Saturday, 7 February 2015

NEW SECURITY APPROACHES FOR THE 21ST CENTURY- How to support crowd security and responsibility

by Dirk Helbing

-Food for thought, to trigger debate


How can we protect companies and people from violence and exploitation? How can we open up information systems for everyone without promoting an explosion of malicious activities such as cyber-crime? And how can we support the compliance with rule sets on which self-regulating systems are built? 




These challenges are addressed by Social Information Technology based on the concept of crowd security. A self-regulating system of moderators and the use of reputation systems are part of the concept. Today’s reputation systems, however, are not good enough. It is essential to allow for multiple quality criteria and diverse recommendations, which are user-controlled. This leads to the concept of “social filtering” as a basis of a self-regulating information ecosystem, which promotes diversity and innovation. 


Better awareness can help to keep us from engaging in detrimental, unfair or unsustainable interactions. However, we also need mechanisms and tools to protect us from violence, destruction and exploitation. Therefore, can we build Social Information Technologies for protection? And how would they look like? The aim of such Social Information Technologies would be to avoid such negative interactions, organize (collective) support or get fairly compensated. Of course, we also need to address here the issues of cyber-security and of the world's peace-keeping approach. Let us start here with the latter.

The "Balance of Threat" can be unstable


Like many, I have was raised in a period of cold war. Military threats were serious and real, but the third world war did not happen. This is generally considered to be a success of the “Balance of Threat” (or “Balance of Terror”): if one side were to attack the other, there would still be time to launch enough intercontinental nuclear warheads to eradicate the attacker. Given the "nuclear overkill" and assuming that no side would be crazy enough to risk elimination, nobody would start such a war. 

However, what if this calculus is fundamentally flawed? There were quite a number of instances within a 60 years period, where the world came dauntingly close to a third world war. The Cuban missile crisis is just the most well-known, but there were others that most of us did not hear about. (see World War III and  Risks of nuclear accidents is rising). Perhaps, we have survived the tragedy of nuclear deterrence by sheer chance?

The alarming misconception is that only shifts in relative power can destabilize a “Balance of Threat”. This falsely assumes that balanced situations, called equilibria, are inherently stable, which is actually often not the case. To illustrate, remember the simple experiment of a circular vehicle flow discussed earlier (see video): although it is apparently not difficult to drive a car at constant speed together with other cars, the equilibrium traffic flow will break down sooner or later. If only the density on the traffic circle is higher than a certain value, a so-called "phantom traffic jam" will form without any particular reason – no accident, no obstacles, nothing. The lesson here is that dynamical systems starting in equilibrium can easily get out of control even if everyone has good information, the latest technology and best intentions.

What if this is similarly true for the balance of threat? What if, this equilibrium is unstable? Then, it could suddenly and unexpectedly break down. I would contend that a global-scale war may start for two fundamentally different reasons. Consider a simple analogue from physics in which a metal plate is pushed from two opposite sides. In the first situation, if either of the two sides holding the plate becomes stronger than the other, the metal plate will move. Hence, the spheres of influence will shift. The second possibility is that both sides are pushing equally strong, but they are pushing so much that the metal plate suddenly bends and eventually breaks. 

Often when an international conflict emerges, an action from one side triggers a counter-action from the opposing side. One sanction is met by something else and vice versa. In this escalating chain of events, everyone is pushing harder and harder without any chance for either side to gain the upper hand. In physics example, the metal plate may bend or break. In practical terms, the nerves of a political leader or army general, for example, may not be infinitely strong. Furthermore, not all events are under their control. Thus, under enormous pressure, things might keep escalating and may suddenly get out of control, even if nobody wants this to happen, if everyone just wants to save face. And this is still the most optimistic scenario, one in which all actors act rationally, for which there is no guarantee, however. 

In recent years evidence has accumulated to demonstrate that in human history many wars have occurred due to either of the instabilities discussed above. The FuturICT blog on the Complexity Time Bomb described how war can result without aggressive intentions on either side. Furthermore, recent books have revealed that World War I resulted from an eventual loss of control - the outcome of a long chain of events – a domino effect that probably resulted from the second kind of instability. Moreover, conflict in the Middle East has lasted for many decades, and it taught us one thing: Winning every battle does not necessarily win a war (quoted in the movie “The Gatekeepers” by a former secret service chief). Similar lessons had to be learned from the wars in Afghanistan and Iraq. Therefore, a new kind of thinking about security is needed. 

Limits of the sanctioning approach


Whilst sanctioning might in some cases create social order, it can also cause instability and escalation in others. In the conflict in the Middle East, punishment is unsuccessful - the punishee does not accept the punishment, because values and culture are different. In such cases, the punishment is considered to be an undue assault and aggression, and therefore a strong enough punishee will strike back to maintain his/her own values and culture. In this manner, a cycle of escalation ensues, where both sides further drive the escalation, each fuelled by their conviction they they are doing the right thing. In such a situation, deterrence is clearly not an effective solution. In other words, it is not useful to organize security alliances among countries which share the same values, as this creates precisely the cultural blocks that are unable to exercise acceptable sanctioning measures and will therefore run into escalating conflicts that can result in wars. Instead we need a new, symmetrical security architecture that is suited for a multi-polar world able to deal with cultural diversity. What we need are new strategies and a new kind of thinking. We also need a suitable approach in face of newly emerging cyber-threats.

How to manage a multi-polar world?


In the past, we have had a world with a few superpowers and blocs of countries forming alliances with them. Whenever one of these countries would be under attack, they would be under the protection of the others belonging to the same bloc. After World War II, the United States of America and Russia were the only superpowers remaining. With the breakdown of the Warsaw pact, there remained just one superpower. China is now the strongest economic power in the world and with Russia's comeback to world politics through the conflicts in Syria and the Ukraine, we are now living in a multi-polar world. Such a world is not well controllable anymore, as the "Three-Body Problem" suggests. This problem originally refers to the interaction of 3 celestial bodies, for which chaotic dynamics may result despite the simple conservation laws of mechanics. So, how much more unpredictable would a multi-polar world be? 

It becomes increasingly obvious that today no power (political or business) in the world is strong enough to play the role of a world police, and that we need a new security architecture. If this would be an architecture for the entire world, it would need to have a number of features: The classical security alliances (power blocks) would have to be overcome. In view of globalization, thinking from the perspective of nation states seems to make decreasing sense. Furthermore, the concept of a "Balance of Threat" would have to be replaced by a "Network of Trust." The concept would have to be symmetric and not based on exclusive rights or veto power. It would have to be based on a set of shared values, and whoever violates them would feel the joint response of all the other countries in the world, independently of who their classical alliances were. For this approach to work well, mutual trust would have to grow, which would require more transparency and less secrecy. 

In the emerging digital society, how much secrecy is still essential? I cannot give a definitive answer to this, but I do believe that secrecy in the right time, place and context may have some benefits (e.g. privacy). But how much opacity should public institutions acting behalf of their citizens be allowed to have? And for what time period? Will the concept of secrecy be feasible at all in the future? Certainly Wikileaks and the Snowden revelations raise the question of whether secrets can still be kept in a data-rich world. Moreover, secret services have often been accused of engaging in unlawful behaviour, which they claim is necessary, to get an inside view of the closed circles of terrorism and organized crime. However, it has been stressed by some that such a strategy may actually promote terrorism and crime, and undermine the legitimacy of secret services, or even the states or powers they are serving. Finally, the effectiveness of secret services has often been questioned, and also whether they do more good than harm.

What alternatives might we have to create a new security architecture? In this context, it is relevant to consider that more than 95 percent of the knowledge of secret services derives from public sources. As ever more activities in the world now leave a digital shadow and become traceable in real time, couldn't the largest part of public security be produced by public services rather than secret services? This does not necessarily mean to close down secret services, but to open up more information for wider circles. For example, why shouldn't specially qualified and authorized teams at public universities develop the algorithms and do the data mining to identify suspicious activities? Thanks to their higher transparency, they are exposed to scientific criticism and public scrutiny and would therefore be able to deliver higher-quality results. Given the many mistakes one can make when mining data, this would probably reduce the risk of wrong conclusions and other undesirable side effects. I am convinced that a step towards more transparency could largely increase the perceived legitimacy of the security apparatus and also the trust of people in the activities of their governments and states. 

Perhaps, some readers of this book will find the above proposal to build public security on public efforts absurd, but it's not. In many countries, the police have already started to involve the citizens in their search for criminals such as through public webpages displaying pictures of suspects, as well as using text messages and social media. "Crowd security" is just the next logical step. In fact, we might put this into a bigger picture. As we know, the Internet started off with ARPANET, a military communication network. Opening it up for civilian use eventually enabled the creation of the World Wide Web, which then triggered off entirely new kinds of business and the digital economy. With the invention and ubiquity of Social Media, a large proportion of us has become part of a world-spanning network. The volume and dynamics of the related digital economy has become so extensive that the military and secret services can often not keep up with it anymore and, hence, they are increasingly buying themselves into civilian business solutions. This clearly shows that a future concept to protect our society and its citizens must largely build on the power of the civic society. 

Crowd security rather than super powers


Let me give an example of a system, in which crowd security is surprisingly effective and efficient, and where it creates "civic resilience". In the late nineties, I spent some time as a visiting scientist at Tel Aviv University with Isaac Goldhirsch. At that time I read in the tourist guide that the average age of people in the country was 32, so I was prepared for the worst. But I found myself enjoying my stay in the Middle East immensely. Despite the daily threats, people seemed to have a positive attitude towards life. 

One of the things that impressed me much was the way security at public beaches was achieved, all based on unwritten rules. Everyone knew that any bag at the beach might contain a bomb that could kill you. Bags with nobody around were considered to be particularly suspicious. But at a beach, there are always some people swimming, so unminded baggage is normal. In this situation, people solve the problem by forming an invisible security network. Upon joining the beach, everyone becomes part of this informal network and implicitly takes responsibility for what is going on. That is, everyone scans the neighbourhood for suspicious activities. Who has newly arrived at the beach? What kind of people are they? How do they behave? Do they know others? Where do they go, when leaving their baggage alone etc.? In this way, it is almost impossible to leave a bag containing a bomb without arousing the suspicions of other people. To the best of my knowledge, there were relatively few bomb explosions at the beaches.

I would like to term the above distributed security activity as "crowd security". We have recently learned about the benefits of "crowd intelligence," "crowd sourcing," and "crowd funding," so why not "crowd security"? In fact, the way societies establish and maintain social norms is very much based on a "peer punishment" of those who violate these norms. From raising eyebrows to criticizing others, or showing solidarity with someone who is being attacked, there is a lot one can do to support a fair coexistence of people. I recall that, during one of our summer schools on Lipari Island in Italy, one of our US speakers noted: "In my country, you cannot even distribute some flyers in a private mall without security stepping in, but nevertheless, there are shootings all the time. I am surprised that everything is so peaceful in the public space on this island: young people next to old ones, Italians next to all sorts of foreigners, and I have not even seen a single policeman all these days." Again, people seem to be able to sort things out in a constructive way. 

How then can we generalize this within an international context? I have sometimes wondered if having less power might work better than having more. When having little power, you must be sensitive to what happens in your environment, and this will help you to adapt (thereby allowing self-regulation to work). However, if you have a lot of power, you wouldn’t make a sufficient effort to find a solution that satisfies as many people as possible. You would rather prioritize your own interests and force everybody else to adapt. But this would not create a system-optimal solution. As the example of cake-cutting suggests, the outcome wouldn't be fair, and therefore not sustainable on the long run. Why this? Because if you were too powerful, you would not get honest answers anymore, and sooner or later you would make really big mistakes that take a long time to recover from. For good reasons, Switzerland does not have a leader. The role of the presidency is taken for a short time period and rotates. This is interesting, as it requires everyone to find a sustainable balance of interests that is supported by many and, hence, has higher legitimacy. But there are more arguments than this for a decentralized, bottom-up "crowd security" approach.

The immune system as prime example


One of the most astonishing complex systems in the world is our immune system. Even though we are bombarded every day by thousands of viruses, bacteria, and other harmful agents, our immune system is pretty good in protecting us for usually 5 to 10 decades. This is probably more effective than any other protection system we know. And there is another even more surprising fact: in contrast to our central nervous system, the immune system is "decentrally organized". It is a well known fact that decentralized systems tend to be more resilient. In particular, while targeted attacks or point failures can shut down a centralized system, a decentralized system will usually survive the impact of attacks and recover. This is one reason for the robustness of the Internet -- and also the success of Guerrilla defence strategies (whether we like this or not). 

Turning enemies into friends


There is actually a further surprise: a major part of our healthy immune response is based on our digestive tract, which contains up to a million billions of bacteria -- 10 times more than our body has cells. These bacteria are not only important to make the contents of our food accessible to our body, while they split them up into ingredients to find food for themselves. The rich zoo of about a thousand different bacteria in us even forms an entire ecosystem, which is fighting dangerous intruding bacteria that do not match the needs of our body. Bacteria that were once our enemies have eventually been turned into our allies through a symbiotic relationship that has eventually emerged through an evolutionary process. My friend and colleague, Dirk Brockmann recently pointed out to me to the really amazing level of cooperation, which is the basis of all developed life and now studied in the field of hologenomics. In fact, humans as well came up with tricky mechanisms encouraging cooperation. These are often based on exchange, such as trade, and a system of mutual incentive mechanisms, which promote coordination and cooperation. Social Information Technologies are intended to support this. 

So why don't we build our societal protection system and the future Internet in a way that is inspired by our biological immune system? It appears that societies as well have something like a basic immune system. The peer-to-peer sanctioning of deviations from social norms is one example for this, which I already mentioned before. We now witness internet vigilantes or lynch mobs on the web, criticizing things that people find improper or distasteful. I acknowledge that lynch mobbing can be problematic and may violate human rights; this will require us to find a suitable framework. It seems that we are seeing here the early stage of the evolution of a new, social immune system. Rather than censoring or turning off social media as in some countries, we should develop them further to make them compatible with our laws and cultural values. Then systems like these could provide useful feedback that would help our societies and economy to provide better conditions, products and services.

The question is how do we best obtain a high level of security in a self-regulating economy and society? In perspective, we might create a security system that is partly based on automated routines and partly on crowd intelligence. If I can illustrate this again with the example of the Internet: let's assume that servers which are part of the Internet architecture, would autonomously analyze the data traffic for suspicious properties, but -- in contrast to what we are seeing today -- we would not run centralized data collection and data analytics. (Our brain certainly does not record and evaluate everything that happens in our immune system, including the digestive tract, but our body is nevertheless protected pretty well.) In case of detected suspicious activities, a number of responses are conceivable, for example: (1) the execution of the activity could be put on hold, while the sender is asked for feedback, (2) the event could trigger an alert to the sender or receiver of the data, a local administrator, or to a public forum, whatever seems appropriate. The published information could be screened by a crowd-based approach, to determine possible risks (particularly systemic risks) and to take proper action. While actions of type (1) would be performed automatically by computers, algorithms, or bots, actions of type (2) would correspond to the complementary crowd security approach. In fact, there would be several levels of self-regulation by the crowd, as I describe later. One may also imagine a closer meshing of computational and human-based procedures, which would mutually enhance each other.


Managing the chat room


We have seen that information exchange and communication on the web has quickly evolved. In the beginning, there was no regulation or self-regulation in place at all. These were the times of the Wild Wild Web, and people often did not respect human dignity or the rights of companies. But police and other executive authorities were also experimenting with new and controversial Internet-based instruments, such as Internet pillories to publicly name people. 

All in all, however, one can see a gradual development of improved mechanisms and instruments. For example, public comments in news forums were initially published without moderation, but this spread a lot of low-quality content. Then, comments were increasingly assessed for their lawfulness (e.g. for respecting human dignity) before they went on the web. Then, it became possible to comment on comments. Now, comments are rated by the readers, and good ones get pushed to the top. The next logical step would be to rate commentators and raters. We can see thus the evolution of a self-regulatory system that channels the free expression of speech into increasingly constructive paths. I believe it is possible to reach a responsible use of the Internet based on principles of self-regulation. Eventually, most malicious behaviour will be managed by automated and crowd-based mechanisms such as the reporting of inappropriate content and reputation-based placements. A small fraction will have to be taken care of by a moderator, such as a chat room master and there will be a hierarchy of complaint instances to handle the remaining, complicated cases. I expect that, in the end, only a few cases will remain to be decided at the court, while most activities will be self-governed by social feedback loops in terms of sanctions and rewards by peers.

The above mechanisms will also feed-back from the virtual to the real world, and we will see an evolution of our over-regulated, inefficient, expensive and slow legal system into one that is largely self-regulating, more effective and more efficient. Here we may learn from the way interactive multi-player online games or Interactive Virtual Worlds are managed, particularly those populated by children. One of my colleagues, Seth Frey, has pointed me to one such example, the Penguin Club. To keep bad influences away from children, communication and actions within the Penguin Club world are monitored by administrators. As the entire population of Penguin Club users is too large to be mastered by a single person, there are several communities run on several servers, i.e. the Penguin Club world is distributed. Moreover, as every administrator manages his or her community autonomously, these may be viewed as parallel virtual worlds. This provides us with an exceptional opportunity to compare different ways of governance. Our study is far from being completed, so I just want to mention this much: It turns out that, if vandalism is automatically sanctioned by a robotic computer program, this tends to suppress creativity and results a boring world. This is reminiscent of the many failed past attempts to create well-functioning, liveable cities managed in a top-down way.

Returning to the virtual world of Penguin Club, I certainly don't want to argue in favour of vandalism, but I want to point out the following: the most creative and innovative ideas are, by their very nature incompatible with established rules, and it requires human judgement to determine, whether they should be accepted or sanctioned. This has an interesting implication: we may actually allow for different rules to be implemented in different communities, as they may find different things to be acceptable or not. This will eventually lead to diverse Interactive Virtual Worlds, which gives people an opportunity to personally choose their fitting world(s). 

Embedding in our current institutional system


Of course, we need to make sure to stay within the limits of the constitution and fundamental laws, such as human rights and respect for human dignity. Such decision may require difficult moral judgements and require particular qualifications of the "judge," the administrator of the gaming community or chat room. So it does make sense to have a hierarchy of such "judges" based on their qualification to decide difficult matters in an acceptable and respected way. These arbiters would be called "community moderators". 

How would a "hierarchy of competence" emerge among such community moderators? This would be based on previous merits, i.e. on qualifications, contributions, and performance. Decisions would be rated both from the lower and the upper level. Over sufficiently many decisions, this would determine who will be promoted -- always for a limited amount of time -- and who will not. If the punished individual accepts the sentence of the arbiter, the moderation procedure is finished, and the sentence is published. Otherwise, the procedure continues on the next higher level, which is supposed to spend more effort on finding a judgement compatible with previous traditions, to reach a reasonable level of continuity and predictability. 

Whoever asks for a judgement process (or revision) would have to come up for the costs (depending on the system, this might also be virtual money, such as credit points). Judgements on higher levels would become more expensive, and for the sake of fairness, fees and fines will not correspond to a certain absolute amount of money, but to a certain percentage of the earnings made in the past, for example, in the last 3 years. For example, in Switzerland, such a percentage-based system is successfully applied to traffic fines. 

Only when the above-described self-regulation fails to resolve a conflict of interest over all judgement instances of the Interactive Virtual World would today's central authorities need to step in. One might even think that many of today's legal cases could be handled in the above crowd-based way of conflict resolution, and that today's judges would then only form the highest hierarchy. This would fit the system of self-regulation proposed above into our current organization of society. I expect the resulting procedures to be effective and efficient. The long duration of many court cases could be dramatically cut down. In other words, new community-based institutions of self-regulation should be able to help resolve the large majority of conflicts of interest better than existing institutions. I see the role of courts, police, and military mainly to help restore a balance of interests and power, when other means have failed. In this connection, it is important to remember that control attempts in complex systems often fail and tend to damage the functionality of the system rather than fixing it in a sustainable way. Therefore, I don't think that these institutions should try to control what happens in society. 

Ending over-regulation


I believe that over time the principles of self-regulation will replace today's over-regulated system. A hundred years ago, only a handful of laws were made in the United Kingdom in one year. Now, a new regulation is put into practice every few hours. In this way, we have arrived in a system with literally tens of thousands of regulations. Even though we are supposed to, nobody can know all of them (but ignorance does not excuse us). Moreover, many laws are often revised shortly after their first implementation. 

Even lawyers don't know all laws and regulations by heart. If you ask them, whether one thing is right or the opposite, they will usually answer: "it depends." So, we are confronted with a system of partially inconsistent over-regulation, which puts most people into a situation, where they effectively violate laws several times a year -- and they even don't know in advance how a court would judge the situation. This creates an awkward arbitrary element in our legal system. While some people get prosecuted, others get away, and this creates an unfair system, not just because some can afford to have better lawyers than others.

However, this is not the only way an unfair situation is created, while our law system intends just the opposite i.e to ensure a system that doesn't generate advantages for some individuals, companies, or groups. So what is the problem? Whenever a new law or regulation is applied, it requires some people or companies to adapt a lot, while others have to adapt just a little. This creates advantages for some and disadvantages for others. Powerful stakeholders would make sure a new law will fit their needs, such that they must adapt only a little, while their competitors would have to adapt much. Hence, the new law will make them again more powerful. However, even if we had no lobbying to reach law-making tailored to particular interest groups, the outcome would be similar. Just the stakeholders who profit most would vary more over time. The reason is simple: If N regulations are made and p is the probability that you have to adapt little, while (1-p) is the chance that you have to adapt a lot, the probability that you are a beneficiary k times is pk(1-p)(N-k). In other words, there is automatically a very small percentage of stakeholders who benefits from regulations enormously, while the great majority is considerably disadvantaged relative to them. Putting it differently: The homogenization of the socio-economic world comes along with a serious problem: the more rules we apply to everyone, the fewer people will find this world not well fit to their needs. And this explains a lot of the frustration among citizens and companies, not just in the European Union. 

Only a highly diverse system with many niches governed by their own sets of rules allows everyone to thrive. Interestingly, this is exactly how nature works. It is the existence of numerous niches that allows many species to survive, and new ones to come up. For similar reasons, socio-economic diversity is an important precondition for innovation, which is important for economic prosperity and social well-being. Nature is much less governed by rules than today's service societies. For example, recent discoveries of "epigenetics" revealed that not even the genetic code is always read in the same way, but that its transcription largely depends on the biological and social environment. 

Thus, how to build socio-economic niches, in which people can self-organize according to their own rules, within the boundaries of our constitution? Can we find mechanisms that promote social order, but allow different communities to co-exist, each one governed by their own sets of values and quality criteria? Yes, I believe, this is possible. Social Information Technologies will help people and companies to master the increasing levels of diversity in a mutually beneficial way. Furthermore, reputation systems can promote cooperation. If they are multi-dimensional, pluralistic, and community-driven, they can offer a powerful framework for social self-regulation, which provides enough space for diversity and opportunities for everyone. 

Pluralistic, community-driven reputation systems


Here I want to elaborate a bit more on another important component of the "social immune system", namely reputation systems. These days, reputation and recommender systems are spreading over the Web which stresses their value and function. People can rate products, news, and comments, and they do! If they make the effort, there must be a reason for it. In fact, Amazon, Ebay, Tripadvisor and many other platforms offer other recommendations in exchange. Such recommendations are beneficial not only for users, who tend to get a better service, but also for companies, since a higher reputation allows them to sell a product or service at a higher price. However, it is not good enough to leave it to a company to decide, what recommendations we get and how we see the world. This would promote manipulation and undermine the "wisdom of the crowd" leading to bad outcomes. It is, therefore, important that recommender systems do not reduce socio-diversity. In other words, we should be able to look at the world from our own perspective, based on our own values and quality criteria. Only then, when these different perspectives come together, can collective intelligence emerge. 

As a consequence, reputation systems would have to become much more user-controlled and pluralistic. Therefore, when users post ratings or comments on products, companies, news, pieces of information, and information sources (including people), it should be possible to assess not just the overall quality, but also different quality dimensions such as the physical, chemical, biological, environmental, economic, technological, and social qualities. Such dimensions may include popularity, durability, sustainability, social factors, or how controversial something is. It is, then, possible to identify communities based on shared tastes (and social relationships). 

We know that people care about different things. Some may love slapstick comedies, while others detest them. So, it's important to consider the respective relevant reference group, and this might even change depending on the respective role we take, e.g. at work, at home, or in a circle of friends. To take this into account, each person should be able to have diverse profiles, which we may call "personas". For example, book recommendations would have to be different, if we look for a book for ourselves, for our family members, of for our friends. 

Creating a trend to the better


Overall, the challenge of creating a universal, pluralistic reputation system may be imagined as having to transfer the principles, on which social order in a village is based, to the global village, i.e. to conditions of a globalized world. The underlying success principle is a merit-based matching of people making similar efforts. This can prevent the erosion of cooperation based on "indirect reciprocity," as scientists would say. For this approach to play out well, there are a number of things to consider: (1) the reputation system must be resistant to manipulation attempts; (2) people should not be terrorized by rumours; (3) to allow for more individual exploration and innovation than in a village, one would like to have the advantages of the greater freedoms of city life -- this requires sufficient options for anonymity (to an extent that cannot challenge systemic stability).

First, to respect the right of informational self-determination, a person would be able to decide what kind of personal information (social, economic, health, intimate, or other kind of information) it makes accessible for what purpose, for what period of time, and to what circle (such as everyone, non-profit organizations, commercial companies, friends, family members, or just particular individuals). These settings would, then, allow selected others to access and decrypt selected personal information. Of course, one might also decide not to reveal any personal information at all. However, I expect that having a reputation for something will be better for most people than having none, if it would help find people who have similar preferences and tastes.

Second, people should be able to post their comments or ratings either in an anonymous, pseudonymous, or personally identifiable way. But pseudonymous posts would have, for example, a 10 times higher weight than anonymous ones, and personal ones a 10 times higher weight than pseudonymous ones. Moreover, everyone who posts something would have to declare the category of information: is it a fact (potentially falsifiable and linked to evidence allowing to check it), an advertisement (if there is a personal benefit for posting it), or an opinion (any other information). Ratings would always have the category "opinion" or "advertisement". If people use the wrong category or post false information, as identified and reported by, say, 10 others, the weight of their ratings (their "influence") would be reduced by a factor of 10 (of course, these values may be adjusted). All other ratings of the same person or pseudonym would be reduced by a factor of 2. This mechanism ensures that manipulation or cheating does not pay off. 

Third, users would be able to choose among many different reputation filters and recommender algorithms. Just imagine, we could set up the filters ourselves, share them with our friends and colleagues, modify them, and rate them. For example, we could have filters recommending us the latest news, the most controversial stories, the news that our friends are interested in, or a surprise filter. So, we could choose among a set of filters that we find most useful. Considering credibility and relevance, the filters would also put a stronger weight on information sources we trust (e.g. the opinions of friends or family members), and neglect information sources we do not want to rely on (e.g. anonymous ratings). For this, users would rate information sources as well, i.e. other raters. Then, spammers would quickly lose their reputation and, with this, their influence on recommendations made.

Users may not only use information filters (such as the ones generating personalized recommendations), but they will also be able to generate, share, and modify them. I would like to term this approach “social filtering.” (A simple system of this case has been implemented in Virtual Journal). 

Together, the system of personal information filters would establish an "information ecosystem," in which increasingly reliable filters will evolve by modification and selection, thereby steadily enhancing our ability to find meaningful information. Then, the pluralistic reputation values of companies and their products (e.g. insurance contracts or loan schemes) will give a quite differentiated picture, which can also help the companies to develop customized and more useful/successful products. Reputation systems are therefore advantageous for both, customers and producers. Customers will get better offers, and producers can take a higher price for better quality, leading to mutual benefit.

Summary


Social Information Technologies for protection might be imagined to work like a kind of immune system, i.e. a decentralized system that responds to changes in our environment and checks out the compatibility with our own values and interests. If negative externalities are to be expected (i.e. if the value of an interaction would be negative), a protective "immune response" would be triggered. 

Part of this would be an alarm system, a kind of "radar" that alerts a user of impending dangers and makes him or her aware of them. In fact, the "Internet of Things" will make changes – both gains and losses -- measurable, including psychological impacts such as stress, or social impacts, such as changes in reputation or power. Social Information Technologies for protection would help people to solidarize themselves against others who attack or exploit them. A similar protection mechanism may be set up for institutions, or even countries. Such social protection ("crowd security") might often be more efficient and effective than long-lasting and complicated lawsuits. Of course, protection by legal institutions would exist, but lawsuits would become more like a last resort than a first resort, for when social protection fails, e.g. when there is a need to protect someone from organized crime. Note that already a suitably designed reputation system would be expected to be quite efficient in discouraging certain kinds of exploitation or aggression, as it would discourage others from interacting with such people or companies, which would decrease the further success of those who trouble others.

Tuesday, 27 January 2015

THE SELF-ORGANIZING SOCIETY – Taking the future in our hands

by Dirk Helbing



I conclude that Big Data, while potentially powerful and useful, is not a universal solution. I also explain why the concept of super-governments ruling their citizens or of companies steering their customers in a top down way will not work on the long run. To master the growing complexity as we network our world, as cultural evolution progresses, and as economic markets differentiate, we need a more decentralized approach. The “Internet of Things” will empower self-organizing systems that create socio-economic order and functionalities of many kinds in a bottom-up way. This approach can solve the problem of over-regulation, benefit from diversity, and promote innovation, collective intelligence, societal resilience, and individual happiness. 


The world is changing at an ever-increasing pace. This has called for new approaches to support decision-making. In the past, whenever a problem had to be solved, the best thing was to ask some experts. These would go to the library, collect up-to-date knowledge, and supervise PhD students helping to fill existing knowledge gaps. But this is a slow process. In the meantime, whenever people have a question, they ask Google or consult Wikipedia, for example. This might not always give the correct or best answer in the world, but it delivers quick answers when we are interested in them, and on average the so resulting decisions might be better than the decision we took in the past. It is, therefore, no wonder that politics and business are increasingly excited about the Big Data approach. This has even fueled the dream that, finally, there will be a universal approach to answer all the questions one might have and to take the best possible decisions for the world. Why should one, then, still ask experts or the citizens, if there are intelligent machines that can figure things out and are more comfortable to handle? One would just have to collect as much data as possible and evaluate them with powerful machine learning algorithms. In fact, if things were as simple as this, I would perhaps consider to agree with a "wise king" ruling the world, using a Big Data approach, but I have some serious reservations about this approach.[1]

Top-down control will fail


Of course, I recognize that there are many hierarchically (top-down) organized systems in our world, and therefore I don't question that they can be useful at times, depending on the respective circumstances. For example, elementary particles form atoms, atoms form chemical compounds, these form solid bodies, and together they may form a planet, which is part of a planetary system, and a galaxy. 

Biological cells create organs, and together they may form a human body. Humans again may organize themselves in groups, cities or organizations, and nations. However, the stability of such hierarchies is based on two important principles: the forces are strongest on the bottom, and the changes are slowest on the top. But this is not anymore true in today's societies, where laws are probably made more quickly than companies and people can adapt. On the long run, this is likely to cause a systemic instability. While it is known that delayed adaptation can destabilize a system, we are also trying to push many of our problems into the future (e.g. public debts, implications of demographic change, nuclear waste, climate change). This creates a concrete danger for our society to get out of control, and therefore we need a new approach – one that generates a resilient, more crisis-proof society. 

Wouldn't new information systems allow one to rule the world more successfully? Yes, to various extents, depending on the approach. In order to run a country or company well over a long time, close-to-optimal decision-making is needed. The question is, how to take such decisions: top down, bottom up, or by combining both? In previous chapters I have shown that, for a number of reasons, a supercomputer to optimize the world in real-time, a Crystal Ball to predict the future, and a Magic Wand to manipulate it will not work perfectly enough. Trying to create such technologies is dangerous. An information and communication system aiming to collect all data in the world may certainly produce a powerful tool. Nevertheless, we should better not build it, as we don't know how to use it well, and it's unlikely we ever will. 

Big Data analytics comes with a number of problems such as over-fitting, spurious correlations, and classification errors. But as a powerful information system will have large-scale systemic impacts, a single mistake can be highly destructive or even endanger humanity. Just imagine the power of such information and communication systems to get into the hands of a misguided group of individuals or a criminal organization. This could easily turn our societies into evil regimes. Hence, wise and caring political leaders as well as companies should better abstain from trying to build an all-knowing and almighty information system. The more powerful information systems are the more safety measures are needed to protect companies and people from potentially resulting harm. This calls for a suitable combination of encryption, decentralization, transparency, participation, reputation systems, community moderation mechanisms, and legal protection. 

Surprisingly, however, not even a decision-maker with the very best intentions and all the data and technology in the world could take optimal decisions. Although computational power grows exponentially in time, the complexity of our world is growing even faster. Therefore, no single person, company or institution will ever be able to optimize our quickly changing world in real-time. 

Supercomputers cannot even perfectly optimize the traffic lights of a big city in real time. This is because the required computational effort explodes with the size and complexity of the system. Possibilities for optimal real-time top-down control will even decrease, as man-made systems become increasingly complex, such that the relative lack of computational power grows with time. Despite this, we have so far attempted to "control complexity" in a top-down way by thousands of laws and enforcement institutions. While this approach has served us well for a long time, it is eventually coming to its limits. The top-down approach has produced over-regulation and high debts, while many problems haven’t been solved. In fact, we seem to have more problems than ever.

Time for a new approach


Due to many instances of misuse, attempts to collect huge masses of data have undermined the trust of people in a conventional Big Data approach. But the digital revolution does not mean that we must loose human rights, free decisions, dignity, and democracy. There are better ways to create social order and socio-economic well-being with future information systems than by massive data collection of sensitive personal data and surveillance of all kinds, from speed control to Internet control and, one day, perhaps even thought control.[2] As I have pointed out, diversity and independent decision-making are important preconditions for collective intelligence, which is needed to turn the complexity of the world into our advantage. The consideration of multiple perspectives is key to master our future in an increasingly complex society. 

We should, therefore, build our society on a trustful, symbiotic relationship with the citizens, customers, and users. The goal should be a society of well-educated and responsible people that is based on the principles of respect, "live and let live," and participatory social, economic, and political opportunities for everyone. 

Locality as success principle of the universe


As Albert Einstein (1879-1955) pointed out, "we cannot solve our problems with the same kind of thinking that created them.” Fortunately, an alternative, superior approach exists. A distributed, information-based management of complex dynamical systems is more efficient than classical top-down control. It is based local real-time interactions (where "locality" is not necessarily restricted to "real space"). 

In our universe, locality is an important success principle. Most physical forces are extremely short-range. Locality is also a crucial principle underlying many self-organization processes in socio-economic systems. It is, for example, a precondition for niches that support diversity and innovation. As we have seen in a previous chapter, local interactions promote the evolution of cooperation and social preferences, too. One might even say that the most interesting socio-economic phenomena are based on co-evolutionary processes that happen on the meso-level (i.e. on an intermediate scale between the individual system component and the entire system). 

So, we should better use the success principle of locality for us. But what implications does it have for the future management of our complex world? We need to pursue an approach based on distributed control and self-organization. Self-organization may be seen as another word for the “invisible hand” phenomenon. But it doesn't automatically produce good outcomes. Phenomena such as phantom traffic jams, crowd disasters, financial crashes, or "tragedies of the commons" show this well. However, these phenomena are now well understood – there are mathematical models or computer simulations reproducing them. And these tell us that it’s often possible to avoid negative outcomes of self-organization: by changing the institutional settings or interaction mechanisms, or just by operating the system in a different parameter regime (e.g. at lower density). 

How societies will be "ruled" in the future


Unfortunately, in the past, humans have been pretty bad at specifying suitable interaction rules, and they haven’t even found good ways to formalize them. This problem has so far been standing in the way of self-organization and decentralized approaches. However, the main point to be considered is that every actor, be it a company or an individual or another entity, should have to pay a fair compensation for the externalities produced (be they harmful emissions, toxic waste, noise, or other things that affect others or the environment in a negative way). Social Information Technologies can help to do this. Even where the invisible hand used to fail in the past, we can often make it work in the future, by considering the externalities. Three hundred years after the inception of the "invisible hand," the enabling technologies for this are just becoming available!

In fact, the sensor networks establishing the "Internet of Things," will for the first time in human history enable us to realize Adam Smith's (1723-1790) brilliant vision of self-organizing systems. This creates an entirely new opportunity to make our increasingly complex world manageable again in a way that is compatible with the complexity of our world. But we need a paradigm shift in the way we think about our world and the way we govern it! 

Using the sensor networks of the "Internet of Things," we will soon be able to perform real-time measurements of the data we need, and it is often not necessary to store them. The collection of as much data as possible, which is at the core of today's Big Data approach, is therefore replaced by a tailored measurement approach. Such real-time measurements (without long-term data storage) are sufficient to enable the real-time feedback required for self-organizing systems. As I have underlined before, one can anyway not process all the data currently stored and storing more data does not necessarily mean better results, so why should we keep such data in the first place? 

However, to fully unleash the power of information for self-organizing systems, we will have to go beyond the brute-force machine learning approach currently applied to Big Data. Namely, we must learn to combine knowledge from the computer, complexity and social sciences. So far, this combination of knowledge and skill sets has often been lacking. The Silicon Valley is too technology-driven, while the social sciences tend to underutilize technology. Finally, the potential of complexity science for real-world applications is just being discovered...

Waking up from the Big Data dream


It is surprising to hear that decentralized approaches should be able to outcompete centralized ones. How is this possible? Couldn't we emulate a decentralized system, i.e. operate a centralized system like a decentralized one? This seems plausible, but it would certainly be more expensive. Moreover, it's not obvious what kinds of data are relevant, and which ones obfuscate the truth. In contrast to what the Big Data thinking often suggests, less data can sometimes be better. For example, I discussed earlier that it is possible to predict epidemic spreading with a model-based empirical approach better than Google Flu Trends can do it with Big Data. This is, because too much data produces problems like "over-fitting" or "spurious correlations." In other words, one might get results that are not relevant (such as random patterns). These would be misleading, producing bad decisions. 

Furthermore, a centralized approach often ignores local knowledge, because it’s usually not possible to centrally process all local information. Processing power and data transmission rates are still limiting factors, and they will always be. Such local knowledge, however, allows decentralized "bottom-up" approaches to perform well.

In other words, the Big Data dream, which promises governments and some companies knowledge of everything and power by knowledge, turns out to be a dangerous illusion. Big Data is far from being a universal tool to fix the world. The Big Data approach was not even able to fix the problems of the Silicon Valley. It is, therefore, also time to wake up from this dream and to say goodbye to the flawed Big Data approach of mass surveillance, too. The terrible terror attacks in Boston and Paris have shown that surveillance can't guarantee 100 percent security. It is also known that extremism and crime are often results of lacking socio-economic participation, integration, and respect.[3]

Therefore, control is not a good substitute for trust – "trusting" is "not knowing." Whoever has power must pay attention to avoid anything that could violate widely accepted moral, cultural or legal values, as this can seriously undermine legitimacy and trust. In fact, mass surveillance has considerably undermined people’s trust already. For example, two thirds of Germans are afraid that their personal data are misused by companies and public authorities.[4] More than fifty percent of all Germans even feel threatened by the Internet. On the long run, this can substantially weaken the credibility of companies and governments. This might even produce a legitimacy crisis and a loss of power. 

Note that the power reached by weapons and other coercive means tends to be destructive and often counter-productive: it undermines the self-organized social order that is based on the local norms and cultures. Therefore, power based on force tends to cause trouble and is usually not stable for long. Constructive power, in contrast, requires the willingness of people to follow their leaders. It is based on a trustful, symbiotic relationship, in which all involved parties, including the citizens, benefit. We, therefore, need suitable institutions that help us to find and maintain a proper balance between different stakeholder interests and support the self-organization of our society and economy (see Information Box 1)

The secrets of self-organization 


At times, self-organization seems to be almost magic. So, how does it work? It's mainly based on mutual adaptation processes. These might be imagined similarly to the way the universe works as a result of physical forces. However, it's hidden socio-economic forces that govern the structure, dynamics, and function of our society (and these may change over time as a result of innovations). These forces relate to the interaction rules in the system, and further mechanisms serve to reach a compliance with these rules. For example, social norms – the rules behind our everyday lives – are maintained by "peer punishment" of those who deviate from them. 

Complementary, money is an important reward mechanism, but not the only one (social reward mechanisms can be even more effective). The weakness of today's money is that it is one-dimensional, while it takes several control parameters and, therefore, a multi-dimensional reward or exchange system to manage complex systems in the future. I have shown that nature, in fact, has created humans in a way that makes us responsive to many different rewards. Interestingly, the virtual world now offers new possibilities to create incentive mechanisms: ratings, reputation systems, and gaming scores are good examples. 

Finally, for self-organization to work well, one must find and apply suitable sets of rules. But how to determine these rules? Top down or bottom up? Over time, top-down regulation has produced the problem of over-regulation, and it also promotes inequality.[5] The approach of self-organization, in contrast, doesn't have this problem, and it has the further advantage that it creates options rather than compromises (see Information Box 2). It enables local rule sets in favor of socio-economic diversity, innovation, happiness, and systemic resilience. The approach is similar to niches in nature. However, favorable self-organization requires the ability to find and implement suitable sets of rules, which is not trivial at all. 

Fortunately, there are recently some new tools, which can help us to identify suitable institutional settings and interaction rules that support the self-organization of desired functionality. For example, we can do experiments more easily. In fact, we may vary and test new rule sets in advance – either with computer simulations or in interactive multi-player online worlds, or both. Compared to today's policy-making, this implies several important differences: 1. computer simulations and Interactive Virtual Worlds can be used as a "policy wind tunnel” to explore the implications of rule sets in advance; 2. no new rules should be implemented without prior testing; 3. alternative sets of rules can be continuously generated and tested. 

Moreover, considering the importance of diversity for innovation, societal resilience, economic well-being, and the happiness of people, one should not implement a single rule set homogeneously all over the world. The self-organizing society should be rather imagined as a set of co-existing, but interacting self-organizing systems governed by their own rule sets. Social Information Technologies would then help us to master this diversity and benefit from it – by making different rule sets understandable and mutually compatible. Altogether, this can create a rich "socio-economic ecosystem," allowing for new ideas and niche markets. I expect that the underlying principle to “live and let live” would also be able to reduce conflict and extremism, which result when minorities are not provided with enough opportunities to personally and culturally unfold and express themselves. 

Where may the digital revolution take us?


It's important to understand that the digital revolution requires us to see the world with different eyes, as entirely new principles will apply. The future world is not well characterized by political categories such as "left" or "right." It will have its own logic, and moving "forward" is the best way of describing it. Even though the digital era will be different and it hasn't been here before, one can already see it coming. One can analyze the new trends underlying the digital revolution, and draw conclusions by studying the transformative "forces" at work. 

It is entirely possible that we will go through a phase based on a super-government approach driven by Big Data. However, my conclusion is that future societies will eventually build on advanced self-organization approaches, enabled by "Internet of Things" technologies operated in a decentralized way. This will happen, because such systems are potentially more effective and efficient, promoting innovation, flexibility, adaptiveness, and resilience, in short: they are superior. Self-organization is enabled by real-time information and feedbacks, and it unleashes the potential of local expertise and collective intelligence, based on coordinated bottom-up engagement. 

The best of all worlds


One might say that self-organization as described before combines the best elements of democracies and market systems, and establishes a synergy between economic and social needs. The approach is well compatible with human rights and constitutional principles, and it has nothing to do with anarchism. I absolutely recognize the importance of socio-economic order for prosperity and well-being. Self-organization in the sense I am using it does not mean that we can just choose the rules that please us. We must rather find suitable rules that serve a certain functionality or purpose. Such rules typically require us to consider the externalities of our decisions and actions, and to compensate others for negative externalities. 

The self-organization approach is also very different from communism or socialism. First, it implies as little top-down planning and control as possible. And second, it builds primarily on enabling individuals to help themselves and to cooperate more successfully rather than on attempts to reach equality by redistributing wealth. The self-organization approach is based on self-determined decisions, but within an information-based framework that promotes collective intelligence and better decisions by everyone. It builds on awareness to promote responsible, other-regarding behavior. 

Suitable reputation and merit-based mechanisms are powerful principles to support cooperation, responsibility, and better socio-economic outcomes in a globalized world. If properly implemented, the future self-organizing world will be more effective and efficient than our current system. Today, top-down regulation still struggles with bottom-up self-organization, thereby causing frictional losses, conflicts, and high costs. In fact, I believe we will not much longer be able to come up for the expensive institutions needed for our current, over-regulated system. Most industrialized countries have reached historical heights in public debt levels in the order of 100 or 200 percent of their annual productivity, or more. Nobody knows how we should ever be able to pay for this – and for even more regulation.

Understanding and following the principles described in this book allows us to unleash the innovative potential of our society, to exploit the new opportunities of the digital age to come, and to better manage the 21st century challenges ahead of us, such as global financial and economic crises, global epidemic spreading, global conflict, globally organized crime, or global environmental and climate change. The Economy 4.0 will come with more creative work, personalized products, a spirit of sharing, and a collaborative information ecosystem that will overcome some scarcities of the past. Who could afford not to pursue this approach? 

In the next decades, I expect the emergence of a Digital Society superior to what we currently have in most places of the world. In the previous chapter, I have given examples showing that a Participatory Market Society is already on its way (the "sharing economy" and the quickly growing "makers community," for example, reflect this well). The Participatory Market Society will build on the new opportunities that information and communication systems provide to us. To get a better idea of how this society might approximately look like, it is useful to discuss the Swiss system, which comes closest to my imagination of how the Participatory Market Society might work. 

As we know, the Swiss system works pretty well. Some of the remarkable particularities and success principles of Switzerland are: it is federally organized; it is built on great science and good education; it is based on basic democracy, where people can vote on substantial matters (including not to increase holidays or not to reduce taxes, as the voters have surprisingly decided!); it's a society that allows several languages and cultures to coexist; it is based on a consensus-oriented and, therefore, other-regarding decision-making tradition; it has a rotating presidency to avoid accumulation of too much power in the hands of one person or party; it has a well-maintained public infrastructure and a fantastic public transportation system; and it has a low debt level compared to other industrialized countries. In a sense, I expect that this system will be further improved, by generalizing it to economic activities, by using new opportunities offered by information and communication systems, and by exploring even better mechanisms to create collective intelligence. 

Finally, note that the self-organization approach is conservative in the sense that it builds on proven and tested success principles of our societies and on core cultural and ethical values (see also Information Box 3). By promoting other-regarding behaviors through the consideration of externalities, it helps us to create more sustainable systems, to preserve our environment, and to make our society more resilient. This is reached by enabling our society to better adapt to our changing reality, i.e. to technological change, environmental change, demographic change, etc. But what if we prefer our society to stay as it is? Can we preserve our current society, or get back to how it was before? I wish we could: many of us had a good time in the past! But this is a very romantic dream, and a very dangerous one, because we can't stop our economy and our societies from progressing. And we couldn't really want to stop its progress, because we would miss out the new opportunities that some other countries would surely use to gain competitive advantages. Why would we want to fall back behind others, if we could be leading this development?

Cities as agents of change


Developing the above thoughts further, what does it mean for the governance of our increasingly complex world that we need to engage more into distributed, bottom-up approaches? It suggests that, besides trying to find global solutions through institutions like the United Nations, we would have to build complementary institutions based on local entities, namely cities and regions. In fact, for many years, we haven't been able to negotiate binding global agreements to reduce climate change, and it has also been impossible to solve a number of other problems. Maybe, a bottom-up approach could be more effective at times? 

In fact, more than 50 percent of all people in the world are now living in cities, and the fraction is steadily growing. Cities are the places were the problems occur, and where the solutions are created. They are the places where pollution and crime happens, and where innovations and goods are produced. Cities are also the places that are most threatened by disasters. Thus, our efforts to increase societal resilience need to focus on them. 

It is, therefore, worth listening to what the previous chief city planner of New York City, Alex Andros Washburn, has to say in his book on the Nature of Urban Design. Interestingly, there is no master plan for New York City, the leading metropolis of the 20th century. Instead, there is a steady little-by-little adaptation to the needs of the respective neighborhoods. Washburn underlines how important it was that he was able to influence everything, while he controlled nothing. In the first place, urban change requires listening, he says, and he adds that public space is where you build public trust, by bringing all sorts of people together. To make the city more resilient and simultaneously meet quantitative, qualitative, and natural needs, top-down and bottom-up processes must intimately play together, pretty much as I have discussed it in the previous chapter. The same can be said about the "virtual cities" in the Internet, i.e. the communities that have formed in the digital world. To create trust, transparency is important there, too.

City Olympics to improve the world


Going a step further, I believe that digital communities and cities can be important agents of global change. It will be the competition and collaboration among cities, which can bring us forward in our attempts to solve the 21st century challenges. If we manage to find ways to make our cities smarter, this will make our planet smarter. In this way, acting locally will cause a global change to the better. For example, I have recently proposed that we might come up with something like “City Olympics” to address global problems such as climate change (see video). 

Calls to counter climate change are often seen by companies and citizens as opposing our preferred ways of life, and that is why they find so little support. However, doing something for our climate could be fun and rewarding, if we would run climate-oriented City Olympics every few years. These would be events with a sportive spirit, where cities all over the world engage in a friendly competition for the best science, technology, and architecture to counter climate change. They would also compete for the greatest citizen engagement (in terms of environmental-friendly mobility, investments into renewable energy technology, better thermal insulation, and more). These events could be presented by the public media in pretty exciting ways. Furthermore, after each Climate Olympics, there would be a cooperative phase, where the best ideas, technologies and urban governance concepts would be exchanged among the participating cities, thereby allowing them to make faster progress. Which city, which country will have reached its climate goals first? Let's be ambitious! While we may dislike regulations that tell us what to do, we love competitions, and we love winners! 

In a similar way could we address other global challenges. This would just change the kinds of disciplines in which cities would compete. It also seems natural that cities form global networks with other cities struggling with similar problems. Exchanging knowledge, ideas, technology and experts, or supporting each other when disasters strike will reward such global networks of cities that are glued together by similar challenges and interests. Why shouldn't we have an alliance of cities that takes the lead in supporting better, climate-friendly technologies? Just suppose cities next to raising ocean lines, such as New York City, Singapore, London, Hamburg, Sydney, and a few others would start this together. Wouldn't that create first mover advantages, which would soon let others follow?

Just a thought: regions rather than nations? 


Note that the principle "think global, act local" can be implemented not only by creating global collaboration networks of cities. It might also be good to have governance structures building on regions. In many cases, global negotiations between nation states don't lead to agreements within a reasonable amount of time. This is often because they are acting selfishly on their own behalf, sometimes equipped with veto powers. So, what if, besides top-down political decision-making institutions we would build bottom-up decision-making institutions such as a council of regions? This might often find solutions that are better adjusted to local needs and would provide more space for local cultures and diversity. We might even have top-down and bottom-up approaches working towards the same goals in parallel, finally implementing the first or best solution found. Such competition would be good! 

To have a strong legitimacy, regional representatives should be elected directly by the people in each region, and to avoid political casts, every grown-up citizen should be an electable candidate, independently of whether he or she belongs to a political party or not. Moreover, it would promote integration if every citizen above a minimum age living in a region would have the right to vote there, no matter whether born in that region or an immigrant. Remember that lack of participation is one of the most important factors causing conflicts.

To solve problems that have trans-regional relevance, the corresponding regional parliaments could send representatives for a limited time into trans-regional and global councils established to address specific problems. After all, these representatives would know best how to serve the needs of the people they are representing. To ensure flexibility and avoid accumulation of power and corruption, the global representatives of the regional parliaments could rotate every few months, or have a mandate for certain subjects only, or both. 

How to master our future: some actionable proposals 


In the past years, I have been talking to a lot of people, and many of them expect that there are major changes ahead of us. There are many signs of a destabilization of our world, and global conflict or war might be the result, because the powers that have dominated the 20th century are struggling to keep their influence. But if we want to manage a smooth transition into a better future, we must innovate not only what we are doing, but also how we are doing it, and how we think about the world. In particular, we need to learn an interaction- and system-oriented thinking. 

People expect that governments act on their behalf, but this doesn't mean that governments should increasingly interfere with their lives and try to micro-manage them. In fact, citizens are calling for more opportunities to take decisions that concern themselves. New opportunities for this are just emerging: information and communication systems increasingly allow for a participatory decision-making and coordination of activities.

Now, given that we will probably face a major change in the way our economy and society are organized, how can we get there smoothly, from where we are today? Below, I will make some actionable proposals to start with.

  1. Improve systemic resilience. Most global or large-scale networks – and networks of networks even more – are prone to highly damaging cascade effects. To protect ourselves from the vulnerability of our critical infrastructures and their essential functionalities, modular design principles, as they are established in management science, are very important. To get there, we must do at least two things: First, we need to make sure to build in "shock absorbers" or "engineered breaking points," which can effectively stop cascades by decoupling different parts of the network. Note, however, that the specific design of shock absorbers and engineered breaking points strongly depends on the particular kind of system. Therefore, an interdisciplinary solution approach is needed. Whenever diverse perspectives on a problem exist, the collaboration between different stakeholders is needed, typically involving independent representatives from politics, business, science, and the citizens. It would, therefore, be useful if, besides professional politicians, independent qualified citizens would be represented in the respective decision-making bodies as well (usually for a specific task and for a short time period).
  2. Reduce laws and regulations such that it supports diversity and its many positive side effects. I have shown that diversity is the basis of societal resilience, collective intelligence, cultural evolution, and the happiness of people. Diversity is also the motor of innovation and economic well-being. Thus, the complaints of companies about over-regulation and of citizens about the prevailing attempts to standardize and homogenize their cultures, lives, and cities, must be taken seriously, otherwise great projects such as the European Union may fail on the long run. We should try to combine the strengths of different cultures rather than making them all the same. Copying the leading economic system is not the best solution. (Remember the section on the Netflix challenge.) Therefore, the way to go is as follows: Give each law, apart from the constitutional principles, a limited term of validity. Avoid over-standardization and create opportunities. Allow different systems of self-organization to coexist and compete with each other. Importantly, when trying to reach high social or environmental standards or similar goals, don't fix a single best practice solution, but offer a choice of 2 or 3 best practice solutions (in the very best sense of pluralism), such that countries, cities, and companies have options to choose from, in favor of a locally and culturally fitting implementation. This will increase diversity and resilience, as there will be not just one solution, but several. It will also increase the support for these laws.[6] Finally, in many cases, compulsory regulations can be replaced by guidelines, thereby, helping everyone to improve established practices.
  3. Build a reputation system to promote awareness, quality and responsible action. If we reduce the number of laws and regulations, we need to replace them by something else. More freedoms can be given, if decision-makers behave in more responsible ways. Suitable merit-based and reputation systems can promote awareness, quality and responsible action. They are able to support cooperation and social order in an efficient and effective way. In fact, we see the quick spreading of reputation systems in the Internet for a good reason: they are extremely useful. They help to promote better services to customers, and allow providers of services and products to sell better quality at a higher price. However, reputation systems should be improved such that they have the following features: manipulation attempts and information pollution should be sanctioned; facts, advertisements, and opinions should be distinguished; anonymous, pseudonymous and personal ratings should be possible, but given different weights; reputation and recommender systems should be community-specific, pluralistic, and based on multiple criteria rather than trying to make everyone apply identical quality criteria; users should be able to choose, configure, create and share information filters and recommendation algorithms. 
  4. Rebalance top-down and bottom-up decision-making according to the principle of subsidiarity. We should build information systems enabling everyone to take better-informed decisions and more effective actions. This will empower people to contribute to the management of our systems in a bottom up way, thereby enabling solutions that are better fitted to local and diverse needs, using local competence and knowledge. Altogether, we will increasingly see the principle "You should do this!" replaced by "I can do something that needs to be done!" We should also create information platforms that support the coordination of such activities as well as the self-regulation of communities, where many conflicts of interests are resolved through a self-organized system of community moderators, considering the externalities of decisions and actions. Those community moderators will serve to judge and support the compliance with local rules, while staying within the framework of our constitutional principles. The temporary role of community moderators in the judgment hierarchy should depend on their previous merits, assessed both in a top-down and bottom-up way in terms of respecting fundamental principles and local rules well. 
  5. Establish a new data format based on the data cord principle to enable informational self-determination and micro-payments. I have pointed out that some of the problems with the Internet as we have it today are related not only with issues of security and cybercrime. They mainly result from a lack of user control over their personal data, from a lack of accountability, and from difficulties to reward companies and people easily and properly for the data, ideas and cultural goods they have produced. I think that all of these problems could be solved by a combination of a Personal Data Store (i.e. a personal mailbox for data) with special encryption techniques and a new kind of data format based on the concept of a "data cord," which connects contents with the respective producer or owner and allows them to control the access to their data.[7] In case of personal data, the related person should be considered the owner, and he or she should be able to control the rights of use of third parties. Furthermore, a Micro-Payment System should enable related multi-dimensional value exchange. Then, the more often data are copied or used, the more (material or immaterial) profits will be produced and automatically shared between the different instances of the value-generating chain. Such a Micro-Payment System would be superior to current intellectual property right (IPR) approaches such as software patents. Current IPR approaches stand in the way of an efficient co-evolution of ideas, which has been the underlying success principle of human culture.[8]
  6. Create a multi-dimensional complementary and backup money system to make our financial system more functional and resilient. We have seen our financial system to be more fragile than we thought, and we cannot exclude it will collapse one day. It is therefore essential to establish a backup money systems, which can step in and keep up economic exchange in case our current system fails. I, therefore, plea for a multi-dimensional exchange system. This would create a welcome competition with our current financial system, which would help it to improve. In fact, we currently see peer-to-peer payment and lending systems coming up. If they meet certain quality standards and serve public interests (such as providing loans to companies for the sake of investments), governments could support the development of such systems, for example, by a special tax status and less regulations (given there is no "too big to fail problem"). The current payment systems (including BitCoin) are not perfect, but allowing for more competition will let our financial system improve.[9] I have also pointed out that a one-dimensional reward system does not allow our complex socio-economic systems to self-organize well. For this reason, a multi-dimensional reward system is needed. Multi-dimensional money could provide such a system. It could be imagined like having several bank accounts for different kinds of use. 
  7. Engage in information infrastructures and measurement methods to determine and charge externalities. For self-organization to work well, it is further important to quantify externalities of decisions and actions, and to charge negative ones to the person or company producing them. If everyone has to pay for damage created, this will largely help to reduce the frequency and size of damage in the future. For the sake of symmetry and fairness, one may also reward people and companies for positive externalities. An important step is therefore to build an infrastructure that is able to measure and quantify damage to our physical and biological environment, but also to our socio-economic system (such as "social capital"). This can now be done with the sensor networks underlying the emerging "Internet of Things," and it will be important to increase awareness and responsible behavior. 
  8. Tax systemic risks and provide rewards for transparency, responsibility, data access, informational self-determination, and open innovation. Besides charging actually incurred damage, it would also make sense to charge likely socio-economic damage ("systemic risks"), as insurance companies would do it with risks caused by individuals. In the past, we have often had business models that lead to "tragedies of the commons" or that undermine privacy, pollute the web with spam, or advertise products and services in ways that are barely distinguishable from user ratings and facts. For the time being, until we have figured out better ways, taxation might help us in a relatively simple and straight-forward way to improve our techno-socio-economic systems. Rather than taxing labor more than profits that are made by monetary investments or robotic production, one might consider to tax excessive numbers of interactions, wherever too many interactions might have undesirable systemic impacts. This would encourage to simplify or decouple complex systems, to increase their resilience, and to collect Smart rather than Big Data (i.e. to discourage the collection of huge quantities of data that are of limited use and often quite problematic in many ways). So, it might be worth considering to progressively tax the number of network links, but also a lack of openness, transparency, participatory opportunities, or informational self-determination. Such taxation could reward local interactions and the provision of high-quality data, but encourage a forgetting of old and irrelevant data. Moreover, one should further promote the generation of participatory information systems that can benefit everyone. Concretely, one should use the money created in the before mentioned way to pay for public information infrastructures and institutions for the digital era to come – in order to quickly build an Information Ecosystem that can benefit everyone. In other words, suitable kinds of taxation could reward desirable and responsible innovations and private activities contributing to them. Let me, finally, stress that such taxation should not stand in the way of an Open Data and Open Innovation approach, and that it should not be based on a surveillance kind of system. Free and open data of high quality should be tax exempt. In this context, it is important to remember that the additional economic value, which can be created by Open Data, has been estimated by McKinsey to be of the order of 3,000 to 5,000 billion dollars per year in the world. It would be great if everyone could get a share of this cake! 
  9. Build the infrastructures and institutions for the Digital Society. I believe that, so far, no country in the world is well prepared for the digital era to come and the new principles governing it. Therefore, it would make sense to engage in an Apollo-like program, and the equivalent of a Space Agency for Information and Communication Technology (ICT): an Innovation Alliance with a mission to develop institutions and information infrastructures for the emerging digital society. This is crucial to master the challenges of the 21st century in a smart way and to release the full potential of information for our society. It is instructive to recall the factors that enabled the success of the automobile age: the invention of cars and of systems of mass production; the construction of public roads, gas stations, and parking lots; the creation of driving schools and driver licenses; the establishment of traffic rules, traffic signs, speed controls, and traffic police; and the invention of safety-enhancing technologies such as guardrails, anti-blockage systems (ABS), and airbags. All of this required many billions of investments each year. We invest a lot of resources into the agricultural sector, the industrial sector, and the service sector. But are we investing enough in the emerging digital sector? While the digital revolution certainly creates new challenges to our societies, it also opens up many promising opportunities to master our future. What do we need to make the digital age a great success? First of all, we need to engage in building trustworthy, transparent, open, and participatory ICT systems, which are compatible with our values. For example, it would make sense to establish the emergent "Internet of Things" as a Citizen Web. This would enable self-organizing systems through real-time measurements and a public information platform that I call the "Planetary Nervous System." It would also facilitate a new kind of search engine. To protect privacy, all data collected about individuals should be saved in a Personal Data Store and, given the agreement of the corresponding users, processed in a decentralized way by third-party Trustable Information Brokers, allowing everyone to control the use of their sensitive data. A Micro-Payment System would allow data providers, intellectual property right holders, and innovators to get rewards for their services. It would also encourage the exploration of new and timely intellectual property right paradigms. A pluralistic, User-centric Reputation System would promote responsible behavior in the virtual (and real) world. It would even enable the establishment of a new, multi-dimensional value exchange system, which would overcome weaknesses of the current financial system by providing additional adaptability. A Global Participatory Platform would empower everyone to contribute data, computer algorithms and related ratings, and to benefit from the contributions of others (either for free or for a fee). It would also enable the measurement, protection and production of Social Capital such as trust and cooperativeness, using next-generation User-Controlled Social Media. A Job and Project Platform would support crowdsourcing, collaboration, and socio-economic co-creation. Altogether, this would build a quickly growing Information and Innovation Ecosystem, unleashing the potential of data for everyone: business, politics, science, and citizens alike. We could also create a Digital Mirror World to assess the likely risks and opportunities of prospective decisions by means of sophisticated computers simulations. This would help us to identify suitable institutional settings and interaction rules for self-organizing systems. Finally, Interactive Virtual Worlds would allow us to unleash the full potential of creativity and self-organization within different socio-economic settings and Intellectual Property Right approaches. Finally, Social Information Technologies would help us to cope with the diversity resulting from this and to benefit from it. 
  10. Build a new educational system that prepares people for the digital age to come and for creative work. It becomes increasingly clear that most of our current institutions and jobs will fundamentally change. Much of the work, which has been performed by people in the past, will be done by computers, algorithms, or robots in the future. This applies particularly to procedural and rule-based work. Hence, many people will instead have to find work in the information- and knowledge-creating sector, including the area of cultural production. Rather than a standardized education, we will need a more personalized education and training in creativity. I imagine that the fundamental skills would encompass language skills, mathematical skills, and programming skills; the ability to find and critically judge information, to curate it and to use it for knowledge production; the skill to share knowledge, collaborate with others, and to co-create services and products, considering their externalities; the ability to concentrate on tasks, but also to flexibly adapt to new opportunities; last but not least, the skill to analyze and understand complex systems and to apply an interaction- and systems-oriented thinking. Digital literacy and good education will be more important than ever. But with the emerging "Internet of Things" and participatory information platforms, we can unleash the power of information and turn the digital society into an opportunity for everyone. It just takes our will to establish the institutions required to make the digital age a great success. Are we ready for this? 

Let's get started!


Of course, governments could bring this on the way, and they should! The spending on wars in the past 10 years exceeded 1 trillion dollars. Instead, we could have used this money to build a basis for the Digital Society of the future. Why not aid people by good information, thereby allowing them to take better decisions? For this, providing information of high quality is key, and that requires openness and transparency. Additionally, participatory opportunities can create new value and trust. Citizens have become part of our global information system. They should now be able to contribute to the collective intelligence needed to solve the ever more complex problems of our world. A new deal on data should treat citizens as first-class partners in exploring the opportunities of the future and mastering our challenges. 

However, independently of whether politicians will support self-organization approaches or not, companies will learn to create more efficient systems and make money with them. That's just the logic of automation implied by the digital revolution. As self-organizing systems spread, this will sooner or later also change the way we govern the world. Advances in information and communication technologies will drive this process. But the citizens can drive it, too. 

Given that Instagram was built by 13 people and WhatsApp by around 50, it becomes clear that a few people can now have global-scale impact. Moreover, note that Wikipedia has a lot of contributors, and OpenStreetMap is now supported by 1.5 million volunteers. Thus, citizens don't have to wait. They can take action themselves. With future information and communication technologies, we can change the world to the better! We can build a Citizen Web, a user-controlled Internet of Things, ourselves. We can measure externalities. We can create an OpenCulture Wiki, collecting information about the rule sets that make diverse cultures succeed. We can build Social Information Technologies to understand each other better and interact more successfully. We can run information platforms, where data, algorithms, and information filters are shared. And we can create a global maker community, producing our own products. 

Thanks to the digital revolution, almost everything seems possible, now. It's not utopia or science fiction anymore. We are just limited by our own imagination, and our will to co-create our future. Do you want to be part of it? Then, follow the FuturICT blog and social media, join the nervousnet community (nervousnet@ethz.ch), and contribute to a trust- and respectful, participatory society, using the power of information!

INFORMATION BOX 1: From a Big Data society to a self-organizing society


A participatory and resilient society needs a sufficiently distributed management of complex systems, based on bottom-up self-organization. In many cases, the self-organization approach can be nicely embedded in the institutional frameworks that we have today, as novel information and communication technologies add new opportunities. For example, a self-organized community management may complement our court system. In other cases, we will find inefficient institutions to be increasingly replaced by better institutional settings.
For self-organization to work well, information must be locally available and manageable. This requires informational self-determination and can be realized with the concept of a Personal Data Store. Note that informed consent to collect personal data is not enough. To exercise our constitutional freedoms, we must be able to determine who can access and use what personal data for what purpose. This does not necessarily mean that we can have data deleted or changed as we like (if the data is not factually wrong), but we could make certain categories of data not viewable to others (e.g. health data, and this would also mean that it wouldn't be allowed to infer health-relevant personal information from other data). Public authorities might, of course, have additional access rights, but solely on the basis of transparent laws and procedures.
In all uses of Big Data, high ethical standards have to be applied. Complementary, one needs efficient technical, cultural, and legal protection from misuse of data and discrimination. For this, it is important to contrast unfavorable perspectives with favorable ones (e.g. "in dubio pro reo"). This applies not only to legally relevant uses of Big Data, but also to business cases. Good quality control mechanisms must make sure that the scientific state-of-the art is applied. For instance, only statistically significant results should be taken as basis of favorable or unfavorable personal treatments (e.g. the classification as a "bad risk"). Furthermore, to avoid massive discrimination, the fraction of people considered "bad risks" should be very limited.
One of the best means to reach all this would be to ensure a sufficient transparency of data-related procedures. Furthermore, the anonymization, encryption and decentralized storage of personal data is strongly recommended to minimize misuse and unintended use. Much of the above still needs to be put in place. So far, we are still lacking proper institutional settings for the digital era to come.

INFORMATION BOX 2: Future governance: options rather than compromises


It would certainly raise satisfaction to have a governance approach where decisions are taken by those who will be affected by the decision, no matter whether this is on a local, regional, national, supranational, global, company, or community level. In principle, we could enable such decision-making by means of electronic participatory voting platforms. Individual points of views could be integrated by an argument map such as debate graph into a reasonable number of options (perspectives). If decisions are not taken in a basic-democratic way (which can be done only for a limited number of key questions), these different options should be all properly represented in the decision committee. The relative number of votes should depend on the respective externalities. Moreover, I would like to suggest that, the more diverse a community is, the larger should the committee be. This applies particularly to a committee that is supposed to resolve global issues. Let's assume we have various options or communities i. Then, each of it could be represented by a*ln Wi people, rounded down to integer numbers, where ln denotes the natural logarithm, and Wi stands for the contribution made to the common good to be created, e.g. the taxes to be paid or the externalities suffered from the respective decisions. Finally, a is a constant that determines the overall size of the committee. I also think that, to establish a new regulation that would apply to all, one should require a high level of support (ideally of the order of two thirds of all votes). Usually, this could only be reached by not just setting a single, homogeneous standard everywhere, but by providing a few best practice options, among which the companies or regions could decide. This would make the desire to have some standardization compatible with the desire to have options and opportunities that are locally and culturally fitting. In other words: self-organization means to create options rather than compromises for everyone. This can embrace the innovative power of diversity and also the collective intelligence that will be the basis of successful Digital Societies in the 21st century. 

INFORMATION BOX 3: A framework of fundamental principles to guide our (inter)actions


In this book, I have argued that we need to allow for diverse sets of rules in order to enable a large variety of functionalities, but also to allow companies and people to experiment and find better rule sets. Nevertheless, it would be favorable to share a number of fundamental principles with each other in the world – a guiding rule set small enough that everyone can remember it, and from which many things, including peaceful co-existence, would follow.
As I have demonstrated before, in a strongly connected world, maximizing the own payoff does not produce the best results. To avoid undesirable systemic instabilities and tragedies of the commons, superior principles than self-regarding optimization are needed. The following set of fundamental rules is the result of extensive discussions I have had with many people. The similarity with principles promoted by philosophers and world religions are not by chance. It is clear that these ethical principles have been the fundament, on which the success of societies has been based for thousands of years. As I pointed out before, these cultural principles are more persistent than steel and more powerful than wars. They also create Social Capital, which is a basis of economic well-being, too. The rules below particularly consider the problems implied by complex interdependencies, strong interactions, and the increasing importance of information, which are characteristic of today's world.

  1. Respect: Treat all forms of life respectfully; protect and promote their (mental, psychic and physical) well-being. 
  2. Diversity and non-discrimination: Support socio-economic diversity (including diversity-preserving uses of Information and Communication Technologies). Engage against discrimination or repression and against a punitive society; give priority to rewards.
  3. Freedom: Support the principle of informational self-determination; respect creative freedom (opportunities for individual development) and the freedom of non-intimidating expression; abstain from mass surveillance. 
  4. Participatory opportunities: Enable self-determined decisions and offer participatory opportunities and good options to choose from. Engage in properly balancing the interests of all relevant (affected) stakeholders, particularly political, business and citizen interests. 
  5. Self-organization: Create a framework supporting flexible, decentralized, self-organized adaptation, e.g. by means of suitable reputation systems.
  6. Responsibility: Commit yourself to timely, responsible and forward-looking actions (and non-actions), considering their externalities. 
  7. Quality and awareness: Commit yourself to honest, high-quality information and good practices and standards; support transparency and awareness.
  8. Fairness: Avoid negative externalities that are directly or indirectly caused by own decisions and actions, or fully compensate the disadvantaged parties for them (in other words: "pay your bill"); reward others for positive externalities.
  9. Protection: Engage in the protection from harm, damage, and exploitation; stay away from aggressive or war-like activities (including cybercrime, cyberwar, and misuse of information).
  10. Resilience: Reduce the vulnerability of systems and increase their resilience.
  11. Sustainability: Promote sustainable systems and long-term societal benefits; commit yourself to systemic benefits.
  12. Compliance: Engage actively into the protection of these ethical principles and in the compliance with them.

To summarize the above even shorter, the most important rule is: Be other-regarding and pay the fair price for your externalities. This fundamental principle takes care of the implications of our interactions, and it's probably enough to create a better world that will benefit everyone! Mastering our future isn't that complicated, after all!


[1] I would perhaps start to believe in this approach, if the Silicon Valley, and the area 100 kilometers around it, was a perfect world for all the people living there, but it's far from this. There is a lot of light, but a lot of shadow, too. 
[2] "Brain hacking" has recently become a scientific field. 
[3] Social networks and cultural norms can be very effective in creating social order and resilience. 
[5] The issue is that each new rule implies adaptation costs, but these are very diverse. Some have lower-than-average adaptation costs, and these are the beneficiaries of the new rule. In case of many rules, there are only a few players that happen to benefit most of the time, while others have relative disadvantages. As a consequence, introducing many rules implies a large degree of inequality. 
[6] A broader support of laws can be often reached by increasing the number of options allowed. 
[7] see Big data, privacy, and trusted web: What needs to be done, see http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2322082
[8] Just suppose we would all own a few words and would have to negotiate about their use with others. This would obstruct and limit our language and culture immensely! 
[9] maybe jointly with some insurance system to cover damage from small-scale accidents that will probably occur, if we want innovations to happen