Should we plunge headlong into the waves and hope to remain bouyant in the social media storm or head for maven haven on the mountain top?

The web is awash with water metaphors, from streaming video to bittorrent file-sharing protocols. And now we have Google Wave, Mozilla Raindrop and open access to the Twitter firehose.

Similar metaphors are often used to describe human emotional experience and the unconscious realm of memories, dreams and reflections. However, as always when venturing into Neptune’s watery domain, not everything is quite as it appears to be.

The internet is not a series of tubes directly interconnecting nodes to create communications channels but a packet-switching network in which content is divided into little data parcels sent via multiple momentarily-determined routes before being reassembled at its destination.

This engineering not only makes the internet very robust it also makes it neutral, as the data packets are carried without regard for their content. All data is thus equal online, notwithstanding the recent use of deep packet inspection by some Internet Service Providers to discriminate against certain kinds of traffic.

So data does not travel in hyperreality the same way as water flows through the real world. What does this have to do with the way we think about the web?

Being able to distinguish between fantasy and reality is always important, but never more so than when we are considering what we might be inclined to view as a techno-utopian fountain of knowledge.

Computer networks may operate according to the packet-switching protocols that govern them, but the humans that use them continue to behave in ways described by social psychology: in herds, influenced by status and impressed by cultural and political authority.

This is what results in an internet that resembles the image above, rather than the egalitarian interdependency that is often promoted as the brave new world wide web.

A research project plotting the topological structure of the internet in terms of the connections between nodes, while taking into account the roles the connections play, produced some arresting results.

It turns out that a dense core of a few critical highly-connected nodes are surrounded by an outer periphery of many sparsely-connected nodes which are heavily dependent on the core. Between the two lies a mantle of very many peer-connected and largely self-sufficient nodes. If the core is removed from the network, about 30 percent of the outer nodes become completely isolated.

This concentration of traffic in a few dense nodes supports the view that behemoths like Google, Facebook and Twitter excessively influence the web in the same way as key superpowers influence global politics and culture.

It also reflects the inequitable distribution of power, wealth and influence in our world.

An open web is an equal web. We must not mistakenly assume that the neutrality of computer networks is a metaphor, and guarantee, for equality in the human interactions they enable.

And there is no need for another metaphor to make the point that, like water, not all of us have equal access to the resources on which this new world order depends.

See also How Twitter Works In Theory and the subsequent Twitter Thoery Applied To Google Buzz for more about Flow, Faces, Phatic, Following, Publics, Mutual Media and Small World Networks.

Look out for Douglas Hofstadter, Sherry Turkle and Steve Jobs on technology and identity.

Chris Anderson is Editor-in-Chief of the US edition of Wired magazine, a post he has held since 2001, and is also author of 2006 best-seller The Long Tail: How Endless Choice Is Creating Unlimited Demand.

His latest foray into the lucrative non-fiction business book market relies on the same trusted formula as his first: entertain the reader with engaging, loosely-connected historical anecdotes wrapped in confident, well-turned prose to present a modish and more or less plausible concept sure to set the twittering classes a-chatter. Then cash in with a series of speaking gigs at upscale digerati gatherings to guarantee media mindshare for your new idea.

However, second time around the zeitgeist has been shaken by financial dissolution and reality has reasserted itself in place of neoliberal abundance economics. The claims The Long Tail made about distributed markets have been largely discredited and people are rightly remembering that there is no such thing as a free lunch after all.

Nevertheless, Anderson’s thesis is of interest, especially in the new media markets which are his native environment and are currently in a turmoil apparently caused by the collapse of business models based on charging for content.

He makes two main proposals, both of which have indisputable premises. The first is that inexorably falling digital processing, storage and bandwidth costs have steadily brought the production and distribution costs of digital goods and services closer to zero. No-one could deny that, nor the key point that the internet powerfully combines all three.

However, tending towards zero and reaching it are not the same thing. And someone still has to pay the remaining marginal costs, which can be considerable at scale. A recent report by Credit Suisse estimates that YouTube will cost Google half a billion dollars this year in bandwidth and content licensing fees.

The second is that there is a significant psychological difference between low price and no price: research shows that the “mental transaction costs” involved in thinking about a purchasing decision inhibit participation even in otherwise attractive propositions. Sweep away charges and the lure of free creates extraordinary demand, not to mention unprecedented competitive advantage.

However, as Anderson says, “advertisers will pay as much as five times more” for readers who are committed enough to subscribe “than they’ll pay for a free magazine that may be treated as junk mail”. So reducing mental transaction costs to zero by giving your product or service away will mean you are neither able to demonstrate commitment to advertisers nor bring in money by charging. Who would invest in a business like that?

In fact, Anderson is apparently quite happy to propose an idea only to refute it himself a few lines later. His introductory claim that we are looking at “an entirely new economic model” which is not just a variation on well-worn strategies is soon contradicted by his admission that “all forms of free boil down to variations of the same thing: shifting money around from product to product, person to person, between now and later, or into nonmonetary markets and back out again”. All of which he identifies as tried and tested marketing methods.

But there are the beginnings of an interesting discussion in this book, a more thorough exploration of which might have made a welcome contribution to the ongoing Great Paywall of News debate. The freemium (free plus premium) approach, giving away a basic version or limited sample of a product or service, offers to combine the benefits of lower barriers to participation without undermining the commitment of paying customers who are also attractive to advertisers.

There’s nothing new about this business model, but it is a key strategy for content producers challenged by the web. It certainly works for The Economist, three-quarters of whose 1.3 million readers are subscribers. And both The Wall Street Journal, with a million subscribers, and the Financial Times, which has been charging for access to its website since 2002, are succeeding behind the paywalls that many pundits said would signal their demise.

Some would protest that these publications are unrepresentative as they offer specialist information which conveys commercial advantage, are aimed at high earners and are often paid for on company accounts. But quality, scarcity and value remain relevant whatever the context and delivery platform. Although cost has become less connected to price on the web, businesses are still not so much built at a price point but according to the value they deliver and the cost of delivering it.

Developing this angle might have encouraged Anderson to admit that some income remains necessary to meet lower but still real production and distribution costs. He might also have attempted a more nuanced assessment of the perceived value involved in paying for a product whose quality, authority or reliability is implied and may even be guaranteed by the cover price.

However, none of this amounts to anything approaching the new market law that Anderson is aspiring to spell out. Many business and marketing models exist, some of which will fade and some grow, but free is not the single determining concept in any of them.

Hosted on whose servers for free?

This is essential reading for anyone involved with the online world. It takes a refreshingly honest look at the first generation of web applications and the way the web has evolved. Check out the talk below then buy the book and delve deeper into his arguments.

Even if you disagree with his perspective, your understanding will be enhanced by having to work out why. And you get treated to a unique musical introduction, too.

How insidious is the slide towards ease of use inside walled gardens such as Facebook and the iPhone? And how many users truly take the red pill by running everything from the command line rather than relying on stable releases of operating systems with convenient graphical user interfaces?

Chris is correct to say that ‘the internet has won as the transport medium for all data’, even though it will take years for this to roll out in practice, but I am not convinced that there must be a one-size fits all ‘universal interface for interacting with the web’.

Some will want hobbled devices that restrict their destinations to a few corporate data silos, but it is still hard to imagine open web search being excluded from that list.

Meanwhile many will continue to relish the relative freedom they currently enjoy to create and contribute on the web by making use of whatever technology they understand and are comfortable with.

I would prefer everyone to own their identity online by publishing and communicating autonomously, making use of open software and systems, instead of depending on proprietary web applications designed to harvest personal data for private profit.

However, there are compromises to be made here as there are in all human endeavour.

I would still rather take part in the Twitter experiment, however profound or trivial it turns out to be, than insist on its open distribution before signing up.

In other words, surely pragmatism is the best solution to such ideological problems?