Network science, the blogosphere, and inequality

A couple of weeks ago, Gene Callahan wrote about the book Linked: How Everything Is Connected to Everything Else and What It Means for Business, Science, and Everyday Life by Alberto-Laszlo Barab?si at Mises.org. Barab?si finds that nodes in intricate networks tend to be connected per a power law, rather than a Gaussian curve, with some nodes referred to as "hubs" being vastly more frequently linked than others. Some examples of such power law networks from Callahan's article:

As Barbasi's team and other researchers examined other existing networks, they found more examples where the network's integrity depended on important hubs, and where link distribution followed a power law. Among the examples Barbasi cites are the biochemical reactions that take place in living creatures, where certain key compounds act as hubs; modern market economies, where a number of hub-like businesses tie together many suppliers and consumers; and ecosystems, where certain organisms are far more connected in the food chain than the average creature.

The ecosystem most familiar to me is the blogosphere, largely due to the fact that I've been a member of the blognoscenti since late 2001 and a blogger for the past six months. Intuitively, the blogosphere appears to follow the same power law distribution described by Barbasi, with a few giant hub blogs getting orders of magnitude more traffic than the majority of nodes out there.

Clay Shirky's article from a few months ago Power Laws, Weblogs, and Inequality, which also referenced Barab?si's work, showed that the same power law relationships are present for Technorati inbound links, the Truth Laid Bear Ecosystem, and Livejournal friends links.

If by extension, the spontaneous organization of human societies and free markets give rise to a power law distribution of wealth (which I have no proof of), the question inevitably arises about what to "do" about this kind of inequality. Shouldn't there be some kind of mechanism by which to make a more 'fair' distribution of wealth?

Although there are various arguments one can make against such redistribution including the argument that it results in property rights violations of those being "redistributed", I think the most overlooked argument is a historical/pragmatic one - that this type of intervention inevitably makes the already existing inequality worse. Redistribution results in a class of dependents that remain trapped in their poverty while another class of bureaucrats arises, whose well-being relies on the very presence of the underclass they are supposed to serve. Incentives are skewed on both sides, and the inequality becomes even more lopsided.

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Shirky: "This is a

Shirky: "This is a counter-intuitive finding - most of us would expect a rising number of choices to flatten the curve, but in fact, increasing the size of the system increases the gap between the #1 spot and the median spot."

I've long intuited the opposite, that more choices lead to greater inequality.

"If by extension, the

"If by extension, the spontaneous organization of human societies and free markets give rise to a power law distribution of wealth (which I have no proof of), the question inevitably arises about what to "do" about this kind of inequality. Shouldn't there be some kind of mechanism by which to make a more 'fair' distribution of wealth?"

No, because it obviously is fair. When every transaction is voluntary it meas that every individual approves of every transaction he is party to. It doesn't get fairer than that. Why would you even suggest it's unfair?

No, because it obviously is

No, because it obviously is fair. When every transaction is voluntary it meas that every individual approves of every transaction he is party to. It doesn't get fairer than that. Why would you even suggest it's unfair?

I don't. I'm asking a rhethorical question that someone else who doesn't have the same values that I do might ask, in order to make the argument that even if one tries to solve this supposed 'unfairness' through intervention, it usually makes the 'unfairness' worse.

I think the "power law"

I think the "power law" probably operates in a much more intense and centralized way in the blogosphere than it would in a genuinely free market society. Transaction costs on the web are artificially low because its basic infrastructure was created by government intervention, and costs are not even remotely internalized.

In a terrestrial economy, without government intervention, business firms would have to pay the distribution and communications costs of competing with other firms a thousand miles away.

And the size of most successful firms would level off much earlier in a free market economy than they do in today's corporatist economy. First of all, the state's intervention to guarantee artificially high returns on capital and land would be withdrawn, so the power of the haves to keep expanding through the magic of compound interest would be seriously diminished. And the government wouldn't be shifting the inefficiency costs of large-scale organization onto taxpayers.

So while successes and failures in the market would no doubt lead to some concentration, the market overall would be much less concentrated and polarized in wealth than it is today.

BTW, Gene Callahan suggested

BTW, Gene Callahan suggested similar reasons for caution in his original article. He pointed out that the structure of existing networks (e.g., the interstate highway system) did not arise spontaneously from market demand, but reflected political decisions made in the interests of those with power. So it's misleading to extrapolate from the experience of an artificial environment like the state capitalist economy, or the internet, to a society in which the level of centralization is limited to what will pay for itself in the opinion of actual market actors, and all costs are internalized.

Johnathan, I don't see how

Johnathan, I don't see how you can ever hope to successfully advance this argument by conceding egalitarian premises. You're only saying to the egalitarians that redistribution won't get them what they want. The point that needs to be made is that what they want is wrong.

I think one of the things

I think one of the things missing in the whole discussion of network science and power law distibution is the ability of #1 and #N to swap places.

The various socialist "remedies" for the power law distribution do not change the distribution, they stifle the movement of the Nth place person into a different rank.

Johnathan, I don't see how

Johnathan, I don't see how you can ever hope to successfully advance this argument by conceding egalitarian premises. You're only saying to the egalitarians that redistribution won't get them what they want. The point that needs to be made is that what they want is wrong.

No matter how hard I try to convince some people that taxation is theft, etc, they simply won't believe it. To them, equality of outcomes *is* a core value. To me it is not. So I do the best I can and try to show that govt cannot create equality of outcomes due to its very nature.

Moral arguments work for some people. Consequential arguments work for others. I use either depending on the situation.

"No matter how hard I try to

"No matter how hard I try to convince some people that taxation is theft, etc, they simply won't believe it. To them, equality of outcomes *is* a core value. "

As long as it remains so you are effectively only encouraging them to move on to the next scheme to rob from the rich and give to the poor.