...The Square and the Tower. ...Niall’s book is about hierarchy and networks. Squares are where people meet and mingle. They are the source of creativity, invention, innovation. Towers, on the other hand, are where power resides – “hierarchical structured power,” as Niall calls it. The great tension in human history is between those two, the squares and the towers – and technology has increased that tension.
...five of the eight richest men in the world today are rich because of network economics.
He then showed a slide of those five men: Bill Gates, Jeff Bezos, Mark Zuckerberg, Larry Ellison, and Michael Bloomberg. In different ways, they all saw and exploited the value of connecting people via technology.
...2008. Here’s Niall again.
The financial crisis, I think, needs to be understood as a colossal network outage. Very few central bankers understood the extent to which the international financial system had become a giant network. I think regulators and legislators underestimated the fragility of the system in 2008. They failed to see that a single node, a single investment bank that nobody regarded as pivotal to the system was in fact very important. And when Lehman failed, the system, the entire global credit system... you remember? I remember... threatened to collapse completely. Andrew Haldane, chief economist at the Bank of England now, is one of the few central bankers who think about this, and indeed this slide was taken from a deck that he did in 2011.
The way I see it is that since 2008 the rest of us have basically caught on with where the financial world was 10 years ago. Initially it was only the financial world that was networked to the max because it was still quite expensive to be networked 10 years ago. But with the advance of giant platforms like Facebook offering zero-cost networking, all of us are now as connected as only investment bankers were a decade ago.
...This is happening in literally hundreds of industries.
These ubiquitous connections were supposed to empower everyone. Instead, they empowered those who owned and controlled the networks. A handful of “platform” companies essentially gained the ability to micromanage the village square, defining what information each person could see and hear.
...Amazon is in a sense eating retail sales by making price discovery much easier.
Similarly, Google and Facebook are eating advertising. Apple, Netflix, and their kin are eating leisure time.
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