Essay on Decision Loops – Part 3

In order to understand Boyd’s model for operations, we must understand his premise that there is a fundamental need for decisions. He states, “Against such a background, actions and decisions become critically important. Actions must be taken over and over again and in many different ways. Decisions must be rendered to monitor and determine the precise nature of the actions needed that will be compatible with the goal. To make these timely decisions implies that we must be able to form mental concepts of observed reality, as we perceive it, and be able to change these concepts as reality itself appears to change. The concepts can then be used as decision-models for improving our capacity for independent action. Such a demand for decisions that literally impact our survival causes one to wonder: How do we generate or create the mental concepts to support this decision-making activity?” [see Boyd, Destruction and Creation]. This quote highlights the basic contribution that Boyd provided. He developed a model that can be extrapolated into a process for decision-making. Boyd called the model he developed the O-O-D-A loop. Continue reading

Essay on Decision Loops – Part 2

Post the end Vietnam War and the entrance of America in the 1970s, it seemed that America had lost their way. The mathematicians and hard science was again in decline and the philosophical and social sciences came to the fore. It would be in the 1990s, that hard science and mathematics would once again gain a dominant position in thought leadership. Out of the counterforce debacle in Vietnam and the dominance of defense and public policy by neoclassical theories, emerged John Boyd who developed a philosophy and process that formulates strategy based on all data and uses dynamic analytics to continuously evolve strategy to achieve objectives. This is not a game theory strategy that mathematically outlines various outcomes based on strategies employed. It is not a precise mathematical formula that defines risk. Boyd believed that strategy is an ever evolving and highly iterative process designed to achieve victory. It requires assumptions of risk with constant analytics of the operating environment. Boyd believed that the real target was your enemy’s perception for it is enemy who decides when they are defeated – not you. Keynes would describe this as the participants in the financial market who decide when you have won or lost – it is the not the companies. In the business market it is the companies competing for market share who decide when they have lost. Continue reading

Essay on Decision Loops – Part 1

In 1928 a young, brilliant mathematician named John van Neumann, devised a theory that would affect economic and military thought for many years to come. The theory that Neumann developed was based upon several observations he made during a game of poker. The first observation was that wining and losing was the interdependent on all players. A wining strategy was not solely based upon a single player’s strategy – but rather the product of all the player’s strategies. In order to devise a winning strategy, Neumann had to account for other player’s strategies, assuming that each player’s objective was to win the game. From these observations Neumann developed what became known as game theory and he applied the theory to economic markets. Previous economic models used traditional neoclassical economic assumptions that a seller and buyer acted solely on the mission to maximize their gains. A seller is looking to maximize profit and a buyer wants the maximum value for capital spent. The contribution that Neumann made was to define a seller and buyer as a transactional unit that was dependent upon each other, but not necessarily to achieve maximize profits and value for capital. Continue reading

Market Thoughts, the End of the Cold War, Credit Crisis of 2008

My wife and I were privileged to have her uncle, John Maresca stay with us for a few days last week. He was in town to speak at his 1959 Yale class mini-reunion.  I immensely enjoy his company which is far too infrequent.  I was able to indulge myself in three days of continuous discussion of geopolitics, history, the Cold War, economics, politics, books and the general history of the world post the Second World War.  I spend my days working in the technology business; the three days Jack was with us was a rare over indulgence in my favorite subjects.  Jack even stayed up late to watch the Celts fall to the Heat in game 2 with me.  The subject of his speech to his Yale class was that the war of his generation was not Korea, not Vietnam, but rather the Cold War 1945 to 1989.  We were honored to sit at a table with a two-time survivor of an attack on the WTC.  In the course of our discussions, I provided Jack with my mini-thesis on the economy of the US post 1989 till today.

The basis of my thesis, which I have hinted at before on this blog, is rooted in the expansion of credit without an accompany expansion of higher capital ratios and reserves.  I bring this up because in course of my many discussions with Jack, I said that I thought Greenspan, Larry Summers and others were the team that failed theUS.  On one had they oversaw a great expansion of credit and debt, but they did not oversee an accompanying expansion of capital reserves.  All of this has been discussed before, I would simply say that if the money multiplier stays were it is, we well have a lot of Friday’s like last week ahead of us.  I posted some charts from the St. Louis Fed.  If you look at these charts and see the expansion of credit, it makes CEOs who talk of productivity gains in the 1990s look like fools.  Do not underestimate what expanding credit debt levels can do make everyone feel good and look like geniuses.

Back in August 2011, I posted my notes from a meeting on Wall Street from March 14, 2008; which also written about in the book The Big Short, by Michael Lewis (see pages 228-230).  The portion of my notes under “XXXX, Former Fed Person” are from Alan Greenspan and the portion before it under “XXXX, Hedge Fund PM” is from Eisman.  I am revealing the names because I want to highlight a few of the notes:

  • AG: The complexity of the models are still too simple to capture human nature.  That is the problem.
  • AG: During the euphoria bankers would tell me they were under pricing risk, but they were forced to play the game.  Was that a BOD level problem?  Why were bankers forced to play the game and under price risk in the market like the others?
  • AG: 20 years ago it seemed that banks were very cautious on how they booked reserves.  The mathematicians took over and said your reserves are wasting money and today it seems the banks are low on reserves.  Part of this accounting issue, some of this is a philosophical style.  Earnings and profitability pressures to mark to market have caused more problems than have capital reserves.
  • SE: Banks in the US are under capitalized, no reserves, pace of credit problems are accelerating, they have not come to grips to with their problems and I would not own a single bank in Florida.  The only good news is the banks in Europe are in worse shape.
  • SE: Capital market problems are worse.  Rating agencies have no idea what they are doing.
  • SE: The buyers of structure mortgage products are structured mortgage people.  It is Ponzi scheme.
  • SE: What is a SIV?  It is 5% cash, 5% Treasuries and 90% asset backed paper, which is leveraged 20 to 1 based on ratings from the ratings agencies published in the paper…what a joke.
  • SE: We are going through the greatest de-levering in the history…there are a lot more Carlyles and Thornbergs…there is not a real solution but to take the pain over time
  • SE: Nothing is going to stop the de-levering process

Four years later with the Europe experiment on the brink of failure, the gains of the Europe Economic Union, which were possible through the stability provided by the winning of the Cold War, now look to be at risk.  I wrote some of this before, but not is such direct terms.  In the past I wrote that “it is clear that many nation-states are working through the stages of political change or revolution fueled by the global credit crisis of 2008.”   The question I should ask my wife’s uncle is: will I be writing a history of the Second Cold War in thirty years?


The Network is at Apogee

The network is at apogee.  There I said it.  After thirty years the complexities that inhibit the network have reached the point that we must now begin the process of taking apart the complexities that we have built.  There are armies of people who will be opposed to what I am writing.  They are the people rooted in the past.  They are comforted by the familiar, the complex, the specialized knowledge they possess.  It is a closed society in which entry is obtained by knowledge of closed system.  I believe we are at point of lowest entropy for the network and thus the lowest utility to man and that is the point or points when revolutions can begin.

I have taken some motivation for this post from David Isenberg’s “Rise of the Stupid Network.”   If you take the time to read this paper, two epiphanies may occur to you as they did to me.  The first is how much of what he wrote in 1997 is applicable today, which I will cover in the subsequent text.  The second is that we became our own worst enemy in attempting build the stupid network.

We based the stupid network on IP, complex control planes and protocols for each solution.  In building the internet, web 1.0, web 2.0, social media, video, virtualization, cloud and all connected services we enjoy and pontificate about; we built the complex network.  The complex network is so intelligent it is dysfunctional and has no place in the future.  What we are about to embark on is the creation of a new network paradigm that for the first time in thirty years can be enabled with technology found in compute and storage.

In reading through the Rise of the Stupid Network, many of Isenberg’s arguments against the telephone company are applicable to the network we live with today.  I have taken elements of his paper and adopted the concepts to our present day condition:

Design by assumption works as long as assumptions hold.  It seems a week does not go by that we do not hear of service outage caused by a network outage.  Recently, Blackberry’s data service suffered a series of cascading failures due to a switch or router failure.  Why do we allow network elements take down a service or the network itself?  If we are powerless to prevent the fault and the fault requires days to repair; can we be proud of what we built?  I am sure the team at Blackberry never assumed this type of failure could take down their network as they had engineered and tested the network to respond to these types of failures by employing complex backup alternatives, but the complex network did fail.

Network design is guided by the principal of scarcity – not plenty.  For the past fifty-one (51) years the network was a scarce resource.  The result of concern for the scarcity of network resources is the unbalanced, complex network we have today.  It is full of stacked over-subscribed elements that have been partitioned and divided and connected many times over and over until we have no idea how it is working and that is why we are fearful of any change in the network.  We operate on the principal of do not fix what is not broken and if it is working, do not change it.

Network design is guided by the needs of the network – not the needs of the compute function.  The architectural manner in which we have been designing networks has changed little in thirty years.  We design networks today based on principals from a bygone era.

The network works as long as engineering assumptions do not change.  The network has been and continues to be inflexible to the changing needs of compute and storage.  We would have no issues with the network if the other technology elements had remained static, but they are not static, they are dynamic.

Who are the main beneficiaries of the current network?  If people who use networks to enable compute and storage are not benefiting from network, who is?  My answer to that question is the incumbent suppliers of networking technology.  If you look carefully, you can see solutions that are rooted in the past and sustained by the self-affirmation that these solutions are meeting the needs of customers.

New customer demands are homogenized into the existing collective.  When is someone going to offer a new solution?  A solution that breaks from the past and a solution that is bold and truly revolutionary.  When I look at what customers want and then look for the solution in the market all I find are homogenized solutions, drawing on the past to extend what we have been doing for decades.  New solutions are increasingly complex and we are made to feel better about this complexity because we are given a sedative of tools to help engineer the traffic flows and provide security for the network.  This is great until the complex network breaks and we have to try to fix it.

The network to date has missed the age of plentiful computing.  The network today is like a time capsule.  It is a beautiful thing.  We can open the capsule and pull out a network design from 2001 or 1991 or 1981 and it looks the same as a network design from 2011.  We would also find in the time capsule:

  • Kodak Instamatic 100 (1963)
  • MITS Altair 8800 (1975)
  • Atari Video Computer System (1977)
  • Milton Bradley Simon (1978)
  • Texas Instruments Speak & Spell (1978)
  • Sony Walkman TPS-L2 (1979)
  • Commodore 64 (1982)
  • Radio Shack TRS-80 Model 100 (1983)
  • Cisco AGS (1989)
  • Nintendo Game Boy (1989)
  • Netware 3.0 (1989)
  • OS/2 2.0 (1990)
  • Telematics X.25 Packet Switch (1990)
  • Cabletron MMAC-8 (1992)
  • Iomega Zip Drive (1995)
  • PalmPilot 1000 (1996)
  • Fore Systems ATM Switch (1999)
  • Sony PlayStation 2 (2000)
  • Apple iPod (2001)

A new network philosophy and architecture will replace the complex mess we have created.  The early signs of this trend can be seen in Hadoop and Cassandra clusters.  Buy low cost compute, cluster the technology; purchase more than you need because it is inexpensive, if some of it fails fix it in the morning or after the weekend because you bought enough to handle the work load.  No one ever has excess amounts of routers standing by because you cannot afford to buy excess amounts of routers to share the work load because the complexity of engineering traffics loads over clusters of routers requires teams of people performing complex calculations using elaborate software tools.

Over the past weekend I posted a 17k word post on revolutions and how they start.  It had nothing to do with technology, but it is applicable because all of the required elements for a revolution in networking are now in place.  We have a network dominated by the old regimes of networking.  They are no longer the upstarts; the lean, hungry, evangelical revolutionaries of their youth, but rather they have grown up and become their father’s IBM of 1991, the Wang of late 1980s and DEC of early 1990s.

The network is in a financial crisis.  Financially the architectural legacy of past thirty years cannot support the demands of the network going forward.  The network is starting to show signs of structural weakness as incumbents are losing control of thought leadership.  New sources of thought leadership are emerging outside of the areas controlled by the old regimes of networking.  Politics is entering the technology buying cycle process as IT leaders are questioning the path forward.  These CIOs and CTOs as well as the operations people are showing signs of receptivity to new ideas and new solutions; because they know that past practices have been exhausted.

These past practices have served us well for many years, but the time has come to start anew.  Thought leaders are emerging in the technology ecosystem from AMZN, GOOG, MSFT, Facebook and others.  They are seeking a new network.  Someday soon when the revolutionaries emerge these thought leaders and intellectuals will transfer their allegiance from the old regimes to the revolutionaries and that is when the revolution will begin.  Class antagonism between teams in IT organizations already exists.  The sycophant router era is coming to an end.  All that is needed is the spark to start the revolution.  We need our Bastille Day, our Shot Heard Round the World.


* It is all about the network stupid, because it is all about compute. *

** Comments are always welcome in the comments section or in private.  Just hover over the Gravatar image and click for email. **

Brinton, Revolutions and Our World Since 2007

I am off to CA next week and therefore posting will be infrequent.  This post is my framing exercise for the all the events ongoing in the world circa 2007 to the present.  This is a very long post, almost 17,000 words to be exact.  I have divided it two parts.  If you prefer the bottom line summary, that is immediately below this paragraph.  If you want to read the details, that is the second section.  The second section is something I took from my 2006 book that I updated and edited to fit this subject matter.  When I wrote the text of the book I was thinking about how to apply theories on behavioral economics and social change, specifically revolutions to technology and financial markets; today I am thinking about applying those theories to their intended subject of governments and nation-states.  It is not a surprise that financial markets have put governments around the world at risk.  It is the natural state of affairs.

If you apply the Brinton model for revolutions to many western nation-states since 2007, it is clear that many nation-states are working through the stages of political change or revolution fueled by the global credit crisis of 2008.  We can debate at what stage each nation-state is in; we can debate the various levels of intensity, but from the Middle East, to Greece to camps of the 99%, these events are not accidents, they are not isolated and can be anticipated and predicted.  If you have the time, read the following and think how many examples of what Brinton wrote in 1934, revised in 1965, which are analogous to events in our daily lives since 2007.  It seems that not a day goes by in which a headline makes me think of some stage in Brinton’s theories and model of revolutions.



Original Draft in 2006 / Edits October 2011

* For ease of reading I removed references to technology markets.

In 1966, Clarence Crane Brinton published a book derived from his research and lecture notes called The Anatomy of Revolution.  This is an obscure book better known within scholarly political science circles than by the readers of books on the business best seller list.  The Anatomy of Revolution is generally considered one of the foundations of revolutionary studies.  Dr. Brinton studied four primary revolutions from western history and identified a sequence of events and a specific set of political and social conditions that were required within each nation-state to support a revolution.  The revolutions he studied were the English, American, French, and Russian – which are widely considered the four important revolutions of western European history post the Enlightenment.  Clearly, there were a series of important revolutions in 1848 that dramatically altered the history of Europe and in recent times we have seen many revolutions in the post-Second World War era – but the four western revolutions studied by Brinton were products of the Enlightenment and rejection of historical monarchies.  Within each of these revolutions, Brinton identified shared elements, common stages, and similar conditions.  From this he concluded that revolutions are not unique, spontaneous events – but predicable events.  Revolutions occur when a specific set of conditions are attained, and revolutions undergo a predictable sequence of events.  We tend to think of revolutions as a spontaneous uprising of an oppressed people against an unjust government.  When we think of revolutions, we think of Liberty Trees, the Boston Tea Party, Bastille Day, and the rising of a united working class against the privileged class.  The truth is that revolutions are really a stage in a cycle of change that is both political and social.  Revolutions take years, not days, to complete their cycle.  In some revolutions, as with the Russian Revolution, it can be argued that the cycle of change required years to play out and began the final stage in the post-Stalin era under the rule of Leonid Brezhnev.  A conclusion can be drawn from Brinton’s thesis that revolutions are merely an extreme form of political change.

If one considers how the technology industry interacts with the financial markets, it can be argued that technology markets and financial markets are cyclical and revolutionary.  Technology markets are the product of human creation.  Each new technology that creates a market seeks to obsolete and replace existing technologies and their markets.  There is opposition to the new technology until a few leaders or early adopters are bold enough to pioneer the use of the new technology.  Once the new technology has been proven, there begins a process of market adoption.  The suppliers of the old technology are forced from their markets and new companies or new technologies become dominant in the market.  By that description, a technology market appears revolutionary.

Companies grow and decline as new technologies enter the market championed by new entrants (i.e. companies).  Investments of new capital flow from declining mature companies (i.e. old regimes) to new companies who contain a strong potential for growth, but possess greater risk.  Growth is the engine that drives value and produces a positive return on capital resources.  If you examine a revolution, the people (i.e. investors) of a nation-state withdraw their investment in the old regime (i.e. mature company) and invest in the revolutionaries (i.e. new entrants) who possess great promise but higher risk because they have never held political power.  By this comparison, we can theorize that markets, revolutions, and value creation are bound by a common element that is human nature.

Financial markets exist as a product of human interaction.  The basic definition of a stock market, in its purest form, is a definition of a revolution.  Buyers and sellers appraise the value of companies on a daily basis.  Their evaluation is a determination of whether a company will grow or decline; whether a company will increase in value or decline in value.  The cycle of creation and destruction in the business world is the equivalent to an accelerated cycle of geo-political revolution amongst nation-states.  Revolutions are not everyday events within the community of nation-states – but political change does occur and political change is a non-violent form of revolution.  Within global markets, old companies are challenged by new markets, new technologies, and new entrants.  The evaluation of whether these companies will grow or decline is the same evaluation in different terms as to whether the revolutionaries ofFrance,Russia, orAmericawould be successful.  If investors were buying stock in the governments of nation-states and the political or revolutionary organizations within these nation-states, we would buy and sell based on our belief in the prospects for their success.  On a global economic level, the evaluation of the strength of nation-states is a process that international currency traders undergo each day.  Currencies are representative of each nation-state in terms of economic strength, prospects for economic growth or decline, and political stability.

To continue the correlation, imagine investing in governments and political organizations instead of companies.  If the year was 1775 and we were living in the British Colonies in the New World, we would be making an investment decision between the Sons of Liberty in Boston versus investing in the British Government or perhaps its American subsidiary.  The British Monarchy of 1775 is the old regime of its day.  It is a vast empire spanning economic and business interests the world over – yet in 1775 people in Boston, New York, Philadelphia, Charleston, and southward had to decide if they wanted to remain part of the old regime or join the new entrant, the revolutionaries.  If we were inSt. Petersburg in 1917, we would be faced with a variety of investment decisions.  We could invest in the Czar, Nicholas the Second and his government, or we could invest in a variety of political organizations such as the Mensheviks, Bolsheviks, Social Democrats, and long list of additional parties seeking control ofRussia.  Power is control of money and resources.  Money and resources create value.  The cycles of stability and instability are revolutionary by nature.  The same principles should apply whether we are discussing capital markets or the course of nation-states.  As our world evolves towards a global market, the geopolitical forces of nation-states are intertwined with the evolution of corporations and the creation and destruction of capital markets.

The Seeds of Revolution

Revolutions within nation-states are the product of three primary elements: (i) financial crisis, (ii) structural weakness, and (iii) politics.  These three elements combine to create conditions that enable the old regime to be overthrown.  Brinton describes the history of the phrase “old regime” [see Brinton, page >26] as a product ofFrancethat was used to describe the way of life of the three or four generations that preceded the French Revolution of 1789.  For our purposes in linking the study of revolutions within nation-states to financial markets and technology adoption, we will use the phrase old regimes to describe the companies, methods of business, technology, and the general structure of the capital markets.

One of the important observations that Brinton contributed was that revolutions do not occur during times of economic depression.  In the four revolutions that he studied, the revolutions all occurred during periods of expanding economic wealth [see Brinton, page 29].  There was a burdening financial crisis in the four nations-states that he studied at the time of revolution, but it was the government that was in a financial crisis – not the social structure of the nation-state.  Brinton writes, “…yet in all of these societies, it is the government that is in financial difficulties, not the societies themselves,” [see Brinton, page 29].  The theory holds that if the people of a society are suffering through economic hardship, their utmost priority will be survival and they will not have time for revolutionary activities.  On the other hand, if the economy is expanding and they have access to the necessities of life, then they have time to commit to resolving issues of a greater scale.  Leisure time, whether it is used for revolutionary purposes, social activities, or sport, is time obtained by securing the necessities of life.  In short, it is hard to be a revolutionary when your primary priority is to find food for your family and pay your bills, but if you have a good job and your family is secure, then it is easier to be a revolutionary after work.  Aristotle theorized that all of man’s actions are the pursuit of leisure time.  If that theory is correct, then man becomes a revolutionary when he believes that the opportunity to increase his security and leisure time is repressed.  When given the opportunity to pursue the acquisition of leisure time unfretted from government rules, there comes a point where greed takes over.

Crane Brinton uses the phrase “structural weakness” to describe the state of the governments in his four revolutions.  His research shows that within the four nation-states he studied, the financial crisis in which the government was undergoing produced an inability to govern.  The term govern means the ability to control power.  Fundamentally, governments on the verge of revolution are structurally weak.  Most of the energies of the government are committed to resolving their financial crisis, which in turn fosters a structural weakness in the ability to govern.  This weakness enables forces of change and revolution to build a foundation from which to operate.

The component of politics as identified by Brinton in revolutions is similar to how it is used in describing markets and technologies.  To change the structure of market requires political capital.  Politics, in time of revolution is the resolution of who will wield the power of the government.  Politics is derived from the stricture that controls the distribution of wealth.  Brinton describes this as, “…we see that economic grievances – usually not in the form of economic distress, but rather a feeling on the part of some of the chief enterprising groups that the opportunities for getting on in this world are unduly limited by political arrangements – would seem to be one of the symptoms of revolution.”  Politics in business is a reflection of who wields the power of regulation.  When regulatory bodies change the laws that govern a market, they can have a profound affect on a market.

Once the three foundations of the revolution are in place – (i) financial crisis, (ii) structural weakness and (iii) politics – the mantle of change has to be raised and championed.  This task is undertaken by the intellectuals who provide thought leadership.  The intellectuals are the analysts, consultants, pundits, politicians, leaders, and established thinkers with a reputation and respect within their industry or nation-state.  These people motivate change.  They do this by influencing and creating a state of mind.  This event is called the “transfer of the allegiance of the intellectuals.”  The phrase “transfer of the allegiance of the intellectuals” comes from Lyford P. Edwards in his book, Natural History of Revolution [see Brinton page >41].

The intellectuals that espouse change are only willing to do so if they believe that change is necessary, possible, in the best interest of the majority of the people of a nation-state, and their personal risk is minimal.  The later point is what separates the intellectuals from the hardcore revolutionary or extremists of the revolution.  The hardcore revolutionaries are people who are committed to change regardless of their personal condition – but this is typically not the position of intellectuals of the revolutions.  The intellectuals of the revolution become agents of change (i.e. revolutionaries) when they detect disorder and discontent.  These two elements provide the intellectual with opportunity as well as security.  If the government is weak, or the old regimes are weak, the intellectuals realize that conditions exist that will support a creation of a new order.  They seek change because they view change as possible, but also because changes provides for their personal gain.

It is the state of mind that exploits the conditions of revolution.  Change does not happen without leadership.  People need to be told what the future will entail to become agents of change.  This is the role of the intellectuals.  The transfer of the allegiance of the intellectuals is the point at which the leaders of change show others the way to the new panacea that change will enable.  This is the method in which a bill becomes law in theUnited States– but the process is typically conducted without a violent episode.  Exceptions such as the Civil War and civil rights movements are noteworthy.

Once the intellectuals are committed to the revolutionary cause, they become the influencers of the state of mind.  Change is rarely the product of the individual – but rather the product of the group.  Brinton defines the agents of change as “pressure groups.”  In our contemporary world we think of pressure groups as lobbyists, consultants, or any type of organized group of people who have formed to promote change in favor of their position and this includes political action committees (PACs).  Lobbyists are people who advocate change.  They are the standard bearers of the revolution.  Pressure groups are activists and can be classified as intellectuals who lobby and pressure for change.  The intellectuals of the revolution are the planners and organizers of direct action.  When the market is structurally weak and thus open to change and financial capital can be committed it is the intellectuals who lead the pressure groups to exploit the political process that enables change.  They can achieve change, because as a group, they have a great ally and that ally is the abstract force of change.  People rarely know the outcome of change – but the intellectuals are a fundamental force in driving the group consensus for change.  It should be noted that ideas are not the agents of change.  People are the agents of change, but the correct conditions must exist to enable a revolution.  In his study of nation-states, Brinton states, “We find that ideas are always part of the pre-revolutionary situation and we are quite content to let it go at that.  No ideas, no revolution.  This does not mean that ideas cause revolutions, or that the best way to prevent revolutions is to censor ideas.  It merely means that ideas form part of the mutually dependent variables we are studying,” [see Brinton, page 49].

The final element of the “old regimes” of which Brinton writes, is class antagonism.  As he states, it is easy to think of this phrase in terms of a simple struggle such as proletariat versus bourgeois, or contending social classes – but this is not his intent.  What he is describing is an underlining social tension that exists between contending classes.  A component of the hypothesis of this essay is the application of his principals to modern market analysis.  Brinton supposes that the class antagonism and their struggle is “…usually carried on under rules, or at least without overt violence,” [see Brinton, page 50].  It is within this definition, that we find an application to market analysis.

When we refer to class antagonism, we are refereeing to the old market versus the new market, or the old regimes versus the intellectuals who are promoting themselves as agents of change and the desire to change the fundamental structure of the market dominated by the old regimes.  Our class antagonism is a contention between old markets and emerging markets, between old regimes and new companies.  The objective that creates this contention is market share.  Old and new companies have the objective of controlling market share.  The old regime as the incumbent is likely to defend their market and it is up to the new entrant to attack the old regime and create a new market.  Brinton concludes his analysis of class antagonisms, by stating, “…social antagonisms seem to be at their strongest when a class has attained wealth, but is, or feels itself, shut out from the highest social distinction, and from positions of evident political power…long before Marx, long before Harrington’s Oceana, practical men knew that political power and social distinction are the handmaids of economic power,” [see Brinton, page 64].

The third chapter of The Anatomy of Revolution begins with a description of the third scene in the fifth act of Beaumarchais’ play, The Marriage of Figaro.  Captured in this scene is a long monologue by the protagonist Figaro that foreshadowed the anguish and resentment that the third estate (i.e. non privileged citizens of 19th century France) felt towards that of the second estate (i.e. royal and privileged class) in late 18th century France.  In the spring of 1789, the Estates-General would be called to order for the first time since 1614 and France would begin an unstoppable slide into revolution.  The Estates-General is a form of national assembly in which the three primary classes of society were represented – the nobility, the clergy, and the common people.  These three classes of European society evolved when the feudal system was dismantled in the thirteenth century.  Each estate represented an organized class of society that the King could call on for consultation as well as to revolve grievances.  As the Estates-General came to order and began to address the pending financial crisis of the government, the nation-state of France began to slowly slip into the dark, deep, bottomless pit of revolution with the protagonists looking up at the fading light and struggling against the forces pulling them down.  “No, my lord Count, you shan’t have her…you shan’t have her! Because you are a great lord you think you are a great genius! Nobility, wealth, a station, emoluments: all that makes one so proud! What have you done to earn so many honors? You took the trouble to be born, that’s all; apart from that, you’re a rather ordinary man! Whereas I, by Heaven! Lost in the nameless herd, I had to exert more knowledge and skill merely to survive than has been spent in a hundred years in governing the Spanish Empire: and you want to joust!” [see Beaumarchais, The Marriage of Figaro].

The first stages of a revolution are a time of great emotional extremes.  The antagonism that the revolutionaries feel towards the old regime has been building for many years, as the nation-state approaches the inflexion point of revolution, the antagonism towards the old regime begins to peak.  This antagonism is fueled by the Eternal Figaro.  The Eternal Figaro is the underlying emotion that drives the revolutionaries.  It consumes the thoughts of the revolutionaries and binds them in a common cause, that their view is noble in nature.  The infallible dream of the revolution is what justifies all means to the end goal.  The Eternal Figaro enables the revolutionaries to commit themselves entirely to their task.  A revolution is an extreme event.  People do not commit themselves to extreme activities without complete and total emotional commitment.  The Eternal Figaro validates their commitment.  The emotional commitment required by the revolutionaries eventually vents itself with the collapse of the old regime.  The seeds of the revolution are planted by the economic crisis, the structural weakness of the government, and the politics of change.  There must now be an event that builds on this foundation and channels the energies and emotions of the revolutionaries towards their cause.

You Say You Want a Revolution

Brinton describes the point at which the revolution begins as the “point, or several points, where constituted authority is challenged.”  There has always been a question concerning how revolutions begin.  Do they begin as a child of spontaneity or are they a planned, choreographed event?  Brinton believes that all revolutions have two common similarities at birth.  The first belief is that revolutions begin when the government attempts to collect monies to resolve their financial crisis from the people of the nation-state who refuse to pay.  There must also be a class distinction between what Brinton calls the “party of the old regime and the party of the revolution.”  The collection of monies that is viewed as unfair leads to the spark that starts the revolution.  By this definition, revolutions are not spontaneous affairs – but they begin through a systematic building of emotional and intellectual frustration within society.  There is an event that ignites the flames of the revolution, but this is not a spontaneous event.  It occurs for a reason.  In the case ofFrance, the King called together the Estates General and empowered the people to take collective action because he had provided a defining moment in which people could choose to be part of the old regime or part of the revolutionaries and the new regime.  InAmerica, British troops marched from Boston toLexington andConcord to seize arms and supplies that had been stockpiled by the local residents.  This action by the British Army provided a point at which the colonists could choose to be loyal to the King or loyal to the local intellectual leaders, who were revolutionaries.  In England, King Charles the First raised his standard to call for those who supported the King in his quarrel with Parliament.  The result was that people ofEngland were forced to choose sides.  InRussia, the revolution that befell the Romanov Dynasty of three hundred and four years began when vast crowds of women filled the streets ofPetrograd demanding bread.  In all four revolutions that Brinton studied, there was an inflection point at which the revolution was ignited – but the seeds of the revolution were planted well before this inflection point was reached.

The time at which authority is challenged, is the point at which a revolution is born.  Whether that revolution will have a long life or a short life, is the question of the staying power of the old regime.  If the old regime can successfully strike down this challenge, the revolution will not begin – but if this challenge is not met, it is a signal to the revolutionaries that the ruling class cannot respond to their challenges (i.e. structural weakness).  The first stage of the revolution ends when the political structure controlled by the old regime collapses and power is transferred to the revolutionaries.  Brinton calls this stage “the Honeymoon.”  Suddenly, what had seemed impossible is now probable.  There is a washing of sins from the soul.  The build-up of angst within society is released and people can envision a prosperous future for themselves and the next generation.  The future is bright and bountiful with hope.  This is the euphoria of revolution.

As the old regime collapses, the people of the nation-state realize that the years of struggle and effort have brought about what, for many years, was only a fleeting dream.  It is at this stage that the intellectuals, who had transferred their allegiance to the revolution, step forward to proclaim to the revolutionaries the expected fruits of their accomplishment.  Wordsworth used these words to describe the French revolution, “France standing on the top of golden hours, and human nature seeming born again.”  Change is often a dramatic event that profoundly affects the human condition.  Revolutions are an extreme form of change that motivates people to take extraordinary personal risks in seeking rewards – rewards that are not guaranteed.  Revolutions are dramatic events that fuel the soul and breathe life into our imagination.  Wordsworth’s words are testament to our desires to dream the impossible dream.  In many ways, the revolutionary nature ofAmerica is what creates a strong and vibrant life force in her society today. America has its periods of prosperity and recession, but the revolutionary cycle of her markets and economic structure forcesAmerica to consistently change and invent new strategies for success, which in turn maintains strength of forward progress.  Amongst the four western revolutions, (i.e. America, England, France, and Russia) America has been the nation-state who has embraced the spirit of open markets and the cyclical nature of market change.  Combine this characteristic with access to capital, the desire to innovate, and the foundation of America’s entrepreneurial spirit and the result is an economic model that accepts a high level of risk to achieve a high level of rewards.

Great Expectations

The period of great expectations that follows the revolutionary event can be long or short, but it ends when the revolutionaries step forward and assume the task of governing.  They must step into the place of the old regime and address the problems that still exist that the old regime was unable to solve.  This is the great trap of the revolution.  Revolutions do not solve problems; they simply affirm new leaders to be responsible for solving the same challenges that existed before the revolution.  At an emotional level, the people of a nation-state may find the change of leadership to be worth the cost of revolution – but as the leaders of the revolution soon learn, the problems facing the nation-state are solved over time, not necessarily by a change in leadership.

The Honeymoon stage of the revolution is a time of optimism and joy.  The old regime has been vanquished and suddenly the road most desired to be traveled – which has been blocked for so long – is open to all.  Opportunities seem bountiful and the rewards and potential for success seem limitless.  There is a measurably high level of optimism about the revolution because the future seems ripe with potential.  People are positively engaged in the creation of a new government.  In the four revolutions that Brinton studied, the Honeymoon period is best identified in the French Revolution.  Brinton states that the Honeymoon stage of the revolution, “…is most perfectly developed in France, where the revolution came in peacetime, and at the end of a great intellectual movement called the Enlightenment which had prepared men’s minds for a new and practical miracle,” [see Brinton, page 90].  Around the world, the news of the French Revolution was celebrated by poets and told in song and story to children and adults alike.  Even the French national anthem that was composed by Claude-Joseph Rouget de Lisle in 1792, celebrated the spirit of the joyous moment of revolution.

Arise, children of the nation!

Our day of glory is here.

For against us we see raised

Tyranny’s bloody banner!

The Honeymoon stage of the revolution is a time when hope abounds for the future with little concern for the complexities and challenges that lay ahead.  Ignorance is bliss and the future is for those who dream.  Revolutions need an event that captures the attention and imagination of the public.  Revolutions need their fourteenth of July 1789 and their fifteenth of April 1775.  Revolutions need an event that is dramatic and compelling enough to shake the bounds of complacency.  People need to be told and shown that everything they had believed has changed.

During the American Revolution, the march by the British Regulars on Concord and Lexington was a galvanizing event for the people ofBostonand its surrounding communities – but it also was the event that drove all of the American Colonies to point of revolution.  The Massachusetts intellectuals of the American Revolution, men such as John Hancock, Samuel Adams, Joseph Warren, John Adams, and Paul Revere, had planned for a preemptive move of aggression by the British Army.  They knew any aggression by the British Army could be used to exploit the tensions in the colonies for separation fromEngland.  Through extensive planning, the Sons of Liberty had worked with the surrounding communities of Boston to perfect a system of alarms to call forth men and arms in defense of the outer towns surrounding Boston.  This system is what enabled many men to be mustered in a short period of time in defense of Concord and the surrounding towns.  What is not common knowledge is that within hours of the British Regulars’ march on Lexington and Concord riders were dispatched to bring the news south to other American colonies.

News of the fighting at Lexingtonand Concord reached New York City within four days.  Philadelphia received the news a day later and most of the southern colonies were informed within twenty days of the hostilities.  By comparison, the news of the shot heard around the world did not reach London until May 27, forty days after the event.  The American revolutionaries had planned well to exploit any aggressive move by British forces.  American intellectuals knew the power of public opinion and had dispatched a fast ship called the Quero [see Paul Revere’s Ride, Fischer, page 275] to bring the news and the American point of view to England, before ships loyal to the King would arrive.  The revolutionaries had seen to their task well and were able to promote their version of events before the arrival of any official British military communication.

The dispatch riders, who carried the news from the colony of Massachusetts, were the IPO road show team of the American Revolution.  It was their mission to sell the news of Lexington and Concord in order to convince the other colonists of the aggression of British regulars and the need for a revolution to separate from English rule.  The mission of the American revolutionaries in 1775 was not much different.  Personal fortunes, geo-political as well as the wealth of nation-states and multi-national corporations were all in play in 1775 and 1996 – the exception being that the stakes were higher in 1775 as life or death hung in the balance.

Perigee and the Rule of the Moderates

The Rule of the Moderates is the phase of a revolution that occurs after the old regime has collapsed and the spontaneous wave of change has broke upon the nation-state.  Brinton believes that the Rule of the Moderates begins when the people of a nation-state and the revolutionaries realize they need to continue to govern the state.  It is true that the old regime has fallen, but this does not dismiss the fact that the mechanisms of government must continue to serve the nation-state.  Economic activities must be supported, services continued, and all the structures that support daily life in the nation-state must continue.  There are new people in positions of leadership within the government and there was a revolution – but this does not mean that the nation-state no longer needs the government that existed before the revolution.  The reality is that the services that the government provided the nation-state still need to be conducted after the revolution.  This means the trash needs to be collected, the mail processed, and money issued to banks.  The government services that existed before the revolution must be continued after the revolution and the responsibility of maintaining services falls on the moderates who assume power after the revolutionary act.

The primary challenge facing the new leaders after a revolution is the need to reform the old system of government.  When the intellectual leaders were in opposition to the old regime, it was easy to be critical of the government because they were not being held accountable for the actions of the government.  Truth be told, it is simply easier to criticize when one is not held accountable.  Now that the moderates are in control of the government, the task of reforming the existing institutions is daunting considering the complexities and confusion caused by the revolution.  Perhaps the best example of this within the four revolutions that Brinton studied is the Russian Revolution.

The provisional government that emerged from the Russian Revolution of February 1917 was composed of Duma and various political groups that had opposed the Old Regime of Czar Nicolas the II.  When Nicholas abdicated, the Duma assumed control of the state.  A revolution had occurred and the Duma was a legitimate successor to Czar’s government as it was empowered as the Parliament before the act of revolution.  The provisional government realized the importance of maintaining their legitimacy as the ruling body.  In doing so, they welcomed various revolutionary groups and organizations in an attempt to build a broad ruling coalition.  Unfortunately, the siren call of power is to strong to draw all parties together and the actions taken by the moderates, in this case the provisional government, are not radical enough to satisfy the demands of the extremists of the revolution.  It is doubtful that Alexander Kerensky, as leader of the provisional government post the February Revolution, realized that there were people in the old regime working against him as well as people organizing a second revolution.  The actions of this later group resulted in what is known as at the October Revolution or the Bolshevik Revolution of 1917.  The Bolsheviks were led by a man named Lenin.

The Accession of the Extremists Heralds the Decline

The inability of the moderates to reform and control the government empowers the extremists of the revolution.  In all revolutions, there exists a group of radicals and extremists who insist that the revolution has not gone far enough [see Brinton, page 122].  These people take the position that the moderates are not revolutionaries – but rather saboteurs who have betrayed the revolution for their own personal gain.  Rather than supporting the revolution, the moderates are accused of stopping the revolution.  From an evolution perspective, consider that the old regime is conservative in nature, regardless of political sympathies.  The moderates are revolutionaries, but they are not extremists.  They seek change, but they also believe that power is inclusive – not exclusive.  Brinton described a political scale [see Brinton, page 123] to illustrate this point.  As power moves from the old regime to the moderates to the opposite end of the scale wherein the extremists are located, it goes from moderately concentrated, to less concentrated, to highly concentrated among a fewer group of people.  The theory is that power under the old regime is concentrated within the old regime and a small number of political parties that are organized in opposition to the old regime within the protocols of the nation-state such as the parliament, Duma, or some recognized entity.  During the time of the old regimes, political power is not concentrated by a few people, but rather within the old regime and political process.  After the revolution, power becomes dispersed amongst many groups.  This is the stage of the Rule of the Moderates.  Power is less concentrated until it begins the process of concentration.  Power within the nation-state becomes highly concentrated until it balances and returns to a level near that which existed during the old regime. Political power is what creates the rule of law.

The primary challenge the revolutionaries confront beyond the need to govern, is that elements of the old regime still exist after the revolution as well as other revolutionary parties.  In the case ofRussia, the Duma led the coalition of moderates until the October Revolution.  Post the October Revolution forces loyal to the old regime used the extreme position of the Bolsheviks to unite moderate forces and launch a civil war against the Bolsheviks.  Revolutions within nation-states and markets are multidimensional.  Change is multidimensional.

Dual Sovereignty

When Brinton describes the existence of dual sovereignty, he is highlighting the process of the concentration of power and establishment of competing governments.  For an historical example, we have been using the Russian Revolution and the role of the Duma, but we could easily use the English Revolution.  Dual sovereignty is the first stage of the revolution within the revolution.  It can be identified by the establishment of competing ruling groups.  Dual sovereignty is the beginning of the breakdown of the government formed during the Rule of Moderates stage.  As political groups, coalitions and elements within the nation-state realize that their goals will not be achieved; they begin to plot against the coalition of the moderate political parties.  These groups each have a degree of legitimacy supported by a sizable portion of society.  Sizable portion of society is a relative term.  Think in terms of the competing groups we are discussing having enough people supporting their position, that it gives the group a legitimate claim to being representative of the people or some portion of the people.  This is obviously more than a small or insignificant number of people – but rather enough people to be of a legitimate threat to the ruling coalition.  When two or more governments within the nation-state reach this level, they begin to issue conflicting orders and directives.  This is called dual sovereignty and it is at this point that the ruling government formed under the Rule of the Moderates becomes paralyzed [see Brinton, page 133].

The extremists of the revolution who emerge as a pressure group contending for control of the nation-state have two distinctive advantages over the government that assumed power from the old regime.  The first advantage is that the ruling coalition must shoulder some responsibility for the ineffectiveness of government [see Brinton, page 134].  The ruling coalition of the moderates is not the old regime, but they did assume power with few, if any, of the challenges resolved that forced the revolution.  By their position as the successor to the old regime, the ruling coalition of the moderates is blamed by the people when their expectations are not met.  The second challenge they face is that the extremists are better organized with more efficient means of operations.  The moderates assumed control from the old regime and with that the inefficient machinery of the state.  The extremists have no need for the old regime and its ruling structure.  Their objective is to eliminate all aspects of the old regimes and their ruling structures.  The extremists are able to build efficient processes and machineries that serve only to achieve their objectives.  In many ways, it is the ability of extremists to evaluate the political and operational structure of the government post the revolution that is their greatest asset.  The extremists do not rush to power, but rather plot the collapse of their foes from within the nation-state, exploiting every weakness of the moderates.

When the government of a nation-state becomes paralyzed by the dual sovereignty, it requires violence to break the impasse.  In almost all cases, the coalition of the moderates finds itself facing a rival government that is “…better organized, better staffed [and] better obeyed.”  The element that makes the rival government dangerous is it is illegal.  It knows that it is illegal and the rival government is more predisposed to use violence to achieve their objectives.  The rival government is the hardcore element of the revolution.  These are the people who are the true believers.  They have given themselves completely to the revolution and to its objectives, and no price is too high to pay.

Brinton describes the weakness of the moderates as a “paradox.”  In the beginning, the moderates are given credit by the people for opposing and then disposing of the old regime – but as they are unable to control and improve the machinery of the government, they begin to lose credibility in the eyes of the people.  Then the moderates are confronted by the radicals or extremists of the revolution.  Eventually, the moderates realize that they have assumed power from the old regime and now find themselves subject to revolutionary forces applied by the extremists of the revolution who believe that the revolution has not gone far enough.  The extremists seek radical and measurable change.  The Rule of the Moderates ends with the “…triumph of the extremists and the merging of the dual sovereignty into a single one.

In the plight of nation-states, Brinton stated that all revolutions were made in the name of freedom [see Brinton, page 138].  As such, the moderates believe in human rights and the freedoms of speech, press, and assembly.  The extremists who oppose the moderates and want to continue the revolutionary process have no commitment to such freedoms.  They are committed to the actions that bring about the accomplishment of their goals and they use the same tactics that the moderates used to bring about the collapse of the old regime.

When we examine why the Rule of the Moderates collapses and the Accession of the Extremists is successful, we find several reasons [see Brinton, page 145].  The first reason Brinton cites is that moderates who were leaders in the revolution were not fanatical revolutionaries.  It is true that the Rule of the Moderates is dominated by intellectual leaders of the revolution, but these leaders and their government were not radical enough to satisfy the extreme core element of change within the society.  Brinton describes the moderates as “realists” who are reasonably well adapted to the realities of government and common sense to support the radical extremes of change that would satisfy the extremists.  The extremists view the moderates as people who betrayed the true potential of the revolution.  In the view of the extremist, the moderates are people who used words and phrases to bring about revolution – but they reveal themselves to be uncommitted to the true cause of the revolution.

Brinton separates the moderates from the extremists by falling back on the belief that the moderates are practical people who seek practical solutions.  He states that, “In normal times, ordinary men are not capable of feeling for groups of their fellow men hatred as intense, continuous and uncomfortable as that preached by the extremists in revolution.  Such hatred is a heroic emotion and heroic emotions are exhausting.”  The moderates are people who want change and believe that the change they are seeking is quite dramatic and significant in nature, hence the need for a revolution to bring about the change they seek.  The extremists view revolution as only partly about change.  To the extremist, the revolution is about significant cultural change and power.  Power is the real difference between the moderate and the extremist.  The moderate wants power, but is unwilling to make supreme sacrifices to achieve and maintain power.  The extremist suffers from no such restrictions.  The extremist of any revolution easily and willing commits himself to the violent assumption and continuance of power.

When the moderates assume power, the majority of their objectives have been achieved, for the moderates are not true believers that they are in a position to change all of society and the ways of man.  They are realists and realists are people who compromise to build broad coalitions to benefit the broadest segment of society.  Briton states that these values give the moderates “…part of their strength and give them hold over their fellow, who share at least their desire for comfort” in normal society.  Unfortunately, a revolution is not a normal time – but rather a time that enables those with radical ideas for change and fantastic visions for the future to find a stage upon which their message can be transferred into actions and deeds.  This is Briton’s “Kingdom of the Blind” wherein “…the wisdom and common sense of the moderate are not wisdom and common sense, but folly.

The Accession of the Extremists

From a historical perspective, the Accession of the Extremists to power is marked by a series of violent escalating events.  The initial overthrow of the old regime on the day of revolution is typically a bloodless event – in comparison to the Accession of the Extremists.  When the old regime abdicates power, the process is more political than combative.  Old regimes surrender power as part of the political process that respects the professionalism and protocols of the diplomatic process.  If the old regime resists the revolutionaries, then open warfare will ensue as seen in the American and English revolutions.  In the Russian Revolution, the Czar peacefully abdicated power.  When power changes hands, the contending players for power do not kill each other on the day of revolution.  They may kill each other in future days, but the transfer of power from the old regime to the moderates is a checkmate – not a period of intense violence.  In the English Revolution, it took time for the lines of battle to be drawn.

Although the actual revolutionary event may shed blood as in the battles atLexingtonandConcord,Paris, or inSt. Petersburg, the initial collapse of the old regime is not a period of intense violence.  When the revolution occurs, the old regime is vulnerable to change because it is structurally weak, thus the old regime is unable to control and govern power.  The old regime’s inability to maintain power results in their inability to vigorously oppose the revolution.  In England, the King had to call for support from within the royal class.  In America, the army of General Gage remained inBostonfor nearly a year, until they were forced fromBostonthrough a military checkmate on Dorchester Heights.  When the collapse of the old regime occurs, the revolutionaries are usually startled with how easily the old regime capitulates or withdraws from their challenge to organize and count their supporters.  The revolutionaries are surprised by the sudden change of power because they had labored at change for many years and the ease with which their objective was accomplished was unanticipated.  When the Rule of the Moderates ends, the revolutionaries who were astounded with how easily the old regime collapsed are also surprised with the level violence associated with the Accession of the Extremists.

The violence that marks the historical transition from the period known as the Rule of the Moderates to the period called the Accession of the Extremists comes in many forms.  Often it is identified by street fighting, bombings, open civil war, violent propaganda, forced seizures, and heated if not violent debates [see Brinton, page 148].  Brinton describes the state of society as a “…universal state of tension.”  As the tension increases within the society, reasonable men become unreasonable.  In normal times, reasonable solutions that provide a compromise resolution to issues are unachievable in the time of the Accession of the Extremists.  Progress in governing the nation-state by the post-revolution modernist government begins to slow.  Governmental issues go unresolved as debate becomes preferred to governing.  Across all levels of society there is a feeling that the revolution is entering a state of crisis.  Some event or some group has to give in to break the impasse between the contending parties for power.  When the breaking point is reached, the Accession of the Extremists is complete and the revolution will enter a term of intense violence.  The Marquis de Lafayette, who was a moderate leader within the French Revolution, crossed the border toSwitzerland to escape the deadly politics of the Terror.  Kerensky went to theUnited States and Trotsky went toMexico.  During the English revolution, revolutionaries who were dissatisfied with the course of events and the policies of Oliver Cromwell leftEngland forFrance and other continental nation-states.

Brinton comments that in his analysis, that the actual overthrow of the moderates is a quick and neat event [see Brinton, page 163].  The change of government usually occurs without the dramatic events that accompanied the overthrow of the Old Regime in the early days of the revolution.  Power simply moves from those who cannot command it to those who can.  At this point of the revolution, there is still a respect for politics and protocol.  The government of the moderates is not an extremist group and as such, they yield power in a respectful manner.  In the same predicament as the old regime was on the day of revolution, the inability of the moderates to maintain and wield power is the structural weakness of the ruling government.  When the structural weakness of the moderates is confirmed by the extremists, the extremists act.

Why the Extremists Win

Alexander Kerensky and the Provisional Government that took control of Russiaafter the Czar abdicated realized all the problems that any government that follows an old regime assumes, with the addition of a war with Germanythat was not going well.  When Czar Nicholas abdicated on March 13th, 1917, he was replaced by a provisional government headed by Prince George Lvov.  Lvov was an interesting person to head the Provisional Government because he was born in Dresden and player in Russian national politics, but he was still an outsider to the core of Russian political power.  Kerensky was appointed Minister of Justice and in this position he introduced a series of reforms abolishing capital punishment and guaranteeing civil liberties to include freedom of the press and abolishing discrimination based on ethic and religious differences.  Prince Lvov’s Provisional Government made no attempt to end the war with Germany.  In May, 1917, Kerensky was appointed Minister of War and promptly announced a new offensive against the Germans on June 18th.  The offensive made some gains, but eventually lost momentum and failed.  Prince Lvov resigned in July and was replaced by Kerensky.  Kerensky was still a popular figure within the government and he was now the leader of the Provisional Government and the first non-royal to lead the Russian Government.

After the February Revolution in 1917, the Bolsheviks met to decide their strategy.  Some members of the party advocated supporting the post-revolution government as it was supported by a majority of Russians.  Their view was that the revolution had occurred and a government of revolutionaries had taken control of the nation-state and this government was supported by the people.  Lenin had the foresight to project through this disguise [see Brinton, page 158].  It did not matter that a majority of Russians supported the post-revolution government – what mattered was for the first time the structure of power had sufficiently changed to enable the possibility of the Bolsheviks accomplishing their objectives; the same objectives they had been toiling for years to achieve when the old regime was in control of the nation-state.

Within days of taking office, Kerensky announced yet another offensive by the Russian Army against the Germans.  The soldiers of the Russian Army were unwilling to obey Kerensky’s command and a couple million of them left for home.  Kerensky’s unwillingness to end the war, his continued call for new offensives and his failure to deal with the economic problems increasingly eroded his political support.  This is the conundrum of the leaders who assume the power of the government post the revolutionary act.  They are left with a set of high expectations to meet from the people and little ability to affect change in a reasonable period of time.  Over time, the political power begins to erode as the people do not see tangible results from the revolutionary promises.  On September 2nd, Kerensky proclaimed Russia a Democratic Republic in which he held the position of Minister-President.

Lenin was not inRussiawhen the February Revolution occurred in 1917.  He was inSwitzerland.  It was the Germans who transported him to Russia hoping that his destabilizing influence would work to their advantage.  The conditions that enabled the Russian Revolution to occur were not a product of the Bolshevik Party.  The Great War, the revolt by the workers in Petrograd and the collapse of the Czar’s Government were not the result of efforts of the Bolsheviks – but it was the Bolsheviks who exploited these conditions to seize power and drive the moderates from the nation-state.

Kerensky’s government continued to weaken as conditions within the nation-state did not improve and the extremists led by Lenin systematically strengthened their position.  On October 25th, the Provisional Government of Alexander Kerensky fell to the Bolsheviks.  This was the October Revolution that the Communists would celebrate for another seventy four years.  Kerensky escaped St. Petersburg on a Danish ship and spent the majority of his remaining life in the Untied States.

The easy answer to the question of why the extremists win and the moderates lose is that the moderates are weak and act indecisively and that the extremists grow strong and act decisively, but as Brinton highlights these generalizations are not a sufficient answer.  Brinton states that the “…extremists win out because thy secure control of the illegal government and turn it in a decisive coup d’etat against the legal government.”  The state of dual sovereignty is ended by the revolutionary acts of the extremists.  Historically, the extremists of the revolutions that Brinton studied were the Independents, the Jacobins, and the Bolsheviks.  Before detailing why the extremists are successful, it is important to remember the state of government post the revolution and who are the people who comprise the extremists.  The government that succeeds the old regime is the moderates.  They are a broad cross section of revolutionaries who unite to assume power based on noble ideals, but within the confines of the structure of society.  The moderates are not people who seek to change the fundamental social structure of society, but rather they seek to change the people who wield ruling power in the nation-state.  The power assumed by the moderates becomes less concentrated due to the broad social coalition of the government of the moderates.  The extremists are the hardcore elements of the revolution.  They have been organizing and working towards revolution for many years.  Initially, the extremists are part of the ruling coalition of the moderates.  Over time, the extremists become disillusioned with the coalition of the moderates as they believe that the revolution has not and will not reach their goals unless there is a continuation of the revolution.  The application of power and the rule of government that was once a shared plurality amongst the post-revolution participants, collapses through a systematic process planned and executed by the extremists.  It is the extremists who want the revolution to continue in order for them to assume power.

Organization and the efficient use of resources to oppose the moderates are fundamental to the success of the extremists.  The extremists obtain their power by “…ousting, usually in a series of conflicts, any and all active and effective opposition from these [government] organizations.  The discipline, single mindedness and centralization of the authority which mark the rule of the triumphant extremists are first developed and brought to perfection in the revolutionary groups of the illegal government” [see Brinton, page 149].  In the historical revolutions studied by Brinton, the existence of the extremists usually pre-date the revolution, as they have a history of being the hardcore revolutionists who have been seeking complete change of the nation-state during the years of the old regime.  The confusion of the revolutionary environment enables the extremists to exploit their size and organization to become the decisive ruling force within the post-revolution society.  They achieve this state by focusing on acquiring command of the key elements of the government that in turn control the nation-state.  The key elements of the nation-state are the military, monetary supply, communications, and law enforcement resources.  If these elements of the government can be controlled, then one would be in de facto control of the government.

The extremists who appropriate power in the revolutions that Brinton studied have a number of characteristics in common.  The first characteristic is their size.  They are few in number.  Historically, Brinton cites the following examples of historical extremists [see Brinton, page >150]:

  • Cromwell’s New Model Army was created with a membership of 22,000 in a country with a population of three to five million
  • The Jacobins numbered 500,000 in a country with a population of over twenty million
  • Lenin’s Bolshevik Party was well under 1% percent of the population in a nation-state of over one hundred million

The small size of the extremists is a pillar of their strength.  They are a focused group that is capable of acting as a unified force focused on an overall objective that is macro by definition.  This ability enables the extremists to concentrate their force on the vulnerable objectives that lead to the assumption of power.  We defined vulnerable objectives as the military, monetary supply, communications, and law enforcement.  Money, arms, communications, and law enforcement are the fundamental foundations of power within society.  Governments wield power through these organizations.  Controlling these governmental elements provides the foundation to power.

The extremists that Brinton studied are fanatical.  They have an intense devotion to their cause.  Extremists are people who are willing to die for their cause.  Typically, they are thoughtful intellectuals – but what separates the extremists from the intellectuals who lead the government of the moderates is their willingness to accept no compromise to achieve their objectives.  The extremists do not have an attachment to the old regime and care little for the existing structures of society.  In many ways, the extremist can be considered the dreamer of revolution.  Their cause has a righteous nature of intensity that separates their motivations from the intellectuals and revolutionaries who played prominent roles during the events leading up to the revolution and within the government of the moderates.  The extremist views change as a positive activity and the more change that can be inflicted on the nation-state will only serve to better the nation-state.  Extremists would rather sweep away all elements of the old regime than live with anything less than the full achievement of their vision.  This is why they perceive the government of the moderates as a weak byproduct of the old regime and as such, they are unwilling to accept its existence.

It is believed by Brinton that the historical age of the extremists provides to them an advantage over the moderates in the contention for power.  The extremists are not newly converted revolutionaries.  These are not people who flocked to the banner of revolution when the revolution became socially appealing.  The extremists are the people who dedicated themselves to revolution in the dark days of the old regime.  Actively suppressed by the old regime, the extremists have been plotting the downfall of the old regime for years during the darkest hours of their cause.  When their goals seemed unattainable and they were actively suppressed, the extremists plotted their revolution.  This is why they kept their membership small and their activities clandestine.  The oppression of their cause taught the extremists to be a disciplined and secretive group.

The extremists in all the revolutions studied by Brinton had powerful and superb leaders.  I am not saying they were nice or benevolent people.  These leaders were Oliver Cromwell, Lenin and Trotsky with contemporaries such as Mao, Fidel and Ho Chi Minh.  The moderates have good leaders as well, but there is not a singleness of purpose.  The leaders of the moderates are often champions of the revolution, but their personal objectives of wealth or recognition are more important then the revolution itself.  The revolution is important, but the revolution is really a means to an end for the moderate revolutionary leader.  When we look at the leaders of the moderates we identify many good leaders, but their numbers prevents them from be effective leaders.  Power during the Rule of the Moderates becomes less concentrated.  The leaders of the moderates cannot effectively concentrate their power to enforce the rule of the law.  The extremists have no such liability.  The extremists follow their leaders with devotion and unanimity.  When the moderates are trying to consolidate power and build broad ruling coalitions, the extremists undermine their efforts and strike at the elements of society that control and project power.

The Reign of Terror is the beginning of a period of great social change within the four preeminent western revolutions.  At this stage in the revolutionary cycle, each of the western revolutions had brought about a change in the structure of the government and the people who ruled the nation-state – but they had not greatly affected the lives of every citizen in meaningful way on a daily basis.  The Reign of Terror begins with the assumption of power by the extremists and it provides the extremists with an unchallenged ability to wield power.  For some period of time, ranging from several months to several years, the extremists have the ability to be as fanatical as they desire for no power exists within the nation-state to challenge their authority.  The name extremist is given to the radical elements of the revolution because they seek change that dramatically affects the political and social structure of society.  The extremists willing employ shock tactics to achieve their objectives.  The term “shock” is used to highlight the secondary goal of the extremists, which is to traumatize the complacent nature of the society in order to highlight the magnitude of the change.  The changes enacted by the extremists go far beyond the structure of the government.  Their reign impacts the ordinary citizen and seeks to enact a permanent change in the social structure of the society.  The change sought by the extremist attempts to undo the fabric of the social order, which was woven over many years.  In some examples, the change wrought by the extremists is directed at revenge and retribution for crimes, real or perceived.  When the people who wield power change, they are afforded an opportunity to exact revenge, small or large.

During the Reign of Terror, politics become real and serious for all citizens, as the punishment for being on the wrong side of the terror is death, pain, suffering, and imprisonment.  Brinton states that the “…terror touches great and small with the obsessive power of a fashion; it holds mean as little of the common weal ever holds them, unless they are professionally devoted to the study or practice of politics” [see Brinton, page 177].  Politics become the daily obsession as unavoidable as our daily sustenance and the weather.  Brinton examines the Reign of Terror from two perspectives.  The first perspective is from the people who are not members of the revolutionary cult of the extremists.  This group is called the outsiders.  The second perspective is that of the insider; who is the true revolutionary believer, devoted to what they perceive is the real revolution.  In this description we find one of the reasons why the terror occurs.  The terror occurs at the hands of the extremist, because the extremist is a person unwilling to comprise and obsessed with achieving a higher order of existence for society.

Brinton describes the outsider as the person who makes up the majority of the society.  He is the person who has a casual, passing interest in politics that peaks and wanes with the political season.  The outsider is interested in politics during the political season – but politics does not consume their life.  The outsider is not meeting clandestinely at night, plotting the overthrow of the state – but rather the outsider takes an interest in politics when it demands his interest.  In short, the outsider is a bandwagon rider.  He is inclined to join the bandwagon when revolutionary fever sweeps through the majority of the nation-state – but he will not be part of the bandwagon when the times are tough or contented.  The attention span of the outsider is measured in months – while the attention span of the insider is measured in years and decades.

The Reign of Terror is difficult on the outsider because the fundamental elements of society that the outsider perceives as the foundation of their familiarity and comfort with society are changing.  One of the early signs of the reign of terror is the phenomenon of renaming.  In the four revolutions that Brinton studied, the extremists begin a renaming process that begins with people, processes and places.  The extremists use the renaming process to confuse, misdirect and to signal an important break with the past.  The target of the renaming process is the outsider.  In each of the four western revolutions, renaming occurred at different levels of seriousness.  In the English Revolution, the renaming process was confined to people and positions.  In France, people and position renaming occurred, but it was also extended to street names, places, palaces, cities, daily conversation, and even the calendar [see Brinton page >178].  The daily greeting went from monsieur to citizen.  The idea was to convey a new level of equal rights that all citizens of the revolution were now granted.  The rallying call of the French Revolution was “Liberté, Egalité, Fraternity.”

The Russians were especially fond of the renaming process, as cities such asSt. Petersburgbecame Petrograd and eventuallyLeningrad.  As the Russian Revolution completed the longest revolutionary cycle in terms of time, we witnessed a return to the names that had been familiar to the outsiders in 1917, nearly eighty years later. Leningradwas renamedSt. Petersburgin 1991, seventy four years after the Bolshevik Revolution.  The Supreme Soviet was replaced by the Duma after the collapse of theSoviet Union.  The Duma was formed as a concession by the Czar as a result of the revolutions of 1905 inRussia.  The Duma assumed control of the state in 1917 when the Czar abdicated.  It was disbanded by the Bolsheviks (i.e. extremists) only to return when the Communist Party ceded power in 1991.  Even the whole country was renamedRussiain 1991, as if the previous seventy-five years had never happened.  This contemporary example witnessed in our own time, is testament to the strength and enduring power of the foundational pillars of embedded social fabric.  Habits are hard to break and the extremists use name changing as one of many tactics designed to break social habits and create new habits and new familiarities.

The difficulty in breaking social habits is a fact that is not lost on the extremists and it is the primary reason why they seek radical social change.  Societies do not undergo revolutions as a common occurrence.  Revolutions require a specific confluence of forces to occur.  The old regimes are secure in the knowledge that social habits are difficult to change and over the long term, a society’s comfort with the daily regime ensures the stability of power.  The extremists are intimately familiar with the difficulties of changing social habits.  Renaming is part of the process of demonstrating to the outsider that society has forever changed.  The social pillars that had enabled the old regime and supported the moderates have now been stripped away.  The extremists are also attempting to create new social pillars and habits that will provide the same stability to their extremist regime as was once provided to the old regime.

In all the revolutions studied by Brinton, there was also an attempt to address the virtues of society.  The objective to create a new society based on higher standards of virtue is an attempt by the extremists to invoke a change within the society that enforces the seriousness of their intentions.  The attempted elimination of vice and laziness are tactics used by the extremists to signal to the populace significant social change.  To the extremist, who is the hard-core revolutionary, it is important to invade the lifestyle of the outsider and disrupt his habits.  The life-style that existed during the old regime and continued into the early stages of the revolution is a barrier that restrains the society from reaching its potential.  Eliminating vices such as gambling, prostitution, drinking, and other amusements are tactics designed to disrupt familiar patterns.  Most extremists in revolutions view their actions as a means to a social utopia.  The means justify the end and as such, it is believed that once a familiar pattern is broken, the seeds of a new social order can be sown.

Opposed to the outsider is the insider.  The insider is the extremist.  He may not have been one of the leading intellectuals who transferred his allegiance during the last days of the old regime – but he is someone who has goals far beyond what was achieved in the earlier stages of the revolution.  In Brinton’s view, the insider is the true believer of the revolution.  Brinton refers to the Reign of Terror and Virtue as the crisis period of the revolution.  It is during this period that politics become lethal and the mere intellectual excitement and challenge of the revolution is eclipsed by the struggle for power.  Before the Accession of the Extremists, violence was not overly prevalent in the revolutionary process.  As the struggle of power begins to crystallize, conditions are created within the nation-state that support open conflict and civil war.  To the insider, the strain of cleansing the nation-state of the enemies of the revolution begins to be too much.  Brinton states that the insider “…begins to have his hesitations and his doubts, to be bored with the endless ceremonies, deputations, committees, Stakhanovites competitions, tribunals, militia work and the other chores necessary to achieve the reign of virtue on earth” [see Brinton, page 182].  Within the camp of the insider, a dichotomy begins to emerge.  Some insiders break under the strain of the revolutionary process and evolve into outsiders – while a remaining group of insiders harden their resolve until the end.  It is this resolve that increases the terror within the nation-state.  The unwillingness to compromise is the path to violence.

On the same level as religious satisfaction, devotion to the extremist cause provides a sense of satisfaction to the insider.  Many of the insiders have been devoted to their cause for many years and as the realization of their hopes, dreams, and plans begin to come true they experience a sense of satisfaction on a personal level similar to a religious awakening.  The realization of the revolutionary dream provides a sense of deep satisfaction and this feeling becomes a substitute for religion devotion.

Throughout the Reign of Terror and Virtue, there is an important underlying motivation to the actions of the extremists.  That motivation is the acquisition of economic power.  In a subtle manner, Brinton has come full circle in the study of revolutions, as it was an acute economic crisis within the old regime that enabled the start of the revolutionary cycle.  The extremists now stand as the arbiters of power within the nation-state.  In order to maintain their power, they need to centralize power.  Briton states that the centralization of power enables the extremists to “…repel attacks from within and without.”  To consolidate military and political power indicates that one has achieved control of the economic engines of the nation-state and thus must be in control of the dispensation of wealth.

The true objective of the extremists is control of the economic engines of the nation-state.  The tactics employed to this point of the revolution have been focused on controlling the apparatus of the nation-state that enforces power in order to seize control of the economic assets.  The extremist connects the environment to the past, to the future, to the people, and the ideas and plans of their competitors.  The extremist plays for the end-game.  The moderate plays the game for the goal of playing the game.  While the moderates are playing the game in the two dimensions of space and time, the extremists is playing the game with a third dimension and that is a projection of what their competitor is or will do.  The extremist is not in the revolution for today, the extremist is in the revolution for tomorrow; a day when the extremist will control power and money – as money and power are linked.  When companies have money, companies have power.  When companies have power, companies can use that power to acquire money.  “The whole point, indeed, of the three revolutions we are about to analyze is that religious enthusiasms, organization, ritual and ideas appear inextricably bound up with economic and political aims, with a program to change things, institutions, laws, not just to convert people” [See Brinton, page 185].  Revolutions within nation-states and within economic markets have entry and exit criteria that are one in the same.  Revolutions find their beginnings in economic crises and reach their end when economic power is consolidated and once again controlled by the few.  In short, that is the definition of a revolution.  A revolution breaks the concentration of power, diffuses power amongst the many, and then returns to a state wherein power in once again controlled by the few – only a different few from the original state.  When revolutions begin, the question is; who will be the controlling few at the end of the revolution?  This is the question that the first estate asks everyday via the global financial markets.

By changing the laws, institutions, and social structure of the society, the extremists are in effect legitimizing their acquisition of power and enforcing their hold on power by being the final arbiters of economic wealth.  If you remove the ideological element from the motivations of the extremists, they appear to conform to the contemporary definition of a Keynesian economist, such as Lyndon Johnson, believing that only the governing body of the nation-state can act as a mechanism to maintain full employment, steady production, and economic stability through activist monetary and fiscal policies.  Control of the economy and the people of the nation-state are required elements to ensure that the ideological objectives of the extremists are achieved.

As the extremists assume power and induce the Reign of Terror and Virtue, they do not restrict their actions to their nation-state.  In all cases, each revolution seeks to export their beliefs and revolutionary changes as well as the revolutionary process.  Brinton identifies this action as nationalism.  In each revolution, the nationalistic fervor to be exported differed – but in all the revolutions, the exportation of the revolution is clearly identifiable.  In the 20th century, the Communist Party of theSoviet Union was an ardent believer in a global Marxist revolution and openly encouraged a bi-polar alignment against the western nation-states.  The ironic aspect of this alignment is that the western nation-states ofFrance,England, andAmerica were all experienced revolutionaries who had used the revolutionary process to evolve from their monarchies.  By the mid-twentieth century, all four revolutionary nation-states studied by Brinton were actively engaged in the nationalistic exportation of their revolutionary beliefs.  Revolution, colonialism, and nationalism are terms for the same activity, which is the exportation of ideological and political systems in order to secure economic wealth.

It is at this point that Brinton ties nationalism and religion together.  The exportation of the revolution by the extremists is a strategy to keep the insiders engaged in the revolution.  Nationalism presents new opportunities to motivate the hard-core revolutionary.  The success they achieved within their own nation-state provides motivation and hope that equal success can be achieved in other nation-states.  This is why the extremists need to consolidate power.  The exportation of their ideas is a threat to the bordering nation-states.  The old regimes that border the nation-state undergoing a revolution fear that the forces of change will be exported to their nation-state.  Brinton again highlights the parallel between the revolution and religion.  He states, “Our revolutionists are convinced they are the elect, destined to carry out the will of God, nature or science” [see Brinton, page 194].  This belief becomes an enabling aspect of the terror.  The extremists use the fanatical belief in their position to justify the guillotine, the firing squad, and the hangman’s noose.  The result is a binary solution for the extremist.  Either you are an ardent believer in the revolution or you are not.  “If there is but one truth, and you have that truth completely, toleration of differences means an encouragement to error, crime, evil and sin” [see Brinton, page 194].  The determination of the extremists is easily identifiable in words of the great leaders who have been the winners in their revolutions.  Mao Zedong stated “this army has an indomitable spirit and it is determined to vanquish all enemies and never to yield. No matter what the difficulties and hardships, so long as a single man remains, he will fight on.”  Ho Chi Minh stated, “You will kill 10 of our men, and we will kill 1 of yours, and in the end it will be you who tire of it.”  Ernesto Che Guevara, the Argentine revolutionary said, “Whenever death may surprise us, let it be welcome if our battle cry has reached even one receptive ear and another hand reaches out to take up our arms.”  Revolutions are full of extremists and their dedication to their cause does not change if the fate of a nation-state or business hangs in the balance.

Having come back to the religious parallel, Brinton eloquently defines the difference between the extremist and traditional religion.  The extremist seeks to find their heaven on Earth in span of their lifetime.  Organized religion creates an afterlife to bridge the gap between what man has now and what man wants.  To the revolutionary, this is a foolish notion, as the revolutionary proposes to fill the gap in the present.  It is at this point that we can realize another important component that supported the revolution in its early stages.  Man has the ability to envision the future and that future is nearly always better – not worse.  The leaders, who are doers, envision a better world.  Their vision may be misguided, but they believe it is noble in nature.  The actions of the revolutionaries, whether in business or in politics are not governed by an objection or a vision of future that is less than present.  Revolutionary leaders do not start a company to change the world because they believe that the net result will be tragedy and despair.  Those who envision tragedy and despair are typically those who are not doers.  Brinton states that “Even if you assume, as the positivist, the materialist, does, that man is an animal and nothing more, a part of nature – and that nature is all there is – it seems reasonably clear that man is unique in nature and among animals in being able to conceive a future” [see Brinton, page 197].  The ability to conceive a future is part of the underlying foundation of revolution and change.  People can envision a future and they can create that model of the future based on an extrapolation of present day facts.  Those who can do that the best, obtain the most amount of money.  This is the art of the venture capitalist, the revolutionaries, the entrepreneurs, and futurist of our time.  They have a vision, a hypothesis of the future, and each day they are seeking to find the path that leads to their vision.

The two objectives of the extremist are the desire to wield power and to achieve their vision of heaven on Earth – but the extremist realizes that these goals are achieved within society.  As such, the pillars of society that enable the old regime to be stable must be instilled within the post-revolutionary society by the new regime created by the extremists.  People are creatures of habit and the old habits that served the old regime need to be replaced with new habits that serve the new regime.  Brinton concludes that the extremists have had to “…invent abstract gods, tribal gods, jealous gods.  Their new faiths have not the maturity of the old.  The have not, despite their aspirations, the universalism of the old.  They have not for the weary and the disappointed the consoling power of the old.  They have not yet gained the power of successful syncretism, the wisdom of the ages.  They are still, in short, revolutionary faiths, more effective goads or prods than as pacifiers” [see Brinton, page 197].  The terror that occurs as part of the accession of power by the extremists is the product of the extremist’s attempts to consolidate power and change the social order.

Why the Terror Occurs

Changing societies and the habits of people are not easy tasks.  They do not occur with a decree of a new law.  The terror that grips all four of the revolutions during the crisis period is the product of seven forces that converge on the revolution in a complicated form.  As we examine the seven forces that converge to create the terror, it is important to note their linkage to the old regimes.  This is where man’s habits of the familiar come into play.  Voltaire said, “As long as people believe in absurdities they will continue to commit atrocities.”  In the revolutions that Brinton studied, as well as in our ITO Revolution, we can clearly identify linkages from the terror to the old regime.  This does not mean that the old regime is responsible for the terror, but rather that elements of the terror can be linked to the old regime.  The history of the old regime and life within the society of the old regime shaped and influenced the outsider as well as the insider.  These experiences affect the out come of events during the terror because people are shaped by the experiences of their past and their actions in the present often reflect some form of linkage to the past.  This is the linkage between the terror and the old regime.

The first characteristic of the Reign of Terror that Brinton identifies is the habit of violence [see Brinton, page 198].  In all the revolutions, the habitual employment of violence does not begin for sometime.  In most of the revolutions that Brinton studied, it occurred months or years after the initial revolutionary act.  The reason for this seems to be that it takes time to reach a social and political state in which the employment of violent means is necessary.  Even the extremists who are the most radical of the revolutionaries do not wake up the day after the revolution and start killing people.  Violence requires people to be pushed into extreme conditions wherein the liberal application of violence becomes not only accepted, but also comfortable and necessary as a course of survival or perceived progress.  When undergoing revolutions, perception is reality.

The second characteristic of the terror is the pressure of a foreign and civil war.  This pressure is a galvanizing force within the nation-state as it clearly sets forth an immediate need for a call to action.  War legitimizes the extremist’s need to centralize power.  In war, people choose sides.  The extremists realize that civil and foreign wars against opposing nation-states provide a litmus test for loyalty to the revolution.  They also realize that a foreign or opposing army is a threat they cannot influence.  Armies are organizations of men who have accepted the need for prolonged and sustained violence.  As we discussed with the first characteristic, when people reach a state at which they are comfortable with violence, they are no longer rational and open to dialogue and peaceful methods of change.

Further complicating the crisis that has engulfed the revolutionary nation-state is the newness of the government [see Brinton, page 200].  The prior government that was composed of the moderates who had assumed power from the old regime was a hybrid of new ways within the structures left by the old regime.  The extremists are no such hybrid.  They are experienced revolutionaries – but they are not experienced leaders of government [see Brinton, page 200].  The new centralized government created by the extremist uses some of the structures of the government left by the old regime and the Rule of the Moderates – but they are new and as such, they do not have well defined channels of operations.  The extremists are simply administratively inexperienced in comparison to the old regime.  Brinton declares that the “…machinery of the Terror works in fits and starts and frequently jams baldly” [see Brinton, page 200].  Conflicts within the new governing administration occur and these conflicts are typically resolved through violence.  As the leaders of the extremists attempt to enforce the creation of their heaven on Earth, they find that the unexpected occurs and their plans are not implemented as smoothly as expected.  Unforeseen challenges occur as people naturally resist change.  The result of these breakdowns and missed objectives is violence.  The extremists are comfortable with violence as their method of conflict resolution.

Each revolution found its roots in a financial crisis for the government – but it was not the nation-state that was undergoing the crisis, but rather the government of the old regime.  As the terror takes hold in the revolution, a real economic crisis begins to affect the nation-state.  The revolutionary process has systematical disrupted the economic machinery of the nation-state.  As the struggle to consolidate power turns violent and the threat of civil and foreign war announces it presence, capital leaves the nation-state.  Businesses are shutdown and people begin to horde and hide items of economic value.  A slow steady decline in national resources begins.  The basic supplies of food, money, goods, and services begin to disappear.  This real economic crisis puts pressure on the extremists to deliver their new panacea – but it is not a revolutionary threat.  Remember the Reagan from the period of the old regimes that revolutions occur when the people of the nation-state are economically prosperous and have time to devote to revolutions.  At this stage of the revolution, the masses within the society begin to enter into survival mode and their actions on a daily basis are very non-revolutionary.

The sixth force that is a component of the terror is class struggle.  This might be perceived as an obvious element of revolution – but Brinton’s studies show that class struggles between the old regime and the revolutionaries are one form of class struggle found in the formative stages of the revolution.  The class struggle that forms during the terror is not the same as the class struggle that precedes the revolution.  In the beginning, the class struggle is the revolutionary element versus the old regime.  The early class struggles can have several variations such as a proletariat versus bourgeois element, religious differences, or a division within the ruling branches of the government.  The early class struggles are strong enough to be a driver of the revolution, but they do not approach the scale and scope of the class struggles that occur during the terror.

The class struggles that occur during the terror are between the multiple contenders for power within the nation-state.  In the Russian Revolution, the struggle was between the Bolsheviks, Kadets, and Whites.  In the American Revolution, it was the Whigs versus the Tories.  In the English Revolution, it was Cromwell versus the King and the moderate members of Parliament who were willing to compromise with the King.  In all revolutions, the extremists are initiating class warfare against the elements of the society that seek a compromise to share power.  Those organizations that were part of the Rule of the Moderates are the enemy.  The class struggle during the terror is also marked by extreme violence and the binary resolution of the problem.  During the early stages of the revolution, the class struggle is marked by social change.  In the terror stage of the revolution, the class struggle is marked by death and the departure of those on the losing side.  As we look at our world in 2004, we find the ancestors of American Tories still living inCanadaand swearing allegiance to the King.  Only with the collapse of the Soviet Union did we find many expatriates from the Russian aristocracy return to their homeland.  Revolutions change society, but the fabric of society that has taken years, decades, and in some societies, centuries to weave is difficult to unravel.  This is why the class struggle during the terror is lethal.  If you cannot change it, the extremists think you must kill it.

There seems to be a seventh force that affects the terror and that force is the determination of the extremists not to compromise.  Politics in a stable society is the art of compromise practiced at a dull and thoughtful pace.  Politics during the terror is decisive, fast, and results not creation of law, but the elimination of opponents.  The extremists who ascend to power are skilled in survival and political intrigue – but they are not skilled in compromising.  This characteristic of the terror forces an unusual set of events to occur in order to force change.  The unwillingness of the leaders of the extremists to compromise will run its course until a large number of insiders defect to the outsiders.  Eventually, the strain of the terror creates within the society a loss of power and support for the extremists.  This may take weeks, months, or years, but the unwillingness to compromise and revert back to politics as usual puts the hardcore extremists at long-term risk.

Crane Brinton closes his discussion of the forces found in the terror by returning to the discussion of religious faith.  In many ways, religion, religious faith, or mankind’s need for faith is a foundation for revolution.  Faith, whether it is religious or agnostic, is a driving force within society and mankind.  Faith is what enables mankind to dream.  Brinton states that “religious aims and emotions help differentiate the crises of our revolutions from the ordinary military or economic crises and give to the reigns of terror and virtue their extraordinary mixture of spiritual fury, of exultation, of devotion and self-sacrifice, of cruelty, madness and high grade humbug” [see Brinton, page 202].  As the forces we have outlined converge during the terror, it creates a cumulative effect on the society.  The economic strains, the class struggles, the open warfare, and the requirement to meet unnatural levels of virtuous behavior, wear on and weigh down the society.  Each break with the past, and the traditions and social order of the past disrupts the social system that had been set.  Brinton states that “…it would seem to be an observable fact of human behavior that large numbers of men can stand only so much interference with the routines and rituals of their daily existence.  It would seem that most men cannot stand the strain of prolonged effort to live in accordance of high ideals” [see Brinton, page 203].  The result of the accumulated strain of the terror is the final stage called Thermidor.  Again we turn to Brinton, “Thermidor comes as naturally to societies in revolution as an ebbing tide, as calm after a storm, as convalesce after a fever, as the snapping back of a stretched elastic band” [see Brinton, page 203].  As we will see in the final phase of revolution, there has been a great upheaval caused by a revolution – but little has been permanently affected as the societies that underwent a revolution return to the social order familiar under the old regime.


The final stage of Brinton’s revolutionary cycle is called the Thermidor Reaction.  Brinton describes the period he calls Thermidor as a “…convalescence from the fever of revolution” [see Brinton, page 205].  In the four western revolutions studied by Brinton, the final stage of Thermidor arrived differently within each revolution.  The exactness of timeline and the transition elements were not consistent across the English, American, French, and Russian revolutions – yet within each revolution a period of Thermidor is clearly identifiable.  Each revolution entered the final stage of revolution on its own timeline, in its own way.  Brinton named the final stage of his revolution model after the final stage of the French Revolution.  It was during the French Revolution that the clearest transition to the final stage of the revolutionary cycle could be identified.  The stage of Thermidor is a reference to the death of Robespierre inFrance, which occurred on July 27, 1794 or on 9 Thermidor Year II of the new French calendar.

In the early days of the French Revolution, Maximilien Francois Isidore Marie de Robespierre who was a lawyer inParisprior to the French Revolution, was elected as a deputy of the Third Estate.  Within the community of French revolutionaries, he gained notoriety for promoting progressive revolutionary polices and his vehement resistance to corruption.  The old regimes of every revolution are guilty of corruption in the eyes of the revolutionaries.  The corruption of the old regimes within each revolution varies in size and scope, yet the revolutionaries are successful in creating a comparison that the old regime is corrupt or not fair and a revolution would bring about a new social order that would be less corrupt and more just.  The revolutionaries are successful in playing to the ebb and flow of feelings of social injustice.  There are times when the social undercurrents are acutely aware of social injustice or inequalities and there are times when little attention is paid to these concerns.  Revolutions always bring about a heightening of the awareness of social inequalities.  The same is true in the business world.  This is exactly what happened post the Second World War in theBritainwhen the population voted to assume state ownership of economic assets to ensure an equitable distribution of wealth.  The same can be argued that the control of the commanding heights of the economy are what drove people to revolt against this economic structure in the late twentieth century.  The evolution from owning the commanding heights of the revolution to viewing the ownership as a limiting factor in economic independence required thirty years.

Robespierre earned the nickname “the Incorruptible.”  His real rise to fame came as the spokesperson for the Jacobin Club.  The Jacobin Club rose out of the Rule of the Moderates to terrorize France.  It was the members of the Jacobin Club who embodied and enforced the extreme policies of the French Revolution as it entered the Reign of Terror and Virtue.  Robespierre was the puritanical spokesperson who was lauded as the oracle of political wisdom during the tribunals and executions presided over by the Jacobin Club during the Terror.  This small group of extremists called the Jacobins used their organizational discipline to appear larger and in control of the nation-state.  When the Jacobins ascended to power, the ruling power of the moderates was diffused amongst many people and organizations.  The nation-state was engaged in a foreign war and these conditions combined to enable the Jacobins to wield, first, influence over the revolutionary public and eventually ruling power.  Robespierre’s eventual arrest and execution was an ironic fate because it was a product of a conspiracy by fellow Jacobins who were engaged in corrupt politics and war profiteering.  They feared that the incorruptible Robespierre, who was the champion of the Reign of Virtue and Terror, would use his power to institute social purity within French society.  The conspirators where successful in having Robespierre arrested and his place secured on the guillotine as a traitor to the French Revolution.  The unintended result of Robespierre’s death was that it galvanized the French population and acted as a signal to begin social healing and a return to normalcy.  Revolutions often begin their inevitable decline when an event of great social notoriety sobers the revolutionary masses.  This is what happened inFrance,England, and the Soviet Union.

The transition to the period of Thermidor is marked by several important events within the society.  The most important of these events is the sense on a personal conscious level that the terror that has griped the society is over.  InFrance, this occurred with the death Robespierre and inRussiait was marked by Khrushchev’s speech to the party denouncing Stalin.  The society within each nation-state begins to recede from the furor unleashed by the extremists during the Reign of Terror and Virtue.  This does not mean that the nation-state is suddenly ruled by leaders who are kind, full of wisdom, and virtuous – but it does mean that the disruption of the social fabric that has been a core activity of the extremists has ended.  InFrance, the fall of Robespierre was met with dance halls opening and prostitutes practicing their trade.  This is the beginning of a return to a social balance understood by a majority of the society.  The revolution did not fulfill the early romantic dreams, but it did change the structure of power and disrupted the social fabric.

The Three Components of the Thermidor Reaction

Brinton outlines three important components that identify the period known as Thermidor.  These components are (a) amnesty and repression, (b) return of the church, and (c) the search for pleasure.  Brinton begins the discussion by noting that in all four revolutions the identification of a tyrant was fundamental to the beginning of the Thermidor stage.  The establishment of the dictator is the attainment of the extreme range of power concentration with a nation-state and market.  Brinton highlights Cromwell, Bonaparte, and Stalin as the dictators who assumed complete and total power over their post-revolutionary nation-states.  Power within the nation-state moves to a dictator because after the “…centralization of power, some strong leader must handle that centralized power when the mad religious energy of the crisis period has burned itself out” [see Brinton, page 208].  The Reign of Terror and Virtue has centralized power, but the extreme state of tension cannot be maintained for an indefinite period of time.  “As time goes on, the pressures the Terror applied to ordinary men are relaxed: the special tribunals give way to more regular ones, the revolutionary police are absorbed into the regular police – which are not necessarily the equivalent of London Bobbies; they man be agents of the NKVD – and the block, guillotine or firing squad are reserved for more dramatic criminals” [see Brinton, page 208].  InFrance, the death of Robespierre left the nation-state to be ruled by small group, who were eventually supplanted by Napoleon.  Cromwell and Stalin both emerged from ruling committees to assume complete and total power within the nation-state.  Only after the death of these dictators, would the nation-states ofFrance,Russia, andEngland return to a state of a plurality of power.  This is the beginning to a return to a state of power concentration in line with power balance during the old regime.

In the revolutions that Brinton studied, the period of Thermidor bore witness to the return to a position of prominence the church that was dominant during the period of the old regime.  In nearly every western revolution, the role of the church within society was attacked during the revolution.  No institution comparable to organized religion exists in the business world to equate the role that religion played in the historical revolutions.  Organized religion provides spiritual fulfillment and moral guidance and acts as a mechanism to foster social unity.  Business markets have trade organizations, unions, and societies that through affiliation provide some of the aspects of the religion, but these groups do not wield the power or play the role of the First Estate in the western revolutions.

The period of Thermidor also bears witness to the return of the moderates, members of the old regime, and the intellectuals who fled the revolution during the Terror.  As the nation-state moves away from the polarization identified during the Reign of Terror and Virtue, the politically savvy moderates deem it safe to return.  In some cases, they begin to take an active role in politics once again.  The signal to return to the nation-state is the elimination of the most violent and extreme revolutionaries.  Predictability and politics, process, and protocols familiar to the old regime return once again.  Brinton writes that the “…more active and violent leaders of the original Terror, they are of course eliminated, either by exile or by death.  They are now declared to have been fanatics, villains, bloodthirsty tyrants, scoundrels.  They become very convenient scapegoats, explanations of the difficulties the new regime has getting things settled” [see Brinton, page 211].

A key identifier of the Thermidor period is the settling of the ruling class.  The new leaders may have been fanatical extremists when it suited their needs, but now that the revolution is beginning to settle and the hot fires of revolution are on the wane, we find that the new ruling class clearly intends to enjoy the privileges of their position and focus on the tasks at hand.  Power still needs to be managed and power is usually concentrated in form of a dictator.  What is not in question is the establishment of a strong ruling organization that is not vulnerable to another revolution or loss of power.  Political power within the nation-state becomes permanent during Thermidor.  The infrastructure of the nation-state is in need of massive repair and the new rulers begin the process of rebuilding the nation-state because this is a mechanism to secure power.   The objective of the new ruling class is not to achieve any of the high ideals of the revolution, but rather to avoid further revolution by stabilizing society around familiar traditions and customs.  Brinton states that “There will be none of the dangerous direct appeals to the people, no risks of great popular uprisings” [see Brinton, page 212].

The role of established religions in the old regimes positioned them as targets for the extremists of the western revolutions.  The religious orders that were strong during the period of the old regimes had become targets for the extremists when they assumed power.  This was primarily due to the fact that the extremists viewed strong organized religions of the old regime to be enablers of the power of the old regime.  In Russian, the Bolsheviks possessed an absolute hated of the Greek Orthodox Church.  InFrance, the extremists attacked Catholics loyal to the Pope inRome; loyalty to God was one thing; loyalty to a foreign Pope was another.  The result of the extremists attack on established religions that they viewed as enablers of the old regime is the return of these religions during the period of Thermidor.

A true identifier of the Thermidor period is the return of the search for pleasure.  The nation-state begins to move away from the Reign of Virtue.  Social standards and high ideals are abandoned.  People are not persecuted at tribunals wherein they are held accountable to standards that few, if any, persons could meet.  The quest to achieve noble standards of a Calvinistic, Robespierrean or Communist social order comes to an end.  The revolution has run its course and it has left many changes to society.  It is now the responsibility of the leadership that emerges from the Thermidor stage to set about repairing the nation-state.  Improving what is imperfect, repairing the damage and setting an acceptable pace and cadence to government.