PDF Summary:The Square and the Tower, by Niall Ferguson

When people think of conspiracy theories, they often imagine shady networks that secretly control governments and other organizations. However, the study of networks reveals that such scenarios are unlikely—networks operating outside of established hierarchies often lead to chaos, not order. In The Square and the Tower, best-selling author and Stanford University historian Niall Ferguson applies network theory to the study of world history to reveal, among other truths, why conspiracy theories are often wrong, whether government hierarchies are truly necessary, and why social media networks stir up more conflict than harmony.

In this guide, we’ll discuss the key principles that Ferguson extracts from his study of history and what these principles imply for life in the age of global commerce and digital connections. Along the way, we’ll bring in additional insights from books like Never Eat Alone and The Anatomy of Peace, and we’ll analyze new developments that are relevant to Ferguson’s view of the future.

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The five nations that made up the pentarchy met as equal powers in the 1800s and made treaties for their mutual protection and benefit, making it legitimate by Rousseau’s criteria. But, as Ferguson notes, the balance of power shifted so that by the time of the First World War they no longer saw each other as equals benefiting equally from the treaties that established the pentarchy. That would have eroded its legitimacy by Rousseau's standard.

In the hierarchy of powers established after the Second World War, the nations participating in the UN may not have equal power on the world stage—as the hierarchy that Ferguson describes illustrates—but they equally stand to benefit by cooperating to avoid another global war. So, again, the world hierarchy seems to at least approximate Rousseau's idea of legitimacy. (However, the recent moves by Russia to expand its empire suggest that it no longer accepts its place within the hierarchy, signaling a potential breakdown in the perceived legitimacy of the established order.)

Additional Networks Undermine Hierarchies

Ferguson’s second conclusion is that any other network that creates additional connections of loyalty between entities within a hierarchy weakens the power of the hierarchy. This is because the additional connections reduce the betweenness of the entities in the tiers above them so that the higher-up entities no longer are the sole pass-through points for information. Any network that allows people to share ideas outside of official communications has the potential to spread ideas that are contrary to the hierarchical order, even if that’s not the network’s primary purpose.

And the more loyalties people have (to friends, ideologies, and so on) outside the official hierarchy, the less complete their loyalty to the hierarchy becomes. Thus, according to Ferguson, there is usually some amount of tension between formal hierarchies and other networks.

Hierarchies and Other Networks Support Different Kinds of Freedom

In Thank You for Being Late, Thomas Friedman provides additional perspective on the principle that other networks undermine hierarchies. He contrasts two types of freedom, freedom from oppression and freedom to do what you think is worth doing, and he discusses how they relate to networking.

As Friedman explains, informal peer-to-peer networks such as those found on social media are great for making people more difficult to coerce and empowering them to throw off oppression. These networks naturally promote freedom from coercive influences. But, according to Friedman, they don’t generally empower people to do things. This is because the freedom to do things is contingent on having infrastructure or systems in place that enable you to do the things you want to do, and informal networks can’t provide that.

Ferguson would probably add that building infrastructure and organizing support systems is something that hierarchies excel at. So, hierarchies promote freedom to do things that the hierarchy supports, while other types of networks promote freedom from coercion by the hierarchy.

Totalitarian Hierarchies Isolate People

Ferguson recounts that the tension between hierarchies and other networks is most evident in totalitarian states, such as Nazi Germany, the Soviet Union, and Communist China. In these regimes, the government hierarchy attempted to control every aspect of life and thus tried to isolate individuals from all other networks.

(Shortform note: Aleksandr Solzhenitsyn provides additional vivid examples of how the Soviet Union isolated citizens from each other in The Gulag Archipelago.)

The government hierarchies in these states controlled people primarily through fear, using brutality and surveillance to instill in everyone the fear of being punished for the mere suspicion of conspiring against the government. This fear of raising suspicion prompted people to avoid having any contact with each other outside official channels. Ironically, the higher up in the government hierarchy you were, the more likely you’d be suspected, because you’d be more valuable to a conspiracy if there was one.

(Shortform note: If totalitarian regimes invariably try to consolidate their power by isolating their people, does that mean that isolating people by preventing them from sharing their perspectives leads to totalitarianism? Some authors warn that it does. For example, in Cynical Theories, Helen Pluckrose and James Lindsay express concern over the direction of the contemporary “social justice” movement. They observe that the movement tends to gang up on anyone with a dissenting viewpoint, using threats and social alienation to police people’s language and culture. The authors interpret this as a warning sign that the movement has metamorphosed from a force for good into a dangerous totalitarian initiative.)

Conspiracy Theories Don’t Work

The tension between hierarchies and other networks also implies that most conspiracy theories are wrong. In Ferguson’s experience, the most common conspiracy theories allege that there’s a secret conspiracy controlling some official hierarchy from behind the scenes. But in reality, conspiracies between individuals or groups within a hierarchy tend to undermine those hierarchies, not absorb them. Based on historical precedent, it’s not unusual for a conspiracy to overthrow a hierarchy, but it’s extremely unusual for a conspiracy to surreptitiously control one.

Debunking Conspiracies Is Complicated

Conspiracy theorists might argue that Ferguson misunderstands or, at best, oversimplifies their perspective. For example, in The Creature From Jekyll Island, Edward Griffin describes two conspiracies: a secret society bent on world domination, and the Federal Reserve, which he alleges to be a creation of a banking cartel rather than a legitimate government agency.

Griffin describes the world-domination conspiracy as a rigid hierarchy on top of the world’s visible national hierarchies that controls them from behind the scenes. If a conspiracy of this kind existed, its structure wouldn’t undermine governmental hierarchies as other types of conspiracies could, because the conspiracy itself is just a part of the world hierarchy that isn’t readily visible.

Griffin also explains that one reason the banking cartel designed the Federal Reserve the way they did was so that it would leverage the existing government hierarchy to enforce the cartel’s rulings on bank policy. According to Griffin, this gave the bank cartel much greater stability than most criminal cartels. Given Ferguson’s principle that hierarchies maintain order, it makes sense that cartels or other conspiracies that managed to integrate themselves with a government hierarchy like this would operate more smoothly.

Thus, Griffin shows us a couple ways that conspiracies could, in theory, fit into the visible hierarchies of power and use them to benefit their own agenda without violating the principles of network theory. Consequently, Ferguson’s observation that other networks undermine hierarchies’ authority debunks only certain kinds of conspiracy theories.

Hierarchies Struggle With Complexity

Finally, Ferguson notes that although hierarchies are efficient for resolving disagreements and maintaining order, they are inefficient when it comes to developing creative solutions to complex problems. This is because decisions tend to be made in the upper tiers of the hierarchy. In an extreme case where all the decisions are made by a single person at the top, the system could never adapt to any situation that was too complex for that single person to fully comprehend.

Though hierarchies where one person makes all decisions are rare, Ferguson observes that hierarchies in general are notoriously inflexible, even ones whose lower tiers have some decision-making authority. At best, they take longer to react to changing situations than networks in which authority is more diffuse and individuals function more autonomously. At worst, they’re completely incapable of adapting to complex situations. This is why some networks, such as the economy as a whole, cannot effectively adopt a hierarchical structure.

This observation also explains why guerilla warfare sometimes enables small, relatively disorganized bands of insurgents to defy much larger hierarchically organized military powers: In the chaotic environment of guerilla warfare, a formless network of small, autonomous bands operates more efficiently than a traditional organized military.

Turning Military Hierarchies Around

In Turn This Ship Around, former US Navy Captain L. David Marquet observes that the traditional military hierarchy (what he refers to as the leader-follower model) works well for coordinating simple physical labors like building pyramids. But it doesn’t work as well in more complex, thought-intensive situations, like operating a nuclear submarine. This corroborates Ferguson’s observations. Marquet goes on to provide a practical blueprint for modifying the hierarchy to empower those at the bottom and improve performance.

According to Marquet, the key is to transition to a “leader-leader model,” where most decisions are made lower down in the chain of command because everyone thinks like a leader in the hierarchy. To foster this kind of thinking in the lower ranks, he recommends changing how subordinates in the hierarchy address their superiors: Instead of asking what to do, or even making suggestions, they should come up with their own solutions and state what they intend to do. In most cases, their superior then simply approves their plans. Marquet also recommends eliminating the traditional top-down approach to monitoring work, instead having people track and report on their own progress.

Marquet’s techniques made his submarine one of the best-performing ships in the US Navy, and, he argues, can be applied to almost any organization that deals with complex information and situations.

Prognosis for the Future

As Ferguson recounts, certain visionaries, social media proponents, and Silicon Valley entrepreneurs have argued that making the world more connected through social media and global commerce will contribute to building a utopian future of world peace and equality. Ferguson contends that this is not the case. He stops short of making specific predictions about what the future does hold, but he identifies a number of trends contradicting the idea that the growth of current networks will precipitate world peace and equality.

Network Growth Doesn’t Bring Peace

First of all, as we’ve discussed, the growth of networks independent of a hierarchical power structure tends to weaken that power structure. Thus, Ferguson says, if the growth of new networks sufficiently undermines the hierarchies that are responsible for maintaining order, the result is anarchy, not peace.

In the case of social media, this scenario is not entirely hypothetical. As Ferguson points out, the proliferation of “fake news” and other inflammatory information passed around social media networks has increased the polarization of opinions and created some unrest in the United States.

(Shortform note: In The Four, a book about the four biggest tech companies in the US, Scott Galloway discusses how social media’s business model makes it inherently prone to promoting polarization. Social media companies like Facebook make most of their revenue by selling targeted advertising. They tend to run ads that target the audience with the most radical views because it’s easier for their algorithms to identify the interests of users who have strong opinions or radical views. Ads that target radical views tend to be more polarizing and are more likely to stoop to the level of fake news.)

Furthermore, says Ferguson, Islamic insurgent groups such as ISIS have made effective use of social media and messaging apps to grow their networks and coordinate their activities. This growth of insurgent networks in the Middle East led to extensive violence and the overthrow, or partial overthrow, of government hierarchies in Iraq and Syria.

How Networks Facilitate Terrorism

As Yuval Noah Harari explains in 21 Lessons for the 21st Century, media networks play a key role in helping terrorists destabilize national governments, not just in allowing them to recruit operatives and coordinate attacks. The strategic principle of terrorism is that a relatively small attack can create enough public fear to undermine people’s faith in the government’s ability to maintain peace, ultimately compromising the government’s legitimacy.

A successful terrorist attack might only kill a dozen people, but it makes millions of people feel unsafe. This is only possible if news of the attack spreads widely and sensationalizes it out of proportion. Thus, terrorists owe a large part of their success to the fact that both social media networks and traditional mass media networks are effective at spreading and sensationalizing news of terrorist attacks.

The Global Hierarchy of the Future Is Uncertain

Another reason Ferguson doesn’t expect the growth of extra-governmental networks to lead to peace is that they threaten the existing established hierarchy. As we’ve discussed, Ferguson believes that it takes a universally accepted hierarchy to maintain order and stability in society. He’s concerned that the world hierarchy established after World War II has decayed, much as the old pentarchy did before World War I, and that there isn’t a unified global vision for what the world hierarchy looks like, or should look like, going forward.

One reason for this breakdown is the rise of online commerce and communications networks such as Facebook, Google, and Amazon, which have emerged as powerful entities. It’s unclear exactly how these platforms will fit (or should fit) into the hierarchy of the global power structure. The only certainty is that they will, in some way, be solidly a part of it: The elections of 2016—both in the US and in the UK—showed decisively how social media can influence democratic governments by influencing voters.

Troll Farms Add to the Uncertainty

To complicate matters even beyond what Ferguson discusses, in recent years, troll farms have added a new dimension to the relationship between social media networks, citizens, and government hierarchies.

In internet parlance, “trolling” consists of creating spurious profiles on social media and using them to spread rumors, disseminate misinformation, or heckle others who post on social media. Troll farms are organizations that use coordinated trolling to influence the public narrative, often for the purpose of manipulating an election.

Some governments now have their own troll farms integrated right into the formal hierarchy. Other governments hire private agencies to provide trolling services. They may use troll farms to control the narrative in their own country or to manipulate elections in other countries, ultimately to advance their own agenda on the international stage.

All three networks that Ferguson mentions—Facebook, Google, and Amazon—have proven to be fertile soil for troll farms. Some of Facebook’s highest-traffic pages related to the US 2016 and 2020 elections were run by troll farms in Eastern Europe. In the realm of ecommerce, merchants can hire troll farms to flood their product pages with positive reviews, causing Amazon’s algorithms to rank their products higher and show them to more customers. Similarly, trolls can be enlisted to artificially boost traffic and other metrics so that a web page will rank higher in search engines like Google.

In some sense, state-sponsored troll farms provide a convenient mechanism for government hierarchies to informally integrate social media networks into the formal hierarchy, using social media to control the public narrative without officially regulating media platforms. Yet they also have the potential to undermine the legitimacy of the governments that use them. In any case, they add one more variable to the power equation, making future hierarchies more difficult to predict.

Ferguson examines two contrasting approaches some governments are taking to regulating social media platforms as they try to incorporate them into their existing power structures. One approach hails from Europe and the other from China.

The European Vision

While the US government has left social media networks largely to their own devices, European governments have increasingly tried to regulate them. European regulators demand that social media companies promptly remove and report any posts that call for violence or otherwise violate the law. However, they have allowed social media companies to remain otherwise independent.

Ferguson notes that in some ways, this regulatory relationship between governments and social media platforms makes the platforms even more powerful: The government depends on them to enforce its own laws online, but the platforms are also free to censor whatever opinions or information they please (unlike most democratic governments). That said, Ferguson also suggests that social media platforms may not be able to censor content effectively because they have so many users and relatively few employees.

The Digital Services Act

Since Ferguson wrote The Square and the Tower, Europe has continued down the path of increasing regulatory scrutiny of social media and other big tech companies. Most significantly, in 2022, the European Union passed the Digital Services Act (DSA), which is aimed at regulating big tech.

The DSA codifies most of the demands that Ferguson identified, requiring digital service providers to remove and report illegal content promptly when they discover it. Social media sites, messaging apps, e-commerce platforms, and search engines all qualify as digital service providers and thus are required to comply with the act in order to conduct business in Europe. Violations are punishable by steep fines.

Additionally, the DSA requires large companies (those with at least 45 million active users per month in Europe and a net worth of at least 75 billion euros) to submit to special government supervision of their operations and to pay a fee to cover the cost of this supervision.

But—as Ferguson anticipated—the DSA leaves online platforms free to censor any content they choose in addition to what the government requires them to delete, assuming they (or their algorithms) can actually find and filter the content as it’s posted.

As of 2023, it still remains to be seen how effectively the EU will be able to enforce the DSA and how much the law will affect what content is posted online. Thus, while the DSA certainly strengthens the connection between government and big tech in Europe, it’s still not clear exactly where big tech will fit within the hierarchy of power.

The Chinese Vision

China, by contrast, has largely blocked access to Western social media sites, instead setting up its own platforms over which the government has complete control. Ferguson notes that China’s social media, web search, and e-commerce platforms are now comparable to Facebook, Google, and Amazon in terms of their usership and revenue. And because of their broad usership, they’ve become powerful tools that help the Chinese government keep its citizens under surveillance.

(Shortform note: International commerce adds another dimension to China’s use of social media. Because Chinese customers represent such a profitable market, China can use its own social media platforms to pressure companies in other countries—and thus, indirectly, the international community—to accept China’s stance on international issues like the question of sovereignty over Taiwan. This is possible because, given the size of the market, companies are becoming increasingly reliant on publicity on Chinese social media. They don’t want to risk a loss of sales if their brand is accused of failing to respect China’s interests.)