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 / Winter 2007 / Issue 49(originally published by Booz & Company)


Best Business Books: Behavioral Theory

On the basis of that observation, he calls for a new type of study — “social physics” — that looks at the origins of collective social patterns in the same way that the study of physics looks at the dynamics of materials and forces. “We can make great progress in building a science of the human world if we learn to look for patterns in the human world as we do in the rest of nature. And if we try to explain them as the natural collective outcomes of ordinary behavior of human beings,” he writes.

Although Buchanan writes about economies, demographics, and social patterns, and not about the Internet, there is certainly no richer environment to test his thesis than the World Wide Web. Analytics as practiced today on the Web represents a sophisticated form of pattern recognition that reinforces Buchanan’s observation that “our collective behavior follows mathematical patterns of surprising precision.”

Because The Social Atom lays out a provocative new explanatory framework for the relationship between individual actions and social phenomena, based on systematic observations of how people behave, I endorse this book, even though I still mistrust the metaphor of social science as physics. “Social science” is a meta-narrative itself — a label that uses semantics rather than logic to situate the messy and often unpredictable phenomena of human behavior in the rigorously measurable realm of physics. I’m still not sure that the “social physics” that Buchanan proposes, based as it is on studying how simple actions of individuals can lead predictably to complex social outcomes, is ever going to be as precise as the name “social physics” implies. One example is Buchanan’s reference to the work of economist and Nobel Laureate Thomas Schelling that uses simple models of individual decision making to explain “white flight” and other instances of ethnic self-segregation. As Buchanan notes, this is not an example of deliberate racism, but of the phenomenon that results when individuals don’t want to be in the minority, thus influencing their neighbors’ decisions and inadvertently setting off a cascade of similar actions. Although this is a key insight, it does not prove that more knowledge about emergent patterns of behavior will enable more precise prediction of individual actions. Nevertheless, the evidence Buchanan cites — “why the rich get richer, cheaters get caught, and your neighbor usually looks like you,” in the words of the subtitle — has caused me to question my previous assumptions about which human behaviors are intrinsically unpredictable and which simply indicate that our social study instruments have failed to detect patterns.

The rich may get richer for mathematical, rather than just social or political, reasons — although, of course, those with more wealth have the means to attain greater social status or political power. The mathematical part is the “power law” of probability distribution (better known now as the 80/20 rule) first elucidated by economist Vilfredo Pareto a century ago. Twenty percent of the world’s rivers convey 80 percent of the water. Twenty percent of the world’s population enjoys 80 percent of its economic wealth. This power law is observable on the Internet (the popularity of blogs, sales of books on Amazon) as it is in many other earthly phenomena.

Whether or not a science of social physics emerges from the scattered provocative findings about cooperation that Buchanan finds in economics and biology, game theory and computer science, anyone seeking to strategize about business these days would do well to understand how individual choices can add up to society-wide trends.

Bottom-Up Knowledge Creation
Have we humans stored and re­trieved information, classified the phenomena of the world, and even organized businesses and political structures as treelike hierarchies simply because we didn’t have search engines during the millennia when paper was the sole storage medium for knowledge? David Weinberger’s book Everything Is Miscellaneous: The Power of the New Digital Disorder has persuaded me that bottom-up knowledge creation through online links and tags is not simply the latest digital culture fad. It’s a fundamental reconsideration of the ways we order a world that is much messier, richer, and more complex — “more miscellaneous,” as Weinberger puts it — than the traditional branching hierarchies of classification systems would suggest.

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