Notes about the possible occurrence of socio-political paradigm shifts with each technological revolution. Prepared by Carlota Perez for a meeting with Mary Kaldor and Robin Murray

This text was written in late 2015. It was not designed for publication, but is rather an example of the personal correspondence that typically remains unseen: one academic thinking out loud to others, to those from different areas of expertise but who share a deep investment in moving through understanding toward solutions. At that point the current political situation was already foreshadowed by protests and rising populist politics, which I, and others, had been predicting for over a decade (see the Epilogue to my 2002 Technological Revolutions and Financial Capital). But now, as much of the world struggles to come up with alternate paths to the future, I would like to share these thoughts, no matter how undeveloped, in the hope of creating further discussion. My work to date has been primarily focused on techno-economic paradigms: the manner in which technology diffuses across the economy in great surges of development, and its socio-economic impact. In the book cited above, I analysed the role of finance in these surges. The current research project studies the role of the state in this process – and the ways in which the institutions of the state change with each paradigm shift. This letter ponders the existence of what could be called a socio-political paradigm that shifts with each technological revolution. It asks if what we are witnessing currently can in fact be expected – and whether alternative manifestations are possible.

Note: Some footnotes and links have been added for convenience of the readers of this blog.

Dear Robin and Mary,

There is something changing in the socio-political sphere that makes me think there is a gradual change of what we could think of as a socio-political paradigm.

Could it be that, not only does each technological revolution bring what I have called a techno-economic paradigm, but perhaps that new model, for business to shape production and management structures and for the ways of competing in the market, would also require, eventually, a new socio-political way of organising society, to handle those changes?

Social democracy was the form that seemed to have coupled best with Fordist mass production. Just as the separation of mind and hand recommended by Taylor made sure that some did the thinking and others did the doing, social democracy was ―and still is―essentially representative. What you get is the possibility of electing representatives who will do the thinking, the discussing and the deciding for you. If you are not satisfied, you express it when you next get a chance to vote.

Today people are disgusted with politicians, with government and with taxes. They do not feel represented. This does not mean that they subscribe to the neo-liberal/libertarian anti-state position, but the sentiment does contain elements of ‘I don’t trust you to think or decide for me’. In the case of business, there is a mechanism with which to change what is consumed; ‘the market’ decides (Hirschman’s exit, voice and loyalty are supposed to be in constant exercise). In democratic politics as currently practiced, the means of expression is the choice, in sporadic elections, of pre-decided options, often between very similar programmes.

One manifestation of the discontent ― and even anger ― is the massive increase in voting for demagogues and messianic leaders who offer to solve everything for you, in the old representative mode. As with Hitler, they rarely explain how exactly they will achieve this, but simply offer to bring back the good times by getting rid of the current, distrusted leadership and of the ‘outsider’ scapegoats who come to personify the main threat.

Yet there has been a contrasting set of phenomena rising to the fore, perhaps less visible and certainly less successful politically up to now. These are the multiple cases of participatory democracy at the local level that are creating a different way of taking decisions about society. These range from the sharing of knowledge (Wikipedia, WikiLeaks, open source software), to community caring, sharing and collective energy provision, to networked political movements. Such activities are not only the domain of ‘progressives’; recent libertarian movements such as the Tea Party have employed similar sharing techniques. Indeed, the use of ICT by the young and the rise of social and political networks evidence a combination of collectivist and libertarian flavours.

Could it be that behind these behaviours and movements there is a strong desire for empowerment, for participation; a rejection of representative democracy and a decision for self-determination? Or are people just looking for a leader that will give them what they want as if by miracle and resolve?

If the first, this would be similar to the new networks in management structures that have emerged within the ICT paradigm. Instead of the Fordist hierarchical structures common in the Age of Mass Production, now the top becomes the centre of a network of empowered units which relate to the ‘outside’ of the firm autonomously, but following a common strategy and using resources provided in the manner that best suits their specific environment or market.

Many others have observed the increasingly ‘networked’ nature of our socio-political realm (see, for example, the influential work of (Manuel Castells). Could it be that the structure of political parties is as obsolete within the ICT paradigm as the old corporate pyramidal organisations? Could deployment require a change of socio-political paradigm in order to really work? The way in which you (Mary) view the roles of the state with multi-level differentiation – local, national supra-national and global – seems to be much more appropriate to the new conditions and possibilities.  Your insistence, Robin, on the need to modernise and de-bureaucratise government is another facet of this necessary change. The failure of the New Public Management model (the public-private partnerships) discussed by Wolfgang Drechsler, pointing to the need for a more effective mode of organisation for government action, also goes in the same direction. Does this have also to do with Karl Polanyi’s ideas about the end of the pure market and the need for government to step in to protect society and regulate business? He wrote that in the early 1940s, precisely at a time similar to the present – and at that point in time, for that technological era, the ‘answer’ was social democracy. But is that still the ‘answer’ now or do we need another form of positive-sum game?

If there are such profound changes, how do they emerge? How do they crystallise? Can change come purely from network connections, or are strong leaders necessary (thought leaders or political leaders)?

Researching innovation, Frank Geels and others of the Dutch School of transitions describe a multi-level perspective, observing that system-wide changes begin with niche innovations, which gradually converge in a self-reinforcing process to change the prevailing old regime. Perhaps the same is true for the socio-political sphere.

The Great Reform Act of 1832 in Britain was perhaps the beginning of the major capitalist processes of democratisation. By widening the franchise, power was gradually taken away from the aristocracy in what arguably marked a new socio-political paradigm. I read somewhere that a biographer of Edmund Burke noted that elections were not considered ‘democracy’ until late in the 19^th century; rather, they were simply the way that aristocrats chose their representatives. This was far from being understood as democratic in the modern sense (or even the Greek sense, although they too only let those designated as ‘citizens’ vote).

Could the Victorian boom which developed from the 1850s provide a clear example of a paradigm shift in the socio-political sphere? This period witnessed the professionalization of the civil service, a new element of state machinery. Pondering this change leads to further questions: when did the ‘bourgeoisie’ take power from the aristocracy? And did they, in fact, or are Cain and Hopkins correct in their assessment that in the UK the aristocracy fused with the banking world and never left power? Or looking at other political developments: what is the history of local government? Was there continuity between the old regime and the modern? How did it evolve in terms of leadership? Were local leaders appointed or elected?

The Labour Party was founded in 1900, beginning the Golden Age of the third surge (i.e. the Belle Époque). Did they represent the shift to another socio-political paradigm? Certainly, they heralded the political emergence of a new segment of society. Then, with the post-WWII setting-up of the Welfare State, one can observe that both the Conservative and Labour party tended towards the centre. At maturity of that techno-economic paradigm (perhaps also of the socio-political one), neo-liberal and individualist Thatcherite policies widened the difference once more; then Blair brought them closer again. The Milliband election timidly began a movement away again (and Corbyn today is pulling towards the populist end, while some critics accuse him and his followers of being ‘old fashioned’ socialists).

However, with the demise of jobs for life and the concomitant drop in power of the unions, could it be that the old voter base simply does not exist in the same way; that employment and culture have been so changed by the techno-economic shift that the old political relationship simply will not work, and that another way forward has to be found to answer the needs and desires of those who were raised on expectations of a Welfare State created in a different paradigm?

Are there any real alternatives presented now that are not populist? Perhaps it’s not a question of location between the extremes and towards the centre of the same continuum but of creating an entirely different continuum? Both the middle of the third surge, during the early 1900s, and the middle of the fourth, in the late 1940s, saw the development of new political spaces and different notions of the ‘social contract’, especially as regards to social fairness.

Are such socio-political changes necessary for the deployment stage of a technological revolution to really begin? Can such a major change in direction (such as the roll-out of the welfare states of the West, accompanied by high rates of taxation inconceivable in the 1920s) occur without a major socio-political shift? Could the change happen later? Or earlier? Are they connected to the changes in political parties? The rise and fall of liberalism; the emergence of social democracy (and fascism, and communism); the current rise of populism as extreme right and left movements, with messianic leaders… Does thinking along the lines of shifting socio-political paradigms provide a path for understanding them?

I have advocated ‘green growth’ as the direction necessary to unleash the potential of the ICT revolution across the economy and to create a positive-sum situation for business and society, one that brings prosperity and reverses the trend in inequality.  But I wonder if this can work without multi-level and participatory democracy. I’m sure this would sound obvious to both of you (Robin and Mary) but, even though I have always agreed with both on the surface, it is only now that I begin to deeply understand the implications –and the difficulty—of the necessary socio-political transformations.

I am daunted by the complexity of the research involved in answering any of my questions. It would require wide-ranging trans-disciplinary research between political and social historians to work on such a theme in connection with the technological revolutions. Even more daunting is trying to understand the process through which such socio-political and even cultural changes occur and, crucially, whether they can be helped along by spreading ideas or by enlightened leadership.