If you look at the business world as divided between “bits” businesses, whose main product is information, and “atoms” businesses, whose main product is something material, you would have to conclude that a central consequence of the Internet has been to destroy traditional bits businesses.
OK, maybe not “destroy” but, like Schumpeter, to “creatively destroy.” But the shrink-wrap software business, the CD-based music business, the video rental business, and the newspaper-on-your-doorstep business probably aren’t making these fine distinctions. They’re too busy dying.
Guess what: politics may be next.
Politics is definitely a “bits” business: the main product of politics is rules and procedures for forcing people to do something (“laws”). Today these products are developed only by specialized brokers (“politicians”) who operate on specialized exchanges (“legislatures”). Sounds like a legacy bits business ripe for creative destruction.
It’s beginning today. When Sarah Palin can raise a candidate’s numbers by five or six points by tweeting about her, when Barack Obama can raise tens of millions of dollars through Internet-based peer-to-peer fund-raising technologies, when micro-messaging can slice and dice a political audience so that no one hears what they don’t want to, the game is over for traditional politics.
Not certain to be a good development, perhaps. The Founders designed the existing government channel to damp down the whims of the mob. In California, where Upton Sinclair made it easy for almost any legislation to go to a proposition voted directly by the people, the result during the twenty years this correspondent lived in the Golden State was an electorate more bent than any pork barrelista on using the state’s good credit rating to slap money down on everything that came before us.
But here’s the way the future works: it’s going to happen whether it’s good or bad, and it seems fair to say that the legislative branch-as-demented-exchange is toast. What will replace it?
One possible Legislature 2.0 is a kind of trading exchange where citizens bid their tax dollars in a day-trading kind of setup against projects proposed by anyone and everyone. Or, if that doesn’t capture the coercive nature of laws and the state, imagine a Legislature 2.0 where citizens “lobby” with their dollars to get others on the exchange to drop projects that will harm them. A kind of K-Street-meets-Farmville.
It’s not so clear what will happen to government’s executive function. The executive branch, which does the actual forcing of citizens, is really more of an atoms business than a bits business. Like the UPS or Fedex of politics, the executive branch actually fulfills coercion. It’s hard to see that being disintermediated by anything.
And it’s not so clear what’s going to happen to the judiciary. A bits business for sure. Will prosecutors and defense attorneys plead their case through social media? It’ll be some time before that happens, but it’s hard to believe that a citizenry that takes its journalism from bloggers and its legislation from Twitter will settle for anything less than a kind of trial by “American Idol,” where a panel of judges flirts with, browbeats, and mugs in front of prosecution, defense, and witnesses while a mass jury of whoever-cares-to-join texts in its verdicts.
Whether it’s as Bad as All That or whether a more consumer-oriented and choice-oriented online culture supplants the stuffy old smoke-filled rooms to the benefit of all, Politics 2.0 is moving forward, and a whole bunch of “brokers” are going to be out of work.
Dan Gordon is the Director of Research at Valhalla Partners, a venture-capital firm in Tysons Corner, Virginia. He has created, written about, and mulled over technology and the appropriate uses of technology for more than 30 years.