“Measuring the Internet Economy” from a Civil Society Perspective

Posted on September 1, 2011

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Among other things I’m involved in a variety of discussions in several venues on Civil Society and the Internet. This below is part of my contribution to one of those discussions and specifically on how to “measure the Internet economy” in this instance from a Civil Society perspective.

One of the basic understandings of the Philosophy/Sociology of Science is that we all tend to reduce our understanding of new phenomena down to a mode which is intelligible within our existing framework of understanding/knowledge. When it is no longer possible to do this then a new framework (paradigm) comes haltingly forward that allows us to explain those phenomena that remain inexplicable–incommensurable–with the attempts at imposing the existing framework and a new framework/paradigm of understanding is born and very soon becomes the new orthodoxy and in turn becomes “that of which it is impossible to consider an alternative”.

Among the core elements of these conceptual frameworks is the various systems of standards/definitions/measurements that allow us to order and “manage” our processes of knowing and thus our actions in the world. In the economics (and thus to a considerable degree the policy) world one of the basic frameworks is the SNA–the System of National Accounts which presents a means for a consolidated measurement at the national level (and thus comparative at the global level) of “all significant economic activity”.

Much of current economic policy nationally (and globally) (within the competitive market/neo-liberal policy environment) is founded on/driven by these measures as outputted as GDP/GNP etc. Various waves of civil society interventions have subjected these measurement procedures/strategies to what might be called “paradigmatic” critiques–the consumer’s movement critiqued the exclusive focus on production (and the absence of measurements concerned with consumption/consuming); the environmental movement critiqued on the basis of the absence of measures reflecting the lifecycle costs of goods and including impacts on the environment from resource depletion and contributions to environmental degradation and change); the women’s movement critiqued on the basis of a failure to include measures reflecting women’s contribution to domestic work; and as well there have been a number of critiques/alternatives proposed along the lines of the GPI–General Progress Index, and the recently widely noted “Happiness Index“–these latter being presented as more meaningful and significant from a “sustainability” policy perspective.

As well, the SNA has a very strong bias away from the measurement of “social capital” related activities (and towards the measurement of the production of physical goods). In many respects this area is perhaps the most damaging from the perspective of Less Developed Countries and the poor and marginalized in Developed countries since it tends to privilege (and give emphasis to) the production of consumer goods (and public policies supportive of this production) over for example, public investments in social capital related activities such as education, health and social support.)

I’m wondering in this context whether there are areas or issues concerning measurement and indices specifically associated with the Internet that would be of particular interest to Civil Society(CS) that might (or might not) be of interest from the perspective of a “critique” of the SNA and broad measures such as the GDP–parallel to the critiques related to the measurement of “women’s work” and “environmental costing” for example?

The obvious measurement(s) are of course related to the “digital divide” — those who have access and (I would add) the capability of using the Internet and those who do not. But I’m also thinking that there may be an additional set of arguments that quite significantly link back to the earlier critiques and those have to do with the linkage of the Internet with social capital.

Thus, it might be possible (and reasonable) to argue that the enhancement of social capital (internetworking, communication at a distance, speeding up of communications etc.etc.) while not unique to the Internet is so much accelerated and intensified by the Internet that “quantity” becomes “quality” that is, the Internet adds so much to these elements of social capital (and is so much a product of previous investments in social capital) that:

1. it would be impossible realistically to “measure” the economic impact of the Internet without including measurements of the intensification of social capital–social capital is of the very “essence” of the impact (social, economic, cultural) of the Internet that one is trying to measure (“the Internet changes everything” effect). The Internet fundamentally changes the nature of economic (and of course other) relations and activities and the intensification of social capital being of the very essence of the Internet means that this intensification of social capital must similarly be accounted for in one’s measurements associated with the SNA.

2. the Internet through its intensification of social capital is transformative (and not simply summative) of the overall economy, economic relations, transactions, production, distribution and consumption; such that it is impossible to describe let alone measure the various components of the SNA without including various of the Internet (and thus social capital) related impacts in any assessment and thus measurement of each of these components (the “Walmart effect“). Thus, for example, a company such as Walmart would not be possible without the affordances provided by telecommunications/the Internet and hence any measurement including Walmart as a component needs to include measures reflecting this relationship.

The value of such an argument from a civil society perspective I think, is that it links overall economic activity (GDP) with the Internet, and links the Internet with the production of social capital which in turn becomes something of a backdoor way of arguing that investment in ICT (and our understanding and measurement of the benefits of the Internet) should be as much focused on education, health, and social support as it is on bits and bytes–hardware and software–something I’m assuming CS all agrees with but also something which is not taken as a necessary given by those folks managing current economic policies.