The Cybernetic Revolution and the Crisis of Capitalism (page 6 of 11)
By Jerry Harris and Carl Davidson
The Chicago Third Wave Study Group

Third wave technologies have thus been used to develop a global bourgeoisie. While finance capital has been dominant since the advent of imperialism, the national formation of this capital is now less meaningful. While still seeking to dominate its "own" state, today information finance capital, independently constituted with multinational currency, seeks autonomy above and beyond the restriction or regulation of any state, anywhere.

Walter Wriston, past chairman of Citicorp and spokesman for information capital, has articulated this view in his book The Twilight of Sovereignty. He notes that today no currency is tied to physical commodities or any central bank, but instead is comprised as information on the global telecommunications infrastructure. He elaborates: "Money is asserting its control over (government), disciplining irresponsible policies and taking away free lunches everywhere" (page 66). International traders take "a vote on the soundness of each country's fiscal and monetary policies" (page 67) and this "giant vote-counting machine conducts a running tally on what the world thinks of a government's diplomatic, fiscal and monetary policies and this opinion is immediately reflected in the value the market places on a country's currency." (page 9).

Wriston clearly thinks this is a revolutionary development in freedom and democracy for this class. He goes on to state that "capital goes where it is wanted and stays where it is treated well" (page 61), noting that the "ability to move capital...is fundamental to the continuous efforts of mankind to live a better life." (page 72) This is free market ideology taken to is fullest and most abstract development The unhindered movement of money becomes the highest form of freedom, and the ability of global financiers to decide the fate of governments and countries the fullest expression of democracy--all made possible by the electronic infrastructure and those with the access and knowledge to use it.

In this sense one could argue that Ronald Reagan was our first third wave president. Reagan's policies clearly favored the rapid development of speculative capital. His appointment of Paul Volker at the Federal Reserve lead to increased interest rates helping to move capital out of manufacturing and into the new global financial infrastructure. These policies helped create 20% profits in finance markets, while pushing manufacturing profits down to 10%. This sped the rush to deindustrialization as money fled to the market of highest returns. Reagan's unconcern for America's trade deficit, and his insistence on deregulation of the market is better understood as an early variant of third wave financial strategy.

Information capitalism has also used third wave technologies to internationalize production even further. Transnational corporations have created global manufacturing and marketing alliances where the trade in products is now replaced by value added activities. A product may easily have a dozen parts built in different countries through an alliance of interlocking global corporations.

Wriston calls a national trade balance an "artifact of a bygone age". (page 87) As he shows: "The popular IBM PS/2 Model 30-286 contains a microprocessor from Malaysia, oscillators from either France or Singapore; disk controller logic array, diskette controller, ROM and video graphics array from Japan; VLSO circuits and video digital-to-analog converter from Korea; and Dram from Singapore, Japan, or Korea --and all this is put together in Florida...Since there are thousands of such products put together in similar ways, the old concept of trading one item for another is obsolete." (page 81) Wriston maintains that the driving force behind the growing interlock of transnational is the need to access intellectual capital.