In case anyone here has not noticed, modern society is collapsing. Traditional, vertically-structured social systems are eroding, their places being taken by horizontal networks of autonomous individuals and associations. The pyramid – with its top-down, command-and-control systems of centralized authority – has been the dominant social organization model in Western society since at least the time of Plato. The underlying assumption of pyramidal systems is that social order can be realized only if decision-making is centralized within established institutions – institutions through which the exercise of unilaterally-directed authority can channel the turbulent forces of human society to productive and harmonious ends.

     The pyramidal model has long been reinforced by Isaac Newton's reductionist and mechanistic model of the universe. This view of nature is premised on the idea that all matter consists of fundamental building blocks – the atom being the preferred explanation – held together, and their behavior regulated, by discernible "laws" (e.g., laws of motion, gravity, light, thermodynamics, etc.). Implicit in such a model is the idea that nature is structured in relatively simple patterns capable of calculation which can be accurately identified and measured. Because of the presumption of certainty inherent in such a model, it has long been an established article of faith that, given sufficient information, it is possible for human beings to predict the consequences of events in both our physical and social worlds.

     The pyramidal model is the one upon which institutions operate, be they business corporations, hierarchical religions, most school systems, or the state. In a chain-of-command fashion, decision-making authority "trickles down" from institutional leaders to the "rank-and-file" members at different levels in the hierarchy. Corporate managers; classroom teachers; legislators, judges, prime ministers and presidents; and ecclesiastical officials, may function in different settings, but each operates on the same premise of establishing order through the exercise of their will over others. No clearer statement of the pyramidal premise has been uttered, in recent decades, than by former U.S. Secretary of Defense and industrial leader, Robert McNamara, who said "[v]ital decision-making, particularly in policy matters, must remain at the top. This is partly, though not completely, what the top is for."

     Implicit in the pyramidal model is the assumption that the institution involved is its own reason for being. What might have begun as a flexible, organizational tool allowing individuals to cooperate for the production of life-sustaining values, comes to be regarded as an end in itself. The successes that were facilitated through the use of organizational machinery tend to produce, in our minds, a dependency upon the system, rather than upon the creative and resilient processes that led us to create this tool for cooperation. With the support of those who have become the leaders, we come to endow the organization with a need for permanency. In this way the organization gets turned into an institution, its own raison d'être. So constituted, the institution resists the processes of adaptation necessary to a creative system, and develops preferences for stability, security, and a resistance to change. Instead of adapting itself to the fluctuations of an inconstant environment, it seeks to force its environment to adapt to its needs for certainty and permanence.

     In their efforts to stabilize and preserve their positions, institutions have had to call upon the state to establish – and enforce – standards of both conduct and goods and services to which others must conform. Because the state is an institution that enjoys a monopoly on the use of violence within a given geographic area, its powers become essential to the regularization of human behavior. Such efforts on behalf of stabilized uniformity are brought about and reinforced through standardized thinking, in which men and women learn to value security above individual liberty. American politics is firmly grounded in the worship of "security:" social security, job security, homeland security, airport security, and the security of national borders, being just a few examples. Lest the public discover what its government has been up to, efforts to reveal such knowledge are routinely repressed in the name of national security.

     Part of the popular mindset that permits the state to assume its role of monopolistic authority in a vertically-structured power system, is the belief that political officials possess a level of knowledge – approaching omniscience – allowing them to foresee conditions, assess the factors influencing the future, and to formulate programs and policies that will lead to predictably satisfactory ends. This is an illusion that can be traced back to Plato's "Republic," and his "philosopher kings." Government-directed economic and social planning proceeds from this assumption, a belief empirically destroyed by the 20th century failure of systems of state planning.

     The problems created by institutionalization center on the fact that any system must constantly renew itself if it is to survive. This is true for an individual, an organization, or a civilization. All systems are subject to the second law of thermodynamics, the entropic principle that a closed system will move from a state of order to disorder. But human beings and our social systems are open – not closed systems – meaning that they can resist entropy – at least temporarily – by ingesting energy from our environments. For any system to remain vibrant, it must constantly renew itself in a constantly changing universe. But such renewal can occur only by the system undergoing change, moving in the direction of a more orderly condition. Such demands run counter to institutional demands for stability, security, and equilibrium.

     In their efforts to create and structure order, institutions produce the rigidity that interferes with change and, paradoxically, generate disorder that can lead to the entropic death not only of individual systems, but entire civilizations. Efforts to structure and restrain the processes by which systems produce the values upon which a civilization depends, can produce dysfunctional consequences. A number of historians have emphasized how the processes of institutionalization, standardization, and other practices designed to enforce organizational stability, contribute to the decline of civilizations.

     A creative, vibrant civilization, in other words, is dynamic, not stable; adaptive to change, not burdened by equilibrium. It is characterized not by those who seek to preserve what they have, but by those who seek to produce what their minds tell them they can have. Individual liberty abounds in such a society, as men and women advance new ideas, new technologies, and new practices in pursuit of their varied self-interests.

     For a number of reasons, the top-down model of social order now finds itself in retreat.

     One cause has been an awareness of the growing inefficacy of large institutions to remain capable of producing the values upon which a society depends for its well-being. Because of their size and bureaucratic sluggishness, institutions tend to become less adaptable to the constancies of change inherent in all living systems. Life is a continuing process of making adjustments and creative responses in a world too complex to be predictable. But institutions insist not only upon their illusions of predictability, but their systems of control by which they imagine they can control the world. This is why institutions have always aligned themselves with the forces of state power, in order to compel the rest of nature – particularly mankind – to conform to their interests.

     But power wars against life, for power seeks to force life to become what it does not choose to be. Because life expresses itself as autonomous and spontaneous individual activity, it is inextricably dependent upon individual liberty. Liberty is the condition in which individuals – and the societies in which they live – can remain resilient and creative, adaptive to changing conditions.

     Furthermore, the nation-state – the hallmark of vertically-structured pyramidal systems – is in decline. There has been a drastic failure of expectations that the state generates social and economic order. 20th century state-conducted wars and genocides killed some 200 million people; state systems of economic planning have produced starvation, impoverishment, and death; shortages of goods and services; unemployment; inflation; and depressions. The promises of individual liberty to be protected by the state have been negated by expanded police states, concentration camps and gulags, torture, censorship, surveillance of the lives of people, and widespread forms of police brutality. The expectation that the state would protect private property has wilted in the face of the burden of taxation, government regulation of land usage, and the powers of eminent domain. There is a growing awareness that "the system" simply doesn't work as most people expect it to work.

     The death-rattle of the nation-state reverberates throughout the world. The "Iron Curtain" behemoth that served as our bogeyman following World War II, began to erode in the 1960s, with Yugoslavia leading the way. Later on, the surviving Soviet Union broke up into fifteen independent nations. Yugoslavia no longer exists, its erstwhile territory subdivided into six separate nations. Czechoslovakia – having broken away from the Soviet Union – has since decentralized into the Czech Republic and Slovakia.

     The vulnerability of the centralized, nation-state model should have become evident to people following the collapse of the British and French empires. George W. Bush's fatuous announcement of the beginnings of an "American Empire" – with himself as "Emperor" – should have been greeted with the same disbelief had Henry Ford announced, in 1900, his intentions to invest in the horse and buggy industry!

     Secession movements abound throughout the world, with Northern Ireland, Quebec, Tibet, and Palestine the more prominent examples. Basque separatism in Spain, and numerous state and local secession efforts in the United States, are but a few examples of large numbers of people seeking to withdraw from dominant nation-state systems. In America, a number of states and cities are defying federal restrictions on the medical use of marijuana and the importation of cheaper prescription drugs from Canada. At the same time, people are increasingly identifying themselves with and organizing their lives around various abstractions that transcend nation-state boundaries. Religion, ethnicity, lifestyles, race – even membership in urban gangs – are some of the categories by which people identify themselves. The Internet is helping to dissolve political boundaries in favor of philosophical, economic, and other criteria by which individuals create cyber-communities with like-minded persons throughout the world.

     But the decentralization process runs much deeper than this. Alternative schools and health care practices continue to draw support away from institutionalized educational, medical, and pharmaceutical interests. The decentralization of management in business organizations – with increased decision-making in the hands of employees – has been going on for over fifty years. Manufacturing is increasingly being done in smaller, more resilient firms. Lawyers are increasingly turning to alternative methods of resolving disputes, including arbitration and what is emerging as "holistic" or "collaborative" law practice. At the same time, there has been increasing interest in the use of "jury nullification," by which members of a jury ignore the instructions they receive from a judge and adopt their own legal standards for guilt or innocence. The Grameen banks of Bangladesh have loaned some $6 billion to four million impoverished individuals – 96% of whom are women – with no collateral other than the promises of a handful of their fellow villagers to repay the loan. Interest-free loans are even extended to beggars. The bank has a 98% repayment record, but refuses to make use of the courts for the few bad debts or defaults.

     The Internet, cell-phones, fax machines, iPods, websites and blog sites decentralize the flow of information among people. It has been estimated that there are some 22 million blog sites in existence throughout the world. The established news media is firmly challenged by technologies that allow anyone to become a news source. Authors need no longer rely on large publishing houses, with "publishing on demand" becoming a viable alternative. The inexpensive availability of video cameras has spawned the widespread growth of documentary film-making. Stock- and commodity-market investors control their own purchases through computers. One expression of a politically-unrestrained marketplace, ebay, provides a means for people to buy and sell virtually anything through Internet transactions. At the same time, PayPal is available as an alternative method for paying for goods and services in a horizontally-connected world. The Internet encyclopedia, Wikipedia, is a continually updated system that allows visitors to edit subject matter content. This same sort of system is used by digg.com, a website through which viewers vote on posted news stories, thus giving news consumers more power over what reports are carried. On a more frivolous level, flash mobs employ cell phones and the Internet in organizing total strangers to participate in some pointless act and then disband. One of the more interesting phenomena is the practice of communities reaching objectives through consensus (i.e., where everyone must agree with a proposed undertaking).

     Caspar, California – an unincorporated town of some 2,000 people occupying 12 square miles of territory – is one town in which community decisions are made through a process of "deliberating until we can find a way that satisfies all." Like Amish communities, Caspar confirms the benefits deriving from smaller, face-to-face associations. This same consensus-seeking process exists in Somalia. This list goes on and on, each week bringing additional examples of informal systems through which people communicate and exchange with one another.

     The most impressive and dynamic example of a decentralized, horizontally-networked social system remains, of course, a free marketplace. (I mean "marketplace," here, in clear contrast with the "business system," two concepts that rarely share similar methods. If one could rid the world of the socialistic practices fostered by members of the business community, we would probably have little need for conferences such as this!)

     On a grimmer note, we have learned in recent decades that nation-states no longer enjoy monopolies in their conduct of wars: guerilla tactics, suicide attacks, and insurgencies have turned war, itself, into a decentralized undertaking. What makes so-called "terrorist" groups so difficult to identify and deal with is their decentralized, non-hierarchical form of organization. Recall how nineteen men, armed only with box-cutter knives, were able to attack the World Trade Center buildings and precipitate the insanity the United States now wages against innocent people. Nor can we overlook the role that fax machines, cell phones, and the Internet play in helping to organize and direct popular demonstrations against governmental programs and practices throughout the world.

     How does the decentralization of social systems represent a threat to the state? Because government enjoys a monopoly on the use of force, unless there is some way to limit the scope of its authority, the state need not confront any impediment to the fulfillment of its will. The illusion has long existed – and been proven fallacious by the American experiment with a written constitution – that such authority can be confined in some definitive manner. The problem is that efforts to create a "limited government" necessarily involve the use of abstract concepts – such as "reasonableness," "general welfare," "necessary and proper," and other words. The same problem exists with respect to efforts to protect individual liberties via a "bill of rights" or other provisions. What is "speech," "due process of law," a "taking of property," or a "speedy trial?"

     As Alfred Korzybski reminds us, "words" – being abstractions – can never equate with what those words attempt to describe. In Korzybski's now classic phrase, "the map is not the territory," we learn that, while words can be defined through the use of other words, their application to any given situation is always subject to interpretation.

     But who is to interpret the meaning of the words that supposedly limit state power and protect individual liberties? With the state's monopoly on the use of force, it insists upon making such interpretations. It should surprise no one to discover that the state – like any other self-interested body – will interpret the scope of its authority according to what is in its interests. Accordingly, the judiciary in America – which long ago usurped this power in construing governmental authority under the Constitution – has given very broad interpretations to governmental authority, and very narrow definitions to constitutional restrictions on such authority. As we are learning in America, there is no way that a constitution can ever prevent the accumulation of power, if enough people support such efforts.

     As a monopolist, the state is unwilling to tolerate alternative forms of social organization that conflict with – and cannot be co-opted to – its interests. By definition, a monopolist requires a vertically-structured social arrangement, devoid of competitive systems. A horizontally-based system is, by its nature, one in which social behavior is decentralized throughout society, with decision-making diffused among the people comprising it.

     In order to understand the distinction between vertically and horizontally modeled social systems, resort could be made to solid geometry. The pyramid of the state-dominated society might be contrasted with a sphere. There is no preferred position to be found on the surface of a sphere; no favored location from which power could either accumulate or flow. Spheres have neither "tops" nor "bottoms," but multilateral connections.

     Faith in pyramidally-structured, vertically-imposed societal order is in the process of being demolished by a more sophisticated understanding of the dynamics of complexity. Technology has generated its own science in the study of "chaos." A primary lesson in this emerging field of inquiry is that complex systems are too varied in terms of their structure and origins to be capable of our generating predictable outcomes. As computer-generated fractals are making us aware, what our limited vision causes us to see as disordered turbulence contains hidden regularities. These experiences are causing many of us to understand that what we see as disorder may be nothing more than an order whose patterns we have not yet identified. The study of chaos is beginning to reveal the integrated complexity of the universe, and the processes by which such complexity generates order.

     Perhaps chaos theory will prove to be another example of Thomas Kuhn's thesis – drawn from his study of the nature of scientific revolutions – that new theories are the products of crises that arise when existing theories are no longer adequate to explain a variety of phenomena. The collapse of the vertical – with its accompanying institutional systems – may be replaced by the horizontal.

     While complex systems are determined, their course of conduct is unavoidably unpredictable. This seeming dilemma leads some to conclude that unpredictability can be overcome by the acquisition of more information. But this is not the case. Predictability depends upon an awareness of all the factors that bear upon the event in question – what chaos scientists call a "sensitive dependence upon initial conditions." That is, one must know, in advance, the identity and the degree of influence of every factor operating upon a system. Such information is impossible to amass for a number of reasons:

1. as we have already seen, "words" are abstractions, meaning that there will always be an information loss between the word, and what it is the word is used to describe;

2. our knowledge of the world is not only abstract, but subjective in nature. We translate our world by reference to our mental constructs – drawn from our limited and unique prior experiences – which makes our understanding inherently different from the world itself;

3. the logistical problem of marshaling all relevant information. Because our senses can process only a tiny fraction of the reality to which they are exposed, we are biologically incapable of even perceiving all the factors acting upon events in our lives. Our capacities for synthesizing all of the information that we do perceive is limited by our tendencies to experience an information overload that can shut down our minds;

4. the role that Werner Heisenberg's "uncertainty principle" plays in efforts to observe events. When we understand how and why "the observer is the observed," we get a glimpse into how our act of looking at or studying something affects what it is we are seeing;

5. in an age of the Internet, cell-phones, and fax machines, the speed with which information is transmitted throughout the world is often too spontaneous and interconnected for the cumbersome, bureaucratic, conservative, and reactive nature of institutions to make effective responses to changes. As we saw in the government's failed response to flooding in New Orleans, the information upon which the state relies is often outdated by the time it takes action. The more informal processes of the marketplace were, however, very quick to respond.

     The study of chaos and complexity is helping us understand why vertically-structured systems tend to be so dysfunctional, while horizontally-networked systems are more effective. There are powerful dynamics within systems that confirm the orderly nature of chaos. In contrast with the presumed simple structuring of nature inherent in the traditional, mechanistic model of the universe, the study of chaos reveals the integrated complexity of nature. Such complexity spontaneously generates order through conditions of non-equilibrium and instability that permit systems to renew themselves. Such inquiries are also providing evidence of the harmony in apparent contradictions – such as one sees in Niels Bohr's "complementarity principle" [e.g., "wave/particle duality"]. Extending this insight into the social realm, there is an increased awareness of the interconnected nature of both "freedom" and "order" in our lives. Institutional efforts – particularly through the coercive powers of the state – to create structured equilibrium conditions necessarily restrain the freedom that generates the creative, negentropic processes needed for the health of any system.

     The model that seems best able to describe a horizontally-networked society is found in the technology of holography. Without getting too enmeshed in the mechanics of the process, holography is a system that permits the creation of three-dimensional images in which a laser beam is split into "reference" and "object" beams. In the interplay between the "object" and "reference" beams, a photographic negative is produced. Unlike the negative of a standard camera, however – in which the photographed object is clearly presented in negative form – the holographic negative consists of an amorphous distribution of particles. What is most interesting is this: if you were to reproduce only a small portion of the negative taken from a standard camera, you would only get the image in that section of the negative. But if you were to run a laser through any portion of the holographic negative, the entire content of the negative is reproduced! The entire message, in other words, is distributed throughout the negative. Thus the word "hologram," which, in Greek, means "whole message."

     The analogy to social systems works this way: whereas the pyramidal model is premised on top-down, unilaterally-directed authority, the holographic model presumes a multilateral, interwoven system largely devoid of "tops" and "bottoms." Analogies to the pointillistic art style of Seurat, or photographs in a newspaper also come to mind: in each, the picture is seen as only the composite of individual dots of paint on a canvas or ink on a page. The reality of the pictures is found only in the interconnectedness of the dots. Without the individualized dots, there is no picture. The model upon which pyramidal systems are grounded, on the other hand, is that the institutional entity – e.g., the corporation, or the state – is the fundamental reality, with individuals functioning as little more than subservient, fungible units. A holographic society, by contrast, is one in which both the purpose and the authority for decision-making is distributed throughout the social system. The distinction between a corporate-serving economic system, and a laissez-faire market system should come to mind.

     What are the institutional dynamics working against this holographic model? The answer is to be found in exploring the conditions necessary for the health of a vibrant system, be it an individual organism, a business enterprise, or a civilization. We are taught to think of a great civilization in terms of the things it has produced: ideas; technologies; great music and other art; beautiful buildings and monuments; or military conquests and complicated systems of social control.

     Such an approach, however, is too focused upon nouns, defining greatness by reference to the things that have been created by people living within such a civilization. It is more important to think of greatness in terms of verbs, (i.e., the processes that foster creativity). Has Western civilization been great because of the works of Michelangelo, Beethoven, Shakespeare, Goethe, Edison, Einstein, and others – as well as the life-enhancing products of industrialization – or because of the conditions in which such creativity could take place?

     This is the kind of question that reminds us just how unpredictable complex systems are. What were the factors that caused the Renaissance to arise in Florence rather than Copenhagen; or the Industrial Revolution to be centered in Manchester instead of Paris? And lest we fear the uncertainties of a world in which the vertical collapses into the horizontal, let us remember that these periods of immense spiritual and material creativity replaced long-established social systems.

     When my wife and I first visited Prague a few years ago, I was entranced by a setting in which we found ourselves. We were sitting in an outdoor restaurant at one end of a huge square, enjoying a large glass of Czech beer. At the opposite end of this square stands the Old Town Hall, from whose third floor window, in 1483, government officials were thrown by angry citizens. At the other end – perpendicular to where we were sitting – was an apartment building in which Albert Einstein, Franz Kafka, and Franz Werfel used to hold philosophic discussions. If there is such a thing as a "power of place," this was it, and I marveled at whatever the conditions were that brought all of these events together – albeit at different times – on this square.

     The institutional order – which enjoys a state-enforced power over the lives of hundreds of millions of people – is not about to allow decentralizing tendencies to liberate their conscripts. There is simply too much power – and, ultimately, money – at stake.

     I believe that the current "war on terror" is a desperate effort on the part of the state to forcibly resist decentralizing processes that threaten the established order. I prefer to think of this campaign as a "War for the Preservation of Institutional Hierarchies," or simply a "War for the Status Quo." The nation-state is fighting for its very existence against the decentralized life forces by which human beings sustain themselves. The intensity of the state's campaign to force human beings back into the collective herd reflects the strength of centrifugal forces. As vertical structures erode in favor of horizontal interconnectedness, the state tries to shore up the collapsing foundations of a centrally-managed society with practices of the most draconian reach. People held in secret prisons without trial or even formal charges being filed against them; the use of torture; expanded police powers, including the authority of government agents to secretly enter private homes without notice to the owners; airport luggage, clothing, and body searches; the detailed surveillance of people's business, medical, and book-reading records, as well as their computer and telephone transactions; and ongoing efforts to disarm the public through illegalizing gun ownership, are some of the more apparent tactics.

     In an exaggerated effort to breathe life into a dying corpse, statists endeavor to micro-regulate details of the lives of people: how they raise their children and treat their pets; their personal safety, smoking, sexual, and eating habits – including the current campaigns against obesity; and efforts to control expressions of anger, hatred, and politically-incorrect attitudes. To monitor and locate its conscripts, the state has installed closed-circuit cameras throughout cities; while the use of RFID chips in clothing and other products, along with national identity cards, are being used to track people's movements.

     The European Union – an undertaking fostered by members of the political establishment to centralize power, but rejected in countries where the public has been allowed to vote on the system – regulates such details of life as the size and shape of bananas and meatballs; whether window-washers may stand on step-ladders; and whether the produce in grocery stores may be sold in terms of pounds or kilos. But just as the EU seems to have little future, these varied efforts to reinvigorate the collapsing pyramid will not withstand the decentralizing currents. The future of the world, I believe, lies in the increased balkanization – not the uniting – of nations.

     Just how desperate the state is to increase its powers over a rapidly decentralizing society, was reflected in the enactment of the Patriot Act in America. Members of Congress – the representatives of the institutional apparatus – did not even bother reading the draconian details of this measure. In fact, the draft of this bill had not even been completed at the time Congress voted for it! It was sufficient that the state masters wanted such enhanced powers over people. The political system has become like a chicken that has just had its head chopped off: it continues to flail about in a noisy display, leaving blood in its trail and making a mess of everything with which it comes into contact. While its wild, flapping around in energized reaction may give the appearance of liveliness, its fate has already been determined.

     Just as a heliocentric model arose when the geocentric model could no longer explain planetary behavior, the holographic model of social systems may be on the verge of replacing a dying pyramidal paradigm that is incapable of accommodating the organizational needs of free and productive people in a changing world. Fewer and fewer people believe in this antiquated system anymore. I suspect that the more perceptive statists know that their pyramidal world – which political violence vainly struggles to hold together – is collapsing into horizontal networks of autonomous people. Even they may be on the verge of discovering that such decentralizing processes will continue; that there is nothing anyone in authority can do to reverse the trend; and that the only humane response open to them is to do what is implicit in the concept of liberty: to get out of the way of others as they join with their neighbors in the pursuit of their respective interests!

Butler Shaffer is a professor at Southwestern Law School in Los Angeles, USA where he teaches courses in Legal Reasoning and Property – and conducts a seminar on Informal Systems of Order. He is author of Calculated Chaos: Institutional Threats To Peace and Human Survival; and In Restraint of Trade: The Business Campaign Against Competition, 1918-1938.