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Recently, Fedor Novikov, evangelist of innovative architecture, pronounced the Smart City dead. This idea of a fully interconnected city, managed from a command center, has long excited the minds of city bureaucrats and nourished the budgets of modern megapolises. And just when wireless technologies made that dream possible, it turned out that the command center is, in fact, redundant. The concept of vertical management quietly died, making way for horizontal services, which directly connect urbanites—without the state’s mediation. Taxi apps were the ones to kill the dream of a progressive mayor.

Vanishing Power-State

In early twentieth century, the father of sociology Max Weber used the term Machtstaat to describe a young bureaucratic power-state. The notion consisted of two necessary components: staat – legitimate authority, which had monopoly on violence, and macht, or might/power, – the ability to solve problems.  A hundred years later, Weber’s colleagues began to note that power was escaping the state; they were so vague in describing where that power was moving to, however, that these observations were more anticipatory than empirical in nature.

It has now become obvious that we are living in the times of separation between macht and staat. Surprisingly, taxi apps have proven that there are instruments, which organize citizens much better than the state is able to. The state is losing to these services so devastatingly, that its own constructive efforts become no longer noticeable. In the world of democratic elections, the unnoticeable gets removed from the budget – otherwise, you are accused of wastefulness. In the end, the state loses its might and the ability to solve problems. All the state has left at its disposal is the authority: to ban, limit, resort to violence, bereave, and redistribute. The governments genuinely see their actions as driven by pure humanism, but are blind to their stark inefficiency. And soon enough, the first of us will deny the state this authority over ourselves.

The epochal influence of taxi and other city apps won’t seem as astonishing, if we remember what role the city itself played in the civilization’s transformation to new forms of political organization. Internet era has long promised global change, but in essence everything created up to this point—be it Facebook or a smartphone—only enhanced the “real” world. The taxi apps, on the other hand, have inserted themselves into the very heart of the old world order: with its multitude of busy annoyed urbanites, labor unions, licenses, organized crime and the futile fight against it.

New Social Contract

Taxi services are just the beginning. The replacement of an intermediary with an interface for direct interaction of citizens will penetrate all spheres, where up to now coordination of a large group of people seemed unthinkable without the state. Citizens will be able to cooperate directly through banks, insurance, and pension funds. Direct interaction will change medicine and education. And soon the courts will follow.

It also becomes clear, however, that the main challenge to this brave new world will come not from the state, which is naturally unwilling to give up power and will painstakingly fight the citizens for it. Even the most technologically advanced and friendly instruments are not enough for the citizenry to stop clinging on to the already ailing yet still powerful authority and to give up on the state monopoly on violence. Just like at every other epochal juncture in history, a shift in the value system is needed.

For the shift to take place, the value of direct interaction, the right of resolving issues directly, without an intermediary, must take center stage, above all others. But what are the values that need to move to the back? The value of life and personal rights. Until this value shift happens, people will happily throw themselves at direct interaction for its convenience, speed,  quality, and synergy. But at first sight of trouble, they will turn to the state for retribution, convincing themselves that they never partook in the contract that presumes a degree of risk. For now, self-importance and personal rights prove to be more significant to people than the values of cooperation.

At the same time, developers of collaborative instruments are also very much prone to this behavior. They take offence at users and go to the state for protection from one another; they expect from others, but not from themselves, to be responsible and trusting. Only those creators of collaborative services who are ready and able to live the new value, then, will disrupt the obsolete order and institute epochal change.

They will turn to their users and say: let’s build a new social contract.   

Maria Liberman is Partner at Brothers Ventures, a boutique Moscow-based angel investment firm, and CFO of COUB, a looped micro video service .

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Мария Либерман

Партнер венчурного фонда Brothers Ventures и финансовый директор сервиса микровидео COUB.

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