Transforming Politics in a Digital Era

transitioning from industrial to knowledge-based economies. The combination of binary knowledge expression, immense processing power, and digital networks has created the basis for a fundamental shift in economic and political organization domestically and internationally. This digital revolution holds tremendous opportunity for society and the global economy as new markets, business models, and means of organization emerge. At the same time, however, innovation has an intensely destabilizing effect for broad societal bargains, such as the notion of property, as well as real competitive position, as new entrants take advantage of technology to challenge incumbents. Our concern is how politics shapes this global revolution in society and the economy. Barrowing from Karl Polanyi, we employ the metaphor of a second Great Transformation to drive a discussion about the political economy of the digital era.1 By “Great Transformation”, we mean a fundamental and basic shift in the rules of society that alters the way economy and polity operate. There is one classic example, the Great Transformation that began in England in the 16th century. In this case, the creation by the state of the commodities for land, labor, and money defined the establishment of a market society. Before that transformation