Capitalism's internet dilemma

by Greg Harris

As the US and its allies prepared their bombing missions in October 2001, the media propaganda war was already in full swing. Thousands of images and millions of words praised US policy, which was equated with the values of civilisation. Many socialists who had experienced such propaganda campaigns before were surprised, however, by the level of intelligent discussion in their workplaces and communities in the face of this imperialist hype.

A major contributor to this continuing openness appears to have been the internet, an unpredictable and accidental but powerful new participant in the world media arena. While the internet is hemmed in from all sides by a mass of commercialism, it still provides the possibility for independent information distribution far surpassing the overwhelmingly corporate-owned press, radio and television. How did this happen? How have the global capitalist corporations lost some of the reins of media control? The answer goes much further than the rise of a new technology.

Around 1450, Johannes Gutenberg invented moveable type. This created the possibility of the modern printing press. Within a few decades, there were millions of published books and other items. According to a technological determinist reading of history, Gutenberg’s invention was the cause of this huge thirst for reading. An alternative, materialist, interpretation is that Gutenberg provided the tool by which an awakening population could get the information it was already seeking, a tool that contributed to this mood. It was a revolutionary time, the Renaissance, demanding revolutionary technologies.

In the 20th century, a similarly revolutionary period, numerous new technologies were employed to develop the electronic media. Most of these were designed to broadcast information, almost exclusively by governments and corporations. The turmoil from the 1980s laid the basis for further media changes. The collapse of Stalinism in the Soviet Union and Eastern Europe was accompanied by a new capitalist triumphalism: Margaret Thatcher’s victory over the miners, the defeat of the Sandinistas in Nicaragua, the Reagan years in the US, the rise of neo-liberalism as governmental orthodoxy, the blight of postmodernism on areas of academic investigation, painted one picture. But there was a counter thread: the renewal of socialist theory, the first stirrings of a movement with an internationalist alternative to capitalist globalisation, a yearning for communication and information beyond the “vast wasteland” of the mass media.

These two opposing globalising trends each had its preferred technologies. The capitalist globalisers reinvented television, especially satellite distribution. Despite a sometimes subversive message (such as The Simpsons), the medium is about global capitalist markets, and with audiences of four billion, it is the one technology which capitalism is delivering to the world’s masses. Proprietary data networks began delivering key financial information in fractions of a second. US national information infrastructure and global information infrastructure initiatives were dedicated to establishing global data networks to deliver new commercial services such as video-on-demand to those who could afford them. And huge, super-secure military networks began exchanging secrets hidden by unbreakable codes, the only privacy in an increasingly intrusive world.

The opposing tendency was represented by dispersed (but still “high tech”) access to global email in academia; the amateur and anarchic networks such as Fidonet; the communities of technologists, known as hackers, driven by beliefs about making technology useful; community activists, trade unionists, and human rights campaigners wanting to link beyond their city or country to share experiences; political activists taking the opportunity for organising provided by this; researchers wanting to overcome the tyranny of distance as fields of research became global. Their technologies: a range of national networks which from the early 1990s, driven by requirements for email interconnectivity, joined up with an old and apparently superseded technology, the internet: unreliable, insecure, and hard to measure for billing purposes.

Both trends showed that the world stood on the edge of a global data network that would let millions and eventually billions of people exchange information across the world immediately. One vision saw the financial opportunity that the commodification of all these global relations could create, a 21st century global information dependence to match the 20th century dependence on the private car. The other had a less clear vision, one that focused on making the new technology useful, using the technology to help overcome the increasing complexity of late 20th century life. Where the first vision was clear and well funded, the second was vague, and only accidentally funded. There was room for only one primary global network. The two visions clashed, and by 1995 the first battle was over: the internet had won; the commercialised information superhighway was, for the moment, vanquished.

The lessons of history

To understand this result, it is necessary to look at the history of the internet’s development. The origins of the internet can be traced back to the successful launch of the first satellite in October 1957, the Soviet Sputnik. In the United States, the panic which followed produced huge investments in US academic research, including the creation of the Defense Advanced Research Projects Agency (DARPA). One project which DARPA funded would grow to become the internet.

According to one version of history, the purpose of the internet project was to save money. DARPA was funding projects at diverse research centres that used a range of incompatible computer systems. Information from one project couldn’t be rapidly shared with another. The solution required was a network communications language (a protocol) that could communicate with this range of computer systems. It would be a relatively benign technology, providing an efficient and comparatively cheap method of allowing the researchers to exchange information. (Only “relatively” benign, because much of the research being funded at the time was on how to use technology to drive Vietnam back to the Stone Age, or to destroy the Soviet Union.)

This theory has some gaping holes. First, at each network site, the communication computers used were Honeywell DDP-516 computers. These were “ruggedised” computers designed to operate on a battlefield. (At one Las Vegas computer show, one was attacked with a sledge hammer to prove its robustness.1) Secondly, why was the chosen network architecture non-hierarchical (not a traditional feature of US military thinking)? This was neither a requirement, nor a characteristic, of existing networks. Its primary purpose is to remove any single point of failure (the US telephone network of the time, which was hierarchical, did have a single vulnerable centre).

An alternative explanation comes from a Rand Corporation proposal of the pre-internet period. This group worked as a private “think-tank”, primarily for the US government. In 1964 Paul Baran of Rand Corporation prepared a research paper, “On Distributed Communications”.2 It is full of terms like “withstanding heavy enemy attacks”, “large numbers of breaks” and “secrecy is of paramount importance”. This is the sort of language that would have had Pentagon generals reaching for their cheque books.

So the internet started life as an offbeat idea to keep military commands flowing over a partially destroyed military and public telecommunications system in a nuclear war scenario. For that purpose even the US military would accept a non-hierarchical network.

From chaotic beginnings, the internet grew beyond the control of DARPA, partly because it was so useful to so much research, not just militarily funded research. What was unusual in the internet’s case was not that its development, like most US technology of the period, was based on government funding, but that the results were not handed over to a corporation to exploit. In this, the internet technologies are different from space research spin-offs such as velcro or teflon.

The internet is not a single technology. Throughout the 1980s, the evolution of the internet replaced many of its original core technical elements with new ones. The method used to develop these technology standards was a system called “requests for comment” or RFCs. Today the entire internet set of standards is based on thousands of RFCs, produced without payment and available for implementation without charge. A group called the Internet Engineering Task Force, part of the Internet Society, continues this tradition of open standards development for the internet. (By contrast, most broadly developed technical standards are based on a standards body that develops and then sells highly priced copies of recommendations.)

DARPA did attempt to hand the internet over to AT&T in late 1971 or early 1972.3 After some months’ deliberation, AT&T declined. While this may sound surprising, there is a record of poor investment decisions by major technology companies caught by surprise by subsequent market developments. The pattern appears to be the inability of a company to exploit a new technology which confronts that company’s core product basis. AT&T itself developed and virtually gave away the Unix operating system. Xerox gave away the graphical user interface that Apple Mac and Microsoft Windows are based on, and there are many more examples. In AT&T’s case, there is still a technical argument that the packet switching concept used by the internet is not inherently better than the circuit switching alternative. Certainly the capitalist telecommunications industry is yet to make money out of packet switching.

The result of the internet’s development is a network used by 400 million or so people around the world, mainly for non-commercial purposes (email, chat sessions, information exchange and so on). The internet’s military origins are sometimes referred to as evidence of the value of military spending. In reality, the success of the internet following these beginnings is a credit to the engineers (during the 1960s and early 1970s often opponents of the Vietnam War) who subsequently worked to build the internet as a public good.

For the past year, the capitalist financial press has debated whether the internet has been a “success”. In terms of usefulness for a growing proportion of the world’s population, the answer is yes. But hundreds of millions of people using a partially free email service or information and swapping music files isn’t capitalism’s real concern. The real concern is: is the internet profitable? The investment results are commercially dismal, with dotcoms substituting optimism for profits in reporting their results. The Financial Times described the dotcom company Cnet’s 2001 results as follows: “Excluding amortisation, impairment of goodwill and intangible assets, business integration expenses, net losses on investments, extraordinary interest expenses and income tax, the group posted a loss of $22m or 16 cents a share, in line with expectations.”4

Capitalism’s technology bonfire

Current telecommunications and information technology industry problems stem directly from an early 1990s vision of future consumer patterns, described in the clash of views above. Following the explosion of the personal computer industry in the late 1980s, the data communications industry came into its own. Initially this was based on proprietary and very expensive services, such as providing stock market information to the financial services industry. But by the late 1980s, it was already clear to media and technology corporations that a mass consumer market was waiting to emerge.

As it turned out, the corporations were correct in their prediction of a fundamental change in global communication. Much to their surprise, however, all of their investments failed. The winner was the internet, an unreliable (“best effort”) network5 most suited to email and haphazard free data retrieval (the World Wide Web). It provided no security, reliability or billing mechanisms, although these are critical commercial requirements. The internet also turned every user into a potential publisher. Perhaps worst of all, it was based on free standards, precluding the possibility of control by patent (in contrast to early development of film, radio and television).

In 1995 and 1996, most investment on earlier alternatives was abandoned, and hundreds of billions of dollars started to make their way into internet companies, regardless of its architecture’s unsuitability for business. Much of this investment was based on the mistaken belief that human civilisation was about to be transformed into a home-based mass of consumers making all their purchases on line.

The internet did provide a means of circumventing telephone company monopoly through the introduction of (poor quality) international and national telephone services. This made it an ideal means of entering the telephone market for new competitors (many of whom have since failed). After decades of monopoly profits, both government and corporate telephone giants started to panic. Major players such as AT&T, British Telecom and Deutsche Telekom each hired new chief executives from the computer industry and set out to recapture markets, both in their traditional territory and in the high-speed internet delivery area.

The introduction of Wireless Application Protocol (WAP) phones at the end of the 1990s was the first attempt to move the internet craze to telephones (although WAP was deliberately designed to be incompatible with the internet). WAP was a marketing disaster, but by the time this became obvious, the telephone companies had already gone down the path of massive investment in 3G (third generation) mobile. European governments were able to sell 3G licences for a total of £120 billion. This cost, at a time of declining markets and the burst of the internet business dotcom bubble, created the conditions for disaster.

Most people in the world don’t have access to a telephone. But if they did, and if they spoke 24 hours a day for the whole year, all those conversations could be carried over the world’s telephone cables in a few hours. This gives an idea of how oversupplied the world is with communications infrastructure. The result has been an unprecedented collapse in the industry. According to the Financial Times, some US$4 trillion in stock market wealth, including around US$1 trillion in actual material investment, has been destroyed.6 By August 2001, some 350,000 jobs had gone in the sector, alongside 200,000 in related information technology industries. Brand new million dollar equipment is smashed up for scrap metal.

The waste defies imagination. In June telecommunications equipment manufacturer Nortel Networks set a record for a three-month loss of US$19.2 billion. Other companies have posted huge drops in anticipated value. The major optical components manufacturer JDS Uniphase has been reported as considering writing down $40 billion currently listed as “good will” on its books, and France Telecom lost up to £100 billion in the estimated value of its Orange subsidiary in the months leading up to a partial listing on the stock market (contributing to its current debt mountain).

After spending £18 million on a Norwegian mobile phone licence, Finnish operator Sonera simply gave it back for free because it couldn’t afford to use it. In all, Sonera’s £4 billion investment in European mobile phone licences is widely considered to be worthless, according to the Financial Times.7

In the last week of August, equipment manufacturer Lucent Technologies announced that it was closing down Chromatis Networks, a business that it bought for $4.5 billion in stock last year. Lucent’s debt was classified as “junk status” by credit rating agency Standard & Poor in June, and further reduced in July.8 Ratings for other companies such as Marconi and Alcatel are also being cut. These reductions damage the corporations in two direct ways: they increase the cost of borrowing, and they can lead to the dumping of their shares where investors (such as pension funds) are barred from owning speculative grade debt.

These results magnify the earlier internet dotcom financial disaster. Between January 2000 and September 2001, more than 700 major internet businesses failed.9 Many of these were simply vehicles for defrauding investors. But others appeared to have a real purpose.

In the second quarter of 2001, personal computer sales declined for the first time in fifteen years. International Data Corporation estimates that PC chip-maker revenues would decline from $50 billion to $38 billion this year, reflecting the collapse of many chip-makers’ employment and plans. On July 31, major US chip-maker Motorola made the extraordinary statement that “its markets were in such turmoil that it could not forecast its performance next year”. The Financial Times reports, “A large telecoms operator has gone bust on average every six days for the past six months”.10 This is leading to tens of thousands of jobs disappearing every week from large equipment manufacturers.

Was this disaster predictable? One major problem for the technology corporations is how to convert technology-based productivity improvements into profit. As socialist economist Ernest Mandel wrote decades ago, when new production methods are introduced, it is initially unclear “whether these methods will continue to bring super-profits to their initiators or if they will lead, on the contrary, to an all-round lowering of prices of production”.11 In this industry, the evidence points to the latter.

Harvard University Professor Michael Porter, writing in the March 2001 Harvard Business Review, complains: “The great paradox of the Internet is that its very benefits—making information widely available; reducing the difficulty of purchasing, marketing, and distribution; allowing buyers and sellers to find and transact business with one another more easily—also make it more difficult for companies to capture those benefits as profits ... The openness of the Internet, with its common standards and protocols and its ease of navigation, makes it difficult for a single company to capture the benefits of a network effect.” Instead of profiting, he writes, “Companies have turned competition into a race to the bottom”, and “simply improving operational effectiveness does not provide a competitive advantage”.12

Commenting on the disaster that the telecommunications sector has become, the Financial Times editorialised: “Investors must be under no illusion that high technology will improve general profit levels. It will not. The advantage of improved efficiency will be eroded by competition.”13

The failure of these “new economy” visions is having an impact on one popular post-industrial theory, that of the “networked company”. Left-wing information theorist Manuel Castells, for example, expects the corporate world to follow the global networked business model of the Cisco corporation.14 Cisco is a difficult model to analyse due to the gulf between its proclaimed practices (the version found in the adulatory business texts) and its less well-known real activities. The networked model has a small but hugely profitable corporate centre outsourcing every activity other than strategy (including manufacturing). This extremely flexible centre simply buys the resources it needs for the time it needs them, overcoming the traditional capitalist dilemma of overproduction by producing exactly what is needed. This model underestimates the genuine financial benefits that capitalist corporations get from monopolisation. Free market enthusiasts can talk about “frictionless capitalism”, but just being able to create a high-speed infrastructure between many medium-sized capitalist companies is not the same as making a profit.

Who controls the internet?

In terms of control structures, the most important body is the Internet Corporation for Assigned Names and Numbers (ICANN). This has responsibility for major changes to the internet’s architecture, including the issuing of “top level domains” such as “.com” or “.org”. ICANN was developed under the auspices of the US government, in consultation with close allies such as the Australian government. It is incorporated in California and therefore subject to Californian courts. The US Commerce Department also maintains a veto over ICANN’s major decisions. A vigorous fight is taking place over the existence of directly elected members on the ICANN board. In the first round of elections in 2000, internet activists (as distinct from corporate representatives) won some positions. While the overall structure of ICANN is completely dominated by corporations, the presence of even a single activist provides access to plans and documentation, something that ICANN is now attempting to stop.

In practice, the threat posed to the internet by ICANN governance activities is less immediate than that from commercial organisations and governments today. ICANN over the next decade could tighten control by restricting future paths of development, such as the implementation of multilingual representation within internet addressing. However, in Code and Other Laws of Cyberspace, US lawyer Lawrence Lessig develops a compelling argument that even without any government controls over the direction of the internet, commercial pressures will provide an increasingly controlled, censored and intrusive network.15 Lessig has become an increasingly vocal advocate of mass political action to try to stem this development.

One left-wing commentator, LabourStart web site’s Eric Lee, equates the internet governance organisations ICANN, W3C and the Internet Society collectively with the WTO, World Bank and IMF.16 This view is not supported by a close examination of these organisations. Firstly, the internet is not a global system of economic relations. ICANN is certainly the US government-designed mechanism for imposing its control over the internet’s governance. The US role in ICANN could be compared to that of European capitalism in the International Telecommunications Union.

As Lee states, the World Wide Web Consortium (W3C) and the Internet Society are also US-based. W3C is an unashamedly corporate organisation, charging its members $50,000 a year. It has no individual membership, and a record of rapidly approving a wide range of not very useful standards based on technologies that its members are trying to sell. It is currently involved in a dispute with the wider internet community around its proposal to endorse standards based on proprietary technology (providing private corporations a stranglehold over the internet’s future).

The Internet Society is a UNESCO-affiliated non-government organisation created in the early 1990s to help maintain the independence of the Internet Engineering Task Force, its key constituent (an aspect which Lee overlooks). Whether and how long the IETF is able to survive as an independent usage-focused global technology group is uncertain. But to date the Internet Society has provided a counterweight to corporate and government interests in the internet standards area. In particular, IETF’s 1999 rejection of the call by the US Federal Bureau of Investigation to facilitate tapping in internet telephony was an important stance. In part the survival of the currently structured internet with the Internet Society’s support represents a political convergence with a proselytising wing of US capitalism. Represented by George Soros, this seeks to use the internet as it currently exists (rather than a fully commodified version) to win the ideological support of the intelligentsia in Third World and former socialist states to support for US “democratic” ideology.

Government controls and threats are being used to keep a rein on the internet. But compared to the controls that are exercised over the issuing of a new television broadcasting licence, for example, these remain flimsy. Governments and corporations are on the lookout for ways to increase this control, and believe that they will be able to use the September 11 terrorist attacks to gain this. Whether this is successful depends on the strength of the civil liberties and anti-war movements in coming months and years.

Another issue of control is the degree of success that global media corporations are having in dominating the internet. Robert McChesney has provided some of the best analyses of global media monopolisation available. In relation to the internet, his writing has focused on answering the untenable argument that the internet is a technology that is about to cause the collapse of capitalist media control. His focus on the media corporations’ ambitions regarding the internet, however, has prevented him analysing what is actually happening. In 1997 (with Edward Herman) he states, “As one Viacom executive put it, media companies ‘like us are in the ideal position to exploit the internet because you’ve got to find the hooks and reasons to bring people into a site and we are good at creating excitement and entertainment’”.17 If this had been the model for the internet’s development (a television rerun), the point would have been valid. But even in 1997 it was clear that this would fail, and the corporations have since lost billions of dollars discovering that people don’t primarily use the internet as a consumer entertainment delivery channel. By the late 1990s, these corporations were focusing on “digital rights management” and “intellectual property rights” to try to ensure that people pay for anything they look at.

On the AOL-Time-Warner merger in 2000, McChesney wrote, “The evidence so far suggests the media giants will be able to draw the internet into their existing empires”.18 That wasn’t so. Political analysis suggests this, and in ten years’ time it will be a very high likelihood. But even by then, the media corporations couldn’t afford the hundreds of billions of dollars (far higher than McChesney estimated) that would be required to force their new media model on unresponsive consumers. He provided figures to show the control exerted over internet start-up companies by media corporations, and the huge advertising spend of these companies with traditional media. But he didn’t mention that this was generally requested and paid for in equity in the start-ups. When most of these subsequently failed, the impact on the media corporations was a substantial dent in their bottom line.

The clearest example of McChesney’s misrepresentation of the internet was his assertion in the same article that, “in the big scheme of things, having the ability to launch a website at a nominal expense is only slightly more compelling than saying we have no grounds of concern about monopoly newspapers because anyone can write up a newsletter and wave it in their front window or hand it out to their neighbors”. In many countries, the union and progressive movements have fought for and won the right to use Gutenberg’s 1450 print media technology. But we haven’t had the right to use a single 20th century mass electronic medium: radio, terrestrial television, satellite television, cable television. The internet is different. How this happened is of some historical interest. What capitalism is doing about it, especially on the “intellectual property” and censorship fronts, to take back what we have today is a pressing political priority, about which we can’t afford to be neutral.

The commercial disaster being experienced by internet investors is having a positive impact on the survival of the internet. The rise of a large capitalist stratum based on internet industry profits, and containing millions of wealthy former workers in the field, was a real capitalist expectation in the late 1990s. The subsequent bankruptcy of these workers with worthless shares and huge tax debts has struck a blow to theories of “people’s capitalism”. In addition, the absence of any substantial sector of the capitalist class drawing large profits from internet businesses weakens the material strength of the commodifying forces.

The internet under attack

Regardless of how useful the internet is, if it can’t make a profit, and it cuts into the profits of other industries, then the capitalist market will try to subvert or replace it. The Economist predicts, “The rules governing the internet will end up like those governing the physical world”.19 These physical world rules, of course, include such capitalist “rules” as the right of the wealthy to control what is published, despite the rhetoric of a free press. The internet today is under attack, particularly around the issues of “intellectual property”, censorship, privacy and national autonomy.

“Intellectual property rights” or IPR are presented as a simple continuation of the right of people to benefit from their artistic or intellectual endeavour. In practice, the owners of IPR generally have no association with the “intellectual property” creators. The creator of Thomas the Tank Engine, for example, sold the idea for around £60,000, while this “brand” is now valued at hundreds of millions of pounds. The creator of Superman died impoverished. What we are now witnessing is a huge property grab. The anti-research US Digital Millennium Copyright Act (DMCA) is one of the weapons being used for this.

A small number of global corporations and a few dozen national corporations now control the overwhelming majority of film, photographic, writing, music and research archives and outlets for the world’s creative endeavour, and control is being tightened. So when a music industry executive speaks up for the poor artists losing income because teenagers are swapping music files, have a closer look. John Perry Barlow, a campaigner against IPR, is a founder of the Electronic Frontiers Foundation and a former member of the Grateful Dead. According to his figures, forty per cent of revenue from a US live concert gets to performers, compared to four per cent of CD sales revenues. Performers aren’t being abused by internet users swapping songs, he says, but by the industry that is “robbing them blind”.20

Censorship is a major feature of any government discussion about the internet. This takes the form of government censorship, such as in Australia, and the voluntary or compulsory use of “filters” such as NetNanny that block users from certain sites. There are two serious issues here. Firstly, these filters are produced for the largest market, the US “Bible Belt”, and reflect its values. So along with sexual images, they often block health education, feminist, gay and lesbian and left-wing political information. The second issue is that because of the huge size and diversity of the World Wide Web, blocking of pages is done by machine, and the names of sites blocked are not released. The socialist movement has a long tradition of opposing censorship, and should stand firmly against this extension of censorship regimes.

Elimination of privacy is the major threat that the internet poses today, with associated implications for freedom of association. Modern technologies and systems are being designed to track internet users wherever they are, with an accuracy of a few city blocks. For a technology that is nominally independent of geography, this is a major change. Systems track the surfing habits of tens of millions of internet users. Combined with other technologies such as giant databases, global positioning and facial recognition software, and we are moving towards a situation where the minute by minute location and activities of much of the world’s population could be tracked. This would provide governments with a huge measure of social control. Now that much of the required technology exists, the focus moves to a civil liberties fight to limit the gathering, exchange and use of this information.

National autonomy is a complex area for the internet. Most campaigns against the internet organised under the banner of “national independence” have a clearly reactionary flavour. This applies, for example, to the appeal to “Asian values” by repressive Asian governments that object to internet information access. Another is the attempt by several countries to control the internet in order to maintain existing censorship laws. One entirely reactionary campaign of the US government has been its recent message to Latin American governments that in order to benefit from internet e-business, nations need to open their local market to global telecommunications companies, privatise any investment that governments have in that area and spend money on infrastructure to facilitate the delivery of US goods to local consumers. The fight against this message forms part of the anti-privatisation and anti-neo-liberal campaigns. It has not emerged as an “anti-internet” campaign.

Defending the internet

The internet offers an extraordinary range of possibilities. For example, simply listing a URL (such as <>) on a banner or placard means that anyone seeing television or press coverage of an event knows exactly where to get in touch or find more information. Email, news, discussion and coordination among union and community activists are made immensely simpler if even one person in a community has internet access. The widespread availability of encryption means it is possible for activists operating under conditions of repression to exchange information securely. (Conversely, any information sent over the internet that isn’t encrypted can easily be viewed by third parties.) Effective web sites can go a long way in distributing information, including whole libraries of socialist literature.

From a capitalist point of view, a new technological medium that can’t be controlled in the same way as existing media is a problem. From a socialist point of view, however, it is not particularly difficult to understand. Capitalism provides a relative limit on the development of technology (burying discoveries, refusing to invest in socially necessary but unprofitable areas, dumping old technologies on the Third World when new and less damaging industrial processes exist, and many more). But that doesn’t mean that the technologies it does develop will do as expected.

The value of the internet to the progressive movement is now universally acknowledged by the movement. However, there is very little understanding of how the internet came to serve this purpose. The general view is that it just arrived, like the fax machine or the mobile phone, and that it is now a resource to be used in campaigning against capitalism. Where the revolutionary movement undertakes an analysis of the internet, it is likely to focus on the fallacy of anarchist theories about classless cyberspace or postmodern theories of post-industrialism.

At present the internet is likely to continue providing its current services until at least 2005, even if major changes move its focus to broadband commercial service delivery. But it is very unlikely that it will still exist as an open and useful medium in ten years’ time without the development of a strong campaign to defend this. The right to privacy of correspondence (through unbreakable cryptography) is already non-existent in many parts of the world, and censorship regimes such as in Australia, France, Germany and China are beginning to emerge.

Many people want to defend the internet as an open information distribution medium. The responses to some of the attacks, such as the campaign against DMCA, are well coordinated, and socialists should use every opportunity to link up with these (publicising their activities, connecting them with the traditional union and progressive movements, and where possible providing organising expertise).

The beginning of a mass campaign exists today, and socialists should relate to this. It is found in the workplaces of the “new economy” (open source programming activists, engineers for social responsibility and for productive uses of technology), in academia (librarians for free information, researchers against financial, legal or geographic limits on their collaboration), in the arts and the media (for free exchange of music and other creative endeavour against the industry monopolies, journalists against censorship and for free speech), and many others. Much of this sentiment is found in the technology sector, an area often considered by those outside the sector to be individualistic and distant from the progressive movement.

There is a slogan on the internet, “Information wants to be free”. For a capitalist system based on private property, wrestling with the dilemma of how to make money from information whose production cost is virtually zero, that is threatening. For the socialist movement it represents broad support for an aspect of our program, the fight against private expropriation of wealth. The internet, and the campaign to defend it, provide us with a precious opportunity.


. Katie Hafner and Matthew Lyon, Where Wizards Stay Up Late, New York, Touchstone, 1996, p. 80.

2. Baran’s work is still available at <>.

3. John Naughton, A Brief History of the Future, London, Phoenix, 1999, p. 116.

4. Peter Martin, “Remember the lessons of history”, Financial Times, October 25, 2001.

5. The internet standard RFC791 states that the Internet Protocol has “no mechanisms to augment end-to-end data reliability, flow control, sequencing, or other services commonly found in host-to-host protocols”. For this reason, the internet can be described as a “best effort” network.

6. Dan Roberts, “Glorious hopes on a trillion-dollar scrapheap”, Financial Times, September 5, 2001.

7. Thorold Barker et al, “Sonera gives up on Norway 3G licence”, Financial Times, August 11, 2001.

8. Vincent Boland, “Marconi and Alcatel credit ratings cut”, Financial Times, August 7, 2001.

9. Web M&A Update, October 31, 2001, <>.

10. Roberts, op. cit.

11. Ernest Mandel, Marxist Economic Theory, London, Merlin Press, 1968, p. 346.

12. Michael E. Porter, “Strategy and the Internet”, Harvard Business Review, March 2001, pp. 66-72.

13. “A revolution halfway round”, Financial Times, September 8, 2001.

14. Manuel Castells, The Rise of the Network Society, Vol. 1, 2nd Ed., Oxford, Blackwell Publishers, 2000, p. 182.

15. Lawrence Lessig, Code and Other Laws of Cyberspace, New York, Basic Books, 1999.

16. Eric Lee, The Internet Belongs to Everyone, Labour and Society International, 2000, at <>.

17. Edward Herman and Robert McChesney, The Global Media, London, Cassell, 1997, p. 122.

18. Robert McChesney, “The Titanic Sails On,” Extra! at <>

19. “The Internet’s new borders,” Economist, August 9, 2001.

20. Speaking at a panel, “Intellectual Property Debate”, Internet Society world conference, Stockholm, June 8, 2001.