Tag Archives: globalization

Virtual Feudalism is Here: the 1% vs. the 99%

16 Oct

Over at Crooked Timber they’re having a discussion of the software SNAFU that’s occurred in the rollout of Obamacare. As anyone in the software biz knows, that’s just how it is with large software projects. The thread title suggests something more interesting and far more sinister: Neo-Liberalism as Feudalism.

That title reminded me of the work of Abbe Mowshowitz, whom I met when I was on the faculty at The Renssalaer Polytechnic Institute back in the previous century. He was interested in how the deployment of computer technology was creating virtual organizations that, he believed, would lead to a virtual feudalism:

Absent a sense of loyalty to persons or places, virtual organizations distance themselves—both geographically and psychologically—from the regions and countries in which they operate. This process is undermining the nation-state, which cannot continue indefinitely to control virtual organizations. A new feudal system is in the making, in which power and authority are vested in private hands but which is based on globally distributed resources rather than on possession of land. The evolution of this new political economy will determine how we do business in the future.

Here’s an essay I ghosted in Abbe’s name back in ’97 but which, alas, never got published. The ideas are his, the prose mine.

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The New World Order of Virtual Feudalism

One might imagine that, in 2020 a person could be brought to trial on criminal charges in a court convened by a private corporation under provisions granted by the United Nations. What is perhaps more difficult to imagine is a world in which such an institutional arrangement is the solution to a pressing problem, and that a wide range of individual and corporate actors would agree to such an arrangement. At the moment we live in a world where criminal prosecution is primarily a power of nation-state authorities, with the United Nations being an organization created by states and having no direct power in the private sector. This imaginary trial thus violates fundamental distinctions governing our political life.

Yet I believe that such arrangements are not only possible, they are inevitable. New actors — most noticeably, large multinational corporations — have come to dominate the world’s advanced economies. Increasingly these organizations are operating in a seamless global marketplace. Ironically, as the marketplace becomes global, the great nation states and empires are fragmenting into smaller and smaller units. Large companies have more wealth and power than small states. These developments conjure up visions of the brave old world of medieval feudalism, in which the role of the nobility will be played by corporate executives assisted by employee-vassals who rule over legions of latter day serfs.

Day by day the emerging new world order looks like a virtual feudalism. In thus talking of feudalism I am not, however, asserting that our immediate future holds a regression to the distant past, though there may well be regressive elements. Rather, I think that we are increasingly living in a world which exhibits patterns of social organization and action characteristic of feudal societies, such as fragmented authority, private security arrangements, and a highly permeable boundary between private and public activity. This feudalism is “virtual” because these patterns reflect non-territorial organizational arrangements made possible by information technology rather than being rooted in the customs of land ownership and tenancy which existed in medieval Europe.

To get a feel for this future let us consider the life of three different individuals who are born in the current world and move into middle-age as virtual feudalism unfolds. Continue reading

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Cultural Factors in the Hunt for Genius

12 Oct

Here’s the main point of my previous post on The MacArthur Fellows Program: It is strongly biased by the social network in which it is situated. The simplest thing it can do to blunt that bias and thereby name more interesting and challenging classes of fellows is to stop giving awards to people on staff at elite institutions. Those institutions are too deeply rooted in the past to serve the future well.

First, while the search for genius, as conducted by the MacArthur Fellows Program for example, is conceptualized as a search for attributes of individuals, even an essence, that’s not how it works out in fact and in our world. If our world were culturally uniform and static, then, yes, the search for genius might properly be conceptualized as a search for essence. But that’s only because every individual would be surrounded by the same culture and thus the possibilities for a ‘fit’ between individual capabilities and accomplishments would be the same for all.

But that’s not the world we live in. In the first place, it is not culturally uniform. Culture varies by class, geographical region, and by ethnicity and religion. In such a world a search for genius will almost inevitably be biased by the interests and understanding for those conducting the search. In such a world the ONLY way to escape bias is to recognize the problem and take explicit steps to correct for it.

Just what those steps would be, I don’t know. Two obvious suggestions: 1) Make sure the selection process includes people from all sectors of society. 2) Conceive each class of awardees as a sampling of the cultural space.

And in the second place, our world is not culturally static. It’s changing rapidly for various reasons. Globalization is driving workforce changes that affect educational requirements and skillset distribution and needs. Computer technology has changed the media world and is itself making many jobs obsolete while creating new classes of jobs. Ideas in every sphere are changing and new expressive forms are emerging in the arts. And globalization is moving large numbers of people from one country to another. Continue reading

The protectionism boogeyman | Prestowitz

3 Feb

A second, more fundamental question, is why anyone thinks that free trade and globalization are always win-win. In the first place, free trade and globalization are not the same thing. Globalization involves capital flows, direct foreign investment, and technology transfers that are not usually involved in plain old trade transactions. Economic theory holds that free trade is win-win, but only under certain restrictive assumptions such as that all markets are perfectly competitive, that exchange rates are fixed, that there is full utilization of resources, that there are no economies of scale, and that there are no cross border flows of capital, technology, or labor. Obviously, those assumptions hold only in very few instances in modern trade.

Turning to globalization, there is even less of a theoretical basis for arguing that it is always a win-win proposition, and that argument is usually made without making a full accounting of the costs of globalization such as those affecting the environment, dislocation of workers, capital investment losses, and skills learning. The truth is that globalization may or may not be a win-win proposition depending on a wide variety of circumstances.

via The protectionism boogeyman | Prestowitz.

World on the verge of a nervous breakdown

31 Dec

The economies of nations are now interconnected so tightly that trouble in one place will  propagate throughout the system. There’s not enough flexibility and resilience,

The inescapable conclusion: Our modern high-tech markets, in which more money than ever before swirls around the globe in a blink of an eye, are better at transmitting panic and fear than anything heretofore created by humans. If civilization is supposed to imply progress, then something has gone very awry: In the second decade of the 21st century, our infrastructure is increasingly fragile, increasingly prone to disruption. The sword of Damocles hangs above everyone’s head, and the thread that keeps it from falling is fraying perilously thin.

What is perhaps most fascinating about this state of affairs is how it has arisen as a consequence of global capital’s relentless quest for lower operating costs and greater efficiency and flexibility. The better we get at extending supply and production chains across the globe, the more vulnerable those chains become to a disruption at any given point. The faster we enable the transmission of information around the world and through the financial markets, the more volatile those markets become, as every new headline sends a different trading signal.

via World on the verge of a nervous breakdown – Globalization – Salon.com.

What caused the wealth gap? – Occupy Wall Street

11 Oct

Economist Jeffrey Sachs says the wealth gap got started with globalization, which allowed a small group of highly skilled people to sell their skills in a world market while forcing less skilled people to compete for foreign labor for every lower wages. Then Reagan decided to dismantle government and the federal government’s been unraveling since then.

You, in fact, call for a renewed emphasis on compassion and social responsibility.

What are our deeper economic objectives? Among these is a sense of well-being, of life satisfaction. Income can play a role in that, but so do things like social trust and honest government – and compassion for other people. This kind of discussion is considered odd and I think that is part of our problem right now. We don’t have effective ways to discuss these things in our society.

Instead, we have people who represent a cult of selfishness, what I would consider Ayn Rand libertarianism. They are political figures who say that the goal of America is to leave [people] alone, and that ideas like compassion and so on are dangerous. What the Republicans have on offer – which is based on this 30-year misdiagnosis – is cruel and deeply wrong, because they express disdain for the idea that people are suffering and they need help.

We’ve arrived at a crossroads about the real meaning of our civilization. I think that we will need to reflect on how to achieve a higher level of happiness in this country — [and think about] issues of social trust, social connectedness, decency, compassion.

via What caused the wealth gap? – Occupy Wall Street – Salon.com.