20

Thinking Ahead

An information revolution presentsnew opportunities and newproblems for business and society

Computers, telephones, andtelevision are merging toprovide faster, wider-reaehing communication.This instant availability ofinformation is alreadychanging the way we do busi-ness. On a deeper level,according to this author, wenow have an "informationsociety" in which industrialinnovation depends cruciallyon theoretical knowledgeand techniques. Mr. Belloutlines the developments thathave led to the postindustrialsociety and shows why recentchanges in communicationstechnology will have enormoussocial and economic consequences.

Mr. Bell is professor of so-ciology at Harvard University.He was chairman of theCommission on the Year 2000of the American Academy ofArts and Sciences.

Daniel Bell

Communicationstechnology-f or betteror for worse

Human societies have seen four dis-tinct revolutions in the character ofsocial interchange; in speech, in writ-Ing, in printing, and, now, in telecom-munications. Each revolution is asso-ciated with a distinctive, technolog-ically hascd, way of hfe.

Speech was central to the huntingand gathering hands—the signals thatallowed men to act together in com-mon pursuits. Writing was the founda-tion of the first urban settlements inagricultural society—the hasis of recordkeeping and the codified transmissionof knowledge and skills. Printing wasthe thread of industrial society—thebasis of widespread literacy andthe foundation of mass education.

Telecommunications (from the Greek,tele, or "over a distance")—the tiesof cahle, radio telegraph, telephone,television, and, now, newer technol-ogies—are the hasis of an "informationsociety."

Human societies exist hecause theyean purposefully coordinate the activ-ities of their memhers. (What is acorporation if not a social inventionfor the coordination of men, materiel,and markets for the mass productionof goods?} Human societies prosperwhen, through peaceful transactions,goods and services can be exchangedin accordance with the needs of in-dividuals.

Central to all this is information.Information comprises everything fromnews of events to price signals in amarket. The success of an enterprisedepends in part on the rapid trans-mission of accurate information.

The foundation of the Rothschildfortune was advance information bycarrier pigeon of the defeat of Na-poleon at Waterloo, so that the Roth-schilds could make quicker stock mar-ket decisions. (The rapidity of trans-mission of information on companiestoday is responsible for the randomw-ilk theory of stock market priees,since such rapidity minimizes thetime advantage of inside information.)

General equilibrium theory in eco-nomics is dependent on "perfeet infor-mation," so that huyers and sellersknow the full range of available prieeson different goods and services, andthe markets are cleared on the basisof relative priees and ordinal utilities.

Author's note.- This article is based on a speechgiven befoie the Tntemaiional Chamhet ofCommerce, iu Oilaado, Florida, October 1978.

Harvard Business Review May-June 1979 21

What was once possible by walkingaround a local market now has to bedone through complex transmissionof news, which flashes such informa-tion to clients in "real time."

A business audience, concerned asit is with information—from balance-of-trade figures to money supply, tobirthrates, to interregional shifts, tochanges in buying tastes and habits-should recognize more readily thanany other tbe importance of anychanges in tbe type and character ofinformation. For this reason, businessshould understand the nature and ex-tent of the powerful technologicalrevolution taking place in communica-tions as well as its potentialities andthreats to the ways of doing husiness.

A new communications system

Today, 135 years after the creationof the Hrst effective telecommunica-tion device, telegraphy, we are on tbethreshold of a new development that,by consolidating all sucb devices andlinking tbem to computers, earns tbename of a "revolution" because oftbe various possihilities of commu-nication tbat are now unfolding. Thisis what Simon Nora and Alain Mine,in an extraordinary report to tbe presi-dent of tbe French Republic, calltelematique, or wbat my Harvard col-league Anthony Oettingcr calls com-punications.^

Telematique, or compunications, isthe merging of telephone, computers,and television into a single yet dif-ferentiated system that allows fortransmission of data and interactionbetween persons or hetween computerstbrough cables, macrowave relays, orsatellites. Thus communications he-come faster, but tbey also are organizedin a totally new way. It would he farbeyond tbe scope of tbis article tospecify tbese ways in detail, hut itis possible to suggest some of tbe basicnew modes and illustrate the conse-quences:

Data processing networks. Thesewould register purchases made in storesautomatically through computer ter-minals as bank transfers. Orders forgoods, sucb as automobiles, can besent tbrough computer networks and

transformed into a programming andscheduling series to provide for in-dividual specifications of tbe itemsordered. In a broad sense, this couldbe a replacement of much of the "papereconomy" by an electronic transfersystem.

Infoimation hanks and letiieval sy!>-tems. Tbese would recall or searcb forinformation through computer systemsand would print out a legal citation,a chemical ahstract, census data, mar-ket research material, and the like.

Teletext system. In tbese systems,such as the British Post Office Prestelsystem (formerly called View Data),or the French Tic-tac and Antiope sys-tems, news, weather, financial infor-mation, classified advertisements, cat-alog displays, and research materialare displayed on home television con-soles, representing a comhination ofthe yellow pages of telephone hooks,tbe classified advertisements of news-papers, standard reference material,and news.

Facsimile systems. Here, documentsand otber material (invoices, orders,mail) can be sent electronically ratbertban by postal systems.

lnteTactive on-line computeT net-works. Tbese allow researcb teams oroffice managers or government agen-cies to maintain communication soas to translate new research results,orders, or, perhaps, financial informa-tion into further action.^

Tbese are not speculations or sciencefiction fantasies; they are developedtechnologies. Tbe rate of introductionand diffusion will vary, of course, ontbe basis of cost and competition ofrival modes, and on government poli-cies that will either facilitate or in-hibit some of tbese developments.

Tbe rate of diffusion is further com-pounded by capital problems: tbe needfor a large-scale sbift to new, inde-

1. See Simon Nora and Alain Mine, L'laformatisa-tion de lo societc (La Documentation Francaisc,January 197S); and the annual reports of theHarvard University Program on InformationTtchnolosy, 1976 and 1977.

2. i have expanded on some of these in "Teletextand Technology," EncounU'r (London), lunciy77, and "The Social Framework of the in-totmation Society," in The fufiire 0/ Computers,cd. hy Michael Dertouzos and Joci Moses(Cambridge, Mass.: MIT Press, to be published.

pendent sources of energy requires alarge, disproportionate allocation ofcapital to purposes that arc, inherent-ly, "capital-using" rather than "cap-ital-saving." Tbus tbe marginal effi-ciency of capital (as reflected in socialcapital-output ratios) tends to fall. Theuncertainty of infiation leads, some-times, to the postponement of capitalinvestment or the short-term substitu-tion of labor inputs rather than capitalinputs, thus dragging down furtbera society's total productivity. Theseare economic and political questionswhich, again, are outside the scopeof this article.

If we assume, however, that manyof these new technologies and modeswill eventually be introduced, wbatcan we say of their consequences? Itis hazardous, if not impossible, to pre-dict specific social cbanges and out-comes. Wbat one can do, however,is to sketch hroad social cbanges tbatare likely to occur wben these newmodes are all in use. And that is tbepurpose of the following two sections.

Societal infrastructure

Every society is tied together by tbreedifferent kinds of infrastructure-trans-portation, energy grids, and commun-ications:

Modes of transportation. Tbe oldestof tbese infrastructures is transporta-tion, which first took place by trails,roads, and rivers, and, later, by canals.Trade was tbe means of breaking downtbe isolation of villages and served asa means of communication betweendistant areas. Transport tbus has beenthe major linkage between settledareas.

Because of transport requirements,all tbe major cities of the world havebeen built near water. Tbe industrialbeartland of tbe United States, forexample, was created hy the interplayof resources and water transport.

Tbus tbe iron ore from the MesabiRange could move on Lake Superior,and coal in southern Illinois andwestern Pennsylvania could be tied tothe Great Lakes hy a river system.Such a network allowed the develop-ment of a steel and tben an auto-mobile industry. The water transport

22 Harvard Business Review May-June 1979

system served to thread together theindustrial cities of Chicago, Detroit,Cleveland, Buffalo, and Pittsburgh.

In Germany, in the early eighteenthand nineteenth centuries, most com-merce flowed from north and southhecause of the course of the majorrivers sueh as the Rhine, the Elhe,the Oder, and the Weser. The eomingof the railroad, linking east and west,greatly facilitated the unification ofGermany by 1870 and its developmentas an industrial and military power.

Power sources. The second infra-structure has heen energy. At firstwaterwheels on rivers were used forpower, followed by hydroelectricity,then oil, gas, and electricity.

The interaction of the energy andtransport systems allowed for thespread of industries and towns, sinceelectricity grids could transmit powerover hundreds of miles. The result wasthe development of large industrialcomplexes, occupying vast spaces,through the long-distance transmis-sion of energy.

Communications systems. The oldestcommunications infrastructure is thepostal service. Much later came thedevelopment of the various telecom-munications systems.

The revolution in communicationsnow makes it likely that there will bea major shift in the relative impor-tanee of the infrastructures: communi-cations vrill be the central infrastruc-ture tying together a society. Such anetwork increases personal interac-tion and drastically reduces the costsof distance. It affects the location ofcides, since the "extemal economies"—gains because of proximity, such as inadvertising, printing, and legal servicesfor banks—once possible only in cen-tral city districts are now replaced hycommunication devices.

Most important, the new communi-cations enlarge tbe arenas in whichsocial action takes place. It is onlyin the past 30 years or so that manycountries, because of revolutions inair transport and communications,have become national societies, inwhich impacts in any one part of thenational society are immediately feltin any other part.

In the broadest sense, we have forthe first time a genuine intemational

economy in which prices and moneyvalues are known in real time in everypart of the globe. Thus, for example,treasurers of banks or controllers ofcorporations can subscribe to a Reutersintemational money market serviceand obtain, in real time, quotationson different currencies in 25 differentmoney markets from Frankfurt toLondon to New York to Tokyo toSingapore to Hong Kong, so that theycan take advantage of the differentrates and move their holdings about.

By satellite communication, throughtelevision, every part of the world isimmediately visible to every otherpart. The multiplication of interac-tions and the widening of the socialarenas are the major consequences ofa shift in the modalities of the infra-stmcture. This is a problem we shallreturn to later.

Postindustrial society

The revolution in communications,tbe creation of an information society,also speeds the development of whatI bave ealled a postindustrial society.'The Exhibit schematically eomparespreindustrial, industrial, and postin-dustrial types of developments.

Most of the world today—that is,principally the eountries in Asia,Africa, and Latin America—is prein-dustrial in that at least 60% or moreof its labor force is engaged in extrac-tive industries. The life of these coun-tries is a "game against nature," inwhich national wealth depends on tbequality of tbe natural resources andvicissitudes of world commodity prices.

A smaller section of the world, thecountries around the North Atlanticlittoral plus tbe Soviet Union and Ja-pan, is made up of industrial countrieswhere the fabrication of goods, by theapplication of machine technologywith energy, is the basis of wealth andeconomic growth.

Some of these latter countries arenow moving into the postindustrialworld. In the postindustrial state, firstthere is a shift from the productionof goods to the selling of services.

3. For an elaboration of this concept, see my book,The Coming of Post-Industrial Society [New York:Basic Books, 197)).

Services exist in all societies but, inpreindustrial societies, these are pri-marily domestic services. In industrialsocieties, these are ancillary to theproduction of goods, such as trans-portation, utilities, and financial ser-vices. In postindustrial societies, theemphasis is on human services (ed-ucation, health, social services) andon professional services (computing,systems analysis, and scientific researchand development).

The second dimension of postindus-trial society is more important: thefact that, for the first time, innova-tion and change derive from the codi-fication of theoretical knowledge.Every society has its hase, to someextent, in knowledge. But only recent-ly has technical change become sodependent on the codification of theo-retical knowledge. We can see thiseasily hy examining the relation oftecbnology to science.

Steel, automotive, utilities, and avia-tion industries are primarily of thenineteenth century in that they werecreated largely hy inventors—"talentedtinkerers"—who knew little about thehasic laws or findings of science.

This was true of such a genius asEdison, who invented, among otherthings, the electric lamp, the gramo-phone or record player, and the mo-tion picture. Yet he knew little ofthe work of Maxwell or Faraday onelectromagnetism, the union of whosetwo fields was the basis of almost allsubsequent work in modern pbysies.This was equally true of Siemens witbhis invention of the dynamo, and Bellwith the telephone, or Marconi withthe radio wireless.

The first "modern" industry ischemistry, in tbat the scientist mustbave a knowledge of the theoreticalproperties of the macromolecules tbathe is manipulating in order to knowwhere he is going. What is true of alltbe science-based industries of the lasthalf of the twentieth century, and theproducts that come from them—elec-tronics equipment, polymers, eom-puters, lasers, holograms—is that theyderive from work in theoretical sci-ence, and it is theory that focuses thedirection of future research and thedevelopment of products.[Continued on page 26]

26 Harvard Business Review May-June 1979

ExhibitThe postindustrial society:

Modes

Mode of production

a comparative scheme

Preindustrial

Extractive

Industiial

Fabrication

Postindustrial

Processing &recyciing services

Economic sector

Transforming resource

Strategic resource

Technology

Skill base

Primary

AgricultureMiningFishingTimberOil & gas

Secondary

Goods producingDurablesNondurablesHeavy construction

Tertiary

TransportationUtilities

Quaternary

TradeFinanceInsuranceReal estate

Quinary

HealthResearchRecreationEducationGovernment

Natural power-wind, water, draftanimal-human muscle

Created energy-electncity, oil,gas. coal, nuclear power

Information' — computer & datatransmission systems

Raw materials Financial capital Knowledget

Craft Machine technology Intellectual technology

Artisan, farmer, manual worker Engineer, semiskilled worker Scientist, technical & professionaloccupations

Methodology

Time perspective

Common sense, trial & error,experience

Empiricism, experimentation Abstract theory: models, simulations,decision theory, systems analysis

Orientation to the past Ad hoc adaptiveness,experimentation

Future orientation: forecasting & planning

Design

Axial principle

Game against nature Game against fabricated nature Game between persons

Traditionalism Economic growth Codification of theoretical knowledge

• Broadly, data processing. The storing, retrieval, and processing o( data become the essential resource tor all economic and social exchanges.

t An organized set ot statements oKaols or ideas, presenting a reasoned ludgmenl or experimental result, that is transmitted to olhers through some communication medium in somesystematic lorm.

The crucial point about a postindus-trial society is that knowledge andinformation become tbe strategic andtransforming resources of the society^just as capital and labor bave beenthe strategic and transforming re-sources of industrial society. Tbe cru-cial "variable" for any society, there-fore, is the strengtb of its basic re-search and science and technologicalresources—in its universities, in its re-search laboratories, and in its capacityfor scientific and technological devel-opment.

In these respects, tbe new informa-tion technology becomes the basis ofa new intellectual technology, inwhich theoretical knowledge and itsnew techniques [such as systems an-alysis, linear programming, and prob-ability tbeory), bitched to tbe com-puter, become decisive for industrialand military innovation.

Corollary problems

Two important consequences of tberevolution in communications roundout the picture of social change. Oneis that, because of a combination ofmarket and political forces, a newinternational division of labor is tak-ing place in tbe world economy; theother involves a widening scale ofpolitical effects across the world.

Economic changes. The developingcountries, in proclaiming a new inter-national economic order at Lima in1975, bave demanded that 259?' of theworld's manufacturing capacity be inthe bands of the Tbird World by theyear 2000. This is a highly unrealistictarget. Yet some tidal changes are al-ready taking place.

There is one group of developingcountries—among them Brazil, Mexico,South Korea, Taiwan, Singapore,

Algeria, Nigeria—tbat is beginning toindustrialize rapidly. It is likely tbatin the next decades traditional, rou-tinized manufacturing, such as tbetextile, sbipbuilding, steel, shoe, andsmall consumer appliances industries,will he "drawn out" of the advancedindustrial countries and become cen-tered in tbis new tier.

The response of the advanced in-dustrial countries will be eitber protec-tionism and tbe disruption of tbeworld economy or tbe development ofa "comparative advantage" in, essen-tially, tbe electronic and advancedtechnological and science-based indus-tries tbat are tbe feature of a post-industrial society. How this develop-ment takes place will he a major issueof economic and social policy for tbe

[Continued on page 28]

28 Harvard Business Review May-June 1979

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Expanded political arena. The sec-ond, more subtle, yet perhaps more im-portant, problem is that the revolutionin communications necessarily meansa change in scale—an expansion in thepolitical arenas of the world, the draw-ing in of new claimants, and themultiplication of actors or of constitu-encies.

In the last decade or more we haveheard much of the acceleration of thepace of change. It is a seductive yet,in the end, a meaningless idea otherthan as a metaphor. For one has toask, "Change of what?" and "Howdoes one measure the pace?" Thereis no metric that applies in general,and the word change is ambiguous.

As Mervyn Jones, the English au-thor, once pointed out, a man whowas born in r8oo and who died ini860 would have seen the coming ofthe railway, the steamship, the tele-graph, gas lighting, factory-made ob-jects, and the expansion of the largeurban centers. A man who was bornin i860 and who died in 1920 wouldhave seen the telephone, electric light,automobile, and motion pictures. Hemight be familiar with the ideas ofDarwin, Marx, and Freud. He wouldhave seen the final destruction of mostmonarchies, the expansion of the ideasof equality, and the rise and breakupof imperialism.

How does one measure the eventsof the past 40 years in order to saythat the pace of change has increased?If anything, one might say that, sincegrowth is never exponential in a linearway but follows an S-shaped or logisticcurve, we are close to "leveling off"many of the so-called changes thathave transformed our lives (e.g., trans-port and communications will not in-crease appreciably in speed). And inthe world increase in population, weseem to have now passed the "pointof inflection," that midway pointwhere the S-curve of change is nowslowing down.

But what is definite is that the scaleon which changes have taken placehas widened. And a change in scale,as physicists and organization theorists

[Continued on page 32]

32 Harvard Business Review May-June 1979

have long known, requires essentiallya change in form. The growth of anenterprise, for example, requires spe-cialization and differentiation and verydifferent kinds of control and man-agement systems when the scalesmove from, say, $io million to $roomillion to $i hillion.

The problem becomes politicallyacute for political systems. Rousseau,in The Social Contract, set forth a"natural law" that the larger a statebecomes, the more its governmentwill be concentrated, so that the num-ber of rulers decreases as the popula-tion increases. Rousseau was seekingto show that a regime necessarilychanges its form as the population in-creases, as the interactions betweenpeople multiply, and as interests be-come more complicated and diverse.

The problem for modern politicalsocieties—especially those that wish tomaintain democratic institutions, thecontrol of government by the consentof the people, and an expanding degreeof participation—is to match the scaleshetween political and economic institu-tions and activities. The fact that gov-ernment has increasingly become moredistant from and yet more powerfulin the lives of persons has led in-creasingly, as well, to separatism, lo-calism, and breakaway movements insociety.

At the same time, the scale ofeconomic activities on a worldwidecanvas has indicated that we lack thegoverning mechanisms to deal with,for example, monetary problems, com-modity prices, and industrial reloca-tion on the new scales on which theseactions take place. As I remarked inan earlier article, what is happeningtoday is that, for many countries, thenational state is becoming too big forthe small problems of life and toosmall for the big problems of life.*

Implications for personal liberty

All of these structural changes leadto the pointed question of the fate ofindividual and personal liberties inthis "brave new world." We have had,from Aldous Huxley to George Orwell,dire predictions of the kinds of con-trols—the expansion of Big Brother

totalitarianism—that may be comingas a result of such technologicalchanges. Indeed, an old Russian jokeasks: Who is Stalin? Answer: GenghisKhan with a telephone. And thereare many humorous examples of howthe new technologies permit thegrowth of scrutiny mechanisms andintrusions in personal life.

A story in the London Times onthe growth of security procedures inGennany reports that the movementsof a German husiness consultant whohas to cross the border into Switzer-land several times a day were reportedto a computer center so that he sud-denly found himself on a list of per-sons to he watched. But the moral ofthe story is not that the computeriza-tion of the border crossings increasesthe power of the police but that be-cause of the political threats of ter-rorism such procedures had to beadopted.

The issue of social control can heput under three headings:

1. Expansion of the techniques ofsurveillance.

2. Goncentration of the technologyof record keeping.

3. Gontrol of access to strategic in-formation by monopoly or govem-ment imposition of secrecy.

In all three areas there has been anenormous growth of threatening pow-ers and, in a free society such as ours,a growing apprehension about theirmisuse.

The techniques of surveillance, sincethey are the most dramatic, have re-ceived the most attention. In GeorgeOrwell's 1984, the government ofOceana monitors party members bya remote sensor of human heartbeats.The sensors are located in the two-way television screens in all homes,government offices, and puhlic squares.By tuning in on individuals and mea-suring their heartbeats. Big Brothercan discover whether an individualis engaged in unusual activities.

4. Sec my essay, "The Future World Disorders: TheStructural Context of Crises" in Foreign Policy(U.S.), Summer 1977. For an acute discussion ofRousseau and the problems of size and representa-tion in society, see Bertraod De Jouvcnel, TheAn of Conjecture (New York: Basic Books, 1967).

5. See David Goodman, "Countdown lo 1984,"The fumri.st, December 1978.

Recently, a young physiologist dis-covered, to his dismay, that he hadinvented such a device himself. Seek-ing to measure the physiological activ-ities of salamanders less painfully thanby plugging painful electrodes intothe animals' bodies, he created a deli-cate voltage sensor that measures theextremely minute electrical field thatsurrounds the bodies of all living or-ganisms, so that one can now detect,and record from a distance, an animal'sheartbeat, respiration, muscle tension,and body movements.

Told that he had invented the devicethat Orwell had imagined, he madea study of the predictions Orwell madein 1984 and found that, of the 137devices Orwell had described, someIOO are now practical, 30 years aftertbe publication of the book.^ Also, inSolzhenitsyn's First Circle, it may berecalled, the prisoner-scientists in thesecret police laboratory were workingon devices to identify telephone callershy voiceprints and also to unscramblecoded telephone conversations—de-vices which are in use today.

The computerization of records,which intelligence agencies, police,and credit agencies use, is hy nowquite far advanced, and so much sotbat individuals are constantly beingwarned to check to see that theircredit ratings are accurately recordedin computer memories, lest they becut off, especially in cashless andcheckless transactions, from the pur-chase of goods that they need.

The problem of secrecy is old andpersistent. Recently, Science magazinereported that at the request of theNational Security Agency (NSA), theDepartment of Commerce had im-posed a secrecy order that inhibitedcommercial development of a com-munications device, invented hy agroup in Seattle, for which a patenthad heen applied. The technique in-volved in the patent application goesbeyond the voice-scramhler technologyused in police and military communi-cations and takes advantage of thespread-spectrum communication bandto expand the range of citizens' bandand maritime radios. Science reports:

"The inventors are fighting to havethe order overturned so that they can[Continued on page 36]

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Real as these issues are for liberty inthe personal and economic sense, theyare not the true locus of the prohlem.It is not in the techtiology per se hutin the social and political system inwhich that technology is embedded.

The most comprehensive system ofsurveillance was first invented hy thatmalign individual Joseph Fouche, whoserved as police chief for Napoleon I.A former Catholic priest, he becamea militant leader of the French Rev-olution, having directed the massacreat Lyons; and after Napoleon he con-tinued as police chief during the Bour-hon restoration of Louis XVIIL Fouchewas the first to organize every con-cierge in Paris as an agent of the policeand to report to local headquarters themovements each day of every residentof the huildings.

The scale of operations has expandedsince Fouche's day. Technology is aninstrument for keeping ahreast of themanagement of scale. The point canhe made more abstractly, yet simply.Technology does not determine socialstructure; it simply widens all kindsof possibilities. Technology is em-bedded in a social support system,and each social structure has a choiceas to how it will he used. Both theSoviet Union and the United Statesare industrial societies, using much thesame kind of technology in their pro-duction systems. Yet the organizationof industry, and the rights of individ-uals, vary greatly in the two societies.

One can take the same technologyand show how different social supportsystems use them in very differentways. For the automohile, one canshow very different patterns of use,and consequent social costs, withoutchanging a single aspect of the auto-mobile itself. Thus, in one kind of

6. Science, 8 November, 1978.

society, one can have a system ofcomplete private ownership of theautomohile where the individual cancome and go largely at his own plea-sure.

But such a pattern involves a highcost to the individual for the purchaseof the car, the insurance, gasoline, anddepreciation, as well as a cost to thecommunity for more roads, parkinggarages, and the like.

Yet one can envisage a very differ-ent pattern, which some cities havetried, where automobiles are barredfrom a large area and in their placethere is a "public utility" system inwhich an individual subscribes to acar service. He goes a short distance-no farther, say, than a usual bus stop-to a parking lot, takes a car, using amagnetic-coded key; drives off in thatcar to his destination; and simplyleaves the car in that other lot, againno farther than a bus stop distancefrom where he wants to go.

The user has a great degree ofmobility [as with a taxi service, yetwithout the cost of a driver), hutfewer ears are needed in this kind ofdistributive system. The cost to theindividual is the walk to and fromthe parking lot and the brief wait fora car that may be necessary if thereare shortages.

Such a system represents an expan-sion of the car-hire service that isavailahle at airports and throughouta city in many countries today. Theillustration is trivial (and I am notarguing for one or another of the pat-terns to be imposed on a society); yetthe import of the example is not sotrivial: namely, a single technology iscompatihle with a wide variety ofsocial patterns and the decision ahoutthe use of the technology is, primarily,a function of the social pattern a so-ciety chooses.

To expand this proposition, the fol-lowing theorem holds: the new revolu-tion in communications makes pos-sible hoth an intense degree of cen-tralization of power, if the societydecides to use it in that way, and largedecentralization because of the multi-plicity, diversity, and cheapness of themodes of communication.

[Continued on page 40]

40 Harvard Business Review May-June 1979

It is quite clear that an elaboratecompunications system allows for in-tensification of what in military par-lance is called command and controlsystems. Through such systems, theU.S. AJr Force was ahle, a dozen yearsago, to set up a watch pattern thatkept track of all aircraft or unidentifiedflying objects over the North Americanair space, and relayed that information,in real time, to a centralized controlstation that in turn monitored theinformation.

Without such a system, one couldnot have basic security against anenemy attack. Yet, in the VietnamWar, the development of the commandand control system meant that tacticaldecisions, which in the past were madeby field commanders, were often madeon tbe hasis of political decisions inWashington. The Vietnam War wasan extraordinary instance of the cen-tralization of military decisions on ascale rarely seen hefore.

In Chile, from 1971 to 1973, theBritish organization theorist, StaffordBeer, set up an effort to prepare asingle computer program to model—and eventually control—every level ofthe Chilean economy. Under his direc-tion, with the cooperation of the Al-lende government, an operations roomwas created to plan for centralizedcontrol of Chilean industry.

This was not a simulations model,as used hy Jay Forrester and his asso-ciates to demonstrate what might beif certain assumptions held, but anoperational recursive model (i.e., a setof "nestings" or minisystems huilt intoa pattern of larger systems) to directthe course of the economy from asingle center. Whether tbis wouldhave heen possihle is moot; the effortwas cut short by tbe overthrow ofthe Allende government in September1973-

And yet, by the very same tech-nology, one can go in wholly difierentdirections. Tbrougb the expansion oftwo-way communication, as in variouscable television systems, one couldhave a complete "plebiscitarian" sys-tem wbereby referenda on a largevariety of issues could be takenthrough responses back from com-puter terminals in each bouse. Forsome persons this would be "com-

plete" democracy; for others it mightmean a more manipulative society,or even the tyranny of tbe majority,or an increase in the volatility of po-litical discussion and conflict in so-ciety.

Witbout going to either extreme(and, at times, the extremes meet),what is clear is that the revolutionin communications allows for a Iargediversity of cultural expressions andthe enhancement of different life-styles simply because of tbe increasein tbe number of channels availableto people. This is happening alreadyin radio, for example, wbere stationscater to very different tastes, fromrock to classical music, from serioustalk shows to news and game shows.Witb the multiplication of televisioncbannels and of video cassettes, tbevariety of cboice becomes staggering.

Under free conditions, individualscan create their own modes of com-munication and tbeir own new com-munities. No one, for example, fore-saw tbe mushrooming of citizens' bandradios, and the ways in which theycame to be used. Tbese allow strangersto communicate readily witb oneanother. The first, fascinating, socialpattern was the development of aninformal communications and warn-ing system by truckers on tbe majorroadways, warning one another oftraps by law enforcement agents orof road conditions ahead. Sometimestruckers simply used tbe CB radio toenlarge social ties in what is an es-sentially lonely occupation.

The CB radio has become a majormeans of communication in isolatedvillage areas, as in Nova Scotia—aform of community telepbone line.And, with two-way video cable tele-vision, community intcrcbange maybeeome possible between tbe elderlyor bobby enthusiasts or others withspecial interests and needs.

In a larger political sense, the ex-tension of networks because of meta-phoric face-to-face contact, will meanthat political units can he reorganizedmore readily to match, and he respon-sive to, the scales of the appropriatesocial unit, from neighborhood toregion.

In the end, tbe question of the rela-tion of technology to liberty is both

prosaic and profoxind. It is prosaicbecause the technology is primarilya facilitator or a constraint, avail-able to intensify or to enhance—whichever direction a political systemchooses to go. It is profound because,as I said, man is a creature capablehoth of compassion and of murder.Which path is chosen goes back tothe long, agonized efforts of civilizedcommunities to find institutional ar-rangements that can allow individualsto realize their potentials and thatrespect the integrity of the person.

In short, the question of liberty is,as always, a political consideration.Even speaking of threats to liberty be-cause of the powerful nature of thenew surveillance technologies is a mis-statement; such a view focuses ontechnological gadgetry rather than onorganizational realities.

Orwell, with his powerful imagina-tion, could conjure up a Big Brotherwatching all others. But there is not,and cannot be, a single, giant hrainthat absorbs all information. In mostinstances, tbe centralization of sucbcontrols simply multiplies bureaucra-cies, eacb so cumbersome and jealousof its prerogatives (look at the warshetween intelligence agencies in theUnited States!) as to inhibit, often, theeffective use of information.

If anything, the real threat of suchtechnological megalomania lies in theexpansion of regulatory agencies whoserising costs and bureaucratic regula-tions and delays inhibit innovationand cbange in a society. In the UnitedStates, at least, it is not Big Brother,but Slothful Brother, that hecomes theproblem.

I do not mean to minimize tbe po-tential for abuse. It exists. But tbcreare also agencies of concern, sucb asthe press. Justice William Douglaswrote in 1972:

"Tbe press has a privileged positionin our constitutional system, not toenahle it to make money, not to setnewsmen apart as a favored class, butto bring fulfillment to tbe people'sright to know."

The crucial issues are access to in-formation and the restriction of anymonopoly on information, subject,under stringent review, to genuine

42 Harvard Business Review May-June 1979

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and the man ^iio inventedKissinger are among dieshar i^ etched portraits in\^iiat Svill be one of the mosttalked ahout books of 1979."*

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concerns of national security. TbeFreedom of Information Act was thefruit of a long campaign in the 1960sto open up the records of governmentagencies so that individuals wouldbave access to information abouttbemselves or information about gov-ernment agency activities involvingpublic matters.

In a somewbat different context,wben tbe first large computers werecreated, tecbnologists compared tbemto large generators distributing energyand assumed tbat tbe most efficientmodel of computer use would be reg-ulated computer utilities, which wouldsell computer time or data services tousers. Tbe rapidity of technologicalebange, resulting in tbe multiplicationof mini- and microcomputers, as wellas some second thougbts about thediverse markets for computer usage,led to complete abandonment of tbeideas of computer utilities and recog-nition of the competitive market astbe best framework for eomputer de-velopment.

The possible growtb of the teletextsystems deseribed earlier, of cable tele-vision, and of video cassettes may leadto tbe upbeaval of tbe major televisionnetwork systems and to new modes ofnews presentation, similar to the newcompetition AT&T faces today intransmission systems.

In sum, from all this arises a moraldifferent from what we might expect.Wbile teebnology is instrumental, thefree and competitive use of varioustechnologies is one of tbe best meansof breaking up monopolies, public andprivate. And tbat, too, is a guaranteeof freedom.5