leung, “A Glutted Market Leaves Food Chains Hungry for Sites,” WSJ,
1 October 2003, Ai, A12.
73. Jon E. Hilsenrath, “Factory Employment Is Falling World-Wide,” WSJ, 20 Octo¬
ber 2003, A2, A8.
74. Makoto Ito, “The Japanese Economy in Structural Difficulties,” Monthly Review
56.11 (April 2005): 32-44.
75. As of March 2005, Japan held $679.5 billion in U.S. Treasury bills, bonds, and
notes; China held $223.5 billion; and Hong Kong held $45.2 billion. U.S. Treasury
holdings by foreign entities overall nearly doubled between September 2001 and
March 2005, from $992.2 billion to $1,977.1 billion. See U.S. Treasury, “Major Foreign
Holders of Treasury Securities,” retrieved 2 June 2005, www.treasury.gov/tic.mfli.txt;
Greg Ip, “Could Overseas Financing Hurt the U.S.?” WSJ, 26 April 2004, A2; Floyd
Norris, “Foreigners May Not Have Liked the War, but They Financed It,” NYT, 12
September 2003, Ci.
76. Christopher Swann, “Concerns for Dollar as Central Banks Sell Off Assets,”
FT, 17 May 2005,1.
77. Paul A. Volcker, “An Economy on Thin Ice,” Washington Post, 10 April 2005, B7.
Also see Chris Giles, “BIS Warns Increasing Levels of Debt Are Creating Conditions
for Financial Crises,” FT, 28 June 2005,1. It should be noted that over 40 percent of
the U.S. current account deficit is made up of intrafirm transfers; this is not merely a
216 • NOTES TO PAGES 5O-53

simple deficit caused by an excess of imports over exports in the traditional nation-
centered sense.
78. Ellen Meiksins Wood, Empire of Capital (London: Verso, 2003), 137-42. Thanks
to Pedro Caban for this source.
79. The Pentagon was building more than seventy major weapons systems at an
overall nominal cost of $1.3 trillion as of 2005, and these relied ever more pervasively
on networks and network applications. Tim Weiner, “Report Says Pentagon Spend¬
ing on Weapons to Soar,” NYT, 1 April 2005, C3; Jonathan Karp and Andy Pasztor,
“Pentagon Work: High Tech Has High Risk,” WSJ, 2 May 2005, B2; Tim Weiner, “Air
Force Seeks Bush’s Approval for Space Arms,” NYT, 18 May 2005, Ai, C4; U.S. Gov¬
ernment Accountability Office, “Defense Acquisitions: The Global Information Grid
and Challenges Facing Its Implementation,” GAO-04-858, retrieved 29 July 2004,
www.gao.gov.
80. Immanuel Wallerstein, “The Eagle Has Crash Landed,” Foreign Policy 131 (July-
August 2002): 60-68; Christopher Marquis, “As Bush Confers with NATO, U.S. Is
Seen Losing Its Edge,” NYT, 28 June 2004, A8; Giovanni Arrighi, “Hegemony Unrav¬
eling—1,” New Left Review 32 (March-April 2005): 23-80.
81. Chalmers Johnson, The Sorrows of Empire (New York: Metropolitan Books,
2004).
82. Michael Perelman, Class Warfare in the Information Age (New York: St. Martin’s
Press, 1998), 80-82.
83. Joyce Jones, “Cyberwise Private Eyes,” Black Enterprise 29.5 (December 1998):
39-40.
84. Michael Orey, “Why We Now Need a National Association for Data Destruc¬
tion,” WSJ, 30 January 2002, Ai, A8.
85. John Markoff, “Taking Snooping Further,” NYT, 25 February 2006, Cl.
86. Michael Godwin, “Digital Rights Management: A Guide for Librarians,” Ameri¬
can Library Association, Office of Information Technology Policy, OITP Technology
Policy Brief, 1; retrieved 12 February 2006, www.ala.org/ala/washoff/Woissues/copy-
rightb/digitalrights/digitalrightsmanagement.htm.
87. Marcelo Prince, “Out of Memory,” WSJ, 24 October 2005, R9.
88. Brian Grow, “Hacker Hunters,” Business Week, 30 May 2005, 74-82 (“Hacking
into computer networks was long seen as little more than a prank, and punishment
was typically a slap on the wrist. That’s beginning to change, however” [77]).
89. Robert O’Harrow Jr., No Place to Hide (New York: Free Press, 2005). For a few
recent instances, see Riva Richmond, “Network Giants Join Campaign to Beef Up>
Security of Systems,” WSJ, 27 October 2004, B2; Riva Richmond, “Job of Guarding
Web Is Shifting to the Network’s Infrastructure,” WSJ, 19 May 2005, B4; Lf Yuan,
“Companies Face System Attacks from Inside, Too,” WSJ, 1 June 2005, Bi, B4; Robert
Block, “In Terrorism Fight, Government Finds a Surprising Ally: FedEx,” WSJ, 26
May 2005, Ai, A5; Gary Fields, “Ten-Digit Truth Check,” WSJ, 7 June 2005, Bi, B6;
 NOTES TO PAGES 53-56 • 217

David Pringle, “Security Woes Don’t Slow Reed’s Push into Data Collection,” WSJ,
3 June 2005, Ci, C4.
90. U.S. Government Accountability Office, “Technology Assessment: Cyberse¬
curity for Critical Infrastructure Protection,” GAO-04-321, 28 May 2004, Abstract,
retrieved 3 June 2005, www.gao.gov/new.items/d04321.pdf; quote from U.S. Gov¬
ernment Accountability Office, “Critical Infrastructure Protection: Department of
Homeland Security Faces Challenges in Fulfilling Cybersecurity Responsibilities,”
GAO-05-434,26 May 2005, Abstract, retrieved 3 June 2005, www.gao.gov/new.items/
d05434.pdf.
91. Eric Lichtblau and James Risen, “Spy Agency Mined Vast Data Trove, Officials
Report,” NYT, 24 December 2005, A12.
92. Scott Shane, “Attention in N.S.A. Debate Turns to Telecom Industry,” NYT, 11
February 2006, An.
93. Schiller, Who Knows, xiv-xv.
94. Glen Hubbard, Paul Krugman, Lewis H. Lapham, and Peter G. Peterson, “The
Iceberg Cometh: Can a Nation of Spenders Be Saved?” Harper’s, June 2005,45.
95. Robert E. Rubin, “‘We Must Change Policy Direction,’” WSJ, 24 January 2006,
A20.
96. See www.freepress.net.
97. See, for example, Ted Koppel, “Take My Privacy, Please!” NYT, 13 June 2005,
A19.
98. In one mainstream tally, these issues include “controlling spam, dealing with
use of the Internet for illegal purposes, resolving the digital divide between devel¬
oped and developing countries; protecting intellectual property;... protecting pri¬
vacy and freedom of expression; and facilitating and regulating e-commerce.” In
addition, Internet governance includes control of the domain-name system and of
navigation aids (search engines and directories). National Research Council, Com¬
mittee on Internet Navigation and the Domain Name System, Computer Science and
Telecommunication Board, Signposts in Cyberspace: The Domain Name System and
Internet Navigation, Prepublication copy (Washington, D.C.: National Academies
Press, 2005), 5-3.
99. Hans Klein and Milton Mueller, “What to Do about ICANN: A Proposal for
Structural Reform,” Internet Governance Project, 5 April 2005, retrieved 5 February
2006, http://doc.syr.edu/miscarticles/IGP-ICANNReform.pdf. For a critique of the
WSIS meeting, see Paula Chakravarty, “Who Speaks for the Governed?” Economic
and Political Weekly, 21 January 2006, 250-57; retrieved 25 February 2006, www.epw
.org.in/showlndex.php.
100. “Carter Adds Reprisals against Iran,” Washington Post, 18 April 1980, At, A29;
quote from Oswald H. Ganley and Gladys D. Ganley, To Inform or to Control? The
New Communications Networks (New York: McGraw-Hill, 1982), 46.
101. National Research Council, Signposts in Cyberspace, 5-46.
218 • NOTES TO PAGES 61-62

Chapter 4: Business Users and U.S. Telecommunications-

System Development

1. Business users have not been entirely overlooked. See Timothy R. Haight, “The
‘S.T of Communications,” in Telecommunications Policy and the Citizen (New York:
Praeger, 1979), 241-66. 1 developed a book-length analysis of the role of business
users in Dan Schiller, Telematics and Government (Norwood, N.J.: Ablex, 1982).
2. The larger social history of telecommunications remains remarkably obscure.
However overdue, extensive and multifaceted research is now thankfully under way,
including a study under preparation by the present writer.
3. Richard John, Spreading the News: The American Postal System from Franklin to
Morse (Cambridge, Mass.: Harvard University Press, 1995).
4. Richard B. DuBoff, “Business Demand and the Development of the Telegraph
in the United States, 1844-1860,” Business History Review 54 (Winter 1980): 459-791
JoAnne Yates, Control through Communication (Baltimore: Johns Hopkins University
Press, 1989); Alfred D. Chandler and James W. Cortada, eds., A Nation Transformed
by Information (New York: Oxford University Press, 2000).
5. Claude Fischer, America Calling: A Social History of the Telephone to 1940 (Berke¬
ley: University of California Press, 1992); Dan Schiller, “Social Movement in Telecom¬
munications: Rethinking the Public Service History of U.S. Telecommunications,
1894-1919,” Telecommunications Policy 22.4-5 (1998): 397-408.
6. Richard B. DuBoff, “The Telegraph and the Structure of Markets in the United
States, 1845-1890,” Research in Economic History 8 (1983): 268.
7. Whereas, around 1904, AT&T was garnering 28 percent of the industry’s private-
wire revenue, by 1914 it had doubled its share of this market to 56 percent. Railroads
were especially significant users of private-wire systems and often enjoyed access
via special shared arrangements with Western Union. In 1914, four-fifths of tele-
graph-service private-wire leases (exclusive of railroads) were held by bankers and
brokers, and an additional 9 percent of leases were held by meatpacking, iron, and
steel companies. These private-wire systems were located disproportionately in the
northern states, stretching from the Atlantic coast to the Missouri River. Some of
the larger systems linked locations in the United States and Canada. Interstate Com¬
merce Commission, Decisions of the Interstate Commerce Commission of the United
States May 1918 to August 1918, vol. 50 of Interstate Commerce Commission Reports
(Washington, D.C.: Government Printing Office, 1918): 734-35, 738-39.
8. “Telegraph Business West,” WSJ, 30 December 1909, 6.1 am grateful to Richard
John for this reference.
9. “Railroads West Said to Be Unable to Get .All the Telegraphers 'Needed,” WSJ,
31 August 1909, 6.1 am grateful to Richard John for this reference.
10. U.S. Congress, Senate, 60th Cong., 2d Sess., Document No. 725, Committee on
Interstate Commerce, Investigation of Western Union and Postal Telegraph-Cable Com-
 NOTES TO PAGES 62-68 • 219

parties, 16 February 1909 (Washington, D.C.: Government Printing Office, 1909), 22.
See DuBoff, “Telegraph and the Structure of Markets in the United States,” 268.
11. “Railroads West Said to Be Unable to Get All the Telegraphers Needed,” 6.
12. The Merchants’ Association of New York, Inquiry into Telephone Service and
Rates in New York City by the Merchants' Association of New York (New York: Mer¬
chants’ Association, 1905), 7, 8-9.
13. Ibid., 36.
14. Ibid., 37-38, 39.
15. David Weiman and Richard Levin, “Preying for Monopoly: The Case of South¬
ern Bell, 1984-1912,” Journal of Political Economy T02 (February 1994): 103-26; Ken¬
neth Lipartito, The Bell System and Regional Business: The Telephone in the South,
1877-1920 (Baltimore: Johns Hopkins University Press, 1989).
16. Alan Stone, Public Service Liberalism: Telecommunications and Transitions in
Public Policy (Princeton, N.J.: Princeton University Press, 1993), 160. See also Schiller,
“Social Movement in Telecommunications.”
17. James Schwoch, “The American Radio Industry and International Communi¬
cations Conferences, 1919-1927,” Historical Journal of Film, Radio, and Television 7.3
(1987): 293-94.
18. Murray Edelman, The Licensing of Radio Services in the United States, 1927 to
1947: A Study in Administrative Formulation of Policy (Urbana: University of Illinois
Press, 1950); Dallas Smythe, The Structure and Policy of Electronic Communications
(Urbana: University of Illinois Press, 1957).
19. Second Annual Report of the Federal Radio Commission to the Congress of the
United States (Washington, D.C.: Government Printing Office, 1928), 26.
20. Ibid., 27, 28.
21. Ibid., 33.
22. Third Annual Report of the Federal Radio Commission to the Congress of the
United States (Washington, D.C.: Government Printing Office, 1929), 19.
23. Second Annual Report of the Federal Radio Commission to the Congress of the
United States, 34.
24. Edelman, Licensing of Radio Services in the United States, 186.
25. Ibid., 171.
26. James M. Herring and Gerald C. Gross, Telecommunications Economics and
Regulation (New York: McGraw-Hill, 1936, 56); Federal Communications Commis¬
sion, Proposed Report: Telephone Investigation (Washington, D.C.: Government Print¬
ing Office, 1938), 419, 613.
27. Marion May Dilts, The Telephone in a Changing World (New York: Longmans,
Green, 1941), 69, 132.
28. By-Products Coal Co. v. Federal Radio Commission, No. 4984, in Third Annual
Report of the Federal Radio Commission to the Congress of the United States, 37.
29. Intercity Radio Telegraph Co., appellant, v. Federal Radio Commission, No. 4987,
220 • NOTES TO PAGES 69-74

in Third Annual Report of the Federal Radio Commission to the Congress of the United
States, 40.
30. Grayson M.-P. Murphy to Honorable Clarence C. Dill, 17 March 1934, in U.S.
Congress, Senate, 73d Cong., 2d Sess., Hearings before the Committee on Interstate
Commerce on S. 2910, Federal Communications Commission, March 9,10,13,15,1934
(Washington, D.C.: Government Printing Office, 1934), 217-18 (see also 142-53,173-
76).
31. The New Deal settlement in telecommunications is a major focus of my work
in progress, tentatively titled “The Hidden History of U.S. Telecommunications.”
32. John M. Schacht, The Making of Telephone Unionism, 1920-1947 (New Bruns¬
wick, N.J.: Rutgers University Press, 1985).
33. This development was noticed by a pioneer in communications scholarship,
perhaps because he had served during this period as chief economist at the FCC.
See Smythe, Structure and Policy of Electronic Communications.
34. Joint Technical Advisory Committee, Institute of Radio Engineers and Radio-
Television Manufacturers Assocation, Radio Spectrum Conservation: A Program of
Conservation Based on Present Uses and Future Needs (New York: McGraw-Hill, 1952),
13-
35. On RCA, see Margaret Graham, The Business of Research: RCA and the Videodisc
(New York: Cambridge University Press, 1986).
36. “I.B.M. Trust Suit Ended by Decree; Machines Freed,” NYT, 26 January 1956,
1,18.
37. Emerson W. Pugh and William Aspray, “Creating the Computer Industry,”
IEEE Annals of the History of Computing 18.2 (1996): 14.
38. Ibid., 9,10 (quote).
39. James W. Cortada, “Commercial Applications of the Digital Computer in
American Corporations, 1945-1995/’ IEEE Annals of the History of Computing 18.2
(1996): 20-21. For much more extended treatment, see James W. Cortada, The Digital
Hand (New York: Oxford: University Press, 2004).
40. Pugh and Aspray, “Creating the Computer Industry,” 11.
41. Duncan G. Copeland, Richard O. Mason, and James L. McKenney, “Sabre: The
Development of Information-Based Competence and Execution of Information-
Based Competition,” IEEE Annals of the History of Computing 17.3 (1995): 30-56.
42. Paul Baran, “The Coming Computer Utility—Laissez-Faire, Licensing, or
Regulation?” Santa Monica: RAND Corporation, P-3466, April 1967:12-13.
43. Jason Oxman, “The FCC and the Unregulation of the Internet,” Office of Plans
and Policy, FCC, OPP Working Paper No. 31 (July 1999), 6.
44. The following paragraphs draw on material published in Dan Schiller, “Busi¬
ness Users and the Telecommunications Network,” Journal of Communication 32.4
(1982): 84-96; and Schiller, Telematics and Government.
45. Federal Communications Commission, “In the Matter of Allocation of Fre-
 NOTES TO PAGES 74-77 • 221

quencies in the Bands Above 890 Me.,” Docket 11866, Comment of the Automobile
Manufacturers Assocation, 15 March 1957,849-51.
46. Business users generated 58 percent of domestic long-distance revenues in
1976, and the largest 3.9 percent of their number accounted for over three-fifths of
this total. U.S. House of Representatives, 97th Cong., 1st Sess., Committee on Energy
and Commerce, Telecommunications in Transition: The Status of Competition in the
Telecommunications Industry, A Report by the Majority Staff of the Subcommittee
on Telecommunications, Consumer Protection, and Finance, Committee Print 9
7~V (Washington, D.C.: Government Printing Office, 1981), 87-89.
47. In the longer work in progress on which this chapter draws, I hope to devote
attention to a succession of popular-cultural projects that concurrently heaped scorn
on AT&T, the core of the regulated network manager system.
48. President’s Task Force on Communications Policy, Final Report (Washington,
D.C.: Government Printing Office, 1968), chap. 1, 6. Documents detailing the delib¬
erations of the Task Force are housed at the Lyndon Baines Johnson Presidential
Library in Austin, Texas (hereafter LBJ Presidential Library).
49. “Memorandum for the President from the Chairman of the President’s Task
Force on Communications Policy,” 2 December 1968, p. 3, in National Security File,
Subject File, Communications Policy—Task Force on, LBJ Presidential Library.
50. Nicholas Johnson, “The Public Interest and Public Broadcasting: Looking
at Communications as a Whole,” Remarks Prepared for Delivery to the Resources
for the Future and the Brookings Institution Conference on the Use and Regula¬
tion of the Radio Spectrum, Airlie House, Warrenton, Va., September 11,1967,1,3;
“Memorandum for the President from the Chairman of the President’s Task Force
on Communications Policy,” 2 December 1968, p. 3, both in National Security File,
Subject File, Communications Policy—Task Force on, LBJ Presidential Library.
51. “Memorandum for the President from the Chairman of the President’s Task
Force on Communications Policy,” 2 December 1968, p. 7, in National Security File,
Subject File, Communications Policy—Task Force on, LBJ Presidential Library.
52. President’s Task Force on Communications Policy, Final Report, chap. 1,17, 20.
53. Ibid., chap. 1, 21; chap. 6,26-28 and 29-36.
54. Ibid., chap. 1, 9; chap. 6, 9-25.
55. Ibid., chap. 6,16-17.
56. Alan Stone, Wrong; Number: The Breakup of AT&T (New York: Basic Books,
1989), 338-
57. See Daniel R. Headrick, Tools of Empire (New York: Oxford University Press,
1981).
58. Daniel R. Headrick, The Invisible Weapon: Telecommunications and International
Politics, 1851-1945 (New York: Oxford University Press, 1991).
59. U.S. Department of Commerce, National Telecommunications and Informa¬
tion Administration, “Long-Range Goals in International Telecommunications and
222 • NOTES TO PAGES 77-81

Information: An Outline for United States Policy,” 98th Cong., 1st Sess., Senate Print
98-22,11 March 1983,114.
60. Dan Schiller, “Comment perpetuer la domination sur les telecommunica¬
tions?” Le Monde diplomatique, February 1985,14-15.
61. Seth Schiesel, “FCC to Open Phone Market to Foreigners,” NYT, 25 November
1997, Ci, C2. See “Rules and Policies on Foreign Participation in the U.S. Telecom¬
munications Market,” International Bureau Docket Nos. 97-142 and 95-22, Report
and Order, 11 Fee Red 3873 (1997).
62. Andrew Ross Sorkin and Simon Romero, “Deutsche Telekom to Pay $50 Billion
for U.S. Company,” NYT, 24 July 2000, Ai, A8.
63. In Fall 2001, around twenty-four million U.S. inhabitants possessed Tt or
higher-speed Internet access lines in their offices, while fewer than 9 million enjoyed
broadband, or high-speed, connections at home; thus the cultural habit of Net
access, now including broadband access, was nurtured at work and only secondarily
at home. Melinda Patterson Grenier, “Record Number of Office Workers Used Web
Broadcasts Last Month,” WSJ, 15 October 2001, B8.
64. Urs von Burg, The Triumph of Ethernet: Technological Communities and the
Battle for the LAN Standard (Stanford, Calif.: Stanford University Press, 2001).
65. Eli M. Noam and Aine NiShuilleabhain, Introduction to Private Networks,
Public Objectives, ed. Eli M. Noam and Aine Nishuilleabhain (Amsterdam: Elsevier,
1996), xvii.
66. U.S. Congress, Office of Technology Assessment, Critical Connections: Com¬
munications for the Future, OTA-CIT-407 (Washington, D.C.: Government Printing
Office, 1990), 137.
67. Burg, Triumph of Ethernet, xiii.
68. Intranets are intraorganizational networks that make use of Internet tech¬
nologies: routers and TCP/IP, as well as, typically, the HTTP application, often with
additional applications such as email and file-transfer protocols.
69. Vinton Cerf, “Transforming Impact of Internet,” Paper presented at the Inter¬
net and the Global Political Economy Conference, University of Washington Center
for Internet Studies, Seattle, 23 September 1999.
70. Kim Cross, “B-to-B, by the Numbers,” Business 2.0 (September 1999): 109. See
also Dan Schiller, “World Communications in Today’s Age of Capital,” Emergences
11.1 (2001): 59.

Chapter 5: The Crisis in Telecommunications

1. Bjorn Wellenius, Carlos Alberto Primo Braga, and Christine Zhen-Wei Qiang,
“Investment and Growth of the Information Infrastructure: Summary Results of a
Global Survey,” Telecommunications Policy 24 (2000): 639 and 642.
2. International Telecommunication Union, Yearbook of Statistics: Telecommunica¬
tion Services Chronological Time Series, 1991-2000 (Geneva: ITU, 2001).
 NOTES TO PAGES 81-83 • 223

3. John Schwartz, “Text Messaging Pushed for Use as Disaster Warning Systems,”
NYT, 31 December 2004, A12.
4. International Telecommunication Union, Yearbook of Statistics; International
Telecommunication Union, World Telecommunication Development Report (Geneva:
ITU, 2002), 13.
5. U.S. Department of Commerce, National Telecommunications and Information
Administration and Economics and Statistics Administration, A Nation Online: How
Americans Are Expanding Their Use of the Internet (Washington, D.C.: Government
Printing Office,2002), 9; Brian Hammond, “Commerce Cites ‘Rapid Growth’ in
Broadband Use,” TR Daily, 5 February 2002,7. '
6. U.S. Department of Commerce, NTIA and ESA, A Nation Online, 9.
7. Adam Cohen, “PayPal and Other Post-Bubble Signs of Life on the Internet,”
NYT, 6 February 2002, A26 (Cohen asserts that twenty-one million wired computers
nationwide had installed photo-editing and -sharing software).
8. Paul Tayloir and Aline Van Duyn, “Head to Head: Cable and Phone Groups
Make a ‘Triple Play’ for U.S. Households,” FT, 12 January 2005,11.
9. George Gilder, Telecosm: How Infinite Bandwidth Will Revolutionize Our World
(New York: Free Press, 2000), 3.
10. Antonio Pasquali, “The Information Society: A Case for Setting Up an Inter¬
national Tribunal,” Media Development 4 (2002): 3.
11. David Bank, “Cisco Profit Surges on Cost Controls,” WSJ, 7 August 2002, A3;
Scott Thurm, “A Go-Go Giant of Internet Age, Cisco Is Learning to Go Slow,” WSJ,
7 May 2003: At, A7.
12. Written Statement of Michael K. Powell, chairman of the FCC, on “Health of
the Telecommunications Sector: A Perspective from the Commissioners of the FCC,”
Before the Subcommittee on Telecommunications and the Internet, Committee on
Energy and Commerce, U.S. House of Representatives, 26 February 2003,4; retrieved
5 February 2006, http://hraunfoss.fcc.gov/edocs public/attachmatch/DOC-231535Al
.pdf.
13. Paul Klemperer, “The Wrong Culprit for Telecom Trouble,” FT, 26 November
2002,15; Eli Noam, “Too Weak to Compete,” FT, 19 July 2002,11 (quote).
14. “France Telecom Posts Big Loss,” WSJ, 6 March 2003, B4.
15. Silvia Ascarelli and Almar Latour, “Europe’s Reckoning May Not Be Over Just
Yet,” WSJ, 11 March 2003, Ci.
16. Ken Belson, “Japan’s Cellphone Giant Casts a Paler Shadow,” NYT, 2 December
2002, C5.
17. Mike Esterl, “Deutsche Telekom to Cut 19,000 Jobs,” WSJ, 3 November 2005,
A3.
18. Dan Schiller, Telematics and Government (Norwood, N.J.: Ablex, 1982). See also
James Cortada, The Digital Hand (New York: Oxford University Press, 2004), for a
valuable though uncritical study of the growth of computerization—which soon
took in networking—within U.S. manufacturing.
224 • NOTES TO PAGES 83-87

19. International Telecommunications Union, World Telecommunication Develop¬

ment Report, A56-59, table 14.
20. Ibid., 41.
21. Howard Gleckman, John Carey, Russell Mitchell, Tim Smart, and Chris Roush,
“The Technology Payoff,” Business Week, 14 June 1993, 57-68.
22. For one informative example, see Seth Schiesel, “The No. 1 Customer: Sorry, It
Isn’t You,” NYT, 23 November 1997, Bt. For academic analyses, see S. D. Oliner and
D. E. Sichel, “The Resurgence of Growth in the Late 1990s: Is Information Technology
the Story?” Working Paper, May 2000; retrieved 5 February 2006, http://www.federal-
reserve.gov/pubs/feds/2000/200020pap.pdf; Wellenius, Primo Braga, and Zhen-Wei
Qiang, “Investment and Growth of the Information Infrastructure,” 639, 642.
23. Almar Latour and David Pringle, “Vodafone Changes CEOs at Key Time,” WSJ,
19 December 2002, A3. By 2004, Vodafone’s units spanned twenty-six countries, but
it still possessed nothing approaching 100 percent ownership of many of its affiliates.
Vodafone’s stakes varied from full (100 percent) ownership in the case of its parent
Vodafone UK, Vodafone (Germany), and Vodafone (Spain), to 3 percent in China
Mobile; 44 percent in SFR (France); 35 percent in Vodacom (South Africa); 45 percent
in Verizon Wireless (United States). David Reiley and David Pringle, “Vodafone Is
Challenge for Investors Tracking State of Global Empire,” WSJ, 2 September 2004,
Ci, C3.
24. Jo Johnson, “France Telecom Sells Dutch Cable Unit,” FT, 27 December 2002,
11.
25. Ken Belson, “Japan’s Cellphone Giant Casts a Paler Shadow,” NYT, 2 December
2002, C5.
26. This quote, which only repeats figures in wider circulation, is from Gilder,
Telecosm, 11.
27. Dan Schiller, Bad Deal of the Century: The Worrisome Implications of the World-
Com-MCI Merger (Washington, D.C.: Economic Policy Institute, 1998), 2. Odlyzko
is mentioned in Shawn Young, “Why the Glut in Fiber Lines Remains Huge,” WSJ,
12 May 2005, Bi, Bio.
28. Dan Schiller, Digital Capitalism: Networking the Global Market System (Cam¬
bridge: Massachusetts Institute of Technology Press, 1999), 68.
29. Shawn Young, Deborah Solomon, and Dennis K. Berman, “Qwest Engaged in
Fraud, SEC Says,” WSJ, 22 October 2004, A3.
30. Rebecca Blumenstein, Joann S. Lublin, and Shawn Young, “Sprint Forced Out
Top Executives over Questionable Tax Shelter,” WSJ, 5 February 2003, Ai, A8; Rebecca
Blumenstein and Carol Hymowitz, “Inside the Tough Call at Sprint: Fire Auditor or Top
Executives?” WSJ, 10 February 2003, Ai, A6; Jason Singer and Shawn Young, “Ousted
Executives of Sprint Hired by Japan Telecom,” WSJ, 22 September 2003, A3.
31. Peter Grant, “On-Demand TV Expands via Underused Fiber Highways,” WSJ,
17 December 2004, Bi; Young, “Why the Glut in Fiber Lines Remains Huge,” Bi, Bio
(quote).
 NOTES TO PAGES 87-88 • 225

32. TeleGeography, Inc., International Bandwidth 2001 (Washington, D.C.: Tele-

Geography, Inc., 2001), 23.
33. Rob Frieden, “The Telecommunications Meltdown in the United States: Rea¬
sons and Solutions,” 31 n.24, retrieved 18 February 2006, www.intel.si.umich.edu/
tprc/papers/2003/ 178/Telecom Meltdown.pdf.
34. Federal Communications Commission, International Bureau Report, “Trends
in the International Telecommunications Industry,” September 2005, table 4.
35. In the late 1990s, households with incomes of seventy-five thousand dollars
and higher were more than twenty times more likely to have access to the Internet
than those at the lowest income levels, and more-than nine times as likely to have a
computer at home. U.S. Department of Commerce, National Telecommunications
and Information Administration, Falling through the Net: Defining the Digital Divide;
A Report on the Telecommunications and Information Technology Gap in America
(Washington, D.C.: Government Printing Office, 1999), xii-xiii. These gaps have
since narrowed.
36. Anne Marie Squeo, “Rural-Phone Subsidy’s Shortfall Could Be Costly for Con¬
sumers,” WSJ, 1 November 2004, A2.
37. TeleGeography, International Bandwidth 2001,124.
38. Pippa Norris, Digital Divide: Civic Engagement, Information Poverty, and the
Internet Worldwide (New York: Cambridge University Press, 2001), 45.
39. Judith Miller, “Globalization Widens Rich-Poor Gap, U.N. Report Says,” NYT,
13 July 1999, A8.
40. World Association for Christian Communication, “Media Ownership and Citi¬
zen Access: A Global Overview,” in Consolidated Report of WACC’s Media Ownership
Programme, 1997-2000 (London: World Association for Christian Communication,
2000), 2.
41. “Indonesia Rescinds Rise in Phone Rates,” NYT, 16 January 2003, W7.
42. Judith Mariscal, Carla Bonina, and Julio Luna, “New Market Scenarios in Latin
America,” in Digital Poverty: Latin American and Caribbean Perspectives, ed. Hernan
Galperin and Judith Mariscal (Lima: Regional Dialogue on the Information Society,
2005), 66; retrieved 1 February 2006, www.dirsinet/index.php?newlang=eng.
43. Juan Forero, “Latin America Fails to Deliver on Basic Needs,” NYT, 22 Febru¬
ary 2005, At, C2. For a more detailed study of the Latin American context, see Sybil
Rhodes, Social Movements and Free-Market Capitalism in Latin America: Telecom¬
munications Privatization and the Rise of Consumer Protest (Albany: State University
of New York Press, 2006).
44. Adam Aljewidz, “Telkom’s IPO Makes It, Struggling,” WSJ, 5 March 2003, C5.
45. U.S. House of Representatives, House Committee on Energy and Commerce,
Subcommittee on Telecommunications and the Internet, Statement of Commissioner
Kathleen Q. Abernathy, “Health of the Telecommunications Sector,” 26 February
2003,3; retrieved 25 February 2006, http://energycommerce.house.gov/108/hearings/
02262003Hearing781/Abernathy 1271/htm.
226 • NOTES TO PAGES 88-91

46. Shawn Young, “Less May Be More,” WSJ, 25 October 2004, Rio; Ken Belson,
“Market Place,” NYT, 25 October 2004, C4; Sara Silver, “Lucent’s Profit Crutch—
Pensions,” WSJ, 28 December 2005, Ci, C4.
47. Mark Heinzl, “Nortel Again Delays Financial Report,” WSJ, 12 November
2004, A3.
48. Ken Brown and Mark Heinzl, “Nortel Board Finds Accounting Tricks behind
’03 Profits,” WSJ, 2 July 2004, Ai, A8.
49. Dennis K. Berman, “Corning Tries to Adapt to Changing Times,” WSJ, 6 March
2003, B4.
50. Gilder, Telecosm, 210; David R. Baker, “JDS Lhiiphase Set to Slash Workforce,”
San Francisco Chronicle, 25 October 2002, Di.
51. Mark Maremont, “Tyco Posts Loss, Will Cut 7,200 Jobs,” WSJ, 5 November
2003, A3, A8.
52. Dennis K. Berman, “Bush Is Expected to Approve Global Crossing Deal,” WSJ,
9 September 2003, A2.
53. New Paradigm Resources Group, Inc., Measuring the Economic Impact of the
Telecommunications Act of 1996: Telecommunications Capital Expenditures (1996-
2001), Prepared for Competitive Telecommunications Association (Chicago: New
Paradigm Resources Group, 2002).
54. Larry F. Darby, Jeffrey A. Eisenach, and Joseph S. Kraemer, “The CLEC Experi¬
ment: Anatomy of a Meltdown,” Progress on Point Release 9.23 (Washington, D.C.:
Progress and Freedom Foundation, 2002), 5.
55. Written Statement of Michael K. Powell, 26 February 2003, 6, 8.
56. Steven Jackson, “Ex-Communication: Competition and Collusion in the Amer¬
ican Prison Telephone Industry,” Critical Studies in Media and Communications 22.4
(October 2005): 263-80; see also the Campaign to Promote Equitable Telephone
Charges Web page, www.curenational.org/etc/about the campaign.htm.
57. Matt Richtel, “Unions Struggle as Communications Industry Shifts,” NYT,
1 June 2005, Ci, C4.; Gary Fields, Timothy Aeppel, Kris Maher, and Janet Adamy,
“Reinventing the Union,” WSJ, 27 July 2005, Bi, B2; Matt Richtel, “In Wireless World,
Cingular Bucks the Antiunion Trend,” NYT, 21 February 2006, Ci, C2.
58. Alicia Chang, “Report: Verizon Service Quality in New York Declining,” Asso¬
ciated Press, 7 May 2003; Fred O. Williams, “PSC finds ‘Alarming’ Problems with
Verizon service,” Buffalo News, retrieved 23 May 2003, www.buffalonews.com/edito-
rial/20030523/1000921.asp.
59. Statement of Michael J. Copps, FCC commissioner, Before House Subcommit¬
tee on Telecoms and the Internet, Committee on Energy and Commerce, U.S. House
of Representatives, 26 February 2003, 6; retrieved 5 February 2006, http://hraunfoss
.fcc.gov/edocs public/attachmatch/DOC-231559A1 .pdf.
60. “Joint Venture with PCCW Ltd. Is Being Written Down Sharply,” WSJ, 24
February 2003, B3.
 NOTES TO PAGES 91~93 • 227

61. Kevin J. Delaney, “Alcatel Posts Loss, Warns on Sales,” WSJ, 5 February 2003,
b3.
62. Written statement of Michael K. Powell, 26 February 2003, 5; Ken Brown and
Almar Latour, “Phone Industry Faces Upheaval as Ways of Calling Change Fast,”
WSJ, 25 August 2004, Ai, A8.
63. Dennis K. Berman, “Bride or Bridesmaid? AT&T and MCI May Compete for
Suitors,” WSJ, 2 August 2004, Cl.
64. David Pringle, “Slower Growth Flits Cellphone Services Overseas,” WSJ, 23
May 2005, At, A6.
65. Shawn Young, “AT&T Posts $7.11 Billion Loss in Wake of Charges,” WSJ, 22
October 2004, B3; John Seward and Almar Latour, “MCI Plans $3.5 Billion Charge to
Reflect Network-Value Drop,” WSJ, 19 October 2004, B2; Christine Nuzum, “Sprint
Intends to Write Down Long-Distance Assets, Cut Jobs,” WSJ, 18 October 2004, B4.
66. Ken Belson, “AT&T Won't Seek New Residential Customers,” NYT, 23 July
2004, At, C3; Ken Brown and Almar Latour, “Phone Industry Faces Upheaval as Ways
of Calling Change Fast,” WSJ, 25 August 2004, Ai, A8; Shawn Young, “AT&T Posts
80 Percent Drop in Net, Confirms Consumer Retreat,” WSJ, 23 July 2004, An.
67. Committee on the Internet and the Evolving Information Infrastructure, Com¬
puter Science and Telecommunications Board, National Research Council, The Inter¬
net’s Coming of Age (Washington, D.C.: National Academy Press, 2001), 151-76.
68. The FCC chair estimated this debt worldwide at “nearly $1 trillion” at the
end of February 2003. Written Statement of Michael K. Powell, 26 February 2003,4.
The overall amount of corporate debt classed as in default or in “distress” globally
increased 38 percent to $942 billion in 2002, according to Jonathan Stempel, “Troubled
Corporate Debt Swells to $942 Billion,” Reuters, 7 February 2003, retrieved 11 Febru¬
ary 2003, http://biz.yahoo.com/rf/030207/financial distressed debt l.html.
69. European Central Bank, “EU Banking Sector Stability,” February 2003, 16;
retrieved 3 March 2003, www.ecb.int/pub/pdf/other/eubksectorstabilityeu.pdf. See
also “ECB Tries to Allay Fears of an EU Bank Crisis,” WSJ, 25 February 2003, A13.
70. Erik Portanger, “Telecom Debt Collapses on Surprised Buyers,” WSJ, 15 Janu¬
ary 2003, Ci, C11. In the United States, some state pension fund managers, perhaps
anxious that the political heat under them might intensify, sought redress. The Illinois
State Universities Retirement System, for example, burned by having lost around $30
million on a 2001 WorldCom bond sale, took legal action against the carrier and the
accountants and underwriting investment banks that had managed the offering.
“SURS Takes Action in Securities Litigation,” The Advocate 12.2 (2003): 1,4.
71. Remarks of Michael K. Powell at the Goldman Sachs Communicopia XI Con¬
ference, 2 October 2002, New York; retrieved 6 February 2006, http://hraunfoss.fcc
.gov/edocs public/attachmatch/DOC-22629Al.pdf.
72. Andrew Hill, “Buffett Likens Derivatives to Weapons of Mass Destruction,”
FT, 4 March 2003,1.
228 • NOTES TO PAGES 93-97

73. In late 2004, the Securities and Exchange Commission decided not to file civil
charges against the former chairman of Global Crossing, Gary Winnick. Bernard
Ebbers, the CEO of WorldCom, was convicted of fraud in 2005 and sentenced to
twenty-five years in prison; he has appealed. The CEO of Tyco International, T. Den¬
nis Kozlowski, was convicted in 2005 on fraud, conspiracy, and grand larceny charges.
Qwest CEO Joseph Naccio was charged with illegal insider trading in December 2005.
Deborah Solomon, “SEC Won’t Charge, Fine Global Crossing Chairman,” WSJ, 13
December 2004, Ai, A13; Almar Latour, Shawn Young, and Li Yuan, “Ebbers Is Con¬
victed in Massive Fraud,” WSJ, 16 March 2005, Ai, A10; Ken Belson, “WorldCom
Head Is Given 25 Years for Huge Fraud,” NYT, 14 July 2005, Ai, C4; Andrew Ross
Sorkin, “Ex-Chief and Aide Guilty of Looting Millions at Tyco,” NYT, 18 June 2005,
Ai, B4; Greg Griffin, “Naccio Hit with 42 Insider-Trading Counts,” Denver Post, 21
December 2005, lA, 14A.
74. Almar Latour, “SBC Gets Big Internet-Phone Pact,” WSJ, 21 September 2004,
B8.
75. Statement of Michael J. Copps, 26 February 2003, 2.
76. Ken Belson, “Ex-Chief of WorldCom Is Found Guilty in $11 Billion Fraud,”
NYT, 16 March 2005, Ai, C8.
77. Om Malik, Broadbandits: Inside the $750 Billion Telecom Heist (New York: John
Wiley and Sons, 2003), 292.
78. Hal R. Varian, “Economic Scene,” NYT, 14 December 2000, C2.
79. For some indications, see Peter Grant and Dionne Searcey, “Verizon, SBC Take
TV Battle to Statehouses,” WSJ, 17 May 2005, Bi, B3.
80. “Bush Sees Broadband Access as a U.S. Goal,” WSJ, 29 March 2004, A4; Anne
Marie Squeo, “Election Pledge: Broadband Access for All,” WSJ, 14 September 2004,
A4.
81. Jesse Drucker and Christopher Rhoads, “Phone Consolidation May Cost Cor¬
porate Clients Clout,” WSJ, 4 May 2005, Bi, B3; Matt Richtel and Ken Belson, “Phone
Mergers Seen as a Curb on Price Wars,” NYT, 15 February 2005, Ai, C6.
82. “The Antitrust Wars” (editorial), WSJ, 11 May 2005, A14.
83. Paul Kirby, “NSTAC to Ponder Recommendations for Improving Response to
Disasters,” TR Daily, 13 October 2005,1-2; James Risen and Eric Lichtblau, “Bush
Lets U.S. Spy on Callers without Courts,” NYT, 16 December 2005, Ai, A22; Eric
Lichtblau and James Risen, “Spy Agency Mined Vast Data Trove, Officials Report,”
NYT, 24 December 2005, Ai, A12; “AT&T Is Accused of Role in Eavesdropping,” NYT,
1 February 2006, A14.
84. Christopher Rhoads and Amy Schatz, “Power Outages Hamstring Most Emer¬
gency Communications,” WSJ, 1 September 2005, A7; Dionne Searcey and Jesse
Drucker, “Phone Networks Fail Once Again in a Disaster,” WSJ, 6 September 2005,
A19, A21.
85. Amy Levine, legislative counsel to Rep. Rick Boucher (D., Va.), quoted in Lynn
 NOTES TO PAGES 97-IO3 • 229

Stanton, “Hill Staffers Hold Out Hope for Telecom Bill This Year,” TR Daily, 1 June
2005,1-2.
86. Jesse Drucker and Li Yuan, “Phone Giants Are Lobbying Hard to Block Towns’
Wireless Plans,” WSJ, 23 June 2005, Ai, A8.
87. Shawn Young, “MCI to Emerge from Bankruptcy,” WSJ, 20 April 2004, B5; Peter
Grant and Almar Latour, “Battered Telecoms Face New Challenge: Internet Calling,”
WSJ, 9 October 2003, At, A9; Almar Latour and Kevin J. Delaney, “KaZaA Creators
Connect to Phones,” WSJ, 19 September 2003, B5; Almar Latour and Peter Grant, “PC
Users Can Now Make Long-Distance Calls Free,” WSJ, 9 October 2003, D2.
88. U.S. Supreme Court, National Cable and Telecommunications Association et
al. v. Brand X Internet Services et al, 27 June 2005, no. 04-277 (slip opinion); Amy
Schatz, “FCC May Set Rules Allowing Bells Exclusive Access over DSL,” WSJ, 3
August 2005, A4.
89. Carlta Vitzhum and Almar Latour, “Telefonica to Acquire Assets of BellSouth in
Latin America,” WSJ, 8 March 2004, B4; James Politi, Paul Taylor, and Leslie Crawford,
“Bell South in Talks on $6bn Sale to Telefonica,” FT, 5 March 2004,1; “Telefonica,”
FT, 17 May 2005,16.
90. John Authors, “Rich Pickings Send Slim into Latin American Telecoms,” FT,
7 September 2004,16.
91. H. Sender, “Asia Global Crossing Bid Signals Chinese Arrival as Merger Players,”
WSJ, 19 November 2002, C5; H. A. Bolande and D. Berman, “China Netcom Group
to Buy Network,” WSJ, 18 November 2002, A3; J. Leahy, “Saved Asia Netcom Aims
for Break-Even,” FT, 12 March 2003,18; J. L. Schenker, “Asians Rush to Buy Assets of
Ailing Giants: U.S. Telecom Pain Is World’s Gain,” International Herald-Tribune, 25
August 2004, retrieved 6 February 2006, http://www.iht.com/articles/535472.htm;
“Slim Pickings,” The Economist, 20 March 2004, 64.
92. Mark Maremont, “Tyco Will Sell Fiber-Optic Unit for $130 Million,” WSJ, 2
November 2004, A10.

Chapter 6: The Culture Industry

1. Edward D. Horowitz, “The Ascent of Content,” in The Future of the Electronic
Marketplace, ed. Derek Leebaert (Cambridge: Massachusetts Institute of Technology
Press, 1998), 93-
2. William Leach, Land of Desire: Merchants, Power, and the Rise of a New American
Culture (New York: Pantheon, 1993).
3. Eric Hobsbawm, The Age of Extremes: A History of the World, 1914-1995 (New
York: Pantheon, 1994), 520.
4. Ithiel de Sola Pool, Technologies of Freedom (Cambridge, Mass.: Belknap Press,
1983), 23, 27, 28.
5. U.S. Congress, House of Representatives, 108th Cong., 2d Sess., Subcommittee
on Telecommunications and the Internet, Committee on Energy and Commerce,
230 • NOTES TO PAGES 103-7

Hearing on “Competition in the Communications Marketplace: How Convergence Is

Blurring the Lines between Voice, Video, and Data Services,” 19 May 2004, serial No.
108-85 (Washington, D.C.: Government Printing Office, 2004). See also Jonathan E.
Nuechterlein and Philip J. Weiser, Digital Crossroads: American Telecommunications
Policy in the Internet Age (Cambridge: Massachusetts Institute of Technology Press,
2005), 23-30.
6. Pool, Technologies of Freedom, 5.
7. David A. Mindell, Between Human and Machine: Feedback, Control, and Com¬
puting before Cybernetics (Baltimore: Johns Hopkins University Press, 2002). For an
earlier argument that convergence is an old trend, see Dwayne Winseck, Reconver¬
gence: A Political Economy of Telecommunications in Canada (Creskill, N.J.: Hampton
Press, 1998).
8. Frank Baldwin Jewett, “Electrical Communication: Past, Present, Future: Speech
to National Academy of Sciences,” Bell Telephone Quarterly 14 (1935): 170.
9. Ibid.
10. Ibid., 172,171. A recent analyst observes that “ [t]he radio sector, appearing in the
1920s, evolved from the learning acquired in the initial commercializing of modern
electrical and telephone equipment in the 1890s.” Alfred D. Chandler Jr., Inventing
the Electronic Century: The Epic Story of the Consumer Electronics and Computer
Industries (Cambridge, Mass.: Harvard University Press, 2005), 13.
11. Lloyd Espenschied, “The Origins and Development of Radiotelephony,” Pro¬
ceedings of the Institute of Radio Engineers 25.9 (September 1937): 1121.
12. Jewett, “Electrical Communication,” 198.
13. Mindell, Between Human and Machine, 320.
14. Vertical integration is investment in businesses backward or forward in a given
industry’s production and distribution chain. Examples include a magazine publish¬
er’s investment in paper making, or a telephone carrier’s investment in the manufac¬
ture of handsets and network facilities. Economies of scope are achieved by lowering
overall unit costs as a result of investing in production of related products, which
share overlapping needs for design, production, and marketing. Chandler, Inventing
the Electronic Century, xiv.
15. Jewett, “Electrical Communication,” 171.
16. This point comes through in an unusually perceptive and careful analysis of
convergence: Nicholas Garnham, “Constraints on Multimedia Convergence,” in
Information and Communication Technologies: Visions and Realities, ed. William H.
Dutton (New York: Oxford University Press, 1996), 108.
17. A vital and neglected nexus for this claim are the seventy-five-odd boxes of
material collected by the FCC in its “telephone inquiry” of 1935-39,"housed at the
National Archives and Records Administration.
18. See Garnham, “Constraints on Multimedia Convergence,” 116—17.
19. Jim Davis and Michael Stack, “The Digital Advantage,” in Cutting Edge: Tech-
 NOTES TO PAGES 108-15 * 231

nology, Information Capitalism, and Social Revolution, ed. Jim Davis, Thomas Hirschl,
and Michael Stack (London: Verso, 1997), 128.
20. Ibid., 128,124-25.
21. Council of Economic Advisors, Economic Report of the President 2005 (Wash¬
ington, D.C.: Government Printing Office, 2005), 145,150.
22. Patricia Aufderheide, Communications Policy and the Public Interest: The Tele¬
communications Act of 1996 (New York: Guilford Press, 1999), 74.
23. Adam Thierer, “Telecommunications, Broadband, and Media Policy,” in Cato
Handbook on Policy, ed. Edward H. Crane and David Boaz (Washington, D.C.: Cato
Institute, 2005), 400-401. '
24. Jonathan E. Nuechterlein and Philip J. Weiser, Digital Crossroads: American
Telecommunications Policy in the Internet Age (Cambridge: Massachusetts Institute
of Technology Press, 2005), 27.
25. In one apt formulation, “[T]here is an imperative to re-inflect notions of the
public airwaves into our digital futures.” Toby Miller, Nitin Govil, John McMurria,
and Richard Maxwell, Global Hollywood (London: BFI, 2001), 109 and 200-201.
26. Thierer, “Telecommunications, Broadband, and Media Policy,” 400-401.
27. U.S. Census Bureau, Statistical Abstract of the United States 2004-2005 (Wash¬
ington, D.C.: Government Printing Office, 2004), 716 (table 1119: “Media Usage and
Consumer Spending: 1999 to 2007”).
28. Aufderheide, Communications Policy and the Public Interest, 91; Diane Mermi-
gas, “How Companies Deal with the Net,” Electronic Media, 19 April 1999,34.
29. Robert W. McChesney and Dan Schiller, “The Political Economy of Interna¬
tional Communications: Foundations for the Emerging Global Debate about Media
Ownership and Regulation,” United Nations Research Institute for Social Develop¬
ment, Technology, Business, and Society, Programme Paper No. 11, July 2003,16-17;
Diane Mermigas, “Merger Frenzy Will Continue in New Year,” TelevisionWeek, 31
December 2001; Diane Mermigas, “Expect a Flood of Mergers in 2004,” Television-
Week, 5 January 2004.
30. Diane Mermigas, “More Work Ahead for TW’s Parsons,” TelevisionWeek, 9
February 2004,12-13.
31. Doug Halonen, “Broadcasters Oppose Coalition Proposal,” Electronic Media,
6 January 2003, 2.
32. Tim Burt and Joshua Chaffin, “Universal Ambitions Spur NBC,” FT, 21 June
2005,15.
33. Cate Doty, “Love before Music,” NYT, 14 March 2005, C7.
34. Mermigas, “Expect a Flood of Mergers in 2004.”
35. Herbert A. Lottman, “Books and the Information Future: Two European
Views,” Publishers Weekly, 4 September 1995,15.
36. Kenneth Li, “Publish Online or Perish?” Industry Standard, 3 April 2000,
60-61.
232 • NOTES TO PAGES II5-I9

37. John F. Baker, “RH Sets Up West Coast Div. for Kids’ Properties,” Publishers
Weekly, 28 August 1995, 25.
38. Paul Klebnikov, “The Twain Shall Meet,” Forbes, 27 February 1995, 74-75-
39. Melinda Fulmer, “Food Makers Cashing In by Turning Brands into Books,
Toys,” Los Angeles Times, 26 March 2000, C4.
40. Ethan Smith, “EMI, Sony BMG Set License Accord for Music Catalogs,” WSJ,
20 December 2004, B5.
41. Klebnikov, “The Twain Shall Meet,” 74-75.
42. Merissa Marr and Dennis K. Berman, “Behind MGM Sale: A Gamble That
DVDs Will Keep Booming,” WSJ, 15 September 2004, Bi, B2.
43. U.S. National Research Council, Committee on Intellectual Property Rights and
the Emerging Information Infrastructure, The Digital Dilemma: Intellectual Property
in the Information Age (Washington, D.C.: National Academy Press, 2000).
44. Herbert I. Schiller, Culture, Inc. (New York: Oxford University Press, 1989),
32.
45. Thomas Guback, The U.S. International Film Industry (Bloomington: Indiana
University Press, 1969).
46. Irving Bernstein, The Economics of Television Film Production and Distribution
(Los Angeles: Screen Actors Guild, i960), 126; Wilson P. Dizard, Television: A World
View (Syracuse, N.Y.: Syracuse University Press, 1966), 160-61.
47. For a helpful review of European practice, see Miller, Govil, McMurria, and
Maxwell, Global Hollywood, 88-99.
48. Dan Schiller and Vincent Mosco, Introduction to Continental Order? Integrating
North America for Cyber-Capitalism, ed. Vincent Mosco and Dan Schiller (Lanham,
Md.: Rowman and Littlefield, 2001), 1-34.
49. Kaarle Nordenstreng, “The MacBride Report: A Milestone in the Great Media
Debate,” Submission to Quaderno del CAC, Barcelona, on the Twenty-fifth Anniver¬
sary of the Approval of the MacBride Report, April 2005,2 (unpublished manuscript
in the author’s possession).
50. Daya Thussu quoted in Robert A. Hackett and Yuezhi Zhao, Democratizing
Global Media: One World, Many Struggles (Lanham, Md.: Rowman and Littlefield,
2005), 8.
51. Dizard, Television, 4.
52. Ibid.
53. UNESCO, Statistical Yearbook 1998 (Paris: UNESCO, 1998), 6.5
54. International Telecommunication Union, Yearbook of Statistics: Telecommuni¬
cations Services Chronological Time Series 1989-1998 (Geneva: ITU, 2000).
55. UNESCO, Statistical Yearbook 1998, 6.5
56. Feng His-liang, “Wondering about American TV and Newspapers,” Across the
Board 16.3 (March 1979): 3.
57. Oluf Lund Johanson, World Radio TV Handbook, vol. 52 (New York: Billboard
 NOTES TO PAGES II9-22 • 233

Books, 1998), 426, 414, 412, 410; International Telecommunication Union, Yearbook
of Statistics.
58. United Nations Development Programme, Human Development Report 2004:
Cultural Liberty in Today’s Diverse World (New York: UNDP, 2004), 86.
59. UNESCO, “2001-02—Did You Know? International Trade in Cultural Goods,”
retrieved 3 January 2005, www.uis.unesco.org.
60. Martin-Barbero quoted in Ana Fiol, “Media and Neoliberalism in Latin Amer¬
ica,” in Who Owns The Media? Global Trends and Local Resistances, ed. Pradip N.
Thomas and Zaharom Nain (Penang: Southbound, 2004), 146-47.
61. Herbert I. Schiller, Mass Communications dnd American Empire (New York:
Augustus M. Kelley, 1969). For a historical perspective focused on Western Europe, see
Victoria de Grazia, Irresistible Empire: America’s Advance through Twentieth-Century
Europe (Cambridge, Mass.: Belknap Press, 2005).
62. John Lawrence Sullivan, “Constructing the Cable Television Market in Latin
America: A Structurational Approach to Organizational Knowledge in U.S. Cable
Networks” (Ph.D. dissertation, University of Pennsylvania, 2000), 315-17, 80. For
other useful accounts, see John Sinclair, Latin American Television: A Global View
(Oxford: Oxford University Press, 1999), and Rosalind Bresnahan, “The Media and
the Neoliberal Transition in Chile,” Latin American Perspectives 133.6 (November
2003): 39-68.
63. Sullivan, “Constructing the Cable Television Market in Latin America,” 87.
64. Ana Fiol, “Media and Neoliberalism in Latin America,” 151.
65. McChesney and Schiller, “Political Economy of International Communica¬
tions,” 10.
66. UNESCO, “2001-02—Did You Know?” On games, see Stephen Kline, Nick
Dyer-Witheford, and Greig de Peuter, Digital Play: The Interaction of Technology,
Culture, and Marketing (Montreal: McGill-Queen’s University Press, 2003).
67. Mermigas, “More Work Ahead for TW’s Parsons,” 12-13.
68. Edward S. Herman and Robert W McChesney, The Global Media: The New
Missionaries of Corporate Capitalism (London: Cassell, 1997), 95-
69. John Sinclair, “Latin American Commercial Television: ‘Primitive Capital¬
ism,’” in A Companion To Television, ed. Janet Wasko (Oxford: Blackwell Publish¬
ing, 2005), 518.
70. Fiol, “Media and Neoliberalism in Latin America,” 137.
71. Nicholas Garnham, “Public Service versus the Market,” Screen 24.1 (January-
February 1983): 20.
72. Graham Murdock, “Public Broadcasting and Democratic Culture: Consum¬
ers, Citizens, and Communards,” in A Companion to Television, ed. Janet Wasko
(Oxford: Blackwell Publishing, 2005), 178. See also Michael Tracey, The Decline and
Fall of Public Service Broadcasting (Oxford: Oxford University Press, 1998).
73. Garnham, “Public Service versus the Market,” 19.
234 • NOTES TO PAGES 122-23

74. Ibid., 6-27.

75. Ibid., 22.
76. Giuseppe Richeri, “Broadcasting and the Market: The Case of Public Televi¬
sion,” in Toward a Political Economy of Culture: Capitalism and Communication in the
Twenty-first Century, ed. Andrew Calabrese and Colin Sparks (Lanham, Md.: Row-
man and Littlefield, 2004), 178-93; Murdock, “Public Broadcasting and Democratic
Culture,” 190.
77. Tony Barber, “Berlusconi’s Critics Take Dim View of TV Privatisation,” FT, 29
September 2004,14; Cinzia Padovani, A Fatal Attraction: Public Television and Politics
in Italy (Lanham, Md.: Rowman and Littlefield, 2005).
78. Eric Pfanner, “State-Aided Broadcasting Faces Scrutiny across Europe,” NYT,
16 February 2004, Cl, C7; Charles Goldsmith, “Under Attack, Venerable BBC Is at
Crossroads,” WSJ, 26 September 2004, Bi, B4; Marc Champion, Emily Nelson, and
Charles Goldsmith, “To BBC’s Rivals, ‘Auntie’ Is Too Big for Its Britches,” WSJ, 28
September 2004, Ai, A17; Charles Goldsmith, “At the BBC, a New Austerity,” WSJ,
3 December 2004, A17; Alan Cowell, “BBC Says It Will Cut 2,900 Jobs over 3 Years,”
NYT, 8 December 2004, Wi, W7.
79. Bernard Miege, “Capitalism and Communication: A New Era of Society or the
Accentuation of Long-Term Tendencies?” in Toward a Political Economy of Culture:
Capitalism and Communication in the Twenty-first Century, ed. Andrew Calabrese
and Colin Sparks (Lanham, Md.: Rowman and Littlefield, 2004), 89.
80. Arthur-Martins Aginam, “Media in ‘Globalizing’ Africa: What Prospect for
Democratic Communication?” in Democratizing Global Media: One World, Many
Struggles, ed. Robert A. Hackett and Yuezhi Zhao (Lanham, Md.: Rowman and
Littlefield, 2005), 127. In Latin America and the Caribbean, by the late 1990s, only
sixty-four of about 570 terrestrial broadcast channels were “state-oriented and cul¬
tural and educational in scope.” Fiol, “Media and Neoliberalism in Latin America,”
150.
81. Pradip Thomas, “Contested Futures: Indian Media at the Crossroads,” in Democ¬
ratizing Global Media: One World, Many Struggles, ed. Robert A. Hackett and Yuezhi
Zhao (Lanham, Md.: Rowman and Littlefield, 2005), 86.
82. Andre Lange, “Transfrontier Television in the European Union: Market Impact,”
in European Audiovisual Observatory, “Transfrontier Television in the European
Union,” March 2004,6, retrieved 3 January 2005, www.obs.coe.int/medium/adv.html
.enm.
83. Ibid., 6-7.
84. Amos Thomas, “Flattery or Plagiarism? Television Cloning in India Today,”
Media Development 51.3 (2004): 39.
85. Hugh Miles, Al Jazeera (New York: Grove Press, 2005), 329; Nabil H. Dajani,
“Television in the Arab East,” in A Companion To Television, ed. Janet Wasko (Oxford:
Blackwell Publishing, 2005), 596.
86. FCC, In the Matter of Annual Assessment of the Status of Competition in the
 NOTES TO PAGES 125-29 • 235

Market for the Delivery of Video Programming, MB Docket No. 04-227, Eleventh
Annual Report, 4 February 2005, www.fcc.gov.
87. Dizard, Television, 77.
88. Ibid., 277.
89. For a useful overview, see Communications Satellites: Global Change Agents,
ed. loseph N. Pelton, Robert J. Oslund, and Peter Marshall (Mahwah, N.J.: Lawrence
Erlbaum Associates, 2004).
90. Joseph N. Pelton, “Satellites as Worldwide Change Agents,” in Communications
Satellites: Global Change Agents, ed. Jospeh N. Pelton, Robert J. Oslund, and Peter
Marshall (Mahwah, N.J.: Lawrence Erlbaum Associates, 2004), 6.
91. Lange, “Transfrontier Television in the European Union,” 11 (table 3).
92. Yuezhi Zhao and Robert A. Hackett, “Media Globalization, Media Democra¬
tization: Challenges, Issues, and Paradoxes,” in Democratizing Global Media: One
World, Many Struggles, ed. Robert A. Hackett and Yuezhi Zhao (Lanham, Md.:
Rowman and Littlefield, 2005), 21.
93. Naomi Sakr, Satellite Realms (London: I. B. Taurus, 2001); Dajani, “Television
in the Arab East,” 580-601.
94. Miles, Al-Jazeera, 348.
95. Ibid., 164-68.
96. Ibid., 275-76.
97. Marc Lynch, Voices of the New Arab Public: Iraq, al-Jazeera, and Middle East
Politics Today (New York: Columbia University Press, 2006).
98. Miles, Al-Jazeera, 278,324.
99. Jeremy Scahill, “The War on AI Jazeera,” The Nation, 1 December 2005; retrieved
2 December 2005, www.thenation.com/doc/20051219/scahill.
100. Lynch, Voices of the New Arab Public, 5, 6. As Lynch underlines, the growth of
Al-Jazeera places pressure on other new Arab satellite stations to permit the airing
of some comparable coverage.
101. Miles, Al-Jazeera, 426.
102. Ibid., 67; Juan Forero, “And Now, the News in Latin America’s View,” NYT,
16 May 2005, A8.
103. Nikolas Kozloff, “Chavez Launches Hemispheric, ‘Anti-Hegemonic’ Media
Campaign in Response to Local TV Networks’ Anti-Government Bias,” Council on
Hemispheric Affairs, retrieved 28 April 2005, www.coha.org/NEWPRESSRELEASES/
NewPressReleases2005/05.47Telesur %20th one.htm. Thanks to Yuezhi Zhao, Rob
Dufy, and Dawn Gable for informing me about Telesur.
104. Ibid., 6,7; Forero, “And Now, the News in Latin America’s View,” A8.
105. Quoted in Forero, “And Now, the News in Latin America’s View,” A8.
106. Andy Webb-Vidal, “Washington to Take Its War of Words with Chavez to
Airwaves,” FT, 22 July 2005,7.
107. Sarah Lyall, “BBC to Close 10 Radio Services and Open an Arabic TV Service,”
NYT, 26 October 2005, A6.
236 • NOTES TO PAGES 129-32

108. Joshua Kucera, “Weaponising the Truth?” Janes Defence Weekly, 8 June 2005,
22- 25; Adam Brookes, “U.S. Plans to ‘Fight the Net’ Revealed,” BBC News, 27 Janu¬
ary 2006; retrieved 1 February 2006, http://news.bbc.co.Uk/2/hi/americas/4655196
.stm.
109. Jeff Gerth, “Military’s Information War Is a Vast and Secret Operation,” NYT,
11 December 2005, Ai.
no. Miles, Al-Jazeera, 277, 323; Edward S. Herman, ‘“They Kill Reporters, Don’t
They?”’ ZMagazine (January 2005): 42-46.
111. Steven R. Weisman, “Under Pressure, Qatar May Sell Arab Network,” NYT, 30
January 2005, Ai, A17.
112. Miles, Al-Jazeera, 425.
113. Eric Pfanner and Doreen Carvajal, “The Selling of AI Jazeera TV to an Inter¬
national Market,” NYT, 31 October 2005, C6.
114. James Curran, “The Press as an Agency of Social Control,” in Newspaper His¬
tory: From the Seventeenth Century to the Present Day, ed. George Boyce, James Cur¬
ran, and Pauline Wingate (Beverly Hills, Calif.: Sage Publications, 1978), 51-75.
115. William Wallis, “Al-Jazeera to Launch English Language TV Channel in 2006,”
FT, 16 May 2005, 6; see also Riz Khan, “Why I’m Joining AI Jazeera,” WSJ, 13 June
2005, A12.
116.1 draw on Zhao and Hackett, “Media Globalization and Media Democratiza¬
tion,” 1; and Miller, Govil, McMurria, and Maxwell, Global Hollywood.
117. For a useful exegesis of the New York Times’s deception of its readers on the
war in Iraq around coverage written by its senior correspondent Judith Miller, see Bill
Van Auken, “Burying the Lies on the Iraq War,” Anderson Valley Advertiser (Boonville,
Calif.), 16 November 2005, 8.
118. Diane Mermigas, “Murdoch’s Global Health Plan,” Electronic Media, 10 April
2000,1,6; European Commission, Report from the High Level Group on Audiovisual
Policy, The Digital Age: European Audiovisual Policy (Brussels: European Commis¬
sion, 1998), 13; Ronald Grover and Tom Lowry, “Rupert’s World,” Business Week, 19
January 2004, 52-60.
119. Daya Kishan Thussu, International Communication: Continuity and Change
(London: Arnold, 2000), 133-37.
120. Miles, Al-Jazeera, 328.
121. U.S. Department of Commerce/International Trade Administration, U.S.
Industry and Trade Outlook 2000 (New York: McGraw-Hill, 2000), 32-34.
122. United Nations Development Programme, Human Development Report 2004,
86.
123. Ibid., 97.
124. Elizabeth Guider, “Sony Ups Its Local Payoff,” Variety, 26 July—1 August 1999,
23-

125. Frank Rose, “Think Globally, Script Locally,” Fortune, 8 November 1999,158.
 NOTES TO PAGES 132-36 • 237

126. Tim Burt and Joshua Chaffin, “Going Where the Growth Is Greater: U.S.
Media Groups Reveal Their Global Strategies,” FT, 21 June 2005,15.
127. Anna Wilde Matthews, “A Giant Radio Chain Is Perfecting the Art of Seeming
Local,” WSJ, 25 February 2002, At, A10; Sarah McBride, “Hit by iPod and Satellite,
Radio Tries New Tune: Play More Songs,” WSJ, 18 March 2005, At, A10.
128. Michael J. Wolf, The Entertainment Economy (New York: Times Books, 1999),
114.
129. Rose, “Think Globally, Script Locally,” 160.
130. Quoted in ibid., 158.
131. Charles Goldsmith, “Moguls Rewrite Script at Cannes as Euro Tanks,” WSJ,
19 May 2000, Bi.
132. Miller, Govil, McMurria, and Maxwell, Global Hollywood.
133. Burt and Chaffin, “Going Where the Growth Is Greater,” 15.
134. Schiller and Mosco, Introduction to Continental Order? 13-14, 22-23.
135. Cassell Bryan-Low and John Carreyrou, “France’s Ubisoft Moves to Rebuff
Electronic Arts,” WSJ, 6 January 2005, A14; Kline, Dyer-Witherford, and De Peuter,
Digital Play, 116,130,189 (quote).
136. Bruce Orwall, “Colombian Pop Star Taps American Taste in Repackaged
Imports,” WSJ, 13 February 2001, Ai, A6.
137. Burt and Chaffin, “Going Where the Growth Is Greater,” 15.
138. These issues are valuably discussed in the context of changes in global chil¬
dren’s media in Pikachu’s Global Adventure: The Rise and Fall ofPokemon, ed. Joseph
Tobin (Durham, N.C.: Duke University Press, 2004). See, in particular, Anne Allison,
“Cuteness as Japan’s Millenial Product,” 34-49; and Koichi Iwabuchi, “How ‘Japa¬
nese’ Is Pokemon?” 53-79.
139. Dan Schiller, Enrique Bonus, Meighan Maguire, and Lora Taub, “Interna¬
tional Communications and the Struggle for Competitive Advantage in East Asia,”
in Changing International Order in North-East Asia and Communications Policies,
ed. Hyeon-Dew Kang (Seoul: NANAM Publishing House, 1992), 73. For the argu¬
ment that communications was interwoven with U.S. imperial power throughout
the post-World War II decades, see Herbert I. Schiller, Mass Communications and
American Empire (New York: Augustus M. Kelly, 1969).
140. Ellen Meiksins Wood, Empire of Capital (London: Verso, 2003).
141. Ibid., 141.
142. Formulation taken partly from ibid., 141.
143. Alan Riding, “A Global Culture War Pits Protectionists against Free Traders,”
NYT, 5 February 2005, A19.
144. Herbert I. Schiller, Communication and Cultural Domination (White Plains,
N.Y.: International Arts and Sciences Press, 1976), 24-45.
145. United Nations Development Programme, Human Development Report 2004,
96-97-
238 • NOTES TO PAGES 136-39

146. United Nations Educational, Scientific, and Cultural Organization, General

Conference, 33d Session, Paris 2005, “Preliminary Report by the Director-General
Setting Out the Situation to Be Regulated and the Possible Scope of the Regulating
Action Proposed, Accompanied by the Preliminary Draff of a Convention on the
Protection of the Diversity of Cultural Contents and Artistic Expressions,” Item 8.3
of the Provisional Agenda; retrieved 21 February 2006, www.unesco.org. For a useful
contextualizing article, Ted Magder, “Transnational Media, International Trade, and
the Idea of Cultural Diversity,” Continuum: Journal of Media and Cultural Studies
8.3 (September 2004): 380-97.
147. Riding, “Global Culture War Pits Protectionists against Free Traders,” A19.
148. Useful information about some of these issues comes from the Internet Gov¬
ernance Project, www.InternetGovernance.org.
149. Christopher Rhoads, “In Threat to Internet’s Clout, Some Are Stealing Alter¬
natives,” WSJ, 9 January 2006, At, A7; an overview with links to related sites is found
at “Alternative DNS Root,” retrieved 19 January 2006, http://en.wikipedia.org/wiki/
Alternative DNS-root.
150. “U.S. Will Retain Its Control of Internet Oversight,” WSJ, 1 July 2005, B3;
Victoria Shannon, “U.S. Seeks to Keep Role on Internet,” NYT, 4 July 2005, C6.
151. Associated Press, “Government Asks Internet Agency to Delay ‘.xxx’ Domain
Name,” WSJ, 17 August 2005, D4.
152. “Controlling Cyberspace” (editorial), Chicago Tribune, 14 November 2005,
17-
153. Mark A. Shiffrin and Avi Silberschatz, “Web of the Free,” NYT, 23 October
2005,13.
154. Dennis Byrne, “Mitts Off the Internet, Iran, China, Cuba ...,” Chicago Tri¬
bune, 14 November 2005,17.
155. “e-Meddling” (editorial), WSJ, 17 October 2005, A18.
156. “ITAA Blasts EU for Compromising Internet Governance,” axcessnews, 23
October 2005, retrieved 31 October 2005, www.axcessnews.com/modules/wfsection/
article.php?/articleid (first quote); Grant Gross, “EU Internet Governance Proposal
Raises U.S. Objections,” Infoworld, 6 October 2005, retrieved 31 October 2005, www
.infoworld.com/article/05/10/06/Hneuproposal l.html (second quote).
157. Gross, “EU Internet Governance Proposal Raises U.S. Objections.”
158. Declan McCullagh and Anne Broache, “Bush Challenges EC over Internet
Governance,” ZDNET U.K., 21 October 2005, retrieved 31 October 2005, http:/7news
.zdnet.com.uk/internet/0,39020369,39232718,OO.htm.
159. Frances Williams, “U.S. Retains Control of Global Internet—-For Now,” FT,
17 November 2005, 4.
160. Saul Hansell, “As Gadgets Get It Together, Media Makers Fall Behind,” NYT,
25 January 2006, El (first quote), E8 (Leonsis).
161. Ibid., Ei.
162. Richard Waters, “Yahoo Feels the Creative Urge,” FT, 21 June 2005,10.
 NOTES TO PAGES 140-43 • 239

163. Ithiel de Sola Pool and Arthur B. Corte, The Implications for American Foreign
Policy of Low-Cost Non-Voice Communications: A Report to the Department of State
(Cambridge: Center for Policy Alternatives and Center for International Studies,
Massachusetts Institute of Technology, 1975), 39 and 45.
164. Martha E. Williams, “The State of Databases Today: 2003,” in Online Databases,
vol. 1 of Gale Directory of Databases 2003 (New York: Gale Group, 2003) xxiv-xxv.
165. In order, they were: Google, MSN, Microsoft.com, Ebay, and Yahoo. Including
Amazon, at number nine, meant that U.S. search engines, portals, and commercial
services constitute six of the top ten European destinations. Andy Reinhardt and
Robert D. Hof, “Europe Heads for the E-Mall,” Business Week, 12 July 2004, 51.
166. Stephanie Gruner, “Executives Meet to ‘Tame’ the Internet, but Critics Fear
a Loss of Innovation,” WSJ, 13 September 1999, A39.
167. Darin Barney, Prometheus Wired (Chicago: University of Chicago Press, 2000),
97-101.
168. Motion Picture Association of America Press Release quoted in Miller, Govil,
McMurria, and Maxwell, Global Hollywood, 137.
169. Ignacio Romanet, “Final Edition for the PressLe Monde Diplomatique, Janu¬
ary 2005,1; Paul Markillie, “Crowned at Last: A Survey of Consumer Power,” The
Economist, 2 April 2005, 5.
170. National Research Council, Committee on Internet Navigation and the Domain
Name System, Computer Science and Telecommunication Board, Signposts in Cyber¬
space. The Domain Name System and Internet Navigation, Prepublication copy (Wash¬
ington, D.C.: National Academies Press, 2005), ES 10.
171. Carol Pickering, “The World’s Local Yokel,” Business 2.0 (May 2000): 188,193.
172. National Research Council, Signposts in Cyberspace, 1-10.
173. Ibid.
174. Thanks to Leigh Estabrook for posing this question.
175. Bob Tedeschi, “E-Commerce Report,” NYT, 22 May 2000, C15.
176. Leslie Helm, “The ‘World’ in World Wide Web Becomes More Visible,” Los
Angeles Times, 22 March 1999, C4.
177. David Block, “Globalization, Transnational Communication, and the Inter¬
net,” International Journal on Multicultural Societies 6.1 (2004): 26, 25.
178. Quoted in Joanne Ingrassia, “Discovery’s Web, I-Strategy,” Electronic Media,
10 April 2000,50.
179. Malini Guha, “Chinese-Language Pop Music Finds Online Outlets,” FT, 7
February 2005, 2.
180. Darin Barney, The Network Society (Maldin, Mass.: Polity, 2004), 173.
181. Yuezhi Zhao and Dan Schiller, “Dances with Wolves? China’s Integration with
Digital Capitalism” Info 3.2 (April 2001): 137-51.
182. Kevin Robins and Frank Webster, “Cybernetic Capitalism: Information, Tech¬
nology, Everyday Life,” in The Political Economy of Information, ed. Vincent Mosco
and Janet Wasko (Madison: University of Wisconsin Press, 1988), 44-75-
240 • NOTES TO PAGES 143-48

183. For an especially insightful study, see Ellen Seiter, The Internet Playground
(New York: Peter Lang, 2005).
184. James Cortada, The Digital Hand (New York: Oxford University Press, 2004);
Dan Schiller, Telematics and Government (Norwood, N.J.: Ablex, 1982). For a recent
journalistic account, see Yochi J. Dreazen, Grep Ip, and Nicholas Kalish, “Why the
Sudden Rise in the Urge to Merge and Form Oligopolies?” WSJ, 25 February 2002,
Ai, A10.

Chapter 7: Parasites of the Quotidian

1. Raymond Williams, Problems in Materialism and Culture (1961; reprint, London:

Verso, 1983), 183.
2. United Nations Development Programme, United Nations Human Development
Report 1998 (New York: Oxford University Press, 1998), 63; see also Stuart Elliott,
“Advertising,” NYT, 5 December 2000, C12.
3. Stuart Elliott, “No More Same-Old,” NYT, 23 May 2005, Cl, C8.
4. Stuart Elliott, “Advertising,” NYT, 23 June 2004, C5; Robyn Greenspan, “Opti¬
mism Drives Ad Forecast Revisions,” ClickZStats, 24 June 2004, retrieved 3 December
2004, www.clickz.com/stats/sectors/advertising/article.php/3373311; Stuart Elliott,
“Advertising,” NYT, 18 April 2005, C10.
5. Bob Davis, “Lagging behind the Wealthy, Many Use Debt to Catch Up,” WSJ, 17
May 2005, Ai, A10.
6. Judann Pollack and Mercedes M. Cardona, “Kraft to Boost Marketing; Plans
New-Product Blitz,” Advertising Age, 5 July 1999,10.
7. Mark Maremont, “Gillette’s Venus Razor for Women to Be Born Amid a Big Ad
Drive,” WSJ, 3 November 2000, B5.
8. Kerry Capell, “Novartis’ Marketing Doctor,” Business Week, 5 March 2001, 56;
Barry Meier and Stephanie Saul, “Marketing of Vioxx: How Merck Played Game
of Catch-Up,” NYT, 11 February 2005, Ai, C2; Marcia Angell, “The Truth about the
Drug Companies,” New York Review of Books, 15 July 2004, 52-58.
9. Brian Steinberg, “P&G Brushes Up Iconic Image of ‘Crest Kid’ in New Cam¬
paign,” WSJ, 29 March 2005, B9.
10. “In the Giants’ Long Shadow,” Advertising Age, 14 February 2000, 30; Erin
White, “WPP Deal Puts Pressure on Havas,” WSJ, 14 September 2004, B14.
11. Anthony Bianco, “The Vanishing Mass Market,” Business Week, 12 July 2004,
60-72.
12. Stuart Elliott, “How Agencies Read Signs of a Slowdown,” NYT, 26 February
2001, Ci, C16. v

13. Richard Tomkins, “Interpublic Hired to Define Coke Globally,” FT, 4 December
2000,20.
14. Allen Rosenshine, “Evolving Agencies’ Mission,” Advertising Age, 8 November
1999. 8.
15. Dean Foust, “Gone Flat,” Business Week, 20 December 2004,76-82.
 NOTES TO PAGES 149-52 • 241

16. Elliott, “No More Same-Old,” Cl, C8.

17. Ibid.
18. Scott Hensley, “Some Drug Makers Are Starting to Curtail TV Ad Spending,”
WSJ, 16 May 2005, Bi, B8; Joe Flint and Brian Steinberg, “Ad Icon P&G Cuts Com¬
mitment to TV Commercials,” WSJ, 13 June 2005, Ai, A6.
19. Herbert I. Schiller, Who Knows: Information in the Age of the Fortune 500 (Nor¬
wood, N.J.: Ablex, 1981).
20. Constance L. Hays, “Broadcasting to a Captive Audience,” NYT, 21 February
2005, Ci, C6.
21. Ethan Smith, “Befitting Its Name, Song Airlines Becomes Music Promoter,”
WSJ, 26 May 2005, Bi, B2.
22. Kelefa Sanneh, “Alanis Revisits Her Hits with a Singalong,” NYT, 17 June 2005,
b3.
23. Elliott, “No More Same-Old,” Ci, C8.
24. Ibid., Ci, C8.
25. H. H. Wilson, Pressure Group: The Campaign for Commercial Television (Lon¬
don: Seeker and Warburg, 1961).
26. Armand Mattelart, Advertising International: The Privatisation of Public Space
(London: Comedia, 1991).
27. Betsy McKay, “Coke’s ‘Think Local’ Strategy Has Yet to Prove Itself,” WSJ, 1
March 2001, B6.
28. Leslie Cauley, “Discovery Is Tailoring ‘Cleopatra’ as a One-Stop Global Media
Buy,” WSJ, 10 March 1999, B17.
29. Bruce Orwall, “MGM Sets Accord with MTV Network for New Bond Film,”
WSJ, 29 September 1999, B8.
30. Geoffrey A. Fowler, “McDonald’s Asian Marketing Takes On a Regional
Approach,” WSJ, 26 January 2005, B3.
31. David A. Aaker and Erich Joachimsthaler, “The Lure of Global Branding,”
Harvard Business Review 77.61 (November-December 1999): 137-44.
32. Fowler, “McDonald’s Asian Marketing Takes On a Regional Approach,” B3.
33. United Nations Development Programme, Human Development Report 1998,
63-
34. Michael Flagg, “Vietnam Opens Industry to Foreigners,” WSJ, 28 August
2000, B8.
35. “Ad Spending Rose in Japan Last Year, Snapping Slump,” WSJ, 18 February
2005, B3; Geoffrey A. Fowler, “Chinese Game Show Offers a Big Prize: A 15-Second
Ad Slot,” WSJ, 30 November 2004, Ai, A12; Geoffrey A. Fowler, “Dentsu Sees Flat Ads
Sales in China,” WSJ, 15 June 2005, B5; Geoffrey A. Fowler and Juying Qiu, “China
Goes from Torrid to Just Hot,” WSJ, 17 February 2006, B3.
36. Wilkofsky Gruen Associates, “TV Advertising in Europe,” Electronic Media, 27
November 2000,12.
37. Mattelart, Advertising International, ix.
242 • NOTES TO PAGES 152-54

38. Dan Schiller, Digital Capitalism: Networking the Global Market System (Cam¬
bridge: Massachusetts Institute of Technology Press, 1999), 89-142.
39. Mylene Mangalindan, “After Wave of Disappointments, the Web Lures Back
Advertisers,” WSJ, 25 February 2004, Ai, A6; Kevin J. Delaney, “Internet Ads Click
with Firms; Some Shift Budgets,” WSJ, 3 May 2005, B8.
40. Joseph Pereira, “Junk-Food Games,” WSJ, 3 May 2004, Bi, B4.
41. Tom Zeller Jr., “Law to Bar Junk E-Mail Encourages Flood Instead,” NYT, 1
February 2005, Ai, C8.
42. Suzanne Vranica, “Postal Service Touts Direct Mail,” WSJ, 15 February 2005,
B4.
43. Riva Richmond, “Blogs Keep Internet Customers Coming Back,” WSJ, 1 March
2005, B9; Brian Steinberg, “Corporate Marketers Try Out Blogs,” WSJ, 3 May 2005,
B8 (quote).
44. Brian Steinberg, “Marketing Folks’ New Medium May Be Your PC’s Hard
Drive,” WSJ, 2 May 2005, B8; Ronald Grover, “Mad Ave. Is Starry-Eyed over Net
Video,” Business Week, 23 May 2005,36-39.
45. Brian Steinberg and Suzanne Vranica, “The Ad World’s Message for 2005:
Stealth,” WSJ, 30 December 2004, Bi, B3; Brock Read, “College Students Are Bom¬
barded by Cellphone ‘Spim,’ Study Finds,” Chronicle of Higher Education, 8 April
2005, A30.
46. Cynthis H. Cho, “For More Advertisers, the Medium Is the Text Message,”
WSJ, 2 August 2004, Bi, B4.
47. Abigail Zuger, “Fever Pitch: Getting Doctors to Prescribe Is Big Business,”
NYT, 11 January 1999, Ai, A13. For a more comprehensive assessment, see U.S. Gen¬
eral Accounting Office, “Prescription Drugs FDA Oversight of Direct-to-Consumer
Advertising Has Limitations,” GAO-03-177, October 2002, www.gao.gov/new.items/
d03177.pdf.
48. For an important study, see Inger Stole, Advertising on Trial: Consumer Activ¬
ism and Corporate Public Relations in the 1930s (Urbana: University of Illinois Press,
2006).
49. Sarah Ellison, “Divided, Companies Fight for Right to Plug Kids’ Food,” WSJ,
26 January 2005, Bi, B2.
50. Schiller, Who Knows; and Herbert I. Schiller, Culture, Inc. (New York: Oxford
University Press, 1989).
51. “It’s Not Just Nike’s Free Speech at Issue” (editorial), Champaign-Urbana (III.)
News-Gazette, 20 April 2003.
52. Stephen Kiehl, “The Art of Brand-Name Dropping,” Los Angeles Times, 25
August 2004, E5.
53. Joe Flint, “CBS Eyes Windfall from Record Rates for ‘Survivor’ Ads,” WSJ, 12
January 2001, B4.
54. Shelly Branch, Product Plugs—‘M’m M’m Good’?” WSJ, 14 November 2000,
Bi.
 NOTES TO PAGES 154-56 • 243

55. Brooks Barnes, “A Good Soap Script Includes Love, Tears, and Frosted Flakes,”
WSJ, 17 January 2005, Ai, A8.
56. Suzanne Vranica, “Miller Calls the Shots in FX Drama Deal,” WSJ, 13 October
2004, Bi, B5.
57. Quoted in Flint and Steinberg, “Ad Icon P&G Cuts Commitment to TV Com¬
mercials,” A6.
58. Robert Guy Matthews, “London Stage Hosts U.S. Marketers,” WSJ, 18 February
2005, B3.
59. Geoffrey A. Fowler, “In Asia, It’s Nearly Impossible to Tell a Song from an Ad,”
WSJ, 31 May 2005, Ai,Aio. *
60. Brian Steinberg, “‘Star Wars’ Tie-Ins May Lose Force,” WSJ, 10 May 2005,
B3.
61. Michael Schroeder, “Some Professors Take Payments to Express Views,” WSJ,
10 December 2004, Bi, B3.
62. James Bandler, “How Companies Pay TV Experts for On-Air Product Men¬
tions,” WSJ, 19 April 2005, Ai, A12.
63. Maureen Magee, “More Schools Ask Students: ‘Want Fries with That?’” San
Diego Union-Tribune, 17 February 2000, Ai, A19.
64. June Kronholz, “Economic Time Bomb: U.S. Teens Are Among Worst at Math,”
WSJ, 7 December 2004, Bi, B6; Constance L. Hays, “Math Book Salted with Brand
Names Raises New Alarm,” NYT, 21 March 1999,1.
65. Schiller, Culture, Inc.; Chin-tao Wu, Privatising Culture: Corporate Art Interven¬
tion since the 1980s (London: Verso, 2002); Michelle Falkenstein, “And Now a Word
about the Sponsors,” Art News 99.5 (May 2000): 218-22.
66. Alessandra Stanley, “Modern Marketing Blooms in Medieval Vatican Library,”
NYT, 8 January 2001, Ai, A6.
67. Edmund Sanders, “Postal Service Putting Its Stamp on Ads to Pay Bills,” Los
Angeles Times, 24 February 2001, At; Jessica Mintz, “Your Face on a Stamp Again?
Custom Photo Postage Is Back,” WSJ, 27 April 2005, Bi, B2.
68. Robert W. McChesney, “On Media and the Election,” The Public 14.10 (Decem¬
ber 2004), 1; Katharine Q. Seelye, “How to Sell a Candidate to a Porsche-Driving,
Leno-Loving Nascar Fan,” NYT, 6 December 2004, A16.
69. Christopher Cooper, “Marketing Nirvana Is to Be a President’s Preferred Brand,”
WSJ, 18 April 2005, Bi, B6.
70. A. Craig Copetas, “Soccer Teams Study Stadium Branding,” WSJ, 24 April 2000,
Ail.
71. Edwin McDowell, “The Parade of Corporate Sponsors,” NYT, 16 July 1999, Ci,
C17.
72. Stefan Fatsis and Joe Flint, “CBS, Fox, and DirecTV Signs NFL Deals Totaling
$11.5 Billion,” WSJ, 9 November 2004, B3.
73. Marilyn Chase, “Do Sponsors Sway Health Web Sites?” WSJ, 8 February 2000,
B7.
244 • NOTES TO PAGES 156-59

74. William L. Bulkeley, “New England Journal Editor Blasts Some Drug Indus¬
try/Academic Links,” WSJ, 18 May 2000, B18.
75. Paul Raeburn, “The Corruption of TV Elealth News,” Business Week, 28 Febru¬
ary 2000, 66-68.
76. Claudia Eller and Sallie Hofmeister, “USA Network Cancels Film after Adver¬
tiser Protests,” Los Angeles Times, 6 December 2000, Ai, A32.
77. Meier and Saul, “Marketing of Vioxx,” Ai, C2.
78. Anna Wilde Matthews, “Worrisome Ailment in Medicine: Misleading Journal
Articles,” WSJ, 10 May 2005, Ai, A9.
79. Kevin Elelliker, “Yet Another Reason to Go to the Gym: How Exercise Can Help
Fight Depression,” WSJ, 10 May 2005, Di.
80. David Hatch, “Local News Execs Feeling Ad Pressure,” Electronic Media, 1
December 2000,37.
81. Brian Steinberg and Joseph T. Hallinan, “GM Has Little to Gain in Paper Fight,”
WSJ, 11 April 2005, B5.
82. Katherine Q. Seelye, “Print Media Work to Convince Advertisers They Still
Matter,” NYT, 2 May 2005, C4.
83. Elizabeth Weinstein, “Graffiti Cleans Up at Retail,” WSJ, 12 November 2004,
Bi, B3.
84. Eduardo Kaplan, “Che Guevara Rebranded for Retail Sparks a Host of Con¬
tradictions,” WSJ, 23 September 2004, A12.
85. Amy S. Rosenberg, “Baby on Block: Imagine Your Logo on Her Newborn,”
Philadelphia Inquirer, 28 May 2005. Thanks to Edward Herman for this reference.
86. Geoffrey A. Fowler, “Chinese Youth League Turns to a New Path: Madison
Avenue,” WSJ, 25 January 2005, Ai, A13.
87. Karby Leggett, “Pay-as-You-Go Kibbutzim,” WSJ, 26 May 2005, Bi, B2.
88. Gary Silverman, “FAA Kicks Billboard Idea into Orbit,” FT, 21 May 2005, 8.
89. Jonathan Kaufman, “Marketing in the Future Will Be Everywhere—Including
Your Head,” WSJ, 1 January 2000, R26.
90. Stephen Kline, Nick Dyer-Witheford, and Greig de Peuter, Digital Play: The
Interaction of Technology, Culture, and Marketing (Montreal: McGill-Queen’s Uni¬
versity Press, 2003), 236, 221.
91. A useful overview of television ratings may be found in Eileen R. Meehan,
“Watching Television: A Political Economic Approach,” in A Companion to Television,
ed. Janet Wasko (Oxford: Blackwell Publishing, 2005), 238-55. For the wider context
of corporate gathering of personal information, see Oscar Gandy, The Panoptic Sort
(Boulder, Colo.: Westview, 1996).
92. Victoria de Grazia, Irresistible Empire: America’s Advance through Twentieth-
Century Europe (Cambridge, Mass.: Belknap Press, 2005), 101.
93. Toby Miller, Nitin Govil, John McMurria, and Richard Maxwell, Global Hol¬
lywood (London: BFI, 2001), 206.
 NOTES TO PAGES 159-63 • 245

94. Stuart Elliott, “Hoping to Quell Concerns about the Accuracy of Its TV Rat¬
ings Data, Nielsen Presents a Research Plan,” NYT, 22 February 2005, C6.
95. Elizabeth Weise, “Companies Learn Value of Grass Roots,” USA Today, 26 May
1999) 4D-
96. Gillian Tett, “Lost Tribes of Acme Accounting,” FT, 21 May 2005, Wi, W2.
97. Joseph Pereira, “Spying on the Sales Floor,” WSJ, 21 December 2004, Bi, B4.
98. Gary Silverman, “Back to the Future: Advertisers Get out of the Living Room
and on to the Street,” FT, 25 October 2004,11.
99. Gary Silverman, “Why the Boardroom Believes in Reality TV,” FT, 1 March
2005,11. '
100. Jennifer Lee, “Caught on Videotape, and Then Simply Caught,” NYT, 22 May
2005,29.
101. Jason Anders, “Web-Filter Data from Schools Put Up for Sale,” WSJ, 26 Janu¬
ary 2001, Bi, B4.
102. Kathryn Kranhold, “Database Is Key to Agency Stake in Medical Sites,” WSJ,
24 August 2000, Bi, B16.
103. Kathryn Kranhold and Michael Moss, “Keep Away from My Cookies, More
Marketers Say,” WSJ, 20 March 2000, Bi, B6.
104. Nick Wingfield and Glenn R. Simpson, “With So Much Subscriber Data, AOL
Walks a Cautious Line on Privacy,” WSJ, 15 March 2000, Bi.
105. Edmund Sanders, “Media Giant Serving Two Masters,” Los Angeles Times, 14
February 2001, Ci, C5.
106. “Coke Plans to Donate 50 Years of TV Spots to Library of Congress,” WSJ, 29
November 2000, Bit.

Chapter 8: Mobilized

1. James E. Katz and Mark Aakhus, Perpetual Contact: Mobile Communication,

Private Talk, Public Performance (New York: Cambridge University Press, 2002).
2. David Pringle, “Motorola Trails Rivals’ Growth in Cellphones,” WSJ, 4 Febru¬
ary 2004, B5; Phred Dvorak, “DoCoMo’s I-Mode Growth Slows at Home,” WSJ, 4
March 2004, B4; Jesse Drucker and Karen Lundegaard, “As Industry Pushes Headsets
in Cars, U.S. Agency Sees Danger,” WSJ, 19 July 2004, Ai, A7; Kevin J. Delaney, “Text
Messaging May Be Peaking in Europe,” WSJ, 16 October 2003, B4, B6; “China’s Cyber
Censors” (editorial), WSJ, 6 July 2004, A22.
3. Greg Ip and Mark Whitehouse, “Huge Flood of Capital to Invest Spurs World-
Wide Risk Taking,” WSJ, 3 November 2005, Ai, A6.
4. Quoted in Erika Brown, “Coming Soon to a Tiny Screen Near You,” Forbes, 23
May 2005, 67.
5. Matt Richtel, “$50 Million Is Raised for Venture in Wireless,” NYT, 13 June
2005, C10.
246 • NOTES TO PAGES 163-66

6. Eleanor Randolph, “The Cell Tower Blight: Text-Message Caller, ASAP,” NYT,
26 February 2005, A26.
7. Brown, “Coming Soon to a Tiny Screen Near You,” 67.
8. Ibid., 67, 68.
9. David Pringle and Don Clark, “Nokia, Intel Plan to Collaborate on Wireless
Technology WiMAX,” WSJ, 10 June 2005, B3.
10. Christopher Rhoads and Nick Wingfield, “Apple’s iPod Faces Challenge from
Cellphones,” WSJ, 11 April 2005, Bi, B4.
11. David Pringle and Charles Goldsmith, “Now Hear This: Cellphone Remixes,”
WSJ, 18 March 2004, B5.
12. Matt Richtel, “Makers of Cellphone Video Games Suddenly Find Great Expec¬
tations,” NYT, 16 May 2005, C12.
13. Stephanie N. Mehta, “Phone Companies See a Wireless Future,” WSJ, 15 Novem¬
ber 1999, A6.
14. “Why You Still Can’t Hear Me Now,” WSJ, 25 May 2005, Dt, D6.
15. David Pringle, Jesse Drucker, and Evan Ramstad, “Cellphone Makers Pay a
Heavy Toll for Missing Fads,” WSJ, 30 October 2003, At, A10.
16. Jessica Tan, “Motorola Targets Top Spot in China,” WSJ, 15 June 2005, B3.
17. Cell phones contain toxins including lead, cadmium, mercury, and materials
that can degrade into arsenic. Fisa Guernsey, “Phones in the Drawer or in the Trash,
or to a Good Cause,” NYT, 28 February 2002, D7; Jesse Drucker, “Old Cellphones
Pile Up by the Millions,” WSJ, 23 September 2004, Bi, B6.
18. Ginny Parker, “DoCoMo Feels Heat of Rival,” WSJ, 17 May 2004, B4.
19. Dvorak, “DoCoMo’s I-Mode Growth Slows at Home,” B4; Ken Belson, “Fast
Phones in Japan, but No Pot of Gold,” NYT, 6 June 2005, C8.
20. Belson, “Fast Phones in Japan, but No Pot of Gold,” C8; David Pringle, “Slower
Growth Hits Cellphone Services Overseas,” WSJ, 23 May 2005, Ai, A6.
21. Pringle, “Slower Growth Hits Cellphone Services Overseas,” At.
22. David Pringle, “Vodafone’s Services Take Hold,” WSJ, 19 November 2003,
B8.
23. David Pringle, “High-Tech Cellphones Catch On in Europe as Models Get
Fighter,” WSJ, 1 June 2004, B4; Paul Taylor, “Dialing for Dollars with Data,” FT, 2
July 2004,17.
24. Cassell Bryan-Fow and David Pringle, “Sex Cells,” WSJ, 12 May 2005, Bi, B2.
25. David Kessmodel, “Nevada May Allow Hand-Held Gaming Devices,” WSJ, 24
May 2005, Bi, B2.
26. Pringle, “Slower Growth Hits Cellphone Services Overseas,” A6.
27. David Pringle, “Vodafone books to Emerging Markets,” WSJ, To March 2005,
A3.
28. Nic Fildes, “Mobile-Phone Service Benefits Africa,” WSJ, 16 February 2005,
B4.
29. Belson, “Fast Phones in Japan, but No Pot of Gold,” C8.
 NOTES TO PAGES 166-69 • 247

30. Ryan J. Foley, “Consumer Complaints Soared in 2002,” WSJ, 25 November

2003, D2.
31. Jesse Drucker, “Cellphone Bills See New Round of Hidden Fees,” WSJ, 1 May
2003, Di, D3; “Three Steps to Better Cellular,” Consumer Reports 68.2 (February
2003): 15-16.
32. Simon Romero, “Cellphone Service Hurt by Success,” NYT, 18 November 2002,
Ai, A17.
33. U.S. General Accounting Office, Report to the Honorable Anthony D. Weiner,
House of Representatives, “Telecommunications: FCC Should Include Call Quality in
Its Annual Report on Competition in Mobile Phone Services,” April 2003, retrieved
6 February 2006, www.gao.gov/cg-bin/getrptJGAO-03-501.
34. “Why You Still Can’t Hear Me Now,” Di, D6.
35. Romero, “Cellphone Service Hurt by Success,” Ai, A17.
36. Dennis K. Berman and Jesse Drucker, “Static, Problems Are Hampering Wire¬
less Growth,” WSJ, 24 November 2003, Bi, B4.
37. Jesse Drucker, “Spotty Cellphone Service Frustrates Customers,” WSJ, 18 August
2003, B4.
38. “Why You Still Can’t Hear Me Now,” Di, D6. One of the early contractors
for the Arpanet—the packet-switched system that was a forerunner of today’s
Internet—explicitly sought to provide the reliability of “the phone company.”
Janet Abbate, Inventing the Internet (Massachusetts Institute of Technology Press,
1999), 65.
39. Berman and Drucker, “Static, Problems Are Hampering Wireless Growth,” Bi,
B4.
40. Drucker, “Spotty Cellphone Service Frustrates Customers,” B4; Andrew Ross
Sorkin and Matt Richtel, “Cellphone Failures Cause Many to Question Systems,”
NYT, 16 August 2003, B7; Yochi J. Dreazen, “Panicked Phone Traffic Jams Lines in
Northeast,” WSJ, 12 September 2001, A3.
41. Quoted in Berman and Drucker, “Static, Problems Are Hampering Wireless
Growth,” Bi, B4.
42. Romero, “Cellphone Service Hurt by Success,” At, A17.
43. U.S. General Accounting Office, Report to the Honorable Anthony D. Weiner,
House of Representatives, “Telecommunications.”
44. Peter Grant, “Phone System’s Weak Link,” WSJ, 17 September 2004, Bi, B2; Jesse
Drucker and Amy Schatz, “Phone Outages Grow More Severe,” WSJ, 10 November
2005, Bio.
45. Anne Marie Squeo, “Cellphone Hangup: When You Dial 911, Can Help Find
You?” WSJ, 12 May 2005, Ai, A10 (quote); see also Anne Marie Squeo, “Tests Show
Many Cellphone Calls to 911 Go Unlocated,” WSJ, 19 May 2005, Bi, B6.
46. Christopher Conkey, “Do-Not-Call Lists under Fire,” WSJ, 28 September 2005,
Di, D3.
47. Quoted in Matt Richtel, “For Now, Unwired Means Unlisted; That May Change,”
248 • NOTES TO PAGES 169-72

NYT, 30 August 2004, Ci, C6; Jesse Drucker, “Phone Directory of Cell Numbers Cre¬
ates Static,” WSJ, 14 January 2005, Bi, B8.
48. Raymond Williams, Television: Technology and Cultural Form (London: Fon¬
tana, 1974), 26.
49. Carolyn Marvin, When Old Technologies Were New: Thinking about Communi¬
cations in the Late Nineteenth Century (New York: Oxford University Press, 1988).
50. Raymond Flandez, “Cell Use Leads Schools to Alter Phone Options,” WSJ, 7
August 2003, Bi; Matt Richtel, “School Cellphone Bans Topple (You Can’t Suspend
Everyone),” NYT, 29 September 2004, Ai, A16; Fox Butterfield, “Inmates Use Cell¬
phones to Maintain a Foot on the Outside,” NYT, 21 June 2004, Ai, A18; Matt Richtel,
“For Liars and Loafers, Cellphones Offer an Alibi,” NYT, 26 June 2004: Ai, A4.
51. Josephine Ma, “Migrant Work Still Fraught with Risk,” South China Morning
Post, 19 June 2004.
52. Organization for Economic Cooperation and Development, OECD Employ¬
ment Outlook 2004, chapter 1, chart 1.3, retrieved 17 July 2004, www.oecd.org. Trends
in hours per capita have diverged since 1970.
53. Employed adult women spent about an hour more per day than employed adult
men doing household activities and caring for household members. U.S. Department
of Labor, Bureau of Labor Statistics, “Time-Use Survey—First Results Announced
by BLS,” 14 September 2004, retrieved September 2004, www.bls.gov./tus/.
54. U.S. Department of Transportation, Bureau of Transportation Statistics, “Amer¬
ica on the Go ... Findings from the National Household Travel Survey: U.S. Business
Travel,” retrieved 6 February 2006, http://bts.gov/publications/america on the go/
us business travel/pdf/entire.pdf.
55. U.S. Department of Transportation, Bureau of Transportation Statistics,
“National Household Travel Survey, 2001” retrieved 6 February 2006, www.bts.gov/
publications/highlights of the 2001 national household travel survey/pdf/entire.pdf.
56. Ibid.
57. Ibid.
58. “Stuck In Traffic,” NYT, 10 May 2005, A16.
59. Drucker and Lundegaard, “As Industry Pushes Headsets in Cars, U.S. Agency
Sees Danger,” Ai, A7; Karen Lundegaard and Jesse Drucker, “Cellphones Are Found
to Pose Riskiest Distractions for Drivers,” WSJ, 15 June 2005, D4.
60. “Cellphone Gabbing behind the Wheel Mounted Last Year,” WSJ, 2 March
2005, D3.
61. “Cost of Cellphone-Tied Crashes Equals Benefit of Calls from Cars,” WSJ, 2
December 2002, A8; Harvard Center for Risk Analysis, “Updated Study Shows Higher
Risk of Fatality from Cell Phones While Driving,” retrieved 6 February 2006, http://
www.hcra.harvard.edu/cellphones.html.
62. Lundegaard and Drucker, “Cellphones Are Found to Pose Riskiest Distractions
for Drivers”; Robert W. Hahn and James E. Prieger, “The Impact of Driver Cell Phone
Use on Accidents,” American Enterprise Institute/Brookings Joint Center for Regula-
 NOTES TO PAGES 172-78 • 249

tory Studies, Working Paper 04-14, July 2004, retrieved 6 February 2006, http://www
.aei-brookings.org/publications/abstract.php?pid=806; Karen Lundegaard and Jesse
Drucker, “Cellphone Use Raises Car-Crash Risk,” WSJ, 12 July 2005, D5.
63. “Are Cell Phones Safe?” 24.
64. “Global Insights from Internet Untethered Participants” (advertisement), NYT,
21 August 2000,16; Ryan J. Foley, “Back Door Could Open to Cellphone Telemarket¬
ing,” WSJ, 18 November 2003, D4.
65. Sarmad Ali, “Cellphone Firms Accused of Billing for Unwanted Ads,” WSJ, 21
July 2005, D5.
66. Gren Manuel, “Dial-a-Coke Is Slaking Thirsts in Australia,” WSJ, 20 October
2003, R3.
66. Gren Manuel, “Dialing for Dollars,” WSJ, 20 October 2003, R3.
67. Amy Harmon, “Lost? Hiding? Your Cellphone Is Keeping Tabs,” NYT, 21 Decem¬
ber 2003,1, 28.
68. Lee, “Space, Mobile Tracking, and Workers,” 11.
69. Matt Richtel, “Live Tracking of Mobile Phones Prompts Court Fights on Pri¬
vacy,” NYT, 10 December 2005, Ai, B13.
70. Kwang-Suk Lee, “Space, Mobile Tracking, and Workers: The Case of Samsung,”
(Unpublished research paper in the author’s possession, 2005), 14.
71. Quoted in Barnaby J. Feder, “What’s in the Box? Radio Tags Know That, and
More,” NYT, 27 September 2004, C4; Barnaby J. Feder, “IBM Expands Effforts to
Promote Radio Tags to Track Goods,” NYT, 14 June 2005, C9.

Chapter 9: Open Questions about China, Information, and the

World Economy

1. “Losing Its Balance” (editorial), The Economist, 20 March 2004,12.

2. Matt Pottinger, “Xinhua Seeks Asia News Unit Owned by French Press Agency,”
WSJ, 11 December 2002, B5.
3. Susan V. Lawrence, “Broadcast News, Chinese Style,” Far Eastern Economic
Review, 2 May 2002,30-31; Ting Shi, “AOL Time Warner/News Corp. Deal: Win-Win
or Not,” retrieved January 2003, http://journalism.Berkeley.edu/projects/asiaproJects/
shi.html.
4. Angela Mackay, “Tom.com Buys Stake in AOL China TV Unit,” FT, 3 July 2003,
27.
5. M. Dickie and A. Harney, “China Ready to Relax Regulations on Foreign Invest¬
ment in TV Production,” FT, 15 November 2004,1.
6. Evan Ramstad and Kevin J. Delaney, “Thomson to Create Venture with China’s
TCL to Make TVs,” WSJ, 3 November 2003, B4.
7. Winston Yau, “TV Makers Win Tariff Fight: Trade Breakthrough Clears Way
for Cheap Chinese Exports to Flood European Markets,” Business Post, 5 September
2002,1.
250 • NOTES TO PAGES 178-81

8. Ramstad and Delaney, “Thomson to Create Venture with China’s TCL to Make
TVs,” B4; Justine Lau and Doug Cameron, “TCL May Float 25% of Its TV joint Ven¬
ture,” FT, 4 November 2003,17.
9. Evan Ramstad, “East Meets. West in TV Sets,” WSJ, 26 November 2004, A7.
10. Gabriel Kahn, “Yo, Yao: What’s Up with Chinese Ads in Texas?” WSJ, 7 Febru¬
ary 2003, Bi, B4.
11. Peter Wonacott, “Yao-Mania: Hoop Star’s China Visit Evokes Beatles, 1964,”
WSJ, 15 October 2004, Bi, B7.
12. G. A. Fowler, “Chinese Game Show Offers a Big Prize: A 15-Second Ad Slot,”
WSJ, 30 November 2004, Ai, A12; Brook Larmer, “The Center of the World,” Foreign
Policy (September-October 2005): 66-74.
13. “HSBC and Partner Offer Credit Card in China,” NYT, 5 November 2004, Wi;
Andrew Browne, “Wooing China’s Credit-Card Users,” WSJ, 30 October 2005, Cl,
c3.
14. Andrew Batson, “China’s Cellphone Output Soars,” WSJ, 31 July 2003, B3; Asher
Bolande, “Handsets from China Driving Down Prices,” WSJ, 30 January 2003, B6;
Jesse Drucker, David Pringle, and Evan Ramstad, “Pricing Pressure Squeezes Cell¬
phone Makers World-Wide,” WSJ, 15 January 2004, Bi, B6; Evan Ramstad, “China’s
Makers of Cellphones Thrive at Home,” WSJ, 21 August 2003, Bi, B4; Evan Ramstad,
“China’s Cellphone Market Has Even More Room to Grow,” WSJ, 20 October 2003,
B7; Evan Ramsted, “China Has Cellphone Hangover,” WSJ, 2 September 2003, Bio.
15. Bolande, “Handsets from China Driving Down Prices,” B6.
16. Evan Ramstad, “In Tech, China Is Setting the Standard,” WSJ, 10 September,
A22; Kathy Chen, “China Sets Own Wireless Encryption Standard,” WSJ, 3 Decem¬
ber 2003, B4; Kathy Chen, “China Sets Limits on Wireless Sales,” WSJ, 10 December
2003, B6; Neil King Jr., “China Urged to Drop Tech Rule,” WSJ, 4 March 2004, B4;
“China Rolls Out DVD Alternative Called the EVD,” WSJ, 19 November 2003, B8.
17. Richard Waters, “People Power to Make China Online Capital,” FT, 29 Novem¬
ber 2004, 7; Rebecca Buckman, “China to Open Telecom Sector but Few Foreign
Players Rush In,” WSJ, 9 December 2004, B5.
18. “Slim Pickings,” The Economist, 20 March 2004, 64; J. L. Schenker, “Asians
Rush to Buy Assets of Ailing Giants: U.S. Telecom Pain Is World’s Gain,” Interna¬
tional Herald-Tribune, 25 August 2004, retrieved 6 February 2006, http://www.iht
. com/articles/535472, htm.
19. Henry Sender, “Asia Global Crossing Bid Signals Chinese Arrival as Merger
Players,” WSJ, 19 November 2002, C5; Asher Bolande and Dennis Berman, “China
Netcom Group to Buy Network,” WSJ, 18 November 2002, A3; Joe Leahy, “Saved Asia
Netcom Aims for Break-Even,” FT, 12 March 2003,18; Schenker, “Asian's Rush to Buy
Assets of Ailing Giants.”
20. Mei Fong, “China Netcom Sets Its Sights Abroad,” WSJ, 26 February 2004,
B5; Han Dong, “From China Unicom to China Netcom: A History of Corporate
Transforming in China’s Telecommunications Industry” (Unpublished manuscript
 NOTES TO PAGES 181-83 • 251

in the author’s possession, December 2004), 22; Leahy, “Saved Asia Netcom Aims
for Break-Even,” 18; F. Guerrera and P. Taylor, “Netcom Price Below Expectations,”
FT, 27 October 2004,19. All three other major Chinese carriers had already sought
such listings, including Netcom’s much larger rival, China Telecom. Bolande and
Berman, “China Netcom Group to Buy Network,” A3.
21. Almour Latour and Matt Pottinger, “Can Li Ka-Shing Make New Phones Ring
Up Big Profit?” WSJ, 20 November 2002, At, A13; Evan Ramstad, Nisha Gopalan, and
C. K. Sing, “EJutchison Whampoa Cellular Service Takes Off,” WSJ, 19 March 2004,
B4; Rebecca Buckman and David Pringle, “3G Phones Don’t Impress Brits,” WSJ,
16 December 2004, Bi, B2. '
22. Jason Dean, “Long a Low-Tech Power, China Sets Its Sights on Chip Making,”
WSJ, 17 February 2004, At, A16.
23. Jason Dean, “Entrepreneurs Bet on Chip Designing in China,” WSJ, 2 December
2004, B4, B6.
24. Jason Dean, “China Considers Venture Fund for Chip Industry,” WSJ, 26 Novem¬
ber 2004, B2.
25. Allan R. Gold, Glenn Leibowitz, and Anthony Perkins, “A Computer Legend
in the Making,” McKinsey Quarterly 3 (March 2003): 1, 7.
26. Charles Hutzler, “In China, Turf Battle Rages,” WSJ, 29 June 2004, A12.
27. Keith Bradsher, “Chinese Computer Maker Plans a Push Overseas,” NYT, 22
February 2003, Bi, B3; Rebecca Buckman, “Computer Giant in China Sets Sights on
U.S.,” WSJ, 18 June 2003, Bi, B4; Evan Ramstad and Gary McWilliams, “For Dell,
Success in China Tells Tale of Maturing Market,” WSJ, 5 July 2005, Ai, A8.
28. David Barboza, “An Unknown Giant Flexes Its Muscles,” NYT, 4 December
2004, Bi, B3; G. Rivlin and John Markoff, “Weighing IBM’s Possible Absence in the
PC Market,” NYT, 4 December 2004, Bi, B3.
29. S. Hamm, “Big Blue’s Bold Step into China,” Business Week, 20 December 2004,
35-36.
30. John Markoff, “Have Supercomputer, Will Travel,” NYT, 1 November 2004, Ci,
C4.
31. Scott Thurm, “China’s Huawei Halts U.S. Sales amid Cisco Claim,” WSJ, 7 Feb¬
ruary 2003, B3; Sameena Ahmad, “We Are the Champions,” The Economist, “Survey
of Business in China,” 20 March 2004,14-15.
32. Scott Thurm, “China’s Huawei, 3Com to Form Venture to Compete with Cisco,”
WSJ, 20 March 2003, B5.
33. David Pringle and Nisha Gopalan, “China’s Huawei Wins 3G Contract,” WSJ,
19 February 2003, B2.
34. Christopher Rhoads and Charles Hutzler, “China’s Telecom Forays Squeeze
Struggling Rivals,” WSJ, 8 September 2004, Ai, A13; Christopher Rhoads and Rebecca
Buckman, “A Chinese Telecom Powerhouse Stumbles on Road to the U.S.,” WSJ, 28
July 2005, Ai,A6.
35. Mei Fong, “China Has Much to Gain Going Online,” WSJ, 5 November 2003,
252 • NOTES TO PAGES 183-85

B4; Mei Fong, “Tom Online to Make Nasdaq Debut,” WSJ, 10 March 2004, C16; Kathy
Chen, “Now, a New Way Cellphones Are Hot in China,” WSJ, 22 September 2003, Bi,

B3'
36. Fiona Harvey, “China Registers Its Larger Interest in Running of Internet,” FT,
26 November 2002, 6.
37. Evan Ramstad, “Chip That Speaks Languages of Asia Levels Playing Field,”
WSJ, 9 February 2004, B8.
38. Richard Waters, “People Power to Make China Online Capital,” FT, 29 Novem¬
ber 2004, 7.
39. Yuezhi Zhao, “Caught in the Web: The Public Interest and the Battle for Con¬
trol of China’s Information Superhighway,” Info 2.1 (February 2000): 57; Edith M.
Lederer, “Official Says China Will Soon Surpass U.S. to Become World’s Largest
Internet and Information Economy,” Associated Press, 25 January 2003; retrieved
March 2003, lexis-nexis.com/university/.
40. Waters, “People Power to Make China Online Capital,” 7.
41. Joe Leahy and Justine Lau, “Frontier of ‘A New Global Contest,”’ FT, 1 June
2004,3.
42. Ben Dolven and Trish Saywell, “China Goes for Private Lessons,” WSJ, 6 Janu¬
ary 2004, A17.
43. X. Xuehui, “Industrializing Education?” in One China, Many Paths, ed. Chao-
hua Wang (London: Verso, 2003), 246, 244.
44. “Private Universities May Proht in China,” Chronicle of Higher Education, 14
February 2003, A41.
45. Ian Harvey, “The West Must Heed China’s Rise in the Global Patent Race,” FT,
21 September 2005,15.
46. Joseph Man Chan and Jack Linhuan Qiu, “China: Media Liberalization under
Authoritarianism,” in Media Reform: Democratizing the Media, Democratizing the
State, ed. Monroe Price, Beata Bouzumilowicz, and Stephen Verhulst (London: Rout-
ledge, 2002), 36. A careful analysis of one important urban party newspaper con¬
cludes that “the influence of the market is getting stronger and stronger.” Zhou He,
“Chinese Communist Party Press in a Tug-of-War: A Political-Economy Analysis
of the Shenzhen Special Zone Daily,” in Power, Money, and Media: Communication
Patterns and Bureaucratic Control in Cultural China, ed. C. C. Lee (Chicago: North¬
western University Press 2000), 142. See, in general, Yuezhi Zhao, Media, Market, and
Democracy in China (Urbana: University of Illinois Press, 1998); and Yuezhi Zhao,
Communication in China: Capitalist Reconstruction and Social Contestation (Lanham,
Md.: Rowman and Littlefield, forthcoming).
47. Quoted in Lawrence, “Broadcast News, Chinese Style,” 30-31.
48. David Hale and Lyric Hughes Hale, “China Takes Off,” Foreign Affairs 82.6
(November-December 2003): 37. The danger posed by “China rising” differs, though,
with ideological proclivity and material interest. For some, especially smaller U.S.
manufacturers reliant on exports, the danger stems from a Communist dictatorship
 NOTES TO PAGES 185-86 • 253

that is sapping U.S. economic power through an undervalued currency. For others,
the threat comes less from China’s artificially manipulating the value of the yuan
than from its implication in an ominous Darwinian turn of the globalization process:
low-wage manufacturing in China cascades into declining employment standards
and deteriorating community values in the United States. The ascent of Wal-Mart,
the world’s largest private employer and retailer, is cited as paradigmatic; Wal-Mart
takes 10 percent of U.S. imports from China. See Jeffrey E. Garten, “Wal-Mart Gives
Globalism a Bad Name,” Business Week, 8 March 2004, 24. In either rendition, the
putative danger to U.S. dominance is never far removed.
49. George J. Gilboy, “The Myth behind China’s Miracle,” Foreign Affairs 83.4
(July-August 2004): 38.
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2003, Ci, C4.
51. Charles Hutzler, “China Launches Manned Spacecraft,” WSJ, 15 October 2003,
A2; Charles Hutzler, “China’s Space Program Is No Small Potatoes,” WSJ, 15 Sep¬
tember 2003, Bi, B3; “China and a New Space Race,” Chronicle of Higher Education,
26 September 2003, B6.
52. Hutchison Telecommunications and Singapore Technologies Telemedia offered
$250 million for a 61.5 percent stake in Global Crossing, an upstart international car¬
rier and one of the bankrupt casualties of the international telecom meltdown. The
bidders aimed to pay one cent on the dollar for these network facilities. The transac¬
tion required approval from the U.S. Federal Communications Commission and the
Committee on Foreign Investment in the United States, which is dominated by execu¬
tive-branch agencies. Issues of “law enforcement and national security” are typically
in the forefront of these reviewing agencies’ concerns. See Tom Leithauser, “Global
Crossing Buyout Gets European OK; Companies Await Approval from CFIUS, FCC,”
Telecommunications Reports Daily, 17 January 2003,5-6; Simon Romero, “Hong Kong
Company May Alter Deal to Buy Global Crossing,” NYT, 1 March 2003, B2.
53. Neil King Jr., “China Urged to Drop Tech Rule,” WSJ, 4 March 2004, B4.
54. Jason Dean, “China Considers Venture Fund for Chip Industry,” WSJ, 26
November 2004, B2.
55. Federal Communications Commission, “International Bureau Releases 2000
Year-End Circuit Status Report for U.S. Facilities-Based International Carriers Reflect¬
ing Steady Growth in Capacity Use,” press release, 29 June 2001. Because they do not
capture data on circuits provided on a non-carrier basis or by private carriers, FCC
figures underestimate the growth in private-line circuits.
56. Ibid.
57. Cathy Hsu, “2002 Section 43.82 Circuit Status Data” (Washington, D.C.: Federal
Communications Commission, International Bureau, 2003), tables 5 and 6; Federal
Communications Commission, “International Bureau Releases 2002 Year-End Cir¬
cuit Status Report for U.S. Facilities-Based International Carriers,” press release, 24
December 2003.
254 • notes to pages 186-89

58. Cathy Hsu, “2000 Section 43.82 Circuit Status Data,” (Washington, D.C.: Fed¬
eral Communications Commission International Bureau, 2001), 3.
59. Hsu, “2000 Section 43.82 Circuit Status Data,” tables 5 and 6; Hsu, “2002 Sec¬
tion 43.82 Circuit Status Data,” tables 5 and 6. Generally, the number of active circuits
increased annually through 2000 or 2001 and then declined somewhat, while the
proportion of public service to private line service continued to decline or remained
stable over this interval.
60. Hsu, “2000 Section 43.82 Circuit Status Data,” tables 5 and 6; Hsu, “2002 Sec¬
tion 43.82 Circuit Status Data,” tables 5 and 6.
61. Hsu, “2000 Section 43.82 Circuit Status Data,” tables 5 and 6; Hsu, “2002 Sec¬
tion 43.82 Circuit Status Data,” tables 5 and 6.
62. R. D. Lyons. “China Developing Satellite Links,” NYT, 5 January 1973,4; Cathy
Hsu, “1995 Section 43.82 Circuit Status Data” (Washington, D.C.: Federal Commu¬
nications Commission, International Bureau, 1996), tables 5 and 6.
63. Hsu, “2000 Section 43.82 Circuit Status Data,” tables 5 and 6; Hsu, “2002 Sec¬
tion 43.82 Circuit Status Data,” tables 5 and 6.
64. Hsu, “2000 Section 43.82 Circuit Status Data,” 4; Hsu, “2002 Section 43.82
Circuit Status Data,” 4.
65. Dan Schiller, “World Communications in Today’s Age of Capital,” Emergences
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66. Jesse Drucker, “Global Talk Gets Cheaper,” WSJ, 11 March 2004, Bi, B2; Mei
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67. Rebecca Buckman and Julie Wang, “PCCW Nears Deal to Sell Stake in Core
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69. Yuezhi Zhao, “Transnational Capital, Chinese Capitalism, and China’s Semi-
Integrated Communication Industries in a Fractured Society,” Paper presented at
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71. Justine Lau, “Most Chinese Groups Prefer Not to Go Global,” FT, 29 September
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72. For a historical study of this endeavor in its U.S. context that focuses on the
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73. Saumitra Chaudhury, “Indian Bourgeoisie and Foreign Capital: A Study of
 NOTES TO PAGES 190-91 • 255

Congress Policy towards Foreign Capital, 1931-1961,” Social Scientist (New Delhi)
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74. Gilboy, “Myth behind China’s Miracle,” 36-37.
75. This point comes through vividly in a recent novel set in the Three Gorges
context: Hong Ying, Peacock Cries at the Three Gorges, trans, Mark Smith and Henry
Zhao (London: Marion Boyars, 2004).
76. Jiang Zemin, “Hold High the Great Banner of Deng Xiaoping: Theory for an
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77. Communist Party of China, Constitution of the Communist Party of China
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80. Ahmad, “We Are the Champions,” 14-15.
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84. Daniel Altman, “China: Partner, Rival, or Both?” NYT, 2 March 2003, sec. 3,
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85. L. Santini, “Drug Companies Look to China for Cheap R&D,” WSJ, 22 Novem¬
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China Is a New Hotbed of Research,” NYT, 13 September 2004, Ci, C4.
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World’s Largest Internet and Information Economy”; see also Hale and Hale, “China
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256 • NOTES TO PAGES 191-93

89. Quoted in Lederer, “Official Says China Will Soon Surpass U.S. to Become
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90. Hale and Hale, “China Takes Off,” 47.
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93. Hale and Hale, “China Takes Off,” 38. Total profits earned by foreign-funded
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United Nations Commission on Trade and Development, Trade and Development
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corporate affiliates in China totaled $2.8 billion in 2001—considerably less than their
counterparts earned in Mexico ($4.4 billion). A different study found, however, that
in 2002, three-quarters of American Chamber of Commerce member corporations
active in China claimed to be profitable, “and nearly 40 percent said their margins
in China were higher than their global margins.” Sameena Ahmad, “Bulls in a China
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95. Ahmad, “We Are the Champions,” 14-15.
96. Frances Williams, “China ‘Set to Join League of Biggest Direct Investors
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97. Ahmad, “We Are the Champions,” 14-15.
98. Gilboy, “Myth behind China’s Miracle,” 43.
99. United Nations Commission on Trade and Development, World Investment
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102. Ahmad, “We Are the Champions,” 14-15.
103. United Nations Commission on Trade and Development, Trade and Develop¬
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104. Ibid., 164.
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 NOTES TO PAGES 193-95 • 257

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Champaign, 2004), 359-60.
107. Minxin Pei, “A Docile China Is Bad for Global Peace,” FT, 12 March 2003,13;
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King Jr., “China Irks U.S. as It Uses Trade to Embellish Newfound Clout,” WSJ, 3
October 2005, Ai, A14.
108. Robert A. Guth, “Asia to Develop Software to Rely Less on Microsoft,” WSJ,
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109. Michele Yamada, “Asian Countries Seek Windows Alternative,” WSJ, 2 Sep¬
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110. Ramstad, “Chip That Speaks Languages of Asia Levels Playing Field,” B8.
111. G. McCormack, “Remilitarizing Japan,” New Left Review 29 (September-Octo-
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Asian Market,” WSJ, 17 March 2004, B5.
114. United Nations Commission on Trade and Development, Trade and Develop¬
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115. In 2002, China supplied 18.3 percent ($61.7 billion) of Japan’s imports, while
the United States accounted for 17 percent ($57.5 billion). Associated Press, “China
Becomes Biggest Exporter to Japan,” NYT, 19 February 2003, Wi.
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117. Shi, “Shi Guangsheng on Achievements of China’s Foreign Trade and Eco¬
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121. Richard B. Du Boff, “NAFTA and Economic Integration in North America:
258 • NOTES TO PAGES 195-96

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capitalism, ed. Vincent Mosco and Dan Schiller (Lanham, Md.: Rowman and Little¬
field, 2001), 35-63.
122. Robert Brenner, The Boom and the Bubble: The U.S. in the World Economy
(London: Verso, 2002).
123. For a powerful depiction of the effects on China’s peasantry, see L. Chang-
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(London: Verso, 2003), 198-218.
124. Joel Baglole, “Citibank Takes Risk by Issuing Cards in China,” WSJ, 10 March
2004, Ci, C2.
125. Karby Leggett and Kathy Chen, “For China, Question of Debt Is Crucial,”
WSJ, 20 January 2003, A2.
126. James Kynge and Mure Dickie, “Chinese PM Warns of Threat to Rapid Growth,”
FT, 15 March 2004,1.
127. Sameena Ahmad, “Behind the Mask,” The Economist, “Survey of Business in
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128. “China Sets Curbs on Money and Credit Growth,” WSJ, 25 March 2004, A15;
Matt Pottinger, “China’s Premier Lists Concerns about Economy,” WSJ, 15 March
2004, A15; R. Glenn Hubbard, “Market Comrades,” WSJ, 26 July 2005, A24.
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B2. Late in 2005, a Chinese official claimed that the auto industry “is facing a grave
overproduction situation,” estimating that by 2010, China’s total annual production
capacity will exceed twenty million vehicles, while demand will be limited to nine
million. Shai Oster, “China Frets over Auto-Capacity Glut,” WSJ, 22 November 2005,
A13.
130. Neal E. Boudette, Jathon Sapsford, and Peter Wonacott, “Cars Made in China
Are Headed to the West,” WSJ, 22 April 2005, Bi, B2 (quote); Peter Wonacott, “Global
Aims of China’s Car Makers Put Existing Ties at Risk,” WSJ, 24 August 2004, Bi,
B3.
131. And, concurrently, a higher incidence of large-scale social protest: such pro¬
tests were said to be rising by 50 percent a year, according to the Public Security
Ministry. Charles Hutzler, “China’s Top Cop Wields Nightstick More Subtly Than
Beijing Used To,” WSJ, 13 March 2003, Ait; Zigang Dong, Christina W. Hoven, and
Allan Rosenfield, “Lessons from the Past,” Nature 43 (10 February 2005): 573-74.
132. Jonathan Yardley, “Farmers Being Moved Aside by China Real Estate Boom,”
NYT, 8 December 2004, At, A10.
133. T. C. Tso, “Agriculture and the Future,” Nature 428, Supplement (11 March
2004): 215.
 NOTES TO PAGES 196-97 • 259

134. J. Kahn “China Crushes Peasant Protest, Turning 3 Friends into Enemies,”
NYT, 13 October 2004, At, A8. Yuezhi Zhao, Communication in China, provides a
compelling account.
135. Yang Lian, “Dark Side of the Chinese Moon,” New Left Reviews (March-April
2005): 139; Kathy Chen, “Beijing’s Blueprint to Tackle Gap between Rich, Poor,” WSJ,
30 September 2005, A9.
136. Ahmad, “Behind the Mask,” 3.
 Index
✓

advertising: Advertising Age, 147; agen¬ American Express, 3,179

cies, 147-49,153; Alliance for American American Scientist, 5
Advertising, 153; commercial surveillance America Online (AOL), 113,139-40,183;
in, 157-60; corporate sponsorships, 44, consumer information, 160; in China,
155-58,161,178; global expenditures on, 177-78
146; job growth in, 14; market research Argentina, 99; telephone lines in, 81; tele¬
and, 9; mergers in, 147; on the Internet, phone rates in, 88
114; political, 155; product placement, Associated Press Television, 129
154—55; promoting consumption, 130,132, AT&T: acquired by SBC, 96; antitrust case
140,145-51; promoting individualism, against, 70-71, 76,106; Bell Laboratories,
170; revenues, 146,153 70; competition in telecommunications,
aerospace industry, 71 75-76, 95; dominance in telecommuni¬
Afghanistan, 126-27 cations, 63-64, 67-68, 72; international
Africa, 87-88,117,132-33; databases in, 140; competition, 99; private-wire system,
defense of cultural diversity, 136; public- 67, 2i8fn7; residential service, 92, 96-97;
service broadcasting in, 122,124; wireless telecommunications convergence, 105-6;
market in, 166 telephone investigation, 69, 94; Western
agriculture, 14, 28,33,39; agribusiness, 25; Electric, 70; wireless service, 164; world
biotech crops, 26-28 telecommunications and, 83,103
aircraft manufacturing, 49 Australia, 55,130
airline industry, 49 Austria, 126
Alcatel, 82
Al-Jazeera, 99,126-31; coverage of Iraq War, Bangladesh, 88
127; coverage of Israeli-Palestinian con¬ Baran, Paul, 8-11,72
flict, 126 Belgium, 82
Allen, Jeanne T., 29,31 Bell, Daniel, 6,19-20, 28
Amazon, 115 BellSouth, 99
American Broadcasting Company (ABC), Berlusconi, Silvio, 123
113,149,154 biotechnology, 25-27,30
American Communications Association, 70 Boeing, 13
262 • INDEX

Botswana, telephone rates in, 81 190; telephony, 81,186-87; television sets

Boyle, James, 29 in, 119,178; wage labor in, 15,191,195;
Braverman, Harry, 23 wireless market, 162,165-66,171,179-80
Brazil: culture industry, 120; defense of Cingular, 164
cultural diversity, 136-37; Internet gov¬ Cisco, and ICT development, 40; in China,
ernance, 56; patents, 47; telephone rates 195; network competition, 182; role in cul¬
in, 88; television sets in, 119; wireless ture industry, 121; stock value, 82
products, 182; wireline telecommunica¬ Citicorp, 40, 55
tions, 99 Clarke, John, 22
Brenner, Robert, 49 Clear Channel Communications, 132
British Broadcasting Corporation (BBC), Cleveland, Harlan, 6-7
122,127-30 Clinton, William J., 55,137
Broadcasting, public-service, 122-25 CNN, 125,127,130
Buffett, Warren, 93 Columbia Broadcasting System (CBS), 149,
Bush, George W„ 87,124,128,138 154.156
Business Week, 156 commodities, 38; commodification of cul¬
ture, 118-22,135-36; definitions of, 19-21,
cable television: advertising and, 149; and 2036118; digital, 52,112-16,141,145-61;
Internet service, 81, 84; in China, 178; in of goods and services, xv, 3,15,21,36-57,
Europe, 125-26; in Latin America, 120; 99; of social labor, 40, 44-45; production
proliferation, 106,112; role in culture of, 146
industry, 139,144; subscriber informa¬ communications: commercial investment,
tion, 160 49; digital media, 52-53; information and
Canada: defense of cultural diversity, 136; communications technologies (ICTs), 39-
public-service broadcasting, 122; televi¬ 40; law enforcement and, 53-54; satellites,
sion programming in, 117,127 38, 44, 49; services and infrastructure, 38;
Cape Verde, telephone lines in, 81 software, 42; systems, 17; technological
capitalism, xiv; Asian financial crisis, 49, transformations of, 52; wireless technolo¬
85,146; biotechnology and, 25-26; capi¬ gies, 41. See also telecommunications
tal investment, 12, 40; industrialization, Communications Workers of America
30-35; informationalized capitalism, 13, (CWA), 70
23-25. 43. 46,55. 61; market growth, 4, 8, computers: centrality to economy, 37; data
15, 21; market relations, 8,14,33. See also flows, 27; employment in, 14; growth, 12,
advertising 71,102,107; manufacturing, 13; networks,
Carr, Nicholas G., xiii 72-73, 76; local area networks (LAN),
Castells, Manuel, 25 78-79; personal computers, 56, 78-79,
Chavez, Hugo, 127-28 81; postindustrialists, 6; potential for, 18;
chemical industry, 25, 43 software, 30,183,193; telecommunications
Chicago Tribune, 65,137-38 policy, 72-75; transnational systems, 12.
Chile, 55,99,128 See also commodities; communications;
China: advertising in, 151,158,177-78; auto culture; Internet; telecommunications
manufacturing in, 196; computer market, Comsat, 77
182; culture industry in, 120,132; Cultural Congress of Industrial Organizations
Revolution, 19; defense of cultural diver¬ (CIO), 70
sity, 136; economic growth, 49,134,177- Copps, Michael, 95
97; education in, 184,191; financing US Corning, 89
debt, 50; foreign investment in, 42,189, Corte, Authur B., 140
192-94; foreign trade, 194; Internet, 138, Council on Foreign Relations, 54
183-91; reintegration in market system, Cuba, 127,138; revolution in, 158
xv, 38; semiconductor market, 181-82; culture, 43; advertising and, 145-61,178;
telecommunications, 87,178-81,186-88, changing definitions of, 18-20, 2036114;
 INDEX • 263

commodification of, xiv, 23,31,33-35, Financial Times, 13,130,134,183

100-101,118-22,135-36; culture indus¬ Fiol, Ana, 120-21
try, xv, 101-3,105,107,112-17,119-35.139. Ford, 94,196
144-45; cultural production, 28-29,33; Foucault, Michel, 29
Internet and, 81; transformation of, 139, France, 138; France Telecom, 82, 84; televi¬
141. See also information-society theo¬ sion in, 126; television production in, 178
rists; postindustrial theorists Fujitsu, 48,182

De Grazia, Victoria, 159,2336161 Gaines, Jane, 29

Dell, 182 Garnham, Nicholas, 22,121-22
Deutsche Telekom, 78, 82,84 General Electric: competition with AT&T,
developed market economies, 39 io6?diversification, 3; investment in
Disney: advertising, 150,154; cultural pro¬ China, 191; investment in less-developed
duction, 114,155; in Latin America, 120; countries, 42; ownership of NBC, 114,152
Internet and, 140 General Motors, 3,13,196; advertising by, 157
Dow Jones Industrial Index, 3 genetically modified food, 26
Germany, 43; computer market, 182; public-
Economic Policy Institute, 86 service broadcasting in, 122; television
Edelman, Murray, 64 in,126
England: agrarian capitalism, 33,35, 43; Ghana, 138
commercial television, 117,132,150; Gilder, George, 85, 89, 98
cultural production, 135; origins of cul¬ Gimbel, John, 43
tural commodification in, 29-34; out of Global Crossing: bankruptcy, 89, 98-99,181;
UNESCO, 38; public-service broadcasting buyout by China Netcom, 188
in, 122-23; telecommunications in, 186 Goldman Sachs, 93,181
Enron, 52 Google, 115,140,142,195
Europe: as prototype for modernization, 32; Great Depression: corporate patents and,
commercial television and, 127,130; com¬ 46; decline in advertising, spending, 146;
petition in telecommunications, 38,77; decline in telephone service, 91; influence
cultural commodification, 121,134; cultural on telecommunications policy, 69, 71,106
protection, 116-17; Eastern, 42; economy, Greenspan, Alan, 15, 93
50,80; European Union, 125,131,136,138;
Internet and, 140; public-service broad¬ Habermas, Jurgen, 2086172
casting in, 122-24; telecommunications, Hackett, Robert A., 126
48; telecommunications crisis in, 82; tele¬ Hall, Stuart, 31-34, 2096179
communications manufacturing in, 183; Harvard Business Review, xiii
Western, advertising in, 151; wireless com¬ Harvey, David, 43, 2116117
munications and, 173; wireless competi¬ Herman, Edward S., 121
tion in, 165,180; wireless market in, 166 Hilferding, Rudolph, 6
Hitachi, 48
Federal Communications Commission Hobsbawm, Eric, 101, 2076166
(FCC), and Telecommunications Act of Honduras, telephone lines in, 81
1996,90-91; liberalization of telecom¬
munications policy, 41, 69-71,73,75-76, IBM: antitrust case against, 71; anti-union¬
79,187; telecommunications crisis and, ism, 51; information and communication
93; telephone investigation, 94; wireless technologies (ICTs), 40; international
policy, 168 competition, 182; Internet, 140; partner¬
Federal Radio Commission (FRC), 64-68 ship with American Airlines, 72; patents,
fiber-optics networks: capacity, 87; dense 47; radio frequency identification (RFID),
wave division multiplexing (DWDM) 173
and, 85; networks, 89,102,167-68,188 India: advertising in, 151; and World Trade
264 • INDEX

organization (WTO), 47; commercial Iran, 56,138; television sets in, 119
television in, 125; culture industry, 120, Ireland, 126
124-25; defense of cultural diversity, 136- Israel, 136
37; economic growth, 134; foreign invest¬ Italy; public-service broadcasting in, 122;
ment in, 42,189; Intelsat and, 77; labor in, television in, 126
15, 90; Non-Aligned Movement (NAM),
37-39; public-service broadcasting in, 124; Japan: advertising in, 146,151,179; com¬
television sets in, 119; wireless market, 165 petition in communications, 48, 77, 99,
Indonesia, 37,77,127,151; advertising in, 151; 193-94; culture industry in, 120-21,134;
television sets in, 119 defense of cultural diversity, 136-37; econ¬
information, xiv-xv, 3-6,18-20; and com¬ omy, 36,50, 80; foreign investment in,
munication technologies (ICTs), 39-40; 189; public-service broadcasting in, 122;
as common currency, 104-6; as public television in, 117,119; trade with China,
good, 2om2o; as resource, 15-24; com¬ 193; wireless market in, 84,164-65,180;
modification of, 4, 8,15-16, 20-23,31,33, wireless usage in, 162
100; destruction of, 52; industries, 30, 76 Jewett, Frank, Baldwin, 103-5
Information Technology Association of Johnson, Lyndon B., 74
America, 138; information theory, 4-5, Journal of the American Medical Association
17-18, 2006113; postindustrial theory, 6,15, (JAMA), 156
19-21; postwar importance of, 7; science
and, 5, 24-26 Katz, James E„ 169
Information Industry Association, 44 Kenney, Martin, 25-26
Information-society theorists, 8,15,18 Kloppenburg, Jack R. Jr., 25-26
Intel, 121,163,191,194 Krippendorff, Klaus, 4,19
intellectual-property rights, 182; global
expansion of, 46; laws and regulations, 29, labor, xiv, 41; anti-unionism, 51; collective¬
46-48, 51-52, 54, 56; role in cultural com¬ bargaining rights and unions, 51, 70; in
modification, 29-31,116 China, 191,195; information workers, 6,
International Monetary Fund (IMF), 38, 41; 9,13-14, 24; mobile privatization and,
policy in telephony, 88; structural-adjust¬ 170-71; representation in telecommuni¬
ment programs, 55,118 cations, 90,166; theory of surplus value,
International Telecommunications Satellite 10; transnational division of, 14; “useful”
(Intelsat), 77,125,186-87 versus “unuseful,” 9-12; wage relations,
International Telecommunications Union, 10-11,14-16, 21-22, 28; working-class
118,137-38 culture, 145; work reorganization and,
Internet, 161,188; advertising on, 147,149, 24, 90-92
152,156-57; culture industry, 115-16; Latin America: commercial television in,
domain-name system, 47, 56,100,138; 127-28,150; defense of cultural diversity
governance, 56,135,138-39,144; growth in, 136; foreign investment in, 42; Non-
of, 41, 46, 52, 55,72—73, 78, 81,112-13,140; Aligned Movement (NAM), 37; public-
high-speed service, 96,144,152, 2226163; service broadcasting in, 124; telecommu¬
infrastructure, 141; “Internet bubble,” nications in, 87-88,119-21,181
xii-xiv, 49, 82, 95,142,146,163,178; Inter¬ Lenovo Group, 182
net Corporation for Assigned Names Lexis-Nexis, 39, 55
and Numbers (ICANN), 56,137-38,183; libraries: American Library Association, 52;
intranets within, 79,187; investment in, commodification of, 142,145; competition
84-85.139.142,187; languages on, 142-43; and, 44; “digital rights movement,” 52-53;
service, 92,160,182-83,187; surveillance librarians as information workers, 9
via, 160; telephone service and, 94, 98; Los Angeles Times, 65,157
unequal access to, 87-88 Lucent Technologies, 82,88-89
Interstate Commerce Commission, (ICC), 68 Lynch, Mark, 127
 INDEX • 265

Magdoff, Harry, 12-13 New England Journal of Medicine, 156

Malaysia, advertising in, 151; telephone lines New International Informational Order
in, 81 (NIIO), 57; and cultural production, 27,
Marx, Karl, 10-11 37-39,117-18,125
Matsushita, 48 News Corporation: corporate sponsorships,
McChesney, Robert W., 121 156; Fox, 127,149,156; in China, 177; in
McDonnell Douglas, 3 Latin America, 120; role in cultural pro¬
MCI: acquired by WorldCom, 95; anti¬ duction, 114,133; Star TV, 133
unionism, 51; bankruptcy, 98; competi¬ newspapers: advertisers and, 148-49; and
tion in telecommunications, 73, 91, 99; communications, 163,166; as cultural
information and communication tech¬ commodities, 23; competition with other
nologies (ICTs), 40; residential service, media, 112; role in capitalist development,
96-97 34; satellites in publishing, 13
media convergence, xv, 27,101-24,147-48; New York Times, xiii, 53-54, 65, 95,138,167
public-broadcast systems, 150 Nokia: role in culture industry, 121; wireless
Mexico, 99,120; defense of cultural diversity, competition, 48-49,163,165
136-37; television production in, 178; tele¬ Non-Aligned Movement (NAM), 37-39
vision sets in, 119; Telmex, 99,181 Norris, Pippa, 87-88
Microsoft: competition in telecommunica¬ Nortel, 88-89
tions, 163,194; in China, 191,195; intel¬ North American Free Trade Agreement
lectual property, 47; radio frequency (NAFTA), 136
identification (RFID), 173; role in culture
industry, 121 O’Harrow, Jr., Robert, 53
Middle East: advertising, 129; Al-Jazeera, 99, Organization for Economic Cooperation
126-31; commercial television in, 125,132; and Development (OECD), 41
databases in, 140; foreign investment in, overproduction, 36, 49
42; patents, 47; pubhc-service broadcast¬
ing in, 140 Parry, Bronwyn, 25
Miles, Hugh, 126-27,12.9-30 patents: chemical industry, 43; copyright
Mindell, David A., 17,103 and trademark laws, 30-31, 45-47; tele¬
Monthly Review, 12-13 phone industry, 63
Morocco: television sets in, 119; wireless Perelman, Michael, 43, 45, 51-52
market in, 166 Peru,99
Motorola: advertising, 155,159; in China, 191; pharmaceutical industry: advertising, 147,
wireless competition, 48-49,163-65 149; earnings, 48; information produc¬
Murdoch, Rupert, 120,123,130,133 tion, 25; Internet, 156
Murdock, Graham, 122 Philippines, 90; advertising in, 151
Phoenix, University of, 44
National Aeronautical and Space Adminis¬ Pool, Ithiel de Sola, 102-3, 106,109,140
tration (NASA), 39 postindustrialists, 6, 21, 30; postindustrial
National Association of Manufacturers theorists, 54; postindustrial theory, 6,15,
(NAM), 63 19-21, 28,35, 2o8fn7i
National Broadcasting Company (NBC), Powell, Michael, 90,93
114,149,152,155 Procter and Gamble, 40,147,149,154
National Security Agency, 53
NEC, 48 Qatar, 126
Netherlands, 126 Qwest, 86
New Deal: frequency allotment, 67-68; pat¬
ent policies, 46; public-service telecom¬ radio: advertising in, 149; and information
munications, 71; telecommunications theory, 18; competition in, 106; competi¬
policies, 73, 76-77. 83.106-7 tion with other media, 112; convergence,
266 • INDEX

102-5; manufacturers, 64; regulation, Taub, Lora, 34

65-69 telecommunications, 186-88; convergence
Radio Corporation of America (RCA): in, 102-16; digitization, 107-9; economic
antitrust case against, 71; business with crises, 82,92, 94-96; effects on social
China, 187; formation, 43; industrial con¬ investment, 42-44, 51, 80,108; hnancial
vergence and, 105 scandals, 86, 93; impact on civil liberties,
Random House, 115 109; impact on poor, 90; infrastructures,
Reagan administration: and libraries, 79-80, 97; investment in, 81-83, 169; liber¬
2136143; out of UNESCO, 38,118; PATCO alization of policy, 40, 42, 83-98,108-14,
strike, 51; telecommunications policies, 126-28; manufacturing, 183; mergers in,
40-42, 77-78 113; network overcapacity, 81-83, 85-86,
Reed-Elsevier, 44, 48 91; networks and services, 12,37, 61-62,
Ritchie, L. David, 18 68,71-77, 80, 96,121,177; technological
Rose, Mark, 29-30 innovations, 80
Rostow, Eugene V., 74, 79; Task Force on Telecommunications Act of 1996, 84, 90,
Communications Policy, 74-76, 79 109-10; telegraph, 62; transnational con¬
Rubin, Robert E., 55 vergence, 116-22; unionization in, 51,
166; World Trade Organization (WTO)
satellites, companies, 44, 48; competition and, 78
with cable television, 77-78,109; growth telephony, 62,72,75-76, 89; access in Africa,
of, 102; in Asia, 130; in newspaper pub¬ 88; and Internet, 84; convergence, 102-12;
lishing, 13; networks, 112,120,125-26,129, local exchange service, 92; long-distance
139; private satellite carriers, 77-78 service, 83-84; New York Telephone, 63;
Saudi Arabia, 126 private line system, 67; rates, 76; residen¬
SBC, 94, 96 tial access, 80; service 76,167,170; wireline
Schiller, Herbert I., 48, 23761139; and Anita service, 41. See also AT&T; MCI; Media
R. Schiller, 2136143 convergence; Sprint; telecommunica¬
Schramm, Wilbur, 17 tions; Verizon; wireless and mobile tele¬
Schumpeter, Joseph, 85-86,183 communications; WorldCom
Sell, Susan K., 46 television: advertising in, 151-57; and con¬
Singapore, 55 vergence, 25,115,118-19 competition in,
Smythe, Dallas, 14, 64 112,126-29; networks and broadcasting,
social investment, 42-44, 51 30,38, 67,115,118,120,148-49; satellite,
Sony, cultural production, 114,116,132-33; 112,120,125-26,129,139. See also cable
international competition, 48; wireless television
telecommunications, 163 Temporary National Economic Committee
South Africa, 77; telephone access in, 88; (TNEC), 69
television sets in, 119; wireless market in, Thailand: advertising in, 151; television pro¬
166 duction in, 178
South Korea, advertising in, 151; defense of Thatcher, Margaret, 118
cultural diversity, 137; foreign investment Thomas, Pradip, 124
in, 189; television sets in, 119; trade with Thussu, Daya Kishan, 130
China, 193; transnational culture market, Time Warner: cultural production, 114,132-
120,134; wireless market in, 173 33; in China, 177-78; in Latin America,
Soviet Union, 15,37,125-26 120; Internet, 140; takeover by AOL, 160;
Spain, 99 Time Warner merger, 113; trademarks, 46
Sprint, 86, 91,152 T-Mobile, 78
Stone, Alan, 63,77 Toronto Globe and Mail, 13
Sullivan, John Lawrence, 120 Truman, Harry, 43
Sweezy, Paul, 8-13 Tunisia, 137-38; Masmoudi, Mustapha, 38
 INDEX • 267

United Nations, 37, 56; Commission on Wal-Mart: anti-unionism, 51; corporate

Trade and Development (UNCTAD), sponsorships, 44; inventory database, 40;
192-94; Educational, Scientific, and Cul¬ radio frequency identification (RFID),
tural Organization (UNESCO), 37,117-18, 173; Wal-Mart TV, 149
135-36; Farm and Agriculture Organiza¬ Watt, Ian, 32
tion, 27; World Summit on the Informa¬ Weaver, Warren, 17
tion Society, 56,137-38 Western Union, 62, 67,106,187
United States, 37-38,41; advertising, 145-61; Westinghouse, 106
against New International Informational Williams, Raymond, 34,145; “long revolu¬
Order, 27,37-39; Chamber of Commerce, tion” in culture, 31-32; “mobile privati¬
63; commercial broadcast systems, 150; zation,” xv, 169-72; on culture industry,
cultural production, 23,104-43; debt crisis, 2086172
49-51; Department of Commerce, US, 77, wireless and mobile telecommunications:
118,137-38; Department of Justice, US, 106; competition with wireline systems, 109;
economy, 6,12-13, 49—51, 73,189; elections, investment in, 109,162-66; less-developed
146,155; Food and Drug Administration countries, 41; manufacturing, 179; new
(FDA), 153; Government Printing Office technologies, 163; providers, 84; service
(USGPO), 44; intellectual property, 46, quality, 166-68; worldwide growth of, 78,
52; Iraq War, 129; liberalizing telecommu¬ 81-84, 9i. 139-44.159.161-66,169-73
nications policy, 36, 40-42, 61-62,65-80, women: impact of markets on, 15; wage and
105-14,126-28; National Research Council, household labor, 171
142; patent policy, 43,47; Postal Service, Wood, Ellen, 50,135-36
US, 44; Securities and Exchange Commis¬ Woodmansee, Martha, 29
sion, US (SEC), 86; State Department, US, World Bank: assessment of China’s peas¬
138; telecommunications manufacturing, antry, 197; structural-adjustment pro¬
183; Trade Representative, US (USTR), 41, grams, 55,118; telecommunications
118. See also telecommunications investment, 41; telecommunications lib¬
Uruguay, 127 eralization, 83
USA Today, 13 WorldCom, 86, 95, 2276170
World Trade Organization (WTO): and
Varian, Hal R„ 95 telecommunications policy, 41,78,118,
Venezuela, 120,127-28; Telesur, 127-28 180; Basic Telecommunications Agree¬
Verizon, 96; wireless, 164 ment, 84; China’s entry into, 188; General
Viacom, corporate sponsorship, 156; cul¬ Agreement on Tariffs and Trade (GATT),
tural production, 114,150-51,154; in Latin 46,118,136-37; libraries and, 142; patent
America, 120; intellectual property, 46, policies, 47; property rights, 56; semicon¬
116; Internet sales, 115 ductor policy, 181-82
Viatel, 82 World War II: information expropriation,
Vietnam, 38; advertising in, 151; television 43; information in postwar period, 7;
production in, 178; War in, 6 technological innovations, 39, 71-72.104;
Vodafone, 84,164,166, 2246123 telecommunications, 80
Von Bertalanffy, Ludwig, 5
Von Burg, Urs, 78-79 Yahoo, 115,142,195
Yoxen, Edward, 24-25
Wall Street Journal, 13, 47, 49. 62,138,152,
154-55.179 Zhao, Yuezhi, 126,143,188
'

.
DAN SCHILLER is a professor in the Graduate School of Library
and Information Science and the Institute of Communications
Research at the LTniversity of Illinois at Urbana-Champaign. He
is a communication historian whose interests center on telecom¬
munications history, and on the role of cultural production in the
socio-economic development of the market system. His books
include Digital Capitalism: Networking the Global Market System;
Theorizing Communication: A Historical Reckoning; Telematics and
Government; and Objectivity and the News: The Public and the Rise
of Commercial journalism.
The University of Illinois Press
is a founding member of the
Association of American University Presses.

Composed in 10.5/13 Adobe Minion

with Meta display
by Celia Shapland
for the University of Illinois Press
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University of Illinois Press

1325 South Oak Street
Champaign, IL 61820-6903
www.press.uillinois.edu
3 1137 QD0L3434 3

DATE DUE
 mines the transformative political and economic

changes occurring throughout the informational

realm, and analyzes key dimensions of the process,

including the build-up of new technological platforms,

the growth of a transnationalizing culture industry,

and the role played by China as it reinserts itself into

an informationalized capitalism.

• .. v . x ■' -s

DAN SCHILLER is a professor in the Graduate

School of Library and Information Science and the

Institute of Communications Research at the University

of Illinois, Urbana-Champaign. He is the author of

Digital Capitalism: Networking the Global Market

System and other books.
 / TELECOMMUNICATIONS / BUSINESS

"Read this book and you will never look at media convergence
the same way again. By tracking business trends across media
and telecom industries, Schiller demonstrates how much has
been lost while citizens have been lulled by the discourses
of globalization, deregulation, and the technology boom.
Schiller's dazzling research and cogent argument make this
book unforgettable."
— Ellen Seiter, Stephen K. Nenno Professor of Television
Studies, University of Southern California

"Dan Schiller is today probably the most lucid and critical

scholar writing on the structure and history of communication
and information systems —not just in the U.S., by the way—
and this book demonstrates that in spades. He unites his
usual clarity of vision of the present with his always-insightful
examination and interpretation of communication history.
This work will be another significant advancement of our
knowledge, informing not just academic curiosity but also
how we ought to think and rethink public policy that is
shaping information and media today."
— Richard Maxwell, professor of media studies, Queens
College, City University of New York

"With a formidable command of knowledge in seemingly

disparate fields and a truly transnational perspective,
Dan Schiller cuts beneath the theoretical debates about
information society and sifts through historical records and
today's headlines to reveal the overarching logic of informa-
tionalized capitalism. The result is a profound, incisive, and
essential book for anybody interested in the contemporary
world and the role of information in it."
—Yuezhi Zhao, Canada Research Chair in Political Economy
of Global Communication, Simon Fraser University

/ yW
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