Making sense of the radical change surrounding us – a long-term perspective – 1

The change overwhelming us is simultaneously exciting, frightening, thrilling, unsettling, clear, and confused.  We have a scary and exciting future with incredible opportunities that we can only vaguely see.

How to make sense of it?

Two writers more than all others have helped me as I slowly sort things out: Seth Godin and Walter Russell Mead.

I’d like to highlight a few articles from Mr. Mead to give a sense of the major trends facing us. He regularly refers to the breakdown of the “blue model.”

The way we’ve done things since World War II isn’t working anymore. The breakdown will continue. The challenge is to figure out how to rearrange the economy and our society into something new. None of us have any idea today what that “new” thing is. But we can see the old model is breaking down.

In Life After Blue, he provides a good summary:

Briefly, the idea is that after World War II America was organized around a group of heavily regulated monopoly and semi-monopoly companies. AT&T was the only telephone company; there were three big networks, three big car companies and so on. There was very little foreign competition, and these companies were able to offer stable, lifetime employment to most of their workers. The workforce was heavily unionized, and the earnings of the big companies were divided between shareholders, managers, workers and government in a predictable way. An intellectual and administrative class of planners, social scientists and managers ran the big institutions and administered the government.

That was a stable model for several decades. The model is breaking:

Several forces came together to break up this system. Foreign competition, first from rebuilding Germany and Japan after World War II and then from low wage newly industrializing countries around the world, eroded the market position of companies like the Big Three auto manufacturers. The rise of offshore banking eroded the tight financial controls of the postwar era. Growing consumer impatience with the high prices and poor quality offered by monopoly companies like the telephone monopoly led to political pressure to deregulate and introduce more competition. Technological change, especially in information processing and communications, led to disruptive changes that shifted the advantage to nimble and lean companies and left the bureaucratic, slow moving giants of the Blue Age behind. American society became increasingly individualistic, with both the left and the right rebelling against the authority of experts and bureaucrats.

As a result, the old way of doing things doesn’t work anymore.

He then goes on to paint a general description of the historical balancing act between individual liberty and centralized control. Usually that is a tradeoff. We gain more government help and assistance by giving up freedom & liberty. The goal at this point is to find a way to increase both without reducing either.

For a very long read that provides very deep explanation, check out my next post.