Powershift

Powershift

Chapter 1 

The Powershift Era

This is a book about power at the edge of the 21st century. It deals with violence, wealth, and knowledge and the roles they play in our lives. It is about the new paths to power opened by a world in upheaval.

Despite the bad odor that clings to the very notion of power because of the misuses to which it has been put, power in itself is neither good nor bad. It is an inescapable aspect of every human relationship, and it influences everything from our sexual relations to the jobs we hold, the cars we drive, the television we watch, the hopes we pursue. To a greater degree than most imagine, we are the products of power.

Yet of all the aspects of our lives, power remains one of the least understood and most important—especially for our generation.

For this is the dawn of the Powershift Era. We live at a moment when the entire structure of power that held the world together is now disintegrating. A radically different structure of power is taking form. And this is happening at every level of human society.

In the office, in the supermarket, at the bank, in the executive suite, in our churches, hospitals, schools, and homes, old patterns of power are fracturing along strange new lines. Campuses are stirring from Berkeley to Rome and Taipei, preparing to explode. Ethnic and racial clashes are multiplying.

In the business world we see giant corporations taken apart and put back together, their CEOs often dumped, along with thousands of their employees. A “golden parachute” or goodbye package of money and benefits may soften the shock of landing for a top manager, but gone are the appurtenances of power: the corporate jet, the limousine, the conferences at glamorous golf resorts, and above all, the secret thrill that many feel in the sheer exercise of power.

Power isn’t just shifting at the pinnacle of corporate life. The office manager and the supervisor on the plant floor are both discovering that workers no longer take orders blindly, as many once did. They ask questions and demand answers. Military officers are learning the same thing about their troops. Police chiefs about their cops. Teachers, increasingly, about their students.

This crackup of old-style authority and power in business and daily life is accelerating at the very moment when global power structures are disintegrating as well.

Ever since the end of World War II, two superpowers have straddled the earth like colossi. Each had its allies, satellites, and cheering section. Each balanced the other, missile for missile, tank for tank, spy for spy. Today, of course, that balancing act is over.

As a result, “black holes” are already opening up in the world system—great sucking power vacuums, in Eastern Europe, for example, that could sweep nations and peoples into strange new, or for that matter ancient, alliances and collisions. The sudden shrinkage of Soviet power left behind an unfilled vacuum in the Middle East as well, which its client state, Iraq, rushed to fill by invading Kuwait, thus igniting the first global crisis of the post-Cold War era. Power is shifting at so astonishing a rate that world leaders are being swept along by events, rather than imposing order on them.

There is strong reason to believe that the forces now shaking power at every level of the human system will become more intense and pervasive in the years immediately ahead.

Out of this massive restructuring of power relationships, like the shifting and grinding of tectonic plates in advance of an earthquake, will come one of the rarest events in human history: a revolution in the very nature of power.

A “powershift” does not merely transfer power. It transforms it.


The End of Empire

The entire world watched awestruck as a half-century-old empire based on Soviet power in Eastern Europe suddenly came unglued in 1989. Desperate for the Western technology needed to energize its rust-belt economy, the Soviet Union itself plunged into a period of near-chaotic change.

Slower and less dramatically, the world’s other superpower also went into relative decline. So much has been written about America’s loss of global power that it bears no repetition here. Even more striking, however, have been the many shifts of power away from its once-dominant domestic institutions.

Twenty years ago General Motors was regarded as the world’s premier manufacturing company, a gleaming model for managers in countries around the world and a political powerhouse in Washington. Today, says a high GM official, “We are running for our lives.” We may well see, in the years ahead, the actual breakup of GM.

Twenty years ago IBM had only the feeblest competition and the United States probably had more computers than the rest of the world combined. Today computer power has spread rapidly around the world, the U.S. share has sagged, and IBM faces stiff competition from companies like NEC, Hitachi, and Fujitsu in Japan; Groupe Bull in France; ICL in Britain, and many others. Industry analysts speculate about the post-IBM era.

Nor is all this a result of foreign competition. Twenty years ago three television networks, ABC, CBS, and NBC, dominated the American airwaves. They faced no foreign competition at all. Yet today they are shrinking so fast, their very survival is in doubt.

Twenty years ago, to choose a different kind of example, medical doctors in the United States were white-coated gods. Patients typically accepted their word as law. Physicians virtually controlled the entire American health system. Their political clout was enormous.

Today, by contrast, American doctors are under siege. Patients talk back. They sue for malpractice. Nurses demand responsibility and respect. Pharmaceutical companies are less deferential. And it is insurance companies, “managed care groups,” and government, not doctors, who now control the American health system.

Across the board, then, some of the most powerful institutions and professions inside the most powerful of nations saw their dominance decline in the same twenty-year period that saw America’s external power, relative to other nations, sink.

Lest these immense shake-ups in the distribution of power seem a disease of the aging superpowers, a look elsewhere proves otherwise.

While U.S. economic power faded, Japan’s skyrocketed. But success, too, can trigger significant power shifts. Just as in the United States, Japan’s most powerful Second Wave or rust-belt industries declined in importance as new Third Wave industries rose. Even as Japan’s economic heft increased, however, the three institutions perhaps most responsible for its growth saw their own power plummet. The first was the governing Liberal-Democratic Party. The second was the Ministry of International Trade and Industry (MITI), arguably the brain behind the Japanese economic miracle. The third was Keidanren, Japan’s most politically potent business federation.

Today the LDP is in retreat, its elderly male leaders embarrassed by financial and sexual scandals. It is faced, for the first time, by outraged and increasingly active women voters, by consumers, taxpayers, and farmers who formerly supported it. To retain the power it has held since 1955, it will be compelled to shift its base from rural to urban voters, and deal with a far more heterogeneous population than ever before. For Japan, like all the high-tech nations, is becoming a de-massified society, with many more actors arriving on the political scene. Whether the LDP can make this long-term switch is at issue. What is not at issue is that significant power has shifted away from the LDP.

As for MITI, even now many American academics and politicians urge the United States to adopt MITI-style planning as a model. Yet today, MITI itself is in trouble. Japan’s biggest corporations once danced attendance on its bureaucrats and, willingly or not, usually followed its “guidelines.”

Today MITI is a fast-fading power as the corporations themselves have grown strong enough to thumb their noses at it. Japan remains economically powerful in the outside world but politically weak at home. Immense economic weight pivots around a shaky political base.

Even more pronounced has been the decline in the strength of Keidanren, still dominated by the hierarchs of the fast-fading smokestack industries.

Even those dreadnoughts of Japanese fiscal power, the Bank of Japan and the Ministry of Finance, whose controls guided Japan through the high-growth period, the oil shock, the stock market crash, and the yen rise, now find themselves impotent against the turbulent market forces destabilizing the economy.

Still more striking shifts of power are changing the face of Western Europe. Thus power has shifted away from London, Paris, and Rome as the German economy has out stripped all the rest. Today, as East and West Germany progressively fuse their economies, all Europe once more fears German domination of the continent.

To protect themselves, France and other West European nations, with the exception of Britain, are hastily trying to integrate the European community politically as well as economically. But the more successful they become, the more of their national power is transfused into the veins of the Brussels-based European Community, which has progressively stripped away bigger and bigger chunks of their sovereignty.