“Long before the founding of Facebook, scholars had already conducted a great deal of research into how smaller and slower social networks operate. What they found gives little ground for optimism about how a fully networked world would function,” observes Hoover Institution Senior Fellow Niall Ferguson in the September/October issue of Foreign Affairs.

The essay, adapted from Ferguson’s forthcoming book The Square and the Tower: Networks and Power, From the Freemasons to Facebook, draws on network theory to argue that these networks may not be as auspicious as advertised and that “utopian visions of a networked world are at odds with everything we know about how social networks work.”

The author observes that the nature of networks has engendered some of the very challenges—unemployment, inequality, and authoritarianism—that they promised to solve: “No businesses in the world are working harder to eliminate jobs such as driving a truck than the technology giants of California. No individuals exemplify the spectacular growth of the wealth of the top 0.01 percent of earners better than the masters of Silicon Valley. And no company did more—albeit unintentionally—to help the populists win their political victories in the United Kingdom and the United States in 2016 than Facebook.”

Finding that “giant social networks are not in the least bit egalitarian,” Ferguson notes, “Facebook has 1.17 billion active daily users. Yet the company’s ownership is highly concentrated. [Founder Mark] Zuckerberg himself owns just over 28 percent of the company, making him one of the ten richest people in the world. That group also includes Bill Gates, Jeff Bezos, Carlos Slim, Larry Ellison, and Michael Bloomberg, whose fortunes all derive in some way or another from information technology. Thanks to the rich-get-richer effect, the returns to their businesses do not diminish.”

Ferguson concludes, “The unregulated oligopoly that runs Silicon Valley has done very well indeed from networking the world. The rest of us—the mere users of the networks they own—should treat their messianic visions with the skepticism they deserve.”

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