T H E  N E T W O R K  O B S E R V E R

  VOLUME 3, NUMBER 3                                    MARCH 1996


     "You have to organize, organize, organize, and build and
      build, and train and train, so that there is a permanent,
      vibrant structure of which people can be part."

          -- Ralph Reed, Christian Coalition


  This month: Efficient markets on the Web
              Communications technology and the Constitution
              More fallacies of neoclassical economics


  Welcome to TNO 3(3).

  This issue Ramin Zabih reflects on an experiment in creating an
  efficient market in computer peripherals on the Web.  I do not
  regard efficient markets as an end in themselves.  But I do think
  that everyone needs to learn their ways, and the Internet can
  make the process of market rationalization particularly visible.
  In particular, we must be aware of what happens as computer
  networking makes it cheaper to gather and distribute price
  information.  You would think that this topic has been thoroughly
  investigated by economists.  But even though some good work
  has been done, much more often they simply assume that price
  information is free.  Such is obviously not the case, and a large
  number of social phenomena, both good and bad, depend on the
  resulting economic friction and hysteresis.  Yet even as computer
  networking helps make some markets more efficient, it also tends
  to create highly nonclassical markets through the externalities
  inherent in information technology; this month's "follow-up"
  continues my discussion of such things.

  Now that the Communications Decency Act has become law and the
  resultant litigation is under way, it's time for an industrial-
  strength post-mortem on the failed campaign to stop it.  This
  issue of TNO offers my own small contribution to this sad task,
  in the form of an account of the political value of the Internet.
  Why would someone want to impose such extravagant burdens on
  such a promising medium?  Part of the answer, I want to suggest,
  was already evident to the folks who wrote the Constitution.

  A footnote.  When civil libertarians upset at the passage of the
  CDA called for web pages to be inverse-videoed, the Christian
  Coalition's Mike Russell had this to say: "This is a predictable
  response from the left.  They're trying to overturn the same
  indecency provisions and guidelines that radio and TV have been
  following for years"  (New York Times, 2/8/96).  Never mind the
  sophistry by which radio and TV are conflated with the Internet.
  The more important consequence, I think, is that supporters of
  communications freedom will now have to get used to the idea that
  the largest organized constituency in the majority Congressional
  party regards them as leftists.


  The political value of the Internet.

  These days one often hears questions such as: What effect will
  the Internet have on politics?  What effect will the Internet
  have on the economy?  What effect will the Internet have on
  relations between men and women?  The questions always make it
  sound like the Internet is in charge here, as if the machines
  have finally taken over the world and are only going to keep us
  around as long as we continue to amuse them.  Although a high
  level of public interest in the Internet is certainly justified
  by its remarkable growth and promise, at the same time I think
  that the Internet also serves as a *symbol* -- a symbol of a loss
  of control that people feel over their lives.  In the economic
  realm the Internet is simply the most visible element of a much
  more extensive technological change that is facilitating rapid
  global restructuring.  And in the cultural realm the Internet
  symbolizes the anxieties that arise as a great diversity of
  people find themselves being rapidly interconnected through a
  whole variety of means.  To reason rationally about the Internet,
  we have to take care to evaluate the cultural constructions of
  technology, neither dismissing the deeper and very legitimate
  concerns that people have nor permitting these concerns to be
  channeled into unwise policy responses that may endanger other,
  equally important social values.

  The Communications Decency Act is a case in point.  We have
  to acknowledge the legitimate concerns that motivated it.
  Pedophilia, for example, is real.  Children really should be
  protected from exposure to disturbing material.  Some people
  really do have sick minds.  Yet very significant questions have
  been raised about the approach that the CDA takes to addressing
  these concerns.

  It helps to put the matter in historical context.  When any new
  technology comes along, people understandably try to interpret it
  through the analogies and precedents provided by other, existing,
  familiar technologies.  Debates about the new technology
  regularly take the form of conflicts over which *old* technology
  provides the appropriate precedent.  In the early days of the
  telephone, for example, businessmen regarded the phone as a means
  for speeding up orders for goods, which were formerly conveyed
  on paper, and they complained at great length about women who
  insisted on using the telephone for extended conversations.
  Phone books were even amended to explain that extended chatting
  on the telephone was not a proper use of it.  There is little
  evidence that the women in question paid these instructions any
  mind, and soon enough the phone companies -- which were numerous
  then and mostly small -- figured out that the women were actually
  a promising market for phone services.  (See Michele Martin,
  Hello, Central?: Gender, Technology, and Culture in the Formation
  of Telephone Systems, McGill-Queen's University Press, 1991.)

  Similarly with the Internet -- is it like a telephone, like
  a newspaper, like a radio, like a postal system?  The warring
  parties in any given conflict over the Internet (intellectual
  property protection is another example) will often be found
  choosing the precedent that suits them best.  The trouble,
  of course, is that the Internet is quite capable of being all
  of those things, all the time, in any combination.  So strange
  and unruly is the Internet that a remarkable myth has arisen
  and entrenched itself in public discourse -- the myth that the
  Internet is unregulated.  In the Washington Post, for example,
  I recently read of "the vast and unregulated Internet".  The
  problem is that, quite aside from the CDA, the Internet is not
  unregulated at all.  Virtually all conduct that is illegal or
  actionable in other media is equally so on the Internet.  Libel,
  threats, conspiracy, insider trading, espionage, obscenity,
  fraud, solicitation or luring of minors -- you name it -- if you
  do it on the Internet and you get caught then you get arrested
  or you get sued.  Are any crimes even possible on the Internet
  that are so original, so undreamt-of, that they are not covered
  by existing law?  No doubt there are, but they have to involve
  technical capacities of the net that have no precedent -- that
  make actions possible or practical that are seriously wrong
  and that were not possible or practical in the past.  One such
  technical capacity might be strong cryptography, though that's
  a matter that's largely independent of the Internet.  Some would
  say that another is the capacity to leave communicative materials
  such as texts and images in places where people can come and
  find them.  Yet the vast majority of serious wrongs that can be
  undertaken in that fashion are illegal already because the same
  materials would be illegal to make available in *any* medium.
  Some legal issues *are* left over after all this whittling down,
  but they are primarily matters of jurisdiction and evidence --
  hardly the stuff of moral panic.

  The whole purpose of the CDA, then, is a bit of a mystery.  This
  was entirely evident at the Senate Judiciary Committee hearing on
  the CDA that I attended in January 1995 -- the one at which the
  presiding Senator of the majority party announced in his gravelly
  voice that Mr. Marty Rimm would not be appearing as a witness
  after all.  The witnesses who did appear, all well-meaning and
  mostly very nice, recited a series of undeniable horribles, all
  of which involved activity that, notwithstanding the involvement
  of computer networks, was quite clearly illegal under existing

  The bill that emerged from these hearings, moreover, is
  remarkably ill-fitted to the evils it seeks to combat.  Above
  all it is straightforwardly unconstitutional, both for its
  vagueness and for its failure to employ the least restrictive
  means available for pursuing a compelling government interest.
  Any number of less restrictive schemes are available.  It is very
  easy indeed to build a Web browser that will not display any page
  that does not certify compliance with this, that, or the other
  organization.  Technically this is a no-brainer, and if necessary
  false claims of certification could reasonably be criminalized.
  Parents could choose which organizations reflect their values,
  and Internet content providers who want children to access their
  pages would be motivated to seek certification according to
  the standards and procedures that each organization establishes.
  Given these simple facts, the mystery of the CDA deepens.  What
  is the problem?

  Part of the problem is that the idea of the vast and unregulated
  Internet provides something for everyone.  Cultural conservatives
  get a den of iniquity to combat, libertarians get to imagine a
  nirvana free of regulation and restraint, and liberals get to
  shudder at the idea of something being vast and unregulated.
  But I think the problem goes deeper that that, and if we really
  want to preserve those aspects of the Internet that really do
  hold significant promise for society then we need to be able to
  explain a lot better what they are.  We can approach this matter
  in several ways, but I would like to approach it by asking, what
  is the specifically political value of the Internet?  What does
  the Internet contribute to a democratic society?

  I want to propose that the political value of the Internet
  lies in part in the powerful support it provides for the
  lateral institutions of society.  Lateral institutions are those
  created by and for people who occupy analogous locations in
  society.  Professional societies and support groups are examples
  of lateral institutions because they are composed of people
  in a common situation and provide a forum to share experiences,
  pool knowledge, shape strategies, and anticipate the future.
  Lateral institutions, both formal and informal, are crucial
  to the economic and political health of any society.  Lateral
  institutions can be contrasted to hierarchies in several ways.
  Lateral institutions are compose of equals, or at worse newcomers
  and oldtimers, whereas hierarchies institute chains of authority
  and control.  People are usually participants in several lateral
  institutions whereas hierarchies tend to lay their claims to the
  exclusion of other involvements and commitments.  And whereas
  lateral institutions create a type of social capital in the
  form of far-flung networks of social relationships, hierarchies
  encourage an orientation to relationships up and down a ladder
  that create isolation and dependency.

  It is commonly held that the Internet is relentlessly creating
  a decentralized society in which hierarchies break down.  But
  the real picture is more complicated that this.  The Internet
  can be used in a lot of different ways, and the Internet is
  hardly the only technology that is advancing at a rapid rate.
  The fact is that computer and communications technologies provide
  the tools for the strengthening of both lateral institutions and
  hierarchies.  The genuine tension between these two principles
  of social organization will be negotiated on a variety of levels,
  not just as a matter of technological inevitability.

  As a rough generalization, though, in the political realm
  technologies really are fitted to forms of social organization.
  The Internet is extraordinarily good at supporting lateral
  institutions.  A large proportion of the discussion groups on
  the Internet, for example, particularly if we exclude Usenet
  and focus on Listservs, are precisely forums for shared thinking
  among members of lateral institutions -- people in common
  situations, common occupations, common difficulties, or whatever.
  Broadcast technologies, on the other hand, encourage hierarchy:
  they originate from a center, which creates or filters the
  contents, and they go out to a mass of otherwise unrelated
  people.  The Internet knits people together in terms of their
  shared involvements in the world; broadcast disregards the
  particularities of people's lives and draws them into an abstract
  relationship with artificially constructed personae, be they
  movie stars or reporters or experts or radio announcers.

  I should emphasize that my view of the political value of
  the Internet is controversial.  It should be contrasted with
  two other views.  One view holds that cyberspace is a wholly
  different realm from that of corporeal, territorial life, so
  that it makes sense to imagine cyberspace seceding as a sort of
  rebellious colony aboard a digital spaceship.  Another view holds
  that the Internet is producing a society of pure individualism,
  a sort of beehive whose orderliness is entirely epiphenomenal,
  incapable of being shaped or regulated from the outside.  I find
  these two views not only politically disagreeable but totally at
  odds with the reality of the Internet's complex intertwining with
  the rest of our affairs.

  What does this mean for American society?  In the 10th Federalist
  Paper, Madison argues that the republican form of government is
  an improvement upon majoritarian democracy on the grounds that
  it is better able to resist the evils of faction.  This was very
  much a live concern in those days: the idea that an organized
  segment of the society might organize to illegitimately impose
  its way of life on the others.  The two approaches to government,
  as he puts it, differ

    ... in the greater number of citizens and extent of territory
    which maybe brought within the compass of republican than of
    democratic government; and it is this circumstance principally
    which renders factious combinations less to be dreaded in the
    former than in the latter.  ...

    The influence of factious leaders may kindle a flame within
    their particular States but will be unable to spread a
    general conflagration through the other States.  A religious
    sect may degenerate into a political faction in a part of the
    Confederacy; but the variety of sects dispersed over the entire
    face of it must secure the national councils against any danger
    from that source.

  It seems clear in reading this that Madison did not anticipate
  the rise of telecommunications, or at least the uses to which
  telecommunications could be put in constructing a political
  organization.  The idea that a faction might coordinate its
  opinions and strategies across great distances never seems to
  have occurred to him.

  These assumptions were challenged, obviously, by the rise of the
  mass media, through which political opinion could increasingly
  be shaped on a national basis rather than through the loosely
  coordinated debates of disparate regions.  This development
  was gradual enough that each increment, for example that
  which followed upon television, can be put into perspective.
  I want to argue, though, that the last several years have
  brought challenges to Madison's assumptions that we are still
  underestimating.  Emerging communications technologies -- not so
  much the Internet as the video downlink, the cheap VCR, the fax
  machine, and targeted mass mail -- have facilitated entirely new
  practices of political organizing.  The elections of 1994, for
  example, demonstrated that hundreds of campaigns could be run in
  a tightly coordinated fashion by a disciplined organization that
  could send out practical and ideological materials to candidates
  and their staffs through a variety of media -- none of them
  remarkable in itself, perhaps, but revolutionary when employed
  within a coherent strategy.

  The same holds true for other kinds of political organizations.
  Madison could not imagine a nationally organized religious
  sect degenerating into a political faction, but such a thing
  is altogether imaginable today.  Those who find the phenomenon
  mystifying often do so because they cannot imagine religious
  people having their act together to employ modern technology, or
  else because they do not know very much about the practical work
  of political organizing.

  It is here, I think, that we can find the larger meaning of
  several conflicts over the nature and meaning of the Internet.
  Those organizations that continued to promote Marty Rimm's
  research after it had been refuted, and who continued to promote
  a vague and unconstitutional law after less restrictive means
  were demonstrated and publicized, effectively discredited an
  important new set of political tools in the eyes of a large part
  of the citizenry, who have access to no other information beyond
  the hype about obscenity that spills out of your computer at the
  push of a button.  The fundamental issue here is a conflict of
  social visions between hierarchical organizations seeking to trap
  people in a closed world of fear and danger and authority, and
  spontaneous associations, heterogeneous and dynamic, among people
  who share common life situations and get together of their own
  accord to make their own meanings out of them.  The Internet
  is no more a guarantee of freedom than the video duplication
  machine is a sentence of authoritarianism.  But communications
  technologies have political affordances, and if we wish
  to preserve the possibility of an open, tolerant, humane,
  pluralistic society then we must articulate and defend the
  political value of the tools that may yet make these ideals


  Creating an efficient market on the WorldWide Web.

  Ramin Zabih
  Computer Science Department
  Cornell University

  Consumers often purchase mass-produced items that are available
  from many different vendors.  These different vendors usually
  charge different prices.  If it were easy to compare prices,
  consumers would benefit substantially, and every consumer could
  get the best price.  This would create what economists call
  an efficient market.  Until recently it was too expensive to
  make pricing information widely available.  With the World-Wide
  Web, the cost of publishing information has fallen dramatically.
  Because of the Web, it may now be possible to create an efficient
  market for many mass-produced consumer items.

  As an example, consider the market in computer peripherals
  (such as printers, modems, etc).  In December 1995, the cheapest
  nationally advertised price I could find for the Hewlett-Packard
  HP660C printer was $330, while the most expensive price was
  $490.  But it took many hours of reading advertisements to
  obtain this information.  Several hundred vendors sell mail-order
  peripherals, and it isn't easy to compare prices.

  Several efficient markets exist, including the stock exchange and
  the commodities market.  Items on these markets (such as stock
  in Hewlett-Packard) are available for a single price at any given
  time, and that price is widely known.  Consumers rarely benefit
  from these markets because they do not trade consumer goods.

  The PriceWeb Experiment

  Together with some friends at Cornell I have begun an experiment
  called PriceWeb (http://www.priceweb.com).  PriceWeb is an
  attempt to create an efficient market in computer peripherals.
  For a given peripheral, PriceWeb's web site provides a list of
  nationally advertised mail-order prices, listed in increasing
  order.  This makes it simple to find the lowest-priced vendor.

  If PriceWeb becomes widely used, it will have a major impact
  on the way that computer peripherals are purchased.  Mail-order
  vendors would have to charge a single, uniform low price,
  unless they can offer customers some additional value.  Computer
  peripherals are sold with fairly standardized warranties
  and return policies; vendors compete primarily on price and
  availability.  This makes product differentiation difficult.

  In an efficient market, most vendors would have to lower their
  prices.  Short term, PriceWeb works to the advantage of consumers
  and to the disadvantage of most vendors.  But in the long term
  there are advantages for vendors as well.  Consumers will be able
  to buy items without worrying that they are over-paying (this
  argument is similar to Saturn's no-haggling policy for new car
  buyers).  And, of course, prices should fall.  These effects
  should lead to more customers

  An on-line service like PriceWeb could have additional
  advantages for vendors.  For instance, sometimes vendors
  wish to clear out inventory by selling an item very cheaply.
  (See http://www.onsale.com for an example.)  On-line pricing
  information can eliminate the delays involved in print media
  advertising, thus allowing vendors to more rapidly adjust their
  prices.  Also, the Internet users who monitor pricing information
  will presumably be quite price-sensitive, so listing an item at a
  low price should generate a large response.  These advantages to
  vendors have to be balanced against PriceWeb's negative effects
  on vendor margins.  If the negative effects are larger, vendors
  will consolidate.

  How much would consumers save in an efficient market? One might
  expect mail-order prices on peripherals to be nearly identical,
  but they aren't.  The average price spread on items that PriceWeb
  covers is $130, and some items have large price spreads.  For
  example, the HP OfficeJet is advertised for as little as $377 and
  as much as $769.

  If the vendors wished to avoid an efficient market, they
  would have several options.  For instance, each vendor could
  sell slightly different items.  If every HP660C printer were
  significantly different from every other HP660C printer, it would
  be impossible to compare their prices.  But this would increase
  manufacturing costs and confuse potential customers, thus
  reducing HP's market share.  This effect is illustrated by the
  American automobile industry, which for years offered an enormous
  range of options, partly to prevent consumers from comparing
  prices.  The Japanese offered very few option packages, which
  gave them a price advantage in manufacturing.  In the computer
  industry, almost everything is mass-manufactured, due to
  extensive standardization (see TNO 3(1) for a discussion of the
  economic impacts of standardization).  So this option is not
  viable, because of opposition from the manufacturers.

  An efficient market could also be thwarted by punishing the
  lowest-price vendor.  For instance, suppose that all the higher-
  priced vendors refuse to carry Hewlett-Packard printers unless
  the lowest priced vendor is forced to raise its prices.  HP could
  in turn raise the price that it charges that vendor, or cut that
  vendor off completely.  But this probably would not be in HP's
  interests.  More importantly, such actions would violate a number
  of laws against price fixing, such as the Robinson-Patman Act (an
  excellent overview can be found at the Federal Trade Commission's
  web site in http://www.ftc.gov/opa/speeches/patman.htm).  These
  laws make it illegal for a manufacturer to fix the price that
  vendors charge.

  An on-line efficient market would also be easier for the
  Government to monitor.  Price-fixing in efficient markets is
  more obvious than in markets with multiple prices.  For example,
  suppose a vendor cut its prices below costs to drive rivals out
  of business, and then raised its prices.  This pattern would
  be fairly easy to spot in an efficient market with pricing
  information available on-line.  The recent SEC investigation of
  NASDAQ trading practices was motivated by an academic study of
  pricing trends in this market; if this data were not available
  electronically, anti-competitive behavior would be harder to


  A number of challenges will need to be overcome in order to
  create an efficient market.  One potential difficulty concerns
  updating price information.  PriceWeb's information comes from
  printed national advertisements.  In a market where prices change
  rapidly, advertised prices may be out of date before they appear
  in print.  The obvious solution would be to use on-line prices
  from vendor's Web sites, but there are some obstacles.  While a
  few vendors (such as Computability, http://www.computability.com)
  provide on-line pricing information, most do not -- in fact,
  surprisingly few vendors have Web sites.  Also, a price that
  appears in a printed ad comes with legal protections against
  false advertising.  These guarantees may not apply to Web-based

  Even if most vendors put their pricing information on-line, it
  may be hard to compare prices.  For instance, consider Andersen
  Consulting's BargainFinder (http://bf.cstar.ac.com), which helps
  consumers buy audio Compact Discs cheaply.  BargainFinder queries
  9 on-line vendors that sell CD's via mail-order.  Unfortunately,
  3 of these vendors currently block BargainFinder from accessing
  their sites.  Because BargainFinder actively queries on-line Web
  sites, it exists at the pleasure of the vendors.  In the short
  term, they may not wish to cooperate.

  PriceWeb will need to become economically self-supporting,
  which is a challenge.  On-line pricing information is what
  economists call a public good (like, for example, a lighthouse).
  It is notoriously difficult to get the beneficiaries of a
  public good to pay for it.  In addition, the Internet's culture
  makes it hard to charge users for information.  I believe that
  consumers will not use PriceWeb if they have to pay for it.
  Some companies think consumers will pay for such a service --
  http://cybersave.com/shop.htm, for instance.  If these companies
  are correct, they will create a market in pricing information.
  Mark Casson's chapter in Information Acumen (Routledge, 1994)
  discusses the effects on markets of information.  An efficient
  market requires perfect information; as the costs associated with
  information fall, the market can become more efficient.  Costs
  are associated with obtaining pricing information for computer
  peripherals.  PriceWeb does not reduce the costs of obtaining the
  information, but instead collects the information centrally and
  makes it freely available.

  PriceWeb might be viable simply because the cost of running
  the experiment is so low.  Placing information on a Web page
  costs almost nothing, and the costs associated with gathering
  and entering data are also small.  Even a small amount of
  revenue (from advertising, for instance) could make PriceWeb
  self-supporting.  In addition, that PriceWeb could provide
  a number of services for vendors that would generate revenue.
  For instance, vendors could be automatically notified if a
  competitor beats their advertised price.

  Will the Web Eliminate Retailers?

  A web-based efficient market could also affect the relationship
  between vendors and manufacturers.  Most manufacturers do not
  sell directly to customers, but via retailers.  Retail stores
  carry products from multiple manufacturers, so a customer can
  compare products side by side.  Manufacturers attempted to
  protect their retailers by various means; for example, the
  Manufacturer's Suggested Retail Price is usually quite high, so
  that every retailer can charge less than MSRP.  Manufacturers
  protect retailers to ensure that retailers carry their goods.
  But with the growth of mail-order, the value provided by
  retailers could diminish.  It may become profitable for the
  manufacturers to enter the mail-order business themselves.
  An efficient market could eliminate many middlemen.

  An efficient market in consumer goods would have a substantial
  impact on society.  For example, it could eliminate many retail
  stores in favor of mail-order vendors, who can locate in areas
  with low fixed costs.  This could have massive consequences
  for many communities, which have downtowns built around retail
  shopping.  Of course, consumers shop for other reasons than
  obtaining the lowest price.  For some items (such as Tylenol),
  the savings may be so small that it isn't worthwhile to find the
  best price.  However, large supermarkets spend a great deal of
  effort trumpeting small price advantages.  It is possible that
  many shoppers are price-sensitive, and would prefer an efficient
  market.  If the Web creates such a market, its impact on society
  will be far greater than any effects we have witnessed thus far.

  While many retailers might disappear, some new businesses will
  also come into existence.  For instance, it will become much
  cheaper to establish the kind of specialty businesses that
  traditionally only flourish in large cities.  A business that
  only appeals to a small percentage of the population can flourish
  on the Web, because it can be easily reached by potential


  Several previous experiments in Web-based consumer empowerment
  have been similar in spirit to PriceWeb.  One example is the
  BBN Auto Mechanics List, profiled by Rich Lethin in TNO 2(8),
  August 1995.  This site lists local auto mechanics in the Boston
  Area.  Besides providing names and addresses, it also includes
  customers' comments on their experiences with each shop.  The
  comments are summarized by the moderator to provide an overall
  grade for the repair shop.  A potential customer can view the
  comments of other customers, and can also add their own comments.
  Another example is http://thelist.com, which performs a similar
  service for Internet Service Providers.  Like Consumer Reports,
  these sites focus on giving consumers useful subjective

  The Web has made an efficient market in consumer goods possible,
  because it has dramatically lowered the cost of publishing
  information.  Until recently, only big corporations or a few
  unusual individuals could reach a large audience.  The Web
  has changed this, and we are just beginning to understand its


  Wish list.

  Lots of people assume that books will soon be supplanted by
  digital media.  These people are not deterred by the simple fact
  that it is still physically painful to read a long text on a
  computer screen; they simply assume that all technical barriers
  will inevitably be overcome.  But things do not necessarily work
  that way.  For many purposes, for example, operating systems
  have gotten worse rather than better over time.  And the price
  of personal computers hasn't gone down all that fast -- as the
  hardware speeds up, the software bloats.  I wish that computer
  screen technology would improve enough that one really *could*
  read a long text comfortably, given that my eyes already hurt
  from the relatively small amount of reading I do online.  But
  what if that result is not inevitable?  What if the technology
  exists in the laboratory, or in fancy niche applications, but no
  incentive exists to invest all of the money that would be needed
  to get the price down for the mass market?  I hope I'm wrong.


  This month's recommendations.

  Turning Wheel: Journal of the Buddhist Peace Fellowship, theme
  issue on Fundamentalism, Fall 1995.  This issue includes eight
  fairly short but enormously humane articles about fundamentalism,
  Christian and otherwise, from a Buddhist perspective.  Single
  copies are $5 postpaid from BPF National Office, PO Box 4650,
  Berkeley CA 94704, (510) 525-8596, bpf@igc.apc.org.

  infoActive.  Nonprofit organizations know in a general way that
  new communications technologies will enable them to completely
  change the way they do business, eventually reshaping all of
  their relationships: with members, donors, clients, press, and
  one another.  This process is partly a matter of experience and
  know-how, but it's also going to require active participation in
  the policy process.  InfoActive, a monthly publication on telecom
  issues for nonprofits, is a good continuing source of background
  information from a nonprofit perspective.  Each issue is focused
  on a specific topic (kids online, privacy, intellectual property,
  cities, Washington politics, etc); the coverage is concise and
  intelligent and includes lots of pointers to useful resources.
  $35/year (8 issues) for individuals, nonprofits, and government;
  $100/year for for-profit organizations from Center for Media
  Education, 1511 K Street NW Suite 518, Washington DC 20005, (202)
  628-2620, infoactive@cme.org.

  Donald G. Dutton, The Batterer: A Psychological Profile, Basic
  Books, 1995.  Some men beat up their wives or partners, going
  through a cycle of sudden extreme violence, profound contrition,
  escalating tension, and more violence.  Having treated numerous
  such men the author explains in some detail how they get that
  way.  The primary factor, he suggests, is suppressed anger and
  shame originating in severe emotional abuse by a father; the
  secondary factor is ambivalent attachment through a disturbed
  connection between the boy and his mother; and then the final
  factor that makes the cyclical pattern of shame and violence
  difficult to reverse is exposure to a culture that tolerates,
  rationalizes, and ignores domestic violence.  Domestic violence
  has been going on for a long time, and yet it has taken until now
  for somebody to describe the phenomenon in clinical terms.  Why?
  One answer can be found in Judith Herman's "Trauma and Recovery",
  which I recommended in TNO 1(1): victims of serious trauma can
  only articulate and legitimize their pain -- that is, they can
  only achieve public recognition that the trauma even *happened*
  -- when political conditions permit.  In the case of domestic
  violence, men who batter only became a public issue when feminism
  *made* them into an issue.  Then they could only become a topic
  of clinical psychology when many such men were -- unlike the
  old days -- actually arrested, actually treated as emotionally
  disturbed criminals, and actually ordered by courts to undergo
  treatment at the hands of psychologists who can treat batterers
  as wounded human beings without putting up with any of their
  self-serving bullshit.  And this book only exists because the
  OJ Simpson trial forced domestic violence onto the media agenda
  long enough to convince a publisher to hire a writer to turn
  a clinician's prose into mass-market English.  (I persist in
  regarding the circus of OJ Simpson's trial as overall a positive
  influence on society because of the many important conversation
  topics it provided.)  Will all of this previously suppressed
  knowledge be driven back into the shadows by the current fashion
  for stigmatizing "victims" and all the nonsense about men as
  an endangered species?  You can't return to the past without
  forgetting all the stuff that made us want to leave it behind.
  This book will make that forgetting harder.

  The April 1996 issue of Upside magazine (recommended in TNO 1(6))
  is a good overview of the Internet industry.



  In TNO 2(5), I complained about the sudden decline of the New
  York Times' business section.  After what seemed like a period of
  real confusion, the daily business section recovered reasonably
  well and the new Monday section on "the information industries"
  even became essential reading.  The Sunday business section,
  though, went through a long, dark night that was still under way
  when I left for a few months overseas in the fall.  The basic
  theme was a shift from serious reporting on industry structures
  toward a "lifestyle" orientation fitted to the demographics of
  their upscale readers.  The format seemed to be: one serious but
  not very good article about some topic that is directly visible
  in the lives of their readers, together with a bunch of personal
  finance material of the sort that magazines like Money and
  Kiplinger's are already doing.  For a while it was just awful --
  imagine People magazine where all of the people happen to operate
  mutual funds.  When I got back to the country in November, things
  seemed to have picked back up somewhat.  Nonetheless I now spend
  at most a fifth of the time reading the Sunday business section
  that I did a year ago.  At a time when everybody desperately
  needs to understand the massive global transformations going
  on in virtually every industry, this is a real tragedy.  Perhaps
  readers in the Times' target demographic figure that they are
  immune to such things, and no doubt the top ten percent of them
  really are.  But the rest of them -- the whole professional class
  that the right now refers to darkly as "elites", notwithstanding
  their supposed supremacy under the title of "knowledge workers"
  -- are headed for a fall, if they haven't already taken it, and I
  like to think that they would benefit from some serious analysis
  of what's about to hit them.  I don't suppose that the New York
  Times would ever consciously set out to provide such analysis,
  but something would be better than next to nothing.

  In my discussion of network economics in TNO 3(1) and TNO 3(2),
  I neglected to include this quote from Cristiano Antonelli, in
  the introductory chapter to his edited volume on the economics
  of information networks, cited in TNO 3(1):

    The novelty of network economics is the general effort it makes
    to incorporate into the microeconomic tradition the study of
    consequences of externalities on the behaviour of agents who
    are strategically aware of the role played by externalities in
    their decision making (page 16).

  Underneath the esoteric vocabulary here is a profound statement.
  The industry that is perhaps the most significant driver of
  global economic change in history does not come close to obeying
  the laws of classical economics, and it is extremely difficult to
  repair classical economics to fit the emerging reality.  Yet most
  of our current public policy discourse about economy and society
  employs the simplest version of neoclassical economic rhetoric,
  which presuppose the whole long list of assumptions behind
  "perfect markets" in a whole long list of hidden or unexamined
  ways.  Among the many pathologies that result is the insistence,
  among people who know enough economics to be dangerous but not
  enough to be useful, that the market dominance of Microsoft
  Windows ipso facto entails that Microsoft Windows is the highest-
  quality product in its category.  This conclusion flies in
  the face of all evidence and reason.  It satisfies the purest
  definition of dogma: the theory is no longer tested against the
  evidence provided by reality but is instead used a priori to
  define reality.  Microsoft people often speak in terms of the
  "popularity" of their products, but this word is surely precisely
  wrong.  Hardly anybody actually *likes* Windows, the way that
  many people genuinely *like* the Mac OS or IBM OS/2.  They
  buy Windows because it runs on cheap open-standard hardware
  platforms and because more applications are available for it.
  These are real economic advantages, but in their origins they
  are nonclassical advantages that depend on market externalities.
  It's an urgent matter to understand the laws of economics, if
  any, that affect the emerging world of information technology.
  But before we can act on any of these hoped-for understandings,
  we're going to have to clear our heads and our language of the
  hidden assumptions of an outdated economic worldview.

  My bibliography on the economics of standards also neglected to
  mention the work of Michel Callon.  See, for example:

    Michel Callon, Techno-economic networks and irreversibility,
    in John Law, ed, A Sociology of Monsters: Essays on Power,
    Technology and Domination, London: Routledge, 1991.

  Although much more abstract and intellectually demanding than the
  economic theories, Callon's analysis is also more sophisticated
  in sociological terms.  He develops a difficult but powerful
  vocabulary for talking about the networks of people and artifacts
  that congeal over time into irreversible infrastructures and
  institutions.  Irreversibility is a relative matter, of course,
  given that extreme contingencies such as earthquakes, wars, and
  profound technological changes can loosen the most entrenched
  sociotechnical network.  But, at the risk of repeating the point
  once too often, the fact is that modern societies are full of
  phenomena that fly in the face of the "equilibrium" metaphors
  that are central to neoclassical economics and the world of
  political rhetoric surrounding the price system.  Callon's theory
  provides the elements of an alternative, in which the economic
  phenomena of resource allocation and money are fully mixed in
  with a range of other phenomena grounded in the relationships
  between people and the intermediaries, particularly texts and
  technical artifacts, that organize so many of those relationships.

  Web picks.

  "Teaching Social Issues of Computing: Challenges, Ideas,
  and Resources", by Tom Jewett and Rob Kling, is on the Web
  at  http://www.engr.csulb.edu/~jewett/teach/teach.html

  Information on the bizarre case of Randal Schwartz, convicted of
  multiple felonies for actions taken as part of his work for Intel,
  can be found at  http://www.lightlink.com/spacenka/fors/intro.html

  Feed is a pretty good newsletter about politics and culture; its
  URL is  http://www.feedmag.com/

  Adbusters is now on the Web, disrespecting commercial culture and
  hyperlinking to the worst offenders and their e-mail addresses:

  A very interesting document from an Oklahoma anti-pornography
  group about prosecuting pornography on the Internet can be found
  at  http://www.bway.net/~dfenton/noporn.html

  "Making Intelligence Smarter: The Future of U.S. Intelligence,
  Report of an Independent Task Force Sponsored by the Council on
  Foreign Relations" is at  http://www.tc.umn.edu/~klp/CoFR.txt
  You know you're in trouble when a report on the CIA begins:

    The U.S. intelligence community faces major challenges,
    including a widespread lack of confidence in its ability
    to carry out its mission competently and legally.
    One consequence of this perception is that reform of
    intelligence policy and capabilities will not be left up
    to the intelligence community itself. Other parts of the
    executive branch and Congress will certainly be involved.

  Watch out for the words "confidence" and "perception".  On the
  surface they might sound like they're acknowledging the problems
  with the intelligence community.  But the point is to treat the
  *perceptions* as the problem.  So far as this quintessentially
  establishmentarian report is concerned, we should be talking
  about *broadening* the powers of this "community", not about
  shutting the whole thing down.  The President's Commission on
  the Future of Intelligence, composed largely of intelligence
  community insiders, is also certain to overlook the profound
  problems.  For some details see

  Last November the Cross-Industry Working Team (XIWT) of the
  Corporation for National Research Initiatives (CNRI) held an
  informal workshop for industry research people on medium-term
  prospects for broadband access to the home.  The workshop notes,
  available on the Web are a very good representation of industry's
  current thinking in this area:  http://WWW.CNRI.Reston.VA.US:3000/
  (I've broken the URL into two lines.)  XIWT's executive director,
  Chuck Brownstein, formerly of NSF, is an interesting guy.  He
  has a background in political science, so he is more reflective
  about the whole technology and policy process than many others.

  The FCC Telecom Act page is at  http://www.fcc.gov/telecom.html

  Information on the conference on Information Technology in the
  Human Services can be found at  http://www.stakes.fi/husita.html

  Phil Agre, editor                                pagre@ucla.edu
  Department of Information Studies
  University of California, Los Angeles         +1 (310) 825-7154
  Los Angeles, California  90095-1520                FAX 206-4460
  Copyright 1996 by the editor.  You may forward this issue of The
  Network Observer electronically to anyone for any non-commercial
  purpose.  Comments and suggestions are always appreciated.

Go back to the top of the file