Technology for the People 

The main barrier to Philippine development is the grossly inequitable distribution of assets, wealth and resources and how those wielding economic and political power prey on others to amass even more. It is a fallacy that the existence of ICT per se—as a technology potentially available to all—will benefit the whole of society and everyone in it equally. It is an even greater fallacy that ICT will serve to level society’s inequities.

(Last of two parts)

By Sandra Nicolas

There are two reasons why ICT, if understood according to the conventional hype, is a development dead-end.

The first reason is that ICT is simply not the epochal economy-transforming technology it’s made out to be. It will not result in a quantum increase in economic output or in jobs as resulted, say, from the development of electricity or railways.

Take electricity. Production processes were truly revolutionized when power, unlike in the days of steam, began to be available to various sizes and types of equipment and could be transmitted over great distances. Production lines were made possible in factories and economic activities could be spread out across the nation.

ICT certainly allows information to be managed and transmitted at speeds unthinkable mere decades ago. Yet, at the end of it, how much does it have to offer beyond being a new and more rapid way of communicating?

Considering the outlays, the productivity gains have so far been marginal. ICT has allowed information to move faster than before. But the gain from information flows through the Internet, moving in seconds instead of days, has nowhere been near the gain in moving goods and people through railways, in days instead of months.

Consider a much-quoted study by Richard Gordon of Northwestern University which tries to explain the 1.33 percent increase in productivity growth in the US (again, probably the world’s greatest user of ICT) from 1.42 percent in 1972-1995 to 2.75 percent between fourth quarter 1995 and fourth quarter 1999. Against the hype, the study finds that only 0.07 percent of the 1.33 percentage-point rise in productivity growth, “a mere pittance,” is due to the use of ICT outside durable goods.

Most of the productivity growth he attributed to the “cyclical upturn of the economy” unrelated to the ICT boom. “Outside of the 12 percent of the economy engaged in manufacturing durable goods, the New Economy’s effects on productivity growth are surprisingly absent,” says the report. Much of the productivity gains in durable goods, in turn, can be explained by rapid gains in just its computer sub-sector. Gordon sums it up, "There was… a really striking result; if you take out the computers and other technology stuff there's no acceleration (in productivity)."

And it is also plausible, though under-researched, that productivity gains have been registered by how ICT has enabled cheap-labor enclaves to be set up in the third world. With workers working to produce goods in factories or “knowledge workers” performing services long-distance in a roomful of Internet-connected computers.

Indeed it is also plausible that much of ICT will be used mainly to increase individual companies’ market share rather than to increase total output—that is, to intensify competition. Take e-commerce and online auctions for producer inputs or consumer goods and services. Apart from the corresponding ICT investments (which some hyper-enthusiastic research speculates may reach over $9.6 trillion worldwide by 2004), will more goods be bought and sold at the end of the day? Maybe a little, but not by much. E-commerce is little more than the glitzy upstart kid on the marketing and advertising block.

The main determinant of output will be how many products the market can take; under capitalism, this is ultimately determined by how much buying power the people have. Outside of the ICT sector and its multiplier effects, most workers will remain underpaid and most of the jobless will remain unemployed. In countries like the Philippines, furthermore, most peasants will remain landless and most of the semi-proletariat will remain on the subsistence fringes of the economy.

Overproduction

This, in fact, underpins the larger problem of a generalized crisis of overproduction in the global capitalist economy: output far outstrips the capacity of the market to absorb it because the majority are poor for being on the losing end of the skewed distribution of resources. (Much of social output is toward wasteful and unnecessary products while necessities are under-provided, but that is another story.)

The ICT industry, like so many others before it, suffers from global overcapacity. Since the early 1990s in the US, for instance, investment has been mainly flat in the other sectors of the economy and the only seemingly profitable outlet for capitalists was in ICT. And even this has proven lacking.

Overcapacity in the ICT industry is especially ironic because, if the hype were true, then one would think that efficiency would be the norm there because of the fast, free and timely flows of information.

Yet the opposite occurred. Take the recent bursting of the high-tech stocks bubble. It was, as the Wall Street Journal bluntly put it, “one of the greatest wastes of money and human energy in modern history.” Billions of dollars were poured into companies that never made a profit, many of which have shut down.

The tech-heavy NASDAQ lost over half of its value, a paper loss of $3.33 trillion. Of over 700 technology companies that went public since 1998, according to Thomson Financial Securities Data, three-quarters are now below their offering prices after selling more than $75 billion in stock that has lost more than half its value.

And the ICT bubble has reached into the real economy as well. Years of unjustifiable ICT investments—which in the US increased from less than 7 percent of total investment in 1954, to one-third in 1980, to over one-half in 2000—are redounding. Tech giants Hewlett-Packard, Dell Computer Corp. and Intel Corp are laying off thousands due to sharply lower growth or even falling sales. Nortel Networks, a Canadian company specializing in high-performance Internet networks, will alone lay off 20,000 employees; Ericsson of Sweden, one of the world’s premier cellphone makers, is shedding 12,000 jobs.

With companies who use ICT probably looking at it more soberly now, we can even expect them to cut investment spending on it substantially beginning 2001.

And this is the industry that will lift the Philippines to prosperity?

Basic problems

The second and more fundamental reason why ICT will not resolve Philippine poverty and backwardness is that the basic social relations which work to keep the majority poor remain. With the advent of ICT, capital and goods certainly move differently, much faster than a century ago.

But ICT has not changed the fact that capitalists hire, control and exploit workers, that landlords dominate, oppress and exploit peasants, and that imperialist countries dictate policy to their neo-colonies. It has not changed the fact that the resources of society are the monopoly of a few.

In the Philippines, how might ICT help resolve the chronic problem of widespread poverty?

ICT is an indispensable tool for economic development. This is certain. But, as a tool, it will work only insofar as it addresses the problems at hand. Is the lack of access to information or the slow pace of processing information the main barrier to economic development, to improving the lives of the majority? Certainly not.

The main barrier to development is the grossly inequitable distribution of assets, wealth and resources and how those wielding economic and political power prey on others to amass even more. It is a fallacy that the existence of ICT per se—as a technology potentially available to all—will benefit the whole of society and everyone in it equally.

It is an even greater fallacy that ICT will serve to level society’s inequities. Who will have the greatest access to and control over ICT? And who will get the edge from having such greater access to it? Those who have the resources to start off with: those who can buy the computers and the telecommunications equipment, who can hire the people to work them and to analyze the information, and so on.

ICT is the wrong answer to the right question. The question is: How will the country create opportunities for the majority to lift themselves out of poverty? What is needed in the Philippines, first and foremost, is to break the land monopoly in the countryside through genuine agrarian reform and to develop a base of national industry that breaks foreign monopoly control of the economy.

ICT alone cannot transform the backward agrarian and pre-industrial economy into a prosperous “knowledge-based economy,” as the hype goes. But does this mean ICT should be scrapped as if it had never existed? Certainly not for its potential benefits are many.

Economic planning revisited

Much of so-called economic planning these days is thinly disguised abdication to market forces. Shouldn’t the economy be managed to meet the needs of the majority for jobs, livelihoods, education, health and housing? And yet, increasingly, these are provided only to the extent that it is profitable to do so.

The emergence of ICT makes the socialist planned alternative more possible than ever before.

ICT enables vastly improved economic planning. The only real advantage to the price and market mechanism is that it, in effect, processes information so that producers’ and consumers’ disparate actions are coordinated through the marketplace. But even this advantage disappears with the great advancements in ICT: efficient and effective economy-wide planning can now be undertaken on a larger scale and more flexibly than ever before. Already TNCs, mammoth organizations spread over great distances, engage in enormously complex planning and management.

ICT also enables the planning mechanism to be more participatory than ever before. The creative input of millions of working people can be elicited, transmitted and used; those primarily responsible for running government can engage in a deeper and more sustained dialogue with the people; distant communities can be linked to the centers of government.

ICT serving the people

But, again, none of this means that ICT is in itself the panacea. Nor does it mean that ICT can substitute for the basic social and economic reforms needed.

ICT is a tool which will be wielded by those in possession of it mainly in their interests. Thus, expect economic and political elites to use ICT to retain their hegemonic control over society so as to continue amassing ever more wealth and power. They are already in overwhelming control of the technology now, notwithstanding computers and satellite dishes being set up in the odd African or Asian village.

Because for ICT to be a tool for economic development, it must be placed in the hands of the people. ICT is not something in the abstract that it is accessible to all. ICT, which resides in hardware, software and skilled personnel, needs material resources to be made real. For ICT to be placed in the hands of the people, the resources of society must be placed in the hands of the people.  #

(Part one: The False Promises of the New Economy)