Transcripts For CSPAN2 Book Discussion On The Seventh Sense 20160612

Guest thats how its being referred to now in copyright circles. It is really, its become a ridiculous, absurd system. Service providers spend a lot of money on dealing with these notices and from the author perspective dont actually achieve getting anything taken down. So we are asking for a number of change to that part of the statute. Were also looking at collective licenses for books so that libraries can access copies of books and actually pay for them instead of having libraries and the googles saying, oh, we cant possibly license all these books, so it has to be fair use. That takes away a lot of income, ultimately, out of the market and from authors. So those are the big ones, but there are a bunch of issues. Host when you look at where we are in publishing in 2016, has there ever been another period in history where this revolution is happening like it is now . Well, when the yeah. I mean, when the beginning of publishing. It was a huge change in terms of the written word. It was enormous. I mean, people who never had access to books before suddenly had access to books. It took a hundred years for the Publishing Industry to realize that, oh, we can use this technology for mass, mass distribution. Cheap books that, you know, many, many people could provide access to. So the digital revolution is just as big. I mean, the implications are huge, and were already starting to see some of that in terms of the ability to access knowledge. Its very, very exciting. We just want to make sure that authors get some of that money, right . Because right now whats happened, whats happened is a result of the information wants to be Free Movement is that its not as though no ones making money off of the content. The technology companies, the Service Providers are making huge amounts of money off of content. The googles, the amazons, apple, facebook, theyre called, you know, the big four, the four horsemen. They are profiting from content now, and every the creators are losing their shirts. And thats its not fair, but its also just very shortsighted because if creators cant afford to keep creating, they wont. Host mary rasenberger, executive editor of the authors guild, thanks for joining us on booktv. Guest thank you very much. Next on booktv, Joshua Cooper ramo, coceo of kissinger associates, talks about his latest book, the seventh sense, with authors Malcolm Gladwell and jacob weisberg. [inaudible conversations] hello . Hi. Thank you, everybody, for coming. This is great. You know, as a writer for most of the last few months, ive been getting up every morning saying to my wife what if nobody reads the book, and i woke up this morning and said what if nobody comes . So its very nice of all of you to come out tonight. The reality is were fortunate to have with us tonight two friends of mine who, i think, will be more interesting and fascinating to many of you. Jacob weisberg is the chairman and ceo of the slate group, longtime journalist, has recently published a book on Ronald Reagan that i cant recommend highly enough, particularly in todays political environment. And malcolm glad welshing Everybody Knows a writer gadwell, Everybody Knows a writer for the new yorker. Were going to talk a little bit tonight about my new book, the seventh sense, and one of the things youll discover quickly when we get into conversation is that one of the big ideas is theres just so many questions to answer that this model of kind of us talking to you is not entirely the right model. So well do that, but we also really want to open up to questions and debate, and i hope people will talk about the ideas that are interesting. With that, i think were going to have a little conversation up here. Jacobs going to talk to me, then were all going to talk, and well open up to questions. So, again, thanks for coming, its great to see so many people here. Its very nice. [applause] i was going to say welcome nyu graduates. I think i know you were probably tempted to go out and celebrate around graduation, but i think coming here and getting a start on your careers and figuring out what this thing is about is a good way to you outperform the people who are out drinking right now, i think. [laughter] as the or not. As sorry. I was going to say as the least famous person here, i decided i should be the moderator. Im going to try to direct the conversation a little bit at least to get started, and i wanted to start it off just by asking josh to explain a little bit of what hes trying to do in the book and how he got interested and so on. And just to get started, josh, what is the seventh sense . So, you know, the Historical Context of the seventh sense ill get to in a moment. Its really this feeling, this instinct for the way in which were enmeshed in all of these networks which fundamentally change things. When you look around the world and you see the most expensive war on terrorism in Human History not succeeding, an Economic Policy that was designed to try to help the middle class and stabilize the economy that appears to be accelerating in fragility and certainly causing problems and things like deflation, as you look at the political environment, there are all these things happening that are sort of unexpected. My idea was to roll up my sleeves and see if i could understand what was driving that. I came at that from a couple different perspectives. One was i had a very interesting experience back when you and i were first getting to know each other back in the 90s. I had briefly run a Startup Company that failed, so i got that experience under my belt. [laughter] and in the process of shutting it down, i got a phone call from this guy named mike moritz. This was in the mid 1990s, and mike said, look, you dont know me. I used to be a journalist at time, and ive now maneuvered into the venture captain moved into the Venture Capitalist movement. I just shut this company down, and i was about to join time as a senior editor, and i said, why not . Ill go out. So i fly out, and mike this was my First Encounter with a Venture Capitalist, so i was not prepared for what i got, showed up at the San Francisco airport in his convertible mercedes, picked me up and took me down to this warehouse and said, look, this is really where you ought to work. I was like do i do this or go to Time Magazine which really was the icon of every possible dream you could have in journalism. So i looked at this company, i said, you know, the opportunity to be employee number four at a Company Called yahoo , that things not going anywhere and i very happily got on an airplane and flew back to new york city saying, whew, thank goodness i missed that one. I have the stability of Time Magazine, thats not going anywhere, right . Once you make an 800 million mistake like that [laughter] you sort of say to yourself what was it kind of missed at this moment . And it was clear to me as i moved through things over the years that there was this dynamic in the system, this possibility of the creation of incredible new basins of prosperity of information, of ideas that came merely from just connection itself. Part of where the seventh sense came from was the sense that, jeez, i wish id had it back then, but part of it also as you look around the world, so many businesses, this journalism business, are being disrupted by these huge forces. What i saw when i left journalism, you know, 10 or 12 years ago and went into the advisory business and moved to china was that these forces are really working out all over society. The things that have happened, unfortunately, to Time Magazine are happening to military affairs, economics, and all of our old ideas are being kind of upturned. My question was, was there some way that i could really get to the root of understanding this . We all know the kind of basic idea which is that connection changes the nature of an object. A connected phone, a connected journalism, its just different than one that a connected economy, to one thats not connected. What i saw was there were people, travis clannic looks at a car and seeing Something Different that produces uber. So its really that story of that instinct thats there. Its a learn bl instinct. This is something you can understand, it is something that is usable, you know, because people all around us have it, but it does often kind of challenge tradition always of thinking. Just to be traditionally minded about it, its a sense of history notice se. Knee chas view was in the Industrial Revolution, look, this is so crazy that my five senses are not enough, and were all going to go crazy, which he did anyhow. But he said we need an additional sense, and that sense is a sense of history, what he called the sixth sense. The idea that if you sort of had a sense where this change was on the ebb and flow of Human History, it would give you something to grab onto. I think we still need the five senses, the sixth sense, but we also need a sense of what does it mean to be enmeshed . How does that change things . Silicon valley people sort of say they divide the world into people who get it and people who dont get it. The people who get it, theyre talking about people who have this understanding of how connection changes the nature of business, changes the nature of politics, changes the nature of everything. And people who can take advantage of that. Yeah. And i think thats i think what ive tried to do in the book is say that ability to understand Network Systems is a piece, but it also incorporates a different element which is that its not enough simply to understand the networks. Youve got to understand the world into which theyre moving. So i think i almost have a sense of kind of the world one way to look at it is sort of on the one hand youve got a group of people who have a tremendous amount of power in economics, in politics, in traditional media who dont really understand how networks work. And in the process of trying to solve problems, often make them worse with. And then you have a group of people who understand networks really, really well, and they tend to be younger, they tend to sit at the heart of these companies where you can make the case the control of, you know, the google algorithm or the facebook algorithm, those are the most powerful handles assembled in Human History, in a way. And that group who i talk about in the group doesnt necessarily understand the larger social constructs of the ideas of, you know, whether its the classical philosophical ideas or the ideas about what makes an economy or a society function. So the rest of us are sort of stuck in the middle. So the cultivation of the seventh sense, maybe we can talk later about the issues around Artificial Intelligence, were not going to beat the machines. The idea that we should learn more about computers to save ourselves, we have to understand the networks and the history and ideas that surround them that really offer a path guard. But often this manifests itself, and you tell these stories in a reversal of a power dynamic or a kind of asymmetry in the dynamic. I mean, isis you describe as a sort of seventh sense phenomenon. You know, donald trump with just his little old donald trump with his twitter account versus the republican establishment and the thing that everyone expects doesnt happen because some seventh sense person or organization shows up and uses it differently. Yeah. That the networks fundamentally permit you they change the way in which these forces behave. And so when somebody looked at isis and thought these are just a bunch of, you know, 15 yahoos with trucks, what they discover is when youre part of a connected system, that ability to make these videos, these horrible videos of 12 people being beheaded has a kind of viral power that traditional power structures have a hard time competing with. Im going to sic malcolm on you in a minute. Do these people who are the beneficiaries of the phenomenon, are they people who understand it, or are they just beneficiaries of it . I mean, does donald trump understand, networks understand what youre talking about intuitively, or is it just somehow hes harnessed it and latched onto it . I mean, i think it is maybe a little bit of both. I think there is this intuitive sense some people have of how the networks work, and then i think theres just there are many things. One of the things about networks is theyre very contagion prone. We build them that way because we want them to be efficient. The networks evolve in ways that suit what the networks want, and what they want is to be faster. They want to be connected all the time. They want to be super efficient. So were Building Systems that are hypercontagious without necessarily the kind of foundational belief, structure saying what do you do in a very contagious system . This is really germane in, you know, for better or worse in this kind of world of Foreign Policy and security because the larger historical narrative against which all this takes place is when power shifts dramatically, when the way power is structured inside a system shifts dramatically, that creates these incredible disruptions. So in the book i make this comparison between the enlightenment and the Industrial Revolution starting with the reformation wiped out many of the sacred european institutions architected for a different power structure, for a different idea of who should be in charge. And if its right now as you look around the world today, there are very few institutions that we trust more than we trusted, you know, ten years ago. Almost everything has kind of declined. And thats a worrisome sign. The question of what basis do you build this kind of new order . So, malcolm, another thought i had reading this book was, oh, my god, david and goliath. Your most recent book is about asymmetries that work out in surprising ways, and why there are cases in which underdogs are successful. How did reading joshs book, how does your here to toly match up with his theory . Oh. You can tell we didnt prepare for this. Hes completely flummoxed by that question. I hadnt thought about that. I suppose the network is a, a lot of what josh is talking about is the deceptive power of networks that you because we have a tendency to focus on a component of a network, we miss the kind of hidden power that comes from the connectivity. So, in essence, it does it is a version of a david and goliath argument which is that david is actually much stronger than he appears. Although im actually more, what im more what i was more interested in after reading the book was the downside of networks. You know, what they i wish you could, id love for you to explain it a little bit more, josh, what they cant do. And so if the opposite of a network is a hierarchy, what sorts of situations are networks beth optimized for, and what situations are hierarchies most appropriate for . Yeah. And i think theres another question which is related to that which is, and i think, you know, were early in this process of figuring out what Network Power means. The other question is like why Certain Networks structure themselves in certain ways, and can we predict in advance which Network Structures are likely to emerge. So one of the classic models is this socalled winner take all network structure. Today we have in the world, i think, nine platforms that have more than a billion users on them, facebook, google, microsoft office, microsoft windows, so on, youtube. And these systems, as we all know, have this winner take all effect. More people use facebook. So, first of all, it creates these natural monopolies which were really not necessarily used to dealing with. The economic structures, its cheap for facebook to add every additional user so they just get more and more profitable as time goes on. And it has the effect of concentrating a huge amount of power in the hands of very few people. Not only power, if you look at the deal around whats app which was, i think, a 19 billion deal, to the its almost a billion dollars per employee at that company. One of the questions is why do certain topologies, Network Spaces are defined by so maybe just slow down, explain yeah. Those who have forgotten what a topology right. [laughter] the idea of a topology is that it comes from mathematics and Computer Network theory is that there are these sort of invisible, like theres a geography that you can see, right . Theres a geography of new york city, of europe that shaped all kinds of decisions, where the rivers ran, where the mountains were, the coastlines were. And for the most of Human History, the thing that mattered most was geography. If you were fighting a war, you wanted to control the coast, the air space, the mountain passes. Well, topologies are things that emerge as a result purely of connect it. So, for instance, the distance between st. Petersburg and moscow is always 450 miles. But depending on how its connected, it can take you a week to get there, or it can take you a millisecond to get there. They change shape depending on the nature of the connection. And there are topologies for currencies. Facebook has a topology of how people are connected, that famous six degrees of separation idea never heard of it. Yeah, exactly. All kinds of networks have top logical features and designs, and they tend to optimize themself for the design that makes them most efficient. So the interesting question is, you know, are there areas so we know, for instance, why the facebook effect works, right . The more people use it whats interesting is when you look at businesses like amazon that at the beginning, it wasnt inherently clear that a merchandise business was going to have that effect. The more people used amazon, therefore, more people would want to use it. Why couldnt more people use amazon and also walmart and these other things. And the insight of jeff bezos was to drive it where the more people use it, the faster his costs went down which allowed more people to use it and so on. The question is also, t not easy enough to say, okay, theres hire arties in topologies or hierarchies in topologies in Network Structures. You find there are Different Network designs that serve different needs. And this is particularly interesting as the great question about this when you talk to people who are designing these systems now is how are Artificial Intelligence systems going to distribute themselves. Because theres an argument to be made that if you have access to all of this data, the smarter the a. I. System gets. It gets more data on itself or more people want to use it so they can take advantage of it. Itll get smarter and smarter. Is so part of the seventh sense which, honestly, i think were still trying to figure out, what is the right to to logical version of power . It gets you right at the heart of these questions like how does the democratic system function . Based on this premise of relatively equal distribution of power. Capitalism functions with this idea of relatively equal participation in the marketplace. We have regulations and all kinds of things to deal with that. What do you do when what the system craves is actually a very different kind of structure . But, i mean, im interested to hear you sort of explain in some specific examples whats different. I mean, we had networks, you call them topologies if you want, you know, in the political structures in the 19th century. A political patronage system is a network. What is the sort of difference and why is that absolutely theyll and not durable vulnerable and not durable in relation to the kind of network, you know, president obamas social Media Network that he leveraged in the campaign . So i think its very important to acknowledge, to say actually networks unlock a huge understanding of a lot of history. In fact, if you look at most of the great empires, you can think of them as Network Systems. The empires built on the river ares of asia or india, that were built on the ocean. The British Network happened to be conducted by ships instead of by electrons. And theres a lot of very interesting work being done now in economics and history where you go back and analyze these things and understand the efficiencies. The biggest change now is, id say two things. One is the incredible speed at which things happen on networks. Theres a famous line of one german general about a hundred years ago towards the end of the First World War who said, you know, if this negotiations leading up to the war had been conducted by horseback instead of this damn telegraph, we could have avoided the war. This telegraph was so fast, we didnt know what to do about it. That acceleration of daily life has spilled into the network. Thats the first thing, the speed is unbelievably fast. And that, one of the things when you is yourself what drives this Movement Towards a winner take all system, partly that is efficiency. Theyre much faster. If you had to look for your friends on facebook and myspace, what you would discover is its a very inefficient process. There was a small team at facebook that about three years in when they were sort of at this pivot point and friendster was still around, figured out this essential ingredient was if you joined facebook and got seven friends in ten days, you were likely to stay. So one is speed is different than in the past. And the second thing thats different is this kind of winner take all system in which the intelligence of the network the more it sees, the smarter it gets and so the better it gets. So lets talk a little bit about business, and lets talk a little bit about politics and Foreign Policy. Malcolm, you speak a hot to business audiences. You know a lot to business audiences. The marketing world is very engaged in what youre doing. And you talk to different kinds of businesses. Do you see businesses that have an understanding of what josh is talking about, having a differential kind of success or picking up on your last question, are there places in the Business World where a much more conventional hierarchical structure still obtains or still does best . Well, it seems to me that there are lots of businesses that are in a process of transition towards something that is a lot more, looks a lot more like a network and are having difficulty understanding how to adapt to that. So, for example, if you think about a hospital, the traditional understanding of a hospital is that the success of the hospital is driven by the skill of the doctors, right . You have world class surgeons, thats half the battle. But now when patients are driving decisions and Patient Satisfaction is so important, your Patient Satisfaction may be as much a function of how nice the receptionist was and how nice the person was who answered the phone as the skill of the surgeon. So thats a kind of, if you think about it, now you have a, you have 20 different notes you have to worry about as opposed to one to two. Now, is that what im sort of wrestling with does that make the hospital a network . Im not sure. It gives it Certain Network qualities, and it changes the way you have to make decisions if youre running the hospital, because all of a sudden you now have to a more obvious example would be a hotel. If i go to a hotel and i go on yelp and i give it a lousy rating, that may be because i had a bad encounter with one out of 600 employees, right . Thats a network biting you in the behind if youre running the hotel, right . You may have nailed 599 of the components of your network, and you missed out on one, and then somebody hates you for it. So, i mean, is that no. Am i, is that yeah. Its a network vulnerability. Thats one of the interesting things. In Network Terms they talk about it as expanding the attack surface. One of the Things Networks do is highly connected systems have a larger foot print. Theres almost anywhere you can hit them. And you have this incredible asymmetry. One fall anywhere in the system can have the effect of disrupting the entire network. Yeah. But i would say sort of picking up on that example, you know, in a hospital used to be attracting the top surgeons was most of your job. Or in a hotel, kind of running a great hotel was most of your job. In fact, i would think networks in a slightly different sense that probably more of your success depends on what networks you tie into in what way. So, you know, networks for diagnosis, customer service, relationships to other possible institutions or in the hotel case, you know, are you on what reservation system are you on, you know . How what sort of accessibility and service do you offer that way probably matters much more. You saw, if you have a terrible hotel, youre not going to be successful over the long term. But you could have a very good hotel and not be very successful if youre not networked properly. Yeah. Well, you know, this actually raises my principal question around the book was the chapter in the book about security. Essentially, Computer Security. The security of Electronic Networks. And its a very, very powerful chapter which makes you very, very afraid. And it made me wonder is security such a crucial question that its sufficient to make me want to opt out of networks entirely . In other words, if a bank came to me and said im going to be the unnetworked bank, im not even going to be on the internet, if you want to Deposit Money Bank of the stone age. Bank of the stone age. [laughter] or right now we have this phenomenon in hospitals around this country are being held up by, theyre paying ransom to electronic thieves, right . Who take the medical records and give them back for 20 million or whatever it is. Why wouldnt the hospital say, you know what . The bank, the threat of being in the network is up that were going to opt out . Yeah. Is that i mean, i think the problem of security is so large and underappreciated that there are many scenarios where the threat from being in the network is greater than the benefits from being in the network. Yeah. I think the problem with it is that you cant the cost everybody has to do this cost benefit analysis. And the problem is, think about the hospital case. So if you go to a hospital, you would ideally like to have the doctor be able to take your blood and immediately run that against a database of 100 Million People or a billion people and see whether or not theres anything interesting there. So it turns out the and as much as it would be fun to go to the hospital of the stone age, like, you want to actually have access to that information. So it turns out that the crucial decision is exactly this one, which is how connected are you. And how do you manage the gate between inside and outside turns out to be the essential sort of locus of power in these systems. The other thing thats interesting, and i talk about this some in the book, how did we end up with this incredibly Unsecure Network Insecure Network system. And you cannot secure a computer theres not a single device in this room that we can safely secure. The great thing that allowed the internet to grow so quickly was this notion of something called post [inaudible] principle. One of the early founders of the internet. He was coming against this sort of at t tradition which build these giant switching centers and said nobody gets to connect to this unless theyve been approved. This was the 60s, and he said, okay, heres my principle. Be generous in what you accept and be careful about what you send. But that fundamental instinct of openness is what allowed the internet to grow so much faster. The reason you can flip on your phone and in five minutes get access to everything in the world is because, actually, this philosophical decision to start with a relatively open system. The problem with that is that its a system that is entirely open, and so its not architected from the bottom up to be secure. And the problem with that so theyve tried to fix this. There are two very famous innovations for this. One is a protocol you can use that looks at every single bit of information and says where did that come from, where is it going. Its sort of like a tsa for the internet. And just like the tsa, it has the effect of introducing totally unnecessary inefficiencies into the system. And so the challenge is what we want is more is and more and more speed. We want our networks to be faster. So so theres a famous trilemma in manufacturing, which is you can have things any two of cheap, good and fast, right . So if you want to get a couch and youd like it to be cheap, and youd like to get it really, really quickly, its probably not going to be very good. So in security theres something which is you can be open, you can be secure or fast, any two of those. So if you want to be open and you want to be really, really fast, youre not going to be secure at all. And so its that balancing of those things is where we are today. Heres why this is i was going to say the reason that it kind of lands is that choice of that topology, that choice of the way we design the connected systems is one we made. And i think one of the interesting questions thinking about the next generation of the internet is how do you solve the security problem as a first concern for Network Design. Yeah. Because that, you know, so when you present it that way and you, we take it for granted that fast has to be one of the three and that we also celebrate networks because of their speed, when did we make this decision . What if i dont need networks to be fast . Especially much of the Network Relationships in my life and in the economy as a whole are needlessly fast. Why does, you know, google doesnt actually have to get back to me in a fraction of a second. Its just something, im used to it now. But, you know, when i had a dialup, you know, the same result a little slower. And you said im going to make im going to increase the amount of time that google needs to respond to you or your bank does. I go online to citibank, theyre going to get back to you in five minutes now. Now, if that was my expectation and you told me that would triple the security, i would take that deal in a heartbeat. Yeah. But people crave, i mean, what everything speed has become the ultimate commodity of competition in the market. And so why does amazon need to deliver something in two hours to you as opposed to waiting . But it is people crave, i mean but see, josh, you say people crave, people crave that because theyre not properly pricing security. If they priced security properly, people wouldnt crave it anymore. If you explain to me, if you explain to every consumer not a single device you own is secure right. What would you pay to make it secure, then they might have a very different attitude about speed. Yeah. Well, one of the great technological issues is philosophically it shouldnt be a choice. That you actually, theres a moment at which you can design the system. Were forced into that because of the way the system is designed. I think one of the reasons that this is, why i feel this is an important book to write is were making decisions about how we Design Systems now that are going to endure for decades to some degree. So the decision to have a relatively open system which had a huge impact on the spread of the internet now introduces another set of cost. Just one quick thing on the security thing. Most people think what the fix for security is going to be is a. I. , that essentially you have have artificially Intelligent Machines that are serving as security guards and that are incredibly effective because theyre talking to themselves on their own networks and the solution is not that we take the existing tcp ip backbone but instead build an entirely new approach to that. But your fundamental point which, by the way, as somebody who likes to sit and read paper books i share, is we are in this kind of speed loop of acceleration. And it has all kinds of effects. But youre both assuming this tradeoff exists, but in the real world were sort of positing the possibility of security, but our fundamental experience has been the total lack of security in the places where we would most expect it, you know . Government personnel records, you know, defense department, the most classified materials, the National Security agency and the state department. I mean, these are the things where they werent, they didnt think they were trading off security the department of defense. Yeah. So, you know, and i mean, if you followed the issue about the iphone and, you know, apple making thinking its making the choice of security over, well, i mean, security of the system over accessibility of criminal justice but, in fact, the fbi if you believe them figured out a way to hack the phone. The ones trying to design the secure systems youve forgotten the hilarious paradox of the government going of after Hillary Clinton for sending classified emails on her blackberry when blackberrys almost certainly more secure than the u. S. Government which is possibly the most electronically porous we know the government was hacked. We dont know for surehill res blackberry they were essentially angry at her for moving things to a more secure environment. There was this moment where they sent out this email to all of their employees who had just received an email saying dont open any emails because it might be a phishing attack. [laughter] kind of this infinite loop of confusion. I want to go back something you said, and i dont mean to only talk about Computer Security, but, to my mind, that was the most interesting chapter in the book because its the place where many of the strands connect, and youre forced to kind of confront. So were living in this incredibly networked world, and we made a series of choices, and now we have to sort of deal with the consequences of those choices. The thing about curt security is that why is it so so difficult for us to talk about the downside of networks . Thats essentially what the security argument is about, right . Well, and also design for it. Ill give you an example. I went to a conference a couple weeks ago on Artificial Intelligence and ethics. And all anybody wanted to talk about was this a. I. Problem which is when the car has to go off the bridge, right, does it hit the bishop, or does it hit the child, and how are you going to program phishing. When its [laughter] obviously. Depends on who made the car. And what you realize in that context is thats an interesting problem, but the background problem is actually much more interesting which is and the reason i think the Computer Security chapter is important, its a metaphor for all the security and Network Systems that were in today. We are so fundamentally vulnerable because of the design of these systems. One person anywhere on the system can shock the entire system. So one of the things thats happened as a result of this constant Internet Connection is the nature of what it means to be at war or peace is kind of changing fairly dramatically. First of all, the distinction between the location of combat which used to always be on the front lines has gone away. , and the second thing thats happened is that has e eroded any sense of, okay, were at war or at peace now. So you have to start by saying, well, we know that ethics are very different in a time of war than peace, sort of the way we approach the rule of law. So i think analyzing that fundamental question. What do the networks do to our fundamental safety. And its relative for two reasons. First of all, we know that security from a political perspective is one of these things that is, as it should be probably, a dominant psychological concern and causes massive shifts. When people feel insecure, they vote in certain ways, they invest in certain ways that actually tend to make them less secure. The more nationalist and well armed a country becomes, the more nationalist and well armed their neighbors become. But its also important because of this reason im saying which is we can choose how to design these systems. We can try to design them in a way that they get rid of this false dichotomy and make us more secure. Im reminded of i once had lunch with a bunch of i. T. Guys from major corporations, so i asked for a show of hands on how many of them had satellite radio in their cars. None of them. No one told us. [laughter] they were like, are you kidding me . Not in a million years. This is another point which gets back to why are we getting so much speed. Were so willing to trade off, if you had said to me ten years ago im going to give you this device, its going to track your every movement, and exchange for that ill save you five minutes in traffic, thats exactly what my Android Phone does. You said oh, sorry. Go ahead. I swuz struck by was struck by that quote that you had from the german general who said cant we go back to horseback. Which, you know and i dont mean to sound like a luddite. Hes not wrong. Because what hes saying is when you slow down a crucial negotiation like that, you give each side a chance to think about things more clearly, right . So theres a case where what hes essentially saying is in the tradeoff between, in this case, speed, thoughtfulness and whatever the third one is, im going to, i would rather i dont mind a situation that builds in some kind of buffer, Decision Making buffer. And thats not a really but its also a Network Design decision. So as we think about the networks now, so one of the problems theres a theory in one of the kind of best established International Relations theory, this idea of whats known as offense dependence theory. And bob jarvis, whos a professor at columbia, essentially says that when its very easy to attack, there are more wars. So, like, when they invented stirrups on horses, people could charge mass lines, there were more wars. When they invented walls around fortified cities, the number of wars in europe went down dramatically. When somebody invented artillery that could poke through those walls, they went up dramatically. What kind of world do we live in . By the way, if you get this wrong, the example world war i. World war i, all the generals thought the machine gun, like that thing is the best offensive weapon ever developed. Have you seen what it does to people . No problem. Wars going to be over by christmas. Turned out it was the greatest defensive weapon in Human History, and it wasnt until an offensive war was developed in the form of a tank that the war came to an end. Were coming out of the nuclear era. The cost of attack was that you yourself would be wiped out. But today the cost of attack is almost zero. Anybody can manufacture a little bug, anybody can develop some sort of cyber attack. It also leads to more and more surprise attacks, it leads to arm racing. So there are all these dangerous conditions. And what you would like to do is step back and say exactly what you said. How do we design some delays into this system . How do we build a network which gives us time to react so that we dont have to kneier jerk knee jerk our way through disaster after disaster. We can make them now, but were not seeing it in that context. I mean, in the real world we are dependent on these networks. Were not prepared to abandon them in exchange for some sort of security that would come from not being a part of them. But we need protection. And we need protection in financial networks, we need protection in National Security networks. And you have in your book this idea of gatekeeping as a sort of core idea around Foreign Policy, around International Relations. And you talk about the sort of gatekeeping around this fundamental question whos inside the gate, whos outside the gate. I just want you to elaborate around that because i think its such an interesting organizing principle particularly around Foreign Policy. Yeah, sure. I dont know if this is for starters, i dont know if this is the right answer. One of the things i was trying to do in the book was be like, okay, what do the Networks Tell Us to some degree about how you solve these problems . I think there are a lot of interesting questions. One of the things we know about networks is weve seen in the last 10, 15 years theyre accelerate rants to inequality. It ends up in the hands of a small group of people. So thats an economic problem that has to be solved. Im not a thoughtful enough person on economics to have an idea. But i did try to think in the Foreign Policy perspective what it said. So weve struggled in the last, you know, decade or so really to articulate a grand strategy kind of, whats our picture of what the International System ought to look like in 15 or 20 years. I was curious do the Networks Tell Us anything about where thats likely to go. So one of the things you find on these systems is this is such incredible power in deciding whos in or out. So to take an example of these winner take all systems again and maybe even the best example is this one from cybersecurity. So in the future there would be a small number, maybe even just one, cybersecurity database that outperforms every other database because it sees every disease. Its like a super immune system, and the more it sees, the smarter it gets at spotting these things called zero days which are these flaws built into the code without anybody knowing theyre there, these advanced persistent threats which is how hackers get in the back door. And the better its going to get at defending against it. All of us in this room may say, look, id like to sign up so it protects me to some degree. Those systems get more and more powerful by factor, an exponential factor because its something known as metcalfs law. This way to the connect professors together in stanford in the 1970s, discovered that the more people who connected to it, the power of that system grew exponentially, not just by one additional person. So if you have ten people using phones or a hundred people using phones, its actually going up much more than a factor of ten. The more people who use it, the smarter it gets, the better it is at defending itself. It also turns out that the cost of being outside that system grows even faster. So if you suddenly have a computer thats not connected to this core and its Getting Better and better at defending itself, that computer has no ability to defend itself. So the decision of whos sort of inside or outside of these gated communities turns out to be an incredibly important decision. And to the extent that being a part of a network which, again, is a choice people can make is possible as a decision, the choice to sort of be outside becomes very important. And from a Foreign Policy perspective, you could begin to imagine a world of kind of gated communities in which people decide whos in and whos out, and that becomes a nexus of power. So, ultimately, small countries have to decide are they behind the u. S. Nato gate, behind the china gate, the you should shah gate, is that russia gate, is that how the world evolves . It may. We know its the search for security. And that question, i mean, the great question of our age to some degree for nations and for, i mean, even individuals which gets to the sort of hospital question is, you know, are you the gatekeeper or the gate kept . On what basis are you going to be gate kept . So, yeah, i think thats the process that people are going to have to go through. And understanding this is sort of a speculative view of the world, but does that become a kind of new cold war, and in that framework does the offensive defensive balance shift towards the sort of mutually assured trunks model . I mean destruction model . I mean, in the early days of this, you know, weve had stuxnet. We have ourselves launch cyber attacks, but we very much dont like them directed against us. Right. You know, do we move towards a kind of global accommodation that the idea of attacking these networks is so terrible that we need to have a sort of mutual tacit or explicit agreement that we dont do that . I mean, one of the interesting things, the other version of that question is does it change the incentive structure so much that people dont want to attack it because they themselves depend on it . And i dont know the answer to that. I mean, i think thats what well puzzle our way through. If theres one big, Large Network and youre not isnt the safest person the little person not in the network in its like remember they used to say years ago that there were far fewer viruses made for apple because apple pcs because they were, there were so few of them . So paradoxingically by choosing the paradoxically by choosing the less popular computer, you immunized yourself against a large portion of attack. Dont i really want to be switzerland in a world where there are these large gated communities . You may want to develop a completely separate proprietary network, but youre going to be competing against these giant systems which have the ability to study you at all sorts of levelings. The great puzzle is the industrial model where you can either opt out, but this problem that the guy with the 50 battleships is going to end up with 5,000 before youve finished your first. You can opt out. Its a choice, and i think therell be interesting structural ways to do that. But by doing that, the cost you pay is you dont get all these maybe you dont, i mean, im just sort of speculating here, but the the whole question is how choice is target . The reason you dont attack switzerland is the upside is small, the downside is large, you know . Youve got a bunch of cantons in zurich, and you maybe lose x number of men. So, i mean, in a from a futurist network model, i think i would feel a lot safer off by myself. Well, you know, also it happens to touch on one of the deepest ideas of daoist philosophy. Theres this story about trees and theyve all been turned into boats and floors and beds, and this one crooked tree is just kind of there surviving. So its not a bad strategy to deal with the lumberjacks [laughter] but i think all of this, when you read the book, it is really frightening in places, and some of these issues are so terrifying that all of us at least i share a little bit the instinct of time to stock your cab bib in the woods. But cabin in the woods. Thats not a very fruitful i think there is, there is a lot and by the way, i mean, the historical analogy if you do believe this, that triggered the biggest wars in Human History, the Industrial Revolution. People dont give up power easily, and thats kind of the met thathistorical narrative here. Having said that, i was out the valley last week, and i was talking to somebody who has built one of these big platform things. He said the thing people on the east coast dont understand is that these are possum positive sum gains. The more connection there is in the system, the more people who use facebook, the better it is in a sense. The more access you get, the more information you have. So if you believe that philosophy fundamentally and you kind of instinctively an optimist, you hope theres some good attitude to get there. But the questions it presents are just gigantic. How do you what kind of political system emerges for this order . Yeah. I mean, i sort of hate to bang this drum, but on opting out of networks, but it strikes me that the logic of Technological Advancement can lead as much to the rejection of networks as the strengthening of networks. And let me give you an example. So with these same back to my lunch with these i. T. Guys. Two things that scare them are their satellite radio. Cars, great vulnerability. And, two, the grid. The electrical grid terrifies them. What do they want . They want an end to the grid. They think the network is actually incredibly dangerous. What they really want is a thousand or even 100,000 little Mini Networks so i can crash columbus, ohio, but i dont crash new york city at the same time. Thats what they want. So having seen and lived through a network experience, what they really want to do is to use the next iteration of technology to liberate us from so this is a case where the network that was imposed without properly pricing security, the security concern is so great theyd rather just give up on and why is that enabled . Thats enabled by the very same technology that is enabling the strength of other networks. So it strikes, this is why when i read your book i felt both terrified and also optimistic in the sense that it doesnt seem to me that we are logically spiraling towards ever more complex and fraught networks. It could also go in exactly the opposite direction. Yeah. How to we choose to design the networks, right . The question that i find so interesting, we know that what happened with the Industrial Revolution and the enlightenment really starting with the reformation when luther said everybody gets their own access to god, you dont have to go through everybody, the process that came after it was people said, jeez, if i have access to god, it was all about the liberation of the individual. So all these political systems that were based, there was a point at which like having one guy with 10,000 serfs seemed completely reasonable, and then the next day it wasnt. So we saw this massive period of revolutions in europe as these systems crashed down. What, does a democratic, you know, capitalism in a way was kind of a model for that. How, does a democratic system survive in a world where things are happening super fast, where theres a small group of people with ability to manipulate large groups of people maybe without their knowing it . How much is this a threat to the underlying ideas of a democratic system . I mean, its a super interesting question. There is a kind of parallel in american democracy to what youre talking about in that the system is evolving at a really undesigned way. We have a system that was designed. It was a constitutional system. And it was the republican system which was intended to have democracy but with constraints and checks and balances. And thats changed pretty rapidly. It changed slowly over a long time, and i think there was, you know, a broad social consensus that making the system more democratic was a good thing. We may be seeing now with the current political phenomenon thats transfixing everybody a way in which an excessively democratic system, a system thats too immediately reflective of mass will can, you know, turn into a kind of majority tyranny which is the anticipated problem. But its the evolution of the system. And i think where theres a parallel to what youre talking about is theres a lot of building first and thinking later. Right . So with these systems, i mean, the idea that security is the afterthought rather or than the result of a sort of premeditated design is whats scary about it. Does this, does everything were going through in the election now look different, too, historically than other periods where people have kind of decried the end of American Democratic systems . Not the, i mean, not because its nasty, you know . Its been, its been very nasty in the past. I mean, i think it does feel different to me because i think there is, you know, whats been exposed is, i mean, were kind of getting off your topic a little bit on to mine, but i think, you know, were seeing a, you know, kind of nationalism and a kind of undemocratic thinking that hasnt been part of our political discourse. I mean, you know, you could talk about it just in relation to violence, right . I dont think weve had a major Party President ial candidate before who applauded violence and thought violence was a reasonable tactic within the system. Its an interesting historical time if you ask yourself the question why is it that cups like spain and italy and germany ended up with this hypernationalist culture and ended up with fascism. Those were societies hit by the Industrial Revolution, and Great Britain and france had been through these e revolutions. They absorbed that shock and could kind of move forward. As this shock of the information revolution hits any societies, what are the ones that have been built to kind of ride that wave out . You know, politically i think one of the things is can you take a seventh sense view of a country and say, okay, this one has the networks that are likely to be able to survive that kind of shock, and this one doesnt. Theres tremendous risk there. I mean, in democratic theory, you know, the possibility of a immediate direct democracy, you know, which is in some ways an expression of a jeffersonian idea of democracy was never possible. You couldnt do that in the 18th century. You had to have Representative Democracy because there was no way. We now have the possibility of immediate direct democracy. We decided, the best democratic system was one in which there was a National Prep side remember plebocide. We could make our decisions that way. I think that would be a very bad idea, but we are, were developing a lot of habits that emulate that. People until a way what people do on social media all day long is express their views, they vote on different things. And so theres this way in which its sort of happening. And i think that is bleeding into politics. You know, im very curious about that. One of the things we havent talked about is a. I. , to we imagine in future president ial elections that the candidate says, by the way, youre not just voting for me, youre voting for my a. I. Over here. Who do you really want to answer the phone at three a. M. . [laughter] how many elections after that are a. I. S themselves actually running for president . Im a much better i won five straight go championships, you should go with me. [laughter] well, of course, the new job isnt president , its gatekeeper. Yeah. Well, should we take some questions . Lets open it up for questions. I dont know if we have microphones out there, but if we dont, just please speak yeah, theres a microphone back there. So walk up to the microphone if youd like to ask a question. Yeah. And just ask one question and make it as to the point as possible so we can get quite a few in. Hi. Michael [inaudible] i attend nyu here and i also work at a companies in new york calls parsley. My question is generally these networks that were talking about are all software company, technology companies, both old and new. And generally, a lot of these companies have received Venture Capital investment. And at what point short term versus long term do you think that this affects the risk and probability of the security . If a Company Receives an investment and the negotiation is for more, a shortterm return versus long term, how does that affect kind of the security . Not necessarily a specific answer, but just your overall thoughts on that. Well, i think we know the answer which is, you know, we discover that the investment in security is just so de minimis compared to the overall architecture. And also the nature of these systems, by the way. You know, if you watch as i did in the course of reporting out this book, these hacking competitions, and you see these people who, you know, a 22yearold kid can gut through a Google Chrome browser that was built by a bunch of ph. D. S, its clear they were not spending most of their time focusing on security. They were focusing on graphics and tracking people as they move more efficiently. So its optimized much more towards features other than security, and i think we know the Economic Impact of that is investors want returns. Yeah. On this question, i had a conversation with a brown Venture Capitalist who said in passing that it was possible to build an alternate secure internet, and it could be done for maybe 50 million or 100 million. And he had a guy who [laughter] he thought could do it. And i was, like, are you going to do it . That sounds to me like an interesting idea. He says, well, no, the guy had this idea for something involving shoes, so hes going to put it on the shelf for the moment which just sort of perfectly encapsulated everything that was wrong with silicon valley. [laughter] but that is simply too complex. But as we know and though World Champion player for out of five matches at the last few weeks so the speed of the development is extraordinary with a lot of people during development they just want to move as fast as they can i havent been in the book theres two camps of people there there is a group of the great question is that you build on when is the coming . There are two theories what is called the boxers that believe you can put Artificial Intelligence and a box there is another group called the realist for the paranoia that the matter how big of a box you build it will get out. So imagine a being 1 million times in more intelligent in your home you probably find a way to get out so that famous line of those who dont believe that theory is connecting Artificial Intelligence is anything at all it is like we will be right back to get you. But the conference that they had is what you are seeing is that they do believe the next grade platform of the first to be 5 billion people now they want to miss that opportunity and it drives us with very little supervision so that tiny group of people. Guide is want to be the grumpy old man. [laughter] i always subject to the example of a. I. For beating a human net chess because that is an example that is precisely analogous to a car bta human running a race. Yes by 1910 it could outpace the as human beings so it is apples to oranges. Of course, that computer can beat. I had dinner in beijing rotating between japanese and career i had dinner the week after with the current chairman who is chinese and i said dully you need to add a fourth thing for the rotation . He said what is so exciting is that it changes the human against human. But racing gets more interesting. Isnt there a huge gap in social and ethical thinking around technology . And given what has happened Artificial Intelligence is that much more terrifying but it genetics that is deeply integrated into the process that is that huge afterthought. And this is one of my points that it is in just more technical but how do we educate ourselves with the humanistic values . Can we do it fast enough . Because those incentives are to build them faster and faster. And there are those working on the problems with a. I. In is would you expect to be very primitive so the nature of the age where everything has to be reassessed in the way we have political structures is very exciting work but we feel like nobody is doing it. Wondering about diplomacy and of course, they dont work after 2330 states d. C. That blow up in the networks . Eight gets back to the issue of how we choose to design the networks Different Network designs so one of those moments in the history of the internet was a great interior alaska solve the problem how was it that you can compete with the white house after a Nuclear Attack . So he came to new york city so that topology is there is a switching point in the entire American Military would have been blinded. Sabaeans think is the internet where messages could spread but heres a question of the ponzi scheme. And allowing for propagation the problem of the highly concentrated center if there is a virus that can escapes out of facebook that is called coated ejection, that is why it isnt quite right it isnt a ponzi scheme but it is said the Interest Rate that things are expressed. I am wondering has the seventh sense always existed . Or is it that we just fine all have a tool or platform and if one becomes dominant . That is my next book. [laughter] so if you read the book you will see that i start to with the tour of these each tent philosophy one of them introduced me to was headmaster it is the feeling for the interconnectedness and what has happened in our modern lives is freer all about the individual that is was liberated all of us and that didnt determine your future but that may is well trey to focus on ourselves but it is very backward looking in that set of values but thats simply isnt by mastering the networks but the deeper instinct. I am a former journalist turned analyst saw at the World Economic forum, they discussed the fourth Industrial Revolution. Now there is a push to get every bed be ready and how to code. That is the impetus to get you to work for a company that leverage the few social of the works. I dont know how to word this. So how o day you think that could be a good push to technology not putting the power to leverage the social networks or companies . I dont know the answer. But the way that it is so confident they will take care of themselves but i dont know that for sure and that bad economic structure that that continues to be the model but then what is the role of labor . But that does strike me as as too narrow of a concept it is actually something completely new and that is the location of where the change is happening. I am thinking more about connection and we talked about the system and the network. As you mention billions of networks for facebook and twitter, a lot of those are about friends and be nice, you are not trying to be a negative person. I am just work wondering about connection. If the billions of people are about how they find compassion and gratitude with the security in the issues that we talk with those macro ideas. Day you literally wrote the book on this originally. [laughter] thinking how humans sister to a view of information had been seen any changes . First of all, that was the artfully handed off. [laughter] that is the milliondollar question and i am simply energizing of these existing patterns of social interaction or do they create new ones . Alike run things the most believe it bader didnt matter but i do think that i am more interested in the response to the trend and the trend itself. The more and more we realize on Electronic Networks to manage social interactions the more privileged the old school facetoface encounter becomes the used to be at talk to everyone on the phone now talk to almost no one. It is like moving in touching by virtue of the novelty. [laughter] so maybe in this way we go back to final on many different levels. Presenters are in the valley last week talking about the great insight he had that it is about talking about the Virtual World when people start the internet revolution i will make a giant business but it turns out with all those friends and 10 days but to have a hunker to get back old school after a shameless plug that to be very into crafting in their brings together people but they have what they do it isnt a preexisting network 50 years ago there would have been as selling or knitting circle and now they are gone so her chip pushes the virtual into the real. And none of us have friends anymore we just sit at home alone. [laughter] that is why when you call i weep. [laughter] maybe one or two last questions. To me it in the financial industry is seems now works overtime have developed the ability to create a protective layer that represents the will of the many the see the benefit of the network against the negative effects and we could see that in the way that we drive today water to people running a red light but everybody else obediently stops as required for a limited followed minutes but we dont try to call each other so the Financial Markets seems to go from the highs and lows but yet they want the same thing to raise capital benefits so do you cnn to this . Is there a limit to our ability to keep growing your own networks of 7 Million People but yet still develop the free marks . Yes amis are imbedded in the system themselves there is a lot of fascinating work being done which is very relevant and i talk about this in the book what makes the system resilient through challenges . The problem is that the speed is so fast that your optimizing fourspeed actually it is for accelerants for all the dangerous behavior so that ability turns out to be crucial in do we have the social structures that bring out the best do you have that shared sense of community and value . So will the networks evolve in certain ways . And make this point in the book Network Science is so primitive to me but in the financial world it is the interaction of the commodities networks and people doing shortterm trading and those that have an impact on something so one of the issues that talk about in the book is the idea decanted not have a Technological Network you need the social network but if you just build a technological one you cannot protect yourself it will be worn off simply by the speed of the exchange. Hello. I am superfast a native of the concept of the Networks Like the electric grid is one of the biggest concerns it really struck me that nobody is talking about Climate Change and that is the biggest threat against the gate keeping societys with the concept like how to read breakdown those walls with one of the biggest threats of all that is threading humankind as though whole how we use that trend to come together as one network to face that overall threat of Climate Change. There are three questions i started the book with it was all of this issue why are there problems that we can see but yet we can do nothing about them . We can measure Climate Change more effectively than ever in Human History to remember watching the bp oil spill there is the Television Channel you to watch like pollution tv all day long there w