Part 1: Rethinking Disruption: Technology Convergence and Organizing Systems Driving Societal Transformation

1.1 How the Smartphone Disrupted the Oil Industry

The introduction of GPRS technology (2.5G) allowed data to be sent all the time, increasing transfer rates dramatically. Touch screens worked well enough to use (2007). With sensors, processing power, and energy dense lithium-ion batteries also now in place, this was the last piece of the jigsaw.

The iPhone was born through technological convergence – the coming together of key technologies at a particular point in time to enable the creation of an entirely new product or service at a competitive cost.

Adoption was non-linear and followed an S-curve – in all technology disruptions the pace appears slow at first because a new product has less than 1%-2% market penetration, then hits a tipping point and accelerates through an exponential phase until the product nears about 80% of the market, at which point growth slows as the market reaches saturation.

Hamstrung by protecting their existing product suite and locked into existing business models, thought processes, cultures, and incentive structures that favor incremental progress over disruptive innovation, incumbents find it difficult to develop and adapt quickly enough to entirely new product architectures, business models, or success metrics.

At the same time, the arrival of the smartphone triggered destruction of value. The market share of Nokia slipped from 51% of the market in Q4 2007 to less than 3% just five years later as net sales slumped 75%. Cameras were included in smartphones and as their quality improved, standalone cameras (both digital and what was left of the film market) became largely redundant. The same can be said of MP3 players, GPS navigation devices, and handheld gaming consoles.

Social lives were transformed as smartphones revolutionized how we communicated, made friends, and managed our networks. The way we found jobs, worked, shopped, and entertained ourselves changed almost overnight. The arrival of social media had an even greater transformative effect, completely upending traditional channels not just of communication but of information, as individuals could for the first-time bypass traditional sources of news and analysis by creating their own content and sharing it with billions of people at the touch of a button.

Uber (founded in 2009), Ola (2010), Lyft (2012), and Didi (2012) have decimated the taxi markets in their respective countries, offering cheaper and more convenient rides. Often hamstrung by century-old regulatory models, licenses, or expensive medallions, established taxi operators have been unable to respond, other than by evolving into ride-hailing services themselves.

The improvement in lithium-ion battery costs, driven initially by the consumer electronics sector and then by the smartphone market, means electric vehicles (EVs) are now disrupting the high end of the gasoline vehicle market and are about to disrupt the mainstream market. The all-electric Tesla Model 3, for example, is now one of the best-selling cars in the US.

The convergence of ride-hailing, AVs, and EVs will soon create an entirely new form of transport known as Transportation-asa-Service (TaaS) – essentially robo-taxis. This will be dramatically cheaper than car ownership, costing up to 10x less per mile and saving the average American family more than $5,600 a year, and trigger a rapid disruption of the gasoline car, bus, delivery van, and truck markets.

In the past, we needed the car to go to a restaurant or shop for food, but today a host of companies such as Amazon, Uber Eats, and GrubHub deliver fresh produce and ready-made meals to our front door. In the past, we needed a car to go and see a movie, but today streaming services like Netflix and Prime offer a monthly subscription to tens of thousands of movies and TV shows for less than the cost of a theater ticket.

1.2 How the Car Transformed Society in the 20th Century

In 1890, a skilled butcher took eight to ten hours to slaughter and dress a steer on a farm. Chicago meatpacking factories did it in 35 minutes. The innovation that made this possible was the moving disassembly line, where animals were slaughtered, butchered, processed, and packed before being shipped in railroad cars around the nation quickly and efficiently. Henry Ford rethought and flipped this model into a moving car assembly line, lowering manufacturing time and costs by an order of magnitude.

Car sales grew from less than 5% of the vehicle fleet in 1905 to more than 95% in 1925. Adoption happened along an S-curve, with a 10-year phase between 1910 and 1920 taking market penetration from 11% to 81%. But this growth was not just a replacement for carriage sales – the car created a whole new market for transport where none had existed previously.

The trusted horse eventually came to be seen as increasingly outdated, dirty, and obsolete. This change in public perception acted as a powerful accelerator of change and happened despite an active resistance campaign from incumbents.

By the 1930s, one in every seven Americans was in employment linked to the auto industry. Whole new industries in auto insurance and finance appeared. The car ushered in the shopping mall and changed the very structure of the retail industry. The impact on raw materials was equally profound as steel, oil, and rubber replaced iron, animal feed, and wood. In just 10 years, the auto industry went from a minor buyer to becoming the leading consumer of steel, with demand skyrocketing from 70,000 tons in 1910 to one million tons by 1920. Increased investment in the steel industry as a result pushed costs down further and brought innovations like corrosion-free stainless steel, which opened new possibilities in applications from surgical implants, food and beverage equipment, and construction.

The car industry also played a more direct role in the growth of the U.S. middle class by raising incomes. In 1914, Ford doubled its workers’ wages, raising eyebrows throughout the industry and beyond. Two years later, profits had doubled and within seven years it owned half the U.S. auto market. 

Its introduction led to huge changes in the built environment as houses, towns, and cities were redesigned around this radical new form of transport. It changed where we lived and worked, and where we built our schools, shops, hospitals, and factories. For the first time, people moved out of towns into the suburbs in huge swathes and needed cars to commute to and from work. Meanwhile, drive-in diners, movie theaters, malls, and big-box stores all became part of the urban landscape.

The car also played an important role in our culture, helping drive the first phase of the sexual revolution as young people found new ways of escaping parental control, while giving people of all ages far more independence and opportunity. The driving test became a cultural rite of passage for teenagers.

Occasionally, a convergence of factors triggers a phase change.

• An incumbent system is kept stable by constraining factors that act to resist change. These brakes can weaken over time.
• Technologies improve in cost and capabilities and converge to enable a disruptive new product or service to outcompete an existing one.
• Disruption happens quickly, despite perceived barriers including strong resistance to change. These barriers are not constants, but variables.
• Adoption is non-linear and follows an S-curve. It is driven by accelerating feedbacks that affect the cost and capabilities of products, demand, supply, and regulation.
• Economic destruction of the existing industry happens early, before the new disruptive industry reaches maturity, and the impact is often disproportionate to the scale of change. Leverage (both financial and operating) means that a small downturn in demand can bankrupt an industry. 
• Disruptors tend to come from outside the incumbent industry. Incumbent mindsets, incentives, practices, and business models blind existing businesses to the new reality. 
• A linear, mechanistic, siloed mindset prevents us from seeing the speed and extent of disruptions in advance.
• Disruptions represent phase changes – they are not just the like-for-like substitution of technologies. They enable new business models, metrics, and incentives. The new system can be fundamentally different to the old in terms of the structure of the value chain, how value is delivered (business model), the metrics and incentives that drive consumers (demand), producers and investors (supply), and policymakers (regulation).
• Disruptions open up possibilities across the value chain, connected sectors, the wider economy, and society. Disruptions of foundational sectors have profound impacts that ripple across not just the economy but the whole of society. These impacts can act as feedback loops impacting the cost and capabilities of technologies and other aspects of the system, acting as secondary drivers of disruption.

Almost all analyses from government, NGOs, banks, consultants, and other prognosticators are linear in three dimensions:

1. Linear Trends. Extrapolating past and present conditions and trends as a heuristic to predict the future.
2. Linear Causality. Treating the system as simple and mechanistic – A causes B and “all else remains equal” (only accounting for first order effects of change).
3. Sector silos. Treating each sector of the economy as its own independent system, whereas in fact everything is interrelated.

The linear approach is a reasonable approximation of the future during periods of incremental progress, when self-correcting feedbacks (brakes) dominate and constrain change, but it is woefully inadequate as disruption approaches and self-reinforcing feedbacks (accelerators) take over.

1.3 How the Printed Book Enabled Europe’s Breakthrough

Trade slowly began to flourish as trade routes were gradually reopened and ideas developed and spread as southern Europe began to prosper once more. The increasing availability of capital in the hands of the merchant class and the developing universities helped nurture a new thirst for knowledge and innovation. The Mediterranean region again became a melting pot of ideas and concepts developed locally, rediscovered from earlier times, and imported from the East (where a higher level of technological capability and social complexity had been maintained). Attracted by the increasing openness to ideas and people of Renaissance Italy, by 1500 around 5,000 Greek intellectuals had migrated to Venice alone.

• They brought secular scholarship, knowledge, and ideas that defined Europe’s new identity and brought lasting change. The result was a dramatic rise in the number of manuscripts published in Europe starting in the 12th century, creating further demand for information and knowledge.

Europe had hundreds of states (cities, republics, and kingdoms) competing for trade, technologies, and people in a way that China did not. New technologies need the right governing structures and societal conditions in which to flourish. For the printed book, Europe, rather than the then-dominant East, provided this environment.

Again, a convergence of technologies was the catalyst.

• Parchment, made from sheep, goat, cow, and other animal skins, was the main technology used by European scribes throughout the Middle Ages. But parchment was expensive – more than 200 sheep were required to make one Bible.
• A new technology in the form of paper was brought to Europe in the 12th century from China by Islamic traders and by the 15th century it had largely replaced parchment in manuscript production.
• The first key enabling technology was now in place, but advances in ink technology, metallurgy, and machining, leading to the invention of metal, movable typeface, were necessary to make the printing press possible. The cross-pollination of technologies across different sectors was key – the first printing press was a modified wine press traditionally used to press grapes and olives. All these technologies came together in the 1450s with the invention of the Gutenberg Printing Press.
• A page could now be printed in just a few minutes, 200 times faster than handwritten manuscripts. The first paper Bibles that came out of Gutenberg’s workshop in around 1454 cost 30 Florins – 10x less than a manuscript Bible.
• Competition, technology improvements, and scale pushed book prices down even further. By 1483, the cost of printing had fallen so far that the Ripoli press in Florence charged three Florins for 1,025 copies of Plato’s Dialogues, whereas a scribe would charge one Florin for a single copy.

The book invited personal reflection and abstract thinking that helped give rise to individualism. Centuries of received wisdom were soon overturned. The church and state began to lose control over access to information.

• The printing press was also instrumental in the spread of ideas of the early humanists such as Petrarch and Renaissance philosophers such as Pico della Mirandola, which in turn laid the foundations for the Enlightenment and Scientific Revolution. This information revolution enabled and then fed into ongoing developments in science, technology, philosophy, and the arts and enabled an acceleration in the development and diffusion of ideas. Francis Bacon, Isaac Newton, John Locke, Galileo, Descartes, Darwin, and others found new ways to understand and explain the physical world and develop the scientific method that underpinned the new mechanized system of production that emerged through the Industrial Revolution.
• Empiricism and the scientific method replaced religion as a more effective way of explaining the world. City states coalesced into nation states as the emerging production system required greater scale and reach to compete. Monarchy was replaced by democracy and the church separated from the state. Freemarket capitalism overturned feudal systems and the barter economy and individuals became empowered to receive rewards for their efforts.

Organizing Systems evolve in ways that resemble biological organisms – those best suited to the economic, technological, and geographical conditions in a given era or place thrive and are replicated. Copy, paste, and adapt, either through mimicry or conquest. The various components that make up the Organizing System should not be thought of as mechanical parts, but as subsystems that interact and overlap with each other. There is no ‘right’ combination in any era or society and the evolution of each aspect and the combinations that develop are not planned or designed, but emerge (self-organize) over time through experimentation (trial and often painful error) and competition.

The importance of geography changes over time and is dependent on the technological capabilities of an era – an early civilization might be dependent on the fertility of the soil and availability of natural resources immediately surrounding it, while a civilization with more advanced transportation and energy technologies can free itself from these constraints and access fertile soil and materials further afield.

Organizing Systems have the capacity to adapt to changing conditions – essentially broadening the range of conditions in which they can function and thrive – but their adaptive capacity is limited in speed and scale. Historically, fundamental change in societal capabilities has happened only when civilizations collapse or as new civilizations break through, when a new Organizing System emerges to replace one that can no longer adapt fast enough to order-of-magnitude improvements in technological capabilities.

Part 2: Rethinking the Past: The History of Humanity

2.1 Humanity 1.0: The Age of Survival

Humans were organized into small groups limited to dozens or hundreds of individuals. These communities, egalitarian by necessity, had little use for belongings that served any purpose other than survival. With no means of storing food, most of their time was spent planning, finding, and gathering food, energy, and materials.

Humans had to live according to nature’s seasonal and climatic flows. They had to be agile and mobile. Leadership was distributed and cooperation was critical to survival as the needs of the group trumped those of the individual. In this system, hoarding and competition within groups were existential liabilities to be avoided and punished. Human activities were local and largely sustainable, despite some mega species extinctions and localized deforestation and landscape change.

The major technological discovery of the Age of Survival was fire, which provided warmth, protection against predators, and heat for cooking, as well as triggering the development of advanced hunting tools. Fire also allowed humans to become more mobile and migrate farther to more diverse geographies.

First, we need to survive, which includes procuring food, water, energy, shelter, and physical security and safety. Staying alive and staying safe. Second, we need to grow. Physical (or horizontal) growth refers to individual and societal reproduction (population expansion, suburbanization, and colonization), which expands at the expense of other human and non-human populations. Spiritual (or vertical) growth can collectively be described as the need to flourish or thrive – the need for purpose, creation, connection, self-improvement, and self-actualization. Human consciousness and behavior manifest themselves in different ways depending on how these needs are met within the context and the circumstances of any particular time.

During the Age of Survival, estimates suggest that the earth could optimally nourish about 8.6 million people living on hunting, fishing, and gathering, although human populations experienced high volatility, with numbers possibly dropping as low as 1,000 to 10,000 individuals around 70,000 years ago. By the end of the Age, the world’s population was probably around four million.

2.2 Humanity 2.0: The Age of Extraction

Initially, agriculture was inferior to foraging as it offered a lower quality and smaller variety of food for a lot more work. Cities were also inferior in many ways – for example, higher population density (of people, crops, and animals) created the conditions for infectious diseases to spread.

After millennia of experimentation, city dwellers developed the production and Organizing Systems that brought food surplus, manufacturing, and trade, which enabled them to organize and support greater numbers of people, opening up huge possibilities for humanity.

• Freed from the need to forage to survive, humans could specialize and innovate in areas like information, food, transportation, energy, materials, and social and organizational structures. Trade allowed plant and animal hybridization techniques to spread, which enabled higher food yields from existing land, which in turn led to larger populations, deeper specialization, and new skills and technologies that expanded the possibilities further.
• As emerging cities developed, they found new challenges around productivity, monoculture, and overcrowding to overcome, such as disease, pestilence, and the need for food storage and imports to survive seasonality.

Extraction became the prevailing system of production and exploitation emerged as a core principle of the Organizing System. Cities harnessed resources and people from as far afield as their technological capability allowed in order to force feed their production systems. They took what they found in nature and harvested them to break down, process, and produce the things they needed or wanted, namely food, energy, and materials.

• Early civilizations found themselves locked into a competitive system driving an underlying need for growth. A world of plenty turned into a scarcity-based system of production where the winner takes all.
• The easiest and cheapest resources to exploit were used first and depleted. Subsequent resources became harder to access and required either increased technological capabilities in extraction or production or the ability to reach and access new resources.
• Once the growth imperative was unleashed, a self-reinforcing process of predatory competition for control of, or access to, resources was inevitable, and with it the need for military power to exploit land, materials, and labor as rapidly-expanding cities competed with one another for finite resources.

Limitations of transportation and communication technologies gave rise to a cluster effect for cities and the centralization of institutions and systems of governance to control and manage civilizations. This centralization was reflected in increasing hierarchies as societies evolved.

• Humanity’s successful Organizing Systems were no longer based on sharing, generalist skills, and equality, but on ownership, specialization, and inequality. Leadership was no longer distributed but controlled directly from the center. Storage and hoarding were no longer punished, but rewarded.

The growth imperative was, however, counterbalanced by a deep-seated need for stability. For societies to thrive and continue to advance and grow, they needed self-stabilization mechanisms. Growth without social stability led to disorder and collapse, while stability without growth led to stasis and being left behind.

• The Organizing System, through its belief systems, culture, and governance structures, played a critical role in creating the push and pull necessary to balance the need for growth with the need to maintain stability.

2.3 Rethinking the Lifecycle of Civilizations

A crude proxy for societal capabilities is the size of settlement that can be supported by a civilization. The maximum size of a city is determined by the technologies and the Organizing System (and geography) of the day. Looking back through history, a recurring pattern is clear to see – large jumps in societal capabilities (core city size) followed by a new equilibrium, followed by collapse into a dark age.

Historically, just as we saw with sector disruptions, breakthroughs are often led by outsiders with access to, and knowledge of, pre-existing technologies, but without the baggage of incumbency of operating within an antiquated Organizing System and the resistance to change that comes with it. Never has the leader of one order made the adaptations necessary to break through and lead the next, higher order.

While civilizations are expanding geographically, riches and resources flow in increasing quantities to the center, generating the wealth needed to improve living conditions and maintain the support of a growing core population. But as the geographic limits of their production and Organizing Systems are reached, these riches and resources dry up, with diminishing returns to further expansion as control or influence of far-flung provinces becomes increasingly expensive and ineffective. Without this increasing surplus from expansion, growth begins to slow. The emergence of rivals with similar capabilities can exacerbate this problem.

• At a certain point in their expansion, civilizations pass a threshold and enter a ‘buffer zone’, within which they can still survive or even thrive for relatively long periods of time. However, with their centralized, brittle structure, they have limited ability to react to shocks that impact their productive capacity and ability to sustain themselves – single points of failure that render the whole inherently fragile.
• These shocks can be environmental, military (wars and invasion), sociopolitical (inequality or over-exploitation leading to rebellion or civil war), or pandemics. Environmental shocks can be exogenous (historically), such as changes to climate and rainfall patterns leading to drought or inundation, or they can be self-inflicted, such as decreasing soil fertility caused by over-irrigation, soil salination, deforestation, or intensive farming, all of which affect the ability of a civilization to feed itself. Over-exploitation of scarce resources can likewise impact energy or material supplies.
• As they reach the limits of their geographic spread, civilizations can no longer expand to exploit more land or resources to overcome these shocks.
• The impact of the end of the expansionary period can be compounded as narrow, embedded interest groups (religious, warrior, monarchical, commercial, or aristocratic) seek to improve their position further. Without the easy gains from expansion, they increasingly extract rents from within society, aided by Extraction Age economies of scale that lead to a centralization of wealth. These groups can capture governments at many levels to privatize and concentrate wealth and profits, while socializing risks and waste. The end result is an extractive feedback loop where more profits accrue to these interest groups. The end result is a concentration of profits and wealth in fewer hands, an increase in inequality, and a decrease in social cohesion and support.

Organizing Systems harden at a time when they need plasticity to adapt. The faster change happens, the more unstable the system becomes, which leads to an increasing desire for social stability and maintaining the status quo.

• The extractive, exploitative, winner-take-all production system is concerned mainly with maximizing income from useful outputs for the center. Both the finite nature of resources and the human and social impacts from production are ignored. Civilizations that go too far in correcting for them handicap themselves competitively in the long term compared with those that do not, creating an inherent conflict between short and long-term interests. All previous leading civilizations were blind to the long-term effect of these impacts until it was too late, prioritizing the short over the long-term and the narrow over the common interest.

Without the possibility of geographic expansion, growth can only come from breakthrough – order-of-magnitude improvements in technological capabilities and a new Organizing System that allow civilizations to produce more from their existing footprints. The only other choice is to cut consumption to live within the existing system’s means, which is almost impossible to do voluntarily when the fundamental beliefs, institutions, and reward systems that led to its success are based on driving growth. These two options are in direct conflict – cutting the scale of production reduces the surplus available to support the investment in innovation needed to break through.

Civilizations soon enter a death spiral. Reductions in the productive capacity reduce the surplus available to feed the core power structures, such as the state bureaucracies, and economic, military, and religious elites. As the surplus shrinks, social expenditures such as education, water, health, social services and technology development are cut, leading to a reduction in support for the system and further lowering of productive capacity. In the face of collapse, rather than adapt, civilizations have tended to re-double their efforts on what had worked previously – more extraction, more walls, more blood sacrifices, or more power for the center of authority, be it king, emperor, or the elites that endorse them. Such actions, while positioned as solutions, are Band-Aids on a system on the verge of collapse. More than that, they accelerate the breakdown by exacerbating the very problems that are causing it. The negative feedback continues as taxes and debt increase and currencies are debased, selling the future to pay for the present, further destabilizing an already brittle and unstable system.

• Every leading civilization, from Çatalhöyük and Sumer to Babylon and Rome, has collapsed in this way, unable to adapt and break through the capability frontier of their order. Dark ages followed, representing a reversal of social complexity and a collapse to a lower level of capabilities. This process of collapse happens remarkably quickly – all the leading millenary civilizations in the Fertile Crescent and Eastern Mediterranean world collapsed in just one hundred years (between 1250 and 1150 BCE), many of them never to return.

The process of change mirrors that at a sector level:

• Breakthrough is driven by convergence – dramatic improvements in technological capabilities in foundational sectors to create the potential for an order-of-magnitude improvement in societal capabilities.
• Civilizations that develop the best combination of technology and Organizing System increase their capabilities rapidly and outcompete others.
• Over time, the Organizing System becomes more embedded and less adaptable.
• As civilizations reach the limit of their expansion, the context is set for collapse and the baggage of incumbency prevents the adaptation needed to break through.
• A shock to the system, such as environmental degradation, increasing inequality, or increasing financial and social instability, can push it out of equilibrium and lead to collapse.
• Civilizations lose adaptability as they approach collapse, blinded by incumbent mindsets, beliefs, incentives, and interests. They double down on what brought them to greatness instead of adapting to the new reality.
• The existing system collapses before the new one emerges. This manifests in a dark age that can last for hundreds of years.
• These periods of change represent a phase change.
• Change happens quickly.
• The emerging leaders come from the edge of the old system.

As the Roman Empire collapsed, the Mediterranean basin and its hinterlands plunged into a new lower order known as the Dark Ages. Technological and organizational capabilities regressed dramatically as Europe fractured and was overwhelmed by religious dogma, poverty, violence, and ignorance. For centuries, even the ruling elites, including emperors, kings, and knights, were illiterate. From the 8th to the 10th centuries, Europe’s main export commodity was its own people – enslaved humans.

While the first printing presses were small and distributed, small print runs of perhaps 100 copies turned into much larger print runs of 500 copies or more. Economies of scale pushed the system to become more centralized, as profitability required more copies of each publication to be printed. The invention of the telegraph and telephone then allowed for direct, person-to-person communication.

• High costs of infrastructure, scarce distribution channels, and economies of scale led to centralization and high barriers to entry. As a result, large newspaper groups controlled the flow of news.
• The emergence of radio and television followed the same model of centralized access to consumers, providing a degree of control over the flow of information. Centralized regulation controlling a limited number of channels emerged to match this structure – governments could regulate newspapers, TV, and radio and influence the messages they delivered.

Steam power developed as Thomas Newcomen and then James Watt developed the steam engine.

• This invention enabled the creation of disruptive products across many sectors including transportation, mining, energy, agriculture, and manufacturing and kickstarted the Industrial Revolution. 
• Steam ships, trains, cars, and planes allowed access to the whole world with an order-of-magnitude improvement in speed and range.
• A centralized system of production on a greater scale than ever before emerged to harvest, extract, and process resources and to distribute the resulting outputs.

New models of thought, belief systems, and conceptual frameworks from the Renaissance and Scientific Revolution gave rise to new political, social, and economic systems that, together, grew to influence, manage, and control the actions and behaviors of hundreds of millions of individuals across the world. The need for scale, reach, centralization, and hierarchy that defined the industrial system of production was reflected in the industrial governance structures, institutions, and in geopolitics.

Religion, which had served a purpose both in explaining the world and in governance through the Dark Ages, no longer offered a competitive advantage. It was unbundled and replaced by empiricism and democracy, its purpose shifting to providing social compliance, a sense of purpose, and stability. Those states that separated church from state and embraced scientific thought progressed far faster than those organized around religious dogma.

• Occasionally they flare up, cause damage and are surgically removed but, in general, their importance diminishes in leading nations – monarchies remain, stripped of their absolute power, and religious and racist dogma fight to return to an imagined golden era.

Scientific thought sought to explain the world by breaking it down into ever smaller pieces, focusing on simple, linear cause and effect. This reductionist thinking, which could explain the separate parts of the world down to a sub-atomic level, was well-matched to the emerging technologies and system of production. It was reflected in education, industry, science, academia, government, and in the increasing specialization of labor, as the complexity of the whole was broken down into manageable parts, disciplines, or departments.

No one country needed direct control of every other nation, merely the power with allies to exert enough influence to ensure access to resources and markets. Global governance structures, institutions, and agreements also evolved to cover issues that required cooperation beyond national borders, but these were designed to further the interests of the nation states’ centers of power, not to replace them.

• Democracy emerged as the best-adapted system of governance, enabling self-organization, experimentation, competition, and adaptive decision-making. It allowed election on the basis of merit (to some degree) rather than inheritance.
• No longer could a small core dominate the wider population through violence, fear, or a belief system that bred subservience (push). New systems that focused on the pull of reward and incentives and the perception of individual freedom outcompeted other alternatives.

The need to incentivize growth within a framework of resource scarcity led to a tension between tolerating (or encouraging) inequality to drive growth and the need for social cohesion. Successful societies managed to maintain the support of both an expanding core and the exploited masses in order to survive by redistributing wealth to maintain stability.

• The social contract that emerged allowed individuals to trade their labor for capital and offered some form of safety net and growth opportunities to most citizens. This contract allowed millions of people to self-organize, start new businesses, and drive the system of production to a vast scale. It created incentives and security to invest in the development of their skills and knowledge, driving specialization and growth at all levels.