A historical perspective on AOL Time Warner in 30 seconds
Felix Stalder

Nettime, Jan. 12, 2000

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In many ways, the current economic development (with the AOL Time Warner merger as the latest event) is strikingly similar to what happened in the late 19th century in the US. A bit more than one hundred years ago, a new market of unprecedented size had been created by the opening of borders (after the end of the civil war 1865). New communication technologies (the telegraph (1844), the train, the telephone (1876), later the automobile and the radio) allowed integrate this enormous space into a single economy and shift the dominant mode of production from local small scale manufacturing to new national economies of scale.

At first, there was wild, chaotic cutthroat competition which, around the turn of the century, was resolved by the creation of what was then called 'trusts': huge mega-corporations that dominated entire industrial sectors. Centering around the development of railroads, new industrial and service enterprises emerged (steel: Carnegie, oil: Rockefeller, electricity: Edison/General Electric, finance: Morgan, telephone: Bell). In the early days, they dominated the political landscape almost completely. Corruption, even in the highest offices, was rampant. Labour conflicts were fierce. One of the best accounts of this is still Upton Sinclair's novel The Jungle (1906) [1]

It took decades to break the stronghold the trusts. In 1911 the most mysterious and powerful of all trusts, Rockefeller's Standard Oil, was broken up into independent companies (many of which are now merging again, e.g. Exxon and Mobil [2]), greatly enriching Rockefeller and the other shareholders.

Ultimately, it was the Great Depression and the Second World War which catapulted the government on center stage as the ultimate arbiter in nearly all economic and social conflicts (New Deal, Welfare State) .

There is no indication that history will repeat itself, nor should analogies in some areas cover over the differences in others, but the current development appears to follow a logic that has very little to do with a "new" economy.

[1] http://sunsite.berkeley.edu/Literature/Sinclair/TheJungle/
[2] http://newsweek.com/nw-srv/issue/23_98b/printed/int/wb/ovbz0523_1.htm