Don't Expect a Network State

my latest essay in National Affairs

In National Affairs, I contrast institutions with networks.

an institution can be characterized as a set of roles…a set of responsibilities as well as authority …

Institutional roles are also regular and persistent. We expect the assistant manager to be at a particular place doing specific work at a regular time, and we rely on him to stay on the job until the workday has officially ended. Moreover, the assistant manager is expected to return the next workday, the workday after that, and so on.

In contrast,

Networks, by contrast, are a set of interpersonal connections. Network connections are not defined in terms of responsibility and authority; there is no written agreement stating what a Twitter user owes a follower or vice versa. Such connections are easily added and dropped: All it takes to follow or unfollow someone on Twitter is a click of a mouse or a tap of a phone screen. One can sign up for Twitter, Facebook, and LinkedIn in a few minutes, though building up a useful set of connections does take more effort.

Network connections are also intermittent and ad hoc.

Will networks supersede institutions? Not necessarily.

When compared to networks, institutions have two advantages: positions of authority and mechanisms of accountability.

The internet has less institutional structure.

No internet courts exist to settle disputes; no police force patrols the internet for cybercrime. This lack of authority creates problems. For example, unsolicited commercial emails — otherwise known as "spam" — have plagued internet users for nearly three decades.

Had I composed the essay more recently, I probably would have used the FTX crypto scam as an illustration. In the world of banking, there is an authority in place to hold bankers accountable and to insure customers’ deposits. FTX’s customers suffered from the lack of accountability and authority in network finance.

But institutions are not always favored.

As time goes on and circumstances change, institutions suffer from decay. They tend to resist useful innovations because those updates might change or eliminate established roles. They opt instead for innovations that add authority to existing roles, regardless of whether that authority can be put to good use. And as people within institutions learn to "game the system," institutional mechanisms of accountability become less effective over time.

I go on to cite universities as examples of institutions that have decayed—fatally, I believe.

I conclude with this speculative idea:

Institutions, including the government, are reasonably well adapted to the world of the physical. Networks, on the other hand, may be better suited to the world of the virtual.

Please read the entire essay before commenting.