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Net Loss

Net Loss: Internet Prophets, Private Profits, and the Costs to Community

Copyright Date: 2002
Pages: 416
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  • Book Info
    Net Loss
    Book Description:

    How has the Internet been changing our lives, and how did these changes come about? Nathan Newman seeks the answers to these questions by studying the emergence of the Internet economy in Silicon Valley and the transformation of power relations it has brought about in our new information age. Net Loss is his effort to understand why technological innovation and growth have been accompanied by increasing economic inequality and a sense of political powerlessness among large sectors of the population. Newman first tells the story of the federal government’s crucial role in the early development of the Internet, with the promotion of open computer standards and collaborative business practices that became the driving force of the Silicon Valley model. He then examines the complex dynamic of the process whereby regional economies have been changing as business alliances built around industries like the Internet replace the broader public investments that fueled regional growth in the past. A radical restructuring of once regionally focused industries like banking, electric utilities, and telephone companies is under way, with changes in federal regulation helping to undermine regional planning and the power of local community actors. The rise of global Internet commerce itself contributes to weakening the tax base of local governments, even as these governments increasingly use networked technology to market themselves and their citizens to global business, usually at the expense of all but their most elite residents. More optimistically, Newman sees an emerging countertrend of global use of the Internet by grassroots organizations, such as those in the antiglobalization movements, that may help to transcend this local powerlessness.

    eISBN: 978-0-271-05440-7
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-xii)
  3. Preface On Not Writing on Internet Time
    (pp. xiii-xvi)
  4. List of Acronyms
    (pp. xvii-xxi)
  5. 1 Introduction
    (pp. 1-40)

    The new “information economy” seems to evoke a contradictory debate on regions and decentralization. On the one hand, technologists such as Nicholas Negroponte believe that local regions are disappearing as important entities in the face of the “spaceless” technology of information exchange. On the other hand, futurists like Alvin Toffler and his political disciples, such as Newt Gingrich, have argued that the microchip is the midwife of regional rebirth and the death knell for central political decision-making.

    How do we explain this contradiction?

    The Internet has emerged as the focus for much of the strongest hype and substance in debates...

  6. 2 How the Federal Government Created the Internet, and How the Internet Is Threatened by the Government’s Withdrawal
    (pp. 41-82)

    In a remarkable turn of societal imagination, many conservatives have begun picturing the computer age as the rejuvenation of small-scale entrepreneurial capitalism against the institutions of the nation-state. Alvin Toffler has talked about “demassification”; George Gilder has cited the “quantum revolution”; former House Speaker Newt Gingrich has promoted decentralization of government to local regions. A steady stream of conservative analysts have argued that new technology has made government’s role, especially the federal government’s role, irrelevant and even dangerous to the healthy functioning of the economy. Even theEconomist, a magazine with an early enthusiasm for the Internet and usually a...

  7. 3 Federal Spending and the Regionalization of Technology Development
    (pp. 83-126)

    What created the Internet, and why is Northern California at the center of its development? Nothing to do with the government, at least according toWired, the fashionable technomonthly that promotes the Net as the embodiment of a new paradigm in human development, unshackled by government, scarcity, or even geography. Since its inception, its covers have featured a parade of cybermoguls from such hip antiestablishment outfits as CitiCorp and TCI Cable, all supposedly self-made men riding the wave of cyberspace benefited by nothing other than pluck and a vision of a libertarian world of freedom.

    There is an almost charming...

  8. 4 Business Cooperation and the Business Politics of Regions in the Information Age
    (pp. 127-178)

    In early 1992, Silicon Valley faced an economic crisis where job growth since the mid-1980s had been lagging behind the national average. Fed by both defense cutbacks and a sense of foreign and domestic competition against their hightech products, business leaders in the region created a new organization called Joint Venture: Silicon Valley, its goal “a community-wide effort . . . to construct a rational blueprint for the continued economic vitality of Silicon Valley.”¹

    With the publication of a commissioned report,An Economy at Risk, along with a jammed conference of technology leaders—with more than one thousand attendees—that...

  9. 5 Banks, Electricity, and Phones: Technology, Regional Decline, and the Marketization of Fixed Capital
    (pp. 179-248)

    When Joint Venture was launched to revitalize the Silicon Valley economy, the founders turned to Bank of America to supply an initial $250,000 to get the effort off the ground, a crucial investment that was a catalyst for the effort. Similarly, one of the largest ongoing supporters of Smart Valley was Pacific Gas and Electric (PG&E), which contributed more than $100,000 to the effort, far more than any of the computer companies involved. Pacific Bell, along with millions spent on its own CalREN networking project, contributed almost $500,000 to Joint Venture’s efforts to wire Silicon Valley schools, also a larger...

  10. 6 Local Government Up for Bid: Internet Taxes, Economic Development, and Public Information
    (pp. 249-298)

    Despite the financial crises of local government (exacerbated by the Internet) and the loss of economic institutions such as utilities and banks tied to regions, the quotation on the right reveals the model of local governance and activism promoted by New Democrats such as Will Marshall at the Democratic Leadership Council. It is a vision that sees cyberspace “enabling” local government power. And from Newt’s Gingrich’s mid-decade Contract with America to George W. Bush’s “compassionate conservatism,” Republicans have continued to frame their attacks on federal programs as an attempt to decentralize government in an era when the Internet is supposedly...

  11. 7 Conclusion: The Death of Community Economics, or Think Locally, Act Globally
    (pp. 299-324)

    When in the 1990s, Newt Gingrich and other conservatives promoted political decentralization and New Democrats framed much the same politics in terms of “reinventing government,” it was hardly surprising that this bipartisan consensus helped drive market competition in telecommunications and the transfer of government responsibilities to local government in a host of other programs. All this added to the crisis increasingly facing most local governments. What is remarkable, though, is how much the drive and desire for decentralized economics and politics was often shared even by the strongest grassroots progressive and left-wing opponents of the governing establishment. Although critical of...

  12. Notes
    (pp. 325-352)
  13. Bibliography
    (pp. 353-380)
  14. Index
    (pp. 381-399)
  15. Back Matter
    (pp. 400-400)