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Digital Wage 

What a difference a year makes, to the country, and to the New Economy

Wednesday, Oct 3 2001
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The wages of sin is death.
-- Romans 6:23

If television images and security measures haven't fully illustrated how connected San Francisco is to America's current troubles, the empty halls of the George Moscone Convention Center last week ought to have. Many of the exhibitors planning to attend the 31st annual Seybold high-tech publishing conference changed plans for fear of flying. Another portion -- companies touted as dynamic pioneers a year ago -- no longer exists. Spectators were scarce, too, and the few present seemed edgy. Lecture halls were populated with empty chairs. Uncertain faces floated on escalators. Seminar discussions not somehow related to terrorist disaster were conducted halfheartedly, so as not to appear profane. Only a year ago Seybold was an ostentatious celebration of San Francisco's high-tech zeitgeist; last week it was ghostly.

In September 2000, Seybold was the site of what then passed for San Francisco's great ethical debates, and the place had been dressed to match. The walls of Moscone Center were swathed in 20-times-life-size images of great moral leaders of the past century: Mahatma Gandhi, Martin Luther King, and César Chávez. (The images had been enlisted to sell Apple computers.)

But like the ancient Israelites, who paid prophets and priests to praise them so that they could live lives at once ostentatious and sanctimonious, the ethical discussions of San Francisco's wealthy tech era were corrupt. Cynical libertarians disputed the ideas of cynical monopolists; thieving merchants debated thieving consumers; vice was sanctified all around. These discussions swam in a new type of popular spirituality based on consumption, which was epitomized by the moral-hero Apple ads. Outside-world ethical debates -- over the dramatic economic inequality the tech boom had engendered, the grand differences developing in Americans' access to technology, and the displacement created by San Francisco's new wealth -- were unheard-of inside these halls.

And as with the ancient Israelites, corrupt ideas portended collapse.

This year there were no banners depicting great moral leaders, because San Francisco and its tech industry weren't leading anybody anywhere. Hotel vacancy rates here stood at 80 percent. Hundreds of tech companies had vanished. Economists had just begun to predict a nationwide recession worse than anything previously imagined, and they were predicting the most unpleasant fate for San Francisco. Widespread joblessness and the humiliation that accompanies it were about to smite this city until it became a more miserable place than many of its young residents had ever seen.

The San Francisco Bay Area will eventually recover and prosper again, and will have its technology industry to thank. Venture capitalists will pour money back into tech start-ups yet unimagined. Grand ethical debates will again rage at trade conventions. And perhaps -- oh dear God let us pray that perhaps -- the debates won't be quite so specious next time.


In the moral universe of 2000, technology companies saw the Internet as a tool for spying on customers; they called this improved service. Web surfers sought Internet content without a price; for them, this was the New Economy. Publishers, music labels, and movie companies sought to jail people who exploited the Internet's ability to reproduce their wares; this was seen as only just. New Internet firms, uninvited squatters on what had initially been an electronic commune, spoke sanctimoniously about squeezing money from freeloaders. Consumers and artists and hackers, and the companies that served them, meanwhile sought to steal. By plagiarizing and hacking and illegally copying, they claimed, they lubricated the creative machinery of the digital information age. Information, they self-servingly said, wants to be free. Through all this, the sanctified status of the Internet as portal to an enlightened universe went unchallenged. Internet publishers and retailers and shysters of all stripes tilted their heads back and sniffed at their real-world peers.


Last year telecommunications companies imagined a future where it would be possible to monitor consumers' every move using computers, do-everything cell phones, electronic wallpaper, and other devices. Just a week before last year's Seybold conference, German telecommunications companies paid their government a record $37 billion for mobile telephone licenses, breaking the previous record of $33.75 billion, which had been established in the United Kingdom.

At the time it was thought that cellular telephones would soon become do-all devices that would be used to surf the Web, start car ignitions, open house doors, and make phone calls. As a result, it would become possible to deposit information about consumers' every daily move into a giant data bank, from which retailers would draw detailed profiles. Already Web merchants were using "cookies" and other digital techniques to monitor surfers' behavior. In the previous year millions of people had witlessly handed companies detailed dossiers on their personal lives. As investors saw it, this was just the beginning; companies would soon be able to follow people virtually every hour of every day. Just as cellular technology in Europe led the way for the United States, a new, lucrative Big Brother age would eventually move across the Pacific as well.

Happily this invasive future didn't completely materialize. Instead, the most notable result of this vision was an unprecedented transfer of wealth from private to public hands. Their coffers empty, European telecom firms are now struggling. "What happened to wireless? It went into treasuries of the world's governments," noted Mark Anderson, publisher of a technology newsletter.

Companies that had bet their future on leveraging the Web's ability to closely monitor users' behavior are either failing or have failed. And to the extent there is one, the privacy debate has moved to Washington and new civil-liberties-bashing anti-terrorist legislation: The government, it appears, may be the one doing the electronic spying.


In September 2000, electronic books -- small devices with screens that can display the text to novels and other digitized volumes -- were heralded as the greatest thing since Gutenberg's press. Companies such as Adobe had once promised a future where vacationers read electronic books on the beach and electronic magazines in the bathroom. A year ago e-books were going to change the nature of books. (That was before Stephen King, the e-book movement's erstwhile champion, abandoned his second electronic book late last year.)

About The Author

Matt Smith

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