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The Stock Market, Armageddon, the Net & OSS
It's easy to lose sight of how much fear new cultures like the Internet can generate, just how unnerved all the people Out There are about all the things people here are learning and doing.
Sometimes, as with the Communications Decency Act, or with journalist's obsession over computer hackers, or politicians' indignation about digitally-driven sexual imagery, the moral backlash is obvious.
At other times it's more submerged. Notice the panic hitting the business community in the weeks after Internet Christmas shopping surpassed expectations.
Or the zooming prices of Internet stocks - Amazon, Yahoo, Intel - which appear to have crazed investors and are pulling financial markets higher and higher, nearly by themselves.
If any response to new technology is more pronounced than fear, it's hype and greed. Amazon.com now trades for more than 50 times the price at which it went public in l997. Ebay, the auction house, is valued at 13 times what its investors paid four months ago. Yahoo is valued at about $39 billion, nearly 100 times its valuation when it first went public, more than Boeing or Anheuser-Busch. "I can't tell you what's going on," an unnerved Wall Street technology analyst told an online trading and financial news service. "I have no idea."
This skyrocketing new valuation of the Internet marks the advent of a new era for the online world. No longer perceived as the playground for cybergurus, hackers, college geeks or fuzzy-head academics, the Internet now has the full attention of decision makers in Washington and on Wall Street. Historically, that's never meant anything good.
This week, the press has been full of Armageddon-like reports of the end of off-line retailing, normal shopping and ordinary work. An NPR station reported that developers are getting nervous about building more malls, since national retailers are increasingly finding online sales easier and more profitable. CBS Radio reported that Land's End was closing some discount outlets, since it was more efficient to liquidate its surplus stock online, and laying off hundreds of employees.
In an editorial page essay headlined "What Will the Internet Economy Look Like?," the New York Times suggested the answer will be grim. Property values will fall as stores close, "creating a glut of retail space and falling rents as Internet sales represent transactions not made in stores." Thousands of jobs would evaporate with them, along with state and municipal budgets, deprived of sales tax revenues.
The stock market, warned the Times, hasn't yet anticipated the economic dislocations that would come along with an Internet economy. "A recession could easily result just from the upheavals created by filing retailers and plunging commercial real estate values."
The creators of popular culture are, inevitably beginning to express these fears about technology as entertainment. In movies like the "Net," the humans are portrayed as dangerously -even murderously-isolated by computer technology. In "Enemy Of The State" geeks are given their most powerful and evil starring role yet, as morally oblivious, enthusiastic manipulators of privacy-invading, freedom-depriving -- and also murderous -- government technology. Even "Buffy the Vampire Slayer" showed the Net as a super-highway for witches in the already vampire and demon-haunted town of Sunnyvale.
The history of technology suggests that periods of enormous technological growth, such as the Renaissance and the Enlightenment, are followed not only by periods of religious and moral upheaval, but also by periods of slower technological growth and greater stability, as humans try and digest the new things in their life.
But so far, at least, the Internet has defied history. No one imagined that the Internet would spring from ARPANet, or that the Net would give birth to the World Wide Web. Like that wretched rabbit, it just keeps on going and going.
The Internet is the first organic technological revolution, the first one that and self-replicates. The number of things that can be done on the Net and Web only increases each day, from e-mail to MP3's to OSS to Videostreaming, to intuitive search engines and voice recognition software. On the Net, it's impossible not to see a culture that, far from slowing down, is only beginning to grow. And most Americans aren't even online yet.
If history is any useful guide, it suggests not that the technological change brought about by computing will halt or slow, but that the fear and hostility it engenders will intensify.
Still, no technological or other force can meet the insanely over-hyped financial expectations suddenly surrounding the Internet. Drooling investors and manipulable business reporters ought to consider the history of technology - some of the hype will come true, but not nearly all of it. When the dust settles, most people will still shop in stores and malls, still want to get some pizza and see a movie afterwards, and still want to see most of what they buy before they buy it.
Life will continue in recognizable form, and lots of investors are going to get roasted alive. It would be almost unbelievably ironic if what brought the soaring stock market down wasn't the collapse of the economy, but the inevitable return to earth of extraterrestrial expectations about the financial performance of Net companies. Perhaps some of those fears about the Internet are justified after all.
One symptom of a profound stress affecting modern thought, writes political scientist and technology historian Langdon Winner, is the growing prevalence of the idea - seen almost daily in media and public perceptions of the Internet - of autonomous technology. This is the belief that somehow technology has gotten out of control and follows its own course, independent of human direction. That this notion is patently bizarre hasn't prevented it from becoming a central obsession of the twentieth century.
There are several important reasons why the Open Source Software movement is an idea whose time has come, and whose message needs to be spread beyond the brainy geeks inventing, improving and distributing it. The notion of autonomous technology is one of those reasons.
OSS promises to give individuals some sense of perceived and real control of their technology. It offers real security: it isn't an out of control force that threatens their way of life, but a vital new tool of technological empowerment, a means of feeling - and being - in control. Operating systems like Linux aren't something a corporation sells and that people use without ever fully understanding it. They represent, instead the rarest idea in all technology: an important tool that people built for themselves, and can improve collectively and for free. And that companies can use to understand and deploy new technologies efficiently and wisely.
As the Net continues to grow at as a rapidly evolving, sometimes even frightening engine of social, cultural and commercial change, so will the hostility of diminished, even endangered institutions in politics, information and commerce: politics, journalism, the music industry, institutional stockbrokers, to name just a few contemporary examples.
At such a time, and for all sorts of good and obvious reasons, people need to feel in control of their own lives. They need to answer yes to philosopher Paul Valery's elemental question about technology: "Can the human mind master what the human mind has made?"
you can e-mail me at jonkatz@bellatlantic.net
While OSS is nice, I don't how praising it dogmatically plays into the speculation problems with Internet stocks, labor reduction, or any of the other topics he touched but failed to discuss with any depth.
"When the dust settles, most people will still shop in stores and malls, still want to get some pizza and see a movie afterwards, and still want to see most of what they buy before they buy it."
/. account so I'm an anonymous coward" Morash
I wonder if this will be true. American culture (especially the export version that's causing social problems in other countries almost as much as it is here) is increasingly founded on this consumption oriented weirdness... as if it's impossible to hang out with your friends and have fun outside of a mall. Our culture is very much focused on the tie-in of entertainment and spending... our economy, from shopping malls to television to the enormous wad of ad-funded web sites, is founded on it. I think that the surge in internet shopping may be a hint of a social shift that is just getting started; people are rejecting the ties between enjoyment of their lives and the need to buy buy buy, and moving towards cleaner ways of having fun. Perhaps buying gifts over the internet (Christmas is a whole additional column as far as consumerism goes), quick and painless as it is, freed up people to spend more time with their families this year. Economic upheaval or no, I think of this as a good thing.
--Jim "Too lazy to get a
From what I've heard, the company is not yet even turning a profit. Great googley-moogley the economy is nuts. This, of course, cannot go on forever.
"Imminent death of USENE^H^H^H^H^Hthe stock market is predicted" 1929 was nuthin'
The author talks about the fear that technology is taking on a direction of it's own, independent of direct control, organic in a sense. The author also says OSS 'promises to give individuals some sense of perceived and real control of their technology'. If you ask me, it's just the opposite. OSS is composed of competeing selfish agents, the whole gift culture thing, and the best stuff wins. The best technologically becomes the standard, or the most acceptable to the culture as a whole. In all truth individuals have much LESS place in the decision of where OSS goes than in traditional software. Not that I'm against OSS, but we should realize that it's a complex, self organizing, social construct and that because of it's exstreamly distributed, fast paced, darwinian nature the individual contributers are not as relavent. Darn, there's a term I'm looking for, the whole ant colony is greater than the sum of the ants thing, and that individual sub-unit doesn't have a clue where the whole is going. Some term from A-Life/complex systems I think. Oh well, you get the picture.
BFD. The shift to internet retailing is just like the shift from downtown shopping areas -> malls
or mom-and-pops -> big box retail outlets.
Job dislocation happens. Amazon will need people to stuff its boxes, etc. And if people really save money and time shopping on the internet that just means more money and time they can spend elsewhere.
um yeah. I've noticed that the vehemently vocal opponents to Katz's boring non-nerd-news articles have stopped filling the reply columns with subjects like "news for nerds!?" and "lose katz!!!".
I just wanted to let you (anyone who cares) know that it doesn't mean we've changed our minds. I know I haven't.
Real Person
This article fits some ideas I've been mulling over. The best thing that E-commerce could do is to replace the automobile as the primary means of accessing goods. Automobile culture has become a ridiculous, bloated socialist boondoggle where the car companies and the government make sure that every American spends several months a year working to cover car payments and insurance, because they think they have no alternative. Local governments compete to debase themselves with malls and parking lots, while quality of life goes into the toilet.
If e-commerce can supplant the Wal-marts and boring repetitive mall shops, I don't think many people will look back. It's a burden to have to drive 20 miles to buy commodified products in a nationwide big box retail outlet. It's like the retailers don't want to do anything for the consumer anymore; they centralize as far as possible and get the government to subsidize them with more roads and cheap gas.
A lot of retail could be handled by small neighborhood shops. All I need, for instance, is somebody to receive my UPS for me, and maybe deliver some real expertise on one product or another.
A lot of the retail systems that used to be exclusive to Wal-mart or chain drugstores for example, are becoming available to Mom+Pop stores. In smaller retail, having automatic restocking is key; they can't hold 500 cases of Coke in the back room like the big ugly box retailers can, but if they can send their shelf levels straight to the distributor on the 'net there's no need. They get the edge in convenience, by about 10 miles.
He's too lazy to even differentiate what he calls technology stocks. There are semiconductor stocks, Internet stocks, computer stocks, networking stocks, business outsourcing stocks, communications stocks, and more, but does he have a mind which is informed enough, and perceptive enough to avoid talking about them all at once as 'technology stocks'? Of course not. Such sheer stupidity. The top mutual funds for the last decade and a half are various technology sector funds, but does he know that? Obviously not.
Slashdot, you can find better heads than this one in your efforts to become a real magazine. Do us all a favor and take away this moron's soapbox, please.
Is it just me or was Slashdot just set back about a day with its stories, and Saturday's stories erased? And also this got me thinking.. should we have a seperate area for talking just about slashdot issues, like how comments are going, problems with service (like stories being back a day), and other stuff like that?
..?
MagPulse (hilgart@nospam-uiuc.edu)
now where did my password go
Wow... all that typing and you didn't say a thing...
Part of economic theory is adjustment. When people get laid off work because some new industry removes it, this is adjustment, a completely natural part of econimcs. Sure it hurts that 30 malls close, but I guarantee you that a bunch of new jobs in this new medium, the internet will open up or needs filling... We see a lot of that look at this something like we could do with a 80% increase in computer employees...
Deal with it. --> good article though.
I thought Jon's article to be excellent, although there are a few points I would quible with.
First of all, I don't think the net is the most radical technology ever to be created by human society. Think of the dislocations the following inventions caused:
control of fire
the wheel
the steam engine
telephone
control of electricity
transistor
Every age likes to thing of itself as the "mostest" in human history. Fact is I don't think there are many things that were invented over the past 30 years that were truly dislocating. Email isn't a radical form of communication vis-a-vis alternatives that already existed. It amy be more convenient or faster, but it isn't a dislocating technology. The telephone was. We all think of the telpehone as something mundane, we take it for granted. But it was truly civilization changing invention.
Moreover, the fear of technology destroying its creator is not a twentieth century invention by any means. i would go back to Mary Shelly's Frankenstein, but that's not going back far enough. She was certainly influenced by the myth of the Golem and many similar myths in many human cultures. Human society has always feared technology and change, no doubt going back to the days when humans first created tools.
Having said that, Jon is 100% correct in noting that the pace of technology ebbs and flows, and that in periods of rapid change fear and resentment (which often generates malicious mystical religious fervor) grow. The Open Source movement is a direct descendant of 18th century enlightment philosophy which believed that the spread of knowledge is the best way to allow human society to control its destiny. The American founding fathers were greatly influenced by this philosophy. It is no coincidence that the radical religious right tries to undermine the public school system, which should be the means of public enlightment (in the 18th century sense, not in the New Age sense).
Those of us involved in Internet technology should dedicate ourselves to use it as a tool for empowerment and education in the best sense of the word.
Just as newspapers survived radio and radio survived television, so will more traditional retailers survive net retailing. In fact, as Katz pointed out, many retailers are adding net retailing to their mix of services. Stores have been closing long before the net was invented. The net is not the cause of store closings. The most significant shift is the shift towards more of the economy being based upon the consumption of information and less on the consumption of physical goods. Information goods can be delivered more cost effectively on line than on main street. In the information economy, physical goods are still very necessary for physical life support. But these physical needs are finite. Demand for entertain, education and other information have more room to grow than the physical life support slice of the pie chart.
More depth, less filling.
The fact that proprietary software is going to cause non-geeks to feel out of control is something that hadn't occured to me. The same thing that we feel in our gut -- that sofware that we can get into the innards of & tweek & manipulate is the only good software, is going to be felt by non-geeks as well. But it's probably not going to be felt in the same way. I imagine they'd feel out of control, because they have a collection of black boxes arrayed around them controlling their lives.
In a way, this is the strongest argument I've come accross for the idea that proprietary software is immoral, rather than simply practical (as ESR seems to argue).
I both agree & disagree with the idea behind this....
On the one hand, yeah, of course there are social constructs controlling the way OSS works. It's certainly not possible to equate gift culture with individual control or anything like that.
But this kind of thing has been going on forever -- cultures aren't individuals, they never have been and never will. Which also means that it's thouroughly wrong-headed to think that just because technology controls aspects of our lives that we've lost something. We might have, but that remains to be shown. My feeling is that what's necessary is responsiveness. If the culture (or in this case, technology) is responsive to the needs and desires of individuals in some reasonable proportion to the degree to which it controls the individuals (and it always will control individuals, though it can be very hard to decide how & to what degree), that's a good thing. Frankly, OSS seems to me to be more likely to be responsive in this way than more proprietary models.
Awesome article, Jon, and right on the mark, IMHO.
Kythe
(Remove "x"'s from
Kythe
I really liked this article. While I admire Mr. Katz very greatly for his opinions and his willingness to share them (as well as his ability to do so), I find that he tends to be a little too "blue sky" for my taste most of the time. This, however, had an appropriate and realistically cautionary tone.
First, people complain when Katz is long-winded, now they complain when he is more succinct. D'oh!
If you can't stand the thought of risk, don't invest in net stocks.
For those of you who manifet more balls than the increasingly apocalyptic and generally squeamish Jon Katz, there's money to be made. Quite a bit in fact.
The SAS have it right - "He who dares, wins".
Leilah
~ Leilah
Wow. This sounds very hopeful, actually. Jobs evaporate all the time -- guess what, there are other jobs. The real good part is part where the net economy deprives governments of tax revenue. That part is real enough -- just look at the way that big manufacturers, for instance, play off states and locales looking for the best tax break package, bribes, etc. in order to move there.
If most commerce moves to the net, it still needs physical warehouses in real places, staffed by real people. Potential tax base. But these will be moveable in a way that your local Walmart isn't. And that means cash starved governments. A good thing.
At such a time, and for all sorts of good and obvious reasons, people need to feel in control of their own lives. They need to answer yes to philosopher Paul Valery's elemental question about technology: "Can the human mind master what the human mind has made?"
contrary to what katz seems to be saying in the posting, it's not at all apparent that oss by itself is going to make technology any less frightening.
it's not the things we control (or think we control) that terrify us, but those that we can't control. software is something we (still) have a hold on - for example, there are always people capable of writing operating systems, and there will always be alternatives to windows. but it's things we have no control over - the tons of our personal information being stored in huge private databases, the increased reliance on systems that were explicitly not designed for mission-critical performance(*) - that are truly terrifying.
exactly because we have no impact on them, but they have a great impact on us.
---
(*) remember the problem with a paging network satellite from a few months back?
My other car is a cons.
You just described every episode of Star Trek that was ever made.
One symptom of a profound stress affecting modern thought, writes political scientist and technology historian Langdon Winner, is the growing prevalence of the idea - seen almost daily in media and public perceptions of the Internet - of autonomous technology. This is the belief that somehow technology has gotten out of control and follows its own course, independent of human direction.
You just described every episode of Star Trek that was ever made.
I have utter faith in the human ability to act individually and as a group to make lives better. We've learned some pretty hard lessons since the Industrial Revolution, and we won't forget them any time soon.
Just because we have this ability (hackers especially!) to bring smiles to our friends and our family, doesn't mean that all of us choose to use it.
Until 1998, I had to be content with making sure my congresspeople were making the right decisions for me, and then I heard that Netscape was going open source. Now it's our turn, and we have control; we have that ability to make people look and say, "that's great! I can use that."
Go change someone's life today with what you can do :)
-- thalakan
It seems to me that the people who are scared sh*tless about the march of technology are not people who're likely to be mucking about with programming Open Source or otherwise. Rather, they are the end users. Given that, its hard to see how Open Source Software will mollify their fears. What Open Software might allow is for more people to influence the functionality of the software they use, since it makes it possible for a user to take a program whose functionality is not appropriate for them to an in-house programmer to fix. Boy would I like to be able to do that with Word 7! *grin* That sort of thing would lower people's frustration with technology, perhaps.
I do think you're right that in-person shopping isn't going away anytime soon, since as you say, most Americans aren't on the Net yet. In any case, I think most people have a higher comfort level with buying some things (clothes, for example) in a store where they can examine and try on the merchandise.
Are ridiculous. Companies like Netgrocer and Amazon are operating with the motto "We lose money on every sale, but we make up for it in volume!" Seriously, the more books Amazon.com sells, the more money it loses!!! Apparently these companies think it is worth selling things for less then cost to build market share.My personal theory is that the use of intelligent agents for comparison shopping will make evertything sold on the 'net a commodity, so as soon as these companies raise their prices enough to show a profit, customers will flock to the new cost leader. You can't expect brand loyalty on the net! Conclusion: 99% of people buying internet stocks are going to get badly burned!
"Freedom means freedom for everybody" -- Dick Cheney