This is an email thread. After reading Martin’s Nameless Conference post, James wrote to us:

Whenever I read about elites, most assume that elites select the next generation of elites. That’s part of the reason young, ambitious people attend those conferences. They are looking for like-minded people but also people who will grant them status–sort of like Harry Potter being selected to attend a special school or King Arthur pulling the sword out of the stone.

This dynamic is usually true but it forgets the elite’s source of authority–it comes from the group of people who are paying attention (the public as you define it). The public is usually fine with elite selecting the elite. This method of succession is easier and less disruptive.

Until there’s a big change (social, technological, economic). At that point, the public lose confidence and select new sources of authority and it is up for grabs who will be elite. This process is messy and dirty–more like war than peace, more like Darwin than Jesus.

So that’s where we are now. It isn’t that the idea of elites have lost power. There will always be elite–groups of people who have more power. Instead, the previous generation of elite are in the process of losing their power and the public is figuring out who the new elite will be. And the young and ambitious who think they will get authority/elite status by being recognized by the previous generation are (probably) wasting their time when they should instead be spending their time with the public.

What do you think?

I responded:

1. As I see it, Martin’s view is that the relationship between the elite and the public has fundamentally changed. Thus, the contests between competing elites will be unlike anything we have seen in the past.

2. One way I think of this is that in the past the elite and the public operated in separate spheres. I call these the super-Dunbar sphere and the sub-Dunbar sphere. Referring of course to the Dunbar number that marks the boundary between small-scale society and large-scale society. The public operated in the sub-Dunbar sphere. You were concerned with your own family, friends, and co-workers. The elite managed in the super-Dunbar sphere, running government and large organizations, including mass media. The public knew that the elites were out there, but the public felt no direct connection to the elites. When elites contested with one another, the public were largely bystanders.

3. But new media have caused these two spheres to collide. The public feels itself on the same playing field as the elites. Anyone can comment on Twitter. So people who never used to think much about the super-Dunbar world are now trying to take part in it.

4. Meanwhile, the elites, who are used to having exclusive jurisdiction in the super-Dunbar world, cannot understand why the public no longer defers to them.

5. The super-Dunbar world requires markets and hierarchies, with elites exercising power. But they have never had to obtain legitimacy from the public on such a direct, continuous basis.
And to Martin’s frustration, the elites cannot seem to cope with that challenge.

6. Note that “the public” is, as Martin points out, is a fractured public. It is many publics. This complicates the problem much further.

Martin chimed in:

I think, with Arnold, that relations between elites and the public have been altered in the latter’s favor, in a way that will be very difficult if not impossible to reverse. And I agree with you that elites, like the poor, will always be with us. You can’t run any kind of a complex society without specialization and hierarchy. So what we need is an elite class adapted to performing its tasks while in close proximity to the public. And what we seem to have, in my experience at least, is a dream of reaction and nostalgia for the twentieth century.

I think the next phase in the revolt of the public will be just that: a reactionary moment, in which the elites seek to regain control over the information landscape. The proposals to break up or regulate Facebook and Google, to criminalize hate speech, and to impose strange new standards for “privacy” all push in that direction.

So long as this moment continues, elites will seek to select successors in the rising generation who think, talk, and act just like they do. They will find young people with old heads.

But only the public can bestow legitimacy. That’s the deeper process of elite selection that Ortega writes about. The indifference to elite competition that Arnold notes was a form of acceptance of their authority. That was then. Today the public not only rejects the legitimacy of the elite class – it’s actively working to undermine it. It wants different in the extreme. That’s how we got Donald Trump.

The collision between reaction and negation will shape the next-generation elites. The main question concerns the violence of the encounter – in matters involving selection, I’m afraid it’s always Darwin, and never Jesus, who drives behavior. The outcome could be optimal or terrible. We seem to have a huge number of options available…

Now I have a question for you.

When I say “elites,” it sounds a bit like a Marxian class: a solid phalanx of shared consciousness. But I’ve found our elites to be divided. What I would call “institutional” elites see the world very differently than their Silicon Valley equivalents. They know this, too. If you read the Times or the Post, hardly a day goes by without a tirade against Facebook, Google, Twitter, and the tech types responsible for the SV culture.

As a San Franciscan who moves in that culture, do you agree that there is a divide? And if so, how would you characterize the two sides?

James replied

It isn’t that the elite has lost their status as much as it is that the people and institutions that defined later 20th century elites have lost their “eliteness”. For a variety of reasons, the public no longer follow them or respect their authority.

But the public always follows someone. It is just that the “elites” they are following haven’t really internalized that they are elite or they haven’t appreciated how powerful that really is right now–whether we’re talking about TV talk show hosts who think of themselves as entertainment or tech companies that view themselves as merely businesses rather than something much, much bigger.

This isn’t just a Silicon Valley CEO sort of thing but broader. My kids–12 and 13 years old–are going to look to Vox more than the NYT for authority. And though it is sort of terrifying and befuddling to me (as a product of all sorts of elite institutions), it isn’t that there’s a crisis of trust. The public trusts all sorts of things–just not the things that I was taught to trust.

To me, there are two important directions that I’m not quite ready to embrace but are worth exploring:

1. The heir apparent to traditional elite will continue to fight for authority. They might win. They still have lots of sources of power, legitimate insights, lessons learned, etc. But they won’t win by wringing their hands and complaining. That’s like the silent movie studio complaining about how sound is distasteful and gauche. They will have to be flexible and appropriate the new methods.

2. The new elites really need to get fast lessons on what to do with that power and to realize there’s actually a struggle going on. They need more resources, more attention, and more visits from folks like the two of you! It isn’t quite like Aristotle trying to school Alexander the Great, but there are echoes. When do you need to make it clear that you’re the center of power? Is their going to be a Suez Canal-like crisis in which the new elites make it clear what they care about? When will they just admit that there’s a power struggle?

Now to directly answer your question, I’m one step removed from the actual elite in Silicon Valley so this is just speculation. The tech elites are still figuring out what it means to have this power, and they are often still hoping to get the “blessing” of traditional sources of power. Can you imagine any tech elite (other than Peter Thiel) flat out saying that they are competing against DC for the influence of the public?

I think that’s how we actually got Donald Trump: a bunch of tech elite realized they had incredible tools for creating trust and relationships with the public. They just weren’t really willing to risk using it and instead let someone else do it.

(Now it is possible that the tech elite actually think this way and just don’t want to confront traditional elite directly but I haven’t heard that in my conversations.)

Martin replied,

Arnold once said to me, “Take the most energetic person in DC – that person will be the least energetic in the room at Silicon Valley.”

Granted that this is semi-anecdotal, but my impression is that SV elites are more open, more interested in ideas, and less concerned with rank than the political and media elites here in Washington or in NYC. They love risk and tolerate failure in a way that would destroy careers here. And they are waaaay younger. Andrew Kortina invited me to a “free speech seminar” in SF. I had never met him: he turned out to be a kid in a tee-shirt with tattoos up his arm. But he read a lot, and spoke wonderfully well, and loved to engage with ideas. Patrick Collison is even more impressive. Marc Andreessen – same. Antonio Garcia Martinez, whom I met at our dinner discussion – brilliant. I just don’t know that there are any analogs here to people like these.

Elizabeth Warren is 70. Mark Zuckerberg, whose company she wants to break up, is exactly half of that. That energy Arnold and I noticed has a lot to do with age…

And as we see with Warren, there’s a sort of undeclared war between the two elite groups. The future of our elite class, I suspect, will depend a lot on how that conflict works out.

Comments?

I wrote,

2. I think that large, established organizations operate according to different incentives than start-ups. Large organizations focus on the downside of new initiatives. In the start-up world, the focus is on the upside.

3. Large, established organizations develop a “culture of no,” in which lots of people have veto power and there is little incentive to say yes. It makes sense, because a lot of people have a stake in the existing way of doing things, a major failure could cause an otherwise-thriving organization to get into trouble. So you can see why there was not much effort made by Xerox to dominate the personal computer market, even though they were the first to develop a lot of the critical technology.

With government, the culture of no gets even stronger. There is no competitive pressure to adapt or change. There is tremendous institutional memory of failure. The FDA can remember every drug that was approved prematurely and found to be dangerous. It has no memory of drugs that were delayed unnecessarily.

Martin, is it fair to say that the CIA fits that model? Could the CIA possibly have come forward in 1986 and said that the Soviet Union would soon collapse? Wrongly making that call would have been a disaster for the agency. Failing the other way was fine, because that was normal. Better to fail conventionally than succeed unconventionally.

4. With start-up culture, the culture is MFABT (“move fast and break things”), as Zuckerberg put it. When you have an idea, you don’t encounter a culture of “No, we veto your idea. Forget about it.” It’s more of a skeptical optimism: “Here are all the doubts we have about your concept. But go ahead and try and show us what you can do. We won’t fund you now, but if you can meet these milestones we’d be interested.”

5. I am skeptical that Facebook’s Libra project will get off the ground. Not only do they have to get past Washington’s “culture of no,” they have all sorts of large incumbent firms as partners, each with its own culture of no. My guess is that none of the partners is really gung-ho for Libra. They are thinking that this is a nice project to have on the back burner in case a crytpocurrency offering turns out to be a competitive necessity, but they won’t want to be the pioneers with arrows in their back.

6. I could see the Silicon Valley giants ultimately moving toward a culture of no, but I can’t see Washington DC ever developing a culture of MFABT. For now, the cultures will remain quite distinct.

Martin responded,

As for CIA, the analytic side of the house was always mega-bureaucratic and risk-averse. I found your description of a “culture of no” sadly humorous. I had a friend, a brilliant analyst who died last year, whose favorite phrase for Agency managers was “The Knights Who Say No” (channeling Monty Python).

Criticism of the Libra project reveals the basic confusions of the elite mind at present. I’ve seen it written that Libra would not be governed by the democratic process: but when was the last time the Fed rang me up to get my input, or put its decisions to a vote?

James finished with

Arnold’s point about the Dunbar sphere makes a lot of sense. I wonder how the next generation of elites are going to maintain authority and what sort of tools/organizations they will need.

The culture of no also comes when the cost of being wrong is so high (which ironically increases the chance you’ll be wrong in some big systems way).

Facebook’s position with Libra is a great example of what happens when the cost of being wrong goes up. My read on Libra is that it highlights the awkward position that Facebook is in right now as they try to work with the traditional powers-that-be. The old Facebook might have just released a currency on top of Messenger and WhatsApp and then used their raw distribution power as a reason why other actors should fall in line. The version of Libra they rolled out tried to partner with other big players rather than co-opt or challenge them.