In July 2012, Paul Omerod spoke at the RSA on network effects. He described this as positive linking – but not because the effects of networks are all positive. His contention is that – especially in economics – we tend to be subject to (but over look) network effects. Better attention to this trend could lead to a revolution in our understanding of how cause and effect actually link up. He describes
- highly unequal outcomes in networked markets; and that
- distribution has nothing to do with objective attributes
Conventional understandings of regulation ignore network effects – so whether it is the regulation of care homes, or banks, they tend to be seen in isolation from one another and their context. Networks have some features in common:
- networks are resilient to shock – they absorb shocks; but
- cascades can take place across networks, as a result of perverse stimuli
- the ‘balance’ in a network is fragile, finely balanced – but networks themselves are far from fragile – far more resilient, almost invisibly resilient than 1:1 relationships
Qualities like confidence, anxiety, sense of identity – indeed often emotional states – spread through networks; spread through networked effects. This is in effect a picture of intimate economics – where sentiment is the currency. Supply and demand is distributed across the network
- Who has the supply and who has the demand?
- Who is in touch with the demand and who is in touch with the supply?
There is an interesting link with conjectures about the psychodynamics of networks – a metaphor for which is the Greek mythological figures, the sirens, who ‘leave you charmed, but wiser…for they can tell you everything that is going to happen over the whole world’. Academic literature describes and analyses network effects, and their impact on us in several different ways.
Giddens, for example, speaks of ‘disembedding’
- Globalisation and changes to time and space
- Move away from local
- Producing symbolic icons and value
- Increasing number of expert systems
Bolune writes of ‘loss of trust’
- Trust becoming commodity of prime importance
- Ontological trust being lost
- Nature of trust has changed
- Trust resides in systems and rules
- Trust in expert systems
- Professions degenerate into a job
- Social roles no longer necessarily define human kind
Richard Sennet writes of ‘drifting’
- Exaggerated significance of work
- Life long narratives hard to maintain
- Insecurity, disorientation, but proliferation of opportunities for development
- Open, flexible system
- Security, connectedness increases
- Leads to regeneration
Identity is formed in the ‘flow’; a network is a projection of manic hope, and repression – perhaps – in that it is trying to guarantee the future will be known to us. Basic assumption is ‘oneness’ – passive involvement in order to relate to an omnipotent power. Conflict is denied and there is an illusion of equality. Everything is possible at the same time (eg it is possible in the same moment to compete and collaborate). There also seems to be some kind of proliferation of choices even when there is scarcity of resources. Incidentally, David Eagleman’s ideas on the brain as a ‘team of rival’ helps here – the idea of levels helps to make sense of the nature of the network.
Slingshot