Belmont Club

The Slow Drip

The AP says the first indictments in the Hariri assassination have been filed in the Hague, but that the contents may not be known for weeks.  The timer is ticking in the Levant, as factions struggle to position themselves against the possible charges. In the meantime, a computer expert warned against the arrival of “next phase” of Stuxnet, which could trigger the “Iranian Chernobyl”.  Uranium centrifuges, like all machinery, need computers to run them. What happens when the computers themselves are the centrifuges’ enemies?  And on the other side of the globe, a former Cayman Islands banker claimed he had handed the details of thousands of dubious offshore accounts to Wikileaks.

Swiss national Elmer handed Assange the data at a news conference at a media club in London. The two yellow and blue discs contain information on around 2,000 banking clients, both individuals and companies, he said, declining to reveal further details on the data.

Those are a lot of information bombs waiting to go off.  Some can blow up nations.  Others, just nuclear programs. Too many to put down to coincidence and more probably driven by the fact that technology has created so many pathways for secrets to be disclosed that anything confidential probably won’t be for long. Chaos! Chaos!

But if you think chaos is frightening, here’s a comforting thought. The Atlantic says the world is increasingly falling under the spell of a new Global Elite.  To these uber-billionaires, passports mean nothing. They are citizens of the country of money. The live, according to the Atlantic, “in New York or Hong Kong, Moscow or Mumbai … a nation unto themselves.” You don’t have to like chaos when the opposite is available. A global aristocracy before which we only have to bow.

The rise of the new plutocracy is inextricably connected to two phenomena: the revolution in information technology and the liberalization of global trade. Individual nations have offered their own contributions to income inequality—financial deregulation and upper-bracket tax cuts in the United States; insider privatization in Russia; rent-seeking in regulated industries in India and Mexico. But the shared narrative is that, thanks to globalization and technological innovation, people, money, and ideas travel more freely today than ever before.

The next thing you know the Atlantic will be pining for the days when the world was ruled by an unelected elite headquartered in the United Nations or Brussels or when the NYT and Time magazine set the narrative agenda of the world. Were those the good old days? Hardly. They were simply the time when we were governed by a different elite.  Why have the new Global Elite when you can have the old one?

Yet many are likely to oppose the ascent of a transnational elite, but not because they are nostalgic for the past, but because they hate elites of all sorts. And they are only now discovering that elites may have been running the show behind the scenes, like the Mighty Oz, all the time. If so, then why choose one over the other? Maybe the elites of the past are simply trying to resist the the elites they think are in ascendance. How else to describe the alliance of Wikileaks and the Guardian or the New York Times against — precisely who? Is one the 2,000 accounts from the Grand Caymans going to be anybody who is ideologically hostile of Julian Assange? Or is it simply a case of one faction against the other?

Maybe the real lesson of the proliferation of these info bombs is that data is too difficult to control. Information is the lifeblood of the modern age. We glory in its benefits, and are now belatedly recognizing its costs. Live by the bit, die by the bit. Assange spills the secrets of a Cayman Islands bank but a couple of Swedish girls can also talk about what Julian is like in his birthday suit.  So who’s ahead? Shouldn’t he have expected that? Probably not, because deep down inside he may have assumed that the old rules still held. That who controls the present controls the past, who controls the past controls the future.

But what happens when no one can control the present? What happens when Assange gets what he thinks he wants, if information wants to be free? Then the advantage falls to people who’ve got nothing to lose. The guys who have no monopoly rents, accounts in the Grand Caymans nor multiple girlfriends in Sweden are safest because they’re too individually insignificant to squash and collectively too powerful to resist. It’s the guy with the million dollar book deal based on stolen information who’s in trouble. The problem with the info age lies in the difficulty of establishing a stable dominance by one set of elites over another. The currency of power slips too easily through their fingers. Back in the day Republican succeeded Democrat and vice versa, because they could hold on to things, but suppose the world is moving to an era when no elite can sustainably supersede another?

Well that would be nice, but true only if the tendency towards more efficient information systems militated against monopoly rents. The alternative could be that monopoly rents can be ensured by dominance over information systems; that is, if monopoly rents were purely a function of information dominance. In that case the world isn’t living on verge of a new age of a freedom, but in the last Indian Summer of freedom.  Like Tunisia the world will enjoy the fruits of its rebellion only until the New/Old Elites get together to form an aristocracy of Transnational Unity. Which is it going to be? Let’s see what happens when these information bombs blow up. Will the detonations prevent the emergence of combinations or will it drive them to make common cause?

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