The Mother of All Disruption

Once again fellow Online Spin author Tom Goodwin has piqued my interest. He starts to unwrap a tremendously thorny problem in his column of last Thursday – Time to Think about Regulation for Disruption. Today, I’d like to take this question up one level – do we have to rethink government entirely?

Government is almost entirely a reactionary business. Even far sighted, historic documents such as the Constitution of the United States and the Magna Carta were reactions to the untenable circumstances that preceded them. And these are the exceptions. The vast majority of governing involves a highly bureaucratic and excruciatingly slow process that attempts to respond to emerging breaches in the unspoken code of fairness that our society tries to live by. Realistically, from the time the need for a new law is recognized to the time a bill is passed, months or even years can pass.

Months or years were, practically speaking, adequate in the world we once knew. But today, that is no longer the case. In that time, complex ecosystems can establish around the breach in question, and, as Tom points out, entire industries may have been decimated in the process. This is the reality of disruption.

In a world that seeks order and governance, this is a bad thing. But, now that we have unleashed the technological Kraken, is that a world we can reasonably expect? Slowly but surely we are dismantling every aspect of our hierarchical society and replacing it with a horizontal network. Hierarchies can’t work horizontally. Something has to give.

Disruptions are a characteristic of networked structures. In order for networks to work, each component of that network has to be given the freedom to act. If the action of an individual resonates with other parts of the network, the actions are picked up and amplified. Each individual act has the potential to become a disruption – with corresponding consequences. Everything becomes accelerated in a network.

Government is built on the ideological foundation of a hierarchy. The word “government” means “to steer.” The assumption is that our society is capable of being steered. This, in turn, assumes that our society all wants to go in the same direction. But if we enforce these restrictions on a network, networks cease to work. Yes, we quell the negative disruptions, but we also eliminate the positive ones.

The United States of America is one of the least restrictive societies on the planet. The founding fathers drafted their articles to enshrine that freedom. You (as a Canadian, I have to say “you”) have managed to balance the practical necessities of government with the lack of restrictions typical of a market economy. Markets naturally emerge from networks. Because the U.S. treasures freedom and innovation, it was inevitable that it would emerge as the testing ground for the impacts of technological advances. You are the canary in the coalmine of massive disruption.

Tom urges lawmakers to become more proactive. But historically speaking, that’s just not the way government works. It’s like riding a cow in the Kentucky Derby and wondering why you can’t keep up. I just don’t think that our current hierarchical system of government is up to the job. It’s a great system, with a ton of democratic checks and balances, but it was built for a different era – one built along vertical lines.

The final issue is one of enforcement. Even if laws are passed to deal with emerging disruptions, it’s becoming almost impossible to enforce them. If lawmakers are scrambling to keep up with society, law enforcers have capitulated entirely. We just can’t afford to enforce the laws we already have on the books.

So, if this is the problem, what is the answer? I think, perhaps, it lies in the very same properties of networks. Government and laws became necessary to avoid abuses of power. Power comes from hierarchies. As societies level out the old dictates of fairness become increasingly relevant. We all have universal concepts of fairness. Abuses of what we consider to be fair are generally dealt with quickly and effectively at the network level. Networks tend to police themselves, as long as there is a common understanding of what is acceptable and what is not. In short, we have to think of regulation in terms of market and network dynamics, not hierarchical governance.

I admit this is tough to wrap your head around. In a world of disruptions, this is the Mother of all Disruption. But symptomatically speaking, it appears that our historic notion of government is ailing. As frightening as it may be to contemplate, we should start thinking about what may replace it.

2 thoughts on “The Mother of All Disruption

  1. Historically speaking, self-regulation and/or the deliberate creation of “policy voids” where multipartite policy capacity, discussion and debate once existed, have done more harm than good. Your diagnosis of some of the foibles of government is fair enough, but naive solutions simply lead to capture of industries and regulated by large monopolies and a de facto plutocracy. Substitute your words like “networks” in for the older “idealist republican” visions or “textbook economics under conditions of perfect competition and perfect information,” and what I see is more of the same deregulation fervor that has been pushed by neoliberal theorists since 1975. As for all governments being lumbering machines, fair enough that there are strong tendencies there that we all hate, but did a government not end racial segregation in the United States? Was there not something called the Progressive Era in the United States, wherein government was seen as a force for fairness?

  2. Thanks for an interesting post on an important topic. I agree that our government is not going to keep up with innovation and disruption. It’s too much to expect. I also agree with Andrew that the “network level” will not automatically instill fairness. Can you provide even one example to illustrate your statement, “Abuses of what we consider to be fair are generally dealt with quickly and effectively at the network level?”

    Isn’t this “network” you’re talking about really the “ecosystem” of startups that have to compete for money and prepare to appease future stockholders or corporate buyers?

    Let’s indeed think about how to replace our sick government system, but I certainly don’t want to leave it to the Googles and Ubers of the world.

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