By Andre Griffith
Having been distracted by other pursuits over the last few weeks, I have been unable to keep as current as I would have liked with some of the more pressing issues of the day. Thus having had a couple of moments downtime this week, I tried to find out some more about a little sub-theme that I have been hearing about in the global financial crisis and that is the contribution of information systems that apparently encapsulate various aspects of operations on Wall Street. While having not come across anything substantive to speak of beyond the sensational blogs declaring things such as “How Wall Street Lied to the Computers”, I came across a theme which might be relevant to us here in Guyana and that is the power of information.
Most of us have probably heard at one time or the other, the phrase information is power, but do we reflect, in the case of information technology, that power can be used for good or for evil. I mean we probably instinctively think of this when we consider political power directly, but do we think of the power of information systems in this light? Differing interpretations can be derived from the same set of objective circumstances. Consider these views of information technology in the financial system that appeared in “The Financial Tsunami” an article by William Engdahl. The first perspective is that of Alan Greenspan, former chairman of the US Federal Reserve Bank in a presentation titled “The revolution in information technology” at the Boston College Conference on the New Economy in March of 2000.
“The impact of information technology has been keenly felt in the financial sector of the economy. Perhaps the most significant innovation has been the development of financial instruments that enable risk to be reallocated to the parties most willing and able to bear that risk…Information technology has made possible the creation, valuation, and exchange of these complex financial products on a global basis”
The second view was expressed by Robert Kuttner, a co-founder of the Economics Policy Institute.
“Since repeal of Glass Steagall in 1999, after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s – lending to speculators, packaging and securitizing credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And, much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s. Much of it isn’t paper at all, and the whole process is supercharged by computers and automated formulas”
Incidentally, Mr. Greenspan was cast as the villain of the piece by Engdahl, however it should be noted that his views were expressed in the year 2000 while Mr. Kuttner was testifying in October 2007 when the beginnings of the crisis had already appeared.
The point here though is that the systems could have been used for good as in the creation of wealth, or for evil as in the obfuscation of risk in order to derive personal gain that would otherwise not have materialised. This latter motivation and action has caused considerable damage to persons by way of destruction of their savings, loss of jobs, retirement earnings etc.
Another view of the dual view was the assessment of Google, by Andrew Keen expressed in the differing sub-titles given to a new book on Google. In the US, the book “Planet Google” carried the sub-title “One Company’s Audacious Plan to Organise Everything We Know” while across the pond in the UK, the same book was sub-titled “How One Company is Transforming Our Lives”. Reflecting on the return to the philosophy of big government in the information age, Keen asks the question whether Google is good or evil, asks us to imagine Google elected to office and observes that Google “possesses the technology now to know much more about each of us than Gestapo or KGB thugs ever dreamed of knowing” and while he concludes that “Google obviously isn’t the Gestapo or the KGB, it could be argued that the Mountain View company has, in ten short years, become more powerful than either of these much feared organizations”
Right here at home, we have cases where the same kinds of “structural conflicts” have apparently already led to gaming of IT systems to the detriment of the public. We also have our own extant debate on information, technology and big (brother) government in the form of the “wiretapping bill”. Unsurprising, the views of the use of the technology closely follow the established political fault lines in the country. But as I like to point out in these articles, in this as in many respects we are not unique. The problem is not the technology. Computer systems did not create the financial crisis, greed and institutional weaknesses did. Google as well, is not locking people up in basements and tearing their fingernails out. Similarly, the technology for wiretapping in and of itself is not going to lead human rights violations any more than it will in and of itself lead to greater success in fighting crime. We should acknowledge that either can be an outcome thus the debate should really start by examining whether our political and legal and institutional culture is mature enough to handle the immense power of information.
