Posted on 10/07/2001 12:16:55 AM PDT by ThePythonicCow
The Enemy Beneath
In the days following the terrorist attacks, the U.S. fractional jet business found itself swamped with inquiries-10,000 is one aviation expert's guess. Meanwhile, all major commercial carriers in the U.S. are tottering on the edge of insolvency. For years, maybe permanently, this awful blow to America is sure to effect strange and sudden turns like this. Actually, the turns only seem strange. What the terrorist attacks may have done is to quicken a trend already in play for the last 44 years. The trend is decentralization.
< In 1957 the civilized world was at its apogee of centralized management. The twin efforts to conquer the Great Depression and to win World War II were huge top-down affairs that had lasting consequences for management and organization. By the 1950s command and control had, as a way of getting almost any task done, even in civilian life, virtually no rival. In fact, America's biggest worry at the time was the Soviet Union, which practiced command and control even more than we did-and at the point of a gun. And it seemed to work, too. In October 1957 the Soviets managed to hoist a 184-pound hunk of metal with a radio transmitter into orbit around the Earth. The success of Sputnik I shocked Americans. With each radio beep Sputnik seemed to say: "Our system of extreme command and control works even better than yours."
But hold the phone. The year 1957, which gave us Sputnik I, also gave us the birth of Fairchild Semiconductor in Palo Alto, Calif. The reason that's notable: Fairchild, in 1959, invented the silicon chip. The company's founder, Bob Noyce, took the idea of a transistor and etched it onto a tiny piece of polished sand. Two years later he upped the ante. This time Noyce was able to etch two transistor equivalents onto a sliver of sand. Then 4, then 8, then 16, then 32--and the rest is history.
By 1969 the chip was performing wonderful feats of calculation. One of them was determining the exact moment at which an astronaut must fire a rocket booster to enter the moon's gravity field. Too late or too early would do the astronaut no good; the sun's competing gravity would suck him into a slow, hot death.
Thanks to the chip, America overcame a five-year Soviet lead in rockets and beat it to the moon. Thanks to the chip--in missiles, in faxes, in computers--we won the Cold War, too.
The chip didn't just defeat the Soviets. Its amazing powers, in the hands of entrepreneurs, began to foil command-and-control monoliths of any kind. In 1976, 21-year-old Steve Jobs, having no shoes and only a rickety VW bus to his name, sold his bus for $1,200. It was just enough to buy a few chips from Motorola. That's how Apple Computer got its start. The same year, down in Albuquerque, N.M., young Bill Gates and Paul Allen wrote software code for kit computers using the latest Intel chip. That's how Microsoft was born.
Poor, humble and decentralized to multiple vanishing points of obscurity, the chip-based PCs nevertheless would grow to be mighty in the next 25 years. By the fifteenth year chip PCs had begun their attack on the top-down computer establishment. As late as 1987 the old guard--IBM and the minicomputer stalwarts such as Wang and Digital--was still laughing at chip PCs. They weren't laughing in 1992. IBM was out of money. Digital was about to be swallowed. Wang was on its way to bankruptcy.
Venture Capitalist of Terror
What worries me most about Osama bin Laden and his network of terror is that he is following the Silicon Valley model of decentralization and disruption, almost to the letter. Think of Bin Laden as a venture capitalist--the VC of mass murder and global terror. Like any other successful VC, he attracts people willing to commit their lives. He doles out money, but only in dribs. He demands that his ventures, if you'll permit me to call them such, stay lean, squeeze pennies and meet milestones. Above all, they must change the rules of engagement. Through clenched teeth one is forced to admit that Bin Laden gets bang for his buck. It's what Fairchild did. It's what Apple did. It's what Microsoft did.
When we knocked out the Soviet Union, we did so by harnessing entrepreneurship and decentralization. Sure, we had a Pentagon, and more important a President and Secretary of Defense in the 1980s with iron wills. But the chip figures hugely here. It gave our military a decisive advantage over theirs. Yet it was invented by young men in a little shed 3,000 miles way. Nobody from the top planned it.
Now we have an enemy who attacks us from below using disruptive and decentralized techniques. This puts America in an odd position. I don't like the looks of this. Seeing as how crazy and scattered entrepreneurs have beaten the crap out of monoliths over the last 44 years in almost every field, I don't like the situation. Not one bit. I have no doubt America will prevail in the end, if only because more people in the world want our lifestyle than want theirs. We have the world on our side. But the actual terms of engagement work against us. For some time, it's going to be ugly.
To see past Digital Rules columns, visit our Web site at www.forbes.com/karlgaard.
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