The Fourth Revolution – Review and Commentary

The book by former Economist Editor in Chief John Micklethwait and Management Editor Adrian Wooldridge: The Fourth Revolution: The Global Race to Reinvent the State contends that states in the West must complete the revolution started by Reagan and Thatcher and become smaller, more efficient systems that provide greater individual liberty.

In 1814, during the first revolutionary period, John Adams said: “Democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.” He also said: “It is vain to say that democracy is less vain, less proud, less selfish, less ambitious, or less avaricious than autocracy or monarchy…” The authors of The Fourth Revolution contend that the secret of good governance lies in checking human desires, not letting them run free.

America’s founding fathers also worried that democracy would crush individual liberty. The majority would use pressure and regulation to press the minority into conformity. The authors say few examine these issues now. In the vacuum, voters regard the practice of democracy as corrupt and inefficient. And yet they won’t question the theory. Their contempt delegitimizes government and turns setbacks into crises.

Democracy is overloaded with obligations, overburdened with unfulfillable expectations, and distorted by special interests. The population’s dependency forces government to continuously expand. During the second revolution, nineteenth century liberals in Great Britain reformed both the state’s machinery and its form of representation. The authors suggest today’s politicians should trim the state and renew democracy.

The rise of the Beijing consensus’s top down modernization and meritocratic governmental institutions makes the west’s democratic alternative seem regressive. America demonstrates too many of democracy’s vices and Europe too few of its virtues.

America’s checks and balances, though successful in the past in preventing the tyranny of the majority, has been subverted to become a political tool that decreases efficiency, compromise, and justice. America’s gerrymandering voting districts entrench special interests, extremism, and mediocre representation for a lifetime. America’s lobbying by special interests awash in money begs the question of graft and favoritism.

Europe, in an effort to stifle popular passions that caused two world wars, has sacrificed national sovereignty to technocratic governmental, financial, and trade bodies and, in the process, are vivifying national populist movements.

Economic inequality is putting western democracy to the test. Quoting Louis Brandeis, “we can have a democratic society or we can have great concentrated wealth in the hands of a few. We cannot have both.” In the era of financial crisis with less to go around and a bloated but inefficient welfare state, the West must stop democracy’s decay or risk their people’s ire.

The authors call for limited government that constrains itself through self-denying ordinances. In the process, three government dangers must be overcome: liberty encroaching expansion, surrender to special interests, and making unfulfillable promises.

As remedies, the authors propose balanced budgets over the economic cycle, fully funded and means tested entitlements tied to life expectancy, and sunset clauses for laws and regulations. Handing some economic power to technocrats and independent commissions and pushing decisions to the states and cities are ways to limit centralized power.

Micklethwait and Wooldridge say that the cost of inaction is high—unreformed, the welfare state will collapse under oppressive debt. The opportunity is great—the rewards to states that revive democracy and reduce the burden of the state will sprint ahead of its peers economically and in life satisfaction. History will be on the side of the nations that promote individual liberty.

We in the West are polarized politically. Our leaders pander to special interests instead of providing for the common good. How much longer can we mortgage our children’s future to pay for our pensions and health care? We are getting less benefit from and paying more for our educational system. We’re transferring tax revenues to the middle classes and crony capitalists in agriculture, defense, finance, etc. at the expense of caring for the truly poor.

The world is looking to the East as the model for economic advances and a better life at the expense of individual liberties. We in the West must become serious about reforming our systems or be left behind in the rubbish heap of history. Some western states, provinces, and cities are becoming more efficient through experimentation. There are lots of ideas to try, if only we were willing to start.

In the coming weeks we’ll cover how Beatrice and Sidney Webb laid the foundations for the welfare state in the third revolution, how Lee Kuan Yew created the Asian Consensus, and how the Nordic states point the way to the future.

The Fourth Revolution: The Global Race to Reinvent the State

Reassurance

If you google (yes, to google is a verb) you’ll get:

re·as·sur·ance /ˌrēəˈSHo͝orəns/

noun

noun: reassurance

  1. the action of removing someone’s doubts or fears.

“children need reassurance and praise”

  • a statement or comment that removes someone’s doubts or fears.

plural noun: reassurances

“we have been given reassurances that the water is safe to drink”

This is interesting, because we all need some reassurance lately. Whether it’s because our health insurance has been cancelled, the insurance company hasn’t offered an alternative, and we’re forced to try the exchanges. Or, we’re a newly minted graduate with unproven skills that we’d use for mutual benefit like gangbusters, if only someone would give us a chance. Or, we’re a displaced older worker that still wants to contribute their skills to society and can’t seem to find anyone who will hire us for anything near (even half) what we’re worth to the employer.

Well, I don’t see it. If left to our own resources (just check the heavily commented websites) we almost squeal with glee at the displacement of humans by technology. Overpopulation, some say with the obvious solutions in mind. A mark of progress others say as they cite previous technology revolutions (market, first industrial, second industrial, digital, etc.).

All of these ‘revolutions’ recast how human labor was employed. Each caused worker dislocations. Some caused worker revolts. None were deterred (only derailed to the average worker’s detriment). They’ll tell you it will all work out. But we’re being inhuman of we go on like that. It won’t all work out. People are suffering needlessly. But we can’t return to the past.

The pundits on one side say if you get more of the pie I get less. So I should take your pie (oh, wait, they call it ‘re·dis·tri·bu·tion’). Some see nothing wrong with this. Others call it theft. The pundits on the other side say business should grow the pie. But business men just take more of the pie that’s left (I’m talking to you, Wall Street). We’ve been told to go shopping and buy from government exchanges, as if all will be better then. But that doesn’t grow the pie, either. It’s plain old manipulation. However, someone has to start growing the pie. It’s not going to grow itself, you know.

a work of the National Institutes of Health, part of the United States Department of Health and Human Services. As a work of the U.S. federal government, the image is in the public domain.

Pie slice, NCI at NIH, public domain

At lunch one day, I was discussing this problem with a friend whose politics differ from mine. We discussed the pie. However, neither of us had any since we’re both trying to lose weight after our job losses. I said we need savvy folks to start enterprises online and in bricks & mortar that use our displaced workforce and apprentice our new grads. Businesses are so refined now that training and loyalty has gone by the wayside. How will young workers grow into positions of responsibility? Why aren’t older workers tapped for their knowledge and expertise?

Now, you could say, these unemployed are the dregs of the workforce. They deserve what they got. And you’d be dead wrong in many cases. Good workers are being let go and not hired to boost stock performance. If you’re so concerned about quality employees, test them as a prequalification step. Give objective, targeted proficiency and psychological tests online as a gate of entry to the interviews. Grow and use trained interviewers with subject matter and social interaction expertise. You’ll be surprised what treasures you find.

Now what would you have them do? Well, figure out what we really need as a society and as a world and have them either make it for or serve it to us. We don’t need more pet rocks. But the world does need more energy, more clean and fresh water, safer roads and neighborhoods, better education independent of economic background, life mentoring, better preventative health care access, etc. You get the idea. Find a need and fill it.

Our technology can be leveraged to support these new enterprises in ways we don’t even bother using. Virtual offices will work if they’re managed well. The usual computer snooping software is unnecessary when folks are measured on productivity and results. When continued employment hinges on good cooperation and quality outputs, a factory, virtual service, or distributed design house (as examples) can flourish.

Meetings can be held online (many outplacement services work that way). Folks can gather centrally on a quarterly or less frequent basis once they’ve been vetted and oriented to the enterprise. Better minds than mine have worked all this out. Look for it and get cracking.

Funding can be raised via loans or investors. While loans may be hard to come by, more investment crowdsourcing is becoming acceptable and available. Check with your accountants and lawyers. I can’t figure it all out for you. You have to pitch in.

Think of it, how many billions of dollars are being left on the table in the interest of the bottom line because social responsibility and innovation are seen as what the other guy does? Granted it won’t be as profitable in the short run as the status quo of squeezing the life out of remaining workers. But in the long run it will pay dividends in work satisfaction, increased tax base, and societal growth and prosperity.

Responsible folks need to give this country (and this blogger) some reassurance and get ‘er done.