The document discusses the interplay between hierarchies and networks throughout history. It proposes that there are three main axes that drive history: nature, hierarchies, and networks. Environmental changes often incentivize innovation through networks, networks tend to disrupt established hierarchies, and hierarchies seek to exploit networks. The document provides several historical examples to illustrate this dynamic, such as how the Black Death led to rising wages in Europe and how the printing press helped enable the Reformation. It acknowledges that today's digital networks pose a challenge to hierarchies but notes that not all individuals on networks are equal and old hierarchies know how to exploit new technologies.

1. Networks
versus
Hierarchies
Harvard,
August
22,
2014

2. Study
ques5ons
1. Are
you
a
hierarch
or
are
you
networked?

3. Study
ques5ons
1. Are
you
a
hierarch
or
are
you
networked?
2. Do
you
think
the
social
and
other
networks
created
by
the
Internet
will
ul5mately
prove
more
powerful
than
the
tradi5onal
hierarchies
of
business
and
poli5cs?

4. Study
ques5ons
1. Are
you
a
hierarch
or
are
you
networked?
2. Do
you
think
the
social
and
other
networks
created
by
the
Internet
will
ul5mately
prove
more
powerful
than
the
tradi5onal
hierarchies
of
business
and
poli5cs?
3. Which
markets
will
be
the
next
to
be
disrupted
by
innova5ons
in
informa5on
technology?

5. Study
ques5ons
1. Are
you
a
hierarch
or
are
you
networked?
2. Do
you
think
the
social
and
other
networks
created
by
the
Internet
will
ul5mately
prove
more
powerful
than
the
tradi5onal
hierarchies
of
business
and
poli5cs?
3. Which
markets
will
be
the
next
to
be
disrupted
by
innova5ons
in
informa5on
technology?

6. Lang’s
Metropolis
as
metaphor
The
city,
the
revolu5on,
the
flood

7. Lang’s
Metropolis
as
metaphor
The
city,
the
revolu5on,
the
flood

8. Lang’s
Metropolis
as
metaphor
The
city,
the
revolu5on,
the
flood

9. Lang’s
Metropolis
as
metaphor
Hierarchy,
network,
nature

10. Our
21st
century
predicament
Hierarchy,
network,
nature

11. The
axes
of
history
Hierarchy
Networks
Environment
Plus
the
Fourth
Axis:
Time

12. The
three
axes
Nature
The
material
constraints
over
which
we
have
no
control
Hierarchies
Ver5cal
organiza5ons
with
command
and
control
Networks
Spontaneously
self-­‐organizing
horizontal
structures

13. Nature
1. Physics
2. Geography
3. Geology
4. Climate
5. Disease
6. Evolu5on
7. Fer5lity
8. Bell
curve
The
environment
is
not
wholly
a
given;
it
can
be
shaped
by,
as
well
as
shape,
humanity

14. Networks
1. Knowledge
/
Memes
2. Migra5on
3. Miscegena5on
4. Informa5on
Technology
5. Markets
6. Clubs
7. Ci5es
8. Cults
9. Movements
10. Crazes
Networks
are
spontaneously
self-­‐organizing;
they
are
the
main
source
of
innova?on,
but
they
are
quite
fragile

15. Hierarchies
1. Clans
2. Tribes
3. Castes
4. Classes
5. Armies
6. States
7. Churches
8. Bureaucracies
9. Corpora5ons
10. Par5es
11. Universi5es
12. Empires
Hierarchies
exist
primarily
because
of
the
economies
of
scale
and
scope
in
security,
but
also
to
extract
rents
from
networks

16. History
explained
• Environmental
changes
oben
incen5vize
innova5on
by
networks
• Networks
tend
to
disrupt
established
hierarchies
• Hierarchies
seek
to
exploit
the
benefits
of
networks

17. History
explained
• Environmental
changes
oben
incen5vize
innova5on
by
networks
• Networks
tend
to
disrupt
established
hierarchies
• Hierarchies
seek
to
exploit
the
benefits
of
networks

18. History
explained
• Environmental
changes
oben
incen5vize
innova5on
by
networks
• Networks
tend
to
disrupt
established
hierarchies
• Hierarchies
seek
to
exploit
the
benefits
of
networks

19. History
explained
• Environmental
changes
oben
incen5vize
innova5on
by
networks
• Networks
tend
to
disrupt
established
hierarchies
• Hierarchies
seek
to
exploit
the
benefits
of
networks
This
is
not
some
kind
of
determinis?c
sequence

20. Example
1:
From
the
Black
Death
…
The
“Black
Death”
(Yersinia
pes5s
bacterium
carried
by
rat
fleas)
killed
30-­‐60%
of
Europe’s
popula5on:
peak
years
1348-­‐50.

21. …
to
rising
real
wages
in
western
Europe
Survivors’
real
wages
rose
by
a
factor
of
around
3
in
the
following
century

22. But
already
medieval
Europe
was
more
networked
The
Guildhall,
home
of
the
City
of
London
Corpora5on
(C12th)

23. …
than
hierarchical
imperial
China
Chinese
imperial
civil
service
examina5on,
reign
of
Emperor
Renzong
(Song
dynasty,
1010-­‐1063)

24. Example
2:
From
the
print
revolu5on
…
Johannes
Gutenberg
(c.
1440-­‐50)
“invents”
prin5ng
press
in
Strasbourg

25. …
to
the
Reforma5on
Joachim
Vadian,
humanist
polymath
who
brought
the
Reforma5on
to
St.
Gallen

26. The
print
revolu5on
…
Volume
of
books
increased
a
hundredfold
between
1495
and
1635;
the
price
of
a
book
fell
99%
Source:
Dinmar
(2012)

27. …
looks
familiar
Source:
Dinmar
(2012)

28. Example
3:
From
wars
of
religion
…
St.
Bartholomew’s
Day
massacre
of
Huguenots,
Paris,
1572

29. …
to
hierarchical
order
The
Peace
of
Westphalia
(Treaty
of
Munster,
1648)

30. Western
empires:
Networks
…
Major
telegraph
lines,
submarine
and
overland,
1902

31. …
plus
hierarchies
Delhi
Durbar,
1903

32. Example
4:
Triumph
of
the
hierarchies
Alfred
Sloan’s
“Organiza5on
Study”
for
GM,
1921.

33. Empire-­‐states:
Great
Helmsmen
…

34. …
and
mass
mobiliza5on
of
youth

35. The
planner’s
dream:
The
economy
as
model
Bill
Phillips
with
MONIAC
(the
Monetary
Na5onal
Income
Analogue
Computer),
a
hydraulic
computer
built
in
1949
to
simulate
the
UK
economy

36. The
21st
century:
Revolt
of
the
networks?
Cairo,
February
2011

37. The
21st
century:
Revolt
of
the
networks?
São
Paulo,
June
2013

38. Today’s
networks
do
pose
a
real
challenge
Source:
Pew
0" 20" 40" 60" 80" 100"
Cellphone"ownership"
Use"cellphone"for"Internet"
Use"cellphone"for"Internet"(18929)"
Use"phone"for"social"networking"
Use"social"networks"(18929)"
Use"phone"for"poli?cal"news"
Use"social"networks"to"share"views"on"
poli?cs"
China"
US"
Egypt"

39. But
not
all
ne5zens
are
equal
>$500m
2,700
>$100m
29,000
Source:
Credit
Suisse

40. Some
are
much
more
equal
than
others
400"
350"
300"
250"
200"
150"
100"
50"
0"
Masters'of'the'Internet'
Google" Facebook"
Market"capitaliza8on"($BN)"
Founders'"stake"($BN)"

41. And
the
old
hierarchy
knows
how
to
use
the
new

42. What
not
to
expect

43. Metropolis
lives!
©
Niall
Ferguson
2014