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The Fourth Revolution:
The Global Race to Reinvent the State
by John Micklethwait and Adrian Wooldridge
THE Marks & Spencer of global trend analysis have come up with another product: I refer to John Micklethwait and Adrian Wooldridge, respectively editor in chief and management editor of The Economist. Having done globalisation, management gurus and (most recently) the religion business, their latest grand tour is of the world's governments.
The Fourth Revolution is a designedly provocative title, which requires some explanation. The authors argue that the first revolution was the creation of nation states inspired by Hobbes's philosophy of a 'Leviathan' government to which all other institutions would pay homage. The second, of which John Stuart Mill was the godfather, replaced Leviathan with the freedoms and liberties appropriate to an industrial society; the third was the welfare state (its prophets William Flew and Beatrice Webb), and it imagined no limit to the extent that enlightened government could elevate the condition of the workers (as long as said government was run by socialist intellectuals).
The 'fourth revolution', say the authors, was inspired by the economist Milton Friedman. As they point out, Friedman started as a believer in Big Government, a member of America's tiny Socialist party, who worked on Franklin D Roosevelt's New Deal. It was his experience as a Washington insider that turned him into the deadliest enemy of state intervention: 'Friedman loathed the liberal conceit that government was the embodiment of reason and benevolence. He saw only muddle and selfishness.'
Anyway, as they point out, Ronald Reagan was bowled over by Friedman's articulacy and passion: the diminutive proselytiser of free-market economics gave intellectual authority to what the intuitive former actor knew he wanted to do. For Reagan's fellow counter-revolutionary against socialism, Margaret Thatcher, the intellectual ballast came from Friedrich Hayek: and in a sign that the battle of ideas seemed to have been won, both Friedman and Hayek won the Nobel prize for economics.
Seemed, however, is the operative word. As Micklethwait and Wooldridge argue, this 'fourth revolution' has been interrupted. The role of government in the affairs of men may have been rolled back in terms of industrial policy, but in the social field it continued to grow. The problem is that with the passing of the baby boomers towards retirement, the West can no longer afford the scale of benefits to all it once churned out. Governments (or at least ours and that of America) have obligations that they can no longer borrow enough to meet: the fourth revolution must be extended.
It is the authors' contention that this debacle, hastened by the 2008 banking crisis, should make us look to the Far East - in particular China and Singapore - for lessons in good government. The claim is that these countries' governments have had a consistent and coherent view of how their economies should develop. Maybe, but consistency has also been enforced in the communists' oppressive one-child policy, which I am convinced will prove an economic and social disaster. Singapore, meanwhile, is a city-state with a rigged democracy - a tremendously successful one, admittedly, but not a model for nations accustomed to centuries of personal liberty. The Confucian mind-set has its virtues, but it is simply not congruent with Europe, let alone America.
I prefer their other example of successful government - Sweden. Our Nordic friends are, in a way, Friedman as a nation: convinced of the merits of the all-pervasive beneficent state, they suddenly realised it didn't work. High taxes had squeezed business beyond the point at which it made sense to pay dividends at all, and the growth in public sector employment was sucking all investment from the economy. It was like the UK after Gordon Brown - only worse.
So, under a series of right-of-centre governments (a previously unheard-of phenomenon there), tax rates were slashed, even to the extent of abolishing inheritance duties. Simultaneously, the state committed itself to a perpetual obligation to produce a fiscal surplus over the economic cycle: as the authors point out, Sweden's public debt fell from 70% of GDP in 1993 to 37% in 2010.
Leading figures in Britain's Conservative party have made pilgrimages to Stockholm to see how it was achieved. But it was easier for the Swedes in this respect: their fiscal retrenchment was carried out when the rest of the world's economy was in a period of strong growth, so allowing more chance of an export-led recovery. Also, Sweden does not have the peculiar obsession with class that characterises our own politics, so it is easier for a government to say 'we're all in it together' - and be believed.
However, given that the authors subtitle their book The Global Race to Reinvent the State, it is disappointing that they devote merely a couple of sentences to the extraordinary example of Estonia. Here we have a nation emerging from the inertia of Soviet-enforced communism and developing an approach that truly deserves the term revolutionary: a single flat income tax rate, no tax on corporate profits until they are paid out in dividends - and the invention of e-government, with all fiscal transfers between state and individual conducted online. And it has worked. God knows what Hobbes would have thought.
More books on Politics
In The Fourth Revolution, Luciano Floridi, a professor of philosophy and ethics at the University of Oxford, argues that online narratives change how we see ourselves. This is not bad per se; even offline, faking is part of life. What counts as "genuine" - our "true" selves, say - is already slippery. "What we consider natural is often the outcome of a merely less visible human manipulation," writes Floridi.
Online interaction just gives us more opportunity to pull the strings of a virtual puppet. But it is a complex arrangement. Who people think you are feeds back into who you think you are, which feeds into who we actually are.
For Floridi, we're living through a fourth revolution. Copernicus cast us out from the centre of the universe, Darwin from a unique position in biology, and Freud from the perceived seat of privilege in our own self-deceiving minds. Now, we are being ousted from the centre of the "infosphere", says Floridi, as the machines mediating our conversations elbow us aside.
Floridi's aim is to prepare the ground for "serious philosophical digging". In so doing, he weaves Proust, Aristotle and Verdi into a discussion of Google+, WhatsApp and sexting – not always to the reader's enlightenment. He also drops neologisms that are likely to blunt the philosophical shovels of those to come: for example, he uses "onlife" (online life) to refer to our new existence.
Fascinating stuff. But, ultimately, both books suffer from being five years too late and five years too early: we already know the internet is changing us, but we lack the perspective to say what shifts are the most important. And all the while, the wheels of change keep on turning.
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