Author Topic: Knowledge & Power (Read 2097 times)

Kudi Nepal Di · « **on:** August 27, 2010, 07:41:08 AM »

"Knowledge is Power" goes the old German adage. But power, as any schoolboy knows, always has negative and positive sides to it. Information exhibits the same duality: properly provided, it is a positive power of unequalled strength. Improperly disseminated and presented, it is nothing short of destructive. The management of the structure, content, provision and dissemination of information is, therefore, of paramount importance to a nation, especially if it is in its infancy (as an independent state).

Information has four dimensions and five axes of dissemination, some vertical and some horizontal.

The four dimensions are:

- Structure – information can come in various physical forms and poured into different kinds of vessels and carriers. It can be continuous or segmented, cyclical (periodic) or punctuated, repetitive or new, etc. The structure often determines what of the information (if at all) will be remembered and how. It encompasses not only the mode of presentation, but also the modules and the rules of interaction between them (the hermeneutic principles, the rules of structural interpretation, which is the result of spatial, syntactic and grammatical conjunction).

- Content – This incorporates both ontological and epistemological elements. In other words: both "hard" data, which should, in principle, be verifiable through the employment of objective, scientific, methods – and "soft" data, the interpretation offered with the hard data. The soft data is a derivative of a "message", in the broader sense of the term. A message comprises both world-view (theory) and an action and direction-inducing element.

- Provision – The intentional input of structured content into information channels. The timing of this action, the quantities of data fed into the channels, their qualities – all are part of the equation of provision.

- Dissemination – More commonly known as media or information channels. The channels which bridge between the information providers and the information consumers. Some channels are merely technical and then the relevant things to discuss would be technical: bandwidth, noise to signal ratios and the like. Other channels are metaphorical and then the relevant determinants would be their effectiveness in conveying content to targeted consumers.

In the economic realm, there are five important axes of dissemination:
From Government to the Market – the Market here being the "Hidden Hand", the mechanism which allocates resources in adherence to market signals (for instance, in accordance with prices). The Government intervenes to correct market failures, or to influence the allocation of resources in favour or against the interests of a defined group of people. The more transparent and accountable the actions of the Government, the less distortion in the allocation of resources and the less resulting inefficiency. The Government should declare its intentions and actions in advance whenever possible, then it should act through public, open tenders, report often to regulatory and legislative bodies and to the public and so on. The more information provided by this major economic player (the most dominant in most countries) – the more smoothly and efficaciously the Market will operate. The converse, unfortunately, is also true. The less open the government, the more latent its intents, the more shadowy its operations – the more cumbersome the bureaucracy, the less functioning the market.
From Government to the Firms – The same principles that apply to the desirable interaction between Government and Market, apply here. The Government should disseminate information to firms in its territory (and out of it) accurately, equitably and speedily. Any delay or distortion in the information, or preference of one recipient over another – will thwart the efficient allocation of economic resources.
From Government to the World – The "World" here being multilateral institutions, foreign governments, foreign investors, foreign competitors and the economic players in general providing that they are outside the territory of the information disseminating Government. Again, any delay, or abstention in the dissemination of information as well as its distortion (disinformation and misinformation) will result in economic outcomes worse that could have been achieved by a free, prompt, precise and equitable (=equally available) dissemination of said information. This is true even where commercial secrets are involved! It has been proven time and again that when commercial information is kept secret – the firm (or Government) that keeps it hidden is HARMED. The most famous examples are Apple (which kept its operating system a well-guarded secret) and IBM (which did not), Microsoft (which kept its operating system open to developers of software) and other software companies (which did not). Recently, Netscape has decided to provide its source code (the most important commercial secret of any software company) free of charge to application developers. Synergy based on openness seemed to have won over old habits. A free, unhampered, unbiased flow of information is a major point of attraction to foreign investors and a brawny point with the likes of the IMF and the World Bank. The former, for instance, lends money more easily to countries, which maintain a reasonably reliable outflow of national statistics.
From Firms to the World – The virtues of corporate transparency and of the application of the properly revealing International Accounting Standards (IAS, GAAP, or others) need no evidencing. Today, it is virtually impossible to raise money, to export, to import, to form joint ventures, to obtain credits, or to otherwise collaborate internationally without the existence of full, unmitigated disclosure. The modern firm (if it wishes to interact globally) must open itself up completely and provide timely, full and accurate information to all. This is a legal must for public and listed firms the world over (though standards vary). Transparent accounting practices, clear ownership structure, available track record and historical performance records – are sine qua non in today's financing world.
From Firms to Firms – This is really a subset of the previous axis of dissemination. Its distinction is that while the former is concerned with multilateral, international interactions – this axis is more inwardly oriented and deals with the goings-on between firms in the same territory. Here, the desirability of full disclosure is even stronger. A firm that fails to provide information about itself to firms on its turf, will likely fall prey to vicious rumours and informative manipulations by its competitors.

Author Topic: Knowledge & Power (Read 2097 times)

Kudi Nepal Di

Knowledge & Power

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