The Dunbar Number, From the Guru of Social Networks

A little more than 10 years ago, the evolutionary psychologist Robin Dunbar began a study of the Christmas-card-sending habits of the English. This was in the days before online social networks made friends and “likes” as countable as miles on an odometer, and Dunbar wanted a proxy for meaningful social connection. He was curious to see not only how many people a person knew, but also how many people he or she cared about. The best way to find those connections, he decided, was to follow holiday cards. After all, sending them is an investment: You either have to know the address or get it; you have to buy the card or have it made from exactly the right collage of adorable family photos; you have to write something, buy a stamp, and put the envelope in the mail. These are not huge costs, but most people won’t incur them for just anybody.

Working with the anthropologist Russell Hill, Dunbar pieced together the average English household’s network of yuletide cheer. The researchers were able to report, for example, that about a quarter of cards went to relatives, nearly two-thirds to friends, and 8 percent to colleagues. The primary finding of the study, however, was a single number: the total population of the households each set of cards went out to. That number was 153.5, or roughly 150.

This was exactly the number that Dunbar expected. Over the past two decades, he and other like-minded researchers have discovered groupings of 150 nearly everywhere they looked. Anthropologists studying the world’s remaining hunter-gatherer societies have found that clans tend to have 150 members. Throughout Western military history, the size of the company—the smallest autonomous military unit—has hovered around 150. The self-governing communes of the Hutterites, an Anabaptist sect similar to the Amish and the Mennonites, always split when they grow larger than 150. So do the offices of W.L. Gore & Associates, the materials firm famous for innovative products such as Gore-Tex and for its radically nonhierarchical management structure. When a branch exceeds 150 employees, the company breaks it in two and builds a new office.

For Dunbar, there’s a simple explanation for this: In the same way that human beings can’t breathe underwater or run the 100-meter dash in 2.5 seconds or see microwaves with the naked eye, most cannot maintain many more than 150 meaningful relationships. Cognitively, we’re just not built for it. As with any human trait, there are outliers in either direction—shut-ins on the one hand, Bill Clinton on the other. But in general, once a group grows larger than 150, its members begin to lose their sense of connection. We live on an increasingly urban, crowded planet, but we have Stone Age social capabilities. “The figure of 150 seems to represent the maximum number of individuals with whom we can have a genuinely social relationship, the kind of relationship that goes with knowing who they are and how they relate to us,” Dunbar has written. “Putting it another way, it’s the number of people you would not feel embarrassed about joining uninvited for a drink if you happened to bump into them in a bar.”

While Dunbar has long been an influential scholar, today he is enjoying newfound popularity with a particular crowd: the Silicon Valley programmers who build online social networks. At Facebook (FB) and at startups such as Asana and Path, Dunbar’s ideas are regularly invoked in the attempt to replicate and enhance the social dynamics of the face-to-face world. Software engineers and designers are basing their thinking on what has come to be called Dunbar’s Number. Path, a mobile photo-sharing and messaging service founded in 2010, is built explicitly on the theory—it limits its users to 150 friends.

“What Dunbar’s research represents is that no matter how the march of technology goes on, fundamentally we’re all human, and being human has limits,” says Dave Morin, one of Path’s co-founders. To developers such as Morin, Dunbar’s insistence that the human capacity for connection has boundaries is a challenge to the ethos of Facebook, where one can stockpile friends by the thousands. Dunbar’s work has helped to crystallize a debate among social media architects over whether even the most cleverly designed technologies can expand the dimensions of a person’s social world. As he puts it, “The question is, ‘Does digital technology in general allow you to retain the old friends as well as the new ones and therefore increase the size of your social circle?’ The answer seems to be a resounding no, at least for the moment.”

At 65, Dunbar is thickening slightly, with a scholar’s slouch, although he tends to take stairs two at a time. A professor at the University of Oxford, he lunches regularly in the senior common room of Magdalen College, where he’s a fellow. The cozy space, with oil portraits of long-dead scholars in robes and wigs, looks out on a baize-like lawn. In November, over thin, gray lamb chops, he told a bit of his story. He grew up in Tanzania, where his father was an electrical engineer, and as a teenager he’d dive and sail off the coast and drive into the bush to shoot elephants. When he was at graduate school in the early 1970s, his original research interest was not human friendship but the social life of the gelada, a monkey found only in the Ethiopian highlands and closely related to the baboon.

Dunbar has a quick, ironic smile and speaks sleepily, in long, fluent dilations. What attracted him to the gelada, he says, were “the peculiarities of their social system, which is based around small family groups which come together into large herds. It’s kind of vaguely similar to what you see in modern hunter-gatherers. It’s called a fission-fusion social system, and it only occurs in two monkeys out of all the 300-odd primates—aside from humans.”

It’s Retailer vs. Retailer in Internet Sales Tax Push

Ann Whitley Wood built her EBay (EBAY) consignment store, Willow-Wear, from a hobby into an $800,000 business during the past dozen years. The former Dallas appellate attorney, who has worked full-time on the venture since 2005, worries proposed federal legislation would saddle her and other Internet sellers with the complex and time-consuming task of collecting state sales taxes.

The Marketplace Fairness Act, and similar legislation that attracted bipartisan support, died in 2012’s extraordinarily unproductive Congress, but Senator Lamar Alexander (R-Tenn.) on Wednesday announced plans to reintroduce it. Boston CPA Sylvia Dion, who has written extensively about Internet sales tax, believes some version of the legislation has a fair chance of passage given the bipartisan support the issue attracts and its growing number of supporters—if Congress is more effective this year.

The legislation is aimed at boosting revenue by allowing states to collect sales tax on all purchases made by residents, including those made online. It has pitted brick-and-mortar retailers small and large, who must collect state sales tax on all purchases, against Web-based companies that only are obliged to collect taxes in states where they have a physical presence, such as a warehouse or sales office.

The long list of supporters includes state governors, who claim they are missing upwards of $20 billion in lost state tax revenue, local mayors, big-box retailers, labor groups, booksellers associations, and the National Retail Federation. (AMZN) was initially opposed but has also become a supporter as it has increased its physical footprint throughout the country. The opposition includes EBay, conservative research groups such as the Heritage Foundation, and e-commerce advocates including NetChoice.

Under U.S. Supreme Court decisions dating to 1967 and 1992, out-of-state retailers have been shielded from state sales tax collection due to concerns about impeding interstate commerce. A handful of states, including California, Illinois, and Georgia, have passed so-called Amazon laws in the past two years, aiming to collect sales tax on purchases made through Internet companies that advertise to their state residents online, says Daniel Wagner, an accountant specializing in state and local tax practice at Kaufman, Rossin & Co. in Boca Raton, Fla.

But those laws are not widely enforced or understood by most Internet sellers.

“I think the Supreme Court got it right in 1992,” Wood says. “I have no business collecting sales tax in Vermont, and I don’t think the buyer there is going to understand why they have to pay it.” She rejects the idea that the current system favors online retailers, noting that many physical stores also do Web sales and that shipping charges level the playing field substantially. She estimates it would take her six weeks a year to comply with sales tax procedures in the 45 sales tax-collecting states, which have close to 10,000 local jurisdictions that may charge different rates.

“Most e-commerce companies require little in the way of state-provided services and infrastructure, so it doesn’t make much sense to collect a sales tax. Brick and mortar stores, on the other hand, require local roads, police and water supplies,” Ken Johnson, chief executive officer of online men’s underwear company Manpacks, wrote in an e-mail. Jeff Milchen, co-director of the American Independent Business Alliance, rejects that argument because “local businesses are paying employee and property taxes that remote sellers are not, and everyone uses the airports and highways and local roads. Internet sellers could not do business without the infrastructure to ship their products.”

Carol Peppe Hewitt, director of Slow Money North Carolina, says the disparity in sales tax collection obligations puts small, local businesses at a disadvantage. “Internet sales should be tied to whatever the state sales tax is required in each state,” explains Hewitt, who co-owns Hewitt Pottery in Pittsboro, N.C., with her husband, potter Mark Hewitt. “We need to level the playing field.”

The 2012 legislative proposals took small business owners into account, exempting companies either under $500,000 or $1 million in annual revenue. Brian Bieron, EBay’s senior director of global public policy, believes the exemption should be significantly higher. “Small business retailers using the Internet are innovators using technology to grow a business, create jobs in communities across the country, and serve consumers with a competitive alternative to the established retail giants,” he wrote in an e-mail. “A meaningful small business exemption needs to be a part of any new Internet sales tax regime to protect this important engine of growth and entrepreneurship.”



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