THE SHIELD OF ACHILLES (116 page)

THE GLOBALIZATION OF CULTURE

Progress in international communications that occurred during the Long War—beginning with the radio and culminating in the satellite-borne signals of global television—was decisive for that war. It may be unlikely that forces of the size that invaded Normandy, vastly larger than anything in the past, will ever be marshaled in an amphibious assault in the future, but it is also clear that only modern telecommunications could have made such an enterprise possible. The great naval campaigns of the Pacific were enabled by a communications network of staggering complexity, involving the coordination of distant fleets, air assaults, and landings combining all arms of the American forces. And, too, it is difficult to overestimate the role of Churchill's stirring addresses to the British public or Roosevelt's Fireside Chats in rallying public opinion, which is a crucial element in mobilizing the popular resources of the nation-state necessary to execute strategies of mass warfare and to withstand mass civilian suffering. The most critical role played by these technologies, however, came at the endgame of the Long War. It was the irrefutable comparison between life in the West and in the Soviet bloc, made possible by modern communications, that utterly demoralized the communist leaderships and so alienated their peoples.
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Nor did this communication go in one direction only. Dissident groups in Poland, Czechoslovakia, and elsewhere were able constantly to expose the actions of the police states under which they labored. The Helsinki Accords gave dissidents an international standard of human rights against which to measure the acts of the Soviet bloc; modern communications made it possible to report these evaluations. An equally important line of communication was the limited travel to the West accorded citizens of the Warsaw Pact states. The bloc actually began to hemorrhage with a mass migration of German citizens through Hungary in 1989.

These two phenomena—immigration and human rights—that are connected to innovations in communication also pose two major challenges to the society of market-states. Immigration on a scale never hitherto seen in peacetime bears a relationship to the market-state different from that it bore to the nation-state. The nation-state could effectively seal its borders because it had the duty of protecting the ethnic nation for whose benefit it was constituted.
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The market-state is more ambivalent about such matters because it can so usefully employ the lower-cost labor of new immigrants to increase the productivity of the society. Moreover, in its multicultural form—like the United States—the market-state must deal with new immigrants who can call upon political groups to whom they are ethnically allied, as well as upon an American political consciousness that is wary of policies favoring exclusion.

It is global communication, both logistically and in images, that drives this immigration. As the market-states of the developed world increase their wealth, they become the target of immigration for peoples of the Third World whose demographic dynamics could quickly overwhelm the capacity of any state to assimilate them. Furthermore, the abandonment of the integrative function of the nation-state, which sought to transform immigrants into versions of the pre-existing national group of the country to which they had come, means that large, unassimilated ethnic groups are now without the resources of the State that would enable them to be assimilated. Maximizing the opportunities of its citizens means that the market-state must leave it to those citizens to determine what cultural attachments they wish to form. Even market-states that do not embrace the multicultural variation chosen by the United States may still face the reality of large knots of unassimilated immigrant communities within their midst, and thus face also the choice of according them full democratic privileges—and risking the loss of civil cohesion—or denying them the right of equal democratic status.

Thus again the ironic intertwining of immigration and human rights: the communications media that bring glamorous images of the developed states to those living in wretchedness also bring to those in comfort images of the suffering and cruelty visited on the less fortunate. Perhaps this latter
development is really a benefit: the states of the developed world must welcome the opportunity to deploy their resources in ways that benefit the oppressed and the poor—this, after all, can justify our good fortune. But polities that are emotionally whipsawed by the most affecting shows of suffering are ill-equipped to devise long-term policies to help anyone. One month's poster child gives way to another. The Kurds had languished under oppressive and genocidal rule since the seventh century until CNN
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brought attention to their plight in Iraq, but soon thereafter attention shifted to the suffering of Muslims in Bosnia.

Lacking the political focus that enables sustained attention to a problem, the publics of the developed states must soon grow disillusioned with humanitarian efforts altogether. Sooner or later there will be analysts who will explain that any help will create dependency, that aid, however well intentioned, actually makes things worse, and so on. In a world of suffering, the dimensions of which are necessarily beyond complete cure because they are essentially comparative, fed by international communications that so vividly and increasingly display the contrast between rich and poor, the society of market-states is ill-suited for helping. Each state is, after all, competing for the skills of learned castes who, unlike the individual bearers of capital under the nation-state, can take their knowledge with them (or withhold it). To become either the most welcoming refuge for the poorest or the chief ministering angel to the Third World is to consign one's state to a steadily degenerating competitive position vis-à-vis other market-states. We can expect moves among some members of the society of market-states to require others to take immigrants, provide aid, or change their human rights policies, thus breeding conflicts among states.

To simply ignore suffering and the denial of human rights in other states, however, is also destructive, depriving states of their moral basis. Of course it may be that the citizens of such states will wall themselves off psychologically, in much the way they can wall themselves off architecturally, from the unassimilated poor in their own countries. This renders the market-state an attractive target, however, to civil disorder as well as to international terrorism.

There are many other problems created for the State by the explosion in communications technology: the privacy interests of individuals and the protection of the family from offensive intrusion are examples. Immigration and human rights, however, are different because they do not admit of single-state solutions. Only coordinated action within the society of states can treat these particular problems effectively and with an attention to their interconnection. These problems bring unusual strains to market-states
because they are called upon to devise cooperative solutions even though the salience of the market—which is indifferent to such concerns and hostile to the transaction costs such solutions impose—is especially high within such states.

ECONOMIC DEVELOPMENT AND THE ENVIRONMENT

The introduction of the computer
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and the mathematics on which high-speed computation is based played a decisive role in defeating fascism and communism in the Long War. No history of the Second World War can give anything like an accurate account if it was written before the revelations about Allied code breaking that began to appear in the 1970s. Nor can any political history of the Cold War omit the phenomenal growth of the developed economies, especially Japan and the United States, that occurred as a result of the introduction of microchip technology. Although, as observed above, the percentage of the American workforce devoted to manufacturing has dropped with the precipitousness that earlier occurred with respect to agricultural workers, the percentage of U.S. GDP contributed by manufacturing has not changed in a significant way. The enormous growth in productivity that accounts for this fact can be largely attributed to the products of the computer revolution. It is not that computer operators have replaced clerk-typists, or even that new computer-based products have given a shot of adrenaline to consumer demand comparable to that of the automobile in an earlier period. Rather it is that a new source of wealth has been discovered: the application of vast amounts of information rapidly applied to the tasks of work. Not only did this greatly enrich the United States and Japan, but it created explosive markets for the products of an entirely new list of economic players on the world scene—Korea and Taiwan, among others—as well as enabling the renovation of the Western European infrastructure that had begun the Industrial Age.

The introduction of the computer was a strategic innovation
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that was productively married to the American doctrine of containment. This doctrine proposed that communism would collapse of its own steadily increasing deterioration if it could be prevented from actually seizing other states (by invasion or subversion). This required that the noncommunist states be made strong through increasing prosperity and effective alliances. It proved to be an effective strategy for the noncommunist society
of nation-states, and yet some of the innovations that made it succeed were ultimately destructive of the power of the nation-state itself. But for the development of the computer, George Orwell might well have been right about the power of communications technology to observe and control national populations. Instead, this technology decentralized the power of institutions, including the State, so that the objects of control slipped out of the hands of governments altogether. George Gilder gives this example:

Regulation by law—the characteristic method of the nation-state—is both losing its effectiveness because of this technology and becoming more costly because the technology of computers has conferred greater value on intellectual capital, which flees from regulation wherever possible.

Indeed some of the core concepts that enabled the nation-state to attempt to manipulate its economy through regulation have become vacuous under the pressure of the mobility made possible by computing technology. The notion of the
trade balance
that has long been held to be crucial to the nation-state depends upon our being able to value the goods and services exchanged in international trade and to assign these values to a particular state. Where the most valuable good is information, which is highly mobile and cannot be measured in these terms, however, it is fruitless to measure trade balances precisely because they are limited to the measurable. One example is the printed book: for a publisher in one nation-state, “foreign earnings” from such a book in another state may account for a large share of total revenue, even though no actual books are exported. This is because it is more profitable for the publisher to sell derivative copyright licenses than to ship books abroad. As Peter Drucker points out, “the most profitable computer ‘export sales' may actually show up in trade statistics as an ‘import.’ This is the fee some of the world's leading banks, multinationals and Japanese trading companies get for processing in their home office data arriving electronically from their branches and customers around the world.”
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Moreover, computing technologies have made possible the complex logistics of transnational value-adding production.

In such circumstances, what sense does it really make to consider this an Italian export? We accept, conventionally, that it matters if the company exporting from Milan is U.S.-owned; the company earnings will be repatriated and can be measured. But suppose it simply can't be determined what country's investors own the exporting company, and to what degree the country that finally exports a product to the United States is the source of value? This casts doubt on the very notion that the world can be subdivided into national economies. And if this is so, then monitoring one of the key functions of the nation-state is erased to nothingness.

Walter Wriston asks:

Monetary and fiscal policy are the two great levers available to the State to manage its national economy. By manipulating the value of its currency, a state can raise or lower interest rates, stimulate or suppress growth, increase exports or imports. In a world of floating exchange rates, however, states do not set the value of their currencies with respect to an external standard—such as the gold standard, or a basket of values related to interstate economic comparisons like the European Monetary Standard— but rather are judged by the market as if currency were any other commodity, like soybeans or petroleum.
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In such an environment, the computer has made possible the instantaneous judgment by the market as to the value of any particular currency because it allows hundreds of thousands of investors to voice their demand decisions through computer-assisted transactions
vastly in excess of the demand for money required by purchases of goods and services. As Wriston, the former head of one of the world's largest banks, noted, “[u]nlike all prior arrangements, the new system was not built by politicians, economists, central bankers or finance ministers. No high level international conference produced a master plan. The new system was built by technology.”
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As of this writing, the amount of dollars trading per day exceeds the total GDP of the American economy annually; only a tiny fraction of this is available to central banks trying to manipulate this trading.

Wriston asked, “What becomes of the great mission of modern governments?” The reply must be: the mission changes. The market-state ceases to base its legitimacy on improving the welfare of its people, and begins instead to attempt to enable individuals to maximize the value of their talents by providing them with the most opportunity to do so. “Be everything you can be” replaces “A chicken in every pot.”
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The market-state has shifted its mission to respond to the new circumstances in which the nation-state found itself. Market-states composing a society of such states reflect the consequences of the strategic changes that won the Long War; with respect to rapid computation, two kinds of challenges arising from this history are paramount: (a) the possibility of a trade war among the developed northern-tier states and/or a trade collapse between North and South, and (b) the transnational problems of protecting the environment. Both of these challenges to the society of market-states are attributable to the revolution in information technology—North-South discrepancies in wealth resulting from a dramatic change in the terms of trade have been further accentuated by it—and yet both problems can benefit from this technology.