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The political economy of information in a changing international economic order

Published online by Cambridge University Press:  22 May 2009

Rita Cruise O Brien  and
G. K. Helleiner
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Extract

The central focus of economic activity in post-industrial societies is shifting from the manufacturing of objects to the handling of information and knowledge. The power of major transnational firms now rests as much upon their capacities to marshal information and knowledge as upon their traditional role in directly productive activities. There is every indication that the sharpest aspect of competition in the future may be based more on the efficient use of specialized knowledge, information, and new technological capacity for its communication and use than on more traditional factors. Information handling capacity already offers industrialized countries and firms considerable economic and political leverage in North-South interaction. Information vital to developing countries is frequently concentrated in the capitals of the North.

Type
Articles
Information
International Organization , Volume 34 , Issue 4 , Autumn 1980 , pp. 445 - 470
Copyright
Copyright © The IO Foundation 1980

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References

1 Knowledge has therefore become a major factor of production. “As a consequence, the ‘knowledge industries’—education, information processing, and research and development—have become the most important sectors of advanced industrial societies.” Gilpin, Robert, US Power and the Multinational Corporation (New York: Basic Books, 1975), p. 166CrossRefGoogle Scholar.

See also Porat, Marc Uri, “Global Implication of the Information Society,” Journal of Communication 28, 1 (Winter 1978): 73CrossRefGoogle Scholar. Porat's, more detailed study (9 vols.), The Information Economy: Definition and Measurement (Washington: US Dept. of Commerce, Office of Tele-communications, 05 1977)Google Scholar, estimated that in 1967 46 percent of U.S. GNP was in information related activities and they accounted for more than 40 percent of the work force (1970) and earned 53 percent of all labor income (1970).

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24 In its initial phase, it arose in the work of the Economic Commission for Latin America, particularly that of R. Prebisch. In its elaboration, subsequent authors drew heavily on Marxist terminology, although the mechanistic and somewhat deterministic approach of A. G. Frank and others was much criticized. Among the more articulate writers, it is precisely the search for fundamental alternatives to the present system and for revised policy which situates dependentistas in the radical reformist tradition. See, for example Cardoso, F. H., Politique et Développement dans les Societés Dependentes (Paris: Editions Anthropos, 1971)Google Scholar; Furtado, C., Obstacles to Development in Latin America (New York: Doubleday, 1971)Google Scholar; and Sunkel, O., “The Development of Development Thinking” in Transnational Capitalism and National Development, Villamil, J., ed. (Brighton: England: Harvester Press, 1979)Google Scholar. An excellent review article may be found in Palma, G., “Dependency: A Formal Theory of Underdevelopment or a Methodology for the Analysis of Concrete Situations of Underdevelopment?” World Development, 6, 7–8 (07–08 1978)CrossRefGoogle Scholar.

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30 Keohane, R. O. and Nye, J. S. (1977), op.cit., p. 11Google Scholar.

31 Waltz argues that broadly speaking industrial powers are neither vulnerable nor dependent. “The Myth of National Interdependence,” in Kindleberger, C., ed. The International Corporation (Cambridge, Mass: MIT Press, 1970), p. 212Google Scholar.

32 The World Administrative Radio Conference, September–December, 1979 organized under the auspices of the ITU, attempted to grapple with the problem of spectrum allocation for the first time in twenty years, including frequencies important to broadcast and private communication carriers.

33 The professional team backing the U.S. negotiations in the GATT numbered about 160, and that preparing the U.S. position for the WARC was conservatively estimated at 930 (including only government employees). The latter estimate was made by the FCC Chairman in 1977, U.S. Senate Foreign Relations Committee, “The New World Information Order,” 11 1977, p. 29Google Scholar.

34 Recent examples of this particularly acute political problem, and especially the hiatus between declared demands and coherent negotiating power may be found in the UNCTAD negotiations in Manila in 1979 and the Lomé II negotiations between the ACP states and the EEC, also in 1979.

35 An important feature of multilateral negotiation is information handling, reflected in the complexity of items on the agenda at most international conferences. Winham, G. R., “The Mediation of Multilateral Negotiations,” Journal of World Trade Law, 13, 3 (06 1979): 199Google Scholar.

In advance of the WARC, for example, Business Week noted “the presence of so many Third World newcomers and their assertiveness in the planning stages had many observers worried that this conference may abandon its traditional technical approach and turn into an explosion of political and economic rhetoric between the LDCs and the industrial nations.” “The Hassle over Sharing the Radio Waves” (21 May 1979): 40 D–E.

36 McHale, J., op.cit., p. 106Google Scholar.

37 Bergsten, F. J., Keohane, R. O., and Nye, J. S., “International Economics and International Politics: A Framework for Analysis,” International Organization, 29, 1 (Winter 1975): 20–21CrossRefGoogle Scholar.

38 Z. Brzezinski calls for a bloc of developed nations to deal with technological breakthroughs in a negotiated manner. Between Two Ages: America's Role in the Technotronic Era (London: Penguin Books, 1976), p. 308Google Scholar.

39 See Robinson, Glen O., ed., Communications for Tomorrow: Policy Perspectives for the 1980s (New York: Praeger Special Studies and the Aspen Institute, 1978)Google Scholar.

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41 Gunther, Jonathan F., The United States and the Debate on the World Information Order (Washington, D.C.: Academy for Educational Development, Inc. 1978), pp. 22–23, 99Google Scholar.

42 Covault, C., “Operational Sensing Spurs Users,” Aviation Week and Space Technology (31 12 1979): 12Google Scholar.

43 Sensitivity to the issues of sovereignty and satellite communication had been apparent in connection with direct broadcase satellites from the early 1970s. See, Queeney, K. M., Direct Broad-cast Satellites and the United Nations (The Netherlands: Sijthoff and Noordhoff, 1978)Google Scholar.

44 Algeria, for example, allows no transmission of computer data to other countries. Chippenger, John, “Who Gains from Telecommunication Development,” (Harvard University, Programme on Information Resources Policy, unpublished report 1976)Google Scholar.

Brazil requires the registration of foreign data links and Mexico has introduced conditions on foreign data flow. Details of these issues are summarized in quarterly publication Transnational Data Report (Amsterdam) 1–2, 1978–1979Google Scholar.

45 An analysis of the U.S. position on the WARC and its global implications may be found in two articles in Foreign Policy, 34 (Spring 1979)Google Scholar. U.S. interest is based partly on the awareness that its outcome will affect the cost of doing business abroad. The spectrum is now recognized as a limited natural resource, which has not been reallocated for 20 years, giving industrialized countries almost unlimited access for commercial and governmental requirements. Developing countries may wish to lay claim to as much of the non-broadcast spectrum as they can by demanding “parking slots” which they cannot yet use. The development of better bargaining capacity as well as resource allocation to national planning in this area is crucial to the protection of developing countries' interests. “Regional Seminar on Communications Policy and the 1979 WARC,” Economic Commission for Africa, November 1978.

46 Jackson, H. K., “ITU: a Potpourri of Bureaucrats and Industrialists” in The Anatomy of Influence, Cox, R. and Jackson, H. K., eds. (New Haven: Yale University Press, 1973)Google Scholar.

47 Less than one-third of the ITU members actively participate in the work of specialized committees. The developing countries are least represented. London: International Institute of Communications Intermedia (01 1979)Google Scholar.

48 This is what Raymond Vernon has called “the obsolescing bargain.” See Sovereignty at Bay (London: Longman, 1971), pp. 46–48Google Scholar.

49 Alejandro, Carlos Diaz has called attention to this in “Finanzas Internacionales: Tópicos de Interés Especial para paises en Desarrollo,” Davis, C. R. French and Tironi, E., eds. America Latina y el Nuevo Orden Económico International (Mexico City: Fondo de Cultura Economica, 1979)Google Scholar.

50 As is clear in the review article “International Bank Lending: A Guided Tour Through the Data,” Federal Reserve Bank of New York, Quarterly Review, 3, 3 (Autumn 1978)Google Scholar, while industrialized countries produce a wide variety of information on the subject, none of it is produced in the developing countries and it may not therefore serve all their requirements.

51 Better insulated against the charge that its advice was marked by self-interest, the “triad” also tempered suspicion of national interest by being based in three major countries. First advising Indonesia, clients now include SriLanka, , Gabon, , Ghana, and Peru, . Financial Times, 17 07, 1979Google Scholar. We are grateful to Stephanie Griffith-Jones at the I.D.S., Sussex, who has given some thought recently to the question of currency markets and information.

52 See Murray, R., ed., Intra-Firm Trade and the Control of Transfer Pricing (Brighton, Sussex: The Harvester Press, 1980)Google Scholar.

53 UNIDO, for example, provides a series of Guides to Information Sources in such sectors as the machine tool or fertilizer industry, or industrial quality control. Each gives directories of professional, trade, and research organizations, sources of statistics, marketing and other economic data, but it is unclear how many developing countries actually make adequate use of such data.

54 See, for example, Strassman, Paul A., “Managing the Costs of Information,” Harvard Business Review, 09–10 1976Google Scholar.

55 These information problems can also directly affect the conduct of foreign policy. See, for example, Ince, Basil A. “The Information Gap and Non-Consultation: Effects on Foreign Policy-Making in Commonwealth Caribbean States,” International Journal, 24, 2 (Spring 1979)Google Scholar.

56 Marschak, J., “The Economics of Inquiring, Communicating, Deciding,” in Lamberton, D. M., Economics of Information and Knowledge (London: Penguin Books Ltd., 1971)Google Scholar.

57 Suggestions for improvement of the uses of expertise are provided by Lipton, C. J., “Government Negotiating Techniques and Strategies,” United Nations (New York: Centre for Transnational Corporations, n/d), p. 8Google Scholar. An alternative proposal has been made in a UNIDO Joint Study on International Industrial Cooperation, 1979 unpublished, which recommended the supplementation of expertise available only in the private market by the formation of a Consultancy Agency, financed on a downward sliding scale by the UN initially and later through voluntary contributions.

An immediate practical possibility might be a directory of specialized consultants in different fields of negotiation, a register which might be updated and verified by relevant intergovernmental agencies. Such directories are already available in the U.S. for domestic purposes.

58 Information in a one-off context must generally be differentiated from the type which is stockable for reuse. Its value when stocked is directly related to local infrastructural capacity for retrieval and use. Information usually has greater value if it is location-or case-specific rather than centrally stored and transmitted from that point.

59 Telematics is mentioned specifically in an important report for the French Government, Nora, Simon and Mine, Alan, L' Informatisation de la Société (Paris: La Documentation Française, 01 1978), p. 11Google Scholar. In the U.S. the term “compunications” has become of more current usage, giving specific accent to the computer rather than telecommunications. The EEC Commission has already launched a program to help the European telematics industry catch up with the Americans and Japanese in the race for markets. The Economist, 13 October 1979.

60 Issues of information production and transmission concentration are of great concern in the OECD, whose Information, Communication, and Computer Policy Unit has published a series of Informatics Studies including Transborder Data Flows and the Protection of Privacy, 1977, Information for a Changing Society: Some Policy Considerations, 1971, Education and Training of Information Specialists for the 1970s, 1973, Information in 1985: A Forecasting Study of Information Needs and Resources, 1973.

61 Nanus, B., “Business, Government and the Multinational Computer,” Colombia Journal of World Business, 13, 1 (Spring 1978), p. 24Google Scholar, outlined the problem as follows:

“There is some reason to suspect that the widespread use of multinational computer systems may aggravate the present tensions that exist between nation states and MNCs. It is unlikely, for example, that multinational management information systems could be made effective without contributing to the homogenization of problem-solving behaviours, cultural values and public attitudes on a worldwide basis. Moreover, multinational computer systems are likely to enhance the power and influence of multinational organisations whose interests transcend national ones.”

62 An excellent recent paper prepared for an OECD meeting on business information gives a thorough idea of the sources and services of data banks available to private enterprise in industrialized countries. The enormous gap between these types of services and the, as yet, rudimentary organization of information available to LDC governments, state corporations or private firms is apparent. Treille, Jean-Michel, “New Strategies for Business Information,” OECD, Working Party on Information, Computer and Communication Policy, Paris, 22 03 1979, DSTI/ICCP/79.19Google Scholar.

63 Nanus, , op. cit.,p. 21Google Scholar.

64 Read, William H., “Foreign Policy: The High and Low Politics of Telecommunications” in Oettinger, A. G. et al. , op.cit. 197–200Google Scholar. For example, major banks are served by the Society for Worldwide Financial Telecommunications (SWIFT) through which the transmission of international payments was provided for 250 European and North American Banks at the rate of 300,000 messages a day in 1978.

65 A. G. Oettinger, op. cit., Introduction and Z. Brzezinski, op. cit.

66 For example, Pool, Ithiel de Sola et al. , Low-Cost Data and Text Communication for Less Developed Countries (Cambridge Mass.: MIT Research Program on Communications Policy, 1976)Google Scholar.

67 Pipe, G. R. and Beenhuis, A. A. M., eds., National Planning for Informatics in Developing Countries (The Hague: Mouton, 1976)Google Scholar.

68 “Informatics” is defined as the rational and systematic application of information to economic, social and political problems. Informatics in the Service of the New. International Economic Order (Rome: Intergovernmental Bureau of Informazione, 07 1978)Google Scholar.

69 Pool, Ithiel de Sola, “Serving the Information Needs of Developing Countries,” OECD Informatics Studies 11, Conference on Computer and Telecommunications Policy (Paris, 1976), pp. 290–91Google Scholar.

70 For example, an international conference on transborder data flows, June 1980.

71 A research project, “The Political Economy of Information in the North-South Negotiating Process” that seeks to examine certain sectors of negotiation, the effects of technological change, and institutional alternatives has been initiated at the I.D.S., Sussex. Information can be obtained from Rita Cruise O Brien.

72 Ramphal, S., “Not by Unity Alone; the Case for Third World Organisation,” Third World Quarterly, 1, 3 (07 1979)CrossRefGoogle Scholar.