Highlights from The Square and the Tower by Niall Ferguson
Highlights from this book
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Historically, as we shall see, innovations have tended to come from networks more than from hierarchies. The problem is that networks are not easily directed ‘towards a common objective … that requires concentration of resources in space and time within large organizations, like armies, bureaucracies, large factories, vertically organized corporations’.6 Networks may be spontaneously creative but they are not strategic.
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In Sergio Leone’s epic spaghetti western The Good, the Bad and the Ugly, Clint Eastwood and Eli Wallach are hunting for stolen Confederate gold. The treasure, they discover, is buried under a headstone in a huge Civil War cemetery. Unfortunately, they have no idea which headstone. Having earlier taken the precaution of emptying Wallach’s revolver, Eastwood turns to him and utters the immortal lines: ‘You see, in this world there’s two kinds of people, my friend. Those with loaded guns. And those who dig. You dig.’ This is a modern example of an ancient truth. For most of history, life has been hierarchical. A few have enjoyed the privileges that come from monopolizing violence. Everyone else has dug.
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Besides the permanent associations which are established by law under the names of townships, cities, and counties, a vast number of others are formed and maintained by the agency of private individuals. The citizen of the United States is taught from infancy to rely upon his own exertions in order to resist the evils and the difficulties of life; he looks upon the social authority with an eye of mistrust and anxiety, and he claims its assistance only when he is unable to do without it … In the United States associations are established to promote the public safety, commerce, industry, morality, and religion. There is no end which the human will despairs of attaining through the combined power of individuals united into a society.
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The problem was that, no matter how much he wrapped himself in the trappings of legitimate rule, appropriating Egyptian, Roman and Habsburg regalia and iconography, Napoleon could never achieve the one thing upon which hierarchical systems of rule ultimately depend (and insist upon): legitimacy.
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A key reason for the British Empire’s scale and durability, then, was the relatively light touch of the central authority. Though its theory was hierarchical – indeed, like John Buchan, Victorian racial theorists ranked mankind according to inherited levels of intelligence – its practice was to delegate considerable power to local rulers and private networks. Unlike Napoleon’s short-lived European empire, the British Empire was not run by a micro-managing genius, but by a club of gentlemanly amateurs, whose seemingly effortless superiority depended on the unsung strivings of local agents and native collaborators.
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In most history, success is over-represented, for the victors out-write the losers. In the history of networks, the opposite often applies. Successful networks evade public attention; unsuccessful ones attract it, and it is their notoriety, rather than their achievement, that leads to their over-representation.
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nothing except infectious political and physical diseases. What they possess today, they have by a very large extent gained at the cost of the less astute German nation by the most reprehensible manipulations. Today we are merely paying this people what it deserves … [T]he German nation was, thanks to the inflation instigated and carried through by Jews, deprived of the entire savings which it had accumulated in years of honest work … We are resolved to prevent the settlement in our country
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Not until the 1970s did it begin to become apparent that, in peacetime, even the best-laid plans were liable to descend into a quagmire of stagflation and corruption. High-modernist planning wreaked all kinds of havoc in its heyday, from the collectivization of Soviet agriculture to the building of Brasilia and the compulsory ujamaa villages in Tanzania. Yet it could always survive such catastrophes, if only because their effect was to kill off any kind of opposition. It was in its decrepitude that the planned system could be challenged.
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The problem for the planners was that a hierarchical system that had been well-suited to the activity of total war – an activity characterized by monopsony, as the state is the sole buyer, and standardization, as destruction is much simpler than production – was wholly unsuited to a consumer society. Those who had fought in the world wars had been promised prosperity as well as victory. In practice, that could be achieved only if millions of households were freed to make billions of choices, to which hundreds of thousands of firms could respond.
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As Hayek observed, ‘To maintain that we must deliberately plan modern society because it has become so complex is therefore paradoxical, and the result of a complete misunderstanding … The fact is, rather, that we can preserve an order of such complexity … only indirectly by enforcing and improving the rules conductive to the formation of a spontaneous order.’
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As Walter Powell pointed out in an illuminating 1990 article, the growth of business networks at both the national and international level represented something more than simply the triumph of markets over the hierarchical corporation. ‘In markets,’ he argued, ‘the standard strategy is to drive the hardest possible bargain on the immediate exchange. In networks, the preferred option is often creating indebtedness and reliance over the long haul’:
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Congress passed the Communications Decency Act of 1996 – its first attempt to regulate Internet communications by imposing fines for the publication online of obscene language – it was appropriate that the Valley’s response was written (as an email) by the former Grateful Dead lyricist John Perry Barlow.13 His ‘Declaration of the Independence of Cyberspace’ was addressed to the ‘Governments of the Industrial World, you weary giants of flesh and steel’: I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather. We have no elected government, nor are we likely to have one, so I address you with no greater authority than that with which liberty itself always speaks. I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us. You have no moral right to rule us nor do you possess any methods of enforcement we have true reason to fear … Cyberspace does not lie within your borders. Do not think that you can build it, as though it were a public construction project. You cannot. It is an act of nature and it grows itself through our collective actions … Cyberspace consists of transactions, relationships, and thought itself, arrayed like a standing wave in the web of our communications … We are creating a world that all may enter without privilege or prejudice accorded by race, economic power, military force, or station of birth. We are creating a world where anyone, anywhere may express his or her beliefs, no matter how singular, without fear of being coerced into silence or conformity. Your legal concepts of property, expression, identity, movement, and context do not apply to us … [Your] increasingly hostile and colonial measures place us in the same position as those previous lovers of freedom and self-determination who had to reject the authorities of distant, uninformed powers.
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In the words of David D. Clark, the Internet’s chief protocol architect: ‘We reject kings, presidents, and voting. We believe in: rough consensus and running code.’
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a breakdown of relations between Russia and the West, based on mutual incomprehension and made possible by: a collapse of European hard power, due to the inability of modern European leaders to accept that diplomacy without the credible threat of force is just hot air;