Saturday, January 08, 2005

Dirt world meets digital world

Are we on the verge of -- or already in the middle of? -- a war between nation states and global organizations? Do we have the makings of a conflict between the dirt world and the digital world?

Electronic communications and strong global trade networks are creating a global production/consumption system where nation states seem to be accidents of history. On the other hand, nation states are the ones with guns and taxes; national leaders and their constituents live in a particular place and are still tied together by physical proximity.

A wonderful book recommended by Marc Smith bears on this topic: The Sources of Social Power, Volume 1, A history of power from the beginning to A.D. 1760 by Michael Mann. The Mann outlines a theory of social power, and then tests it through a masterful analysis of innumerable historical examples. For him, societies can be explained by the interactions among four power sources: ideological, economic, military and political relationships. The relative influence of these power sources varies. Cultures of conquest like the Assyrians and Incas were based on military power. The ideological power of the Catholic Church was key during the Middle Ages. Political power became more visible during the rise of the European monarchies, and was joined by economic power in the run-up to the Industrial Revolution.

Mann's other key claim is that "a society" as a well-defined unit of analysis is a fiction. Societies are shot through with power networks that have wildly different physical scales; in the Middle Ages, for example, political power was limited to the feudal manor and its immediate environs, while the ideological power of the Church reached in a uniform way across Western Europe. The constituent parts of notionally distinct "societies" thus overlap and intersect with each other in complex ways.

Mann's thinking applied to current conditions suggests that globalization and territoriality are not at odds. They are, in fact, power sources operating at different scales. Nation states have political and military power which is based on physical contiguity. Globalization is, so far, an economic phenomenon. (Ideology doesn't play much of a role - yet.) This is not unlike the situation Mann describes in the Middle East around 900 - 400 BC. A number of quite distinct power centers around the Mediterranean, from Egypt to Persia, were stitched together by Phoenician and Greek trade.

I therefore think that my fears of "vertical" conflict between national and global power players are overblown.

A much more likely fight is a "horizontal" one between nation states on the basis of the globalization enabled by digital technology.

I was told yesterday that business leaders in major companies are frustrated by inability of their CIOs to deliver the business system interconnection they need; outsourcing would be much more common than it is today if Service Oriented Architectures actually worked.

Another straw in the wind: some researchers suggest that demand for university places in India will rise to 9 million places in 2015, and 20 million places in China in 2025. The NCES projects that just over 2 million bachelor's and master's degrees will be conferred in the US in 2013. In other words: in less than ten years, there will be more than ten times as many qualified knowledge workers in Asia as in the US.

At this point interpretation becomes a matter of temperament and bias. Some people believe that the rise in international trade and the shift to a knowledge economy will lead to a happy world where everybody becomes more affluent. Richard Rosecrance argues from this corner in The Rise of the Virtual State: Wealth and Power in the Coming Century.

I'm not convinced; for my money, Prof. Rosecrance under-estimates the negative impact the rise of knowledge economies in Asia will have on earning potential and life-style of Americans and Europeans. The standard of living in Asia will certainly rise; the question is whether economic growth is enough of a non-zero sum game for US/EU living standards not to decline. Rosecrance argues that the rise of virtual economies will make military conquest obsolete. Even if this were true, it addresses only one of the four sources of power that Michael Mann uses.

Organizations with global aspirations, from international NGOs to multi-national companies, play a crucial role in accelerating the development of a world where such conflicts arise. They can also play a key role in defusing tensions. Countries go to war where there is no commonly accepted authority to resolve their differences. Global organizations can create the conditions where there is a common set of values within which conflicts can be worked out.

This does not necessarily imply a global government. Government is just one of Mann's four sources of power, ie political power. Ideology can play a similar role without the creation of a black helicopter brigade. But what ideology? I'm still thinking about that... Fifty years ago one might have proposed communism or capitalism. These days the most obvious candidate is neoliberalism. However, there's a more interesting possibility: the emergence of a ideology based on the synthesis of neoliberalism and socialist activism. One can see the makings of such a fusion in many technology companies whose employees are predominantly Left on social issues and Right on commercial ones.

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