The Next Great Internet Disruption: Authority and Governance

An essay by David Bollier and John Clippinger as part of their ongoing work of ID3, the Institute for Data-Driven Design : “As the Internet and digital technologies have proliferated over the past twenty years, incumbent enterprises nearly always resist open network dynamics with fierce determination, a narrow ingenuity and resistance….But the inevitable rearguard actions to defend old forms are invariably overwhelmed by the new, network-based ones.  The old business models, organizational structures, professional sinecures, cultural norms, etc., ultimately yield to open platforms.
When we look back on the past twenty years of Internet history, we can more fully appreciate the prescience of David P. Reed’s seminal 1999 paper on “Group Forming Networks” (GFNs). “Reed’s Law” posits that value in networks increases exponentially as interactions move from a broadcasting model that offers “best content” (in which value is described by n, the number of consumers) to a network of peer-to-peer transactions (where the network’s value is based on “most members” and mathematically described by n²).  But by far the most valuable networks are based on those that facilitate group affiliations, Reed concluded.  When users have tools for “free and responsible association for common purposes,” he found, the value of the network soars exponentially to 2ⁿ – a fantastically large number.   This is the Group Forming Network.  Reed predicted that “the dominant value in a typical network tends to shift from one category to another as the scale of the network increases.…”
What is really interesting about Reed’s analysis is that today’s world of GFNs, as embodied by Facebook, Twitter, Wikipedia and other Web 2.0 technologies, remains highly rudimentary.  It is based on proprietary platforms (as opposed to open source, user-controlled platforms), and therefore provides only limited tools for members of groups to develop trust and confidence in each other.  This suggests a huge, unmet opportunity to actualize greater value from open networks.  Citing Francis Fukuyama’ book Trust, Reed points out that “there is a strong correlation between the prosperity of national economies and social capital, which [Fukuyama] defines culturally as the ease with which people in a particular culture can form new associations.”