Tag Archives: virtual feudalism

King Trump Assembles His Court

13 Dec

I was struck by a passage in a NYTimes editorial for 12.12.16, “Flawed Choices for the State Department”. It was primarily about the choice of Exxon Mobile CEO for secretary of state (and secondarily about John Bolton as deputy), noting that he “knows scores of world leaders”. I was particularly struck by this paragraph:

Steve Coll, author of “Private Empire: ExxonMobil and American Power,” wrote in The New Yorker that in nominating Mr. Tillerson, Mr. Trump would be “handing the State Department to a man who has worked his whole life running a parallel quasi state, for the benefit of shareholders, fashioning relationships with foreign leaders that may or may not conform to the interests of the United States government.” He added that “the goal of Exxon Mobil’s independent foreign policy has been to promote a world that is good for oil and gas production.”

I was particularly struck by the phrases “parallel quasi state” and “Exxon Mobil’s independent foreign policy”, for they reminded me of the concept of virtual feudalism that my friend and colleague Abbe Mowshowitz developed back in the 1990s.

He wrote a book about it, Virtual Organization: Toward a Theory of Societal Transformation Stimulated by Information Technology (PDF); here’s a passage from the publisher’s blurb:

Computers mediate between individuals by providing channels of communication in the form of messaging systems; they act as brokers in matching buyers and sellers, employees and employers, resources and work processes, and so on. The social significance of computers as mediators and brokers has tremendous political and economic consequences. For managers, these consequences manifest themselves most clearly in the virtual organization, which is founded on the separation of requirements, for example, inputs such as components, from the ways in which requirements are met, or satisfiers, for example, suppliers and distribution networks. Separating these elements allows managers to switch easily from one way of meeting a requirement to another. Used systematically, switching brings huge increases in productivity but it also weakens traditional loyalties. Absent a sense of loyalty to persons or places, virtual organizations distance themselves 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 the possession of land. The evolution of this new political economy will determine how we do business in the future.

The result, Abbe argued, is that the world will evolve to a condition where nation-states are gravely weakened relative to the power of large transnational corporations. The result will be a neo-feudal world ruled by a global oligarchy of business elites and their government cronies at the expense of an immiseration global peasantry, many of whom are desperately trying to cling to illusions of middle class life.

Is President-Elect Donald Trump now in the process of using cabinet appointments as a ruse to assemble the Lords and Ladies to the court His Royal Highness, King Donald, First Emperor of the World?

While other rich men have been elected President (e.g. Franklin D. Roosevelt) none have had the wealth or worldwide business interests that Trump has. How will he separate his foreign policy from his business interests? As a preface to an enumeration of these business interests, Libby Nelson of Vox notes:

The most positive outcome of these entanglements could be that Trump pursues win-win deals that enrich both the country and himself. But these same relationships could lead him to act and react in ways that distort the economy, tilting it in favor of his own interests, and changing the United States’ foreign policy to benefit him rather than the country. It could also distort the economy, rewarding allies at the expense of other companies, stifling growth.

Even if the worst-case scenario doesn’t come true, Trump has clearly demonstrated he has little interest in meaningfully separating his businesses from his presidency. Because many Trump businesses bear the Trump name, the president-elect will be aware of where his interests are even if he hands the reins of the business to his adult children, as he’s said he will do.

Has he in effect chosen Tillerson as his Baron of Oil and Fossil Fuels? His cabinet is fast filling up with business executives and business-friendly politicians. In addition to Tillerson we’ve got the following executives:

  • Andrew F. Puzder, CKE Restaurants, Sec. Labor
  • Linda McMahon, World Wrestling Entertainment, Small Business Administration
  • Steven Mnuchin, Goldman Sachs, Treasury Secretary
  • Wilbur Ross, WL Ross & Co., Commerce Secretary
  • Betsy DeVos, Windquest Group, Secretary of Education

How will these people address one another in meetings of the Cabinet Court? Lord Andrew? Dame Linda? Sir Steven? Your Highness?

Who is going to be Court Jester?

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Before Abbe wrote his book he asked me to ghostwrite an article about virtual feudalism. He was unable to find a publisher for it, so I’ve reprinted it at New Savanna. I organize it around capsule accounts of the lives of three people and accompanying commentary, Molly Mckenna: The Corporate Lord and the Impoverished State, Robert Wong: New Loyalties and Citizen Action, and Jarvis Roosevelt: Whither Liberty and Justice for All?

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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