Why Brexit is like Unplugging From an Operating System … Hard, and Probably Dumb

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On the world stage, empires are becoming operating systems.

That’s why voting to leave the EU, in favor of some homebrew alternative, will be such a disaster for England.

In the old days, you built an empire by having a stronger army or navy than other countries, who then had to pay you taxes in return for protection.

Today’s global empires are more like operating system platforms in the tech world (think iOS or Android), in that they go beyond security to provide vital organizing structures necessary for all activity. They organize and aggregate money, resources and investment. They provide governance and laws for people (e.g. immigration). They regulate commerce and keep global corporations in check. And they build and manage lots of complex infrastructure.

There are three primary ‘operating system platforms’ in today’s globalized world: the U.S., the E.U., and China. George Orwell foreshadowed this in his book ‘1984′ (written in 1949): Oceana, Eurasia, and Eastasia.

Over the next couple of decades, as pressure intensifies from accelerating climate change, mass migration, capital flows and technology innovation, pressure will increase for countries to align with one of these operating system platforms. Few will be able to afford the investments required to go it alone.

For an idea how this might work, consider how OS platforms work in the tech world. For starters, they’re not democracies, but loosely dictatorial. To avoid gridlock, each has leaders who can make tough decisions consistently, and with conviction… people like Bill Gates (Microsoft), Steve Jobs (Apple), and Larry Page and Sergei Brin (Google).

To join these platforms, app developers must agree to their rules. Remit a percentage of transactions. Comply with guidelines about navigation, appearance, and resource utilization. Meet minimum participation and investment thresholds.

In return, developers get protection and security, but also market access and promotion, collective buying power, and foundational technology (‘API’s’) they can build on for free. They also often get input into platform decisions – especially now that Apple and Google have successfully neutralized Microsoft, making the OS platform world more competitive.

If developers don’t like an OS platform’s behavior, they can shift their investment to a competing one. Developers often build on multiple platforms (like Netflix on both iOS and Android), but not necessarily with equal investments. And they don’t necessarily get equal value back from the platforms, which have different participation ’tiers’ (with corresponding ’service level agreements’), and also cut special deals for large, influential developers.

This is where Brexit gets interesting. The E.U. is the weakest of the three big ‘global operating systems,’ because it has a weak core (no dictator), and lots of bureaucracy. China is authoritarian. The U.S. lacks a dictator, but has 200 years of laws and precedent and 50 ‘developer-states’ that are (for the most part) fully committed.

Even before Brexit, to continue the analogy, the E.U. was struggling for market share, and had less commitment from its ‘developers’ than the other platforms. The U.K., its second largest ‘developer,’ hadn’t even adopted the Euro – and common currency is a core platform attribute.

In theory, the U.K. had the clout to negotiate concessions from the E.U. to stay, if it had chosen that approach. Instead, it voted to forfeit its seat in the inner circle of a major world OS platform. That puts it in the same boat with countries like Canada, Australia, Japan, Korea, Turkey, India, and so on – who don’t get the benefits of fully committing to a global OS platform. They may have favored trade or tax or intellectual property agreements, the implied promise of military protection, or lean heavily on the dollar or yuan. But when push comes to shove, they’re off the grid.

As for the E.U., the jury’s now out. It’s like Microsoft, in turnaround mode and playing catch-up. It’s ‘developers’ are restless and a little loose, evaluating their options. Problem is, when an OS platform loses strength, it can afford less investment and provide less value back to its participants, and a vicious downward cycle ensues.

If this analogy were perfect, a new global OS platform challenger would come along quickly that Britain could join (like Amazon or Facebook, challenging Google and Apple). But short of another world war, this won’t happen – no other countries have the core strength to start one. The three current global OS platforms will likely get stronger and more deeply integrate more countries into their systems over the next twenty years. The only alternative is gridlock and global anarchy.

My advice to England: it’s not too late to un-Brexit. You have one of the biggest voices in the governance of the E.U. platform, and you don’t have the scale or conviction to go it alone.

To the E.U.: Figure out a better value proposition for your members countries (developers), and fast. Don’t make them think so hard about whether being on your platform is worth the perceived costs. Maybe set up a 2nd tier for the weaker Eastern European countries, or for chronic problem ‘developers’ like Greece.

For the rest of us, the Brexit vote raises the question of how democracy and local decision making will fare in a world dominated by global ‘operating system platforms.’

In the technology world, the only voting that matters is voting with your feet (investment of time and money). Britain got a taste of that the day after Brexit, when markets dumped the pound sterling, cutting the Island’s buying power overnight and probably relegating it to years of economic decline. And it will likely suffer an even more painful exodus of human capital, as talented young Brits leave London for Paris or Frankfurt or Dublin.

But Brexit also showed that ballot-box voting – and participatory democracy – still has some potency in a world that increasingly hungers for strongmen and their ability to get things done. And thats good, because the leaders of these global operating systems will need both types of voting to keep them honest.

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