The long first chapter of writer James C. Bennett's new book, The Anglosphere Challenge, is a fascinating combination of cultural anthropology and technological prognostication. It led me to reflect on a number of issues.

1) Our Anglospheric culture, as Bennett calls it, enables people to form and break relationships easily. In economist's terms, the costs of entry and exit are low.

2) The ability to formulate and dissolve partnerships is very important in the real world of business, yet it receives relatively little attention in business school, much less in economics.

3) In the 1960's and 1970's, a book with the ambition, scope, and intellectual power of The Anglosphere Challenge would have been written by an academic.

4) Today's political Left is focused on group solidarity rather than on building a coalition.

What Causes Prosperity and Democracy?

In Learning Economics, I raise the question What Causes Prosperity?. Bennett answers that economic prosperity and political freedom/democracy both stem from what he calls "civil society." By this, he means the networks of associations that people form, reminiscent of de Tocqueville's observation that

"Americans of all ages, all conditions, and all dispositions constantly form associations. They have not only commercial and manufacturing companies, in which all take part, but associations of a thousand other kinds, religious, moral, serious, futile, general or restricted, enormous or diminutive. The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner they found hospitals, prisons, and schools. If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they form a society. Wherever at the head of some new undertaking you see the government in France, or a man of rank in England, in the United States you will be sure to find an association."

What de Tocqueville saw nearly 200 years ago is still prevalent. Bennett points out that as new opportunities arise in computers and digital communication, standard-setting bodies emerge to resolve key issues. These voluntary organizations, rather than isolated individuals or hierarchical command structures, are best able to achieve progress in the information age. He cites open-source software as an extreme example of decentralized co-ordination.

In economics, we speak of a vibrant market as one in which there is free entry and exit. The cost of starting a new project is low, which means that new ideas are easily tried. Also, the cost of terminating a project is low, which means that bad ideas are quickly discarded. This fluidity of entry and exit is central to the concept of what I call a learning economy.

Government can impede a learning economy by making it difficult to start new firms -- and in fact some economists, most notably Hernando de Soto, have argued that a key to improving conditions in underdeveloped countries is to reduce the number of days needed to obtain government permission to start a new business.

Moreover, government can slow the process of exit by protecting outmoded businesses, allowing them to tie up resources that could better be used elsewhere. In my view, this is one of the most significant ways in which governments of developed countries can impede a learning economy. To take one example, I believe that the entertainment industry has used government power to retard the development of new models for distributing music.

Bennett takes the view that free entry and exit are characteristics of the culture of ancient England. The English were able to form relationships across tribal and religious boundaries. Unlike the states of continental Europe, the English obtained law and order without a strong central monarch. They developed the pragmatic, evolutionary common law, as opposed to a top-down imperial code of law.

In Bennett's view, the cultural characteristics of easy entry and exit are the foundation of both democracy and the free market. The ability of citizens to form relationships that cross tribal or religious lines is the key to developing modern social institutions.

After reading Bennett on the importance of fluid relationships in the social, economic, and political sphere, one might be more skeptical about the nation-building project in Iraq. That country strikes me as one where loyalty to a clan or religious group is likely to supercede the ability to form a political coalition or a business relationship. If so, then democratic institutions will be difficult to establish.

Partnership Formation

In my brief, well-timed career as an entrepreneur, a lot of my good luck was in partnerships. I think that the topic of how to identify, form, and dissolve partnerships is one that is under-appreciated in most books on business and economics. In Under the Radar, I tried to discuss the partnership issue at greater length, given how important it was in my own experience.

When I was forming partnerships, easy entry and exit was crucial. For me, this meant starting out with small, informal joint ventures that could be initiated at low cost and evaluated quickly. In contrast, whenever another company asked for a formal proposal or initiated the relationship by having me sign a lengthy Nondisclosure Agreement, this was invariably the kiss of death -- a sign that they were too stiff and ponderous for my style. I never was able to come to terms with companies that required heavy formal documentation early in a relationship. I assume that the formal approach works for some people, or else I would not have run across it, but it was incompatible with me and the partners that I joined. Our approach to establishing trust was empirical.

Regardless of whether trust is established empirically or formally, Bennett's view is that people in the cultures derived from England have "templates" by which they can form productive relationships with strangers. These templates include market transactions, legal agreements, and inter-operability standards. In other cultures it can be difficult to have a business or political relationship outside one's immediate clan. Those relationships that do form tend to be hierarchical, with one party dictating terms to the other.

The Academy Loses its Monopoly

Bennett's book fits into a pattern. Many -- but by no means all -- of the important nonfiction books I have read in recent years have been written by people who are not affiliated with colleges and universities. These influential intellectual works have come from people like Virginia Postrel, Ray Kurzweil, Daniel Pink, and Jeff Hawkins.

Thirty or forty years ago, most serious writing came from the academy. If you came across an important work of nonfiction, chances are it was the work of a professor.

My sense is that some academics continue to believe that universities have a monopoly on intellectual talent. Stuck in the 1960's, such snobs continue to automatically ignore books like The Anglosphere Challenge.

In fact, the 1960's was an unusual period in the history of higher education. The normal state of the academic market is excess supply. As with Rock'n'Roll or movie acting, there are typically more people who want to make a living at intellectual pursuits than there are positions for them. However, in the 1960's, a bulge in the student-age population and large increases in government money in response to the "Sputnik challenge" created an environment where higher education could absorb just about all of the available intellectual talent.

By the late 1970's, the market had reverted to normal. Ph.D's had difficulty finding academic jobs, and many found their way into business. Bennett's background seems to fit that pattern, as this interview indicates.

"I was educated at the University of Michigan. My primary concentration was in anthropology with a minor concentration in political science. I started out intending to study political science, and then go to law school, but after beginning that study I became dissatisfied because the political science department, and most of the other disciplines at the University and in academia at that time were concerned with very narrow, very mechanical kinds of questions. I was interested in the broad scope of human interactions with their environment -- a very wide range of human questions -- and, of the disciplines, only anthropology attempted an overview and still attempted to create an integrating vision. I found this lacking almost every place else. So, I switched to anthropology even though I never had any intention of being a professional anthropologist, and I've never regretted that."

Another realm in which there typically is excess supply is journalism. More people would like to be commentators and pundits than the traditional press can support. The fact that there are so many would-be journalists is one of the sources of tension between bloggers and mainstream journalists. By changing the rules of entry, the blogging phenomenon makes this excess supply manifest.

We may be headed for similar tension between the professoriate and those of us who are not affiliated with the academy. To date, such tension has manifested itself in the form of criticism of the political narrowness of academics. In the future, people may come to realize that the insularity of academic thinking goes beyond politics. The self-centeredness of the academy might then be recognized as a learning disability among the very people who pride themselves on high IQ's.

Self-Marginalizing Groups

In fact, the Academy in particular and the political Left in general are falling behind in the Information Age. Adept at using its tools, they are unable to absorb its meaning.

In the Information Age, technological change is rapid. New opportunities and threats emerge at an accelerated pace. Bennett makes this point, as I do in Learning Economics, for example, in the chapter on Nonlinear Thinking.

Bennett argues that modern technological change requires the sort of flexibility that the Anglosphere culture has been developing for over a millennium. It requires, in my terminology, easy entry and exit for social, economic, and political institutions. Intense emotional attachment to an arbitrary group or an outmoded institution will tend to be dysfunctional.

Failure to understand this requirement for flexibility can lead to what I call self-marginalizing groups. These are groups whose taste for coalition-building is weak but whose commitment to solidarity is strong. Unable and unwilling to compromise and form temporary alliances, such groups will tend to get stuck outside of the mainstream of political and market developments.

Interest-group politics, as traditionally practiced, has shown the characteristics that Bennett associates with the Anglosphere. Coalitions are fluid, pragmatic, and temporary. From the 1930's through the early 1960's, the Democratic Party included both the racist Solid South and the urban African American vote in the North. Meanwhile, Republicans tried to stitch together a coalition that included rural constituents and large banking interests.

At the moment, American politics seems to lack this flexibility and fluidity, particularly on the Left. The focus seems to be on conformity to dogma rather than breadth of coalition.

On the Right, I believe that it is still possible to discern the tensions and compromises that one would expect in an alliance-building environment. The loose coalition includes libertarians and moral conservatives, deficit hawks and tax-cutters, immigration supporters and immigration opponents.

What has emerged on the Left is a core of rigid, dogmatic, conformity enforcers. Its organizations, such as MoveOn.org, the Howard Dean campaign, or the movement to resist Social Security reform, are self-marginalizing. They can achieve a high level of intensity, and with the Internet they can be successful at co-ordination and fundraising. However, they lack the flexibility in forming alliances that politics in the Anglosphere has traditionally required.

Social Security is the latest cause to be sucked into the Left's Mob-o-Matic. If developments hold to form, the strident thereisnocrisis movement will be filled with righteous anger and self-congratulation even as it alienates anyone trying to bring common sense or balance to the issue. Ultimately, this crowd will raise the credibility of the President's reform proposals, just as in Iowa the Howard Dean orange-hat invasion increased the attractiveness of John Kerry.

The Democratic Party still has many voices of reason on Social Security, but as David Brooks recently pointed out, those voices are being drowned out. Soon, you may not be able to hear them. The entire party may choose to self-marginalize.

I think, and I believe that Bennett would agree, that the traditional Democratic Party and its beliefs are an important component of the American fabric. However, by taking on the characteristics of self-marginalizing groups, the Left is walking away from The Anglosphere Challenge.