Kevin Kelly is executive editor of Wired magazine, the monthly bible of the techno-utopians, and his book New Rules for the New Economy is techno-utopianism in all its fullness: adolescent rantings against authority; promiscuous generalizations that would be maddening if they weren’t so silly; blissful ignorance of nuance and complication; irreverent dismissiveness of religion, culture, tradition, and practically everything that shapes the moral life; meaningless aphorisms (“No harmony. All flux.”); and a breathless reductionism that is encapsulated in sentences like, “We are simply unable to deal with questions that cannot be answered by means of technology.”
The fact remains that Kevin Kelly is a smart man, and his book and magazine are full of telling facts and interesting observations. And Kelly’s book is less than 150 pages, which means that tolerant readers have to do a minimal amount of slogging through the mush to arrive at some genuine insights.
Kelly’s most valuable insight is in his discussion of network goods. A network good is one that dramatically increases in value (with a corresponding reduction in cost) when it is widely used. As Kelly points out, a fax machine cost $ 1,000 in 1965 and connected its user to a network worth $ 1 million. Now, a fax machine costs $ 200 and connects its user to a network worth $ 3 billion. Kelly is not exactly breaking new ground here, but he does an excellent job of seeing the observation through to its consequences.
The Internet, as Kelly and others have pointed out, is the ultimate network good. Just three years ago, the Internet and its popular applications such as e-mail were largely limited to universities. Now, e-mail addresses are nearly universal and almost every organization has its own Web site. A commercial Internet barely existed in 1995; now it is rapidly becoming as important as the telephone. The stock market has responded in kind, boosting Internet stocks to seemingly inexplicable heights. In stock value, the Web site Yahoo! is now worth twice as much as Rupert Murdoch’s News Corporation, which owns hundreds of media properties all over the world. The stock value of America Online dwarfs that of all the television networks combined, and the online retailer Amazon.com is worth more than Barnes & Noble and Borders combined. Except for the investments made in health care, practically all venture capital dollars are now flowing to entrepreneurs trying to harness the new medium in creative and untested ways.
All this makes the question almost irresistible: Why are Americans, especially Americans in business, so fixated on the Internet? There is, after all, nothing in the food or water of America that explains why the telephone, the television, and dozens of lesser technologies were born here. But there is something in the culture of America that does.
Rather than search for what generates our culture’s enthusiasm for technology, Kelly simply conflates the two: “Technology has become our culture, and our culture technology.” But the reductionism of techno-utopians shouldn’t obscure the real and deeply American reasons for the popularity of the Internet.
Like so much about this country, the American passion for the Internet is best described in Alexis de Tocqueville’s 1835 masterpiece Democracy in America. “In democracies nothing has brighter luster than commerce; it attracts the attention of the public and fills the imagination of the crowd; all passionate energies are directed that way.” The attraction of this medium is seen in more than the rapid adoption of the Internet. Not only do ordinary Americans use it, but they buy and sell it. Ordinary Americans are the ones fueling the excitement surrounding stocks like Amazon.com and Yahoo!
One day late last year, the average trade in Netscape was 615 shares; the average trade in Yahoo! was 458 shares. These aren’t the size of mutual and hedge funds transactions. They’re trades that ordinary individuals, often buying from their online trading accounts, are capable of. What Tocqueville said of America on the eve of the Industrial Revolution applies eerily well to America in the Information Revolution: “In the United States the great industrial undertakings are executed without trouble because the whole population is engaged in industry and because the poorest man as well as the most opulent gladly joins forces therein.”
The ability of Tocqueville to teach us about Internet mania is definitive proof of the primacy of culture over technology. Between Tocqueville and Kelly, we have seen the development of nearly every modern technology: from the electric light to the railroad to the automobile to the telephone to the Internet. If these technologies were determinants of culture, Tocqueville’s descriptions of America in 1835 would have no resonance with us today. Instead, he explains aspects of our society with a clarity unequaled by Kelly or anyone else.
Tocqueville would certainly disagree with the techno-utopians. But he would understand why this era of great technological innovation often drives intelligent people to such absurd, sweeping conclusions. As Tocqueville put it:
When the dominion of precedent is left behind, . . . one has a natural inclination to deduce the motives for one’s views from the very nature of man, and that leads of necessity and almost in spite of oneself to a great number of very broad generalizations. So democratic man likes generalizations because they save him the trouble of studying particular cases.
Kevin Kelly — and his techno-utopian friends at Wired magazine — would offer more than an occasional insight if they tempered their enthusiasm for the Internet with a recognition of what Tocqueville called, “the strange stability of certain principles” in America.
Techno-utopians are right to look at the new medium with awe, for its astonishing potential to facilitate the exchange of information, to revolutionize communication, to transform commerce, and to create enormous wealth. But its potential is not unlimited. Human nature did not change on or about August 9, 1995, when Netscape began selling its stock, just as it did not change with the advent of radio, television, telephone, radar, or any other technological advance of this American century.
Mark Gerson is co-CEO of the GL Group, a business publishing company in New York.
