The End of Power

MOISÉS NAÍM

BASIC BOOKS

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Copyright © 2013 by Moisés Naím

Published by Basic Books,

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Designed by Trish Wilkinson

Set in 11.5 point Minion Pro

Library of Congress Cataloging–in–Publication Data

Naím, Moisés.

The end of power: from boardrooms to battlefields and churches to states, why being in charge isn't what it used to be / Moisés Naím.

pages cm

Includes bibliographical references and index.

ISBN: 978-0-465-03156-6 (hardcover: alk. paper)—ISBN: 978-0-465-03781-0 (e-book)

1. Power (Social sciences) 2. Organization. I. Title.

HN49.P6N35 2013

303.3–dc23

2012049642

10 9 8 7 6 5 4 3 2 1

To Susana, Adriana, Claudia, Andres, Jonathan, and Andrew

Preface: How This Book Came About

C
HAPTER
O
NE

T
HE
D
ECAY OF
P
OWER

Have You Heard of James Black Jr.?

From the Chess Board . . . to Everything Around Us

What Changed?

The Decay of Power: Is It New? Is It True? So What?

But What Is Power?

The Decay of Power: What's at Stake?

C
HAPTER
T
WO

M
AKING
S
ENSE OF
P
OWER
: H
OW
I
T
W
ORKS AND
H
OW TO
K
EEP
I
T

How to Talk About Power

How Power Works

Why Power Shifts—or Stays Steady

The Importance of Barriers to Power

The Blueprint: Explaining Market Power

Barriers to Entry: A Key to Market Power

From Barriers to Entry to Barriers to Power

C
HAPTER
T
HREE

H
OW
P
OWER
G
OT
B
IG
: A
N
A
SSUMPTION
'
S
U
NQUESTIONED
R
ISE

Max Weber, or Why Size Made Sense

How the World Went Weberian

The Myth of the Power Elite?

C
HAPTER
F
OUR

H
OW
P
OWER
L
OST
I
TS
E
DGE
: T
HE
M
ORE
, M
OBILITY
,
AND
M
ENTALITY
R
EVOLUTIONS

So What Has Changed?

The
More
Revolution: Overwhelming the Means of Control

The
Mobility
Revolution: The End of Captive Audiences

The
Mentality
Revolution: Taking Nothing for Granted Anymore

How Does It Work?

Revolutionary Consequences: Undermining the Barriers to Power

Barriers Down: The Opportunity for Micropowers

C
HAPTER
F
IVE

W
HY
A
RE
L
ANDSLIDES
, M
AJORITIES
,
AND
M
ANDATES
E
NDANGERED
S
PECIES
? T
HE
D
ECAY OF
P
OWER IN
N
ATIONAL
P
OLITICS

From Empires to States: The More Revolution and the Proliferation of Countries

From Despots to Democrats

From Majorities to Minorities

From Parties to Factions

From Capitals to Regions

From Governors to Lawyers

From Leaders to Laymen

Hedge Funds and Hacktivists

The Political Centrifuge

C
HAPTER
S
IX

P
ENTAGONS
V
ERSUS
P
IRATES
: T
HE
D
ECAYING
P
OWER OF
L
ARGE
A
RMIES

The Big Rise of Small Forces

The End of the Ultimate Monopoly: The Use of Violence

A Tsunami of Weapons

The Decay of Power and the New Rules of War

C
HAPTER
S
EVEN

W
HOSE
W
ORLD
W
ILL
I
T
B
E
? V
ETOES
, R
ESISTANCE
,
AND
L
EAKS
—
OR
W
HY
G
EOPOLITICS
I
S
T
URNING
U
PSIDE
D
OWN

The Stakes of Hegemony

The New Ingredients

If Not Hegemony, Then What?

Who's Afraid of the Big Bad Wolf? Traditional Power at Bay

Soft Power for All

The New Rules of Geopolitics

Just Say No

From Ambassadors to Gongos: The New Emissaries

Alliances of the Few

Anyone in Charge Here?

C
HAPTER
E
IGHT

B
USINESS AS
U
NUSUAL
: C
ORPORATE
D
OMINANCE
U
NDER
S
IEGE

In the Land of Bosses, Authority, and Hierarchy

What Is Globalization Doing to Business Concentration?

The Power and Peril of Brands

Market Power: The Antidote to Business Insecurity

Barriers Are Down, Competition Is Up

New Entrants and New Opportunities

What Does All This Mean?

C
HAPTER
N
INE

H
YPER
-C
OMPETITION FOR
Y
OUR
S
OUL
, H
EART
,
AND
B
RAIN

Religion: The Nine Billion Names of God

Labor: New Unions and Nonunions

Philanthropy: Putting the Bono in Pro Bono

Media: Everyone Reports, Everyone Decides

C
HAPTER
T
EN

T
HE
D
ECAY OF
P
OWER
: I
S THE
G
LASS
H
ALF
-F
ULL OR
H
ALF
-E
MPTY
?

Celebrating the Decay of Power

What's Not to Like? The Dangers of Decay

Political Paralysis as Collateral Damage of the Decay of Power

Ruinous Competition

Be Careful What You Wish For: Overdosing on Checks and Balances

Five Risks

C
HAPTER
E
LEVEN

P
OWER
I
S
D
ECAYING
: S
O
W
HAT
? W
HAT TO
D
O
?

Get Off the Elevator

Make Life Harder for the “Terrible Simplifiers”

Bring Trust Back

Strengthen Political Parties: The Lessons from Occupy Wall Street and Al Qaeda

Increase Political Participation

The Coming Surge of Political Innovations

Appendix: Democracy and Political Power

Acknowledgments

Notes

Bibliography

Index

POWER MAY FEEL ABSTRACT, BUT FOR THOSE WHO ARE MOST ATTUNED TO
it—namely, the powerful themselves—its flow and ebb can have a visceral edge. After all, those in positions of great power are best positioned to spot limits on their effectiveness and to feel frustration over the gap between the power they expect their rank to convey and the power they actually have. In my own small way, I experienced such constraints back in February 1989. At the time I had been named, at age thirty-six, the minister of development in the then-democratic government of my home country, Venezuela. Soon after we took office in a landslide election victory, we faced riots in Caracas—triggered by the anxiety over our plans to cut subsidies and raise fuel prices—that paralyzed the city with violence, fear, and chaos. Suddenly, and despite our victory and apparent mandate, the economic reform program that we had championed acquired a very different meaning. Instead of symbolizing hope and prosperity, it was now seen as the source of street violence, increased poverty, and deeper inequality.

But the most profound insight I had at that time was one I would not
fully comprehend until years later. It dwelt in the enormous gap between the perception and the reality of my power. In principle, as one of the main economic ministers, I wielded tremendous power. But in practice, I had only a limited ability to deploy resources, to mobilize individuals and organizations, and, more generally, to make things happen. My colleagues and even the president had the same feeling, though we were loath to acknowledge that our government was a hobbled giant. I was tempted to chalk this up to Venezuela itself: surely our sense of powerlessness had to do with our
country's notoriously weak and malfunctioning institutions. Such weakness could not be universal.

Yet later I would appreciate that it was universal indeed, or nearly so, among those with the experience of power. Fernando Henrique Cardoso—the respected former president of Brazil and founding father of that country's success—summed it up for me. “I was always surprised at how powerful people thought I was,” he told me when I interviewed him for this book. “Even well-informed, politically sophisticated individuals would come to my office and ask me to do things that showed they assumed I had far more power than I really did. I always thought to myself, if only they knew how limited the power of any president is nowadays. When I meet with other heads of state, we often share very similar recollections in this respect. The gap between our real power and what people expect from us is the source of the most difficult pressure any head of state has to manage.”