Wednesday, April 20, 2016
Explaining What’s Going On – Politically and Otherwise
It’s the morning after Donald Trump’s and Hillary Clinton’s big New York wins, and people are looking for explanations for what’s going on.
Why are political outsiders like Trump and Sanders dominating the news? Why does Hillary win despite her record negative unfavorability ratings? Why do 80% of the millenials vote for an avowed socialist ? Why does the political establishment seem so weak? What are traditional institutions - Congress, the Presidency, corporate America, Wall Street – held in such low esteem? Why are the elite – liberals, intellectuals, the rich, the successful, even physicians – in trouble?
The answer to all of these questions, according to James Davidson, a venture capitalist, and Lord Reese-Mogg, vice-chairman of the BBC, resides in the rise of the sovereign individual armed with computer and who is part and parcel of the Information revolution.In their 1999 book. The Sovereign Individual: Mastering the Transition to the Information Age, they define such an individual was someone who doesn’t trust the government, who wants more power in the hands of individuals, and who is willing to do things for him/her self.
They explain what is going on as the fallout from the transformation to an Information Society, as differentiated from previous societies – 1. hunter-and-gathering societies, 2. agricultural societies, and industrial societies.
In Information societies, access to information empowers individuals to gain wealth and power at the expense of traditional sources of power – nation state, political parties , and corporations. As a result, the U.S. government is losing influence internationally, the Republican and Democratic parties are in disarray, Wall Street is on everyone’s no-no list, and the income gap between the rich, poor, and middle class expands exponentially.
Social media savvy individuals at their keyboards are scaling the income heights - Bill Gates at Micosoft, Jeff Bezos at Amazon, Mark Zuckerman at Facebook, and assorted CEOs in Silicon Valley. At the same time, governments, labor unions, licensed professionals, and millions of middle class workers without IT skills are losing favor and seeing their incomes collapse.
We are witnessing political devolution, shifts of power and influence , and new market arrangements. Online markets are replacing Main Street markets. Widespread anger stalks the land among those left out. There is suspicion and anger and opposition to globalization, free trade, foreign workers, immigrants, rich people, the political elite. There are complaints about capital flight and disappearing jobs. There are negative reactions among the newly educated young without jobs, the crumbling middle class, especially those with middling skills but without IT know-how. Life has become more complex, more commercial, and more secular, with the decline of religion and the nanny state with demands for lower taxes, fewer regulations, and greater efficiencies. Nations with growing financial obligations have reached the limits of taxation, and individuals are demanding personal efficiencies rather than hassles of bureaucratic obstructionism.
Enter Donald Trump, with his mastery of media access, his tweets, and his exploitation of public anger. Enter Bernie Sanders, with his talk of a political revolution, which is destined to fail because of his faith in big government which is the way out.
Enter the new era of Information. Enter the diminishing returns of power and taxation, with the increased capacity of individuals to assert their will, to protect themselves against predatory taxation, to protest redistribution of wealth, with less centralized social control, less regulation and regimentation, and less ability to fund unfunded social entitlements.
It’s a whole new ballgame, designed for entrepreneurs and innovators, who understand the dynamics of the Information Age and know how to exploit its profound changes.