Managing Leadership^®

A few years ago, Rich Karlgaard published a terrific piece in Forbes called “Ten Laws of the Modern World. They are well-chosen, and the explanations for their selection are astute – brief, but full of thought-provoking ideas.

Here are two of them:

Ricardo’s Law. The more transparent an economy becomes, the more David Ricardo‘s 19th-century law of comparative advantage rules the day. Then came the commercial Internet, the greatest window into comparative advantage ever invented. Which means if your firm’s price-value proposition is lousy, too bad. The world knows.”

And:

Wriston’s Law. This is named after the late Walter Wriston, a giant of banking and finance. In his 1992 book, The Twilight of Sovereignty, Wriston predicted the rise of electronic networks and their chief effect. He said capital (meaning both money and ideas) when freed to travel at the speed of light “will go where it is wanted, stay where it is well-treated.…” By applying Wriston’s Law of capital and talent flow, you can predict the fortunes of countries and companies.”

The applications suggested for these today sound wonderfully empowering of regular people – almost revolutionary. Surely, they should operate to reinforce and enhance one another for the benefit of all.

But have they? What do recent political and business events say to us about this?

Certainly, globalization‘s many faces seem to suggest that Ricardo’s Law is working at full throttle. Wriston’s Law clearly adds tremendous momentum to this, and the rise of some economies and shifts occurring in many industries can assuredly be traced to it.

But I recall being struck years ago by a claim in Kanan Makia‘s disturbing book about pre-war Iraq, “Republic of Fear.” The author asserted that Saddam Hussein, far from having his power diluted by the high degree of literacy and advanced education of his population, combined with their access to sophisticated communications networks, rather was able to use these to strengthen, to a degree not before seen, his indoctrination and control of the population. Knowledge, power, freedom of maneuver did not redistribute as one might have expected; rather, they centralized with even more brutal intensity. They did not empower, but oppressed.

Perhaps transparency is only valuable to those who look, speed of information transfer to those who think, and the facility for wide-ranging collaboration to those who act. Ignorance, as they say, is no excuse, and neither is lethargy. Laws, formal or otherwise, are not themselves proactive or effective – only people are.

Are you?

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Today’s tip: Speaking of networks, transparency, and the controversy even they can generate, please see The Economist on Clouds and Judgement, an introduction to a special report on rapid and remarkable developments in corporate information technology. Only for people willing to see, think, and act.

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