The EU’s ruling on Apple’s Irish tax affairs is a sign of two different sets of change: the ending of the ICT boom, and the decline of globalisation
Silicon Valley seems surprised, and not for the first time, by the fact that the European Union has a different view of its business practices than it does. Apple is perplexed (even maddened) by the decision of the EU’s Competition Commissioner, Margrethe Vestager, that it should pay the same rate of corporation tax as other companies doing business in Ireland–and that it therefore owed €13 billion, perhaps more, in back taxes. Bloomberg explains the issue well.
Google, similarly, has been perplexed by the three separate anti-trust suits that the EU has filed against it. One relates to its advertising business; a second to its shopping service; the third is about whether Google has been giving preferential treatment to both Search and Chrome in its Android operating system.
So what’s going on here? Two separate things: first, it’s about the coming end of the ICT boom that has dominated innovation and culture since the mid-1970s; second, it’s about the limits of corporate power and influence as economic globalisation declines.
One of the striking things about much of the commentary on Jeremy Corbyn’s Labour leadership election campaign and victory was the short-term nature of the historical thinking. Mostly, it seems, political memories stop in the early 1980s, when current 60-somethings started work. And some of the political prognosis has bordered on hysteria.
There’s a longer view that might help people understand what is happening.
The political scientist David Runciman has observed that Britain has had political crises every 40 years, for more than a century now. There was one in the 1890s, one in the 1930s, one in the 1970s, and we’re certainly living through one now.
In an earlier post in my “long waves” series I wrote briefly about the war school and the different theories that existed within it. After this post, I plan mostly to move on from Joshua Goldstein’s 1988 book, Long Cycles: Prosperity and War in the Modern Age. In summary, there are three “war” theories: The leadership cycle school, based on the work of Modelski; the world-system school, led by Wallerstein; and the power transition school, which has emerged from the research of Organski. Goldstein summarises these differences well:
The leadership cycle school focuses on the role of global war in establishing a new international order under a world leader roughly every century. The neo-Marxist world-system school focuses on hegemony and rivalry in the core of the world economy, linking hegemonic cycles to pairs of long waves. The power transition school focuses on changes in national power and their effects on war and hegemony.
The second post in my series on long wave theories
The idea of long waves is associated with the Russian economist Nikolai Kondratiev, who was eventually shot by Stalin for his troubles. But the first versions of the theory came from two Dutch scholars a decade earlier, van Gelderen and de Wolff. Kondratiev studied price data (and therefore effectively was looking at long swings in economic investment activity), but other long wave theorists have developed their theories based on different drivers of change, from innovation, to capitalist restructuring, to long-run capital investment, to war.
My plan in these posts was to review the different theories by re-reading the various theorists, but the American academic Joshua Goldstein has done a lot of this work in some detail in his 1988 book Long Cycles: Prosperity and War in the Modern Age, and has also posted the whole of the book online. I’d say his book is essential reading if you’re interested in the idea of long wave theory.
This post will draw on some of my wider reading, but will mostly synthesise the painstaking work that Goldstein has done.
It’s fairly clear, if you spend any time doing futures work, that there are some recurring patterns that seem to evolve over one or two generations, or more. As part of a personal research project, I have started re-reading these “long wave” theories to try to understand their similarities and differences, and I’ll be blogging about my reading as I go.
An obvious starting point in this journey is Jim Dator’s long survey of the area, “From Tsunamis to Long Waves and Back”, drawn from the archive of the journal Futures, and published over two articles in Futures in 1999. The essay – recombined – can be found here.
Here I’m just going to pull out some extracts that seem to shape the landscape.
One of the most tiresome tropes on the futures circuit is the idea that the world is speeding up, often accompanied by a dodgy video with dodgier data. It’s one of those things that almost every generation in history has believed, along with the notions that young people are less respectful than they used to be and that society is going to the dogs. It also helps to sell books and consultancy projects. And broadly speaking, it is just plain wrong. To borrow Sohail Inayatullah’s terminology, it is a “used future”, borrowed from someone else.
Watching the SOPA/PIPA saga unfold from the other side of the Atlantic, it was difficult not to see it as a ‘wave war’, in which companies which grew up in different technology waves compete to set the frame of economic and policy discussion. On the one side, the media companies, creatures of the mass production era that dominated much of the 20th century; on the other, the technology companies that have grown up in the digital wave that followed it. (I wrote about these waves in the Futures Company Futures Perspective report, Technology 2020).
The technology companies seem to be on the right side of the generational wave.
I read an interview the other day with a futurist who said that a traveller from 1910 would find the present world ‘unfathomable’. It was one of those ahistorical things which futurists say to get attention, sometimes adding that everything is speeding up, but it’s not borne out by the briefest review. Quite a lot of the world of 2010 would be familiar to a traveller from a hundred years ago.