Brits have a positive fondness for ideas and debate, so why aren't you running this information economy?

Great Britain is sitting on, or, actually, under, a veritable gold mine. This resource is not in the North Sea, or under Welsh hills. It's likely to be perching under your hat. The world's transition from an industrial economy to one based on information should greatly favour those nations with a literate and well-educated populace. Could Britain's literacy be the ultimate renewable natural resource?

This idea surfaced as I sat eating dinner with the editor of this column in a Soho restaurant. It was amusing, not to mention appetising, to be collaborating, for once, over a plate of pasta, instead of the Internet.

We, both veterans of US newspapers, were talking about our common perception that Britons read at a level that shames their American cousins (like me). You all are literate and well-educated and, in theory, much better prepared for a world where wealth will be based on ideas and know-how.

Michael Dertouzos, head of the Laboratory for Computer Science at MIT, put it this way in 1991: "The agricultural age was based on ploughs and the animals that pulled them; the industrial age, on engines and the fuels that fed them. The information age we are now creating will be based on computers and the networks that interconnect them."

Industrial economies were also built on invention, manual skills and manual labour. Engineers whipped up clever machines that mechanics built from materials which miners muscled out of the earth. The banking trade sprung into place to provide the capital that enabled this industrial age.

Information economies require intellectual capital - good ideas, creative skills and enabling technologies. Well-educated and well-read people will likely provide the economic sinew of the future.

Literacy is a resource the way coal and iron and a merchant fleet once were - natural resources that can give a nation an edge. Heck, this isn't even a new idea, Britons have been at it for centuries.

The last time a new network revolutionised the globe - I refer to the 16th century's then-nascent postal services - Britons were right there. Thomas Hobbs, for example, corresponded with Galileo, Descartes and Leibniz, to name a few, and came up with concepts like artificial intelligence and distributed processing.

Hobbs was sufficiently ahead of his time that the House of Commons cited his writings as a probable cause of the great fire and plague of 1666. Oxford at one point recommended that his Leviathan be burned along with other "Pernicious Books and Damnable Doctrines".

Skilled, well-educated British people are cheap by American, Japanese and German standards, the strong pound notwithstanding. Brits have a positive fondness for ideas and debate, so why aren't you running this information economy already?

Well, for one thing, it's hard for you to get on the Internet. Service providers are available but phone companies charge you by the minute to connect, a practice that disappeared in America years ago.

Deregulation of the phone system in the US led not only to the free local phone calls that make frequent and prolonged Internet access affordable, but also to the creation of hundreds of thousands of jobs in the wildly booming telecommunications industry. For another, British taxation, a lingering legacy of the Industrial Revolution's social displacement, makes it almost ridiculously expensive to put the basic tool of the new economy, the computer, in the hands of Britons.

Value Added Tax is a particularly bad idea: it says the more value you add to something, the more expensive, and therefore harder, it's going to be to sell. In a world where educated consumers demand increasingly high value in products, this is the closest thing to a national self-destruct mechanism I've ever heard of.

In 1997, computers are not luxury items, they're the price of admission to economic growth. If a nation's tax schedule succeeds in putting the basic tools of the new world economy out of the reach of all but the wealthiest, this will exacerbate, not lessen, social disparity.

This is particularly heinous in a country where working-class people may well be more literate than their counterparts elsewhere. Lots of poor Americans can afford computers, but they can't read. Lots of poor Britons can read, but they can't afford computers or Internet connections.

Trust me, it's a lot easier to fix the computer problem than to fix the literacy problem. If you don't think so, drop in on an adult "learn to read' class. Even if they do succeed in becoming literate, late-literacy adults, robbed of productive years and opportunities, start at the back of the economic pack. Literate people, armed with a computer and a network connection, can become information workers, pulling themselves, and their nation's economy, ahead. Illiterate people just don't have that option.

You need look no further than the basic nomenclature of the Internet for proof of how British literacy works. The Internet is based on a collection of bits called "packets" (not "packages", as Americans would say) because of work done by Donald Watts Davies at the National Physical Laboratory. Davies, the son of a Welsh coal-mine employee who died shortly after his son's birth, educated himself on the subject of networks from a book his mother, a postal clerk, found and brought home.

Without literacy, Davies' story might have been very different. Without access to networks, a future Davies, though literate, may fare no better.

cg@gulker.com