In the early 1980s, George Gilder helped to clarify the muddied field of economics with two insightful books—Wealth and Poverty and The Spirit of Enterprise (both recently updated and reviewed in The Freeman). In these landmark works, Gilder managed to wrest economics from the deadening morass into which it had sunk for over a half-century. When practiced by Gilder, economics is no longer the dismal science.
With the publication of Microcosm in 1989 and now an updated and much-expanded version of Life After Television (originally published in 1990), Gilder has built upon his economic works by offering insights regarding recent and future developments in today’s most dynamic industries—computers and telecommunications. Gilder offers a compelling vision of the future, whereby technological advancements enhance individual creativity.
In Life After Television, Gilder takes the reader on a technological journey into the microcosm of the computer, across the air on the “spectrum of electromagnetic vibrations,” and on beams of light traveling across strands of glass or fiber-optic cables. It is an exciting journey for both the technology expert and for those individuals with an interest in how our economy and our culture will be transformed by the information revolution.
Gilder’s contagious enthusiasm regarding great leaps in the fields of computers and telecommunications springs not from the base appeal of couch potatoes passively surfing across 500 channels or of video games available to numb our children’s minds. Instead, Gilder declares that individualism will win out over mass culture. The top-down structure of television, whereby a few executives appeal to the widest, and therefore lowest, common denominator possible, will be overthrown by a bottom-up, consumer- and entrepreneurial-driven revolution.
Gilder sagaciously observes: “A healthy culture reflects not the psychology of crowds but the creativity and inspiration of millions of individuals reaching for higher goals. In place of the broadcast pyramid, a peer network will emerge in which all the terminals will be smart—not mere television sets but interactive video receivers, processors, and transmitters.”
He refers to these smart terminals as teleputers. He points out that “the teleputer is an instrument of creative destruction.” That is, as with any major invention or innovation, an entrenched and less-efficient system must give way. Such entrenched, special interests, however, do not do so readily, instead trying to stop the critical economic process of creative destruction through government protection against competition. As Gilder notes: “Capitalism may offer the promise of great power and wealth to the very few people who can shape or anticipate the future, but bureaucratic politics provides a rich panoply of weapons to the many more people who want to resist change. Whenever possible, the government and its principalities attempt to frustrate or dispossess innovators.”
Gilder understands the dynamic nature of markets, and therefore observes: “American industry, released from its regulatory shackles, could finance a program of fiber to the home without any government aid.” The best actions for government to take regarding the telecommunications and computer industries is not some bureaucrat-driven industrial policy; it is deregulation.
Interestingly, while Gilder predicts the death of television under this wave of creative destruction, he makes a compelling case for newspapers spearheading the information revolution. Production and transmission costs will collapse for newspapers as computers and fiber optics replace printing presses. Gilder explains: “The ultimate reason that the newspapers will prevail in the information age is that they are better than anyone else at collecting, editing, filtering, and presenting real information and they are allying with this computer juggernaut to do it. The newspapers are pursuing the fastest-expanding current markets rather than rearview markets. They are targeting adults with real interests and ambitions that generate buying power rather than distracting children from more edifying pursuits.”
In the end, the fundamental difference between the television and the personal computer—or soon to be teleputer—can be explained in economic terms. It is the difference between reacting and creating; the difference between demand and supply. As Gilder states: “While TV watchers use their machines to lull themselves and their children into a stupor, PC users exploit their machines to become yet richer and smarter and more productive—and still better to exploit future computer advances. . . . The TV is a consumption product. The PC is a supply-side investment in the coming restoration of the home to a central role in the productive dynamics of capitalism, and the transformation of capitalism into a healing force in the present crisis of home and family, culture and community.”
Where other authors see only ways in which computer and telecommunications advancements serve current markets, Gilder sees how such developments create new markets—impacting the entire economy and culture. Life After Television is and will be an exciting adventure.