Are Those Who Ignore History Doomed to Repeat It?



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Are Those Who Ignore History Doomed to Repeat It?

Peter Decherney, Nathan Ensmenger,†† and Christopher S. Yoo



The Master Switch: The Rise and Fall of Information Empires

Tim Wu. Alfred A. Knopf, 2010. Pp x, 366.


Introduction


The Internet has become such an integral part of people’s daily lives that one can easily forget how young it is. After a two-decade gestation period, during which the network was primarily the plaything of university-based computer scientists, the Internet exploded onto the public’s consciousness during the mid-1990s. During this period, the Internet was widely regarded as unlike anything that had ever gone before.1 Every month seemed to bear witness to a new innovation that made possible new forms of expression and communication. The Internet’s potential seemed limitless.2

In recent years, the heady days of the Internet’s youth have given way to the more troubled days of its adolescence. Commentators have begun to bemoan the ways in which the Internet may actually be damaging the human condition.3 Other writers are more sanguine about the Internet’s past, but harbor concerns about its future. In particular, these authors warn that corporate actors are threatening to change the Internet’s fundamental character in ways that will ultimately harm end users.4

Tim Wu has written an important new book in this latter tradition. In The Master Switch: The Rise and Fall of Information Empires, Wu scrutinizes the history of four of our nation’s leading communications technologies and identifies a disturbing pattern that he calls “the Cycle.” New technologies emerge swathed in the spirit of “revolutionary novelty and youthful utopianism” (p 6).5 Over time, consumers become dissatisfied with the quality or reliability of the new technology, and incumbents become concerned with the threat that the new technology poses to existing revenue streams (p 10). This in turn opens the door for a great mogul (often with the assistance of the federal government) to take control of the industry and make sure that it runs in an orderly fashion, which ushers in “a golden age in the life of the new technology” (p 10). In the process, the control asserted by this mogul transforms the technology “from a freely accessible channel to one strictly controlled by a single corporation or cartel—from open to closed system”—until some new form of ingenuity restarts the Cycle anew (p 6).

The book offers much to admire. Wu builds his narrative around some of the leading figures in the history of technology, an approach that fits well with Wu’s natural flair for storytelling. But perhaps the most compelling aspect of the book is the sheer scope of its argument. Attempting to find a single overarching pattern in industries as disparate as telephony, broadcasting, motion pictures, and computers is ambitious. If successful, identifying a single cycle that accurately describes how communications technologies and business practices change over time would give policymakers (and the policy advocates attempting to persuade them) the kind of clear policy inference needed to justify the type of categorical intervention that Wu proposes.

But expanding a theory’s scope can be a double-edged sword. While breadth of application heightens a theory’s analytical power, it simultaneously makes it harder to frame a theory that is consistent with the underlying facts. Devising a theory that accurately describes the considerations driving the evolution of a single industry is difficult enough. Developing a theory that takes into account all of the essential characteristics and idiosyncrasies of multiple industries simultaneously makes the challenge even harder. The more general the theory, the more difficult this problem becomes.

The success of The Master Switch thus depends on the extent to which the histories of the industries on which Wu focuses actually fit the pattern he has identified. The first four Parts of this Review take each of Wu’s key industries in turn and critically examines the historical instances the book discusses as well as the portions of the historical record that are not mentioned. Part V discusses the broader theoretical literature exploring some of the nuances lost by attempting to draw a single conclusion that spans all four of these industries. We recognize that Wu’s book is aimed at a popular rather than a scholarly audience, and we applaud Wu’s attempt to identify patterns in the manner in which different technology-oriented industries evolve. Nonetheless, a close examination of the historical episodes that serve as the foundation for Wu’s argument suggests that the Cycle Wu has identified represents just one of many possible cycles. A more complex vision of the mechanisms driving these cycles would yield new insights into which policy levers to pull and when.





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