5. The Social Environment Model

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People are social environment blind


The social environment model works for any society, modern or traditional, socio-technical or socio-physical, and for any social level or community size. This chapter links the arcane role of society to modern technology. It describes:

  1. The social dilemma inherent to all social systems,

  2. Traditional social responses to it,

  3. A social system as an environment within an environment,

  4. Enron and the credit meltdown as higher social errors,

  5. STS as a new social design based on an old inspiration.

Individuals competing in a world environment Courtesy of Brian Whitworth and Adnan Ahmad. Copyright: CC-Att-SA-3 (Creative Commons Attribution-ShareAlike 3.0). Figure 5.1: Individuals competing in a world environment

In the following discussion, bear in mind that social systems online and offline follow the same principles. A social system is always people interacting with people, regardless of the base architecture. Social implementations tried in the physical world, like communism or capitalism, can be tried online, and those tried online can be applied offline, as the Arab spring illustrates.

5.1 Homo Economicus

In a limited resource environment, if two beetles independently compete for the same food and one gets it, then the other loses out. As the beetle with the food is more likely to survive, in natural selection individuals competefor advantage. The farmer growing the food also competes with the beetles and both compete with bacteria that would also consume it. Limited resource environments reward individual competencies like strength or speed that increase success and survival. In Figure 5.1, competition for limited resources develops individuals to be competent to succeed in the world.

The homo-economicus model of society is that individuals seek to benefit themselves by less effort, more gain or both (Persky, 1995). Individuals competing for advantage favours the evolution of competencies by competition. Mill's economic man seeks wealth, leisure, luxury and procreation above all else, and Adam Smith postulates that such individuals in a free market also help society, as by the market everyone produces more (Smith, 1776/1986).

This model assumes people are rational actors who can calculate their own best interests, though they may actually use heuristics—psychologically efficient versions of rational logic (Tversky & Kahneman, 1982). Competition drives self-interested individuals to competence gains in the evolutionary process of natural selection.

That free individuals act in self-interest is a defeasible rule that can be described as follows:

Rule 1: If freely acting individuals {I1, I2 …} face action choices {a1, a2 …} with expected individual utility outcomes {IU(a1), IU(a2), …} then:

If IU(ai) > IU(aj) then prefer ai over aj

In words: Free individuals prefer acts expected to give more value to themselves.

The concept "value" here is deliberately left vague, so it may include physical gains like food, social information tokens like money, psychological gains like appreciation, or social gains like reputation.

5.2 Homo Sociologicus

While Rule 1 is evident in nature, social cooperation is equally common; e.g. in the animal kingdom, social insects like ants form massively cooperative societies and are so successful they account for at least a third of all insect biomass. The genetics that drives their behaviour evolved because individuals working together can create more value than working alone (Ridley, 1996). For ants, the unit that competes and survives is not the individual but the colony; e.g. soldier ants die protecting the colony, as without it they cannot survive anyway. In this model, individuals combine into a community that performs, in evolutionary terms, based on the sum of the actions of its members (Figure 5.2).

So biologists now argue for multi-level selection—evolutionary selection for groups as well as individuals (Wilson & Sober, 1994). Social cooperation changes the evolutionary reward rule—individuals still act but the acts selected are those that create value for the community, not those that create value for the individual. That socialized individuals can generate community value suggests a defeasible social alternative to game theory's Rule 1:

Rule 2: If a social unit S of { I1, I2 …} individuals faces social action choices {a1, a2 …} with expected social utilities SU(a1), SU(a2), …} then:

If SU(ai) > SU(aj) then prefer ai over aj

In words: Socialized individuals prefer social acts expected to give more value to the community.

If it is the colony that lives or dies, not just the ant, the unit of evolution changes. Value outcomes are calculated for the group as a whole. Natural selection now favours Rule 2, i.e. the evolution of behaviours to help the colony survive. For ants, natural selection favours acts giving community, not individual, gain.

This then is a basis for Rule 2 to operate in people, allowing for social evolution. Social acts are those that reference the social unit not the individual; e.g. defending society is a social act independent of any individual state. Social castes can be dedicated to social acts, like worker or soldier ants.

A community cooperating in a world environment Copyright status: Unknown (pending investigation). See section "Exceptions" in the copyright terms below.
Figure 5.2: A community cooperating in a world environment

Rule 2 applied to human society gives homo sociologicus, who prefers acts that benefit the community (Bone, 2005). This is Marx's communist man, who is politically motivated to common acts that benefit the community. A psychological basis for this motive is Social Identity Theory (Hogg, 1990), where groups form when members share a common identity, or idea of themselves. If anyone attacks one member of such a group, all group members feel attacked and respond accordingly. Most countries' defence forces work by this rule, as servicemen and women are expected to give their lives for society. In Figure 5.1 individuals reap the consequences of their individual performance but in Figure 5.2 the social unit bears the consequences of its performance.

These two pragmatic rules, one at the individual level and one at the community level, now interact to create social dilemmas.

5.3 The Prisoner's Dilemma

Game theory is the systematic study of the rational choices of individuals in interdependent social interactions. It usefully presents the essentials of social situations for analysis and underlies many key economic, political and group management theories. Yet its validity was challenged by the discovery of a scenario called the prisoner's dilemma.

In the prisoner's dilemma two prisoners (Bill and Bob) each face two-year jail terms on circumstantial evidence for a crime they did commit. Each is separately offered a plea bargain, to testify against the other. If the other does not testify, he walks free but his partner gets seven years in jail. If both testify, both get six years (one off for testifying). In outcome utility terms the options are:

  1. Bill and Bob stay silent, and each gets two years in jail.

  2. Bill confesses for immunity, and Bob gets seven years.

  3. Bob confesses for immunity, and Bill gets seven years.

  4. Bill and Bob both confess, and both get six years jail.

Table 5.1 shows the outcome payoff matrix as free years out of seven. If both keep quiet, or cooperate, both get five free years, but if both testify, or defect, they only get one free year each. The temptation isfor one to defect and get seven free years, while the other cooperating "sucker" gets none. As individuals following Rule 1, each prisoner concludes:

  • Whether he cooperates or defects doesn't depend on my choice.

  • If he defects, it pays me to defect, as then I get 1 not 0.

  • If he cooperates, it still pays me to defect, as I get 7 not 5.

Years free











Table 5.1: Prisoner's dilemma—Individual outcomes


Game theory, following Rule 1, concludes that it always pays individuals to defect, as the expected defect average gain is 4 but the cooperate average is only 2.5. If both parties follow game theory, defect/defect is the equilibrium state. People rationally maximizing profit creates the worst possible result for all.

However working as a social unit, i.e. following Rule 2, gives a different result. The available social acts forthe pairare mutual cooperation and mutual defection, with expected gains of 10 and 2 respectively (Table 5.2). If both parties follow Rule 2 mutual cooperation is the new equilibrium state. So when social cohesion is allowed, simulated agents in a prisoner's dilemma situation evolve a cooperative equilibrium (Dayton-Johnson, 2003).

In performance terms, Rule 1 gives only 2 free years of value but Rule 2 generates 10 free years, a considerable improvement. Game theory assumes that rational beings must calculate payoffs for the individual, but it is just as rational to calculate payoffs for the social unit as a whole (Table 5.2). After all, Rule 2 is just Rule 1 applied to the social unit instead of the individual unit. It is just as logical and just as pragmatic.

Conversely, it is illogical to label alternatives to individual self-interest irrational if they generate more value. Indeed, we ourselves are a society of cells, and cancer is the result when one of them acts for itself alone, regardless of the rest. Since what people define as "self" often includes the community around them (Persky, 1995), both rules are equally rational and pragmatically grounded.

Years free (Pair)

Social Outcome

Social Act





Table 5.2: Prisoner's dilemma—Social outcomes


5.4 The Tragedy of the Commons

The tragedy of the commons (Hardin, 1968) extends the two-person prisoner's dilemma to a case of many people in a group (footnote 1). In it, some farmers each with cows and a plot of land live by a common grass area. If a farmer's herd also grazes the commons it grows fat, but if over 50% of farmers do so, the commons is overgrazed and dies off. This parallels many forest and river conservation problems.

Working as individuals each farmer's logic is:

  • My actions are independent of those of the other farmers.

  • If ≤ 50% graze it pays me to graze, as I get more value.

  • If > 50% graze, it still pays me to graze, as I get more value initially.

As it always pays each farmer to graze the commons, by game theory they must destroy it. In a hypothetical case, 100 farmers each get a ton of beef per month grazing their own plots, and three more tons grazing the commons. This reduces by one ton each month of overgrazing, to become barren in three months. Table 5.3 shows farmer outcomes by choice for 10 months. By Rule 1, the average graze benefit is 28, while the average not-graze benefit is 10, so graze is preferred. Destroying the commons is the equilibrium point.



49% graze

Over 49% graze


Do not graze






Table 5.3: Tragedy of the commons individual outcomes


Working as a social unit gives a different conclusion. The social acts available to the village are by what percentage to graze the commons. Table 5.4 shows the expected outcome per farmer for overgrazing is 1,600 tons over 10 months, while the expected not overgrazing value is 2,500, making it the preferred choice. A village following Rule 2 will save the commons as a valuable community resource.

The fact is that social cooperation works: Axelrod invited programs for a simulated survival of the fittest social interaction tournament to see which survived. He found that none of the eight most successful programs initiated defection (Axelrod, 1984). Nasty programs succeeded at first but in time ran out of victims and met only other nasties. Cooperative programs found allies and prospered.


Social Outcome

Social Act

Not overgraze




Table 5.4: Tragedy of the commons social outcomes


5.5 Synergy

The ability of a group to perform at a social level depends on its ability to generate synergy. Social synergy is the difference between what individuals produce by acting together compared to what they produce apart. It can be positive or negative, where trade is a positive synergy and war a negative one. People tend to join communities with positive synergy and leave those with negative synergy, whether people leaving websites plagued by conflicts or refugees fleeing war torn nations.

Synergy is a property of the social interaction, not the social individuals. In the prisoner's dilemma, the interaction is the loyal friendship total (10) less the defect total (2), i.e. 8 years. In the tragedy of the commons, it is the village cooperative total (2,500) less the competitive total (1,600), i.e. 900 tons.

Science shows the benefits of synergy. To illustrate, suppose 100 solitary researchers each make different knowledge advances of equal value. Following a zero-sum model, as private companies do, they will keep their results secret, as why let competitors benefit from my work? In contrast, academics following a non-zero sum model will share their research (footnote 2). In the first case, the total knowledge increase is 100 units of human understanding, but in the second case it is 1000 units, as each researcher gets 99 new ideas from others as well as their own. This is a hundred-fold gain vs. keeping research secret. If the scientists of history had kept their research secret, benefits like electricity may not have occurred. Yet the decoding of the human genome sequence was nearly patented for commercial gain rather than made available to all. What is the justification for people patenting what Nature created?

Social synergy arises when people work to create others' outcomes. It is not just people adding their efforts, say to lift a heavy log together. In positive synergy, specialists create value for others; e.g. if a fisherman trades excess fish for a farmer's excess grain, both turn their excess into value. Each gives an extra they do not really need for a deficit they do. Conflict is the reverse, as each creates negative outcomes for the other.

Large communities produce more because more citizens do more work, so productivity based on individual competence increases linearly with group size. In contrast, synergy depends on citizen interactions, which increase geometrically with group size. So large communities produce more but synergize much more. Synergy is especially important for large societies. When millions synergize, as today, the output gains are enormous. Synergy is why ordinary people today have better food, healthcare and entertainment than the richest aristocrats of the middle ages, and today's rich have more money than they can spend in a lifetime.

Synergy is also especially applicable online, as one can give information to others without losing it oneself. So when the Internet allows millions to synergize information, the effect is especially powerful, as systems like Google illustrate. The prosperity of modern society is based on people specializing and synergizing.

5.6 Defection

Anti-social acts like stealing are individuals taking from a social interaction but not giving anything back. The drive to get something for nothing permeates the current system from crime to bargains and gambling. So every social synergy has a corresponding defection, e.g. in trade, sellers can defect by false advertising, shoddy products or bad warranties. If so, buyers buy less. Buyers can also defect; e.g. buy an expensive ball gown, wear it to a ball, then falsely request a refund, saying it did not fit. If many customers do that, sellers offer less, e.g. refuse refunds (also defect), even though refunds benefit both seller (more sales) and buyer (less risk).

Game theory, by formally calculating personal social interaction outcomes, points out the fly in the social ointment of synergy. If my acts give your gains and yours give mine, what if I take from you but give nothing back? On a personal level it always pays to defect, e.g. for a seller to give shoddy goods or for a buyer's cheque to bounce.

Yet if the cheated "sucker" does not repeat the interaction, both lose their synergy gains, so cheaters destroy their own success. If a crime-wave "succeeds", the social benefits it feeds on dry up. Crime is like a social parasite that kills its host. The idea that one can get something for nothing is the big lie of our generation. All crime is essentially socially unsustainable. The myth of pure profit is an impossible dream.

Game theory suggests that mutual synergy is like a ball balanced on the crest of a hill, that must sooner or later roll permanently down into the valley of mutual defection, yet we still generate synergy even after thousands of years of society. Crime can short-circuit the link between social acts and synergy, but it has not prevailed, even though defections can cascade into social collapse. If I defect I not only gain personally but also reduce the synergy gains of others, increasing the pressure on them to also defect. If another person also defects, this increases the pressure on the remainder to defect, etc. Hence a common reason given for cheating is that "everyone is doing it" (Callahan, 2004). A few defections can cause a chain reaction that destabilizes an entire social system.

5.7 Social Dilemmas

The prisoner's dilemma was thought to be an exceptional case until it was found to be the social rule. Social dilemmas like the volunteer dilemma (footnote 3) represent a generic problem inevitable in synergistic societies (Diekmann & Lindenberg, 2001).

In the social environment model, social dilemmas arise when Rule 1 contradicts Rule 2, i.e. when what benefits the individual does not benefit the group, or when what benefits the group does not benefit the individual. The dilemma is not that people selfishly follow Rule 1 or that they ethically follow Rule 2, but that they are caught between. Certainly game theory's Rule 1 is insufficient, as people in social dilemma games are much more cooperative than game theory predicts (Poundstone, 1992). The mystery is not why people synergize or why they are selfish, but how they can be both.

Game theory implies that society cannot succeed but it already has. Deducing that social cooperation is irrational (von Neumann & Morgenstern, 1944) is like deducing that bumblebees cannot fly by the laws of physics, when in fact they do. In science, we change the theory not the facts. Human instincts know what human logic does not: that synergy works.

Social dilemmas cannot be solved at the personal level, because an honest person among cheats is just a fool. Individuals alone cannot solve social dilemmas. One person trying to synergize in a social dilemma is just a sucker. In the tragedy of the commons, the farmer who on principle does not graze just misses out and the commons is destroyed anyway. The choices for individuals in social dilemmas are all bad, so how did we achieve synergy at all?

The solution to all social dilemmas is to evolve a higher social unit to change the gain-loss equation. This is not easy. It has taken thousands of years of often bitter struggle to stabilize massive synergies like global trade and international peace. The heroes of our social evolution were those who saw beyond themselves. The path to social synergy has on both sides the cliffs of defection. We alone among the mammals have crossed thezero-sum barrier into the lush valley of massive social synergy (Wright, 2001). We were lucky.

5.8 The Zero-sum Barrier

Game theory differentiates between zero-sum and non-zero-sum games. In zero-sum games, like poker, your loss is my gain, so if you lose I win at your expense. If everyone fights, the winner gets the biggest share. In these zero-sum games, taking another's slice of the reward pie just increases your share.

In contrast, in non-zero-sum games, which give social dilemmas, we all connect, so your loss is my loss. If we all fight, we all become poor, as dog-eat-dog societies evidence. In non-zero-sum games, taking another's slice shrinks the whole pie, e.g. Hitler conquered Europe but the process left it in ruins. Conversely, synergy works by increasing the shared pie for all, making every slice larger, as market trade benefits all (Figure 5.3). Non-zero-sumness is an unpleasant term, but the argument that it is the secret to modern prosperity is a strong one (Wright, 2001).

Courtesy of Brian Whitworth and Adnan Ahmad. Copyright: CC-Att-ND-3 (Creative Commons Attribution-NoDerivs 3.0 Unported).

Courtesy of Brian Whitworth and Adnan Ahmad. Copyright: CC-Att-ND-3 (Creative Commons Attribution-NoDerivs 3.0 Unported).

Figure 5.3 A-B: Zero-sum vs. Non-zero-sum interactions: A. a. Zero-sum: Expand my slice but shrink the pie, e.g. Hitler's conquest of Europe. A: Non-zero-sum: Expand the pie and everyone's slice, e.g. the evolution of civilization


Synergy is also the key to socio-technical system design, as these systems must enable synergies and deny defections to succeed. While traditional word processing software just has to increase user competence, socio-technical systems must also increase community synergies and defend against anti-social defections. If users just followed Rule 1, systems like Wikipedia would not work, as no one would give to others for no gain. Conversely, if people just followed Rule 2, these systems would not need defenses against anti-social defections.

In forums like AnandTech, if anyone in a group solves a problem then everyone gets the answer. In online security, if one person gets a virus the community responds. The larger the group, the more likely someone can solve in seconds a problem you might take days to solve. Same again functions let Amazon readers tap into the experiences of others, to find books bought by those who bought the book they are looking at now. Wikipedia users correct errors of fact, supply references and offer examples for everyone. Table 5.5 shows how socio-technologies increase synergy and reduce defections.






Email, Chat, ListServ, IM

Send useful messages

Spammers require spam filters


Moodle, Blackboard

Share learning:
Pupils help others learn

Students copy (turnitin.com)


Wikipedia, Tiddlywiki

Share knowledge.
Tap group knowledge

Wikipedia monitors "trolls"


Facebook, Myspace, Bebo

Relate to friends, family

Social networks banish predators

Keep current

Digg, Del.icio.us

Share bookmarks:
Show online trends

Mark their own web sites


Second Life, The Sims, MP games

Shared play.
People interact in a virtual world

Rob newbies who need "safe" areas


E-Bay, Craig's List, Amazon

Item trading.
People trade more goods

Reputation systems cut scams



Job trading:
People find and offer work better

Padded CVs and fake job offers


Webdonkey, Bit-Torrent

Shared downloading:
Groups share download work

Prosecution by society's copyright laws.


Flickr, YouTube

Share viewing:
Share photo and video experiences

Editors remove items that offend.


Help boards like AnandTech

Share advice:
People help others solve problems

People put old questions in new threads


Slashdot, Boing-Boing

Shared views.
People comment and share opinions

Karma systems deselect negativity



Links leaders and followers

Identity theft.
A persona is hijacked

Table 5.5: Synergies and defections in socio-technologies


5.9 The Social Environment Model

In general, we do not see environments, not because they are too far away but because they are too close. As a fish is the last to see water, or a bird the air, so we as social animals tend to be social environment blind. In the social environment model, a social system is an environment within an environment (Figure 5.4). This model combines the homo economicus and homo sociologicus views.

A social system is an environment to its members because it imposes requirements on them (laws and norms) and dispenses their gains and losses (salaries and taxes). It does the latter by social tokens likemoney, which are exchanged for world value like food.

A social system can then fail by incompetence with respect to its environment, as a wasteful company going bankrupt, or by internal conflict, if it fails to create synergy or prevent crime. People in a society thus operate under two environments, one that rewards them for competing and one that rewards them for cooperating. Social problems can arise if either environment is not satisfied.

Table 5.6 shows how people label various combinations of individual and community outcomes. The "selfish" Rule 1 directs individuals to choose the first row, while the "good" Rule 2 directs them to choose the first column. It works for biological as well as social behaviour, as the first row is symbiosis, commensalism and predation respectively. People however have a choice, between their instincts for personal gain (Rule 1) and their social training for synergy (Rule 2).

If people only followed Rule 1 crime would prevail and society would collapse. If they only followed Rule 2, we would be like ants, locked in under genetically bred kings or pharaohs. Our actual social path was a pragmatic combination of Rules 1 and 2.

The problem facing humanity was how to combine Rule 1 and Rule 2 in a way that is feasible, i.e. doable by people. A well known solution is the utilitarian ideal of "the greatest good for the greatest number," as popularized by Dr Spock's sacrifice in Star Trek II: The Wrath of Khan. It seems simple to prefer the greatest good but what is that for millions of people over time? Is an aircraft crash that loses hundreds of lives today but causes safety changes that saves thousands of future lives "good"? Should governments then crash planes or sink ferries to introduce needed safety measures? The problem with the utilitarian solution is that the greatest good of millions of people over hundreds of years is not calculable by anyone, let alone a majority of people. It is valid but not feasible.

Nor does a simple AND of Rules 1 and 2 work well. It is feasible but not optimal, as people acting only to benefit both themselves and society would often not act at all. Finally, any sort of weighted trade of social utility against individual utility raises complex questions, like how much social good is my individual loss worth, or how much individual good warrants a social loss? On this logic, old people would go to war, having less to lose, while young people would want to stay at home.

The social environment model Copyright status: Unknown (pending investigation). See section "Exceptions" in the copyright terms below.
Figure 5.4: The social environment model

What is needed is a rule combination that is simple enough for people to conceive. Such a solution is cognitive anchoring, fixing one rule and then applying the other (Tversky & Kahneman, 1974). This approach suggests the following combinations:

Rule 3a: If {SU(ai) ≥ SU(aj) and IU(ai) > IU(aj)} then prefer ai to aj

In words: Choose acts that do not harm society but benefit oneself

Rule 3b: If {IU(ai) ≥ IU(aj) and SU(ai) > SU(aj) } then prefer ai to aj

In words: Choose acts that do not harm oneself but benefit society

Following Rule 3a, individuals seek opportunities that do not hurt society, as it gives in its own laws, i.e. one competes by the rules.

Following Rule 3b, individuals help others in society if it does not involve too much personal loss.

These rules are much easier to apply than ideals of calculating the greatest good for the greatest number or percentage trade-offs of individual vs. community benefits.

Applying Rule 3 to Table 5.6 gives synergy, opportunity and service as the main directives of human society. Those following Rule 1 exclusively are self-interested criminals, whose acts collapse society. Those following Rule 2 exclusively are altruistic saints willing to sacrifice themselves for society at any time.

In contrast, most people follow neither crime nor altruism alone. If the community goes to war so do they, but they still try to survive personally. They try to get ahead without disobeying laws, but also help community others out if the cost is not too much. That people naturally help others is not part of game theory. Only the social environment model recognizes both Rule 1 and Rule 2.



Minor Effect







Minor Effect








Table 5.6: Synergies and defections in socio-technologies


5.10 Social Order

Before considering modern ways to cross the zero-sum barrier, including those enhanced by technology, it is worth considering the traditional ways. By rule 2, social dilemmas are solved when people form a higher social unit. If the commons farmers form a village, they can institute a cooperative grazing roster to preserve the common grazing. Game theory arbitrarily excludes the social agreements critical to solving social dilemmas (Aumann, 1998).

A society's social order is the degree to which its members follow common rules. In perfect social order everyone is of "one mind", like an ordered crystal whose constituent atoms all move as one. Social anarchy in contrast is like a gas, whose atoms all move randomly according to individual exigencies. Freedom lets members of a society choose whether to act as one or in opposition, and allows creative acts against the norm. Enforcing order avoids anarchy, but also reduces freedom and creativity.

If a community acts as one (social order), whether by religion, culture, law or coercion, social dilemmas give way to synergy; e.g. a village can set up a game reserve to stop poaching, individuals killing animals for personal gain. The village can conserve its resource to create, for example, a tourist income. It can do this by physical barriers like fences or by declaring the land sacred, so those who defy the gods become its enemies and can expect banishment.

Enforcing order, even psychologically, is a blunt instrument. It makes members effectively ants, i.e. denies freedom. Socializing citizens to follow Rule 2 engages social evolution to synergy but disengages the individual evolution of competence and creativity. The struggle between social and individual evolution is reflected in the historical swings between the rise of civilizations and their fall at the hands of more vigorous barbarians. Social performance, in this view, requires both individual competence and social synergy.

5.11 Social Hijack

Centralizing control structures to create social order, by means of a king, emperor or pharaoh, invites social hijack. Social hijack is when individuals take control of a community for their own ends, as a virus can hijack a biological organism to serve its purposes. Plato's ideal leader was a benevolent dictator, who enforced social order to create synergy but justly returned society's gains to its citizens, i.e. enforced social synergy but returned it to those who created it.

Yet dictators are also the worst of leaders if they use society's performance for their own personal luxury or power ends. This is not legitimate, so they must repress individuality by police state control and indoctrinate the masses into blind service by media propaganda. This makes dictatorships:

  1. Unstable. If those who create social wealth gain nothing from it, they have, as Marx notes, "nothing to lose but their chains". A privileged aristocracy living in luxury while the workers who create that wealth starve invites a grass-roots revolution.

  2. Impermanent. Royal bloodline dynasties ensure that when kings, emperors, pharaohs eventually die the power vacuum is filled by their offspring. Yet inevitably time produces incompetent or even insane offspring whose foolish acts lead to a civil war and the collapse of the dynasty.

  3. Unproductive. When a society blindly follows the whims of leader(s) isolated by wealth from world realities, it becomes incompetent and fails to generate produce from the world.

Societies with absolute rulers, like Burma and North Korea, tend to be poor. Their rulers replace natural productivity requirements by their personal social agendas; e.g. in Zimbabwe Mugabe addressed social inequity by driving white farmers off productive farms. Then he gave them to his cronies, who looted but did not plant, grow or harvest. Equity without productivity turned what was the bread-basket of Africa into the basket-case of Africa.

Social hijack is an evolutionary dead-end, changed only by the leader's death, social collapse or both. The physical starvation of millions by incompetence does not trigger revolution as only a social challenge can defeat a social system. Yet a prosperous society needs both competence and synergy. Synergy is like the interest paid on the capital of competence—if there is no capital there is no interest either. Synergies from social order (Rule 2) add to the competence gains of natural competition (Rule 1) but cannot displace them.

Yet neither is Rule 1 alone sufficient, as it ignores synergy. Most now reject the Social Darwinist argument that since nature weeds out the weak so should society. As Nature's web of performance tolerates an extraordinary diversity of life, so it behooves a society to be tolerant. Who knows which citizen will generate progress?

5.12 Social Inventions

Periodically, society discovers new ways to increase social performance. Individuals in competition can attribute their results to their acts, but in social environments, our gains arise from the acts of others. We therefore invented accountability, that we are responsible for the effects of our acts not only on ourselves, but also on others. Who actually discovered this is lost in the mists of history, if it was even one person, but even so it was an invention, a social invention.

While forming a social unit engages synergy, it disconnects individuals from the direct consequences of their acts. Justice—punishing unfairness—is one way people restore this. Unfairness is here not merely inequity—the unequal distribution of outcomes—but distributing outcomes according to contribution (footnote 4). Studies suggest that people recognize justice, that value gained matches contribution made, and tend to avoid unjust situations (Adams, 1965). People even prefer fairness to personal benefit (Lind & Tyler, 1988). In contrast, chimpanzees are simple outcome maximizers, who follow Rule 1 entirely (Jensen et al., 2007).

Criminals destabilize society, but justice changes the dynamic by punishing unfair acts. If individuals seek revenge on those who "wronged" them or their family, cheating is unprofitable over time, as today's defection is paid back with interest tomorrow. If a society can make unfair interactions a bad choice, selfish people will prefer mutual synergy to mutual conflict, i.e. justice aligns individual good and social good. Unfortunately, in "an eye for an eye" cultures one revenge act creates another, giving endless vendetta cycles, as in the Middle East. Revenge was the precursor of justice, as individuals administered justice personally, rather than leaving it to society. The case has been made that our entire justice system of police, laws, courts and prisons is simply to deny unfair acts (Rawls, 2001).

People often fail to see how the community level operates. A theft is "good" for the robber but is always bad for the community. If someone steals $100 and is caught penniless, a court may sentence them to a year in jail. If the police, trial and incarceration costs are over $100,000, and the robbed get no return, where is the value? If everyone loses, why waste money prosecuting? The error is to apply a personal perspective to a social level problem. For a community, $100,000 may be a small price to pay for social order. The state calculates at the community level, not the individual level; e.g. depression reduces productivity but no laws deny it because it affects the outcome of people not communities.

Social rules are about changing social interaction contingencies, not individual profit or loss; e.g. the 1980 clean up of New York crime changed the social environment, from one where shootings were common to one where it was safe to walk the streets. The increased productivity of an entire city was worth the effort. Spending thousands of dollars in police, court and prison costs to prosecute a hundred dollar theft is a community level good deal, as successful crimes create copycats and one defection can snowball into a social collapse (footnote 5). Giuliani's clean up of crime in New York cost millions but generated a synergy gain of billions (footnote 6).

Democracy is another social "invention", that a community selects its leaders by information vote rather than physical conflict (Mandelbaum, 2002). Democracy vests the power to control the community in the community itself rather than in a king or dynasty, so democracies also have constitutions limiting terms of office. A dictatorship has a centre to hijack but a democracy that distributes control to the people does not. This turns out to be better than trusting central elites, however benevolent, not because it is more efficient but because it allows anarchy free transitions of power. Given our human history of bloody power struggles, it is always amazing to watch a democratic leader who has lost a vote peacefully hand over control to a successor.

Democracies combine individual freedom, social order and resistance to hijack. They produce more because free people contribute more work, more ideas and more research. They also self-regulate more, reducing security costs (Tyler, 1999). The allied democracies overcame the Axis dictatorships in World War II by producing more as well as fighting better. Democratic nations have increased over time not because democracy is "nice" but because it is productive.

5.13 Social Health

It is not obvious that social change often requires social health. Those who can't conceive freedom can't achieve it. If democracy is unthinkable then it is unworkable. Freeing oppressed people who are not ready only leads to anarchy and a return to autocracy, e.g. the French revolution gave freedom, then the Terror, then a return to an emperor (Napoleon) (footnote 7). Yet America and England tried the same and it worked. They crossed the zero-sum barrier to democracy and today it is unclear why our predecessors ever settled for less. Democracies out-produce autocracies because free people produce more and online is no different (Beer & Burrows, 2007). The gain is in the synergy, based on social interactions, based on ethical people.

So the synergy a community can generate depends on the social health of its citizens. Social evolution requires individual evolution because each level emerges from the previous one. Social health has also been called social capital, defined as the "norms and networks facilitating collective action for mutual benefits" (Woolcock, 1998).

Unlike ants, people learn to socialize, e.g. young players in soccer trail the ball like a cloud of insects, as each tries to get the ball and score a goal. Inevitably, they obstruct each other and the team results are poor. Only with social training do players learn positions like forward or fullback, and engage in social acts like passing the ball. In sports, both individual competence and team synergy are important.

As one can test individual skills, so one can test community synergy, e.g. if a group offers cheap coffee on an "honesty" system of 25¢ per cup, what percentage cheat and take the coffee but leave no money? If everyone defects and takes the coffee for free, the synergy (and the coffee) fails.

Fast-food chains in different suburbs illustrate this with respect to the synergy of self-service, where customers can help themselves to tea, coffee, milk and sugar etc. Serving speeds improve as servers just give customers a cup, reducing long queues. However, if social health is low, people loot the beverage resources put out, so they are then kept behind the counter. This causes delays and long lines, as servers must pour the milk and get the sugar for each customer.

Similarly, the social invention of supermarkets required a certain amount of customer social evolution, as traditional shopkeepers kept goods behind the counter to prevent theft. Only if most customers do not steal, can goods go out on shelves to allow customer self-help, improving efficiency enormously.

Social health, the percentage who defect on social synergies, affects social performance. It is equally important online, where social systems are subject to natural selection, as people flow into communities that perform and out of those that do not. A physical barrier like the Berlin Wall can stop such flows for a while, but even it was unsustainable. It is even less possible online, where people join and leave communities with the click of a mouse.

Online communities can improve their social health; e.g. by a constitution that members accept as they register, by routine posts to remind people of ethics, or by moderation. If senior members help new members, the newcomers are more likely to give back. Banning trolls also raises the social health of the group if not too oppressive. Regular social health feedback of a group defection measure, like the number of posts deleted by moderators, would raise social health awareness and improve social performance.

5.14 Communism and Capitalism

In the political conflict of capitalism and communism that dominated the last century, competitive value (Rule 1) was the assumed opposite of community value (Rule 2). However in the social environment model, they are underneath the same, as Rule 2 is just Rule 1 applied to the social instead of the individual unit. If the synergy gains are returned to the people who generated them, both options allow stable societies. Capitalism focuses on individual productivity via markets while communism focuses on community sharing, yet a community that produces little and shares it equally is hardly better than one that produces a lot but shares it unfairly. Humanity need not choose between the unequal distribution of wealth and the equal distribution of poverty, between individual productivity and community synergy. We can we have both personal productivity and community synergy given personal freedom and social goodness, as section 5.16 suggests.

Adam Smith linked individual to public good by suggesting the "invisible hand" of a market maximizing profits gives group value (Smith, 1776/1986). So in the context of a social market, the "greed is good" maxim applies: the harder people work for themselves the more value they generate for the community. Yet Smith's argument for competition is not an argument against cooperation, which he also believed in. In competitive sport, referees penalize illegal acts and free markets have common good rules, e.g. against insider trading. As sociologists like Granovetter argue, individual economics is always embedded in a larger social context outside any competitive framework (Granovetter, 1985). Playing fields and competitive environments work best when level.

The social environment model both supports Smith's link and lets it work the other way, i.e. as competition can support public good, so public good can support competition. To contrast the two is like arguing that mother is better than father or father is better than mother, when really both together are best. If capitalist models included synergy, businesses like Microsoft would not have found Berners-Lee's World Wide Web "uneconomic".

Rule 3, in both its forms, combines the capitalist view of society as self-interested individuals and the communist view of society as ant-like cooperatives. That citizens help both themselves and society is neither pure capitalism (Rule 1) nor pure communism (Rule 2). If pure communist societies have lower productivity and pure capitalist societies lower socialization, a hybrid will perform better than either alone. This predicts that communist countries will move to acquire a business face and capitalist countries will move to increase public good, as both are. Eventually these apparent political opposites will meet in the middle to be indistinguishable. In this model, the invisible hand of market competition works best with the visible hand of public good.

5.15 Social Inflation

It is an error for any social environment to try to insulate its members from the demands of its environment. This cannot be done, as outer environment demands ultimately "cascade" over inner ones. Social environments that ignore the demands of their environment experience social inflation, where the value of the tokens it distributes to members lose their external value. Monetary inflation illustrates this, as money (a social token) loses value relative to external standards (like a loaf of bread).

Grade inflation occurs when professors give all students A's regardless of competence, and the token "A grade" loses value in the University's environment, i.e. with employers. Internally giving high grades seems to benefit everyone, as grading is easier, students are happier, and high pass rates attract more students. Yet externally it gives no value to the society at large, so is unsustainable.

Crime and corruption deny the requirements of the social environment but social inflation is denying the requirements of theenvironment of the social environment. It builds gradually, like a choir slowly going off-key together, but ends suddenly, in the failure of the entire social unit.

In social inflation the social unit as a whole goes against its environment, i.e. does not satisfy its requirements. Unless there is an internal rectification, eventually there must be an external rectification. World events like the great depression and the world wars illustrate external rectifications, as did the 2007–2012 global financial crisis. This world gives gains at the cost of risk, but banks and credit companies began offering loans regardless of risk. Internally this seemed to benefit everyone—lenders got more interest, borrowers got needed money and bank popularity increased. As some banks increased lending, others followed suit to keep in the market. Finally, when companies could not recover their loans, bad debt decreased the share token value.

The expected result of letting an external rectification "run its course" is the collapse of the social system and its synergy, in this case the global credit system, usually followed by depression or war. Knowing this, the US and other governments stepped in with billion dollar bailouts, but without an accompanying internal rectification this will only delay the inevitable external rectification. No social system can deny its environment. As shown in Figure 5.4, a social system must not only demand synergy from its members but also pass on the requirements of its environment to them.

Businesses leaders who cheat society of billions are removed but what of those who lost even more money by incompetent risk management? Both cases are social errors. If the same people who caused the credit collapse still draw bonuses based on their business "skills", no correction has been made. As Enron was a higher level of unethicality, so the credit collapse was a higher level of incompetence. In the social environment model, competence and synergy are both important to social performance. A society need not punish bank leaders for negligence but should remove them for the same reason it removes criminals— for the good of society.

Fiascoes like the credit crunch and Enron highlight the issue of private business and the state. When Wall St's credit froze, through its own errors of judgment, the US state stepped in to pay the $700 billion heating bill, quoting the public good. Similarly, when Enron's naughty boys, playing with the matches of cheating, nearly burnt down the share market house, the state again stepped in, again for the public good. To expect state bailouts in hard times but no state interference in good times is like a child who wants to be left alone but expects its parents to pay the bills. If public good is important, it is important all the time, not just when there is trouble. If in times of trouble the nation must pay the piper, then in times of plenty it can call the tune. For corporate cheats, it can set public-good rules of financial disclosure or rule that no company can pay zero tax. For corporate incompetence, it can replace the incompetent by those with real skills. Any society that fails to act in its own interests in such ways invites its own collapse.

As crime arises if citizens are under-socialized, social inflation arises if they are over-socialized. Too much of a good thing becomes a bad thing, as the organization becomes:

  1. Bureaucratic. People follow social rules regardless of practical consequences. When rule following is the primary directive, the group becomes externally incompetent.

  2. Image focused. When social appearances supersede practical skills, people with fake qualifications can get high positions. As image wins over substance, the group becomes incompetent.

  3. Reality denying. Outside problem "shocks" are covered up or denied rather than dealt with, and whistle-blowers who point them out suppressed or fired. No competence learning occurs.

  4. Political. Members are too busy with internal power struggles to attend to outside problems, so the group handles them poorly.

  5. Negatively driven. Socialization works by applying negative sanctions, so avoiding them becomes the key to advancement. Leaders practice non-failure not success. Yet budget cuts and monitoring are no substitute for incentives and a positive vision. Negatively driven citizens become submissive or apathetic.

The above are maladaptive because they try to use social means (rules, image, conformity, politics, sanctions) to achieve competence goals. This does not work, as the goals of a level require operation at that level. The solution to incompetence is competence, which is created not by more rules and regulations but by rule breaking, image deviations, criticism and citizen incentives. The challenge of social design is not satisfying the requirements of one environment.

5.16 Higher Social Systems

The vertical ellipses of Figure 5.4 mean that a social environment can be contained by another, e.g. as many people can form into a company so many companies can form into a stock market. The company is a social group to its members, and the stock market is a social group to its members, with both social systems adding value to members. Companies reward employees with pay and stock markets reward companies with share prices that allow public investment. Equally, both environments place synergy requirements on members: companies ask employees not to steal their product value (stock) and stock markets ask companies not to steal their product value (ratings) by falsely reporting profits.

Rule 3 can be universalized to the multi-environment case where S1 contains S2 …:

Rule 3'a:If {{SU1(ai) ≥ SU1(aj) or SU2(ai) ≥ SU2(aj)… } and IU(ai) > IU(aj)} then prefer ai to aj

In words: Choose acts that do not significantly harm higher environments but benefit oneself.

Rule 3'b: If { IU(ai) ≥ IU(aj) and {S1U(ai) >S1U(aj) or (S2U(ai) > S2U(aj)…}} then prefer ai to aj < >

In words: Choose acts that do not significantly harm oneself but benefit higher environments.

It follows that a social dilemma solved for one social system can reappear if a higher one is formed. When the same social dilemmas operate at higher social levels, "new" problems arise; e.g. the Enron debacle, with estimated losses of over $60 billion, occurred when Enron executives cheated the stock market by reporting false profits to raise their stock price. Other companies laid off staff to "compete" with Enron's imaginary profits of over 80%. Within the stock market social system, Enron defected on the rule by which the stock market creates synergy, as if everyone made false claims, no one would invest. If false reporting had not been illegal before Enron, it would have to have been made so, for the stock market to survive. The stock market, a higher social system, had to act against the Enron cheats or collapse itself.

Confusion arises because advocates of Rule 1 or Rule 2 cherry-pick cases to support doctrinal positions. In this model, competition is good but not always, e.g. if business did operate by pure competition (Rule 1), then Enron's innovative methods of obtaining value in the stock market environment would have been a competitive advantage, as would have been their paying zero U.S. tax for seven years. So the business maxim "greed is good" does not apply to defecting on a social contract. Cheating one's colleagues is not "competitive advantage", as its bottom line is a loss of value for the whole society.

Higher social system defections involve hypocrisy, e.g. Enron bosses hypocritically asked workers to serve the Enron company environment while themselves cheating Enron's social environment, the stock market. Gangs like the Mafia have a similar hypocrisy, demanding strict loyalty and service within their community, while as a group pillaging the community at large. In general, a social rule that does not apply at every level creates an inconsistency that must eventually be resolved, e.g. it is inconsistent for member states that do not give their citizens democratic rights to have democratic rights themselves within the U.N. assembly.

Wildlife conservation in Africa also illustrates the importance of acting at the right social system level. Poaching is a classic tragedy of the commons case, yet public ownership has generally been a disaster for conservation in third world countries (Ridley, 1996). Under nationalization, the government could not stop locals poaching the large animals that damaged their crops. The trend was only reversed when wild-life titles were "privatized" to local communities, like the Campfire programme, where hunters purchase the right to kill game from local villages (Ridley, 1996, p.236). When the village "owned" the wild animals, it looked after its resources, prevented members poaching and wildlife numbers grew.

In contrast, whales roam international oceans not owned by any country, so we could hunt them to extinction. If a global humanity owned the whales, it would be as foolish to hunt them to extinction as for a farmer to kill all the cows in his herd. So as nations hold local power, perhaps rights should be "privatized" to nations, who would then physically prevent whale poaching in their zones.

Rule 3 can be idealized to define categorically good acts as those that give value "all the way up", not just for oneself, but for the community, for humanity, and even the planet we live upon. The principle that there are levels of "good" was made clear in the Nuremburg trials—where citizens following national laws were convicted of "crimes against humanity", i.e. held to a higher standard of right and wrong.

If social environments are within a world environment, is the higher good to serve the world not society? Conversely, if Rule 1 is to meet the world's requirements, is that then the higher good? Obeying Rule 1 is not following a higher good. It is individuals seeking their own gain not that of their environment. If the latter occurs, they are unconscious of it; e.g. innumerable animals have lived, fought, reproduced and died with no idea at all of the natural evolution of life on earth. To unconsciously contribute, as unknowing grist to a mill, is not acting for a higher good.

However consciously contributing to a higher environment, as Rule 2 proposes for social environments, is acting for a higher good. This is why Rule 2 is the ethical rule. So by the Rule 3 extensions, the highest good is to recognize the requirements of the highest level environment while still living in lower ones. The pragmatic ideal is to serve the highest environment one can conceive while surviving the demands of lower environments.

5.17 The Golden Rules

The current prosperity of humanity has been linked to its social evolution which in turn traces back to ethical advances like:

Do unto others as you would they do unto you


This golden rule has been expressed in many different cultures and contexts:

  1. Rabbi Hillel's sum of all rules: "If you don't like it done to you, don't do it to others".

  2. Kant's proposal: "Act only on that maxim by which you can at the same time will that it become a universal law", i.e. if everyone does it, is it still successful?

  3. Pareto's optimality principle: "Good actions benefit at least one other and do no harm."

  4. Rawl's "veil of ignorance" requires state justice to be "blind" to individual needs.

  5. Harsanyi's approach rules out immoral or anti-social acts from consideration (Harsanyi, 1988).

These and other forms suggest a solid universal social principle that is equally applicable to information technology (Siponen & Vartiainen, 2002). Anti-social acts fail all golden rule tests; e.g. Hillel rejects stealing as one does not wish to be stolen from, Kant finds it wrong as if everyone does it, it does not work, and Pareto finds it harms another. Rawls from behind his veil of ignorance cannot advocate it without knowing who is stealing from whom, and Harsanyi finds stealing an anti-social act. Rule 3 rejects stealing because overall it is a social loss, e.g. when a wallet is stolen there is not just the money lost but also disruptive losses like renewing credit cards.

All golden rules sit above the individual economics of game theory. Kant distinguished categorical imperatives from hypothetical ones, i.e. the rule is not "Do unto others so they will do likewise unto you". Such "deals" are merely instruments to individual benefit. Kant's imperative is to do what is categorically the right thing to do, regardless of the outcome for oneself. He advocates operating on a higher level than one's small self.

The golden rules ask free people to act beyond their own interests, hypothetically to flip every social interaction equation to see if it still works the other way, to stand in the shoes of others and to think of the society as a whole.

This model frames this call as not just to "goodness" but also to social productivity. The ethic of serving a community is logical because Rule 2 is just Rule 1 applied to the social instead of the individual unit. Higher social levels are more productive because synergy works. Ethics is just pragmatics at a community level.

Using the golden rules, the ship of human society has navigated a middle way between the evolutionary dead-ends of endless tribal conflict and mindless social conformity. This struggle began thousands of years ago, at the dawn of the agricultural revolution, when "civilized" farmers cultivating the land battled "barbarian" hunter-gatherers, whose essential code was:

"Take what you can and give nothing back."

Humanity is fortunate that reason pulled us out of the dark ages, but reason was too fragile to get us across the original zero-sum barrier of the agricultural revolution (Whitworth, Van de Walle, & Turoff, 2000). That needed faith and religion. The first religion seems to have been started over six thousand years ago by the first Zoroaster in Persia (footnote 8). He called upon the people of the herd to hear the immortal shining ones, do right not wrong and to reject the followers of the lie. It is easy to forget how huge that first step was. Today all golden rules address free people, not mindless followers, so what is advocated is not just goodness but free-goodness.

5.18 Free-Goodness

All golden rules advocate free-goodness, doing right for no personal benefit. Another way to say this is that the best things are done for no particular reason. In socio-technical systems, free people doing what they want to help others they have never met, for no particular reason.

Neither Rule 1 (compete for yourself) nor its Rule 3a extension (compete by the rules) explain why online experts help others with hardware problems. People routinely help others in physical society too, e.g. giving lost visitors directions even though they probably never see them again. Only in socio-technology, is this the basis of the social system. The theory base is the philanthropy Rule 3b, that people with enough will give back to the community, even if there is no benefit to themselves.

Rule 3b is not that individuals in markets unconsciously help society. It reverses the logic of Rule 3a, to say that if individual needs are met, a positive urge to social value remains. Granted that people are self-motivated, it says they are also socially-motivated, to help others if they can, e.g. BitTorrent system users help each other download large files although the community lets them download and leave. Yet it survives because many do not. Even in a community of people downloading free, and perhaps pirated, web content, people help each other.

In the past, heroes in philosophy, art, science, music, politics and other fields sacrificed their lives, often literally, to create works whose value was often only realized after their death, e.g. Tolkien, Socrates, Van Gogh, etc. Today technology lets us all be small heroes, to do good for no reason now. We can add a page to Wikipedia, tweet against injustice or start a free web site like Kickstarter (footnote 9), a funding platform for creative projects. The same technology that magnifies social negativity like spam can magnify positive social acts. It lets many small heroes combine, until they are more than any past hero, e.g. no one person could write Wikipedia. Good acts can cascade too, as the movie Pay it Forward suggests.

Socio-technology, as a new social system design, may arise from the digital divide, that only the better off have computers. If social evolution requires personal evolution, online communities may work because they have more social health. If so, online communities predict our social future.

Whatever the reason, systems like Wikipedia threw themselves on the goodwill of their citizens and not only survived but prospered. That virtue supported by technology is productive is an important social discovery (Benkler & Nissenbaum, 2006). Socio-technical systems succeed not by technical efficiency but social efficiency. The social invitation to do small selfless acts of community service was taken up. Socio-technology enables social synergy, but if people did not follow Rule 3b it could not work.

In history, societies that enforced order got synergy, e.g. Egypt's pyramids were a synergy product. We know today that markets can incentivize individuals to synergy given contextual legal systems. What we did not know, until the Internet arrived, was that people not subject to coercion, nor enticed by incentives, can freely synergize. We knew people could be forced to be good citizens, or enticed by reward or punishment to be so, but not that they could freely be so.

The socio-technical systems that are today transforming the Web differ in significant ways from current physical society (Kolbitsch & Maurer, 2006). A community level focus gives social systems that are decentralized, transparent and participative. Initiatives like SETI, and FLOSS (Free, Libre, Open Source Software), community sites like SourceForge and FreshMeat, deny all forms of social control, whether of acts (repression) or of information (propaganda), and believe quite simply that free people will do the right thing. The Creative Commons is founded on the principle that people will freely make their creative work public (synergy) if receivers do not copyright or sell it (defect).

This is not communism, because individuals are free to express themselves without social control. It is not socialism, because individuals can take from the community and not give back. It is not anarchy, as there are anti-social defenses to oppose disorder. It is not altruism, as no-one has to sacrifice for the community. It is not capitalism because the primary goal is not personal profit but community service. Socio-technical systems illustrate free-goodness, a new social system design, based on freedom, service, legitimacy and transparency. They are the online evidence of the social future of humanity today.

5.19 New Business Models

The advent of free-good citizens synergizing without payment or central control is reflected in new online business models, necessary if socio-technology supports not just online society but all society. The historical trend is to stabilize synergy for larger groups, from tribes to mega-states like Europe, India, China and America (Diamond, 1998). Each stage of this social evolution needs more complex social mechanisms, which today's technologies allow.

The social evolution happening today online has led to business models based on community service rather than personal profit. Current research on trust generally frames the problem as how to get people's trust to make a business sale. Yet asking how to trick people into buying products is viewing the issue at the wrong level. Even if tricking customers into buying was possible, those susceptible would soon go bankrupt and so no more be customers. No business can survive on stupid customers. Marketing that tries to trick customers to buy what they do not need is self-defeating.

Advertising works on the personal level, but on the community level it does not pay communities to let product propaganda lie to citizens. It is claimed that advertising funds TV, but currently it is killing it, as advertisements overpowering programs just turns people to other options like the Internet. As people get more technology savvy, they mute the ads or flip to other channels, just as they set their browsers to block web popups.

The profit motive online is illustrated by the dot.com bubble of the late 1190s, when greedy online business start-ups found that online customers were not as gullible as supposed. It seems obvious to say, but that is why they are still customers. A few con men can succeed, by the synergy of society, but con-societies cannot succeed.

Community level business models change the question, from how to trick customers to how to synergize with them. Instead of seeing customers as competitors for profit, to be kept in the dark, they are partners in value creation. Systems like eBay illustrate that customers are not the competition, but part of the business.

The Chinese philosopher Lao Tse, founder of Taoism, best stated how to govern a community:

"One should govern a state as a cook fries small fish, that is without scaling or cleaning them."

His advice was to "cook" a state without interfering with its citizen parts directly, using community level not personal level acts. Yet current management barely even works on the personal level, based as it is on information forms, regulations and organization structures. Managing people like pieces on a chess board is working at the wrong level (footnote 10). Treating people like numbers just lowers morale, increases apathy and sometimes gives paralyzing strikes, i.e. causes the system to fail entirely (footnote 11).

Seeing people as people not information on a spreadsheet or wallboard is the difference between management and leadership. Leaders practice management by walking about and talking to staff, rather than sitting in their office analyzing reports. The TV program Undercover Boss is successful because most CEOs dont do this. Yet acommunity inspired will always outperform individuals seeking profit e.g. wartime factory production is double or more that of peacetime. Semler details how his company activated human level performance productivity, based on ideals like transparency (Semler, 1989). Yet while people want leaders who inspire not managers who manipulate, most companies seem to want to employ slaves. It is counter-intuitive to zero-sum thinkers that giving workers freedom can increase productivity, but Google gives its employees half a day a week to work on personal projects for just that reason. Increasingly, employees succeed despite their managers not because of them, as the comic strip Dilbert illustrates (footnote 12).

5.20 A New Social Form

Game theory's specification of "rational" decision making directs many decision strategies in business, economics and politics, but fails utterly to explain how humanity crossed the zero-sum barrier to achieve the synergies of civilization. Homo-economicus who seeks self-interest has joined with homo-sociologicus who seeks community good. The first seems "selfish" and the latter "good" but both rules are essentially pragmatic. Community service is as rational as self-service.

In the social environment model, citizens combine these rules by anchoring one and applying the other. Anchoring social good then seeking self-gain explains the highly successful market trade systems of the last century, where individuals sought profit under social good laws. Anchoring individual good then seeking community gain explains the highly successful socio-technical systems of this century, where contented people help a community for no personal reason.

Technology is the effect magnifier that is forcing humanity to resolve its social choices, e.g. last century, nuclear technology magnified the power of war until humanity had a choice: to destroy itself by nuclear holocaust or not. The decision not to destroy itself was made by our choice, not by the technology that forced us to make it. Technology just upped the ante. Nuclear weapons exposed the illusion of world domination and highlighted the folly of mutually assured destruction (MAD), but people still had to make the choice.

Likewise the industrial revolution the century before brought the feudalism myth to a head, as serfs became factory slaves instead of farm slaves. This century, information technology challenges the illusion of profit, the myth of getting something for nothing (footnote 13). The profit motive is to get more for less, so the obvious ideal is to get something for nothing at all. Enron, World Corp and the credit meltdown banks all sought perpetual profit. Yet just as perpetual motion contradicts physical laws, so perpetual profit contradicts social laws—everyone taking from everyone else cannot succeed. We scorn medieval myths of a physical elixir of perpetual youth, but today seek equally impossible algorithms of perpetual profit, as pyramid profit schemes show.

People using technology to pursue profit increase the chances of a global social collapse, but how can a society based on personal profit call them to ethics? The profit motive is ending its useful life. The profit idea allowed higher performance by replacing physical results with data, as sales and salaries replaced harvests, but today it distorts rather than improves. The profit motive turns health systems into sickness systems generating money from illness. The academic search for truth becomes publishing for promotion and grants. Taxation systems become tax evasion systems, as companies pay no tax, traffic regulation becomes revenue gathering, and the list goes on. What was progress is now an obstacle to it. The solution is not more of the same, whether budget cuts or bailouts, but, as always, to evolve a new system. In this view, that system will be based on good people not just good calculations and data.

In our social evolution, the dictatorship of kings or emperors was an advance over hunter-gathering. It worked until it was replaced by republicanism, government by an elite like the Roman Senate. This worked until replaced by feudalism in the middle ages. That worked until the industrial revolution gave us capitalism and communism, both claiming to give power to the people. Yet both are also based on profit (for the individual or community). The profit motive as a social driving force has served us well, but it must give way to a new social form. Tokens like money that focused people on productivity now distract them from synergy. If one offers peanuts one gets monkeys, but if one offers honey one gets wasps.

The Internet invention is to offer people nothing personal at all, but to go directly to community synergy, without passing out any money. Instead of bribing people to synergize with money, just ask them to do it for us. The technology shows the benefits of that virtue immediately, so it is obvious that it works. There is no need for propaganda and marketing to convince people that something is good if it manifestly is. Systems with no reward tokens have nothing to steal and with no central control there is no centre to hijack. If anti-social acts are transparent then people abusing the system are exposed, shamed and can be banned. In the light of public scrutiny, defections shrivel like ghosts in the sunlight. Right now, the physical world has no society not driven by profit, but the virtual world says that it could. This is not just a theory, but a social practice already tried and proven.

Yet make no mistake, the socio-technical vision of the future is radical beyond capitalism and communism. Rule 3b states that making a profit is OK until you get enough, then profit must give way to service. It asks first "Do you have enough?" and then if the answer is yes, "What have you given back?" In this view, the super-rich who continue to take but give nothing back are social bludgers, because today social synergy is the cause of wealth. In the future, the rich list will be a list of shame not envy. 

If the profit motive is entrenched, how can Rule 3b supersede Rule 3a? The answer is that when our social health reaches a certain level, it will seem the obvious thing to do. No revolutions are necessary, only evolutions. One day, a physical community will just ask its people to synergize, not by bribery or coercion, but by common sense, and as online, they will respond.

The beginning of this new vision is seen in the rise of independent voters, who sit between the right and left wings of politics and increasingly decide elections. Tradition calls them swinging voters, but really they are free voters who decide each issue on its merits, not on a formal doctrinal rule. Members of this free choice party have no conventions, no rules, no formats and no utopias. For them, every political vote is a conscience vote. They believe that:

a) I am free. I am not a slave to anyone, however righteous or powerful they seem.

b) I am good. I seek the benefit of others as well as myself.

c) I am a citizen. I am not alone, but part of a larger group.

Free-good citizens reject personal profit and community control as evolutionary dead-ends that were tried and failed. They hold that each person should freely do as they think best, and let others do the same. They believe in us, that some people may err, but most will not. This faith in humanity as a whole is the basis of social evolutions, e.g. science is the belief that if people talk openly, the truth will out. Likewise the answer to evil is transparency, as what plot is so secret that someone somewhere in the community does not know of it? The negative view is that without control people will revert to savages, but the positive view is that people left alone will naturally synergize. Free-good citizens don't need a boss. The proof of this today is no logical treatise, no Word of God or issued doctrine, but in the online experience itself. The manifesto of the Arab Spring lies in the social structure of the Internet itself.

This social structure is sustained by  people doing what they don't have to, not by any formal rule or theory. Humanity is tapping the social goodness of small heroes to transform itself at the informal personal level not the formal informational level. If freedom is the price of individual evolution and goodness  the price of social evolution, the socio-technical experiment of doing both has worked. Beyond the profit of self and the virtue of community service is choosing to do things for no reason but that they seem like a good idea. The greatest advantages  arise when we stop seeking advantages and just do what we think is right.

5.21 Glossary

Here is a summary of the key terms of this model:

  1. Rule 1. Competing self-interested individuals evolve competencies (individual evolution).

  2. Rule 2. Cooperating socialized individuals evolve social synergies (social evolution).

  3. Synergy. The difference between what individuals produce as a social unit vs. independently.

  4. Anti-social acts. Taking individual benefit from society without contributing to its synergy.

  5. Social dilemmas. When individual outcomes (Rule 1) contradict social outcomes (Rule 2).

  6. Social instability. When social systems generating synergy are unstable to anti-social chain reactions.

  7. Social order. That all members of a social group act as one.

  8. Social freedom. That members of a social group are free to act from their own choice.

  9. Social hijack. When leaders hijack society for their own ends, and maintain control by:

    • Repression: Coerce people to not follow Rule 1.

    • Brainwashing: Convince people to follow Rule 2.

  10. Social inventions. New ways to get synergy and competence:

    • Justice: Punish unfair anti-social interactions by laws, police, and sanctions.

    • Democracy: The group periodically changes its leaders by freely voting.

    • Legitimacy: The allocation of "rights" that are:

      • Fair. Individual consequences match the individual contribution (Rule 1).

      • In the public good: Benefit society as a whole (Rule 2).

  11. The golden rules. That individuals can freely choose to serve an environment above themselves.

  12. Social environment model. That social units are environments within environments.

  13. Rule 3. That citizens combine Rules 1 and 2 by anchoring one and applying the other:

    • Rule 3a. If social laws are not broken, compete for individual advantage (markets).

    • Rule 3b. If one has free time or money, give to others in the community (service).

  14. Rule 3'. Extends Rule 3 to apply to nested social structures.

  15. Rule merging. That communism (Rule 2) and capitalism (Rule 1) will merge into a hybrid.

  16. Social health. The percentage of individuals in a community that freely support social synergy.

  17. Social token. How a society distributes the value it generates, e.g. money, grades or stock ratings

  18. Social inflation. When social tokens lose external value because the group does not satisfy its environment's needs.

  19. External rectification. When a society's collective incompetence has consequences for its citizens.

5.22 Discussion Questions

The following questions are designed to encourage thinking on the chapter and exploring socio-technical cases from the Internet. If you are reading this chapter in a class - either at university or commercial – the questions might be discussed in class first, and then students can choose questions to research in pairs and report back to the next class.

  1. What is social synergy? How do communities encourage synergy? How do they prevent its destruction? How do trust and synergy relate? Give physical and electronic examples.

  2. Give five examples of defections in ordinary life. What happens to a community if everyone defects? Give five online examples of defections, and for two specify how technology lowers the defection rate.

  3. Would you prefer to be a middle class citizen now or a lord three hundred years ago? Research history to compare factors like diet, health, clothes, leisure, travel, etc. Where did the lord's wealth mainly come from? Where does the power of your salary to buy many things come from today? How does the principle apply online?

  4. What is a social dilemma? Give three physical examples from your experience. Why cannot individuals solve them? How are they solved? Give three online social dilemmas. How can they be solved? Relate this to socio-technical design.

  5. What happens if one suggests things in a group? Conversely, what happens if no-one in a group suggests anything? How can groups manage this dilemma? Answer the same questions for volunteering. Give examples in both cases from both offline and online.

  6. What percentage of online users are lurkers who look but do not post? Go to a popular board you have not used before. What stops you contributing? Add something anyway. How could the board increase participation?

  7. Is ethics idealism or pragmatism? Explain the statement: Personal ethics is community pragmatics. How can STS design affect ethics?

  8. Analyze the case of a thief who steals a wallet and is not caught. List the thief gains and the victim losses to get the net community result. What if everyone in a community steals? Generalize to the online case where spam "steals" a few seconds of your time. How does this differ from an offline theft?

  9. Why is synergy important for larger communities and especially important for socio-technical systems? How can technology help increase synergy? Report the current estimated sizes of popular socio-technical systems. Clarify what is exchanged, who interacts, the synergy and the defections.

  10. Look at the objects you use every day. How many could you make? How many are even produced in your country? How hard would it be for you to make them? Compare the cost it would take you to make say a simple table with how much you pay for it. Relate this to social synergy.

  11. Discuss whether people are rational actors acting in natural self-interest. Give physical examples of common acts that are irrational, i.e. done knowing they will cause suffering, or knowing that they will not give any benefit. In general, when are people irrational? How does this affect STS design?

  12. Describe the volunteer dilemma. Is it that people will not volunteer or that they will? Look at the extreme case of people volunteering to go war. Why did not only many Japanese but also those in other armies volunteer for kamikaze type missions? Explain this in terms of Rule 2. How important is volunteering in online communities? How can technology support it?

  13. Describe how online babysitting exchange cooperatives work. Based on a game theory matrix, how would one act if one followed Rule 1? How about Rule 2? How do people actually act? How does the technology affect this?

  14. Social networks like Facebook are about friends but what is a friend? In anyone who helps you a friend? Define a friend in synergy terms. Does friendship imply trust? Is it a one-way or two-way thing? If you "friend" someone on Facebook, are they really a friend? Explain the difference referring to information and human levels.

  15. Consider how one person cheating causes others to cheat, e.g. in sports. Draw a diagram to show how social defections cumulate as each one reduces the probability that cooperation will give synergy benefits. How do social defenses alter these percentages? Use an online case to illustrate.

  16. What is social order? Explain its strengths and weaknesses, with examples. Is social order possible on the Internet? Discuss the success or not of attempts by countries like China and Iran to control the use of the Internet by their citizens. Mention proxy software designed to thwart that control.

  17. What is social hijack? Are all dictators social hijackers? Give physical examples of past communities ruled against their will that eventually rebelled. Can the same occur in online communities? How does STS design affect this?

  18. Can a social system exist if it is not a physical "thing"? If so, are new social designs like democracy social inventions? What then was invented? Make a list of the social inventions of physical society over the last two thousand years. How does socio-technology add to that list?

  19. In the middle ages, whether in China, England or Russia, democracy was not only unthinkable but also impossible. Why? What changed in the last thousand years to make it possible? How is the same change factor allowing new social designs to develop on the Internet?

  20. Describe some well-known peasant revolts of the past that were successfully put down. If the Arab Spring is the same, but based on modern socio-technology, why is it harder to put down? Discuss how the information revolution is changing how Arab states have been governed for centuries.

  21. Describe the communism vs. capitalism ideological battle that dominated the last century in Rule 1 and 2 terms. What is the result today, i.e. which social design won? Is China purely communist? Is America purely capitalist? How would you describe the successful social designs of this century?

  22. What exactly is democracy? Is the Democratic People's Republic of Korea democratic? Were the Greeks of Athens democratic? Is the USA democratic? Are there any online democracies? Is Wikipedia a democracy? Describe online systems that have at least some democratic features.

  23. The Enron collapse lost millions but the 2007–2012 credit meltdown lost billions. Explain how one was an ethical failure and the other a competence failure. What happened to the perpetrators in both cases? Can such things happen online? Describe what would happen to say Wikipedia if it became a. Corrupt or b. Incompetent. Can socio-technology reduce the likelihood of such "crashes"?

  24. Do the various golden rules of history follow Rule 1 or Rule 2? How do these golden rules, which began thousands of years ago, affect the design of information technology today?

  25. What is social transparency? Is it making everything visible to all? How does it relate to privacy? How can STS support both transparency and privacy?

  26. If an ant in an ant colony serves the community, are ants ethically good? Are people forced to serve a community also good? Explain why without freedom there is no goodness. Relate to the issue of whether smart software should take over human choice or whether software should always leave the ethical choices to people.

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