Who Owns the Future?

A piece by Jaron Lanier entitled “Sell your data to save the economy and your future” is more relevant than it may seem at first.

He asks why the wealth created by computation is unevenly distributed:

This question has to be asked. Something seems terribly askew about how technology is benefitting the world lately.

How could it be that since the incredible efficiencies of digital networking have finally reached vast numbers of people that we aren’t seeing a broad benefit?

How could it be that so far the network age seems to be a time of endless austerity, jobless recoveries, loss of social mobility, and intense wealth concentration in markets that are anaemic overall?

The answer turns out to be quite similar to that raised by Norbert Wiener a half century ago. Lanier says:

While people are created equal, computers are not.

When people share information freely, those who own the best computers benefit in extreme ways that are denied to everyone else.

Those with the best computers can simply calculate wealth and power away from ordinary people.

It doesn’t matter if the best computers run schemes called high frequency trading firms, social media sites, national intelligence agencies, giant online stores, big political campaigns, insurance companies, or search engines.

Leave the semantics aside and they’re all remarkably similar.

All the computers that crunch “big data” are physically similar. They are placed in obscure sites and are guarded like oilfields.

His recommendation is a bit facile, I think. Basically he wants Facebook to pay you for your boring family picnic reports.

I think what’s really at issue is our model of wealth – which is that it is made up of capital and labor, and that it can grow indefinitely. Labor becomes relatively irrelevant over time. Resources and waste disposal become critical and cannot grow without bound. A pure information economy cannot actually feed anybody.

Comments:

  1. > All the computers that crunch “big data” are physically similar.

    Who cares? What possible interest does the physical form of the big data crunchers have to people who aren't intimately interested?

    > I think what’s really at issue is our model of wealth

    Any model that doesn't include FB and Google making their users richer is incomplete.

  2. My first thought is that it's an obvious outcome of reducing transaction costs. Krugman's core/periphery model is a canonical example of that: lowering distance or trade costs (which, in this case, can be interpreted as various forms of digital distance/trade) can lead to the emergence of highly concentrated cores.

    I think that idea is playing a part. ICT has created a global network that enables an historically new level of concentration, but the same dynamic has happened / continues to happen on many scales. (Sometimes called the Matthew effect).

    Another possibly slightly flippant point that nevertheless keeps on niggling at me: if you (a) give a hundred agents a hundred dollars each (b) get them to randomly give one dollar away each turn (but don't allow negative money values) (c) repeat for 200,000 random exchanges, the wealth distribution looks like this. You end up with one person with $400-450 and forty people with between zero and $50.

    I keep on trying to sell this idea to right wing think tanks as proof that extreme wealth is an unavoidable consequence of entropy, no luck so far.

  3. Who cares? What possible interest does the physical form of the big data crunchers have...?

    I think it's just a way of emphasizing that WalMart and Google and ReMax are really in the same business, despite appearances.

    Any model that doesn’t include FB and Google making their users richer is incomplete.

    To first order? Not necessarily.

    The question is not whether FB or Google add value. The question is what fraction of the added value they capture.

    I think there's a deeper issue here. The presumption is that by adding a small amount of value to me they make me better off. To be fair, for me Google adds a huge amount of value, while Facebook is just a more or less unmitigated nuisance. Still, most of what Google provides me is hard for me to monetize, since they provide it to you in equal measure. Neither directly helps the average end user to produce anything they can use to trade for food or shelter, at least not very much

    They meanwhile also increase income inequality, which I think arguably makes everybody worse off. Which is Lanier's point, and was Wiener's when he saw it coming. I do think they add value in the net, but it isn't blazingly obvious.

    Your point about the incompleteness of the model brings up a question that people need to think about when they think about modeling. I suggest your correction is not important to the first order model.

  4. I find it mildly amusing that Walmart and Amazon, two retailers with almost zero margins relative to their competitors, are singled out as models of how large data crunchers are value thieves. They add value by reducing costs, largely because of how they use the same banal computers accessible to everyone in their sectors. They just use the computers more intelligently.

    As for Dr. Tobis' comment about the difficulty in monetizing the value Google provides, this is a common mistake made by people just learning about economics. Value and money are not the same. I'm in a country that does not allow Google to operate (efficiently, at least). Google adds value, believe me. There are many things more valuable than money. In our current society, one highly valued commodity is time. The amount of time Google saves is considerable.

    The discussion above is horribly muddled. Wealth is increasing. The amount of wealth held by the previously poor is increasing. Almost every measurable aspect of human life is improving dramatically during the course of our lifetimes. But for some reason the thought that wealthy people are getting wealthier is held to invalidate a system that has brought hundreds of millions out of poverty.

    This conversation about the benefits of computation being unequal is just the same argument in microcosm.


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