By the middle of the 19th century, rapid urban growth spurred by the industrial revolution had created urgent social and environmental problems. Cities responded by building centralized networks to deliver clean water, energy and safe food; to enable commerce, facilitate transportation and maintain order; and to provide access to health care and energy. Today these century-plus-old solutions are increasingly inadequate. Many of our cities are jammed with traffic. Our political institutions are deadlocked. In addition, we face a host of new challenges—most notably, feeding and housing a population set to grow by two billion people while simultaneously preventing the worst impacts of global warming.
Such uniquely 21st-century problems demand 21st-century thinking. Yet many economists and social scientists still think about social systems using Enlightenment-era concepts such as markets and classes—simplified models that reduce societal interactions to rules or algorithms while ignoring the behavior of individual human beings. We need to go deeper, to take into account the fine-grained details of societal interactions. The tool known as big data gives us the means to do that.