Social Capital and Social Networking

Colombia, the only risk is wanting to stay
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There is some fascinating research from Michigan State University about the use of online social networking sites by college students and the effect on their social capital. For non-economists, social capital is one of the three types of capital or “wealth”. The other two types are physical capital (what you own e.g. a computer, machines, money) and human capital (skills, experience). The third type of capital is your social connections – or social capital.

The study found that Facebook allows people to keep in contact with communities more efficiently, hence increasing their social capital. The authors of the study wrote, “Social capital has been linked to a variety of positive social outcomes, such as better public health, lower crime rates, and more efficient financial markets.” In addition, there was a correlation between Facebook usage and psychological well-being.

Of course, Facebook started off as a social networking site for college students only. Hence, it encouraged people to develop their relationships with people within their local college communities and people who they know offline which is more useful social capital than that which would be gained through forums and sites such as Digg.

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The study goes on to look at two different types of social capital: bonding (cementing networks of homogenous groups of people) and bridging (social networks of socially heterogeneous groups of people). The argument is that some types of social capital are bad: criminal gangs, racist and extremist groups have high levels of bonding capital. The study found that Facebook tends to generate the good type of social capital: bridging.

Perhaps my criticism of the study is how it can be shown that Facebook causes an increase in social capital. To me, it seems pretty likely also that people with greater social capital will be more likely to sign up to Facebook.

But it’s certainly an interesting study. There certainly hasn’t been much study in the general area but I think it’s an area which needs studying: just as the web allowed us to enhance our human capital by learning more about different kinds of things, the social web will allow us to enhance social capital.

The “social web” may have drastic implications for our society and economy.

Hierarchy and Leadership in Society

Water Melody
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I saw a really interesting use of game theory in last week’s New Scientist about the origin of leadership and I wanted to share it here.

Regular readers will know that I’ve written about game theory many times in the past: I find game theory to be a very elegant way of modelling human behaviour with many applications in economics and the social sciences.

This piece of game theory concerns the question of why hierarchy exists in society. Why do we have leaders? Imagine the following scenario. Let us imagine two people, Persons A and B, who both need to hunt in order to eat. They can choose from one of two forests to hunt in, but they must travel together for their protection.

Person A is familiar with Forest 1 as it is where he typically hunts. Person B is familiar with Forest 2: that is where he usually hunts.

Which forest will they choose to go to? Obviously each person will prefer to go to the forest that they are most familiar with and to hunt there: by doing this they maximise their own success (the “number of kills” and the amount of food they can bring back). The following diagram shows the payoffs:


9th open Archeon Longbow shoot
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Person A knows all the ins and outs of Forest 1, so he’s an efficient operator. In Forest 1, Person A gets 3 “kills” but Person B gets 1 “kill” as he doesn’t know it at all.

If they both decided to travel to Forest 2, the opposite is true. Person B gets 3 “kills” as he knows the forest well, Person A only gets 1.

If Person A and Person B couldn’t agree on which forest to travel to, neither of them would bring back any food, let alone reach a forest, because they can’t travel unless they travel together for protection.

In the scenario, what would happen? Well, Person A would choose to travel to Forest 1, the forest he knows the most well. If he chooses Forest 1, he has possible payoffs of either 3 kills or no kills. If he chose to travel to Forest 2, he has the possibility of no kills or 1 kill. Conversely as the payoffs are opposite for Person B, he will choose to travel to Forest 2, his favoured forest.

The end result is that both people will attempt to travel to their own favoured forest and neither of them would have any food to eat.

Desert Leader
Creative Commons License photo: Hamed Saber

For society, the best solution is that both people work together to agree where they want to hunt (this way society as a whole gains food from 4 “kills”). However, for this to happen, one person must take a lead but someone else must agree to follow: somebody must accept a smaller payoff and a smaller amount of food than which he would have had if he was leader.

This illustrates the importance of hierarchy and leadership in society: without somebody taking the lead to make a decision and other people following, society would not function. Society needs a leader and a follower.

Natural selection might be expected to select the leaders. After all, they are more successful at hunting and perform better. But natural selection at the group level would favour groups which worked well together (as the game theory diagram shows, groups which have a leader and follower are more successful as a whole).

THINK! Driving Challenge

I received an e-mail from the team at AMV BBDO about the THINK! Driving Challenge which I wanted to share with all of you.

It is a website which demonstrates just how difficult it is to talk on the mobile phone whilst driving: an issue which is quite close to my heart. Last year I was crossing at a crossroads: opposite was a stationary car. The driver was obviously distracted for some reason and moved off harshly whilst we were crossing. Thankfully she stopped the car a few inches before she knocked us out.

Anyway, give it a go before you proceed any further down the post so it’s not spoilt for you!

DfT Driving Challenge

Nicola Davies writes:

Just over a year on from the introduction of the tough new penalty of three penalty points and a £60 fine for using a mobile phone whilst driving, the Driving Challenge directly builds upon a film made by the University of Illinois 10 years ago which demonstrates the psychological principle of ‘inattentional blindness’.

I wrote about a gorilla/basketball video several years ago which demonstrated this inattentional blindness.


Client: Department for Transport
Agency: AMV BBDO
Creative: Gary Hoff, Stuart Woodall, Sean Vrabel
Account Management: Kate Gault, Giovanna Cucchi, Olivia Browne
Digital Producer: Nicola Davies
Web Production: iCG
Film Production: Brick and Pin
Director: Richard Topping
Exposure: Online

Super Nano-Paper Stronger than Iron

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Science and nanotechnology never fails to amaze me. From New Scientist comes news that scientists have created nano-paper which is almost as strong as steel. Similarly to normal paper, it’s made from celluose.

Celluose nanofibres are the main structural reinforcement material in plant structures. Normally, paper is made through a mechanical process which damages these fibres, reducing the strength of the paper. The new method of producing paper involves breaking down the pulp with enzymes and fragmenting them with a mechanical beater. When water is drained away, the fibres join together through hydrogen bonds giving “nano-paper”.

According to New Scientist:

Mechanical testing shows it has a tensile strength of 214 megapascals, making it stronger than cast iron (130 MPa) and almost as strong as structural steel (250 MPa). Normal paper has a tensile strength less than 1 MPa.

Wow. I wonder what novel uses could come from this.

A Utopian Star Trek Society – Making Economics Redundant

les années sans lumiere
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The society of Star Trek invented by Gene Roddenberry is sometimes held up by fans as something we should strive towards. In the Star Trek universe, they don’t use money: people strive towards bettering themselves and humanity. Doesn’t that sound like communism to you?

If we tried to apply these principles in our world today, it certainly wouldn’t work. That’s been demonstrated in communism. Money is a much better way to carry out transactions than bartering: with bartering there needs to be a double-coincidence of wants. A baker may barter a few loaves of bread in exchange for a haircut with a hairdresser. Now, the baker only needs his hair cut once every month or two. Between haircuts, the hairdresser has nothing to barter and thus cannot have any bread on the table.

As for striving towards bettering ourselves and humanity? It doesn’t work in communism: communism gives people incentives to do as little as possible as they aren’t individually rewarded. Free-market economics (or capitalism) works simply because it gives people individual incentives to work and perform better: wages for workers, profits for companies and dividends for shareholders. Economics uses the fact that people act in their own self-interest to lead to an optimal outcome for society. I’d argue that economics is the single most important invention ever: one which paved the way for science, technology and pretty much every single aspect of life we experience today.

I was watching Visions of the Future on the BBC the other day and it did lead me to wonder whether we might be on the verge of this Star Trek age where we might be able to do without money. There are two bits of technology which I believe would allow this to happen.

totality bites
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First of all, nuclear fusion. Nuclear fusion promises to be an abundant source of energy which is inexhaustible. Limitless and pollution-free, nuclear fusion could render the assumption of scarcity in economics out of date (that society doesn’t have enough resources to meet human wants). With an infinite amount of energy, we could do anything: mitigate global warming, travel to other planets, whatever we like.

Secondly, molecular assemblers or “replicators” as they are known in Star Trek. The development of replicators depends on further research into nanotechnology but the promise is that they can produce more or less anything at the touch of a button by constructing objects atom by atom. The only limitations would be the amount of energy required to replicate the objects and knowing what we want to produce with them.

Many scientists believe that nuclear fusion and molecular assemblers are both viable technologies and may only be about 50 years away.

In a world with limitless energy and the means to create anything that we wanted, nothing is scarce. We could immediately create anything that we want in order to fulfill our wants and needs. And it’s that fact which would render economics redundant. If everything costs nothing to make, why would you need money?

Creative Commons License photo: fdecomite

So what would be the effect of such technologies on society? Wealth is more or less meaningless and there is no reason for money to exist, so there will be no such things as city stock traders or economists. In fact, anyone working in the primary and secondary sectors would be made redundant by replicators. The important people in such a society would be the scientists and engineers: in a world where we aren’t limited by resources, we are only limited by our ideas. Scientists and engineers are the people who will come up with those new ideas.

At first glance, the utopian society as described in ‘Star Trek’ can seem like a communist society which would never function in the real world. I believe that today we are beginning to see the glimpses of technology which would bring society into a new age where we are no longer constrained by resources, scarcity and economics. The only constraints would be our ideas and dreams. Gene Roddenberry’s dream of our futuristic society might not seem so farfetched afterall.

Protein Folding in a Computer Game

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Big distributed computing projects such as SETI@Home, folding@home and “the BBC Climate Change Experiment” have been around for years. They utilise extra computing power when the computer is inactive to help find aliens, fold proteins or to run climate models to predict the effects of climate change.

Computer scientists have found a new way to help them understand how proteins fold – one of the central problems in biology. From The Economist:

Proteins are the building blocks of life inside cells; they are first made as long chains of molecules and work properly only after they have folded into their final shape. But understanding the rules of protein folding remains one of biology’s central problems.

The existing program uses trial and error, and pre-programmed mathematical rules that govern folding as understood today. But users of the screensaver told David Baker, a biochemist at the University of Washington and lead scientist on Rosetta@home, they could do better.

Players use their computers to fold proteins. The more chemically stable the folded protein becomes, the more points the players are awarded. In trials of the game hundreds of players were given 40 protein puzzles to solve (for the trials, the folding solutions were already known). Many of the best players were not scientists but were able to find the correct structure faster than computers.

It’s great to know that the power of the human brain can still beat a computer! So far the experiment has only been run using proteins for which the folding solutions were already known. The next step is to give players proteins for which solutions aren’t known – the players will then be taking part in some new cutting edge research!

Choosing a strong and memorable password

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I don’t think I’m alone in having difficulties inventing strong and secure but unique and memorable passwords for every website. The problem has really exploded recently as I’ve started to do more online shopping making it even more important to keep all my accounts secure.

I found out about the following technique to choose strong and memorable passwords today and I think it’s really good.

A good technique for choosing a password is to:
Choose a phrase between 8 and 16 words long that will be easy to remember. You can include names and numbers too.

Take the first letter of each word in order, including any numbers, capital letters or punctuation. This then becomes your new password.

For example:

Choosing the phrase: ‘My pet dog’s first name is Rex!’ would result in the password: MpdfniR!

or the phrase: ‘My sister Peg is 24 years old’ would give the password: MsPi24yo

Choosing a password in this way produces a password which should be easy to remember, but cannot easily be guessed. With practice, you should be able to choose phrases which provide the required number of different character types.

You can choose words and associations which are relevant to the site you may be visiting. Say – you might associate that with the environment and therefore one of Gandhi’s sayings: “Earth provides enough to satisfy every man’s need, but not every man’s greed.” By taking the first part of his quote and applying the quoted method, you might have a password like “Epe2semn,“.

I think by more or less any measure, this password is pretty secure. It contains a mixture of uppercase and lowercase characters, numerical characters as well as punctuation.

Some scientific research on this method is detailed in a Cambridge University paper “The memorability and security of passwords – some empirical results” (2000).

PETA offering $1m for in-vitro chicken

CNN reports that the People for the Ethical Treatment of Animals or PETA are offering a prize of $1million to the first team of scientists who develop lab-grown chicken meat which is commercially viable and indistinguishable in taste from the real thing.

The group said the scientist had to be able to produce the meat in large enough quantity so it could be sold in 10 U.S. states — at a price competitive to the prevailing chicken price.

Further, the meat had to have “taste and texture indistinguishable from real chicken flesh to non-meat eaters and meat eaters alike.”

This potentially can provide people with all the meat they want, and all the vital nutrition that comes from consuming it, at a lower price. Rather than having to care for chickens, lab-grown meat involves growing tissue from stem cells and stretching the meat periodically to simulate the effects of exercise.

I remember reading about lab-grown meat in an article several months ago. The article wrote using quite emotive language – about how lab-grown meat would lead to a situation where we’ll all consume corn-fed beef in rich countries whilst those from lower income backgrounds would be eating Frankenstein meat.

But come to think of it, I don’t think it’s a bad idea at all. I would hesitate before eating meat which was grown inside a laboratory. But to be honest, I think if it was proven to be safe and I’d eaten it before, I would definitely eat it again. For some of my vegetarian friends, it would allow them to consume meat without what they see as the ethical implications of doing so.

Lab-grown meat certainly sounds unattractive when you describe it using words such as “frankenstein”, “test tube chicken” or as the IHT describes:

commercially viable “in vitro chicken” — taking stem cells and growing them into poultry flesh, presumably without the feathers and bones

But once we’ve seen it and tried it, I can’t see why it won’t take off.

Improving Energy Efficiency: Can it really save the world?

It’s Earth Day today. This is a day to raise awareness about the environment and issues such as climate change and resource depletion. But I’d like to raise something which is often overlooked though, to do with the economics of climate change. But can we really cut our energy usage by switching to more efficient appliances?

Let’s take energy-saving light bulbs as an example. An standard 100W incandescent light bulb is exceptionally inefficient – it produces about 95% heat, only 5% of that energy is turned into visible and useful light. However, new energy-saving fluorescent light sources can produce the same amount of light for just 20W.

OK, so there are considerations such as the amount of energy which used in manufacturing new fluorescent light bulbs for us to use or the costs of installing additional insulation to reduce heat loss because less heat is now produced by light bulbs. Although they are very valid points, they’re not the issues I wish to explore.

On the face of it, if we all switched from 100W incandescents to 20W fluorescents, there would be a 80% drop in the energy consumption! Hey, presto! But that isn’t the whole story. Because economics tells us that when the price of something falls, consumption increases. In other words, because our lighting systems now consume less energy and cost less to run, people will demand more lighting systems.

Take a look at this graph from the presentation “Energy Services and Energy History: Lighting and Transport in the UK” (slide 11).

Price of Lighting

The cost of lighting (and efficiency) has been falling steadily since 1300, yet it is obvious that we are using much more lighting now as costs have been falling. Since 1900, the efficiency of lighting improved 50 times. Meanwhile, the amount of lighting used has increased by 155 times. So despite all the huge efficiency improvements over the last 100 years, we’re still using 3x as much as energy as we were before.

What I hope this has demonstrated is that improving energy efficiency won’t necessarily decrease energy usage. But would switching to more energy-efficient bulbs cut energy usage in our developed world today? Perhaps. For me, the cost of leaving the light bulb on is so small that I barely even think about it. So a light bulb which costs less to leave on probably won’t cause me to leave the light on for any longer then I currently do. But in some countries, if the price of leaving the light bulb on is now a fifth, I could envisage households which might decide that rather than just having one light bulb in the lounge on, they could now install a light bulb in every room in the house. This increased usage of lighting would negate any of the benefits of improved energy efficiency.

It might all seem a bit pointless talking about light bulbs, but I chose it as an example because it’s easy to explain and there’s a lot of good data. But this same theory can apply to all kinds of other things.

Let’s say that a new generation of cars has twice the fuel efficiency. This means the cost of running the car is half what it was before. More people will therefore decide to use cars, and perhaps to use cars on those short journeys they wouldn’t have before. Also in the less economically developed countries, this could make running a car a viable proposition for many people.

My conclusion is that we can’t rely on improvements in efficiency to reduce our energy usage. It simply won’t work. In fact, it could even lead to increased energy usage and make things worse. That’s not to say we shouldn’t create efficient light bulbs and cars but they’re not going to save the environment. We need more proactive ways of dealing with our use of fossil fuels.

Unexpected Consequences

There’s an article in this week’s New Scientist (12th April 2008, p17) by William Laurance from the Smithsonian Tropical Research Institute entitled “Expect the unexpected” which I thought was really interesting. He talks about some of the unexpected ways in which we’re damaging the planet.

Take biofuels. Many countries, including the USA, have promoted biofuels as alternatives to using fossil fuels. Why? Because when you grow corn, the plant will “breathe in” carbon dioxide. When you put it into your car and burn it, it’ll release an equal amount of CO2. So biofuels are supposed to be carbon neutral and won’t contribute to climate change.

In order to encourage people to use biofuels, governments have subsidised them. In essence, they tell farmers that they’ll give them an additional amount of money for every gallon of biofuel they produce, on top of the amount of money they sell it for. This encourages farmers to produce biofuel because they can earn more money from it: basic economics.

So what’s been the effect of this? Well, US farmers have switched from growing soya to growing corn. This made soya more scarce and drove up the price of soya across the world. The higher soya prices then acts as an incentive to others to produce soya; you can now make more money by selling soya.

That’s lead to deforestation in the Amazon in order to clear the way for soya production. And the deforestation has lead to forest fires.

In the Amazon, the trees help to generate their own rainfall. Why? Rain falls and the dense vegetation quickly recycles the moisture, returning it to the atmosphere so it’ll rain again. As deforestation continues, less water vapour is recycled. That means less rain in the future: a feedback loop.

Anyway, I won’t repeat the entire contents of the article as Laurance gives many other examples of unexpected consequences of rising demand for wooden furniture, logging and fishing.

It does really make you think about how everything in the world can be linked together in so many ways and all impact upon each another. In some of my own physics research, I found that an increase in global temperature would lead to a greater occurrence of lightning. Effects of lightning? Forest fires may be created and nitric oxides are produced. A significant number of forest fires could reduce CO2 absorption. Nitric oxides are fertilisers: could this lead to better forest growth? Nitric oxides also lead to the production of ozone in the atmosphere which is a greenhouse gas. More greenhouse gases = further global warming. Did anybody expect that?

The fact is there are just so many different interlinked processes going on in the world around us. It reminds me slightly of James Lovelock’s Gaia Hypothesis:

The Gaia hypothesis is an ecological hypothesis that proposes that living and nonliving parts of the earth are a complex interacting system that can be thought of as a single organism. Named after the Greek earth goddess, this hypothesis postulates that all living things have a regulatory effect on the Earth’s environment that promotes life overall.

It’s a controversial theory. Says Lovelock on climate change:

He says the global climate treaty, the Kyoto Protocol, is simply an attempt to appease a self-regulating Earth system.

Professor Lovelock thinks the Earth’s attempts to restore its equilibrium may eliminate civilisation and most humans.

He wants a rapid end to the destruction of natural habitats, which he says are key to planetary climate and chemistry.