Page 123 - Culture Society and Economy

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CULTURE, SOCIETY AND ECONOMY

Castells qualifies this untenable claim from time to time. For example, he
concedes that Harrison is correct when he demonstrates that the signifi-
cant small business networks are not stand-alone operations but in fact
subcontracting captives of transnational corporations. Referring to small
and medium business, Castells wrote:

It is true that small and medium businesses [sic] appear to be the forms of
organization well-adapted to the flexible production system of the informa-
tional economy, and it is also true that their renewed dynamism comes
under the control of the corporations that remains at the center of the struc-
ture of economic power in the new global economy. 54

But this concession is immediately qualified in the following sentence by
noting ‘the crisis of the traditional powerful corporate model’.
He goes on to assert that this traditional corporate model is in ‘disin-
tegration’ and has moved from a ‘vertical’ to a ‘horizontal’ structure. As
a result ‘a new organizational form has emerged as characteristic of the
informational/global economy: the network enterprise’. 55 But his funda-
mental point is this:

Since most multinational firms participate in a variety of networks depending
on products, processes, and countries, the new economy cannot be char-
acterized as being centered any longer on multinational corporations, even
if they continue to exercise oligopolistic control over most markets. This is
because corporations have transformed themselves into a web of multiple
networks embedded in a multiplicity of institutional arrangements’. 56

But the unreal and idealized representations of both international finance
and global information technology in Castells’ thought somehow neglects
to foreground the obvious fact on which all agree. Transnational corpora-
tions have concentrated greater wealth and are more powerful than
ever before in national and global economies. The very firms he quotes as
examples of crisis and misplaced arrogance – IBM, Philips and Mitsui – are
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more powerful than ever. Mitsui – one of the original zaibatsu – includes
giant firms such as Toshiba and NEC. The fact that large transnational
corporations restructure and develop networks of inter-relationship can
hardly be taken to mean that they are less powerful. This is the very oppo-
site of the true situation. The trillions of dollars of international financial
transactions are not flowing freely between all individuals in an undiffer-
entiated ‘network’. This capital has owners – a small minority of persons
who are the real lords of the universe. The same applies to the concept of
an ‘informational’ society. Internet or not, the significant means of global

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