Networks and The State

The Canadian state has had an interesting relationship with networks since the beginning. Networks connect things and enable outcomes. Those who direct and influence the State have preferences for what those outcomes should be. To understand how the state is grappling with the consequences of social networks, it might be useful to look at how it has grappled with physical networks. We’ll begin with some basic theory about the Canadian State.

Canada is made of citizens. Some of those citizens become leaders. Those leaders try to create some explainable representation of society’s optimal social welfare function, and package it into something people can recognize, understand and vote for. They do that because they need the consent of the citizens in order to have the power to direct the state towards outcomes. At a somewhat regular interval, citizens are offered one coupon for one bullet. They mark their coupon with an X alongside the name of the person they’re sending to represent them on a board, council, legislature, or Parliament. A neutral group counts all the coupons as honestly and fairly as they can. We just assume that the side with the most bullets would have won a war. Since we know the result of such an armed conflict with a lot more certainty because of a vote, we can just dispense with the unnecessary damage to life, limb, and property. It’s just much more peaceful to do it this way. No death. No destruction. Peaceful transfers of power. It’s an excellent set of cultural norms that enable a continuous cycle of improving quality of life.

Cleavages emerge, coalitions form, decisions accumulate, outcomes come, coalitions crumble, and new cleavages emerge. Along some axis it seems like we’re going around in circles. Along another axis, progress generally accumulates as the collective intelligence of the citizens improves. We make fewer mistakes each time around.

It’s in this way that the people who directed transportation policy in the first half of the 20th Century were representing the coalitions that won power. And it’s how you end up with seemingly strange contradictions.

For instance, consider Toronto’s public mass transit monopoly: The TTC. In an excellent book, Toronto Sprawls (2007), Lawrence Solomon tells the story of how Toronto’s leaders, to avoid the emergence of Bolshevism, felt compelled to nationalize the traction system.

In other words, in order to prevent the mass nationalization of all of the things, they felt the need to nationalize some of the things.

The general heuristic was very Canadian. Cities were evil because they were dense. Density caused people to get ideas about their individual freedom and collective responsibilities to each other that were different from the ideas you get living in less density. When people were concentrated, they networked, and they organized. They organized apartment buildings where single women could live alone, unaccompanied by a husband. They organized debate clubs. They organized trade unions. And this was all very disruptive to the way that a coalition wanted life to be.

The traction system, made of electric powered streetcars, had been enabled by cheap hydroelectricity and brilliant entrepreneurs. They were private, for-profit, entities. To be profitable, they required population density along their lines. That meant that housing needed to be dense enough to attract the capital required for a line extension. Which meant, in turn, that density at the end of these lines was always dense enough to support a private line extension. It’s kind of neat to think about the density of Toronto getting dictated by the profit function of a private streetcar enterprise, isn’t it?

And here you see the problem for a certain coalition.

If you desired a lower population density in the city, you needed to subsidize that lower density. If you desired a very low population density, you needed steep subsidies. In order to minimize the burden on the state, you’d need to have some way of transferring the cost from one set of people to another. And, the most effective way was through flat rate pricing on a monopoly network. That way, a person living in density and sin would subsidize the site rent of a person living holy and remote.

It follows then that policy makers, on behalf of their coalition, in order to prevent Bolshevism, needed lower population densities. They needed to reprice site rent through subsidization and redistribution. Later, the state would make use of forced land redistribution, veterans benefit policy, mortgage financing, and zoning regulations to prevent the accumulation of density. These policies, in Toronto, remained in place all the way up through the 1980’s. Some of that inertia remains stubbornly locked in by a form what some call NIMBYism, but others might call conservatism. It’s kind of funny to think about Hippies who once stuck it to the man…growing up to become the man. It’s only a contradiction if you accept that time exists.

The Canadian State has long had a curious relationship with its railroads. Railroad networks both acknowledge latent opportunity and reinforce it. A transportation link will reach out and lick a remote area because of the prospect of some potential out there. Fur. Fish. Timber. Gold. Iron. Coal. Tungsten. Oil. Diamonds. Trade. Real Estate. Once the node is connected to the network, greater opportunities are opened up. And of course, a Canadian, I’m going to think this way. It’s encoded into the way we’re taught to think about the vastness of our country and it’s a physical inevitability.

And yet, inequity caused by freight rates charged to farmers would cause a surge of Bolshevist-Curious behaviour in the 1920’s through to the 1960’s. Transportation, supply management and resource management policy cause cleavages to emerge and re-emerge in rural Canada. These cleavages are deep, periodic, and predictable. The State has had to repeatedly intervene to regulate railroads in order to regulate the cleavages. 

Social networks are a lot like physical networks.

Social networks both acknowledge latent opportunity and reinforce it. A communication link will reach out and lick a remote area of the social graph because of the prospect of some potential out there. Fame. Ideas. Rage. Actualization. Once the node is connected to the network, greater opportunities are opened up and life can get better. And of course, as a technologist, I’m going to think this way. It’s encoded into the way we’re taught to think about the vastness of billions of humans on the planet.

Networks connect people together more densely. And densely connected people tend to organize. They organize box socials. They organize protests. They organize violence. And some of that behaviour is deeply inconvenient to a coalition of citizens. (Is there anything worse than a box social?)

It may follow that, for some coalitions of citizens, they have come to associate the increase in social networking with the rise of Fascism, Communism, Neo-Marxism or Millenarianism. So it might follow that, in order to reduce polarization, regulate cleavages and to enforce existing laws, the state might need to effectively regulate social networks in order to reduce the likelihood that some outcomes could harm the state and its citizens.

Just as the way the TTC was nationalized was objectively unfair to a large group of people, any move to regulate social networking will be unfair to a large group of people. Policies designed to strengthen the status quo do much to perpetuate that status of winners and losers. This is especially problematic when the status quo is intolerable to some. In this way, the Bolshevist living in downtown Toronto apartment in 1906 has a lot in common with the Fascist living in a Southern Ontario McMansion in 2021.

If those who control the state don’t want Bolshevism, Fascism, or Millenarianism, the state will not use the tools at its disposal to advance those agendas. It just won’t. The citizens want what they want. The leaders do their best to create a coalition that is just large enough to secure a temporary monopoly on power. It is what it is.

So what might the state do?

What it does best. Come up with some strange contradictions.

The Canadian state already has laws managing the density of ideas in networks. In particular, hatred is regulated by laws. Many of those laws extend to categories of speech that are restricted owing to the Canadian experience in other countries (Germany and Rwanda loom large in the psyche). Canada has courts. Courts can be eventually be funded to handle loads. There are legal mechanisms to manage the density of power law around some people. The state might try to apply existing laws to the digital domain. They are trying to come up with new ones. The state is experimenting with another set of laws to regulate density.

Just as it was not in the commercial interests of streetcar companies to reduce density, it may not be in the commercial interests of social networking companies either. After all, rage machines are profit centres. If private enterprise can’t figure out how to derive better metrics for wellbeing and managing two bottom lines, it may be necessary for the state to intervene in that way too – by mandating specific metrics and imposing independent reporting regimes.

The fear is that the Canadian state will be so ham fisted that it might as well be a trotter. And that is a legitimate concern. If you’ve ever watched politicians talk about a technical field you have deep expertise in, then you probably understand the nature of the horror and frustration that I’m stirring in you right now. For me it’s a bit of a burning sensation. It’s hard to watch, isn’t it?

At the time of writing, the Canadian state is trying to signal a bit of its intent. It appears to believe that by managing the size of the nodes in a network, it can manage the entire network. This belief is rooted in eighty years of telecommunications policy – it isn’t a novel discovery. And, naturally, this comes with capture. The state’s most traditional lever is the subsidy. It’s often easier, and more popular, to throw money at a problem than it is to address the core root of it (Faster than you can say: SR&ED). The idea here would be to elevate and amplify moderate voices over the most extreme voices.

This is a bit of a solution looking for a problem. The adage that you’re entitled to your speech but not entitled to a mass audience is one I’ve heard repeated since the late 2000’s. However, many feel as though they are entitled to an audience, as many Instafamous Influencers would tell you. There tends to be an insistence among many to promote their voices over those of others regardless of merit.

Of course this comes with a contradiction. The supply of opinion is huge and the incentive to differentiate through radical positions is massive. Network effects are as inevitable as they are powerful. The state may end up subsidizing increasingly radical voices.

Of course – the are points in between and a wider policy matrix that could be deployed to achieve the outcomes that would be great for nearly all the citizens.

A combination of subsidy, exhortation, mental health programs, and enforcement of existing laws would go a long way to reduce harm, mitigate threats, and increase liberty. The ultimate reasons for Millenarianism, Fascism, Communism may not really be resolvable in any way that the ultimate reason for the speed of light, site rent, and natural monopoly can be.

For now, we’re going to do the best we can do given what we know.

And we’ll do better next time.