Internet 2.0: the economic, social and cultural consequences of the new Internet

ShirkyOur enthusiasm for the internet is returning.  The nuclear winter that followed April 2000 has lifted.  The startups are back, baby.  Microsoft is once more playing catch up. 

If you are a civilian like me (an anthropologist, that is, without much technical savvy), it’s a little mystifying.  Will Internet 2.0 (aka Web 2.0) change everything or just some things?  Is this a revolutionary moment or an evolutionary one?  Is everything I know wrong, or just this, that and the other thing?  Is this 2.0h! or merely 2.0. 

I was listening to a podcast  in which Jenny Attiyeh interviews David Weinberger, Chris Nolan, and Stowe Boyd.  And it filled me with that sense of panic that always happens when I listen to people talk about the future.  Intellectually, I begin to hyperventilate.  What if everything I know is wrong!  Maybe the world is once more taking leave of my senses.

Here are three models that sort out the possibilities for me.  Consider them a kind of telescope.  Those who buy model 3, probably also buy models 2 and 1.  Those who buy 2, probably also buy 1 (but not 3).  Those who buy model 1 only buy model 1.  I make no claims for the veracity or the utility of these models.  But writing them out helped return my pulse almost to normal.

Model one: disintermediation

The Internet is an efficiency machine.  It removes the friction that stands between buyers and sellers.  Now Dell can sell directly, from factories to consumers.  Now Amazon can disintermediate the bookstore and someday the publisher.  We are on the verge of being able to tell how much of the marketplace was about the accidents, not the essentials, of supply and demand.  Markets will verge on maximal efficiency. 

In this model, the revolution runs deep but its structural effects are limited.  Really, we live in the same old world.  It’s just that certain pieces have been taken out.  Hey, we didn’t need them anyhow.  The world is merely more compact, more elegant.  And that’s a good thing. 

Model two: long tail

The Internet is a profusion machine.  It allows small cultural producers to find small cultural consumers, and as a result, all hell is breaking lose.  Chris Anderson’s long tail model (and my own plenitude model) says that the tiny acts of innovation, rebellion and refusal that used to die in obscurity can now, some of them, find just enough fellow travellers to sustain themselves.  As a result, the gravitational power of the center is being made to creak like the mast of an 18th century man of war in a perfect storm.  It might hold…or maybe this is the moment to throw ourselves overboard. 

I recently had dinner with a journalist who belongs to the upper reaches of the newspaper elite.  Casually, ever so casually, she let slip that the great newspapers may not exist five years from now.  This is a very good way to get an anthropologist’s attention and make his head spin.  I had to leave the table.  My paper bag was in the cloak room.

In effect, the long tail model is an efficiency model too.  It says that now that people can reach one another, they will reach one another.  The costs of access, the friction created by the media, has dropped to almost nothing.  But this model goes vastly beyond the efficiency model.  It says that the structural effects of the Internet 2.0 will not be merely a matter of making the economy more efficient.  There will also be social consequences large and small.  The world will ramify.  Elites will fall.  Diversity will flourish.  The fundamentals of association and government will transform.  In short, the very nature of the social beast will change. 

This is not a disintermediated world with "bits taken out."  This is the world less hierarchical and more heterogeneous, a whole with more, and more various, parts now wired and networked in new ways. 

Model three: reformation

The Internet is a reformation machine.  It will create new fundamentals of and for our world.  It change the units of analysis and the relationships between them.  This reformation model says, in other words, that the coming changes will deeply cultural…and not merely social (model 2) and economic (model 1). 

I noticed this doing research in Korea.  Teens and college students were creating new networks with webpages (the local equivalent of MySpace) and and the clouds of photos and messages they were sending one another.  I assumed that this was Model 2 stuff, a change in fundamentals of interaction, until they began to talk about themselves in new ways. 

It became clear eventually that these people were reforming personhood and the self.  The self was not merely better connected, but now more porous, more distributed, more cloud like.  This cultural fundamental, the definition of what and who a person is, was changing.  (In the Attiyeh interview, Weinberger talks about buddy lists in the West and what he calls the "continuous presence" of friends.)

When I listen to Clay Shirky (pictured) talk about categories of knowledge and the tags by which it is organized, I begin to wonder, as he does more brilliantly than I could hope to, whether we are looking at new ideas of the idea.  This too is a good way to get the anthropologist’s attention.  If there is something my tribe cares about, it is culture and the way in which culture defines knowledge of and in the world.  To think that this is now "under construction" is quite enough to make me reach for a paper bag and my best hyperventilation cessation technique.  Just give me a minute.  No, really, I’ll be fine. 

The reformation model says fundamental categories of our culture (particularly the self and the group and the terms with which we think about them) are changing.  We are now down to what is sometimes called the DNA level of things.  This isn’t actually a great metaphor for anthropological purposes, but the phrase is a tag, so you know what I mean.  Model 3 is not about faster markets or new networks.  This is a change in the basic terms of reference, the very  internal blue print with which we understand and construct the world.

Model four:  continuous presence (everything and everyone all the time)

One way to assess innovations is to make a guess about where we are headed.  I think our economic, social and cultural destination might be this: we will be continuously connected to all knowledge and all people with a minimum of friction, and priviledge will be measured, in part, by how good are the filters with which we make contact with all but only the people and knowledge we care about.  One of these filters will, I hope, be a "pattern recognition" system that detects the fundamental changes set in train by models 1, 2 and 3 so that we can have a little early warning.  Because, frankly, you know, I’ve just about had it. 


Jenny Attiyeh interviews David Weinberger, Chris Nolan, and Stowe Boyd.  Thoughtcast.  here

Shirky, Clay.  2005.  Ontology is Overrated: Categories, Links, and Tags.  Clay Shirky’s Writings About the Internet.  here.

17 thoughts on “Internet 2.0: the economic, social and cultural consequences of the new Internet

  1. JohnO

    Fascinating breakdown of models.

    I’ll work in reverse. Number 4 is a response to N.A.D.D. (popularized by Rands) – information overload, combined with the need to see all the information. There just isn’t the time, so filters must be put in place. We’re defined by those around us (in the athropological sense), and the internet has permiated our telephone booth sized personal space.

    Number 3 I think the movement of the internet and those associations into the phone booth.

    This doesn’t happen if #2 doesn’t happen. And there are a lot of people for which #2 doesn’t happen. See below.

    Number 2 Is the internet enabling our current interactions, and furthering others (through long tail). The internet is a form of encouragement for our social lives.

    However, I know many many people (in the perfect demographic mind you) who have no part in the social implications of the internet. They choose to have nothing invested in it.

    Number 1 Is the simple model of efficiency, that took place even 4+ years ago. This will continue to be the driving force (in my mind) because of the business implications. Like you said, markets optimize for efficiency.

    However, consider this example. Headhunter agencies thrive on the web. The internet created a huge space for a third party to enter the space specifically designed to remove them.

    I think each of these models has fierce resistence by the status quo (and the market). The market optimizes for efficiency, so a free and open internet is free and open to all, malicious or not. (,258,p1.html) What is to stop the business market from optimizing for #1, while destroying social possibilities?

    Should the internet get segregated into white/gray/black zones, based on the network they lie on? Perhaps Google has an answer? (read these:

    Interesting thought material…

  2. Peter

    Grant, your post is fascinating and thought-provoking. However, I think it is extrapolation of just one trend at the expense of others.

    Another trend in our lives, which the Internet (or more strictly, the World-Wide-Web) has greatly facilitated is information-overload, something which was there before 1990, but has been exacerbated to the point where we each potentially have access to all information (past and present), all the time. Your models can each be seen as contributing to this trend.

    One consequence of info-overload is the need for filters, as the previous commentor suggests. A fancy name for filters is intermediaries. I never bought the idea of disintermediation, since I think it was driven mainly by tech journalists and IT academics able to make their own travel bookings. The rest of humanity either don’t fly or will still use someone else to handle the job of making bookings for them. This someone else may even live on the Internet, as in the case of Expedia or Last-minute.

    Blogs are the latest example of the rise of intermediaries.

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  8. Patricia

    “The Internet is a reformation machine. It will create new fundamentals of and for our world. It change the units of analysis and the relationships between them. This reformation model says, in other words, that the coming changes will deeply cultural…and not merely social (model 2) and economic (model 1). ”
    very interesting post. i disagree with peter on the filters, and myself believe our culture will continue its unravelling via disintermediation, ready for reformation in new forms that serve a culture that has shifted.

    although ‘info overload’ is true, those growing up in this new information framework will naturally adapt, inventing new ways of organization/filtering for more effective info absorption. think of other major 20th century tech and how it modified cultural perceptions over time. TV is a terrific example. those over the age of 30 who adopted this new tech as adults never totally adjusted nor changed their perceptions completely concerning the new VISUALLY textured media landscape. that paradigm shift in perception took place in the generation after, which grew up with it, spawning even richer visual context with newer tech, like the web’s graphical interface.

    the web’s affects on cultural interaction are only beginning, its ability to form social groups outside of geographical and language barriers are just a hint, i believe, at what is eventually to come.

  9. Shamus

    I love this kind of thinking, but it does miss a discussion of the architecture of the internet. Many people who use the internet and wax lyrical do not understand the underlying layers that it is built on. To this end it is important to note the discussions that are taking place around attempts by the ISP’s to created a two tiered internet. Voluminous discussion can be found here: and here:,GGLD:2004-48,GGLD:en&q=two+tiered+internet

    The Telco ISP’s are attempting to usurp the gaurenteed end to end connectivity of the internet which will surely undo aspects of all these models.

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  13. Jenny Attiyeh

    Thanks for the intelligent dissection of “Internet 2.0” and what it might actually mean for the future. I am of course flattered that Grant listened to my ThoughtCast podcast, so I’m biased in his favor, but…. it would be worth taking a stand now, while the future hasn’t happened yet, on whether or not these developments (1 thru 3 I agree are highly likely to occur) are in our best interests, or those of future generations.
    In my podcast, David Weinberger speaks to the benefits of a virtual, or online social life. I raise the issue of fresh air, going for walks, physical human contact. To be frank, if we are to live at such a distance from others that we don’t even know what our ‘friends’ look like, or how they behave in the real world, then we will sadly discover that we have no friends, merely acquaintances. Friends are people who will, if necessary, wait with you in the emergency room, or help you pack boxes prior to a move, or even worse, take care of your dog when you’re out of town. At least that’s my opinion.
    Think of it like online matchmaking. If you like the description of someone on some website, and you strike up an e-mail intercourse – yes, I think this is a valid use of that term – then you might think you know how you feel about this person. How many of us think we’ve met this fabulous new ‘friend’ online, or over the phone even, only to be disappointed when you meet face to face? And I’m not just talking about romance here.
    This concept of a controlled relationship — no, they won’t call you and interrupt your dinner, or ask you to come over at the last minute to hear their latest sob story, or leave you irritating voicemail messages you feel obliged to return — is not what I want to see the future become. I don’t want a hands-off, ‘safe’ form of social interaction that (and I’m getting into hot water when I say this, or at least I did with David Weinberger) only reinforces the paltry offline social skills that many netizens seem to possess.
    Okay, please convince me that I’m wrong.
    With interest,

  14. John Hibbs

    This is one of the most profound pieces about the Net that I have come across in more than a decade being passionate about the changes in store because of it. My work is virtual entirely virtual and my connections worldwide have brought me into contact with some exceptional people. But as extensive as are those contacts and as brilliant as many of them are, I don’t know anyone that could author something of this profundity. Thank you Grant.

    About what Jenny has to say? There are ten million reasons to get to know and love Shakespeare. One of them – a big one – is his continuous urging that we find “balance” in our lives. Jenny, this is not an “either/or” proposition — it’s a BOTH proposition. Not easy, especially in an Age where there greatest danger is the Tyranny of the Instant. You are right — we need to hug the trees and walk the dog and snuggle closely to our friends and lovers — and when we do that, along with our connectivity opportunities, with the proper measure of “balance”, we will have enriched our lives in ways that even the Bard might not have imagined.
    John Hibbs

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