Conventional thinking says that when a business, a nation or an ideology is coming to its end, metrics will tell you everything you need to know. Whether it’s KPIs, quarterly or annual reports showing relative growth and expansion, it has become easy to ward off claims of imminent doom. But here’s a story.
In 2000, Reed Hastings, the founder of a fledgling company called Netflix, flew to Dallas to propose a partnership to Blockbuster CEO John Antioco and his team. The idea was that Netflix would run Blockbuster’s brand online and Antioco’s firm would promote Netflix in its stores. Hastings got laughed out of the room.
We all know what happened next. Blockbuster went bankrupt in 2010 and Netflix is now a multi-billion dollar company, more than ten times what Blockbuster was worth. Netflix is what’s known as ‘a disruptive innovation’ – an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances. Today, Hastings is widely hailed as a genius and Antioco is considered a fool. Yet that is far too facile an explanation.
Antioco was, in fact, a very competent executive—many considered him a retail genius—with a long history of success. Yet for all his operational acumen, he failed to see that networks of unseen connections would bring about his downfall.
Yet Blockbuster’s model had a weakness that wasn’t clear at the time. It earned an enormous amount of money by charging its customers late fees, which had become an important part of Blockbuster’s revenue model. The ugly truth -and the company’s Achilles’ heel -was that the company’s profits were highly dependent on penalising its patrons. It wasn’t until the arrival of an alternative, better way to watch movies, did Blockbuster collapse. Until that precise moment, Blockbuster sat atop the video rental industry. With thousands of retail locations, millions of customers, massive marketing budgets and efficient operations, it dominated the competition.
Why is this important? Because today, an argument persists that since democracy is the dominant system and no alternative has challenged it, any talk of a real crisis is exaggerated. Like Blockbuster, financial metrics are used to present the dubious health of the country’s economy, growing employment rates, increases in social spending even if the ground reality suggests otherwise. The democratic system often masks its internal weakness by projecting stability and success while being on the verge of a cliff. “On the Temptations of the West ”, Pankaj Mishra describes the current sentiment.
“Whether it is catastrophic wars in Iraq and Afghanistan or disastrous interventions in Libya, the financial crisis of 2008, soaring unemployment in Europe, which seems like a problem with no solution, and is likely to empower far-right parties across the continent, the unresolved crisis of the euro, hideous income disparities in both Europe and the United States, the widespread suspicion that big money has corrupted democratic processes, the absurdly dysfunctional American political system, Edward Snowden’s revelations about the National Security Agency, or the dramatic loss of a sense of possibility for young people everywhere – all of this separately and together has not only severely depleted the West’s moral authority but also weakened its intellectual hegemony…This is why the message to the rest of the world’s population can no longer be the smooth reassurance that the Western way of life is the best, which others should try to replicate diligently in their own parts of the world through nation-building and industrial capitalism…But there are, and always were, other ways of conceiving the state, society, economy, and the good life.”
While losing the moral and intellectual authority is not as tangible as a weakening military capability and economic struggle, it is the true red flag of a system in crisis. Ironically, the turnout of a recent election exemplified how British people felt about the state of their political system. Britons turned out in huge numbers to vote on their future in the European Union, with 72.2% of registered voters casting their ballots in the referendum. While the numbers can been seen as a democratic success after years of dwindling electoral participation, a more subtle point is missed — the majority of people, angry, frustrated and suspicious of the ruling establishment, turned up to throw a political grenade into the existing system. On the other side of the Atlantic, Trump’s ‘undemocratic’, authoritarian tendencies did nothing to stop Americans, even from the traditional Democrat voter base, from supporting him. With campaigning for the UK election on 12 December 2019 underway, Britons are presented with the socialist politics of Jeremy Corbyn or the strange mix of nationalist neoliberalism of Boris Johnson. In Corbyn, people see the last chance to ‘save’ democracy and save the sell-off of the NHS to private firms. In Johnson, they see the man who will get Brexit done. For some Muslims for too long, the voting process has become a cost-benefit analysis to simply slow down a race to the bottom. But it needn’t be this way. This is a great opportunity for Muslims to first, collectively disengage from secular parties and second, work as a block, based solely on Islamic principles; one that not only presents its heritage and comprehensive way of life to the rest of British society but also one that negotiates with the government without compromising our beliefs. It’s our Netflix moment.
When Blockbuster ruled, the switch over wasn’t easy. Some customers were reluctant at first, they actually liked being able to browse movies at the store and pick one up at a moments notice, but others jumped right in. And as more of their friends raved about Netflix, the laggards tried it too, fell in love with it and convinced people they knew to give it a shot.
Network scientists call this the threshold model of collective behavior. For any given idea, there are going to be people with varying levels of resistance. As those who are more willing to begin to adopt the new concept, the more resistant ones become more likely to join in. Under the right conditions, a viral cascade can ensue.
However, this cannot happen unless people ‘disrupt the market’. A market with Blockbuster and Netflix growing together successfully, side by side just couldn’t work. It’s either voting or political activism. One gives life to a wrecked system, the other takes the mandate away from secular politicians. That is why the argument from some Muslims, who claim both options are viable, miss the point. While the voting numbers haven’t necessarily decreased, many intangible signs of a system in crisis have reared their head. Declined systems and ideologies are those where people stop believing in its core principles, its ability to deliver and solve problems. The indifference towards a declined system doesn’t manifest itself precisely until an alternative, no matter how ambitious, reaches its threshold of collective behaviour. Until then, the existing system is able to maintain an illusion of strength and stability. The metrics, they say, tells them everything they need to know.
