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Digital Capitalism: Networking the Global Market System

Author: Dan Schiller
Publisher: Cambridge, MA: MIT Press, 1999
Review Published: June 2000

 REVIEW 1: On-Kwok Lai
 AUTHOR RESPONSE: Dan Schiller

Dan Schiller's book is not just another work on the burgeoning social scientific interests in the rise of the globalization of market capitalism, coupled with the emergence of the informational / network society (Hirst & Thompson 1999, Castells 1996). It is a well-researched empirical account on the instrumental role of the information and communication technologies (ICTs) have on global capitalism, or what Schiller refers to as "digital capitalism." In Dan Schiller's terminology digital capitalism refers to the condition where "(ICTs) Networks are directly generalizing the social and cultural range of the capitalist economy as never before" (xiv) and, as such, is an important contribution and a welcome addition to the debate on the problematique of our present and coming modernity.

Stimulating our continual debate on the informational society are the analyses of the book: they are diverse studies covering a wide range of issues with interpretive insights. The analyses contextualize particularly the local and regional levels of institutional and socio-cultural dynamics, which have been influencing and continuously shaping the digitalization of global economic production and social spaces of the developed economies (USA in particular). Yet the digitalization processes follow the differential trajectory of digital capitalism at supra-regional (North America), national, sub-regional, and local spaces: "Sophisticated network systems in turn comprised the increasingly essential infrastructure for engorged transnational corporations, pursuing export-oriented, regionally or even globally integrated production strategies. Corresponding to the ongoing buildup of transnational production chains, therefore, was a powerful pan-corporate attempt to subject worldwide telecommunications policy to United States - originated, neo-liberal regulatory norms" (40).

In spite of the diversity of issues covered in this volume, three major themes are especially well-articulated here and there (though not consistently argued in analytical terms throughout); namely: (1) the tendency of ICTs' growth and applications that are controlling most if not all aspects of our society, under the domination of the neoliberal, pro-market, profit-driven policies, which in turn reinforce socio-economic and political inequalities in the advanced capitalist world - this is the very essence of digital capitalism; (2) digital capitalism further enables and hence reinforces the globalization of capitalist governance and corporate-led rule, particularly in the deepening of consumerism on a transnational scale with both virtual and real encounters in and beyond the cyberspace; (3) that ICTs enhanced capitalist, market forces and their dynamism evoke the transformation process in the educational arena -- and higher education in particular -- as argued that the high education institutions will be newest, yet the last, battlefield between digital capitalist forces and the enlightened intellectuals.

The book has four main chapters, coupled with a short introduction and conclusion. Each one addresses a particular (sub)theme with unique perspective, contributing to the revelation of the underlying dynamics of digital capitalism, with numerous empirical examples. After the introduction which highlights the main line of debate -- namely, that ICTs enhance the governance of global capitalism via the digitization of information -- Chapters 1 and 2 address the neoliberal and capitalist networking drive, originated in the United States, which foster the emergence of digital capitalist processes at the global scale. The importance of geo-techno-political dynamics in and outside USA and the instrumental role of ICTs economic giants (like MCI, Microsoft and America Online) are also specified, highlighting the inherent contradictions in and between the Old (materials production) and New (knowledge production) Economy. This part, though theoretically underdeveloped, parallels recent observations on the transformation of capitalism in the informational age (Robert McChesney, Ellen Wood and John Foster, Eds., 1998).

Chapter 3 addresses specific changes in the market place with the increasing use of ICTs in advertising, marketing, and delivery of services and products, and rightly argues that "there is a reason to believe that the Internet is bound up in a profound threefold shift of the greater media system, from 'mass' to 'class' marketing, from national to transnational marketing, and from what we called probabilistic to individualized marketing. Advertisers have been pivotal to this triple reorientation" (135). In other words -- and this reviewer wholeheartedly agrees -- digital capitalism redefines the class society in production, consumption, and exchange arenas, representing a new epoch of capitalism and market governance.

Chapter 4 focuses on digital capitalism in education and training proper in the midst of the so-called Knowledge Economy, and draws the contours of the on-line delivery of educational products and services and their specific investments by both traditional and emerging knowledge providers, like universities and media corporations. In short, education becomes a booming industry of its own, replete with profit-making drives, and hence follows traditional market logic, which stands in opposition to the fundamental ethos of education: values and norms. The impact of the digital and capitalist governance in the educational arena is emphasized and held up to question by the author through a clear illustration of the organic interplay of the old and new (ICTs enhanced) education models for mass education and corporate labor development. According to Schiller, this revolutionary change is embedded in the differential functional and socio-cultural networks of the developed economies. All these changes reinforce the syndrome of the digital divide (between the haves and have-nots) which is structurally anchored in social reality.

Clearly and with numerous empirical examples, Schiller successfully introduces digital capitalism as a new idea for discursive function. That said, there are some caveats, especially in terms of methodology, source of information and data for analysis, and geographical coverage of Digital Capitalism. First and foremost, what is missing in the book is an analytical/theoretical construct(s) to further explore the multi-dimensional manifestations and contradictions of digital capitalism. Although there is much said about the phenomena/happenings about the "new" way of doing business, mediascape, and economic restructuring and transformation in the core chapters, the very basic analytical question of how structurally different (or revolutionary) is "digital" capitalism from the advanced global capitalism is not fully elaborated.

Missing a well-articulated theoretical-analytical construct and framework, Schiller seemingly adopts a one-directional, deterministic (system over people, technology over society) and pessimistic view on interpreting the interplay, interactions, contradictions, and synergies between the corporate-led economic system (digital capitalism) and the societies that are embracing or resisting such transformation. In reality, there are more occurrences of peoples' fight against the global capitalism in general and digital capitalism in particular, including organized protests (against the World Trade Organization, for example) and social movements (say, for environmental justice) against corporate-led capitalism. Further, ever-increasing informational viruses, hacker activities, and cyber-terrorism illustrate the dynamic and creative social forces in redefining spheres of control over digital capitalism.

Regarding the sources and data analyzed by the author to support his case for digital capitalism: against the backdrop of the cyber-communicative (Internet/cyber-based) information regime, Schiller's source of information, raw materials, and data are predominantly gleaned from the printed medium, including the Financial Times, Los Angeles Times, New York Times, and the Wall Street Journal. Obviously, the selection of printed media is in strong contrast (irony?) to the claim that we are in a digital era. Furthermore, these printed media are very authoritative in empirical terms but how analytically sound they are still remain a question. In other words, without a vigorous articulated analytical framework yet with a highly empirically focused study, the idea with Digital Capitalism is, or might be, a valid one as an idea but not -- as Schiller presents it -- an analytical concept that we can further explore.

As Schilller's discussion on the idea of digital capitalism is predominantly a North American (and, to a certain extent, the the Organization for Economic Co-operation and Development (OECD) countries') experience, his assertion that the corporate-led market system is somewhat globally transcended is highly questionable, if not especially problematic. He notes: "What is historically new, or so it seems to me, is a change in the sweep of corporate rule. For the first time since its emergence in the early twentieth century, the corporate-led market system no longer confronts a significant socialist adversary anywhere on the planet. Digital capitalism also is free to physically transcend territorial boundaries and, more important, to take economic advantage of the sudden absence of geopolitical constraints on its development. Not coincidentally, the corporate political economy is also diffusing more generally across the social field" (205).

Historically, the hegemony of global capitalism (or its counterpart, socialism) has never been able to transcend regional and local spaces, nor the ethnic-cultural spheres, though it has been adapting differentially in different socio-polities. Hence, digital capitalism seems to have a local, ethnic, and culturally shaped life course of its own. How the digitalcapitalism will (fail to) develop and penetrate into different, developing, ethnic-cultural spaces remains to be seen.

In spite of these problems, this work is a highly significant success in bringing out new illuminations, contextualizations, and interpretations of the facets of digital capitalism, in developed economies (North America) in particular. Furthermore, its richness in case studies and lively deliberations on them should undoubtedly be of great interest for students and scholars of ICTs development and advanced global capitalism.

That said, it is important to keep in mind that due to the opaqueness of human meaning of the changes in the informational society, innovations in ICTs are revolutionizing information, education, and entertainment delivery, affecting their production and consumption and transforming all aspects of social life and behaviors (Nie and Erbring 2000). For that reason, there is an urgent need for theoretically- and analytically-informed intellectual explorations of the etiology, processing, and impact of digital capitalism, as well as the alternative policy options, advocating different and better mode of coping strategies in a digital world. Obviously, this is a challenge for both Dan Schiller and for all of us!

Manuel Castells, The Rise of Network Society. Oxford: Blackwell, 1996.

Paul Hirst and Grahme Thompson, editors, Globalization in Question (2nd edition). Cambridge: Polity Press, 1999.

Robert W. McChesney, Ellen Meiksins Wood and John B. Foster, editors, Capitalism and the Information Age: The Political Economy of the Global Communication Revolution. New York: Monthly Review Press, 1998.

Norman H. Nie and Lutz Erbring, Internet and Society: A Preliminary Report. Stanford Institute for the Quantitative Study of Society: February 17, 2000.

On-Kwok Lai:
On-Kwok Lai is a professor at the School of Policy Studies, Kwansei Gakuin University, Japan, where he teaches comparative policy studies, focusing on environmental, technological, and urban affairs. He was a DAAD (German Academic Exchange Service) Fellowship holder at the University of Bremen and University of Bielefeld, Germany and has taught in Hong Kong and New Zealand. His current research interests are on comparative socio-political aspects of urban/environmental transformation under the new informational and high-tech regime.  <oklai@ksc.kwansei.ac.jp>

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