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Optimal power structures

I recently wrote that:

Hierarchies [of power] allow for genuine decision making over the endless, cacophonic debates of pure democracy, but they come at the cost of hampering information flow (at an extreme, it becomes unidirectional) and making people at the bottom feel ineffective or inconsequential.  As a society, we seem to have settled on the idea of power being locally hierarchical, but globally competitive between those separate hierarchies.

I hypothesise that hierarchies are the constrained-optimal power structure for most, if not all, collaborative human endeavours. I imagine the optimal height and breadth of the hierarchy to be a function of the two, possibly intertwined, technologies at play: that used to aggregate individual beliefs to arrive at decisions, and that used to combine individual efforts to produce the output.

I likewise hypothesise that social networks are the optimal power structure for most, if not all, competitive human endeavours, with beliefs propagating across the network and decisions being made by individual nodes. I imagine the optimal network parameters (number of links per node, weighting per link, etc) to be functions of how similar the output of individual nodes are and the costs of maintaining each link.

Note that if the aggregate output for collaborative endeavours is a linear function of the output of each individual, then a hierarchy can be seen as a special case of a network with asymmetric link weightings: A takes more account of B’s view than B does of A’s.  This raises the intriguing possibility of the two types of model being able to be nested.  Do linear aggregation functions represent a definition of competitive endeavours?

I argue that these hypotheses are true on the simple basis that they are what we observe.  Collaborative efforts are always hierarchical.  Competitive efforts interact through networks.  I’d invite any examples of counter-factuals.  If there are any counterfactuals – if, for example, a power structure exists that is highly hierarchical (tall and narrow) when the optimal structure is much more network oriented – then the key question is ‘Why doesn’t it change?’.  Why doesn’t the Coase theorem kick into gear?

There’s an obvious question of where and how democracy fits into my framing of the world.  I imagine democracy as being something based on a social network.  For any given shock (i.e. news), once the network of opinions stabilises, democracy is just the formal counting of which nodes believe what.  Within this, though, I make a distinction between two different types of pure democracy. When the network is uniformly connected and every link carries the same weight, then every person truly carries the same value to the overall decision.  By contrast, when the network is not uniformly connected and/or weights are different across links, then even if individuals get an equal vote each in the decision, their opinions will be biased towards those individuals with more links and more weights.  Nevertheless, both situations count as “pure” democracy.  Obviously any type of representative democracy represents a hierarchy.  Even in the upper level where the democracy is played out there are sub-levels of deferred power.  Witness the machinations and power-plays of the UK’s House of Commons.

Web 2.0 sites such as Wikipedia, Digg, Slashdot and del.icio.us represent an interesting experiment here because while they are clearly collaborative to some extent, they each claim, to varying degrees, to be purely democratic.  The users both contribute content and decide which contributions are most important.  There is an ongoing debate over who contributes most to such sites.  One view, from people such as Aaron Swartz, argues that:

[Outsiders] make one edit to add a chunk of information, then insiders make several edits tweaking and reformatting it. In addition, insiders rack up thousands of edits doing things like changing the name of a category across the entire site — the kind of thing only insiders deeply care about. As a result, insiders account for the vast majority of the edits. But it’s the outsiders who provide nearly all of the content.

By contrast, Chris Wilson (of Slate) notes essentially the opposite view:

Palo Alto Research Center’s Ed Chi, the scientist who determined that 1 percent of Wikipedians author half of the content, told me he originally hypothesized that the site’s most energetic editors were acting as custodians. Chi guessed that these users mostly cleaned up after the people who provided the bulk of the encyclopedia’s facts. In reality, he found the opposite was true (PDF). People who’ve made more than 10,000 edits add nearly twice as many words to Wikipedia as they delete. By contrast, those who’ve made fewer than 100 edits are the only group that deletes more words than it adds. A small number of people are writing the articles, it seems, while less-frequent users are given the tasks of error correction and typo fixing.

But the debate over who contributes to Wikipedia and Digg is not of particular concern to me per se.  My concern is the power structures of these sites and that is quite recognisable.  Wikipedia has guiding editors who can lock pages down.  Digg and Slashdot both employ moderators that get veto power over the user-voting.  There is a formalised, structural hierarchy.  What is interesting is that there also seems to be an informal hierarchy based on the volume of user contributions.  The users that contribute more also get more of a voice when decisions are made.  Quoting Chris Wilson’s Slate article again:

The influence of these members was particularly apparent last month. After Digg tweaked its secret sauce, top contributors noticed a decline in influence—fewer of their submissions became top stories. The super Diggers published an open letter of grievances and threatened to boycott the site. The changes in the algorithm, the Digg execs said, were meant to bring a more diverse set of stories to the site, and they begged for patience from the top Digg contributors. (Thus far, a shaky truce has endured.) The takeaway: Digg’s brass believe that the site, which purports to be the product of a broad-based community, will cease to run smoothly if a microscopic percentage of its user base stops participating.

The reasons for this are simple enough:  Without the top contributors, the overall value of these sites would plummet.  They therefore have far more bargaining power with the formal power structures of the site owners.

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Organic food, standards and conspicuous consumption

There is a fantastic article up at the Financial Times by Bee Wilson, entitled “What makes a pig organic?”  It’s clearly part of a publicity push for her soon-to-be-published book, “Swindled:  From Poison Sweets to Counterfeit Coffee – The Dark History of the Food Cheats” (Foyles, Waterstones, Amazon), which was recently book-of-the-week on the BBC.  It starts with:

This is a tale of two pigs. The first – let’s call him Soren – is reared in Denmark. For the first few months of his life, he lives a cramped existence in a barn. This pink, flabby creature is castrated so that his meat won’t taste too strong. When at last he is allowed outside, his only freedom is a small concrete run. At a young age, he is killed and turned into bacon, using potassium nitrate and sodium nitrite. When you put slices of him in a pan, white watery liquid runs out.

The second – let’s call him Juan – was lucky enough to be born in the Iberian peninsula. He is sleek, black and hairless, a descendant of the original wild boar. Juan spends his life munching acorns among the oak trees. By the standards of animals destined for pork, he is allowed to live a long, calm life. He is only killed when he is 20 months, oldish for a pig, after which time his flesh is cured in sea salt until his fat turns to oleic acid, a fatty acid similar to that in olive oil. Juan is now jamón ibérico de bellota. When you eat slices of him, the salty flesh melts in your mouth.

It should be perfectly obvious which pig has led a better life and makes for better food. But there is one further crucial difference between the two. Because he has had only organic feed and has not suffered the worst indignities of factory farmed pigs – overcrowding and no access to outdoor space – Soren the Danish pig ends his life in a British supermarket labelled “organic”. Whereas Juan, for technical reasons, doesn’t qualify for the organic label.

… which is just a little bit sensationalist, but gets the point across.  A little later we start getting into the truth of the matter:

When you buy an organic egg you are not just buying the means to make an omelette, you are buying a dream. It is the dream of something delicious, which will simultaneously be good for your body and good for the hens and people who produced and packed it. It is the dream of being self-indulgent and virtuous at the same time – which essentially encapsulates the main yearning of our consumerist world. As Lynda Brown says: “Everybody wants an organic egg to come from a chicken that has led an idyllic life. But most people don’t actually want to pay for it.” The result is that when you look behind the dreamy label of much organic food – as with Soren the pig – you find it is not so very different from the industrial, compromised food you were trying to buy your way out of. The yolk is still pallid. The workers are still underpaid. The hens are still crowded – just a bit less than for conventionally farmed eggs.

In other words, buying organic is a form of conspicuous consumption.  How do we know that buying organic is a “dream of being self-indulgent and virtuous at the same time”?  Well, as Bee notes later on:

Take soy milk. In the Tesco longlife milk aisle, you can choose between: first, Tesco Calcium Enriched Soya Drink (at 63p a litre), your basic average soy milk; second, Tesco Organic Unsweetened Soya Drink (at 99p a litre), a premium-looking product with a price tag to match; and third, Tesco Value Unsweetened Soya Drink (60p a litre) with its no-frills packaging. Yet if you look at the small print, you will see that the Value soy milk is organic too. In other words, you are being offered a choice between spending 60p on organic soy milk that doesn’t appear to be organic or 39p more for the organic soy milk that loudly trumpets the fact. By paying that 39p, you are effectively admitting that organic food is simply an idea to you. It is an idea that says wealth and health (whereas “Value” is an idea that says poverty). This is the reductio ad absurdum of “organic” as a brand.

However morally-driven we might all pretend (and like) to be, people like Megan McArdle are a rarity.  For the vast majority of us, buying organic is a way of tickling our egos or showing off to our dinner-party guests.  If we actually end up easing the living conditions of the creatures we eat, that’s a largely unnecessary bonus, because it’s the label that counts.  This is not unique.  In a very real way, buying organic food is much the same as buying “fair trade” food.  We’re buying the highly-visible feel-good factor.  Don’t believe me?  Here’s another titbit of evidence.  Bee Wilson notes:

In the US, [t]he USDA allows many more nonorganic ingredients to be used in “organic” food than are permissible in the UK. Last year, there was outrage when the USDA certified Anheuser-Busch’s Wild Hop Lager, which included hops sprayed with pesticides and grown with chemical fertilisers, as an “organic” beer.

Wild Hop Lager does get lampooned, but not because they failed to make their product truely organic.  People bag it because it’s a bad beer.  Here are it’s reviews on RateBeer.com, BeerAdvocate.com and hop-talk.com.  Notice that none of them are rejecting it because of it’s judicious use of the word “organic.”  They’re rating it on the basis of what makes a good beer.  The closest we get is from the latter, saying:

Why is it awful…? Because once again a megabrewery is trying to make a product that looks like a craft brew, yet they are pouring their money into marketing it and not into making it.

… which is really saying nothing about the desirability of environmental sustainability or the avoidance of man-made chemicals.  If Anheuser-Busch produced a not-at-all organic beer that nevertheless tasted good this reviewer would be all over it.