Monday, April 15, 2013

The End of Power

The End of Power:
Power is shifting—from large, stable armies to loose bands of
insurgents, from corporate leviathans to nimble start-ups, from
presidential palaces to public squares. It has become harder to
wield power and easier to lose it, and the world is becoming less
predictable as a result. As people become more prosperous and
mobile, they are harder to control and more apt to question
authority.
Insurgents, fringe political parties, innovative start-ups,
hackers, loosely organized activists, upstart citizen media
outlets, leaderless young people in city squares, and charismatic
individuals who seem to have “come from nowhere” are shaking up the
old order. These are the micropowers: small, unknown, or
once-negligible actors who have found ways to undermine, fence in,
or thwart the megaplayers. Navies and police forces, television
networks, traditional political parties, large banks—the large
bureaucratic organizations that previously controlled their
fields—are seeing their authority undermined.
Micropowers should be aberrations. Because they lack scale,
coordination, resources, and a pre-existing reputation, they should
not even make it into the game, or at least they should be quickly
squashed or absorbed by a dominant rival. But the reverse is
increasingly true: The micropowers are beating the
megaplayers.
Javier Solana, the former Spanish foreign minister, secretary
general of the North Atlantic Treaty Organization, and European
Union foreign policy chief, once told me: “Over the last
quarter-century—a period that included the Balkans and Iraq and
negotiations with Iran, the Israeli-Palestinian issues and numerous
other crises—I saw how multiple new forces and factors constrained
even the richest and most technologically advanced powers. They—and
by that I mean we—could rarely do any longer what we wanted.”
The end of the Cold War and the birth of the Internet helped
enable the rise of today’s micropowers, but they were by no means
the only important factors. We need to look at deeper
transformations in how, where, how long, and how well we live.
These changes can be usefully imagined in three categories: the
More Revolution, the Mobility Revolution, and the Mentality
Revolution. The first is swamping the barriers to power, the second
is circumventing them, and the third is undercutting
them.
The More Revolution
Ours is an age of profusion. There are more people, countries,
cities, political parties, and armies. More goods and services, and
more companies selling them; more weapons and more medicines; more
students and more computers; more preachers and more criminals. The
world’s economic output has increased fivefold since 1950. Income
per capita is three and a half times greater than it was then. Most
important, there are more people—2 billion more than there were
just two decades ago. By 2050 the world’s population will be four
times larger than it was a century before.
The More Revolution has progressed in the face of economic
recession, terrorism, earthquakes, repression, civil wars, natural
disasters, and environmental threats. Without diminishing the
urgency or the human and planetary toll of these crises, we can
assert that the first decade of the 21st century was arguably
humanity’s most successful: As the Center for Global Development
scholar Charles Kenny put it, “Best. Decade. Ever.”
According to the World Bank, between 2005 and 2008, from
sub-Saharan Africa to Latin America and from Asia to Eastern
Europe, the proportion of people living in extreme poverty (those
with incomes under $1.25 a day) plunged. Given that the decade was
marked by the onset of the deepest economic crisis since the Great
Depression of 1929, this progress is even more surprising. The
world is expected to reach the Millennium Development Goals on
poverty set in 2000 by the United Nations much earlier than
originally anticipated. One of the most audacious goals back then
was to cut the world’s extreme poverty in half by 2015; that
impressive feat was achieved five years early, in 2010.
Despite the global financial crisis, the economies of poorer
countries continued to expand and create jobs. That trend began
three decades ago; 660 million Chinese have escaped poverty since
1981, for example. The share of Asians living in extreme poverty
dropped from 77 percent in the 1980s to 14 percent in 1998. This
sort of progress is happening not only in China, India, Brazil, and
other successful emerging markets but also in the poorest countries
of Africa.
The economists Maxim Pinkovskiy of MIT and Xavier Sala-i-Martin
of Columbia University have shown that between 1970 and 2006
poverty in Africa declined much faster than generally recognized.
“All classes of countries, including those with disadvantageous
geography and history, experienced reductions in poverty,” they
write in a 2010 paper for the National Bureau of Economic Research.
“In particular, poverty fell for both landlocked as well as coastal
countries; for mineral-rich as well as mineral-poor countries; for
countries with favorable or with unfavorable agriculture; for
countries regardless of colonial origin; and for countries with
below- or above-median slave exports per capita during the African
slave trade.”
Since 2000 child mortality has decreased by more than 17 percent
worldwide, and child deaths from measles dropped by 60 percent
between 1999 and 2005. In developing countries, the number of
people in the “undernourished” category decreased from 34 percent
in 1970 to 17 percent in 2008. The World Bank reckons that since
2006, 28 formerly “low-income countries” have joined the ranks of
“middle-income” ones. These new middle classes may not be as
prosperous as their counterparts in developed countries, but their
members now enjoy an unprecedented standard of living. The
Brookings Institution’s Homi Kharas, one of the most respected
researchers on the subject, told me: “The size of the global middle
class has doubled from about 1 billion in 1980 to 2 billion in
2012. This segment of society is still growing very fast and could
reach 3 billion by 2020.”
The world’s socioeconomic landscape has changed drastically
during recent decades: 84 percent of the world’s population is now
literate, compared to 75 percent in 1990. Average scores on
intelligence tests all over the world are now higher. Meanwhile,
combat deaths are down by more than 40 percent since 2000. Life
expectancy in countries hardest hit by the HIV/AIDS pandemic is
starting to rise again. And we are providing for our agricultural
needs better than ever: Since 2000 cereal production in the
developing world has increased twice as fast as population. Even
“rare earths”—the 17 scarce elements used in the manufacture of
cellphones and in fuel refining—are not so rare anymore, as new
sources and producers enter the market.
According to the United Nations Human Development Index, which
combines health, education, and income indicators to give a global
measure of well-being, standards of living have risen everywhere in
the world since 1970. Simply put, billions of people who until
recently lived with almost nothing now have more food, more
opportunities, and longer lives than ever before.
The overall picture of humanity living longer and healthier
lives, with basic needs far better addressed than ever, is crucial
to understanding today’s shifts and redistributions of power, and
to putting into perspective more fashionable explanations of
current events. Yes, the Arab Spring and other recent social
movements have made spectacular use of modern technologies. But
they owe even more to the rapid rise in life expectancy in the
Middle East and North Africa since 1980; to the “youth bulge” made
up of millions of people under 30 who are educated and healthy,
with a long life span ahead of them, yet have no jobs or good
prospects; and, of course, to the rise of a politically active
middle class. It’s no coincidence that the Arab Spring started in
Tunisia, the North African country with the best economic
performance and the most success in lifting its poor into the
middle class.
When people are more numerous and living fuller lives, they
become more difficult to regiment and control. The exercise of
power in any realm involves, fundamentally, the ability to impose
and retain control over a country, a marketplace, a constituency, a
population of adherents, a network of trade routes, and so on. When
the people in that territory—whether potential soldiers, voters,
customers, workers, competitors, or believers—are more numerous, in
fuller possession of their means, and functioning at ever-greater
levels of ability, they become more difficult to coordinate and
control, let alone dominate.
The Mobility Revolution
Not only are there more people today, living fuller and
healthier lives; they also move around a lot more, making them
harder to manage. This trend changes the distribution of power
within and among populations, whether through the rise of ethnic,
religious, and professional diasporas or through individual vectors
of ideas, capital, and faiths that can be either destabilizing or
empowering. The United Nations estimates that there are 214 million
migrants across the globe, an increase of 37 percent during the
last two decades. The number of migrants during that period grew by
41 percent in Europe and 80 percent in North America.
Immigrants are changing the businesses, religions, and cultures
of the countries in which they settle. In the United States, the
Hispanic population grew from 22 million in 1990 to 51 million in
2011; one of every six Americans is now Hispanic. In Dearborn,
Michigan, the world headquarters for the Ford Motor Company, 40
percent of the population is Arab-American. Such enclaves are bound
to transform coalitions and voting patterns as well as business
strategies and even religious competition. Political parties,
politicians, businesses, and other institutions increasingly face
competitors that have deeper roots and a better understanding of
this new population. The same thing is happening in Europe, as
governments have proven unable to stem the tide of immigrants from
Africa, Asia, or other, less wealthy, European countries. An
interesting case in point: In 2007 a Nigerian-born man was elected
in Portlaoise, Ireland, a commuter town west of Dublin, as that
country’s first black mayor.
Immigrants send billions of dollars in remittances to their home
countries every year, promoting economic growth and development.
Worldwide, they wired, mailed, or carried home $449 billion in
2010. (In 1980 remittances totaled less than one-fourth of that in
inflation-adjusted dollars.) Nowadays, remittances are more than
five times larger than the world’s total foreign aid and larger
than the annual total flow of foreign investment to poor countries.
In short, workers who live outside their home country, who are
often very poor themselves, send more money to their country than
foreign investors and more than rich countries send as financial
aid. For many countries, remittances have become the biggest source
of hard currency and, in effect, the largest sector of the
economy.
Perhaps the most aggressively power-transforming aspect of the
Mobility Revolution is urbanization. More people have moved, and
continue to move, from farms to cities than ever before,
particularly in Asia. In 2007, for the first time in history, more
people lived in cities than in rural areas. The U.S. National
Intelligence Council reckons that “every year 65 million people are
added to the world’s urban population, equivalent to adding seven
cities the size of Chicago or five the size of London annually.”
Internal migration—especially population shifts from farms to
cities—can be as disruptive to power as international
migration.
A newer form of mobility is also reshaping the landscape of
power: brain circulation. Poor nations tend to lose many of their
skilled and better-educated citizens to richer countries, which
attract them with visions of a better life. This well-known “brain
drain” deprives nations of nurses, engineers, scientists,
entrepreneurs, and other professionals who are expensive to train.
In recent years, however, increasing numbers of these professionals
have been returning to their countries of origin and upending
business as usual in industries, universities, the media, and
politics.
AnnaLee Saxenian, dean of the School of Information at the
University of California, Berkeley, has found that Taiwanese,
Indian, Israeli, and Chinese immigrants who worked in California’s
Silicon Valley often became “angel investors” and “venture
capitalists” in their old countries, starting up companies and
eventually either moving back or traveling frequently between their
old and new countries. In so doing, they transfer the culture,
approaches, and techniques they learned in the United States.
Inevitably, the dynamic, competitive, and disruptive business
culture common in entrepreneurial hubs clashes with the
monopolistic and traditional ways of doing business often found in
developing countries.
These migrations are occurring in the context of a vast increase
in the movement of goods, services, money, information, and ideas.
The trade in goods was barely slowed by the recession that started
in 2008. In 1990 the world’s total exports and imports amounted to
39 percent of the global economy; by 2010 they had risen to 56
percent. And between 2000 and 2009, the total value of merchandise
traded across borders nearly doubled, from $6.5 trillion to $12.5
trillion (in current dollars), according to the United Nations.
Total exports of goods and services in that period jumped from $7.9
trillion to $18.7 trillion, according to the International Monetary
Fund.
Money also has become more mobile. The stock of foreign direct
investment measured as a percentage of the world’s economy jumped
from 6.5 percent in 1980 to a whopping 30 percent in 2010, while
the volume of currency that moved internationally every day grew
sevenfold between 1995 and 2010. In the latter year, more than $4
trillion changed hands across international borders each day.
The ability to move information around has expanded even faster.
Somalia epitomizes the concept of “failed states,” societies in
which citizens lack access to basic services that most of us take
for granted. Yet even there, 21st-century mobile telephony is
widely available. In 1990 across the globe, the number of mobile
cellular subscriptions per 100 people was 0.2. By 2010 it had
exploded to more than 78. The International Telecommunications
Union reports that in 2012 subscriptions to mobile telephony
exceeded 6 billion—equivalent to an astonishing 87 percent of the
world’s population.
In 1990 the number of Internet users was insignificant—a mere
0.1 percent of the world’s population. That number rose to 30
percent by 2010 (and to more than 73 percent in developed
countries). By 2013 nine-year-old Facebook had nearly 1 billion
users, more than half of whom access the social network via mobile
phones and tablets.
We should consider the impact of another tool that does not get
the credit it deserves for changing the world: the prepaid phone
card. The growth of calling-card usage leaves the Internet’s growth
in the dust. Now prepaid calling cards are giving way to prepaid
mobile phones. Prepaid cellphones have displaced those that require
a long-term subscription and bind the user to a service provider
through an elaborate contract. The less-well-off who choose to
leave home for opportunities further afield no longer face as stark
a choice between staying close to their families and improving
their fortunes.
The two characteristics shared by all of these
mobility-enhancing technologies are the speed and extent of the
drop in costs of moving goods, money, people, and information.
Airline tickets that used to cost thousands of dollars 20 or 30
years ago can now be had at a fraction of the cost. Transporting a
ton of cargo today costs one-tenth what it did in the 1950s. Wiring
money from California to Mexico in the late 1990s cost about 15
percent of the transferred sum; today the charge is less than 6
percent. Mobile phone platforms through which money can be
transferred from one cellphone to another will soon make
remittances almost cost-free.
The Mobility Revolution has had a profound effect. Power needs a
captive audience. In situations where citizens, voters, investors,
workers, parishioners, or customers have few or no alternatives,
they have little choice but to consent to the terms of the
institutions they face. But when borders become porous, and the
governed—or controlled—population becomes more mobile, entrenched
organizations have a harder time retaining their
dominance.
The Mentality Revolution
The More and Mobility Revolutions have created a new, vast, and
fast-growing middle class whose members are well aware that others
have even more prosperity, freedom, and personal fulfillment than
they do. These new members of the global middle class hope and
expect to catch up. These expectations, and the discontent they
breed among those left behind, are now global. They affect rich and
poor countries alike; indeed, the overwhelming majority of the
world’s population lives in what could now be called rapidly
changing societies. The embattled middle classes take to the
streets and fight to protect their living standards while the
expanding middle classes protest to get more and better goods and
services. This is a new mind-set—a change in mentality—that has
profound consequences for power.
The Muslim world is a rich source of examples of how the
Mentality Revolution is transforming long-held traditions, from the
rise of a fashion industry aimed at hijabi (veiled or
covered) women to the spread of no-interest banking in Western
countries that have large Muslim immigrant communities. In India,
the transformation in attitudes is spreading back from the young
generation to their elders. A country where divorce was once
considered shameful—and women, in particular, were discouraged from
remarrying—now has an increasingly robust matrimonial advertising
industry devoted to listings by divorced senior citizens, some in
their 80s or even 90s, seeking love late in life and without
embarrassment. Mature adults are leaving the arranged marriages
into which they were inducted when they were teens or young
adults.
Global public opinion surveys provide a clearer picture of the
extent and velocity of these attitudinal changes. Since 1990 the
World Values Survey (WVS) has been tracking changes in people’s
attitudes in more than 80 countries, containing 85 percent of the
world’s population. WVS Director Ronald Inglehart and several of
his co-authors have documented profound changes in attitudes
concerning gender differences, religion, government, and
globalization. One of their key findings is a growing global
consensus regarding the importance of individual autonomy and
gender equality, along with a corresponding popular intolerance for
authoritarianism.
Globalization, urbanization, changes in family structure, the
rise of new industries and opportunities, the spread of English as
a global lingua franca—these have had consequences in every sphere
of modern life, but their effect has been most important at the
level of attitudes. The more contact we have with one another, the
greater our aspirations.
One of the best examples of all three revolutions working
simultaneously is the Indian outsourcing industry. Young, educated
Indians who belong to the country’s burgeoning middle class have
flocked to work at urban call centers and other business-process
outsourcing companies, which in 2011 generated $59 billion in
revenue and directly and indirectly employed almost 10 million
Indians. Although the jobs pay relatively well, they plunge young
Indians into a welter of contradictions and competing
aspirations—that is, aspirations to succeed in an Indian social and
economic context while sublimating their cultural identities with
fake accents and names, and dealing with abuse and exploitation at
the hands of affluent customers a continent away.
For young urban Indian women in particular, the jobs have
provided opportunities and economic benefits they might not
otherwise have had, leading to lasting behavioral changes that are
upending cultural norms. Never mind the lurid newspaper articles
about call centers as “a part of India where freedom knows no
bounds, love is a favourite pastime, and sex is recreation,” as an
article in the India Times put it in 2004. Closer to the
mark is a recent survey by India’s Associated Chambers of Commerce
finding that young working married women in Indian cities are
increasingly choosing to put off having children in favor of
developing their careers.
Revolutionary Consequences
The More, Mobility, and Mentality Revolutions challenge the
traditional model of power. In that model, large, centralized,
coordinated organizations deploy overwhelming resources and
crushing force to obtain and retain power. As the three revolutions
continue to progress, organizations that rely on coercion face
ever-increasing costs simply to maintain market share and patrol
their boundaries.
The inability of the United States or the European Union to curb
illegal immigration or illicit trade is a good example. Walls,
fences, border controls, biometric identification documents,
detention centers, police raids, asylum hearings,
deportations—these are just part of an apparatus of prevention and
repression that has thus far proven to be extremely expensive and
largely futile. The United States has failed utterly to curb the
inflow of drugs from Latin America despite a longstanding and
enormously expensive interdiction effort.
Power exercised through code or moral obligation also faces
challenges as the three revolutions advance. Traditions embedded in
family or tightly knit communities help people who live short lives
marked by disease and poverty to cope, share support, and accept
harsh realities. But as their material comforts increase and they
gain access to more alternatives, the world’s lower classes become
less dependent on their inherited belief systems and more open to
experimentation. Consider the crisis of the Catholic Church, which
is having more and more difficulty recruiting priests who accept
the vow of celibacy and competing with small evangelical churches
that can tailor their messages to the culture and concrete needs of
specific communities.
Power that operates through persuasion, such as advertising
campaigns or political patronage, is also challenged by the three
revolutions. Imagine a political candidate or party trying to drum
up votes through a combination of messages, advertising, and
promises of rewards in the form of constituent services and jobs.
The More Revolution is creating better-educated and better-informed
pools of constituents who are less likely to passively accept
government decisions, more prone to scrutinize authorities’
behavior, and more active in seeking change and asserting their
rights. The Mobility Revolution is making the demographics of the
constituency more diverse, fragmented, and volatile. The Mentality
Revolution breeds increasing skepticism of the political system in
general.
By no means is big power dead. The big, established players are
fighting back, and in many cases are still prevailing. Dictators,
plutocrats, corporate behemoths, and the leaders of the great
religions will continue to be the defining factors in the lives of
billions of people, even as they slowly lose market share. But
these megaplayers are more constrained in what they can do than
they used to be, and their hold on power is less secure.
The More, Mobility, and Mentality Revolutions are attacking the
model of organization so persuasively advocated by Max Weber and
his followers in sociology, economics, and other fields, and they
are attacking it precisely at the points where it once drew
strength. Large organizations were more efficient because they
operated with lower costs, thanks to economies of scale. Today,
however, the costs of maintaining order and control are going
up.
The profound changes in the way power is gained, used, and lost
drive many of the trends that are changing the world. Some of these
trends are welcome and worthy of celebration: more competition in
business, politics, or the sciences, tyrants and tycoons who are
now less secure in their dominant position, more meritocracy and
opportunity for those with talent, grit, and ambition. But the
decay of power drives unwelcome trends as well: the inability to
contain carbon emissions, reach a reasonable political deal about
the budgetary choices of the American government, the failure to
stop the carnage in Syria, and Europe’s economic catastrophe. We
have entered an era where many players have just enough power to
veto, undermine, or dilute the initiatives of others but no single
player has enough unconstrained power to push through an agenda.
Many democratic countries are overdosing on checks and balances and
the resulting gridlock, dilution, and delays in governmental
decision-making have become dangerously common. This can and will
change. In the next decade or so, the wave of innovation that has
revolutionized communications, medicine, and physics will
inevitably drastically transform the way we govern ourselves.

Reprinted from The End of Power: From Boardrooms to
Battlefields and Churches to States, Why Being in Charge Isn't What
It Used to Be by Moisés Naím. Available from Basic Books, an
imprint of the Perseus Book Group. Copyright ©2012.