Tony Wagner, The Global Achievement Gap, New York, Basic Books, 2008
Collaboration is an essential skill for us. Command-and-control leadership style is becoming less and less valued in organizations. People have to understand the importance of working fluidly and across boundaries. As organizations become more global, the ability to work fluidly around the world is a competitive advantage. [23]
It's hard for many to let go and trust people to do the work, to truly empower people to achieve results, not just to complete tasks. [25]
Corporations are increasingly being organized around a very different kind of authority and accountability structure - one that is less hierarchical and more reciprocal and relational. [28]
1.01.2008
1.01.2007
John Parrish
John Parrish, Paradoxes of Political Ethics, New York, Cambridge University Press, 2007.
But because of the invisible hand, [Adam] Smith thinks, even in the absence of such 'generous and disinterested motives' among society's members, society will nevertheless persist, if somewhat 'less happy and agreeable' than it might have been. In such a case, cooperation will subsist, not as it would among friends, but rather as it might among merchants, 'from a sense of its utility, without any mutual love and affection; and though no man in it should owe any obligation or be bound in gratitude to any other.' The advantage of this more reliable and efficient style of providence is that it does not require widespread virtue: indeed, it really asks for nothing more from human beings than what Smith unsentimentally describes as a 'mercenary exchange of good offices.' Under the division of labor human beings in society have become profoundly interdependent, needing one another's help, vulnerable to one another's harm. Thus it is from this quality of mutual interdependence that both the division of labor and its necessary consequence, inequality (both of station and of talent), arise. [Wealth of Nations, I.ii.4]
Interdependence both motivates and reinforces the market system's reliance on such non-virtuous (though not, on Smith's moral psychology, necessarily vicious) micro-economic motives as self-interest and need. In civilized society, Smith observes, a given human being 'stands at all times in need of the co-operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons.' [Wealth of Nations, I.ii.2] Thus if the invisible hand is to perform the providential function that Smith has implicitly assigned to it, it is necessary for it to rely on these less than fully virtuous motives to aid in its work. No longer is scarcity the central concern of economic thinking, though of course it will never entirely recede from view. Rather, the profound and enduring new problem of modern commercial societies is productive and distributive coordination - grounded in the fact that our mutual interdependence as human beings is so great, and yet our practical claims on one another's benevolence are so small. [246]
But because of the invisible hand, [Adam] Smith thinks, even in the absence of such 'generous and disinterested motives' among society's members, society will nevertheless persist, if somewhat 'less happy and agreeable' than it might have been. In such a case, cooperation will subsist, not as it would among friends, but rather as it might among merchants, 'from a sense of its utility, without any mutual love and affection; and though no man in it should owe any obligation or be bound in gratitude to any other.' The advantage of this more reliable and efficient style of providence is that it does not require widespread virtue: indeed, it really asks for nothing more from human beings than what Smith unsentimentally describes as a 'mercenary exchange of good offices.' Under the division of labor human beings in society have become profoundly interdependent, needing one another's help, vulnerable to one another's harm. Thus it is from this quality of mutual interdependence that both the division of labor and its necessary consequence, inequality (both of station and of talent), arise. [Wealth of Nations, I.ii.4]
Interdependence both motivates and reinforces the market system's reliance on such non-virtuous (though not, on Smith's moral psychology, necessarily vicious) micro-economic motives as self-interest and need. In civilized society, Smith observes, a given human being 'stands at all times in need of the co-operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons.' [Wealth of Nations, I.ii.2] Thus if the invisible hand is to perform the providential function that Smith has implicitly assigned to it, it is necessary for it to rely on these less than fully virtuous motives to aid in its work. No longer is scarcity the central concern of economic thinking, though of course it will never entirely recede from view. Rather, the profound and enduring new problem of modern commercial societies is productive and distributive coordination - grounded in the fact that our mutual interdependence as human beings is so great, and yet our practical claims on one another's benevolence are so small. [246]
1.02.2004
John Maynard Keynes
John Maynard Keynes, The Economic Consequence of the Peace, Amherst, N.Y., Prometheus Books, 2004 [1919].
Where we spent millions before the war, we have now learnt that we can spend hundreds of millions and apparently not suffer for it. Evidently we did not exploit to the utmost the possibilities of our economic life. We look, therefore, not only to a return to the comforts of 1914, but to an immense broadening and intensification of them. All classes alike thus build their plans, the rich to spend more and save less, the poor to spend more and work less. [54]
The new rich of the nineteenth century were not brought up to large expenditures, and preferred the power which investment gave them to the pleasures of immediate consumption. In fact, it was precisely the inequality of the distribution of wealth which made possible those vast accumulations of fixed wealth and of capital improvements which distinguished that age from all others. Herein lay, in fact, the main justification of the Capitalist System. If the rich had spent their new wealth on their own enjoyments, the world would long ago have found such a regime intolerable. [67]
Thus this remarkable system depended for its growth on a double bluff or deception. On the one hand the labouring classes accepted from ignorance or powerlessness, or were compelled, persuaded, or cajoled by custome, convention, authority, and the well-established order of Society into accepting, a situation in which they could call their own very little of the cake, that they and Nature and the capitalists were co-operating to produce. And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very litte of it in practice.[68]
I seek only point out that the principle of accumulation based on inequality was a vital part of the pre-war order of Society and of progress as we then understood it and to emphasise that this principle depended on unstable psychological conditions, which it may be impossible to re-create. It was not natural for a population, of whome so few enjoyed the comfortes of life, to accumulate so hugely. [69]
We cannot expect to legislate for a generation or more. The secular changes in man's economic condition and the liability of human forecast to error are as likely to lead to mistake in one direction as in another. We cannot as reasonable men do better than base our policy on the evidence we have and adapt it to the five or ten years over which we may suppose ourselves to have some measure of prevision; and we are not at fault if we leave on one side the extreme chances of human existence and of revolutionary changes in the order of Nature or of man's relations to her. [222]
It is, however, generally supposed that if the whole of a man's surplus production is taken from him, his efficiency and his industry are diminished. The entrepreneur and the inventor will not contrive, the trader and the shopkeeper will not save, the labourer will not toil, if the fruits of their industry are set aside, not for the benefit of their children, their old age, their pride, or their position, but for the enjoyment of a foreign conqueror. [224]
Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes man, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whome the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. [247]
A sentiment of trust in the legal money of the State is so deeply implanted in the citizens of all countries that they cannot but believe that some day this money must recover a part at least of its former value. To their minds it appears that value is inherent in money as such, and they do not apprehend that the real wealth, which this money might have stood for, has been dissipated once and for all. This sentiment is supported by the various legal regulations with which the Governments endeavour to control internal prices, and so to preserve some purchasing power for their legal tender. Thus the force of law preserves a measure of immediate purchasing power over some commodities and the force of sentiment and custom maintains, especially amongst the peasants, a willingness to hoard paper which is really worthless.
The preservation of a spurious value for the currency, by the force of law expressed in the regulation of prices, contains in itself, however, the seeds of final economic decay, and soon dries up the sources of ultimate supply. If a man is compelled to exchange the fruits of his labours for paper which, as experience soon teaches him, he cannot use to purchases what he requires at a price comparable to that which he has received for his own products, he will keep his produce for himself, dispose of it to his friends and neighbours as a favour, or relax his efforts in producing it. A system of compelling the exchange of commodities at what is not their real relative value not only relaxes production, but leads finally to the waste and inefficieny of barter. If, however, a government refrains from regulation and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer. [251]
The question of Inter-Allied indebtedness is closely bound up with the intense popular feeling amongst the European Allies on the question of indemnities - a feeling which is based, not on any reasonable calculation of what Germany can, in fact, pay, but on a well-founded appreciation of the unbearable financial situation in which these countries will find themselves unless she pays. [281]
Where we spent millions before the war, we have now learnt that we can spend hundreds of millions and apparently not suffer for it. Evidently we did not exploit to the utmost the possibilities of our economic life. We look, therefore, not only to a return to the comforts of 1914, but to an immense broadening and intensification of them. All classes alike thus build their plans, the rich to spend more and save less, the poor to spend more and work less. [54]
The new rich of the nineteenth century were not brought up to large expenditures, and preferred the power which investment gave them to the pleasures of immediate consumption. In fact, it was precisely the inequality of the distribution of wealth which made possible those vast accumulations of fixed wealth and of capital improvements which distinguished that age from all others. Herein lay, in fact, the main justification of the Capitalist System. If the rich had spent their new wealth on their own enjoyments, the world would long ago have found such a regime intolerable. [67]
Thus this remarkable system depended for its growth on a double bluff or deception. On the one hand the labouring classes accepted from ignorance or powerlessness, or were compelled, persuaded, or cajoled by custome, convention, authority, and the well-established order of Society into accepting, a situation in which they could call their own very little of the cake, that they and Nature and the capitalists were co-operating to produce. And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very litte of it in practice.[68]
I seek only point out that the principle of accumulation based on inequality was a vital part of the pre-war order of Society and of progress as we then understood it and to emphasise that this principle depended on unstable psychological conditions, which it may be impossible to re-create. It was not natural for a population, of whome so few enjoyed the comfortes of life, to accumulate so hugely. [69]
We cannot expect to legislate for a generation or more. The secular changes in man's economic condition and the liability of human forecast to error are as likely to lead to mistake in one direction as in another. We cannot as reasonable men do better than base our policy on the evidence we have and adapt it to the five or ten years over which we may suppose ourselves to have some measure of prevision; and we are not at fault if we leave on one side the extreme chances of human existence and of revolutionary changes in the order of Nature or of man's relations to her. [222]
It is, however, generally supposed that if the whole of a man's surplus production is taken from him, his efficiency and his industry are diminished. The entrepreneur and the inventor will not contrive, the trader and the shopkeeper will not save, the labourer will not toil, if the fruits of their industry are set aside, not for the benefit of their children, their old age, their pride, or their position, but for the enjoyment of a foreign conqueror. [224]
Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes man, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whome the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. [247]
A sentiment of trust in the legal money of the State is so deeply implanted in the citizens of all countries that they cannot but believe that some day this money must recover a part at least of its former value. To their minds it appears that value is inherent in money as such, and they do not apprehend that the real wealth, which this money might have stood for, has been dissipated once and for all. This sentiment is supported by the various legal regulations with which the Governments endeavour to control internal prices, and so to preserve some purchasing power for their legal tender. Thus the force of law preserves a measure of immediate purchasing power over some commodities and the force of sentiment and custom maintains, especially amongst the peasants, a willingness to hoard paper which is really worthless.
The preservation of a spurious value for the currency, by the force of law expressed in the regulation of prices, contains in itself, however, the seeds of final economic decay, and soon dries up the sources of ultimate supply. If a man is compelled to exchange the fruits of his labours for paper which, as experience soon teaches him, he cannot use to purchases what he requires at a price comparable to that which he has received for his own products, he will keep his produce for himself, dispose of it to his friends and neighbours as a favour, or relax his efforts in producing it. A system of compelling the exchange of commodities at what is not their real relative value not only relaxes production, but leads finally to the waste and inefficieny of barter. If, however, a government refrains from regulation and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer. [251]
The question of Inter-Allied indebtedness is closely bound up with the intense popular feeling amongst the European Allies on the question of indemnities - a feeling which is based, not on any reasonable calculation of what Germany can, in fact, pay, but on a well-founded appreciation of the unbearable financial situation in which these countries will find themselves unless she pays. [281]
1.01.2004
John Maynard Keynes
John Maynard Keynes, The End of Laissez-Faire, Amherst, N.Y., Prometheus Books, 2004 [1926].
Above all, the ineptitude of public administrators strongly prejudiced the practical man in favour of laissez-faire - a sentiment which has by no means disappeared. Almost everything which the State did in the eighteenth century in excess of its minimum functions was, or seemed, injurious or unsuccessful. [19]
Cairnes, in the Introductory Lecture on 'Political Economy and Laissez-Fair,' which he delivered at University College, London, in 1870, was perhaps the first orthodox economist to deliver a frontal attack upon laissez-faire in general. 'The maxim of laissez-faire,' he declared, 'has no scientific basis whatever, but is at best a mere handy rule of practice.' This, for fifty years past, has been the view of all leading economists. Some of the most important work of Alfred Marshall - to take on instance - was directed to the elucidation of the leading cases in which private interest and social interest are not harmonious. [28]
In the first place, each individual will discover what amongst the possible objects of consumption he wants most by the method of trial and error 'at the margin,' and in this way not only will each consumer come to distribute his consumption most advantageously, but each object of consumption will find its way into the mouth of the consumer whose relish for it is greatest compared with that of the others, because that consumer will outbid the rest. Thus, if only we leave the giraffes to themselves, (1) the maximum quantity of leaves will be cropped because the giraffes with the longest necks will, by dint of starving out the others, get nearest to the trees; (2) each giraffe will make for the leaves which he finds most succulent amongst those in reach; and (3) the giraffes whose relish for a given leaf is greatest will crane most to reach it. In this way, more and juicier leaves will be swallowed, and each individual leaf will reach the throat which thinks it deserves most effort.
This assumption, however, of conditions where unhindered natural selection leads to progress, is only one of the two provisional assumptions which, taken as literal truth, have become the the twin buttresses of laissez-faire. The other one is the efficacy, and, indeed the necessity, of the opportunity for unlimited private money-making as an incentive to maximum effort. [30]
[unfettered free markets, assumption 1: efficient allocation through competition; assumption 2: maximum productivity from maximum reward]
There are other considerations, familiar enough, which rightly bring into the calculation the cost and character of the competitive struggle itself, and the tendency for wealth to be distributed where it is not appreciated most. If we have the welfare of the giraffes at heart, we must not overlook the sufferings of the shorter necks who are starved out, or the sweet leaves which fall to the ground and are trampled underfoot in the struggle, or the overfeeding of the long-necked ones, or the evil look of anxiety or struggling greediness which overcasts the mild faces of the herd. [32]
Individualism and laissez-faire could not, in spite of their deep roots in the political and moral philosophies of the late eighteenth and early nineteenth centuries, have secured their lasting hold over the conduct of public affairs, if it had not been for their conformity with the needs and wishes of the business world of the day. [34]
Laissez-faire has ruled over us rather by hereditary right than by personal merit. [35]
The important thin for Government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all. [40]
Above all, the ineptitude of public administrators strongly prejudiced the practical man in favour of laissez-faire - a sentiment which has by no means disappeared. Almost everything which the State did in the eighteenth century in excess of its minimum functions was, or seemed, injurious or unsuccessful. [19]
Cairnes, in the Introductory Lecture on 'Political Economy and Laissez-Fair,' which he delivered at University College, London, in 1870, was perhaps the first orthodox economist to deliver a frontal attack upon laissez-faire in general. 'The maxim of laissez-faire,' he declared, 'has no scientific basis whatever, but is at best a mere handy rule of practice.' This, for fifty years past, has been the view of all leading economists. Some of the most important work of Alfred Marshall - to take on instance - was directed to the elucidation of the leading cases in which private interest and social interest are not harmonious. [28]
In the first place, each individual will discover what amongst the possible objects of consumption he wants most by the method of trial and error 'at the margin,' and in this way not only will each consumer come to distribute his consumption most advantageously, but each object of consumption will find its way into the mouth of the consumer whose relish for it is greatest compared with that of the others, because that consumer will outbid the rest. Thus, if only we leave the giraffes to themselves, (1) the maximum quantity of leaves will be cropped because the giraffes with the longest necks will, by dint of starving out the others, get nearest to the trees; (2) each giraffe will make for the leaves which he finds most succulent amongst those in reach; and (3) the giraffes whose relish for a given leaf is greatest will crane most to reach it. In this way, more and juicier leaves will be swallowed, and each individual leaf will reach the throat which thinks it deserves most effort.
This assumption, however, of conditions where unhindered natural selection leads to progress, is only one of the two provisional assumptions which, taken as literal truth, have become the the twin buttresses of laissez-faire. The other one is the efficacy, and, indeed the necessity, of the opportunity for unlimited private money-making as an incentive to maximum effort. [30]
[unfettered free markets, assumption 1: efficient allocation through competition; assumption 2: maximum productivity from maximum reward]
There are other considerations, familiar enough, which rightly bring into the calculation the cost and character of the competitive struggle itself, and the tendency for wealth to be distributed where it is not appreciated most. If we have the welfare of the giraffes at heart, we must not overlook the sufferings of the shorter necks who are starved out, or the sweet leaves which fall to the ground and are trampled underfoot in the struggle, or the overfeeding of the long-necked ones, or the evil look of anxiety or struggling greediness which overcasts the mild faces of the herd. [32]
Individualism and laissez-faire could not, in spite of their deep roots in the political and moral philosophies of the late eighteenth and early nineteenth centuries, have secured their lasting hold over the conduct of public affairs, if it had not been for their conformity with the needs and wishes of the business world of the day. [34]
Laissez-faire has ruled over us rather by hereditary right than by personal merit. [35]
The important thin for Government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all. [40]
1.01.2002
Albert-László Barabási
Albert-László Barabási, Linked: The New Science of Networks, Cambridge, Mass., Perseus Pub., 2002.
The construction and structure of graphs or networks is the key to understanding the complex world around us. Small changes in the topology, affecting only a few of the nodes or links, can open up hidden doors, allowing new possibilities to emerge. [12]
Random network theory tells us that as the average number of links per node increases beyond the critical one, the number of nodes left out of the giant cluster decreases exponentially. That is, the more links we add, the harder it is to find a node that remains isolated. Nature does not take risks by staying close to the threshold. It well surpasses it. Consequently, the networks around us are not just webs. They are very dense networks from which nothing can escape and within which every node is navigable. [19]
Stanley Milgram awakened us to the fact that not only are we connected, but we live in a world in which no one is more than a few handshakes from anyone else. That is, we live in a small world. Our world is small because society is a very dense web. We have far more friends than the critical one needed to keep us connected. [30]
The number of social links an individual can actively maintain has increased dramatically, bringing down the degrees of separation. Stanley Milgram estimated six. Frigyes Karinthy five. We could be much lcoser these days to three. [39]
Our ability to reach people has less and less to do with the physical distance between us. Discovering common acquaintances with perfect strangers on worldwide trips repeatedly reminds us that some people on the other side of the planet are often closer along the social network than people living next door. Navigating this non-Euclidean world repeatedly tricks our intuition and reminds us that there is a new geometry out there that we need to master in order to make sense of the complex world around us. [40]
Hubs appear in most large complex networks that scientists have been able to study so far. They are ubiquitous, a generic building block of our complex, interconnected world. [63]
The power law distribution thus forces us to abandon the idea of a scale, or a characteristic node. In a continuous hierarchy there is no single node which we could pick out and claim to be characteristic of all the nodes. There is no intrinsic scale in these networks. ... With the realization that most complex networks in nature have a power-law degree distribution, the term scale-free networks rapidly infiltrated most disciplines faced with complex webs. [70]
Nature normally hates power laws. In ordinary systems all quantities follow bell curves, and correlations decay rapidly, obeying exponential laws. But all that changes if the system is forced to undergo a phase transition. Then power laws emerge - nature's unmistakable sign that chaos is departing in favor of order. ... They are the patent signatures of self-organization in complex systems. [77]
The scale-free topology is a natural consequence of the ever-expanding nature of real networks. ... Thanks to growth and preferential attachment, a few highly connected hubs emerge. [87]
Growth and preferential attachment can explain the basic features of the networks seen in nature. [91]
In networks that display fit-get-rich behavior, competition leads to a scale-free topology. Most networks we have studied so far - the Web, the Internet, the cell, Hollywood, and many other real networks - belong to this category. The winner shares the spotlight with a continuous hierarchy of hubs.
Yet Bose-Einstein condensation offers the theoretical possibility that in some systems the winner can grab all the links. When that happens, the scale-free topology vanishes. [107]
Most systems displaying a high degree of tolerance against failures share a common feature: Their functionality is guaranteed by a highly interconnected complex network. ... It seems that nature strives to achieve robustness through interconnectivity. Such universal choice of a network architecture is perhaps more than mere coincidence. [111]
Similarly, in scale-free networks, failures predominantly affect the numerous small nodes. Thus, these networks do not break apart under failures. The accidental removal of a single hub will not be fatal either, since the continuous hierarchy of several large hubs will maintain the network's integrity. Topological robustness is thus rooted in the structural unevenness of scale-free networks: Failures disproportionately affect small nodes. [114]
For scale-free networks the critical threshold to break break apart disappears in cases where the degree exponent is smaller or equal to three. Amazingly, most networks of interest, ranging from the Internet to the cell, are scale-free and have a degree exponent smaller than three. Therefore, these networks break apart only after all nodes have been removed - or, for all practical purposes, never. [115]
The response of scale-free networks to attacks is similar to the behavior of random networks under failures. There is a crucial difference, however. We do not need to remove a large number of nodes to reach the critical point. Disable a few of the hubs and a scale-free network will fall to pieces in no time. [117]
The removal of the most connected nodes rapidly disintegrates these networks, breaking them into tiny noncommunicating islands. Therefore, hidden within their structure, scale-free networks harbor an unsuspected Achilles' heel, coupling a robustness against failures with vulnerability to attack. [118]
When a network acts as a transportation system, a local failure shifts loads or responsibilities to other nodes. If the extra load is negligible, it can be seamlessly absorbed by the rest of the system, and the failure remains effectively unnoticed. If the extra load is too much for the neighboring nodes to carry, they will either tip or again redistribute the load to their neighbors. Either way, we are faced with a cascading failure. [120]
Most cascades are not instantaneous: Failures can go unnoticed for a long time before starting a landslide. Attempting to decrease the frequency of such cascades has inevitable consequences, however, as those cascades that do succeed are then more disruptive. [121]
The Pfizer study of how physicians adopt a new drug demonstrated that innovations spread from innovators to hubs. The hubs in turn send the information out along their numerous links, reaching most people within a given social or professional network. [129]
In scale-free networks the epidemic threshold miraculously vanished! That is, even if a virus is not very contagious, it spreads and persists. Defying all wisdom accumulated during five decades of diffusion studies, viruses traveling in scale-free networks do not appear to notice any threshold. They are practically unstoppable. [135]
While you could persuade an institution to close down the portion of the network under its authority, no single company or person controls more than a negligible fraction of the whole Internet. The underlying network has become so distributed, decentralized, and locally guarded that even such an ordinary task as getting a central map of it has become virtually impossible. [148]
While entirely of human design, the Internet now lives a life of its own. It has all the characteristics of a complex evolving system, making it more similar to a cell than a computer chip. Many diverse components, developed separately, contribute to the functioning of a system that is far more than the sum of its parts. [150]
Like architects' buildings, the Web's architecture is the product of two equally important layers: code and collective human actions taking advantage of the code. The first can be regulated by courts, government, and companies alike. The second, however, cannot be shaped by any single user or institution, because the Web has no central design - it is self-organized. It evolves from the individual actions of millions of users. As a result, its architecture is much richer than the sum of its parts. Most of the Web's truly important features and emerging properties derive from its large-scale self-organized topology. [174]
As research, innovation, product development, and marketing become more and more specialized and divorced from each other, we are converging to a network economy in which strategic alliances and partnerships are the means for survival in all industries. [208]
In a network economy, buyers and suppliers are not competitors but partners. The relationship between them is often very long lasting and stable.
The stability of these links allows companies to concentrate on their core business. If these partnerships break down, the effects can be severe. Most of the time failures handicap only the partners of the broken link. Occasionally, however, they send ripples through the whole economy. [209]
In reality, the market is nothing but a directed network. Companies, firms, corporations, financial institutions, governments, and all potential economic players are the nodes. Links quantify various interactions between these institutions, involving purchases and sales, joint research and marketing projects, and so forth. The weight of the links captures the value of the transaction, and the direction points from the provider to the receiver. The structure and evolution of this weighted and directed network determine the outcome of all macroeconomic processes. [209]
If we view the economy as a highly interconnected network of companies and financial institutions, we can begin to make sense of these events. In such networks the failure of a node has little effect on the system's integrity. Occasionally, however, the breakdown of some well-selected nodes sets off a cascade of failures that can shake the whole system. [211]
Cascading failures are a direct consequence of a network economy, of interdependencies induced by the fact that in a global economy no institution can work alone. [211]
A me attitude, where the company's immediate financial balance is the only factor, limits network thinking. Not understanding how the actions of one node affect other nodes easily cripples whole segments of the network. ... Hierarchical thinking does not fit a network economy. In traditional organizations, rapid shifts can be made within the organization, which any resulting losses being offset by gains in other parts of the hierarchy. In a network economy each node must be profitable. [213]
The construction and structure of graphs or networks is the key to understanding the complex world around us. Small changes in the topology, affecting only a few of the nodes or links, can open up hidden doors, allowing new possibilities to emerge. [12]
Random network theory tells us that as the average number of links per node increases beyond the critical one, the number of nodes left out of the giant cluster decreases exponentially. That is, the more links we add, the harder it is to find a node that remains isolated. Nature does not take risks by staying close to the threshold. It well surpasses it. Consequently, the networks around us are not just webs. They are very dense networks from which nothing can escape and within which every node is navigable. [19]
Stanley Milgram awakened us to the fact that not only are we connected, but we live in a world in which no one is more than a few handshakes from anyone else. That is, we live in a small world. Our world is small because society is a very dense web. We have far more friends than the critical one needed to keep us connected. [30]
The number of social links an individual can actively maintain has increased dramatically, bringing down the degrees of separation. Stanley Milgram estimated six. Frigyes Karinthy five. We could be much lcoser these days to three. [39]
Our ability to reach people has less and less to do with the physical distance between us. Discovering common acquaintances with perfect strangers on worldwide trips repeatedly reminds us that some people on the other side of the planet are often closer along the social network than people living next door. Navigating this non-Euclidean world repeatedly tricks our intuition and reminds us that there is a new geometry out there that we need to master in order to make sense of the complex world around us. [40]
Hubs appear in most large complex networks that scientists have been able to study so far. They are ubiquitous, a generic building block of our complex, interconnected world. [63]
The power law distribution thus forces us to abandon the idea of a scale, or a characteristic node. In a continuous hierarchy there is no single node which we could pick out and claim to be characteristic of all the nodes. There is no intrinsic scale in these networks. ... With the realization that most complex networks in nature have a power-law degree distribution, the term scale-free networks rapidly infiltrated most disciplines faced with complex webs. [70]
Nature normally hates power laws. In ordinary systems all quantities follow bell curves, and correlations decay rapidly, obeying exponential laws. But all that changes if the system is forced to undergo a phase transition. Then power laws emerge - nature's unmistakable sign that chaos is departing in favor of order. ... They are the patent signatures of self-organization in complex systems. [77]
The scale-free topology is a natural consequence of the ever-expanding nature of real networks. ... Thanks to growth and preferential attachment, a few highly connected hubs emerge. [87]
Growth and preferential attachment can explain the basic features of the networks seen in nature. [91]
In networks that display fit-get-rich behavior, competition leads to a scale-free topology. Most networks we have studied so far - the Web, the Internet, the cell, Hollywood, and many other real networks - belong to this category. The winner shares the spotlight with a continuous hierarchy of hubs.
Yet Bose-Einstein condensation offers the theoretical possibility that in some systems the winner can grab all the links. When that happens, the scale-free topology vanishes. [107]
Most systems displaying a high degree of tolerance against failures share a common feature: Their functionality is guaranteed by a highly interconnected complex network. ... It seems that nature strives to achieve robustness through interconnectivity. Such universal choice of a network architecture is perhaps more than mere coincidence. [111]
Similarly, in scale-free networks, failures predominantly affect the numerous small nodes. Thus, these networks do not break apart under failures. The accidental removal of a single hub will not be fatal either, since the continuous hierarchy of several large hubs will maintain the network's integrity. Topological robustness is thus rooted in the structural unevenness of scale-free networks: Failures disproportionately affect small nodes. [114]
For scale-free networks the critical threshold to break break apart disappears in cases where the degree exponent is smaller or equal to three. Amazingly, most networks of interest, ranging from the Internet to the cell, are scale-free and have a degree exponent smaller than three. Therefore, these networks break apart only after all nodes have been removed - or, for all practical purposes, never. [115]
The response of scale-free networks to attacks is similar to the behavior of random networks under failures. There is a crucial difference, however. We do not need to remove a large number of nodes to reach the critical point. Disable a few of the hubs and a scale-free network will fall to pieces in no time. [117]
The removal of the most connected nodes rapidly disintegrates these networks, breaking them into tiny noncommunicating islands. Therefore, hidden within their structure, scale-free networks harbor an unsuspected Achilles' heel, coupling a robustness against failures with vulnerability to attack. [118]
When a network acts as a transportation system, a local failure shifts loads or responsibilities to other nodes. If the extra load is negligible, it can be seamlessly absorbed by the rest of the system, and the failure remains effectively unnoticed. If the extra load is too much for the neighboring nodes to carry, they will either tip or again redistribute the load to their neighbors. Either way, we are faced with a cascading failure. [120]
Most cascades are not instantaneous: Failures can go unnoticed for a long time before starting a landslide. Attempting to decrease the frequency of such cascades has inevitable consequences, however, as those cascades that do succeed are then more disruptive. [121]
The Pfizer study of how physicians adopt a new drug demonstrated that innovations spread from innovators to hubs. The hubs in turn send the information out along their numerous links, reaching most people within a given social or professional network. [129]
In scale-free networks the epidemic threshold miraculously vanished! That is, even if a virus is not very contagious, it spreads and persists. Defying all wisdom accumulated during five decades of diffusion studies, viruses traveling in scale-free networks do not appear to notice any threshold. They are practically unstoppable. [135]
While you could persuade an institution to close down the portion of the network under its authority, no single company or person controls more than a negligible fraction of the whole Internet. The underlying network has become so distributed, decentralized, and locally guarded that even such an ordinary task as getting a central map of it has become virtually impossible. [148]
While entirely of human design, the Internet now lives a life of its own. It has all the characteristics of a complex evolving system, making it more similar to a cell than a computer chip. Many diverse components, developed separately, contribute to the functioning of a system that is far more than the sum of its parts. [150]
Like architects' buildings, the Web's architecture is the product of two equally important layers: code and collective human actions taking advantage of the code. The first can be regulated by courts, government, and companies alike. The second, however, cannot be shaped by any single user or institution, because the Web has no central design - it is self-organized. It evolves from the individual actions of millions of users. As a result, its architecture is much richer than the sum of its parts. Most of the Web's truly important features and emerging properties derive from its large-scale self-organized topology. [174]
As research, innovation, product development, and marketing become more and more specialized and divorced from each other, we are converging to a network economy in which strategic alliances and partnerships are the means for survival in all industries. [208]
In a network economy, buyers and suppliers are not competitors but partners. The relationship between them is often very long lasting and stable.
The stability of these links allows companies to concentrate on their core business. If these partnerships break down, the effects can be severe. Most of the time failures handicap only the partners of the broken link. Occasionally, however, they send ripples through the whole economy. [209]
In reality, the market is nothing but a directed network. Companies, firms, corporations, financial institutions, governments, and all potential economic players are the nodes. Links quantify various interactions between these institutions, involving purchases and sales, joint research and marketing projects, and so forth. The weight of the links captures the value of the transaction, and the direction points from the provider to the receiver. The structure and evolution of this weighted and directed network determine the outcome of all macroeconomic processes. [209]
If we view the economy as a highly interconnected network of companies and financial institutions, we can begin to make sense of these events. In such networks the failure of a node has little effect on the system's integrity. Occasionally, however, the breakdown of some well-selected nodes sets off a cascade of failures that can shake the whole system. [211]
Cascading failures are a direct consequence of a network economy, of interdependencies induced by the fact that in a global economy no institution can work alone. [211]
A me attitude, where the company's immediate financial balance is the only factor, limits network thinking. Not understanding how the actions of one node affect other nodes easily cripples whole segments of the network. ... Hierarchical thinking does not fit a network economy. In traditional organizations, rapid shifts can be made within the organization, which any resulting losses being offset by gains in other parts of the hierarchy. In a network economy each node must be profitable. [213]
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