The Politics of Change and Stagnation
Over the last 18 months, the spectacle of politics has fascinated me, and a lot of other people, to the point of obsession. I have ranted and raved, turned out to events, tuned in to all kinds of political media theatre, donated large sums of money, engaged at every level possible. Today, thanks to the miracle of the absentee ballot, I cast my vote. The outcome is out of my hands, and there’s a certain relief and freedom to that circumstance. While I remain committed to my preferred outcome and its importance to the future, the last week has taught me that there’s a lot going on in the world external to politics: dynamics that will have at least as significant a role in the shaping of our future as who occupies the White House for the next four years.
One reason why politics has become such an obsession – almost a blood sport – for so many people on both sides of the issues is because it is one of the few institutions that offers the promise of personal control (albeit largely illusory) in a world environment presently characterized by accelerating and unpredictable change. The conceit of the Bush people, voiced earlier this week in Ron Suskind’s New York Times Magazine article on the faith and certainty, is that the clique in charge of the US government transcends the traditional need to understand and react to the world by making its own reality and forcing others to react to that. While I’m sure this accurately reflects their views, it also strikes me as a bit of psychological overcompensation stemming from the radical inability of even the most powerful political institution in the world to grasp or exert much real influence over dynamics that are reshaping the world in strange and unpredictable ways. Just as the high floors of buildings sway more dramatically in an earthquake, so must the upper echelons of political power be more sensitive to today’s turbulent forces of change and transformation. I don’t blame them (much) for being terrified, although I do question the effectiveness of their response.
Over the last four days, I was engaged in extremely intense dialogue with business leaders and thought leaders from around the world and across a number of industries, trying to identify the pivot-points and take an inventory of the forces in conflict. Typical of such exercises, we didn’t find many answers, but we did uncover a teaming termite mound of nasty questions.
- Is the world becoming more centralized and hierarchical, or are new technologies forcing power out to the edges?
- Will rising new economic and political players like China, India and perhaps Russia and Brazil (the “BRICs”) integrate into the existing global system or transform it, perhaps in disruptive and alarming ways?
- Will we embrace the excitement and opportunities of a complex and unpredictable world, or retreat into the simple certainties of dogma, xenophobia and conflict?
- Will the giant transnational companies continue to use their scale and scope to consolidate their markets and standardize the world to their practices, or does their size blind them to the threats posed by new innovations which can, in a flash, change the whole game?
In the coming weeks, I hope to write a fair amount about these subjects, since they expose issues that may have a lot more to do with the world we will be living in than matters of partisan politics. The conflicts between simplicity and complexity, hierarchy and decentralization, hegemony and multi-polarity, conflict and integration underlie our political discourse, economics and global culture. They are the big continents now in drift, forcing us to redraw our maps and rethink our modes of living.
Part of the tension in the current moment is that all of these forces have been building without a visible means of release. We’re in a classic stalemate of collective action known as a Prisoners’ Dilemma: collective action benefits all, collective inaction benefits nobody, but if one participant acts alone and fails, he hurts himself and benefits his competitors. Since there’s no overall incentive for collective action, and strong disincentives against any single player acting without coordinating with others, the default position is stagnation. The classic solution to the Prisoners’ Dilemma is “follow the leader” – one player, by virtue of his assets or reputation, is trusted by the others, such that when he takes action, the others follow suit. The game gets hard when the leader fails and the other players take stock of their own interests, preferring to stand pat rather than risk disaster.
For example, in economics, businesses and individuals are sitting on large piles of cash because other sources of investment – stock, land, commodities, etc. – currently deliver low returns at relatively high risk. Without investment, there’s no growth. Without growth, there’s nothing to drive higher returns on investment. In such an environment, the way to start a virtuous spiral is for each player to independently come to the conclusion that the opportunities of being the first-mover outweigh the risks of failure. Hope outweighs fear, collective action emerges from a series of uncoordinated individual decisions, and the incentive structure changes to reward participation rather than inaction.
The problem is, the current environment is far more conducive to fear than hope. First, the institutions of the global political and economic order are literally under attack from extremely sophisticated enemies against whom there is no obvious and effective strategy (short of a coordinated global response, which seems increasingly improbable under current world leadership). Second, we have the recent example in world politics of the most significant player on the scene – the United States – staking out an extremely risky position vis-à-vis Iraq, which proved an utter disaster. Nothing is more likely to perpetuate a dynamic of risk-aversion and paralysis than a concrete example of what happens to a lone actor who takes action and miscalculates badly.
Bush talks a good game about decisiveness and optimism, but by blundering arrogantly from one disastrous decision to another, he has ironically cast a pall over the whole idea of taking risks. Compared to the catastrophe of Iraq, the “costs of doing nothing” start to look pretty cheap. Most disturbingly, the other participants in the worldwide Prisoners’ Dilemma now view American leadership with skepticism and American action with intense distrust. The collective action that is our best hope of resolving many of these global dynamics without conflict and catastrophe recedes from sight.
This gives rise to intense uncertainty. The outcome of the game depends on the responses of other actors, each making their own calculations about risk and reward independent of what we would call “the common good.” Frameworks and principles that were painstakingly erected through leadership and collective action lose their legitimacy, and soon, not just the game but the rules themselves are in play. This makes for the most dangerous and uncertain environment since the late 17th century, before the emergence of British hegemony and the current liberal political and economic world order.
Replacing Bush in the White House in two weeks might change this picture somewhat, but likely not much. The forces that have been unleashed, the questions that have been raised, and the dynamics now in motion have assumed a life independent of the world of politics – even for politicians who claim to make their own reality.
8:56:32 AM 
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