Tulips, trains and the Internet

Monte Reid, November 1, 2010, Essay #1, COML 509 B2 Fall
Dr. Alexander Kuskis, Gonzaga University


Introduction
Down through history, civilization has seen a great many changes in both technology and culture that have profoundly impacted the way people lived their lives, done business and planned for the future. Some of these changes have resulted in temporary shifts in economy, whiles others have been more systemic in nature and produced lasting ecological change. A brief description of two of the world’s “greatest booms and busts” provides perspective to the systemic change brought about with the introduction of the Internet and its ongoing expansion.

Tulip mania
In the early part of the 17th century, the Dutch tulip market saw an unprecedented demand for high quality tulip bulbs. Fortunes were made as people invested and even mortgaged their homes to buy highly sought after bulbs. At times, trading sessions rivaled the feeding frenzy of the Wall Street Stock Exchange just before the closing bell. In 1637, a single Semprus Augustus bulb was reportedly traded for 12 acres of land (Mackay, 1841).

Unfortunately, in February1637, the hyper-inflated economic bubble burst along with many hopes and dreams for a better life. Prices plummeted to a fraction of their former value, leaving the country in deep economic straits. Many private investors, bankers and companies lost everything they had, leaving them in utter ruin.


United States railroad expansion
More than two hundred years later, near the end of the 19th century, the United States saw a rush to build railroads as the country expanded. Dozens of railroad companies sprang up almost overnight to capitalize on new markets opened by this technology. Competition was fierce and business was rife with unscrupulous characters willing to do anything to insure success and the wealth that would surely follow (Grodinsky, 1962).

In 1893, the bubble burst for the railroad boom just as it had done some 250 years before in the tulip market. The ensuing period of cutthroat volatility, mergers and bankruptcies left the market with only a handful of surviving railroads.

There is, however, an important difference between the two crashes. While the Dutch tulip boom and bust resulted in a deep national depression and some market legislation, it was more economic in nature and did not lead to a basic change in the way people did business or lived their daily lives.

On the other hand, the railroad boom of the 1880s and 90s, and the bust that followed, left the United States with a new infrastructure that impacted business and lifestyle on many different levels. Railroads opened vast new supplies for raw materials such as minerals, lumber, agriculture and crops. New towns were established along the routes accelerating westward expansion. Jobs were created, communication enhanced and low-cost transportation became a reality. The establishment of the railroad system had brought about a lasting and systemic change.

Dot com or bust
A close parallel between the railroad boom of the late 19th century and the dot com boom and bust between 1995 and 2001 is easy to see. Both expanded rapidly, burst and left lasting changes in our society. The establishment and growth of the Internet is nothing less than a worldwide systemic change.

Communication theorist Neil Postman suggests that with any introduction of technology, there are trade offs. There is a disproportionate advantage to a few and it will be not merely additive, but ecological in nature, i.e. wide-sweeping and permeating all levels of society (Postman 1998). The American Indian lost land as settlers moved in, fortunes were made as immigrant workers slaved for a pittance and the railroads brought about a true systemic change in lifestyle as mentioned before.

The Internet too, saw similar effects, as large international players were suddenly able to access previously unattractive, smaller markets. Mom and Pop record stores in small towns across the world saw customers dwindle as iTunes appeared with its online music catalogue of millions of tunes at a much lower cost and easier accessibility. On the other hand, small entrepreneurs could now reach out to large international markets with their ideas and products, if they had the capital to invest in the proper equipment and possessed the right knowledge to master the new technology.

Conclusion
While an economic crisis can indeed be devastating in impact upon the masses, it is often only temporary as shown not only by the Dutch Tulip Mania, but also our recent recession of the last few years. However, when there are major technological advances that provide systemic change, such as with the expansion of the railroads and the Internet, mankind is able to reach beyond itself to a new level of existence.

Postman also suggests there is an “epistemological, political or social prejudice” in every great technology (Postman 1998). Here too, the chasm is widening between those who have and those who do not. The list of Internet winners and losers is now being written. There are homeless who search for their next meal, there are people who live in developing countries, often living on two dollars a day, who can not afford a pair of shoes, much less an internet connection or a cellular phone plan. These unfortunates can only watch as the rest of the world leaves them behind in a technological black hole that is almost impossible to escape. What can be done for them? What should be done? What will be done?

References

Grodinsky, J. (1962). Transcontinental railroad strategy, 1869-1893; a study of businessmen. Philadelphia: University of Pennsylvania Press.

Mackay, C. (1841). Memoirs of extraordinary popular delusions. London: R. Bentley.

Postman, N. (1998, March). Five things we need to know about technological change. Speech presented at Denver University, Denver, CO.