DISRUPTION: ECONOMIC FACTORS ON POLITICAL STRUCTURES

Change is a consistency in everyone’s life that can affect one’s career, geographical situation or social status. Some changes occur from planning, while others occur from unpredictable circumstances. Nonetheless, every change challenges one’s general perception - and the potential outcomes are determined by the flexibility and adaptability of an individual. On a larger scale, established structures, in both political and economic realms, face challenges that occur from continuous change as well. Here, the adaptability to change relies on the flexibility of a society to evolve and develop. If an event or specific circumstances drastically challenge the durability of a society or address the effectiveness of the existing structures, it is often referred to as a disruption or a disruptive phase.

Disruption refers to a break with present structures, mostly with a transformative departure from established systems, norms, traditions and frameworks, that have shaped practices, institutions and the perception of society. It involves questioning and dismantling existing hierarchies and ways of thinking with new, mostly more innovative and more effective approaches. These approaches mostly arise from advancements in technology and science, resulting in a disruption within the economic realm. Nonetheless, due to changes within the economic structures and the perception of the society, these challenges - or new realities - will, directly or indirectly, affect the political structures as well. Furthermore, certain events that challenge established hierarchies, for example, within the geopolitical and diplomatic relations between different nations, can also be claimed as a disruption.

This analysis examines the root causes for disruption in the economic realm and the potential adaptations it will cause to political and societal structures. The terms disruption and disruptive phases will be defined, including examples from the past in both realms. Further, the analysis will include potential factors for further disruptions and evaluate, if we are or are not already within a disruptive phase, referring to economic re-constructions due to highly technological advancements. In conclusion, the analysis will provide policy solutions that gather adaptability for development.

Definition: Disruption And Disruptive Phases

Disruption defines an event, trend or objective that challenges established perceptions, ways of thinking, structures, frameworks or hierarchies. A change is generally considered disruptive when it meets one of two criteria: either it stands in direct opposition to the current status quo, or it is irreversible — meaning that the consequences of the disruption will necessarily shape a new reality. When a change challenges the status quo, it often addresses existing hierarchies and societal perceptions. In contrast, an irreversible change transforms ways of thinking, structures and frameworks. While a disruption that challenges established hierarchies and perception is not irreversible, due to the possibility of further developments that enforce the re-establishment of old hierarchies, rupturing structures and frameworks are irreversible. Their outcomes may evolve over time, and the resulting structures or frameworks might not last forever, the knowledge and perspectives they introduce will leave a lasting impact on society, making at least certain aspects of the transformation irreversible.

A deeper understanding reveals that a disruptive change opposing the current status quo is often the consequence of an earlier disruption within underlying structures and frameworks. The ongoing war in Ukraine serves as a compelling example: while it challenges existing geopolitical hierarchies and power balances, it still operates within the established structures of international power relations. This conflict is largely rooted in a previous disruption that had shaped new structural realities: the collapse of the Soviet Union in 1991. That event fundamentally reshaped global order, dismantling a bipolar world and creating newly independent states, including Ukraine. The war in Ukraine, then, is a hierarchical disruption stemming from these earlier structural changes — an illustration of how opposing disruptions pave the way for challenging hierarchies within the structures. Perhaps this is a logical consequence, as when a new framework is developed, actors within the realms will challenge old hierarchies as well. Due to this understanding, we can divide the definition into the terms of structural disruption, which indicates the changes that affect the structures and frameworks, and the dynamic disruptions that illustrate the changes that challenge hierarchies within the structures.

A disruptive phase is marked by a high frequency of structural disruptions. The structural disruptions reshape the fundamental systems and frameworks that underlie societies, economics and political orders, occurring in such rapid succession that the system has little time to stabilise. As a result, established structures become fragile and remain in a constant state of adaptation. This ongoing transformation creates an environment where traditional hierarchies and power dynamics are increasingly challenged and reconfigured as well. In these phases, the pace and depth of change often lead to intensified struggles for influence and control, as actors within the system attempt to either preserve their positions or adapt to the new realities being shaped. Understanding the nature of disruptive phases will help us to evaluate the influence that structural disruptions in the economic dimension have on political structures. Therefore, we need to examine the root causes of economic structural disruptions.

Structural Disruptions In The Economic Realm

Disruptions and their root causes are highly complex, with their influences and effects being primarily interrelated, whether consciously or unconsciously, within the broader field of social science. Particularly in sociology, which has made human society the central focus of its studies, the effects and cascading events that shape societal structures are closely analysed. Inevitably, disruptions find their place within this framework. However, this is limited to the form defined by me as structural disruption. This conclusion arises from insights or theses in sociology, which identify a type of evolution in complex systems – such as human societies – where these do not stand in opposition to a system but emerge from it. This is related to an observation in sociology known as emergence. Emergence in complex systems describes the development of new properties, structures or behaviors that cannot be directly derived from the individual elements of the system. In societal structures, this means that individual actions and interactions give rise to collective phenomena that go far beyond the sum of individual contributions. Social institutions, cultural norms and economic dynamics often emerge from multiple individual decisions without being centrally planned or controlled. These emergent structures can develop a dynamic on their own, shaping societal behavior and, in turn, influencing individuals. This results in complex interactions that lead to often unpredictable developments and can influence the stability or change of social systems.

Following this observation, the context of this concept is complemented by the idea of autopoiesis. Autopoiesis describes the ability of complex systems, such as societies, to create and sustain themselves by autonomously producing and reproducing their own structures and elements. In doing so, they regulate their internal processes independently and develop a dynamic that is neither predictable nor planable, as complete knowledge of all parts of the system cannot realistically be obtained. A popular example of this is political parties, whose organisational interests steadily dominate. The following indicates that structural disruptions are phenomena that do not necessarily have an exogenous origin. Rather, we can conclude that, within a much broader spectrum, disruptions, as they merely find a place in human societies, have an evolutionary character of their own, as they occur within society, arise from societal interactions, and their effects only influence society (the human species).

Within the scope of this article, I focus on the most relevant form, or the most commonly used form of the term “disruption,” namely in the economy, specifically in technological advancements that shape economic systems. Genuine knowledge production, thus, the accumulation and creation of true knowledge, whose significance lies solely in its inherent purpose, is the maxim of human potential and, therefore, a principle that must shape societies, but also have its origin within societal dynamics. The current societal structures are built around the two metrics of money and power, whose relative nature generally leads to less effective structures in societies, as they are hierarchically lower than genuine knowledge production. Regardless of this aspect, in this context, they are essentially relevant to us, as knowledge production, regardless if it is genuine or not, in all areas bear improvements in economic systems, since commercialisation is a central aspect of our society. Furthermore, many achievements are generated solely from the practicality of competitive advantages. Here, I am not denying that a money-centred economic system brings progress, quite the opposite, but it is not the most effective one. This implies that the origins of disruptions lie in the continuous creation of knowledge, which is currently rooted in the principles of market economies to gain a short-term competitive advantage. With those advantages, an economic actor gathers the position of a monopolist, which, in turn, results in two further outcomes: cumulating financial wealth and power for the actor through the monopolistic situation; other actors will expand their research and development as well, to equal the gap in the relative metrics. This compound effect is the reason for the structural change, and even further for the irreversible character of those disruptions. Here it is essential to mention, that this described compound effect is not the problem of money-orientated structures, while the other side of this coin is profit maximisation, which, in fact, leads to ineffective methodological approaches in terms of genuine knowledge production. While the consumption of physical goods that provide crucial benefits for our lives - such as technological inventions, like fridges or washing machines - are great examples of genuine knowledge production, profit maximisation relies on steadily increasing consumption, leading, for example, to unethical ways in which companies manipulate consumer behaviour.

The fact that new technologies are being discussed as revolutionary in this context indicates the aforementioned evolutionary character of disruptions within our society. These technologies are revolutionary because they are changing economic systems in a sustainable way. The currently most relevant and simplest example to illustrate this thesis is the development and usage of artificial intelligence, which is transforming entire economic structures and, furthermore, societal structures, such as government, communication, education and other fields of societal life. This transformative process shows that while the economy is already organising itself around implemented modern technologies, other societal entities have not yet taken this direction, complementing the thesis that disruption is rooted in the economic realm. Another example from the past is the structural changes in communication technology, which not only fundamentally and irreversibly changed the structures of the economy but also clearly illustrated how structural disruptions lead to dynamic disruptions. For example, Nokia was the dominant player in mobile communication technology until the establishment of smartphones, but they fundamentally misjudged the structural changes and lost their dominant market share since then. Furthermore, this structural change led to complex dynamic disruptions, the evaluation and context of which are difficult to empirically substantiate. One idea, however, is the hierarchical changes in the world economy due to changing demand for resources, which then depend on the occurrences of domestic resources or trade agreements. This brief introduction to the definition and causes of disruptions and their links to the economic system, will help us to evaluate the current status and perceptions that will shape the future.

Assumptions And Predictions

Has A Disruptive Phase Already Begun?

The crucial metric to evaluate whether a disruptive phase has begun is the frequency of changes and challenges that can be classified as disruptive. We have not only witnessed a vast number of disruptions since the onset of the digital revolution but also a noticeable acceleration in their occurrence over the last 15 to 20 years. The digital revolution means a general change in the economic realm replacing the industrial mode of economic growth with high technology. These shifts clearly indicate a massive disruption in the established structures, enforcing further dynamic disruptions within established hierarchies. Within the economic realm, we are likely to experience a contraction due to missing opportunities, indicating exhaustion of the maximum potential (The Rolex Theory). As a result of the ongoing disruptions new opportunities occur for innovative actors. While this development is evident, further consequences and conclusions may be obscured for others:

• The development that led to the digital revolution and the establishment of the digital area is enforcing increasing motivation and endeavor for knowledge production among economic participants. Since this era is still at an early age, actors are highly interested in developing monopolistic positions in order to gather long-lasting impact, which ultimately results in accumulating and securing wealth and power. This ambition is clearly reflected in the massive surge of patent applications worldwide since the early 2000s, highlighting the race for innovation and ownership of revolutionary ideas. This race for knowledge production and ownership fuels innovation and will result in a compound effect that will lead to an even higher frequency of structural disruptions as well.

• The dynamics driven by the early stage of the digital era and ongoing knowledge production are naturally forcing dynamic disruptions as well. The structural shift towards the digital revolution has become a key driver for relatively poorer nations to improve their global standing, offering opportunities for rapid development and economic advancement. Aside from the monopolistic actors who developed revolutionary technologies, most national economies initially lacked access to both the technology and the knowledge behind it, leading to an open and competitive race for technological adoption and innovation. This trend results in dynamic disruptions within the geopolitical realm, as power balances shift when the discrepancy in the relative metrics of money and power between two nations starts to equalise. Those dynamics could also be visualised through the aforementioned patent applications, as the People’s Republic of China, for example, is one of the most prominent players in this field, holding the largest number of high-tech patents globally.

This leads to the assumption that there is a disruptive phase due to the quantity of structural disruption that occurred throughout the early stages of the digital revolution. Thus, the limitation of structural disruptions within economic structures and the gathering of power in this context indicates that relatively powerful nations are experiencing disruptions primarily. This trend will likely increase rapidly, leading to new structures, perceptions, hierarchies and ways of thinking. Furthermore, this disruptive phase will lead to a cascading wave of further disruptions, as complex systems, in order to secure their own stability and survival, must, at least in some kind, adapt to their environment. This means that caused by the disruptive phase, mainly in the sphere of affluent nations (as they need to adapt to secure their standing in the hierarchy), will shape new environmental aspects for complex systems outside of this sphere. Especially states that became independent in the last two centuries (due to economic dependence) will be affected by those changes, as the demand for resources or industrial locations will change.

What Are The Influences On Governmental Structures?

Assuming the predictions of an ongoing disruptive phase hold true, the aspect of how to develop political and governmental structures becomes crucial. Therefore, we divide the subject matter into two premises that align with the changes in the economic structures: adaptability and genuine knowledge production.

A state must ensure adaptability in order to remain efficient during disruptive times. Adaptability determines how a state and its policymaking react to both structural and dynamic disruptions. An effective approach would realign priorities in times of disruption, strengthen flexibility to respond to structural changes and avoid being overly constrained by hierarchical challenges. To not be hindered by these challenges, the state must distance itself from rigid goal-setting, focusing instead on strengthening its societal core. The most crucial factor that improves adaptability is the education system and the overall level of education in a society. The ability to identify and navigate challenges requires cognitive skills such as structural thinking, analytical approaches, and the ability to visualise opportunities. On the other hand, a significant obstacle to flexibility is the concept of autopoiesis, where entities in society strive to ensure their survival. These entities, particularly those that rely on old structures, may suffer losses and, in some cases, be permanently eradicated. However, this change is necessary to foster future development. In fact, entities negatively impacted by structural disruptions will likely attempt to resist or deny these changes at all costs. This can be seen in the increasing government spending or legislation designed to block the practical implementation of new technologies, for example. While this scenario has been highlighted in several of our analyses, such decadence only ensures that these nations will remain at a hierarchical disadvantage compared to those that embraced structural change in a more forward-thinking way.

Logically, the primary metric to ensure a state’s flexibility and adaptability is genuine knowledge production. Rather than being a mere by-product of the market economy, a state must establish structures that motivate, compel and force individuals to produce genuine knowledge — the cultural core, as mentioned earlier, determines the specific approach a state must take to accomplish this. Not only does a state in which individuals generate genuine knowledge experience less influence from hierarchical structures, since knowledge production is an absolute and intrinsic goal without any relative characteristics, but it also enhances the overall cognitive skills of society. This increase in cognitive ability ensures greater flexibility in responding to disruptions. In short, disruptions will have fewer effects on such a society, and any minor impacts that do occur can be absorbed due to the higher cognitive capacity of its members. It is important to note that genuine knowledge is not intended to steer society in a specific economic or scientific direction, but rather to foster skills that align with the cultural core and ultimately support the state’s adaptability.

Conclusion

In conclusion, the initial insights into the dynamics of disruptions and disruptive phases aim to provide a foundation for evaluating one’s perspective on changes in the political landscape. By understanding the root causes of disruptions and exploring additional approaches that may not have been covered in this analysis, a more comprehensive understanding can be developed regarding the functioning of political structures. This broader view helps to recognise how disruptions shape not only the immediate political environment but also the long-term evolution of societal frameworks. Furthermore, a key takeaway from this analysis is the importance of genuine knowledge production, especially in times of disruption. It enables individuals and institutions to adapt, innovate and navigate through shifts, acting as both, a stabilising force and a catalyst for progress, developing the cognitive skills needed to react effectively to change. Ultimately, reinforcing the foundations of knowledge production ensures that societies become independent of hierarchical transformations, due to the intrinsic nature that shapes their resilience to metrics based on relative values.