Metcalfe’s Law vs. WealthSpace
posted by Frank Pasquale
If you’re getting sick of FaceBook’s privacy practices, and have a high net worth, you might opt into new social networking sites for the wealthy…call them WealthSpaces. Founders of such sites have found the balance between openness and access tricky:
“It’s very difficult to build a network based solely on wealth,” says Stephen Martiros, a managing director of CCC Alliance, a coalition of rich families based in Boston. “You might start with a few wealthy people, but as you grow it eventually reverts to the mean. And once that happens, the wealthy leave.”
A Geneva member [of aSmallWorld, another social network for the wealthy] wrote: “One of my friends, a funny old-timer here, told me that the site has lowered so much its level, that she has invited her maids.”
Funny indeed. While the social networking of the rich and famous may seem a silly topic, the dilemmas of these sites actually reflect a larger tension within social networking.
Metcalfe’s Law suggests that “the value of a network exponentially grows with each additional node.”* Therefore, you’d think the name of the game for social networking would be to take advantage of such network effects. However, Cory Doctorow notes that mega-openness creates embarrassing conflicts between the “different selves” presented at work, home, and other social situations:
Having watched the rise and fall of SixDegrees, Friendster, and the many other proto-hominids that make up the evolutionary chain leading to Facebook, MySpace, et al, I’m inclined to think that these systems are subject to a [a new law]: “Adding more users to a social network increases the probability that it will put you in an awkward social circumstance.” Perhaps we can call this “boyd’s Law” for danah boyd, the social scientist who has studied many of these networks from the inside as a keen-eyed net-anthropologist and who has described the many ways in which social software does violence to sociability in a series of sharp papers.
***
Every “social networking service” has had this problem and every user I’ve spoken to has been frustrated by it. I think that’s why these services are so volatile: why we’re so willing to flee from Friendster and into MySpace’s loving arms; from MySpace to Facebook. It’s socially awkward to refuse to add someone to your friends list — but removing someone from your friend-list is practically a declaration of war.
Perhaps just as “sticky wages” gum up the economy, “sticky online friendships” will forever derail the panoptic dream of an online social world precisely mirroring the real one. I’m not saddened by that possibility.
Hat Tip: Sam Ladner.
*To be precise: “[T]he value of a telecommunications network is proportional to the square of the number of users of the system.” Given the importance of network effects to the success of social networking sites, many have thought that some variant of Metcalfe’s law also applies to them.
December 2, 2007 at 5:33 pm
Posted in: Social Network Websites
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Responses (5)
Dudley - December 2, 2007 at 7:43 pm
Interesting post! This looks like a version of the “snob effect” that economists talk about for particular goods–where the good loses value to certain consumers as it gains popularity with others.
James Grimmelmann - December 2, 2007 at 8:42 pm
Metcalfe’s Law does not state that the value of a network grows exponentially with the number of users. Reed’s Law does. Metcalfe’s Law says that the growth in value is quadratic, not exponential.
In any event, both are probably wrong. Tilly and Odlyzko provide a convincing argument that value increases as n log n. Their argument is compatible with Zipf’s Law, and thus with lots of Long Tail arguments.
greglas - December 2, 2007 at 8:49 pm
You’ve got a couple different things here, I think. One is about software architectures of exclusivity and their failure, which maps pretty well to how fashion trends are found and then crash under their own weight. I’m not sure who to cite for that, Bordieu I suppose… The other is about software architectures and their failure to recreate the social conditions that allow individuals to perform multiple roles in discrete social milieus. That’s kind of a Goffman problem.
Frank - December 2, 2007 at 9:16 pm
Dudley: nice connection! I wonder if the network is the snob good, or perhaps the profile within the network. Or the “quality” of friends.
James: Many thanks for the clarification.
Greg: I like the point about software architectures that allow users to perform many different roles–are they really liberating? The rise of “gated communities” in cyberspace leads me to cast a slightly skeptical eye on an insistence on autonomy in presenting the self.
Perhaps just as no person is a hero to his or her valet, the leveling pressure to present one coherent self in cyberspace helps consolidate the multiple selves we develop to deal with increasing levels of inequality and social fragmentation. I don’t like the idea of a “cyberspace class transvestite” jetsetting with pals from “aSmallWorld” while “keeping it real” on MySpace. As Thomas Frank suggests in Commodify Your Dissent, that type of “chameleoning” works to disguise and reinforce class divisions, not to bridge them.
On the other hand, perhaps the pressure to consolidate a self on some dominant social networking platform will intensify the artificiality of presented personalities. As Alessandra Stanley noted today in a sharp column on the “Classless Utopia of Reality TV,” many “principals [of reality TV], whose romances and kitchen quarrels furnish plotlines, are not really actors, but neither are they ordinary people exactly; they are a new hybrid of semiprofessional personalities who play themselves on camera.” But that may not be a bad thing–just a reminder of the limits of the online self.
Sam - December 3, 2007 at 5:50 pm
Hi Dudley,
Greglas is right — Bourdieu can explain all of this. The rich will always have the “right” membership in the “right” clubs not because they are psychic, but because they themselves determine what the “right” club is. This is the changing face of economic domination, as exhibited through material goods.
“Elite” networks will always change, just as “elite” luxury goods always change. Carry a Louis Vuitton bag with all those logos? How declasse. How gauche. Everyone knows the “right” bag doesn’t show off its logo. It is the same with social networks.
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