The End of Power (10 page)

In short order, the symbolism of size and scale—the idea that the ventures most likely to succeed and endure were in some way the most monumental—passed into popular imagery virtually everywhere. As the world's largest office building (as measured by floor area), the Pentagon, built during World War II, from 1941 to 1943, was a perfect symbol of this principle during the 1950s and '60s. So, too, was the famed buttoned-down culture of IBM, whose attributes of hierarchy and convention were placed in support of the goal of advanced engineering. In 1955, General Motors, one of the early adopters and paradigmatic examples of the M-form management structure, became the first US corporation to net more than $1 billion in a year as well as the largest corporation in the United States, in terms of its revenues as a proportion of gross domestic product (roughly 3 percent); it employed more than five hundred thousand workers in the United States alone, offered consumers eighty-five different models to choose from, and sold about 5 million cars and trucks.
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Mass-production principles were also being expanded to industries such as homebuilding by businessmen like Bill Levitt, a former Navy construction worker who pioneered suburban development by building affordable middle-class homes by the thousands.

But the apparent triumph of the behemoth organizations that produced this Cold War cornucopia of goods and services also stirred worries. Architecture critics like Lewis Mumford complained that the new Levittowns were monotonous and the houses too spread out to create a real community. Irving Howe, the literary and social commentator, decried the postwar years as the “Age of Conformity,” and in 1950 the sociologist David Riesman bemoaned the loss of individualism under institutional pressure in his influential book
The Lonely Crowd.
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And these were not the only concerns raised. As large organizations took hold in every area, apparently cementing their grip on various facets of human life, social critics worried that the hierarchies they established would become permanent, separating an elite that controlled politics and business from everyone else, and concentrating power in a ruling group or class at the same time that the implacable logic of size caused organizations to grow larger and larger, swallowing each other up if need be through mergers or sharing the wealth in cartels and combines. For some, the expansion of government programs from military to social spending, and the growth of the bureaucracies tasked with administering them—again, not just in left or socialist societies—was a similarly worrying trend.
Others viewed the concentration of power as chiefly a product of the capitalist economy.

In one way or another, these fears echoed the beliefs of Karl Marx and Friedrich Engels, who argued in
The Communist Manifesto
(1848) that governments in capitalist society were political extensions of the interests of business owners. “The executive of the state,” they wrote, was “nothing more than a committee for managing the affairs of the whole bourgeoisie.”
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Over the following decades, scores of influential followers would advance various arguments that had in common a core theme. Marxists argued that the expansion of capitalism brought with it the reinforcement of class divisions and, through imperialism and the spread of finance capital around the world, the replication of these divisions both within countries and between them.

But the rise of large hierarchical organizations focused a very particular critique that owed a debt to Weber, for its focus, and to Marx, for its argument. In 1951, the Columbia University sociologist C. Wright Mills published a study titled
White Collar: The American Middle Classes.
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Like Ronald Coase, Mills was fascinated by the rise of large managerial corporations. He argued that these firms, in their pursuit of scale and efficiency, had created a vast tier of workers who carried out repetitive, mechanistic tasks that stifled their imagination and, ultimately, their ability to fully participate in society. In short, Mills argued, the typical corporate worker was alienated. For many, that alienation was captured in the warning printed on the Hollerith punch cards that, thanks to IBM and other data processing firms, became ubiquitous symbols and agents of bureaucratized life during the 1950s and 1960s: “Do Not Fold, Spindle, or Mutilate.”

In 1956 Mills further developed this argument in his most famous work,
The Power Elite.
Here, he identified the ways in which, according to him, power in the United States clustered in the hands of a ruling “caste” that dominated economic, industrial, and political affairs. Yes, Mills argued, American political life was democratic and pluralistic; yet despite this, the concentration of political and economic power put the elite in a stronger position than ever before to retain its supremacy.
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These ideas made Mills a social critic, but his views were by no means radical for their time. President Dwight Eisenhower would make a similar point only five years later in his farewell speech to the nation, in which he warned against unchecked power and the “undue influence” of the “military-industrial complex.”
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During the 1960s, the suspicion that modern economic organizations inherently produced inequalities and a permanent elite spread further among sociologists and psychologists. In 1967, a scholar at the University of California at Santa Cruz, G. William Domhoff, published a book titled
Who Rules America?
In it, Domhoff used what he called the “Four Networks” theory to show that American life was controlled by the owners and top managers of large corporations. Domhoff has continued to update the book in new editions, weaving in everything from the Vietnam War to the election of Barack Obama to make his case.
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The trope of an entrenched elite or establishment has itself become a foil for those who want to join its ranks, whether politicians who run against Washington or upstart firms seeking to dethrone a larger, more powerful rival. An example of the latter traces back to 1984, when Apple made advertising history with its iconic commercial introducing the Macintosh personal computer: in a tableaux inspired by George Orwell's dystopic novel, a woman pursued by a phalanx of jackbooted police hurls a sledgehammer at a huge screen broadcasting a Big Brotheresque message to row upon row of benumbed automatons, setting them free. The ad was not-so-subtly aimed at IBM, Apple's then-dominant competitor in the personal computer market. Of course, today IBM is out of the PC market, and its market capitalization value is dwarfed by that of Apple, which, in turn, is being criticized for maintaining its own Big Brotheresque grip on its operating system, hardware, stores, and consumer experience. Google, incorporated in 1998 with the informal hacker ethos and corporate motto of “Don't Be Evil,” is now one of the world's biggest corporations (as measured by market capitalization) and is seen in some quarters as akin to the Antichrist, single-handedly destroying newspapers, crushing rivals, and violating consumer privacy.

Increasing wealth and income inequality in the United States in the last twenty years, along with the global trend toward massive CEO pay packages and banker bonuses, have fed the perception that those who get to the top stay there, remote and above the cares that afflict lesser mortals. The theorist Christopher Lasch, who died in 1994, called the policies and behaviors in the West that made these trends possible—deregulation and such social choices as private schooling, private security, and so on—the “revolt of the elites.” He described this phenomenon as a kind of opting-out of the social system by those wealthy enough to be able to do so. “Have they canceled their allegiance to America?” Lasch asked in a cover essay in
Harper's
.
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The idea of a “revolt of the elites” has resonated. Despite fuzziness as to what exactly defines the elite (Wealth? Status measured some other way? Particular professions?), the notion of a resurgent elite further strengthening its hold on government is very much alive. In 2008, days after the massive US bank bailout was announced and a few short weeks after the collapse of Lehman Brothers and the rescue of the insurance giant American International Group (AIG), the critic Naomi Klein described the era as “a revolt of the elites . . . and an incredibly successful one.” She argued that both the long neglect of financial regulation and the sudden bailout reflected elite control over policy. And she suggested that a common trend in the concentration of power linked together major countries with seemingly opposed political and economic systems. “I see a drift toward authoritarian capitalism that is shared in [the United States], Russia and China,” Klein told an audience in New York. “Not to say that we're all at the same stage—but I see a trend toward a very disturbing mix of big corporate power and big state power cooperating in the interests of the elites.”
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A concomitant belief is that globalization has merely increased the concentration of power in individual industries and economic sectors, with market leaders cementing their hold on the top spots.

Events of recent years have revived the concern that power in many or most countries is ultimately held by an oligarchy—a small number of top players that enjoy disproportionate control over wealth and resources and whose interests are intimately woven, whether in blunt or subtle ways, into government policy. Simon Johnson, an MIT professor and former chief economist of the International Monetary Fund, drew on his experience to argue that everywhere the fund was called on to intervene, it found oligarchies seeking to shelter themselves and off-load the burdens of reform onto other constituencies (or foreign lenders). Oligarchies are a standard feature in emerging markets, Johnson asserted in a 2009 article in
The Atlantic
, but not just there. In fact, he argued, the United States set the lead here, too: “Just as we have the world's most advanced economy, military, and technology, we also have its most advanced oligarchy.” He pointed to lobbying, financial deregulation, and the revolving door between Wall Street and Washington and argued in favor of a “breaking of the old elite.”
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Such analyses inform a more general belief that is so pervasive as to have become almost a collective instinct: “Power and wealth tend to concentrate. The rich will become richer and the poor will stay poor.” This rendering of the idea is something of a caricature, yet it is the default
assumption underpinning conversations in parliaments, at millions of household dinner tables, in university halls and at after-work gatherings of friends, in erudite books, and in popular TV series. Even among freemarket devotees, it is common to find echoes of the Marxist idea that power and wealth tend to concentrate. In the last decade or two, media coverage of the extravagant wealth of Russian oligarchs, oil sheiks, Chinese billionaires, and American hedge-fund managers and Internet entrepreneurs has been enthusiastically provided and consumed. And whenever these tycoons intervene in politics—as with Silvio Berlusconi in Italy, Thaksin Shinawatra in Thailand, or Rupert Murdoch and George Soros globally—or Bill Gates and others try to shape public policies in the United States and around the world, the public is again reminded that money and power reinforce each other, creating an almost impenetrable barrier for rivals.

The received wisdom that economic inequality is fated to endure and even get worse makes all of us, in a little way, Marxists. But what if the model of organization that Weber and his inheritors in economics and sociology found to be the most adapted to competition and management in modern life has become obsolete? What if power is dispersing, coming to dwell in new forms and through new mechanisms in a host of small and previously marginal players, while the power advantage of the big, established, and more bureaucratic incumbents decays? The rise of micropowers throws open such questions, for the first time. It holds out the prospect that power may have become remarkably unmoored from size and scale.

JAVIER SOLANA, THE SPANISH FOREIGN MINISTER WHO IN THE MID
- 1990s became secretary-general of NATO and then the European Union's foreign policy chief, told me: “Over the last quarter-century—a period that included the Balkans and Iraq and negotiations with Iran, the Israeli-Palestinian issues and numerous other crises—I saw how multiple new forces and factors constrained even the richest and most technologically advanced powers. They—and by that I mean we—could rarely do any longer what we wanted.”
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Solana is correct. Insurgents, fringe political parties, innovative startups, hackers, loosely organized activists, upstart citizen media, leaderless young people in city squares, and charismatic individuals who seem to have “come from nowhere” are shaking up the old order. Not all are savory; but each is contributing to the decay of power of the navies and police forces, television networks, traditional political parties, and large banks.

These are the
micropowers:
small, unknown, or once-negligible actors that have found ways to undermine, fence in, or thwart the megaplayers, the large bureaucratic organizations that previously controlled their fields. Going by past principles, micropowers should be aberrations. Because they lack scale, coordination, resources, or a preexisting reputation, they should not even be making it into the game—or at least, not making it for long before being squashed or absorbed by a dominant rival. But the reverse is true. Indeed, micropowers are denying established players many options
that they used to take for granted. In some cases, the micropowers are even winning the contests against the megaplayers.