Recorded on November 9, 2017.
With social networks like Facebook and Twitter in abundance, the effects of networks on society in the twenty-first century are inarguable. However, Niall Ferguson, author of The Square and the Tower, argues that networks are not a new phenomenon and have been impacting human culture from the beginning of history.
Niall Ferguson and Peter Robinson discuss networks and hierarchies throughout history in this episode of Uncommon Knowledge. Ferguson breaks down what he means by networks and hierarchies using the imagery of the Piazza Del Campo in Siena, where the Torre del Mangia, representing the hierarchy, casts a long shadow over the Piazza Del Campo, representing the network. Ferguson argues that this powerful imagery invokes the essence of his book and the intertwined nature of networks and hierarchies within society.
Ferguson goes on to discuss the importance of networks in social movements throughout history, including Martin Luther and the Reformation, Paul Revere and the American Revolution, Joseph Stalin and the Soviet Union, and social media and Donald Trump. He argues that a networked world is a dangerous world, in that it allows movements and societies to advance in unexpected ways.
About the Guest:
Niall Ferguson, MA, DPhil., is the Milbank Family Senior Fellow at the Hoover Institution, Stanford University, and a senior fellow of the Center for European Studies, Harvard, where he served for twelve years as the Laurence A. Tisch Professor of History. He is also a visiting professor at Tsinghua University, Beijing, and the Diller-von Furstenberg Family Foundation Distinguished Scholar at the Nitze School of Advanced International Studies in Washington, DC. He is the author of fifteen books, most recently The Square and the Tower.
- The Square and the Tower: https://www.hoover.org/research/square-and-tower
- The Square and the Tower: (33:01): https://www.youtube.com/watch?time_continue=3&v=6XyLaYUVzJo#t=32m38s
- 'The Square and the Tower' considers the staggering power of networks: https://www.csmonitor.com/Books/Book-Reviews/2018/0111/The-Square-and-the-Tower-considers-the-staggering-power-of-networks
- Network Concerns: https://www.hoover.org/research/network-concerns
Peter Robinson: "I thought once everybody could speak freely and exchange information and ideas." One of the co-founders of Twitter said recently, "The world would automatically be a better place. I was wrong about that." The response of our guest today, "If the Twitter co-founder had known his history, he would not have been surprised." Historian, Niall Ferguson, on Uncommon Knowledge now.
Theme Music Plays
Peter Robinson: Welcome to Uncommon Knowledge, I'm Peter Robinson. Now a fellow at the Hoover Institution at Stanford, Niall Ferguson has taught at institutions including, Oxford, Cambridge, the Stern School of Business, the London School of Economics, and Harvard. The author of a dozen major works on economics, military history, and diplomacy, Professor Ferguson has just published The Square and the Tower. Niall Ferguson, welcome.
Niall Ferguson: Thanks, Peter.
Peter Robinson: To explain why this book is called The Square and the Tower, the reader must come with me to Siena. Explain that Niall.
Niall Ferguson: Well, this is a book about networks and hierarchies, but I wasn't allowed to call it networks and hierarchies because hierarchies is one of those words publishers don't like.
Peter Robinson: On sales books.
Niall Ferguson: And so I thought, what can I call a book that is about the relationship between informal networks, social networks, and hierarchical structures of power, and I suddenly remembered Siena, a beautiful town in Tuscany that reached its zenith in the century before the Black Death. If you go to Siena, and I urge all viewers to do this, you will see the most perfect juxtaposition of a square and a tower. The Torre del Mangia which is this extraordinary beautiful tower, casts a great shadow over the main Piazza in the center of Siena, and that's the symbol I was looking for. I hadn't been there since I was in my twenties, but I've always thought of Siena when I've been trying to understand the relationship between government in the sense of hierarchical power structures and informal social networks of the sort that you find in town squares.
Peter Robinson: We'll come to Luther in a moment, but to quote again from the big themes first, The Square and the Tower, "This book distinguishes the long epochs in which hierarchical structures dominated human life from the rarer but more dynamic eras when networks had the advantage."
Peter Robinson: So, explain that. When we think of networks, often we think of Silicon Valley. You are taking a much longer view. Give us, ... as they say, we'll come to Luther in just a moment, but the longer view hierarchies tend to predominate.
Niall Ferguson: Well, when I moved out to be a full time Hoover Fellow at Stanford, I became a next door neighbor of Silicon Valley, and I was amazed, this is just over a year ago now, by how utterly indifferent to history people in that world are. In fact, in their view, history began with the Google IPO, or the founding of Facebook, and everything before that is the Stone age. So, part of the point of this book is to explain to the world of Silicon Valley, you did not invent networks. Social networks go back to the very dawn of human history. We are designed by evolution to network, but for most of history, informal social networks have been subordinated to hierarchical power structures. And there's a good reason for that. A lot of human history is to do with conflict, and early human structures, even before states, simple villages had always to be concerned with defense. And so a great deal of early human history is essentially about command and control. Networks, informal networks are not very good at defense. We can explore the significance of that for modern times in a minute, but back in the day, if we go all the way back to pre-history, somebody has to be in charge, somebody has to give the orders and the foot soldiers have to obey. So, for most of history, the tower overshadows the square. Indeed, that's part of Siena's symbolism. The tower's nearly always casting a shadow over the square. There are just occasional periods in history, we're in one of them now, when technology and other factors empower the networks and weaken the hierarchies.
Peter Robinson: And one more of the major themes of the book, you're a professional historian, "This book is an attempt to atone for sins of omission." Explain that.
Niall Ferguson: Well, if Silicon Valley's ignorance of history, I'm afraid historians are very ignorant about network science, and I plead guilty to having spent much of my career writing about networks without understanding the first thing about how networks function. Now, I've always been drawn temperamentally to study social networks. I didn't quite know that about myself until quite recently, but when I look back over 25 years of writing, I've written relatively little about kings, and queens, and indeed governments. I've written a lot more about networks, like for example, the network of Jewish bankers that was so important in 19th and 20 century history.
Peter Robinson: Your book The House of Rothschild.
Niall Ferguson: The House of Rothschild and the book I wrote about Siegmund Warburg, and I wrote a book about the British Empire, which is really a book about social networks and globalization.
Peter Robinson: Okay, good. Stop and explain all three of those. Banking, international banking networks. Why is the banking system in network instead of a hierarchy?
Niall Ferguson: Well, a credit system by its very nature is a distributed network, whether it's of banks or simply borrowers and lenders, there's not really that much hierarchical structure in a credit system. Now, we invented, relatively recently, central banks to preside over financial systems, but in practice, when you look at the international financial system in the 18th, 19th, 20th centuries, and into the 21st, it's more readily intelligible as an enormous network. And it became a much more complex network with the advent of technology in the 1980s, '90s, and into the 2000s, and we ended up with an astonishingly complex financial network, so complex that the people who thought they were running it, the central banks, completely lost control of it for a time. They didn't realize in 2008, the one single node in the network called Lehman Brothers, was so important to the network, that if you let it fail, the entire network of international credit would come crashing down. That was an aha moment for me and indeed for some central bankers. And I talk about this in the book. In some ways, the financial system became networked before everybody else did. 2008, it was mostly people in finance who were truly networked. The rest of us hadn't quite got there. The network platforms that made social networks like Facebook possible, came later. Now, we're all as networked as the financial system was in 2008.
Peter Robinson: You mentioned the British empire and what I'm trying to do is draw out a clear distinction between networks and hierarchies. So, to my mind, if you say British Empire, the first thing that comes to my mind is almost a great chain of being, Queen Victoria's at the top and the lowly sergeant major in some godforsaken village in India is at the bottom, and there's taking orders all the way up and all the way down, and you were saying that no, that's the wrong way to look at the British empire.
Niall Ferguson: As a general statement, I think it is true that most organizations have a kind of pyramidal structure, and there's an org chart on the CEO's wall or indeed the prime minister's office wall that shows that the CEO or prime minister is at the top and everybody else is in a sense reporting to that person, and that was true of the British Empire too. There are lots of lovely wall charts that put Queen Victoria at the top of a great chain of being that extends down to the lowliest Indian peasant, but in all these cases, there is another way of graphing the institution, graphing the organization, and that is its network structure. Who is really talking to whom? Who is really in a close relationship with whom? That network, whatever institution you're talking about, will look different from the org chart. And then the British Empire's case, although officially, Queen Victoria was the empress of all she surveyed, that wasn't really how the British Empire worked. It wasn't as if she issued orders that were then carried out in lowly villages. Actually, the British empire was built by networks of traders, and networks of missionaries, and networks of Oxford educated orientalists. It was very de-centralized, it's pretty hard to control what's happening in India from London even today, and in that sense, I think you're right to point out there is not a perfect distinction between networks and hierarchies. To be absolutely clear, a hierarchy is a special kind of network. It's a kind of network where there are missing edges. The nodes are not all connected. Most nodes can only get to the other nodes through a central node. That's what a hierarchy really is. Whereas, the distributed network is one in which most nodes are connected to most other nodes, there isn't one single central node through which all the others have to go. Now, that's the network science part that I didn't understand when I was writing about networks 10 years ago, but now I do.
Peter Robinson: So, as a kind of summary opening statement, is this fair that, and I'm trying to relate this to experiences that almost all of us have. I'm thinking of my kids now who are just reaching the age where they're getting their first jobs, and here's the difference between a hierarchy and a network. The hierarchy is the organization chart, which is visible to every employee on his first day of his or her first day of work, the network is composed of a series of those aha moments when you say, 'oh, so this is the way it really works,' and that's the person you really need to talk to if you want to get that done, right.
Niall Ferguson: Exactly.
Peter Robinson: Okay, okay. Got it.
Niall Ferguson: At the water cooler is often the place that reveals who really calls the shots. I remember having that experience at Oxford University as an undergraduate, discovering that really the college porter was the powerful people and the man who was president of Magdalen had least power of all. In fact, university is a good introduction to this world because they're not really very hierarchical institutions at all. Formally, there were people called deans, presidents, vice chancellors, but they're really quite weak relative to all those impossible academics, and yet impossible academics think of themselves as members of a republic of letters. I think that's what attracted me to universities as a young person. I always hated a command structure. I loathed the military. I didn't really like corporate life either. I don't like having a real boss. And so temperamentally, I'm a networks person. And one way of thinking about this, which your viewers might find helpful is to ask the question, am I a hierarchy person or a network person? Do I instinctively think first of all, of the chain of command, I report to him and they report to me? Or do I more instinctively think of that network, informal network of friends, acquaintances, and indeed family? That's the thing that a network can naturally gravitates towards. And then real networkers don't believe in the org charts, or at least they regard them as a kind of facade behind which the real power structures lie as networks.
Peter Robinson: All right. Now, we come to Martin Luther, 500 years ago and even 500 years ago, because you're writing here about tension between hierarchy ... By the way, I better stipulate. The book is full of one historical example, after another. You bring in Rome, you bring in John Buchanan's novel, Greenmantle. I mean, it's amazing how your mind finds connections across the kind of vast compendium of his history. This is a little television chat program, and we won't get very far. We will get to Luther. 500 years ago, he presents his 95 theses to the Archbishop of Mainz setting in train a series of events that you argue would anticipate the rise of Silicon Valley five centuries later. I'm quoting, "Luther was as much of a utopian as the pioneers of Silicon Valley in our own time, utopian, but the true upshot of the Reformation was not harmony, but polarization and conflict." All right, give all of that to us.
Niall Ferguson: Well, if we are to understand our own time, we need to use the right analogies and I don't think our own time is much like the 20th century. A time when very hierarchical states were in almost total control of social networks. You need to go much further back in time to find a period when the networks really could challenge the hierarchies, and that time was the 16th and 17th century. A time when a new technology, which was very network friendly, called the printing press, allowed the message of a heretic, critic of the church, Martin Luther to go viral. If Martin Luther had done what he did in 1517, in 1417, he would just have been burned at the stake and we'd never have heard of him. But Luther's message in 1517 could go viral, not just in Germany, but all over Europe because of the printing press. So for me, this is a really powerful analogy and there are some excellent academic work that shows that the impact of the printing press on say, the cost of the printed work, the cost of the page or of the book, and the volume of books produced was very like the impact of the personal computer. In our time, the same drastic fall in the price of information and increase in the volume of information, it's very much the same pattern, and it's had similar consequences I think. Now, Luther, as you said, was a utopian. He thought that if everybody could read a printed version of the Bible and have a direct relationship to God, then everything would be awesome. Well, he didn't quite put it like that. He said there would be something like the priesthood of all believers, which is a vision in early Christianity too, except that's not what was produced by the Reformation. In fact, the Reformation produced polarization, some people agreed with Luther, some people wanted to go even further than Luther, Calvin for example, but other people said, "No, this is completely wrong, and we need to fight this." And then the counter Reformation adopted some of the techniques that had pioneered and turned against the Protestants. So, we had 130 years of religious conflict in Europe extending right into the middle of the 17th century. In our time, I think something very similar happens, a new technology beginning in around the 1970s, hugely transformed the public sphere in ways that we're only still gradually beginning to understand. Then, as in the Reformation, it was a utopian vision. Everybody would be connected. There would be a global community. Mark Zuckerberg's phrase, the founder of Facebook. Do we have a global community today? I don't think so. What we have is the same phenomena, polarization and crazy stuff going viral. In the 17th century, belief in witchcraft went viral as much as Martin Luther's sermons had in the 16th century. In our time, it's not just cat videos that get shared online, it's fake news, and extreme views.
Peter Robinson: And you also argue that the dream, that one component of this, Mark Zuckerberg, the Facebook motto used to be, "Make the world more open and connected." I've already quoted the Twitter co-founder, Evan Williams, who said, "Once we're all connected, the world will simply be a better place just because it will be." One component of that hopeful vision was, in one way or another, we'd all be equal. Everyone would have access to information. Education would be ... and in one way or another, incomes would tend to level out. To the contrary, we've got stagnation of middle-class wages in this country, and vast fortunes, tens of billions to Zuckerberg, and Sergey Brin, and Larry Page, and Jeff Bezos, the moguls of the networked world. And you argue what? That this is a temporary anomaly, that more competition and more technology will come along, and incomes will tend to be equalized, or that inequality is a direct artifact output of the networked world?
Niall Ferguson: The latter.
Peter Robinson: Such a cheerful book you've written here.
Niall Ferguson: The dream. Well, it's a dream, it was a dream, wasn't it? We were all going to be netizens and everybody was going to be, as it were, on a level playing field in a giants network. But in fact, that's not what network science predicted at all. As social networks grow, they don't grow in a kind of equal way where new nodes attach themselves randomly to the existing nodes in the network. The new nodes have a preference to be attached to the well-connected nodes. And so, the already well-connected become even more connected. The rich get richer, the fit get fitter, the connected get more connected. So, when you look at networks from the vantage point of a physicist, like the Great László Barabási, what you find is that the networks are the least egalitarian of structures. As they grow, the returns, connectedness get more and more concentrated in a few hands. We who use social networks, who are the users, should be distinguished clearly from those who own them, and the ownership of the giant network platforms is incredibly concentrated. And as you mentioned, it has made billionaires of a relatively small number of people in Silicon Valley. So, one of the ... I think, unintended consequences, and there have been many, but one of the most important unintended consequences of the internet age has been to amplify, to reinforce inequality by allowing connectedness to become an incredible source of wealth as well as influence.
Peter Robinson: Dr. Kissinger, The Square and the Tower. "It was as I reached the halfway stage of my biography of Henry Kissinger with volume one finished." Brilliant book. We've spoken about it on this program, "And volume two, half-researched." Hurry up, if you wouldn't mind, "That an interesting hypothesis occurred to me. Did Kissinger owe his success, fame, and notoriety, not just to his powerful intellect and formidable will, but also to his exceptional ability to build a network." I'm going to come to the answer, but first the question; What was it about Kissinger that made you suspect there was something exceptional going on here? That the network was unusual?
Niall Ferguson: This is really why the book came to be written. One book leads to another, and volume one of Kissinger left me with a puzzle; How had this pretty academic individual become so influential so quickly after he entered governments in 1969 as Richard Nixon's National Security Advisor? And the hypothesis was that quite deliberately, Henry Kissinger built a network, not just of people in the administration with whom he worked, in fact, he was kind of dismissive of the org chart of the federal government, but more importantly, with people outside it, in the media particularly, but even more eclectically to Hollywood, and then of course to other countries, to the leaders, and foreign ministers, and ambassadors of other countries. So, my hypothesis, and this will be a big part of volume two, is that Kissinger understood that the world was moving away from mid-20th century hierarchies, from the days of totalitarian leaders and imperial presidents, into a new world in which networks would really be crucial. And perhaps by instinct or perhaps by design, he very rapidly became the most networked man in the world, so that by 1973, this was being acknowledged. I came across a terrific profile, I think in Newsweek, which makes this point about him, that he is the most connected man in the world. With the help of a very brilliant former student of mine, Manny Rincon-Cruz, we actually graphed the Kissinger network.
Peter Robinson: Which I actually I'm going to display for you.
Niall Ferguson: Which I am glad you are showing, because it's one of my favorite bits of artwork from the book, and this was quite a labor of love. Looking at all the connections between all the people who served in the Nixon or Ford administrations and wrote memoirs, that's the sets of people that I looked at.
Peter Robinson: So, talk us through this network. There's Richard Nixon, right in the middle. That's what you'd expect, but what would you ... What is unexpected? What is this specially telling about Henry Kissinger's network?
Niall Ferguson: This is what's known in the trade as an ego network. It shows all the most important relationships that Kissinger has ...
Peter Robinson: And this is derived from his memoirs. So, the number of times he mentioned someone, is that right?
Niall Ferguson: Exactly. So, we can see who the important people were, at least in Kissinger's memory of his time in government, and what you find is, not surprisingly, that Nixon himself is the most important, and Ford is also pretty important. Proximity and size of the node tell you those things, but then you notice that foreign leaders are as important as Americans in this network graph. Whether it's Brezhnev, or the North Vietnamese negotiator, Le Duc Tho.
Niall Ferguson: So, I think what you can do with a graph like this is be precise about which relationships mattered most to Kissinger. Now, I think this is a good illustration of why the network approach is helpful because he usually kind of casually make statements about important relationships, but this is a way of seeing who really mattered to him, at least in retrospect.
Peter Robinson: It's fascinating, Dobrynin, the Soviet ambassador to the United States looks as important, maybe even a little bit more important than Gerald Ford ...
Niall Ferguson: Right.
Peter Robinson: ... who became president after Richard Nixon left office.
Niall Ferguson: Which is telling you that Kissinger talks more about Dobrynin, the Soviet ambassador than he does about one of the two presidents he served. And you could also make the point that foreign secretary of state, William Rogers, is a very unimportant node in this graph despite the fact that in the org chart of the Nixon administration, he was superior to Kissinger when he was National Security Advisor.
Peter Robinson: The Square in the Tower, you contrast Henry Kissinger's ego chart with Richard Nixon's. "Nixon's inner circle was that a man confined within the walls of the White House." He's talking to his staff and that's about it. "Kissinger by contrast, mentions key foreign leaders almost as much as the presidents he's served." Okay. So, that tells us Kissinger ... what does it tell us? I mean, there's almost a sense in which you want to just say, he was a good schmoozer.
Niall Ferguson: Well, a good schmoozer is a kind of disparaging way of putting it, and you could also say, but of course, he was Secretary of State, he had a lot of relationships with foreign leaders, but the next step was to look at the ways in which the different members of the Nixon and Ford administration related to one another. Who mentions whom? If you take the entire universe of memoirs written from that time, and it turned out to be larger than I'd expected, lots of memoirs from that period, it's very striking how many people talk about Henry Kissinger. In fact, Henry Kissinger is the second most important node in that graph after Nixon himself. And that's an important piece of evidence for the argument that Kissinger really was the second most powerful man in that period of American government. And I think that's why this technique is useful. It forces you to be rigorous when you're talking about relationships. What you can't show the graphs like this very easily is the quality of relationships. It just shows you the people were connected. It doesn't tell you if they loved one another or hated one another or we're indifferent to one another, but I think this is a way that historians can be more rigorous in their analysis of social networks, of relationships, and after all, that's what a lot of politics is about.
Peter Robinson: So, in principle at least, if we had enough letters, if enough documents and letters survived, you could do an ego chart for every member of the Court of Henry VIII.
Niall Ferguson: Absolutely.
Peter Robinson: And it would be very revealing probably.
Niall Ferguson: And indeed that work is being done.
Peter Robinson: Oh, is it done, it's being done? Really?
Niall Ferguson: Yes. Some of the most enjoyable parts of writing this book were the reading of research by often young scholars looking at network analysis of the Court of Henry VIII, or for that matter, of the Protestant martyrs who lost their lives under his daughter, Bloody Mary, Mary I. So, I think this tool is being deployed more and more, and part of what The Square and the Tower does is to introduce this quite academic and quite technical literature to the general reader and say, you know what? This is happening a lot of different places. Think of the Enlightenment. Benjamin Franklin is a well-known figure, but did you know anything about his network of correspondence? You begin to see where Franklin fits into the Enlightenment network or the network of the American Revolution, which I got very excited about, which reveals that Paul Revere really was one of the crucial figures in the revolution by measures of network centrality. We can show that he was the connector in the network that made the American Revolution in Boston. And the reason Paul Revere's ride is famous is partly because it was Paul Revere. People believed what Paul Revere said because they were connected to him, they knew him.
Peter Robinson: I see. The squashing of networks, the Union of Soviet Socialist Republics, this year marks the 100th anniversary of the Bolshevik Revolution and the founding of the Soviet state. And the question is, did the USSR have anything to teach us about hierarchies and networks, and in your hands, the answer is it most certainly did. Tell us the story of Oxford philosopher, Isaiah Berlin, and the Russian poet, Anna Akhmatova.
Niall Ferguson: Berlin and Akhmatova met a handful of times. The most memorable of their meetings was in Leningrad, in her apartment, one night, shortly after the end of World War II in 1945, November I think.
Peter Robinson: Right. Immediately after.
Niall Ferguson: This was a meeting of minds of kindred spirits. The philosopher and political thinker Berlin, who himself had been born in Russia, born in the Russian empire, and Akhmatova, one of the great poets of the 1920s who had been cast into outer darkness by Stalin because her poetry was not in conformity with socialist realism. It was an encounter between two intellectuals. They spent the night talking about poetry, reading poetry, and talking about art. When Stalin got wind of this encounter, he was furious and began to persecute Akhmatova again and her family. It led to her son being consigned to prison, to the labor camps again. And I tell this story because it illustrates that there have been times in human history when to network, to be in a social network was itself a criminal offense that could even lead to death. Stalin above all other leaders, distrusted any kind of networking that did not go on with his or at least the communist party's approval. His paranoia extended to eavesdropping even on a poet. And this is perhaps the quintessence of the hierarchical order that was totalitarianism. The Soviet Union was set up in the mid 20th century so that nobody could network with impunity and you did it at your peril. Networking without Stalin's approval could get you sent to the Gulag and even get you shot.
Peter Robinson: A contrast and a tentative conclusion, which I think is probably a little bit wrong, but you'll adjust it. Contrast with the Soviet Union is the United States, and one of the things that Tocqueville writes about, he visits the United States in the 1830s and he is struck by the richness of private associations, churches, neighborhoods, voluntary associations of all kinds. And of course, reading your book, I think to myself, Tocqueville is seeing networks, he's seeing networks. Does the richness and variety of private networks in a nation represent a useful rough index of liberty? Should it be in some way an aim of policy to provide the kind of government that most easily permits networking?
Niall Ferguson: Yes and yes.
Peter Robinson: Yes and yes, really?
Niall Ferguson: Tocqueville was right that civil society was what made the United States successful as a democracy and the lack of it, the lack of a vigorous associational life was why France kept making a mess of democracy in his time. And I think that observation is one of the most profound of his career. What he was seeing when you traveled in early 19th century America was a networked society with a lot of very decentralized local decision making being taken by citizens without reference to central government. And Tocqueville was a great critic of the centralization of the French state, going back to the 18th century and into his own day, his constant warning was, centralization is the enemy of liberty, associational life and decentralization is the friend of liberty. This turns out to be true. Unfortunately, we didn't really hear Tocqueville in this country. In fact, if Tocqueville came back to the United States today and looked around, he would conclude that the French must have taken over the United States at some point and created a very powerful central government in Washington D.C, where we're having this conversation, which increasingly resembles the Paris that Tocqueville wrote so critically about in the 19th century. So, we've lost that magic that made the United States different. We've lost that vital association of life, we've lost that default setting that Americans used to have when confronted with a local problem, let's solve this together, let's not call in the federal government to solve it for us.
Peter Robinson: Donald Trump, China, and what comes next? The Square and the Tower, "Candidate Donald trump completely dominated Hillary Clinton on both Facebook and Twitter. If the social media platforms have not existed, Trump would've been forced to conduct a more conventional campaign, in which case the greater financial resources of his opponent, who out-spent him by more than two to one, would surely have been decisive." Donald Trump is president today because his campaign is networked, while the Clinton campaign was hierarchical, true?
Niall Ferguson: That is the argument of my book and indeed something I've revisited in recent columns. More and more, I think, that Facebook and Twitter, these social networks or network platforms were crucial to Trump's victory in 2016, and if they have not existed, he would not have won. Now, everybody has their own pet theory as to why the election turned out the way it did, but I think people who on the eve of that election called it right, maybe in a stronger position than the people who said that Hillary Clinton had a 90% probability of winning and then subsequently, retrofitted their theories to the facts. I think the decisive variable must have been the social networks because it gave Trump tools, which were available to the Clinton campaign, but simply weren't used so effectively, to target advertising at key voters with great precision and at very low cost. It is much cheaper to do this and more effective than to go for old-style commercials paid for on TV, which I'm afraid the Clinton campaign was still heavily reliant on.
Peter Robinson: So, all of this sounds very odd, not wrong, but odd. Democratic Party is the party of youth, hipness, cool. Hillary Clinton won by a large margin among those millennials who chose to vote and you're saying that she was outmaneuvered by a septuagenarian real estate executive from Queens. So, we simply have to say the association of youth and networking is superficial at best. This is open to anybody who wants to grab it.
Niall Ferguson: It's more rich in irony than even you suggest because Silicon Valley itself, if you'd asked nearly all the senior executives, software products, ...
Peter Robinson: Not a lot of Trump supporters.
Niall Ferguson: ... they were all completely on board with Clinton. The campaign contributions overwhelmingly went to her, Eric Schmidt of Google was one of her campaign advisors. There was only really a handful of people in Silicon Valley who backed Trump, Peter Thiel being the bravest. So, what's amazing here is that the tools created by liberal elites, and they don't come much more liberal than Mark Zuckerberg, were the key to the success of the populous candidate and tools that were thoughts to be the property of youth turn out to be a very powerful instrument to mobilize middle aged and aging Americans in support of the populous candidate. This is the great irony of 2016, but we shouldn't be so surprised. Exactly the same thing had happened just a few months before in June 2016 in the Brexit referendum in Britain, where Facebook was very effectively used by the leave campaign to get predominantly older provincial voters to turn out in massive numbers. 90% turnout for voters aged 65 and older in the Brexit referendum.
Peter Robinson: 90%, really? I hadn't heard that figure. That's astonishing.
Niall Ferguson: So, that's the irony of all of this. And I think it was Brad Pascal who was Trump's digital media director who observed just the other day that they had designed these networks never imagining that they could be used to advance the cause of a populist, right-wing candidate. And this brings us back full circle to your Twitter founder quotation at the beginning. You know, we never thought that if we connected the world it would turn out this way. Sheryl Sandberg of Facebook said not so long ago, "We never thought our tools could be used in this way." You know, history is great because it's full of irony. This is Edward Gibbon class irony. Silicon Valley built the tools that propelled Donald Trump, a man they nearly all abhor, into the White House.
Peter Robinson: Niall, in concluding The Square and the Tower, you write about the great nation states, and the tensions, the rivalry between the United States and China, but you also make the point that there are now networks of economics and technology that extend across national borders. And I'm going to quote you. "The key question is how far this network of economic complexity now poses a threat to the hierarchical world order of nation states. Can a networked world have order? In the light of historical experience, I very much doubt it." Explain.
Niall Ferguson: Well, the typical Utopian view is that, it would be great to have a networked world, Anne-Marie Slaughter has written a whole book about this, but in fact, we should see that what happened at the national level in the 2016 election, can also happen at the global level if we leave it to the networks. My argument is that a networked world is a dangerous world. Networks in the 18th century ran out of control in France, produced a revolutionary eruption that turned Europe on its head. What was the solution to the problem of the rampant revolutionary networks?
Peter Robinson: Napoleon.
Niall Ferguson: Napoleon Bonaparte, I'm in charge, at the return of hierarchy, and then an even more elegant solution; the pentarchy of five great powers that established themselves as the guardians of order at the Congress of Vienna. Now, this seems to me very instructive, because they said explicitly, "We five great powers are dominant, the rest of you are subordinate to us and we will establish the rules of international order." My argument to the conclusion of The Square and the Tower is that we need some similar order, some similar hierarchical structure to the international order because if we just leave it to the networks, if we leave it to Facebook and Twitter, we were not going to end up with a global community of netizens all sharing cat videos, we're going to see the polarization, the viral manias happening on a global scale and not just in national elections. Plus, we know from 2016 the bad actors, whether it's ISIS or Russian intelligence can very easily hack the networks. I don't think Russia decided the election, but Russia certainly did nothing to hurt Donald Trump's chances with its interventions on Facebook and Twitter. So, a networked world is not a stable world at all, there needs to be some hierarchical order. I think it's not yet clear what kind of order can emerge. Certainly with Donald trump as president, I don't see a strategic plan in place yet. Some people say it'll just be a two power world order, the G2 or Chi-merica, China and the United States, maybe that will be the outcome. My own preference is that we take the existing pentarchy on the United Nations Security Council, the five permanent members, and make that the Congress of Vienna of the 21st century.
Peter Robinson: Can we put up with France for another century?
Niall Ferguson: Well, what's the alternative? If you restructure the UN permanent members you're going to end up with even more awkward partners. The great thing about ...
Peter Robinson: You don't want the Germans on?
Niall Ferguson: Well, I wasn't going to name any names, but if you did it on the basis of population, you'd be getting rid of France and bringing on India, Indonesia, can get very complicated if you go by population. The thing about the UN Security Council, and those viewers skeptical about the UN need to listen carefully here, is that it does have legitimacy globally, despite the fact that it's really quite arbitrary a remnant of past history, that the five permanent members are who they are.
Peter Robinson: The five are?
Niall Ferguson: The United States, Russia, China, Britain, and France. The winners, as it were, of world war II just happened to have a privileged position. The losers, don't call us, we'll call you, Germany, Japan. This is a very interesting setup to me because it reminds me of the Congress of Vienna, five powers that outrank the others that are permanently on the UN Security Council, and it has legitimacy. When the UN Security Council issues a resolution, the world pays a lot more attention to an issue than when it doesn't, take North Korea. So, I think one of the interesting paradoxes of our time is that an opportunity exists today to use the UN Security Council in a way that wasn't possible at all in the era after it was created. Because in the cold war, either the Soviets vetoed our resolutions or we vetoed theirs. So, one possibility here is that international order could be based on a pre-existing institutional structure that just hasn't worked before. It's a long shot, but if you think that China plus America is a better idea, I've got bad news for you, that's not enough. I don't think that creates nearly enough legitimacy for the rest of the world to buy in.
Peter Robinson: All right. Couple of last questions, where do you stand? Does your argument militate in the direction ... this is much in the news lately in Silicon Valley where you and I both live these days, where do you stand on the anti-trust issue? The notion that somehow or other, the legal framework doesn't seem to be adapted to it just now, but one way or another it would be better for America if Facebook, and Google, maybe Amazon, maybe Apple, but the giants were broken up in one way or at least constrained.
Niall Ferguson: Well, this is an idea that's gaining ground on the left of the Democratic Party because they look back to the glory days of trust busting and they want to bring an antitrust back into their political vocabulary after a period when it's been more or less nonexistent. I think it's going nowhere, frankly. I don't think the law is going to be very helpful. Certainly, the tradition as the courts interpreted it in recent decades has been, you have to show that consumers are worse off ...
Peter Robinson: And they're better off.
Niall Ferguson:... and try that with Jeff Bezos, he'll show you that Amazon has made consumers much better off. I don't think that's where the big tech companies are vulnerable, they're natural monopolies. I don't think you can break them up the way standard oil was broken up, but I think they are vulnerable to increased regulation and I will be amazed if there is not a significant change in the regulation in the course of 2018, because the status quo just seems indefensible. Right now, Facebook is the biggest media publishing company in American history and yet it is regulated as if it is not one. It's regulated as a network platform with no liability for anything that appears in the platform. If that is still the case, a year from now, I will be stunned and it will I think be a major mistake on the part of lawmakers because that's an indefensible anomaly. And every time I hear Facebook executives say, "We're not a content company, we're a tech company, we're a network platform." I say, pull the other one, it's got bells on, you are bigger now than William Randolph Hearst at the height of his power.
Peter Robinson: Which leads to another ... I keep thinking this is going to be the final question, I'm adding one more. What's the longer term prospect ...? Not even that, be five years from now, we now have a situation in which news is gathered and paid for by one set of entities, the traditional news organizations, and yet overwhelmingly the profits accrue to Facebook ... actually those two, Facebook and Google, advertising has shifted dramatically to Facebook and Google. Facebook alone earned as much in advertising last year as all the other media companies, all the traditional media companies in America combined, and Google earned a multiple of what Facebook earned in advertising. They don't pay for their news, they just take it. Are we old fashioned enough to believe that investigative journalism and pretty good commentary, informed commentary, remains essential to democracy, and if we do believe that, is the current situation tenable?
Niall Ferguson: No, the current situations is not tenable ...
Peter Robinson: It just plain isn't, is it?
Niall Ferguson:... but it's worse than you say.
Peter Robinson: Ah, keep cheering me up.
Niall Ferguson: Because what happens when 45% of Americans at the last can't get their news from the Facebook Newsfeed, that is not some random aggregation of data. What happens in the Newsfeed is that the algorithm tries to decide what news the user will like or share and pay attention to because ...
Peter Robinson: It's literally trying to tell you what you want to hear.
Niall Ferguson: Exactly, and what you like to hear, and what you like to share because that's how Facebook gets paid by advertisers, by showing that people are stuck to the content that they go to. So, we've created filter bubbles, echo chambers, whatever you want to call them, that completely dis-aggregate the old public sphere so that people have their own personalized newsfeeds, there no longer is a common conversation in America. Everybody is in his or her own little bubble and that's the most dangerous part of it. Look, my heart bleeds for the traditional publishers, but what's happened to them happened to music publishers years ago, it's just the latest internet disintermediation or disruption, whatever term you prefer, to befall a traditional business. And I feel equally sad for the traditional advertising agencies that are being given the same treatment. But we as citizens should be much more worried about what's happened to the public sphere in the age of Facebook and Twitter. We've talked about how it's been polarized, we've talked about how fake news and extreme views are more likely to go viral, but I think the ultimate threat to the stability of democracy is the disappearance of a national conversation and the creation of multiple personalized filter bubbles. That can't be good for us.
Peter Robinson: And do have a first draft at a solution? What would you propose?
Niall Ferguson: It's something I think a lot about when I do think that there needs to be at least a level playing field in terms of regulation. You can't go on pretending that Facebook's not publishing content, it's the biggest publisher of content there's ever been. Secondly, I think that therefore has to be liability for that content. Thirdly, that imposes a whole bunch of new costs on these companies because the sheer scale of the volume of content appearing on these platforms, remember there are more than two billion people using Facebook, all using it to post stuff, and comparable large numbers of advertisers using it to sell stuff. This is beyond editorial control, and whenever they try to reassure us that they're going to hire 10,000 people to look for bad content, fake news, or Russian propaganda, my response is the same as I already gave you, I pull the other one and it's got bells on. This is far, far larger as a problem than 10,000 editors can possibly address. So, I think what we'll see is a level playing field, increased liability for the network platforms, and a huge problem for them, which is how do you curate and edit content in such vast volumes that we have never seen anything like it before? We need to make that their problem and not our problem as citizens.
Peter Robinson: Niall, last question. It is in the nature of these programs that one really wants to end on an upbeat. And so I'm going to say to you, Niall, I hear by command you, Niall Ferguson, author of The Square and the Tower, what's the most hopeful aspect of the development of this networked world for the United States of America?
Niall Ferguson: The good news is that if you empower networks, there are good things that happen too. The Printing Press produced not only religious conflict, it produced the Scientific Revolution, it produced the Enlightenment, it produced the American Revolution, it produced the Industrial Revolution. These great leaps forward in human understanding happened because intellectuals and innovators were able to exchange ideas freely, publish them, or just correspond with one another in an enormous network that was global at its maximum extent. And we have something very similar today. The best thing about the internet is that it enables innovation and creativity to happen without any central control. Nobody is calling the shots on how we try to solve the great problems that face us today. And so when I'm being optimistic, I tell myself, it's all going to be fine, there may be disruption, there maybe polarization and crazy stuff may go viral, that happened in the 17th century. But remember what happened in the 18th century. The greatest breakthroughs in our political understanding, and the foundation of the greatest republic, perhaps the greatest polity in all of history, the United States of America, I don't believe China ends up owning this technology and therefore the 21st century. They're trying to, because essentially, the Chinese have their own network platforms that are under state control, that won't be better than what we've got here. So, the creativity of Facebook, the creativity of Google, these ultimately are assets to the United States. If they as companies thought a bit more nationally and a bit less globally, I think that would be good for them and good for us. What is good for Facebook should be good for the United States and vice versa. You could say that about General Motors in the 1950s, you can't yet say it about Silicon Valley, and it's high time that we did.
Peter Robinson: Niall Ferguson, author of The Square and the Tower, thank you.
Niall Ferguson: Thank you.
Peter Robinson: I'm Peter Robinson for Uncommon Knowledge and the Hoover Institution, thank you.