Capitalism in the Digital Age

Kevin M. Carragee

Dan Schiller. Digital Capitalism: Networking the Global Market System. Cambridge, MA: The MIT Press, 1999. xxvi + 294 pages. Notes and index. $29.95 (cloth); $16.95 (paper).

Dan Schiller provides a richly textured account of the evolution and consequences of the Internet in his new book, Digital Capitalism: Networking the Global Market System. Eschewing a narrow focus on technology and its influences, Schiller documents the degree to which the development of the Internet has been shaped by the interests and requirements of transnational corporations. This political economy approach properly links the Internet to broader political, economic, and social contexts, while recognizing the degree to which new technologies alter the contexts in which they develop.

A former professor of communication at the University of California at San Diego, Schiller details the increasing use of the Internet by multinational corporations both as an advertising medium and as a central means to manage the communication and commerce necessary to sustain and extend their far-flung economic investments. In this sense, corporate interest and investment in computer networks was shaped by the requirements of a global market economy, while simultaneously extending the reach and power of transnational corporations. Corporate and commercial uses of the Internet, according to Schiller, have now eclipsed educational, non-profit, and governmental uses of this technology, demonstrating the degree to which the Internet has been integrated into a market economy dominated by large transnational corporations.

Schiller’s focus on the market-driven uses of the Internet provides a particularly significant counterpoint to optimistic accounts of this technology and its potential consequences. In the 1990s, scholars, social critics, and politicians repeatedly heralded the Internet as a technology that would serve to democratize American society, reduce or eliminate information inequalities, and improve American education. In contrast, Schiller cautions that the increasing corporate hegemony over the Internet will serve to deepen consumerism, exacerbate social inequalities, and extend market-driven logic and techniques to education.

The book’s structure enables Schiller to outline his views in a clear and coherent manner. The first two chapters outline the history of computer networks and how neoliberal, or market-driven, policies helped to modify existing telecommunication systems and to increase the power of transnational corporations. The third chapter documents the evolving commercialization of the Internet, given the corporate realization that this technology could deepen consumerism both nationally and internationally. Chapter 4 provides a troubling discussion of how American education is now increasingly shaped by market considerations.

Schiller provides a particularly effective account of how transnational corporations and their political allies sought to transform telecommunication policies and regulations along neoliberal lines in the 1980s and 1990s. This initiative, successful both in the United States and in many other nations, severely reduced state regulation over telecommunication, privatized national telecommunication systems in many nations, and diminished the public service or social welfare obligations of telecommunication systems. According to Schiller, these changes reduced the power of national governments, while dramatically enhancing the reach and power of multinational corporations.

In his chapter on American education, Schiller cautions that “[c]yberspace lent itself both to an unparalleled market takeover of the learning process and to a relentless vocationalism” (145). Schiller details how a variety of trends increasingly have shaped American education along market lines. These trends include the growth of in-house corporate education (some 1,200 corporate universities now exist); increasing partnerships between corporations and universities; and the growth of for-profit companies offering educational services, including degree programs, and products. Schiller provides a provocative account of the growing number of partnerships between universities and corporations. Attractive to university administrators because of their economic benefits and because of the threat of corporate education, these partnerships, according to Schiller, often decrease the autonomy of the university. He contends that “[t]he New Partnership sought two super-ordinate goals: more expeditious commercialization of university research and a closer match-up between what was being taught to students and labor-market needs” (161).

While an impressive contribution to our understanding of the Internet’s development, Schiller’s book could have been enhanced by a greater historical focus. The Internet represents only the latest communication technology embraced for its potential to create a more informed and democratic society. In the twentieth century, for example, reformers and social critics hoped that film, radio, and television would play this role; these hopes were dashed by the commercialization of these media, a process now repeated with the Internet. In addition, Schiller at times overstates the degree to which the Federal Communication Commission pursued regulatory policies that served the public interest. The FCC, like many of its regulatory counterparts, long has been dominated by the very industries it regulates. Therefore, Schiller overestimates the degree to which the neoliberal policies enacted by the FCC in the 1980s and 1990s represented a break with its past.

These reservations, however, do not detract from the substantive contribution that Schiller makes to our understanding of the Internet and digital capitalism. By placing the Internet’s development and influences within broader economic and political contexts, Schiller has produced a book that deserves critical attention and reflection. His book serves as a powerful reminder that the production of knowledge is shaped by varied social forces, including the interests and intentions of those who dominate communication technologies. Efforts to promote national and international telecommunication policies that would serve democratic rather than market interests need to begin with an understanding of contemporary telecommunication systems. Schiller provides this understanding by detailing how transnational corporations have come to dominate the Internet and the regulation of telecommunication.

Kevin M. Carragee is assistant professor in the Department of Communication and Journalism at Suffolk University.