This part of the book investigates how trains, telegraph, and telephone changed the way people organize themselves.

The electric information revolution had two major technological periods: trains and telegraph, followed by telephone. The first wave of technology – trains and telegraph – was controlled by an elite: specialists were necessary to operate it. The second wave of technology – telephone – made instant communication available to common folk. Each technological wave had two phases. During the first phase, people used the technology to make what they already did more efficient. During the second, people changed the way they organized, being able to take the technology for granted.

The electric information revolution introduced people to new ways of thinking about business organizations, political organization, and even family organization, which in turn affected how people think about themselves as individuals.

It presented people with a new metaphor for thinking about the world: continuous flow and constrained hierarchy, that was inspired by the continuous flow of electricity through a switching network.

It changed the way buildings were built, cities were structured, and children were educated. It made the modern nation-state possible and necessary.

Identifying winners and losers:

  • The information intensive North won the Civil War in the United States.
  • The United States was the economic ‘winner’ with respect to England and Europe.
  • Business organizations that were professionally managed were ‘winners’ compared to those using ‘natural management’.