The idea that most captured my thinking while at school was Hegel’s process of History. Think of History as a marketplace of ideas that happens over time. At the highest level there are competing approaches to how society should be structured. The goal of History is to uncover a sustainable form of society that reconciles perfectly with some ideal conception of human freedom. World War II and the Cold War saw Enlightenment-era answers to this challenge vying for resources and adherents in the real world. Western Liberalism happened to win, but since History takes place over such long period that inconsistent approaches eventually fail it’s possible that there are inconsistencies at the heart of the way we live that make it unsustainable in the long term.
While the global battlefield showcased the fight between ideas like Communism, Fascism, and Western Liberalism, other ideas are pit against one another on smaller scales all the time. Take for instance the showdown between alternating current and direct current (AC and DC). Both are ideas about how to transfer electricity. DC ultimately lost because it wouldn’t work on a large scale; it wasn’t viable in the long term. Had Edison’s pro-DC publicity campaign been successful and DC became the dominant electricity model, it’s likely that we would have quickly hit the upper limit of usefulness and been abandoned in favor of AC anyway (or another, better technology).
This happens everywhere: Phrenology lost to Psychology; more trivially the curtsey lost to the handshake. Betamax was superior to VHS but lost the format war of the 70s. Either format would have been beaten handily by DVD but only VHS lived to see its own demise. Inconsistent (or suboptimal) approaches lose out over and over again.
For now Western Liberalism married with Capitalism seems to be the mode of choice for maximizing individual freedom in the broader context of society. This means having a democratic society with—in varying degrees—free markets. This has been supplemented by finance, a global network that connects all countries and peoples of the world and communicates information about supply and demand via indicators (market prices) that drive human behaviors.
The hierarchy of things should be that governments set the rules for economic behavior, and within those confines companies and individuals act in their own self interest. Unfortunately in practice money is seductive and politicians are (often) bribed. Further still, government is inherently local while finance is global. In essence, by its nature finance struggles to be the highest principle at play—the one at the heart society. After all, there’s more money to be made when everything—government included—is subsumed into the profit-seeking construct. This isn’t to say that finance is bad, just single-minded.
The recent financial meltdown seems to hint that Capitalism may have at its core some inconsistencies that undermine its long term viability. These objections aren’t new; take for example shopping at Wal-Mart: short term benefit (in the form of low prices) is contrasted with the long term cost of driving down wages and moving business overseas. Similar arguments can be made socially and environmentally.
In the past few years we have seen the rise of another global network that connects all peoples in all countries and efficiently communicates information about supply and demand: the Internet. While the relationship between finance and technology has usually been mutually beneficial, with the advent of the Internet it seems possible for technology to offer an alternative to finance as the central pillar for global society—one for which finance is a tool rather than a master.
Already large companies are trying to bend the internet into a new corporate-controlled distribution channel for their products and services, but could this go the other way? Could the internet replace finance as the central pillar that networks the world together? Are the two necessarily in competition? What would the world look like if this shift ever took place? Do we want it to?
I’m curious to know.