By foregrounding their solutions (to yesteryears problems) and placing them in their historical context, maybe, we can make room for new logics of collective action.

In 1937, Coase published the Nature of the Firm, defining the idea of transaction costs in order to address a puzzle that mainstream economics had ignored at the time: the question of why firms exist in a world, where markets were assumed to be the most efficient allocators of resources. The analytically powerful tool of transaction costs allowed him to ask situation-specific questions on when a firm might be more efficient then market-based transactions. He clearly operationalized his framework, by stating that other things being equal, “a firm will tend to be larger, the less the costs of organizing and the slower these costs rise with an increase in the transactions organized.” (Coase 1937)

He is wrong, at least in some situations: a new form of (non)organization emerges when transaction costs fall so dramatically that neither a market nor a firm is necessary to integrate global supply chains, as we can observe in the case of Wikipedia or Linux.

In 1947, Horkheimer and Adorno published their Dialectics of Enlightenment, a small book of essays that they conceptualized as a “message in a bottle” to a future audience. Their chapter on the culture industry is a scathing attack on art in mass society. They describe the complex environment of capture where industry plays to a mass audiences taste that itself becomes streamlined by industry. Art looses its relevance as an outside critique of existing power asymmetries.

Their media critique hinged on one technological factor, namely that 1-to-N media outperform N-to-N media. They do not imagine a world of a thousand blossoming blogs and youtube-publishing grandmothers. Most media critics have been raised on their scenario, therefore are not good at imagining a world that is neither elitist nor captured.

Mancur Olson’s Theory of Collective Action (1964) is based on the simple recognition of the category mistake that the common collective interest of a group does not automatically lead to harmonious collective action by its members (I agree). His words “rational, self-interested individuals will not act to achieve their common or group interest” have been seared into our unconsciousness. The elegance of his argument has led us to assume free-riding wherever and whenever at least two people get together. We tend to forget that his argument relies on several contingent assumptions concerning transaction costs of collective action (that they are fairly high) and on how we understand human agency (ignoring that most of what we value is inter-subjectively derived).

Thanks to Mancur Olson, we have lost the ability to explain why people act collectively beyond their narrowly defined individual self-interest. So when confronted with the phenomenon, we have been denying its existence. And even after being confronted with lots of empirical evidence (think Linux, Wikipedia, or Mother Teresa) we are struggling to develop the vocabulary to talk about open value chains, commons-based peer production, and massive collaboration. The poverty of our economics (in the original sense of good husbandry) has forced us to rely on a fairly undeveloped metaphorical language of Marcel Maus’ gift economy, the communal cooking pot, or the North American Potlatch system to make sense of something as intuitive as intersubjective coproduction.

Thomas Schelling took the idea of rational interest to the extreme. By postulating a situation of an absolute threat to individual and collective survival (the anarchy of the international system under the threat of nuclear annihilation), he could get rid of all inter-subjectivity. Assuming a world without language (or a world where language had no value, because it would not carry weight), he was able to concentrate on signaling, the thinnest form of co-action. The beauty of signaling is that it is self-explanatory and clear, no messy inter-subjective understanding needed.

However, he purposely ignores all aspects of social life that depend on humans working together to find out something that neither of them knows ex ante. As good acolytes of Thomas Schelling we assume that “talk is cheap” and facebook is suspect. Never mind that anything human that is of value is inter-subjectively created.

Nietzsche said, you must have chaos within you to give birth to a dancing star, but definitely, we should not rely to much on C-H-A-O-S, when constructing the political theories of tomorrow.

Keep an open mind, relearn to speak inter-subjective philosophy, ignore contract thinking in political theory and economics, learn from what you see around you, develop an appreciation for new logics of collective action, and start building open value chains and communities of practice. Imagine what Machiavelli would write about, if he would would write today.

If strategy is about optimizing choice in situations of strategic interdependence, how do you strategize in and against constantly changing environments? In New Bases of Competitive Advantage, they came up with the concept of adaptive advantage which addresses the challenge by taking strategy to the meta level:

We believe that companies can renew and sharpen their quest for sustainable competitive advantage by pursuing adaptive advantage. Organizations with adaptive advantage recognize the unpredictability of today’s environment and the limits of deductive analysis. They seek to develop the most favorable organizational context in which new approaches to new problems can continually emerge. Adaptive advantage thus enables them to unite reflection with execution and to balance deduction with experimentation.

The meta strategies they outline are: Signal Advantage (detect, capture, and exploit pattern advantage), Systems Advantage (Shape and manage business systems for advantage), People Advantage (leverage human resources beyond the firms boundaries), Social Advantage (leverage new social and ecological expectations for advantage), and Simulation Advantage (simulate for advantage). Read up on their ideas and reflect and discuss what they might mean for your business, brand, and lifeworld.

I just spent the day at the Futures of Modernity Symposium in Munich, held in honor of Ulrich Beck, the grand sociologist and author of Risk Society (1992). The idea of the event was:

Throughout the world, contemporary societies are facing the challenges posed by a set of heterogeneous phenomena of social change which are not only placing existing convictions and interpretations in question, but are already creating new and multiple realities that escape the established categories of thought. The emerging outlines of a Cosmopolitan World Risk Society cannot be grasped in terms yesterday’s sociology which takes its orientation from industrial society in the nation-state and from the exclusiveness of European (i.e. Western) modernity. Nevertheless, the multitude of social phenomena which point to epochal transitions towards a new future open up novel horizons of critical analysis and discussion and pose a range of pressing questions that must be addressed today if we are to be ready for the challenges of tomorrow.

It was a great event, however, I was shocked that nobody spoke about the emancipatory potential or the totalitarian dangers of new forms of technologically mediated ideation, deliberation, and collaboration. New forms of collective action such as peer production, crowd-sourcing, and networked governance were completely ignored, as if all that had happened recently was the 40th anniversary of the landing on the moon and the 20th of the fall of the Berlin Wall. What about Twitter, the opening of the Facebook stream APIs, or the Open Government Initiative? :)

Ulrich Beck’s main thesis is that we live in a second modernity. Modernity for Beck is the move to instrumental rationality (ends-means rationality) as the main mode of thinking. This means during modernity (roughly 17^th to the end of the 20^th century) the aim was to control nature and human institutions to reduce risks to our societies.

Second modernity develops when we realize that we cannot control all risks because the complexity of institutions we created to control risks, states, the financial markets, insurance companies, nuclear energy, or genetic engineering, themselves create new uncontrollable and global risks.

Beck states that in second modernity we have left modernity, but cannot go back to premodern forms: all flavors of fundamentalisms (Christian, Islamic, or other) are modern responses to the challenges of our age not premodern uprisings. He also warns that post-modernity neither gives substantive answers to the challenges that risks confront us with, nor to the inequalities of our worlds. This means we are effectively living in a Gramscian interregnum.

This framework of risk society allows us to describe all types of phenomena from the injustice of the subcontracting in the global supply chain to the risk propensity of Wall Street bankers that show no remorse about their actions, explaing responsibility away by calling it “systemic failure.” Because these human manufactured uncertainties are of planetary nature, Beck calls for cosmopolitan Realpolitik as a response to the challenges of second modernity. He asks, how can national states re-conquer a state-political meta power vis-à-vis those economic actors – in order to force a cosmopolitical regime upon world-political capital that includes political freedom, global justice, social security, and ecological sustainability?

And here is where I would want to disagree. It is not by re-awakening early modern zombies that will save the planet.

The emancipatory power of concepts like radical transparency, open collaboration, and network governance stems from an emerging new paradigm in social theory. Unfortunately, at this point there is no enough political philosophy or social theory discussion on this important topic, which will probably shape human societies for the next 300 years.

Clearly, it is time to collaborate on this “beyond modern” planetary political theory and public policy project!

Government as a Contract Society institution wants to insure the legality of its operations at all times, therefore, it is very careful in its communication: “if you really need an answer, please do not send an email, letters are better integrated into our (electronic) work-flow.” But network society logic (outcome orientation, eternal beta, radical transparency) have a way of sneaking up onto us.

In 2009, there is a clear realization that “things will be messy, but this is necessary (and not as dangerous as we think).” And everybody (and their grandmother) is scrambling to set up platforms to “ideate,” “deliberate,” and “collaborate.” On Wednesday, for example, we will discuss the participatory budgeting platform for the city of Erfurt.

The Obama adminstration has just gone through the first two months of the Open Government Initiative and there are interesting first lessons. And because online interaction is still so new, we are developing our sensitivity for deliberation 2.0. Here are some takeaways from Beth Noveck, in a recent NYTimes article:

If you don’t frame the debate, if you don’t ask a good question, you don’t get a good answer to the question.

If people are going to be asked to spend the time on contributing, you want to use the participation they give you.

If you run a dialog over weeks and weeks, you cannot begin to use the inputs you are given [there will be too many].

Government must also create a culture that is in some ways more formal than much of the rest of the Web. On sites like Slashdot, she said, the most popular posts are “the funniestor the snarkiest.” But that’s not an appropriate standard when trying to debate policy.

There is a reason you want people with expertise working in the jobs we have,(..) but the new online tools will nonetheless put pressure on officials to take public opinion into account.

Even something like having a blog with an open discussion about policy is revolutionary in the way government works.

In addition to the public brainstorming session, she ran another online discussion for government officials. This was unusual in that it asked for ideas from people at every level of government, speaking on their own. That’s very different from the usual structure in which feedback on ideas posed by one agency is funneled up through the chain of command at other agencies.

As we are preparing for the Erfurt Sessions, what are your takeaways from deliberation projects you have been involved in? What projects worked? Which did not? Why?

In Western thought we locate the birth of rationalism with early Greek thinking, when mythical explanations of social artifacts do not suffice anymore. Rationalism can take two perspectives: (a) observatory or retrospective rationalism that seeks to describe and explain why things are happening by linking causes to effects and (b) instrumental rationalism that connects ends with efficient means.

Instrumental rationalism only became pertinent after a radical perspective change took place in the 15^th Century: the move from a universal, a-temporal transcendental world view to our human-centered perspective. Instrumental rationality sees our collective challenges and opportunity as a set of engineering problems:  how do we achieve an end by using the fewest means possible (efficiency)? Engineering problems have several attributes that distinguish them from other problems: They assume that there is a unique solution that everyone can agree upon as long as we have solved coordination problems, which are seen standard-setting issues.

So by giving up the world-view of universality and transcendence in the 15th Century, humanity gained the possibility of shaping its own world. And shape we did.

However, as a result of this instrumental rationality revolution, we were confronted with a governance crisis. How could we legitimate authority in society in a world, where authority was not transcendentally predefined. The quick answer offered was the idea of the pre-historical social contract. This rhetorical figure that allowed us to argue that the distribution of authority was fair, because we agreed upon our social structure in the original position: immanent, but a-historical. This rhetorical figure allowed us to assign sovereignty, to delineate the inside from the outside, and to develop the functional differentiation necessary for a continuous efficiency revolution.

With the rise of functionally organized and technologically mediated networks (the web 2.0 revolution), the conditions of possibility of coordination changed in such a way that a form of governance that is organically linked to the idea of instrumental rationality has become possible. Network society emerged as an engineering society based on a culture of “rough consensus and running code.” Requests for Proposals (RFCs) are the procedural principle on which governance is based. Self-selection is becoming an accepted principle for participation in the policy process, expertise in an an engineering culture is defined by merit (outcome) and not position, and political problems are reduced to the creative acts of RFC-writing, the focused and technologically structured deliberation, and accountability comes from peer review of radically transparent processes.

So basically, in 2009, we are starting to have the match-up of instrumentally rational value creation with an engineering governance culture. Questions to ask: Is this the world we want? Can it deal with all collective action problems that we want public governance to be able to deal with? How high are the barriers to participation in such a world? Can we construct media literacy campaigns that will decrease these barriers?

If we drill down to the unquestionable, why do we actually participate?, we find metaphors mapping the logic of one domain onto another: our society on a body, where everybody has their role; our society onto an original contract; or our society described as a network of inclusive, some-how like-minded, outcome-oriented, collaborators, guided by rough consensus and running code.

It was Benedict Anderson’s Imagined Communities (1983) that gave us the toolkit to think about the “historical” phenomenon of nationalism:

Nationality, nation-ness, and nationalism are cultural artifacts whose creation toward the end of the 18th C was the spontaneous distillation of a complex ”crossing” of discrete historical forces; but that, once created, they became ”modular,” capable of being transplanted to a great variety of social terrains, to merge and be merged with a variety of political and ideological constellations.

He then went on to define nationalism as an imagined political community, imagined as both inherently limited and sovereign.

It is imagined because the members of even the smallest nation will never know most of their fellow- members, meet them, or even hear of them, yet in the minds of each lives the image of their communion. [...] In fact, all communities larger than primordial villages of face-to- face contact (and perhaps even these) are imagined. Communities are to be distinguished, not by their falsity/genuineness, but by the style in which they are imagined. The nation is imagined as limited because even the largest of them, encompassing perhaps a billion living human beings, has finite, if elastic, boundaries, beyond which lie other nations. No nation imagines itself coterminous with mankind. The most messianic nationalists do not dream of a day when all the members of the human race will join their nation in the way that it was possible, in certain epochs, for, say, Christians to dream of a wholly Christian planet. It is imagined as sovereign because the concept was born in an age in which Enlightenment and Revolution were destroying the legitimacy of the divinely-ordained, hierarchical dynastic realm. Coming to maturity at a stage of human history when even the most devout adherents of any universal religion were inescapably confronted with the living pluralism of such religions, and the allomorphism between each faith’s ontological claims and territorial stretch, nations dream of being free, and, if under God, directly so. The gauge and emblem of this freedom is the sovereign state. Finally, it is imagined as a community, because, regardless of the actual inequality and exploitation that may prevail in each, the nation is always conceived as a deep, horizontal comradeship. Ultimately it is this fraternity that makes it possible, over the past two centuries, for so many millions of people, not so much to kill, as willingly to die for such limited imaginings.

This way of thinking clearly outlines the types of questions we need to ask of network societies. We first need to look for discrete historical forces that are being distilled and are becoming modular and then we need to develop a definition of the form of collective life. Here are my candidates for historical forces:

Pattern Recognition. XML stands for the separation of form and content that allows us to exchange data between different databases. With automatic data-generation and aggregation (Google search, the Amazon recommendation engine, etc.) we can make relationships visible and create values in ways not possible before. By mashing up automatically generated and aggregated data with collaboratively produced information (geo-mapping like Google Earth), we develop a new depth of  understanding our worlds.

Collaboration platforms. The idea of allowing users to simply manipulate content radically changes our conception of production. In order to work, such a platform must be simple enough that contributions can be modular and granular. Wikipedia clearly shows that this can work.

Self-publishing. Tools that allow us to self-publish and have universal access to self-published content changes how we perceive cultural production.

Social networking. Different social networking platforms have different aims (making your social graph actionable, expanding your network, finding expertise, living communal life), but all lead to different conceptions of how we understand society. The contract metaphor that our nation state system relies on is challenged by the network metaphor.

This is a first cut and I am not sure if it is exhaustive, but it delineates the main discrete historical forces behind the phenomena that we often refer to as Web 2.0. The question is what we will want to name a society based on the distillation of these forces and how we can define it. Imagined? Unlimited? Not-Sovereign? …What do you think?

PS: To read the testimony of Vivek Kundra at the Subcommittee Hearing on: “The State of Federal Information Security”

[...]THEREFORE BE IT RESOLVED THAT the City of Vancouver endorses the principles of:

• Open and Accessible Data – the City of Vancouver will freely share with citizens, businesses and other jurisdictions the greatest amount of data possible while respecting privacy and security concerns;
• Open Standards – the City of Vancouver will move as quickly as possible to adopt prevailing open standards for data, documents, maps, and other formats of media;
• Open Source Software – the City of Vancouver, when replacing existing software or considering new applications, will place open source software on an equal footing with commercial systems during procurement cycles; and

BE IT FURTHER RESOLVED THAT in pursuit of open data the City of Vancouver will:

• Identify immediate opportunities to distribute more of its data;
• Index, publish and syndicate its data to the internet using prevailing open standards, interfaces and formats;
• Develop appropriate agreements to share its data with the Integrated Cadastral Information Society (ICIS) and encourage the ICIS to in turn share its data with the public at large
• Develop a plan to digitize and freely distribute suitable archival data to the public;
• Ensure that data supplied to the City by third parties (developers, contractors, consultants) are unlicensed, in a prevailing open standard format, and not copyrighted except if otherwise prevented by legal considerations;
• License any software applications developed by the City of Vancouver such that they may be used by other municipalities, businesses, and the public without restriction.

BE IT FINALLY RESOLVED THAT the City Manager be tasked with developing an action plan for implementation of the above.

It is interesting to see how in 2009, organizations of all types are asking radical questions about process and governance. What will our world look like in 2010? [thanks to Ines Mergel for twittering about the motion. Do RSS her blog]

We have an opportunity and a responsibility to act upon this challenge.

[Transformation] We are undergoing radical changes in our lifeworlds, societies, markets, governments, and inter-governmental relations. This is affecting the family, work-life balance, spirituality, institutions of the state, market, civil society, production, distribution, statehood, and inter-societal relations. The change from a society build upon the metaphor of the original contract between property owners to a society understood through the metaphor of the network and service provision, fundamentally changes the logics of our interactions on all levels of society.

[Governance]The focus on governance in the contemporary discourse of political science and policy making acknowledges this transformation by moving the focus from political science to the meta-level, where we discuss what is the role of governments, civic associations, and the private sector in creating economic, social, political, and inter-collective public goods. In corporate governance, we ask how can we regain the trust of investors and society, in global governance, we ask how can we address global challenges, in good governance, we ask how can governments gain the trust of multi-lateral lending institutions through better administrative practices and policy making, in e-governance, we ask how do information and communication technologies and new practices impact how we structure societal life.

These are not abstract academic discussions; these are battles happening in the real world, with real consequences for the politics of our worlds, because decisions made today will outline the conditions of possible public value creation tomorrow.

[Legitimation] Any institution as an institution is only as effective as it is legitimate. Legitimacy involves the capacity of the institution to sustain the belief that the existing institutional practice is the most appropriate for society. Legitimation then is the process of acquiring legitimacy by persuading intersubjectivities of the validity of a governance structure. As a process it is historical, which means it changes through time and is path-dependent. Therefore, legitimation needs to be analyzed from a macro-historical perspective. Today, the move from law-based legitimation to results-oriented legitimation changes our conception of our social worlds as much as the 16^th Century move from transcendental to immanent law-based legitimation.

[Responsibility and Action] The role of the academy in the emergent network society is that of a gardener or maybe even a landscape architect. We live in a time in which we can frame, shape, delineate, and delimit the [public] spaces of our societies. Let us take that seriously, because great responsibility comes attached with such a role. The Monterrey Forum gives us such a platform. The questions that need to be addressed are: How is the landscape in which we can think about public value changing? What is the role of new technologies? What are changing legitimizing practices? How can we shape our institutional landscapes? What do we need to know to do that? How and where can we intervene?

Remember, “all” German speaking high-ranking government officials are lawyers, educated in the continental tradition of law and therefore share a strong code-centered culture. Therefore, the inherently legal(istic) question of the day was, how are the civil service laws of Austria, Germany, and Switzerland transforming as we are moving towards outcome orientation (network society)?

Now, in theory (dogma in legal terms), all countries are undergoing a radical transformation. The classical idea of the civil servant (public law) is being questioned and the flexibility of civil law (cl) as the framework to regulate the relationship between the state and the civil servants is being evaluated. However, in practice, we can observe the following developments:

• In Austria, the evidence is mixed. Austria has had both civil servants and cl-employees for quite some time. In practice the distinction does not go along lines of function (core state functions vs. non core functions). After several failures with the introduction of objectives-based renumeration, some states are actually reneging on changes.
• In Germany, there was a change in the constitution (Art. 33 Para 5 GG and Art. 74, Para 1, N.27 GG) that modified the civil service guarantee and the spheres of influence between the federal government and the states. However, in practice this change has almost no impact and because of federalistic competition mobility of civil servants between the states is decreased.
• In Switzerland, a change has take place with the new Bundespersonalgesetz. It is mainly felt in introducing unlimited employment contracts (Swiss civil servants originally were political appointees for the duration of a government’s term), the capacity to fire employees, and linking renumeration to achievements. However, new challenges have not been dealt with both on the dogmatic (what happens when core state functions are taken up by cl-employees, how do we deal with non-compliance) and the pragmatic level (how do we deal with mobbing, constitutional rights, etc.).

In general, the move towards outcome-orientation in employment contracts did not have that many supporters in the room, which is not surprising because all participants were either government officials or Professors from public universities. The main critique was that because the objective of the state is not to maximize profit, having performance contracts makes no sense (is that a category mistake or a level-of-analysis problem?). The response of the vocal minority to this was that for most aspects of what most government employees do, objectives can be specified and performance indicators developed.
Another critique was that because not enough resources were available for performance incentives, in practice, bonuses where given out not for over-performance or were not significant enough to impact behavior.

Overall, more interesting than the substantive arguments was the style of arguing. Lawyers will always be lawyers, even if they speak about transformative change. And theoretically, there should be incommensurability between the legalistic-institutional contract society and outcome-oriented network society.

However, one should never underestimate lawyers, because they are very smart, know how to write and speak, and are pretty adaptive. In European public administration, network society is only imaginable, if driven by lawyers that have internalized outcomes into their text culture. It will be interesting to see, if this will be a performance culture that is legally embedded or a legal culture with a sprinkle of of outcome-orientation.

[pictures taken by Gregor Wenda('s camera)]

It seems that in the privacy debate we often do not distinguish between different strands of thinking and therefore do not allow for all possible permutations in our positions. So let me propose a first framework to disentangle the debate.

1. the public-private debate addresses the question what importance we ascribe to the distinction between our public and private selfs. The distinction has been foregrounded by feminist theory as modern artefact, necessary if we assume that society is based on a contract between originally independent individuals. It constructs two different domains of life governed by different rules, biased against certain groups. It is a bourgeois concept insofar that it is a defensive right against the intrusion of the state and constitutive for communicative action in modern democratic thinking. With the transformation in how we imagine collective action (from contracts to networks, from constitutive to outcome-based legitimation, from function to process, government to governance) the public-private distinction, in theory, should be losing importance as a guiding principle. These ideas show up very early in the history of the Internet, think of JenniCam and has been mainstreamed with all types of myspaces and facebooks. However, many of us still feel very strongly about the distinction and feel by giving it up, we look into the abyss of absolute vulnerability.
2. the data retention debate focuses on the question how much of our lives should be registered and for how long. Viktor makes the argument that “we should revive our society’s capacity to forget” by tagging data with expiration dates. I very much enjoyed Viktor’s article, because he focused only on one aspect of the debate (data retention) and therefore is able to offer actionable policy advice. However, his argument relies on the idea that because the human brain retains its sanity by forgetting and because societies in the past did not have the capacity to retain all data, we should make use of our technological capacity to forget. I think both can be challenged, (a) is the analogy between the function of the brain and how we deal with collective memory valid? – This leads to questions of Philosophy in Flesh, and (b) Should we be so luddite/conservative and institutionalize forgetting, just because we very not able to remember in the past (and it worked well for us)?
3. The aesthetics of the naked self debate. Clearly, we feel uncomfortable or even violated when data about ourselves that does not put us in the best of lights is revealed. However, this might be not because of the over-stepping of the public-private divide, but because we are unhappy with the aesthetics of the projection. Think of Pamela and Tommy Lee (available at Amazon).
4. The decontextualization debate. Analog life is contextual, while digital data can be re-mixed. This leads to drunken pirates losing their diplomas and Las Vegas judges to be fired for breaking off their feet in the prosecutor’s ass. We are still grappling with developing (legal) frameworks that allow us to contextualize the digital.

By untangling these strands in the privacy debate, we can differentiate our positions on the issue. One way is to then deal with them one-by-one, as suggested by Viktor, or to just allow more complexity into the debate. I, for example, am not concerned about the public-private distinction, but do think there are important issues in the data retention debate, and I believe that we need to become more sophisticated in how we deal with the aesthetics-of-our-naked-selfs issue and the decontextualization issue. Not sure this adds value to the discussion, but here it is.

I was arguing that in network society the move from institutional legitimation to results-oriented legitimation changes our conception of our social worlds as much as the 16^th Century move from transcendental to immanent-institutional legitimation. And these macro-historical changes in the argumentative patterns explaining collectivity allow us to adapt our policy recommendations and political strategies.

That is quite a mouthful and needs to be disentangled. The following chart might help to clarify, what I was arguing:

	Transcendent (-1600)	Immanent-institutional (-2000)	Results-oriented (2000+)
Foundation	God	The State	The Result
Argument	God said so.	At some point in the past, we decided upon a common rule book/institution.	I see and accept the result.
Metaphor	Body	Contract	Network
It is good at:	stability	mobility
Nature:	One-with-nature	Controlling nature	de-naturalized, disembodied
	Tension cannot be thought.	Tension between individual and collective.
Power		government	Consensus of stakeholders
	The people	citizens	stakeholders

It is important to realize that even though the concepts are exclusive in their thrust, they are not exclusive in our social worlds. Echos of transcendental legitimation still are part of our legitimation cultures (political families, cancer of society, heads of state), institutional legitimation explains most of our governance structure and our passports. However, in government, public administration, the private sector, and civil society we can observe the move to results-oriented legitimation.

Metaphors in the social realm often remain relatively stable over time. For example, the metaphor of society as a body was the foundation of political thought from antiquity to the 17^th century, and still influences our thinking today (Livy 1998). Since then, the social contract metaphor has shaped the debate from Hobbes (1998) to Rawls (1971). With the beginning of the 21^st Century the network metaphor is emerging as an alternative to contract society. However, we are not yet fully immersed in it. To understand how it will structure social life, we can analyze its grammar. This can be done by analyzing its main grammatical principles, guiding how we imagine social and political life.

The Technology Principle:

Network Society is mediated through technology.

The precondition for any network society is technology. Only with technologies (even though they can be as unsophisticated as mail or the telegraph) can we imagine networks that bridge space-and-time. This means that the CIO is moved to center-stage as the manager of the network.

The Choice Principle:

Any network participant chooses to participate or to leave at any point in time.

The most radical departure from our understanding of collectivities as naturally given or contracted before the beginning of time is the paradigm of choice. Network members choose to become members, to contribute, and to leave at any time. Think of instantiations of network society on the internet and beyond, such as the Smallworld, OpenBC, MSN-Messenger, Skype, the Linux-Kernel-Team, to imagine the future of political life. The governmental CIO will have to guide policy on what type of social software to offer to potential network-participants.

The Consensus Principle:

Decisions in choice-communities are made by consensus.

Because of the ability of network participants to leave at any time, decisions need to be made by consensus. This does not mean that there is no hierarchy. Consensus is not Unanimity. Unanimity means that everybody agrees, consensus means that no-one disagrees. The distinction is not merely semantic, and in practical life it makes a huge difference: a decision is taken without a vote, but giving every participant the right to disagree (consensus), is fundamentally different from a world where everybody must explicitly agree to everything (unanimity). Consensus also does not mean equality between the participants. It just means that a project is pushed forward and participants are not disgruntled enough to leave (known as forking in Linux terms). This type of decision-making comes natural to CIOs, however,

The Scale and Network Effects Principle:

Network effects are the glue of network society.

One might question, however, how a community based on choice and consensus might scale up to real political communities. This is where network effects as the glue of network society come in. The network effect causes a community to value a potential member dependent on the number of members already participating. Metcalfe’s law states that the total value of a community possessing a network effect is roughly proportional to the square of the number of existing community members. Therefore, joining a network benefits others who have joined before – the classic example is that by purchasing a telephone a person makes other telephones more useful. This type of effect in a transaction is known as an externality in economics, and externalities arising from network effects are known as network externalities. Network effects make it very difficult for members to leave, because the community value lies in the interconnections to the other members. However, that is not the only glue holding networks together.

The Path Dependency Principle:

Path dependency makes it costly for us to exercise choice and leave any given network.

Path dependency is the simple but important concept that change in a society depends on its own past. Think of the impact of the Mexican revolution on policy-making today or the QWERTY keyboard, which would not be in use now except it happened to be chosen a hundred years ago. Once we invest in technologies (or practices), moving to something completely different becomes very expensive.

The Transparency Principle:

Transparency takes the role of democracy as the standard against which any governance situation is evaluated.

In network society, a member might want to understand how a specific decision was reached to assure that the principle of consensus was not violated and why a specific standard was set in the way that it was. That is where transparency (and its little sister documentation) comes in, and explains why it has become so very fashionable in the last few years. We often link transparency to democracy, however, if we look closely at academic writing through time, nobody really talked about transparency before network society.

The Reflexive Governance Principle:

The term governance assumes that the right of any participant in any decision-making situation needs to be reflected at all times.

The first documented use of the term governance was by Wyclif in 1386, “ is stiward..faili in governaunce of e Chirche.” (Sel. Wks. III. 346). His usage of governance as the action or manner of governing introduces the concept as a fairly neutral critical instrument to compare and evaluate different forms of governing.

It is interesting to see how this concept has not played an important role outside of the Anglo-Saxon world until the end of the 20^th Century. For 600 years languages like Spanish or German happily ignored it. In Spanish, the word most commonly used to describe questions of how we can govern in the transforming world is gobernabilidad and in German it is Steuerung or steering. These terms are not grammatical or conceptual equivalents to the English term governance. In 2000, finally the Real Academia (2005) included governance [gobernanza] into the Spanish language, with both the old English meaning and the second meaning which describes the move from government to governance, including alternative political actors, like this:

Arte o manera de gobernar que se propone como objetivo el logro de un desarrollo económico, social e institucional duradero, promoviendo un sano equilibrio entre el Estado, la sociedad civil y el mercado de la economía

This definition exemplifies the move from Governing to Governance in network society (Peters and Pierre 2000, Castells 1999). The concept of governance automatically foregrounds the question of how an aspect of social life should be governed, superseding the modern idea that the state is solely responsible for the administration of the public. It forces us to reflect on how social life can or should be organized.

The Outcome Legitimacy Principle:

The legitimacy of a policy that aims to create public value is derived from the public value created (as defined by its stakeholders)

In contract society the legitimacy of any policy was derived by the institutional legitimation of the actor that was pursuing it. In order to question the legitimacy of any act, one asked, is actor x endowed with the legal right to pursue the policy y? In network society, this becomes irrelevant. The question is transformed into, did policy y have an actual public value creating impact? Which of course leads to the meta-question of, who gets to decide that a public value has been created? This is not trivial and the network society term of stakeholder hides more than it enlightens.

These eight principles describe the grammar of network society and outline the framework in which policy-making is and will be taking place.

To: Participants of the Workshop “Prospectiva del Gobierno Electrónico” of Función Publica

Digital Era Governance: Policy Making in Network Society

The world is changing radically. We are moving from modern contract society (1700-2000) to network society (2100s). Digital-Era Governance is becoming the most important policy field, necessary for all other policy areas (development, security, welfare). The new president will have the chance to shape digital-era governance policy. What are the main opportunities and challenges for the next Mexican President?

Four radical challenges (and opportunities)

1. Implementing Citizen-Focused Government. Taking Citizen Relationship Management (CiRM) seriously will lead to the reengineering of almost all governmental processes that affect the citizens, will break down governmental silos to make cross-agency cooperation possible, will lead to a massive deployment of CRM-software, and will change how we think of the state. At the avant-garde are cities like NYC, Chicago, with the implementation of 311-numbers and citizen contact centers. No Federal government worldwide has implemented a pure CiRM-approach.

à Federal government should foster municipal and state initiatives and develop its own approaches.

2. Fostering a robust and diverse software development ecosystem. Government as a major buyer of IT-products and services can impact the IT-industry structure and (best) practices. There are many issues where governments might want to push for open source solutions for security, cost, or industrial policy reasons.

à It will be necessary to develop an explicit open source policy.

3. Developing an explicit federal policy on public internet access projects such as municipal wireless or the MIT one-laptop-per-child project. In the next years WiMax deployment, other access technologies, and hardware developments will radically change the internet provision landscape and new ways to bridge the digital divide will become possible.

à Develop explicit public internet access policy and think about joining the OLPC-Initiative.

4. Move the Mexican Nation online. I am referring to the nation not the state. With the Web 2.0 revolution social software (online communities such as myspace, secondlife, linkedin, etc.) are becoming mainstream. Most of us spend most of our lifes online even today. Mexico is already a network society with more than 10% of the population living outside of Mexico.

à Find a way of developing or using online platforms that will be taken up by the Mexican nation.

For more information and to discuss the points, please send me an email: philipp@itesm.mx!

When I ask my students at the Graduate School for Public Administration and Public Policy what governance means in Spanish, most answer with gobernabilidad. When I tell them that I prefer to say gobernanza, they laugh out loud at my Spanish.

Gobernanza (Governance) as a concept is not commonly employed in Spanish. It was first used in England in 1380 by John Wycliff, the reformer and bible translator, as a concept that allows us to compare different ways of governing.

For 600 years languages like Spanish or German could happily ignore this concept. However, in the last years word has become fashionable, mainly for three reasons. Governments are loosing the capability to take decisions for their populations as alternative actors (business, civil society) are taking up governmental functions, are “doing governance”, globalization has led to us to call for global governance (not global government), and the move towards a customer orientation in public administration has empowered the voices calling for good governance.

As we are expecting a new administration in office in December, the following seven principles can be used to hold any politician, public administrator, and other actors involved in public life accountable.

Rule of law: A society needs to implement the rule of law. This means that the law is above any individual actor or group, even the most powerful. The law must be equally valid for all members of the society. The legal system must provide justice and equal treatment for all groups and individuals of the society. This includes the observation of human rights.

Functions of the state: The state must have a monopoly over the legitimate use of force in society and guarantee the enforcement of its laws. The state must also offer a political process that guarantees the participation of all members of its society through some type of representative process, and ensure that its checks and balances work properly. Beyond these functions, the state is an institution that must work to maximize the benefits of all of its members.

Securing fair competition: In order to make market economies work efficiently, an effective economic framework is required. The state has to assure that contracts are enforced (which requires an efficient legal and juridical system), a stable currency (which requires consistent monetary policy and well-regulated financial markets), and that fair competition is guaranteed (which requires antitrust legislation, consumer protection legislation, intellectual property legislation).

Internalization of external effects: The state is responsible for minimizing the negative side effects of production. If a producer is able to shift the costs of environmental pollution to the public, this externalization has the effect of an (undesired) subsidy to the producer and regulatory intervention is necessary.

Public goods: Good governance requires the state to provide public goods which, by definition, are not provided by a market, such as internal and external security (police/military), a basic infrastructure for transportation and communication, the preservation of the society’s cultural heritage, basic education, and a social policy that guarantees residents a minimum income and health care. Although the quality and quantity of public goods depends on the economic wealth and foundational philosophy of a society, without these goods a successful society cannot exist.

Education: The state has the responsibility to make optimal use of the intellectual resources of its society. This includes giving all children access to affordable education according to their abilities and protecting them from exploitation for short term gains, thereby securing a society’s longer term investment in adequate education.

Regional integration and global compatibility: In a globalizing world, economies and societies cannot exist self-sufficiently. Therefore, they need to make themselves more compatible to other societies by adhering to global economic and social standards and integrating into larger markets. This requires a state structure that can guarantee fair domestic competition even against powerful external investors. Regional integration is not merely about issues such as reduction of custom rates; it should focus on the harmonization of legal rules and standards in order to create viable markets and on accords with neighbors centering on the provision of regional public goods (security, water, environment, etc.).

Implementing good governance will have a greater impact on the success or failure of Mexico than any Mexican President or party. And it is time that Mexico’s citizens hold all political leaders, all public administrators, and private sector actors that impact public life accountable to the seven principles of good governance. With Central and Eastern Europeans from countries that have adhered to these principles, we have had much happier conversations around the dinner table in 2006 than in 1993 – let us hope for the same in Mexico in 2007.

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gobernanza

1. f. Arte o manera de gobernar que se propone como objetivo el logro de un desarrollo económico, social e institucional duradero, promoviendo un sano equilibrio entre el Estado, la sociedad civil y el mercado de la economía.

2. f. ant. Acción y efecto de gobernar o gobernarse.

Real Academia Española © Todos los derechos reservados

It was amazing that more than 100 government officials showed up and that our food was stuck in AMLO-induced traffic (or so they said in the end they fed us BigMacs).

At the event I noticed that whenever we talk about networks in public administration there is a confusion how we use the term. Three different meanings come to mind:

a. Lifeworld Networks: In our lifeworlds the network vocabulary comes very close to what we experience day-to-day. We do have the feeling that with MSN, MySpace, Secondlife, OpenBC, or LinkedIn our social networks are being augmented, but not substantially transformed.

b. Network Society: This concept describes the radical transformation of how societies understand and legitimize themselves as collectivities. Castells speaks about the move from “space of place” (territory) to a “space of flows” (cyberspace), I refer to the move from Hobbesian “contract society” to today’s “network society.”

c. Public Value Networks: This is what Bill Eggers was talking about, the question of (if we assume that a transformation to network society is actually taking place) how can we design networks that allow us to create public value effectively and efficiently and achieve accountability (through transparency).

One of the questions Bill and I were debating in the break, was if a specific prior structure of the society would be necessary to implement public value networks. I think two things are necessary, (a) a broad appreciation of network society as the base metaphor for social and political life, and (b) a shared work culture of creating public value through networks.

Now, what does that mean for Mexico? After talking to many public officials on all levels, it seems that much of the frustration voiced by public officials is a frustration with hierarchies and a missing focus on outcomes. If that is the case, there should be surprising pent-up energy that could be channeled by policy entrepreneurs implementing public value networks.

Where in governements should we expect those policy entrepreneurs to come from? From talking to very few public officials, my hunch is they will come from the IT-departments. Governmental CIOs are taking more public roles today, they are designing the technological infrastructures, network-centric thinking comes natural to them, so expect them to come out of the basement…