Trade involves the transfer of goods and services from one
person or entity to another, often in exchange for money. Economists
refer to a system or network that allows trade as a market.
An early form of trade, barter, saw the direct exchange of goods and services for other goods and services, i.e. trading things without the use of money. Modern traders generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and letters of credit, paper money, and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade involving more than two traders is called multilateral trade.
In one modern view, trade exists due to specialization and the division of labor, a predominant form of economic activity
in which individuals and groups concentrate on a small aspect of
production, but use their output in trade for other products and needs. Trade exists between regions because different regions may have a comparative advantage (perceived or real) in the production of some trade-able commodity –
including the production of scarce or limited natural resources
elsewhere. For example, different regions' sizes may encourage mass production. In such circumstances, trading at market price
between locations can benefit both locations. Different types of
traders may specialize in trading different kinds of goods; for example,
the spice trade and grain trade have both historically been important in the development of a global, international economy.
A busy market in Mile 12. Lagos - Nigeria
Retail trade consists of the sale of goods or merchandise from a very fixed location (such as a department store, boutique, or kiosk), online or by mail, in small or individual lots for direct consumption or use by the purchaser. Wholesale trade is the traffic in goods that are sold as merchandise to retailers, industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services.
Historically, openness to free trade
substantially increased in some areas from 1815 until the outbreak of
World War I in 1914. Trade openness increased again during the 1920s but
collapsed (in particular in Europe and North America) during the Great Depression of the 1930s. Trade openness increased substantially again from the 1950s onward (albeit with a slowdown during the oil crisis of the 1970s). Economists and economic historians contend that current levels of trade openness are the highest they have ever been.
Etymology
Trade is from Middle Englishtrade ("path, course of conduct"), introduced into English by Hanseatic merchants, from Middle Low Germantrade ("track, course"), from Old Saxontrada ("spoor, track"), from Proto-Germanic*tradÅ ("track, way"), and cognate with Old Englishtredan ("to tread").
Commerce is derived from the Latincommercium, from cum "together" and merx, "merchandise."
In the Mediterranean region, the earliest contact between cultures involved members of the species Homo sapiens, principally using the Danube river, at a time beginning 35,000–30,000 BP.
Some trace the origins of commerce to the very start of transactions in prehistoric times. Apart from traditional self-sufficiency, trading became a principal facility for prehistoric people, who bartered what they had for goods and services from each other.
The caduceus, traditionally associated with Mercury (the Roman patron-god of merchants), continues in use as a symbol of commerce.
Trade is believed to have taken place throughout much of recorded human history. There is evidence of the exchange of obsidian and flint during the Stone Age. Trade in obsidian is believed to have taken place in New Guinea from 17,000 BCE.
The earliest use of obsidian in the Near East dates to the Lower and Middle paleolithic.
Robert Carr Bosanquet investigated trade in the Stone Age by excavations in 1901. Trade is believed[] to have first begun in south west Asia.
Archaeological evidence of obsidian use provides data on how this material was increasingly the preferred choice rather than chert from the late Mesolithic to Neolithic, requiring exchange as deposits of obsidian are rare in the Mediterranean region.
Obsidian provided the material to make cutting utensils or tools,
although since other more easily obtainable materials were available,
use was exclusive to the higher status of the tribe using "the rich
man's flint". Interestingly, Obsidian has held its value relative to flint.
Early traders traded Obsidian at distances of 900 kilometres within the Mediterranean region.
Trade in the Mediterranean during the Neolithic of Europe was greatest in this material.Networks were in existence at around 12,000 BCE Anatolia was the source primarily for trade with the Levant, Iran and Egypt according to Zarins study of 1990. Melos and Lipari sources produced among the most widespread trading in the Mediterranean region as known to archaeology.
The Sari-i-Sang mine in the mountains of Afghanistan was the largest source for trade of lapis lazuli. The material was most largely traded during the Kassite period of Babylonia beginning 1595 BCE.
Later trade
Mediterranean and Near East
Ebla was a prominent trading center during the third millennia BCE, with a network reaching into Anatolia and north Mesopotamia.
A map of the Silk Road trade route between Europe and Asia
Materials used for creating jewelry were traded with Egypt since 3000 BCE. Long-range trade routes first appeared in the 3rd millennium BCE, when Sumerians in Mesopotamia traded with the Harappan civilization of the Indus Valley. The Phoenicians were noted sea traders, traveling across the Mediterranean Sea, and as far north as Britain for sources of tin to manufacture bronze. For this purpose they established trade colonies the Greeks called emporia.
Along the coast of the Mediterranean, researchers have found a positive
relationship between how well-connected a coastal location was and the
local prevalence of archaeological sites from the Iron Age. This
suggests that a location's trade potential was an important determinant
of human settlements.
From the beginning of Greek civilization until the fall of the Roman Empire in the 5th century, a financially lucrative trade brought valuable spice to Europe from the far east, including India and China. Roman commerce allowed its empire to flourish and endure. The latter Roman Republic and the Pax Romana
of the Roman empire produced a stable and secure transportation network
that enabled the shipment of trade goods without fear of significant piracy, as Rome had become the sole effective sea power in the Mediterranean with the conquest of Egypt and the near east.
In ancient Greece Hermes was the god of trade (commerce) and weights and measures. In ancient Rome, Mercurius was the god of merchants, whose festival was celebrated by traders on the 25th day of the fifth month.
The concept of free trade was an antithesis to the will and economic
direction of the sovereigns of the ancient Greek states. Free trade
between states was stifled by the need for strict internal controls (via
taxation) to maintain security within the treasury of the sovereign,
which nevertheless enabled the maintenance of a modicum of civility within the structures of functional community life.
The fall of the Roman empire and the succeeding Dark Ages brought instability to Western Europe
and a near-collapse of the trade network in the western world. Trade,
however, continued to flourish among the kingdoms of Africa, the Middle
East, India, China, and Southeast Asia. Some trade did occur in the
west. For instance, Radhanites were a medieval guild or group (the precise meaning of the word is lost to history) of Jewish merchants who traded between the Christians in Europe and the Muslims of the Near East.
The first true maritime trade network in the Indian Ocean was by the Austronesian peoples of Island Southeast Asia. Initiated by the indigenous peoples of Taiwan and the Philippines, the Maritime Jade Road
was an extensive trading network connecting multiple areas in Southeast
and East Asia. Its primary products were made of jade mined from Taiwan
by Taiwanese indigenous peoples and processed mostly in the Philippines by indigenous Filipinos, especially in Batanes, Luzon, and Palawan. Some were also processed in Vietnam, while the peoples of Malaysia, Brunei, Singapore, Thailand, Indonesia, and Cambodia
also participated in the massive trading network. The maritime road is
one of the most extensive sea-based trade networks of a single
geological material in the prehistoric world. It was in existence for at
least 3,000 years, where its peak production was from 2000 BCE to 500
CE, older than the Silk Road in mainland Eurasia and the later Maritime Silk Road.
The Maritime Jade Road began to wane during its final centuries from
500 CE until 1000 CE. The entire period of the network was a golden age
for the diverse societies of the region.
Sea-faring Southeast Asians also established trade routes with Southern India and Sri Lanka as early as 1500 BC, ushering an exchange of material culture (like catamarans, outrigger boats, sewn-plank boats, and paan) and cultigens (like coconuts, sandalwood, bananas, and sugarcane); as well as connecting the material cultures of India and China. Indonesians, in particular were trading in spices (mainly cinnamon and cassia) with East Africa using catamaran and outrigger boats and sailing with the help of the Westerlies in the Indian Ocean. This trade network expanded to reach as far as Africa and the Arabian Peninsula, resulting in the Austronesian colonization of Madagascar by the first half of the first millennium AD. It continued up to historic times, later becoming the Maritime Silk Road.
Mesoamerica
Tajadero or axe money used as currency in Mesoamerica. It had a fixed worth of 8,000 cacao seeds, which were also used as currency.
The emergence of exchange networks in the Pre-Columbian societies of
and near to Mexico are known to have occurred within recent years before
and after 1500 BCE.
Trade networks reached north to Oasisamerica. There is evidence of established maritime trade with the cultures of northwestern South America and the Caribbean.
Middle Ages
During the Middle Ages, commerce developed in Europe by trading luxury goods at trade fairs. Wealth became converted into movable wealth or capital.
Banking systems developed where money on account was transferred across
national boundaries. Hand to hand markets became a feature of town life
and were regulated by town authorities.
Western Europe established a complex and expansive trade network with cargo ships being the main carrier of goods; Cogs and Hulks are two examples of such cargo ships. Many ports would develop their own extensive trade networks. The English port city of Bristol traded with peoples from what is modern day Iceland, all along the western coast of France, and down to what is now Spain.
During the Middle Ages, Central Asia was the economic center of the world. The Sogdians dominated the east–west trade route known as the Silk Road after the 4th century CE up to the 8th century CE, with Suyab and Talas ranking among their main centers in the north. They were the main caravan merchants of Central Asia.
From the Middle Ages, the maritime republics, in particular Venice, Pisa and Genoa, played a key role in trade along the Mediterranean. From the 11th to the late 15th centuries, the Venetian Republic and the Republic of Genoa
were major trade centers. They dominated trade in the Mediterranean and
the Black Sea, having the monopoly between Europe and the Near East for
centuries.
From the 8th to the 11th century, the Vikings and Varangians traded as they sailed from and to Scandinavia. Vikings sailed to Western Europe, while Varangians to Russia. The Hanseatic League was an alliance of trading cities that maintained a trade monopoly over most of Northern Europe and the Baltic, between the 13th and 17th centuries.
The Age of Sail and the Industrial Revolution
Portuguese explorer Vasco da Gama pioneered the European spice trade in 1498 when he reached Calicut after sailing around the Cape of Good Hope
at the southern tip of the African continent. Prior to this, the flow
of spice into Europe from India was controlled by Islamic powers,
especially Egypt. The spice trade was of major economic importance and
helped spur the Age of Discovery
in Europe. Spices brought to Europe from the Eastern world were some of
the most valuable commodities for their weight, sometimes rivaling gold.
From 1070 onward, kingdoms in West Africa became significant members of global trade. This came initially through the movement of gold and other resources sent out by Muslim traders on the Trans-Saharan trading network. Beginning in the 16th century, European merchants would purchase gold, spices, cloth, timber and slaves from West African states as part of the triangular trade. This was often in exchange for cloth, iron, or cowrie shells which were used locally as currency.
Founded in 1352, the Bengal Sultanate was a major trading nation in the world and often referred to by Europeans as the wealthiest country with which to trade.
In the 16th and 17th centuries, the Portuguese gained an economic advantage in the Kingdom of Kongo due to different philosophies of trade.
Whereas Portuguese traders concentrated on the accumulation of capital,
in Kongo spiritual meaning was attached to many objects of trade.
According to economic historian Toby Green, in Kongo "giving more than receiving was a symbol of spiritual and political power and privilege."
In the 16th century, the Seventeen Provinces were the center of free trade, imposing no exchange controls, and advocating the free movement of goods. Trade in the East Indies was dominated by Portugal in the 16th century, the Dutch Republic in the 17th century, and the British in the 18th century. The Spanish Empire developed regular trade links across both the Atlantic and the Pacific Oceans.
In 1776, Adam Smith published the paper An Inquiry into the Nature and Causes of the Wealth of Nations. It criticized Mercantilism, and argued that economic specialization could benefit nations just as much as firms. Since the division of labour
was restricted by the size of the market, he said that countries having
access to larger markets would be able to divide labour more
efficiently and thereby become more productive. Smith said that he considered all rationalizations of import and export controls "dupery", which hurt the trading nation as a whole for the benefit of specific industries.
In 1799, the Dutch East India Company, formerly the world's largest company, became bankrupt, partly due to the rise of competitive free trade.
When an inefficient producer sends the merchandise it
produces best to a country able to produce it more efficiently, both
countries benefit.
The ascendancy of free trade was primarily based on national
advantage in the mid 19th century. That is, the calculation made was
whether it was in any particular country's self-interest to open its
borders to imports.
John Stuart Mill proved that a country with monopoly pricing power on the international market could manipulate the terms of trade through maintaining tariffs, and that the response to this might be reciprocity
in trade policy. Ricardo and others had suggested this earlier. This
was taken as evidence against the universal doctrine of free trade, as
it was believed that more of the economic surplus of trade would accrue to a country following reciprocal, rather than completely free, trade policies. This was followed within a few years by the infant industry scenario developed by Mill promoting the theory that the government had the duty to protect
young industries, although only for a time necessary for them to
develop full capacity. This became the policy in many countries
attempting to industrialize and out-compete English exporters. Milton Friedman
later continued this vein of thought, showing that in a few
circumstances tariffs might be beneficial to the host country; but never
for the world at large.
20th century
The Great Depression
was a major economic recession that ran from 1929 to the late 1930s.
During this period, there was a great drop in trade and other economic
indicators.
The lack of free trade was considered by many as a principal cause of the depression causing stagnation and inflation. Only during World War II did the recession end in the United States. Also during the war, in 1944, 44 countries signed the Bretton Woods Agreement, intended to prevent national trade barriers, to avoid depressions. It set up rules and institutions to regulate the international political economy: the International Monetary Fund
and the International Bank for Reconstruction and Development (later
divided into the World Bank $ Bank for International Settlements).
These organizations became operational in 1946 after enough countries
ratified the agreement. In 1947, 23 countries agreed to the General Agreement on Tariffs and Trade to promote free trade.
The European Union became the world's largest exporter of manufactured goods and services, the biggest export market for around 80 countries.
Today, trade is merely a subset within a complex system of companies which try to maximize their profits by offering products and services to the market (which consists both of individuals and other companies) at the lowest production cost. A system of international trade has helped to develop the world economy but, in combination with bilateral or multilateral agreements to lower tariffs or to achieve free trade, has sometimes harmed third-world markets for local products.
Free trade is a policy by which a government does not discriminate
against imports or exports by applying tariffs or subsidies. This policy
is also known as laissez-faire policy. This kind of policy does not
necessarily imply because a country will then abandon all control and
taxation of imports and exports.
Free trade advanced further in the late 20th century and early 2000s:
EC was transformed into the European Union, which accomplished the
Economic and Monetary Union (EMU) in 2002, through introducing the Euro,
and creating this way a real single market between 13 member states as
of January 1, 2007.
Protectionism is the policy of restraining and discouraging trade
between states and contrasts with the policy of free trade. This policy
often takes the form of tariffs and restrictive quotas. Protectionist policies were particularly prevalent in the 1930s, between the Great Depression and the onset of World War II.
Religion
Islamic teachings encourage trading (and condemn usury or interest).
Judeao-Christian
teachings do not prohibit trade. They do prohibit fraud and dishonest
measures. Historically they forbade charging interest on loans.
The first instances of money were objects with intrinsic value. This is called commodity money
and includes any commonly available commodity that has intrinsic value;
historical examples include pigs, rare seashells, whale's teeth, and
(often) cattle. In medieval Iraq, bread was used as an early form of
money. In the Aztec Empire, under the rule of Montezuma cocoa beans became legitimate currency.
Currency
was introduced as standardised money to facilitate a wider exchange of
goods and services. This first stage of currency, where metals were
used to represent stored value, and symbols to represent commodities,
formed the basis of trade in the Fertile Crescent for over 1500 years.
Numismatists have examples of coins from the earliest large-scale societies, although these were initially unmarked lumps of precious metal.
The Doha round of World Trade Organization negotiations aimed to lower barriers to trade around the world, with a focus on making trade fairer for developing countries. Talks have been hung over a divide between the rich developed countries, represented by the G20, and the major developing countries. Agricultural subsidies
are the most significant issue upon which agreement has been the
hardest to negotiate. By contrast, there was much agreement on trade facilitation and capacity building. The Doha round began in Doha, Qatar, and negotiations were continued in: Cancún, Mexico; Geneva, Switzerland; and Paris, France, and Hong Kong.
China
Beginning around 1978, the government of the People's Republic of China (PRC) began an experiment in economic reform. In contrast to the previous Soviet-style centrally planned economy,
the new measures progressively relaxed restrictions on farming,
agricultural distribution and, several years later, urban enterprises
and labor. The more market-oriented approach reduced inefficiencies and
stimulated private investment, particularly by farmers, which led to
increased productivity and output. One feature was the establishment of
four (later five) Special Economic Zones located along the South-east coast.
The reforms proved spectacularly successful in terms of increased output, variety, quality, price and demand.
In real terms, the economy doubled in size between 1978 and 1986,
doubled again by 1994, and again by 2003. On a real per capita basis,
doubling from the 1978 base took place in 1987, 1996 and 2006. By 2008,
the economy was 16.7 times the size it was in 1978, and 12.1 times its
previous per capita levels. International trade progressed even more
rapidly, doubling on average every 4.5 years. Total two-way trade in
January 1998 exceeded that for all of 1978; in the first quarter of
2009, trade exceeded the full-year 1998 level. In 2008, China's two-way
trade totaled US$2.56 trillion.
In 1991 China joined the Asia-Pacific Economic Cooperation group, a trade-promotion forum. In 2001, it also joined the World Trade Organization.
International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance have increased in recent centuries, mainly because of Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing.
Empirical evidence for the success of trade can be seen in the contrast between countries such as South Korea, which adopted a policy of export-oriented industrialization,
and India, which historically had a more closed policy. South Korea
has done much better by economic criteria than India over the past fifty
years, though its success also has to do with effective state
institutions.
Trade sanctions
Trade sanctions against a specific country are sometimes imposed, in order to punish that country for some action. An embargo,
a severe form of externally imposed isolation, is a blockade of all
trade by one country on another. For example, the United States has had
an embargo against Cuba for over 40 years. Embargoes are usually on a temporary basis. For example, Armenia
put a temporary embargo on Turkish products and bans any imports from
Turkey on December 31, 2020. The situation is prompted by food security
concerns given Turkey's hostile attitude towards Armenia.
Fair trade
The "fair trade" movement, also known as the "trade justice" movement, promotes the use of labour, environmental and social standards for the production of commodities, particularly those exported from the Third and Second Worlds to the First World. Such ideas have also sparked a debate on whether trade itself should be codified as a human right.
Importing firms voluntarily adhere to fair trade standards or governments may enforce them through a combination of employment and commercial law. Proposed and practiced fair trade policies vary widely, ranging from the common prohibition of goods made using slave labour to minimum price support schemes such as those for coffee in the 1980s. Non-governmental organizations also play a role in promoting fair trade standards by serving as independent monitors of compliance with labeling requirements. As such, it is a form of Protectionism.
An information society is a society or subculture where the usage, creation, distribution, manipulation and integration of information is a significant activity. Its main drivers are information and communication technologies,
which have resulted in rapid growth of a variety of forms of
information. Proponents of this theory posit that these technologies are
impacting most important forms of social organization, including education, economy, health, government, warfare, and levels of democracy. The people who are able to partake in this form of society are sometimes called either computer users or even digital citizens,
defined by K. Mossberger as “Those who use the Internet regularly and
effectively”. This is one of many dozen internet terms that have been
identified to suggest that humans are entering a new and different phase
of society.
There
is currently no universally accepted concept of what exactly can be
defined as an information society and what shall not be included in the
term. Most theoreticians agree that a transformation can be seen as
started somewhere between the 1970s, the early 1990s transformations of
the Socialist East
and the 2000s period that formed most of today's net principles and
currently as is changing the way societies work fundamentally.
Information technology goes beyond the internet,
as the principles of internet design and usage influence other areas,
and there are discussions about how big the influence of specific media
or specific modes of production really is. Frank Webster notes five
major types of information that can be used to define information
society: technological, economic, occupational, spatial and cultural.
According to Webster, the character of information has transformed the
way that we live today. How we conduct ourselves centers around
theoretical knowledge and information.
Kasiwulaya and Gomo (Makerere University) allude
that information societies are those that have intensified their use of
IT for economic, social, cultural and political transformation. In
2005, governments reaffirmed their dedication to the foundations of the
Information
Society in the Tunis Commitment
and outlined the basis for implementation and follow-up in the Tunis
Agenda for the Information Society. In particular, the Tunis Agenda
addresses the issues of financing of ICTs for development and Internet
governance that could not be resolved in the first phase.
Some people, such as Antonio Negri, characterize the information society as one in which people do immaterial labour.
By this, they appear to refer to the production of knowledge or
cultural artifacts. One problem with this model is that it ignores the
material and essentially industrial basis of the society. However it
does point to a problem for workers, namely how many creative people
does this society need to function? For example, it may be that you
only need a few star performers, rather than a plethora of
non-celebrities, as the work of those performers can be easily
distributed, forcing all secondary players to the bottom of the market.
It is now common for publishers to promote only their best
selling authors and to try to avoid the rest—even if they still sell
steadily. Films are becoming more and more judged, in terms of
distribution, by their first weekend's performance, in many cases
cutting out opportunity for word-of-mouth development.
Michael Buckland characterizes information in society in his book Information and Society.
Buckland expresses the idea that information can be interpreted
differently from person to person based on that individual's
experiences.
Considering that metaphors and technologies of information move
forward in a reciprocal relationship, we can describe some societies
(especially the Japanese society) as an information society because we think of it as such.
The word information may be interpreted in many different ways. According to Buckland in Information and Society,
most of the meanings fall into three categories of human knowledge:
information as knowledge, information as a process, and information as a
thing.
Thus, the Information Society refers to the social importance
given to communication and information in today's society, where social,
economic and cultural relations are involved.
In the Information Society, the process of capturing, processing
and communicating information is the main element that characterizes it.
Thus, in this type of society, the vast majority of it will be
dedicated to the provision of services and said services will consist of
the processing, distribution or use of information.
The growth of computer information in society
Internet users per 100 inhabitants
Source: International Telecommunication Union.The amount of data stored globally has increased greatly since the 1980s, and by 2007, 94% of it was stored digitally.
The growth of the amount of technologically mediated information has
been quantified in different ways, including society's technological
capacity to store information, to communicate information, and to
compute information. It is estimated that, the world's technological capacity to store information grew from 2.6 (optimally compressed) exabytes in 1986, which is the informational equivalent to less than one 730-MB CD-ROM per person in 1986 (539 MB per person), to 295 (optimally compressed) exabytes in 2007. This is the informational equivalent of 60 CD-ROM per person in 2007
and represents a sustained annual growth rate of some 25%. The world's
combined technological capacity to receive information through one-way broadcast networks was the informational equivalent of 174 newspapers per person per day in 2007.
The world's combined effective capacity to exchange information through two-way telecommunication networks was 281 petabytes of (optimally compressed) information in 1986, 471 petabytes in 1993, 2.2 (optimally compressed) exabytes in 2000, and 65 (optimally compressed) exabytes in 2007, which is the informational equivalent of 6 newspapers per person per day in 2007.
The world's technological capacity to compute information with humanly
guided general-purpose computers grew from 3.0 × 10^8 MIPS in 1986, to
6.4 x 10^12 MIPS in 2007, experiencing the fastest growth rate of over
60% per year during the last two decades.
James R. Beniger
describes the necessity of information in modern society in the
following way: “The need for sharply increased control that resulted
from the industrialization of material processes through application of
inanimate sources of energy probably accounts for the rapid development
of automatic feedback technology in the early industrial period
(1740-1830)” (p. 174)
“Even with enhanced feedback control, industry could not have developed
without the enhanced means to process matter and energy, not only as
inputs of the raw materials of production but also as outputs
distributed to final consumption.”(p. 175)
One of the first people to develop the concept of the information society was the economist Fritz Machlup. In 1933, Fritz Machlup began studying the effect of patents on research. His work culminated in the study The production and distribution of knowledge in the United States in 1962. This book was widely regarded and was eventually translated into Russian and Japanese. The Japanese have also studied the information society (or jÅhÅka shakai, æ å ±å瀟äŒ).
The issue of technologies and their role in contemporary society
have been discussed in the scientific literature using a range of labels
and concepts. This section introduces some of them. Ideas of a
knowledge or information economy, post-industrial society, postmodern society, network society, the information revolution, informational capitalism, network capitalism, and the like, have been debated over the last several decades.
Fritz Machlup (1962) introduced the concept of the knowledge industry.
He began studying the effects of patents on research before
distinguishing five sectors of the knowledge sector: education, research
and development, mass media, information technologies, information
services. Based on this categorization he calculated that in 1959 29%
per cent of the GNP in the USA had been produced in knowledge
industries.
Economic transition
Peter Drucker has argued that there is a transition from an economy based on material goods to one based on knowledge. Marc Porat
distinguishes a primary (information goods and services that are
directly used in the production, distribution or processing of
information) and a secondary sector (information services produced for
internal consumption by government and non-information firms) of the
information economy.
Porat uses the total value added by the primary and secondary
information sector to the GNP as an indicator for the information
economy. The OECD
has employed Porat's definition for calculating the share of the
information economy in the total economy (e.g. OECD 1981, 1986). Based
on such indicators, the information society has been defined as a
society where more than half of the GNP is produced and more than half
of the employees are active in the information economy.
For Daniel Bell
the number of employees producing services and information is an
indicator for the informational character of a society. "A
post-industrial society is based on services. (…) What counts is not raw
muscle power, or energy, but information. (…) A post industrial society
is one in which the majority of those employed are not involved in the
production of tangible goods".
Alain Touraine
already spoke in 1971 of the post-industrial society. "The passage to
postindustrial society takes place when investment results in the
production of symbolic goods that modify values, needs, representations,
far more than in the production of material goods or even of
'services'. Industrial society had transformed the means of production:
post-industrial society changes the ends of production, that is,
culture. (…) The decisive point here is that in postindustrial society
all of the economic system is the object of intervention of society upon
itself. That is why we can call it the programmed society, because this
phrase captures its capacity to create models of management,
production, organization, distribution, and consumption, so that such a
society appears, at all its functional levels, as the product of an
action exercised by the society itself, and not as the outcome of
natural laws or cultural specificities" (Touraine 1988: 104). In the
programmed society also the area of cultural reproduction including
aspects such as information, consumption, health, research, education
would be industrialized. That modern society is increasing its capacity
to act upon itself means for Touraine that society is reinvesting ever
larger parts of production and so produces and transforms itself. This
makes Touraine's concept substantially different from that of Daniel
Bell who focused on the capacity to process and generate information for
efficient society functioning.
Jean-François Lyotard has argued that "knowledge has become the principle [sic]
force of production over the last few decades". Knowledge would be
transformed into a commodity. Lyotard says that postindustrial society
makes knowledge accessible to the layman because knowledge and
information technologies would diffuse into society and break up Grand
Narratives of centralized structures and groups. Lyotard denotes these
changing circumstances as postmodern condition or postmodern society.
Similarly to Bell, Peter Otto and Philipp Sonntag (1985) say that
an information society is a society where the majority of employees
work in information jobs, i.e. they have to deal more with information,
signals, symbols, and images than with energy and matter. Radovan Richta
(1977) argues that society has been transformed into a scientific
civilization based on services, education, and creative activities. This
transformation would be the result of a scientific-technological
transformation based on technological progress and the increasing
importance of computer technology. Science and technology would become
immediate forces of production (Aristovnik 2014: 55).
Nico Stehr
(1994, 2002a, b) says that in the knowledge society a majority of jobs
involves working with knowledge. "Contemporary society may be described
as a knowledge society based on the extensive penetration of all its
spheres of life and institutions by scientific and technological
knowledge" (Stehr 2002b: 18). For Stehr, knowledge is a capacity for
social action. Science would become an immediate productive force,
knowledge would no longer be primarily embodied in machines, but already
appropriated nature that represents knowledge would be rearranged
according to certain designs and programs (Ibid.: 41-46). For Stehr, the
economy of a knowledge society is largely driven not by material
inputs, but by symbolic or knowledge-based inputs (Ibid.: 67), there
would be a large number of professions that involve working with
knowledge, and a declining number of jobs that demand low cognitive
skills as well as in manufacturing (Stehr 2002a).
Also Alvin Toffler
argues that knowledge is the central resource in the economy of the
information society: "In a Third Wave economy, the central resource – a
single word broadly encompassing data, information, images, symbols,
culture, ideology, and values – is actionable knowledge"
(Dyson/Gilder/Keyworth/Toffler 1994).
At the end of the twentieth century, the concept of the network society gained importance in information society theory. For Manuel Castells,
network logic is besides information, pervasiveness, flexibility, and
convergence a central feature of the information technology paradigm
(2000a: 69ff). "One of the key features of informational society is the
networking logic of its basic structure, which explains the use of the
concept of 'network society'" (Castells 2000: 21). "As an historical
trend, dominant functions and processes in the Information Age are
increasingly organized around networks. Networks constitute the new
social morphology of our societies, and the diffusion of networking
logic substantially modifies the operation and outcomes in processes of
production, experience, power, and culture" (Castells 2000: 500). For
Castells the network society is the result of informationalism, a new
technological paradigm.
Jan Van Dijk
(2006) defines the network society as a "social formation with an
infrastructure of social and media networks enabling its prime mode of
organization at all levels (individual, group/organizational and
societal). Increasingly, these networks link all units or parts of this
formation (individuals, groups and organizations)" (Van Dijk 2006: 20).
For Van Dijk networks have become the nervous system of society, whereas
Castells links the concept of the network society to capitalist
transformation, Van Dijk sees it as the logical result of the increasing
widening and thickening of networks in nature and society. Darin Barney
uses the term for characterizing societies that exhibit two fundamental
characteristics: "The first is the presence in those societies of
sophisticated – almost exclusively digital – technologies of networked
communication and information management/distribution, technologies
which form the basic infrastructure mediating an increasing array of
social, political and economic practices. (…) The second, arguably more
intriguing, characteristic of network societies is the reproduction and
institutionalization throughout (and between) those societies of
networks as the basic form of human organization and relationship across
a wide range of social, political and economic configurations and
associations".
Critiques
The
major critique of concepts such as information society, postmodern
society, knowledge society, network society, postindustrial society,
etc. that has mainly been voiced by critical scholars is that they
create the impression that we have entered a completely new type of
society. "If there is just more information then it is hard to
understand why anyone should suggest that we have before us something
radically new" (Webster 2002a: 259). Critics such as Frank Webster
argue that these approaches stress discontinuity, as if contemporary
society had nothing in common with society as it was 100 or 150 years
ago. Such assumptions would have ideological character because they
would fit with the view that we can do nothing about change and have to
adapt to existing political realities (kasiwulaya 2002b: 267).
These critics argue that contemporary society first of all is
still a capitalist society oriented towards accumulating economic,
political, and cultural capital.
They acknowledge that information society theories stress some
important new qualities of society (notably globalization and
informatization), but charge that they fail to show that these are
attributes of overall capitalist structures. Critics such as Webster
insist on the continuities that characterise change. In this way Webster
distinguishes between different epochs of capitalism: laissez-faire
capitalism of the 19th century, corporate capitalism in the 20th century, and informational capitalism for the 21st century (kasiwulaya 2006).
For describing contemporary society based on a new dialectic of
continuity and discontinuity, other critical scholars have suggested
several terms like:
transnational network capitalism, transnational informational capitalism (Christian Fuchs
2008, 2007): "Computer networks are the technological foundation that
has allowed the emergence of global network capitalism, that is, regimes
of accumulation, regulation, and discipline that are helping to
increasingly base the accumulation of economic, political, and cultural
capital on transnational network organizations that make use of
cyberspace and other new technologies for global coordination and
communication. [...] The need to find new strategies for executing
corporate and political domination has resulted in a restructuration of
capitalism that is characterized by the emergence of transnational,
networked spaces in the economic, political, and cultural system and has
been mediated by cyberspace as a tool of global coordination and
communication. Economic, political, and cultural space have been
restructured; they have become more fluid and dynamic, have enlarged
their borders to a transnational scale, and handle the inclusion and
exclusion of nodes in flexible ways. These networks are complex due to
the high number of nodes (individuals, enterprises, teams, political
actors, etc.) that can be involved and the high speed at which a high
number of resources is produced and transported within them. But global
network capitalism is based on structural inequalities; it is made up of
segmented spaces in which central hubs (transnational corporations,
certain political actors, regions, countries, Western lifestyles, and
worldviews) centralize the production, control, and flows of economic,
political, and cultural capital (property, power, definition
capacities). This segmentation is an expression of the overall
competitive character of contemporary society." (Fuchs 2008: 110+119).
digital capitalism (Schiller 2000, cf. also Peter Glotz):
"networks are directly generalizing the social and cultural range of
the capitalist economy as never before" (Schiller 2000: xiv)
virtual capitalism: the "combination of marketing and the new
information technology will enable certain firms to obtain higher profit
margins and larger market shares, and will thereby promote greater
concentration and centralization of capital" (Dawson/John Bellamy Foster 1998: 63sq),
high-tech capitalism
or informatic capitalism (Fitzpatrick 2002) – to focus on the computer
as a guiding technology that has transformed the productive forces of
capitalism and has enabled a globalized economy.
Other scholars prefer to speak of information capitalism (Morris-Suzuki 1997) or informational capitalism (Manuel Castells 2000, Christian Fuchs
2005, Schmiede 2006a, b). Manuel Castells sees informationalism as a
new technological paradigm (he speaks of a mode of development)
characterized by "information generation, processing, and transmission"
that have become "the fundamental sources of productivity and power"
(Castells 2000: 21). The "most decisive historical factor accelerating,
channelling and shaping the information technology paradigm, and
inducing its associated social forms, was/is the process of capitalist
restructuring undertaken since the 1980s, so that the new
techno-economic system can be adequately characterized as informational
capitalism" (Castells 2000: 18). Castells has added to theories of the
information society the idea that in contemporary society dominant
functions and processes are increasingly organized around networks that
constitute the new social morphology of society (Castells 2000: 500). Nicholas Garnham
is critical of Castells and argues that the latter's account is
technologically determinist because Castells points out that his
approach is based on a dialectic of technology and society in which
technology embodies society and society uses technology (Castells 2000:
5sqq). But Castells also makes clear that the rise of a new "mode of
development" is shaped by capitalist production, i.e. by society, which
implies that technology isn't the only driving force of society.
Antonio Negri and Michael Hardt
argue that contemporary society is an Empire that is characterized by a
singular global logic of capitalist domination that is based on
immaterial labour. With the concept of immaterial labour Negri and Hardt
introduce ideas of information society discourse into their Marxist
account of contemporary capitalism. Immaterial labour would be labour
"that creates immaterial products, such as knowledge, information,
communication, a relationship, or an emotional response" (Hardt/Negri
2005: 108; cf. also 2000: 280-303), or services, cultural products,
knowledge (Hardt/Negri 2000: 290). There would be two forms:
intellectual labour that produces ideas, symbols, codes, texts,
linguistic figures, images, etc.; and affective labour
that produces and manipulates affects such as a feeling of ease,
well-being, satisfaction, excitement, passion, joy, sadness, etc.
(Ibid.).
Overall, neo-Marxist accounts of the information society have in
common that they stress that knowledge, information technologies, and
computer networks have played a role in the restructuration and
globalization of capitalism and the emergence of a flexible regime of
accumulation (David Harvey 1989). They warn that new technologies are embedded into societal antagonisms that cause structural unemployment, rising poverty, social exclusion, the deregulation of the welfare state and of labour rights, the lowering of wages, welfare, etc.
Concepts such as knowledge society, information society, network
society, informational capitalism, postindustrial society, transnational
network capitalism, postmodern society, etc. show that there is a vivid
discussion in contemporary sociology on the character of contemporary
society and the role that technologies, information, communication, and
co-operation play in it.
Information society theory discusses the role of information and
information technology in society, the question which key concepts shall
be used for characterizing contemporary society, and how to define such
concepts. It has become a specific branch of contemporary sociology.
Second and third nature
Information society is the means of sending and receiving information from one place to another. As technology has advanced so too has the way people have adapted in sharing information with each other.
"Second nature" refers a group of experiences that get made over by culture.
They then get remade into something else that can then take on a new
meaning. As a society we transform this process so it becomes something
natural to us, i.e. second nature. So, by following a particular pattern
created by culture we are able to recognise how we use and move
information in different ways. From sharing information via different
time zones (such as talking online) to information ending up in a
different location (sending a letter overseas) this has all become a
habitual process that we as a society take for granted.
However, through the process of sharing information vectors have
enabled us to spread information even further. Through the use of these
vectors information is able to move and then separate from the initial
things that enabled them to move.
From here, something called "third nature" has developed. An extension
of second nature, third nature is in control of second nature. It
expands on what second nature is limited by. It has the ability to mould
information in new and different ways. So, third nature is able to
‘speed up, proliferate, divide, mutate, and beam in on us from
elsewhere.
It aims to create a balance between the boundaries of space and time
(see second nature). This can be seen through the telegraph, it was the
first successful technology that could send and receive information
faster than a human being could move an object.
As a result different vectors of people have the ability to not only
shape culture but create new possibilities that will ultimately shape
society.
Therefore, through the use of second nature and third nature
society is able to use and explore new vectors of possibility where
information can be moulded to create new forms of interaction.
As steam power was the technology standing behind industrial society, so information technology
is seen as the catalyst for the changes in work organisation, societal
structure and politics occurring in the late 20th century.
In the book Future Shock, Alvin Toffler used the phrase super-industrial society to describe this type of society. Other writers and thinkers have used terms like "post-industrial society" and "post-modern industrial society" with a similar meaning.
Related terms
A
number of terms in current use emphasize related but different aspects
of the emerging global economic order. The Information Society intends
to be the most encompassing in that an economy is a subset of a society.
The Information Age is somewhat limiting, in that it refers to a 30-year period between the widespread use of computers and the knowledge economy,
rather than an emerging economic order. The knowledge era is about the
nature of the content, not the socioeconomic processes by which it will
be traded. The computer revolution,
and knowledge revolution refer to specific revolutionary transitions,
rather than the end state towards which we are evolving. The Information Revolution relates with the well known terms agricultural revolution and industrial revolution.
Knowledge services and knowledge value put content into an economic context. Knowledge services integrates Knowledge management, within a Knowledge organization, that trades in a Knowledge market.
In order for individuals to receive more knowledge, surveillance is
used. This relates to the use of Drones as a tool in order to gather
knowledge on other individuals. Although seemingly synonymous, each term
conveys more than nuances or slightly different views of the same
thing. Each term represents one attribute of the likely nature of
economic activity in the emerging post-industrial society.
Alternatively, the new economic order will incorporate all of the above
plus other attributes that have not yet fully emerged.
One
of the central paradoxes of the information society is that it makes
information easily reproducible, leading to a variety of freedom/control
problems relating to intellectual property.
Essentially, business and capital, whose place becomes that of
producing and selling information and knowledge, seems to require
control over this new resource so that it can effectively be managed and
sold as the basis of the information economy. However, such control can
prove to be both technically and socially problematic. Technically
because copy protection is often easily circumvented and socially rejected because the users and citizens of the information society can prove to be unwilling to accept such absolute commodification of the facts and information that compose their environment.
Responses to this concern range from the Digital Millennium Copyright Act in the United States (and similar legislation elsewhere) which make copy protection (see DRM) circumvention illegal, to the free software, open source and copyleft
movements, which seek to encourage and disseminate the "freedom" of
various information products (traditionally both as in "gratis" or free
of cost, and liberty, as in freedom to use, explore and share).
Caveat: Information society is often used by politicians meaning
something like "we all do internet now"; the sociological term
information society (or informational society) has some deeper
implications about change of societal structure. Because we lack
political control of intellectual property, we are lacking in a concrete
map of issues, an analysis of costs and benefits, and functioning
political groups that are unified by common interests representing
different opinions of this diverse situation that are prominent in the
information society.
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