Address at the 21st Eurasian Economic Summit in Istanbul on “Dilemma of our century: Technology vs. politics”
Thursday, 12 April 2018 14:36   

Marmara01Distinguished participants,
Ladies and Gentlemen,
Dear Friends,

Our hosts from the Marmara Foundation always challenge us to think of and discuss the most important processes. It is the same with today's topic, which concerns the dilemma of our century - the relationship between technology and politics.

To answer this dilemma, we need to look at the big picture that goes beyond the borders of states and mandates of governments. And that big picture is civilizations.

One of the few who dared to seriously explore civilizations is Arnold Toynbee. According to Toynbee's Law of Progressive Simplification, a powerful measure of the progress of civilizations will be the degree to which we shift from a global economy based on material growth to one that consciously includes non-material development.

This process of etherification can be described in the following way: the more difficult the challenges for a civilization, the more creative its response should be. Key role have the creative minorities that find innovative solutions to the challenges. Thinking beyond patterns, the creative minority changes the paradigm of the majority and creates conditions for a new way of life. The non-active majority, for its part, accepts and imitates these ideas.

Etherification is the ability to achieve the same or even better results in less time and with less energy. Computers, from 30 ton machines occupying the entire room, are now reduced to laptops weighing just one kilogram. The analog telephony, with all copper wires, poles and transmitters, is now reduced to digital telephony with smart phones connected to telecommunication satellites. As the dimension of computers decreases, the processing capacity increases.

This process is most visible if we look at industrial revolutions. The founder of the World Economic Forum, Klaus Schwab, says that, unlike all previous industrial revolutions, the current fourth industrial revolution does not develop with a linear but exponential pace. Oz Guinness reminds us that the fourth industrial revolution is the transition from the era of pyro-technology to the era of biotechnology, from the rule of fire to the engineering of life. With the digital transformation of human civilization, the boundaries between the physical, the digital, and the biological are deleted. A world is born in which artificial intelligence, robotics, nanotechnologies, biotechnologies, quantum informatics, crypto-values will prevail and dominate.

But where is politics here? Politics is created for the needs of the polis, that is, the city. The meaning of politics is to regulate the relations in the polis and to provide solutions to common issues for citizens. Hence, the city is the birthplace of politics (but also of civilizations).

With the Westphalian order, politics from the city was transferred to the sovereign Westphalian state. It is a model of absolute concentration of state power, which aims to achieve internal stability and external security through politics. Through colonization, this European Westphalian order has become international order in which key actors are states.

But Daniel Bell noted that the states are often too big for small local problems, and too small for big global challenges. This is especially true in terms of globalization. There are also increasingly non-material creations and challenges that the territorial state simply cannot control.

At the heart of these processes is the digital etherification of our civilization that leads to de-territorization, deregulation and de-stateization of states. Contrary to the vertical hierarchy of the state, the horizontal networking of the society is more pronounced. It is the digital transformation that takes away the position of states and revives the cities, because real life is at local level.

For example, cyber markets like Amazon, eBay, AliBaba, AliExpress undermine the sovereignty of national economies.

Smart phones have become digital wallets, digital stock exchange, digital banks.
With the virtual crypto-currents, the banking system and the state are circumvented. On December 18, 2017, the crypto-currents reached a record transfer of USD 600 billion. It is expected that the crypto-transfer will soon reach a trillion dollars. With the help of blockchain, all transfers and payments can be done without the mediation of the banks. And whoever starts to use blockchain no longer wants to waste time at a bank counter. Hence, the question is: Is the banking system going to collapse?

Paul Mason thinks that parallel currencies, time banks, new forms of ownership, economy of sharing and many other innovations are part of a new economic life whose heart is beating with a different rhythm. Their lowest common denominator is that they all function as non-hierarchical social networks on the Internet.

But there is a dark side of the medal, too. Deep web is about 500 times larger than the surface web. Within this deep web is dark web as a digital black market that flourishes illegal trade in narcotics, weapons, credit cards, human organs ...

It all works through the Internet, which has become the backbone and nervous system of globalization. That nervous system connects all networked computers, smart phones and other smart devices that together make up the global super-computer. And, the biggest part of that global super-computer is owned by individuals, not by states. At present, the states and other international actors like the European Union are leading legal battles to regulate that super-computer.

In truth, states are trying to adapt to these processes. Some of the Baltic countries are leaders in the digitalization of administrative services, i.e. in "e-government". The project "Regulatory Guillotine" in the Republic of Macedonia has reduced the bureaucracy and regulatory burden on the companies. We have established an e-Real Estate Cadastre which now covers 99% of the territory of the country. And whoever feels the freedom and ease of digital services does not return to the counter.

Some states go a step further and want to transform into a start-up nation that will expect the universities to produce staff for the start-up economy. Incubators and accelerators will recognize and support new student's ideas while studying and with state guarantees will encourage private equity to support them in their realization. The Republic of Macedonia has a Fund for Innovation and Technological Development, through which funds are provided to support the innovation activity. The start-up state creates an environment and conditions for development and well-being in the digital age.

But the state is bypassed, circumvented at the local level due to the smart cities that exclude politicians, at least the old-fashioned ones. When politicians were expected to take care of the towns, there was plenty of pollution, crime and poverty. Now, with the help of technology, attempts are made by cities to self-regulate. These are cities in which infrastructure is in line with people's modern needs. The efficiency of public services is raised to the maximum, and the inefficient bureaucracy is reduced to a minimum. Therefore, everything you need in the Smart City world is the battery of your smart phone to last longer.

The digital transformation has also changed the direction of intergenerational education. If in the past parents educated their children to find a way to live better, today children educate their parents to handle the latest technology.

Moreover, young people have no patience for politics and for politicians of the past. That's why millions of young people migrate to the most developed centers to realize their business ideas there and to realize their life plans. The southeast of Europe is getting empty. Those who create real value with their talents, education and skills leave their countries. Separated from their homeland, these new, digital nomads have a need for belonging. The solution to the challenge of modern nomadism can be found in the great Arab historian Ibn Khaldun. He argued that what holds together territorially unrelated Arab nomads is the principle of asabiya or clan solidarity. Today, in the era of digital nomads, we have digital asabiya. Regardless of where they are, people are part of social networks and groups that give them a sense of belonging, that is a key human need.

But it is naive to expect that digitization will respond to all challenges. Like any human creation, digital transformation is also subject to the law of unplanned consequences because things can go wrong.

So the question is: Did digital transformation create a social network or social cobweb?

We expect social networks to bring us more freedom of expression. With one tweet, you share your view with the whole planet. But at the same time, giving us freedom of expression, social networks took away our free time to think well.

Technology has made it easier for us to access digital services, transfers and broadcasts. But the price for this unbearable ease is paid with our privacy.

Recently, Sofia became the first humane robot with citizenship. Will someday robots with artificial intelligence run for elections and be active in politics? Will a political party be able to overcome the fulfillment of their pre-election promises? But does it mean that man will become a slave to his own creation? Will we create a new tyrant, a new Nero instead of a leader with wisdom, i.e. Sofia?

I believe that in order to fulfill its initial goal, politics should be adapted to people's new expectations in the new global conditions. People still have a desire for freedom just as much as they need security. New politicians should offer quick and creative solutions. Inspiration and example for them can be the leaders who manage megalopolises. The experiences of managing Istanbul, New York and Hong Kong in the 21st and 22nd centuries become more important for the future of managing globalized diversity than the experiences of the nation-state of the 19th and 20th centuries. Perhaps it's time for politics, which was born in the polis, to return now to the megalopolis.

Thank you.