No Con Economics

In The End of Power (2014) Moises Naim addresses the history and sources of power from the observations of Machiavelli (1513) and Hobbes (1651) through Nietzsche (1885), Weber (1922), Schumpeter (1942) and Mills (1956) to contemporary visionaries/pundits/exploiters such as George Soros, Silvio Berlusconi, and Rupert Murdoch. Naim argues that the More, Mobility, and Mentality revolutions have undermined existing power structures and left in its wake disorder, de-skilling, alienation, over-simplification and significant barriers to effective, constructive collective action. For example, Francis Fukiyama calls the resulting political state in America a “vetocracy” (223) – metastasized checks and balances that have yielded political paralysis.   

Does Naim have a solution for how to escape this dystopian state of affairs?  Sort of.  In the final chapter, he appeals to a Clayton Christiansen-like disruptive innovation in politics and governance that would bring accountability to our political actors and, thus(?), generate trust in our domestic and international governance bodies.  He concludes this short last chapter, subtitled “So What?” What to Do?” with the following optimistic forecast:

“Driven by the transformation in the acquisition, use, and retention of power, humanity must, and will, find new ways of governing itself.”

In this posting, I’ll return to Naim’s “resolution” after illuminating 1) what he means by power, 2) the channels through which power is exercised, 3) the three revolutions that lead Naim to believe that economic and political power have declined, and 4) the consequences of the decay of power.  Stated differently:  What is his argument? So What? (If true, how does it matter?) And What (what can be done to generate better outcomes)?

What?

Naim provides the following working definition of power: “Power is the ability to direct or prevent the actions of other groups and individuals.” He goes on to argue that such an exercise of power leads individuals and groups to act in ways that they would not otherwise have acted. Clearly, this is both a relatively narrow and negative definition. Using MacMillan’s Taxonomy of Power (page 26), Naim characterizes four channels for its exercise: coercion via muscle (force), obligation via identification with a group (and its related code of behavior), persuasion via pitch (such as advertising and campaigning), and inducement via financial incentives.  Each of these approaches to the exercise of power seeks to build barriers to competing sources of power or influence; however, Naim argues that though contemporary forces make it easier to obtain power, it has become much more difficult to sustain as the three revolutions make escape from such influences also easier.

This brings me to the core of the book: how the More, Mobility, and Mentality revolutions have undermined the accumulation and sustained use of power and influence. Historically, as argued by Weber among others, power has been closely related to size:  the bigger the more powerful.  In short, size requires resources to manage and to retain influence; such burdens limit the flexibility of smaller, more nimble and more coherent enterprises. (52)  Furthermore, as more people have access to resources (through earning power and the increased flow of funding), are more mobile both physically and electronically, and have access to better information and education, their opportunities and desire to escape or confront existent sources of power increases. 

Crisply stated, Naim describes the three revolutions as follows:

The More Revolution (58): “When people are more numerous and leading fuller lives, they become more difficult to regiment and control.”

The Mobility Revolution (64): “Power needs a captive audience…Inevitably, the ease of travel and transportation, and the faster, less costly ways of moving information, money, or values makes life easier for challengers and harder for incumbents.”

The Mentality Revolution (66-67): “The propensity of the young to question authority and challenge power is now amplified by the More and Mobility revolutions.” For example, Naim cites the World Values Study conclusion that “there is a growing global consensus regarding the importance of individual autonomy and gender equality as well as a corresponding popular intolerance for authoritarianism.” Further, “in mature democracies, public confidence in leaders and institutions of democratic government…not only is low but shows a secular decline.”

In chapters five through nine, Naim applies the aforenoted forces to various sectors of our nation states and global political economy.  He provides copious examples for each, but to retain some brevity here, I’ll just cite the titles because they nicely highlight his messages.

Chapter 5 – Why are Landslides, Majorities, and Strong Mandates Endangered Species? The Decay of Power in National Politics

Chapter 6 – Pentagons Versus Pirates – The Decaying Power of Large Armies

Chapter 7 – Whose World Will It Be? Vetoes, Resistance, and Leaks – or Why Geopolitics Is Turning Upside Down

Chapter 8 – Business As Unusual – Corporate Dominance Under Siege

Chapter 9 – Hyper-Competition For Your Soul, Heart, and Brain

The author then turns to the consequences of a world in which no power for good or evil can be sustained.  In particular, he highlights five primary risks of a world in which power is decaying.

So What?

It might be desirable to think of a world in which no one has power (as defined above) over others; put more starkly no master/servant relationships.  Of course, Naim recognizes that many people (e.g., some CEOs, presidents, and other potentates) still hold significant power over others.  His point is that, given the three above noted revolutions, their hold on such power is less sustainable than it otherwise might be. He does, however, cite some positive consequences of declining power such as “freer societies, more elections and options for voters, new platforms for organizing communities, more ideas and possibilities, more investment and trade, and more competition among firms, and thus more options for consumers.” (219)

As Naim puts it, a glass half full is also half empty.   He quotes former U.S. Office of Management and Budget chief Peter Orszag who observes that “…we need to confront the fact that a polarized, gridlocked government is doing real harm to our country.  And we have to find some way out of it.” Naim observes that the decay of power generates five serious risks to social welfare. 

• Disorder: the inability of existing governing entities to produce order; that is, to provide sufficient stability and predictability for people to live fulfilling, productive lives.
• De-skilling and loss of knowledge: The loss of large, centralized organizations that serve as reservoirs for the development of significant “experiences, practices, and knowledge” cannot be easily displaced with diffuse organizations that lack power. Furthermore, the disorder noted above leads to the rise and allure of what historian Jacob Burckhardt called “terrible simplifiers” (229) who exploit the gaps and push populist “solutions” that appeal to subsets of the population at the expense of others.
• The banalization of social movements: Naim argues that large collective action movements will be replaced by new low impact, low involvement participation that Morozov labels “slacktivism.”  His concern is that “actual, forceful, coalitions directed toward specific social goals become impossible to orchestrate.” (230)
• Boosting Impatient and Shortening Attention Spans: The more difficult it is to sustain power and influence, the more short term incentives and fears will dominate.  Congressional elections every two years with campaigning beginning shortly after the previous election surely doesn’t lead to long term initiatives or policy development.  Similarly, dependence on quarterly financial reporting does little to encourage business commitment to investment that take years to demonstrate its value.
• Alienation: “Changes in the power structure, the traditional hierarchy, predictable norms, and well-know rules inevitably lead to disorientation and heightened anxiety.” Trust in existing institutions falls and with it the social bonds between individuals and the communities in which they live.

And What?

In the final chapter, Naim attempts to find a silver lining that might counter the fragmentation and disorganization that results from the decay of power.  He finds hope from some non-governmental organizations (NGOs) that tend to have a solitary focus to which its energies and those of its proponents can direct their attention.  He envisions reinvented political parties, with structures similar to these NGOs, that would compete with each other to yield revival of both meaningful participation and trust.  He does not address the mechanism or process needed to transcend these narrow and typically single issue political interests to yield constructive collection action.

My inclination is to look to the work of the late Mancur Olson who addressed the sources and diminution of collective action in three books.  His final work, published posthumously, has the perfect title to conclude this posting and set up another opportunity to post on this blog:  Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships (2000.)

Naim concludes the book with his vision for a surge in innovation that would change the nature of politics. He does not limit his discussion to any particular country; thought, it would seem to apply to those countries often labeled as mature democracies. He identifies the following as central goals for innovation in the political sphere: 1) restored trust, 2) reinvented political parties, 3) improved ways for meaningful citizen participation in politics, 4) limits imposed on the excessive checks and balances existent in many political structures, 5) policies enacted to avert and reduce excessive concentrations of power and unaccountability, and 6) increased capability of nation-states to work together collectively.

As noted in the second paragraph of this posting, Naim is optimistic that we will find a way to accomplish the agenda just described.  Although the goals he posits are definitely attractive, he provides little evidence that such a sea-change in politics is inevitable.