David Ronfeldt on the Evolution of Governance

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From the report, Tribes, Institutions, Markets, Networks

By David F. Ronfeldt, Senior Social Scientist of Rand Corporation

Full document at http://www.rand.org/publications/P/P7967/P7967.pdf

Selections taken from http://www.nicklewis.org/book/export/html/125


Introduction

Power and influence appear to be migrating to actors who are skilled at developing multiorganizational networks, and at operating in environments where networks are an appropriate, spreading form of organization. In many realms of society, they are gaining strength relative to other, especially hierarchical forms. Indeed, another key proposition about the information revolution is that it erodes and makes life difficult for traditional hierarchies.

This trend ”the rise of network forms of organization” is so strong that, projected into the future, it augurs major transformations in how societies are organized.

What forms account for the organization of societies? How have people organized their societies across the ages?

The answer may be reduced to four basic forms of organization:

1. the kinship-based tribe, as denoted by the structure of extended families, clans, and other lineage systems.

2. the hierarchical institution, as exemplified by the army, the (Catholic) church, and ultimately the bureaucratic state.

3. competitive-exchange market, as symbolized by merchants and traders responding to forces of supply and demand.

4. and the collaborative network, as found today in the web-like ties among some NGOs devoted to social advocacy.

Incipient versions of all four forms were present in ancient times. But as deliberate, formal organizational designs with philosophical portent, each has gained strength at a different rate and matured in a different historical epoch over the past 5000 years. Tribes developed first,hierarchical institutions next, and competitive markets later. Now collaborative networks appear to be on the rise as the next great form of organization to achieve maturity.

The rise of each form is briefly discussed below, as prelude to assembling the four in a framework, currently called the TIMN framework about the long-range evolution of societies. The persistent argument is that these four forms and evidently only these underlie the organization of all societies, and that the historical evolution and increasing complexity of societies has been a function of the ability to use and combine these four forms of governance in what appears to be a natural progression.

While the tribal form initially ruled the overall organization of societies, over time it has come to define the cultural realm in particular, while the state has become the key realm of institutionist principles, and the economy of market principles. Civil society appears to be the realm most affected and strengthened by the rise of the network form, auguring a vast rebalancing of relations among state, market, and civil-society actors around the world.

The TIMN Framework

Before elaborating on this, some definitional issues should be noted. The terms tribes, institutions, markets, networks beg for clarification:


Tribes:


The first major form to define the organization of societies is the tribe, which emerged in the Neolithic era some 5000 years ago. Its key organizing principle is kinship initially of blood, and later also of brotherhood.6 Its key purpose is to render a sense of social identity and belonging, thereby strengthening a people's ability to band and survive.

The maturation of this form defines a society's basic culture, including its ethnic, linguistic, and civic traditions. Indeed, what happens at this level of organization has remained a basis of cultural traits well into modern periods; it also lays the basis for nationalism.

In keeping with the primacy of kinship and the codes of conduct that stem from it, the classic tribe is egalitarian, its members share communally. It is segmentary every part looks like every other part, and there is little or no specialization. And it is acephalous or headless, classic tribes do not have strong, central chiefs. (The chiefdom is a transitional phase between tribes and early states.)

A society cannot advance far (at least not in developmental terms) with a tribal organization. It is vulnerable to clan feuds and resource scarcities, and tends to alternate between fusion (where clans intermarry and absorb outsiders) and fission (where a part hives off and goes its own way).

The tribal form is particularly limited and inefficient for dealing with problems of rule and administration, as in attempting to run a large agricultural activity or govern a conquered tribe. And that takes us to the next form to evolve: the hierarchical institution.

But as I move to discuss that and later forms, the point should be kept in mind that tribelike patterns, which once dominated the organization of societies, remain an essential basis of identity and solidarity as societies become more complex and add state, market, and other structures. Moreover, the tribal form, even though it eventually loses its grip on the overall overnance of a society, persists in affecting the later forms. This shows, for example, in the development of aristocratic lineages and dynasties, old-boy networks, and mafias that permeate the ruling institutions of some societies at different periods of history.

Yet, however much a set of people may enjoy the sense of solidarity and community that a tribal life-style can provide, no society or segment of society can make much progress in modern, especially national terms solely on the basis of this form. Among other things, it cannot provide well for physical defense and security or organize people well for major economic and other undertakings.


Institutions


The term institution as used here (in the tradition of Max Weber) refers to bounded organizations that are based essentially on hierarchy, and have leaders, management structures, and administrative bureaucracies. As numerous anthropologists have written, with its rise, hierarchy supplants kinship as an organizing principle. Moreover, in the words of philosopher Jurgen Habermas (1979: 160), Collective identity was no longer represented in the figure of a common ancestor but in that of a common ruler.

High points of the formâts rise are the ancient empires, especially the Roman Empire and later the absolutist states of the sixteenth century, where all of society was supposed to assume its place under a top-down ruling hierarchy. The major result of this formâts development is the state, which overwhelms the tribal design.

As seen in traditional institutions like the army, the monarchy, and the Catholic Church, the essential principle behind this form is hierarchy. It enables a society to address problems of power, authority, and administration, and to advance by having a center for decision, control, and coordination that is absent in the classic tribe.

The hierarchical form excels at activities like building armies, defending a nation and expanding its domain, organizing large economic tasks, dispensing titles and privileges, enforcing law and order, ensuring successions, imposing religions, and running imperial enterprises, all activities at which the tribal form was lacking.

Hierarchical institutions are typically centralized and built around chains of command; bureaucratization occurs as they become more elaborate and technically oriented. Partly borrowing from the tribal culture, this form thrives on ritual, ceremony, honor, and duty, especially where aristocratic dynasties take hold.

Two points bear emphasis to conclude this sketch. First, history speaks to the impossibility for a single hierarchy to rule an increasingly complex society and all its political, economic, and other affairs indefinitely. Nonetheless, rival hierarchies, for example, Church and State may coexist if they define bounded realms and stay out of each other's terrain.

Second, the hierarchical design proves to have a key limitation: It cannot process complex exchanges and information flows well. This shows up most in the area of economic transactions, which become too complicated for monarchies and their bureaucracies to control in detail. They have increasing difficulty dictating terms and prices in a productive, acceptable manner. This proves particularly the case with long-distance trade within and beyond a country's borders; as it grows, traders and merchants who had operated at the behest of a state work to break free of autocratic controls and to go independent. Thus, the institutional paradigm of governance begins to fail in the economic realm, and gives way to the rise of the next great form: the market.


Markets


That takes us to the third form to mature: the competitive market. There were marketplaces in ancient times (e.g., the Greek agora), but the market as a philosophical and organizational concept does not arise until the eighteenth century, on the eve of the industrial revolution, when the writings of Scotland's Adam Smith and the French Physiocrats explain that a market economy will function as a self-regulating system if left alone by the state (as well as by big business monopolies). Then we see a transition in Europe from mercantilism, where the state dominates the market, to capitalism, where market actors may try to dominate state actors—and in the process, mercantilism is outperformed. We also see a separation of the state and market realms, and of the public and the private sectors. Compared to the tribal and institutional designs, the market engages a very different, even contradictory set of principles.

Its essential principle is open competition among private interests that are supposed to behave freely and fairly. Its strength is that it enables diverse actors to process diverse exchanges and other complex transactions better than they could in tribal and hierarchical systems. At its best, this form leads to a productive, diversified, innovative economy, overcoming the preferences of the prior forms for collectivism and statism.

Whereas the ideal institutional system was hierarchical, the ideal market system is competitive and quite atomized. The new concept meant that property, products, services, and knowledge could be traded across great distances at terms and prices that reflected local exchange conditions rather than the dictates of rulers. It meant that people were entitled to act in terms of personal interests, profit motives, and individual rights that ran contrary to traditional notions of hierarchy. Thus, the market concept entailed new ideas about how a society should be organized.

While the market was not supposed to supplant the institutional system, it does displace it from dominating the economic realm. It limits the institutional systems scope of activity and increasingly confines it to the realm of the state. In the eighteenth- and nineteenth-century nation-states where the market system took control of economic transactions, the institutional system retained its hold on the state, for its functioning depended on hierarchy and still continues to do so.

Thus the point to emphasize is not one of competition and conflict between the two forms of organization, but combination. A society's ability to combine these distinctive forms of governance, many of whose principles contradict each other, renders an evolution to a higher level of complexity. It also expands a society's capabilities; for the growth of the market system strengthens the power of the states that adopt that system (e.g., through increased tax revenues), even as it ensures that the state alone cannot dictate the course of economic development. The state emerges from the combination better able to focus on its core strengths, like providing for national defense, preserving law and order, and assuring that health, education, and welfare requirements are met for strengthening society as a whole, none of which the market system itself can accomplish well.


Networks

The tribal, institutional, and market forms have long ruled the organization and advance of society, and some analysts have recently thought that this would spell the end of the story. However, as noted earlier, yet another form is on the rise around the world: the information-age network.

Its key principle is heterarchic (or, to offer another term, panarchic) collaboration among members who may be dispersed among multiple, often small organizations, or parts of organizations. Network designs have existed throughout history, but multiorganizational designs are now able to gain strength and mature because the new communications technologies let small, scattered, autonomous groups to consult, coordinate, and act jointly across greater distances and across more issue areas than ever before.

In retrospect, research by anthropologist Luther Gerlach and sociologist Virginia Hine looks especially relevant for the TIMN framework and its implications for the rise of the network form and the concomitant strengthening of civil society. They concluded that many social movements in the 1960s and 1970s in the United States amounted to what they call segmented, polycentric, ideologically integrated networks” (SPINs):

By segmentary I mean that it is cellular, composed of many different groups.... By polycentric I mean that it has many different leaders or centers of direction.... By networked I mean that the segments and the leaders are integrated into reticulated systems or networks through various structural, personal, and ideological ties. Networks are usually unbounded and expanding.... This acronym [SPIN] helps us picture this organization as a fluid, dynamic, expanding one, spinning out into mainstream society. (Gerlach 1987: 115, based on Gerlach & Hine 1970)

But while Gerlach and Hine anticipated by two decades many points about the rise and nature of all-channel network forms of organization, their work has been little noted.

Why does the information revolution, in both its technological and non-technological aspects, favor the rise of organizational networks? In the first place, this revolution makes life difficult for traditional institutions. It erodes hierarchies, diffuses power, ignores boundaries, and generally compels closed systems to open up. This hurts large, centralized, aging, bureaucratic institutions.

While institutions are traditionally built around hierarchies and prefer to act alone, the new multiorganizational networks consist of (often small) organizations or parts of institutions that link together to act jointly. Building and sustaining such networks requires dense, reliable information flows. As mentioned earlier, today's information technology revolution enables this by making it possible for dispersed actors to consult, coordinate, and act jointly across greater distances and on the basis of more and better information than ever before. While examples exist across the political spectrum, the most evolved are found among progressive political advocacy and social activist NGOs that depend on using new information technologies to consult and coordinate.

The rise of these networks implies profound changes for the realm of civil society. In the eighteenth and nineteenth centuries, when most social theorists focused on state and market systems, liberal democracy fostered, indeed required, the emergence of this third realm of activity. Philosophers such as Adam Ferguson, Alexis de Tocqueville, and G. W. F. Hegel viewed civil society as an essential realm composed of all kinds of independent nongovernmental interest groups and associations that acted sometimes on their own, sometimes in coalitions, to mediate between state and society at large. However, civil society was also considered to be a weaker realm than the state or the market. And while theorists treated the state and the market as systems, this was generally not the case with civil society. It was not seen as having a unique form of organization equivalent to the hierarchical institution or the competitive market, although some twentieth century theorists gave such rank to the interest group.

Now, the innovative NGO-based networks are setting in motion new dynamics that promise to reshape civil society and its relations with other realms at local through global levels. Civil society appears to be the home realm for the network form, the realm that will be strengthened more than any other, either that, or a new, yet-to-be-named realm will emerge from it. And while classic definitions of civil society often encompassed state- and marketrelated actors, this is less the case with new and emerging definitions—the separation of civil society from state and œmarket realms may be deepening.

The network form offers its best advantages where the members, as often occurs in civil society, aim to preserve their autonomy and to avoid hierarchical controls, yet have agendas that are interdependent and benefit from consultation and coordination. A multiorganizational network may become most durable, it may even have a central coordinating office and be institutionalized, when its members develop strategic interests in being part of it that at times override their individual interests, and when they prefer to stay in this form and not coalesce into a hierarchical institution if the network gains power and influence. Should this continue to occur, civil-society actors will gain power relative to state and market actors.

One of the most important points for the United States, as a society on the eve of making the T+I+M+N combination, is that a non-profit, service-oriented social or third sector is emerging. Organizational theorist Peter Drucker in particular sees that “the autonomous community organization is gaining strength as a new center of meaningful citizenship in the United States. And he foresees that,


the post-capitalist polity needs a third sector, in addition to the two generally recognized ones, the private sectorof business and the public sector of government. It needs an autonomous social sector. (Drucker 1993: 171)

Social theorist Jeremy Rifkin makes a similar point in heralding the rise of a third sector:

The foundation for a strong, community-based third force in American politics already exists. Although much attention in the modern era has been narrowly focused on the private and public sectors, there is a third sector in American life that has been of historical significance in the making of the nation, and that now offers the distinct possibility of helping to reshape the social contract in the twenty-first century. (Rifkin 1995: 239)


As these trends grow, civil-society (or the new realms) actors should gain power relative to state and market actors at local through global levels in the coming decades, leading to a radical rewriting of relations between states and citizens. While some writers claim that this willdiminish the power of nation-states, the TIMN framework implies that the state, as the home of the hierarchical form, is an enduring, essential entity for a society. The state may grow even stronger in some respects. The key is for governmental and nongovernmental actors to learn to cooperate better. This can help strengthen the state; but it may also mean that nations become as strong and well represented as states in policymaking processes.

In other words, the TIMN framework recognizes a dynamic in which the rise of a new form (and its realm) reduces the scope of an existing form (and realm), yet strengthens the latter's power within that reduced scope. This was the case with the rise of the market system, it constrained the state, yet enhanced the states power. The presumption here is that this pattern will recur with the rise of the network form.


Discussion

By John Robb, and others in the comments area: http://globalguerrillas.typepad.com/globalguerrillas/2009/03/societal-evolution-and-timn.html