On the promise of network unions

A review of @balajis idea on how to get us from bowling alone to building together.

Is it possible to create some big and efficient organization like Amazon, but outside of work context? Not many startup founders managed to grow their companies as Jeff Bezos did. Amazon has around 1.3 million employees and $1.6T market cap.   

Balaji Srinivasan at 1729.com has written an article, The Network Union, that aims to answer this question. By contrasting, for example, Facebook the company, with Facebook the social network.

He says that one basically needs only a pulse to join the biggest social network with over 2.6 billion users. But to join Facebook as a company one needs to undergo a series of challenging interviews and provide a proof of skills.

Facebook is an entropic social network designed to maximize time spent on website and a social graph that has no hierarchy or direction.  But Facebook the company has a direction, set mainly by its founder Mark Zuckerberg, but also other stakeholders that he reports to, or gets advice from.

Mark Zuckerberg differs from an elected president or prime minister, because he was selected not just for legitimacy but also for competence. The reason is, he gradually built his backlinks (references, customers, fans…) over a long period of time – from the first user to over 2.6 billion users worldwide.

In contrast elected officials are selected on the basis of legitimacy only. For example, they are part of an old East Coast elite, they have certain class, elite education, etiquette and manners, and they know how to hold a party line and utter the right politically correct phrases.

But they are not founders, as they haven’t built an institution from scratch. They are inheritors of institutions, that were once built from scratch, but over generations experienced an institutional decay. (Due to entropy, atrophied skills, S-curves and a monoculture of peak predators that get comfortable with their stable niche).

Microsoft was once peak predator in its niche, but then lost its clout to new entrants like Google. It took a new leader, Satya Nadella, to realize the importance of open source and turn around the company with a new vision and approach.

Balaji Srinivasan mentions similar examples of turnarounds for countries – from Meiji Restoration in Japan, to more recent examples of Singapore under Lee Kuan Yew, China after Deng Xiaoping, or the rise of Dubai. And also, Estonia after the fall of Iron Curtain, positioning itself very early on in the 1990s as a software country “E-stonia”.  

 Balaji Srinivasan sees his concept of network unions as a precursor to network states of the future. He predicts network states can arise gradually - through a combination of communities first built in the cloud with their own identity, and digitally native tools such as crypto currency, VR and social networks, that then “rain down on earth” and take a physical form of various hacker houses spread across the globe, gated communities, or even new startup cities and states.

Some time ago, I wrote about a related concept of charter communities, that can represent a stage between charter schools and charter cities.  Before getting deeper into Balaji Srinivasan’s ideas, I was also inspired by a similar concept of Civium by Jordan Hall, that is based on the idea of superlinear scaling from Geoffrey West’s book Scale. This is a curious phenomenon in complex systems such as cities – when they double their population, various their metrics such as wealth more than double.

I think these ideas fit with Balaji Srinivasan’s concept of network unions that have hierarchy and direction (and I would add duration) and are able to speed up the collective learning, OODA loops and collective intelligence, of their members.

In some ways they resemble the structure of religions and might require tithing or some membership dues. In other ways they can have some unique emergent characteristics due to the use of crypto solutions – that might help to significantly speed up bootstrapping the desired future – and instead of tithing might even provide something like a universal scholarship with both social and performance components. From a different perspective, one could also call these structures something like learning unions.

Internet enabled peer-to-peer communication, disintermediated from elite approval of the printing press age. It thus let thousand metaconcerts bloom – short bursts of online collective energy and cooperation across the globe, as we have seen in the GameStop saga this year. But without a longer duration or deeper change of the legacy systems.

We have also seen new and more durable memetic tribes rise and connect online, like the rationalist diaspora that spun-off Effective Altruism movement. But often they rely too much on legacy institutions and theorizing.

I think network unions are a useful, novel and versatile concept that can help online memetic tribes scale and even create offline and geographic presence through collective action and collective bargaining.

The key is that network unions focus on building not just a social graph (as social networks do) but a social tree, with a hierarchical structure and a direction that can allow for longer duration, a healthy community of fast learners and superlinear scaling of their wealth and skills.