Sun Aug 11th, 2013 at 08:40:17 PM EST
I didn't want to read Jaron Lanier's Who Owns the Future? (NY: Simon and Schuster, 2013 ISBN 978-1-4516-5496-7) as I thought Lanier's writings as a virtual reality enthusiast back in the day were somewhat simplistic and naive and what I knew of his first book (I saw him speak on it a couple of years ago), You Are Not a Gadget, continued in that stream. However, I read an interview with Lanier in which he seemed to be approaching an idea about the unification of economics with information theory and thermodynamics, a subject that really interests me, so when I saw the book displayed in the library, I reluctantly picked it up and worked through it.
Lanier is still a simplistic and naive thinker in many ways but he also is addressing some serious issues, the future of the Internet economy and a secure middle class. His thoughts can serve as a jumping off point for deeper discussion, even if those jumps take us far away from Lanier's views and the neo-liberal canards he seems to have bought into.
Lanier is a computer tech guy so he tends to see every problem as a computer tech problem. This immediately hobbles him in significant ways. He begins his argument with an obviously false comparison:
"At the height of its power, the photography company Kodak employed more than 140,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people. Where did all those jobs disappear? And what happened to the wealth that all those middle-class jobs created?"
Others have run the numbers more realistically and that idea of reducing employment in photography from 140,000 to 13 does not hold up, especially in a world where Apple, a company that does not make it into Lanier's employment calculations, is advertising "Every day more photos are taken with the iPhone than any other camera." In fact, there is almost no data in this book. Lanier does cite Martin Ford's The Lights in the Tunnel which he says argues that "the latest waves of high-tech innovation have not created jobs like the old ones did." He cites it once and moves on as if the proposition has been definitively proven.
Another fundamental problem for me appears in the very first paragraph of his book:
Maybe you bought, or stole a physical copy, paid to read this on your tablet, or pirated a digital copy off a share site.
I got his book out of the library. Such things as libraries are not at all part of his thinking from the very beginning (I found one mention of libraries in the whole book). This is an example where I think Lanier may have swallowed the neo-liberal and libertarian Kool-Aid: he does not consider community and communitarian solutions at all, unless you consider a dematerialized, depersonalized transaction enacted over the Internet as a community.
Lanier is also a musician and has a long-standing interest in preserving a middle-class income for his cohorts. He sees the transformation of the music industry as destroying the possibility of making a decent living for artists and musicians through the "free" copying of their work, leaving their only real source of income in live performance:
The peasant's dilemma is that there's no buffer. A musician who is sick or old, or who has a sick kid, cannot perform and cannot earn.
Of course, universal health care and a secure system of Social Security could do a lot to remedy that situation but Lanier does not see that. In fact, his understanding of health care is strictly as a computer scientist, the problems in US health care are not due to insurance company profits and a failure to recognize we are all in a single risk pool but because of a failure in network architecture:
Nonspecialist doctors have already lost a degree of self-determination because they didn't seize the centers of the networks that have arisen to mediate medicine. Insurance and pharmaceutical concerns, hospital chains, and various other savvy network climbers were paying better attention.
When health insurance companies turned into digital networks, general-practice physicians became somewhat marginalized, serving increasingly as nodes in a scheme run by statistical algorithms and, to a lesser degree, pharmaceutical concerns.
Health insurance companies in America, by using cloud computer analysis to mostly insure people who didn't need insurance, similarly ejected risk into the general system. But there wasn't some giant vastness to absorb the waste. Instead, the economies in which finance and insurance could exist in the first place were weakened.
Here is another problem I see with Lanier's ideas: he is only seeing the USA. He does not consider or even mention the health care systems in every other industrialized nation which cover everybody. He doesn't bother to compare the situation of a musician in France or England who has the benefits of health care coverage and a more secure social safety net with the situation in the US. The possibility doesn't exist for him.
Another example of this US-centric myopia is his statement, "When music is free, wireless bills get expensive, insanely so." Sorry, I see no direct cause and effect, especially since there are numerous studies, with data, showing that US customers pay much more for wireless and other network services than other countries around the world. Is that because we are enjoying so much more free music or because service providers are charging their customers higher fees here than in other countries? Another possibility Lanier does not even recognize.
This "it's simply a network problem" mindset extends to his understanding of the financial system and the recent collapse of the economy, the Great Recession:
Finance got networked in the wrong way. The big kinds of computation that have made certain other industries like music "efficient" from a particular point of view were applied to finance, and that broke finance. It made finance stupid.
When correlation is mistaken for understanding, we pay a heavy price. An example of this type of failure was the string of early 21st century financial crises in which correlations created gigantic investment packages that turned out to be duds in aggregate, bringing the world to indebtedness and austerity. Yet few financiers were blamed, at least in part because the schemes were complex and automated to such a high degree.
Financial concerns, through the magic of digital networks, can now take risks without paying for those risks, while gaining benefits for successes. It's sometimes called "too big to fail."
Mortgages were a reliable, clean mechanism for many years. What happened in the early 21st century was exceptional, and caused by the poor use of digital networks.
Lanier does not discuss the deregulation and criminality that lards the financial system and led directly to the housing crisis and economic bust. He doesn't seem to understand that the system was rigged over years and years of planning and lobbying and that the major players are, in effect, criminal enterprises, that "too big to fail" is not a bug but a feature very carefully designed into our present financial system.
Here, again, his worldview is contaminated with neo-liberal propaganda:
We just went through taxpayer-funded bailouts of networked finance in much of the world, and no amount of austerity seems enough to fully pay for that.
Guess somebody does not understand Keynesian economics or reads Paul Krugman. Austerity was never a solution for the Great Recession no matter how much the mostly wrong Right demanded and continues to demand it. When, as Charles Pierce says, people got no jobs and got no money, a government should spend to generate jobs, income, and economic activity.
What Lanier sees as the problem is that we don't own our own information, that any contributions we may make to the universal pool of knowledge is monetized not by the individual contributors but by the Siren Servers which vacuum up all the data and organize it to make money for themselves: Google, Facebook, Amazon, Apple, (NSA)....
We are not benefiting from the benevolence of some artificial intelligence super being. We are exploiting each other off the books while those concentrating our information remain on the books. We love our treats but will eventually discover we are depleting our own value.
That's how we can have economic troubles despite there being so much wealth in the system, and during a period of increasing efficiencies. Great fortunes are being made on shrinking the economy instead of growing it. It's not a result of some evil scheme, but a side effect of an idiotic elevation of the fantasy that technology is getting smart and standing on its own, without people.
The question is whether we'll engage in complete enough accounting so that people are honestly valued. If there's ever an illusion that humans are becoming obsolete, it will in reality be a case of massive accounting fraud.
...instead of economics being about a bunch of players with unique positions in a market, we devolve toward a small number of spying operations in omniscient positions, which means that eventually markets of all kinds will shrink.
And it's not Facebook's fault! We, the idealists, insisted that information be demonetized online, which meant that services about information, instead of the information itself, would be the main profit centers.
That inevitably meant that "advertising" would become the biggest business in the "open" information economy. But advertising has come to mean that third parties pay to manipulate the online options in front of people from moment to moment. Businesses that don't rely on advertising must utilize a proprietary channel of some kind, as Apple does, forcing connections between people even more out of the commons, and into company stores. In either case, the commons is made less democratic, not more.
Twas ever thus. The advertising model is to sell audiences to advertisers rather than information or programming. In newspapers, magazines, on radio, on TV, that has been the business model throughout the 20th century. Naturally, it would extend into the 21st.
His solution is only roughly sketched and somewhat incremental, in my opinion. He wants to give people nano-payments for every bit they add to the general store of information.
In the event that something a person says or does contributes even minutely to a database that allows, say, a machine language algorithm, or a market prediction algorithm, to perform a task, then a nanopayment, proportional both to the degree of contribution and the resultant value will be due to the person.
You meet a future spouse on an online dating service. The algorithms that implement that service take note of your marriage. As the years go by, and you're still together, the algorithms increasingly apply what seemed to be the correlations between you and your spouse to matching other prospective couples. When some of them also get married, it is automatically calculated that the correlations from your case were particularly relevant to the recommendations. You get extra nanopayments as a result.
If homeowners with mortgages had been owed something resembling royalties whenever a mortgage was leveraged, then there would not have been over leveraging. The cost of risk would have been built in from the start, and would have been paid for by the investor creating the risk. Benefits would have been shared with those who were creating the fundamental value: homeowners who promised to pay the mortgages. Economic symmetry would have prevented investors from taking risks on other people's uninformed behavior, using yet other people's money.
This would almost certainly not do away with Siren Servers. In fact, it would probably require new Siren Servers to institute that system of nano-payments, a dream of some from before the very first days of Wired magazine, a dream that has yet to be realized.
It would also require an expanded idea of intellectual property and copyright. How would you determine whether your bit of data is an unique and worthwhile bit of data? How long would you retain rights in that data? All this goes unmentioned by Lanier.
A more incremental path to security would not answer the hard philosophical questions about such concepts as copyright, but it would make them less contentious. In a world in which a person starts to earn royalties on tens of thousands of little contributions made over a lifetime of active participation on the 'net, it will matter a little less if there is a conflict about attribution in some minority of those cases.
I wonder if Larry Lessig would agree.
It would also require a return to Ted Nelson's vision of computing, Xanadu:
The first principle is that each file, or whatever unit of information the thing is built of, exists only once. Nothing is ever copied.
A core technical difference between a Nelsonian network and what we have become familiar with online is that Ted's network links were two-way instead of one-way. In a network with two-way links, each node knows what other nodes are linked to it.
That would mean you'd know all the websites that point to yours. It would mean you'd know all the financiers who had leveraged your mortgage. It would mean you'd know all the videos that used your music.
This is a concept I also find attractive, although I wonder how it can be implemented. I like the idea of footnoted discourse where you can track back an idea to its origins and check provenance automatically. It's something I try to practice myself, having been taught this art by my fine English teachers in grade and high school (thanks Mr Dexter, Mr Nielsen, and Mr Schneller - great teachers all).
In humanistic information economics, provenance is treated as a basic right, similar to the way civil rights and property rights were given a universal stature in order to make democracy and market capitalism viable.
Unfortunately, I don't see any evidence that Lanier understands how civil and property rights are being systematically eroded by the plutocracy we have today. All he sees is that they are using digital networks to do it. Lanier recognizes the machines but fails to see the people pushing the buttons (and the people who stand behind those who run the Soft Machine).
By the end of the book, I enjoyed Lanier's personality and truly believe he is trying to think through hard problems though without the intellectual tools to do so, no matter how surely he seems to believe that he does. My opinion about his naiveté and simplicity were confirmed but these are also sympathetic traits. The ways our 21st century networked economy, society, and culture is changing us and the possibilities of a livable future need to be examined and discussed. Lanier's concerns about a secure and expanding middle class, about the ownership of our information and communications (hello, NSA) are real and serious. Yet, he doesn't have a real economic, political, social, or cultural analysis outside his computer technology analysis. He is a hard-core techie confronted with an ecological systems species loss and trying to solve it with a screwdriver.
Like others present at the creation of our brave new digital world, he is having serious second thoughts. Unlike some of them, he hasn't stepped outside that bubble into a wider world. For another perspective on those second thoughts, here is a link to a talk Anil Dash gave on April 1, 2013 at Harvard's Berkman Center: http://cyber.law.harvard.edu/interactive/events/luncheons/2013/04/dash
PS: The work of Elinor Ostrom is extremely useful in discussing these issues. Her Nobel Prize speech is at
http://nobelprize.org/mediaplayer/index.php?id=1223&view=1 video of Nobel Prize speech
http://www.nobelprize.org/nobel_prizes/economics/laureates/2009/ostrom_lecture.pdf transcript of Nobel Prize speech