French military might strode defiantly across the land, contemptuous of the political calculus with which other governments anxiously weighed enmities and alliances, weakening the forces of war and binding the raw element of conflict in diplomatic bonds. To their own and everyone else’s surprise, the French learned that a state’s natural power and a great simple cause were far stronger than the artificial structure of international relations by which other states were ruled.
Such a fundamental transformation was least of all expected at a time when many believed that highly developed state finances and standing armies had led to a level of civilization at which the strength of the people was excluded from public affairs. Everything was reduced to a a few strands—treasury, credit, army—which the cabinet held in its hands…
Archive for the ‘economic determinism’ Category
John is en fuego today:
.….In the last thirty years, we’ve seen a shift in the technological substrate. This new susbstrate is increasingly a family of technologies related to information networks.
As this new substrate begins to take control, we’re going to need new management forms. Both bureaucratic and market systems are proving insuffient solutions to the challenges of a networked age.
In both cases, the emergence of a global network is eroding the efficacy of bureaucracy and markets as solutions. How? One reason is scale.
A global network is too large and complex for a bureaucracy to manage. It would be too slow, expensive, and inefficient to be of value. Further, even if one could be built, it would be impossible to apply market dyanmics (via democratic elections) to selecting the leaders of that bureaucracy. The diversity in the views of the 7 billion of us on this planet are too vast.
In terms of markets, a global marketplace is too unstable. Interlinked, and tightly coupled markets are prone to frequent and disasterous failures. Additionally, a global marketplace is easy for insiders to corrupt and rig, as we saw with the 2008 financial melt-down. Given instability and unmitigated corruption, markets will fail as a decision making mechanism.
So, what’s going to replace bureaucracy and markets?
Read the rest here.
In very strong agreement with John. I like markets and think they produce efficient and optimized results for many things ( not all things) but free markets currently face massive (and sadly bipartisan) efforts to rig them by the oligarchy here at home, much less in autocratic states where the practice of state socialism, kleptocracy and government by mafia or tribal/sectarian minority is the norm. People will seek work-around structures to adapt, thrive and evade extortionate schemes by elites that have hijacked the state.
Hat tip to Lexington Green
This is a fun book by the former editor-in-chief of WIRED , author of The Long Tail and the co-founder of 3D Robotics, Chris Anderson. Part pop culture, part tech-optimist futurism and all DIY business book, Anderson is preaching a revolution, one brought about by the intersection of 3D printing and open source “Maker movement” culture, that he believes will be bigger and more transformative to society than was the Web. One with the potential to change the “race to the bottom” economic logic of globalization by allowing manufacturing entrepreneurs to be smart, small, nimble and global by sharing bits and selling atoms.
Here’s the history of two decades of innovation in two sentences: The past ten years have been about discovering new ways to create, invent, and work together on the Web. The next ten years will be about applying those lessons to the real world.
This book is about the next ten years.
….Why? Because making things has gone digital: physical objects now begin as designs on screens, and those designs can be shared online as files…..once an industry goes digital in changes in profound ways, as we’ve seen in everything from retail to publishing. The biggest transformation, but in who’s doing it. Once things can be done on regular computers, they can be done by anyone. And that’s exactly what we’re seeing happening in manufacturing.
…..In short, the Maker Movement shares three characteristics, all of which I’d argue are transformative:
1. People using digital desktop tools to create designs for new products and prototype them (“digital DIY”)
2. A cultural norm to share those designs and collaborate with others in online communities.
3. The use of common design file standards that allow anyone, if they desire, to send their designs to commercial manufacturing services to be produced in any number, just as easily as they can fabricate them on their desktop. This radically foreshortens the path from idea to entrepreneurship, just as the Web did in software, information, and content.
Nations whose entire strategy rests upon being the provider of cheapest labor per unit cost on all scales are going to be in jeopardy if local can innovate, customize and manufacture in near-real time response to customer demand. Creativity of designers and stigmergic /stochastic collaboration of communities rise in economic value relative to top-down, hierarchical production systems with long development lags and capital tied up betting on having large production runs.
Interesting, with potentially profound implications.
An interesting piece in Democracy Journal by James Kwak:
….Countries differ in their economic success because of their different institutions, the rules influencing how the economy works, and the incentives that motivate people,” write Acemoglu and Robinson. Extractive institutions, whether feudalism in medieval Europe or the use of schoolchildren to harvest cotton in contemporary Uzbekistan, transfer wealth from the masses to elites. In contrast, inclusive institutions—based on property rights, the rule of law, equal provision of public services, and free economic choices—create incentives for citizens to gain skills, make capital investments, and pursue technological innovation, all of which increase productivity and generate wealth. Economic institutions are themselves the products of political processes, which depend on political institutions. These can also be extractive, if they enable an elite to maintain its dominance over society, or inclusive, if many groups have access to the political process. Poverty is not an accident: “[P]oor countries are poor because those who have power make choices that create poverty.” Therefore, Acemoglu and Robinson argue, it is ultimately politics that matters.
The logic of extractive and inclusive institutions explains why growth is not foreordained. Where a cohesive elite can use its political dominance to get rich at the expense of ordinary people, it has no need for markets and free enterprise, which can create political competitors. In addition, because control of the state can be highly lucrative, infighting among contenders for power produces instability and violence. This vicious circle keeps societies poor. In more fortunate countries, pluralistic political institutions prevent any one group from monopolizing resources for itself, while free markets empower a large class of people with an interest in defending the current system against absolutism. This virtuous circle, which first took form in seventeenth-century England, is the secret to economic growth….
Read the rest here.
Have a new short article up at IVN.us:
Traditionally, in American politics, questions of budget deficits and national debt were seen as purely domestic issues that only had ancillary effects on foreign policy. The situation today is different: debt has become a strategic problem not only because of the magnitude of American debt ($14 trillion), but because our major allies and adversaries are interlocked economically and have their own severe systemic debt and monetary issues. Even China, which enjoys high GDP growth rates, has a crisis of “hidden debt” that reputedly exceeds $1.6 trillion and may, in fact, be several times larger. Among the great powers, when it comes to accumulating risky amounts of debt, no one has clean hands.
….However, enthusiasm in Washington for shrinking the numerous missions given to the military to line them up with the Pentagon’s reduced capabilities is nonexistent. This may fool the voters back home, but it doesn’t deceive mullahs in Teheran or North Korean generals that the American ability to respond in a crisis has been circumscribed by capability and costs, particularly when key American allies like Britain and France have made sharp defense reductions of their own. Realistically, we are effective now for one crisis at a time and our ability to juggle any other major problems will be extremely limited, removing some of the “super” from our superpower status that Americans are accustomed to….
Read the rest here.