Are national political institutions in irreversible decline?

December 4, 2017 Alistair Nicholas 0 Comments

The authority of government, including of democratically elected governments, is under siege around the world because of the rise of technology. Supra national tech giants (search engines, online market places, cryptocurrencies) are not only bringing disruption to commerce. They are also raising questions about the role and limits of the power of national governments. In the following article Jon McLeod, Corporate and Public Affairs Chairman at Weber Shandwick (parent company of Powell Tate) in the UK, looks at the challenges supranational tech giants are posing for governments.

Sometime between 69 and 70 AD, the Flavian emperor Vespasian issued a decree on his powers.

Produced on massive bronze tablets, its basic premise was that Vespasian’s power would trump any of the other competing authorities of the day.

So long as you did what his decree said, you could not be sanctioned by the Senate, courts or any other elected plebiscite.

At a stroke, Vespasian abolished the jurisdiction and enforcement capability of every other arm of Government.

Cutting out the intermediacy of the state – of all states – has become a voguish theme for those observing the political implications of the rise of the so-called tech giants.

Whether it’s what some have perhaps unfairly described Uber’s shoot-first-ask-questions-later approach to local taxi regulations, or Google’s, some might say relaxed, take on privacy laws, the ironic lesson from the liberal West coast techies is that governments, nay, democracies don’t always matter, especially if they stand in the way of progress, whatever that is.

Bitcoin and other cryptocurrencies similarly dispense with state controlled denominations of value and substitute a tradeable investment that is accepted as a substitute for cash. A PR initiative recently saw a London Estate agent put a high end flat on the market inviting offers in Bitcoin. A mansion valued at AUD$2.5 million has become the first Australian property that will accept payment in Bitcoin. There are many other examples.

States are also facing challenges in cyberspace to defend not their borders but more often their sovereign authority.

Whether or not Russia interfered in the Brexit poll, the US elections, Catalonia etc, it is clear that the state’s capacity to defend itself with steel and bullets is no longer the guarantor of national autonomy.

Attacks and efforts to undermine states with different value systems are now a real part of the state’s loss of autonomy. For example, a North Korean cyberattack is thought to have crashed the UK’s National Health System’s PCs with whacked-out software. A Chinese hacker – it is not clear whether it was a criminal operation or state-sanctioned espionage – is believed to be responsible for a cyberattack on an Australian defence contractor. The Australian Signals Directorate anticipates that cyberterrorism will become an increasing risk for companies and governments.

A new statecraft, not necessarily on the Vespasian model, will be needed to pull back governments’ ability to govern.

For business and organisations, to plan for the end of Government might seem an extreme step.

But global enterprises need to take account of the inherent instability of nation states, the challenge to the international rule of law and the pervasive nature of cyber-driven risk.

At a time when many countries will increasingly rely on supranational agreements over trade, citizens and intellectual property, the capacity to enforce those deals must be watched closely. It won’t be enough to cast them in bronze.