Due April 21 via bSpace
Marshall gives several reasons why industries tended to ‘localize’ while Cairncross seems to suggest that, with the ‘death of distance,’ ‘fate of location,’ and ‘increased mobility,’ localization will be no more. Are there any arguments in Marshall that Cairncross has overlooked and that might yet prolong localization? If you think there are, discuss why you think Marshall is right. If you think there are not, suggest how Cairncross might account, for example, for Marshall’s arguments about invention and skill (Marshall, §3 and beyond).
Some of Marshall’s points still hold today. The main issue to consider with Cairncross’s “death of distance” is the fact that we need more than intangible information to survive. The introduction we read definitely suggested an information revolution, and a consequent shifting social structure. However, in the grand scale of things, the environment is still the way it is. Coal mines won’t be able to supply coal if there are no mines in an area. If you want pineapples and you live in Norway, you are still going to have to physically ship them with a boat and a truck. In this sense, Marshall’s ideas about localization still hold true, we are bound by what is near us and how our cultures have shaped us. It will probably remain this way until we invent instantaneous, low-energy matter transport.
A factor that might prolong localization is the lack of infrastructure in many areas. Cairncross assumes, many times, that the internet and telephones are available and socially accepted in many areas. However, this is not the reality, even 9 years after his book was published. The governments in certain areas have also found ways to control and filter material so that in a sense all this information is monitored and inhibited, or amplified in certain ways that can in a sense sort of enforce a cultural imperialism.
What we can do with the internet is harvest the skills of an individual remotely. Occupations such as systems administrators and human resource management seem to be able to be translated into a medium where raw information is all you need. Although we can’t necessarily have, say, a cobbler fix shoes online, the ability to mail your shoes to a cobbler half a world away diminishes distance, and take away a certain type of localization. -Robert A.
In The Death of Distance: How the Communications Revolution is Changing our Lives, the author, Frances Cairncross makes a candid argument regarding how technology is eliminating the problem of distance and how the end of localization will vastly change society. These points, which are evident in today’s economic climate, refutes Alfred Marshall’s argument of how industries tend to localize in Industrial Organization, Continued. The Concentration of Industries in Particular Localities. In today’s world, technology has allowed the globalization of consumerism, which has led to a more interconnected global economy as businesses engage in more international trade/relations for resources, capital and labor in order to follow the economic golden rule buy low, sell high. An example of this is Apple Inc. products: their computers, iPhones, and iPods are designed in California, but produced in China and sold worldwide. Thus, the outsourcing of jobs is a modern twist of Cairncross idea of “A Global Premium for Skills”, but for cheaper wages. Another example of outsourcing of jobs is companies such as Comcast and DirecTV outsourcing their help hotline jobs to people in India as a cost effective alternative to customer support. Thus, the internet and new advances in travel/transport promotes globalization, which marks the beginning of the end of localization. Even Marshall, makes a statement, saying that “the growing cheapness, rapidity and comfort of foreign travel, are inducing her (England) trained business men and her skilled artisans to pioneer the way for new industries in other lands, and to help them to manufacture for themselves.” (IV.X.15) The death of localization is inevitable in a global economy today; if industries are competing on an international level, they must learn to be efficient in each of their global markets. -Kasey
…However, although technology makes us mobile and makes information accessible, this has nothing to do with Marshall’s concept of localization. In short, I do not believe that living in an always more globalized world automatically makes industries and companies mobile and flexible. One of the most important concepts by Marshall is that of the industrial district, also referred to as business cluster. A business cluster is a network of companies that are located in the same geographical territory and that collaborate throughout the different phases of the production of a specific product. Silicon Valley is certainly the most important and popular example of business cluster, however there are countries – such as Italy – whose economy is almost completely organized in business clusters (i.e. home furniture district of Brianza, guns district of Val Trompia, fashion district of Milan, shoes district of Brenta, and so on). These economies are based on localization: localization is their only raison d’être. Localization means history, knowledge and skills (know-how) and, even if production can be outsourced and the product can be accessible to everyone in the world, a particular expertise is not exportable. Italian shoes are unique because their production required hundreds of years of practice and tradition: they are part of a culture, and culture is inevitably local. Yes, we live immerse in a global society that coins new terms such as glocal, however it is through differences and localization that we are still able to create unique and distinctive products. If it were not like this, we would live in a very boring world.
What I am trying to say is that even if, from a Cairncross’ perspective, we are now able to outsource the production of those shoes to “developing countries” (I strongly disagree with his idea of industrial colonization: developing countries should not serve as the “rich industrial countries”’ assembly plant), we can distribute them globally, we can buzz about them through the most advanced technology platforms on the internet or on a mobile device, we can even create an iPhone application to design our customized pair of Italian shoes. However, what makes those shoes special, is still the fact that they belong to a specific culture of tradition and that they are locally designed there. Even Apple would not be the same if it did not belong to a specific local context named Silicon Valley. -Marco
In his 1920 text, Alfred Marshall explains the reasons behind industries’ tendency to localize. Almost a century later, the same argument is constantly being reiterated in the discourse of anti-globalization. Many critique the trend of globalization, which is often praised to be greatest byproduct of development communication technology, as further stratification of informational, economic, and cultural wealth among countries. Some at the highly opinionated stance criticize internet and other communication methods as tools to propagandize new forms of cultural imperialism.
However, as Caincross points out, there are abundant benefits that the “small world” offers to all the people on this planet. Caincross argues that, in the world that we are living in, “the cost of communicating ideas and data is now distance free … (ix)”. We need to realize that the focus of his argument is not only on the “death of distance”, but also on the death of distance in terms of “communicating ideas and data”. In other words, it is the idea and data, the formless information as property, that really matters. Marshall’s theory explains how “physical conditions” (IV.X.5) around natural resources and skilled labor encourages industry to centralize in certain location. However, in current days where the exchange of ideas make more benefit than the exchange of tangible goods, industry finds less reasons to localize.
Caincross’ arguments suggest us valuable insight on multi-directionality of globalization. Concluding the “The Trendspotter’s Guide to New Communication,” she argues how new communication methods can stimulate “global peace”. We have witnessed her theory in real life for numerous times. We saw not only how tweets from Iran spurred democratization movement in the totalitarian regime, and also how exposure of Abu Ghirab prison on the helped the global society to warn against the rise of American neo-imperialism. -Yeon
I feel localization of industries is still an important factor in the global economy, and despite the visions of increased communication networks and the “death of distance” Cairncross suggests, Marshall’s arguments for the tendency to localize still stand.
Marshall describes “physical conditions” such as geographically based resources or climate as some of the “chief causes” for localization, and increased communication networks cannot, for example, allow people to mine coal from the comfort of their own homes. Some industries are necessarily localized and must rely on physical shipping and transportation to deliver their goods; Cairncross seems to focus primarily on information goods when it comes to transportation. Still, it is worth noting that some of Cairncross’s predictions are applicable even to these physically bound industries; open networks of price information spur increased competition for all industries, but do not necessarily discourage localization (in fact, probably the opposite to keep costs low).
The congregation of skilled workers to localized industries is also seen today, even with the “death of distance.” Silicon Valley is a prime example of computer and information industries localizing to create a vibrant community of innovation and collaboration. Marshall argues that localized industries allow employers to gravitate to communities with rich worker pools, and skilled labor to find a fertile market for employment. These natural tendencies have made Silicon Valley what it is today, and have even stretched out to the area’s universities; Cal and Stanford house some of the strongest computer science programs in the nation. -Charlie
Though it is true that “communicating ideas is now distance-free” (Cairncross p. ix), Cairncross seems to have overlooked the willingness of a community to embrace “the death of distance,” particularly that of a regime’s ability to accept or defect it. I mostly agree with Marshall’s sentiments that geography tends to determine what a society can and cannot do (Marshall IV.X.3). After viewing the condition of the world we live in now, Cairncross’ claims seem a little too naïve and ambitious for me to accept.
For instance, the fact that markets will become more competitive (Cairncross p. xiv) may discourage Multinational Corporations (MNCs) and their respective home-governments from entering particular industries. This, then, may prompt the local industry to produce enough for their local consumers, instead of capturing markets overseas. A government may also encourage this behavior by embracing protectionist policies such as raising tariffs or quotas as well as reducing subsidies for local firms who aspire to compete globally. In addition to this, transaction costs will always be at play – for actually importing and exporting goods can be costlier than just producing at a local level. Cairncross also talks about the loss of privacy and the desire for democratic governments. People who will desire privacy more than convenience can simply detach from the wired world, and thus create their own communities. As we can see from China and Singapore, it is possible to control your people undemocratically and still be an economic powerhouse. China, for instance, has censored content from the New York Times and Google. Lee Kuan Yew even famously said that “democracy is not for everyone,” and backs it up by the evident success of the Singaporean economy alongside its people’s lack of desire for democracy. -Christian
In Alfred Marshall’s “Industrial Organization, Continued. The Concentration of Industries in Particular Localities,” he provides several reasons why industries tended to localize. Marshall discusses localization from the perspective of the economy of production. Marshall explains the important factor of physical conditions when industries decide to localize because the character of the climate and soil in a location is very critical. Marshall explains, “When an industry has thus chosen a locality for itself, it is likely to stay there long: so great are the advantages which people following the same skilled trade get from near neighborhood to one another.” Marshall expresses the importance of the connection between location and specific skilled labor. Industries that localize tend to have employers seek out workers with special labor skills that are required for their specific type of work. In contrast, in Frances Cairncross’ “Trendspotter’s Guide to New Communications,” she argues that there will no longer be localization and that the internet now makes communication distance-free. Cairncross overlooks the arguments provided by Marshall because even though the internet and new communication technologies have the ability to function as a library, marketplace, meeting room, and distribution chain, it cannot provide some of the functions that local industries can. For example, the mining industry requires a location with certain physical characteristics and workers with specific labor skills. Mining requires a specific area of land with certain physical conditions and workers who are typically strong men. While Carincross strongly believes that the death of distance, fate of location, and increased mobility will result in the loss of localization, she overlooks the most crucial aspects that allow local industries to thrive that cannot be replaced by the internet or new technologies. -Jody
Most of the points that Cairncross makes about the “death of distance” are reasonable and have already taken place after the advent of the internet and digitalization. However, Cairncross hyperbolizes the increased mobility and compression of distance as affecting all of society whereas it may have had profound effects on only segments of certain industries. One, there may be a new form of trust, but I do not think that the digital age has necessarily increased people’s trust in buying certain products. If anything, scams seem just as prevalent in today’s market than before because anyone can create and market their product over large distances with ease of the technology. In inversion of the home and work space did not fully take place either. Although there seems to be an increase in working at home from the industrial age, for instance, there are still certain jobs, whose nature requires an employee to be present in an office in the city, whatever is most efficient for the company. Cities are still centers and hubs of working opportunities and people are still migrating into the cities to find jobs.
I think what Carincross mainly overlooks is the fact that although the internet digitized information and decreased space, not everything in the world dematerialized and were affected in the same way that “information” has. There are still material jobs that tend to be localized (such as manufacturing factories in developing countries) because it is the cheapest and most efficient way of producing. I am not sure if this is an example of localization because these factories are globally connected to the corporations in America as well, but it does seem to tie into arguments for the division of labor and concentration of certain skilled workers in certain locations. -Summer
There are two important arguments made by Marshall that Carincross has overlooked that will prolong localization. One is the convenience of the localities nearby in order to buy trifling purchases. This is because people enjoy feeling the sense of pride that even when they may be purchasing necessities, they still have the means to buy extra items. Spending money on extra items allows people to feel that they are not constrained by money. Thus, they they feel satisfied when they have earned enough to allow them to make extraneous purchases that they can enjoy for the sake of enjoyment rather than need. The second reason is that people will always need localities for expensive and special kinds of items that they can see before they buy them. With the Internet, descriptions can be skewed, and there is no way of actually knowing for a fact that the object in the picture is the actual picture a person will receive or the description of the product is actually accurate. In addition, people may not spend large amounts of money on expensive items online for fear that wiring the money electronically may somehow end up in the wrong account or the wrong hands.
Furthermore, Carincross states that the line between home and office will blur and that more people will have more home offices. This will make it convenient for people to work while simultaneously taking care of their homes and families. However, people don’t spend their entire lives within their homes and many, especially the rich, may get tired of seeing the same items in their homes year after year. People will want to continue to go to localized shops because these places will continue to receive shipments of new products, and people’s will want to see and buy different items in their homes rather than seeing the same objects over and over. -Apin
After reading these two articles I found that it seems almost unfair to compare the two because they were written 61 years apart. The Marshall article, written in 1920, gives a great account of how pre-internet economies grew and thrived. On the other hand, the Cairncross article written in 2001 shows how the internet and other modern technologies effect the way we live and the way our economies work today. The one thing that the Cairncross article does not seem to talk abouit is the location of resources. I can see how the internet and mass connectivity can spread the workforce and allow for many different economic benefits but that does not change the fact that we still cannot send iron ore or oil over the internet. Large industries are still located where there are rich resources required to produce their specific product and that can not and will not change.
We must also look at the IV.X.15 paragraph of the Marshall where the paper starts to acknowledge the benefits and possibilities of long range business deals and communication. Marshall says, “the growing cheapness, rapidity and comfort of foreign travel, are inducing [England’s] trained business men and [England’s] skilled artisans to pioneer the way for new industries in other lands, and to help them to manufacture for themselves goods which they have been wont to buy from England” (Marshall, IV.X.15). This passage speaks more towards what Cairncross what saying about connectivity and connection being at the base of modern economics. In conclusion, the two articles are very hard to compare because they were written in very different economic times yet there are similarities and hints that prove that Marshall was on the right track in his predictions on how economics and industry would progress in the future. -Eric
While Cairncross’ arguments which suggest that localization is diminishing are very convincing and indeed true in many aspects nowadays, Marshall has one main argument which Cairncross has overlooked and just might yet prolong localization. Marshall proposes that “the chief cause [for localization of industries has] been physical conditions” (Marshall, IV.X.3). He refers to how certain industries are heavily reliant on the available abundance of natural resources in certain geographic locations. For example, the majority of the oil industry is localized in the Middle East in countries such as Saudi Arabia, Iran, Qatar, and Iraq. Despite our advances in communication, mobility, and intertwining networks, all of which have contributed to the “death of distance,” this region has always and continues to be the leader in the industry. Although the advances which Cairncross mentions has enabled many businesses and people around the world to have “access” to this industry, they are limited by indirect means. The original source and supply of such businesses is still the massive oil wells in the Middle East. A company which wishes to sell oil can have all the customers it wants lined up, all of its communication networks running efficiently, and all of its machinery in state-of-the-art condition, but without being localized in a region with adequate supply, the business will ultimately fail. -Robert S.