"Nothing exists except through human consciousness."

Part 2 of All the little piggies went to market

Jun 09, 2023

Image: Shutterstock

Where will it all end? Business’s takeover of Political and Societal roles, that is. Here are some thoughts.

Where are we now?

Outsourcing the manufacturing activities of Western countries did not just have to do with Business. Far from it. It impacted everything, including the shredding of political structures and the evisceration of societies. The deindustrialization took off in the 1980s, and soared after December 2001 when China was admitted into the World Trade Organization.

As an indication of scale, between 1990 and 2018 the amount of the UK economy accounted for by manufacturing fell from 17 percent to 10 percent.1 That is a massive shift, particularly when you consider that significant outsourcing had already occurred in the 1980s, and that it was “the heavier, more energy-intensive industries which declined the most.”2

This momentous change occurred without great fuss. The actions were presented to employees as a fait accompli, and to customers as a smart way to keep product quality up and cost down. The impact on politics and society was not properly discussed in the mainstream news, and there never was any democratic choice.

All of which is odd, isn’t it, when you consider how hard Western countries had worked, throughout the two centuries up until the 1980s, to build their manufacturing capabilities? But, hey ho, in the space of just thirty years, it was all scattered around the globe.

Think back. The expansion of commerce in the second half of the 19^th century had 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”3 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.

Nevertheless, as soon as digital technologies enabled seamless communication on a global scale, the work was shipped out across the world. In the western countries where deindustrialization took place there were promises of more work in services and high-paying knowledge work. But that was of little use to many manual workers. Anyway, when the manufacturing operations went, it led to the immediate demise of whole networks of supporting services.

Now, you may say …
… the change brought the chance of prosperity to places in the world that really did need it,
… and, in due course, new technology was going to make many of the jobs redundant anyway,
… and the change was a fast-track means for western countries to reduce their CO2 outputs to alleviate what we were told was a newly identified existential challenge to the continuance of the human race.

… but whatever the supposed-benefits, it initiated a massive undermining of the culture and the power of the West, and contributed to destabilization right across the world. So, let’s take a brief, closer look at this phenomenon.

Hyper-globalization

We’re talking about globalization or, more specifically, economic globalization, which has been labelled hyper-globalization. In 2011, Harvard economist Dani Rodrik identified it and what he labelled ‘the globalization trilemma’. It considers the interplay of three factors:

Hyper-globalization - that is, economic globalization with a vision of zero transaction costs and tariffs, so that national borders don’t inhibit market exchange.
Democratic policies.
National sovereignty.

Rodrik showed that only two out of these three factors can exist at one and the same time. If democratic policies and national sovereignty are to the fore, hyper-globalization cannot happen. Similarly, if democratic policies and hyper-globalization are favoured, then national sovereignty is ruled out.

So, ultimately, it comes down to a political stand-off: a battle between a globalized world and the set of nation-states. After the horrors of the Second World War the longing for global peace and cohesion was strong. Understandably so. In fairly short order it led to the founding of the U.N. and other transnational organizations focused on various aspects of world peace, health and prosperity.

Alongside all of this, Klaus Schwab, who founded the World Economic Forum (WEF) in 1971, seems to have formulated a dream of hyper-globalization. What if there could be a hyper-efficient global supply chain? Wouldn’t that enable more human potential to be liberated?

Well, maybe, but it would inevitably overturn the extant political system based upon nation-states. Schwab presumably realized this because he seems to have formed the WEF specifically in order to promote the idea of stakeholder capitalism4 (that’s the idea that a company must serve its employees, customers, suppliers and communities, as well as its shareholders), but stakeholder capitalism is surplus to requirement if Business, Politics and Society are actually working in synergy, as was the case under the nation-state political system.

In fact, switching from a nation-state basis to a global basis for operating the economy obviously meant acting against the best interests of many of the employees of the outsourced corporations, together with some of their customers and the local communities within the affected nation-states. Which is why we have subsequently heard so much about the ‘hollowing out’ of North American and European industrial areas:

The flip side of the changing skylines of China and the Middle East was the rising unemployment and the hollowing out of industrial communities in Europe and the US to create crime-ridden, welfare-dependent, post-industrial wastelands.5

The U.S. now lacks the capacity to manufacture many next-generation and emerging technologies. This is to say nothing of the human suffering and sociopolitical upheaval that have resulted from the hollowing out of entire regional economies. Once vibrant communities in the so-called Rust Belt have lost population and income as large factories and their many supporting suppliers have closed.6

A hoped-for benefit was that the countries from which production was outsourced would be centers of excellence for innovation. However, the article just-quoted above goes on to point out …

In terms of long-term competitiveness, the biggest strategic consequence of this profound decline in American manufacturing might be the loss of our ability to innovate—that is, to translate inventions into production. We have lost much of our capacity to physically build what results from our world-leading investments in research and development. A study of 150 production-related hardware startups that emerged from research at MIT found that most of them scaled up production offshore to get access to production capabilities, suppliers and lead customers.7

Why aim for ECONOMIC globalization in the first place?

Pulling the whole world together, so to speak, is not easy. Countries have different histories that have resulted in different political systems and societies. These political and societal currents run deep. Very deep. But, if you are going to try to push the globalist agenda, some folks figured that economic globalization was the way to square (or, at least, start to square) the circle.

Here, the insights of German sociologist Niklas Luhmann (1927-1998) are useful. Luhmann proposed that humans do not communicate. Not directly, that is. Our brains do not directly communicate. It’s our communications that communicate. He used this insight to identify that what therefore are in operation are ‘function systems’.

According to social systems theory, society has evolved to a state in which it consists of a variety of large communication systems that can be identified by the functions they perform.8

The function systems, which are subsystems of society, include politics, law, education, mass media and, yes, economy. Many aspects of human life and behavior vary according to place and history but nearly all societies use money. So, the economy function system was the obvious candidate to initiate globalization.

But, inevitably, this would override another key issue: each nation-state was assumed to represent a particular group of individuals, its populace. In his pamphlet critiquing the French Revolution while it was still in progress, Edmund Burke wrote:

I cannot conceive how any man can have brought himself to that pitch of presumption, to consider his country as nothing but carte blanche, upon which he may scribble whatever he pleases. A man full of warm, speculative benevolence may wish his society otherwise constituted than he finds it; but a good patriot, and a true politician, always considers how he shall make the most of the existing materials of his country.9

This classic conservative stance underpinned the legitimacy of the nation-state. When it comes to Business, it aligns, too, with the assertion of American lawyer and academic, Philip Bobbitt, that “the corporation was a nation-state vehicle to improve the welfare of its citizens.”10 Which raises yet another important issue - citizenship.

Citizens of what?

Nation-states have (or should we now say ‘had’?) citizens. We have the Greeks to thank for sorting that out:

The polis [city-state, community] was grounded in nomos, the rule of law, which meant that no man—no matter who he might be—was master, and all men were subject to the same rules. Any leader who set himself above the law was reckoned to be a tyrannos—a tyrant. It was also grounded in the notion of citizenship—the idea that every man born from the blood of the community has a share in power and responsibility. This notion that ... the proper way for us to live is as citizens in communities under the rule of law ... is an idea originated by the Greeks and bequeathed by them as their greatest contribution to the rest of mankind and history.11

Note, particularly, the point about sharing “power and responsibility”. It’s how and why citizenship confers equality. To underline that point …

Political equality - citizenship - equalizes people who are otherwise unequal in their capacities.12

… not, as we often hear today, the converse. However, by pulling apart Business, Politics and Society via outsourcing and hyper-globalization the citizenship contracts with nation-states have been broken.

So, to what group, if any, are we supposed to belong? We hear about ‘global citizens’ but does that really make sense? Here’s the answer from a Luhmann perspective:

One acts in the global economy by spending money … By buying an American soft drink in a little street parlor, a Chinese peasant becomes, economically, a little ‘global player’ - but not a ‘world citizen’. Those that buy products do not constitute the global economy; it is constituted by the economic communication that occurs.13

The difficulty with all of this is that our perceived realities are built over long periods of time from different start points and through differing experiences. Added to which, Luhmann suggested that, anyway, the function systems that underpin our realities evolve independently of conscious human intervention. It’s automatic. He described it in terms borrowed from biological science as autopoesis. If this is true, the hyper-globalists may be trying to push water uphill. Moeller gives a specific example of the challenge:

According to Luhmann, violent religious fundamentalism, racial extremism, and regional separatism can be interpreted as ‘demonstrations of non-irritability’. These movements display a pose of immunity against the effects of functional globalization. … Rather than identifying themselves as members of democratic parties or with certain roles within the economic system, some Muslims and Serbs choose to identify themselves first of all as Muslims or Serbs - and this is where the tolerance of functional differentiation ends, because these identifications have no place within function systems. Once more - functional globalization allows every Muslim to be a Muslim and every Serb to be a Serb, but only as long as they accept that their religion or ethnicity is ultimately neglected by the function systems.14

So, I ask again, what are we supposed to be citizens of?

Back to Business

Earlier, I mentioned Klaus Schwab and the WEF. Professor Schwab founded the WEF in order to promote stakeholder capitalism15. Laurence (Larry) Fink, Chairman and CEO of BlackRock, the world’s largest investment management firm, is a member of the WEF’s International Business Council and a member of its Board of Trustees.

Mr. Fink writes an annual letter to CEOs. In his 2022 letter he wrote:

Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke.” It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.16

I disagree. In my opinion stakeholder capitalism is very much about politics, and definitely involves social and ideological issues. How could it not? In fact, in an earlier iteration of his letter, Mr. Fink included this:

You have to force changes. It has to be imbued in the culture of a firm. Behaviors across the entire firm in every region have to be similar, and every citizen of the firm has to understand what are acceptable and unacceptable behaviors. [My emphasis.]

Well, that’s unequivocal! Is the ‘citizen of the firm’ now the destination for our citizenship inclinations? I can almost hear 1984’s O’Brien declaiming the above paragraph! It was online for months but does now appear to have been removed. I presume the change was in response to external pressure … which is encouraging. However, it serves to highlight the current state of affairs. In the 21st century Business has taken on powers that until recently were vested in national Political and Societal domains. As a result, the connections between Business, Politics and Society have become, at the very least, unclear and confusing.

Under the nation-state order of things these issues were taken care of by a synergistic harmony of Business, Politics and Society. When digital tech evolved there was a need to think about how to handle the new phenomenon of the genuinely global corporation but was it really necessary or optimal to try to kill off the nation-state?

Whatever the answer to that question, although no-one ever voted for it, in the late-twentieth and early-twenty-first centuries, globalization made massive strides in the West. UNTIL … it hit a wall. Globalization can only function if all major economies participate. If some won’t - as, for example, China, Russia, some Arab states, and more - not only does it weaken the system for the rest, but it raises a red flag for the security of all.

As of 2023, the current situation might be described as half-and-half: half nation-state-based, half globalized-world-based. What are the implications of that? I suggest this is where some research from the marketing/advertising sector can help us. That’s where I’ll go next in Part 3, the conclusion to this series.

In the meantime, two final points:

One: The title of this post, “Nothing exists except through human consciousness”, is from George Orwell’s 1984, from the interrogation of Winston Smith by O’Brien. It just seemed to sum up so much of the nonsense that currently besets us.

Two: There has been too large a gap between my previous post and this one. My apologies. The good news (at least the way I see it!) is that the hiatus has enabled me to better plan future activity.

Aargh! by David Pinder

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