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Forecasting the Digital Age

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from: Eugene Linden
to: Esther Dyson

Posted Thursday, Oct. 15, 1998, at 3:30 AM ET

Dear Esther,

Thinking back, it does not seem so long since we last crossed paths. But then it hits me that the entire phenomenon of the Internet has exploded since the Intellicorp gang speculated on the potential of object-oriented programming around Tom Kehler's swimming pool. I have to ask myself whether the world has really changed since the 1980s. Until recently, for instance, I was regularly hearing about how information technologies keep the various elements of production and sales in such intimate contact (I'm using the word intimacy in the Webster's rather than Paula Jones/Lewinsky/Clinton sense of the word) that businesses can now adjust instantly to changes in the marketplace and that recessions will be a thing of the past.
I have to say I just don't buy it. For one thing, a recession now seems very much to be a thing of the near future. Part of the blame lies with the derivative effects of those information age productivity improvements. Sure, it's wonderful for employers to have modem access to low-cost programmers in Bangalore or bean counters in Bucharest. It's also great for employers to be able to use an expert system to assign seats on airplanes or configure a custom-made truck. But access to a global labor market puts a cap on wages in the United States, and automating white-collar and knowledge workers out of jobs reduces the prospects for a class of workers too old for training in the new economy.
Maybe this is why the wage gap has continued to widen even during the fabulous economic boom of the 1990s. Some portion of the global growth of the past few years may have come out of the future prospects of the middle class. Most U.S. workers are not as well off now as they were in 1989 and face the prospect of a new recession with sky-high credit card debt and negligible savings. The long-term result of all these productivity improvements might be that the many losers in this winner-take-all economy reduce their consumer spending and vent their anger politically, demanding protectionism, a safety net, and other programs that would scare the bejesus out of the bond traders who now seem to control the destiny of the world.
And what do the gyrations of the international markets say about this brave new world in which everyone is more efficient because they have access to information anywhere, anytime? In theory, the integrated global market should be stable as investors smoothly adjust to a continual stream of new information. Instead, investors seem to react at the same time--pulling billions out of Mexico in just a few hours in December 1994, Thailand in 1997 and, it seems, everywhere these past few weeks. This synchronicity belies the supposed diversity of the global marketplace. Instead we've got a herd mentality, turbo-charged by the scale of the market.
I don't want to leave the impression that I'm against technological innovation. I'm not. I'm all for it, although in my new book, The Future in Plain Sight, I'm technologically neutral. The conceit I explore is that while the details of the future are unpredictable, we could know a lot about how people will live if we know whether or not life is likely to be more or less stable than the present. The issue of stability then is like a peephole into the future. I see a number of clues in the landscape that presage a more unstable future--the integrated global market and the wage gap being two of them--but I specifically chose clues that were not susceptible to some technological fix. Technology won't do us in, as the Luddites claim, but it won't save us from an unstable future.
What thinkest thou?

dialogues
entries
12345
from: Eugene Linden
to: Esther Dyson

Posted Thursday, Oct. 15, 1998, at 3:30 AM ET
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Eugene Linden writes about science, technology, and the environment for Time magazine. He is author of The Future in Plain Sight. Esther Dyson is chairman of EDventure Holdings and a member of the board of the Electronic Frontier Foundation. She is author of Release 2.0: A Design for Living in the Digital Age. Click to purchase The Future in Plain Sight or Release 2.0: A Design for Living in the Digital Age from Amazon.com.
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