The United States, China and the Power Shift

Global power shift in digital age

From The Statesman

The recent stock market gyration triggered by the meltdown in Chinese stock market on 27 February showed how little control any one has over global phenomena. Chinese have begun to invest in the stock market with the hope of getting high returns but investing in China is more like gambling without rules. Investors panicked and global markets swayed. Welcome to globalisation. Share the pain.

US oil services giant Halliburton Co. has announced that it is moving its headquarters and chief executive to Dubai, a booming Middle East commercial center that would one day make Hong Kong and Singapore look like backwaters. Tatas and Mittals are expanding globally, hyping national egos without creating jobs at home.

The Untied States, like other countries, which is shaped politically like a pyramid with some power nodes superior to others, is now losing that well-defined shape and control. The present political tension between President Mr George W. Bush and Democratic controlled Congress is in one sense a manifestation of the slow change that has been occurring since the beginning of the digital age, pushing the United States toward more government but less power, regardless of what the conservatives and liberals profess.

The marketplace capitalism wedded to globalisation and fuelled by instant-networked communication makes too much government not only unnecessary but rather a severe handicap. The power shift, with due respect to Alvin Toffler, is inevitable. The traditional hierarchical political structure with well-defined power centers is becoming more or less heterarchical, in the sense that power is becoming increasingly distributed. No single power center seems to be capable of asserting greater authority than the other. Heterarchy, a favourite term of computer scientists, assures an uninterrupted flow of information without going through predetermined nodes.

The emerging shape of the political system has begun to mimic the Internet heterarchy. Life has begun to imitate technology. In the age of networked globalisation, the hierarchical structure, whether it is presidential, parliamentary or corporate, is very inefficient because information, a prerequisite of power, instead of flowing through the best available route must pass through only one critical path. This endangers the flow of information. That’s why the Chinese stock market is so dangerous because it is so opaque. It lacks transparency, which an anathema to the working of the digital age.

The heterarchical structure on the other hand is more robust because power centers are decentralised and can be mirrored and replicated without one being superior to the other. Heterarchy operates on the principle of equifinality, that’s, the same goals can be reached via different routes. It requires creative imagination to apply these constructs to the current global situation.

Why is Texas-based Halliburton moving to Dubai? It is where the oil is. Senator Patrick Leahy called it an insult to the American taxpayers and soldiers. The American people need to understand that political and economic power is being routed through many dispersed nodes. Less government is a distributed government, not a dereliction of power and responsibility but its more efficient exercise through dispersal of power. In a political heterarchy, as the United States is becoming now, there are multiple ways of getting from one node of power to another to get the work done. There is low correlation, for example, between who sits in the White House and the stock market gyrations.

China communist rulers too would soon understand that by becoming part of the world economy, they have lost political control. The digital age is metamorphosing American society into a new political culture in which the leader of the nation need not be a heroic figure or a great intellectual. Mr George W. Bush would do, in spite of his malapropisms and inadequate grasp of the issues.

China is ruled by inarticulate technocrats, albeit in well-cut Western suits.

Power is shifting to the knowledgeable. The Internet was designed as a heterarchical system of networked communication that would be virtually indestructible even if some of the nodes were nuked. Information could get from point A to B in more than one ways through dynamic routing so that no single node becomes indispensable for the entire network. Something like that is happening to the United States political system, though with a caveat that the hierarchical pyramidal structure will never be completely flattened. The world would never be totally flat.

But more importantly, the presidency has been diminished in power by globalisation; consequently further strengthening the emerging heterarchical political structure of dispersed power centers. Congress and other political institutions too are losing their power because the Internet economy finds the political system cumbersome.

The icons of the pyramidal power, the President, Congress and the Judiciary, will still be there, though with reduced powers, not due so much to the fifty-fifty gridlock but because the Feds, the stock market, the global capital flow, shareholders’ power and opinion polls are becoming the new power centers in the evolving heterarchical political structure.

Regardless of terrorism, another aspect of globalisation, these are extraordinary times to witness these awesome changes taking place in the United States and rest of the world.

(N.D. Batra, professor of communications at Norwich University, is the author of Digital Freedom, forthcoming from Rowman & Littlefield)