Small is Powerful: Escaping the 20th century love of big power
I’m planning to write a book over the next few months. It will be called Small is Powerful: why the era of big business, big government and big culture is over (and why it’s a good thing).
It’s being published by the brilliantly imaginative crowd-funding publisher Unbound, so if you like the themes and want to back the book, keep an eye out for the pitch when it is uploaded in the next few weeks.
The key argument in the book is that for much of the last century there was a ‘big consensus’. Big concentrations of political, economic, social and cultural power were celebrated and encouraged. Since the 1970s, however, that consensus has been increasingly undermined both in theory and practice. This is good; it’s a shift which holds out the promise of a fairer, stabler, freer and more creative world. The book will argue, however, that the shift to a small politics, economics and culture is not happening nearly quickly or evenly enough and that, in fact, there are some powerful forces trying to turn back the years. In short, it’s time for the ‘smallists’ to stand up and be counted.
That’s the elevator pitch. I’ll be posting more detailed accounts of different parts of the argument as I write the book. In the meantime, here are my rough thoughts on the historical background to the book’s claims which will form the core of the first chapter.
A Brief History of Big Versus Small
Our modern notion of individual freedom and rights was forged in the seventeenth and eighteenth centuries by the great liberal thinkers and movements of that era. But at the time these ideas were widely regarded not as a modern vision of the future but as answering an urgent need to protect ancient respect for diverse local practices, traditional constraints on the power of the state and an economy built around the agricultural smallholder and artisan. In fact, it was monarchical absolutism that presented itself as fresh and radical with its goal of placing all power in an efficient centralised state that would break with tired medieval ways, unite fragmented nations in a common purpose and secure economic well-being at a time of growing imperial conflict. The early assertion of liberal rights and freedoms were as much a reaction against this new wave of absolutism than a break with the past.
Ultimately, of course, liberalism gained the upper hand over absolutism by the middle of the nineteenth century with democracy, the rule of law, legal recognition of human and civil rights and free trade and the free market very gradually securing gains across Europe and achieving full acceptance in the United States.
But just as an ideology that had its origins in respect for ancient diversity, small government and the independent trader seemed to be on the rise, a counter-trend was slowly emerging that valued entirely the opposite. It would be easy to say that absolutism regrouped and fought back but that is too simple. This was the emergence of a new consensus around the value of concentrations of political, social and economic power which was both far more intellectually sophisticated, more politically complex and more deeply rooted in major technological and economic changes than the belief in the divine right of kings. And, as it would turn out, it would also prove far more ambitious.
Making Big Beautiful
As the big consensus grew in force it tended to focus on three different rationales.
The first was that vast concentrations of power and wealth were a good in themselves. A small minority of humans have a natural inclination to lead and the vast majority have an inclination to be led. Strict hierarchy and the accumulation and exercise of great power is just a fact of life. Attempts to do otherwise are at best doomed and at worst an abomination against human nature. Such views, of course, found their most extreme expression in the fascist movements of the first half of the twentieth century and which achieved huge historical significance in the 1930s and 1940s prior to their military defeat.
The second rationale was that big was more efficient. It is difficult to overestimate how influential such a view was on political and business views during much of the last century. The notion that scale reduced needless duplication of effort, allowed the pooling of technical expertise, reduced costs and ensured the maximum mobilisation of resources towards a shared goal played a central role in the waves of company mergers and acquisitions in the late nineteenth and early twentieth centuries that created the model of the large corporation that still exists today. It was also a reasoning that led directly to the drive for public ownership that reached its height of enthusiasm in the 1940s. It explains why so many in the west looked nervously and even enviously at the Soviet system which it was widely feared would overtake capitalism because of its extreme emphasis on concentration of power and resources.
The final rationale was more complex. This was the claim that big power was the best way to achieve other beneficial goals. Particularly on the left the notion took hold that the concentration of power and resources in the state would mean that working class conditions could be improved more rapidly, that the power of the capitalists could be matched more effectively and that the economy could be controlled to create the full employment and price stability that ordinary workers needed. Even highly influential figures who were not closely associated with the Labour movement - such as John Maynard Keynes and William Beveridge – agreed with and helped develop important parts of this rationale.
Of course, this drive towards a big consensus was not purely the result of powerful ideas and arguments. Technological change played a very important role. The rise of mass production techniques which had their origins in the electricity, oil and steel revolutions of the late nineteenth century offered the opportunity for well-resourced corporations to produce millions of standardised goods very cheaply allowing those firms to make vast profits and grow even bigger. And, as is often the way, what becomes a trend in the commercial sphere soon had its imitators in the public sphere. Big business seemed to make an obvious case for the big state. If the production of cars could be made a million times more efficient through concentration and scale then why not healthcare or education?
As a result, much of the impetus for big concentration came from the desire of companies and their owners to eliminate competition through merger and acquisition, to gain a dominant position in a market and ultimately make a lot of money. Equally the idea that the state should accrue more power in order to drive forward public benefit was always going to find a willing audience among a fair proportion of politicians and government officials.
The final piece of the jigsaw that led to the big consensus that dominated much of the last century was the emergence of a strong social and cultural conformism. Beginning with the high-minded moralism of the Victorian era and the unleashing of patriotic unity during the world wars, the twentieth century was increasingly dominated by a strong sense of what was normal and abnormal behaviour sometimes reinforced by the power of law. This reached its apogee in the 1940s and 1950s as the conventional nuclear family became central to marketing campaigns and popular culture and as a small handful of civil society, workplace and political organisations attracted very large memberships keen to sign up to certain sets of pre-ordained values and aspirations. This was the era of the Women’s Institute, the Readers’ Digest, Rotary Clubs, mass trade unionism and mass political parties. Social and cultural power was not just conformist, it was literally concentrated in the form of these big organisations that shaped behaviour, values and expectations through the force of peer networks. As a result, the hostility to ‘otherness’ and ‘abnormality’ could be intense and was palpable enough to be critiqued in the works of writers such as George Orwell and Irving Howe.
This all meant that for the first seven decades of the last century the ‘big consensus’ was either growing in power or, in the post-war period, in a position of unquestioned dominance across the whole of the developed economies of both capitalist west and Soviet east. Both in theory and practice big was beautiful. Those early philosophers of freedom may have seen off the absolutist monarchs and replaced them with democratic political systems and legal protection of human rights (at least in the west) but the state had grown enormously in size, economic power had been concentrated in vast global corporations and social and cultural difference was frowned upon and regularly persecuted. The defence of a world of small, distributed power had failed.
Small Fights Back
The dismantling of that consensus began, initially in a very small way, in the 1970s.
The starting-point was the end of the long post-war boom. As economic problems for the advanced economies piled up and stagnation took hold in the Soviet bloc during the ’70s it became harder to sustain the claim that big government and big business had discovered the source of endless efficiency and growth. This provided the context within which intellectuals, entrepreneurs and many ordinary people began to wonder if there was an alternative.
E.F.Schumacher’s book Small is Beautiful directly criticised the way mass production technologies and the large corporation (both public and private) had dehumanised work and damaged the environment. Published in 1974, the book was a sensation turning Schumacher, who had been chief economist at the National Coal Board for over two decades, into a global celebrity addressing lectures attended by thousands and securing him numerous private audiences with presidents of businesses and nations alike.
Another economist who suddenly came back into fashion was Friedrich Hayek who had been a stern critique of big government since the 1920s. Despite the fact that he had been a relatively obscure academic for many decades, he was unexpectedly awarded the Nobel Prize for economics in 1974. This thrust the 75 year old back into the global spotlight and reignited a wave of interest in his work and views. This ultimately made him the intellectual standard-bearer for the New Right which became such an influential political force in the 1980s and led a long campaign to reduce the size of the state which continues largely, although not entirely, on the right of the political spectrum to this day.
Cultural and social conformity also began to fracture at this time. The 1960s had seen an upsurge of interest in alternatives to the stifling conventions of the post-war era but the real challenge came in the 1970s as those long disempowered and marginalised because of their ‘otherness’ – women, black, gay and disabled people – established forthright movements demanding the same respect, rights and freedoms as dominant groups. The long-term impact on people’s sense of themselves and their attitude to others of these early movements against concentrations of cultural and social power has been enormous. It is maybe unsurprising that it was during the 1970s that the decline in membership of the big civil society and political groups that had reinforced those concentrations began.
But perhaps the most profound development in the 1970s that was to break the big consensus was the least noticed at the time. This was the gathering of a strange bunch of hobbyists, drop-outs and geeks in the bay area of California. It was here that loose groups like Community Memory, the Homebrew Computer Club and the People’s Computer Company developed a vision of a world remarkably similar to E.F. Schumacher’s: one where the computing technologies developed by IBM and available only to the wealthiest corporations and government could be made available to the masses. It was this vision and that unique bay culture that incubated and inspired Apple and Microsoft and led directly to the PC explosion of the 1980s and the internet revolution that is still unfolding today and that is doing so much to empower individuals and small groups to challenge the biggest powers and do things for themselves. Could there, for example, be a better description of the revolutionary and ‘small’ nature of the internet than Community Memory’s self-professed goal (formulated in 1973) to create “a communication system which allows people to make contact with each on the basis of mutually expressed interests without having to cede judgement to third parties”?
Of course, these various developments were far from co-ordinated: indeed they all came from very different political, cultural and even geographic contexts. But there was clearly something happening in the 1970s that inspired diverse thinkers and groups to feel confident enough to turn against the big consensus in one or other area and get noticed.
Forty Years of Small
Over the last four decades, the powerful consensus in favour of big concentrations of power and resources has been under assault like never before but the battle is far from won.
In particular, the notion that government has a central role to play in owning and controlling economic resources and activity no longer holds the enormous sway it once did. Public ownership and planning has been in long term decline in the west, the Soviet model has collapsed and Asian communism has increasingly embraced the free market. Even the crisis of 2008 has done little to revive a popular appetite for state control beyond tighter regulation of the banking sector. The impact in terms of reduction of poverty, lower levels of global inequality and rising living standards is undeniable.
On the other hand, this has been a revolution that has to a large extent favoured the large corporation. The Asian and Eastern European embrace of the free market offered huge opportunities to those companies with the resources to exploit them and they have done so ruthlessly. Corporations in west and east grew as a result. Large financial organisations enjoyed a long boom and grew even bigger: a situation that was to lead to the problems of the last five and a half years.
Having said that life has not become more certain nor secure for global companies. Markets are faster moving than ever before. The power of small companies to challenge incumbents has grown, consumers are more demanding and powerful, and small campaigns against corporate practices can grow with astounding rapidity. The churn amongst ‘leading’ companies has been creeping up for years.
Much of this is being driven by those revolutionary technologies first conceived in California in the 1970s. The internet has genuinely empowered small businesses, consumers and campaigners in precisely the way those geeky Californian hippies hoped.
But it feels like this is a revolution that has a lot farther to go. A great deal of wealth and power is still concentrated in corporate and government hands and there are certainly signs that big business (ironically some of it with origins in the Californian hacker ethic of the 1970s) and state agencies are finding new ways to seize back control.
Socially and culturally there have been huge steps forward particularly in the west. The notion of an ‘acceptable’ way of life endorsed by key civil society groups, advertisers, cultural bodies and the state has degraded very rapidly. The centuries-old persecution, disempowerment and marginalisation of women, the disabled and people of different races and sexuality is now deeply contested and challenged in many different countries.
But in a similar fashion to the trends towards a smaller economic world, this social revolution remains unfinished just as new forces are gathering to reassert big power. A resurgent religious fundamentalism in Asia and Africa deliberately sets itself, often violently, against any idea that big cultural and social power should be dismantled. While in Europe and America, a new populism and national chauvinism has emerged which is deeply hostile to the diversity of lifestyles and backgrounds that now characterises the most advanced economies.
However, perhaps the area that has been most resistant to the small revolution has been the political world. While the civil society groups that once upheld big power have gone into terminal decline, their political counterparts – the parties – have managed to carry on regardless. The influence of organisations like the Rotary Clubs and the trades unions has declined along with their memberships but parties, despite seeing a similar drop off in public endorsement, maintain a central position as the arbiters of political decision-making by virtue of static constitutions and hidebound electoral systems. These concentrations of big political power are surely overdue a shift towards small principles.
A Small Future?
Should the great early theorists of freedom be transported to 2014 I think they would be pleased and disheartened in equal measure. John Locke, for example, might marvel at how widely government is viewed as the servant of the people and how common democratic processes have become. Equally he would be shocked at the extent to which even the democratic state now has the freedom and resources to shape many aspects of the lives of its citizens. Adam Smith would, no doubt, take great comfort from the fact that individual economic freedom is now very widely acknowledged as fundamental to wider well-being but he would certainly be deeply worried by the size and power of the corporations that now control vast swathes of global markets. Thomas Jefferson might relish the way freedom to speak one’s mind and live as one sees fit has become the norm in many countries but he would doubtlessly despair at the huge concentrated power amassed by the banks and their allies.
What these time-travelling thinkers might conclude is that something very odd and disturbing happened in the twentieth century: the idea that power and resource was best entrusted to the few rather than the many took hold even in those countries that considered themselves the champions of liberal principles. 2014, they might reflect, is thankfully now very different to 1954 – the world is in many ways a lot ‘smaller’. But we are still struggling to escape the twentieth century as is evidenced by the rise of movements that hate all that has changed in the last forty years even though big power is very far from vanquished.
In short, a different and better world awaits us but the strength of vested interest and wrong-headed allegiance to the power-hungry can never be under-estimated. It would be a situation those seventeenth century thinkers would recognise very well.
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