Why Rapid Technological Progress Demands Competitive Governance

Ground-breaking economist, mathematician, and complexity theorist W. Brian Arthur has a fascinating presentation on the revolutionary ‘intelligenation’ of the economy at PARC, a research and development center. In addition to laying out his compelling theory of technological evolution (too much to discuss here, but found in his talk and in his excellent book The Nature of Technology), Arthur concludes his remarks with a sobering reminder: as the pace of technological innovation increases, humanity faces the serious dilemma of governing a powerful, ever-growing and ever more complexly connected world.

He argues that the challenge facing human economies today is not productivity, but access. Arthur is not making a crude egalitarian argument: the disparity of access to the fruits of productive economies is not a problem of technological processes or factories. It’s a problem of access to the institutions that harness the power of modern production.

Arthur offers an admirable definition of economics. He considers the standard notion that economics is about ‘markets allocating goods under conditions of scarcity’ far too limiting. Instead, “the economy is how we organize ourselves to meet our needs.” This expanded view of the economy and its study should hearten advocates of competitive governance, as governing institutions clearly are a method of organizing to meet our needs.

Governance can no longer be treated as ‘given’, as outside models and analysis. Indeed, the nation-state fades from its sacrosanct position as the ultimate tool for social organization, and becomes merely one possible ‘social technology’: as open to innovation and evolution as iPods or XBoxes.

Arthur’s warning and his expanded definition of the economy converge: our world is advancing, but with an institutional ball-and-chain attached.

Everyone should be concerned that the power of technology be used for good, and that it be kept out of the hands of those who would use it for oppression and exploitation. This requires building networks of potent checks and balances on predatory elites around the world. In a word, it requires competition, to erode unjust power and incentives towards violence.

Specifically, the humanitarian concerned with worldwide inequality should look aghast at the prospect that much of humanity could miss out on an impending future of rapid innovation, all because they’re trapped using bad social technologies. The technological advance is almost inevitable but, as Arthur implicitly warns, we must have our institutional house in order so that we may bring a cleaner, richer, more peaceful, and more meaningful world to everyone on Earth.

This demands decentralized experimentation: a worldwide industry of innovative, entrepreneurial, ‘Start-Up nations.’