Social Physics

Alex Pentland


Where do new ideas come from? How do they get put into action? How can we create social structures that are cooperative, productive, and creative? These are perhaps the most critical questions for any society, and they are especially important right now because of global competition, environmental challenges, and the failure of governments to act.

In the past few centuries we have seen Western culture thrive, in large part because of the paradigms inherited from Enlightenment thinkers such as Adam Smith and John Locke. Their intellectual frameworks offered answers to these critical questions. From that base we created a pluralistic society in which both the distribution of goods and the policies of government are determined by competition and bargaining. Our open civil society outcompeted more top-down, centralized societies, and now free markets and political elections are being experimented with in almost every country around the world.

In the last few years, however, our lives have been transformed by networks that combine people and computers, allowing much greater participation and much faster change. As the Internet makes our lives increasingly connected, events seem to move faster and faster. We are drowning in information, so much so that we don’t know what items to pay attention to and which to ignore.

As a result, our world sometimes seems to be on the edge of spinning out of control, with posts on social media such as Twitter causing stock market crashes and overthrowing governments. So even though the use of digital networks has already converted the workings of our economy, business, government, and politics, we still don’t fully understand the fundamental essence of these new human-machine networks. Suddenly our society has become a combination of humans and technology that has powers and weaknesses different from any we have ever lived in before.

Unfortunately, we don’t really know what to do about it. Our ways of understanding and managing the world were forged in a statelier, less connected time. Our current conception of society was born in the late 1700s during the Enlightenment and crystallized into its current form during the first half of the twentieth century. Things moved more slowly back then, and usually it was only a small group of traders, politicians, or wealthy families who really moved things along. Therefore, when we think about how to manage our society, we speak of “markets” and “political classes,” abstractions that events move slowly, so every one has pretty much the same information and so people have time to act rationally.

In today’s light-speed, hyperconnected world, these assumptions are being stretched past the breaking point. Today virtual crowds can form in minutes and often consist of millions of people from all over the world—and with each new day it may be a different set of millions of people contributing and commenting. We are no longer in the era of financial exchanges with physical trading floors and political conventions with smoke-filled back rooms, where small groups of people haggle until they come to mutually acceptable deals.

To understand our new world we must extend familiar economic and political ideas to include the effects of these millions of people learning from each other and influencing each other’s opinions. We can no longer think of ourselves as only individuals reaching carefully considered decisions; we must include the dynamic social effects that influence our individual decisions and drive economic bubbles, political revolutions, and the Internet economy.

Adam Smith himself understood that it is our social fabric that guides the “invisible hand” of the market and not just competition alone. In his book Theory of Moral Sentiments he argued that it was human nature to exchange not only goods but also ideas, assistance, and favors out of sympathy. Furthermore, he thought that these social exchanges guided capitalism to create solutions for the good of the community. Smith, though, lived in an era where almost all the bourgeois residents in a city knew each other and were constrained by social pressure to be good citizens. Without the obligations provided by strong social ties, capitalism often turns rapacious and politics turn poisonous. In our new hyperconnected world, most ties are weak, and all too often the invisible hand no longer functions.

The goal of this book is to develop a social physics that extends economic and political thinking by including not only competitive forces but also exchanges of ideas, information, social pressure, and social status in order to more fully explain human behavior. To accomplish this we will have to explain not only how social interactions affect individual goals and decisions but, more important, how these social effects produce Adam Smith’s otherwise mysterious invisible hand. Only once we understand how social interactions work together with competitive forces can we hope to ensure stability and fairness in our hyperconnected, networked society.

Social Physics Alex Pentland