Dan Schiller is a professor in the Graduate School of Library and Information Science and the Department of Communication at the University of Illinois at Urbana-Champaign. He is answered some questions about his book Digital Depression: Information Technology and Economic Crisis.
Q: You describe the current state of capitalism as a “contradictory matrix of technological revolution and stagnation.” Can you elaborate?
Dan Schiller: Going on seven years after the financial crisis commenced in 2007-08, standard measures of economic health remain lackluster: real unemployment and underemployment continue to be elevated and investment and growth sluggish. Already endemic in Japan, deflation is now overtaking Europe. Only government bailouts valued in the trillions of dollars have prevented a more thoroughgoing collapse and, even with this unprecedented intervention, the economy remains mired.
At the same time, however, information and communications technologies (ICTs) and the Internet industry in particular continue to constitute a sparkling pole of growth. We are living through a period in which a technological revolution is wrapped up in an economic slump: a digital depression. The purpose of my book is to clarify this conjunction, and to show that it is giving rise not to stable and widely shared prosperity but to harsh geopolitical conflicts and deepening inequality.
Q: How does the Great Depression of the 1930s provide a model for what the world is currently experiencing?
Schiller: During the Great Depression, even while the overall economy languished some industries nevertheless continued to expand—petroleum, for example, and electrical products. In this way the Depression provides an object lesson in how the digital depression that I’ve identified may unfold. It’s not a story of general uplift, but of specific industrial vectors of growth amid a wider devastation. This is so even within the communications sector itself, where search engines and social networks boom while newspapers crater.
However, as I show, a more immediate benchmark is the 1970s, when the path into today’s crisis-ridden digital economy began to be blazed across a far-reaching landscape of production and finance.
Q: What distinguishes your analysis of the financial meltdown from those before you?
Schiller: I borrow from specialist scholarship about finance and economics to ground my analysis of the pervasive role of digital network systems and services in contemporary finance. From inter-bank electronic funds transfers and consumer ATMs to corporate treasury management and proprietary asset trading systems, the entirety of organized finance has become a networked enterprise.
For my purposes, the most relevant implication is that ICTs are not all on one side of the economic ledger. Far from comprising a means to economic salvation, or even health, they were intrinsic aspects of the changes in production as well as finance that eventually led us over the precipice in 2008.
Q: Does a networked political economy alter the effect of forces such as income inequality?
Schiller: Not in the sense of mitigating it. Economic inequality – which pivots around not only income but also assets such as stocks and bonds, that is, wealth – has been increasing for decades, and the digital depression is accentuating this.
The topic of inequality is right now receiving significant attention and this recognition, though belated, is encouraging. Nevertheless, leading analysts of economic inequality make only passing reference to the Internet, ICTs, or digital capitalism. The issues go beyond the fact that, joining oil barons and financiers at the top of today’s wealth pyramid are today’s Internet billionaires. Perhaps more important are the globe-spanning network systems and services that enable today’s transnational capitalism to operate across ever-lengthening financial circuits and production chains.
Q: Looking forward, how can the concept of Digital Capitalism be applied to mitigate the financial stagnation the world is currently experiencing?
Schiller: Whether Internet industries may become a large enough pole of economic growth to regenerate capitalism remains to be seen. The herculean reorganization that is tearing through production and finance has not by any means been completed: there exist many fields where a process of Internet-enabled commodification may continue to extend and to grow. The signs are, however, that this selfsame process is intensifying geopolitical-economic rivalries and structural instabilities amid a secular stagnation – rather than placing the market system on healthier foundations.