Disintermediation

quote_2015-10-22by David

This is my essential piece of 21st century vocabulary. I first saw the term used in what was, very briefly, futurology. The term originated, according to the Net, in banking in the 1960’s as a description for removing a single layer of mediation between lender and borrower. It is a well established term in Economics, and I am surprised at its lack of popularity in describing the process of disseminating information (see Wikipedia) and shortening the supply chain (see Amazon).

Just a wee while ago, before the Protestant reformation, information about Christianity was exclusively controlled and interpreted by the Catholic church. The Reformation changed the politics of information. In Scotland it reached its apogee with the Calvinist idea that a personal relationship with God required people to read the Bible for themselves. So everyone had to learn how to read. It was you, the book and God, no need for the expensive bejewelled intermediaries. But it was the “everybody reading” that was the real political dynamite.

I think this is disintermediation nearly five hundred years before it was called that. I bet there is a theological term for it too – but I think its about time the god squad started adopting the lingua franca, the traffic the other way has crowded our vocabulary with theological terms for long enough.

Shop forwards to just about now and the giant communications device at the heart of Amazon reserves for its human components only the humblest of tasks that are, as yet, in-automatable. A huge amount of data processing capacity was needed to take only a couple of layers of intermediaries out and what a transformation. At a stroke Amazon has used its capacity for sharing information to pay no tax anywhere, have a terrible reputation as an employer, yet have a happy client list that is a sizeable percentage of the western world’s population. That these mega-corporations do not seem beholden to the nation state is remarked on by very few. Such is the seductive power of information explosion.

The disintermediation of the supply chain has one more step to take, one that could be as important as, well, the Net itself. The removal of banking from the chain. No matter how compressed the supply chain might seem between, say, a customer in California and a heather honey croft in Perthshire, the payment requires a continuum of integrated banks to move the money around.

Enter stage left, a Digital currency with its miracle ingredient – the blockchain. Digital currency requires no intermediaries. Every user of the digital currency has a copy of the blockchain, which is effectively a copy of the data that a bank would have indicating how much money everyone has. Despite every bank, government and financial services organisation trying, no one has broken the security of the blockchain. Yes, people have stolen Bitcoins, leave your real or virtual wallet somewhere unsafe then theft can occur. Yes, there are scalability issues, there may need to be many virtual currencies. But using banks may soon seem as quaint as tally sticks, or mashing up dead trees to print pictures of the queen on them. Show of hands for those wiping a tear for the end of the banks control over the money system? I thought so.

Neither of my two examples represent unblemished improvements to the human condition. “Information is always increasing,” the compelling Second Law of Consciousness, does not wait for moral sanction before changing everything.

Now – how far could this go? If each big dump of data on society creates a big jump in politics and economics, how much data is there? What if all of the information in the world could be made available to everybody free of charge? What sort of change might that bring?

Of course – that’s exactly where we are now.

The cost of connecting the remaining 60% of the world’s population as yet offline is about two Olympics and a World cup. And yes, “they” are calculating right now how many McDonalds you have to sell to pay for it.

Intellectual property is basically theft of course, since the very latest patent that Apple is registering still requires Newton and Einstein et al to have thought of most of it first – so there is still an issue about everyone’s access to all the world’s information that is an artificial political construct. Once upon a time it was not economically viable to give everyone a copy of the bible when each copy was hand written over the course of years. Nowadays “copy/paste” is economically free, but politically explosive.

The exciting bit for me is the disintermediation of politics. If we are all connected, if we can all share all of the information relevant to our political thought processes – why do we need to vote once every five years for the proxy who will make all decisions for us? Once upon a time putting an X in a box every few years was not only a convenient highest common denominator of our species communication’s skills, it represented the only technique for soliciting public opinion. Stuck as we are in a world where parliament is opened by a woman with diamonds on her head telling us that austerity is good for us, we seem to be very far away from a participative democracy.

There are some early, possibly unhelpful, examples here such as Switzerland’s (hardly a model for those aspiring to a Socialist utopia) referendum system. But the duopoly of British politics (I am sure there was a third Britain-wide political party, but for the life of me…) will not concede a single thing in their struggle for survival and relevance. I find it hard to believe that our ancient monarchy will evolve into anything. That is what is attractive about Scottish independence – the destruction of the senescent British state. We would have to build it again. I find it hard to see how we turn our over-mediated politics into something for grown-ups who can read and write. We need to start again.

“The urge to destroy is also a creative urge” Mikhail Bakunin


Further reading:

ScotPound: A New Digital Currency for Scotland

What Exactly is the Blockchain?

Explain Like I’m Five: Bitcoins

 

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About RIC Aberdeen

The Radical Independence Campaign sees Scottish independence as the first step towards creating a fairer, greener, more democratic place. RIC Aberdeen are a local campaigning group, ordinary people who want to make a difference. We do canvassing every Wednesday night, along with other events. Please get in touch for more info.

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