I wrote about Facebook in a blog in January, pointing to ominous clouds on the horizon. (And, one looking at the future of Facebook and the world in 2011.)

For an update. Those clouds now are overhead. With the ever-growing realization that Facebook has been a channel for manipulating our life-as-we-know-it (literally so), there is the drumbeat of #deletefacebook (which I joined last week). And with this are articles showing how difficult it actually can be, which bring to the fore just how deeply Facebook has plunged itself into our being.

There are how-to guides to find alternative to Facebook. There is the recounting of the times Zuckerberg has skirted over the line on privacy, each followed by the ritualistic apology. And there is Colbert's acerbic humor on "Suckerberg", which includes screen shots showing the mind-blowing amount of information Facebook holds on various staff members of his show -- including call's made from one staffer's cellphone, the family tree of another,  and the data for the face-recognition of a third.

Many people will leave Facebook and use alternatives. Some will discover they can leave without using social network alternatives at all. People who stay with Facebook will opt out of everything they can think of, especially related to sharing their personal information with advertisers and apps. (As part of the mea culpa this time around, Facebook is centralizing the privacy settings so you don't have to navigate through twenty different places to do the job.) People will log into apps using their email addresses rather than Facebook, thwarting the insidious tunneling by Facebook beyond its own borders.

Whether people leave or decide to stay with tighter privacy controls, the targeted advertising and third-party sharing that is the life blood of Facebook will be eroded.

Beyond these short-term, but possibly devastating reactions that are focused on Facebook, it is becoming all the more likely that we are at the beginning of a broad sea change in how we view social networking and in our willingness to give up privacy for a song. Jaron Lanier pointed out the faustian bargain we have made with Facebook, Google (which at least gives us something of value in the search engine) and the like, and proposed a path for us to be enfranchised for the personal data we toss into the world.

There is an alternative to the business model of mining personal data, which is having Facebook and others move to a subscription model. But this will not sustain the valuations Facebook currently enjoys. People are not likely to pay out of pocket anywhere near the value that is implied by giving the world all of their personal data. Which suggests just how much we all are giving away.

The following is a brief, contemporary account of our world, which we call, for obvious reasons, the Amazon Dystopia. I leave it undated -- Nadir.


The dystopia is most evident in the control of the working class. During work and commuting time all workers are mandated to wear a “health watch”, a wristband that monitors their movement. The wristbands also tell the time and weather. Workers also wear “world view” collars and glasses equipped with biometrics and a 360 degree video display to determine the level of their exertion, and where they are fixing their gaze. The collars can generate electric impulses to encourage workers. If they fail to perform, there is summary dismissal. The government has recently added a worker-terminating explosive charge if workers are found engaging in treasonous behavior – which includes “robust criticism or a marked lack of enthusiasm.”

Cocking and the Rise of the Plutocrats

The elections are determined by majority vote, but the people’s choice becomes the tool of the wealthy once ascending to office. This transformation is known as “cocking”. This is an unfortunate play on the Koch name, but one that is not classified as robust criticism.

Cocking was first revealed in the Washington Post, which reported that the Koch brothers, a center of corporate political power, presented various incumbents with a check made out to their opponent for $25 million, with the threat that the check would be handed over to the opposition if the incumbent did not act in what the Koch brothers considered to be the best interests of the country. The threat only had to be made good one time, and the story planted for the Washington Post team to uncover, (with a Pulitzer for their efforts), before compliance to the threat became absolute.

The Consolidation of Power: From the One Percent to the One
The cocking grew, and political power became increasingly consolidated with those with the deepest pockets, until it finally has become a plutocracy of one. And having power over the press has helped to correctly frame the new order for the masses. At least the small subset of the masses that is not placated by free, unlimited streaming of videos and music.

From Each According to His Need

A value-added tax is now a primary source of revenue. Essentials such as food, clothing, and school supplies pass through a taxation station, the “fulfillment center”. Its operation is based on extensive records of every citizen, both their biometrics, gazing patterns, queries, social interactions, and of course consumption history, to infer their preferences, to the end of taxing them more highly on their purchases based on the algorithmic determination of how much they need them. This principle is promoted with the slogan, “from each according to his need.” All purchases are made with the certification of the buyer that they will not resell or redistribute, with the delivery chain iron clad from the fulfillment center to the consumer's doorstep to reduce the risk of missteps.

Luxury goods by definition are not needed, and therefore generally are exempt from taxation.

To Each According to His Abilities

The tax is paid to the agency that is responsible for the building and maintaining of this distribution system. This payment is tax exempt, because it already is a tax. The agency is in private hands because the government has determined to leave to business those things that it can do best, as measured by the profit they can extract. Thus the slogan, “to each according to his abilities.” As has been noted in various recent Washington Post articles, this is the most sure way of adding to the economy, and thus to the wealth of all individuals.

The Revolt of the Masses

Note by the conveyor of this account: As with any dystopia there is a plucky, fearless group that is fighting back. Led by Kadir and his former-rival-but-now-lover Sabella, a beautiful woman who is good with knives, this group is bringing in others to fight against the tyranny of the plutocracy.

Note by the second conveyor of this account: They are discovered and killed. The end.

Investors tend to focus on the most likely outcome. As a risk manager, I spend time focusing on the unlikely, on the bad things that might possibly happen. Where T.S. Eliot writes, "This is the way the world ends, Not with a bang but a whimper" I would write, "This is one possible way the world might end...."

So, with that as the starting point, how might the world end for Facebook? And, by extension, for Apple and Google, because Google faces similar, but not so dire, business risk, and because much of Apple's raison d'être is to provide the hardware for Facebook and related applications.

Regulatory Backlash

As a start, there is a crescendo of regulatory backlash to the power that Facebook and Google wield. It is most manifest in recent action in Europe, and has been given some headline coverage from a speech a few days ago by George Soros at the World Economic Forum. If you want a sense of where he is coming from, the Washington Post headlined it as "Facebook and Google are doomed, George Soros says."

The current controversy on net neutrality applies to Google and Facebook. One concern is that without net neutrality there will be a stifling of the small start-ups, and increased power for the larger players. Point the rifle three clicks to the left from the net neutrality debate, and you have them in the line of fire.

A Self-destructive Business Model

Facebook and Google have a business model that is at war with itself. On the one hand they link like-minded people together, so they can share their views, interests, and product suggestions. On the other hand, they depend on advertisers for their revenue. But if their business model is perfected in the first case, there is no need for the second. People will know what they want without the advertisers that are outside their social circle chiming in.

Social Norms

Obviously a social network like Facebook or Instagram only works if people want to share on the social network. And the bulk of those who do so are acutely sensitive to the cool thing to do. If it becomes uncool, that is the end of that. Put another way, the fever pitch of social media is of the same flavor as any fad. It has no purpose other than being the thing of the moment. For social media, that moment might last another two years or another ten. But at some point there is the risk people will find it so last year, or so "what my parents used to do."

As a measure of it being a fad, what other $500 billion company could disappear from the face of the earth tomorrow and have no real impact -- except on advertisers?

And there are signs of change. When Cook states that he wouldn't want his nephew on social media, that is not a good sign. Closer to home, a month ago my fourteen year old daughter decided to get off of social media.

A recent meme is social media as cigarettes. Think of cigarettes in the Mad Men era. People were addicted, but also it was part of being social, and it was the way you kept yourself busy. If you weren't holding a cigarette, what were you going to do with your hands? Social media is addictive, social, and keeps you feeling like you are doing something with your hands.

How Does Apple Fit into the Mix?

The iPhone is the hardware that runs the fad. Take away the need for social media functionality, and there is no reason to move beyond the power of, say, the iPhone 6. Maybe you disagree with that, but by the time you get to the iPhone X I think you are at a bridge beyond. Once you deal with the battery issues and avoid dropping it, (or drop it and pay $100 to get the screen repaired), a smart phone lasts forever, and has the power you need if you are not lighting up social media. Put another way, think about how frequently you upgrade your iMac.

The Darkening of Silicon Valley

One thing that can help push social norms away from Facebook is a reframing of the Silicon Valley sphere away from the cool end of the dial and toward the menacing. The sea change that is putting Silicon Valley companies in the sights of regulators is also washing away the veneer. Soros wasn't the only one bashing the fruits of Silicon Valley. There was a litany of others along with Soros from the World Economic Forum. Undeniably, Silicon Valley is exciting, filled with great minds, and is the go-to destination for college kids. I know the feeling; that was the investment banks of the 1980's. And look where that ended up.

Case in point, there is the growing realization that Facebook is not simply a fun app, and the work of those brilliant Silicon Valley engineers is not just creating a global sand box where we can play. In the wrong hands it in can subvert a political system with more efficiency than a rioting mob. It already has. That has got to move the dial a bit in terms of perceptions.

Note: I did a post on Facebook back in 2011 that has similar sentiments, but with a more philosophical flair.

Perfect memory, complete knowledge, the creation of a personal, imaginary world, the nurturing of a virtual life, and living the double life of the real and the virtual; these, the trajectory of the virtual age, are the central themes in the short stories of the Argentinian writer, Jorge Luis Borges. Borges wrote in the first half of the twentieth century. He was a literary prodigy, works of his published while he was still a child. And, perhaps because he knew that he faced the specter of blindness in mid-life due to a genetic condition, Borges read voraciously and developed a command of literature, mathematics and history in his early years.

1. We are creating and inhabiting our own virtual world. It most immediately appears in computer games and avatars, but it also appears with a bit more subtlety through our on-line image. Our Facebook selves are not our real selves, and our Facebook friends are not really our friends. Like the sultry-voiced grandmother as a phone sex worker, as we extend further out past a small circle of real friends we are to a greater and greater extent who we wish to be or who we think others want us to be in a virtual world. (My eight year-old daughter is a twelve year-old French girl in Poptropica).
2. We are moving toward a world where there is perfect memory and unlimited knowledge. Knowledge of the world and our history through Wikipedia, of where we are and what we are doing through social networks. If something is put into the cloud, it might well be there forever. And when we inhabit our virtual selves we capture all of our history, because all that is virtual begins in the noosphere.

The Circular Ruin

A recent New York Times article critiquing of popular music for 2011 came away with the view that “2011 may well be remembered as the most numbing year for mainstream rock music in history. The genre didn’t produce a single great album, and the best of the middling walked blindly in footprints laid out years, even decades, earlier.”

The same could be said for the genre over much of the recent past.  And could be said for music in general, art in general, and culture in general. And for the basic structure of our lives in general, as well. A teenager today thinking back to the 1960 is peering into a past as removed in time as when I as a teenager looked back from the 1960s to the world of the 1910s. For me this was a distant and remote world shrouded behind World War II, the depression, and World War I, a world with which I shared little. Not so for today's teenager looking back to the 1960's, still listening to the Beatles and familiar with the epochs of James Bond movies running from Sean Connery to Daniel Craig. The conveniences of daily life were much changed from the 1910s and the 1960s, but not so from my teenage years to today. We had a refrigerator, TV, telephone and dishwasher. I drove my friend's Mustang. The refrigerator didn't have an ice maker, the phone was rotary, but then again, living in Nevada at the time, where the speed limit on the highway was whatever "is safe and sane" meant  I could drive the Mustang a lot faster then than we do today.

Given the amount of time we spend on-line and the ubiquity of computer chips in mediating our lives, you would think that we would have less connection with the fifty-year past. One reason we maintain this connection is that we have recordings and movies, while all we have from the 1910’s are books and grainy photographs. But there is another reason. Think of what we are really getting from the Cloud that might differentiate us from the past. For all the 4-G networks and iPads, what we have produced are differences in quantity, speed, and access, not differences in kind. Through on-line search we basically have a faster and more extensive encyclopedia, through on-line shopping we always have the latest catalog at our fingertips with operators always standing by, through e-mail we have a cheap personal telegraph.

Jaron Lanier makes this point: “Suppose that back in the 1980s I had said, ‘In a quarter century, when the digital revolution has made great progress and computer chips are millions of times faster than they are now, humanity will finally win the prize of being able to write a new encyclopedia and a new version of UNIX!’ It would have sounded utterly pathetic.”

What these new, improved modes of telegraph, encyclopedia, and retail have done for overall efficiency is a popular topic of debate. But the debate doesn’t end there. The effect that this has had on our lives is not only one of economics and productivity, but of culture.

In his 1985 book Amusing Ourselves to Death, Postman looks at the changes for our culture and our mode of thinking as we moved from relying on the written word to the instantaneous connection of the telegraph, then to the sound-bite laden, visual medium of television. Among many desultory effects one stands out: we became preoccupied with “news”, with knowing what is happened even when those things had not even the most remote value to us, and when, in any case, the speed of receiving that information was inconsequential. Postman asserts that the news of the day is a figment of our technological imagination. It is literally a media event.

This preoccupation actually started even before television. Television just leveraged the effect of the telegraph, which already had unleashed the demand for immediate reporting of irrelevant information from distant locations, by making it more entertaining and accessible.

Now we can add the internet, social networking, and email to the telegraph and television. We are getting better and better at keeping the serious at bay while wrapping ourselves in the absurd. Postman, perhaps reflecting on the founding of USAToday, considered the emergence of paragraph length news reports as "an astonishing tribute to the resonance of television’s epistemology". Now we have Twitter. Look at what are we seeing in a recent commercial from AT&T: Two tailgate heroes, eyes glued to their cell phones, turn such "breaking news" as a player's sprained ankle and a stolen mascot into something “so 42 seconds ago”, not to mention posting videos to Facebook with blazing speed.

News becomes a guiltless form of entertainment because we view news as weighty and worthy of attention. We get to have our chocolaty treat while arguing it is actually nutritious. But the ubiquity of the Cloud extends this beyond the six O’clock news. While the leading edge in the old media was entertainment masquerading as news, now we have entertainment masquerading as just about every component of our waking lives. Entertainment masquerading as social lives as we keep on top of what our friends (including all of our celebrities friends) are thinking about and doing at the moment. Entertainment masquerading as work as we e-mail colleagues incessantly and check out anything on the web that is even remotely related to work.

There is only so much that is really happening in the world at any moment, so to have sufficient content to fill our demand, we recycle and remix. We can see the same news in dozens of different venues, second hand links to a few original news items and thoughts. Or forgo the notion of news or thought altogether and simply follow someone as they go about their daily lives (which ultimately could become self-referential if they are going about their daily lives doing the same thing).

It seems that we are awash in information, but the actual information has hardly changed, it is just repackaged in many forms. Lanier also points this out: "It is astonishing how much of the chatter online is driven by fan responses to expression that was originally created within the sphere of old media and that is now being destroyed by the net. Comments about TV shows, major movies, commercial music releases, and video games must be responsible for almost as much bit traffic as porn. There is certainly nothing wrong with that, but since the web is killing the old media, we face a situation in which culture is effectively eating its own seed stock".

So for all the apparent newness we have become a culture of the remix. We think that we are in a technological revolution, but what we really have is more of the same, just faster, ever-present, and in color. We are mistaking high resolution and portability as an advancement of culture.

“I know a guy...”
Is LinkedIn anything more than a resume warehouse? Is it simply a web-based Rolodex to make it easier to stay up with your business contacts?

I don't know the business model for the company, and don't have any basis to comment on its long-term prospects, but in a somewhat stream-of-conciousness mode, I hear the “linked” in LinkedIn, and it starts me thinking about network theory, and the place LinkedIn most naturally fills in that space, which is to establish weak links.

In partiular, LinkedIn is an application of a theory the sociologist Mark Granovetter proposed in a 1973 paper. Granovetter looked at how job seekers used their social connections in their search. He came up with the surprising finding that the most valuable networking contacts in a job search are not from the ranks of close relationships, but rather from casual acquaintances and those known only indirectly through others.

The reason these second-order relationships, which he calls weak ties and which network theory refers to as weak links, are so valuable in the job search is that they have information that is outside the sphere of the tighter circle of friends. That is, when it comes to job opportunities, your close associates are likely to know pretty much the same things that you know already, and for that matter, any one of them is likely to know most of what any other one knows. After all, you are close because you work in similar jobs, went to the same schools, live in the same neighborhood. But the weak links extend your reach to opportunities that you and your strong links do not know.

If LinkedIn is successful in helping to create and exploit weak links, it also can be effective in fostering group action. Just as a job search depends more on weak links than on one's immediate group, so political action depends on weak links to spread the word and enlist broad action. This is true whether the means of communication is word of mouth, leaflets or the Internet. Granovetter discovered this when he examined the Italian community of Boston's West End to try to explain their lack of success in creating effective community organizations. He attributed it to strongly linked clusters or cliques that lacked weak links connecting them. The result was that any leader seeking to form a coalition to oppose, say, an urban renewal project, found no way into the various cliques. Starting with any one group, there might be no one who knew someone in another group well enough to provide an introduction, or because each group was so tightly linked and suspicious of outsiders (which would explain the lack of weak links) the leader could not generate the requisite trust.

Weak links are a key source of stability and resilience in networks. They are the conduit for sources of information and support while not being essential to the network's function. By definition, a weak link is one that is not integrated into a network; it can be broken without affecting the function of the network Their value derives in part from being unessential, and, for that matter, low maintenance. Having sets of strongly linked networks that are then linked to one another through weak links is an attractive structure for survivability.

One question that is widely debated is if LinkedIn, social network sites in general, and more broadly the expansion of information and communication, bind us more strongly. Do they affect the number and the value of weak links?

My view is that there are forces that govern the number of weak links, and the structure of networks generally, that occur even in their absence. In particular, I propose the following hypothesis:
Over the course of social evolution, the number of weak links initially increases and then, as the society matures, decreases. The same is true over the course of capitalist evolution.

To see what I mean by this hypothesis, which I will expand on below, consider the progression from the starting point of society. Early society consisted of small networks of closely connected nodes – the family, the village. These groups then begin to connect to one another through weak links. In some cases, the node – the person – who provides that connection becomes as important as the central figure in the group. But if the weak links have persistent value, they will strengthen and the network will expand to include that link and its related network. The end result is a society and economy that is integrated, and that, because of the loss of weak links, is less diverse and resilient. Constraining how far this goes is as much technological as it is culture: How many balls can anyone have in the air? How well can they communicate? Our Facebook's thousands of friends and LinkedIn's hundreds of connections notwithstanding, the fact is we really can't be friends and colleagues with all the matter in the universe.

Networks, Weak Links, and the Evolution of Society
Anthropologist Allen Johnson separates the development of society into three stages: the family/tribe, the local group, and the regional polity. Johnson views these three through a set of eight variables. The quality of network linkages is not one of them. But my objective is to provide a perspective for the role of the likes of LinkedIn, so I will take his three stages along a different route.

In the first stage, the family/tribe, all of the members are tightly linked. There are few if any weak links to other groups or tribes. The unit size is on the order of fifty people There are abundant resources for the tribe to forage or to develop the beginnings of agriculture and herding, with population density that is less than one person per square mile. With density so low, there is little need for territorial defense.

As population grows and resources become more constrained, the family/tribes form local groups in response to population pressures and the need to shepherd and protect resources. The network structure is a cluster of various tightly linked family-tribes all linking into a central figure, termed a Big Man.

Local groups might have hundreds of people and a population density that is ten times that of the family/tribe. This is near the limits for the number of strong links one person can manage, (embodied in the concept of the Dunbar number), and so weak links may start to emerge within the Local Group. Protection of those resources requires keeping other tribes at bay, so interaction with others, when it does occur, is often violent rather than cooperative. But it is within the local groups that weak links begin to form as they reach out in informal trade, and begin the transfer of technology, such as methods of farming and storage, toolmaking and the like. The result is greater stability than for the isolated family/tribe.

The development of weak links continues as the Local Groups evolve into Regional Polity, which includes the chiefdom and the state. For the Regional Polity, the value of weak links across chiefdom becomes manifestly evident, because of the increased importance of trade and alliances. The nodes that create the weak links with other Regional Polities define the nature of the state, for example differentiating feudal, capitalist and totalitarian states.

For the feudal state, the links come through emissaries of the state and the bonds of marriage. That is, the weak links are maintained under the control of the central node of the network. If the weak links across the chiefdom and states come through merchants and financiers, we have nascent capitalism. The importance of the weak links can be measured by observing the stature and power afforded to the merchant class, which controls those connections. In the totalitarian state, the ideal network is to have all members connected through a strong link with the center and have weak links across the members themselves. Of course, it is impossible for the center to establish and maintain the strong links directly, so they do so through the political machine or covertly through the state police, both of which also take action to keep any intra-member links weak, or prevent their establishment at all.

Networks, Weak Links, and the Evolution of the Political Economy
The evolution of society is carried forward hand in hand with the evolution and stratification of the political economy. For example, until around 1100 AD Europe was peppered with small towns and villages, each self sufficient and nameless. Transportation was perilous, and was taken with a risk of becoming forever lost. And, in any case, there was little reason to travel from one village to the next, given that one had little to offer compared to another. (Sort of like each town having its own McDonalds, Starbucks, and Gap).

The exception was the towns that were in a central position, perhaps based on being on a waterway or adjacent to a geographical pass, and thus became the hub for surrounding villages. Over time these towns grew in wealth, and the wealth in turn supported guilds, which then over time became specialized based on their proximity to the raw materials for metals, wood, and textiles. The guilds provided goods to enhance the lives of those in the adjacent country side, and they in turn provided the towns with food and raw materials. Thus developed the economic structure for the Local Group.

The town and its supporting countryside each represented its own network of associations, and it became the task of the merchants to provide the links between them. The reason such links made sense post-1100 where they didn't a few centuries earlier was the differentiation of production that supported trade. The links were weak because, first, it was only through the merchants that the connection existed, and second, if the merchants disappeared, the basic function of the town continued as before.

As towns with proximity to waterways became port cities and hubs of trade, the next step of capitalism developed. The product of the port cities was their links rather than real goods. And while the interior merchants plied their wares, trading the goods of one town for those of the next, it is in the ports that the essentials of capitalism took form: larger scale trade required capital for ships and letters of credit to finance cargo.

The point is that the evolution of society was often led by the network and links created by the economy, or was stifled by the lack of such links. The deliberate isolation in the Tokugawa era of Japan met its end because of the links that came about through trade. The control of wealth by the feudal lords began to fade, much as it did in the West, as the capital locked in the land was unleashed for capitalist enterprise, and the land-centered production was overshadowed first by that of the merchant class, and then of the industrialist. Another extreme is the early Ming in China, which demonstrated legendary seafaring, with fleets of 27,000 men traveling during multi-year expeditions to India and beyond, in one case as far as Africa. But the interest was amassing tribute and curiosities, (including giraffes!), not trade, with the result being centuries of isolation which left them in the dust during a period of unprecedented development in the West.

I'd Like to Teach the World to Sing
A key difference between a world made up of democratic, capitalistic societies and a world made up of feudal, totalitarian societies is the evolution forward from the Regional Polity. Absent revolution or war, the feudal state, centered around a ruler who guards all weak links, will be stable. Other states will be kept at arms length, with the only link being a weak link from ruler to ruler expressed through treaties and trade agreements. If, on the other hand, the links are established between the merchants and bankers, the links between the states may move beyond the ruler’s control, and will become increasingly strong. More information flow is better for business, as is a broader network for channels of production and distribution of product. Ultimately, at least in economic terms, the boundaries of the Regional Polity blur, and rather than having network clusters connected via weak links, the clusters integrate into one tightly connected network.

The key to this process is the limits of technology. Until very recently, the cost of communication and the limitations on keeping track of contacts was the constraint on transforming weak links into strong ones. But now the limitations of communication and processing are fading. The result is one large state, not in political terms, but in economic and informational terms. LinkedIn is one instrument in this process, but it extends beyond the social networks. Indeed, as I have argued in a recent post, the impact of links arising through much of the social media is more apparent than real. However, it is the most visible manifestation of what is occurring.

As the societal structure throughout the globe has moved along this path, the number of independent units has fallen. During Neolithic times there may have been in excess of 100,000 Local Groups, while today in we have a Regional Polity stage with only a few hundred states. And if we think in economic rather than political terms, the clusters, though difficult to define, are no doubt far smaller, and may be shrinking still.

From a network perspective, we are then all one big, happy, strongly linked family and that is the process of pulling in all information, to the point that there is less and less for a weak link to give you. In terms of information, everyone will be strongly linked, in the sense that they will all have the same (social) information.

So do we at last all link hands (strongly) and sing in perfect harmony? Even absent the political differences that prevent integration on the informational and economic side from extending out, there is a problem with a network that moves from many small networks connected by weak links to one network largely connected through strong links. And that is a reduction of resilience. Recall that a weak link is, by definition, one which at once both provides information from a new source and is not disruptive if it is broken. Recall also that in the earliest stage of society, the family or tribe, the key vulnerability was its isolation and lack of diversity. The final stage in the evolution of society brings things full circle, because although much larger and more productive, the fully linked society, with everyone sharing the same network, is also less resilient. All the nodes and clusters will tend to come to the same world view, share and depend on the same technology, and become intertwined in production. I wrote about this tendency in anearlier post on “asexual capitalism”.

And this perhaps gives rise to the collapse of societies. There is no end to speculation and proposals for the reason societies, flourishing and with great power and resources, falter and collapse. One suggestion, by Joseph Tainter, is that they fall under their own weight, they require ever increasing amounts of energy – both for operation and maintenance, and for management oversight – until the populace realizes it might be more efficient and productive to break away. With that realization usually precipitated by shocks such as famine or invasion. But another might be the reduction in weak links as the civilization expands, enveloping and integrating its neighbors, links that might have introduced the civilization to other ideas and approaches, warned of impending disaster, given shelter during calamity, and provided the resilience to these shocks.

The Securities and Exchange Commission disclaims responsibility for any private publication or statement of any SEC employee or Commissioner. This post expresses the author's views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff. Similarly, this post expresses the author's views and does not necessarily reflect those of the Department of Treasury or its staff.

A New York Times article reports on avatars in World of Warcraft finding love, which they then consummate through their players, who are real people. As one of my French friends says, it is a turvy topsy world. It reminds me of a Star Trek episode where two ethereal and compatico aliens made up of pure intelligence decide to inhabit the bodies of the Star Trek crew in order to experience the physical world. It doesn't work out well. The humans start to die, so, being of moral character, the aliens retreat into their disembodied state, but first have one last fling in order to consummate their love (with a kiss – it was 1960's television).

We, like WoW's Avatars and Star Trek's Sargon and Thalassa, are straddling the virtual and the physical. The trend is moving toward the former, but most of us still remain in the camp of preferring the latter. But if we do take the leap to living more in a set of virtual worlds, what is the problem with that? One reason, that I will discuss in this post, is that the virtual world is one of limited depth and created with compete intentionality and rationality, and thus strips away much of what makes us 'real'. This might be so obvious that it is not worth writing about. Obvious now, but I do not think it is only in science fictions and thought experiments that we will find games and virtual reality that blur the line beyond our ability to perceive the physical from the virtual.

We are Living in a Materialist World
What is a person?” If I knew the answer to that, I might be able to program an artificial person in a computer. But I can’t. Being a person is not a pat formula, but a quest, a mystery, a leap of faith. – Jaron Lanier

Materialism is a thread of philosophy that views man as inhabiting a deterministic world driven only by the laws of nature. Given that our virtual worlds are driven by a set of (virtual rather than physical) laws laid down by their decidedly finite creators, are completely understandable and solvable, devoid of the spiritual and mystical which the materialist denies, the virtual worlds pose a materialism of a new sort. Consider the Turing Test, which I discussed in a previous post. If we end up being successful in developing a machine that can fool people into thinking it is a person, that can use algorithms to successfully feign personal experience and emotion, then we have gone far towards proving this materialist case.

Indeed, success with the Turing Test is a prerequisite for replacing the physical with the virtual, because people still want human interaction, or the appearance of such interaction, when they occupy their virtual worlds. So creating your own made-to-order world also will mean populating it with made-to-order people, friends created based on the sort of information used now in social networks and dating sites; great friends based on your background, the books you read, music you listen to, sites you visit, perhaps personality tests and the types of e-mail you write. Friends that are then updated and refined based on who you are clicking with. You end up in a virtual world that you prefer to any real world you could find, you end up with apparent humans that are more interesting and tuned into you than any real humans would be.

The virtual worlds we create and occasionally inhabit are materialist because in the virtual world everything comes with a purpose, everything – even randomness – has to be created by rational, conscious action. Everything is constructed with a defined cause and effect. As Lanier writes in You are Not a Gadget:


The virtual at once seems to be covering everything but at the same time seems to leave everything of substance out.

The Virtual, Worlds Gone Mad
You cannot call up any wilder vision than a city in which men ask themselves if they have any selves...
You cannot fancy a more skeptical world than that in which men doubt if there is a world. – G.K. Chesterson

Materialism was the rage in early 20^th century England, and the Catholic apologist G. K. Chesterson wrote Orthodoxy as a charge against its dogma. In Orthodoxy, Chesterson likens the world of the materialist to that of a madman. The real world, the world of the sane, is filled with mystery, with infinite depth that cannot be plumbed. In contrast, the world of the madman is limited in scale, rational in its construction, and self-contained. We can say of the virtual what Chesterson says of the materialist:


The complete intentionality of the virtual world, like that of the real world in the eyes of the materialist, can give the impression of humanity, but it is the humanity inhabited by the madman who can not see anything without it having set about with a cause. Chesterson wrote that, “The madman is not the man who has lost his reason. The madman is the man who has lost everything except his reason”.

The virtual world has nothing but reason; it is rational and consistent, because it is developed through the rules of logic and mathematics. Virtual materialism takes materialism to an extreme: In the virtual world there is not even a place for the material. It is a world where one has no self, a world in which there is no world.

In a recent post I laid the blame for the inadequacies of neoclassical economics and behavioral economics on the failure to take into account human context. By context I mean that humans make decisions that are colored by their assumptions, experience, agenda, and even their sense of foreboding.
One way for economics to overcome its deficiencies is to take into account these inherently human characteristics. A different route is for people to cast aside these traits and start behaving more like computers. It looks like we might be going down the latter path.

In an article in this month's Atlantic, Brian Christian recounts his role as a confederate in the annual Loebner competition, which runs the Turing Test to see if computers can fool judges over the course of a five minute conversation conducted via computer console. The humans won this time around, as they have in each of the twenty years the contest has been run. And Christian's bet is that the computers will not be winners anytime soon because even as computers get faster and more adeptly programmed humans will counterattack with the weapons in their arsenal. One of those, which Christian used to win the event's prize as the “most human human” (the human who was most often identified correctly as a human), was to interrupt frequently and backtrack to previous points in the conversation the way we do in real conversation. By comparison, the computers far preferred a you-ask-I-answer interrogative approach.

The tendency for the Turing Test to become a competitive game for the humans as well as the computer programmers -- that is, where the humans are trying to win rather than 'be themselves' within the structure of the game -- defeats the test's intention, which is more or less to have a computer be indistinguishable from a person in a “normal” human interaction: say, a pleasant dinner conversation with a stranger, in which neither party is trying to prove that he is not a computer.
A better Turing Test to overcome the problems introduced in the competitions is to interject a computer into a round of dinner conversations where the human subjects are not made aware that this is occurring. After the fact, subjects are told that some of their companions might have been computers, and only then are they asked to rank the guests by “humanness.”

Apply the same method to other common modes of conversation, moving down the line toward the increasingly vacuous and context-less: e-mail exchanges, then online chat, and finally “texting.” As we go down the line we lose more and more context and depth. Each back and forth depends, if anything, on fewer and shorter prior communications. Tweets, which seem like the lower-limit of texting, are virtually “stateless,” meaning that they often spew forth apropos of nothing. As we descend into these more modern forms of communication it becomes easier and easier for a computer to “win” the Turing Test.

To illustrate this point, Christian relates an exchange between a computer and an unwitting human, where the human engaged in a conversation for an hour and a half, and then broke away without ever realizing there wan no human on the other end. (The dialogue, presented in part in this link, is one of the funniest things I have ever read). And this occurred in 1989:


We are indeed sinking to that level, not by becoming more verbally abusive, but by becoming less verbal, period. We are moving as a society toward the vacuous and non-contextual as we embrace new modes of conversation. Many have written on the vacuousness of IM and SMS-based conversation. But it is not depth of content that differentiates humans from machines. A computer can already beat us in terms of content. One human in a previous Loebner competition was pegged as a computer because she knew more Shakespeare than the judges thought was humanly possible, but not more than what they thought was possible for a computer. Recently a computer went head-to-head with past Jeopardy champions and won handily.

For humans, context matters more than content. A computer does not have existential angst. It does not hold grudges or have its reactions shaped by its childhood experience. It does not respond to a remark based on the previous conversations and how that colors the sense of the other person's interests and emotions. These dimensions of human interaction are flattened as we sink into the texting, twittering world.

Where will Facebook be in ten or fifteen years? In our immediate euphoria, such a long term view may be like taking a good joke too far. But where Facebook is in that long term will say a lot about the nature of society. And, or course, it also will say a lot about how much anyone with a very long view should be willing to pay for Facebook.

The success of Facebook depends on people being willing to eschew privacy, to share their lives, or their lives such as they are in the limited dimensions of the virtual world, with a wide set of people; to have many Facebook friends, to have an interest in the day-to-day world of those friends, to believe in the value of interaction afforded by virtual modes of contact. If people decide to cull back their circle to something that resembles real life and share their lives in more personal and direct ways, Facebook may still exist, but it will not be a potent force.

I am not going to enter the discussion of how secure Facebook's position is, or how much advertising it can generate. Instead, I am going to discuss the implications of Facebook for our individuality as we increasingly embrace Facebook and similar systems that replace real interaction with the virtual, and the implications of this world for the success of Facebook.

The basic point is that either the world changes and Facebook become marginalized, or Facebook continues the thrive and we live in a world of existential alienation. Most of my discussion will be along the lines of those in Jaron Lanier's brilliant book, You Are Not a Gadget. I will use excerpts from the book below.

Crowd Identity and Alienation
It naturally happens that the designs that celebrate the noosphere and other ideals of cybernetic totalism tend to undervalue humans. Examples are the ubiquitous invocations of anonymity and crowd identity – Lanier

The themes of Existentialism are freedom of choice, authenticity, and alienation. These are themes cast aside by the Internet age in general – the cloud, the hive, the redefining of humans as parameters of a database, the programs that confine our imagination – and Facebook as a particular. Existentialism starts at the level of personal meaning rather than general philosophical theory, the person is the active subject rather than a passive spectator. It deals with choice, while the Internet constricts, even dictates, our choices.

Kierkegaard writes extensively about people's desire to meld into the common crowd in the quest to overcome existential anxiety, to be, as Kierkegaard put it, tricked out of one's self by “the others.” He calls the result of this desire leveling. Leveling makes people feel closer and more connected because there is less need to grapple with the uncertainty in interpreting subjective experiences. After all, one way we remain alone is that we cannot know what another person is really seeing or experiencing.

“Melding into the common crowd” has the two operative characteristics of melding and commonality. The melding is a natural force within the social network community, because its whole objective is to allow us to interject ourselves into this huge and ever-present crowd. The commonality of the crowd is another aspect of leveling. If everyone is the same, the uncertainty in knowing what others are experiencing disappears. Heidegger refers to this aspect, the leveling of all differences: “by averageness and leveling down, everything gets obscured, and what has thus been covered up gets passed off as something familiar and accessible to everyone. ...by virtue of an insensitivity to all distinctions in level and genuineness, and in providing average intelligibility, opens up a standard world in which all distinctions between the unique and the general, the superior and the average, the important and the trivial have been leveled”.

The elimination of distinctions comes about inevitably in the digital world because people need to be transformed into standardized dimensions in order to insert themselves into this crowd. Lanier discusses the path to this standardization of identities: “Individual web pages as they first appeared in the early 1990s had the flavor of personhood. MySpace preserved some of that flavor, though a process of regularized formatting had begun. Facebook went further, organizing people into multiple-choice identities. If a church or government were doing these things, it would feel authoritarian, but when technologists are the culprits, we seem hip, fresh, and inventive”.

Marx also had a notion of alienation that provided a background to the most prominent existentialists and that links alienation to subjugation of individuality. The 'materialism' of Marx's philosophy of historical materialism came from Feuerbach, and the 'historical' came from Hegel; the latter overcame the limitations of the former by seizing on historical development to place humans in an active role. But while the Hegelian focus was on the realm of thought, Marx's was on the physical world, the practical sphere. It is in this that Marx was a precursor of Existentialism; one of the first to consider the individual directly rather than as a part of the universal. Not surprisingly, Marx's application of this practical orientation was to labor, which historically was how man interacted with and conceptualized the world.

Marx's focus on alienation in labor led naturally to the the plight of the worker, which then led to the indictment of capitalism, and from there to the solution of communism. We can abstract from the economic system that gave rise to alienation in society, and put the philosophical point more abstractly and with less polarity: in modern society labor became increasingly specialized and this specialization dissociated a person from his essential nature. Marx argued that for the most part, the worker does not engage their human essence, their creativity and ingenuity, their ability to respond to many varying challenges and situations.

A similar alienation occurs due to the computer cloud. We become detached from our essence by the transformation from a person with infinite depth and variation into one that is finite, specified by a multidimensional digital array. The Marxist view is alienation through specialization. In a sense people are turned into a datum, into one dimensional commodities. The Facebook world is not much better than that. In the ironic guise of a social tool, it creates a force for alienation and leveling beyond the dreams of Existentialists of a century ago.

The End of Privacy
The only hope for social networking sites from a business point of view is for a magic formula to appear in which some method of violating privacy and dignity becomes acceptable.– Lanier

Facebook and related sites owe their existence to a willingness for people to give up privacy. In order to meld into the crowd, people send pictures of where they are and give frequent updates of what they are doing. Most people are not exhibitionists, or even if they are now, every social trend, including a trend towards exhibitionism, has a rebound. I think there will be a time when protection of privacy once again becomes the norm, when it will be considered avant garde not to strip away the subjective and complex of the individual and dive into the cloud. At the least, to limit it to a small set of people.

One pressure that will act against the current fashion of casting aside privacy and dignity is that it will dawn on people that the world of Facebook has features of an all seeing Orwellian state, only worse, because rather than a single anonymous entity tracking our actions, we happily and voluntarily contribute, updated intraday, with the singular eye of the state replaced by the many eyes of the anonymous cloud. And rather than only tracking what we are doing and where we are, we throw in our preferences and our thoughts for free. I am surprised that repressive regimes do not seize on this tool rather than suppress it.

Replacing the Real with the Fictional
The most effective young Facebook users, the ones who will probably be winners if Facebook turns out to be a model of the future they will inhabit as adults, are the ones who create successful online fictions about themselves.– Lanier

The solution to the loss of privacy is to hold back the real and push forward a fictionalized version of the self into the cloud. This is the only way to meld into the crowd and still preserve individual identity. Fortunately, even as Facebook reduces individualism by holding the subjective from display, it also allows us to create such self-designed fictions. Toward the terminus of his life, Kierkegaard stopped going to church, saying that he no longer wanted to participate in “making a fool of God.” Here we make a fool of people.

Prognosis
So my bet – a long term bet because it will take the force of cultural change to accomplish – is that Facebook will become marginalized. It will not disappear, it will remain a repository for factoids about one's collection of friends, but the reality of what Facebook friends really are will become evident, as will the effects of standardization of the individual, the cost to individuality of giving up privacy, and the frustration with having Facebook friends that are increasingly fictionalized and flattened versions of their real selves.

Postscript: I joined Facebook a few years ago because some people sent me e-mails from their Facebook accounts asking to be my friend. So I signed up and befriended them all. I haven't received any new friend requests for the past year. I thought no one wanted to be my friend anymore, until I recently checked my privacy settings and discovered no one could search for my account.