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The Information Age Revolution is a Bigger Deal than You Thought

The internet is revolutionizing economic production and human relations. I'm not sure that there has ever been one machine that has so clearly revolutionized both of these phenomena simultaneously.

That concurrence of phenomena is revolutionary in extraordinary ways. Information technology is therefore transforming not only how we view work and how we view relationships but also how we view the relationship between the two.

The relationship between work and human relationships is one of the central questions of history. Namely, how is productive activity helped or hindered by the impulse to connect with other human beings?

Information technology is beginning to make us optimistic about the economic potential inherent in cooperative, creative relationship. That optimism is politically profound in that it calls into question the paradigm of human society that focuses on the role of the ruler vis-á-vis the ruled.

It is no coincidence that this reevaluation is happening at a time at which we can finally imagine that it is possible to care for the basic needs of all of humanity. Rather, that fact, the fact of plenty, affords us the comfort and confidence to re-imagine social relationships. At the same time, of course, information technology is partly responsible for the explosion of wealth that makes such a reality imaginable.

This revolution in social relationships has the potential to call forth an age of prosperity and peace that has been beyond our hopes. This is partly because information technology so clearly demands the mindset of cooperative thinking and so clearly highlights the potential inherent in the development of human capital.

Marx postulated that an age of cooperative production would be ushered in by the rise of the proletariat, the working classes. He did not, however, spend a great deal of time outlining the process by which the masses could prepare themselves to lead and organize society. His focus was on cooperation but not on the creative potential that has to be nourished to make cooperation worthwhile and productive. It is no surprise that Russia was never able to organize a society based on worker's empowerment: The workers were not sophisticated enough to run society. Inevitably, elites took over. Such elite control was inevitably, too, subject to corruption.

The rise of the paradigm of cooperative, creative production is at least as important as which class rules society. Information technology has highlighted, even to hardened capitalists and self-promoting entrepreneurs, the importance of developing human capital. This fact should not be dismissed with cynicism. Rather, it points to the forces of this age and should be seized upon accordingly.

Sovereign Wealth Funds

Sovereign Wealth Funds represent an attempt by states to benefit from markets but also have the potential to inject political considerations into macroeconomics. Is this inherently a bad thing? Free trade orthodoxy might say so. But, where is the bright line that distinguishes the familiar economic collective of individuals (i.e. the corporation) from the economic collective we call the state? In other words, will the time come at which free citizens endorse increased activity of such funds in the name of economic well-being? Will future citizens of the world look back and have difficulty understanding the distinction between capitalism and socialism?

What Do Financial Markets Tell Us about Ourselves?

Financial markets are like the mirror of mankind, revealing every hour of every working day the way we value ourselves and the resources of the world around us.

It is not the fault of the mirror if it reflects our blemishes as clearly as our beauty.

(Niall Ferguson, The Ascent of Money)

What do you think the financial crisis is telling us?

Foreign Policy Prediction

Obama's cool veneer on foreign policy issues still hasn't been matched by a convincing agenda: "Be gentler and wiser." does not a strategy make, even when paired with a great deal of detailed knowledge.

I have enough confidence in Obama to believe that he is capable of coming around to a progressive, but realistic strategy. The question is: How much pain will intervene? Furthermore, foreign policy difficulties could be the specter that haunts the Obama administration: It all depends on Obama's learning curve and the pace of world events.

My prediction is that Obama will eventually come around to a global stabilization policy that rests on stronger concerted action between democracies. He could certainly accomplish this, if he wished to, while maintaining the least combative stance possible towards authoritarian regimes.

My instincts tell me that Obama's conciliatory nature, and Democratic biases, will lead him to favor gentle diplomacy with rogue regimes. I suspect that this will bear some fruit but that it will also encourage some destabilization: some nations will be encouraged by Obama's caution. The logic of democratic convergence will eventually make itself clear and Obama will be capable of discerning as much. Will it be too late for him? I hope and suspect not but cannot rule out the possibility.

Community Organizing in Government

Obama's background as a community organizer is showing itself in his governing style. Today, for instance, (1) I received an e-mail from the Obama camp with a video responding to the prolific community discussion on health care found on the change.gov website. The e-mail talked about the importance of transparency and engagement and still refers to Obama, at times, as "Barack." Very heimish (warm, friendly). (2) Additionally, Obama took the opportunity of his meeting today with the National Governor's Association to ask for their feedback about how to spend stimulus money:

The meeting with the governors was "unprecedented," said Gov. Edward Rendell (D) of Pennsylvania, in that it was the first time a transition team for an incoming administration reached out to state governors to ask their help in crafting a national agenda. Forty-three of 50 states are facing serious deficits.

It looks like we have our first "information age" president.

The Nation-State and Global Integration

A few questions about strains on the power and efficacy of the nation-state:

(a) Does the global financial crisis call for international management of, say, currency exchange rates?

(b) Do globalization and the near-global triumph of capitalism undermine the greatest incentive (namely, international competition, respectively, among capitalist powers and between capitalist and non-capitalist powers) for leading capitalists to attend to the well-being of those who are not succeeding?

(c) Do global warming and other environmental strains demand an internationally-coordinated response that cannot entirely be managed by one nation-state?

My answer to all of these questions is 'yes' and points to the growing importance of international cooperation to solve many of our most pressing problems. I am not arguing that states are not strong. Neither am I am arguing necessarily for inter-governmental cooperation to solve these problems (although, such will sometimes be vital). Rather, I am arguing that a global perspective is becoming of greater importance. In due time, I believe that such a perspective will become the dominant paradigm, superseding the nation-state paradigm.

It is no coincidence that this pattern of integration presents itself as we find ourselves in a world in which everyone can be lifted out of poverty and in which universal education can be imagined. These goals can be achieved because (a) the global economy is sufficiently integrated to distribute basic goods, services, and skills to those in need of them, (b) globalization and the near-triumph of capitalism have led to a global economy in which human capital is of ever-greater economic value, and (c) environmental challenges force us to focus on how we can develop wealth without solely relying on materials. The best answers to this question are the development of technology and of human capital.

Emerging Independent Judiciary in Iraq

Briefly:

Here’s a story you don’t see very often. Iraq’s highest court told the Iraqi Parliament last Monday that it had no right to strip one of its members of immunity so he could be prosecuted for an alleged crime: visiting Israel for a seminar on counterterrorism. The Iraqi justices said the Sunni lawmaker, Mithal al-Alusi, had committed no crime and told the Parliament to back off.

Read more.

Impressed by Obama

Obama's strategy thus far, on three major issues, can be characterized as "focus, continue, and engage." The broad outlines are perfectly elegant.

Specifically:

+focus on the economy: little explanation is needed here. Obama has managed to include many major advisors in his administration: Geithner at Treasury, Summers at the National Economic Council, Goolsbee and Volcker on a special recovery taskforce.

+continue with the late second-term Bush approach to foreign policy: The caution here is reassuring to me and seems that it will be generally endured by those further to the left on such issues.

+engage on health care: Obama has chosen to extend internet democracy first to the discussion about health care. This is wise because (a) he can thus engage activists, and perhaps even temper their expectations as they are forced to wrestle with real world issues, even while he postpones immmediate action and (b) he may actually be able to glean a few good ideas as discussants will be able to sift the 'wheat from the chaff' through a participant-run ratings system.

Very impressed.

An Ironic Aspect of the Economic Crisis

One of the perceived causes of the crisis is that Americans do not save enough. Interestingly, many stimulus packages are designed to work only if Americans spend the money that they save.

American Competitiveness

Brooks on Michael Porter, of Harvard Business School, and his suggested response to the economic crisis:

Porter wrote that the U.S. economy has historically benefited from several great assets: an unparalleled environment for entrepreneurialism, a tremendous infrastructure for scientific research, the world’s best universities, a strong commitment to competition and free markets, decentralized regional economies, and efficient capital markets.

But, Porter continued, these advantages are starting to erode. The U.S. has an inadequate rate of reinvestment in science and technology. America’s confidence in free markets is waning. Lack of regulatory oversight has undermined capital markets. Universities have not sufficiently increased graduation rates. American workers do not have a credible safety net. Regulations and litigation have inflated the cost of business. Most important, there is no long-term economic strategy to organize responses to these problems.

Condolences

My condolences to the people of India, a vibrant and justifiably confident democracy. Of course, it is sad again to see fellow Jews targeted in a disconcertingly familiar episode.

Obama and Russia

I agree.

Obama enters office signaling that he will continue the policies of President Bush's late second term in Iraq and Afghanistan, and key architects of those policies, starting with Defense Secretary Robert Gates, will likely keep their jobs. That would leave Russia as the unexpected laboratory for Obama to shape his own foreign policy.

Read more.

GM, New Deal, Etc.

My apologies for my short-term hiatus.

This clip from "This Week with George Stephanpolous" presents interesting discussion about the role of the government vis-a-vis GM and infrastructure projects. The most intriguing idea, though perhaps not presented in the most substantive way possible during this particular interview, is David Brooks discussion of the importance of supporting social networks in the era of an economy dependent on human capital.

A Dollop of Buyer's Remorse

I'm not feeling too happy about Obama's advocacy of a GM bailout, especially since it's one of his first economic moves. I don't like the trends it symbolizes.

From newser.com (which reports on Krauthammer and Brooks):

American prosperity relies on creative destruction—the failure of nonviable companies and their replacement by defter rivals. The government endeavors to protect the worker in periods of transition, writes David Brooks in the New York Times, but not the firms themselves. That’s why the auto-industry bailout is a bad idea: Extending the life of the Big Three means preserving their unworkable business models.

The financial bailout ensured that the system itself continued to function, Brooks writes, but “a federal cash infusion will not infuse wisdom into management” at GM, Chrysler and Ford. Charles Krauthammer, in the Washington Post, agrees, writing that the Detroit bailout underlines philosophical differences between Republicans and Democrats: “In this crisis, we agree to suspend the invisible hand of Adam Smith— but not in order to be crushed by the heavy hand of government.

Provocative, but Worth Considering

Thomas Sowell writes:

Barack Obama has the kind of cocksure confidence that can only be achieved by not achieving anything else.

Anyone who has actually had to take responsibility for consequences by running any kind of enterprise-- whether economic or academic, or even just managing a sports team-- is likely at some point to be chastened by either the setbacks brought on by his own mistakes or by seeing his successes followed by negative consequences that he never anticipated.


The kind of self-righteous self-confidence that has become Obama's trademark is usually found in sophomores in Ivy League colleges-- very bright and articulate students, utterly untempered by experience in real world.

The signs of Barack Obama's self-centered immaturity are painfully obvious, though ignored by true believers who have poured their hopes into him, and by the media who just want the symbolism and the ideology that Obama represents.

The triumphal tour of world capitals and photo-op meetings with world leaders by someone who, after all, was still merely a candidate, is just one sign of this self-centered immaturity.

"This is our time!" he proclaimed. And "I will change the world." But ultimately this election is not about him, but about the fate of this nation, at a time of both domestic and international peril, with a major financial crisis still unresolved and a nuclear Iran looming on the horizon.

For someone who has actually accomplished nothing to blithely talk about taking away what has been earned by those who have accomplished something, and give it to whomever he chooses in the name of "spreading the wealth," is the kind of casual arrogance that has led to many economic catastrophes in many countries.

A Watershed Moment for Gay Marriage?

The Republican mayor of San Diego, a relatively conservative city, breaks down in this poignant video as he endorses the legalization of gay marriage.

The aesthetics are powerful: Mayor Sanders presents as a genuine, straightforward man who has deep love and concern for gay San Diegans. I think that the symbolism of the man, his city, and his party will help to catalyze a significant change in the political context on this issue over the next few years.

If you'd like to support the mayor, for whom this process has been difficult, you can contact him here.

The Media and Obama

Victor Davis Hanson:

Imagine the reaction of the New York Times or the Washington Post had John McCain renounced his promise to participate in public campaign financing, proceeded instead to amass $600 million and outraise the publicly financed Barack Obama four-to-one, and begun airing special 30-minute unanswered infomercials during the last week of the campaign.

I don't agree with all of the points in this article (especially the section about Palin) but do find compelling the sections about the media's treatment of campaign finance and Obama's associations.

Scariest Palin Clip Yet

Palin recently mocked fruit fly research at an autism conference, even though such research has provided indispensable genetic knowledge and insights into autism itself.

Kagan on Europe: A Spicy Interview

Here are excerpts from a spicy interview with Robert Kagan in Der Spiegel. I particularly enjoyed the incisiveness of his critiques of European political blindnesses.

First:

Kagan: Correct. And, in that respect, ever since the surge, the additional troops we sent, there have been great successes…

SPIEGEL: …which are undeniable, though not necessarily sustainable. And this results primarily from the fact that the US government is paying bribes to tens of thousands of Sunni fighters to turn their backs on al-Qaida and no longer attack US troops.

Kagan: The money is really not the main issue. The issue is the entire new US military strategy, which establishes security and dramatically improves the lives of people. The New York Times recently reported that the overwhelming majority of al-Qaida terrorists have abandoned Iraq as a safe haven and that they are joining their fellow insurgents in Afghanistan.

SPIEGEL: The terrorists are undoubtedly concentrated in Afghanistan and in the border region with Pakistan, and some are certainly going to those places from Iraq. But this is not an entirely new development. The war against terrorism should have been waged in Afghanistan rather than Iraq, as Obama has said.

Kagan: You cannot acknowledge our successes in Iraq because Europeans can never admit that Bush is doing something right.

And:

SPIEGEL: An overwhelming majority of Europeans want to see Barack Obama become president…

Kagan: Yes, of the United States, although they would never elect someone like that in their own countries. But I understand the Europeans. I too believe that Obama would be an exciting choice, given America’s history. But also a risky one. He has no foreign policy experience compared with McCain, who has been to Europe dozens of times and is intimately familiar with world problems.