The European Dream (30 page)

What becomes clear in even a cursory examination of the evolution of capitalist markets and nation-state governments in Europe is that their development has been anything but smooth. The history of these two pillars of European modernity is checkered with struggle and compromise all along the way, as competing interests have sought to impose their own beliefs and agendas onto the process.

Europeans often wonder why we Americans, by contrast, have been so unquestioning of capitalist theory and so patriotic and loyal to our country. The difference is that America wasn’t faced with all the labyrinthine conflicting interests that often impeded the evolution of free markets and nation-state development in the Old World. The American economic and political experiment emerged on virgin soil. There were few remnants of feudalism in the colonies, although one could make the case that the plantation system and slave labor was a close facsimile. Still, we were spared having to spar with an entrenched nobility and aristocracy. Moreover, craft guilds never became a force to reckon with in America. Free labor existed from the very outset. Capitalists never had to contend with a pre-existing set of economic relationships that favored set prices over market prices and placed restrictions on production so that craftsmen could maintain control over their respective trades.

Equally important, mercantilism never really took hold in America. The United States of America was born in rebellion to the mercantilist policies of the British crown. We fought a revolution to free ourselves from what we regarded as an intolerable exercise of economic tyranny by the state, and although we toyed with our own brand of mercantilism in the early years of the republic, it was a short-lived affair.

Nor did Americans have to wrestle with competing cultural affiliations in the forging of a national identity. Immigrants that fled to America from Europe were anxious to leave many of the old ties behind. Starting over meant accepting the American Dream—free markets and representative government. That’s why they came here. The fact that English was established as the lingua franca made assimilation easier among immigrants who, in their native lands, had long been separated from one another by language barriers.

The Americanization of the New World wasn’t friction-free. There were already Native Americans here when Europeans arrived. The genocide of the American Indian and the internment of their remaining numbers have continued to haunt Americans, undermining any claim we might have about our special moral status among the peoples of the world. So, too, with regard to slavery. The forced transport and enslavement of millions of Africans in the American South all but nullified any pretense we might have entertained about the nobility of the American experiment.

By and large, however, the American project was as free of traditional encumbrances and conflicting interests as it is possible to be. The capitalist class and the government of the country were rarely at odds. It was simply assumed that the primary role of government was to protect the private property interests of its citizens, which meant safeguarding a capitalist free-market economy. In Europe, however, governments eventually, if not reluctantly, took on the role of tempering the excesses of the market by redistributing wealth more equitably to ensure that no one was left behind.

So, if Americans are the most passionate capitalists and the most patriotic people on Earth, it’s because we view our free-market economy and American government as the guarantors of the American Dream. Were either of these two institutions to begin to fail, or were Americans to come to believe that either the capitalist system or our representative form of government were no longer fostering the American Dream but, rather, undermining it, the stability of the system itself would be cast in doubt—which is just what’s beginning to happen in the wake of increasing corporate influence over the political affairs of government, the growing divide between rich and poor, and the steady downward mobility of middle- and working-class Americans.

Political observers worry that increasing numbers of Americans are alienated from the American political process and have come to believe that special interests—especially big business—run the country. They are forever pouring over election turnouts for signs of whether Americans are disengaging from the political process. The numbers are not encouraging. Nearly 70 percent of all eligible adults voted in the national election in 1964. By 2000, only 55 percent of eligible adults cast a vote in the national election.
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More important than the slippage in the number of people voting is the steep decline in the number of people who still believe in the American Dream. Recall that one out of three Americans say they no longer believe in the American Dream. If that figure continues to free-fall, America is in deep trouble. Without the American Dream to bolster us, there is little left of the public psyche to maintain the American bond.

The problem, however, is that the fall of the American Dream may be inevitable. In a world that is moving beyond the kind of eighteenth-century ideological assumptions that gave rise to the American Dream, we Americans may find ourselves like the proverbial “odd man out,” grossly out of step with the changes taking place all around us as the human race enters a global era.

H
UMANITY FINDS ITSELF, once again, at a crossroad between a dying old order and the rise of a new age. Revolutionary new technologies are forcing a fundamental change in our spatial and temporal consciousness. After two hundred years of living under the dominion of national markets and territorial nation-states, human relationships are bursting out of the old institutional seams. A new man and woman are emerging whose sense of self and perception of the world are as different from the autonomous, propertied individual of the modern age as the latter was to the communal individual of the medieval era. The new consciousness is far more expansive and global in outlook.

The national market and the nation-state suddenly feel a bit too small and limited to accommodate a world where more and more human activity—both economic and social—spill over the old edges and spread out onto the entire globe.

The birth of a new economic system is driving the changes in governance models, just as it did in the early modern era, when market capitalism uprooted the feudal economy and forced a shift in governing models from city-states and principalities to modern nation-states. This time around, it’s the national market economy that is being challenged by a global network economy and the nation-state that is being partially subsumed by regional political spaces like the European Union. Network commerce is too quick, too dense, and too globally encompassing to be constrained by national borders. Nation-states are too geographically limited to oversee inter-regional and global commerce and harmonize the growing social and environmental risks that accompany a globalized world.

Every country is facing the pressures of an ever more connected and interdependent world. But it is European society that appears to be at the vanguard of the changes taking place, making it the world’s classroom for rethinking the future.

What’s pushing all of these institutional changes is a communication revolution that is increasing the speed, pace, flow, density, and connectivity of commercial and social life. Software, computers, the digitalization of media, the Internet, and mobile and wireless communications have, in less than two decades, connected the central nervous system of nearly 20 percent of the human race, at the speed of light, twenty-four hours a day, seven days a week. Today, one is instantaneously connected, via the World Wide Web, to literally a billion or more people, and able to communicate directly with any one of them. Incredibly, the total amount of information a peasant farmer or an inhabitant of a small village might have been exposed to in a lifetime two hundred years ago would not be as great as the information contained in a single online Sunday edition of
The New York Times.

It’s not only the expanded reach and greater access to information that have been so fundamentally altered but also the speed of exchange between people. Recall that the standard hour didn’t come into play in people’s lives until the thirteenth century. Before that time, economic and social exchange was not dense enough to warrant the segmentation of the day into twenty-four standard units of measurement. In the medieval era, one’s daily rounds were as limited and unhurried as they might have been in antiquity and required only a handful of natural benchmarks to mark the passage from one activity to another—the medieval day was divided into sunrise, high noon, and sunset. As human population grew, scattered hamlets metamorphosed into larger towns and cities, and commerce, trade, and social intercourse quickened, making it necessary to establish the hour and then the minute and the second, to organize the dramatic increase in the density and volume of human exchanges.

Over the past decade, two new time segments have been introduced into social life, both the result of the quickened pace of communication between people brought on by the computer and telecommunications revolutions. The nanosecond and picosecond are so short in duration that they exist far below the realm of human perception. One second in duration represents the passage of one billion nanoseconds. While it’s impossible for the human mind to grasp a nanosecond experientially, information is now flowing at that speed everywhere in the world.

The market-exchange economy and territory-bound nation-state were not designed to accommodate a communication revolution that can envelop the globe and connect everyone and everything on the planet simultaneously. The result is that we are witnessing the birth of a new economic system and new governing institutions that are as different from market capitalism and the modern territorial state as the latter were from the feudal economy and dynastic rule of an earlier era. (We’ll turn our attention to new governing institutions in the next chapter.)

The market economy is far too slow to take full advantage of the speed and productive potential made possible by the software, communications, and telecom revolutions. Nor is it just a matter of finding new organizational formats to upgrade the conduct of business in a market economy. It’s the market-exchange mechanism itself that is becoming outmoded.

Markets are linear, discrete, and discontinuous modes of operation. Sellers and buyers come together for a short moment of time to exchange goods and services, then part. The lapsed time between the completion of one exchange and the introduction of the next exchange represents the lost productivity and added cost of doing business that eventually make markets obsolete.

The new communication technologies, by contrast, are cybernetic, not linear. They allow for continuous activity. That means that the start-and-stop mechanism of market exchanges can be replaced with the idea of establishing an ongoing commercial relationship between parties over time.

For example, consider the
Amazon.com
way of selling versus the new music company models for marketing music.
Amazon.com
operates in a conventional market-exchange relationship with customers even though the computer and World Wide Web are used to make the purchase. The buyer pays for an individual compact disc, and the seller ships it by mail.

By contrast, in the new network model used by music companies such as Napster, the user pays a monthly subscription fee that gives him unlimited access to the music company’s library. In the old
Amazon.com
model, the physical CD—the property—is exchanged between seller and buyer, whereas in the new network model, the user is paying for the time for which he has access to the music.

In pure networks, property still exists, but it stays with the producer and is accessed in time segments by the user. Subscriptions, memberships, rentals, time-shares, retainers, leases, and licensing agreements become the new medium of exchange. The music company creates a 24/7 commodified relationship with the client, making him part of a music network. Now the user is paying for access to the music when he is asleep, awake, working, as well as when he is listening to the music. The music company prefers commercializing an ongoing relationship with the user over a period of time, rather than having to sell each CD as a separate market transaction. It’s a matter of time and cost.

The music companies maintain a fast, efficient, smooth, and continuous relationship with the client over time, while
Amazon.com
is slogging along, having to negotiate each and every transaction as a discrete closed-end process. In a world where everyone is connected via cyberspace and information is being exchanged at the speed of light, time—not materials—becomes the most scarce and valuable resource. In pure networks, providers and users replace sellers and buyers, and access to the use of goods in extended time segments substitutes for the physical exchange of goods between sellers and buyers.