Peter Thiel must have been on to something. While it’s unlikely that the populist-style economics in his book Zero to One: Notes on Startups is going to have an impact on the productions of the high priests of dominant university-cultured economics, becoming a billionaire in a couple of years shows certain qualities in terms of superior heuristics. Hence, a compelling argument to take seriously his contrarian claims about the economic modi operandi that are also well worth delighting in: “Globalization (horizontal) does not equal technological (vertical) progress” Hard to beat in its iconoclastic simplicity. Despite its seeming innocuousness, such an assertion is also likely to offend all the right circles: those of cynical power brokers who’ve built their empires as globalization’s intermediaries and those of the dogmatics who sustain them ideologically with absolutist but ahistorical free-trade mythology, disregarding the ambiguities of economic strategy. Thiel’s book is also a good indication as to why the PayPal founder and libertarian billionaire has supported Trump’s campaign and agenda in favor of an imperial rollback and against liberal globalization (“America First”).
Imperialism and Globalization
The current crisis of globalization and the recurrence of nationalisms is also the crisis of U.S. imperialism. Both have long worked in a quiet symbiosis, being inheritors of a historically path dependent strategic advantage of British naval power. With the end of World War I and above all of World War II, the U.S. became the definite heir to British thalassocracy and the naval protection of its trade routes which granted it seemingly infinite access to resources and thus an edge in comparative price advantages and market access. This system of economic organization haunts globalization well into the 21st century. The heart of U.S. imperial geopolitics remains the prevention of land-based Eurasian alternatives (the ever looming threat of a Paris-Berlin-Moscow-Beijing axis) and alliances which could evade the control of its Navy, hence the vocal opposition of a fraction of U.S. military leadership against the One Belt One Road Initiative, as illustrated recently by U.S. Admiral Kurt Tidd.
Economic empire is all about the organization of strategic (inter-)dependencies between the center and the periphery. Similarly, globalization rewards the differentiation and fracture of supply chains. Core strategic centerpieces are safely tucked away in the industrialized homeland while the more banal labor and production stages are outsourced abroad to evade financial and regulatory impediments and to create the permanent omnilateral threat of withdrawal. This organization of spatial relations in turn reinforces the power of the military as supervision organ which forces market access, alternatively secures or destabilizes trade routes, and guarantees the stability of transnational property relations and currency value. It’s the reason why lesser military powers like Germany organize their specialization in the vicinity (cheap labor in Central and Eastern Europe) rather than in far-away locations which would require higher military investments to secure. The current historical form of the global economy, rather than being the result of an optimal distribution of resources, is foremost a sophisticated expression of a political organization principle. Industrialized economies insist on free trade, but are careful to specify under what conditions while always naughtily self-conscious that despite formally equal conditions, they have the biggest guys in the ring.
Thiel again: last-mover advantage. It is true that innovation can come too early and is particularly expensive in the initial stages of research. In the economic world, this can be observed as the reluctance of private sector companies to spend vast amounts of resources on research and development. Eric Delbecque and Christian Harbulot’s reflection on the history of economic warfare points out that the great industrialized economies of the 20th century have co-evolved in unison with national parapolitical organizations to protect them and to engage in mutualized and merciless economic espionage and warfare. Organizations conducting research thus often end up with the fruits of many years of financial, and intellectual investments pirated in an instant. Such risk certainly explains the reluctance of many economic actors in the largely anarchic space of international relations, loosely covered by a veneer of international law, to make significant technological investments. Instead, they often prefer existing price advantages attained through cheap outsourced labor and a downwards spiral of regulations. Cheap gas and oil become the economic doping of an otherwise untenable time- and energy-consuming system of long distance logistics while at the same time perpetuating the militarily supervised center-periphery relations of asymmetrical interdependence. In the same vein, the main arguments against increasingly efficient energy solutions have for a long time been largely cost-based: Why invest in researching and developing technology when it produces potentially devastating losses and existential disadvantages in the short-term and only offers marginal price advantages? Never change a winning team! Especially when its the steady rent, capital, and political dependency producing team of petrochemicals. Free trade globalization will always favour industrial nations’ inertia betting on cheap raw materials secured by big naval-aerial power and sometimes procured by dodgy paramilitary networks. It gladly outsources its externalities from cheap slave labor to toxic environmental damage. Out of sight, out of mind.
Technology as Decentralization
While groundbreaking technological innovations often happens first in the framework of the hyper-centralized and -verticalized confines of large corporations and ultracapitalized high-risk military research, its spin-offs have continuously facilitated decentralization – PCs and the internet being the obvious example. Similarly, today permaculture, solar panels, autonomous energy housing, mesh networks, and the blockchain allow for various kinds of a sustainable and efficient organization of lifestyles both prosperous, self-sufficient and independent of centralized power. Cody Wilson’s 3D printed gun is the nightmare of the 20th century economy, since it moves the main – and with the controlled demolition of state-welfare functions increasingly sole – legitimization mechanism of state power – security – into the hands of the individual. From the perspective of state power, the variety of the technologies of decentralization and autonomy of course are all problematic because they pose a challenge to the ongoing subsidization of a complex of military-petrochemicals-pharmaceuticals-agribusiness-chemicals-food-corporate infrastructure which doubles as a stabilizing transnational control grid.
Observing the functional mechanisms of these sector-organizations, it is easy to see how technology becomes a double-edged sword and constant challenge to their globalized but ultimately highly centralized supply chains. Territorialization: Planned obsolescence and suspiciously regular innovation cycles show that economies organized around a skeleton of centralizing megacorporation’s prefer the steady trickle of shareholder returns to the potentially unmanageable entropy of technological innovation. Especially if technological innovation, as is often the case, manages to cut out the (technological-financial) middle men and helps to self-organize the bulk of medical, energetic, nutritional and technological needs. The currently ongoing political-ideological war against the class of (mainly white) rural independent and armed US landowners must be understood in this context. From the perspective of the state, Waco will always stand for the limits of extraction and control.
Ending the Long 20th Century
Society is the inertia of expectations: A nexus of hypertrophic industries of the 20th century continues to haunt the 21st century. Yet, inexorable dialectical momentum is carrying forth all of their enemies. Today, we observe the behemoths of 20th century political organization in accelerating distress. The rapid evaporation of U.S. military supremacy experienced in Syria – despite disproportionately superior military spending – speaks volumes of the limits of centralized and one-dimensional technological paradigm. In the domain of energy, low-cost fracking and renewables have installed themselves as permanent competitors of the dominant petrochemicals players thus reversing a moribund and increasingly politically awkward Carter Doctrine. In communications, the internet — originally conceived as a tool for political control and counterinsurgency — has led to collateral effects of open source tinkering with technologies that facilitate independence and a spread of skills and crafts that are a challenge to cumbersome megacorporations. Despite the disabling spirit of the education system, mature markets and their educated middle classes eventually reach saturation and declining returns for soulless industry produce. Instead, the high-information customer tends towards individualized, high-quality local and small artisanal production. While large corporate players try to catch up by engaging in split-offs and financing, acquiring, and controlling smaller players with start-up venture capital, this mode of production is ultimately a challenge to the very nature of corporate growth models based on declining labor costs, efficiency and economies of scale. This also explain the steady approval of multinationals of the importation of vast numbers of some the earth’s least cultivated populations into mature markets (In addition, of course, to downwards pressure on labor costs). Their pre-bourgeois tastes and lack of immune systems against advertising’s psychological warfare are guaranteed to stimulate outdated industrial growth and consumption models – at least for a while.
Even aesthetically, globalization today seems to have run its course. The hippy slogan think global, act local has found its unlikely counterpart in the reemergence of nationalist populism. The latter favors the specific over the universal that has, in the past 70 years, has normalized urban landscapes as endless carbon copies of sterile glass facades and identical stores in pedestrian precincts. The increasing outspoken popular distaste for this imperial aesthetic and for the socio-cultural obscenities as the seemingly inevitable byproduct of global governance’s multiplicities anticipates the fall of the fragile internationalist colossus. With Trump the U.S.-Gorbachev is already in office — hastily managing imperial decline by repatriating capital and a manufacturing base against the U.S. military’s decreasing capacity to guarantee it abroad. Combined with populist momentum across the West, and a still relatively open internet, what appeared to be a vain and perspectiveless struggle a few years ago, has become a realistic strategic perspective. For anyone striving towards ending the long 20th century, the task must be to identify, support and strategically invest in the growing number of increasingly powerful economic players of decentralization, small-scale production, and independence from globalization’s supply chains. The plastic explosives of decentralizing technology for the controlled demolition of inhumane and ugly globalization are already in place.
Mene mene tekel: The current process of ideological diversification and political opening is only an expression of an ongoing secession of libertarians, technophiles, and economic nationalists whose instincts are healthy enough to see the writing on the wall. Like a pack of hungry wolves, they are sensing the economic, military, social, and aesthetic fragility of the current system. Today, the task of every lucid political movement must be to embolden them to bet on its demise.
Nicolas Hausdorf is a German editor, analyst, and essayist based in Melbourne. His essay “Superstructural Berlin,” an experimental sociology and pulp theory of Germany’s capital (with illustrations by Alexander Goller) has been published by Zero Books. He tweets at @dcntrrr.
The German political-economic leadership still remembers the trauma of the World War I embargo organized by Great Britain.