The End of Power

by Naim, Moises

  *The regional classification is the one used by the World Bank.

  *The Polity project excludes countries with less than 100,000 inhabitants.

  *For purposes of this analysis I included only the original OECD countries. Mexico, Chile, Turkey, Korea, the Czech Republic, and Poland are not included in the OECD group.

  ACKNOWLEDGMENTS

  I BEGAN TO WRITE THIS BOOK SHORTLY AFTER JUNE 7, 2006. THAT was the day when I published a column in Foreign Policy magazine titled “Megaplayers Vs. Micropowers.” The column’s central message was that the trend “where players can rapidly accumulate immense power, where the power of traditional megaplayers is successfully challenged, and where power is both ephemeral and harder to exercise, is evident in every facet of human life. In fact, it is one of the defining and not yet fully understood characteristics of our time.” The column was well received and I was thus encouraged to expand it into a book. It only took me seven years to convert that intention into this book. . . . Yes, I am a slow writer.

  But that is not the only reason why it took so long. I also had many distractions. Until 2010, I was the editor-in-chief of Foreign Policy magazine, a demanding job that slowed down my book writing but also gave me a wealth of opportunities to test, expand, and refine my ideas on how power is changing. Interacting with the authors who wrote for the magazine and with its brilliant staff was a constant source of inspiration, information, and intellectual challenge. They took me where I could not have gone on my own, and for that, I am very grateful.

  The person who deserves most of the credit for helping me develop the ideas in this book is Siddhartha Mitter. His support, suggestions, and overall contribution to the book are immeasurable. Siddhartha’s talent is only exceeded by his generosity. James Gibney, the first editor I hired at FP, and one of the best editors I know, was also instrumental in pushing me to clarify my thinking and forcing me to render my thoughts in the clearest possible language. I am very fortunate to have had the help of these two extraordinary colleagues and dear friends.

  Jessica Mathews, the president of the Carnegie Endowment for International Peace, read and commented in great detail on several drafts of the manuscript and was a constant source of ideas, criticism, and guidance. Her 1997 article, “Power Shift,” continues to be the seminal work that influences all of us who write about power and its contemporary changes. Jessica also gave me the time to finish the book at Carnegie, my professional home since the early 1990s. I am deeply indebted to her and to the Carnegie Endowment.

  I am also grateful to Phil Bennett, Jose Manuel Calvo, Matt Burrows, Uri Dadush, Frank Fukuyama, Paul Laudicina, Soli Ozel, and Stephen Walt, who read the entire manuscript and gave me detailed comments that made the book vastly better. And to Strobe Talbott, a longtime, generous friend who is now the president of the Brookings Institution, and who not only found the time to read several drafts of the entire manuscript but also spent hours helping me refine the implications of the decay of power.

  Thanks are due to those who over the long period of this book’s gestation gave me their time, shared their insights, critiqued my ideas, and in some cases, read and commented on early drafts of individual chapters: Mort Abramowitz, Jacques Attali, Ricardo Avila, Carlo de Benedetti, Paul Balaran, Andrew Burt, Fernando Henrique Cardoso, Tom Carver, Elkyn Chaparro, Lourdes Cue, Wesley Clark, Tom Friedman, Lou Goodman, Victor Halberstadt, Ivan Krastev, Steven Kull, Ricardo Lagos, Sebastian Mallaby, Luis Alberto Moreno, Evgeny Morozov, Dick O’Neill, Minxin Pei, Maite Rico, Gianni Riotta, Klaus Schwab, Javier Solana, George Soros, Larry Summers, Gerver Torres, Martin Wolf, Robert Wright, Ernesto Zedillo, and Bob Zoellick.

  A special note of thanks goes to Professor Mario Chacón of New York University, who prepared the appendix, a detailed analysis of empirical data showing the manifestations of the decay of power in national politics worldwide.

  I had superb research assistants throughout the period I worked on this book. I’d like to thank Josh Keating, Bennett Stancil, and Shimelse Ali for their help in making the book as strong as possible.

  Those who think that the internet and search engines have made libraries obsolete have not had the experience of working with the staff of the Carnegie Endowment’s library. Kathleen Higgs, Christopher Scott, and Keigh Hammond not only helped me find the sources and data I needed but often also alerted me to material that I did not know existed and in some instances proved critical in shaping my thinking. Thank you!

  I owe a very special debt of gratitude to Melissa Betheil. She doubled as my executive assistant and researcher, performing with grace and intelligence what often seemed an impossible balancing act. Lara Ballou also helped me manage my diverse activities with kindness and effectiveness. A couple of years ago, Lara joined Marina Spindler in running The Group of Fifty, an organization over which I preside and which would have consumed far more of my time were it not for Marina and Lara’s efforts. My thanks to these three indispensable colleagues.

  I am very fortunate to have as my agent and as my editor two of the top professionals in the business. Rafe Sagalyn, my longtime literary agent, gently but firmly helped me to define more precisely the book I wanted to write and then found the right publisher and editor for such a book. Tim Bartlett, at Basic Books, who has edited many of the most significant recent works on power and its mutations, took a strong interest in this project and spent an inordinate amount of time reading, commenting on, and editing my drafts. I am immensely grateful to both of them. At Basic Books, Tim’s assistants Sarah Rosenthal and Kaitlyn Zafonte were tremendously helpful. Sandra Beris and Christine J. Arden of Basic’s production team provided splendid editorial support. And Michele Jacob, Basic’s publicity director, and Caitlyn Graf, my publicist, were early and enthusiastic supporters of the book. I thank everyone on the team at Basic for getting behind the book.

  I also want to recognize and express my thanks to Luis Alberto Moreno, Nelson Ortiz, Roberto Rimeris, and Alberto Slezynger. They know why.

  My biggest thank-you, however, goes to my wife Susana, and to our children Adriana, Claudia, and Andres, a group now reinforced by Jonathan and Andrew. They give me the love, strength, and unconditional support that makes everything worthwhile. That is why this book is dedicated to them.

  Moisés Naím.

  Washington, DC

  March 2013

  NOTES

  CHAPTER ONE

  1. Dylan Loeb McClain, “Masters of the Game and Leaders by Example,” New York Times, November 12, 2011.

  2. “The title of Grandmaster has been used since 1838, but gained greater currency in the early twentieth century, when tournaments were sometimes designated grandmaster events, e.g. Ostend 1907, San Sebastian 1912.” The World Chess Federation (Federation Internationale des Echecs, known as FIDE from its French acronym) introduced the formal title “International Grandmaster” in 1950. The meaning of this term has changed during the history of chess. In the early twentieth it referred to someone who “might sensibly be considered as a challenger for the world championship, but eighty years later some to whom the world champion could give odds bear that name” (“World Championship” Oxford Companion to Chess, p. 450; Hooper and Whyld, Oxford Companion to Chess, p. 156).

  3. Robson, Chess Child: The Story of Ray Robson, America’s Youngest Grandmaster.

  4. James Black, quoted in Michael Preston, “12-Year-Old Brooklyn Chess Champ Eyes Bold Move: Becoming Youngest Grandmaster Ever,” Daily News, June 2, 2011.

  5. D. T. Max, “The Prince’s Gambit,” The New Yorker, March 21, 2011, http://www.newyorker.com/reporting/2011/03/21/110321fa_fact_max.

  6. Mig Greengard, quoted in ibid.

  7. Edward Tenner, “Rook Dreams,” The Atlantic, December 2008.

  8. Max, “The Prince’s Gambit.”

  9. Ivan Arreguín-Toft, “How the Weak Win Wars: A Theory of Asymmetric Conflict,” International Security 26, no. 1 (2001): 93–128; Ivan Arreguín-Toft, “How a Superpower Can End Up Losing to the Little
Guys,” Nieman Watchdog, March 23, 2007, www.niemanwatchdog.org. On the impact of IEDs, see Tom Vanden Brook, “IED Attacks in Afghanistan Set Record,” USA Today, January 25, 2012.

  10. Martin Wolf, “Egypt Has History on Its Side,” Financial Times, February 15, 2011. The updated figure for 2011 is from the Polity IV Project’s Global Report 2011, which was compiled at George Mason University (Wolf’s original source).

  11. Emmanuel Saez, “Striking It Richer: The Evolution of Top Incomes in the United States (Updated with 2009 and 2010 Estimates),” March 2, 2012, http://elsa.berkeley.edu/~saez/saez-UStopincomes-2010.pdf.

  12. Robert Frank, “The Wild Ride of the 1%,” Wall Street Journal, October 22, 2011.

  13. The sources for the facts and statistics cited here on business and managerial turnover can be found in the endnotes to Chapter 8.

  14. ArcelorMittal’s Web address is www.arcelormittal.com.

  15. See my Illicit: How Smugglers, Traffickers and Copycats Are Hijacking the Global Economy.

  16. Todd Gitlin, Occupy Nation: The Roots, the Spirit, and the Promise of Occupy Wall Street (New York: HarperCollins, 2012).

  17. Joseph Marks, “TechRoundup,” Government Executive, November 2011, p. 43.

  18. Aday et al., “New Media and Conflict After the Arab Spring,” p. 21.

  19. Machiavelli, The Prince, ch. 3, http://www.constitution.org/mac/prince03.htm.

  20. Hobbes, Leviathan, ch. 11, http://www.bartleby.com/34/5/11.html.

  21. Nietzsche, Thus Spake Zarathustra, ch. 34, http://nietzsche.thefreelibrary.com/Thus-Spake-Zarathustra/36–1; see also Meacham, “The Story of Power,” Newsweek, December 20, 2008.

  22. Dahl, “The Concept of Power”; see also Zimmerling, “The Concept of Power,” ch. 1. Another more academic definition was offered in 2005 by two leading scholars, Michael Barnett and Raymond Duvall: “Power is the production in and through social relations, of effects that shape the capacities of actors to determine their circumstances and fate.” Based on this definition, they propose a taxonomy of power: compulsory, institutional, structural, and productive. See Barnett and Duvall, “Power in International Politics.”

  23. Hobbes, Leviathan, ch. 13, http://www.bartleby.com/34/5/13.html.

  CHAPTER TWO

  1. For a detailed discussion, see MacMillan, Strategy Formulation: Political Concepts, particularly ch. 2.

  2. The other two channels of power—coercion and reward—actually alter the situation.

  3. At the theoretical level, finding a precise definition of barriers to entry has led to considerable hair-splitting among economists. One approach defines barriers to entry as factors that enable firms that are already in the market to command prices that are higher than unfettered competition would produce, yet without inducing new competitors to enter. Another approach identifies barriers to entry as any costs that a new competitor faces prior to entering the market, yet that firms already in the market do not face. In other words, the distinction is between a protected price advantage for firms already in the market and a supplementary cost, such as an entry fee, for would-be competitors. Other economists have more complex definitions still, but nothing in these debates takes away from the core insight that barriers to entry are essential to understanding the dynamics of a marketplace and the use of market power to maximize long-term profits. (For further discussion of this issue, see Demsetz, “Barriers to Entry.”)

  4. On barriers to entry in politics, see Kaza, “The Economics of Political Competition.”

  CHAPTER THREE

  1. LaFeber, The Cambridge History of American Foreign Relations, Volume 2: The American Search for Opportunity, 1865–1913, p. 186.

  2. Adams, The Education of Henry Adams: An Autobiography, p. 500.

  3. Chandler, The Visible Hand: The Managerial Revolution in American Business; see also Chandler, Scale and Scope: The Dynamics of Industrial Capitalism.

  4. Lewis et al., Personal Capitalism and Corporate Governance: British Manufacturing in the First Half of the Twentieth Century. See also Micklethwait and Wooldridge, The Company: A Short History of a Revolutionary Idea.

  5. Alan Wolfe, “The Visitor,” The New Republic, April 21, 2011.

  6. See “Max Weber” entry in Concise Oxford Dictionary of Politics, p. 558.

  7. See “Max Weber” entry in Encyclopaedia Britannica, Vol. 12, p. 546.

  8. Wolfgang Mommsen, “Max Weber in America,” American Scholar, June 22, 2000.

  9. Marianne Weber, Max Weber: A Biography (New York: Transaction Books, 1988).

  10. Scaff, Max Weber in America, pp. 41–42.

  11. Mommsen, “Max Weber in America.”

  12. Weber, Economy and Society: An Outline of Interpretive Sociology.

  13. Scaff, Max Weber in America, p. 45.

  14. Ibid., p. 45.

  15. Weber, Economy and Society: An Outline of Interpretive Sociology, p. 973.

  16. Weber, “Unequalled Models,” in Essays on Sociology, p. 215.

  17. Weber, “Politics as a Vocation,” in Economy and Society, p. 223.

  18. McNeill, The Pursuit of Power, p. 317.

  19. The information in this paragraph is drawn from Zunz, Philanthropy in America: A History.

  20. Coase, “The Nature of the Firm.” The author describes his motivation for this research in his Nobel Prize lecture, which is available online at http://www.nobelprize.org/nobel_prizes/economics/laureates/1991/coase-lecture.html.

  21. A more modern rendition of the transaction cost approach was offered by Coase’s student Oliver Williamson in his important book Markets and Hierarchies: Analysis and Antitrust Implications. Williamson was awarded the Nobel Prize in Economics in 2009.

  22. Leebaert, The Fifty-Year Wound: The True Price of America’s Cold War Victory, p. xiii.

  23. Sloan, My Years with General Motors.

  24. Howe, “This Age of Conformity”; Riesman, Glazer, and Denney, The Lonely Crowd: A Study of the Changing American Character.

  25. Marx and Engels, The Communist Manifesto.

  26. Mills, White Collar: The American Middle Classes.

  27. Mills, The Power Elite.

  28. Eisenhower’s speech is available online at http://www.h-net.org/~hst306/documents/indust.html.

  29. Domhoff, Who Rules America? Challenges to Corporate and Class Dominance.

  30. Christopher Lasch, “The Revolt of the Elites: Have They Canceled Their Allegiance to America?” Harper’s, November 1994.

  31. Klein’s talk is available online at http://fora.tv/2008/10/20/Naomi_Klein_and_Joseph_Stiglitz_on_Economic_Power#fullprogram.

  32. Simon Johnson, “The Quiet Coup,” Atlantic, May 2009, http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/. See also Johnson and Kwak, 13 Bankers.

  CHAPTER FOUR

  1. Interview with Javier Solana, Washington, DC, May 2012.

  2. Larkin, Collected Poems.

  3. William Odom, “NATO’s Expansion: Why the Critics Are Wrong,” National Interest, Spring 1995, p. 44.

  4. Charles Kenny, “Best. Decade. Ever,” Foreign Policy, September–October 2010, http://www.foreignpolicy.com/articles/2010/08/16/best_decade_ever.

  5. Xavier Sala-i-Martin and Maxim Pinkovskiy, “African Poverty Is Falling . . . Much Faster Than You Think!,” NBER Working Paper No. 15775, February 2010.

  6. Interview with Homi Kharas, Washington, DC, February 2012.

  7. The results of this OECD survey and other relevant reports can be found at www.globalworksfoundation.org/Documents/fact465.science_000.pdf.

  8. Brzezinski, Strategic Vision: America and the Crisis of Global Power.

  9. Jason DeParle, “Global Migration: A World Ever More on the Move,” New York Times, June 26, 2010.

  10. Jorge G. Castañeda and Douglas S. Massey, “Do-it-Yourself Immigration Reform,” New York Times, June 1, 2012.

  11. The figures on remittances are quoted from the World Bank Development Indicators Database (2011 edition).

  12. D
ean Yang, “Migrant Remittances,” in Journal of Economic Perspectives 25, no. 3 (Summer 2011), pp. 129–152 at p. 130.

  13. Richard Dobbs, “Megacities,” Foreign Policy, September–October 2010, http://www.foreignpolicy.com/articles/2010/08/16/prime_numbers_megacities.

  14. The National Intelligence Council, Office of the Director of National Intelligence, “Global Trends 2030: Alternative Worlds” (Washington, DC, 2012).

  15. Saxenian, The New Argonauts: Regional Advantage in a Global Economy.

  16. The figures on tourist arrivals are from the World Bank’s World Development Indicators Database (2011 edition).

  17. World Bank, “World Development Report 2009: Reshaping Economic Geography” (2009).

  18. The figures on foreign exchange are from the Bank for International Settlements: Statistical Report (2011), http://www.bis.org/publ/rpfxf10t.htm.

  19. “Somali Mobile Phone Firms Thrive Despite Chaos,” Reuters, November 3, 2009.

  20. These data are taken from the World Bank’s World Development Indicators Database (multiple years) and the International Telecommunications Union indicators database.

  21. Ibid.

  22. Ibid.

  23. Data provided by Facebook, Twitter, and Skype.

  24. Long Distance Post, “The History of Prepaid Phone Cards,” http://www.ldpost.com/telecom-articles/.

  25. Ericsson (telecom company), Traffic and Market Report, June 2012.

  26. Huntington, Political Order in Changing Societies.

  27. Al-Munajjed et al., “Divorce in Gulf Cooperation Council Countries: Risks and Implications,” Booz and Co, 2010.

  28. National Intelligence Council, Office of the Director of National Intelligence, “Global Trends 2030: Alternative Worlds” (Washington DC, 2012), p. 12.

  29. Frey, Diversity Explosion: How New Racial Demographics Are Remaking America.

  30. William Frey, “A Boomlet of Change,” Washington Post, June 10, 2012.

  31. Inglehart and Welzel, Modernization, Cultural Change and Democracy.