Kitabi Kabiir #1: The Rise of the Network Society

The Rise of the Network Society by Manuel Castells

Jan 2023

Initial Comment: I started reading this book along with my advisor last year (2022) and this was the first academic book that I completed reading this year. This was very insightful book with lots of information and it effectively gave me the basic understanding of how things changed in the last few decades and how we as nations have evolved into a global network. There is multipolarity. Whenever I hear about any contemporary geopolitical news, I am reminded of this book. And I must admit that I felt that the book was heavy with lots of critical concepts that went over my head initially. With discussions with my advisor and a course on “Globalization and Cyberspace” at my institute helped clear a lot of concepts. As the name suggests, it lays out the foundation and gives a detailed account of how world changed due to internet. It explicates the several dimensions that were influential in shaping the world economy in the internet age. The growth trajectory of the so-called “Global North” and the “Global South” were demystified. The language of the book was fairly clear and comprehendable. But this was one of those books where you MUST have a highlighter ON all the time. Each chapter was very detailed with lots of important concepts. And the sequence was well justified by the narrative established by the author.

Summary:

Disclaimer: This is my humble attempt to note down some of the key learnings from the book. This is a work in progress and my understanding may be inaccurate and I would be happy to discuss more about this. The idea with this blog is to have key insightful pointers that shaped my understanding and were very important.

“I contend that around the end of the second millennium of the common era a number of major social, technological, economic, and cultural transformations came together to give rise to a new form of society, the network society,” (Castells and Castells, 2010, p. xvii)

ARPANET and the Minitel systems were upto some important innovation that would change the world forever. In one of the chapters, author explains how ARPANET became popular whereas Minitel did not. ARPANET was developed in, what author would term as, “Millieu of Innovation”. Top universities in the Silicon Valley, increasing expatriats from China, India among other countries, thriving entrepreneurial culture in the US, developments in the finance industry, liberalization policy, regulations on innovations — all of these contributed to what we now call as the Silicon Valley.

Network Logic: What is specific to informational mode of development is the action of knowledge upon knowledge itself as the main source of productivity.

Chapter 1: The Information Technology Revolution

What characterizes the current technological revolution is not the centrality of knowledge and information, but the application of such knowledge and information to knowledge generation and information processing/communication devices, in a cumulative feedback loop between innovation and the uses of innovation.

· The feedback loop between introducing new technology, using it, and developing it in to new realms becomes much faster under the new technological paradigm.

· New information technologies are not simply tools to be applied, but processes to be developed.

There is therefore a close relationship between the social processes of creating and manipulating symbols (the culture of society) and the capacity to produce and distribute goods and services (the productive forces ).

This chapter decodes “The IT Revolution”, examines why is it so fast and uneven!?

Author highlights some of the characteristics of The IT Revolution:

1. Information is the raw material
2. Pervasiveness of effects of new tech since information is integral to human activity.
3. Networking logic of any system or set of relationships using these new IT. Penalty is too high to be outside the network.
4. IT paradigm is based on flexibility. Processes reversible, Organizations and institutes modified or fundamentally altered. Ability to reconfigure in age of constant change and organizational fluidity. But we should not have value judgement because flexibility could be liberating for one but repressive for others. Networks are created not just to communicate but also to gain position and to outcommunicate.
5. Growing convergence of specific technologies into highly integrated system within which old separate tech trajectories become indistinguishable

In short, Tech and the IT Revolution is complex. It is neither good, nor bad, nor neutral. It is complex. We cannot predict anything related to tech deployment. Rules are socially constructed. It only makes sense in the hindsight.

Chapter 2: The new economy: Informationalism, Globalization, Networking

The new economy is informational, global and networked.

• Informational : productive and competitive unit in economy is knowledge based information.
• Global: Core activities of production, consumption, and circulation and their components (capital, labour, raw material, management, information, technology, markets) are organized on global scale through network linkages between economic agents.
• Networked: Productivity is generated through and competition is played out in a global network of interaction between business networks.

Productivity was dipping at a time but it was a precursor to new innovation led growth.

Profitability, and growth value of stocks matter the most to the firms and not the productivity. Profitability, and growth value of stocks matter the most to the firms and not the productivity. Political institutions want competitiveness in their constituent economies. Productivity is good thing but a small thing in larger scheme of things. Profitability and competitiveness is what matters the most. Profit for companies increases in four ways: 1. Reduce production costs, 2. Increase productivity 3. Broaden the market 4. Accelerate capital turnover. Broadening of markets happened first. Capitalists saw rise in profitability. And there was need of communication infrastructures.

Increased market is favorable for both government and industry. Globalization helps both. Competitiveness for government also includes wage generation along with the supreme products through free and fair market.

Factors leading to global economy:

1. Liberalization, deregulation of financial markets.

2. Technology required to process complex transactions

3. Nature of new financial products such as futures and options

4. Speculative financial flows to make advantage of market, hedge funds and its low regulations.

5. Rating securities of nations and firms — defining standards. Example: Moody’s

Globalization meant international production and clusters/regionalization.

The new economy affects everywhere and everybody but is inclusive and exclusionary at the same time, the boundaries of inclusion varying for every society, depending on institutions, politics, and policies. On the other hand, systemic financial volatility brings with it the possibility of recurrent financial crises with devastating effects on economies and societies.

Chapter 3: Network Enterprise: The Culture, Institutions and Organizations of the Informational Economy

Cultures manifest themselves fundamentally through their embeddedness in institutions and organizations. By organizations I understand specific systems of means oriented to the performance of specific goals. By institutions I understand organizations invested with the necessary authority to perform some specific tasks on behalf of society as a whole.

Organizational Trajectories in the Restructuring of Capitalism and in the Transition from Industrialism to Informationalism

· From Mid 1970s, major divide in organization of production and markets in global economy.

· Org changes interacted with IT diffusion but org changes preceded IT diffusion in business firms.

· Goal of Org Change: Flexibility in production, management and marketing

· Many org changes aimed at redefining labour process and employment practice through automation, elimination of tasks.

· Knowledge management and information processing are essential to the performance of organizations operating in informational economy.

Old Organizational trends that were sidelined were evolved through IT.

From mass production to flexible production

· Fordism: Organizing technical and social division of labour. Through assembly lines, vertical integration. Taylorism and Scientific division of labour.

· Flexible-specialization: Production accommodates to ceaseless change without pretending to control it.

· Dynamic Flexibility: High volume flexible production system supporting economies of scale and customized reprogrammable production system capturing economies of scope. Both product and process flexibility.

Interfirm networking, corporate strategic alliances, horizontal corporation and global business networks, Network of Networks — these collectively comprise of the new organizational reforms after the world war and around the time when internet was developed and booming.

Typology of East Asian business networks

Japan

• Horizontal Networks: Networks reach out to variety of economic sectors
• Vertical Networks: Keiretsu; large specialized industrial corporation, comprising hundreds, and even thousands, of suppliers and their related subsidiaries.
• Labor practices and work organization reflect this hierarchical network structure
• The more that firms are in the periphery of the network, the more labor is considered expendable and exchangeable, most of it being accounted for by temporary workers and part-time employees
• Thus, networked business groups lead both to flexible cooperation and to highly segmented labor markets that induce a dual social structure, mainly organized along gender lines
• Government led industrialization. State and business firms were friends. Financial dependency on the government approved loans. Top grads worked for some time and later went to other places so the values were spread.

Korea

• Samsung and other Chaebol enjoyed government support and oligopoly.
• Mutual obligation networks external to the chaebol are rare. Internal chaebol relations are a matter of discipline down the network, rather than of cooperation and reciprocity.
• Workers are mainly supposed to fulfill the orders they receive. Unions were state-controlled and were kept subservient for a long period.
• Government was more authoritative. Labour was also not strong as its union was under the government. The military state origin of chaebol was certainly more influential in shaping the authoritarian and patrilineal character of Korean business networks than the Confucian tradition of rural Korea.

China

• The Chinese business organization is based on family firms (jiazuqiye), and cross-sectoral, business networks (jituanqiye), often controlled by one family.
• Thus, families prosper by creating new firms in any sector of activity deemed profitable. Family-based firms are linked by subcontracting arrangements, exchange of investment, sharing of stock. Firms are specialized in their trade, families are diversified in their investments. Connections between firms are highly personalized, fluid, and changeable, unlike the long-term commitment patterns of Japanese networks. Similar to Surat Sellers — sharing of stock, family based firms
• Workers have no commitment, their ideal is to create their own business and become future competitors.
• Not only government but also informal credit sources like family savings. State distrust kept the businesses far. But government did support businesses through ETRI when needed.

— Hong Kong: Benevolent Colonial support coupled with family solidarity. Large scale housing program with low rent, financial support, etc.

Chapter 4: The Transformation of Work and Employment: Networkers, Jobless, and Flex-timers

Work was fundamentally divided into smaller chunks and across geographies. Hence, work/manufacturing/services was done across geographies and hence a network. Since the notion of work changed, one could work outside office and hence any time — flex time.

Chapter 5: The Culture of Real Virtuality: the Integration of Electronic Communication, the End of the Mass Audience, and the Rise of Interactive Networks

Computer mediated communication became the norm. One could be anyone so identity and self representation changed. However, the old cultural factors were also permeated into the digital realm.

Chapter 6: The Space of Flows

The notion of place was that of contiguity. Afterall that is how cities were organized. However, the division of work and evolution of the notion of time meant that the work was organized across spaces of flows.

Chapter 7: The Edge of Forever: Timeless Time

Due to all the above changes, the world economy was fundamentally changed. The constructs of time, space and society changed due to the rise of the network society.

Note: This is a work in progress. Some of the ideas are not elaborated as I would hopefully revisit the annotated PDF to add stuff here!

This post is a reflective account of studying design with a sociotechnical lens through coursework. If you have ideas to make this better, feel free to reach out to me on Twitter @jkabiir9 This book summary would hopefully remind of the key concepts! Thank you for taking the time to read.