May 26 2009

Nodes’ Codes

by at 3:55 pm under Uncategorized

In “Nexus,” Buchanan explains how small-world networks are often created formally, with informal and random links providing the crucial extra connections. The global network of states, financial institutions, and NGOs share this same formal/informal structure. The world functions as a global network because of the varying degrees of formality offered by these nodes. Without each structure in place, we would cease to live in a “small” world. Even though these nodes bring a necessary level of randomness to the global network, they were not random in their creation. John Agnew writes in “The New Global Economy”: “Globalization, therefore, did not just happen and it is not synonymous with the neo-liberal policies instituted by many national governments in the 1980s. It required considerable political stimuation without which technology and economic stimuli to increased international economic interdependence could not have taken place. (Agnew 8).

States have a very formal networking structure that is largely based on trade (and therefore financial institutions). Long histories of alliances and trade routes have led us to an established social order. The G8, United Nations, NAFTA, NATO, and the European Union are all examples of the formalization of these networks. These are slow moving beasts of globalization that are often historical accidents as much as logical alliances. However, they are all based on the relationship among states and leave little room for informal networking connections, so crucial for small-world networks, to develop.

Here the financial institutions and NGOs hold so much promise. Their structures are inherently more random, even though they often develop from state relationships. For example, I worked with Sister Cities International over the last several years. Originally started by President Eisenhower to reunited Americans of German heritage with German citizens after World War II, the organization now works on “twinning” cities around the world in hundreds of combinations. Sometimes these cities are twinned because of heritage, sometimes because of trade opportunities, and sometimes because of past conflicts. Very recently, Sister Cities received a large grant from the Gates foundation to work on twinning more cities in Sub-Sahara Africa. This massive network is highly unorganized, yet was created because of a highly organized development at the state level–World War II. Financial institutions have given it a new goal that will result in many fantastic opportunities for the people brought together randomly thanks to the fortunes generated by a technology boom that largely missed their corner of the world.

Financial institutions are the pivotal connection between the formal state nodes and the random NGOs. They are regulated by laws, both national and international, but are working for the benefit of the private sector which is only interested in profit and will seek it anywhere. All the nodes of this global network expand in size and influence together because of their interconnections. NGOs will expand the breadth of financial networks, while new state-level agreements will allow more NGOs to find support. The opportunity for combining different nodes is nearly endless.

Sister Cities is an example of a network within a network. As the number of NGOs grow at an accelerating rate, combined with the power of the internet to find the connections between all of these organizations, the efficiency of the network will continue to be enhanced. I think this spells good things for the bottom billion, even though I believe our formal institutions have failed them in the past. Today, trade and therefore economic development can occur from the bottom up instead of from the top down. That’s a global network worth expanding.

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