Disintermediation


I attended Diane Francis's talk expecting to disagree with everything she said. After all, she is the hard-nosed conservative, and I am the long-haired hippie leftist. There is plenty of room for disagreement. And yet, I found myself agreeing with everything she said with hardly a niggle or a qualm, and yet with my tree-hugging principles intact. No, Diane Francis has not come over to the dark side - it's just that, as I said, these issues transcend politics.

Francis began by introducing the concept of disintermediation. This is what happens when the middle man - the 'intermediate' in a relation is eliminated. Disintermediation is what happens when knowledge is democratized. When people have access to knowledge directly, they do not need intermediaries to filter it, evaluate it, accredit it, and give it to them.

Disintermediation is what is happening around the world today. The advent of a global video culture disintermediated the communist regimes of the East Bloc; people in Germany, Hungary and Czechoslovakia could see what life was like in the west, could see patterns of resistance (such as the Tiananmen uprising), could see other communist governments falter and fall.

Disintermediation is what happened when three young film-makers with a minuscule budget and a hand-held camera filmed The Blair Witch Project, bypassing the major studios and their major stars, and made in the order of $200 million. Disintermediation is what happened when a guy in his living room called Matt Drudge bypassed traditional media and almost brought down a president, or when a former wrestler named Jesse Ventura bypassed party politics and became governor of Minnesota.

And despite setbacks for companies such as MP3.Com and Napster - and the lawsuits continue - there is no way of stopping this. Already, alternative technologies such as Gnutella (or I might add, alternative services such as Groove) are stepping into the void. Napster and MP3 are vulnerable to lawsuits because they are centralized; services like Gnutella are decentralized. You can't sue them because there's nobody to sue.

The 20th century, said Francis, may be the only century in which writers, performers and other artists can become multimillionaires by virtue of their copyrights.

The same principle holds in politics. The political process - especially in Canada - is very rigid. You have to pay your party dues - put up signs, hand out leaflets, go to conventions - then if you toe the line, you can become a candidate, which means  you have to pay much more in dues: you make deals to raise money, trade favours, work with the leader to be part of the national campaign.

Fossilized political monopolies, asserts Francis, are on the way out. Canada should evolve toward a system like the Unites States, or better, Switzerland, where many public issues are determined by referendum.

Indeed, she said, government is already dying. They don't have fiscal and monetary policy flexibility any more; this is determined by the dictates of world trade and the world financial system. The Canadian Liberal government of 1994, for example, was forced to make a 180 degree turn in its policies after the Mexican currency crisis: it had to support free trade, reduce the taxes on capital gains, and begin reducing the deficit.

Left-wingers - like me - may not like this, but some people - like me - don't like gravity either. The global economy is a fact; information technology has made it a fact.

On the other hand, continues Francis, there is a corresponding shrinkage happening is the requirement for and role of the state. Consider, she argues, the realm of social policy.

With the convergence of high tech and biotech, health care costs will decline dramatically. Government support for health care programs, therefore, will not be needed. Indeed, many treatments will prevent the occurrence of expensive medical conditions to begin with. Children can be cured of genetic defects in the womb. Automatic urine analysis will tell you what you should eat for breakfast. Designer drugs will address many of the mental illnesses that cause other social problems.

If you doubt any of this, see The Human Genome, above.

And think about what happens to social policy - indeed, even ethical issues - when social problems can be traced to genetic causes. James Watson, asserts Francis, goes so far as to suggest that there may be a 'spiritual gene', that is, a predisposition to spirituality. There may be a particular genetic combination responsible for violent behaviour. What happens to our concept of law and order when we come to view crime, poverty and other social ills as genetic deficiencies and not moral weakness?

The rise of information technology promotes the rise of the individual, both in rights and responsibilities. We are already beginning to see people express these rights and responsibilities, as for example, at the Seattle protests. What was viewed as a negative and disruptive force by the business community is in fact, said Francis, the first signs of an emerging global government. And, indeed, in a global economy, we need a global government, just as we need global police and global democracy.

National governments - and for that matter, people who reject direct democracy - who think that such developments need to be regulated are missing the point. It is not about whether the decisions made by the people as a whole are good or bad; rather it is the case that you can't regulate them, no more than you can regulate Gnutella.

I guess my only qualm with Francis's talk lies in the question: how do we get from here to there?

Revolutions can be - as another speaker pointed out - messy and bloody businesses. And it doesn't help when people say - as Francis did - that people, nations and cultures which don't get with the program will be destroyed. It may be true, but I think, it doesn't have to be.

I think that it would be foolhardy for government to simply get out of the governing business. There has to be a transition - even the communists have had to take things one step at a time in the transition to free market economies. If the systems, infrastructure and mechanisms for democratic government and civil society are not put into place, organized crime and corruption will fill the void, as it has in Moscow.


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