The End of an Era: the Internet hits ground
Felix Stalder

Published in Telepolis, 20.01.2001
[English version | German version]

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The crash of the dot-com sector in the US and in Europe has ultimately brought to an end the first period in the history of the Internet as a mass medium. The decline of the tech-heavy stock market indexes such as NASDAQ or NEMAX stands for much more than simply the failure of a few Internet-companies. It is the final indicator that many of the most popular assumptions about the Internet typical for the thinking and much of the action of this entire period turned out to be plain wrong.

Epitomized in John Gilmore's famous dictum that "the Internet treats censorship as damage and routes around it" and John Perry Barlow's 1996 "Declaration of Independence" was the belief, or hope, of many of the pioneers of the various shades of cyberculture in the "distinctiveness" of the Internet. The Internet - immaterial, instantaneous and global - was thought to be fundamentally and inherently different from the material world as we knew it. How different was a matter of taste. Every visionary could see what s/he cherished for most dearly but couldn't find in the real world.

For political activist, the Internet held the power to rekindle the fire of democracy and direct citizen involvement at a time when cynicism about the actual institutions of the liberal democracies had reached unprecedented levels. The Digital City Amsterdam became a model for participatory on-line democracy through which the gap between the political class and the citizens was hoped to be closed. For (neo)libertarians the Internet promised nothing less than the end of the nation state because of its intrinsic global and transnational nature. National legislation seemed to be irrelevant when entire websites could be relocated into more welcoming jurisdictions within seconds. When a book about the Francois Mitterand's illness was banned in France it appeared almost immediately on foreign Internet-servers. Even taxpaying seemed to loose its inevitability due to anonymous electronic cash and off-shore data-havens. Many progressive artists envisioned possibilities of bypassing the dreaded arts business and the control of the cultural institutions as every artist could speak to the audience without needing the traditional mediators such as galleries and museums. Perhaps even more profound, the interactive and participatory nature of on-line art works seemed to erode distinction between artist and audience and offer a model for what some called the rise of the "prosumer": the consumer who is also a producer. There was hardly any problem to which the Internet, due to its intrinsic distinctiveness, was not offering the best hope in a generation for a radical solution. Of course, for most people, these visions remained esoteric until the Internet also promised to change the rules of the economy. Out were the rules of cautious long-term investment and of evaluating the fundamentals of company and in were the new rules for the new economy, symbolized by Kevin Kelly's paradoxical ruminations "that the most valuable things of all should be those that are given away." Because the Internet was so different from and superior to the material world even the most far-fetched e-commerce business plan seemed better than a well-established conventional company. Thanks to Internet-day trading and IPO mania, anyone who was only visionary enough to see the future could get very rich, very quickly. Seeing this future didn't require that much vision anyway during the incessant fire of media propaganda on-line and off-line, electronic and print.

In the year 2000, almost fitting for a historic date change, most of those hopes that were based on the Internet being altogether a different place hit ground rather roughly. The Digital City Amsterdam nearly collapsed under internal and external pressures of operating in an increasingly commercial environment, as two recent posts on the Nettime mailing list chronicle (here and here). In the most recent elections in the US, arguably the technologically most advanced country in the world, the Internet played hardly any role, particularly not in shaking up the old-school political establishment. Last year, national governments began in earnest to regulate the Internet. In Britain, the Regulation of Investigatory Powers Act extended significantly the rights of the police to access to e-mail and other online communications. South Korea outlawed access to gambling websites. The United States has passed a law requiring schools and libraries that receive federal funds for Internet connections to install filtering software to block material somehow considered harmful to minors. Rather than eroding the reach of national legislation, the Internet suddenly appears to extend it. On Nov. 20th, a French judge ordered Yahoo! to comply with French laws prohibiting the sale of Nazi memorabilia to French customers, even though Yahoo! operates in the US. While Yahoo! vowed to fight the verdict, it stopped the controversial auctions anyway. Under the provisions of the Hague Convention an on-line store could be liable under laws in any of the 48 member-countries which are set to ratify the treaty later this year (though there is some opposition from the US). For all its technical feasibility, anonymous electronic cash remains as elusive as it did 5 years ago, not the least because governments have made it clear that they would not allow any financial institution operating within their jurisdiction to issue such a currency. The art world seems to fall back into its traditional patterns. Museums have regained their high-ground on the Internet as they received their own top-level domain .museum to create a separated space of approved High Culture.

Most drastically, of course, the crash of the dot-com sector has demonstrated that even the new economy is still above all, an economy, and that the much laughed at old-style companies have little problems establishing themselves also on the Internet. The problems of eToys (forgetting the legendary Toywar for the moment) in the face of the competition of Toys'R'Us are quite typical: the Internet-only pioneer is pushed aside by an established "bricks and mortar" store that simply added an on-line interface to its well established distribution infrastructure: the new buzzword of this convergence of old and new: "clicks and mortar." What all of these events have in common, and why it is justified to think of them as closing a specific period in the history of the Internet, is that they all force us to recognize that the Internet is not a space separate from society. On the contrary, as the Internet becomes more and more integrated into everyday life, it starts to resemble, well, everyday life. As established institutions recognize the value of the Internet in expanding their activities, they are throwing in their entire wait to make the technology adapt to them. How poorly founded those early visions of the Internet as a distinct entity were is revealed by the fact that hardly anyone of the early visionaries even tries to defend their views. Where is Barlow now? What happened to Kevin Kelly? What is even more revealing is that none of the investors who got burned by the decline of the tech-stocks has been complaining publicly. Somehow, it seems, everyone knew that all the promises were too good to be true and those who lost money are, perhaps, too ashamed to admit it. Or would you admit that you bought shares when they were $104 1/2 in last March now that they are worth only $3 1/2?

However, as they Internet hits the ground, two things happen. First, what we have seen in the last year, the Internet looses its utopian distinctiveness. At the same time, however, the Internet begins indeed to transform the ground it has landed on. Now that it becomes clear that many of the first cultural and economic models do not work, I would not be surprised to see a second wave of innovation taking place. As venture capital has dried up a little bit and the dreams of getting rich over night at the stock market have been shattered, room is opening again for real experiments that are aimed at solving real, practical problems and that might, or might not, lead to the next big thing. The end of dot-com madness creates the space in which new thinking about what is useful rather than simply what is profitable can develop.


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