Networks and Power | Niall Ferguson

[Music] good evening i'm nicholas paul bryce wits director of development here at the long now foundation and as always i want to thank you for joining us tonight by a quick show of applause how many of you out there tonight are stainless steel card-carrying members of the long now foundation that's that's incredible our membership program is about to clear 10,000 members across more than 60 countries and that membership really has become the foundation of our foundation your regular support is a significant fraction of our overall operating budget every single year and it allows us to do what we do so in a very real way we couldn't do that without you so thank you the other significant fraction of our operating budget comes from our annual fundraising campaign at the end of every single year like many nonprofit organizations the long now foundation raises an astounding percentage of our operating budget between now and the end of the year and this this regular season allottee means 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equation of time cam that's made out of bronze the donation that gets it is $2,500 and since the unit cost on those beautifully crafted things is about $900 it's a pretty good deal the conceit of long now foundation is that we're sort of in the midst of a 20,000 year story of civilization dating back to the first towns and agriculture and dating forward to what remains to be seen and what remains to be done and in consequence we're sort of in love with historians who are all about telling the long story in ever new ways and civilizations story is basically a story of argument swarms of arguments and these arguments get played out and firms often of power there's an argument about economic power as arguments about political power arguments about military power and from time to time arguments about the whole mode that power gets played out in and that's what we hear about tonight from historian Niall Ferguson [Music] thank you very much indeed Stuart it's a great pleasure to be here tonight thank you for braving the air to join us you may have heard it announced today that the annual White House Correspondents Dinner will no longer feature a comedian but a historian which made me think that perhaps history was the new comedy I do not intend to give you stand up tonight let me disillusion you what I want to do is talk about networks and power I'll be talking quite a bit about what's in my most recent book the square and the tower but I'll also be trying to go a little further than I did in that book thinking about what we need to do if we are to manage what has been created the extraordinary giant online social networks made in Northern California in our time the law now I guess is an attempt to situate the present and I have always admired what Stuart and his colleagues have done in helping us to understand our position in a continuum of human history over thousands of years but the corollary of the long now is the short then and the short then is a phrase that hit me as I was hurtling up to 80 this evening what I want to convey to you is how near the past is and how relevant it is to the problems that we confront today and that some of the things that we know about events 500 year ago can illuminate our long now if you want to get a handle on that relationship between networks and hierarchies that central to the square and the tower jota's Sienna one of the most beautiful towns in all of Italy and look at the extraordinary juxtaposition in the center of Siena of the Piazza del Campo the square one of the most beautiful squares in all of Italy and the Torre del mangia which casts a long shadow over is the square is where the people of Siena networks where they hang out chat informally exchanged whether in a marketplace or even in a horse race between the local districts the tower was part of the Palazzo publico where the government of the Republic of Siena was located and one of the ideas I want to convey to you tonight is that we today also live our lives partly in a square partly in the realm of social networks but also partly in the realm of hierarchies I'm a kind of networks person I've always hated hierarchies I would have been terrible in the military even academic structures of governance slightly unnerved me I became an academic because it seemed to me that universities were the least hierarchical of organizations and so I gonna naturally prefer to be in the horizontal realm of the Town Square but I can't escape the hierarchies of universities and of governments whether we like it or not we're all situated partly in the square and partly in the term now it's a cliche of our time but like many cliches it's true that the world has never been as networked as it is today and that is I think the case certainly when you look at the way the network platforms Amazon Google Facebook Twitter the way those companies have built giant online social networks there's never been anything quite like that before today's networks are very large and they're fast they operate much more rapidly than previous networks could because of Technology I quite like this visualization of the Facebook network put your hand up if you're on Facebook go on don't pretend you're not so to an extraordinary extent mankind is on Facebook two point two seven billion regular users and this map tries to plot every city pair with what's called a Great Circle Line and the transparency of each of these great circle lines is determined by the number of friend pairs in the cities hence the extraordinary brightness of North America where Facebook originated and the extraordinary darkness of the People's Republic of China where it's still not admitted we were told and I think most of us believed it that if everybody was connected then everything would be awesome we are creating a world where anyone anywhere may express his or her beliefs no matter how singular without fear of being coerced into silence or conformity John Perry Barlow the late lamented epitomized the libertarian spirit of the the early internet and the idea that if we're all connected it will be awesome has persisted in much that mark Zuckerberg has said as Facebook has grown this was him speaking at the Harvard commencement last year all people want to connect the great arc of human history bends towards people coming together in ever greater numbers to achieve things we couldn't on our own that was the promise I think most of us believed it and then came 2016 the annus horribilis of the liberal internet political events first in Britain in June of 2016 then in the United States in the member November of 2016 km as a huge shock because it turned out that the network platforms that the tools that had been created by Silicon Valley could be used for purposes that were certainly far from utopian I got to know Evan Williams recently he's a really nice guy very impressive but he said something last year that went to the heart of the matter I thought once everybody could speak freely and exchange information and ideas the world is automatically going to be a better place I was wrong about that and I think most of us were wrong about that and I think we all need to say to ourselves what Homer Simpson often says to himself well though the square in the tower is is about why it all went a bit wrong and in particular why both networks science and history should have made as much more wary of the promise of a massively insecure nectars planet now I say Network Science and History because part of what writing the book helped me do as an historian was to learn much more about network science than I had known before a lot of my career had been spent writing about networks partly because I'm temperamentally drawn to them as I said before I always found government archives slightly stuffy places but private papers their archives of companies that always appeal to be more but I used the word the word Network very casually like most people do I'm going out networking tonight I hadn't really understood the six great laws of network science and it was when I started to read Network scientists work like say laszlo barabasi 'he's amazing book linked or i started to read Nicholas Christakis his work on social networks I suddenly realized this applies to history and if we only think about history using these tools we'll we'll see it through completely fresh eyes once you understand the basic conceptual framework everything the present the past and potentially the futures that we confront looks different if I could graph the social network of you all as they say in Texas if I could just know a little bit maybe a lot about you all if I could get Mark Zuckerberg to give me all your data which he he used to do but it's got a little tougher then I could graph the network to me you just be nodes and the relationships between you would just be edges and what would be fascinating would be that this would not be a lattice in which each node had the same number of edges as the rest no social network was like that there would be clusters some of you are quite closely connected there's a little inner circle of long now lifers and then then there would be the network isolate the person who came in here by mistake thinking it was jazz doesn't know anybody here doesn't know who the hell I am bit too embarrassed to get up and go yet the hub of this network would be Stewart Stewart has the highest betweenness centrality because for any two nodes in this network to connect the quickest way is almost certainly through Stewart Brand as I delved into this way of thinking about society and the connections between people It was as if scales fell from my eyes and I began to see past work that I'd done in a completely different light so what I'm going to do is I'm going to tell you the six great truths about networks borrowing from the work of network scientists and then I'm going to do the big analogy because if you want to get from the the long now to the short then what you need is a big analogy that's the history piece and then in the fourth quarter I'm going to as you're all beginning to nod off or check your devices I'm very i've got eagle eyes for device checkers our cold call anybody I see on Facebook in the final quarter I'm going to tell you what this implies for our present predicament and what we need to do that's not in the book so you'll be in a unique position birds of a feather flock together okay if we did the social network if we graph the network in here it'd be quite interesting if we found what often turns out to be true of social networks that there were two rather distinct clusters there's a great illustration of this point in a recent paper by brady in' and company which shows the extraordinary polarization of political twitter and can see here a graph that depicts retweet activity on political issues of American Twitter users liberals retweet liberals and conservatives retweet conservatives and there's hardly any retweet activity across the great political divide we used to call it the political center we now call it the killing zone and for every moral or emotive word you use in a tweet it is 20% more likely to be retweeted so if you're wondering why there's so much strong language on Twitter people have figured that out this is not a new insight sociologists working in the 1970s knew that there was something called homophily they knew it when they studied the networks of friendships in American high schools that was supposed to be racially integrated but weren't despite all the efforts of policymakers posts the civil rights movement self-segregation was going on in these high schools and self-segregation goes on on the giant online social networks of our time so homophily is the first law and and it should not have surprised us that creating giant online social networks would in fact create not one happy global community all sharing cat videos but this second insight from network science it's a small world because week tires are strong the straws on the work of eminent sociologists like Milgram and Granovetter and the basic insight is that we all have our close circle of family and friends but the reason that there are six degrees of separation which started out as a short story and then turned out in Stanley Milgram's work to be true is that our clusters of friends and family are all connected by the the loose casual acquaintance that we have they act as bridges or connectors to other people's clusters of friends and family and Milgram showed in a famous paper from 1967 these are the cheesy graphics from the paper it was the sixties after all but if you sent chain letters from random people in the Midwest to aid that were designed to get to a particular individual in New England that none of them knew it took six or seven steps for the letter to get there this was the first demonstration of the small world principle that there are roughly six degrees of separation between any two randomly selected human beings the third insight for network size is that stuff goes viral not just because of its content I know you think that something goes viral the cat video that goes viral goes viral because it's a cool video but it's not just that it's not just the inherent content that matters it is the structure of the network that the cat video attacks that matters this is true in the study of epidemic disease and it's true in the study of cultural memes so that's the third key point to bear in mind network structure determines a lot if you attack the network at the right point if we give the meme to Stewart of the awesome cat video it is much more likely to go viral than if we give it to the jazz fan who's too polite to leave it's all about where you enter the network and what the network structure is like if there is a node with high betweenness centrality that's that's crucial to why things go viral fourth point this is my attempt to distill all of Network science into six things I could remember in talks networks never sleep networks are complex adaptive systems with emergent properties and phase transitions and that's why the bird video at the beginning was so great because that's a perfect illustration of what we mean by emergent properties what we mean by a complex system if only human beings were as good networking as birds and we're always colliding into one another but we're human beings flying our around up there above that field after 10 minutes they would have formed two hostile clusters of conservative and liberal birds and have been flying at one another so this is another important point to remember there are lots of network graphs in this talk and in my book but they're just snapshots of things that are constantly in flux and because they are truly complex adaptive systems they don't behave in predictable ways weird stuff can happen a network can go from being highly distributed and decentralized to being highly centralized in a matter of days example the great revolutions of modern times as I try to show in the book the Bolshevik Revolution looked like a massive distributed network sweeping across the Russian Empire with minimal coordination Lenin's message just went viral but within a few years of the Bolshevik seizure of power the Bolshevik network had gone from being decentralized to being highly centralized a dictatorship of the proletariat in fact the dictatorship by the party elite talking of Bolshevism and I just made that segue up completely on the spur of the moment um one of the best examples of the the attack syndrome the fact that networks attack networks was the attack by the Soviet communist regime on the elite intellectual networks of my country of origin the United Kingdom this is one of my favorite stories in the by the way the book is full of stories it's it's actually designed to be read by people with attention deficit disorder I divided it up into 60 6-0 short chapters and you don't need to read them all or even read them in the right order it's it's designed for people who keep checking their email this is one of my favorite of the stories it's the story of the Cambridge spies the biggest success to date including recent events of Russian espionage what did they do they hacked an elite network the Apostles the most elite of all the intellectual societies at the very pinnacle of Cambridge University's social life but cleverest of the clever the self-perpetuating elite that still exists today and the Apostles were hacked by Soviet operative named Arnold Deutsch who managed to recruit three of its members to the Communist Party knowing that as members of the Apostles they would be highly likely to attain high positions in the British establishment which they did including high high positions in British military intelligence networks attack networks and it takes a network to defeat a network a line I got from General Stanley McChrystal 'he's book about his time in Iraq I'm saving the sixth law of networks for just a little bit later but now the big analogy and this is my favorite part because this is the history part so what is it like that's the question you should always be asking about the present the hell is this like and every day in every edition of the New York Times somebody will tell you that it's the 1930s and then in the Washington Post somebody will tell you that it's the 1970s but I'm here to tell you that all these analogies with the mid 20th century are of no use at all because the structure of the public sphere has been changed so much by the internet that it's nothing like the mid 20th century our time our time most closely resembles the period after the late 15th century when the printing press are you laugh sir that's what I like to hear incredulity because it's a typical American response that anything that happened before the United States is irrelevant so the history of the United States you're wrong you so wrong let me show you how wrong you are nothing has happened like the impacts of the personal computer and the internet since the advent of the printing press and here's the proof if you look at the impact of these two technologies and there's a wonderful paper by a guy named dick Moore in London who does this it's incredibly similar the effect of the technological innovation is drastically fruit to reduce the cost of producing content and drastically to increase the volume of content these two graphs are the same one for the printed book the other for the personal computer what's the difference the timescale history today happens 10 times faster than it did at the time of the printing press but that's the only significant difference except for one more I'll come to you so the better analogy for thinking about our time is not 1930s it's not what again that's all very interesting but we live in a different time we live at a time of massive technological disruption of the public sphere and most of us underestimated especially those of us who cling to old ways of getting information like newspapers made of we underestimate the extent to which our time is a time of communications revolution as dramatic as the time of the Reformation oh yes this is a scary analogy it is not a funny analogy sir it is a bloody terrifying analogy because when they introduced the printing press into Europe everything was going to be awesome Martin Luther for it was he just 501 years ago said if everybody can read the Bible on a printed version of the text in their own language everything will be awesome we didn't quite use that that word what it actually said was will achieve the priesthood of all believers the Bible speaks off not quite what happened what happened was that yeah Martin Luther's sermons were rapidly spread through her all of Europe thanks to rapid production by printing presses but so were books like the malleus Maleficarum which argued that witches live amongst us and have to be burnt at the stake that book the malleus Maleficarum the hammer of wickedness was one of the bestsellers of the 16th and 17th century that's a good example of fake news and it's a good example of something going viral that is a good deal more harmful than a cat video you know how it is that people always wanted to tear down statues these days have you noticed that and rename things iconoclasm is a typical product of a disruption of the public sphere suddenly we must face the icons of the previous era that happened in the period of the Reformation too as in this illustration of a church getting a full Protestant makeover in Antwerp and 1566 polarization in the sixteenth and seventeenth-century escalated rapidly from verbal violence you're a heretic no you're a heretic no you are a heretic into actual violence the threshold between verbal violence and actual violence is a very fragile fence and they crushed it and they spent a hundred and thirty years crossing it the Wars of Religion that persisted from the peasants revolt that followed Luther's Reformation all the way to the end of the 30 Years War in 1648 I sometimes think we're living through a secular Reformation it's not religion but political ideology but it takes a similar form there's a whole range of different things that we now categorize as hate speech well in the 16th and 17th century you didn't say hate speech you said blasphemy what we are experiencing though it hasn't yet escalated to the levels of religious warfare could because there's no obvious reason why the polarization process that I've described to you should stop it's always important to think ahead to what's true or askew so obviously there are all kinds of differences between my short Lenin and the long now one of them I've mentioned already everything happens 10 times faster today that's good news they had a hundred and thirty years of religious conflict we should get it down to thirteen they had the thirty years war it'll only be three for us there's another so here's a really interesting thought that I had right in the book after the printing press was invented amazingly it stayed a distributed network and people didn't sell ads on most of what was printed very few ads on Luther's sermons you'll find and that's the big difference between then and now we thought that the internet was going to remain a decentralized thing Tim berners-lee's vision of the World Wide Web was just like the birds flying around nobody's in charge everybody's just flying together whoo and then it turned out that unlike the printing press you could centralize the internet you could centralize the software you could centralize ecommerce you could centralize social networking you could decentralize digital media the internet was supposed to assure in this wonderful era when we were all going to be netizens do you remember that seems like another world doesn't it we're going to all speak truth to power on our personal blogs all all at once it's gonna be awesome and then the best blog would be netizen of the year seems like a hundred years ago that we believed that stuff instead what happened with amazing speed was the a relatively small number of near monopoly companies took over the internet to go over the World Wide Web and they created hierarchical structures I love these org charts because they're authentically funny and whoever did this cartoon is really cool because they kept they have a sort of grain of truth in each case and anybody whose works for one of these companies will I think attest to that but the point is that what we thought was going to be a decentralized distributed awesome cool network where would just be adding nodes and and blogging with amazing speed became hierarchical because remember phase transitions emergent property it's a complex system it was never gonna stay the way Tim designed it sorry Tim two consequences of the advent of the network platforms the return of monopoly capitalism my good friend Peter Thiel explaining why monopolies are awesome in his book zero to one which is a huge bestseller not least in China I'll come to China in a minute Scott Galloway's Four Horsemen of the Apocalypse each one controlling one of your vital organs Google as your brain Facebook's your heart Amazon's your gut will you do the consumption and I won't say exactly what Apple is except that phones are status symbols I suppose the advent of monopoly capitalism is kind of mind-blowing enough and certainly not something that many people predicted if any even more important is what the network platforms have done to democracy and that's really what I want to focus on with the remaining time I have if you were paying attention to the importance of social media during the 2016 election you spotted that Donald Trump's probability of beating Hillary Clinton was way higher than all the political scientists and pundits were saying who were using polling data and models of the pre social media political system he dominated her he dominated her on Facebook he dominated her on Twitter he actually dominated her also on Google search and just eight years before these platforms had been marginal in their importance to understand what was going to happen in November 10 2016 you have to see that this had happened Brad Pascal who was Trump's digital director put it very nicely these social platforms are all invented by very liberal people on the west and east coast and we figure out how to use it to push conservative values I don't think they thought that would ever happen The Economist nearly got it rights social medias threat to democracy no no there's nothing undemocratic about populist winning elections the real threat was to liberalism the real threat was to to be precise the political middle-ground that was the thing that was threatened we now know and with every week we know more that the Russians used Facebook and Twitter to disseminate fake news and extreme views my favorite meme of Russian origin is the one on the bottom right there Satan if I win Clinton wins Jesus not if I can help it press like to help Jesus win gotta hand it to Eve an instant Petersburg that is pretty smart but here are a couple of interesting things number one it turns out that liberals were more likely to retweet Russian content than conservatives I guess this was can you believe the crap these conservatives say and the other thing is that Russian content was probably around 1% of all the political content on social media during the 2016 election campaign that's not a lot most of the content was homegrown now you can take your choice depending on how you like to think about the historical process in a very close election everything can be regarded as the critical variable from the weather to the Russians to the fact that Hillary Clinton didn't go to Wisconsin but I want to suggest that the most plausible counterfactual for 2016 is that if it had not been for the network platforms Donald Trump could not have won if you imagine the election without facebook without Twitter without YouTube let's not forget it would have been very hard for the Trump campaign to overcome its financial disadvantage the Facebook advertising is the killer app of modern politics because it's targeted precision targeted and cheap this is the key inside of 2016 meanwhile on the other side of the world things go very differently China builds a far wall around its own Internet and essentially keeps the Western the US companies out we laugh and say that's like trying to nail jello to a wall as Bill Clinton famously put it and the Chinese said watch as nail jello to the wall watch as also build the only tech companies in the world that can rival yours which they proceeded to do Baidu Alibaba $0.10 are the only rivals in the world to the big Internet companies we sometimes refer to by the acronym Fang and another amazing thing not only did the Chinese match Silicon Valley in some domains they do better than Silicon Valley like in mobile payments and in processing speed the next time you're in China if you haven't been for a while you'll notice that ever pays for things with their phones and they laugh at you when you take out your credit card that's because they have pulled ahead in FinTech and the ability that the big Chinese tech companies have to process vast numbers of transactions not only exploiting the scale of the Chinese market but increasingly expanding abroad into other emerging markets also gives them an advantage in the artificial intelligence arms race unlike here in China the square in the tower at least appear to be in harmony Jack Ma last year before he got his marching orders from Xi Jinping said at a Communist Party conference the political and legal system of the future is inseparable from Big Data bad guys won't even be able to walk into the square I've got a little kind of cold shivery feeling in my spine when I read that quotation first I thought excellent he used the word square this will help my book and then I thought wait what does he mean by the square oh yeah in China there's only one square this was a coded reference to the way in which AI big data can be used to prevent their ever being another 1989 in Tiananmen Square there are three models three ways of dealing with the problems that we've created with technology the Chinese model is clear the network platforms of China will be subordinated to the wishes of the party and if necessary if possible a system of social credit will be built on the basis of the individual citizens data that you might think of as totality anism 2.0 1984 but with a portable telly screen that you volunteer to be under surveillance by the European approach is different the Europeans have no technology companies worth talking about all they can do is tax regulate and find the American companies and that is what they're proceeding to do George Soros at Davos earlier this year said it's only a matter of time before the global dominance of the US IT monopolies is broken EU competition a competition commissioner vest Argo will be their nemesis but what happens here what happens in the United States where these companies were born where the internet was created that's not clear all I think I can say with any confidence is that there will be a struggle between the tower and the square and it began with this little exchange on social media last year and it is escalating to a remarkable extent this year mainly because conservatives have come to believe that they are going to be discriminated against by the network platforms because they are all run by liberals and it will never be 2016 again in my conceptual framework this is the old battle between the square and the tower if you think of Silicon Valley as the square and Trump Tower is the tower but the difference is that and this is another parallel with the sixteenth and seventeenth-century outside actors are just free to join in the whole saga of the caravan remember the caravan to a remarkable extent stories about the caravan of would be illegal immigrants stroke asylum seekers marching towards the US border intent on deciding the outcome of the midterms that whole story was generated on Facebook groups groups which Turner and close inspection to foreign administrators if you think things have been fixed at Facebook or fixed at YouTube you've drunk the kool-aid again let me conclude because I've gone on long enough what can we learn from my big analogy what can that short then that very near 16th and 17th century experience of polarization conflict fake news driven by a technological disruption what can it teach us about today well the answer is we need a cyber Westphalia we need to end our 30 Years War preferably before it begins in 1648 Europeans finally drew a line under a hundred and thirty years of religious conflict it was done with complex to complex treaties which defined what we now think of today as the sovereignty of states well I want to suggest to you this evening that we need to get there preferably without the intervening strife this is my last slide but it's got a lot of content it's actually a single slide digesting a twenty thousand word paper that was published last week by the Hoover Institution where I work in title what is to be done and in that paper which is available free on the Hoover website I try to address what we do and I go through the six ideas that I can out there and I reject two and a half of them I don't think it makes any difference whether there is net neutrality or not that's just about the balance of power profit between internet service providers and network platforms it doesn't change a thing I don't think that antitrust legislation can be resuscitated as Tim Wu and others believe and that these companies can be broken up at least I don't think it can be done fast enough given the strong bias of the US courts against the old version the Brandeis version of antitrust and in favor of the post 1960s Bork version I think it's not a viable project in any case there are natural monopolies in the realm of networks and this will be I think a blind alley there needs to be regulation more than there has been and more effective regulation than there has been but we mustn't make the mistake of thinking oh there utilities we should regulate them the way we regulated the railroads what I argue in this paper is for three distinct steps the first is to get rid of the strange now anachronistic rule that exempts the network platforms from liability for the content that they carry on their platforms this goes back to the mid-1990s when most of these companies didn't exist and now makes no sense when they're the biggest companies in the world section 230 makes no sense when essentially these are the biggest content publishers in history 80% of Americans most of the people in this room get their news via referral from either Google or Facebook the pretense that they're just tech companies that the liability for the content belongs with the original traditional media producer or the user who posted them the comment that seems to me an anachronism but even as we expose the network platforms to liability for the content that they produce or publish we must ensure that they don't become the sensors of our public sphere and that is the tendency that we currently see partly under european pressure partly because of european regulation more and more is being done in the name of community standards it's a slippery slope if we leave the network platforms to decide what is hate speech and what is not what should appear in the rankings and what should not that is too much power for private corporations to wield far too much and that's why I make another proposal which that is to say that they should uphold the First Amendment because they have become the public sphere and that's a controversial proposal but I think it's necessary if we are to avoid the fate of a kind of privatized China in which content is censored by Facebook and Google on our behalf in deference to increasingly restrictive notions of what is hate speech last but not least and this is the most Westphalian part of it we need urgently an International Convention on cyber war we've had such conventions before on everything from piracy to biological weapons the great powers represented today by the five permanent members of the UN Security Council need to recognize that this process of constant violation of one another sovereignty which is the essence of what happened in 2016 is dangerous to all of them now there's a problem with that which is to get Russia to stop behaving like a rogue regime on alternate days and a great power on the other days but one lesson of the 17th century is that that can be done the habit of violating sovereignty which has been re-established in our time can be broken that is what they achieved in Westphalia in 1648 I hope I persuaded you that history plus network science provide a useful way to think about our contemporary problems I hope I've persuaded you sir that the analogy is not a frivolous one but actually a deadly serious one and now all I need to do is urge you to buy the book remember you don't need to read it just need to own it thank you for paying attention to me an invite Stuart brand to come and join me up on the stage thanks very much [Applause] he's got a lot of questions in his hand it's quite worrying that's a dozen form of applause when you get lots of questions sometimes we don't Kevin Kelley who manages the questions managed for his on top that's his privilege it's a hierarchy really it looks like a network and he's asking if the internet founders who are probably most of them still alive had known history had studied with you how should the internet social media have been created differently in the 90s it's a great question here's a counterfactual basically his policy and I remembered a lot of the people who did that we're studying what happened when the printing press came off and we're very excited about it a little bit worried about it but not worried enough what you're saying I think if you if you look back on on the way the printing press developed there was a for-profit wing that ultimately did finance itself by selling ads and it evolved into newspapers and magazines but that was only a fraction of all the printed content that was out there most printed content was accessible free through things called libraries and libraries were nonprofit absolutely ready existed they'd already exist the public libraries gradually began to spread in the protestant realms because remember process santa's omim sista don literacy country like mine scotland went from very low literacy to very high literacy because of the Reformation schools had libraries books were regarded as a public good and this meant that most printed content was not provided by profit-making institutions it was essentially free and crucially catalogs in increasingly effective and I'll call them objective ways anybody who spent time in one of the great libraries of the world say the Cambridge University Library knows that the books are sorted in such a way that you find the book that you're after and next to it of books on similar top this is an incredibly valuable thing if you're doing serious research Google is not like that you may think Google is like that but you're wrong because that is not how search works so I think when we look back on the evolution of the internet the fatal mistake was to have too much for profit and not enough we'll call it Wikipedia not enough that was nonprofit under the printing press by maintaining a very large nonprofit sector the network remained distributed and that was probably the original sin of the Internet to allow the sale of ads to be the driver of revenue for increasingly powerful corporations I'll say one more thing because it's a great question if you look back on the events that led from the foundation of Amazon to the dominance of the network platforms in our time it was a kind of slow burn it was only really in the last 10 years that the monopoly capitalism aspect became apparent so I don't think one can be too harsh on the people who designed the internet and the world wide web they thought it would stay distributed I think that was Tim berners-lee's vision the printing press had stayed distributed even the most powerful newspaper barons like William Randall first did not get anywhere close to the market shares of Facebook and Google today it's very surprising that we got to this place and I don't think we can blame ourselves for not predicting it so you study economics a lot you did a book the ascent of money what's your sense of why unlike with books this kind of very quick very powerful central deep sort of resent realization happen what what's the economic driver of that well there are two our answers to that question ones just the classic one that the scale works I mean Reid Hoffman has his new book out masters of scale blitz-scaling I think the book is called and what that shows is that the same old thing is true of Genet companies as was true of motor companies you know there are returns to increasing returns to scale but the other thing which is really powerful here is quite separate and has to do with the nature of network platforms the economics of two-sided markets it turns out that in the domain of networks that the power law or the Zips law rather applies more strongly under Zips law in a networked market it's a kind of 90% to the winner 9% to the runner-up and 1% everybody else outcome and and that means that we have a double economic tendency towards concentration again that wasn't I think well understood and it's only recently that economists have begun to see the peculiar quality of these so-called two-sided markets where a company like Facebook acts as a platform in which consumers can connect with with sellers it looks like it's free but actually it's anything but free because the sellers are paying so much to get the attention of the consumers all of this I think came as a surprise to economists who who by and large lagged behind the development of the network platforms there very very few economists Matthew Jackson at Stanford is an exception who kind of saw the significance of this and then of course you had the problem that I refer to earlier the the problem of the way the antitrust law had evolved in the United States the test was just is the consumer harmed that was the Robert Bork test now if you ever mention antitrust to the likes of Jeff Bezos or any of the other Titans of the valley they laugh because it'll be so easy to win those cases under current law you'll just say dude it's free and the conversations over so I think for that reason that was never going to be much pushback even as these firms developed really very very dominant positions in different parts of the market I mean Amazon has a total monopoly on audiobooks at the moment I mean it has basically a complete control the of an increasingly popular market I mean a bit hands up if you listen to books rather than read them right that's a complete monopoly and we actually don't have the legal tools to stop that at the moment and I think it'll be really hard to change Tim who's got a new book out which is essentially let's get back to antitrust and it's almost it's a trendy thing you know that there's a sort of hipster antitrust movement you have to grow a goatee beard to belong to it and wear a beret and I live in Portland but it's it's gonna be so hard to achieve that given the way the courts are set up and I I dare if that's one reason that I kind of don't see antitrust as the way to go another thing that drove scale I think it exponentially is the one that didn't people who were making all of that according to each other was Metcalfe's law the power of the net goes up as basically the square of the number of the nose exactly and so Jeff came along and said we're gonna lose money for a long time because our whole functions get big fast and they get big fast thing took off and then what it seems like and China maybe the interesting counter example is these things scaled up so fast and so far and so the 2.27 billion Facebook users mark and it's not gonna know what every one of them is up to you not even remotely well that's and he's complaining about the signs of his coming he doesn't know everything going on in the 10,000 people working for Facebook so scale has this sort of built in obscurity apparently and yet you're saying that China isn't facing that problem well I think that probably are more than they would like to admit okay in the sense that when you spend time in China and and I I I'm a visiting professor at Tsinghua actually do most of my teaching there because they don't really like me teaching at Stanford so I I go to China and they're what striking is that one could say very frank things that are quite critical of the regime on WeChat at the time last time I was there there was a lot of negative meme circulation with respect as Xi Jinping's appearance at a military exercise in Russia so the idea that they have the whole thing locked down the illusion I made to 1984 may be a bit misleading what they can do is they can have surveillance over what people are doing how they're spending and what they're saying and that is a power that none of the 20th century totalitarians had can they from that surveillance maintain their power indefinitely yeah that's another question and I think history would lead you to be somewhat skeptical about the proposition but a highly centralized system rooted in the mid twentieth century vision of one-party rule can coexist with giant online networks in which there is at least the appearance of free speech I'm somewhat more skeptical about the viability of this of this regime under these conditions but it's certainly a different situation from the one that we find ourselves in today because least it's clear in China that the the square is subordinate to the tower whereas here we are in this strange situation of collision where there is in fact an ongoing and I think escalating conflict between Washington and Silicon Valley and it's not clear how that is going to turn out at the moment there's no question Facebook and Google have enormous power they dominate the public sphere and what we've seen in 2016 and I think we've also seen it this year is that that's not a stable state of affairs for democracy because they really don't take seriously enough the responsibilities that I believe come with the kind of power they have okay so China is pushing ahead with artificial intelligence very strongly they're using it for face recognition among other things and one imagines a security state like we used to see in Eastern Europe where there was a large amount of basically a citizen tree surveilling other parts of the day and you know Stasi had this huge operation they were not able to hire robots to watch the citizens of those trees and places like China or the US or others who come to mind can and so does this hierarchical potential for very powerful one-sided surveillance yet potentially enhanced or a new kind of level that we haven't seen before what's clear is that if the surveillance exists it can even in a democracy be used conceivably used for political ends one once it exists even if it's currently in the hands of private sector actors you should not assume that it can never be nationalized and taken over by the state that's the first observation the lesson of the twentieth century is that any corporation can be nationalized that those sorts of political events are far from low-probability like AT&T was well I'm thinking also of the way in which in even in the recent past we saw the entire government-sponsored entities that run the housing industry taken into what was politely called conservatorship but they were basically nationalized during the financial crisis so I think we need to be worried that we are simultaneously building that the tools of the surveillance state in what we still think of as a free as a free society this is a big risk to run and nor is it desirable that those powers should remain in the hands of more or less unregulated private actors I mean I don't feel better that I'm under the surveillance of big zucker than under the surveillance of Big Brother it's it's not really a radically different state of affairs if my privacy is gone it's gone and I don't really have any way of knowing when it will be that in time of national emergency a federal government will simply say we demand access to the data the Chinese have it we're at war it's a national emergency and you must comply one of the lessons of of history is that no matter how powerful corporations may appear at their Apogee think Standard Oil as well as AT&T they can be with remarkable ease brought under the control of government particularly in times of emergency or simply when the public turns against them has happened to stand it off so I think that the point I'm truly trying to get her in this new paper which the last slide summarized is that the status quo in the United States today is not stable we can't leave things as they are because the big tech companies have way too much power and we can't really account really believe their protestations that they'll behave better in the future I think that's an extremely important point there certainly don't seem to me sufficient incentives for them to be better in the future when they're business models are predicated on engagement they have to show that you're engaged with the content to justify what they charge the advertisers and you will be engaged by the sensational I'm afraid even rational people like the ones in this audience will be seduced by the extreme views and the fake news the business model inherently favors polarization and I don't see anything that has changed in the last two years to alter the incentive for these companies to promote in their recommendation lists that which is sensational so there are some fundamental things that I don't think have been fixed and that's what I've been wrestling with how do you fix those problems without creating a very powerful federal regulator which that which effectively transfers the power to the state I'm usually described as a conservative by comparison with most academics that's probably true but I'm really a classical liberal I worry more about individual liberty than I do about oh I don't know traditional values I my views are those of the Scottish enlightenment and what I'm trying to come up with when I say let's create greater liabilities for these companies or essentially ways of constraining them forcing them to behave themselves better that don't empower the government and potentially hand the power of the surveillance company to the state question from Sean Jewell basically relating to your piece of of history accelerating says so seems like tech is progressing faster than our government's ability to regulate as this novel has happened previously in history governments is one of the things that so long as this layered thing of how commerce moves very rapidly and governments not necessarily governments which the nature of governance is slower than that and and these kind of debates we're always saying well that's terrible cuz governance can't keep up right with what needs to be governed does that happened before and what do you ever say about always that's the standard pattern the innovation doesn't come from the hierarchy doesn't come from the government innovation comes from the network that's very clear the industrial revolution isn't the product of a few brilliant people who dreamt up the steam engine the Industrial Revolution happens because there's a network of people some academic some just almost self-taught engineers who together solve a series of problems that are really worth first thought of it properly in the scientific revolution but didn't really get thought of technologically until the late 18th century so the network's creative but here's a really critical difference the technologies of the Industrial Revolution that were so important in propelling the world out of what was more or less sustained poverty by and large produced networks with a hub-and-spoke architecture think of railroads think of the Telegraph's think of the steamship companies so that Industrial Revolution technologies which were certain not the creation of the state lent themselves very readily to state control as long as you controlled the hub you controlled the railroad network you control the telegraph system so in the nineteenth century what happens is that private entrepreneurs beginning in the British Isles invent railroads of the invent Telegraph's and they start building them it's it's entirely done by private enterprise and within a very short space of time these technologies are adopted by European governments and then they're adopted in North America and they're rolled out and they are extraordinarily easy to control centrally the 20th century regimes that we think of as the totalitarian regimes beginning with the Soviet Union understood that with hub-and-spoke technology he who controls the hub controls the network Stalin literally controlled the central switchboard of the Soviet telephone network and would routinely as Steve Cochran shows in his brilliant biography tap the phones of other members of the Politburo so I think the difference in our time is that what happened in the 70s was essentially the pentagon said look we're kind of busy with the Vietnam mess could you just kind of do what you want to do out there with with what was then ARPANET there was a moment at which the state basically let go of what was to become the Internet and the innovation happened in in a kind of almost a fit of absence of mind by the national security state it grew very rapidly and because of the way that it was designed it was highly decentralized I actually have a lovely picture on my office wall that caught Eric Schmidt's eye the other days he was passing it of the original ARPANET which has a kind of square shape and all the different nodes are marked on it like Stanford and Harvard and it was pointing out where he actually was in the Xerox node there is one little node down in the bottom right hand corner that just says Pentagon it's not in the middle it's not the center of this kind of hub-and-spoke type of architecture it's just one node in what is a distributed network so that's different in our time here the technologies raced ahead precisely because it was designed to be decentralized and nobody I think expected it not to stay that way two questions one from Alex Pico or one from Kevin Kelly both it basically raising the question of television and where it fits in Arcanine back to 2016 you've got a counterfactual of what if there was no social media a similar one would be what if there was no fox news the process of polarization let me make it clear predates Twitter this was already a pretty polarized country but even before the advent of of the internet what the cable TV revolution did was to end those regulations that had enforced rules on political coverage rules that would require even airtime for rival candidates and created a new architecture in which you could have liberal news and conservative news but I think what's striking about the last 10 years is the way in which our pre-existing division and it's a division not just between liberals and conservatives there's also this exhausted middle of people who think of themselves as independents but this division has been exacerbated by social media and it's interesting to watch the way that the established media not only TV channels but also newspapers got into a curious feedback loop with social media where they would notice that their social media numbers were boosted by Trump appearing this is the morning Joe's story and they would say gee we're doing really well on Twitter this morning we should have him back and so there was this curious symbiosis between what we think of as mainstream media or traditional media and and the new media to the point that the one became somewhat parasitic on the other so I think the polarization is not new there have been other periods in American history of great division let's not forget there was an actual civil there was an actual civil war right now we just have a kind of virtual one but I think the social networks have made it worse and there's lots of good evidence for that Jonathan Hyde my friend at NYU whose brilliant book with Greg lukianov the coddling of the American mind you should all read he had a great illustration of this showing the increase in proportion of people who say they hate the other party and that that's something really quite recent so I do think we're in new territory and it's not right to say oh it's it's just what it's just the way it was because the way it was in the early days of fox news and the way it was then on CNN was very different I mean if one went back now and looked at the content that those networks were putting out in the early days one would be quite startled by how bland it would seem so networks are described as these are the three modes centralized decentralized and so-called distributed well there's basically not much in the way of home activity mm-hmm I was in Prague a couple weeks ago for a gathering of the etherium blockchain crowd devic on floor and there was this groundswell of hopefulness and kind of joy about the process of developing a seriously distributed network that can cut across a lot of things which tend to keep flying into the hierarchical mode and toward the end of your book and you did this book about money after all you would call attention to Bitcoin and smart contracts and blockchain in general where do you see that fitting in to the story as it comes to pass or doesn't comes to pass yeah it's a great question and to all the Bitcoin holders in the audience and on the platform it's been a pretty bad time down below 6,000 today I'm Nora I do neural Rubini is gloating as we speak he's sought to relaunch his career as the prophet of the doom of crypto I I have a less negative view than Nouriel and I've actually written at great greater length on this subject in what will be a new edition of the ascent of money out early next year with two new chapters taking the story up to the present and one of the last chapter is entitled from the euro to aetherium and the argument that I make there is that there's no question that there will be at least one use case for blockchain a meaningful use case it's not clear that it will be money what we have in Bitcoin I would think of as an option on digital gold it might turn out to be something with gold like qualities that you might if you had a million dollars want to have one or two or three percent of your portfolio my view is that if you want if you have a million dollars lucky lucky you if you have a large amount of money and can afford to have a diversified portfolio you should if you if you're a regular professor you probably are a long real-estate whether you like it or not because most of your portfolio is that incredibly expensive house that you had to buy near the Stanford campus so this is a sort of recommendation for the high net worth individuals in the room not for the regular folk but if you are if you have a relatively high net worth let's say north of a million dollars then you might want to have one or two percent of it in it's something like gold something like Bitcoin just because it behaves differently from the rest of your portfolio and is unlikely to be wiped out if the stock market crashes it'll just behave differently the problem with Bitcoin and this is a long conversation I'll try and keep it short is is a couple of things one while it might be a cool store of value remains to be seen or at least an interesting asset to own it's definitely not something that you would transact it so it's not making the cut as money conventionally understood the other problem is that even although it was designed to be decentralized it's funny how the mining got concentrated super fast and air in China that definitely wasn't part of the plan and it's an illustration of how the best-laid schemes of distributed network designers often go a glai as the government well the interesting thing about the Chinese government strategy is is that it wants simultaneously to prevent Bitcoin being held by Chinese citizens but control the network fire mining and that's not a particularly enticing prospect given that if you have more than 50% of the mining then you potentially control the whole Chane and you can alter it so here's the way I'm thinking about it now it's not dead but it's vulnerable and it's especially vulnerable to state mandated digital currency here I agree with something that the neural Rubini just published it's what I say actually in the square in the tower that the Chinese are most likely to create bit you on at some point they're experimenting with blockchain based currencies just to see if they can make it work but they certainly aren't going to make a non state controlled digital currency legal tender in China so the use case for blockchain probably isn't money it may very well be that there are uses for blockchain I know there are some people in the audience who take a different view but there may be uses when it comes to the storage of data in forms that don't require high frequency of change title-deeds is the case that most often gets cited but but I guess the story of the crypto experiment really is a chapter in in financial history that illustrates a point you made earlier Stewart the way in which innovation runs ahead of regulation a lot of terrible analogies were drawn last year with the tulipmania you may remember that anybody who didn't understand Bitcoin would say oh it's tulipmania because it's saved trying to understand it but it's not remotely like tulipmania what it is like is a phase of innovation that produced the the instrument we call the stock or equity and that innovation in the early 18th century produced bubbles just as we've seen in the last 12 months chaos fraud it's a free-for-all very similar to the Mississippi bubble and the South Sea Bubble of the early 18th century at the end of which the notion of equity finance survived the really was a use case for this so I think it will be somewhat similar here in the end something will come of it I don't think it all ends up as zero can it stay it's say use cases developed for bar chain apart crunching as these secured public Ledger's that really really are distributed do you see that as some kind of if if if that develops is that some kind of Wikipedia like leavening to the problems you see here potentially one of the most interesting writers in this subject lives in these these in this town Sam lesson whose essays for the information I found very illuminating and I think he's one of those blockchain believers who's attracted by the technology because it has libertarian implications decentralized and not controlled by the state and you'd have to be a kind of natural-born authoritarian to want that to fail I think my instinct is I want this to work I'd love there to be a use case I particularly like the idea that some data will be stored in a decentralized way we've been dependent on centralized archives for much much longer than the printing presses existed one of the defining functions of a state going back to the medieval period is that it has an archive and in that archive truth resides now in a free society that's sort of unproblematic we don't really think twice about the fact that there are these things called the National Archives in Washington where you can go and do historical research as this story and I depend on those archives and and frequently use them but you can't as an historian ignore the fact that very often the state's central control of information is abused the archives get we did and now we're back in the realm of 1984 the state decides what data are preserved and what are destroyed so the idea that some information could be stored in ways that did not require the state as the third-party arbiter that seems attractive and likely to work you won't be surprised at the internet archive base here in town which is a none seriously non-government entity is very much in bed with some of the bar chain folks and they're looking for ways to enhance each capability I think as a as a student of political theory I I sight strongly with Alexis de Tocqueville's view that Liberty is dependent on decentralization it's one of the central arguments in democracy in America and in the old regime and the revolution that the problem in Europe was particularly in France was excessive centralization and the great strength of the United States top fuel saw was its decentralization well lo and behold we've ended up being pretty centralized and I think we need to think of technological ways but also of good old-fashioned political ways to be more decentralized that should be a kind of goal that liberals and conservatives can agree on that we should be a little bit more like Switzerland in our governance and a less like like France so you as a conservative it must be interesting times I think the Liberals haven't really had to change their worldview very much but you know the David Brooks is sort of complaining to the world that as a conservative feels like he doesn't have a home anymore there's no political party you can call his own because of the what's happened basically with conservative politics and the last couple of elections and here in California Orange County used to be totally red it was totally Republican that was totally blue and there's a super majority of Democrats in our state legislature and so on are these interesting times free was definitely a rude awakening that question are you or have you ever been a defender of Donald Trump that'll be the question asked in the great investigative inquiries held after Donald Trump's departure from the White House I mean I I think as I said I don't really see myself as a conservative my classical liberal I rooted in the teachings of the late 18th century Enlightenment thinkers and the good news is that late 18th century ideas turn out to work quite well the reason the Enlightenment happens in those places where it happens is that they'd add the Reformation the thing about the Reformation is it has this unintended consequence you teach people to read so that they can read the Bible and then they can read anything it's the great unintended consequence of the 16th century and in Scotland which in the initial phase of the Reformation is basically like Afghanistan under the Taliban I mean you have this sort of ultra Calvinist regime in the south of Scotland and warring tribes in the north it's a complete Afghanistan situation in the space of a hundred years because of literacy it leaves behind these crazy battles of the Reformation and and arrives at the ideas of Adam Smith and David Hume and the rest so that's a kind of reason for optimism and the ideas of the Enlightenment spread through a network I talked about this in the book the Enlightenment was a network nobody sat at head office saying what do we do in the Enlightenment today there's no chief executive of Enlightenment Inc it's actually just a bunch I'm really sorry to say this of white guys there are some women it's mostly guys writing to one another publishing stuff Jefferson is sitting getting his collection of books shipped over Franklin to the ideas of the Enlightenment cross the Atlantic through the Enlightenment network they go very global it's remarkable how far say Voltaire's ideas travel and out of these ideas comes a design for a republic which is going to be new in its to new and innovative in being designed to avoid tyranny now the classical theory of politics said if you have a democracy it'll become a tyranny that just always happens that was the standard view right the way from the ancient Roman Republic it's the venetian republic iroquois league they're constantly asking historical questions about how can we avoid that happening here and they come up with the notion of checks and balances that's central to the way the constitutions designed it's very counterintuitive let's not have power in one institution let's designers to be a kind of institutionalized conflict and the good news is it works Alexander Hamilton brilliantly foresaw in a number of speeches and letters that some opportunistic demagogic figure would be bound to become president at some point he explains exactly how it will happen and the goal of the Constitution is to make sure that that person cannot overthrow Liberty because that person's power will be checked by the other post Constitution when Trump was elected some of my best friends including Andrew Sullivan became overwhelmed with anxiety that tyranny was about to be established Tim Snyder at Yale published on tyranny and my attitude was chill the Constitution was designed for precisely this eventualities and if you look at the results closely at the results of the midterm as you'll see just how well it's worked and the founding fathers must be going job done checked balanced thank you very much indeed sir thank you thank you [Music]

Channel: Long Now Foundation

Views: 34,309

Rating: 4.8483753 out of 5

Keywords: Culture, Technology, Networks, Power, Government, History, Printing Press, Reformation, Economics, Facebook, Social Networks, Trump, Internet, Monopolies, Democracy, China, Populism

Id: 07KKYostAJ0

Length: 91min 58sec (5518 seconds)

Published: Mon Jan 06 2020

Reddit Comments

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1 and a half hour video and no leading comment/questions or summary. This has to be a joke.