15 Oct 2017

Niall Ferguson: contrarian historian

From Sunday Morning, 11:08 am on 15 October 2017

Hierarchical structures are needed for order and security, but we also need networks if we're to have innovation, historian Niall Ferguson says in his new book.

British historian Niall Ferguson.

British historian Niall Ferguson. Photo: AFP / FILE

In The Square and the Tower, Ferguson examines early networking movements, which began in places such as town squares, and how social networks dominate today's thinking.

While historians have paid too little attention to networks in the past, the networking titans of today could do with a history lesson, he says. 

"If you spend some time in Silicon Valley, which I've been doing lately, you realise quickly that not much history was studied by the people building the great network platforms of our time.

"The majority are relatively oblivious to the networks of the past. The assumption is the past is irrelevant because our technology is so awesome we've essentially reinvented the world. What could the past possibly have to teach us? The message of the Square and the Tower is a lot."

Chief Operating Officer of Facebook Sheryl Sandberg recently expressed shock that Facebook could be used for "nefarious purposes", Prof Ferguson says.

"Shocked to find that technology could be used for bad ends by bad people? Come on! It doesn't take too much historical study to realise that's the most likely thing to happen to any new technology, especially communications technology.

"Ignorance of history and a certain naivety – I think these two characteristics of Silicon Valley are very palpable."

The result of the US presidential election and the Brexit vote in the UK would have been entirely different pre-social networks, he says.

"That's slowly sinking in because the political class is a little bit behind the curve. If you go to Washington and ask Republicans today 'What are you going to do about the fact Facebook and Silicon Valley, in general, are against you and lean left?' they look slightly blank."

The Republican Party is sleepwalking towards disaster because it fails to see that there'll never be another 2016, he says.

"There'll never be another time when populists and conservatives can use Facebook because [Mark] Zuckerberg has resolved to tweak the algorithms and make sure that doesn't happen that's a huge deal. I can assure you that very few Republicans in Washington understand that."

Facebook founder Mark Zuckerberg told the APEC summit his company was responding to criticism over fake news appearing on the site.

Mark Zuckerberg Photo: AFP

The science of networks has been poorly-served by historians, he says.

"It tends to be conspiracy theorists who write about networks; whether it is the Illuminati, the Rothschilds or the Freemasons.

"Conspiracy theorists have loved the idea that there's a secret network that controls the world. Respectable historians run a mile from that stuff and the result is nobody writes seriously about networks."

Networks can unleash great innovation, but how powerful are they? One network flourished in 19th-century Europe and then faced a brutal backlash.

"In the 19th and 20th centuries, when the various handicaps that had been imposed on them in the past were lifted, you saw an extraordinary expansion of Jewish influence in the world. In finance, industry, culture, science, literature – not to mention music."

This extraordinary success was achieved by a small minority of people, but resentment and deep-rooted anti-Semitism soon festered.

That backlash reached its "hideous crescendo" in the Holocaust, says Prof Ferguson.

Hitler blamed the Jews for all Germany's ills, claiming that through their control of finance they undermined the nation.

The Nazi's programme to destroy the Jews and the inability of even powerful Jews to stop it revealed that the opposite was true, Prof Ferguson says.

"When it came to the crunch these supposedly powerful Jewish financiers were quite weak. They really couldn't withstand a popular movement that came to power and then systematically destroyed their civil rights, their human rights and then their lives."

Once power is in the hands of the revolutionaries, networks can quickly transform to hierarchies.

The most powerful hierarchies in history were the totalitarian states of the mid-20th century, he says.

The ideal is to have hierarchical institutions and networks in some kind of balanced tension.

"The tendency to innovate tends to be lacking in hierarchical structures, people are very inclined to be yes-men if they are the advisors to the most powerful man in the country."

Historically, waves of innovation are a network phenomena, he says.

Niall Ferguson

Niall Ferguson Photo: Tom Barnes

"The Enlightenment largely happened outside the institutions of formal academic life, we have this fundamental tension in world history.

"We need hierarchical structures for order and security, but we also need networks if we're to have innovation."

An entirely networked world is one in which a lot can go wrong, he says.

"We need some kind of hierarchical order if we're to avoid a kind of global anarchy."

Yet despite history's warnings, there are powerful advocates for a world run by networks.

"I'm constantly amazed by how many people who do have power haven't studied history.

"I'm coming to the conclusion that if you haven't studied history, you should be excluded from having power – it's a little bit like driving without a driving licence, you're quite likely to crash."

Professor Ferguson is a professor of history at Harvard, and also has senior fellow positions at Oxford, the Hoover Institution and Stanford University.

The Square and the Tower is published by Penguin New Zealand.