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Whither Power?


The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn’t What It Used to Be by Moisés Naím (Basic Books 2013), 320 pages.

The topic of Moisés Naím’s book is the decay of power — the shift of power “from brawn to brains, from north to south and west to east, from old corporate behemoths to agile start-ups, from entrenched dictators to people in town squares and cyberspace.”

But he might just as easily call it a book on the transition from hierarchies to networks. Power, Naím says, isn’t just shifting in the directions described in the quotation above. Power itself is evaporating — “slipping away” — even in the hands of its new recipients. And what’s emerging in its place is a society based not on power but voluntary association: horizontal networks and self-managed groups.

The main reason for the declining power of legacy institutions is falling barriers to entry. Individuals, small groups, and self-organized networks are increasingly able to take on powerful institutions on an equal — or more than equal — basis. That results, in Naím’s terminology, from the “More Revolution” (quantitative increases in population, income, literacy, et cetera), the “Mobility Revolution” (self-explanatory), and the “Mentality Revolution” (more education, rising expectations, and decreased deference to authority).

But the decisive revolution, in my opinion, is the “Less Revolution”: the ephemeralization, or the decline in material requirements (overhead and capital outlays) required to undertake any given function. The 20th century was the era of large, centralized, hierarchical institutions, mainly because of the large capital outlays required to enter the field. The precipitous fall in capital costs required to undertake the same functions means that by the end of the 21st century there probably won’t be enough of such institutions left to bury.

Declining advantages

The rest of the book is a survey of Naím’s thesis — the declining power advantages of size — as it applies to specific facets of society.

In politics, majority parties in control of national governments are finding their political power less and less meaningful. The proliferation of groups with veto power — organized interest groups such as the Pirate Party in Europe and Tea Party in the United States, the Arab Spring, hacktivist movements, and NGOs et cetera — has led to a paralysis in national politics. The application of asymmetric warfare techniques to other areas of life — political, economic, social — means that the deliberate application of power finds itself increasingly thwarted by “vetoes, foot-dragging, diversions, and interference.” The network-communications revolution and the removal of transaction costs for coordination have increased what Samuel Huntington called the “crisis of governability” back in the 1970s by several orders of magnitude.

In the international arena, despite the apparent concentration of power in the hands of the United States (the “sole remaining superpower”), the actual power advantage of the United States and second-tier Great Powers is steadily diminishing. As asymmetric warfare techniques proliferate, the advantages of superior military force are in rapid decline. The weaker military side prevailed 55 percent of the time between 1950 and 1998, compared to only 12 percent between 1800 and 1849. And the change has accelerated in the last decade or so, with the rapid technological advances and cheapening of area-denial weapons that make American power-projection capabilities less and less usable.

In economics the falling capital outlays for production are undermining the whole material basis for the power of large institutions. The revolution in cheap manufacturing technology makes the large mass-production factory irrelevant from a purely material and technical standpoint. The revolution in desktop information processing, network communications, and P2P (peer-to-peer) organization is having a similar effect on the big media corporations.

The network-information revolution is also rendering large government and corporate institutions vulnerable to networked public information and pressure campaigns. Until the 1990s, the Mexican government’s attempted suppression of the Zapatista uprising in Chiapas or Shell Oil’s use of mercenary death squads to suppress local resistance in Nigeria would hardly have merited an inside paragraph in the major newspapers of record. But thanks to global information campaigns on the Internet, such state and corporate malefactors have found themselves blindsided by negative publicity and scurrying under the refrigerator like cockroaches when the kitchen light is turned on.

For most prestigious corporate brands, the five-year risk of a catastrophic collapse of value from attacks on their public reputation has grown from 20 percent to 82 percent over the past 20 years. Negative publicity by means of networked communications media is a venerable David-vs.-Goliath strategy that has been practiced by the Wobblies as “open-mouth sabotage” for decades. More recently, in the Internet Age, it’s been the primary weapon of public-pressure campaigns such as Charles Kernaghan’s fight against Kathie Lee Gifford, and the Coalition of Immolakee Workers against Taco Bell and KFC. Corporations are starting to learn they no longer live in the broadcast era of one-way communications that they control. And their attempts to shut up critics with SLAPPs (strategic lawsuits against public participation) or DMCA (Digital Millennium Copyright Act) take-down notices are running up against what Mike Masnick calls the Streisand Effect: attempts to suppress embarrassing speech have the tendency to draw orders of magnitude more attention to the embarrassing speech.

The shared paradigm

The main problem with Naím’s analysis is that, for all his celebration of the network revolution and the decline in institutional power, he wants to stop the rolling rock halfway down the hill. Throughout the book, he warns of the dangers attendant to a loss of authority, like “anarchy” or a Hobbesian “war of all against all.” At the same time he idealizes the role of authority — e.g., the “Pax Americana” — in imposing order.

In the end he seems unable to conceive of the possibility that rather than being something “imposed” by authority, order may instead result from horizontal, voluntary cooperation.

It is a fundamental deficiency of vision. He repeatedly points to all the complex problems facing the world — climate change, terrorism, resource depletion, et cetera — that, in his view, require some sort of usable power to solve. He ignores the extent to which such problems actually result from the past exercise of that power.

In so doing, he perpetuates a paradigm common to both mainstream Left and Right that should be quite familiar to us in American politics: the portrayal of the world’s present ills (poverty, corporate power, the concentration of wealth, et cetera) as natural and inevitable absent state intervention to prevent them. The statist Left justifies state intervention on the grounds that it’s necessary to prevent the otherwise inevitable emergence of wealth disparities and concentrations of economic power caused by an unregulated market. The statist Right (which misappropriates to itself the label “free-market” or “libertarian”) shares the view of those outcomes as inevitable, but argues either that the outcomes really aren’t all that bad or that they’re the reward for superior productivity and performance in a “free market.” This shared paradigm of statist Left and Right serves as a legitimizing ideology for both big government and big business by portraying them as competitors or enemies rather than, as they are in reality, parts of a single interlocking system of power.

That is demonstrated by Naím’s view of the importance of some hegemonic power in guaranteeing global political stability. He idealizes the “peace” and “stability” imposed by hegemonic powers such as the bipolar superpower condominium of the Cold War, as well as the United States’s unilateral attempt to impose a world order since the end of the Cold War. He totally ignores the fact that many of the instabilities that supposedly require a hegemon to suppress them were themselves the direct result of past exercises of hegemonic power.

How much terrorism was directly generated by Britain’s promotion of the Zionist project in Palestine, or the American decisions to overthrow Mosadeq and to destabilize the Soviet client regime in Afghanistan? How many global hot spots are aftereffects of the World War I victors’ hubris in drawing imaginary lines through the territories of the Ottoman and Austro-Hungarian empires?

How much bloodshed was foisted on the world by the U.S. government itself, when it supported Central American death squads, instigated bloody coups in places such as Indonesia, and promoted the universal triumph of military dictatorship in the Southern Cone of South America through Operation Condor?

The superpower dual hegemony during the Cold War may have “left little room for local conflicts to spread,” but superpower involvement in local proxy wars also made them extremely bloody. The deforested toxic-waste dump that persists in what was formerly South Vietnam should be enough to convince us of that. Instead of asking who will prevent aggression after Pax Americana, it would make more sense to ask who will deter America.

Misunderstanding free trade

Naím also idealizes — unjustifiably — the world order enforced by superpower military hegemony and the “soft power” of the IMF and World Bank. The claim that the Washington Consensus promotes “lowered trade barriers” is ludicrous. It has lowered tariffs — but only because tariffs have ceased to serve corporate power and instead have become a hindrance to it. Meanwhile, it greatly strengthened a new form of protectionism: so-called intellectual property, which serves the same protectionist function for transnational corporations that tariffs did for industrial corporations a century ago. The global system of information lockdown enforced in behalf of transnational corporations — I call it the DRM (digital rights management) Curtain — is more protectionist than anything Smoot and Hawley could have imagined.

The “peace” enforced under the UN Security Council since World War II has been a regime of extraction by the industrial powers of the global north against the global south.

What Washington calls a global regime of “free trade” in fact ratifies a status quo resulting from centuries of imperial land expropriation, enclosure, and slavery. It protects state-subsidized and state-protected global corporations in mining and agribusiness, as well as sweatshop employers, against victims’ attempts to obtain justice. It has absolutely nothing to do with free trade or free markets.

The problem with Naím’s framing is that he fails to understand the true nature of the state. The state, as Franz Oppenheimer pointed out, is the political means to wealth — i.e., rent extraction — by the coalition of privileged classes that control it. This is as true of the global neoliberal regime enforced by the United States as it is of domestic policy. The American state does not promote “free markets” or “lower trade barriers,” but instead a mixture of markets and state intervention best calculated to guarantee the maximum sustainable rate of rent extraction for the classes that control the state.

Despite his enthusiasm for the network revolution, Naím constantly finds himself looking back to the fleshpots of Egypt. His most thoroughgoing rhetoric about the revolutionary effects of decentralization notwithstanding, he seems most comfortable with a hybridized vision in which the network revolution is domesticated, co-opted, and incorporated into existing institutional power structures.

The history of the last few decades is a history of attempts by existing power structures to put new wine in old bottles — to domesticate new decentralized production technologies by decentralizing operations while retaining centralized disposal of their product. Transnational corporations outsource actual production to small job shops in China but use “intellectual property” law to integrate them into a corporate framework. They attempt to copy the advantages of P2P organization within their institutional framework by means of management fads such as the Wikified firm and Enterprise 2.0, despite the fact that genuine P2P organizations are inevitably more agile and efficient than corporate imitations.

Naím shows no little sympathy with this state of affairs. In language reminiscent of Tom Peters’s gushing back in the 1990s about the portion of his new Minolta’s price that reflected “human imagination” rather than labor and materials, Naím celebrates the growing share of firm market value that results from patents and copyrights, human capital, and goodwill rather than the book value of tangible assets: in other words, “value” created by embedded rents on artificial scarcities enforced by the state, rather than by natural scarcities or necessary costs of production. To put it in Biblical language, the Children of Israel have invented a way to make bricks without straw — but Pharaoh has forbidden it in order to keep the straw suppliers in business.

Naím imagines that new small-scale production technologies such as job shops full of cheap CNC (computer numerical control) machinery will be integrated into the existing global economy — “small-batch production of mass-market goods.” But that is only a temporary hybrid form resulting from the effort — ultimately doomed — to integrate garage-production technology into a corporate institutional framework. It will eventually give way to small-batch local production of goods for local consumption, by small neighborhood shops in both American and Chinese communities. Garage factories in American communities will soon be producing knockoffs of patented industrial goods, or illegally producing generic replacement parts and accessories from CAD/CAM files on the Pirate Bay. Chinese and Vietnamese shops will ignore Nike’s trademark and sell identical sneakers — without the enormous brand-name markup — locally.

In every case, genuine network organizations run circles around the corporate imitations. And (as the record companies can tell you in regard to file-sharing technologies) the artificial property rights on which such attempts at co-optation depend are becoming unenforceable.

Despite Naím’s attempt to maintain a position with one foot in the old world and one in the new, there’s no halfway stopping point. He needs to stop worrying and learn to love complete freedom.

This article was originally published in the November 2013 edition of Future of Freedom.

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