Historical essay on convergence vs divergence clubs and network power

Chapter Two: The Age of Network Power In which the Seventh Sense reveals a fundamental insight: Connection changes the nature of an object. 1. Several hundred years ago the forces of the Enlightenment and the Industrial Revolution, like twin hammers, began working away at the roots of an ancient order. The powerful ideas of liberty, freedom of thought, science, democracy and capitalism - these all layered one upon the other. They washed, like irresistible tides, across the institutions and kingdoms and beliefs of Europe and in a process of revolution, of invention, of destruction and creation, they put a period at the end of one era, and began the very first lines of anew human story. These forces produced what we know today as the modern world: Trains knit new markets, science tripled life spans, democracy liberated politics. Confronted with this really irresistible pressure, a gulf opened. The world started to cleave. On one side were the nations and peoples that our modern economists would come to know and label as a “Convergence Club.” ? This group mastered and refined and then used the tools of their era to become industrial, democratic, scientific and rich.1° They left the age of kings and feudal lords, of alchemists and all-knowing priests behind. At the same time, a “Divergence Club” appeared. These nations missed the essential turn. They were trapped. Old ideas, useless habits of power, inescapable history - varied shackles held them back from the punctuated shift to a new, more advanced equilibrium. Russia, China, much of Latin America and Africa - for them, the leap to being honestly modern was fatally elusive. Even today, they struggle to catch up. Weare now in the earliest stages of a shift that promises to be still more consequential than the one that enlightened and industrialized our world over several centuries after the Dark Ages. The essence of this shift is best captured by the prodigious explosion of different types of connection emerging around us now - financial, trade, information, transport, biological - and the innovative combinations that follow these and other fast, fresh links. Modern, highly-connected systems are different than those with less connection. And, as we'll come to see, they are particularly different from those with slower connection. We experience power through networks now, as once we experienced it through brick-bound institutions like universities or military headquarters or telephone company switches. You can no more understand the operations of Hizb’allah or China’s central bank or the most valuable Internet companies today without at least this frank admission: Their ° On one side: William J. Baumol, Convergence of Productivity Cross-national Studies and Historical Evidence (New York: Oxford University Press, 1994) 10 This group mastered: See Joel Mokyr, “The European Enlightenment, the Industrial Revolution, and Modern Economic Growth”, Max Weber Lecture, European University, March 27, 2007 18 HOUSE_OVERSIGHT_018250