Thursday, April 3, 2014

Degrees of separation – class and capital

This is still in rough form (though I've been kicking it around for a while), but I thought it might be interesting to think about inequality/social mobility/access to capital in terms of networks, specifically degrees of separation and Milgram's small world experiment.

New media has expanded our social networks, but it has also created the illusion of even larger ones (often Facebook friends and Linked In connections would be considered complete strangers by any reasonable standard). In order to keep our networks roughly analogous to Milgram's, a  connection is defined as someone who knows you by name and with whom you have had multiple one-on-one private exchanges either face-to-face or through some other medium.

You have zero degrees of separation from your self. (This point will be important when discussing capital. In other words you have no separation from your own money.) you have one degree of separation from someone who you have had repeated one-on-one contact with. I'd also suggest excluding employer/employee connections, at least when talking about class and capital. These relationships tend to be highly constrained and should, at the very least be analyzed separately.

With this groundwork laid, I'd like to propose the following, at least as a thought experiment. The original Milgram study looked at the degrees of separation between people who lived Omaha and people who lived in Boston. What if, instead of geographic distance (which arguably means less than it once did), we looked at economic distance (which arguably now means more)?

As before, randomly selected subjects will be asked to connect with strangers and the path length would be measured. Unlike the Milgram study, though, the corresponding pairs of subjects would live in the same geographic area. In this experiment, subjects will be assigned targets so that some are trying to contact subjects in their own income bracket, some are trying to contact subjects in brackets lower than theirs and some are trying to contact people in brackets higher.

Obviously, I don't know if the data will back me up on any of this but here are a few speculations and possible implications:

Though we can't go back in time to gather the data to confirm this, there is both statistical and anecdotal evidence that the correlation between economic distance and degrees of separation is getting stronger;

There seems to be a high inverse correlation between degrees of separation from capital and probability  of getting a business funded. This relationship appears to be particularly strong for really bad business plans. I've noticed that when I do a little research into one of those what-were-they-thinking ideas, I always find at least one founder with a low degree of separation from someone with a large amount of capital;

One implication of the above would be that ventures (even bad ones) from people who attended Ivy League schools are far more likely to find funding. I realize this will strike most as a blinding flash of the obvious, but hopefully bringing graph theory tools in will uncover something interesting;

Increasing degrees of separation might also help explain the apparent rise of let-them-eat-cake journalism. We previously discussed a number of major stories such as the SAT and over-the-air television where the standard narrative is written, not just from an upper class perspective, but seemingly under the impression that no other perspective exists. Perhaps journalists who write for major publications are less likely to know people in other economic classes.

A big caveat here. path length is a useful but very limited metric for discussing graphs. I think it would be useful to look at degrees of separation but I suspect the main thing it would accomplish would be to raise more questions.

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