[MUSIC PLAYING] SPEAKER: Please join me in
welcoming, to the stage, Mr. Quentin Hardy. QUENTIN HARDY: Well, let's get
right to the real wattage here. We have a lot to cover today
because Niall Ferguson has written very interesting books
about networks and power, something of interest to more
than a few people in this room, I'm sure, inherently,
and considering current events, which
we will touch on towards the end of our talk. Let's go about 40
minutes and then, please, if you have any questions, come
to the mike, bring them up. It's great if it's interactive. I'll say a couple
of opening remarks that struck me in
reading this book. You really, what you take
from it more than anything, and we should talk
about this as well, is how much you learn
about the present by looking carefully at the
past, and how important it is, even in building cutting-edge
technology, to have with you the lessons of
the past and a grounding in previous experiences
and human events because one thing you can
say about the future is, it's going to show up
consisting 99% of the past. And if you don't take
those lessons, woe betide. Now, the question
becomes quickly, how does one look at the past? From the kind of
relationships that we're seeing in traditional histories,
those of hierarchies of power, the kings and their
armies, that was one way, but it's become a very
insufficient means of analysis. And we quickly move
through Marxist histories, focusing on social and
economic strata, that became particularly apparent
as work standardized and wealth grew in the
Industrial Revolution, and it became very
much a standard means of analysis of the world. More recently, hidden
social histories of feminist and
marginalized groups, which tend to be stories of
repression and resistance and overcoming, reflect
the growing empowerment of these groups, and
their getting a voice in the world, and
their own efforts to recapture these
stories and place them in a proper context
of human experience. Then, we come more recently
to science-enamored areas like big history, which look
at people as a biological event within the existence
of the universe, or Cliodynamics, which attempts
to make history as predictive as a Google search. Explaining our fates through the
prisms of geography or disease or its ecosystem influences
is another popular means of analysis at this point. In most of these
cases, though, you tend to have systems focusing
on the primacy of conflict and power relationships,
usually in fairly stark terms. Our guest today, Niall
Ferguson, has become interested in a somewhat different
and very timely approach to historical analysis. Professor Ferguson is
the author of 16 books and currently Milbank Family
Senior Fellow at the Hoover Institution. He wanted to examine
history through the prism of human networks which is to
say lattices of understanding and information and,
yes, power, along with the primacy of key
nodes in the connections and influence that cause
some networks to succeed over others. As he himself says
in his new book, "The Square and the Tower,"
is not an either/or way of approaching history. Traditional and
nontraditional hierarchies, or towers in this
context, are also social networks, the squares
in which people exchange information and relationships. And successful
networks often take on aspects of their
time's systems of power. But his network-based
analysis of history focuses on distinctive ways
that information was shared, often towards a particular end. The book looks at this
in the time of Luther, the Republic of Letters, and
the rise of European nationalism enlightenment, and in several
other examples, many of them more recent. And while, as I
said, hierarchies are a type of network, they
tend to be rigid and highly codified and concerned
with formal concentration in management of power,
whereas social networks are somewhat looser, more
diffuse, and mutable. If any of you are
seeing parallels in this topic and
current events, you have come to
the right place. But in some ways,
this is also a book about the tensions, information,
and power over the past 600 years. And it seems
appropriate to begin by talking in terms of
historical events, in order, as I say, to better
inform the present. That is, we will use the
past to look at how recent advancement in
networked society, primarily the internet, web
2.0, and massive data capture and analysis, are
now challenging traditional hierarchies
in ways occasionally seen in history before. So let me begin by
asking, what led you to seek this new framework
for historical analysis? NIALL FERGUSON: Well, thanks,
Quentin, for inviting me here. It's great to find that a free
talk has an audience, even on a beautiful sunny day
like this in California. I had worked, without
quite realizing it, on networks for much of
my career as a historian. I had, for example, written a
book about financial networks, looking at the rise of
the Rothschild family, and specifically German-Jewish
financial networks, which I talk about a bit in this book. And I'd also written a book
about the British Empire which was partly a book
about networks too because, although we
tend to think of empires as very hierarchical things,
actually the British Empire was built by networks of traders
and missionaries and the like. And so I had been
doing this for years. My natural proclivity
was not to go and study kings and presidents
and field marshals, but was to go and study more
informal social networks. But then I realized,
as I was writing a biography of Henry
Kissinger, who in some ways is a super networker
in his career, that I didn't have a formal
understanding of networks. So I thought, hey, I'm
moving to Stanford, leaving behind the
stuffy east coast and coming to a university
right next to Silicon Valley. I'd better do my homework. So the idea was, I'm going to
study some network science, get a little bit more
familiar with concepts that many of the people
in this room live and breathe, and then try
and apply those concepts to historical study. A few historians
had been doing this, and I try and cite most
of them in the book, but it's quite patchy. History tends to lag
behind all disciplines. So although sociologists and,
heaven knows, neuroscientists, and economists, and
others have been talking about
networks for decades, we're kind of
catching up belatedly. The other reason for
doing it, I have to admit, was that after I came here,
which is nearly two years ago now, I was very struck by how
uninterested people in Silicon Valley were in history. Like history begins with
the Google IPO, dude. Everything before
that is the Stone Age, and we so don't
need to study it. So part of the point of the
book is to say to people here, actually, you may never
have studied history and you may think it's
all completely boring, but it's highly relevant
to what you're doing. And I think the book makes
a reasonable case for that, partly because I think it saw
the crisis coming that began in the election of 2016. And in that sense, I think
the book is quite a good guide to where we are now. QUENTIN HARDY:
Actually, you've made me jump ahead to
this week's interview in the Washington
Post where you said, you saw two years ago that
there was a crisis coming in tech and politics. What informed that? NIALL FERGUSON: It was deja vu. To be honest. I mean, I've been in New
York from around 2002-3 when I moved from
the UK to the US, and I had encountered
the same moods that I encountered in Silicon
Valley a couple of years ago, the mood of, we are the
masters of the universe. Resistance is futile. And you, little professor of
history, you just run along. There's nothing
you have to offer. That was very much the
pre-crisis mood on Wall Street, and I wrote a book called
"The Ascent of Money," which was published just
before Lehman Brothers blew up. It was written 2005-6-7. And the point of
that book was to say, massive financial
crisis is coming, and you'd better understand
why, and you'll only understand why if you know
some financial history. So when I got here, I thought,
wow, this is so familiar. These people running
the big tech companies, with some notable exceptions,
do have the same attitude that the Goldman Sachs
and Morgan Stanley people had circa 2004-5-6. So my hunch was, this is the
kind of hubris that is nearly always followed by nemesis,
and pretty quickly, it became clear to me that
the 2016 election was going to be that nemesis. And the kind of ways in which
the network platforms were being used in the
election, those were obviously problematic. Whether you look at the
way the Russians were able to instrumentalize them,
or the way that the platforms themselves incentivized
fake news and extreme views, even before
Trump's victory, I could see trouble coming. And that spurred me
on to write the book. QUENTIN HARDY: Mm-hmm. Now, we'll return to our
putative hubris shortly. But let's talk a little
bit about network theory, generally, since you were
able to apply as in 2016. You had seen certain
patterns going back-- well, the big start for
you is probably Gutenberg. Talk generally about what
network theory in history means, and what you saw in
terms of Gutenberg and Luther. NIALL FERGUSON: Well,
the general point, which will be obvious
to people here, is that any
historical phenomenon, any organization
of human beings, has some network architecture. And everybody is a node, and
their relationships are edges, and it doesn't really
matter what it is. You ought to be able to plot
that if you have the data. And this is a pretty
powerful tool just in itself, and not one that has
tended to be used much. As you mentioned,
for years, people tended to think of social
change in terms of classes. A class is a very
blunt instrument for historical study. It worked for Marx, but the
fact that historians are still using that framework so
long after Marx wrote is odd, when in
fact, you can capture much more about
any social movement by graphing the network. Point one. QUENTIN HARDY: It's interesting
to talk about the proletariat. It's equally interesting to
talk about certain Vietnamese and Cambodians in cafes in
Paris in the '40s and '50s, forming communist cadres. NIALL FERGUSON: And
the revolutions, and this is a point
the book makes, that were so powerful
in the 20th century, beginning in the Russian
Revolution in 1917, are actually better understood
as the results of networks of revolutionaries, than
of great historical forces propelling one class up
and the other class down. The big insight for me
came from a paper published by a guy named Dittmar, who
was working at the London School of Economics. And Dittmar's paper,
which I cite in the book, says, if we compare the impact
of the personal computer and the internet on the late
20th century/early 21st century with the impact of the
printing press on Europe in the 16th and
17th century, there are some striking similarities. And he has a couple
of great charts which I reproduced showing
that the impact of the printing press on the price of content
and the volume of content is comparable in
its size and shape to the impact of the personal
computer and the internet. The big difference-- I mean,
there are a whole bunch-- but the big one is,
it happens faster in our time, roughly an
order of magnitude faster. But the same processes
seem to be at work, and so the key
analogy in the book is that if you want to find
a time like our own time, it's much better to go back
to that period 500 years ago than to expect to find
good analogies in, say, the 19th and 20th century. And that's because of the
way communications technology changed between the printing
press and the internet because most of the innovations
of the 19th and 20th century favored centralized control
because they had a hub and spoke architecture--
railroads, telegraphs, and so forth. And so there's a period where
hierarchical structures are very powerful, and
distributed network structures are very weak, and that period
is the 19th and 20th century. And most people, if they study
any history, in my experience, have studied the 20th century. They know the 1930s, but
if you only know the 1930s, there's a tendency
for everything to look like the 1930s. Part of the point
of this book is, this is nothing like the 1930s. If you want to understand why
we have tremendous polarization in online networks, if you want
to understand why crazy stuff goes viral, and seems to
go viral more readily than sensible stuff, look at the 16th
and 17th centuries because I think the Reformation is a
perfect kind of analogy-- not perfect, but it's
a pretty good analogy-- for what we're
experiencing today. So combining network
science, which tells you that if you create any
decent-sized social network, there will be homophily. There will be self-segregation. And you also can see that
in any social network. Stuff will go viral and it
will go viral more rapidly, the denser the network. If you combine
that with history, then I think you have quite
a powerful set of tools for understanding the present. I mean, I do applied history. My main goal in writing
history is not just to indulge myself in
nostalgia for bygone ages. My interest is in
trying to illuminate our present predicament and the
plausible futures that we face. And I found that applying this
combination of network science and history is a pretty good way
of thinking about where we are. And it hasn't proved
unsuccessful in anticipating the crisis that we
now find ourselves in. Cambridge Analytica is
just part of a gathering crisis around the power of
the technology platform. QUENTIN HARDY: Another
element of this that I like about the advent
of a powerful communications technology-- what happened
with print and the Reformation and what seems to be happening
now-- is, in both cases, certain powerful and
seemingly extrinsic factors give new life to the medium. The printing press comes
along just as Constantinople falls, flooding Europe
with all these texts which people want to translate. Just as the bourgeoisie
are rising and being able to read in your vernacular
is an interesting thing, not so long after the
new world is discovered. So there's all this stuff to
read about all these voyages, which also creates an industry
in piracy, not sea piracy, but book piracy. Columbus's narrative
of his travels appear in 10 different versions
around Europe within a year. Everybody's just
wild to read this. So the act of reading becomes
important at a whole new level. NIALL FERGUSON: Absolutely. QUENTIN HARDY: And the church
tries to control information in a new way. The first book burning is 1510. It's too late. They don't understand. Like, you can't keep up
with the velocity here. And the last step is Luther, the
first bestselling author, 1519. 5,000 copies in a year. Oh, my god, what a home run. NIALL FERGUSON: Doesn't
sound like much, but it is enormous by the
standards of the time. QUENTIN HARDY: Fast
forward to today, where you've got technology,
and in particular, the internet coming around
just as the Berlin Wall falls, free markets appear
to be triumphant as a global dominant idea-- you get into this very peculiar
space of Fukuyama's history ending, but that's
a different story-- and the idea of individual
empowerment arising. World War II ends and 180
countries are created, and they all get sovereignty. So you've got these new ideas
about how the world ought to work, combined with these
very, very rapid new forms of information sharing
and information consumption in both cases. Now, that's really interesting. The bad news is, the
wars of the Reformation killed a third of Germany. There's an enormous amount
of turmoil associated with changes of power. Do you think we are headed for
not a similar level of crises, but some kind of turmoil
in the social order? Is that the lesson
of history Here NIALL FERGUSON: I think
the lesson of history is that polarization
processes don't necessarily stop themselves, that you can
think this country is very polarized today, and
you can go on Twitter and look at the extraordinary
vehemence with which people debate political
issues, but don't think it couldn't get worse because
this is nothing compared with what this country did
to itself in the 19th century over the central
issue of slavery. So I think if one
takes the analogy that you sketched there, a
couple of further points arise. Number one, the
printing revolution did indeed coincide
with other variables that rendered the Roman
Catholic hierarchy vulnerable. You mentioned an
important point. There's not much intellectual
property rights protection in 16th and 17th
century printing. It's a super distributed network
with each printer really doing his own thing in
each German town. So it's kind of early
internet rather than current internet, this network. But what's very striking
is that in both cases, people are optimistic about
what the new technology will do. So Luther himself thinks that
the printing press will really help improve Christianity
because everybody is going to be able to read the
Bible in the vernacular and have a direct
relationship with God, and the priesthood of all
believers will be possible. So it's a little bit
like the optimists about the internet in the
1990s saying, ad nauseam, if everybody is connected, then
everything will be awesome, and this has been
said in multiple ways. John Perry Barlow said, in
the '90s, with his declaration of the independence
of cyberspace, and Mark Zuckerberg has
said it repeatedly-- until relatively
recently-- we're building a global community. We'll solve all the
world's problems and everything will be awesome. So you start out
with the technology and it just seems, intuitively,
this has to be good. And then what do you find? Well, in the 16th
century, as you mentioned, very quickly, the new technology
allows severe polarization to happen-- QUENTIN HARDY: And
those in the tower want to reassert themselves. NIALL FERGUSON: And the
church says, whoa, whoa, whoa, stop all this. People like me from northern
Europe say to Luther, you're absolutely right. But you haven't gone
nearly far enough. You need to meet Calvin. And then the people
in southern Europe go, you are all
heretics, and we are going to burn your ass
as well as your books. And so the whole thing
escalates into 130 years of extraordinary bloodshed that
culminates in the 30 Years War. When I look at
where we are now, I worry that we've created
engines of polarization online. And it ain't just Facebook. It ain't just Twitter. It's YouTube, and you know
it, and the problem is that they're designed to polarize . They're designed to move
people along the spectrum from more moderate to
more extreme opinions. QUENTIN HARDY: Those
are neutral, Niall. They're not designed-- NIALL FERGUSON: This
wasn't meant to happen, but nor was Martin
Luther setting out to start 130 years
of religious war. That was not the plan. QUENTIN HARDY: Fair. NIALL FERGUSON: The
only law in history is the law of
unintended consequences. And here we, I think,
need to be quite careful because what worries me
in the current climate is that what is already verbal
violence may not stop there because there is a history
of crossing from the verbal to the actual. The American Civil
War was prefigured by roughly 20 years of ferocious
debate on the whole gamut of issues from slavery
itself to states' rights to the nature of
racial difference. It's certainly towards
the end of this process that actual violence begins. Or take another good example. Islam is the religion
that's been most affected by the internet. I don't think anybody would have
predicted that at the outset, but that's what happened. And it's because the
internet coincided with two great waves
of fundamentalism in the Sunni and Shia
worlds, circa 1979, just as the internet
is getting going. And since then,
what's happened is, the different networks
that have evolved have become very powerful
tools of propounding what we'll call fundamentalist
or literalist versions of Islam. That already is violent. A huge proportion of
what we call terrorism is currently conducted
around the world by various kinds
of Islamist groups, notoriously Islamic state
Boko Haram and so forth. So I think it's already the case
that our networked world has become violent, at
least in one domain. There is no reason
why it should not become violent in the
realm of secular politics. That's my big worry. QUENTIN HARDY: You're
not a fatalist. You think it's in the hands
of the people in the moment. NIALL FERGUSON: Absolutely. QUENTIN HARDY: And
the tools are neutral. And most of the online
groups, it really is notable that most of the
online political groups so far, and this would go to some
elements of social media as well, are better
at tearing things down than programmatically building
new things, with the exception of things like Wikipedia,
where the group knows the rules and can contribute in
a very formalized way. But for the most part, something
like an Al-Qaeda can destroy, but it cannot get the mail
delivered particularly well, or deliver basic needs
particularly well, or establish a durable
society particularly well. NIALL FERGUSON: I
mean, Islamic state turned out to be very
bad at being a state, but it's very good at
being an online network, and as an online network,
it's very good at radicalizing young people. QUENTIN HARDY: So
doesn't that also mean it exhausts itself over time? It's not sustainable. NIALL FERGUSON: Well. I'd love to see evidence that
the network was shrinking. I don't see it at this point. If anything, look at what
just happened in France. The network is growing, as
far as we can measure it. There is something of a plateau
in terms of terrorist attacks and casualties over,
the last three years or so but there's no decline, no
meaningful statistical decline, if you look at the data from
the START folks at Maryland. So I don't see it. I'd love to see it. I would love to believe
that the radical ideologies of the present will
burn themselves out. But the bad news is, if one
looks at the 20th century experience, that
Bolshevism, which was the extreme
version of Marxism, took a very long
time to burn out. I mean, 1917 to 1991 is
a pretty long period. And during that period,
Soviet communism remained a very powerful
disruptive force in the third world,
right into the 1980s. It really wasn't
until the mid '80s that you started to see this
thing running out of steam. So let's not assume that
things burn themselves out too quickly just out of
a sort of Steve Pinkerish optimism that the world just
has to be getting better. It feels like it's
getting better. Make it get better. QUENTIN HARDY: Not to get
all Pollyanna about things, but it is healthy to remember
that in the long view of history, 1914
to 1989 is probably one long conflict about
unwinding colonialism, in some form or
other, with Bolshevism playing an act in that as well. NIALL FERGUSON: And
rebuilding new empires that claim to be against
imperialism, one Russian and the other American. Just to make sure your narrative
doesn't get too simple. QUENTIN HARDY: They're
still contending in cyberspace and elsewhere. I mean, the scale
of human losses, 70 to 100 million people,
just in the big wars. So we may have passed the
crisis point actually, and not know it. We're not living in
that era of violence that our parents and
their parents knew. NIALL FERGUSON: Well, that's
certainly right, Quentin. Unfortunately, I have to keep
immersing myself in the 1970s to finish the
Kissinger biography, and each time I go back to the
material relating to the United States and the world
in the early 1970s, I'm reminded of how much
worse that time was than now. I mean, it's much, much worse. QUENTIN HARDY: '68 to '71,
2,000 bombings in America. NIALL FERGUSON: There's much
more warfare around the world. In most parts of
the world, there's some kind of conflict going on. Homicide rates are
higher in the US. There's a lot more really
violent student protests. Today's snowflakes, even
on the Berkeley campus, are like such losers compared
with the people who were running the anti-war
demonstrations-- QUENTIN HARDY: Do
not get personal! NIALL FERGUSON: --in the
late '60s and the 1970s. But it's true, right? So when we tell ourselves
things are really terrible, what we should
definitely say is, but they're actually not
as bad as they were then. But the reason that I hesitate
to go full Steve Pinker is that-- and this is a really
vital point that's been made most vehemently by Nassim
Taleb, but I think it's right-- given the capacity
for destruction that we have created, not
least with nuclear weapons, it does not take much
to completely destroy the argument. It only takes one
nuclear exchange to render the entire thesis all
the better angels of our nature and enlightenment now are wrong. QUENTIN HARDY: The cost of
violence has collapsed also. NIALL FERGUSON: And it's
only a matter of months ago that the President
of the United States was talking about fire
and fury in connection with the nuclear
program in North Korea. So I think one thing
I've learned from history is, don't be a trend follower. Don't just assume that the
future is a projection forward of that nice line you just
identified in the data because history has all kinds
of non-linear qualities. There were plenty
of people in 1911 who thought Norman
Angel was right when he said war had
become a great illusion. And three years
later, the biggest war that had ever
happened broke out, to the surprise of
nearly all people. One thing that I did
get very fascinated by, around 10 years ago, was
the total unexpectedness, even to sophisticated players,
of the outbreak World War I. Historians write about it
like it was very predictable. Oh, this thing had its
origins in the 1870s. Oh, no, it had its
origins in 1815. But it didn't have
its origins anywhere if you were actually there at
the time in the summer of 1914. For most people, it's
a complete surprise that they're suddenly
in a massive war. And it's also surprising that it
lasts four and a quarter years and kills more than
10 million people. So we have to remember, at
any historical moment in time, we can't predict, with
any model, the future, and we need to be
aware of scenarios that seem really low probability, but
could have very high impacts, the so-called black swans. I've come to the
conclusion that if you're interested in those
black swans, history is your best guide
because it will help you think
about scenarios that are totally outlandish in terms
of your own lived experience. Most people in this
room are pretty young. Looking around, I'm the
oldest guy in the room, but this means your data set,
your personal history data set, is laughably small. And you shouldn't really
be running any experiments with such a small data set. History basically says, let's
have a really large data set. Let's include the experience of
all the people who ever lived, who vastly outnumber
the living, and then let's think about what
might happen next. QUENTIN HARDY: Now,
let's open it up to questions in just a minute. But I also wanted to
refer to the reassertion of existing power,
which also happens in these moments of crises. We didn't touch on
the 19th century, but really starting with
the Congress of Vienna, and then moving through
these industrial, as you put it, very
centripetal industrial forces, there was a return to
centralized control. Today, we see a
call to regulate. We see a call for
authoritarian states to use the new
systems of technology to keep an even tighter
handle on population. Are we moving to a phase
of even greater control by a few incumbent powers? NIALL FERGUSON: Well, it's
already happened in the sense that in China, the square
and the tower are one. That's to say, the
network platforms that evolved in China,
Baidu, Alibaba, Tencent, are in a close
relationship, shall we say, with the Communist
Party that runs the country, and data on those platforms are
essentially available on demand to Xi Jinping. So we already have an
answer to that question for a really large
proportion of humanity. The second problem is that
in Europe, because there are no major technology
companies there, they've embarked on the
regulatory process ahead of the United States. And the future of tech
companies in Europe is higher taxation, tighter
regulation, and hefty fines, and the responsibilities
being put on tech companies for, in effect, censorship. If you let hate speech be on
the platform for any period of time, we're going
to clobber you, and that is a responsibility
that no major company can really want to have. The US is the unresolved
puzzle, and I'll say two things. Number one, unlike in the
age of the printing press, hierarchy evolved in
itself and of itself in Silicon Valley, that what
never happened to the printing press was centralization
and the emergence of giant network platforms. And that's why very
few billionaires were produced by the printing press. It stayed a distributed
network, and not many people sought to make
money, sought to monetize print data through advertising. Advertising, they're in
newspapers and magazines, but books don't
carry advertisements, and public libraries don't
carry advertisements. So the evolution of print
technology was different. Our technology
evolved very rapidly in the direction of
monetizing of data, and that led to the emergence
of these network platforms, of which Google is one. And I think in that sense, the
hierarchy has already formed. The question is,
what's the relationship between the Silicon
Valley hierarchy and the federal
government in Washington? And that's the question
that's going to be answered in the coming months. And I think it's very hard
to predict, at this point, quite what the answer will be. QUENTIN HARDY: You talk
to people on both sides. How would you characterize
their feeling? Mutual incomprehension? NIALL FERGUSON: A
little bit, because I think Washington is full
of people who don't even use the technology. I mean, the striking thing to me
is how many eminent legislators are totally clueless. QUENTIN HARDY: I was struck. Christopher Wiley was
testifying about his work at Cambridge Analytica
and Parliament, and he actually, in
an aside, started moaning about talking to
government regulators. I have to keep explaining to
them how this stuff works. And they're asking questions
no database engineer would ever ask me. Sorry, kid, you know? NIALL FERGUSON: I think there
is mutual incomprehension in the sense that there
has been a great-- I've been struck by
it, in Washington, when I talk to
people, that there is a kind of a duh
response to much of what one says
about what's happened. But I think at the
same time, there's a lack of political knowledge,
a lack of political awareness in some of the companies. Not Google so much
because I think I have to give credit to your
recently departed chairman, Eric Schmidt, who incidentally
read this book in manuscripts and helped me get stuff
right that I probably wouldn't have got right,
just in my own reading. But he, I think, understood
that the big tech companies have to have a relationship
with government. Others have been more aloof,
and I think one reason that Facebook is in trouble at the
moment is that it didn't think it needed to stoop to-- hah!-- meet the mere President
of the United States. That kind of hubris does
almost always lead to nemesis. But as I said, it's not clear
how this plays out, given the mutual incomprehension. We have a whole
bunch of options that are going to be discussed
in the coming months. Antitrust is one. Regulate them as
utilities is another. Change the legal standings
so that there can be more litigation is a third. I wish I knew which
one it would be, but I'm pretty
confident of one thing. The status quo is over
or in its last inning, and things will look a lot
different a couple of years from now. QUENTIN HARDY: Right. Well, I will not speculate on
other companies' characters or motives, but I will welcome
questions from the floor. Speak up to the
microphone, please. AUDIENCE: It's such an
honor to hear you speak. I've read a couple
of your books, and I've never encountered
an author who's like-- every single book that
he writes, I'm interested in. QUENTIN HARDY: So far, so
good with this question. NIALL FERGUSON: You're going
to say the word "but" now. AUDIENCE: I have two questions. One is, I think it's
really ironic that now that information is so
easily disseminated, right, and everything is
so distributed, that you see the
banking elites have more power than ever, right, what's
happening in the European Union. We're talking about
one world currency now, and things like that. So using your framework of
networking and power hierarchy, do you predict any future
trends that you see? Like do you continue to see the
global elites having more power and complete
domination of humanity, or do you see maybe something
like blockchain technology, cryptocurrency, something
distributed, finally taking them down, right? So that's my first question. And the second
question is, when you do researches on books
such as the Rothschilds, right, I mean, it's really hard
to really paint an accurate picture of what the real power
hierarchy is in this world, right, just because nobody
really knows who owns what and who calls the shots, right? So I was wondering if you have
gained very special access to some of these systems or
some of these people in order to do your work? NIALL FERGUSON: Two
great questions. There's quite a line
behind you so I'm going to give pretty
brief answers so that we can get through as many as
we can in the 15 minutes we have left. I think the financial
elites successfully withstood the financial
crisis by essentially going hand in glove with the
federal government, and making sure that the
regulatory cost of doing that was kept to a minimum. Look at the complexity of
Dodd-Frank which, in any case, is probably going
to be scrapped. The price that they paid for the
bailouts has been pretty small, and if anything, it's entrenched
the position of the surviving banks. What are the two
challenges they face? Number one, populism-- the
disgust of middle America, not to mention provincial Britain
and many other places, with that outcome is
real, and it isn't over as a political force. Number two, I think, and this
goes to the blockchain point, that they still haven't really
got a handle on what could be the next financial revolution. The disparaging remarks
of certain bankers I'll not name about Bitcoin-- it's tulip mania. I can't take this
seriously-- betrayed, I think, some ignorance
as well as some fear. So I think there is a challenge. I think blockchain is a
real potentially disruptive technology. I hate to use the
word disruptive, but I think it
does at least have the promise of some
re-decentralization of the internet. But it's very early
days, and my hunch is that the use case that
matters is not money. And we'll look back and say, do
you remember all that nonsense about cryptocurrency? We should have realized that
blockchain wouldn't really provide a new form of money. Finally, you can't
write a history of an institution like
the Rothschild banks without access to
the archives, and I did get that access at a time
when it was quite restricted. It's now pretty open, since my
book was published in the '90s. Now, scholars can go to the
Rothschild archive in London and have pretty much unlimited
access to what is there. And my view is that that's a
very good thing because this was a powerful important
institution, probably more powerful than any
financial institution today, in the 19th century. But its power has
been exaggerated often by conspiracy theorists,
and it's very healthy to let the daylight
of serious scholarship in and show that they had
power, but not the kind of power that the anti-Semites
used to claim. QUENTIN HARDY: I'll just
footnote what he said quickly about blockchain. I, think symbolically
and psychologically, it's certainly interesting
because the dominant power form is the nation state. And it likes to express itself
in controlling violence, in printing money, and
in printing stamps, which are all statements about
where the border ends, right? The police go to here. If we have to go past the
border, we go to the army. A stamp costs this much. If you go past the
border, it costs more. This currency is good to here. You need somebody else's
currency past that. And email has
pretty much hollowed out the need for stamps. I think state controlled
violence is still its own thing, although there
are these insurgent groups doing their thing. And blockchain is
attacking currency on a transnational basis,
so that these things are presented in a way
that seem like a threat to the nation state. The dominant form
is provocative. Next question. AUDIENCE: Thanks
for coming, Niall. Recently, I watched on
YouTube a phenomenal debate you had about a year ago with
Fareed Zakaria at the Munk Debates on the end of the
liberal world order, which was the proposition you supported. What I don't understand,
is that something you still agree with today? And in particular, what does
your research on networks inform about that possibility? NIALL FERGUSON: I
lost the debate, as those of you who watch
it will see, but imagine trying to say that the liberal
international order is doomed in Toronto, where everybody
thinks that they're liberal, international, and orderly. So I never had a
chance in that fight. But of course,
I've been entirely right in terms of what
subsequently happened because here we are, in a
trade war between the biggest economies in the world,
the US and China. And it's real and it's
serious, and it could escalate. I think there's no question
that the high tide of free trade is behind us. The high tide of very free
migration is behind us. And the high tide of very free
capital movements is behind us. So my argument then, that
globalization overreached and that the backlash against
it is going to dial it back, I would stand by. And I think that one shouldn't
freak out about this because it doesn't mean the end of trade
and the end of migration and the end of free
capital movement. It just, I think, involves a
dialing back of those things. They had overshot
in so many ways. So I don't look back and say,
when I think about that debate, I was so wrong. Dear Fareed, I take it all back. Actually, I'm going to write him
an email saying, I was right. Where's my damn apology? Can we rerun the debate? I want a rematch. AUDIENCE: Hi, Niall. I watched a previous
talk that you gave about networks and hierarchies. Unfortunately, I haven't had a
chance to read this book yet, although I enjoyed
your other ones. And in it, I believe, and I
could be misunderstanding this, that you mentioned that a
lot of times, networks occur. They kind of come out of left
wing, and a lot of times, hierarchies will come
and then co-opt them. And then the network
will kind of cease to be, and they've kind
of co-opted this. I'm curious. If that's correct, then, and you
believe it to be, in this case, and you two already
touched on this somewhat, it's a little bit
different now in that there's these massive
tech companies, right? It's not completely
decentralized, as like before, we're
talking about communication and the internet, what have you. I'm curious. In this sense, is
the hierarchy that might come in to co-opt
this whole network, is this traditional
government or is this the private sector
in the form of goals and what have you? Just curious. NIALL FERGUSON: Yeah, this
is very much the right way of thinking about it. The book argues that
because social networks are complex systems with
emergent properties-- they can undergo phased
transitions-- they themselves can quite quickly go
from a distributed architecture to a
centralized architecture, all by themselves. But what commonly
happens, historically, is that the revolutionary
network ends up in some way being co-opted
by the established hierarchy. It happened to Napoleon. I mean, he ends up saying,
hey, can I be crowned emperor? I like the outfit. And so most hierarchies,
and if they're to survive, have to have the skill of
absorbing the new network. And I think that's a fairly
clear and recurrent theme of the book. In our own time, I think it's
been an easy thing, in China, to simply take the square
that formed in the big tech companies and say,
seamlessly, you're going to be part of
the party hierarchy. And the pyramidal structure
of the Communist Party lends itself to
that pretty well. I think in the case
of the United States, it was happening. The National Security Agency was
co-opting the tech companies, and then Snowden
blew the whistle. Now, I keep asking people in
the intelligence community, did that really change
everything and stop it, or is it all still going on
and we just don't know? And they all look
at me and they say, but you don't have
security clearance, so I can't tell you that. So I don't know. I don't know, but that's the
process I'm talking about. AUDIENCE: Thanks very
much for the talk. I really appreciate this
notion that basically there are concepts that historians
will use to reason about bodies of people. You reference Marxism
using class based thinking, and ideally you would basically
be able to look at network data and discover the
communities of people that were most predictive of the
outcomes that you cared about. And I guess there's a sense
that historians could basically take those concepts and use
those to reason and to make predictions, and to
build theory on top of, and ideally, make
falsifiable theories. So I guess I wonder if there's
actually a promise there, if you think this can
be grounded inside of the massive amount
of data that we've been able to collect. NIALL FERGUSON:
I think there is. I'm skeptical that
we'll ever really get to predicting history because
I think the process is so complex that
one can't model it, and therefore, one can only
predict in rather circumscribed contexts. I mean, even predicting
something very circumscribed, like what the economy
will do next year, turns out to be super difficult.
And as for politics, well, you remember the
predictions of 2016 and how most people
in the business of political
prediction were wrong. What I would say is that if
you take a thesis like Quentin proposed, that any radical
ideological movement will, at some point, burn
out, that, I think, you could really investigate
using network science and history. It's fascinating to
me that nobody has yet done a serious network-based
analysis of either the communist revolution in
Russia, or the rise of Hitler. I know more about the latter
because I started my career as a historian of
interwar Germany. It is amazing that we still are
explaining the rise of Hitler with the statistical
techniques of the 1980s. Nobody has really
taken any steps forward to understand that better. And one project I
have at the moment at the Hoover
Institution is to try to take data on the Nazi
party and the Nazi vote, and understand this phenomenon
as something that went viral, that was very pernicious
indeed, and try to understand its dynamic. QUENTIN HARDY: That
would be one area where I would say in most
historical analysis, you'd have a data quality
problem, but thank you, German bureaucrats. It's a data-rich environment. NIALL FERGUSON: We have very
good data on this process. Now, the bad news is that the
Nazi experiment wasn't left-- oh, did I say bad news? The good news is that
the Nazi experiment wasn't left to run its course. It was annihilated by massive
aerial bombardment and ground forces. So we actually can
never know how long the half life of Nazism
was because it was destroyed by exogenous forces. But I think we can at least
understand how it grew, and the dynamics of its rise. With the Russian case,
we have something more to go on because although
external pressure has played a part, I suspect the truth
of the Soviet collapse was that it was internal. AUDIENCE: So to make
sure I understand, you're proposing that we think
of Nazism as this meme that infects some body
of people, and you can predict how
far it will cascade across your social graph,
and what it's length of time will be. QUENTIN HARDY: Over
time, it gathers you power, influence and charisma, AUDIENCE: Yeah. That's right, and I
suppose as a function of tracking many other similar
memes and the populations that we see today, that
we have similar data for. NIALL FERGUSON: So
there are people who work on this kind of
problem in the recent past, like Nicholas Christakis,
or Laszlo Barabasi. And my basic suggestion is,
we take these methods which look at cascades, social
and political contagion, and apply them to what
was perhaps the biggest catastrophe of them all, that
the most advanced society in Europe that was
Germany in the 1920s produces the most
disastrously murderous regime. I still think that's one
of the big questions. And what's exciting
about network science is that it gives
us some new tools to work with to try to
understand that process better. Will we get to the
point that we can predict the course of
comparable extremist movements? Probably not. But I think we'll
understand a little bit better what to look for. And I'm excited by
that prospect because I think we have
enough data to chart the course of the movement,
and understand what things accelerated that course. Why was it some places and not
others that went for Hitler? Those sorts of
questions seemed to me to be ideally suited
to this approach. QUENTIN HARDY: How hard
is our 1 o'clock stop? AUDIENCE: We can go for-- QUENTIN HARDY: OK, if
you can take them, great. NIALL FERGUSON: At some point,
there's an editor in London, as we speak, sending desperate
messages to me, like, are you nearly done? QUENTIN HARDY:
Where's my column? NIALL FERGUSON: This is
the day I write my column. But I'm having fun,
so let's keep going. My phone's on silent. AUDIENCE: OK, that's good. So this is maybe a bit
of a naive question, but as you were saying,
people generally tend to view the
future through the lens of their own experience
or very recent history. I mean, do you see in your
study of history, any evidence that the proclivity of humans
to learn the lessons of history has increased over
time, or are we just doomed to repeat the same
mistakes over and over again? NIALL FERGUSON: Great historians
have reflected on this problem. One of my favorite
observations was AJP Taylor's, that men
only learn from history how to make new mistakes. That kind of council
of despair was quite common amongst the
older generation of historians when I was an undergraduate. And I'm much more, I guess
I'm more of a positivist. I think it's worth a try. One thing's very
sure, very clear. People who don't know
any history at all are very likely to make
obvious avoidable mistakes. And we've run this experiment
in the US government for multiple
generations, and I think we are now in the position to
say that this hypothesis is good, and having people taking
major strategic decisions who don't know anything about
history is a terrible idea. QUENTIN HARDY: You don't favor
going with your gut, huh? NIALL FERGUSON: Well,
you know, let's just put it this way-- the
track record's terrible. And what's fascinating is that
even the recent past, the US government's bad
at learning from. So I heard a great paper
by a military historian recently on the
lessons of Vietnam. And one very good observation
he made in that paper was that even really obvious
lessons of what had gone wrong in Vietnam were not
learned, and we still rotate troops out of combat
zones after six months, and we still ensure
that no memory forms, even at the short time,
in a short time span. So I think it's clear
that not knowing history is a major handicap
for decision makers. It's also clear, though, that
if you have a theory of history that says the arc of
history bends my way, then you will do bad things
with great certainty. And I almost fear those people
more than the ignoramuses. The people who think that
history is on their side have probably done more
damage than the ignoramuses over the long run. So when anybody uses the phrase
"arc of history" in a speech, you should really
be very wary indeed. There is no arc of history. It doesn't exist. QUENTIN HARDY:
Beware any god that agrees with you all the time. NIALL FERGUSON: Right. I think a state
of uncertainty is what a good historical
scholarship gives you, a sense that there are a bunch
of options you haven't even considered. And here, I'll go back
to Taylor's observation that the study of history
is a bit like learning to appreciate music. Another way of putting it
was RG Collingwood who said, the thing about a
historian is that he's like an experienced woodsman. He'll see the tiger in the
grass where the unwary traveler won't. And I love that image
of being able to see the tiger in the grass
because you've just been wandering around the
woods most of your life. AUDIENCE: Given all that,
you're still optimistic. NIALL FERGUSON: Look,
I'm from Glasgow, where pessimism is
the default setting, and I moved to
northern California in the hope of finding a cure. QUENTIN HARDY: We'll check
back on you later on that one. AUDIENCE: Hi. Thank you very much for this
exciting electrifying talk. So I have two questions which
have been partially covered by the previous question,
but it's very interesting, I think, to discuss. So the first one is about
history and education and society. So I come from Greece, which
is a country which, in a sense, has been stuck in history. So everybody learns ancient
and medieval history very well, new history also very well. But people also have
similar short sightedness and short memory, and they
make the same mistakes that their parents did. So I think these were
covered partially by saying that it's also the
establishment that makes sure that no memory is created,
and people don't really have this extra intellect to
try to learn from history. And I would like to ask
you, as an educator, how we could fix this. So that's my first question. The second question
is about two things. One is the parallel with
the printing revolution, and the other is about optimism,
pessimism, and skepticism. So these do remind me a
lot of another book that has been recently released,
the "How to Fix the Future." I'm not sure if you have read
that one by Andrew Keene. NIALL FERGUSON: I haven't. AUDIENCE: So in the
similar concepts I discussed and how people
are on the optimism side, technology will
solve everything, we don't need to worry. On the pessimism side, it's
going to destroy everything. AI will rule us all. We'll be exterminated,
and things like that. And then the maybe
people in between will say that no,
we have history. We can study it,
and you can see how to go to a good
enough future for us, rather than hope that
things all just-- let things take their own road. So my question
is, I would assume that you are more on
the maybe category, and how probably you see
networks of different actors forming and actually trying
to create the future that would be the optimal for us. NIALL FERGUSON: I'm
conscious that at some point, people have to get back to
their desks, so I'll be brief. I think, when it comes
to teaching history, there needs to be a focus
on the lessons of history. If one doesn't make that
explicit in the classroom, then I think it's
very easy for people to infer wrong assumptions
about what they're studying. And so I'm pressing
for history to be more explicit about the
implications for the present of what you just studied because
that too seldom is explicit, whether in high schools
or in universities, whether in Greece, in
Britain, or the United States. I haven't read how
to fix the future. I think the first
thing one should do is remember that there's no such
thing as the future, singular. There are multiple futures,
and both the futures that you sketch there,
the "It'll all be awesome and we'll solve all
problems" future, the kind of singularity
version, and the "we're all doomed, it's going to be like
a science fiction nightmare," I mean, both those are
plausible futures. I don't know what
probabilities you're going to attach
to those futures, but the business, it seems
to me, of applied history is to say that there
are a bunch of futures. We get to choose. We have agency. And the challenge
here is to make sure the techno optimists don't
build a future that turns out to have the unintended
consequence that the pessimists feared. That's, I think, quite plausible
because I think that resembles, closely, past episodes. You don't set out to create
weapons of mass destruction when you're doing the
Industrial Revolution. Actually, the goal is
to make cheap shirts. Let's make clothes cheap. That's really the
Industrial Revolution. But it turns out to also
make artillery vastly more destructive. And I think that's
the main lesson I would take from my 25 or
30 years of historical study. There is a powerful law of
unintended consequences , and those people who are too
optimistic, too confident, about what it is
that they're doing, those people who really believe
the arc of history is bending their way and it will solve all
problems and everything will be awesome, those people often are
the ones who produce the most disruptive technologies
without meaning to. QUENTIN HARDY: At the
risk of skirting banality, the future is what we
collectively will do today, and likewise, what we
collectively will do today will always recast the past. There will be data, but we
will read it differently. NIALL FERGUSON:
Everybody is acting on the basis of an implicit
or explicit historical model of how the world works. There are just those people
who know that they're doing applied history,
and those who are unaware that they're doing it. But nobody doesn't
have some theory in their head of
how the world works, and how their actions are likely
to influence their futures. And that seems to me to
be part of the point here. One's trying to get people
out of bad models of thinking about the world, I mean,
the bad model that says, well, it's Allah's
will, it's God's will. There's nothing much
I can do about it. And when it all goes wrong, it's
probably the fault of the Jews. I mean, that is not a great way
of thinking about the world-- QUENTIN HARDY: We've run
that experiment a few times. NIALL FERGUSON: You'd be
amazed how many people think about the world this way. One can find them online,
including on YouTube. [LAUGHTER] AUDIENCE: Thank you very much. QUENTIN HARDY: My dude. I need another hour. SPEAKER: All right,
well, thank you Quentin. Thank you, Niall. Thank you everyone for coming. Let's give them a
round of applause. [APPLAUSE]
