Metcalfe’s law is wrong (?)

In one of my recent forays onto (into?) the web I slipped down one of those odd little wormholes that take you places you've never seen before and found this article challenging Metcalfe's law

Metcalfe's law, which states that the value of a telecommunications network is proportional to the square of the number of users of the system (n²) requires no introduction around here - it is a fundamental axiom of the networking business. But here were the authors of this critique saying that it was wrong. Instead, they propose that the value of a network of size n grows in proportion to n log(n) i.e. more slowly than Metcalfe would have it. Radical stuff!

In their paper the authors present some interesting discussion of what creates the value of networks. Beyond just being a dry dissection of Metcalfe's logic, the paper has some worthwhile insights into the question of how to place an economic value on networks, and how to consider making investments in them.

However, this wasn't what really interested me. The essence of their argument against Metcalfe's law is that:

The fundamental flaw underlying both Metcalfe's and Reed's laws is in the assignment of equal value to all connections or all groups. The underlying problem with this assumption was pointed out a century and a half ago by Henry David Thoreau in relation to the very first large telecommunications network, then being built in the United States. In his famous book Walden (1854), he wrote: "We are in great haste to construct a magnetic telegraph from Maine to Texas; but Maine and Texas, it may be, have nothing important to communicate."

In pondering this my dystopian instincts were aroused and I was tempted to slip back into 'unreformed industrial age bureaucrat' mode.  Could this, I thought, be the proof on my own (and now never to be published) Craig's law, which was once to have stated that "the cost of doing business in the public sector rises, and the likelihood of reaching sensible conclusions decreases, in proportion to the square of the number of people involved"?  Connected Republic - bah humbug!!

However, that view simply doesn't stack up with my own experience in recent years, in which my capacity to perform effectively (I like to believe) as a public servant was (generally) vastly enhanced by operating in an increasingly networked environment.

So who do we rely upon - Metcalfe or his detractors? Fortunately, I didn't have to attempt a serious critique of 'n log(n)'. Metcalfe comes to his own defence in a nice piece called  Metcalfe’s Law Recurses Down the Long Tail of Social Networking. Here, among other things, he responds to his critics' assertion that Metcalfe's law is dangerous (because it can encourage irrational exuberance for investments in networks that become speculative bubbles a la the dotcom frenzy). He really came to my rescue with this statement:

But, if anybody wants to spend time on Metcalfe’s Law, let me suggest what are likely to be more fruitful paths. Accurate formulas for the static value of a network are fine, but it would be much more useful to understand the dynamics of network value over time. Also important would be linking Metcalfe’s Law to Moore’s Law and showing how that potent combination underlies what WIRED’s Editor-in-Chief Chris Anderson calls The Long Tail.

And it is at the point where I am about to disappear down the Long Tail wormhole that I'll stop paraphrasing these various ideas and arguments and let others pursue them as they see fit.

So what to make of this? I concluded that, to me, it doesn't matter how much actual value we derive from networks. I'm just darned glad we've got them because of the capacity for social and economic value creation they give us.

My role has never been to put a value on networks. Instead, I have been (and remain) an advocate for them. I'm not so interested in the economics or mathematics of networks, but in their effects in the real world. And here I believe they are hugely positive - despite the extra burden they impose on old-school bureaucrats, and their facilitation of viruses and spam, and their hyper-enablment of many age old human foibles and failings etc.

In this day and age I just don't think we can prosper as individuals, communities, societies, economies or, most importantly, as a species without them. Take our global environmental problems. I think we'd be in our current situation regardless of whether we had networks or not.  But without networks our capacity to seperately and collectively understand and address our predicament would be vastly diminshed and the capacity for powerful vested interests (public and private) to game their responses would be much greater than it is.

Sunlight is, as they say, the best disinfectant. And that is what I think we get from networks - a heightened ability to see where we stand and where we need to get to. Thoreau was wrong -  we have many things of great importance to communicate, and we need to do it quickly. Of course communication and understanding is one thing and action is another, but I know what order I prefer to see them in.

 So Craig's law never was right and it turns out I'm one of the network utopians. That makes me happy. How about you?