|
IRISH CASE STUDY: Transcending Location: People, Governance
& the Age of the Cyber There is nothing permanent except change The 1990s were times of unparalleled success for the Irish economy. There is a renewed spirit of confidence amongst our people. We hear much about the growing Government coffers and what it should do with our new found wealth. There are buoyant tax revenues, growing by 14% in 1998 and government spending runs at 45% of GNP. However, the world is changing in ways that could have immense effects not only for Ireland but all nations. This case study tells a story of change. It poses a question: What is the significance of the development of a cyber-economy for Ireland, its people and governance? You should use the tools of economic analysis from chapters 4 and 17 on Government and chapter 11 on the Information Economy to explore this case. The future is disorder. A door like
this has cracked open five or six times since we got up on our hind
legs. It is the best possible time to be alive, when almost everything
you thought you knew is wrong.' The immense growth of the cyber-economy is probably the single most important development in the world today. We have come untold distances from the opinion of a U.S. 'Expert' panel who in 1995 stated that ...the Internet has little commercial potential and almost no significance other than as an electronic medium for chat and an outlet for pornography (p.182). Nobody, it seems, had the foresight to imagine the potential for the Internet to actually change the way we live - but the 'Net' is starting to do just that. Just as the learned men of Thomas Edison's time declared that his incandescent lamp was "unworthy of attention of practical or scientific men" , those who easily dismiss the cyber-economy as a fad are failing to recognise that we may stand on the verge of a new age. The cyber-economy is based on interconnections, linking and re-linking millions of computer users. Ideas created anywhere are transmitted globally at the speed of light. Its importance lies in the potential this holds. Even now at the start of the 21st century the basis of all organisation, social and economic, is locality. Many of the world's population still do not move far from where they were born. This immobility of people and their assets has informed the way we see and structure the world around us, but this has the potential to change. As information becomes the most important source of profit, information technology is beginning to separate profit-earning ability from where you are. As a consequence, many of the advantages countries like Ireland, now believe they have may evaporate. This could alter how people organise their lives. Microprocessing could change the social and economic structures of our world. More and more of the economy is and has the potential to migrate to the cyber-economy, combining technologies in innovative ways to transcend locality. 'Corkman Has Lifesaving Operation From U.S. Surgery Without Leaving His Cork Bed' - a science fiction headline? Not really, many of the components which make cyber-surgery possible are already in place. General Electric are experimenting with a Magnetic Resonance Treatment Machine (MRT), which essentially allows surgeons perform operations using a computer. Since surgeons could perform operations without actually touching a body (a microprobe is used), it is not too difficult to imagine surgeons not even being in the room. Already, the Aran islands use information technology so doctors in Galway can give instant diagnosis. If such things are possible, are there any limits to potential? We are entering into the world of business without borders (i.e. on-line shopping, cyber-brokerages, cyber-banking). In such a world the consumer is everything. Decisions about what and where to produce are made by people responding to the needs of consumers. The consumer is the driving force. Immobility and its disadvantages will be continuously eroded. With the cyber-economy, any individual or firm with access will be able to easily shift out of any country. While probably made illegal, past laws have not been able to withstand change (faxes were illegal in the 1980s in the U.S.). This means that technological innovations could place a large and growing portion of the world's wealth potentially outside the reach of any particular government. With the ability of people to bypass regulatory authorities and shift their funds directly through the Internet it may become beyond the power of any government to regulate. The Internet is too widespread to be
easily dominated by any single government. By creating a seamless global-economic
zone, anti-sovereign and unregulatable, the Internet calls into question
the very idea of the nation-state. Tax codes are heavily dependent on surveillance of communication and transactions. Tax systems depend upon reporting to the tax authorities. A.I.B. pays interest on a deposit account, reports the interest to the Irish Revenue Authorities and the income is taxed. If A.I.B. moved outside the Irish jurisdiction they would not be obliged to report. Will the D.I.R.T. tax scam in Ireland of recent years become part of the norm? As the Internet becomes used more for transactions, will there be any need to report these transactions? Encryption could make it easy to protect transactions in cyberspace, hence many taxes will simply become uncompetitive. Why should you pay heavy taxes in Ireland when the cyber-economy provides an alternative? It will be similar to the merchants in history who avoided paying huge taxes by simply sailing elsewhere on the high seas, and why many multinational companies came to Ireland in the past - tax breaks. Should this happen, governments could find themselves with a sharp drop in revenue. Therefore, will they have the funds to sustain the current system of governance? What could they do? Either way the potential will still be for a large drop in income. In which case, can we expect the same level of services provided by government today? The shape and direction of the Internet market will be determined by human choice. People may not have any alternative but to become more sovereign and take greater control of their lives. Such transformation may be seen as both good and bad news for Irish people. You decide. |