Good intentions. Opportunism. Wishful thinking.

This first appeared a year ago. Does it still make sense?

Jan 22, 2024

This piece first appeared a year ago. I’m reposting it particularly for more recent subscribers - in case you haven’t yet had the chance to look through everything. With the Davos meeting of the World Economic Forum again making headlines, it might be of interest.

The above image is from Shutterstock.

Well, the world’s private jets converged on Davos to deliver the gilded elite to the World Economic Forum’s 2023 annual meeting. What were the aims this time? In the run-up to the event, the WEF website gave prominence to an article titled Time to stem the tide of fragmentation. This explained that a worrying trend of division is causing fragmentation - Gosh, that’s new, is it? - and declares that, to tackle it, “We must get to work - now.”

Pondering this, I started mentally tracing the trajectory that has led us to where we now are and concluded that we are experiencing the consequences of good intentions augmented with helpings of opportunism and wishful thinking.

Good intentions

War, an ever-present feature of human history, has always welcomed new tech because of the greater destructive efficiency it enables. But in the 20th century, a red line was crossed. World War One had proved that armed conflict could be industrialized, and World War Two led to the creation and deployment of technology that might actually wipe us all out. No surprise then that, even as World War Two was still raging, many people were anxious to plan for a less violent future. Which is why, in June 1941, signatories from 14 countries agreed to the Declaration of St. James Palace which stated, in part:

“That the only true basis of enduring peace is the willing co-operation of free peoples in a world in which, relieved of the menace of aggression, all may enjoy economic and social security; and that it is their intention to work together, and with other free peoples, both in war and peace to this end.1

Enduring peace. Free peoples. Relief from the menace of aggression. Economic and social security. What’s not to like? This longed-for set of conditions led, just a couple of months after the end of World War Two, to the creation of the United Nations.

Thus was the shift to global-thinking initiated: if armed conflict can destroy all of us, we’d better focus on our common humanity. That led, on 10th December 1948, to a UN General Assembly in Paris at which the Universal Declaration of Human Rights was adopted. But here’s the rub, all of this created a tension with the prevailing nation-state basis of organizing things:

[H]uman rights, as the name suggests, is a transnational ideology that asserts that people have rights as a result of their humanity and not, as is usually the case, as a result of their membership of a national community.2

To complicate matters further, the foundational idea that all humans are created equal may sound good but isn’t as straightforward as it sounds because none of us lives in isolation. Rather, we are members of societies, a point recently expressed by historian David Starkey:

Society is not a contract of fragmented individuals. Society is a contract that goes across generations. It is a contract of past, present and future – of the dead, the living and those yet to be born. And it is culturally specifically rooted. Therefore, an attempt to arrive at a single version of international law is an absurdity.3

But a contrary view gained traction in recent years. Former European Commission President Jean-Claude Juncker put it like this:

These populists, nationalists – stupid nationalists – they are in love with their own country.4

So there we have it: a sharply delineated split between globalists and nationalists, between David Goodhart’s Anywheres and Somewheres, between an elite and ‘the rest’. But where does Technology and Business position itself in all of this?

Opportunism

The terrifying destructive potential of the atomic bomb prompted us to think differently and holistically about our relationships with other people, other species and the planet. It seems appropriate therefore to reference a quote from ‘the father of the atomic bomb’ - J. Robert Oppenheimer:

“When you see something that is technically sweet, you go ahead and do it and you argue about what to do about it only after you have had your technical success.”5

Well, here’s the thing, that’s a universal truth. We cannot know, at the outset, all of the uses to which a new technology may be put and any unintended consequences that might occur. It is all literally unknowable. And, I argue, this blind impulse is what led, in the 1980s, 1990s and 2000s, to the biggest change ever in business practice.

It all happened because, post-WW2, digital technology progressed rapidly and started to change things. For example, the transistor (1948) was an instant success as a miniature, more stable alternative to the vacuum tube/valve, and the word processor almost overnight rendered the typewriter obsolete.

1971 is a particularly significant year in all of this, marking a transition from digital infancy to an independently developing digital world. In November 1971 there was the launch of a ‘micro-programmable computer on a chip’, Intel’s 4-bit 0.1MHz 4004 microprocessor, the enabler of microcomputers. At the time, the vast majority of people were unaware of its existence, let alone its importance.

And, oh yes, in 1971, Klaus Schwab published Modern Enterprise Management in Mechanical Engineering and founded the World Economic Forum (WEF). In the book, he argued that, in alignment with the political goals of globalization, and in order to achieve long-term growth and prosperity, businesses must serve not only their shareholders but all of their stakeholders. So the WEF was founded in order to promote stakeholder capitalism. (As sketched four paragraphs on, I submit that stakeholder capitalism was already in place by virtue of the synergy between businesses, polity and society. Globalization ripped them apart.)

There was a great deal of other activity, of course. A couple of years earlier, in October 1969, Arpanet successfully made a telephone line connection between a computer at UCLA and one at Stanford Research Institute. Things advanced rapidly and in 1989 the World Wide Web was born, parented at CERN by physicist Tim Berners-Lee. So, in the last quarter of the 20th century, some forward thinkers could not only glimpse remarkable futures, but also initiate them. Some, like the founders of Microsoft (founded 1975) and Apple (1976) got in early with a direct focus on the new desktop-computer space. Other visionaries, like the founders of Amazon (1994), Google (1996) and, later, Facebook (2004), grasped some of the new commercial opportunities created by the network explosion.

But another key influential group tends to get glossed over - global business consultancies working in alliance with the new software creators. McKinsey, Accenture (formerly Andersen Consulting) and others piled in, particularly in the 1990s and 2000s, to drive a reformulation of the entire structure of business (from vertical hierarchical to horizontal, geographically dispersed) through global outsourcing, including some sophisticated new variants like Business Process Outsourcing (BPO).

Now, here's why I think this activity wrenched apart an existing synergistic set of elements and constituted an opportunistic gold-rush that ignored the fact that the business corporation was a creation of the nation-state. For over two centuries the nation-state and the business corporation had operated in synergy. The expansion of commerce in the second half of the 19th century coincided with the rise of the nation-state as the dominant constitutional order across the western world. At that time, the United States of America, Germany, Italy and more joined the list of nation-states and found, in the business corporation, the perfect partner for success. The legitimizing basis of the nation-state was “The State will better the welfare of the nation”6 and the business corporation was its indispensable ally:

Its indispensable ally for tax revenues on business profits.
Its indispensable ally for the provision of jobs to bring prosperity to citizens.
Its indispensable ally to produce tax revenues from those employed, directly and via sales taxes.
Its indispensable ally to produce tax revenues to finance welfare payments and retirement benefits.

For a long time, this modus operandi was a rip-roaring, money-generating, society-enhancing success; a model that enabled a free market where the risks of product development were borne by entrepreneurs.

However, none of these advantages could withstand the gold-rush pressure to outsource and offshore activities. In large part, globalization was on the march because the opportunities it created for some to get exceedingly rich were irresistible.

Refer a friend

Wishful thinking

By the millennium, many companies had offshored at least some of their manufacturing but when, in December 2001, China joined the World Trade Organization (WTO), the floodgates opened. China’s admission to the WTO was a political gamble. In March 2000, former U.S. President Bill Clinton had declared:

By joining the WTO, China is not simply agreeing to import more of our products; it is agreeing to import one of democracy’s most cherished values: economic freedom.7

Two decades on we know that, rather than ingesting democracy with their KFC buckets, the Chinese seem to be as much in thrall to the Communist Party of China (CPC) as they ever were. We know, too, that some members of the global community have not bought in to the global dream at all: Russia, Iran, some Middle Eastern states, perhaps Turkey, and more besides.

For the foreseeable future it looks as though we need to keep at least some elements of nationalism and plan at least some activities on a national basis - particularly security and energy requirements.

But we need also to maintain a global umbrella to keep watch on supranational challenges such as pandemics, climate issues and so on. How might that be done? Well, perhaps we might re-think and reinvigorate the United Nations?

Aargh! by David Pinder

Discussion about this post