InReview – Issue 16

Telecosm: How Infinite Bandwidth will Revolutionize Our World by George Gilder; New York, Free Press, 2000; 351 pp.

George Gilder is the publisher of the Gilder Technology Report, a Fellow at the Discovery Institute, and author of many articles and books including Microcosm, dealing with the microcomputer revolution.

Telecosm is not a simple read. Gilder goes into the physics of telecommunications to support why he believes dramatic improvements in our telecommunications infrastructure will dwarf what is going on in computing both in magnitude and importance. He goes deeply into the history of telecommunications to show not only where this revolution came from, but who the key people were and are. He looks at the information system with infinite bandwidth, and speculates how information will flow and change behavior when no one is stuck behind a 56k modem. He even speculates on who the “Bill Gates” of telecommunications might be, and suggests which companies might be the center of the next growth spurt, a truly bold thing to do.

I am not a physicist, but found he was there to pull me along in the argument, getting a sense of where he is going and why, even if I didn’t get all the details. I intend to take another run through this book, and have asked several colleagues to read it as well.

With this heavy material, it is surprising to find this a fun book to read. For example, he makes an economic argument for how the new system will work, centered around advertising people will want to read. Sometimes he makes statements so outrageous that they make you laugh. He brings out the old argument that the technology will actually lead to more leisure time, and then shifts in mid-stream to raise the work bar for everybody: “Under capitalism, where profit comes from serving others, this release of entrepreneurial energy will be more morally edifying than the ‘leisure’ diversions” (p. 252).

My major difference with Gilder is his insistence that the telecommunications revolution replaces the computing revolution, rather than thinking of them together as the information revolution. Perhaps this is because he has already written on the computer revolution and it is time to get on to the new thing. But, right or wrong, Gilder brings insight, careful thought, and good writing to a very important subject. As Bill Gates said in his book endorsement, “Gilder is very stimulating even when I disagree with him, and most of the time I agree with him.”

Reviewed by Al Erisman

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One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy by Thomas Frank; New York: Doubleday, 2000. xviii, 414 pp.

Thomas Frank is a founding editor of The Baffler a magazine of cultural criticism based in Chicago. Frank earned a Ph.D. in American history from the University of Chicago. One Market Under God manages to combine 400 pages of sober, detailed, and competent research with a scathing wit worthy of H.L.Mencken and a prophetic, critical passion worthy of Martin Luther King, Jr.. As the title implies, “one nation under God” has been reduced to “one market under God.” An army of business leaders and writers, supported by politicians and pundits, has managed to convince huge numbers of the people that true democracy is to be found in the interplay of unregulated markets.

Are television viewers expressing their free affirmation of the system by watching advertising on television? Is the health care and insurance system we have a reflection of our economic “votes”? Is the much talked about “free agent” era of “downsizing” a glorious dawn of liberty for employees? Frank argues that business has managed to sell this bill of goods to much of our political and cultural leadership today. But these choices are not expressions of any deep freedom; they occur within narrowly constrained limits. most of the deregulation and globalization of business has led to vast growing disparities between rich and poor, to a dis-empowering of the people.

Frank’s criticism of techno-business enthusiasts like George Gilder and Tom Peters is sustained and scathing. Thomas Friedman (The Lexus and the Olive Tree) gets pummeled every few pages. Even James Collins and Jerry Porras (Built to Last) are criticized for treating the corporation as a quasi-human entity with “core values” (pp. 227-28).

Frank is not some ignorant reactionary whiner but a truly brilliant, powerful critical voice. This book is especially important reading for leaders and promoters of the “New Economy.” I resonate with much of what he says. However, Frank’s critical assault is so total that nothing is left standing. It is overkill. Thomas Friedman urged us to value the “olive tree” — not just the “Lexus” in his famous book. He tries to describe the global era, he is not prescribing it. And Built to Last is not some disingenuous appeal to put a human face on predatory capitalism; it is a powerful call to build corporations for the long haul around core values other than just profit maximization.

Frank leaves us thinking that all the news is bad about today’s business, technology, and globalization. This rhetorical and critical overkill diminishes the appropriate criticisms he has made and the hard questions he raises. All he seems to approve (and he actually says very little about positive responses to the horrors he describes) are reviving the labor unions and increasing government regulation. But history shows that these two are surely no panacea. We need brilliant guys like Frank (and Gilder!) to come away from the extreme edges of the continuum and help us hammer out some creative, workable responses to the challenges we face.

Reviewed by David W. Gill

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The Tipping Point: How Little Things Can Make a Big Difference by Malcolm Gladwell; Boston, Little Brown, 2000; 279 pp.

Malcolm Gladwell is a writer for the New Yorker and a former business and science writer at the Washington Post. It is not obvious that the sales at Hush Puppies shoes, the crime rate in New York City, and the success of the midnight ride of Paul Revere have anything to do with each other, let alone any connection to business, technology, and ethics. Gladwell does a good job on the former, and it is not difficult to think about how these ideas could extend to the latter.

Gladwell’s book explores what happens when things “tip” — when a trend in one direction is arrested and there is a dramatic shift in the other direction. Hush Puppies shoes sold only 30,000 pairs in 1994 and were on their way to being phased out. Suddenly, because of a small event, instead of dropping out of sight, sales accelerated to over 430,000 pairs the next year, and four times that the next. What happened? Similarly, murders dropped by about 67% between 1992 and 1997 in New York City.

We all know the successful story of Paul Revere rallying the colonists with his midnight ride. We know a great deal less about a similar ride by William Dawes who rode through other villages with little impact. What was the difference? Gladwell extracts characteristics of messages and messengers that led to successful change, and shows their absence in Dawes’s midnight ride. He builds the case that not only can small changes produce huge results, but suggests ways to understand and influence these changes.

The book is well written and enjoyable to read, even if you do learn more about Sesame Street and other children’s television than you ever cared to know. But the author did not take the book in the direction I had expected of a former business and science writer. Missing, for example, is any reference to chaos theory, a natural topic to at least touch on by a science writer.

Also missing were a host of potential “tipping points” in the business and technology world. I wonder how far an organization can cut its overhead before efficiency in the organization “tips” and the costs go out of control? Or how far a business can reduce its customer services replacing human beings by telephone message prompts before the customers walk away? Or how tightly an airline can schedule its airplanes before a slight weather or mechanical delay will stop the system entirely? Certainly the NASDAQ “tipped” in March 2000; it would likely be amenable to the same analysis.

That The Tipping Point raised these questions, even though it didn’t resolve them, makes this a worthwhile read for people interested in business, technology, and ethics.

Reviewed by Al Erisman