Jay Ogilvy: The Significance of Google’s Withdrawal from China

Jay_OgilvyJay Ogilvy, Cofounder at Global Business Network and Chairman of Esalen Institute’s Global Potentials Program contributed the following comments to CDT:

Google’s withdrawal from China would be significant in so many ways:

(1) It signals a transition from a clear distinction between roles and responsibilities of the “public sector” and the “private sector,” such that issues of diplomacy and (inter)national competition be left to the respective governments located in the public sector. But now Google (and as of today, possibly, Microsoft) comes along and very much on its own, without any vote of the public, without even any evident effort to coordinate with the government, makes a move that has tremendous significance for the diplomatic and political-economic arena–to the extent that our Secretary of State, Hillary Clinton, must comment on it. This is, as our friend Hegel would say, nothing short of world historical. Short of the role of the East India Company in what we now know as India, it’s hard to come up with other examples of a private corporation (albeit “publicly held”) yanking the reins any harder on the bridle of history.

(2) This move de-legitimates the current Chinese regime. It shows the limits of Chinese Communism when confronted by a different architecture of communication. It demonstrates the incompatibility between authoritarian control and the kind of open, peer-to-peer network so necessary to economic success in the information era.

(3) From a purely economic point of view, it could be argued that Google’s decision is almost criminally irresponsible to its shareholders who will be denied the profits it would surely have derived from the fastest growing IT market in the world. BUT, maybe from a purely economic point of view it’s absolutely the right thing to do because of the brand value that will accrue to Google as a result of this decision. Here we get a case where transcending the narrow logic of give-me-get-you physical exchange to a higher economy of sublime goods like brand equity. How much more profit will Google make worldwide by hewing more closely to its mission: “Do no evil”?

(4) Google’s (and perhaps Microsoft’s) decision to exit China must therefore be understood not so much as a winning or losing move in the old game, but as a genuine game changer: It amounts to a paradigm case of the shift from the political era to the economic era when power passes from presidents and prime ministers to the chairmen and CEOs of major corporations (much as power once passed from the priests and the Pope to presidents and prime ministers during The First Reformation). Now, in this Second Reformation known as “privatization,” we see a reframing of the game board. In place of the First Reformation’s separation of Church and State, in the Second Reformation we witness a separation of State from Marketplace. Deregulation is one manifestation of that separation; this kind of corporate autonomy with global geo-political implications is another.

(5) There is a profound irony in all of this, namely, a peculiar vindication of Marxism at the expense of Maoism. How so? An unreconstructed (Soviet?) Marxist might come at these events and say, in effect, ‘We always knew that the ownership of the means of production was the crucial thing, and that the private sector capitalist fat cats were pulling the strings behind the curtain of public sector governments. So what’s new?’ But now that the game has changed so profoundly following the Second Reformation, we see in today’s China the public sector CCP playing the role of the authoritarian, repressive regime, and the newly energized and historically-technologically empowered private sector trying to liberate the means of production from public sector domination. From an analytic point of view, Marxism is vindicated because it turns out that you really do need to keep your eye on the ownership of the means of production. But in this twist of the “cunning of reason” (again, Hegel: Die List der Vernunft) it turns out that genuine liberatory potential has passed from the communist “revolutionaries” to the corporate fat cats.