Write a response on 2 articles: "Here comes everybody" and "oversold Twitter and Facebook as tools for political action.”

24 I HER E C ') MES EV E RY BO DY

deep source: newly capable groups are assembling, and they

are working without the managerial imperative and outside

the previous strictures that bounded their effectiveness. These

changes will transform the world everywhere groups of people

come together to accomplish something, which is to sayev­

erywhere.

SHARING ANCHORS COMMUNITY

Groups of people are complex, in ways that make those

groups hardtoform and hard to sustain; much of the shape

of traditional institutions is a response to those difficulties.

New social tools relieve some of those burdens, allowingfor

new kinds of group-jorming, like using simple sharing to

anchor the creation of newgroups.

I m agin e you are standing in line with thirty-five other people, and to pass the time, the guy in front of you pro­ poses a wager. He 's willing to bet fifty dollars that rio two

people in line share a birthday. Would you take that bet?

If you're like most people. you wouldn't. With thirty-six

people and 365 possible birthdays, it seems like there would

only be about a one-in-ten chance of a match , leaving you

a 90 percent chance of losing fifty dollars. In fact, you should take the bet, since you would have better than an 80

percent chance of winning fifty dollars. This is called the

Birthday Paradox (though it's not really a paradox, just a

26 I HER E C O M€5 E V Er, , 6 0 D Y

surprise) , and it illustrate s som e of the complexities involved in groups.

Most people get the odds of a birthday match wrong for

two reasons . First, in situations involving many people , they

think about themselves rather than the group. If the guy in

line had asked , "Wh at are the odds that someone in this line

shares your birthday?" that would indeed have been about a

one in ten chance , a distinctly bad bet. But in a group, other

people 's relationship to you isn't all that matters; instead of

counting people , you need to count links between people. If

you're comparing your birthday with one other person's , then

there's only one comparison, which is to say only one chance

in 365 of a match. If you're comparing birthdays in a group

with two other people-you, Alice, and Bob, say-you might

think you'd have two chances in 365, but you'd be wrong.

There are three comparisons: your birthday with Alice's , yours

with Bob's, and Alice's with Bob's. With four people , there are

six such comparisons, half of which don't involve you at all;

with five, there are ten, and so on. By the time you are at

thirty-six people , there are more than six hundred pairs of

birthdays. Everyone understands that the chance of any two

people in a group sharing a birthday is low; what they miss is

that a count of "any two people" rises much faster than the

number of people themselves. This is the engine of the Birthday Paradox.

This rapidly rising number of pairs is true of any collec­

tion of things: if you have a bunch of marbles, the number of

possible pairs will be set by the same math. The growing com­

plexity gets much more wretched in social settings, however;

marbles don't have opinions, but people do. As a group grows

5 H ~ R I NG ~N CHO RS C O M M U NI TY I 27

to even modest size, getting universal agreem ent becomes first

difficult, then impossible. This quandary can be illustrated with

a simple scenario. You and a friend want to go out to a mo vie.

Before you buy the tickets, you'll have to factor in your various

preferences: comedy or romance, early show or late, near work

or near home. All ofthese will have some effect on your mutual

decision, but with just two of you, getting to some acceptable

outcome is fairly easy.

Now imagine that you and three friends decide to go out to

a movie. This is harder, because the group's preferences are

less likely to overlap neatly. Two of you love action films , two

hate them; one wants the early show, three the late one, and so

on. With two people, you have only one agreement to make.

With four, as Birthday Paradox math tells us , you need six such

agreements : Other things being equal, coordinating anything

with a group of four is six times as hard as with two people,

~ Figure 2-1: Three clusters, with all conn ection s drawn. The sm all cluster has 5 members and IO connections; the middle one has IO members and 45 connection s; and the large one has IS and IOS . A group's compl exity grows faster than its size .

28 I H ER E C OM E S EVER YBOD Y

and the effect gets considerably worse as the group grows even moderately large. By the time you want to go to a movie in a

group often, waiting for forty-five separate agreements is pretty

much a lost cause. You could sit around discussing the possible

choices all day, with no guarantee you'll get to an agreement at

all, much less in time for the movie. Instead you'll vote or draw

straws, or someone will just decide to go to a particular movie

and invite everyone else along, without trying to take all pos­

sible preferences into account. These difficulties have nothing

to do with friendship or movie-going specifically; they are

responses to the grim logic of group complexity. This complexity means, in the words of the physicist Philip

Anderson, that "m ore is different." Writing in Science maga­

zine in 1972, Anderson noted that aggregations of anything

from atoms to people exhibit complex behavior that cannot be

predicted by observing the component parts . Chemistry isn't

just applied physics-you cannot understand all the proper­

ties of water from studying its constituent atoms in isolation.

This pattern of aggregates exhibiting novel properties is true

of people as well. Sociology is not just psychology applied to

groups; individuals in group settings exhibit behaviors that no

one could predict by studying single minds. No one has ever

been bashful or extroverted while sitting alone in their room ,

no one can be a social climber or a man of the people without

reference to society, and these characteristics exist because

groups are not just simple aggregations of individuals.

As groups grow, it becomes impossible for everyone to

interact directly with everyone else. If maintaining a connec­

tion between two people takes any effort at all, at some size

that effort becomes unsustainable. You can see this phenom-

S H II R I N G IINCHO R S CO M MUN I TY I 29

enon even in simple situations , such as when people clink

glasses during a toast. In a small group , everyone can clink

with everyone else; in a larger group , people touch glasses

only with those near them. Similarly, as Fred Brooks noted in

his book The Mythical Man-Month, adding more employees to

a late project tends to make it later, because the new workers

increase the costs of coordinating the group. Because this con­

straint is so basic, and because the problem can never be

solved, only managed, every large group has to grapple with it

somehow. For all of modem life, the basic solution has been

to gather people together into organizations.

We use the word "organization" to mean both the state of

being organized and the groups that do the organizing-"Our

organization organizes the annual conference. " We use one

word for both because , at a certain scale, we haven't been able

to get organization without organizations; the former seems

to imply the latter. The typical organization is hierarchical,

with workers answering to a manager, and that manager an­

swering to a still-higher manager, and so on . The value of such

hierarchies is obvious-it vastly simplifies communication

among the employees. New employees need only one connec­

tion , to the ir boss, to get started. That's much simpler than

trying to have everyone talk to everyone.

Running an organization is difficult in and of itself, no

matter what its goals. Every transaction it undertakes-every

contract , every agreement, every meeting-requires it to ex­

pend some limited resource : time , attention, or money.

Because of these tran saction costs , some sources of value are

too costly to take advantage of. As a result, no institution can

put all its energies into pursuing its mission; it must expend

30 I HERE COMES EVERYBODY

considerable effort on maintaining discipline and structure,

simply to keep itselfviable. Self-preservation of the institution

becomes job number one, while its stated goal is relegated to

number two or lower, no matter what the mission statement

says. The problems inherent in managing these transaction

costs are one of the basic constraints shaping institutions of all kinds.

This ability ofthe traditional management structure to sim­

plify coordination helps answer one of the most famous ques­

tions in all of economics: If markets are such a good idea, why

do we have organizations at all? Why can't all exchanges of

value happen in the market? This question originally was posed

by Ronald Coase in 1937 in his famous paper "The Nature of

the Firm," wherein he also offered the first coherent explana­

tion of the value of hierarchical organization. Coase realized that

workers could simply contract with one another, selling their

labor, and buying the labor of others in tum, in a market, with­

out needing any managerial oversight. However, a completely

open market for labor, reasoned Coase, would underperform

labor in firms because of the transaction costs, and in particular

the costs of discovering the options and making and enforcing

agreements among the participating parties. The more people

are involved in a given task, the more potential agreements

need to be negotiated to do anything, and the greater the trans­

action costs, as in the movie example above.

A firm is successful when the costs of directing employee

effort are lower than the potential gain from directing. It's

tempting to assume that central control is better than markets

for arranging all sorts of group effort. (Indeed, during the

twentieth century much of the world lived under governments

S H A R I N G ANCHORS C OMMUNIT Y I 31

that made that assumption.) But there is a strong limiting fac­

tor to this directed management, and that is the cost of man­

agement itself. Richard Hackman, a Harvard professor of

psychology, has studied the size and effectiveness of work

groups in Leading Teams. Hackman tells a story about a man who ran a nonprofit whose board of directors numbered forty.

When asked what he thought such a large board could accom­

plish, he replied, "Noth in g," in a way that implied he liked it

that way. Because of managerial overhead, large groups can

get bogged down , and whenever transaction costs become too

expensive to manage within a single organization, markets

outperform firms (and central management generally) .

Activities whose costs are higher than the potential value

for both firms and markets simply don't happen. Here is the

institutional dilemma again: .becau se the minimum costs of

being an organization in the first place are relatively high,

certain activities may have some value but not enough to make

them worth pursuing in any organized way. New social tools

are altering this equation by lowering the costs of coordinating

group action . The easiest place to see this change is in activi­

ties that are too difficult to be pursued with traditional man­

agement but that have become possible with new forms

of coordination.

How Did All Those Pictures Get There?

On the last Saturday in June, Coney Island kicks off the sum­

mer with the Mermaid Parade , a sort of hometown procession

for New York City hipsters. Hundreds of people show up to

32 I HERE COME S E VERYBOD Y

march around Brooklyn's famously run-down amusement

park in costumes that are equal parts extravagant and weird­

a giant red octopus puppet, a flotilla of hula-hooping mer­

maids, a marcher sporting a bikini top made of two skulls.

Thousands tum out to watch and photograph the festivities,

taking pictures ranging from a couple of snapshots to dozens of high-quality photos.

A handful of these pictures end up in local newspapers, but

for most of the history of the Mermaid Parade, most pictures

were seen only by the people who took them and a few of their

friends. The sponsor of the parade didn't provide any way for the

photographers to aggregate or share their photos, and the pho­

tographers themselves didn't spontaneously organize to do so.

That is the normal state of affairs. Given the complexities of

group effort, hundreds of people don't spontaneously do much

of any consequence, and it wouldn't have made much sense for

anyone to expend the effort to identify and coordinate the pho­

tographers from the outside. A couple of years ago, however, the

normal state of affairs stopped operating.

In 2005, for the first time, a hundred or so of the attendees

pooled thousands of their Mermaid Parade photos and made

them publicly available online. The photos came from all sorts

of photographers, from amateurs with camera-phones to pros

with telephoto lenses. The group was mainly populated by

casual contributors-most people uploaded fewer than a

dozen photos-but a handful of dedicated contributors shared

more than a hundred pictures each, and one user, going by

the online name czarina, shared more than two hundred pho­

tos on her own. The group pooled these photos by uploading

them to a service called Flickr, giving each of the photos a free­

3HARING ANCH OR S CO M MU N I TY I 33

form label called a tag. As a result, anyone can go to Flickr

today, search for the tag "mermaidparade," and see the photos.

This is a simple chain of events : people take pictures, people

share pictures, you see pictures. It's so simple, in fact, that it's

easy to overlook the substantial effort involved behind the

scenes.

Flickr is the source of the sharing, but here's what Flickr

did not do to get the sharing to happen: it didn't identify the

Mermaid Parade as an interesting event, nor did it coordinate

parade photographers or identify parade photographs. What it

did instead was to let the users label (or tag) their photos as a

way of arranging them. When two or more users adopted the

same tag, those photos were automatically linked. The users

were linked as well; the shared tag became a potential stepping­

stone from one user to another, adding a social dimension to

the simple act ofviewing. The distinction between Flickr coor­

dinating users versus helping them coordinate themselves

seems minor, but it is in fact vital, as it is the only way Flickr

can bear the costs involved. Consider what it would have taken

for Flickr to organize hundreds of amateur mermaid photog­

raphers. Someone at Flickr HQ would have had to know about

an obscure parade on the other side of the country. (Flickr is

based in California .) They would have had to propose a tag for

the group to use in order to assemble the uploaded photos.

Finally, they would have had to communicate the chosen tag

to everyone going to the parade.

This last step is especially hard. When you are trying to

address a diffuse group , you are locked into the dilemma that

all advertisers face: how do you reach the people you want,

without having to broadcast your message to everybody?

34 I H E RE CO ME S E VE R Y BOD Y

People in the category "Potential photographer of the Mermaid

Parade" aren't easy to find. Flickr couldn't have known in ad­ vance who would go to the parade. Instead, they would have

to send messages out to many more people than would actu­

ally attend, in hopes of reaching the right audience, advertis­

ing to photographers , hipsters, New Yorkers, and so on, in

hope of getting the tiny fraction of those groups who would

actually go. Most such ads would be seen by people who

weren't going to the parade, while most of the people who

were going wouldn't see (or pay attention to) the ads. Given those obstacles, "no business in the world would take on the

job. The profit motive is little help ; no one could sell enough

pictures, even the skull-bikini ones, to be able to pay the pho­

tographers, much less leave any profit afterward. Likewise, no

nonprofit or government agency would touch the problem;

even the porkiest of pork-barrel projects isn't going to cover

publicity for hula-hooping mermaids. The gap between effort

and payoff is too large for any institution to span .

Yet there the photos are. Without spending any serious

effort on any individual set of photos, and without doing any­

thing to coordinate or even identify groups of photographers ,

Flickr has provided a platform for the users to aggregate the

photos themselves.

The difference between the value of the photos and the

cost of aggregation is a general one. Flickr isn't just for photos

of dancing mermaids , family reunions , and the effects of that

third ma rgarita ; it also hosts photos of broad public interest.

Flickr provided some of the first photos of the London

Transport bombings in 2005, including some taken with

camera-phones by evacuees in the Underground's tunnels.

SHARING A N C H O R S C OM M U NI T Y I 35

Flickr beat many traditional news outlets by providing these

photos, because there were few photojournalists in the af­

fected parts of the transport network (three separate trains on

the Underground , and a bu s), but many people near those

parts of the transport system had camera-phones that could

e-m ail the pictures in. Having cameras in the hands of ama­

teurs on the scene was better than having cameras in the

hands of professionals who had to travel. The photos that showed up after the bombings weren't just

amateur replacements for traditional photojournalism; people

did more than just provide evidence of the destruction

and its aftermath. They photographed official notices ("All

Underground services are suspended"), notes posted in

schools ("Please do not inform children of the explosions"),

messages of support from the rest of the world ("We love you

London"), and within a day of the bombings, expressions of

defiance addressed to the terrorists ("We are not afraid" and

"You will fail"). Not only did Flickr host all of these images,

they made them available for reuse, and bloggers writing

about the bombings were able to use the Flickr photos almost

immediately, creating a kind of symbiotic relationship among

various social tools. The images also garnered comments on

the Flickr site. A user going by Happy Dave posted an image

reading "I'm OK," meant to alert his friends who had sub­

scribed to his images on Flickr; he received dozens of com­

ments from well-wishers in the comments. The "Do not

inform the children" image generated a conversation about

how to talk to kids about terrorism . The basic capabilities of

tools like Flickr reverse the old order of group activity, trans­

forming "gather, then share " into "share , then gather." People

36 I ~ERE COM E S EVERYBODY

were able to connect after discovering one another through

their photos.

A similar change in the broadcasting of evidence happened

after the awful destruction caused by the Indian Ocean tsu­

nami at the end of 2004. Within hours of the tsunami dozens

of photos were available on the Web showing various affected

places , and within days there were hundreds. As with the

London bombings, there was no way to get photojournalists

on the scene instantly, but here the problem was not just the

speed ofresponse but the spread of the damage, which affected

thirteen countries. And as with the London bombings, the

photos weren't used just for evidence; people began uploading

photos of missing loved ones , and various weblogs began to

syndicate these photos to aid in relocation. The most visited

photo tagged "tsun am i" is a picture of a little boy, age two at

the time he went missing. The picture originally went up with

contact information to aid in the search, but as time went on,

it turned into an ongoing memorial; viewers posted hundreds

of comments of support and prayers under the photo, and

many commenters came back months later to check in and

conversed with one another in the comments. When the boy's

body was finally recovered and identified, months later, several

people posted the sad news on Flickr, and the community that

had formed around the photo posted expressions of grief and

condolences for the family, then dissolved.

Photo sharing also helped provide the world with docu­

mentation ofthe 2006 military coup in Thailand. Immediately

after the coup the military placed restrictions on reporting by

the media, but it didn 't (and probably couldn't) place similar

restrictions on the whole populace. As a result, many of the

S~AR ING A NC H O RS C OMMUNIT Y I 3 7

earliest photos of tanks in front of Government House, the

parliament building, came from individuals posting images

from ordinary digital cameras, and they were discoverable by

their tags (Bangkok, Thailand, Military, Coup). One of those

users was Alisara Chirapongse , then a fashion-obsessed col­

lege student, who blogs under the name gnarlykitty, who posted

the coup photos to her weblog, along with running commen­

tary on the cause and immediate aftermath of the anny over­

throwing Thaksin Shinawatra, then prime minister. As the

army announced that it wanted to take control of communica­

tions and ban public political speech, her posts took on a new

urgency:

One new little change that this law brought us is the

whole new level of censorship. No political gather­

ing , no discussing politics , and of course no voicing

your opinions whatsoever about the whole mumbo

ju m bo coup. (Oops did I just do that?)

Alisara posted links to Wikipedia, the collaborative1y produced

encyclopedia, which was acting as a clearinghouse for breaking

news of the coup (as is now usual). She also pointed her read­

ers to a petition to restore freedom of speech and to a proposed

demonstration, which she later attended and photographed.

Then , as the initial disorientation of the coup gave way to

the new normal, Chirapongse went back to her life as a

fashion-obsessed student. As she put it,

This blog is my personal blog where I usuall y write

things concerning my life and things I like. Since my

38 I HERE CO MES E V E R Y BO D Y

life is lived here in Bangkok Thailand, it should come

as no surprise to anyone that I sometime blog about

it. So blogging about the Coup is merely blogging

about something that's currently happening in

my country.

The rest of that post was about a night she spent at a club, and

the post after that was about how much she likes her new

camera-phone. She wasn't a full-time journalist, she was a

citizen with a camera and a weblog, but she had participated

in a matter of global significance at exactly the time when the

traditional media were being silenced.

The content in these examples is quite varied-the gentle

ridiculousness of the Mermaid Parade and the awful serious­

ness of the London bombings; the man-made intervention of

a military coup and the natural destruction of the tsunami.

The common thread is the complexity of gathering the photos.

The groups of photographers were all latent groups, which is

to say groups that existed only in potentia , and too much effort

would have been required to turn those latent groups into real

ones by conventional means . The mermaid photos were too

unimportant to be worth any institutional effort. The London

bombing photos were taken by the people on the scene. The

tsunami's destruction was spread out over tens of thousands

of miles of coastland, and the uses of photos included finding

missing persons, something outside the purview of typical

news gathering. During the Thai coup the military rulers were

able to place restrictions on organized media, giving amateur

photographers an advantage in providing views oftanks in the

streets. In each of those cases the cost of coordinating the

SHARI N G AN CH OR S CO M M U N I T Y I 39

potential photographers would have defeated any institution

wanting to put photos together quickly and make them avail­

able globally.

The task of aggregating and making photos available is

nothing like, say, the task of putting a man on the moon. Prior

to services like Flickr, what kept photo-sharing from happen­

ing wasn't the absolute difficulty but the relative difficulty.

There is obviously some value to both photographers and

viewers in having photos available, but in many cases that

value never exceeded the threshold of cost created by the in­

stitutional dilemma. Flickr escaped those problems, not by

increasing its managerial oversight over photographers but by

abandoning any hope of such oversight in the first place, in­

stead putting in place tools for the self-synchronization of oth ­

erwise latent groups.

Making the Trains Run on Time

The structure of traditional managerial oversight is often

illustrated by an "org chart," a diagram of the official organi­

zational hierarchy. This chart is the simplest possible view of

an organization's reporting structure. It is usually drawn as an

inverted tree of boxes and arrows. The box at the top repre­

sents the head of the organization; the lines drawn downward

from that box connect her to various officers and vice presi­

dents through the layers of management, until, at the bottom,

there are the rank and file, represented by boxes with lines

connecting upward but not downward. The org chart diagrams

both responsibility and channels of communication-when

40 I H E RE CO H E S E VE R Y B O D Y

two boxes are connected on such a chart, the upper box is the

boss ; communication from the CEO flows down through the

layers of management, while information from the workers

flows up in the same way. Compared to the chaos of the mar­

ket, the org chart draws clear and obvious lines of responsibil­

ity, and it is that very clarity that allows the firm to outperform

a pure market for work.

The org chart is like institutional wallpaper-ubiquitous

and not terribly dramatic. It's funny to think of it as a specific

invention, but its existence and form owe quite a lot to the en­

vironment in which it was first widely used-railroad manage­

ment in the 1800s. The pioneering managerial methods were

meticulously documented by Alfred Chandler in his book The

Visible Hand. The principal problem in running a railroad was

arranging for eastbound and westbound trains to share the

same track , because it was prohibitively expensive to lay more

than one track for a particular line . By 1840 Western Railroad,

a pioneer in building longer rail lines, had to deal with a dozen

trains crossing in opposite directions every day. That situation

created obvious safety risks , risks that were not long in moving

from the theoretical to the real: on October 5, 1841, two pas­

senger trains collided head on, with two fatalities and seventeen

injured. This accident alarmed both the public and Congress

and forced the railroads to rethink their management.

For the next fifteen years railroads invested in better over­

sight. As a result, their safety record improved, but their profit­

ability decayed. A big firm like Western could haul more people

and cargo to more places than could a smaller railroad, but the

cost of managing the enterprise had risen much faster; Western

was actually making less money per mile of track than its

S HA R ING ANCHORS COHMUNITY I 41

smaller competitors. David McCallum, a railroad superinten­

dent for the New York & Erie Railroad, proposed both an expla­ nation and a solution for this decayed profitability. As he put it

in his Superintendent's Report of 1855:

A Superintendent of a road fifty miles in length can

give its business his personal attention, and may be

constantly engaged in the direction of its details ...

any system however imperfect, may under such cir­

cumstances , prove comparatively successful.

In the govemment of a road five hundred miles

in length, a very different state exists. Any system

which might be applicable to the business and extent

of a short road , would be found entirely inadequate

to the wants of a long one.

More is different: a small railroad could function with ad

hoc management, because it had so few emplo yees and so few

passing trains, but as the scale rose, the management prob­

lems rose faster. This is where the institutional dilemma

meets Birthday Paradox math : not only does managing re­

sources take resources. but management challenges grow

faster than organizational size.

McCallum's proposed solution to this dilemma included

making a clear delineation of the responsibility for different

segments of track. Central management would oversee re­

gional divisions and supervise the trains passing through their

region. McCallum introduced several formal innovations to

New York & Erie: strong hierarchical oversight, including an

explicitly divisional organization of the railroad with different

42 I HERE C OM ES EVERYBO D Y

superintendents responsible for different parts of the railroad.

He diagrammed this form of organization with what may have

been the first commercial org chart in history. This method

was widely copied by other railroads, then by other kinds of firms .

In addition to revolutionizing management structure,

McCallum wrote six principles for running a hierarchical or­

ganization. Most are what you'd expect (number one was en­

suring a "proper division of responsibilities"), but number five

is worth mentioning: his management system was designed

to produce "such information, to be obtained through a sys­

tem of daily reports and checks, that will not embarrass prin ­

cipal officers nor lessen their influence with their subordinates."

If you have ever wondered why so much of what workers in

large organizations know is shielded from the CEO and vice

versa, wonder no longer: the idea of limiting communications,

so that they flow only from one layer of the hierarchy to the

next, was part of the very design of the system at the dawn of managerial culture.

Post-Managerial Organization

When an organization takes on a task , the difficulty of coordi­

nating everyone needs to be reined in somehow, and the larger

the group, the more urgent the need. The standard, almost

universal solution is to create a hierarchy and to slot individu­

als into that organization by role. In Coasean terms, McCallum's

system lowered the transaction costs of running a railroad by

increasing managerial structure. This approach greatly simpli-

SHARING ANCHOR S CO M M U N I TY I 4~

fies lines of responsibility and communication, making even

very large organizations manageable. The individuals in such

an organization have to agree to be managed, of course, which

is usually achieved by paying them, and by making continued

receipt of their pay contingent on their responsiveness to their

manager's requests.

An organization will tend to grow only when the advan ­

tages that can be gotten from directing the work of additional

employees are less than the transaction costs of managing

them. Coase concentrated his anal ysis on businesses , but the

problems of coordination costs apply to institutions of all

sorts . The Catholic Church and the U.S. Army are as hierar­

chical as any for-profit business , and for many of the same

reasons. The layers of structure between the pope and the

priests , or between the president and the privates, is a product

of the same forces as the layers between the general superin­

tendent and a conductor on the New York & Erie. This hierar­

chical organization reduces transaction costs, but it doesn't

eliminate them.

Imagine a company with fifteen hundred employees,

where each manager is responsible for half a dozen people.

The CEO has six vice presidents, who each direct the work of

six supervisors, and so on. Such a company would have three

layers of management between the boss and the workers. If

you want to bring the workers closer to the boss, you will have

to increase the number of workers that each manager is re­

sponsible for. This will reduce the number of layers but will

also reduce average management time with each staff mem­

ber (or force everyone to spend more hours per day commu­

nicating with one another). When an organization grows very

44 I HERE COMES EVERYBODY

large, it reaches the limit implicit in Coase's theory; at some

point an institution simply cannot grow anymore and still re­

main functional, because the cost of managing the business

will destroy any profit margin. You can think of this as a

Coasean ceiling, the point above which standard institutional forms don't work well.

Coase's theory also tells us about the effects of small

changes in transaction costs. When such costs fall moderately,

we can expect to see two things. First, the largest firms

increase in size. (Put another way, the upper limit of organi­

zational size is inversely related to management costs.) Second,

small companies become more effective, doing more business

at lower cost-than the same company does in a world of high

transaction costs. These two effects describe the postwar in­

dustrial world well: Giant conglomerates like ITT in the I970S

and GE in recent years used their management acumen to get

into a huge variety of businesses, simply because they were

good at managing transaction costs. At the same time there

has been an explosion of small- and medium-sized businesses,

because such businesses were better able to discover and ex­ ploit new opportunities.

But what if transactions costs don't fall moderately? What

if they collapse? This scenario is harder to predict from Coase's

original work, and it used to be purely academic. Now it's not,

because it's happening, or rather it has already happened, and

we're starting to see the results.

Anyone who has worked in an organization with more

than a dozen employees recognizes institutional costs.

Anytime you are faced with too many meetings, too much

paperwork, or too many layers of approval (shades of

SHARIN G AN CH O RS C O M M U NIT Y I 45

McCallum), you are dealing with those costs. Until recently,

such costs have been little more than the stuff of water-cooler

grumbling-everyone complains about institutional overhead,

without much hope of changing things. In that world (the

world we lived in until recently), if you wanted to take on a

task of any significance, managerial oversight was just one of

the costs of doing business.

What happens to tasks that aren't worth the cost of mana­

gerial oversight? Until recently, the answer was "Those things

don't happen." Because of transaction costs a long list of pos­

sible goods and services never became actual goods and ser­

vices; things like aggregating amateur documentation of the

London transit bombings were simply outside the realm of

possibility. That collection now exists because people have al­

ways desired to share, and the obstacles that prevented shar­

ing on a global scale are now gone. Think of these activities as

lying under a Coasean floor; they are valuable to someone but

too expensive to be taken on in any institutional way, because

the basic and unsheddable costs of being an institution in the

first place make those activities not worth pursuing.

Our basic human desires and talents for group effort are

stymied by the complexities of group action at every tum.

Coordination, organization, even communication in groups is

hard and gets harder as the group grows. That difficulty means

that whatever methods help coordinate group action will spread,

no matter how inefficient they are, so long as they are better

than nothing. Small groups have several methods for coordinat­

ing action, like calling each group member in tum or setting up

a phone tree, but most of these methods don't work well even

for dozens of people, much less for thousands. For large-scale

46 I H E R E C OMES EVE RY B O DY

activity, the methods that have worked best have been those

pioneered by McCallum-hierarchical organization, managed

in layers. The most common organizational structures we have

today are simpl y the least bad fit for group action in an environ ­

ment of high transaction costs.

Our new tools offer us ways of organizing group effort

without resorting to McCallum's strategies. Flickr stands in a

different kind of relationship to its photographers than a news­

paper does. Where a newspaper is in the business of directing

the work of photographers , Flickr is simply a platform; what­

ever coordination happens comes from the users and is pro­

jected onto the site. This is odd. We generally regard institutions

as being capable of more things than uncoordinated groups

are , precisely because they are able to direct their employees.

Here , though, we have a situation where the loosely affiliated

group can accomplish something more effectively than the in­

stitution can. Thanks to the introduction of user-generated la­

beling, the individual motivation of the photographers-devoid

of financial reward-is now enough to bring vast collections of

photos into being. These collections didn't just happen to be

put together without an institution; that is the only way they

could have been put together.

This is where Coasean logic gets strange. Small decreases

in transaction costs make businesses more efficient, because

the constraints of the institutional dilemma get less severe .

Large decreases in transaction costs create activities that can't

be taken on by businesses , or indeed by any institution, be­

cause no matter how cheap it becomes to perform a particular

activity, there isn't enough payoff to support the cost incurred

by being an institution in the first place. So long as the abso-

S H A RIN G A N C H O R S COMMUNITY I 47

lute cost of organizing a group is high, unmanaged groups

will be limited to undertaking small efforts-a night out at the

movies, a camping trip. Even something as simple as a pot­

luck dinner typically requires some hosting institution. Now

that it is possible to achieve large-scale coordination at low

cost , a third ca!egory has emerged: serious , complex work,

taken on without institutional direction. Loosely coordinated

groups can now achieve things that were previously out of

reach for any other organizational structure, because they lay

under the Coasean floor.

The cost of all kinds of group activity-sharing, coopera­

tion , and collective action-have fallen so far so fast that ac­

tivities previously hidden beneath that floor are now coming to

light. We didn't notice how many things were under that floor

because, prior to the current era, the alternative to institutional

action was usually no action. Social tools provide a third alter­

native: action by loosely structured groups, operating without

managerial direction and outside the profit motive.

From Sharing to Cooperation to Collective Action

For the last hundred years the big organizational question has

been whether any given task was best taken on by the state,

directing the effort in a planned way, or by businesses com­

peting in a market. This debate was based on the universal

and unspoken supposition that people couldn't simply self­

assemble ; the choice between markets and managed effort

assumed that there was no third alternative. Now there is.

48 I HERE COMES EVERYB ODY

Our electronic networks are enabling novel forms of collec­

tive action , enabling the creation of collaborative groups that

are larger and more distributed than at any other time in his­

tory. The scope of work that can be done by noninstitutional

groups is a profound challenge to the status quo .

The collapse of transaction costs makes it easier for people

to get together-so much easier, in fact, that it is changing the

world. The lowering of these costs is the driving force under­

neath the current revolution and the common element to ev­

erything in this book. We're not used to thinking of "groupness"

as a specific category-the differences between a college semi­

nar and a labor union seem more salient than their similari­

ties. It's hard to see how Evan Guttman's quest for the return

of the mobile phone is the same kind of thing as the distrib­

uted documentation of the Indian Ocean tsunami. But like a

chain of volcanoes all fed by the same pool of magma, the

surface manifestations of group efforts seem quite separate ,

but the driving force of those eruptions is the same: the new

ease of assembly. This change can be looked at as one long

transition, albeit one with many manifestations, unfolding at

different speeds in different contexts. The transition can be

described in basic outline as the answer to two questions: Why

has group action largely been limited to formal organizations?

What is happening now to change that?

We now have communications tools-and increasingly,

social patterns that make use of those tools-that are a better

fit for our native desires and talents for group effort. Because

we can now reach beneath the Coasean floor, we can have

groups that operate with a birthday party's informality and a

multinational's scope. What we are seeing, in the amateur

SHAR ING ANCHORS COMMUNIT Y I 49

coverage of the Thai coup and the tsunami documentation

and the struggle over Ivanna's phone and countless other

examples , is the beginning of a period of intense experimenta­

tion with these tools. The various results look quite different

from one another, and as we get good at using the new tools,

those results will diverge still further. New ease of assembly is

causing a proliferation of effects, rather than a convergence,

and these effects differ by how tightly the individuals are

bound to one another in the various groups. You can think of group undertaking as a kind ofladder of

activities, activities that are enabled or improved by social

tools. The rungs on the ladder, in order of difficulty, are shar­

ing, cooperation, and collective action. Sharing creates the fewest demands on the participants.

Many sharing platforms, such as Flickr, operate in a largely

take-it-or-leave-it fashion, which allows for the maximum free­

dom of the individual to participate while creating the fewest

complications of group life. Though Flickr sets public sharing

as the default , it also allows users to opt to show photos only

to selected users, or to no one. Knowingly sharing your work

with others is the simplest way to take advantage of the new

social tools. (There are also ways ofunknowingly sharing your

work, as when Google reads the linking preferences of hun­

dreds of millions of internet users. These users are helping

create a communally available resource , as Flickr users are ,

but unlike Flickr, the' people whose work Google is aggregat­

ing aren't actively choosing to make their contributions.)

Cooperation is the next rung on the ladder. Cooperating is

harder than simply sharing, because it involves changing your

behavior to synchronize with people who are changing their

50 I HERE COMES E VER YB OD Y

behavior to synchronize with you. Unlike sharing, where the

group is mainly an aggregate of participants, cooperating cre­

ates group identity-you know who you are cooperating with.

One simple form of cooperation, almost universal with social

tools, is conversation; when people are in one another's com­

pany, even virtually, they like to talk. Sometimes the conversa­

tion is with words, as with e-mail.TM, or text messaging, and

sometimes it is with other media : YouTube, the video sharing

site, allows users to post new videos in response to videos

they've seen on the site. Conversation creates more of a sense

of community than sharing does , but it also introduces new

problems. It is famously difficult to keep online conversations

from devolving into either name-calling or blather, much less

to keep them on topic. Some groups are perfectly happy with

those effects (indeed , there are communities on the internet

that revel in puerile or fatuous conversation), but for any

group determined to maintain a set of communal standards

some mechanism of enforcement must exist.

Collaborative production is a more involved form of coop­

eration, as it increases the tens ion between individual and

group goals. The litmus test for collaborative production is

simple: no one person can take credit for what gets created,

and the project could not come into being without the partici­

pation of many. Structurally, the biggest difference between

information sharing and collaborative production is that in

collaborative production at least some collective decisions

have to be made. The back-and-forth talking and editing that

makes Wikipedia work results in a single page on a particular

subject (albeit one that changes over time) . Collaboration is

not an absolute good-many tools work by reducing the

S H A R I N G ANC H O R S CO M MU N IT Y I 51

amount of required coordination, as Flickr does in aggregat­

ing photos. Collaborative production can be valuable, but it is

harder to get right than sharing, because anything that has to

be negotiated about, like a Wikipedia article, takes more en­

ergy than things that can just be accreted, like a group of

photos.

Collective action , the third rung, is the hardest kind of

group effort, as it requires a group of people to commit them­

selves to undertaking a particular effort together, and to do so

in a way that makes the decision of the group binding on the

individual members. All group structures create dilemmas,

but these dilemmas are hardest when it comes to collective

action, because the cohesion of the group becomes critical to

its success . Information sharing produces shared awareness

among the participants, and collaborative production relies on

shared creation , but collective action creates shared responsi­

bility, by tying the user's identity to the identity of the group.

In historical terms, a potluck dinner or a bam raising is col­

laborative production (the members work together to create

something), while a union or a government engages in collec­ tive action, action that is undertaken in the name of the mem­

bers meant to change something out in the world, often in

opposition to other groups committed to different outcomes.

The commonest collective action problem is described as

the "Tragedy of the Commons," biologist Garrett Hardin's

phrase for situations wherein individuals have an incentive to

damage the collective good. The Tragedy of the Commons is a

simple pattern to explain, and once you understand it, you come

to see it everywhere. The standard illustration of the problem

uses sheep. Imagine you are one of a group of shepherds who

52 I H E R E C O MES EV E RY B ODY

graze their sheep on a commonly owned pasture. It's obviously

in everyone's interest to keep the pasture healthy, which would

require each ofyou to take care that your sheep don't overgraze.

As long as everyone refuses to behave greedily, everyone bene­

fits. There is just one problem with this system: "everyone"

doesn 't take your sheep to market. You do. Your incentive , as an

individual shepherd, is to minimize the cost of raising the fat­

test possible sheep. Everyone benefits from you moderating

your sheep 's consumption of grass, but you would benefit more

from free riding , which is to say letting them eat as much free

grass as they possibly could.

Once you have this realization, you can still refrain from

what would ultimately be a ruinous strategy, on the grounds

that it would be bad for everyone else. Then another, even more

awful thought strikes you: every other shepherd will have the

same realization, and if even one of them decides to overgraze,

all your good works will only end up subsidizing them. Seen

in this light , the decision not to overgraze is provisional on

everyone else making the same decision, which makes it very

fragile indeed . The minute one of the other shepherds keeps

his sheep out in the pasture an hour longer than necessary, the

only power you have is to retaliate by doing the same. And this

is the Tragedy of the Commons: while each person can agree

that all would benefit from common restraint, the incentives

of the individuals are arrayed against that outcome.

People who benefit from a resource while doing nothing

in recompense are free riders. Societies have generally dealt

with the problem of free riders in one of two ways. The first

way is elimination of the commons , transferring ownership

of parts of it to individuals, all of whom have an incentive to

SH1<RIN G 1<NCHORS COHHUNITY I 53

protect their own resources. If six shepherds each own one­

sixth of the former commons , the overgrazing problem is a

personal one, not a social one. If you overgraze your section,

you will suffer the future consequences , while your neighbor

will not. The second way is governance or, as Hardin puts it,

"mutual coercion, mutually agreed upon." This solution pre­

vents the individual actors from acting in their own interests

rather than in the interests of the group. The Tragedy of the

Commons is why taxes are never voluntary-people would opt

out of paying for road maintenance if they thought their neigh­

bors would pay for it. It's also why restaurants often add an

automatic tip for large parties-when enough people are eat­

ing, everyone feels comfortable underfunding the group's tip,

even if only unconsciously.

Collective action involves challenges of governance or, put

another way, rules for losing . In any group that is determined

to take collective action, different members of the group will express different opinions. Whenever a decision is taken on

behalf of the group, at least some members won't get their

way, and the bigger the group is, or the more decisions are

made, the more often this will happen. For a group to take

collective action, it must have some shared vision strong

enough to bind the group together, despite periodic decisions

that will inevitably displease at least some members. For this

reason collective action is harder to arrange than information

sharin g or collaborative creation. In the current spread of so­

cial tools , real examples of collective action-where a group

acts on behalf of, and with shared consequences for, all of its

members-are still relatively rare.

The essential advantage created by new social tools has

54 I H€R€ CO M ES E VER ',' e O D Y

been labeled "ridiculously easy group-forming" by the social

scientist Seb Paquet. Our recent communications networks­

the internet and mobile phones-are a platform for group ­

forming , and many of the tools built for those networks , from

mailing lists to camera-phones, take that fact for granted and

extend it in various ways. Ridiculously easy group-forming

matters because the desire to be part of a group that shares,

cooperates, or acts in concert is a basic human instinct that

has always been constrained by transaction costs. Now that

group-forming has gone from hard to ridiculously easy, we are

seeing an explosion of experiments with new groups and new kinds of groups. Our social tools remove older obstacles to publicexpression,

and thus remove the bottlenecks that characterized mass

media. The result is the mass amateurization of efforts pre­

viously reserved for media professionals.

My uncle Howard was a small-town newspaperman, pub­lishing the local paper for Richmond, Missouri (popula­ tion 5,000). The paper, founded by my grandfather, was the

family business, and ink ran in Howard's blood. I can still

remember him fulminating about the rise of USA Today; he

criticized it as "TV on paper" and held it up as further evidence

of the dumbing down of American culture, but he also under­

stood the challenge that USA Today presented, with its color

printing and national distribution. The Richmond Daily News

and USA Today were in the same business; even with the dif­

ference in scale and scope, Howard immediately got what

USA Today was up to.

Despite my uncle's obsession, USA Today turned out to be