The Pennsylvania State University The Graduate School College of Communications THE POLITICAL ECONOMY OF THE DIGITAL DIVIDE IN TAIWAN A Thesis in Mass Communications by Chen-Ling Hung © 2004 Chen-Ling Hung Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy May 2004 The thesis of Chen-Ling Hung was reviewed and approved* by the following: Ronald V. Bettig Associate Professor of Communications Thesis Advisor Chair of Committee Dennis Davis Professor of Communications Richard Taylor Professor of Communications Chris Benner Assistant Professor of Geography John Nichols Professor of Communications Associate Dean for Research and Graduate Programs in Mass Communications *Signatures are on file in the Graduate School iii ABSTRACT This study utilizes a political-economic perspective to analyze the digital divide. This approach corrects the ideological bias of neo-liberal research on the digital divide and its insufficiency of theoretical foundation and provides a framework for political- economic scholars to systematically explore this issue. Political-economic theory is useful for examining the digital divide for it provides a holistic analysis of existing relationships among wealth, power and knowledge. This theory provides a critical perspective on the operation of capitalism, arguing that the nature and development of capitalism is signified by the concentration of wealth and power in the hands of a few people who dominate policymaking and the distribution of resources, including new technology and information, thus strengthening existing disparities. The study employs four entry points including history, ownership, access and policy to analyze the digital divide from a global perspective while focusing on the case of Taiwan. Its findings suggest that Internet development in Taiwan is following similar patterns and exhibiting many of the same characteristics found at the global level, including the role of the state and corporation sector in commercializing the Internet. The commercialization of the Internet has inspired a trend toward concentration of ownership in Internet-related industries which include media, telecommunications and information technology. This study also finds disparities in Internet use a reflection of existing social inequality in terms of income, education and location. The divide is further strengthened by information policy that tends to favor the interests of big corporations and ignore the needs of the poor. In a word, this inequality of resource allocation is inherent in the nature of capitalism and is further deepened with the global expansion of capital and technology. The development of the Internet and its application shows that the Internet itself is not an autonomic domain. To the contrary, it is molded by the political-economic context in which it emerged. For a further look at how the state and the corporation work to strengthen social and economic inequality, this study utilizes critical theories of the capitalist state to analyze iv information and industrial policies in Taiwan. It finds the role of the Taiwanese state has been transformed, from a developmental state which led the nation’s progress before the 1990s, to a capitalist state which tends to yield to the interests of the capitalist class. This transformation signifies the decline of the state’s autonomy, constrained by both internal and external factors. Internally, the Taiwanese capitalist class went from being nestled under the state’s protection to a contending force against the state. Internationally, Taiwan’s further incorporation into the global economy, especially its entry into the World Trade Organization, set constraints on the state’s autonomy. The analysis of the liberalization of Taiwan’s telecommunications market and the lifting of the ban on chipmakers’ move to China both demonstrate limits on state autonomy. Consequently, the state gradually acts as a capitalist state which spontaneously protects the interests of the (global) capitalist class as a whole while ignoring or even deepening social inequality. In conclusion, based on the political-economic analysis of the digital divide, globalization definitely does not benefit everyone. Rather, it strengthens Taiwan’s reliance on western countries especially the United States and worsens the nation’s industrial crisis. As WTO requirements forced Taiwan to give up more of its autonomy, they also increased social inequality in many ways, which in turn deepen the digital divide. Therefore, this study provides some cautious thoughts on bridging the digital divide in the context of Taiwan’s changing status in the international division of labor and its social inequality and discontent. This study proposes the principle of “inclusive politics” by which representatives from civil society can participate in policymaking and make inclusive policy highlighting the needs of the poor. It argues that the solution to the digital divide is based on a society of justice and equality where civil rights are valued and promoted. Only in such a world, can technology be distributed equally and used for human development. v TABLE OF CONTENTS LIST OF FIGURES .....................................................................................................viii LIST OF TABLES.......................................................................................................ix ACKNOWLEDGEMENTS.........................................................................................xi Chapter 1 THE DIGITAL DIVIDE—GLOBAL CAPITALISM AND ITS DISCONTENT .....................................................................................................1 1.1 Introduction: The Rationale for Studying the Digital Divide through the Political-Economic Approach .......................................................................3 1.2 Taiwan in Brief...............................................................................................12 1.2.1 Why Taiwan?........................................................................................12 1.2.2 Development of the Internet in Taiwan................................................16 1.3 Methodological Approach: Case Study..........................................................17 1.3.1 Data Collection.....................................................................................19 1.3.2 Data Analysis........................................................................................20 1.4 Research Questions and the Outline...............................................................21 1.4.1 Research Questions ..............................................................................21 1.4.2 Outline ..................................................................................................22 Chapter 2 THEORETICAL APPROACHES .............................................................24 2.1 Theoretical Approach .....................................................................................24 2.1.1 The Political Economy of Communications.........................................24 2.1.2 The Political Economy of the Internet..................................................27 2.1.2.1 Ownership of Cyberspace ..........................................................27 2.1.2.2 Commodification of Cyberspace................................................29 2.1.2.3 Class Struggle...........................................................................31 2.1.3 The Theories of the Capitalist State ...................................................33 2.2 Key Concepts behind the Digital Divide........................................................35 2.2.1 The “Information Society” ...................................................................35 2.2.1.1 Post-industrial Society: Daniel Bell ...........................................36 2.2.1.2 Informational Capitalism: Manual Castells................................39 2.2.1.3 Cultural Imperialism: Herbert Schiller.......................................45 2.2.1.4 Summarizing Bell, Castells and Schiller..................................49 2.2.2 The Theories of Development..............................................................50 2.2.2.1 Modernization Theory................................................................50 2.2.2.2 Diffusion of Innovations ............................................................54 2.2.2.3 Dependency Theory ...................................................................57 2.2.3 Globalization ........................................................................................63 2.2.3.1 A review .....................................................................................64 2.2.3.2 Globalization and Inequality ......................................................72 vi Chapter 3 GLOBALIZATION AND THE DIGITAL DIVIDE.................................76 3.1 A History of the Internet.................................................................................76 3.1.1 Two stages of Internet Development....................................................76 3.1.1.1 Computer Networks and National Defense................................77 3.1.1.2 ARPANET to Internet................................................................77 3.1.2 State/Corporate Dominance..................................................................78 3.1.3 Resistance in Cyberspace .....................................................................80 3.1.4 Global Governance...............................................................................82