Pondering National Governance

This is a recent article published in the NY Times. To make any sense of our answers to this question requires some ideological and historical clarity. [Blog comments]

Is the United States Too Big to Govern?

By Neil Gross

May 11, 2018

Last month the Pew Research Center released a poll showing that Americans are losing faith in their system of government. Only one-fifth of adults surveyed believe democracy is working “very well” in the United States, while two-thirds say “significant changes” are needed to governmental “design and structure.” [Because nobody really knows what these words mean, or they don’t agree among the many meanings, polling results are questionable indicators.]

The 2016 election is one explanation for these findings. Something is not right in a country where Donald Trump is able to win the presidency. [Well, that’s a selective value judgment – one could easily substitute in the names Hillary Clinton or Bernie Sanders. The point of a democratic society is that the people get to make those decisions and the people agree to abide by them or revolt. Are the people revolting against themselves or against their political representatives?]  

But here’s another possibility: What if trust in American democracy is eroding because the nation has become too big to be effectively governed through traditional means? With a population of more than 325 million and an enormously complex society, perhaps this country has passed a point where — no matter whom we elect — it risks becoming permanently dissatisfied with legislative and governmental performance. [There’s an implicit assumption here that the original intent of the founders is that some central authority should “govern” the affairs of the population and manage the national interest (“traditional means”?). This is probably half true in that a national interest must be represented as the sum of its many parts. We have a Federal government. What was not intended was an all-powerful Federal government.]

Political thinkers, worried about the problem of size, have long advocated small republics. Plato and Aristotle admired the city-state because they thought reason and virtue could prevail only when a polis was small enough that citizens could be acquaintances. Montesquieu, the 18th-century French political philosopher, picked up where the ancient Greeks left off, arguing for the benefits of small territories. “In a large republic,” he wrote, “the common good is sacrificed to a thousand considerations,” whereas in a smaller one the common good “is more strongly felt, better known, and closer to each citizen.” [I suspect Dunbar’s number is at work here.]

The framers of the United States Constitution were keenly aware of these arguments. As the political scientists Robert Dahl and Edward Tufte noted in their 1973 book, “Size and Democracy,” the framers embraced federalism partly because they thought that states were closer in scale to the classical ideal. Ultimately, however, a counterargument advanced by James Madison won the day: Larger republics better protected democracy, he claimed, because their natural political diversity made it difficult for any supersized faction to form and dominate. [With Federalism and the separation of powers and overlapping jurisdictions, I think the founders split the difference here.]

Two and a half centuries later, the accumulated social science suggests that Madison’s optimism was misplaced. Smaller, it seems, is better. [This is a false and impossible choice. When complex networks grow too large, they break-up into smaller, more manageable pieces, but these smaller entities are vulnerable to competitive pressures. This is true in industrial organization, economic and financial markets, and digital and social networks. It also applies to social choice and governance. The founders’ idea was to create a coordinated network of states, counties, and municipalities to manage affairs at the appropriate jurisdictional level. National issues are the sole responsibility of a Federal government balanced by parochial interests. This would secure the strongest union to guarantee citizens’ rights and freedoms. As that task grows in complexity, the need for decentralization and coordination reasserts itself.] 

There are clear economic and military advantages to being a large country. But when it comes to democracy, the benefits of largeness — defined by population or geographic area — are hard to find. Examining data on the world’s nations from the 19th century until today, the political scientists John Gerring and Wouter Veenendaal recently discovered that although size is correlated with electoral competition (in line with the Madisonian argument), there is no association between size and many other standard measures of democratic functioning, such as limits on executive power or the provision of human rights. [Another question raised here is what exactly we mean by democracy. Strictly democracy means government by the people, but popular democracy is a narrow offshoot of that definition. IT also begs the question of what a government by the people is trying to accomplish. Our founders made it clear they thought it was life, liberty, and the pursuit of happiness.  Note: the pursuit of happiness, not its guarantee.]

In fact, large nations turn out to have what the political scientist Pippa Norris has called “democratic deficits”: They don’t fully satisfy their citizens’ demands for democracy. [Again, what is that demand? Is it coherent?] For one thing, citizens in large nations are generally less involved in politics and feel they have less of a voice. [Are they unable to secure life, liberty and pursue happiness or do they just not like the results?] Voter turnout is lower. [Low voter turnout could mean that voters are happy with the status quo, or don’t believe voting matters to their individual fates.] According to the political scientist Karen Remmer, smaller-scale political entities encourage voting in ways large ones can’t by “creating a sense of community” and “enforcing norms of citizenship responsibility.” [Perhaps because they enjoy more intrinsic rewards to participation. This would suggest more localized control over politics.] In addition, small countries promote political involvement by leaning heavily on forms of direct democracy, like referendums or citizen assemblies. [This is a feature of scale. Direct democracy on a large scale can empower the tyranny of the popular majority because the effects are so far removed from that majority.]

A second problem is political responsiveness: The policies of large nations can be slow to change, even if change is needed and desired. In a book published last year, the sociologists John Campbell and John Hall compared the reactions to the 2007-2008 financial crisis in Denmark, Ireland, and Switzerland. These three small countries didn’t cause the crisis; a homegrown Irish housing bubble notwithstanding, the shock wave they dealt with came from America. But though the countries were economically vulnerable, Mr. Campbell and Mr. Hall observed, this vulnerability fostered unexpected resilience and creativity, generating in each nation “a sense of solidarity or ‘we-ness’” that brought together politicians, regulators, and bankers eager to do whatever was necessary to calm markets. [Again, a sense of “we-ness” is one of scale. Cultural homogeneity helps.] 

With the United States lacking the same sense of shared fate and vulnerability, American policymakers could organize only a tepid response, which helps explain why the recovery here was so slow. This theory sheds light as well on developments in environmental and social welfare policy, where it is increasingly common to find a complacent America lagging behind its smaller, more innovative peers. [Complexity plus centralization leads to sclerosis, which is why centralizing authority in a large, diverse, pluralist society make be unworkable.] 

Finally, largeness can take a toll on citizen trust. The presence of a wide variety of social groups and cultures is the primary reason for this. Nearly all scholars who study country size recognize, as Madison did, that large nations are more socially heterogeneous, whether because they represent an amalgamation of different regions, each with its own ethnolinguistic, religious or cultural heritage; or because their economic vitality encourages immigration; or because population size and geographic spread promote the growth of distinctive subcultures; or because they have more differentiated class structures. [Agreed, which is why encouraging a large diverse population of the virtues of multiculturalism may actually be a detriment. I believe the original idea, or at least the one that prevailed in past influxes of cultural groups, was the melting pot of gradual, voluntary assimilation.]

It isn’t inevitable that a large amount of social variation would undermine trust. Well-governed societies like Canada address the issue by stitching diversity and multiculturalism into their national identities. Yet in the absence of cultural and institutional supports, heterogeneity and trust are frequently in tension, as different ways of life give rise to suspicion and animosity. Without at least a veneer of trust among diverse social groups, politics spirals downward. [This characterization of Canada seems counter-intuitive. Stitching ethnic diversity and multiculturalism into a national identity means that national identity must be based not on ethnicity, race, or diverse cultures but in a national identity based on universal principles and social contracts. In other words, on something called patriotism and fealty to the larger community, subsuming ethnic, racial, and cultural differences.]

The challenges of American largeness are here to stay. The task now is for individuals, civic organizations and institutions to commit themselves to building stronger communities and a renewed sense of shared responsibility and trust among different groups. Within the constraints of our nation’s size, we can create conditions for as much democracy as possible. [So, we converge on the idea that it is inevitable we decentralize power and assume the responsibility of self-governance? What then is the real political conflict of interest?]

Neil Gross is a professor of sociology at Colby College.

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How the Enlightenment Ends

What’s Going On?

This is an excellent interview with technology culture guru Jaron Lanier, author of some very insightful books on the clashes between technology and humanism. See comments and highlights below…

And then when you move out of the tech world, everybody’s struggling…

It’s not so much that they’re doing badly, but they have only labor and no capital. Or the way I used to put it is, they have to sing for their supper, for every single meal. It’s making everyone else take on all the risk. It’s like we’re the people running the casino and everybody else takes the risks and we don’t. That’s how it feels to me. It’s not so much that everyone else is doing badly as that they’ve lost economic capital and standing, and momentum and plannability. It’s a subtle difference.

‘One Has This Feeling of Having Contributed to Something That’s Gone Very Wrong’

By Noah Kulwin April 17, 2018 New York Magazine

Over the last few months, Select All has interviewed more than a dozen prominent technology figures about what has gone wrong with the contemporary internet for a project called “The Internet Apologizes.” We’re now publishing lengthier transcripts of each individual interview. This interview features Jaron Lanier, a pioneer in the field of virtual reality and the founder of the first company to sell VR goggles. Lanier currently works at Microsoft Research as an interdisciplinary scientist. He is the author of the forthcoming book Ten Arguments for Deleting Your Social Media Accounts Right Now.

You can find other interviews from this series here.

Jaron Lanier: Can I just say one thing now, just to be very clear? Professionally, I’m at Microsoft, but when I speak to you, I’m not representing Microsoft at all. There’s not even the slightest hint that this represents any official Microsoft thing. I have an agreement within which I’m able to be an independent public intellectual, even if it means criticizing them. I just want to be very clear that this isn’t a Microsoft position.

Noah Kulwin: Understood.
Yeah, sorry. I really just wanted to get that down. So now please go ahead, I’m so sorry to interrupt you.

In November, you told Maureen Dowd that it’s scary and awful how out of touch Silicon Valley people have become. It’s a pretty forward remark. I’m kind of curious what you mean by that.
To me, one of the patterns we see that makes the world go wrong is when somebody acts as if they aren’t powerful when they actually are powerful. So if you’re still reacting against whatever you used to struggle for, but actually you’re in control, then you end up creating great damage in the world. Like, oh, I don’t know, I could give you many examples. But let’s say like Russia’s still acting as if it’s being destroyed when it isn’t, and it’s creating great damage in the world. And Silicon Valley’s kind of like that.

We used to be kind of rebels, like, if you go back to the origins of Silicon Valley culture, there were these big traditional companies like IBM that seemed to be impenetrable fortresses. And we had to create our own world. To us, we were the underdogs and we had to struggle. And we’ve won. I mean, we have just totally won. We run everything. We are the conduit of everything else happening in the world. We’ve disrupted absolutely everything. Politics, finance, education, media, relationships — family relationships, romantic relationships — we’ve put ourselves in the middle of everything, we’ve absolutely won. But we don’t act like it.

We have no sense of balance or modesty or graciousness having won. We’re still acting as if we’re in trouble and we have to defend ourselves, which is preposterous. And so in doing that we really kind of turn into assholes, you know?

How do you think that siege mentality has fed into the ongoing crisis with the tech backlash?

One of the problems is that we’ve isolated ourselves through extreme wealth and success. Before, we might’ve been isolated because we were nerdy insurgents. But now we’ve found a new method to isolate ourselves, where we’re just so successful and so different from so many other people that our circumstances are different. And we have less in common with all the people whose lives we’ve disrupted. I’m just really struck by that. I’m struck with just how much better off we are financially, and I don’t like the feeling of it.

Personally, I would give up a lot of the wealth and elite status that we have in order to just live in a friendly, more connected world where it would be easier to move about and not feel like everything else is insecure and falling apart. People in the tech world, they’re all doing great, they all feel secure. I mean they might worry about a nuclear attack or something, but their personal lives are really secure.

And then when you move out of the tech world, everybody’s struggling. It’s a very strange thing. The numbers show an economy that’s doing well, but the reality is that the way it’s doing well doesn’t give many people a feeling of security or confidence in their futures. It’s like everybody’s working for Uber in one way or another. Everything’s become the gig economy. And we routed it that way, that’s our doing. There’s this strange feeling when you just look outside of the tight circle of Silicon Valley, almost like entering another country, where people are less secure. It’s not a good feeling. I don’t think it’s worth it, I think we’re wrong to want that feeling.

It’s not so much that they’re doing badly, but they have only labor and no capital. Or the way I used to put it is, they have to sing for their supper, for every single meal. It’s making everyone else take on all the risk. It’s like we’re the people running the casino and everybody else takes the risks and we don’t. That’s how it feels to me. It’s not so much that everyone else is doing badly as that they’ve lost economic capital and standing, and momentum and plannability. It’s a subtle difference.

There’s still this rhetoric of being the underdog in the tech industry. The attitude within the Valley is “Are you kidding? You think we’re resting on our laurels? No! We have to fight for every yard.”

There’s this question of whether what you’re fighting for is something that’s really new and a benefit for humanity, or if you’re only engaged in a sort of contest with other people that’s fundamentally not meaningful to anyone else. The theory of markets and capitalism is that when we compete, what we’re competing for is to get better at something that’s actually a benefit to people, so that everybody wins. So if you’re building a better mousetrap, or a better machine-learning algorithm, then that competition should generate improvement for everybody.

But if it’s a purely abstract competition set up between insiders to the exclusion of outsiders, it might feel like a competition, it might feel very challenging and stressful and hard to the people doing it, but it doesn’t actually do anything for anybody else. It’s no longer genuinely productive for anybody, it’s a fake. And I’m a little concerned that a lot of what we’ve been doing in Silicon Valley has started to take on that quality. I think that’s been a problem in Wall Street for a while, but the way it’s been a problem in Wall Street has been aided by Silicon Valley. Everything becomes a little more abstract and a little more computer-based. You have this very complex style of competition that might not actually have much substance to it.

You look at the big platforms, and it’s not like there’s this bountiful ecosystem of start-ups. The rate of small-business creation is at its lowest in decades, and instead you have a certain number of start-ups competing to be acquired by a handful of companies. There are not that many varying powers, there’s just a few.
That’s something I’ve been complaining about and I’ve written about for a while, that Silicon Valley used to be this place where people could do a start-up and the start-up might become a big company on its own, or it might be acquired, or it might merge into things. But lately it kind of feels like both at the start and at the end of the life of a start-up, things are a little bit more constrained. It used to be that you didn’t have to know the right people, but now you do. You have to get in with the right angel investors or incubator or whatever at the start. And they’re just a small number, it’s like a social order, you have to get into them. And then the output on the other side is usually being acquired by one of a very small number of top companies.

There are a few exceptions, you can see Dropbox’s IPO. But they’re rarer and rarer. And I suspect Dropbox in the future might very well be acquired by one of the giants. It’s not clear that it’ll survive as its own thing in the long term. I mean, we don’t know. I have no inside information about that, I’m just saying that the much more typical scenario now, as you described, is that the companies go to one of the biggies.

I’m kind of curious what you think needs to happen to prevent future platforms, like VR, from going the way of social media and reaching this really profitable crisis state.

A lot of the rhetoric of Silicon Valley that has the utopian ring about creating meaningful communities where everybody’s creative and people collaborate and all this stuff — I don’t wanna make too much of my own contribution, but I was kind of the first author of some of that rhetoric a long time ago. So it kind of stings for me to see it misused. Like, I used to talk about how virtual reality could be a tool for empathy, and then I see Mark Zuckerberg talking about how VR could be a tool for empathy while being profoundly nonempathic, using VR to tour Puerto Rico after the storm, after Maria. One has this feeling of having contributed to something that’s gone very wrong.

So I guess the overall way I think of it is, first, we might remember ourselves as having been lucky that some of these problems started to come to a head during the social-media era, before tools like virtual reality become more prominent, because the technology is still not as intense as it probably will be in the future. So as bad as it’s been, as bad as the election interference and the fomenting of ethnic warfare, and the empowering of neo-Nazis, and the bullying — as bad as all of that has been, we might remember ourselves as having been fortunate that it happened when the technology was really just little slabs we carried around in our pockets that we could look at and that could talk to us, or little speakers we could talk to. It wasn’t yet a whole simulated reality that we could inhabit.

Because that will be so much more intense, and that has so much more potential for behavior modification, and fooling people, and controlling people. So things potentially could get a lot worse, and hopefully they’ll get better as a result of our experiences during this era.

As far as what to do differently, I’ve had a particular take on this for a long time that not everybody agrees with. I think the fundamental mistake we made is that we set up the wrong financial incentives, and that’s caused us to turn into jerks and screw around with people too much. Way back in the ’80s, we wanted everything to be free because we were hippie socialists. But we also loved entrepreneurs because we loved Steve Jobs. So you wanna be both a socialist and a libertarian at the same time, and it’s absurd. But that’s the kind of absurdity that Silicon Valley culture has to grapple with.

And there’s only one way to merge the two things, which is what we call the advertising model, where everything’s free but you pay for it by selling ads. But then because the technology gets better and better, the computers get bigger and cheaper, there’s more and more data — what started out as advertising morphed into continuous behavior modification on a mass basis, with everyone under surveillance by their devices and receiving calculated stimulus to modify them. So you end up with this mass behavior-modification empire, which is straight out of Philip K. Dick, or from earlier generations, from 1984.

It’s this thing that we were warned about. It’s this thing that we knew could happen. Norbert Wiener, who coined the term cybernetics, warned about it as a possibility. And despite all the warnings, and despite all of the cautions, we just walked right into it, and we created mass behavior-modification regimes out of our digital networks. We did it out of this desire to be both cool socialists and cool libertarians at the same time.

This dovetails with something you’ve said in the past that’s with me, which is your phrase Digital Maoism. Do you think that the Digital Maoism that you described years ago — are those the people who run Silicon Valley today?

I was talking about a few different things at the time I wrote “Digital Maoism.” One of them was the way that we were centralizing culture, even though the rhetoric was that we were distributing it. Before Wikipedia, I think it would have been viewed as being this horrible thing to say that there could only be one encyclopedia, and that there would be one dominant entry for a given topic. Instead, there were different encyclopedias. There would be variations not so much in what facts were presented, but in the way they were presented. That voice was a real thing.

And then we moved to this idea that we have a single dominant encyclopedia that was supposed to be the truth for the global AI or something like that. But there’s something deeply pernicious about that. So we’re saying anybody can write for Wikipedia, so it’s, like, purely democratic and it’s this wonderful open thing, and yet the bizarreness is that that open democratic process is on the surface of something that struck me as being Maoist, which is that there’s this one point of view that’s then gonna be the official one.

And then I also noticed that that process of people being put into a global system in which they’re supposed to work together toward some sort of dominating megabrain that’s the one truth didn’t seem to bring out the best in people, that people turned aggressive and mean-spirited when they interacted in that context. I had worked on some content for Britannica years and years ago, and I never experienced the kind of just petty meanness that’s just commonplace in everything about the internet. Among many other places, on Wikipedia.

On the one hand, you have this very open collective process actually in the service of this very domineering global brain, destroyer of local interpretation, destroyer of individual voice process. And then you also have this thing that seems to bring out this meanness in people, where people get into this kind of mob mentality and they become unkind to each other. And those two things have happened all over the internet; they’re both very present in Facebook, everywhere. And it’s a bit of a subtle debate, and it takes a while to work through it with somebody who doesn’t see what I’m talking about. That was what I was talking about.

But then there’s this other thing about the centralization of economic power. What happened with Maoists and with communists in general, and neo-Marxists and all kinds of similar movements, is that on the surface, you say everybody shares, everybody’s equal, we’re not gonna have this capitalist concentration. But then there’s some other entity that might not look like traditional capitalism, but is effectively some kind of robber baron that actually owns everything, some kind of Communist Party actually controls everything, and you have just a very small number of individuals who become hyperempowered and everybody else loses power.

And exactly the same thing has happened with the supposed openness of the internet, where you say, “Isn’t it wonderful, with Facebook and Twitter anybody can express themselves. Everybody’s an equal, everybody’s empowered.” But in fact, we’re in a period of time of extreme concentration of wealth and power, and it’s precisely around those who run the biggest computers. So the truth and the effect is just the opposite of what the rhetoric is and the immediate experience.

A lot of people were furious with me over Digital Maoism and felt that I had betrayed our cause or something, and I lost some friends over it. And some of it was actually hard. But I fail to see how it was anything but accurate. I don’t wanna brag, but I think I was just right. I think that that’s what was going on and that’s what’s happening in China. But what’s worse is that it’s happening elsewhere.

The thing is, I’m not sure that what’s going on in the U.S. is that distinct from what’s going on in China. I think there are some differences, but they’re in degree; they’re not stark. The Chinese are saying if you have a low social rating you can’t get on the subway, but on the other hand, we’re doing algorithmic profiling that’s sending people to jail, and we know that the algorithms are racist. Are we really that much better?

I’m not really sure. I think it would be hard to determine it. But I think we’re doing many of the same things; it’s just that we package them in a slightly different way when we tell stories to ourselves.

This is something I write about, you know I have another book coming out shortly?

Yeah, that was gonna be where I took this next.

One of the things that I’ve been concerned about is this illusion where you think that you’re in this super-democratic open thing, but actually it’s exactly the opposite; it’s actually creating a super concentration of wealth and power, and disempowering you. This has been particularly cruel politically. Every time there’s some movement, like the Black Lives Matter movement, or maybe now the March for Our Lives movement, or #MeToo, or very classically the Arab Spring, you have this initial period where people feel like they’re on this magic-carpet ride and that social media is letting them broadcast their opinions for very low cost, and that they’re able to reach people and organize faster than ever before. And they’re thinking, Wow, Facebook and Twitter are these wonderful tools of democracy.

But then the algorithms have to maximize value from all the data that’s coming in. So they test use that data. And it just turns out as a matter of course, that the same data that is a positive, constructive process for the people who generated it — Black Lives Matter, or the Arab Spring — can be used to irritate other groups. And unfortunately there’s this asymmetry in human emotions where the negative emotions of fear and hatred and paranoia and resentment come up faster, more cheaply, and they’re harder to dispel than the positive emotions. So what happens is, every time there’s some positive motion in these networks, the negative reaction is actually more powerful. So when you have a Black Lives Matter, the result of that is the empowerment of the worst racists and neo-Nazis in a way that hasn’t been seen in generations. When you have an Arab Spring, the result ultimately is the network empowerment of ISIS and other extremists — bloodthirsty, horrible things, the likes of which haven’t been seen in the Arab world or in Islam for years, if ever.

Black Lives Matter has incredible visibility, but the reality is that even though it has had an enormous effect on the discursive level, and at making the country fixated on this conversation, that’s distinct from political force necessary to effect that change. What do you think about the sort of gap between what Silicon Valley platforms have promised in that respect and then the material reality?

That observation — that social-media politics is all talk and no action or something, or that it’s empty — is compatible with, but a little bit different from, what I was saying. I’m saying that it empowers its opposite more than the original good intention. And those two things can both be true at once, but I just wanna point out that they’re two different explanations for why nothing decent seems to come out in the end.

I want to be wrong. I especially wanna be wrong about the March for Our Lives kids. I really wanna be wrong about them. I want them to not fall into this because they’re our hope, they’re the future of our country, so I very deeply, profoundly wanna be wrong. I don’t want their social-media data to empower the opposite movement that ends up being more powerful because negative emotions are more powerful. I just wanna be wrong. I so wanna be telling you bullshit right now.

So far it’s been right, but that doesn’t mean it will continue to be. So please let me be wrong.

Platforms seem trapped in this fundamental tension, and I’m just not sure how they break out of that.

My feeling is that if the theory is correct that we got into this by trying to be socialist and libertarian at the same time, and getting the worst of both worlds, then we have to choose. You either have to say, “Okay, Facebook is not going to be a business anymore. We said we wanted to create this thing to connect people, but we’re actually making the world worse, so we’re not gonna allow people to advertise on it; we’re not gonna allow anybody to have any influence on your feed but you. This is all about you. We’re gonna turn it into a nonprofit; we’re gonna give it to each country; it’ll be nationalized. We’ll do some final stock things so all the people who contributed to it will be rich beyond their dreams. But then after that it’s done; it’s not a business. We’ll buy back everybody’s stock and it’s done. It’s over. That’s it.”

[Blogger note: this choice between socialism and libertarianism is a highly interesting and crucial question, but I don’t think there’s one answer. Facebook strikes me as a dysfunctional idea from the beginning. Social interaction doesn’t scale, data networks scale. A global gossip network like Facebook makes almost no sense. I suspect FB will be competed down to many different functional social media models rather than one concentrated behemoth. Something like search. or Wikipedia seems rather different in nature. Google Search looks more and more like a public good, which means it is likely to become a regulated public utility. It’s not exactly clear how search works as a public utility, but I think the political imperative is already there.]

That’s one option. So it just turns into a socialist enterprise; we let it be nationalized and it’s gone. The other option is to monetize it. And that’s the one that I’m personally more interested in. And what that would look like is, we’d ask those who can afford to — which would be a lot of people in the world, certainly most people in the West — to start paying for it. And then we’d also pay people who provide data into it that’s exceptionally valuable to the network, and it would become a source of economic growth. And we would outlaw advertising on it. There would no longer be third parties paying to influence you.

Because as long as you have advertising, you have this perverse incentive to make it manipulative. You can’t have a behavior-modification machine with advertisers and have anything ethical; it’s not possible. You could get away with it barely with television because television wasn’t as effective at modifying people. But this, there’s no ethical way to have advertising.

So you’d ban advertising, and you’d start paying people, a subset of people; a minority of people would start earning their living because they just do stuff that other people love to look at over Facebook or the other social networks, or YouTube for that matter. And then most people would pay into it in the same way that we pay into something like Netflix or HBO Now.

And one of the things I wanna point out is that back at the time when Facebook was founded, the belief was that in the future there wouldn’t be paid people making movies and television because armies of unpaid volunteers organized through our network schemes would make superior content, just like what happened with Wikipedia. But what actually happened is, when people started paying for Netflix, we got what we call Peak TV — things got much better as a result of it being monetized.

So I think if we had a situation where people were paying for something like Facebook, and being paid for it, and advertising was absolutely outlawed, the only customer would be the user, there would be no other customer. If we got into that situation, I think we have at least a chance of achieving Peak Social Media, just like we achieved Peak TV. We might actually see things improve a great deal.

So that’s the solution that I think is better. But we can’t do this combination of libertarian and communist ideology. It just doesn’t work. You have to choose one.

You’ve written this book, Ten Arguments for Deleting Your Social Media Accounts. I don’t want to make you summarize the whole book, but I want to ask what you thought was the most urgent argument, and to explain why.
Okay. By the way, it’s … For Deleting Your Social Media Accounts Right Now.

Right now! So the whole thing is already urgent, so which of these urgent pleas do you believe to be the most pressing?

There’s one that’s a little complicated, which is the last one. Because I have the one about politics, and I have the one about economics. That it’s ruining politics, it’s empowering the most obnoxious people to be the most powerful inherently, and that’s destroying the world. I have the one about economics, how it’s centralizing wealth even while it seems to be democratizing it. I have the one about how it makes you feel sad; I have all these different ones.

But at the end, I have one that’s a spiritual one. The argument is that social media hates your soul. And it suggests that there’s a whole spiritual, religious belief system along with social media like Facebook that I think people don’t like. And it’s also fucking phony and false. It suggests that life is some kind of optimization, like you’re supposed to be struggling to get more followers and friends. Zuckerberg even talked about how the new goal of Facebook would be to give everybody a meaningful life, as if something about Facebook is where the meaning of life is.

It suggests that you’re just a cog in a giant global brain or something like that. The rhetoric from the companies is often about AI, that what they’re really doing — like YouTube’s parent company, Google, says what they really are is building the giant global brain that’ll inherit the earth and they’ll upload you to that brain and then you won’t have to die. It’s very, very religious in the rhetoric. And so it’s turning into this new religion, and it’s a religion that doesn’t care about you. It’s a religion that’s completely lacking in empathy or any kind of personal acknowledgment. And it’s a bad religion. It’s a nerdy, empty, sterile, ugly, useless religion that’s based on false ideas. And I think that of all of the things, that’s the worst thing about it.

I mean, it’s sort of like a cult of personality. It’s like in North Korea or some regime where the religion is your purpose to serve this one guy. And your purpose is to serve this one system, which happens to be controlled by one guy, in the case of Facebook.

It’s not as blunt and out there, but that is the underlying message of it and it’s ugly and bad. I loathe it, and I think a lot of people have that feeling, but they might not have articulated it or gotten it to the surface because it’s just such a weird and new situation.

On the other hand, there’s a rising backlash that may end the platforms before they have the opportunity to take root and produce yet another vicious problem.

I’m in my late 50s now. I have an 11-year-old daughter, and the thing that bothers me so much is that we’re giving them a world that isn’t as good as the world we received. We’re giving them a world in which their hopes for being able to create a decent, happy, reasonably low-stress life, where they can have their own kids, it’s just not as good as what we were given. We have not done well by them.

And then to say that observing our own mistakes means that you’re old and don’t get it is profoundly counterproductive. It’s really just a way of evading our own responsibility. The truth is that we totally have screwed over younger generations. And that’s a bigger story than just the social-media and tech thing, but the social-media and tech thing is a big part of it. We’ve created a scammy society where we concentrate wealth in ways that are petty and not helpful, and we’ve given them a world of far fewer options than we had. There’s nothing I want more than for the younger people to create successful lives and create a world that they love. I mean, that’s what it’s all about. But to say that the path to that is for them to agree with the thing we made for them is just so self-serving and so obnoxiously narcissistic that it makes me wanna throw up.

This interview has been edited and condensed for length and clarity.

Surviving the Digital Economy

 

This will be a crucial issue for a free society going forward…giving away your information data is like giving away your labor.

Want Our Personal Data? Pay for It

The posting, tagging and uploading that we do online may be fun, but it’s labor too, and we should be compensated for it

By Eric A. Posner and Glen Weyl

WSJ, April 20, 2018 11:19 a.m. ET

Congress has stepped up talk of new privacy regulations in the wake of the scandal involving Cambridge Analytica, which improperly gained access to the data of as many as 87 million Facebook users. Even Facebook chief executive Mark Zuckerberg testified that he thought new federal rules were “inevitable.” But to understand what regulation is appropriate, we need to understand the source of the problem: the absence of a real market in data, with true property rights for data creators. Once that market is in place, implementing privacy protections will be easy.

We often think of ourselves as consumers of Facebook, Google, Instagram and other internet services. In reality, we are also their suppliers—or more accurately, their workers. When we post and label photos on Facebook or Instagram, use Google maps while driving, chat in multiple languages on Skype or upload videos to YouTube, we are generating data about human behavior that the companies then feed into machine-learning programs.

These programs use our personal data to learn patterns that allow them to imitate human behavior and understanding. With that information, computers can recognize images, translate languages, help viewers choose among shows and offer the speediest route to the mall. Companies such as Facebook, Google, and Microsoft (where one of us works) sell these tools to other companies. They also use our data to match advertisers with consumers.

Defenders of the current system often say that we don’t give away our personal data for free. Rather, we’re paid in the form of the services that we receive. But this exchange is bad for users, bad for society and probably not ideal even for the tech companies. In a real market, consumers would have far more power over the exchange: Here’s my data. What are you willing to pay for it?

An internet user today probably would earn only a few hundred dollars a year if companies paid for data. But that amount could grow substantially in the coming years. If the economic reach of AI systems continues to expand—into drafting legal contracts, diagnosing diseases, performing surgery, making investments, driving trucks, managing businesses—they will need vast amounts of data to function.

And if these systems displace human jobs, people will have plenty of time to supply that data. Tech executives fearful that AI will cause mass unemployment have advocated a universal basic income funded by increased taxes. But the pressure for such policies would abate if users were simply compensated for their data.

The data currently compiled by Facebook and other companies is of pretty low quality. That’s why Facebook has an additional army of paid workers who are given dedicated tasks, such as labeling photos, to fill in the gaps left by users. If Facebook paid users for their work, it could offer pay tied to the value of the user’s contribution—offering more, for example, for useful translations of the latest Chinese slang into English than for yet another video labeled “cat.”

So why doesn’t Facebook already offer wages to users? For one, obviously, it would cost a lot to pay users for the data that the company currently gets for free. And then Google and others might start paying as well. Competition for users would improve the quality of data but eat away at the tech companies’ bottom line.

It’s also true that users simply aren’t thinking this way. But that can change. The basic idea is straightforward enough: When we supply our personal data to Facebook, Google or other companies, it is a form of labor, and we should be compensated for it. It may be enjoyable work, but it’s work just the same.

If companies reject this model of “data as labor,” market pressure could be used to persuade them. Rather than sign up directly with, say, Facebook, people would sign up with a data agent. (Such services, sometimes referred to as personal data exchanges or vaults, are already in development, with more than a dozen startups vying to fill this role.) The data agent would then offer Facebook access to its members and negotiate wages and terms of use on their behalf. Users would get to Facebook through the agent’s platform. If at any time Facebook refused reasonable wages, the data agent could coordinate a strike or a boycott. Unlike individual users, the data agent could employ lawyers to review terms and conditions and ensure that those terms are being upheld.

With multiple data agents competing for users’ business, no one could become an abusive monopolist. The agent’s sole purpose would be managing workers’ data in their interests—and if there were a problem, users could move their data to another service without having to give up on their social network.

Companies such as Apple and Amazon also could get into the act. Currently, their business models are very different from those of Facebook and Google. For the most part, their focus is on selling products and services, rather than offering them without charge. If Facebook and Google refuse to pay users for their data, these other companies are big and sophisticated enough to pay for data instead.

Would the “data as labor” model put the tech giants out of business? Hardly. Their vast profits already reflect their monopoly power. Their margins would certainly be tighter under this new regime, but the wider economy would likely grow through greater productivity and a fairer distribution of income. The big companies would take a smaller share of a larger pie, but their business model would be far more sustainable, politically and socially. More important, they would have to focus on the value that their core services bring to consumers, rather than on exploiting their monopoly in user data.

As for Congress, it could help by making it simpler for individuals to have clear property rights in their own data, rights that can’t be permanently signed away by accepting a company’s confusing terms and conditions. The European Union has already taken steps in this direction, and its new regulations—which require data to be easily portable—are a leading stimulus for the rise of data agent startups. Government can also help by updating labor law to be more consistent with modern data work while protecting data workers from exploitation.

Most of us already take great satisfaction in using social media to connect with our friends and family. Imagine how much happier and prouder we would be if we received fair pay for the valuable work we perform in doing that?

Prof. Posner teaches at the University of Chicago Law School. Dr. Weyl teaches at Yale University and is a principal researcher at Microsoft (whose views he in no way represents here). Their new book is “Radical Markets: Uprooting Capitalism and Democracy for a Just Society,” which will be published on May 8 by Princeton University Press.

https://www.wsj.com/articles/want-our-personal-data-pay-for-it-1524237577 (Paywall)

The Asset Divide

Below is a recent article explaining the growing wealth inequality based on asset ownership and control. This shouldn’t even be phrased as a question as our easy credit policies, massive RE debt leverage, and favored housing policy has created an almost insurmountable wealth divide between the asset-rich and the asset-poor. Who and what policies do we think those left behind are going to be voting for? Non-gender bathrooms? See also Thomas Edsall’s article in the NYT.

Is Housing Inequality the Main Driver of Economic Inequality?

Richard Florida

A growing body of research suggests that inequality in the value of Americans’ homes is a major factor—perhaps the key factor—in the country’s economic divides.

Economic inequality is one of the most significant issues facing cities and entire nations today. But a mounting body of research suggests that housing inequality may well be the biggest contributor to our economic divides.

Thomas Piketty’s influential book, Capital in the Twenty-First Century, put economic inequality—and specifically, wealth inequality—front and center in the global conversation. But research by Matthew Rognlie found that housing inequality (that is, how much more expensive some houses are than others) is the key factor in rising wealth.

Rognlie’s research documented that the share of wealth or capital income derived from housing has grown significantly since around 1950, and substantially more than for other forms of capital. In other words, those uber-expensive penthouses, luxury townhomes, and other real estate holdings in superstar cities like London and New York amount to a “physical manifestation” of Piketty’s insights into wealth inequality, as Felix Salmon so aptly puts it.

More recent research on this topic by urban economists David Albouy and Mike Zabek documents the surge in housing inequality in the United States. Their study, published as a National Bureau of Economic Research working paper, charts the rise in housing inequality across the U.S. from the onset of the Great Depression in 1930 through the great suburban boom of the 1950s, 1960s, and 1970s, to the more recent back-to-the-city movement, the 2008 economic crash, and the subsequent recovery, up to 2012. They use data from the U.S. Census on both homeowners and renters.

Over the period studied, the share of owner-occupied housing rose from less than half (45 percent) to nearly two-thirds (65 percent), although it has leveled off somewhat since then. The median cost of a home tripled in real dollar terms, according to their analysis. Housing now represents a huge share of America’s total consumption, comprising roughly 40 percent of the U.S. total capital stock, and two-thirds of the wealth held by the middle class.

What Albouy and Zabek find is a clear U-shaped pattern in housing inequality (measured in terms of housing values) over this 80-year period. Housing inequality was high in 1930 at the onset of the Depression. It then declined, alongside income inequality, during the Great Compression and suburban boom of the 1950s and 1960s. It started to creep back up again after the 1970s. There was a huge spike by the 1990s, followed by a leveling off in 2000, and then another significant spike by 2012, in the wake of the recovery from the economic crisis of 2008 and the accelerating back-to-the-city movement.

By 2012, the level of housing inequality in the U.S. looked much the same as it did in the ’30s. Now as then, the most expensive 20 percent of owner-occupied homes account for more than half of total U.S. housing value.

Data by Albouy et al. Design by Madison McVeigh/CityLab

Rents show a different pattern. Rent inequality—or the gap between the cost of rent for some relative than others—was high in the 1930s, then declined dramatically until around 1960. Starting in about 1980, it began to increase gradually, but much less than housing inequality (based on owner-occupied homes) or income inequality. And much of this small rise in rental inequality seems to stem from expensive rental units in very expensive cities.

The study suggests this less severe pattern of rent inequality may be the result of measures like rent control and other affordable housing programs to assist lower-income renters, especially in expensive cities such as New York and San Francisco.

That said, there also is an additional and potentially large wealth gap between owners and renters. Homeowners are able to basically lock in their housing costs after purchasing their home, and benefit from the appreciation of their properties thereafter. Renters, on the other hand, see rents increase in line with the market, and sometimes faster. This threatens their ability to maintain shelter, while they accumulate no equity in the place where they live.

***

But what lies behind this surge in housing inequality? Does it stem from the large housing-price differences between superstar cities and the rest, or does it stem from inequality within cities and metro areas—for instance, high-priced urban areas and suburban areas compared to less advantaged neighborhoods?

The Albouy and Zabek study considers three possible explanations: The change over time from smaller to larger housing units; geographic or spatial inequality between cities and metro areas; and economic segregation between rich and poor within metro areas.

Even as houses have grown bigger and bigger, with McMansions replacing bungalows and Cape Cods in many cities and suburbs since the 1930s (as the size of households shrunk), the study says that, at best, 30 percent of the rise in housing inequality can be pegged to changes in the size of houses themselves.

Ultimately, the study concludes that the rise in both housing wealth and housing inequality stems mainly from the increase in the value of land. In other research, Albouy found that the value of America’s urban land was $25 trillion in 2010, roughly double the nation’s 2016 GDP.

But here’s the kicker: The main catalyst of housing inequality, according to the study, comes from the growing gap within cities and metro areas, not between them. The graph below shows the differences in housing inequality between “commuting zones”—geographic areas that share a labor market—over time. In it, you can see that inequality varies sharply within commuting zones (marked “CZ”) while it remains more or less constant between them.

In other words, the spatial inequality within metros is what drives housing inequality. Factors like safety, schools, and access to employment and local amenities lead individual actors to value one neighborhood over the next.

Data by Albouy et al. Design by Madison McVeigh/CityLab

All this forms a fundamental contradiction in the housing market. Housing is at once a basic mode of shelter and a form of investment. As this basic necessity has been transformed over time into a financial instrument and source of wealth, not only has housing inequality increased, but housing inequality has become a major contributor to—if not the major overall factor in—wealth inequality. When you consider the fact that what is a necessity for everyone has been turned into a financial instrument for a select few, this is no surprise.

The rise in housing inequality brings us face to face with a central paradox of today’s increasingly urbanized form of capitalism. The clustering of talent, industry, investment, and other economic assets in small parts of cities and metropolitan areas is at once the main engine of economic growth and the biggest driver of inequality. The ability to buy and own housing, much more than income or any other source of wealth, is a significant factor in the growing divides between the economy’s winners and losers.

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A Financial Crisis Is Coming?

A provocative article in USNWR. We’ve been warning about unsustainable asset prices built on unsustainable debt leverage for the past 8 years (which only means we were waaaaay too early, but not necessarily wrong!) For all this time we’ve been focused on growing total debt to GDP ratios, which means we’re not getting much bang for all that cheap credit, trying to borrow and spend our way to prosperity.

The PE ratios of equities and housing reflect a disconnect with fundamental values based on decades of market data. For example, one cannot really pay 8-10x income on residential housing for long, or pay near to 50% of income on rents, as many are doing in our most pricey cities.

Nose-bleed asset prices on everything from yachts to vacation homes to art and collectibles to technology stocks and cryptocurrencies are indicative of excessive global liquidity. Soaking up that liquidity to return to long-term trend lines will be a long, jarring process. Nobody really knows whence comes the reckoning since we have perfected a particularly successful strategy of kicking the can down the road.

A Crisis Is Coming

All the ingredients are in place for a catastrophic economic and financial market crisis.

By Desmond Lachman Opinion Contributor USNWR, Feb. 14, 2018, at 7:00 a.m.

MY LONG CAREER AS A macro-economist both at the IMF and on Wall Street has taught me that it is very well to make bold macroeconomic calls as long as you do not specify a time period within which those calls will occur. However, there are occasions, such as today, when the overwhelming evidence suggests that a major economic event will occur within a relatively short time period. On those occasions, it is very difficult to resist making a time-sensitive bold economic call.

 

So here goes. By this time next year, we will have had another 2008-2009 style global economic and financial market crisis. And we will do so despite Janet Yellen’s recent reassurances that we would not have another such crisis within her lifetime.

 

There are two basic reasons to fear another full-blown global economic crisis soon: The first is that we have in place all the ingredients for such a crisis. The second is that due to major economic policy mistakes by both the Federal Reserve and the U.S. administration, the U.S. economy is in danger of soon overheating, which will bring inflation in its wake. That in turn is all too likely to lead to rising interest rates, which could very well be the trigger that bursts the all too many asset price bubbles around the world.

A key ingredient for a global economic crisis is asset price bubbles and credit risk mispricing. On that score, today’s financial market situation would appear to be very much more concerning than that on the eve of the September 2008 Lehman-bankruptcy. Whereas then, asset price bubbles were largely confined to the U.S. housing and credit markets, today, asset price bubbles are more pervasive being all too much in evidence around the globe.

 

It is not simply that global equity valuations today are at lofty levels experienced only three times in the last one hundred years. It is also that we have a global government bond market bubble, the serious mispricing of credit risk in the world’s high yield and emerging market corporate-bond markets and troublesome housing bubbles in major economies like Canada, China, and the United Kingdom.

 

Another key ingredient for a global economic crisis is a very high debt level. Here too today’s situation has to be very concerning. According to IMF estimates, today the global debt-to-GDP level is significantly higher than it was in 2008. Particularly concerning has to be the fact that far from declining, over the past few years Italy’s public debt has risen now to 135 percent of GDP. That has to raise the real risk that we could have yet another round of the Eurozone debt crisis in the event that we were to have another global economic recession.

 

Today’s asset price bubbles have been created by many years of unusually easy global monetary policy. The persistence of those bubbles can only be rationalized on the assumption that interest rates will remain indefinitely at their currently very low levels. Sadly, there is every reason to believe that at least in the United States, the period of low interest rates is about to end abruptly due to an overheated economy.

The reason for fearing that the U.S. economy will soon overheat is not simply that it is currently at or very close to full employment and growing at a healthy clip. It is rather that it is also now getting an extraordinary degree of monetary and fiscal policy stimulus at this very late stage of the cycle.

Today, U.S. financial conditions are at their most expansionary levels in the past 40 years due to the combination of very low interest rates, inflated equity prices and a weak dollar. Compounding matters is the fact that the U.S. economy is now receiving a significant pro-cyclical boost from the unfunded Trump tax cut and from last week’s two-year congressional spending pact aimed at boosting military and disaster-relief spending.

 

Today, in the face of an overheated U.S. economy, the Federal Reserve has an unenviable choice. It can either raise its interest rate and risk bursting the global asset price bubble, or it can delay its interests rate decision and risk incurring the wrath of the bond vigilantes who might sense that the Federal Reserve is not serious about inflation risk. In that event, interest rates are apt to rise in a disorderly fashion, which could lead to the more abrupt deflating of the global asset bubble.

 

This time next year, it could very well turn out that today’s asset price bubbles will not have burst and we will not have been thrown into another global economic recession. In which event, I will admit that I was wrong in having been too pessimistic about the global economic outlook. However, I will fall back on the defense that all of the clues were pointing in the opposite direction.

The Death of Text?

 

The following short essay was published in the NY Times feature called The Fate of the Internet. Frankly, it’s difficult to take these arguments too seriously, despite the transformative effects of technology.

Welcome to the Post-Text Future

by Farhad Manjoo, NY Times

I’ll make this short: The thing you’re doing now, reading prose on a screen, is going out of fashion. [Which means what? It’s popularity is fading as a communication channel?]

We’re taking stock of the internet right now, with writers [Hmm, what’s a writer without a reader?] who cover the digital world cataloging some of the most consequential currents shaping it. If you probe those currents and look ahead to the coming year online, one truth becomes clear. The defining narrative of our online moment concerns the decline of text, and the exploding reach and power of audio and video. [Yes, but where does real “power” really reside? In cat videos and selfies? Those behind the curtain are really smiling.]

This multimedia internet has been gaining on the text-based internet for years. But last year, the story accelerated sharply, and now audio and video are unstoppable. The most influential communicators online once worked on web pages and blogs. They’re now making podcasts, Netflix shows, propaganda memes, Instagram and YouTube channels, and apps like HQ Trivia.

Consider the most compelling digital innovations now emerging: the talking assistants that were the hit of the holidays, Apple’s face-reading phone, artificial intelligence to search photos or translate spoken language, and augmented reality — which inserts any digital image into a live view of your surroundings.

These advances are all about cameras, microphones, your voice, your ears and your eyes.

Together, they’re all sending us the same message: Welcome to the post-text future. [No, they are welcoming us to the distractions of circuses. That’s what entertainment is.]

It’s not that text is going away altogether. Nothing online ever really dies, and text still has its hits — from Susan Fowler’s whistle-blowing blog post last year about harassment at Uber to #MeToo, text was at the center of the most significant recent American social movement.

Still, we have only just begun to glimpse the deeper, more kinetic possibilities of an online culture in which text recedes to the background, and sounds and images become the universal language.

The internet was born in text because text was once the only format computers understood. Then we started giving machines eyes and ears — that is, smartphones were invented — and now we’ve provided them brains to decipher and manipulate multimedia. [Yes, but civilization was not born with the ASCII computer language. Computers are becoming clever tvs, but they still deliver a lot of trivia as content and video formats probably amplify that. Perhaps we are seeing the trivialization of popular culture? Has it ever not been trivial?]

My reading of this trend toward video as a substitute for text applies to certain types of media and content. Certain commentators have adapted readily to YouTube channels to transmit knowledge and ideas and the educational potential is just being tapped. But true power in the world of ideas is controlled by those who know how to manipulate text to understand abstract intellectual ideas that govern our world.

The question is, is technology turning us into sheep or shepherds? Because for sure, there are wolves out there.

As John Maynard Keynes wrote,

The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back…

Dennis_The_Menace-11-6-09-240x300

Order vs. Chaos: How We Choose

(The Towers of San Gimignano)

Below is a thought-provoking essay by historian Niall Ferguson examining the fluid structure of societies that swing from hierarchies to decentralized networks.

Anyway, this is a subject dear to my heart, as it is the overriding theme of several of my fiction books. See interjections below…

In Praise of Hierarchy – The Wall Street Journal
https://apple.news/A3UEyEvI-SnuHNdt8fLLjzg (paywall)

The Saturday Essay
Established, traditional order is under assault from freewheeling, networked disrupters as never before. But society craves centralized leadership, too.

It is a truth universally acknowledged that we now live in a networked world, where everyone and everything are connected. The corollary is that traditional hierarchical structures—not only states, but also churches, parties, and corporations—are in various states of crisis and decline. Disruption, disintermediation, and decentralization are the orders of the day. Hierarchy is at a discount, if not despised.

Networks rule not only in the realm of business. In politics, too, party establishments and their machines have been displaced by crowdfunded campaigns and viral messaging. Money, once a monopoly of the state, is being challenged by Bitcoin and other cryptocurrencies, which require no central banks to manage them, only consensus algorithms.

But is all this wise? In all the excitement of the age of hyper-connection, have we perhaps forgotten why hierarchies came into existence in the first place? Do we perhaps overestimate what can be achieved by ungoverned networks—and underestimate the perils of a world without any legitimate hierarchical structure?

True, few dare shed tears for yesterday’s hierarchies. Some Anglophile viewers of “The Crown” may thrill at the quaint stratification of Elizabeth II’s England, but the nearest approximations to royalty in America have lately been shorn of their gilt and glamour. Political dynasties of the recent past have been effaced, if not humiliated, by the upstart Donald Trump, while Hollywood’s elite of exploitative men is in disarray. The spirit of the age is revolutionary; the networked crowd yearns to “smack down” or “shame” each and every authority figure.

Nevertheless, recent events have called into question the notion that all will be for the best in the most networked of all possible worlds. “I thought once everybody could speak freely and exchange information and ideas, the world is automatically going to be a better place,” Evan Williams, a co-founder of Twitter, told the New York Times last May. “I was wrong about that.”

Far from being a utopia in which we all become equally empowered “netizens,” free to tweet truth to power, cyberspace has mutated into a nightmare realm of ideological polarization, extreme views and fake news. The year 2016 was the annus horribilis of the liberal internet, the year when the network platforms built in Silicon Valley were used not only by Donald Trump’s election campaign but also by the proponents of “Brexit” in the United Kingdom to ends that appalled their creators. In 2017, research (including some by Facebook itself) revealed the psychological harm inflicted by social media on young people, who become addicted to the network platforms’ incessant, targeted stimuli.

Most alarming was the morphing of cyberspace into Cyberia, not to mention the Cyber-caliphate: a dark and lawless realm where malevolent actors ranging from Russian trolls to pro-ISIS Twitter users could work with impunity to subvert the institutional foundations of democracy. As Henry Kissinger has rightly observed, the internet has re-created the human state of nature depicted by 17th-century English philosopher Thomas Hobbes, where there rages a war “of every man against every man” and life (like so many political tweets) is “nasty, brutish, and short.”

We should not be surprised. Neither history nor science predicted that everything would be awesome in a world of giant, online networks—quite the contrary. And now that it becomes clear that a networked world may be an anarchic world, we begin to see—as previous generations saw—the benefits of hierarchy.

The word hierarchy derives from ancient Greek (hierarchia, literally the “rule of a high priest”) and was first used to describe the heavenly orders of angels and, more generally, to characterize a stratified order of spiritual or temporal governance. Up until the 16th century, by contrast, the word “network” signified nothing more than a woven mesh made of interlaced thread.

For most of history, hierarchies dominated social networks, a relationship exemplified by the looming Gothic tower that overshadows the Tuscan town of Siena’s central piazza.

DSC_1483_2

Siena’s torre

This is roughly how most people think about hierarchies: as vertically structured organizations characterized by centralized and top-down command, control and communication. Historically, they began with family-based clans and tribes, out of which more complicated and stratified institutions evolved: states, churches, corporations, empires.

The crucial incentive that favored hierarchical order was that it made the exercise of power more efficient. Centralizing control in the hands of the “big man” eliminated or at least reduced time-consuming arguments about what to do, which might at any time escalate into internecine conflict. The obvious defect of hierarchy—in the mid-19th century words of Lord Acton, “power corrupts, and absolute power corrupts absolutely”—was not by itself sufficient to turn humanity away from the rule of “big men.”

There have been only two eras of enhanced connectedness, when new technology helped social networks gain the upper hand. The second is our own age. The first began almost exactly half a millennium ago, in 1517, and lasted for the better part of three centuries.

COM2014-tiny FB cover

The epic story of chaos vs. order during the Savonarola-Machiavelli era, foreshadowing Martin Luther.

When the printing press empowered Martin Luther’s heresy, a network was born. Luther’s dream was of a “priesthood of all believers.” The actual result of the Reformation he inspired was not harmony, but 130 years of polarization and conflict. But it proved impossible to kill Protestant networks, even with mass executions. Hierarchy had to be restored in the form of the princely states whose power the Peace of Westphalia affirmed, but this restoration was fleeting.

Like the Reformation, the 18th-century Enlightenment was a network-driven phenomenon that challenged established authority. The amazing thing was how much further the tendrils of the Enlightenment extended: as far afield as Voltaire’s global network of correspondents, and into the depths of Bavaria, where the secret network known as the Illuminati was founded in 1776.

In Britain’s American colonies, Freemasonry was a key network that connected many of the Founding Fathers, including George Washington and the crucial “node” in the New England revolutionary network, Paul Revere.

IGWT Cover12 6x9 large 2017

Freemasons in today’s Washington, D.C.?

At the same time, the American revolutionaries—Franklin, Jefferson, Lafayette—had all kinds of connections to France, land of the philosophes. The problem in France was that the ideas that went viral were not just “liberty, equality and fraternity,” but also the principle that terror was justifiable against enemies of the people. The result was a descent into bloody anarchy.

 

Those who lived through the wars of the 1790s and early 1800s learned an important lesson that we would do well to relearn: unless one wishes to reap one revolutionary whirlwind after another, it is better to impose some kind of hierarchical order on the world and to give it some legitimacy. At the Congress of Vienna, the five great powers who defeated Napoleon agreed to establish such an order, and the “pentarchy” they formed provided a remarkable stability over the century that followed.

Just over 200 years later, we confront a similar dilemma. Those who favor a revolutionary world run by networks will end up not with the interconnected utopia of their dreams but with Hobbes’s state of nature, in which malign actors exploit opportunities to spread virus-like memes and mendacities. Worse, they may end up entrenching a new but unaccountable hierarchy. For here is a truth that is too often glossed over by the proponents of networked governance: Many networks are hierarchically structured.

Nothing illustrates this better than the way the internet has evolved from being an authentically distributed, decentralized network into one dominated by a few giant technology companies: Facebook, Amazon, Netflix and Alphabet’s Google—the so-called FANGs. This new hierarchy is motivated primarily by the desire to sell—above all, to sell the data that their users provide. Dominance of online advertising by Alphabet and Facebook, coupled with immunity from civil liability under legislation dating back to the 1990s, have create an extraordinary state of affairs. The biggest content publishers in history are regulated as if they are mere technology startups; they are a new hierarchy extracting rent from the network.

The effects are pernicious. According to the Pew Research Center, close to half of Americans now get their news from Facebook, whose incentive is to promote news that holds the attention of users, regardless of whether it is true or false, researched by professional journalists or cooked up by Russian trolls. Established publishers—and parties—were too powerful for too long, but is it really a better world if there are no authorities to separate real news from fake, or decent political candidates from rogues? The old public sphere had its defects, but the new one has no effective gatekeepers, so the advantage now lies not with leaders but with misleaders.

The alternative is that another pentarchy of great powers recognizes their common interest in resisting the threat posed by Cyberia, where jihadism and criminality flourish alongside cyberwarfare, to say nothing of nuclear proliferation. Conveniently, the architects of the post-1945 order created the institutional basis for such a new pentarchy in the form of the permanent members of the United Nations Security Council, an institution that retains the all-important ingredient of legitimacy, despite its gridlocked condition throughout the Cold War.

It is easy to be dismissive of the UNSC. Nevertheless, whether or not these five great powers can make common cause once again, as their predecessors did in the 19th century, is a great geopolitical question of our time. The hierarchical Chinese leader Xi Jinping likes to talk about a “new model of great power relations,” and it may be that the North Korean missile crisis will bring forth this new model. But the crucial point is that the North Korean threat cannot be removed by the action of networks. A Facebook group can no more solve it than a tweet storm or a hashtag.

Our age may venerate online networks, to the extent of making a company such as Facebook one of the most valuable in the world. Yet there is a reason why armies have commanding officers. There is a reason why orchestras have conductors. There is a reason why, at great universities, the lecturers are not howled down by social justice warriors. And there is a reason why the last great experiment in networked organization—the one that began with the Reformation—ended, eventually, with a restoration of hierarchy.

There is hope for hierarchies yet. “The Crown” is not mere fiction; the hierarchy of the monarchy has continued to elevate the head of the British state above party politics. In a similar way, the papacy remains an object of authority and veneration, despite the tribulations of the Roman Catholic Church. Revolutions repeatedly sweep the countries of the Middle East, yet the monarchies of the region have been the most stable regimes.

Even in the U.S., ground zero for disruptive networks, there still is respect for hierarchical institutions. True, just 32% of Americans still have “a great deal” or “quite a lot” of confidence in the presidency and 12% feel that way about Congress. But for the military the equivalent percentage is 72% (up from 50% in 1981), for the police it is 57%, for churches 41%, and for the Supreme Court 40%. By comparison, just 16% of Americans have confidence in news on the internet.

We humans have been designed by evolution to network—man is a social animal, of course—but history has taught us to revere hierarchy as preferable to anarchy, and to prefer time-honored hierarchs to upstart usurpers.

Mr. Ferguson’s new book, “The Square and the Tower: Networks and Power, from the Freemasons to Facebook,” will be published by Penguin Press on Jan. 16.

 

The Death of Culture?

Designing a Sustainable Creative Ecosystem

Too Much information = The Death of Culture?

The major creative industries of music, photography, print, and video have all been disrupted by digital technology. We know this. As Chris Anderson has argued in his book Free, the cost of digital content has been driven towards zero. How could this be a bad thing? Well, TMI (Too Much Information — in this case, Too Much Content) is the curse of the Digital Age. It means creators make no money and audiences can’t find quality content amidst all the noise.

The end result will be a staleness of content and stagnant creative markets, i.e., the slow death of culture. So, how did this happen and what do we do about it?

View the rest of the story on Medium.

View story at Medium.com

View story at Medium.com

View story at Medium.com

View story at Medium.com

View story at Medium.com

Policies vs. Values

It’s difficult to make sense of American politics these days, though not for lack of trying! The following article published in Yahoo News presents some evidence that is more widely confirmed but also introduces some interpretations that are contradicted by that evidence (see blog comments). Most of the mainstream reporting seems to be suffering from these contradictions.

To begin, American voters are not divided so much by policy issues, as the head of the survey institute proclaims. Empirical evidence of voting patterns shows that most of the voting preferences are explained by urban vs. rural and suburban policy interests and household formation, with married voters contrasted against singles, with children or not.

The remainder (about 1/3, but growing) is probably explained by the moral values/ideological divide on which Jon Haidt has done so much research (see my The Righteous Mind review). People who lean left or right in ideology seems to have different value priorities that are reflected in how they view politics. Haidt classifies six moral values with their opposites as 1) care/harm; 2) liberty/oppression; 3) fairness/cheating; 4) loyalty/betrayal; 5) authority/subversion; 6) sanctity/degradation.

He goes on to show that liberals value the first three only and suspect the last three so that they focus on care and fairness as the foundation of a free society more than loyalty, authority and sanctity. Conservatives employ all six in designing their moral foundations. Haidt readily recognized this advantage for conservatives but suggests it is more a tactical advantage rather than a fuller understanding of a sound moral society.

Identity politics seems to have turned differences in moral value priorities into tribalism. So we have a Left tribe, referring to themselves as Progressives, and a Right tribe, calling themselves conservatives and libertarians. These tribes have developed two different cultures that appear incompatible. This cultural divide is far more distinct than race, ethnicity, or gender, despite what the media might proclaim. (MAGA is a cultural clarion call, not a racial or ethnic dog whistle.)

Of course, different cultures need not be antagonistic or adversarial, especially since they can evolve over time to share many of the same values, priorities, and mores. One error I see promoted by the liberal urban media and Democrats is the firm belief that their opponents are regressive and that progressivism must be proselytized. Voting results do not substantiate this belief and voting patterns show a majority of Americans embrace both traditionalism and tolerance for differences. Any friction is caused by the socio-economic disruption due to the rapid pace of change. It’s a mistake to push that pace of change merely for its own sake. Instead, we should manage it more judiciously without alacrity and judgment. People resist change instinctively and they need help adapting. That’s the role for politics and policy.

Unfortunately, truth and accuracy are the first victims of tribalism, and that seems to be the source of our present dysfunction.

Divided by symbols, Americans see a ‘serious threat’ across the aisle

Yahoo News,  Jon Ward, Senior Political Correspondent

An annual survey of American attitudes about politics and values released Tuesday found, to no one’s surprise, that the nation’s divisions are growing dangerously deep and wide.

American Values Survey

More than half the people in both the Republican and Democratic parties see the other side as a “serious threat to the country,” the American Values Survey by the Public Religion Research Institute (PRRI) found. At a panel discussion at the Brookings Institution to discuss the poll findings, Henry Olsen, a senior fellow at the Ethics and Public Policy Center, said a “pre-Spanish Civil War mentality” was taking hold among voters.

The word “war” itself was mentioned numerous times by the panelists, in reference to the way both left and right see politics now as a zero-sum fight.

The good news — or the bad, depending on how one views it — is that the divisions are mostly not about policy, but symbolism.

“When you’re at war symbols begin to matter more,” said Robert Jones, CEO of PRRI. “Confederate monuments, flags … the [border] wall is part of that.”

But, he added, “If you talk policy, Americans are pragmatic.”

He cited a finding in the latest values survey, which PRRI has conducted for eight years in a row, that around half of Republicans support a path to citizenship for undocumented immigrants. He contrasted that with the political rhetoric from President Trump about building a wall along the U.S.-Mexico border.

“It’s the symbolic issues that are animating more than the actual policy issues,” Jones said. “When you turn from symbols to policy, there’s less polarization.”

There was agreement among the panelists Tuesday, including the conservative Olsen, that Trump fuels the conflict by highlighting the most inflammatory public issues.

But the deeper question is, why are Americans so focused on symbols rather than substance when it comes to choosing and following political leaders? Is it a recent phenomenon, brought on by the age of entertainment over information that has dominated the world since the advent of television? Or is it a natural human instinct?

Joy Reid, a panelist who hosts a weekend show on MSNBC, said that the election of former President Barack Obama in 2008 and 2012 was a symbolic act for many black Americans, and that Trump voters — most of them white — engaged in counter-symbolism. [The problem with this interpretation is that the Rust Belt states flipped from Obama to Trump, indicating that symbolism was probably “trumped” by policy results.]

Trump is “almost a flip-side, bizarro-world Obama,” Reid said. “For a lot of hardcore Obama supporters, Obama was the point. It wasn’t specifically that he would do some specific economic thing,” Reid said. “It was the symbolism of having somebody who was not white, somebody who has international roots in his family, somebody who represented a changing America.” [We don’t see a problem here? Voting for someone because they are “not white,” does what for whites in a material sense? Of course, the non-white Obama could never have won an election without the support of a significant plurality of whites. Casting this history in terms of race is probably not helpful.]

Similarly, Reid said, “For a lot of Trump supporters Trump is the point. It isn’t his policies. It’s not what he’s going to do even for them.” [I would agree that it is less about Trump’s policies in a positive sense and more a reaction against Obama’s policies and divisiveness. This extends into the backlash against political correctness that Trump instigated.]

“Just having that man, who is white and very ethno-nationalist in his whitenesss … very proactive about putting forward his gender and racial identity and saying I represent this and I’ll attack the people who in your view are detriments to it … that’s kind of the point,” she said. [There it is again – ethno-nationalism and whitenesss – instead of patriotic sovereignty through Americanism that mischaracterizes the Trump opposition. This is not to say Trump did not take advantage of this mischaracterization.] 

Reid said that Democrats who want to “convert” Trump voters may be chasing a lost cause. “I’m not sure that can be done,” she said. “He has a power over at least a third of the country that I don’t think anything can break.”

But while the PRRI study found 15 percent of Trump supporters said there’s nothing he could do to lose their support, there were twice as many confirmed opponents of the president. PRRI asked those who disapprove of Trump if there was anything he could do to win them over, and 33 percent of them said there was not.

E.J. Dionne, a Washington Post columnist who was also on the panel, disagreed with Reid that no Trump voters could be won over. “To me, these numbers show that there are a substantial number of Trump voters or supporters who can be converted,” he said, citing Trump’s approval numbers, which are down to 39 percent in the average of all polls, while 56 percent disapprove.

“This is a substantial drop-off from where Trump stood on Election Day 2016,” Dionne said. A year ago, right after he was elected, Trump had a 44 percent approval rating, and a 50 percent disapproval rating. [Mr. Dionne is wrong as he views our politics from within the liberal media bubble, advocating that democratic politics is a zero-sum game: For Democrats to win, Trump has to lose. The country’s voters are not really in sync with this approach, which is why that urban media bubble is subjected to such criticism.]

Olsen’s explanations for the victory of symbolism over substance, and the rise of Trumpism, had more to do with a loss of what Jones called “cultural dominance” combined with economic vulnerability for some of the president’s supporters. [This makes far more sense.]

Trump’s voter base “feeds on fear,” Olsen said.

But he cautioned against dismissing them, saying that would only increase the risk of violence.

“If you’re educated and well-off, you tend to look at these reactions as being hopelessly naive, out of touch, racist, irrational and consequently worthy of being ignored,” Olsen said. “If that’s the response, you shouldn’t expect them to give up their arms. … If the answer is basically to build a wall around populism, what you simply do is build up tension, build up the partisanship. And then, if you go through some sort of economic decline that makes even more people despairing, you raise the possibility of a much more dangerous counterreaction.” [This is the danger that anti-Trump forces want to deny or disregard. They will not avoid blame for any future chaos that results.]

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