by Naim, Moises
THE END OF POWER
THE END OF
POWER
FROM BOARDROOMS
TO BATTLEFIELDS
AND CHURCHES
TO STATES,
WHY BEING
IN CHARGE
ISN’T WHAT IT
USED TO BE
MOISÉS NAÍM
BASIC BOOKS
A MEMBER OF THE PERSEUS BOOKS GROUP
New York
Copyright © 2013 by Moisés Naím
Published by Basic Books,
A Member of the Perseus Books Group
All rights reserved. Printed in the United States of America. No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews. For information, address Basic Books, 250 West 57th Street, 15th floor, New York, NY 10107.
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Designed by Trish Wilkinson
Set in 11.5 point Minion Pro
Library of Congress Cataloging–in–Publication Data
Naím, Moisés.
The end of power: from boardrooms to battlefields and churches to states, why being in charge isn’t what it used to be / Moisés Naím.
pages cm
Includes bibliographical references and index.
ISBN: 978-0-465-03156-6 (hardcover: alk. paper)—ISBN: 978-0-465-03781-0 (e-book)
1. Power (Social sciences) 2. Organization. I. Title.
HN49.P6N35 2013
303.3–dc23
2012049642
10 9 8 7 6 5 4 3 2 1
To Susana, Adriana, Claudia, Andres, Jonathan, and Andrew
CONTENTS
Preface: How This Book Came About
CHAPTER ONE
THE DECAY OF POWER
Have You Heard of James Black Jr.?
From the Chess Board . . . to Everything Around Us
What Changed?
The Decay of Power: Is It New? Is It True? So What?
But What Is Power?
The Decay of Power: What’s at Stake?
CHAPTER TWO
MAKING SENSE OF POWER: HOW IT WORKS AND HOW TO KEEP IT
How to Talk About Power
How Power Works
Why Power Shifts—or Stays Steady
The Importance of Barriers to Power
The Blueprint: Explaining Market Power
Barriers to Entry: A Key to Market Power
From Barriers to Entry to Barriers to Power
CHAPTER THREE
HOW POWER GOT BIG: AN ASSUMPTION’S UNQUESTIONED RISE
Max Weber, or Why Size Made Sense
How the World Went Weberian
The Myth of the Power Elite?
CHAPTER FOUR
HOW POWER LOST ITS EDGE: THE MORE, MOBILITY, AND MENTALITY REVOLUTIONS
So What Has Changed?
The More Revolution: Overwhelming the Means of Control
The Mobility Revolution: The End of Captive Audiences
The Mentality Revolution: Taking Nothing for Granted Anymore
How Does It Work?
Revolutionary Consequences: Undermining the Barriers to Power
Barriers Down: The Opportunity for Micropowers
CHAPTER FIVE
WHY ARE LANDSLIDES, MAJORITIES, AND MANDATES ENDANGERED SPECIES? THE DECAY OF POWER IN NATIONAL POLITICS
From Empires to States: The More Revolution and the Proliferation of Countries
From Despots to Democrats
From Majorities to Minorities
From Parties to Factions
From Capitals to Regions
From Governors to Lawyers
From Leaders to Laymen
Hedge Funds and Hacktivists
The Political Centrifuge
CHAPTER SIX
PENTAGONS VERSUS PIRATES: THE DECAYING POWER OF LARGE ARMIES
The Big Rise of Small Forces
The End of the Ultimate Monopoly: The Use of Violence
A Tsunami of Weapons
The Decay of Power and the New Rules of War
CHAPTER SEVEN
WHOSE WORLD WILL IT BE? VETOES, RESISTANCE, AND LEAKS—OR WHY GEOPOLITICS IS TURNING UPSIDE DOWN
The Stakes of Hegemony
The New Ingredients
If Not Hegemony, Then What?
Who’s Afraid of the Big Bad Wolf? Traditional Power at Bay
Soft Power for All
The New Rules of Geopolitics
Just Say No
From Ambassadors to Gongos: The New Emissaries
Alliances of the Few
Anyone in Charge Here?
CHAPTER EIGHT
BUSINESS AS UNUSUAL: CORPORATE DOMINANCE UNDER SIEGE
In the Land of Bosses, Authority, and Hierarchy
What Is Globalization Doing to Business Concentration?
The Power and Peril of Brands
Market Power: The Antidote to Business Insecurity
Barriers Are Down, Competition Is Up
New Entrants and New Opportunities
What Does All This Mean?
CHAPTER NINE
HYPER-COMPETITION FOR YOUR SOUL, HEART, AND BRAIN
Religion: The Nine Billion Names of God
Labor: New Unions and Nonunions
Philanthropy: Putting the Bono in Pro Bono
Media: Everyone Reports, Everyone Decides
CHAPTER TEN
THE DECAY OF POWER: IS THE GLASS HALF-FULL OR HALF-EMPTY?
Celebrating the Decay of Power
What’s Not to Like? The Dangers of Decay
Political Paralysis as Collateral Damage of the Decay of Power
Ruinous Competition
Be Careful What You Wish For: Overdosing on Checks and Balances
Five Risks
CHAPTER ELEVEN
POWER IS DECAYING: SO WHAT? WHAT TO DO?
Get Off the Elevator
Make Life Harder for the “Terrible Simplifiers”
Bring Trust Back
Strengthen Political Parties: The Lessons from Occupy Wall Street and Al Qaeda
Increase Political Participation
The Coming Surge of Political Innovations
Appendix: Democracy and Political Power
Acknowledgments
Notes
Bibliography
Index
PREFACE
How This Book Came About: A Personal Note
POWER MAY FEEL ABSTRACT, BUT FOR THOSE WHO ARE MOST ATTUNED TO it—namely, the powerful themselves—its flow and ebb can have a visceral edge. After all, those in positions of great power are best positioned to spot limits on their effectiveness and to feel frustration over the gap between the power they expect their rank to convey and the power they actually have. In my own small way, I experienced such constraints back in February 1989. At the time I had been named, at age thirty-six, the minister of development in the then-democratic government of my home country, Venezuela. Soon after we took office in a landslide election victory, we faced riots in Caracas—triggered by the anxiety over our plans to cut subsidies and raise fuel prices—that paralyzed the city with violence, fear, and chaos. Suddenly, and despite our victory and apparent mandate, the economic reform program that we had championed acquired a very different meaning. Instead of symbolizing hope and prosperity, it was now seen as the source of street violence, increased poverty, and deeper inequality.
fully comprehend until years later. It dwelt in the enormous gap between the perception and the reality of my power. In principle, as one of the main economic ministers, I wielded tremendous power. But in practice, I had only a limited ability to deploy resources, to mobilize individuals and organizations, and, more generally, to make things happen. My colleagues and even the president had the same feeling, though we were loath to acknowledge that our government was a hobbled giant. I was tempted to chalk this up to Venezuela itself: surely our sense of powerlessness had to do with our country’s notoriously weak and malfunctioning institutions. Such weakness could not be universal.
Yet later I would appreciate that it was universal indeed, or nearly so, among those with the experience of power. Fernando Henrique Cardoso—the respected former president of Brazil and founding father of that country’s success—summed it up for me. “I was always surprised at how powerful people thought I was,” he told me when I interviewed him for this book. “Even well-informed, politically sophisticated individuals would come to my office and ask me to do things that showed they assumed I had far more power than I really did. I always thought to myself, if only they knew how limited the power of any president is nowadays. When I meet with other heads of state, we often share very similar recollections in this respect. The gap between our real power and what people expect from us is the source of the most difficult pressure any head of state has to manage.”
I heard something similar from Joschka Fischer, one of Germany’s most popular politicians and a former vice chancellor and foreign minister. “Since I was young, I was fascinated and allured by power,” Fischer told me. “One of my biggest shocks was the discovery that all the imposing government palaces and other trappings of government were in fact empty places. The imperial architecture of governmental palaces masks how limited the power of those who work there really is.”
Over time, I would glean similar observations not just from heads of state and government ministers but also from business leaders and the heads of foundations and major organizations in many fields. And it soon became clear that something more was going on—that it wasn’t simply that the powerful were bemoaning the gap between their perceived and actual power. Power itself was coming under attack in an unprecedented way. Every year since 1990, I have attended the World Economic Forum’s annual meeting in Davos, frequented by the world’s most powerful people in business, government, politics, the media, nongovernmental organizations, science, religion, and culture. In fact, I have been lucky enough to attend and speak at almost all of the most exclusive power-fests in the world, including the Bilderberg Conference, the annual meeting of media and entertainment tycoons in Sun Valley, and the annual meetings of the International Monetary Fund. My conversations each year with fellow participants confirmed my hunch: the powerful are experiencing increasingly greater limits on their power. The reactions to my probing always pointed in the same direction: power is becoming more feeble, transient, and constrained.
But this is not a call to feel sorry for those in power. Powerful people bemoaning their powerlessness is certainly no reason for hand-wringing in our winner-take-all world. Rather, my aim is to delineate the impact of the decay of power. In the pages ahead I explore this process of decay—its causes, manifestations, and consequences—in terms of the ways it affects not just the 1 percent at the top but, more importantly, the vast and growing middle class as well as those who seek merely to make it through another day.
Moisés Naím
March 2013
CHAPTER ONE
THE DECAY OF POWER
THIS IS A BOOK ABOUT POWER.
Specifically it is about how power—the capacity to get others to do, or to stop doing, something—is undergoing a historic and world-changing transformation.
Power is spreading, and long-established, big players are increasingly being challenged by newer and smaller ones. And those who have power are more constrained in the ways they can use it.
We often misunderstand or altogether overlook the magnitude, nature, and consequences of this transformation. It is tempting to focus exclusively on the impact of the Internet and other new technologies, on the direction of power shifts from one player to another, or on the question of whether the “soft” power of culture is displacing the “hard” power of armies. But those perspectives are incomplete. Indeed, they can obscure our understanding of the fundamental forces that are changing how power is acquired, used, kept, and lost.
We know that power is shifting from brawn to brains, from north to south and west to east, from old corporate behemoths to agile start-ups, from entrenched dictators to people in town squares and cyberspace. But to say that power is shifting from one continent or country to another, or that it is dispersing among many new players, is not enough. Power is undergoing a far more fundamental mutation that has not been sufficiently recognized and understood. Even as rival states, companies, political parties, social movements, and institutions or individual leaders fight for power as they have done throughout the ages, power itself—what they are fighting so desperately to get and keep—is slipping away.
Power is decaying.
To put it simply, power no longer buys as much as it did in the past. In the twenty-first century, power is easier to get, harder to use—and easier to lose. From boardrooms and combat zones to cyberspace, battles for power are as intense as ever, but they are yielding diminishing returns. Their fierceness masks the increasingly evanescent nature of power itself. Understanding how power is losing its value—and facing up to the hard challenges this poses—is the key to making sense of one of the most important trends reshaping the world in the twenty-first century.
This is not to say that power has disappeared or that there aren’t still people who possess it in abundance. The president of the United States or China, the CEO of J. P. Morgan or Shell Oil, the executive editor of the New York Times, the head of the International Monetary Fund, and the pope continue to wield immense power. But less so than their predecessors. The previous holders of these jobs not only dealt with fewer challengers and competitors, but they also had fewer constraints—in the form of citizen activism, global markets, and media scrutiny—on using the power they had. As a result, today’s power players often pay a steeper and more immediate price for their mistakes than did their predecessors. Their response to that new reality, in turn, is reshaping the behavior of those over whom they have power, setting in motion a chain reaction that touches every aspect of human interaction.
The decay of power is changing the world.
The goal of this book is to prove these bold assertions.
HAVE YOU HEARD OF JAMES BLACK JR.?
The forces driving the decay of power are manifold, intertwined, and unprecedented. To see why, turn your mind from Clausewitz, the Fortune 500 rankings, and the top 1 percent of the US population that accounts for a disproportionately large chunk of the nation’s income and consider the case of James Black Jr., a chess player from a working-class family in the Bedford-Stuyvesant neighborhood of Brooklyn, New York.
By the time he was twelve, Black had become a Master at chess, a ranking achieved by fewer than 2 percent of the 77,000 members of the United States Chess Federation—and only 13 of those Masters were under fourteen.1 The year was 2011, and Black has a good shot at becoming a Grandmaster—a ranking awarded by the World Chess Federation based on the player’s performance in tournaments with titled players. Grandmaster is the highest title a chess player can attain. Once obtained, the title is held for life.2
When Black became a Master, he was following in the footsteps of America’s youngest Grandmaster ever: Ray Robson of Florida, who attained that status in October 2009, two weeks before his fifteenth birthday.3
Black taught himself the game on a cheap plastic set he bought at Kmart and quickly moved on to chess books and computer programs. His idol is Mikhail Tal, a Ru
ssian world chess champion of the 1950s. What motivates Black, in addition to his enjoyment of the game, is the way it lets him wield power. As he told a reporter: “I like to dictate what the other player has to do”—as clear a statement of the innate urge for power as one can find.4
But the achievements of James Black and Ray Robson are no longer exceptional. They are part of a global trend, a new phenomenon that has swept through the long-closed world of competitive chess. Players are learning the game and achieving mastery at much younger ages. There are more Grandmasters now than ever before: 1,200-plus today versus 88 in 1972. And as newcomers defeat established champions with increasing frequency, the average tenure of the world’s top players is trending down. Moreover, today’s Grandmasters hail from far more diverse backgrounds than did their predecessors. As the writer D. T. Max observed: “In 1991, the year the Soviet Union broke up, the top nine players in the world were from the U.S.S.R. By then, Soviet-trained players had held the world championship for all but three of the past forty-three years.”5
Not anymore. More competitors are now capable of climbing to the top of the chess leagues, and they come from a wide variety of nations and neighborhoods. But once they reach the top, they have a hard time staying there. As Mig Greengard, a chess blogger, observed: “You’ve got two hundred guys walking the planet who, with a little tailwind, are playing strongly enough to beat the world champion.”6 In other words, among today’s Grandmasters, power itself is no longer what it used to be.
What explains these changes in the world’s chess hierarchy? In part (but only in part): the digital revolution.
For some time now, chess players have had access to computer programs that enable them to simulate millions of games played by the world’s best players. They can also use the software to work out the implications of every possible move; for instance, competitors can replay any game, examine moves under various scenarios, and study specific players’ tendencies. Thus the Internet has both broadened the horizons of chess players around the world and—as James Black’s story attests—opened new possibilities for players of any age and socioeconomic background. Countless chess sites deliver data and competitive game opportunities to anyone with a Web connection.7