Information Technology and Wealth
* PhD Thesis: Whitney-Smith, Elin. "Information Technology and Wealth: Cybernetics, History and Economics" (1991). Doctor of Philosophy (PhD), Dissertation, Engineering Management & Systems Engineering, Old Dominion University, DOI: 10.25777/b24g-b673
URL = https://digitalcommons.odu.edu/emse_etds/162
Contextual Quote
"Wealth is generated through information. Those who control information, control access to wealth. Economic history can be analyzed in terms of information ownership. There have been two major information control shifts in the economic history of the west. Through understanding the dynamics of information ownership and control we can understand the dynamics of economic development."
- Elin Whitney-Smith [1]
Abstract
"Capitalism developed where and when it did because there was high information access. There was high information access because of a major advance in information technology - the press. Where the technology was not controlled by the ’’powers that be” there was economic growth and a shift in the entire social structure. Where it was controlled there was no structural change and there was economic ruin. The development of capitalism is a major step change in economic growth. It is also a major change in the way people organize themselves into groups. Major step changes in the growth and in the organization of cultures are found to be related to the introduction and use of information technology. The limit to growth is the limit of effective use of information or the variety limit. Economies are able to grow once the variety limit is raised. Information technology allows people to increase their individual variety in relation to the amount of information processed. This increase in individual variety allows the entire society to grow. Where there is high access to information through technology there is much growth and where there is less information access through control of technology there is less economic growth. When a high access economy is in competition for resources with a low access economy the high access economy will be more economically successful. A causal loop model is developed from a rich picture of the phenomena. The model is applied back to the press and forward to the telegraph and telephone and used to predict the impact of the current information revolution. One of the implications of information technology is that it allows people to model things better."
Contents
Elin Whitney-Smith:
"chapter I presents a brief summary of the history of mankind and an informal model of how major shifts in social, economic and cultural paradigms occur. It is intended to focus the reader on broad similarities of the dynamics of change.
Chapter II talks about the way the pre-press world presented itself on the basis of the "clues" in the historical record in contrast to how a post-press world presented itself.
Chapter III presents the social consequences of the changes in information access brought about by the press.
Those consequences include:
1) where economic development has occurred;
2) gender and age class of participants in economic development;
3) how we define what is part of the conversation of economics and what is not.
Chapter IV is a review of what has been said by others or literature review and how that relates to economic development and the impact of the press.
Chapter V presents the formal model - the second step in the outline of how one does science above.
Chapter VI uses the formal model to look at the impact of the press and is the third step in the scheme of how to do science above.
Chapter VII is the fourth step. It uses the model to investigate electric information technology - the telegraph and the telephone. In the course of that investigation the model is found to have some misfits. Investigation of these misfits further refines the model.
Chapter VIII is the conclusion and implications. It brings us back to the beginning in the form of a meta comment on what it means to take this stance toward historical and social science research.
I believe that there are regularities in how people shift from one way of perceiving and interacting with their world to another way of perceiving and interacting.
These regularities have to do with the perception, access and circulation of information in the society and the changes in perception have real consequences and leave trails of evidence. I have written this work as an offering to the reader in support of that belief."
(https://digitalcommons.odu.edu/emse_etds/162)
Excerpts
Writing, Knowledge and Power in the Early Hydraulic Societies
Elin Whitney-Smith:
"In the hydraulic societies which became the first city states, political power was based on the engineering knowledge used to build irrigation projects (North, 1981}. This knowledge was kept by the priest-kings and was the source of their power. In order to maintain power these early states invented the first information technology? writing (Ascher & Ascher, 1982; Canerio, 1970; Jones, G. & Kautz, 1981; Flannery, 1973? Lannning, 1967, Trigger, 1982? White, 1949; Cowgill, 1975; Wenke, 1984)
Writing was useful for recording the knowledge necessary to keep power. Writing can be seen as the first attempt to make information into a commodity which could be stored, passed from one to another and kept from those who were not members of the literate classes. This meant that in order to control certain information it was only necessary to restrict education. This helped the established hierarchy create the perception of the state as the protector and source of wealth, knowledge and all things necessary for life - physical and psychological. Citizenship gave people the right to share in the wealth but did not give them rights to own the means of production. Participation in the power structure was reserved to the ruling (knowledge owning) class by definition.
In these early city states the members of the elite had a paternal responsibility to the members of the group. The Bible story of Joseph's interpretation of the pharaoh's dream will serve as an illustration of how this relationship may have been perceived. The existence of the dream is an indication that the Pharaoh was expected to be privy to knowledge which others did not have. The dream told of seven years of plenty followed by seven years of famine. The actions of the Pharaoh in storing food from the years of plenty to be used in times of starvation shows that it was presumed to be the responsibility of the Pharaoh to insure that the people did not suffer. He could do this because he had superior knowledge and he had the power to allocate the use of wealth - the distribution of food. In contrast, it was not presumed to be a responsibility of western heads of state after the rise of capitalism to see to the feeding of the people in famines. In addition, the acceptance of Joseph into the ruling elite based on his knowledge indicates that knowledge was seen as providing an entre to the ruling class.
The story also shows how labor was determined by the elite: the children of Israel eventually became slaves in Egypt because of the group they belonged to, not because of their activities or their skills. Because security was no longer based on information shared by the all the people, but on the accumulation of material goods, it made sense for those who were stronger or more numerous to take goods from those who were weaker. Increased population also made the taking of land and labor - in the form of captive slaves - economically beneficial. This made physical security and military power a perceived need which allowed for an elaboration of the stratified state by creating another elite - the military - and further concentrated power in the hands of the elite who administered the whole (Schmookler, 1984). The culmination of this world view was Rome.
...
There are a few points in this whirlwind look at world history which I want to emphasize. The basic shift from the perception of the world as bountiful to a world of want preceded the invention of writing - the first information technology - and yet is dependent on it. This led to the perception that information was a source of power rather than something to be shared. This created a condition where it made sense to make information into a commodity and to control it as if it were a thing.
The combination of these two perceptual shifts - from the world of plenty to the world of scarcity and from information as a thing to share to information as a source of power - created a world in which elites used the innovations of their culture to increase the wealth of the whole. Much of the wealth was distributed by the elites to be used by all who were considered members or citizens. But what we would consider the activities of ownership, the decisions about the use of wealth, were in the hands of the elites. Therefore, they benefited most from the production of wealth in the culture. The elites were able to live better, had access to education and the arts, and made the decisions about what would be developed and what would not. This last decision-making ability enabled the elites to direct the course of innovation and therefore the direction of development.
The hierarchical organizational structure of the early city states - where decision making power is limited to one person or a small elite - emerged from the relatively egalitarian organizational structure of the hunting/gathering band - where decision making power is shared by most of the members. This seeming "about face" becomes more understandable when we realize the implications of the perceptual shifts which must have occurred.
The story may have gone something like this: In a world which has all of a sudden become perceived as poor, people would be willing to change some of their habits to work for a more stable resource base. Initially this did not involve a massive change in behavior. They only had to plant some seeds, remember where they were and then return for the harvest. It must have made sense to have some ordering of this activity. The shaman or grandmother, who would be the natural equivalent of a long term data base, may have directed the work and allocated goods. From this perspective the priest-king is an extension of this role, of one who allocates goods and labor for the good of the whole. Over time increased reliance on crops instead of hunted and gathered foodstuff eroded the traditional egalitarian organization. This occurred because the scale of the organization changed as populations grew. All the members of an emerging city state were no longer known or related personally to the "chief" or ruler. This meant that the nature of the relationships changed from a loosely ordered organization based on common ownership and common information control, to a paternalistic hierarchy in which information is controlled and resources are allocated by the central power structure (Gailey, 1987; White, 1949; Service, 1975)."