But as societies such as Singapore reach higher levels of development, where more citizens want fewer restrictions on access to the internet, they run the risk of losing the people who are their key resource for competing in the information economy. Thus Singapore is wrestling with the dilemma of reshaping its educational system to encourage the individual creativity that the information revolution will demand, while maintaining social controls over the flow of information.

Another reason why closed societies will become more costly is that it is risky for foreigners to invest funds in a country where key decisions are made in an opaque fashion. Transparency is becoming a key asset for countries seeking investments. The ability to hoard information, which once seemed so valuable to authoritarian states, undermines the credibility and transparency necessary to attract investment on globally competitive terms.

Geographical communities still matter most, but governments that want rapid development will have to give up some of the barriers to information flows that have protected officials from outside scrutiny. No longer will governments that want high levels of development be able to afford the luxury of keeping their financial and political situations a secret.

From a business standpoint, the information revolution has vastly increased the marketability and value of commercial information by reducing costs of transmission and the transaction costs of charging information users. As Adam Smith would have recognized, the value of information increases when the costs of transmitting it decline, just as the value of a good increases when transportation costs fall, increasing demand by giving its makers a larger market.

Politically, however, the most important shift has concerned free information. The ability to disseminate information increases the potential for persuasion in world politics. NGOs and states can more readily influence the beliefs of people in other jurisdictions. If one actor can persuade others to adopt similar values and agendas, that is soft power.

Free information and soft power can, if sufficiently persuasive, change perceptions of self-interest and thereby alter how hard power is used. If governments are to take advantage of the information revolution, they will have to establish reputations for credibility amid the white noise of the information revolution. Democracies will do better than authoritarian states, but at the price of increased confusion. Cheap flows of information have created an enormous increase of channels of contact across state borders. Democratic states are more easily penetrated, and political leaders will find it more difficult to maintain a coherent ordering of foreign policy issues.

Even though there is evidence to support these effects of the information revolution and globalization, it would be a mistake to believe that such effects are irreversible. Technology is only one factor in a complex set of social causes. We should also ask what conditions these trends depend upon, and what it would take to slow, derail or reverse them. For example, would a strong and prolonged economic downturn lead to demands for government response that would alter marketization and globalization? Would "grand terrorism" or the equivalent of a domestic Pearl Harbor lead to a demand for intrusive government, even at the cost of civil liberties? Would the increasing power of states such as China, India or a revived Russia - particularly if accompanied by an expansionist ideology - transform the international system so that the defense functions of government would return to the Cold War model? Could ecological trends such as global warming become so clear and alarming that the public would demand much stronger governmental action?

Such scenarios are worth exploring both as contingencies as well as counterfactual thought experiments to check our reasoning about the strength of the practical rather than the philosophical causes that underlie Fukuyama's argument. So far so good on his central trends, but long before biotechnology changes human nature something unexpected may break the bottle. For non-Hegelians, there is no end of surprises in history.

Joseph S. Nye is dean of The John F. Kennedy School of Government at Harvard University. 

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