Doc Searls challenges me to come up with the goods, though in a good natured way. Since what he has done with the Linux Journal and in the open source community has had a tremendous influence on my own thinking, let me boil down one of the simplest and most important ideas of the next half century into a short space.

The postage stamp history of political ideology in the 20th century is between left and right, and between public and private sectors of the economy. This view is wrong when you look at it, and misses the third great sector: the social sector, the sector which runs not on money or political consensus, but on the intricate interactions of people. What the internet is doing is allowing a rebirth of the social sector, and giving it the means of producing value. Linux, blogging and wikipedia are value, which while enabled by the public and private sectors are driven by the social sector. The rebirth and resurgence of the social sector is a driving force in politics, and one that is going to change the direction of not merely American politics, but politics in every country.

Firm and State:
A Postage Stamp History of the 20th Century

The postage stamp historian of the 20th century will tell you that the major conflicts were between various kinds of democratic government, and between those who placed their faith in free markets, and those who placed their faith in governments. The result was a series of mixed economy solutions, and a series of relatively free countries at the industrialized core, doing business with relatively unfree countries that provided resources or were at the peripheries of the central economy. The postage stamp historian would tell you that free market ideologies were associated with "the right" and government solutions with "the left".

However, this postage stamp history doesn't have room for the reality that the most important military challenges from the right - both the First and Second World Wars - were not free market in their origins. Neither the German Empire, nor the Nazi State were free market nations, but instead mixture of state and corporate control, resembling aristocracies more than any other kind of political organization. The authoritarian and totalitarian right had little to do with free markets. The same problem occurs when one looks at the challenges from the totalitarian left. While nominally state controlled, the reality was that the major Stalinist states had such a problematic bureaucracy that most of the economy devolved down to localism. Local semi-market economics produced as much as half of the Soviet food supply. While nominally centralized, the economics of late Maoist China and Breshnev's USSR were closer to feudalism than to anything outlined in Karl Marx.

It also doesn't explain the relative stasis of the public and private sector. Over the last generation, the share of public and private sector in most industrialized nations hasn't budged. Conservative, liberal, labor, even socialist, governments come and go - and most countries have relatively static ratios of government demand in GDP.

Let me propose a different postage stamp history, namely that there are, and have been all along, three sectors. The first sector is the private sector, which relies on posession and exchange, the second sector is the public sector which relies on consent and mobilization, and the third sector, the social sectory, which relies up on the shaping of attitudes and behaviors. The history of the 20th century isn't really the history of the public against the private sector, but the struggle between the public and private sectors to see how much of the social sector they could control. There have been a series of shifting coöperative and competitive arrangements between adherents of the public and private sector as to how to divide the social sector between them, and a series of political coalitions where the losers of those arrangements attempt to mobilize various parts of the social sector in the political wars.

I take this road based on an idea from The Semi-Sovereign People, a classic of political theory, that there is no political spectrum until it is created by a fracture line. Everyone has interests as members of the public, private and social sectors, and which role you act in depends on which you feel is either most likely to get you ahead, or which interest is most threatened by others.

Political and economic orders often realize that to remain stable, they must reach into the social sector. Social innovation ties closely to economic and political organization. People learn to live in communities around the sources of their economic sustenance, and people learn to create economy out of the social infrastructure that they have.

The reason for this change is complex, but also fits in a small space in abstract: the early modern period collided head on with a society that had grown precisely because of the power of its social sector. That social sector, however, could not adapt to many of the ideas, technologies and forms of social organization that the modern brought with it. The Victorian world had used the social sector, because both the public and private sectors could not deal with the problems of world spanning empire. In fact, repeated failures of the public sector to deal with these problems was the signature of the period between 1770 and 1850. The private sector as we knew it was also still being born. The modern corporation did not exist in 1800, and the legal infrastructure that it now rests on took most of the century to be created.

The public and private sectors swept away a social sector which simply could not deal with reality. Reality in the form of machine guns that slaughtered large numbers of young men in battle - the social infrastructure of the military could not accept the reality of mechanized warfare. I could enumerate dozens of other examples: from the inability of Victorian manners to accomodate the telephone, the disruptive effects of rising wages that industrialization in war time created. In the sciences one could see a similar wave of problems, the old, structured, classically driven world view broke down in the face of relativity and quantum mechanics.

Thus the social sector was ripe for being pillaged, and the activity used to maintain it ripe for being directed by either state, corporation, or by some combination of the two. The size of government expanded dramatically, but so did the size of corporate control over the economy.

This postage stamp history then, argues, that the public and private sectors fought with each other on the margins, but that the real conflict was whether state, or corporation, would be the driver of culture and social activity.

Post-modern, post-society

The late 20th century witnessed the problems both with state culture and corporate culture. Through out the 20th century there were rejectionists who looked back at the power that the world of art, culture and religion had had previously, and wished for its return, or wept at its demise. One of the first quotes is variously attributed to Claude Debussy or Gabriel Faure, and it runs that in the 20th century art would no longer lead, but would instead comment on the flow of history.

These groups were spread across the social spectrum, from far left to far right, and off the spectrum entirely. The desire to have social, rather than government or economic, forces be decisive is appealing to anyone who is better with words, pictures, notes or wood than with money or negotiations.

The problem that the social sector had was not merely that it could be fragmented by war, economic dislocation or new ideas, but that it had no means of production. From the view of both firm and state, culture was a non-productive activity which was best used to support the projects of elites. Whether it was "education" or "public relations", the social sector was unpaid labor to be used to advance other causes. Many of these causes, such as the eradication of poverty or the improvement of education, where noble and laudable, but many more were not.

Totalitarian states failed because it is very expensive to substitute the secret police and youth groups for a growing and breathing social sector. Consumerist states have had the problem that the more people are affluent, the more they realize that there is a void in their lives. The social sector which exists in support of either public sector or private sector actions does not have the same organic feel, nor the same satisfying richness, that a social sector the responds as a primary to problems does. That is, you can tell when culture is driving the solutions, and when it is riding along.

In the last 30 years, the devastation to what remained of the old social sector. Some of this was continuity from the modern project. A good example is the eradication of racism, which was a central pillar of the social sector of the 19th century. The public sector, and the parts of the social sector that formed around it, were overtly hostile, not only to racism, but to its symbols, such as the Confederate flag. But an economic fact was as important: beginning in the 1970's, wages began to flatten out. Instead of seeing productivity and inflation reflected into wages, wages began to rise only about as much as inflation. To make up for this, families, even those relatively far up the economic scale, had to send both parents to work. The rise in median household incomes is almost entirely from working more hours.

The problem is that the people being sent to work were the same people who had, previously, done the work of maintaining the social sector. The time spent in the office was directly robbed from time spent in church groups, schools, volunteer organizations and other forms of social and cultural bonding.

The Social Sector and the Netropolis

Now let me put the big idea in simple terms: the internet both enables, and its shape is driven by, the hunger for a social sector. It enables that social sector, because now the social sector produces things of value. It produces software. It also reduces transaction costs by allowing buyers to avoid various layers of middle man. It reduces the transition costs of people moving. It allows people to find others of similar social interests. And people have directed more and more of their energy to these pursuits, because it was easier to find the value in being on the internet, than in making money or pursuing political power.

There is a "market of markets" and people choose which one to enter based on their understanding of which one offers the most reward, or protects against unacceptable downsides. The social sector, which includes raising children, creating art and going to church, as well as every private friendship - is the great unknown market place.

Reform and Liberation

The big idea then is the reform and liberation of the social sector. Instead of treating the social sector as a source of political shock troops, instead of seeing it as a dumping ground or as an expensive hobby that rational economic actors should avoid, the great project is creating a social sector which is capable of changing the way society works. We can no longer pay in oil backed currencies for all that we wish to do. Either we have to accept doing much less, or we must find ways of paying people which do not exclusively involve allowing them to buy bigger houses and drive bigger cars.

Reform and liberation go hand in hand. To the extent that the social sector is used to generate trolls for anti-scientific points of view, to the extent that the social sector is seen as merely unpaid labor in the record companies PR arsenals, to the extent that protecting culture means protecting bigotry, the social sector cannot participate in the governing of society. The social sector for a century has been like an Indian reservation where those who could not compete in the world of public and private retreated. The objective reasons why the social sector of 1890 fell from grace still exist, and there are forces in society that are happy to yoke anger, confusion and fear to reactionary politics.

This is different, in kind, from a social sector which is driven in response to the needs of firm and state - instead we are witnessing the rise of a social sector which is, slowly, learning how to deal with its own objective realities, and directly find solutions to those problems. It is far from perfect, as both the public and private sector were far from able to manage transitions in the late 19th century.

The first part is the recognition that the social sector exists, and that it can be measured. Links are, if you think about it, currency of a social kind. They aren't money, they aren't votes, but they have a reality.

The second part is the acceptance of responsibility. The social sector has been able to be irresponsible, allowing whatever fetishes to grow as people needed to deal with the pressures of firm and state. A social sector which becomes a coequal partner in society cannot afford this, nor can it afford to be essentially rejectionist. The social sector is a revolutionary, not counter-revolutionary, force. If your objective is to "win" 1932 or 1968, then the social sector will not be of much use to you.

The growth of this responsible core of the social sector is an easy one to trace - from the fuming wastelands of old style mailing lists and spam capsizing of Usenet - to the world of blogging, where the social sector is able to push back on corporate and government interests - is a very short span of years. We have come very far, very fast.

The advantages of the social sector are clear: it can produce social goods at much lower cost than either government or private sectors. It can do so with a much greater alignment of reward and social good, with lower externalizations of cost. It acts towards both "creative destruction" by liberating resources from previous tasks, and in positive creation. These activities have been disruptive of previous economic arrangements, and will continue to be so. People can be happier with lower effort and less use of bottleneck resources, this is one of the very definitions of improving the commonwealth.

There are many other important trends and ideas in the present, and it is foolish to think "social sector good, private sector and public sector bad". The social sector must continue to make the kinds of quantum leaps in effectiveness that we have seen in the last decade, it must also realize that it's period of being a ward of firm and state means a dramatically higher standard.

But it also means, that in every discussion, in every debate, in every policy program, treating the social sector as a coequal marketplace to public and private markets will increasingly become a reality. It means asking whether an activity really can be structured to be handled by the social sector as its primary means rather than by government or by corporation.

The corresponding stick to this carrot is this: the social sector is growing in power. If it is not turned into a positive structure, it will be used as a negative one. We need only look at the uses that religious fanaticism and ethnic hatreds are put to in the modern world for the purposes of genocide and terrorism to understand that the question is not if the social sector is to become a coequal sphere, but in what way will it become a coequal sphere. Just as the question of the early 20th century was not if government and corporate structures were to grow and master a wide range of new technologies, but how it was to be done.

Failure will bear increasingly stiff penalties. From isolated terrorist acts, to "ethnic cleansing" and the 9/11 attacks, failure to incorporate social forces and the mechanisms of the social sector into a growing and positive balance has traced an arc of ever increasing violence.

The attraction of this idea is that it is neither left nor right in the old sense. It is a mechanism which will, in fact, push back against both tendencies on the political spectrum, and will create "third poles" of politics and choice. The "third way" is not "between socialism and capitalism" but its own point on a triangle. The rewards for mastering this sector are greater happiness and a new source of solutions for problems, the penalties are as dramatic: an ever increasing cauldron of instability leading down the path of ever increasing danger and chaos.