Historically, hierarchies — empires, dynasties, governments, institutions — were more powerful than networks. But networks have been gaining power and influence. Understanding the power differences between hierarchies and networks provides a useful model for viewing the world.

The Square and the Tower

The difference between concentrated power in hierarchies and distributed influence in networks is the topic of economic historian Niall Ferguson’s 2018 book The Square and the Tower: Networks and Power, from the Freemasons to Facebook. The book’s title refers to the two distinct forms of organization that have shaped human society: the hierarchical structures of the state or institutions (the “tower”), and the decentralized, informal networks of the people (the “square”).

Throughout history, power has oscillated between hierarchies and networks. The square will topple a tower that gains too much power — think the Arab Spring, the Enlightenment, and the Russian Revolution. And the opposite is true — centralized hierarchies rein in networks that become unwieldy. A prime example is the increasing regulation of cryptocurrencies — crypto is a distributed network (the square), and the SEC and CFTC (the tower) are working to impose rules and order on that network.

Ferguson argues that while hierarchies traditionally held more power, networks have increasingly challenged and disrupted these power structures. Networks used to be limited by geography and communication technology. The printing press, telegraph, telephone, automobiles, air travel, internet, and social media have accelerated the reach and importance of networks.

Network Characteristics

Networks are more agile, adaptable, and innovative than hierarchies and can be powerful tools for individuals and groups seeking to effect change. However, networks can also be unstable and prone to volatility, making them susceptible to manipulation and collapse. So, networks can be both liberating and destabilizing, while hierarchies can provide stability but also be rigid and resistant to change.

The increasing power and reach of networks is both exciting and deeply concerning. On the plus side, as compared to hierarchies, networks are more innovative and creative. Think of the network of Silicon Valley entrepreneurs and all the life-changing technologies that network has created. Or the rise of crypto — that has been through a network. Even the internet is the result of a network — there was no centralized authority that created the internet.

But networks can create and spread bad ideas as well as good ones. Networks are spontaneously creative, but they are not strategic — you can’t know what’s going to come out of a network. Notably, conspiracy theories spread through networks and they can amplify extremist views.

The internet, email, texting, and social media have created huge networks where ideas (good and bad) spread rapidly. But we’re also sorting ourselves into networks that are echo chambers of similar ideas with limited outside views. Currently, there’s a battle where corporations and governments are attempting to rein in the wide-ranging discourse of echo chamber networks. Recent examples involve Twitter and Facebook placing limits on posting misinformation about the 2020 election and COVID. And there’s been an outcry against those limits by those who feel censored.

Where does this all lead? We’ll see. What The Square and the Tower teaches is that there’ll be an oscillation as relative power shifts between hierarchies and networks, and as each gains more power, the other will work to undermine that power.