The Washington Post published this last Sunday one of the more interesting pieces on current politics I've seen in quite awhile. In an article awkwardly entitled "Q: What will happen when a national political machine can fit on a laptop? A: See below," Everett Ehrlich argues that the rise of political parties was due in part to the need to have a massive organizational structure to handle the various manifestations of information required to push candidates. With the spread of the Internet, which drives the cost of information towards zero, such massive bureaucracies are no longer the most efficient way of accessing, distributing, or manipulating information. A small, heavily-networked team can be far more effective, politically.
He cites the Howard Dean operation as the key example of this:
For all Dean's talk about wanting to represent the truly "Democratic wing of the Democratic Party," the paradox is that he is essentially a third-party candidate using modern technology to achieve a takeover of the Democratic Party. Other candidates -- John Kerry, John Edwards, Wesley Clark -- are competing to take control of the party's fundraising, organizational and media operations. But Dean is not interested in taking control of those depreciating assets. He is creating his own party, his own lists, his own money, his own organization. What he wants are the Democratic brand name and legacy, the party's last remaining assets of value, as part of his marketing strategy.
It's an interesting argument, one which I've heard in various forms numerous times over the last decade. When I worked as a consultant in the mid-1990s, the assertion that small, nimble, 'mammal' companies were going to eat the collective lunches of big, lumbering, business dinosaurs was so common as to be a cliché. While that certainly stroked the egos of managers of small companies and scared managers of large corporations into looking at that Internet thingie, it wasn't too accurate a prediction. Most big companies seemed to spend the last decade getting even bigger, devouring the nimble mammals and slower-moving dinosaurs alike.
The notion that small & networked can be at least as effective as big & mighty becomes less amusing when we look at the arena of modern global politics. Warnings about distributed, networked attacks didn't just happen around 9/11; thoughtful strategists were sounding off about the possibility back in the mid-1990s. John Arquilla and David Ronfeldt's 1996 book, The Advent of Netwar (available as PDFs for each chapter), remains one of the best introductions to the topic.
Ehrlich paints a fascinating picture of how the use of the web can and will shape electoral politics. I think that many of his observations about how Dean's campaign functions are on-target. His scenarios of how the big parties will respond to web-enable insurgencies are less convincing, however. Big corporations didn't hold firm against the rise of smaller companies by simply battening down, twisting rules to make life hard for the non-dominant firms; they also lifted good ideas wholesale from the up-and-comers (sometimes by buying them, sometimes not), took advantage of their comparative strengths (in money, in global access, in ability to absorb losses), and figured out how to play the game like small companies without having to divest themselves of their size and power.
It remains to be seen whether modern political parties will prove to be too sclerotic and hidebound to learn from networked insurgent movements. They may simply be so big and entrenched that they are able to withstand passing trends in Internet politics. If Ehrlich is right, though, and campaigns like Dean's represent a fundamental shift in American politics, the choices for traditional parties are few: either ignore the new forces and wither or embrace them and be transformed.
But is defining technology based on the present electoral system as good as defining a better electoral system based on new technology?
Probably not, but it is much more feasible.
"How has the Internet affected Coase's Law? Strictly speaking, the law remains as valid as ever: A firm should still expand until the cost of performing a transaction internally exceeds the cost of performing it externally. But the Internet has caused transaction costs to plunge so steeply that it has become much more useful to read Coase's Law, in effect, backwards: Nowadays firms should shrink until the cost of performing a transaction internally no longer exceeds the cost of performing it externally. Transaction costs still exist, but now they're often more onerous in corporations than in the marketplace."
"By beefing up its technology and distributing it more freely, Amazon could bust out of the conceptual prison of stores and the virtual confines of a single Web site. Says e-commerce consultant and author John Hagel III: "It's really breaking apart the whole store metaphor." Into what? Already, Amazon has applied its own technology to forge an identity as an online mall -- a piece of business that generates gross margins about double its 25% retail margins. Plugging into its massive e-commerce system, thousands of retailers from mom-and-pop shops to Lands' End Inc. (S ) and Circuit City Stores Inc. (CC ) sell through its site. Amazon even runs the Web sites and distribution for the likes of Target Corp. (TGT ) and Toys 'R' Us Inc. (TOY ), which are featured on Amazon.com."
"There are four business models out there today. The first is the vertical model exemplified in the 1980s by the IBM monopoly. The second, which dominates today, is the horizontal model dominated by AOL, Cisco, Intel and Microsoft. They are also monopolies, I might add. The third is the Linux/open-source business model. And the fourth is the Ethernet business model. It's based on de jure standards with proprietary implementations of those de jure standards, and it is unlike open source in that competitors don't give their intellectual property away. The competition is fierce, but there is a market ethic that products will be interoperable. And the standard evolves rapidly based on market engagement in such a way to value the installed base. There is a heavy value placed on sustaining and maintaining the installed base. That's the Ethernet business model."
"I wonder if you realize that a dozen or two people like yourself with the right combination of communication, technological and organizational skills could design and implement a global government without the consent of any present form of organization and provide it with the neural network to insure its success. A government that could continually evolve to ensure that no matter affecting the public good or the health of the planet fails to be disclosed, examined and understood. Or that any existing organization could escape being confronted with synthesized opinions and alternatives that would swiftly emerge. Such an organization based on rights of participation and withdrawal and consent of the participants could be something entirely new in this tired world. Now that would be something truly worthy of the best within us and the best among us. And a great deal of fun in the bargain! It would, in the fullest sense, be far from democratic since the Internet remains largely a tool of the privileged and technologically savvy. That, we can hope, will change in time. One must always begin somewhere, remembering that the sages tell us our responsibility is to succeed in the world as we find it if it is ever to become the world we wish it to be." :D