One of history’s recurring themes is man’s inability to credit information which conflicts with his prejudgments. Examples abound. In her book, Practicing History, the American historian Barbara Tuchman uses the Japanese attack on Pearl Harbor as one illustration of this. Despite the fact that Japan had opened the Russo-Japanese War in 1904 by a surprise attack against the Russian fleet, American authorities dismissed the possibility of a similar maneuver in 1941: "We had broken the Japanese code, we had warnings on radar, we had a constant flow of accurate intelligence . . . we had all the evidence and refused to interpret it correctly, just as the Germans in 1944 refused to believe the evidence of a landing in Normandy." Tuchman concludes: "Men will not believe what does not fit in with their plans or suit their prearrangements." This phenomenon, unfortunately, is not limited to discrete events.

When major tides of change wash over the world, power structures almost inevitably reject the notion that the world really is changing, and they cling to their old beliefs. In the past some changes came slowly and gave us the time we needed to adjust to a new reality. In the last years of this century, however, the velocity of change in the world has become so great that there are literally no precedents to guide us. Policymakers are discovering that many of the events that are altering the world come not in response to their actions, but are driven by technologies which they may only dimly understand.

II

About 85 percent of all the scientists who have ever lived are alive today. With their advanced tools and increased creative opportunities, it is not surprising that the rate of change is now more rapid than at any time in human history. "The entire Industrial Revolution," says Dr. Carver Mead of the California Institute of Technology, "enhanced productivity by a factor of about a hundred," but "the microelectronic revolution has already enhanced productivity in information-based technology by a factor of more than a million—and the end isn’t in sight yet." The immense consequences of this technological revolution have not always been grasped by policymakers.

Politicians and diplomats are by nature attracted to those political historians who record the rise and fall of nation-states, but they generally display little interest in the history of science. This lack of interest compounds the difficulty of understanding what is happening. Indeed, many renowned history books barely mention the impact of science on the course of political events. Even in ancient Greece, as Plato records, engineers were not held in high regard by philosophers: "You despise him and his art," he wrote, "and sneeringly call him an enginemaker, and you will not allow your daughter to marry his son or marry your son to his daughter." Very little has changed, even though scientific achievements are altering the shape of national and international events in fundamental ways.

A good example is the launching of Sputnik by the Soviet Union on October 4, 1957. At the time, world reaction was divided. Dr. Edward Teller opined that the United States "had lost a battle more important and greater than Pearl Harbor." President Eisenhower, however, took a more sanguine view:

So far as the satellite itself is concerned, that does not raise my apprehensions, not one iota. I see nothing at this moment . . . that is significant in that development so far as security is concerned, except . . . it does definitely prove the possession by the Russian scientists of a very powerful thrust in their rocketry.

The chancellor of West Germany, Konrad Adenauer, related the event to European geography: "Five hundred and sixty miles is only the distance from Bonn to Vienna. It does not prove they can fire anything parallel to the earth over a distance of many thousand miles."

In the blinding clarity of hindsight, Dr. Teller was probably closer to the mark in some ways than the politicians. Despite the initial reactions to Sputnik’s launch, what should no longer be in dispute is that satellite technology changed the world forever. Even today the full consequences are not yet known. On the other hand, the fallout from the event did galvanize America to mount a program that would put a man on the moon.

The convergence of computers with telecommunications has created an information revolution. One observer, the journalist Mike O’Neil, has said that this revolution is "hurrying the collapse of old orders, accelerating the velocity of social and political change, creating informed and politically active publics, and inciting conflict by publicizing the differences between people and nations."

The impact of information technology, moreover, has a profound effect on the rate of advance of all science, since calculations that used to take years can now be made in minutes. Scientific knowledge is currently doubling about every 13 to 15 years. The old industrial age is being slowly replaced by a new era of the information society. This transition does not mean that manufacturing does not matter, or that it will disappear, any more than the advent of the industrial age meant that agriculture disappeared. What it does imply is that, like agriculture today, manufacturing will produce more goods for more people with less labor. It also means that the relative importance of intellectual capital invested in software and systems will increase in relation to the capital invested in physical plants and equipment. Traditional accounting systems designed for an earlier age no longer reflect what is really happening, either in business or national economics.

III

The information revolution is changing our global economy, transforming national political and business institutions and altering national foreign policy objectives and the methods of achieving them.

Changes of this magnitude are profoundly disturbing to the power structure, and with good reason. The mismatch between the fruits of new technology and the operation of the political process, whether in government, business or the family, has often produced unrest, changing value systems and sometimes, indeed, revolution. Just as the spread of rudimentary medical knowledge took away the power of the tribal witch doctor, the spread of information about alternate life-styles in other countries threatens the validity of some official doctrines and thus some governments’ power bases.

Knowledge has always conferred power on those who have it and know how to use it, and the proliferation and dissemination of information to huge numbers of people can be, and more often than not is, a precursor to a shift in the power structure. But the effects of the information revolution go even deeper: the very nature and definition of national sovereignty is being altered.

The currently accepted tenets of national sovereignty, like most man-made concepts, did not emerge full-blown upon a waiting world, but evolved over time. Those with a vested interest in any given definition want to sustain their own power, and naturally resist any change which might undermine their authority.

Perhaps one of the first organized presentations of a concept of sovereignty appeared toward the end of the sixteenth century from the French scholar, Jean Bodin. He argued for the unlimited and autocratic power of the state unrestrained by law. This idea was embraced by kings but challenged by others, including Johannes Althusius, who argued that the state’s power was limited by the laws of God and nature and by the social contract between the state and the governed.

It was left to the great Dutch jurist, Hugo Grotius, to give us the definition of sovereignty that exists more or less intact to this day. Grotius defined sovereignty in broad terms as "that power whose acts are not subject to the control of another, so that they may be made void by the act of any other human will." This definition obviously covers many different facets of the exercise of power.

One of the fundamental prerogatives assumed by all sovereign governments has been to pursue their national interest by waging war. This has been true since ancient times, but today it is an aspect of sovereignty that is being severely circumscribed by the effects of information technology. No one who lived through the Vietnam War can fail to understand the enormous impact that television had in frustrating the American government’s objective in Southeast Asia. A general recognition that war produces violent death is one thing, but witnessing the carnage of a battle or the body bags being unloaded at Dover Air Force Base on the television set is quite another. While debate will rage for years about whether Vietnam was lost on the battlefield or on the home front, few observers would fail to give at least some significant weight to television’s impact on the citizens at home.

When the British engaged in war over the Falkland Islands, they severely limited the press and television coverage of the hostilities. Whether that military operation could have been successfully conducted under the glare of full television coverage is an open question; in any case, British rules on press coverage differ from those in America. In the United States, we have seen the names of American agents overseas published and have read accounts in national newspapers detailing American naval and troop movements at a time of national emergency.

Such episodes puzzle both domestic and foreign observers. Alexander Solzhenitsyn in his address at Harvard in 1978 put it this way: "We may see terrorists heroized, or secret matters, pertaining to one’s national defense, publicly revealed, or we may witness shameless intrusion on the privacy of well-known people."

This process has repercussions on the effectiveness of leadership. We are all familiar with the old saying that no man is a hero to his valet, and it can be argued that television has become the valet of today’s world leaders.

In the absence of a major threat to the integrity of one’s own borders or to the independence of the nation, one can at least question whether a democratic government operating in the full glare of television cameras could, in fact, conduct any sustained military operation that produces heavy casualties. If the answer is no, one important aspect of national sovereignty has been substantially altered.

IV

If we look at national domestic politics, we observe a similar phenomenon.

The quality, speed and nature of information spread by the mass media has altered the relationship between the people and their government. Representative government in America is changing. Information technology has made it both possible and politically profitable for politicians to bypass traditional political structures that supported the orderly process of government, and instead move toward the TV cameras to push a particular issue. As more and more leaders do this, the traditional cement of party discipline and consensus government begins to crumble. Adversarial confrontations make good TV drama, but may often lead to bad policy decisions.

The national and international agendas are increasingly being set by the media in the sense that policymakers have to spend a good share of their time and energy dealing with whatever crisis or pseudo-crisis has been identified by the media that particular day. Real issues, deliberative thought and long-range strategic plans are often casualties of whatever damage-control actions are required at the moment. In these circumstances, the old bipartisanship in American foreign affairs has fallen prey to a new divisiveness. The so-called TV docudramas, part fact, part fiction, have even attempted to change the record of past events. The merging of media and message has created a situation wherein, according to Daniel Boorstin, a "larger and larger proportion of our experience, of what we read and see and hear, has come to consist of pseudo-events."

This kind of information is rarely a solid foundation for good policy judgments. However, it characterizes the age in which we live. We live in a world where Yasir Arafat works with a media consultant; where Mohammed Abbas, who hijacked the Achille Lauro and murdered an old man in cold blood, appears on American network television, even though he was a fugitive from justice at the time; where the Iranians stage marches for the cameras; and where Soviet spokesmen appear regularly on American TV. The world today is very different from that of Citizen Edmond Genet—now, instead of being asked to leave the country, he would be on Ted Koppel’s "Nightline" to protest President George Washington’s outrageous policies.

Without passing a value judgment, the fact is that representative government, as envisaged by the Founding Fathers, is no longer operating in the manner originally intended. We may have to think anew about old relationships, but for the moment, the use of information technology has far outstripped the political process.

This problem is not limited to Western governments. If democratic societies face the problem of adapting to what amounts to a wholly new definition of sovereignty, closed societies like the Soviet Union will have a much more difficult time. Their problem is twofold: first, communist regimes have always relied to some extent on their ability to control what their citizens see and hear. This control is now beginning to slip, and from the Soviets’ point of view the situation will get much worse. In addition to borders becoming increasingly porous to TV and radio transmissions, studies at Harvard’s Center for Information Policy Research reveal that citizens of the Eastern-bloc countries have little difficulty gaining access to VCRs; the number available in Moscow is growing daily. The KGB is concerned that videotapes will be used for magnitizdat—a word coined for "tape publishing"—by political opposition groups.

The Soviet government’s second major problem is whether the U.S.S.R. can continue to be a leader in science. Modern scientific research increasingly requires the ability to have access to huge data bases at remote locations. If access is limited to a very small number of scientists, progress will be slowed. On the other hand, opening up supercomputers and data bases to large numbers of men and women obviously loosens the state’s control of data. It is a very real Hobson’s choice, and the dilemma will only get worse over time.

The phenomenon of eroding government control over the management of institutions and how citizens live and work is not limited to closed societies, but is becoming increasingly evident in the West. National sovereignty and political saliency have traditionally entailed the government’s power to regulate major sectors of society, ranging from health care to heavy industries. The increasing difficulty of exercising this power in the information age as opposed to the industrial age was summed up, in the March/April issue of Chief Executive magazine, by the economist George Gilder: "A steel mill, the exemplary industry of the material age," lends itself to control by governments. Gilder continued:

[A steel mill’s] massive output is easily measured and regulated at every point by government. By contrast, the typical means of production of the new epoch is a man at a computer workstation, with access to data bases around the world, designing microchips comparable in complexity to the entire steel facility, to be manufactured from software programs comprising a coded sequence of electronic pulses that can elude every export control and run a production line anywhere on the globe.

The advent of the silicon compiler, which is analogous to desktop publishing for chip design, opens up, in Gilder’s words, "a great economic cleavage between the interests of entrepreneurs and the authority of national governments." As technology continues to progress, the cleavage will deepen.

V

The growing inability of sovereign governments to regulate their affairs in the information age will have profound foreign policy implications.

Recently a private company forced a superpower to change its policy. This occurred when the government’s monopoly on photographs from space was broken by the launching in February 1986 of the privately owned French satellite SPOT. When the pictures of the Chernobyl nuclear disaster taken by SPOT appeared on the front pages of the world’s newspapers, the Soviet Union was forced to change its story and admit that the event was much more serious than it had previously claimed. In this instance, the technology was not new, but the power to use the information shifted from the government to the private sector. However, the event posed a continuing dilemma: what SPOT revealed about Chernobyl, it can also reveal about American military sites. There is no American censorship of SPOT pictures, as there has been on a de facto basis of America’s Landsat photos.

While the resolution of SPOT’s picture is only ten meters, it will undoubtedly be improved. It is not beyond the realm of possibility that the next logical development might be for an international news agency to purchase its own high-resolution satellite. As a cost comparison, the purchase of a satellite would be a good deal less expensive for a television network than covering the Olympics. If this occurs, the guardians of national security will clash in space with the defenders of the First Amendment.

The policy dilemma posed by SPOT was further sharpened by the offer of the Soviet Union to sell high quality imagery, which has a five-meter resolution, to anyone beyond their borders who could meet the price. National rules, including those of the Department of Defense and President Carter’s secret directive in 1978 limiting the power of civilian satellites, are eroding to the point of ineffectuality. One can wonder about the course of events if SPOT had produced a picture of Pearl Harbor on December 8, 1941, when the world was being told our fleet was intact. What is certain is that it will become progressively harder for nations to assert what is not true if the "spy in the sky" is not controlled by the government.

Another traditional aspect of sovereignty has been the ability of nation-states to issue currency and mandate its value. In the past, what kings said their currency was worth was not always congruent with the facts. In the seventeenth century the Amsterdam bankers made themselves unpopular by weighing coins and announcing their true metallic values. However, those bankers spoke to a very small audience and their voices were not heard far beyond the city limits. Technology now carries the market’s judgments on the value of currencies to all parts of the planet within minutes.

Today we are witnessing a galloping new system of international finance. Our new international financial regime differs radically from its precursors in that it was not built by politicians, economists, central bankers or finance ministers, nor did high-level international conferences produce a master plan. It was built by technology. It is doubtful if the men and women who interconnected the planet with telecommunications and computers realized that they were assembling a global financial marketplace that would replace the Bretton Woods agreements and, over time, alter political structures. Although only a few politicians recognized the possibilities of instant global communications, the money traders of the world immediately drove their trades over the new global electronic infrastructure, creating a new international monetary system governed by the Information Standard.

Today, information about all countries’ diplomatic, fiscal and monetary policies is instantly transmitted to more than two hundred thousand screens in hundreds of trading rooms in dozens of countries. As the screens light up with the latest statement of the president or the chairman of the Federal Reserve, traders judge the effect of the new policies on the relative values of the country’s currency and buy or sell accordingly.

Although innumerable speeches are made giving lip service to the idea of a global marketplace, many people still fail to understand the reality. The entire globe is linked electronically, with no place to hide. Finance ministers who believe in sound monetary and fiscal policies are starting to perceive that the new technology is on their side. And politicians who wish to evade responsibility for the results of their imprudent actions on fiscal and monetary matters correctly perceive that the new Information Standard will punish them. The consequences are, in fact, more draconian than the gold exchange standard and a great deal faster in coming.

VI

Like all technological advances, the new Information Standard makes the world’s power structures very nervous, and with good reason. The rapid dissemination of information has always changed societies and, thus, the way governments operate. In the United States, perhaps the most dramatic example of this dynamic was the civil rights movement. The plight of black people in many sections of the nation went almost unnoticed by many Americans for almost a hundred years. Suddenly the TV cameras brought into our living rooms the image of Bull Connor with his dogs and whips. Americans quickly decided together that this was wrong, and the civil rights movement made a quantum leap forward, drastically changing the country’s political landscape.

Even though American politicians have come to accept universal suffrage and the ballot box as arbiter of who holds office and who does not, the similar new global vote on a nation’s fiscal and monetary policies is profoundly disturbing to many.

The world’s financial marketplace will never recede to its old national borders. Lines on the maps, traditionally the cause of wars, are now porous. Money and ideas move across borders in a manner and at a speed never before seen. Markets are no longer geographical locations, but data on a screen transmitted from anywhere in the world. It is difficult to suddenly accept the judgment of thousands of traders who translate politicians’ actions into new monetary values, because this situation has arisen so quickly. Nevertheless, it is about as useful to curse the thermometer for recording a heat wave as it is to rail against the values the global market puts on a nation’s currency.

This state of affairs does not sit well with many governments, because they correctly perceive that the new Information Standard is an attack on their sovereign powers. Since global financial markets are a kind of free speech, many complain about what the markets reveal about their country’s policies.

In the past, if a country did not like the way a particular financial standard was working, be it the gold standard or the Bretton Woods agreements, the leader of the country could call a press conference and simply opt out of the system. This has happened many times in history. What will eventually harness politicians’ attention is that there is no longer any way for a nation to resign from the Information Standard. No matter how a country attempts to escape from the system, the world’s trading room screens will continue to light up and the market will continue to make judgments.

Since the underlying technology of the new financial system will not disappear, it is reasonable to assume that the Information Standard will be with us for a long time. The good news is that since it is here to stay, there will be increasing pressure on all governments to implement sound fiscal and monetary policies, which will in turn enhance the chances of international financial cooperation. While each nation will continue to pursue what it perceives to be its national interests, there will be increasing pressure to harmonize various economic policies. Progress is already visible in these areas.

VII

In the field of foreign policy, new technology is rewriting old concepts of sovereignty and over time will also change national objectives. As early as 1945, British Foreign Secretary Anthony Eden noted that "every succeeding scientific discovery makes greater nonsense of old-time conceptions of sovereignty." Although Eden was among the first leaders to recognize the impact of science on national sovereignty, the current shift in the power structure is not unique in history. There have been many instances throughout history of technology’s impact on international relations, altering the balance of power between sectors of society and between countries.

The early science of blue-water navigation is a case in point. Although mariners from many countries had for years crossed oceans and explored foreign climes, only the Europeans exploited the political potential presented by this new knowledge. The historian Fernand Braudel has pointed out that "the conquest of the high seas gave Europe a world supremacy that lasted for centuries." The historical mystery is why the technology of ocean navigation, once demonstrated, was not grasped by other maritime civilizations to expand their own political power.

In more recent times, even the most jaded diplomat might have to concede that the balance of power in the world shifted decisively on July 16, 1945, in the desert at Alamogordo, New Mexico, when the first atomic explosion took place. (For the modern Luddites who explain almost daily that the Strategic Defense Initiative will not work, it is useful to remember that almost half of the scientists at Los Alamos thought the atomic bomb would not fire.) When it did, relations between nations were instantly altered and, indeed, the very survival of our planet came into question. The process works both ways: scientists suddenly also discovered the desirability of a world framework of international law and order to protect society from their own discoveries.

Some will say that while new technologies may affect the balance of power on a temporary basis, they cannot change the basic geopolitical interests of a country. This argument rests, in part, on the fact that it is vital for a country to have assured access to certain critical raw materials. Countries having these desired natural resources within their borders are therefore of strategic importance to the United States. The oil-rich nations in the Middle East are the most obvious examples, but there are other countries whose soils contain important minerals ranging from copper to titanium.

Not that long ago, armies fought and men died for control of the iron and steel in the Ruhr Basin because ownership of these assets conferred economic and political power. Indeed, the idea of a nation-state was based on the concept of territoriality. Today, these once coveted assets may be a liability. To the extent that new technology replaces once essential commodities with plastics or other synthetic materials, the relative importance of these areas to the vital interest of nations is bound to change.

When World War II cut the United States off from a supply of natural rubber from the Far East, we turned to synthetic rubber, the basic research on which had been completed before World War I. The technology had not been exploited because it was too expensive. The war emergency caused us to set aside economics in order to produce tires, but as we went up the learning curve, production costs were driven down. When we reached the point where synthetic rubber became cost-effective, the significance of rubber-producing countries to our strategic interests tended to decline.

Today, as fiber-optic cable replaces the twisted copper pair, the relative strategic importance of copper-producing countries will also shift. Sand, the most common substance in the world, is the raw material for computer chips. Clay is the base for superconducting ceramics that will speed data by a factor of a hundred, generally enhance the power of magnets and thus further shift the value of traditional natural resources. Over a period of years this same pattern, in various degrees, will continue to apply to other natural resources, even oil.

As scientific advances continue to unfold, diplomatic priorities are bound to change. Even the strategic importance of critical areas of the world is altered by technology. It was not so long ago that conventional wisdom held that lights would go out all over the world if the Suez Canal were ever to be closed. However, conventional wisdom did not take into account the technology that would allow the building of huge supertankers able to carry oil economically around the Cape of Good Hope. This feat was achieved by relatively simple technology, but it altered the importance of the physical control of a specific territory.

Today the velocity of change is so great in all aspects of science, technology, economics and politics that the tectonic plates of national sovereignty and power have begun to shift. Political scientists and statesmen are fond of remarking that generals usually prepare to fight the previous war. Now the policymakers may be guilty of similar errors. If today’s leaders in government and business fail to recognize that the world has changed because what they see, in Tuchman’s words, "does not fit in with their plans or suit their prearrangements," they will follow into oblivion a long list of leaders who have made similar mistakes. Those who can understand and master change will be tomorrow’s winners.

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  • Walter B. Wriston is a consultant to the secretary of state and former chairman of Citicorp/Citibank. Copyright © 1988 by Walter B. Wriston.
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