From: utzoo!utcsrgv!perelgut
Newsgroups: net.misc
Title: Information Economy
Article-I.D.: utcsrgv.909
Posted: Thu Jan 20 11:26:46 1983
Received: Thu Jan 20 11:42:53 1983

                        Introduction

This article discusses  a  new  model  of  global  economics
called "The Information Economy".  Many ideas are taken from
an article describing Yoneji Masuda (a Japanese  economist).
The  article, by Robert Arnold Russel, appeared in a monthly
column in the November 1982 issue of Executive.

The premise  is  that  classical  economics  is  limited  by
material productivity in a world where resources are running
out.  The new school of economic thought is based on  infor-
mation productivity instead of industrial productivity.


                  Brief Review of Theories

Classical economics is based on the  Renaissance,  humanism,
and  the  development  of  material  productivity.  Material
values are the basis of this economy. Material  value  comes
from  the  production, sale and consumption of useful goods.
Useful goods are produced by applying  scientific  rules  in
order to turn natural resources into products.

Classical economics is characterized by free competition  of
private enterprises and the priciple of profit-making.  Mass
production leads in  turn  to  democratic  ideas  and  trade
unionism  as  well  as  high  mass-consumption  societies in
industrially advanced countries.

However production of large  quantities  of  goods  produces
wastes,  causing  pollution  and environmental disruption as
well  as  causing  shortages  of  natural  resources.   This
imposes a fatal limit on classical economics

Information economics is based on three pillars: information
productivity, a spirit of globalism, and the desire of indi-
viduals, groups, communities, and nations to  improve  their
knowledge and awareness through purposeful action (in brief,
self-actualization.)

The drive for self-actualization turns knowledge and  infor-
mation into wealth since people need to consume it as a pro-
duct in the process of self  improvement.   Self-fulfillment
is  a  growing trend (See References) Instead of fragmenting
society, as some people fear this trend may  do,  communica-
tions  technology will create increasingly powerful interest
groups (such as this network?).  In this way the  drive  for
self-fulfillment becomes a moral action, driving the economy
forward and tying communities together.

We are now aware that the industrial economy has  created  a
disharmony  due  to problems with the Third World and pollu-
tion and the  environment.   The  non-polluting  information
economy  will restore the harmony.  Development of the Third
World is possible through inexpensive information technology
such  as  hand-held computers and cheap satellite communica-
tions and broadcasting.  The Third World  looms,  not  as  a
problem,  but  as a potential market of three billion consu-
mers.  Thus the second pillar, the spirit of globalism.

The third pillar of post-industrial economics is information
technology.   "The  computer  is  thousands  or  hundreds of
thousands of times superior to man's  brain  in  information
productivity.   [For  the  flamers  out there, this is not a
comment on potential, just a  statement  of  perceptions.  -
sgp]   The  increase  of material productivity made possible
through the invention of steam engines and machinery in  the
Industrial Revolution was in the order of hundreds of multi-
plications at most." Computers will also become able to gen-
erate information and knowledge.


               Information Economy Summed Up

Information economics has the spirit of  globalism  and  the
ideas of coexitentialism as its idealogical support, and its
technical basis in the development  of  information  produc-
tivity.   The  basic concept of economy lies in the realiza-
tion of time-value (self-actualization) which is made possi-
ble  through the production, distribution and consumption of
information (much like the definition of material values).

In the past, production of information was  carried  out  by
man's   intellectual  thinking.   Technical  advances   have
resulted in a remarkable  rising  information  productivity.
Soon electronic production of information will enter a stage
of mass production which will pass  into  a  stage  of  mass
sharing of information through public utilization of comput-
ers.  With the onslaught of home computers  costing  only  a
few hundred dollars this is already taking place.

Further, computers will contribute  to  the  development  of
pollution  free  and  resource  saving technologies and will
promote ecological technologies and systems.  Masuda's  hope
is  that  this will lead to an era of coexistence of man and
nature on the globe as a spaceship.


                         References

Some references stressing the predominance of the drive  for
self-fulfillment  as  a  social  characteristic of this age:
Daniel Yankelovich, "New Rules"; Christopher Lach, "The Cul-
ture of Narcissism"; and John Kettle, "The Big Generation".

Yoneji Masuda's major work is "The Information Society".  It
is  available  from The World Future Society/4916 Saint Elmo
Avenue/Bethesda, Maryland/  20814/U.S.  for  $12.50(US).   A
shorter  version  of  his  theories  was published under the
title "The Conceptual Framework of Information Economics."

	---       Stephen Perelgut        ---
	--- decvax!utzoo!utcsrgv!perelgut ---