Leveraging: A Political, Economic and Societal Framework

205 Pages·2014·1.765 MB·English

by  David M. Anderson (eds.)

David M. Anderson E ditor
Leveraging
A Political, Economic and Societal
Framework
Leveraging
David M. Anderson
Editor
Leveraging
A Political, Economic and Societal
Framework
1 3
Editor
David M. Anderson
Washington, DC
USA
ISBN 978-3-319-06093-4 ISBN 978-3-319-06094-1 (eBook)
DOI 10.1007/978-3-319-06094-1
Springer Cham Heidelberg New York Dordrecht London
Library of Congress Control Number: 2014939538
© Springer International Publishing Switzerland 2014
This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part
of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations,
recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or
information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar
methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts
in connection with reviews or scholarly analysis or material supplied specifically for the purpose of
being entered and executed on a computer system, for exclusive use by the purchaser of the work.
Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright
Law of the Publisher’s location, in its current version, and permission for use must always be obtained
from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance
Center. Violations are liable to prosecution under the respective Copyright Law.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
does not imply, even in the absence of a specific statement, that such names are exempt from the relevant
protective laws and regulations and therefore free for general use.
While the advice and information in this book are believed to be true and accurate at the date of
publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for
any errors or omissions that may be made. The publisher makes no warranty, express or implied, with
respect to the material contained herein.
Printed on acid-free paper
Springer is part of Springer Science+Business Media (www.springer.com)
To my parents
Leveraging Testimonials
Anderson argues persuasively that we live in an Age of Leverage and that people,
businesses, and governments use various forces of leverage to accomplish their
goals. Finding the right balance between effort and effect represents one of the
primary challenges of our times.
—Darrell West, Vice President and Director, Governance Studies, Brookings
Institution
Hedgehog-lovers rejoice! This book uncovers the One Big Thing that explains
many smaller things—like economics, national security, political gridlock, family
structure, government regulation, diplomacy, information technology and labor
relations. It even dares to touch on moral issues, like how leveraging can be used
for good or ill. A very Big Thing indeed.
—Bill Schneider, Distinguished Senior Fellow, Third Way
The idea of leveraging has been bubbling up for years now, but perhaps it took a
philosopher like David Anderson, with an eye toward policy and a commitment
to analytical rigor, to show us how world-changing this concept might be. Within
this single volume, we find a diversity of virtues: academic rigor, policy relevance,
loads of examples, and a commitment both to getting the philosophy right and the
empirical details right. Add to this the fact that all of the chapters are dedicated to
a novel idea that has the potential to profoundly influence the way that we under -
stand ourselves and you have a book that just might single-handedly found a new
interdisciplinary field of study: Leverage Studies.
—Lee McIntyre
Center for Philosophy and History of Science Boston University
As the relationships between different holders of power, nationally and interna-
tionally, become more complex and potentially unstable, the notion of lever-
age takes on an ever greater significance. Anderson’s book is the first systematic
attempt to study the use of leverage in diverse spheres of social and economic life,
and provides a much needed guide to assessing the problems of under and over
leveraging in the face of increasing pressures to achieve the maximum impact with
the least amount of resources at one’s disposal. Its interdisciplinary approach will
undoubtedly pave the way for a new discourse of leverage analysis.
—Henry Tam, Director, Forum for Youth Participation and Democracy,
Cambridge University
vii
viii Leveraging Testimonials
Leverage is everywhere. It is controversial and it should be more so, since it raises
complex ethical questions. This volume is the first to address the ethics of leverage,
a topic that we should all consider. Anderson’s concept of the Leverage Mean is a
provocative framework for that discussion.
—Peter Levine, Lincoln Filene Professor of Citizenship and Public Affairs,
Tisch College, Tufts University
A ground-breaking study of leverage, the critical idea of our era, Anderson’s
book is destined to be a classic. Imaginative, eye-opening, and full of surprises,
this collection explains post-modern behavior as none has before it ...indispensa-
ble reading in economics, government, philosophy, public policy, social work, and
many other fields.
—Robert Paul Churchill, Elton Professor of Philosophy, The George
Washington University
It is not often that a little-appreciated concept is demonstrated to have fecund
applications across the social sciences. In Leveraging, David Anderson and
colleagues have pulled off that impressive feat.
—Bruce Miroff, State University of New York, Albany
David Anderson is on to something with enormous potential for the future. He and
his coauthors reveal how the concept of leveraging impacts every aspect of human
endeavor—from the economy to politics to social relations.
—Alex Sanders, Former President of the College of Charleston and former
Chief Judge of the South Carolina Court of Appeals
To show how leveraging can be used to advance the public good, this book
deploys tools from economics, political science, international relations, manage-
ment theory, history, sociology, psychology, philosophy, leadership studies, gen-
der studies, communication studies, East–West relations, and constitutional law.
“Leveraging” is the very model of a multi-disciplinary project that has the poten-
tial to create as well as shape a new framework for public policy.
—Jonathan D. Moreno, David and Lyn Silfen University Professor, Professor
of Medical Ethics and Health Policy and of History and Sociology of Science,
University of Pennsylvania
This eye-opening book makes the case that leveraging has become a key strategy
to achieve the goals of people, organizations, and countries. It provides a help-
ful set of concepts and tools for anyone working in local, state, and national
government.
—Jamie Raskin, Maryland State Senator and Professor, Washington College of
Law, American University
The concept of leveraging has been part of mankind’s thinking for a very long time.
Anderson brings that concept to a whole new level as an organizing/explanatory
Leveraging Testimonials ix
approach to understand human interactions as diverse as Wall Street nfi ancing,
parenting, China and the West, labor relations and so much more. Leveraging has
bright new insights for students of philosophy, ethics and public policy. It also is
a must read for those struggling with the challenges facing us today: the regula-
tors of mega-nfi ance businesses, the new foreign service ofcfi er station in southern
Africa or the social worker trying to help a dysfunctional family.
—Parris N. Glendening, Governor (MD, 1995–2003) and President, Smart
Growth America’s Leadership Institute
Preface
I had an insight in the middle of the summer of 2010, almost 2 years after the onset
of the nfi ancial crisis. It occurred to me that the most talked about feature of the
nfi ancial crisis, leveraging, was actually as relevant to our understanding of poli-
tics, international relations, and family life as it was to our understanding of the
U.S. economy and the global economy overall. In the context of family life, as
the intact two parent nuclear family with the father as economic provider and the
mother as the caretaker was no longer the model of family life—since now there
were a great variety of family structures—it had become necessary for everyone
in the family, parents and children alike, to leverage in order to get things done.
Whereas in the past the husband would just tell his son or daughter or wife what he
wanted to have done, now this kind of authority and power is no longer the norm.
It struck me that a similar dynamic happened at the end of the Cold War. As a
traditional structure of power and authority was dismantled, not only did Russia
lose considerable authority and power since its empire, the USSR, dissolved. But
also the United States, the lone superpower, was left without the kind of influence
and control over the “other noncommunist states” that it had during the Cold War.
Presidents and Prime Ministers, like mothers and fathers, found themselves lev-
eraging resources and relationships as never before in order to accomplish their
goals. When you cannot just tell people what to do, you have to adopt a different
strategy to satisfy your ends.
The insight that I had was really a blend of two empirical points, which only
became clear to me after a year.
The first empirical point was that there were three different but related con-
cepts of leveraging that had become increasingly important in all societal spheres,
namely traditional bargaining leverage, what many management theorists called
resource leverage, and what many of the economists were calling financial or
investment leverage. Each of these concepts was related to the basic idea of lever-
age that comes from physics, actually ancient physics and in particular the thought
of the Greek mathematician and scientist Archimedes. Leverage involves getting
maximum effect from exerting a minimum effort, and you have to use some device
or tool to create a fulcrum in which the maximum effect is created.
The second empirical point was that leveraging, which I believed had become
more prominent in recent years, was really a basic principle of human conduct, one
which had never been fully explained. So irrespective of the question about how
xi
xii Preface
prominent the three-part concept had become in recent years was the discovery
that leveraging is actually a very fundamental part of human life.
I couldn’t decide which would be more important, to have discovered the domi-
nant theme of our time, which is what I immodestly argued in a paper for The
Brookings Institution, or to have discovered a basic principle of human conduct.
Was this observation about social reality more about changes that had come about
in the social world (due to the rise of investment leveraging, the dismantling of
some major structures of authority and power, and the rise of information technol-
ogy which made leveraging the Internet and all forms of information technology
both possible and necessary for being successful in one’s endeavors)? Or was this
observation more about a very basic feature of social reality that always existed
but which had really only been systematically explained as a principle of physics
that applied to mechanical levers?
I hoped that others would think at least one of these ideas made sense, but I
came to appreciate that they could both be true. Certainly they could both also be
false, and more than a few people tried to convince me that this was indeed the
case. But why, I asked myself and then others, could it not be the case that a basic
principle of human conduct had never been identified or explained, and during a
certain period of human civilization that particular principle, for a set of reasons,
took on an even greater role in human affairs? Communicating information has
been a basic feature of human civilization for a long time, but that didn’t mean that
we had an Information Age when the Greeks created direct democracy or when
the printing press was invented. No, it would take a lot more emphasis on informa-
tion, how it is made, how it is transmitted, how it is sold, what it is, in order for an
entire age to be called, The Information Age.
In my wildest empirical dreams I believe we live now in the Age of Leverage.
In more reasonable moments, I believe we live during a time when leveraging—
bargaining leverage, resource leverage, and investment leverage—has become the
dominant strategy individuals, organizations, and governments use to achieve their
ends. Moreover, this strategy always existed because leveraging is a basic princi-
ple of human conduct.
Although I am basically an interdisciplinary thinker who has no one discipli-
nary home, even though I was trained in philosophy (the one field that is most
likely to leave a person without a single disciplinary bias), I am still driven by
moral considerations more than empirical ones. Thus, although this book centers
around what I believe is a two-part empirical discovery about the social world, I
am finally more of an ethicist and political philosopher, even political practitioner,
than anything.
This bias toward trying to understand justice and goodness and trying to make
the world a better place led me pretty fast toward a simple solution to the situation
that my observations made clear. For it was part of my discovery of the immense
role being played by leveraging especially in the United States but around the
world that in each area of life—the economy, politics, international relations, the
family—there were problems that came about as a result of either too much lever-
age or too little leverage. Excessive investment leveraging is really what caused