We destroyed our institutions. Now what?

Social media helped us shake up rigid institutions and empower people, but gave us a new world that has proven to be brittle and destructive. The new power structures that have arisen aren’t up to the job of maintaining our civilization.

When Charlene Li and I wrote Groundswell ten years ago, we had a utopian vision for social media. Here’s how we defined the groundswell:

The groundswell is a social trend in which people use technologies to get the things that they need from each other, rather than from traditional institutions like corporations.

Consider the world of 2008, which functioned because of institutions. Those institutions included:

• Governments, both national and local.
• Political parties, like the Democratic and Republican parties in the US.
• Intergovernmental agreements, like NATO, NAFTA, and nuclear treaties.
• The legal system, including law enforcement and the courts.
• The mainstream news media, including newspapers and television networks.
• Large corporations organized around shareholders, employees, and the drive to compete and deliver profits.
• The global financial system, including stock, debt, and commodities markets.

For the most part, these institutions were not despotic. Governments were accountable to voters, as were political parties. Courts and law enforcement bodies were accountable to elected legislatures. Corporations were accountable to shareholders and, while their influence was fading, to employee unions.

But while they weren’t absolutely unresponsive, institutions were slow and dull. Governments shifted slowly; bureaucracies kept them steady. Police kept policing. Companies built streamlined supply chains that made global trade efficient, if not flexible. Companies’ fortunes ebbed and flowed based on market conditions or management effectiveness. If they faltered, they went bankrupt or got bought.

Rigid systems are ripe for corruption. And there certainly was plenty of corruption in these parties, governments, corporations, and law enforcement agencies. But the corruption was at a manageable level, insufficient to completely destroy everyone’s faith in the system. If you were poor or black, you might see these institutions as unfair, but what could you do about it?

Institutions collected our taxes, gave us “choices” for elections, put the worst criminals in jail where they couldn’t hurt us, maintained our roads, passed regulations to prevent too much pollution and abuse, paid for some of our health insurance if we had a good job, gave us a salary and desk and a phone and workers’ compensation and if we got laid off, unemployment and outplacement. We could even invest if we had a few extra bucks and reap some of the benefits of being in a world ruled by institutions.

By 2008, we could already see the seeds of excess by these institutions creating cracks in the edifice. Corporate excess spawned resentment from wage slaves. The Tea Party, and later the Occupy movement, threatened parties. Online and mobile technologies threatened to disrupt commerce; blogs and “alternate” news sources rattled media built on distribution networks of airwaves and paper.

But there have always been failures and rumblings, even as the system itself survived. A few radicals couldn’t upset the institutions built on money, power, and most importantly, the complacency of the masses.

That all changed in the last ten years.

It turns out giving power to people is dangerous

“Power to the people!” It was the rallying cry of the 60’s, when dissent took the form of protests. But the institutions slowly adjusted.

The groundswell that took root in 2008 wasn’t about slow adjustment. It empowered people at the touch of a mouse. Not only didn’t you have to get out of bed; you didn’t even have to type. You could just hit the “like” button.

In the end, what threatens institutions is their lack of responsiveness to their constituents and stakeholders. But the threat also comes from new leaders and technologies and movements that are more responsive to those same constituents. So consider where we are now.

• Facebook and Twitter enable people to effortlessly rise up in an instant. That brought us the Arab Spring powered by the same forces that make stupid memes go viral.
• Disruptive candidates like Donald Trump and Bernie Sanders poke the traditional parties in the eye — and create deep divisions and mistrust among party members.
• Anyone can pretend to be a news organization. We get Now This and Vice — and fake news spread by Russian trolls. We get mindless “influencers” like Kim Kardashian.
• Anyone who’s unhappy with the status quo in America can arm themselves with an AR-15 and in many states, carry it around openly.
• Sharing economy companies like Uber and Airbnb flout regulations in the name of “disruption” — and undo the stable, dominant ways people have always traveled.
• Politicians lie at will and get huge followers who don’t care, because they’re “shaking up the status quo.” Nationalist movements spread and gain followers worldwide.
• Bitcoin soars, displacing money in some modalities, like extortion.
• Companies unwilling to participate in the traditional, institutional way of raising cash pursue unregulated “ICOs” instead.

While you can quibble with the individual elements of this trend and how much staying power they have, you can’t quibble with the general pattern. It looks like this.

1. Institution is slow and unresponsive.
2. People feel disenfranchised.
3. New “disruptive” entrant empowers the disenfranchised (Facebook, Instagram, Amazon, Trump, Uber, Bitcoin, Spotify).
4. Institution is unable or unwilling to address the change.
5. People tap into the new source of power and threaten, disrupt, or destroy the institutions.

This is not new. What’s new are the ways technology enables the change, and the speed with which the change happens. In the past, such changes have simply created new power centers, like the liberal and civil-rights driven people taking over the Democratic party in the 60s, or the cable industry shaking up television in the 70s. Old institutions morphed into or became displaced by new ones.

But the change this time has happened so rapidly that the new “institutions” and the leaders that run them are not up to the task of leading America.

Amazon is destroying retail with a model built on exploiting warehouse workers and copying successful products and putting them out of business.

Uber exploits drivers, fails to pay them properly, flouts rules, and subsidizes rides to put taxis out of business.

Spotify pays artists a tiny pittance and destroys the record industry.

Facebook and Twitter sweep away media and become the playground of hateful and destructive movements of all kinds, but take no responsibility for what happens on their platforms.

And of course, Donald Trump’s version of “leadership” is built on a culture of lying and a failure of government to perform its most basic functions.

I’m not sentimental for the old institutions. Their level of unresponsiveness created a fertile ground for this change. But we are not replacing old institutions with new ones. We are replacing old institutions with chaos.

In Groundswell, we said that people would get the things they need from each other, rather than institutions. That was true. But we failed to see that this idea of connecting to get power would inevitably create new sources of power in the groundswell’s enablers — a group that, collectively, is failing to build a new world to replace the old one.

Anarchy is terrible way to run things. Nobody enforces laws, everybody has guns, the streets are full of potholes, and the airplanes keep crashing. It concentrates power in the hands of people who appeal most strongly to the powerless and stupid. And you can’t trust people like that.

At this point, I’d like to support people who are actually ready to build something. Let’s see if we can remake some institutions that are ready for a groundswell-enabled world, instead of leaving it to chance.

Anyhow, that’s how I’ll be voting and investing, starting right now.