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Howistechnologyshifting authorityfromcentralised commandstructurestoflat formsoforganisation?

Tableofcontents
Tableofcontents Chapter1:Introduction Terminology

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Chapter2:Controlthroughtechnology Chapter3:Networksasameansofdistributingpower Chapter4:Distributednetworkstoachievecoordination Chapter5:Casestudiesofcoordinationusingnetworks Coordinationofinformationproducts Realworld,timesensitivecoordination Commercialapplication Recruitment,terminationandmentoring Leadership Importanceofculturewithinanorganisation Chapter6:Futureofanetworkedsociety&conclusion Bibliography

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Chapter1:Introduction
Technologies have long shaped our political world. The rise of the internet over the past few decades has made many opportunities technically possible, bringing withitpolitical,culturalandsocialchange.It has also brought greater potential for harm, as technology can be a force that magnifiesexistingpower structures. In response to the emergence of technology as an extension of centralised power, other technologies have been developed that reduce the possibility of concentrating power, and allow for powertobedistributedamongindividualsmoreequally.

While the technology itself is a phenomenon worthy of study, it can not be examined in isolation. The political structures that precede and are consequences of it must be included in analysis. Given that manyprototypesinareassuchasdigitalcurrencyareemerging,thisisanappropriatemomenttoanalyse thesenewtechnologiesimpactonpoliticalinstitutions.

The key change to be analysed is the movement and conflict between an infrastructure and power structure where power is centralised, toadistributednetwork.Whenpoweriscentralisedsingleentities hold authority over decisionmaking, and when power is distributed in a network,thesameauthorityis distributed between many individuals, with no one individual having substantially more power than any other. The network infrastructure can be distributed over many points of control, to prevent any single entity from capturing it. This new architecture leadstomanyfurtheropportunitiesfororganisation,since it can make nonhierarchical organisational practices efficient enough to compete with free market or hierarchicalformsoforganisation.

Highly optimistic analyses have been delivered by Yochai Benkler and Clay Shirky, who see entirely new forms of production such as mass collaboration emerging fromthevastlyloweredbarrierstoentry on the internet. Other authors, such as Evgeny Morozov (2012) see this optimism as misplaced, as whilst he acknowledges that the internet can be empowering, he argues that it also gives repressive regimes the capacity to stifle dissent, and that improvements in technology, such as labour saving

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devices, often work to decrease political action by individuals. Malcolm Gladwell (2010) also regards the kind of power utilised by individuals online as shallow, describing online political action as slacktivism. Existing literature covers much technical and political ground, but it is often focused on a simple increase of activity within existing structures, rather than a difference in kind. The vital aspect is theshiftingparadigmintermsofthemakeupofpower.

The main objective of this dissertationistochartthegrowthofdistributednetworksasaformofpower competing with centralised command structures. In doing so, it will test whether distributed networks can resist state and corporate power, whether they provide greater personal freedom, and if they can support coordination of group activity in the absenceoftopdowncontrol.Tocontrastthesetwoforms of power, it is also necessary to substantially define both concepts, especially to state the negative aspects of centralised power. It will further seek to analyse the consequences of these changes on cultureandattitudestowardstechnology.

The main hypothesis is that distributed networks increase the power of the individual against concentrated power, allowing individuals to organise outside of hierarchy. The conclusion establishes that while distributed networks certainly reduce the power of the state and corporations in theory, the impact of the development of such infrastructure is dependent on its use by individuals. This uptake is more likely to happen when there is a direct benefit to the user, such as efficiency in the case of business. There are two levels of distributed networks, one of infrastructure, the second of institutions built on that infrastructure. The second is the more likely toemerge,sincethereisgreaterpossibilityfor profit.

The dissertation largely draws on a literature review of secondary research. It also includes some original research of web platforms used for coordination, and interviews with people who haveutilised themfororganisation.

Chapter two introduces the existing and expanding form of centralised power that is held by the state and corporations, discussing how the present architectureoftheinternetsupportsthisstructure,andthe

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importanceofsurveillanceanddataasformsofcontroloverindividuals.

Chapter three defines the concept of distributed networks more clearly, describing the features that distinguish it from centralised power. It will discuss particular implementations of distributed networks and their consequences for the effect of centralised power, control over dataandtheimpactonculture of increased capacity for individuals. It will also include criticisms and weaknesses of distributed networks,andexamplesoftheirfailuretodeliverindividualpower.

Chapter four analyses the forms of organisation that can be built on each type of infrastructure, comparing hierarchical management to new forms of organisation where efficiency is derived from the speed of communication, the amount of data available and the ability to transmit data easily and automatically.

Chapter 5 builds on the previous chapter, using case studies ofsoftwaredevelopmentplatformGithub, video game company Valve and the Occupy political movement to examine how effective this form of organisation can be in practice. It begins with the production of online informationproducts, and the second part assesses the challenges of offline and time sensitive organisation. It alsodealswiththerole ofcultureinthesuccessfulimplementationofthesepractices.

Chapter 6 makes predictions for the future of these trends, discussing how the conflict between state/corporate power and distributed networks might evolve in the coming years and what forms of power and organisation will emerge in society. It finishes with a summary and conclusion of the argument.

Terminology
Nodeasinglepointinanetworkthatcanbeanindividual,agroupofindividualsoranentity

Distributed network a network where control is evenly divided among its members. Data is not 5

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routedthroughacentralpoint,butpassedfrompointtopointuntilitreachesitsdestination.

Platform a website, software or device that enables a certain type of activity such as collaborative editingofdocuments,orphotosharing

Chapter2:Controlthroughtechnology
This chapter concerns the way in which the existing technological infrastructure is set up in a way to allows large entities to concentrate power through thecollectionandaggregationofmassiveamountsof data.Itgoesontodealwiththeimplicationsofthispowerforcontrolandprivacyfortheindividual.

Conventionally, institutions have been arranged to deliver a single item reproducedexactlyfromalarge entity to many individuals, as in mass media,ormassproduction.Thoughtheinternetcansupportmany types of connections, virtually all internet traffic is routed through ISPs, focal points where data that passes through can be monitored and restricted. It is also focused around hubs that store data and provideservices.

Foucault used Benthams panopticon prison design astructureinwhichinmatesmustassumetheyare being observed at any moment as a metaphor for the way in which institutions study and gather knowledge on individuals in order toexercisecontrol(Foucault1977).Thismetaphorisausefulwayto seetheuseoftheinternetandhowthestatecanleverageitsarchitectureforthepurposeofsurveillance.

Because control is granted to specific entities who oversee the management of data and provision of services, this allows the state to monitor traffic, making it possible to enact wide scale surveillance on manyindividualsatlowcost.Althoughcommunicationsuchasemailistransmittedfromoneindividualto another, utilising the network, it must pass through a centralised hub. It is these hubs that make the infrastructure vulnerable in two ways, as exercisers of power themselves, and as a focal point for 6

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pressurefromotherinstitutions,toextractuserdataforexample.

In 2004, it was revealed that AT&T had a secret area in one of its telecomsfacilitiesinSanFrancisco that allows the National Security Agency (NSA) to intercept communications including internet traffic and internet phone connections. There are 15 to 20 such rooms around the U.S. (Electronic Frontier Foundation2006).

The NSA has also built a fortified $2 billion center in Utah to be completed in 2013 that will monitor almost all U.S. communications, including those passed on from monitoring rooms in major telecom facilities such astheonedescribedabove,andsatellites.Itwillcontainlargewarehousescontaininghard drives for long term storage of collected data. The center will also dedicate computing powertowards brute force attempts (testing every possible password combination) to read encrypted messages (Bamford2012).

This is not simply a straightforward increase in active surveillance by the state on individuals. The implication of these activities to monitor internet traffic is a vastly increased capacity of the states surveillance power, but it is alsobecomingimpossible toavoid foravarietyofreasons.Thesurveillance itself is pervasive, since the tools to do so are decreasing in cost, and can often be automated. New technologies such as satellite and drone imagery increase the reach of surveillance. There is also a greater domain available to monitor, as more activities are conducted through the internet (Schneier 2013a). Since the internet is now wedded to our daily lives, almost every interaction involves transmitting data. One company is tracking employees metrics on health and mood and although the programme is voluntary, privacy concerns have been raised about whatthecompanyisabletodowith thedata(Finley2013).

Many essential services now beingonlinecreatesadependencyforthecitizenandthisinturnmakesthe states ability to restrict access a much greater sanction. The centralisation of power in the network around large institutions also enhances propaganda, sinceitcanbedeliveredonmorechannelsatlower cost with greater personalization (Morozov 2012). The NSAs attempt to break the current strongest

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encryption available also threatens the privacy of the individual, leaving a very limited ability to communicate without surveillance. Consequently, the existing power of the state is magnified by the infrastructureavailabletoit,giventhatservicesarefocusedaroundhubs.

While the monitoring and control of the internet by states is an important issue, it has been well discussed and encounters strong opposition,suchasthe campaignsagainsttheSOPAandPIPAactsin the U.S. (Pepitone and January 2012). The power of corporations to conduct thesamedatagathering and processing is less commonly opposed. A different bargain is struck between the state and the individual, and the corporation and the individual. Individuals giveupsomeoftheirlibertytothestatein exchange for security, while with corporations, privacy is exchanged for a service (Davies 1997). The commodification of privacy, as opposed to an intrinsic right, makes the intrusion more palatable for users.

Onereasonforthelackofoppositiontothisintrusionmaybetheinvisiblewayinwhichdataisrecorded about users. In the commercial world data is collected for the purpose of revenue. The personal informationgatheredisthenusedinspecificallytargetedadvertisingandtopersonalisetheserviceitself.

While some data isrecordedupfront,suchasdetailsenteredwhensigningupforanaccount,muchdata is clearly entered as personal communication between users.Behindtheseisamuchlargerpoolofdata that is collected automatically, including time of visits and location and especially the opaque data that Google collects from search terms (Oboler 2012). Facebook and Google can be used as identity verification platforms for other sites, giving them access to much more data about browsing habits acrosstheweb.

The state must exploit primary data sources for its information whereas corporations that operate service hubs can collect data from users actions in real time, increasing the accuracy andthescopeof the data. The rise of real time, large scale andincreasinglypersonalisedinformationisreferredtoasbig data. Collecting greater amounts of real time data is essentialforcompaniesthatrelyonpersonalisation to remain profitable (Manyika et al 2011). Since the profitability of thecompanyisbasedonincreased

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collectionofdata,itisnegativelycorrelatedwiththeusersdesireforprivacy.

The issue at stake is not simply the amount of data being collected, or even the pervasiveness of surveillance, but the computation of this data. Finley comments that in an age of big data [, computation] can reveal things about you that you may not even know about (Finley 2013). The processing of variousstreamsofdataacapacityaffordedbythecentralisationofdatastorageallows analysts to find data that onlyemergesfromlongtermtrendsorfrompiecingmanydatapointstogether. This differs from previousdataanalysis,wheretointerpretsuchabigpicture,qualitativemethodswould have to be used. There is now no longer a choice to be made between data size and data depth (Manovich2011).

A notable example of the consequence of computation of data is when the U.S. store Target used analysis of previous purchases, associated by credit card, to determine that a woman was pregnant. They subsequently sent special offers for baby related items before her family were aware of the pregnancy(Duhigg2012).

Although the state and corporations collect data independently fromeachother,thereisnotnecessarily a divide between access and analysis of the data. Government can subpoena information from corporations such as Facebook, who provide an extensive history of the users privatecommunication on the site (Carioli 2012). Morozov (2012) comments that as well as social networks being used by activists, the same tools can also be used against them and to a much greater extent. The distinction between various stores of data melts still further when user provided data is included. For example Boston police aggregated photo and video from many public sources as well as CCTV cameras to identifysuspects(Ackerman2013).

The internet as an infrastructure for day to day communication produces vast amounts of data. This in itself is not necessarily a danger, but when transmission of datainvolveshubsthatstoreandanalysethe data, it becomes a useful tool for surveillance and control, reducing the privacy of the individual. This surveillance is carried out by both state and corporations, though corporations have much greater

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access,whichsurprisinglyislesscommonlyopposedbyusers.

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Chapter3:Networksasameansofdistributingpower

The previous chapter described the ways in which centralised power magnifies existing power through control of data and power to restrict network traffic. Using hubstoroutedataonlineisonlyonemeans of creating a network. Networks can also be created in a peer to peer fashion that does not require centralisedcontrol.

This system, where the infrastructure itself isspreadoutovermanynodes,isreferredtoasadistributed network. Shirky (2003) sets out two requirements that define a peer to peer network: (1) treats variable connectivity and temporary network addresses as the norm and (2)givesnodesontheedge significantautonomy.Thismeansthatanytwogivennodescanexchangedatawithouttheneedtoroute it through a centralised server, while still being able to makeuseofthesharedpowerofallthenodesin thenetwork.

Because there is no dominant node in the network, capacity is distributed among all nodes on a much more equal basis. This means that there is no central authority which can dictate where the power is directed a decision to act mustbeagreedonconsensuswithasfeworasmanynodes asarenecessary for the purpose. It also reduces the power of any node to restrict traffic on the network, because it travels from one peer to another. The ad hoc method of network constructionmakestheinfrastructure flexibleandenablesgroupsofnodestoadapteasilyforthepurposeoftheaction.

Distributed networks have many advantages over centralised networks and so pose a direct threat to centralised networks when they compete. These advantages come from the lack of a single focused point of power, whichdecreasestheimpactofanytargetedattackonthenetwork.Whenanyonenode is compromised, the rest of the network can reroute aroundit.Thisprincipleisdemonstratedbyrecent riots such as London 2011. The centralised command structure of law enforcement has an effective strategy against physical groups with leadership, but has difficulty preventing geographically dispersed 11

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actsofviolence,coordinatedthroughpeertopeernetworks(SullivanandElkus2011).

It is important to distinguish between advances in technology that empowers the individual and technology which simply magnify existing power structures. Technology should not be seen as a virtuallyautonomous,allencompassingagentofchange(Marx1997p.564).

Much has been written about the use of social media by governments, giving them a new channel by which to communicate with citizens. Jared Cohen and Alec Ross are two U.S. state department employees that have been using twitter for public engagement, and opening up government to more rapid communication with citizens (Lichtenstein 2010). Although their project has been extremely successful, garnering many followers, there is nothing differentinkindfromstatetocitizeninteractionas has always occurred, and can in fact increase the domination of individuals by repressive governments whomakeuseofnewtechnologies(Morozov2012).

Anne Marie Slaughter (2009)realisestosomeextentthepowerofnetworks,describingtheadvantages of making connections withthepublicandofincreasingopenness.However,shedoesnotrecognisethe substantial change in the nature of the relationship. Bothofthesemodelsstillseethestateorotherlarge institutions as continuing to existinthesameformandpassingmessagesdowntoindividualsindomestic and international situations, with only the nature of communicating being altered. However, distributed networks vastly alter the nature of power, shifting the balance from large hierarchically structured groups,tonodescomposedofindividualsorsmallgroups.

The digital currency Bitcoin is an example of a value exchange system that functions on a distributed network without the need for centralised authority. Conventional online currency transfers are routed through a trusted third party, which depends on its prominence as a node for itsauthority,thathandles accounts. Bitcoin reproduces the function of processing transactions in a decentralised way. When a transaction is made from one party to another, other nodes use cryptography to verify the transaction, recordingitpubliclytopreventrespendingofthetransferredamount(Nakamoto2011).

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The lack of a centralised institution tostorevalueandverifytransactionsdeposits meansthatthereisno single node in the network that can exercise power overit,andthisgivesBitcoinstheirsecurity.Nodes frequently enter and exit fromthenetworksocapturingasingleonewillnotimpactthenetworksability tofunction.

This has made it appealing for criminal enterprise as it is verydifficultforlawenforcementtodetectthe identities of the parties involved. The Silk Road and The Armory (which has ceasedtrading)areblack markets for drugs and weaponry respectively that use the Bitcoin currency to facilitate transactions (Chen2012Christin2012).Usersalsouseanotherformofcryptography,PGP,to concealtheaddress where they will receive the physical goods. As well as facilitating criminal trade, the anonymous nature of Bitcoin also assists tax evasion, since governments have no way of verifying what income has been received by an individual. Thus, the existence of Bitcoin is a threat to law enforcement, providing protection from the centralised power of the state to surveil and censor, since there are no identifiable recordsproducedandusersareabletoremainanonymous(Reitman2011).

There are some flaws to the Bitcoin technology. It may notbeasanonymousascommonlyassumedto be. This presentsagreater dangerifuserspresumeprotection,astheymaybecomemorerelaxedabout the data they reveal about themselves than when they were aware of surveillance. Since data about individuals can be matched from many sources, big data style analysis may not require a centralised store of information, but could identify usersbasedoncorrelationsofotherdatawiththepublicrecords of bitcoin transactions. The use of hubs that securely store Bitcoin value is also a threat to anonymity (ReidandHarrigan2012). Wikileaks1 is an organisation dedicated to the publishingofsecretdocumentsleakedfromgovernments and corporations. It was launched in 2006,butdidnotrisetoprominenceuntil2010whenitreleaseda video of a U.S. helicopter attack in Iraqthatkilledtwochildren,aswellastwolargesetsofdocuments from the U.S. government. The source of one of the leaks, Private Bradley Manning, was arrested on charges of treason and is currently in custody awaiting trial. In addition to these leaks, many other

http://www.wikileaks.org

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documentsfromgovernmentsaroundtheworldhavealsobeenpublished.

Leaks of state secrets are not a new phenomenon, but the internet vastly lowers the costsofdoingso. Theabilitytotransmitdataatverylowcostmeansthatanindividualdoesnotrequirethe large resources of an institution to leak information. When dissemination of data is done by centralised institutions, it means that political pressure can be applied to prevent their actions. When the dissemination is decentralised,thereisnointerestwhichcanbeleantupontoalterbehaviour(Benkler2011).

The mass amateurisation of publishing allows foran extremelywiderangeofvoicestobeheard(Shirky 2011). This vastly increases the number of nodes that can become publishers, rather than the small number of conventional media outlets, decreasing the powerofcentralisedpowertocontroltheflowof information in society. Since the act of copying and disseminating information is so easy it reduces the power of any particular node in the network to restrict access. This prevents all the control control to newcivilsocietyinstitutions.

The reduction in power to control sources of information, not only takes power away fromcentralised organisations, but also reduces the ability of any node to control the way in whichdiscourseisframed. Traditional news media reacted to the leaks by attempting to discredit Wikileaks. They did so by framing Wikileaks using the rhetoric of terrorism, denying its value as a media organisation (Benkler 2011). Because there are now so many sources of information available, such as blogs and social media,nosinglenodeisabletodominatethediscourse.

There are some aspects of Wikileaks that make it difficult to describe it as a distributed network. Despite the presence of wiki in its name, it is not publicly editable, but managed by a mostly anonymous group of volunteers, who verify documents before releasing them. The website is hosted from a single source and power is concentrated in the figure of Julian Assange, who acts as the organisations public face. This is Wikileaks greatest flaw, sinceitmakesitmucheasierforthestateto use informal systems of pressure and approval on market actors (Benkler 2011 p.3). For example, everyDNSs action to suspend wikileaks.org, making the website inaccessible (Arthur and Halliday

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2010).

While Wikileaks itself as an organisation is not a distributed network, the actions of supporters take advantage of the power of distribution. When access to wikileaks.org was restricted, many mirror websites appeared tokeep thecontentavailable.WikiLeaksalsoreleasedanencryptedinsurancefile, which they encouraged people to download, so that the file would be spread around, making it invulnerable to censorship (WikiLeaks 2010). Bitcoin was also used for donations after several credit cardprovidersrefusedservicetoWikiLeaksafterpressurefromtheU.S.government. Defense Distributed2 isaprojectthataimstodesignanopensourcefirearmthatcanbe3Dprinted.Ina similar way to the way in which information from Wikileaks proliferates over many nodes, making it impossible to recover or control, the ease ofreplicatingthefilepreventsrestrictionbylawenforcement. Not only is the design reproduced over many nodes, the production can also be distributed, making it possible for individuals to manufacture their own firearm without the resources of an institution. This is one of the few examples of the way that a distributed network can empower theindividualandreduce thepowerofthestateinthephysicalworldandthisislikelytoexpandasthecostsof3Dprintingfall. Diaspora3 is an open source attempt to use a distributed network to reduce the problems that come with centralisation of data on social networks. On Diaspora, individuals can host their own pod, to store their data on their own node. This prevents any one node having control over large amounts of data, or over any individual user, if they choose to hosttheirowninstallation(Weise2012). However, Diaspora has not been successful asacompetitortoservicessuchasFacebook.Asofwritingthereare 405,540users(Diaspora2013)comparedtooverabilliononFacebook(Tam2013).

There is not a choice of whether to have an increase in the amount of available of information, since whether this data is transmitted through distributed networks, or through centralised hubs, the capacity for any node to collect data has vastly increased. Thebarrierstopublicationhavefallen,andsohasthe costofsurveillance.Thechoicestobemadeconcernhowthisdataistobestoredandtransmitted.
2 3

http://defensedistributed.com/ http://www.joindiaspora.com

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Bitcoin, Wikileaks and Diaspora can be seen as experiments in using distributed networks as an alternative to using centralised hubs as the infrastructure that supportsonlineinteractionandexchanges. Whilst they suffer from various flaws, Wikileaks and Bitcoin have posed a substantial challenge to centralised organisations. Diaspora has not been as successful, and this may be demonstrative of the lack of concern that users have towards privacy when it is given up in exchange for a service and the illusionofcontrolismaintained.

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Chapter4:Distributednetworkstoachievecoordination
While the infrastructure of the internet is a vital component of the shift from centralised to individual power, technology alone is not enough to consolidate political change.Technologycannotbeseenasa unitary force of progress that is isolated from human action (Morozov 2013). The institutions that are builtonthisframeworkfortheorganisationofcollaborationarekeytosuccess.

Conventionally, organisations are arranged hierarchically, a system in which every individual except for the most senior is subordinate to someone else. The hierarchy is based on a system of privileged information. This allows orders to be conveyed down steps of authority in a chain of command, becoming more specific as they progress (Shirky 2011). This allows complex tasks to completed by teams of individuals who are overseen by a particular manager. There are five main functions of management:

1. Allocationoftasksinthemostefficientmanner 2. Aggregatingcompletedworkintoacoherentwhole 3. Verticaldisseminationofinformation 4. Recruitment,terminationandmanagementofemployeesskills 5. Providinganoverallvisionfortheteam

As the number of individuals in a group increases, the complexity of coordinating a task rises too.The use of hierarchy is generally more efficient than an absence of organisational structure, such as a free labour market, since it lowers transaction costs (Coase1937),butitcomeswithitsownproblems.For business, it is expensive to pay employees whose sole job is to coordinateactivity,andwhenthecosts are too high, this will prevent productive activity from taking place (Shirky 2011). The authoritarian structuremayalsocauseresentmentamongemployees,orleadtocorruptionwithinmanagement.

Alternatively,thefunctionsofmanagementcanbeperformedusingthecapacityofadistributed network.Inthisorganisationalform,tasksaredividedsothateachnodeperformsasmallpartofthe 17

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taskinadditiontotheirregularorspecialisedtasks.Technologyisavitalpartofthiscapacity,asitisthe basisoftheplatformsthatenablethedivisionofthefunctionofcoordination.Eachaspectofthe managementfunctionisexplainedbelowasfeaturesthatcanbeproducedusingaplatform.Such platformsallowforrapidcollaborationamonggeographicallydispersedandlooselyconnected individuals(Benkler2011).

When the function of management is divided, there is no single individual who undertakescoordination and allocates tasks, so another method must be found of determining what should be done next. Stigmergy is aconceptderivedfrombiology,andreferstomarkersleftbehind by collaboratingworkers that indicate what the next necessary action is. The environmental state contains information passedon from peer to peer (Parunak 2006 p.2). Thisisawayofdeterminingactionswithoutrequiringanoverall plan,allowingtheprojecttobemoreflexibleonnewdirectionsasnecessary.

Allocation can also be determined by using a formalised reputation system, in order to ensure that the most appropriate individual within a group performs the task. Each individual within the group will be ratedaccordingtotheirrelevantskills.

The use of a platform is more important when it comes to automatically subdividing tasks. In order to make taskscompletablebyanyindividualwithoutmanagerialoversight,theycanbemadegranularand modular (Benker 2006). Granularity refers to the size of the task, as smaller tasks can be completed more easily. Modular refers to the extent to which it can be broken down into smaller components (Benkler2006p.100).

Platforms also lower the barrierstoentryforindividualstomakecontributionsbymakingthetaskseasy to complete. This is especially relevant regarding online publishing where previously transactions costs would have been prohibitively high and deterring contribution. Usingbloggingplatforms,individualscan publish articles with extremely low overheads in comparison to conventional media. This breaks professional categories, since entry to the profession is no longer limited by access to the tools of production(Shirky2011p.63).

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The features that platforms provide: stigmergy, granularity, modularity and lowered barriers to entry, make it possible to aggregate individual contributions without the need for a specific individual to produce a coherent whole. Platforms also enable data to be much more easily manageable, through searchandanalytics.

The shift in organisation from hierarchical to a flat structure can be seen in the management of data as well. Whereas taxonomy refers to the practice of organising data in a tree structure, which requires absolute decisions about which category an item should be placed in, folksonomy is organisation that uses descriptive tags, which function like keywords, to create categories as necessary. [I]f you'vegot enoughlinks,youdon'tneedthehierarchyanymore(Shirky2005).Arecordinadatabasecanhavean unlimited number of tags, that can be added by any person, removing the need foraspecificindividual to control the process of categorisation. The tags can thenbevotedupordownbyotherusers,sothat the mostpopularandrelevanttagsaremostprominent.Therecordwillbeabletobefoundunderallthe tags that have been used to describe it, and it also forms an ad hoccategoryforrecordsthatsharethe sametag,withoutconfiningthemtoasinglecategory.

In the absence of a hierarchical organisational structure, it is not necessary tocommunicateinformation vertically but it can be organised in a manner that makes information contributable and available to all individuals in a group. This can be achieved through wikis, which are editable by any member of the group,andcontributionscanbemadeaccordingtotheprinciplesofmodularityandgranularity.

Information can also be transmitted via peer to peer networks within an organisation, passed from individual to individual until it reaches the appropriate destination rather than through a structure that definesasingleindividualasamanagerwhoisresponsiblefordissemination.

The management of employees within an organisation can also be achieved using a reputation system. Rather than employees being subject to performance reviews by managers, this function can be distributed among employees as a whole. Each employee rates every other employee on a variety of

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metrics to produce an overall ranking system, which can then be used to identifyespeciallyvaluableor unproductivemembersofthegroup.

The most difficult aspect of management to reproduce is the long term leadership and vision. This involves setting a direction for the group, inspiring individuals to create belief in the project and mentoring individuals to improve weaknesses inrelevantskillareas.Thereisnowaytosimplydistribute this function, but setting direction can be achieved by giving members of a group complete freedom of contribution, essentially creating a market of competing projects where the most popular project will succeed. This might be due to its perceived value, or it might be due to the ability of the projects creator to inspire individuals. Although this capacity remains in one person, the structure does not become hierarchical, as thepositionisnotfixedandcanbeundertakenbyanyindividual.Membersofa group are not compelled to take orders or remain in the group if they are no longer convinced of its value.

The function ofmanagement(allocation,aggregation,disseminationofinformation,human resourcesand leadership) can be distributed by using technological platforms to dividethevariousfunctionsamongall employees.Mostimportantistheprincipleofdividingtasksintogranularandmodularcomponents.

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Chapter5:Casestudiesofcoordinationusingnetworks
The previous chapter laid out the principles of using distributed networks as the basis for coordination economic activity. This chapter will expand and testthoseprinciplesbyreferringtoseveralcasestudies of organisations that make use of them. This includes software development platform Github, video game developers Valve and the political movement Occupy. The chapter is organised around the principles, making reference to these organisations in order to demonstrate them. It will also deal with questionsoftheimportanceofcultureandhowwellleadershipcanbeproducedasacollaboration.

Software development is a useful starting point for the investigation of practicalexamplesofdistributed management theory. The Open Source community often makes use of manyofthepracticesdescribed so far in development. The useful point of analysis is the format of theplatformsinuseandthefeatures they have that facilitate coordinationandcollaborationinawaythatreplacesthefunctionsofcentralised managementandauthorityeitherasadirecttranslationorwholly.

Coordinationofinformationproducts
Github4 is a version control platform for software development, which allows many individual users to make small contributions very easily. The useful part of this is that it allows tasks to be divided upina granular and modular manner, vastly lowering the barrier to contribution, making it more likely that individuals will make contributions. Each project on Github has a wiki a collaboratively edited resource that serves as a repository for developers working on the project to share important information. Every action performed on Github, such as uploadingnewcodecreatesartifactswhichact as stigmergic indicators that help other contributors to decide what actions are appropriate and where theyshoulddirecttheircontributions(Dabbishetal2012).

Video game companyValveisanexampleofanorganisationwhichutilisesaflatstructure.AtValve,no employee has an actual title. This is in order to remove organizational constraints (Valve Corporation

http://www.github.com

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2012 p.36). The company allows its employees to focus their work on whatever activity they choose without any managerial oversight. In order to coordinate activity, Valve relies on time allocation and team formation as replacements for price signals. These metrics are stigmergic indicators of the popularityofaparticular project,allowingothercontributorsinthegrouptogaugetheusefulnessoftheir contributions.

The communityoperated project space, London Hackspace, utilises a wiki for dissemination of information and community management. The wiki is editable by any member of the group, but not publicly, and hosts an aggregate of information as well as an area for coordination of maintenance and administration tasks. Any member can add tasks to be completed, which are divided intogranularand modular units. After completion, the task completer can update the list (W. Beaufoy. Personal communication.2013,April4).

Both Google and Nasa have made use of the principles of granularity and modularity described by Benkler to do large amounts of human analysis. Nasa has created Moon Zoo5, a project to create a crowdsourced map of the moon. Users of the site can easily logonandidentifyfeaturesofland froma satellite photo which shows a small area on each visit. Each task is very small and simple to complete and the software automatically puts each feature spotted into a database so it can be used as a larger map. Google Maps uses a similar approach with its Map Maker feature6, where any user can add or edit a local feature on the online map, in order to improve its accuracy. Amazons Mechanical Turk7 allows anyone to create a job that can easily be divided into small simple tasks, which workers can then completeforasmallpayment.

One issue with this method of collaborative working using very small tasks is that although it is very effective when the task is simple, quality may suffer with tasks that require sustained involvement and

5 6

http://www.moonzoo.org http://www.google.com/mapmaker 7 https://www.mturk.com/mturk/

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awareness of the bigger picture to synthesise information.Forexample,whilecrowdsourcedjournalism from amateur reporters may be effective in recording the facts of a story, it might not be effective at providing detailed analysis that cannot be divided into component parts. However, the principles are scalable, so tasksdonothavetobeassmallastheexampleslistedabove,whichoftentakefiveminutes or less, and results from Moon Zoo have been as good as you would get from an expert (Geere 2012).

Realworld,timesensitivecoordination
Occupy is an anarchist political movement that was active around the world, especially in New York and London. The movement used existing flat organisational structures such as general assemblies and workinggroupstocoordinate,butadaptedthemtotakeadvantageoftechnologicaldevelopment.

Facebook was found not tobeuseful forthepurposeofcoordinationamongdiversegroupsbecause of its insular nature. It is limited to the networkofanindividual,thereforenotgoodformasscollaboration. It was also noted for the problem of transparency of data to government agencies, as its the kind of thing that the CIA would have spent alotofmoneyandalotoftimetocreate(D.Hornbein.Personal communication.2013,January23).

The disaster relief programme Occupy Sandy was more tightly organised duetoitsspecificpurposeof responding to the hurricane damage. It used the platform Sahana, which logs incomingrequestsfor aid and allowed workers to allocate themselves to tasks (Balkind 2013). This platform allows jobs to be dividedeasilyanddistributestheprocessofcoordinationoverallnodesinthesystem.

Githubhasalsobeenusedfornonsoftwareprojects,forexample,theUScityofChicagohaspublished data sets online using the platform including street locations, building footprints, bike routes, pedway routesandbikeracklocations.

Commercialapplication

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BlaBlaCar8 is an example of the way in which the vastly lowered barriers to entry that distributed coordination creates can make small transactions profitable. In this case drivers usetheplatformtosell spare seats in their car (N. Brusson. Personal communication. 2013, April 19). However, while the exchanges are conducted between peers, the infrastructure itself is a centralised hub that depends on routing transactions for profitability. Thus, it is unlikely there will ever be any commercial examples of coordinationthroughdistributednetworks.

Recruitment,terminationandmentoring
Valve does not have a dedicated HR department, individuals in the company spontaneously organise committees in response to a perceived need by employees for new skills. Anybody who wants to participate in the process of interviewing candidates is able to,anddecisionsarereachedbyconsensus using email. Employee termination is also reached by consensus, rather than delegated to a specific individual.(RobertsandVaroufakis2013)

An important aspect of how Valve operates is its peer review system, which determines the performance of employees, and is also a way of managing pay. It also uses another rating system, known as stack ranking, where each employee rates eachotheremployeebasedonfourqualities:skill, productivity, group contribution and product contribution, which are added together to produce an overallrating.Thisdataisthenpooledandmadeaccessibletoall.(ValveCorporation2012).

The company handbook also describes a number ofweaknessesoftheirformoforganization.Someof the more personal functions of management are difficult to recreate, such as mentoring to help employeesdevelop(ValveCorporation2012).

Leadership
One difficulty with the practice of distributed management is the problem of recreating leadership and vision, the setting of an overall direction, without an individual to conduct the more subtle and human parts of management, to be able to tell a story around the project. While consensus can be used for
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http://www.blablacar.com

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making decisions, the decision reached may be either simplistic and reductive to meet the lowest common denominator, or else it might become overly complex in an attempt to appease all parties to move forward. There are also efficiency issues, as the leaderlessness does come at a price, its much harder to organise things quickly (D. Hornbein. Personal Communication. January 24, 2013). This is another aspect that Valve has struggled with, stating that it is difficult making predictionslongerthana fewmonthsout(ValveCorporation2012p.52).

Sometimes the culture itself may oppose leadership altogether, as is the case with onlineactivistgroup Anonymous, as the culture will actively attack anyone that says, I speak for anonymous, anyone that takes on any semblance of telling people theyre a leader (D. Hornbein. Personal communication. January24,2013).

Forking is one way of dealing with this problem, abandoning consensus allowing popular choices to thrive. There is some evidence to suggest that while the task of leadership is very difficult to separate into component parts, technology creates the possibility of making the role of leading less fixed and easier to takeupbyany individual.EvidencefromOccupyshowsthattheattempttofind consensuscan often be destructive to the group, especially when membership is entirely open. Drew Hornbein from Occupy stated that technology hasnt removed leadership, its just that technology has lowered the barrier of entry into leadership. So while the task of leadership cannot be divided into component parts,itcanbedistributedamongmanyindividualsovertime.

Importanceofculturewithinanorganisation
Despite the advantages that a distributed infrastructure brings, there is no doubt that the technology itself, or even the principles can be entirely effective in replacing a hierarchical system of management. Thecultureandattitudesofanorganisationarealsovitalaspects.

All of the above case studies present examples issues relating to the attitudes of individuals towards working practices. In Valve, such spontaneous orderbased enterprises rely to a large extent on individualsthatbelieveinthesocialnormsthatgoverntheirexistence(RobertsandVaroufakis2012). 25

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While these systems are often perceived to be open from the outside, it is actuallymoreoftenthecase that they employ a restrictive membership that helps them function. The general openness of political group Occupy was described as a flaw, due to particular individuals or small groups exercising a significant amount of influence over the group, decreasing the quality of discussion and collaboration, driving more valuable contributors away from the group, which then gave the disruptors further power (D.Hornbein.Personalcommunication.2013,January23).

Without trust it is impossible for a reputation system to function. A group requires trust in its members for collaboration to work. While technology can facilitate organisation, something beyond merely the possibility of collaborating is necessary, which can be difficult to produce online. Occupy members commented that while online discussion wasextremelyusefulforcoordinationoverlongdistances,what brought the group together and created trust was the collective purpose in sustaining the physical encampment(M.Bray.Personalcommunication.2013,24January).

The above examples show that it is possible to apply the principles of distributed networks for coordination in various settings, for information production,aswellasintherealworld.Coordinationof activity through the principles of stigmergy and division hasbeendemonstratedtobesuccessfulthough. Though there are somecaveatsastohowthatorganisationtakesplace.Trustisessentialinallexamples and to have trust thegroupmembershipmustalsoberestrictedinsomesense.Itmayalsobedifficultto reproducethemorehumanaspectsofleadership,whichinvolvethesettingofbroad,longtermgoals.

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Chapter6:Futureofanetworkedsociety&conclusion
This chapter addresses the potential developments of the trends described inthisdissertation,including the conflict between centralised forms of power and distributed networks, how the infrastructure of distributed networks might evolve and expand in the future and how the institutions built on this infrastructuremaydevelop.Itwillfinishwithashortconclusionofthedissertation.

Although much of the internet involves peer to peer connections, a substantial portion of the infrastructure is based on hubs that collect, process and store vast amounts ofdataforthe purposesof security and profit. The collection of data by both states and corporations is likely to continue. For states more legislation is being passed to allow greater control over data and diminishing privacyrights such as CISPA in the U.S. The cost of surveillance is becoming cheaper and more infrastructure is becoming connected to a network that has powerful nodes vulnerable to monitoring. The increasing amount of connection alsobenefitsthe corporations,whocancollectmoredataonbrowsingbehaviour, as the demand for personalised servicesrises.Thepowertoprocessthisdataanddeterminetrendswill alsoincrease.

Given attitudes towards data, and the real time access, it is likely that corporations will secure greater power over data than the state. Privacy maybecomeacommodityforexchangeratherthanarightasit isatpresent.

However, there will not simply be a rise in the power of corporations. The decreasing cost of surveillance technology also empowers individuals and the amount of information about all parties will increaseandbedispersedirretrievablyonmanynodes.

There isalsoapotentialfor furtherdistributednetworkinfrastructureto grow.Given theexpectedrisein connected devices, referred to as the internetofthings,itmaymakemoresenseforconnectionstobe made from peer to peer rather than to plug into an overarching system. An alternative system will

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certainly develop, as Bitcoin has, but it may not be able to compete with the commercial offerings. Competitors to Facebook such as Diaspora have not been able to offer the same level of service and the absence of centralised data may indeed beitsdownfall.Thedevelopmentofdistributednetworksis partially based on how the infrastructure is used. Some features already exist, such as the ability to create contracts withouttheneedforathirdpartytoverifytheeventusingBitcoins.Societalacceptance isessentialforthedevelopmentofsuchfeatures.

Whether or not the basic infrastructure changes or remains corporate dominated, it is likely that organisational practices using distributed networks to spread the functions of management will develop because of the advantage in cost in comparison to hierarchies. This will occur as platforms increase in capacity. Occupy could become a blueprint for activism. Another possibility is the use of these organisational practices for mass collaboration, similar to Wikipedia. The lowered barriers to entry including transaction costs that the internet bringswillcertainlyallowformorecollaborationthatcould nothaveexistedotherwise.

The greatest weakness of nonhierarchical organisation is the lack of a strong leadership which can articulate complex long term goals. However, this may also be their greatestasset, sincethebarriersto group creation are lowered organisations might form for specific short term purposes beforedissolving again.

Therefore, what is likely to emerge is a collection of peer to peer practices that are built on a commercial centralised structure. Commercial services that enable individuals to coordinate and collaborate together with reducedmanagerialoversightandgreaterefficiencyarethemostlikelyformof economic activity. Thiscouldcreateahyperefficientfreemarketwhereexchangepartners canbeeasily matchedwithverylowtransactioncosts,becauseoftheamountofinformationavailable.

However, given the vastly lowered barriers to entry for contribution, attitudes towards profit may change (Benkler 2006). This could mean that many products that were previously commercially provided can be provided in cooperative manner using Benklers notion of commonsbased peer

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production. Since the transaction costs are eliminated in many cases, if there is free provision, this will undermineanycommercialoperation,asinthecaseofWikipedia.

The dissertation has charted the competing forms of power of centralised command structures and distributed networks. Centralised networks poseastrongthreattotheprivacyoftheindividual,andthis threat comes both from the the state and the corporation, through the capacity to store and process massive amountsofdata.Thisthreatemergesfromthecentralisednatureoftheinfrastructureandmeans of organisation which means that some nodes in the network store and large amounts of data making thembothpowerfulandvulnerabletointerference.

This power can be combated through the creation ofdistributednetworksasdemonstratedthrough the development of Bitcoin, which removes the need for a centralisedauthoritytoverifytransactions,while reproducing the efficiency of a conventional currency exchange system. The production and dissemination of information is likely to change as the cost of gathering and analysing it decreases with thedevelopmentoftechnology.

The development in infrastructure will not be useful unless strong political institutionsarebuiltontopas alternatives to hierarchy. The functions of management can be reproduced through the development of technological and social platforms which enable many individuals to each perform small parts of these tasks. The case studies analysed show that while technology does enable such behaviour, culture and attitudes within a group are vital components of their success. Trust among members is the most importantaspectwhichdeterminessuccess.

Given the infancy of distributed networksasatechnology,itisdifficulttopreciselydetermineitsimpact. Theyarecertaintoposeamajorthreattocentralisedpowerstructuresatsomelevel.

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