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Liars and Outliers: Enabling the Trust that Society Needs to Thrive

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How does society function when you know you can't possibly trust everyone in it? That's the question at the heart of Bruce Schneier's enlightening new book, "Liars and Outliers." There is no single or simple answer, Schneier explains. Instead, four "societal pressures" combine to help create and preserve trust within society. Those pressures include: (1) Moral pressures; (2) Reputational pressures; (3) Institutional pressures; and (4) Security systems. By "dialing in" these societal pressures in varying degrees, trust is generated over time within groups.

Of course, these societal pressures also fail on occasion, Schneier notes. He explores a host of scenarios -- in organizations, corporations, and governments -- when trust breaks down because defectors seek to evade the norms and rules the society lives by. These defectors are the "liars and outliers" in Schneier's narrative and his book is an attempt to explain the complex array of incentives and trade-offs that are at work and which lead some humans to "game" systems or evade the norms and rules others follow.

Indeed, Schneier's book serves as an excellent primer on game theory as he walks readers through complex scenarios such as prisoner's dilemma, the hawk-dove game, the free-rider problem, the bad apple effect, principle-agent problems, the game of chicken, race to the bottom, capture theory, and more. These problems are all quite familiar to economists, psychologists, and political scientists, who have spent their lives attempting to work through these scenarios. Schneier has provided a great service here by making game theory more accessible to the masses and given it practical application to a host of real-world issues.

The most essential lesson Schneier teaches us is that perfect security is an illusion. We can rely on those four societal pressures in varying mixes to mitigate problems like theft, terrorism, fraud, online harassment, and so on, but it would be foolish and dangerous to believe we can eradicate such problems completely. "There can be too much security," Schneier explains, because, at some point, constantly expanding security systems and policies will result in rapidly diminishing returns. Trying to eradicate every social pathology would bankrupt us and, worse yet, "too much security system pressure lands you in a police state," he correctly notes.

Despite these challenges, Schneier reminds us that there is cause for optimism. Humans adapt better to social change than they sometimes realize, usually by tweaking the four societal pressures Schneier identifies until a new balance emerges. While liars and outliers will always exist, society will march on.

You can read my longer review of Schneier's "Liars & Outliers" over at Forbes.

It is said that the song Wipe Out launched a generation of drummers. In the world of information security, the classic Applied Cryptography: Protocols, Algorithms, and Source Code in C by Bruce Schenier may have been the book that launched a generation of new cryptographers.

Schenier latest work of art is Liars and Outliers: Enabling the Trust that Society Needs to Thrive. For those that are looking for a follow-up to Applied Cryptography, this it is not. In fact, it is hard to classify this as an information security title and in fact the book is marked for the current affairs / sociology section. Whatever section this book ultimately falls in, the reader will find that Schneier is one of the most original thinkers around.

In Applied Cryptography Schneier dealt with the pristine world of mathematical cryptography where aspects of pure mathematics could be demonstrably proven. For example, non-repudiation is absolutely provable.

In Liars and Outliers, Schneier moves from the pristine world of mathematics into the muddy world of human trust. Non-repudiation is no longer an absolute in a world where a Windows kernel can be compromised and end-users can be victims of social engineering.

The book addresses the fundamental question of how does society function when you can't trust everyone. Schneier notes that nothing in society works without trust. It's the foundation of communities, commerce, democracy, in truth - everything. And Schneier deals extensively with social and moral pressures that effect trust.

Liars and Outliers is very similar to books Umberto Eco, that have a Renaissance feel to them; bringing myriad and diverse topics together. Schenier does this here and intertwines topics such as game theory, evolution, surveillance, existentialism and much more. Schneier's brilliance is that he is able to connect seemingly disparate dots around information security and society, and show how they are in truth tightly coupled.

In the book, Schneier makes note of those that don't follow the rules. He calls these people defectors, and these are the liars and outliers of the book. The book notes that everything is a trade-off, and these defectors are the ones that try to break the rules.

An overall theme of the book, in which Schneier touches and references sociology, psychology, economics, criminology, anthropology, game theory and much more, is that society can't function without trust. He writes that in our complex interconnect and global society, that we need a lot of trust.

Schneier makes frequent reference to Dunbar's number, which he first references in chapter 2. Dunbar's number was first proposed by British anthropologist Robin Dunbar and is a theoretical cognitive limit to the number of people with whom one can maintain stable social relationships. It is generally in the area of 150. So when someone sees a person with 3,000 Facebook friends, something is clearly amiss.

In chapter 9 on institutional pressures, Schneier takes a very broad look at threats facing society today. One of the biggest perceived threats we have today is terrorism, and the book astutely notes that we can never ensure perfect security against terrorism.

If Schneier had his way, the TSA budget would be measured in the millions, not billions of dollars. He incisively observes that all the talk of terrorism as an existential threat to society is utter nonsense. As long as terrorism is rare enough (which it is), and most people survive (which they do), society will survive. He writes that while that observation is true, it is not politically viable for our leaders to come out and say that.

While the book is heavy on the people focus, Schneier also acknowledges that sometimes and for some people, the incentives to commit crimes are worth the risk. To deal with those, that is where security technologies come into play.

An interesting observation made in chapter 10 around technology is that sometimes the technological changes have absolutely nothing to do with the societal dilemma being secured. For example, he notes that between the ubiquity of keyboards and the tendency for teachers to focus on standardized tests, cursive is no longer being taught that much in schools. The result is that signatures are more likely to be either printed text is an illegible scrawl; making them easier to forge. Which in turns creates new security risks.
In the book Schneier makes scores of astute observations on how society functions around security. He notes in chapter 16 that we are currently in a period of history where technology is changing faster than it ever has. The worry is that if technology changes too fast, the attackers will be able to innovate so much faster than society can that the imbalance become even greater; with failures that negatively affect society.

In many of the examples in the book, Schneier paints a dark picture given the advantage that the attackers and defectors have. But he also notes that we are in a period of history where the ability for large-scale cooperation is greater than it has ever been before. On that topic, he refers to the book The Penguin and the Leviathan: How Cooperation Triumphs over Self-Interest by Yochai Benkler where he writes that the Internet can and has enabled cooperation on a scale never before seen. And that politics, backed by science, is ready to embrace this new cooperation.

On the lighter side, in chapter 17, Schneier notes that Mussolini didn't make the trains run on time; he just made it illegal to complain about them.

Schneier notes at the end of the book that its lesson isn't that defectors will inevitably ruin everything for everyone. Rather that we as a society need to manage societal pressure to ensure that they don't.
Liars and Outliers is an absolutely fascinating and groundbreaking book. In this election year where the candidates attempt to make sweeping simplistic promises to fix complex problems, Schneier simply answers that in our complex society, there are no simple answers.

In Applied Cryptography Bruce Schneier demonstrated he was quite the smart guy. In Liars and Outliers, he shows he is even smarter than most of us first thought.

This is a superb book.

First, it's immensely readable and filled with an incredible amount of information about how societies evolved and work (and why not).

More importantly, however, Bruce has identified what is probably the most important issue facing all of us today. Trust. Without trust, society doesn't work. But look around: we don't trust the government, we don't trust big business, and we don't trust banks or anyone on Wall Street. (There's a much longer list, but you get the idea.)

Our existing models of trust and mechanisms for dealing with defectors don't scale to either the size of the Internet or the flood of information that's so readily available. Once upon a time, perhaps in a fairy tale, we actually knew our elected representatives, and they counted on us to fund their election campaigns. Now it's PACs and SuperPACs and we're irrelevant. If your elected representative parties a bit too much while away from home, or too obviously is influenced by the hordes of lobbyists, or actually admits their ignorance in a committee meeting, you'll know about it instantly. Once upon a time, we were "protected" from that knowledge because it simply didn't deserve space in the newspaper and wasn't entertaining enough to for the local TV news. Otto von Bismarck observed that "laws are like sausages; it's better not to see them made." That sentiment also applies to lawmakers.

In that same fairy tale, you worked your entire life for one company, then took your gold watch and retired to a life of leisure, supported by a retirement fund almost wholly funded by your employer. That is, unless your employer repaid your loyalty by "riffing" you or was so ineptly managed that the company eventually went bankrupt, taking your retirement income with it. Or perhaps you worked your entire life for a local government that "promised" generous pension benefits and lifetime healthcare. Unfortunately, the people who made those promises were never required to figure out how to pay for them, and the day of reckoning is now very near.

And then there's the marvelous fantasy about how the equity in your home will eventually fund your move to a tropical island. The folks on Wall Street have already spent your home equity on yachts and ski chalets and putting their kids through expensive colleges.

I'd sure like to see the Presidential candidates debate this topic. Unfortunately, none of them would be the least bit credible.

Read Bruce's book to find out whether our society can survive.

"Liars and Outliers: Enabling the Trust that Society Needs to Thrive" is a departure from Bruce Schneier, who is widely regarded for his cryptography books and as a highly respected computer security commentator. Moving away from the hard core mathematics required for effective modern cryptography, in his latest offering Schneier constructs a framework for understanding trust and the various systemic forces that act upon it.

This innovative systems perspective of trust as it relates to security in general represents a profound breakthrough which should have considerable influence on discussions and debate within the security community. The detailed analysis of how pressures, incentives, and penalties influence individuals and organizations is extremely useful for understanding potential and probable results of various policy and control initiatives.

Schneier also provides an excellent explanation for why criminal organizations are inherently more agile and adaptable than business and law enforcement agencies. This inherent agility is very apparent in computer and network security where the pace of new exploits and attack vectors at times seems to overwhelm traditional defense mechanisms.

The conclusions drawn in this book describe the importance of trust and how it will not diminish over time in the future. Schneier deftly summarizes how the trust framework must be well understood when designing and implementing societal pressures and how "perfect security" is an absolute illusion. While no specific policy recommendations are offered, this book should provide foundational knowledge for fueling effective and informed debate in the security arena.

I'm a regular reader of Mr. Schneier's blog, due to a long interest in security problems. Lock picking, cryptography, body language reading, all the functional edge-of-society skills that grab your interest. In addition to those blog posts, Mr. Schneier also talks about bigger security issues, meta problems of society. Over time, he was moving towards this book, and blog readers got a glimpse into how a book evolves from a few powerful thoughts into a fully-formed text. The book, once I had a chance to read it, blew me away.

Mr. Schneier starts with first principles, giving a thorough introduction to game theory in order to orient a reader along his thesis. Mr. Schneier posits that we cannot have perfect security, nor do we want it. The complexity of society and social interactions are such that all of life is essentially a risk assessment, and yet we regularly takes these leaps of faith which we call trust. And the exploration of trust, how that originated and how it evolves and expresses itself today, is the central thesis here.

The game theory is not a in-depth treatment but it is thorough, surely thorough for casual readers and quite informative. Mr. Schneier is particularly careful to footnote and expose his reference material whenever he goes into math or science. He has a solid rigor to his work, and he builds strong arguments to explain how trust originated, and how the social interactions we take for granted are minor miracles of evolution -- of culture and humans.

Some of what he discusses will depress you, especially when you reach Chapter 13, "Corporations". In fact, if you've followed the central thesis of the Occupy movement -- that there's an inherent unfairness in many systems today -- you will see a strong overlap between that and the metaphor frequently employed in the book regarding "knobs" of regulations on behavior. Basically, the feedback loops we construct to promote or limit behavior also have consequences, some largely unintended and most not well-understood by all affected parties.

The book is extremely well-researched. He footnotes where necessary, and has thoughtfully listed his references and bibliography of references. His publisher, however, had decided to throw all footnotes at the back of the book, so you will flip back and forth constantly. This disconnect between what publishers think readers want and what readers actually want was the only negative here.

As a jumping off point for game theory, it's a spectacular read. The bibliography alone is worth the book price. Mr. Schneier's treatment of basic and more complex tradeoffs will grab you, and prime you to understand where he's going with the idea of trust and its origins. His explanations of how complex social interactions work in that context have changed how I look at many of these institutions. I must admit to be concerned that we may never turn the tide, or the knobs, back to our favor.

-C

Liars & Outliers: Another seminal tome by Bruce Schneier, one of the most respected thinkers in Information Security and Cryptography on the planet today.

I just finished 'Liars & Outliers". An intense and very good read. The book offers loads of information and lucid writing. Although the middle of the book was a bit hard to get through, it was well worth it in my opinion. I walked away after having read this book with a new perspective on a lot of issues I had never considered before.

Mr. Schneier is expert on the subjects he tackles and his copious notes and references are a shining example of this. I would highly recommend this book to anyone wanting to learn more about Security and how it permeates nearly every aspect of our daily lives.

Mr. Schneier is well known for presenting complex subjects in easy to understand terms, and his latest book does a great job of untangling and explaining the concepts of trust, compliance, and security. The book details why healthy systems need parasites to thrive and evolve, including society. This was a very enjoyable book to read and I made a lot of notes as I went through it.

Bruce goes through a lot of information and it's easy to see that the book could have been twice the length. The text runs the first two thirds of the book and the final third is end notes and reference. This final section is an invaluable source for follow up on the issues raised in the body of the volume. Overall - Highly recommended!

I'm a big fan of Schneier's books, so I was excited when he was coming out with another one. I wasn't exactly clear on what the book was about when I first picked it up (based solely on the title), but in typical fashion, the opening paragraphs quickly orient the reader to the basic premise - what compels us to trust others in society? That is, why don't we check to verify the food we buy at the grocery store isn't poisoned? Or that a letter in the mail isn't actually a letter bomb?

My biggest complaint (notice I'm giving 4 stars, so it's not that big a complaint) is that the early-middle part of the book is slow. The explanations are good, but not great, with complex topics being covered with too much prose in one section, and not quite enough concrete examples in another (for which Schneier is so well-known). Once he moves out of models of trust and the basics of societal pressures, the book picks back up to a normal pace for one of his books, and is again delightful. Finally, he ties it all in to security and technology, as one would hope/expect.

It's a good book, and despite being a little slow at parts, I finished the book in pretty short order, but it doesn't quite live up to my high expectations for Schneier's style. I would still recommend it to anyone with an interest in security or sociology.

"This book should be read by anyone in a leadership role, whether they're in the corporate or political sphere. And for anyone at C-level within a corporation or the equivalent level in government, this book is a must read.

Schneier's observations, such as how employing a security guard can increase the rate of shoplifting and how taxing garbage/waste can lower the rate of recycling, demonstrate that more complex thought needs to go into decisions on structures and policies." reviewed further on NakedSecurity

I recommend this book to anyone who has to deal with the world around them and wants some simple analytic tools to use.

In a world of ever expanding interpersonal and organizational contacts, the question of whom to trust becomes harder to answer. Whether it's trusting your neighbor with your house key, PayPal with your money, or your elected officials with your welfare, Schneier provides a fascinating collection of methods for considering and analyzing the issues involved. No technical knowledge is needed to understand and apply his theories to everyday life.

My only gripe (and I would have lowered the rating to 4.5 stars, if I could) is that the 100 pages of footnotes vastly expand on and add to the text, but reading the footnotes along with the text required two bookmarks and a lot of flipping back and forth. It was worth the effort. (On his blog, Schneier says the separate footnotes were the publisher's decision - well, it was a bad one.)