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Who Owns the Future?: A Book Review

by gmoke 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

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European Tribune - Who Owns the Future?: A Book Review
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.

I'd say from experience that it is the other way around, when cost/online commincations goes down, file-sharing goes up. Of course, that just changes the medium, before that copying was done by burning CDs and before that was the era of home taping.

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.

Hm, he reminds me of Galambos.

Galambosianism - RationalWiki

Other libertarians quickly found Galambosians to be obstinate cranks. Reportedly, Andrew Galambos and Ayn Rand once met and within five minutes each had declared the other insane. Also reportedly, Galambos would keep a jar or coffee can next to him when speaking in public, into which he would drop a nickel or dime any time he mentioned the name of another person, or mentioned an idea or phrase attributed to another person, to symbolize he was paying "royalties" to them for his use of their intellectual property. He went so far as to drop a nickel in "royalties" to the long-dead Thomas Paine every time he used the word "liberty", on the mistaken belief that the word was invented by Paine. Also reportedly, he was born Joseph Andrew Galambos, Jr. but legally changed his name to Andrew Joseph Galambos so he wouldn't infringe on his father's intellectual property rights. Jerome Tuccille's humorous history of the early libertarians, It Usually Begins With Ayn Rand, includes several such anecdotes of interactions with the Galambosians.[1]

Galambosians themselves were not allowed to discuss any of Galambos' ideas with others. This, you see, would be a violation of Andrew Galambos' intellectual property rights. Any attempt to discuss Galambos or his ideas with a follower would get a response of silence, an answer like "yes I'm a Galambosian, but I'm not allowed to say what that means", or the question "have you taken V-50?"

In general, I would place Lanier with other supporters of conservative economics. Technological change is changing the society and as always conservative plans are trotted forth in order to create money streams that retain the existing order. The main thing that is different in today's debate compared with the one the 19th century is that the economic liberals won that one so hard that the conservative case today is stated in economic liberal terms, in particular regarding the concept of intellectual property.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon Aug 12th, 2013 at 07:14:34 AM EST
Oops, now I owe him a nickel.

Thanks for that.  Had never heard of that particular strain (pun intended) of Libertarianism.  Gad, Shakespeare must be the wealthiest ghost in eternity under that scheme.

Solar IS Civil Defense

by gmoke on Mon Aug 12th, 2013 at 01:10:17 PM EST
[ Parent ]
I haven't seen every calculation, but of those I've seen, most of the people who have "run the numbers" on the Kodak/Facebook/Instagram comparison have been trying to prove Lanier wrong and used a bunch of assumptions unfriendly to Lanier.

Perhaps he deserves that for not showing any data, but the repeated counting of Apple Store employees, Canon employees (who were employed back when Kodak was at 140,000) and others as "proof" that there has been no contraction has not impressed me.

Now it's fair to point out that fewer people employed in farming has not meant immediate unemployment. Rather people moved from the land into industry.

However, I think that masks an important point that Lanier has noticed, new industries have not arisen that provide mass employment the way the old ones did - and this is changing the nature of our economies and societies.

by Metatone (metatone [a|t] gmail (dot) com) on Mon Aug 12th, 2013 at 10:55:04 AM EST
Having read the rest of your piece, I have to agree that Lanier lacks the context of understanding to make sense of what is going on overall.
by Metatone (metatone [a|t] gmail (dot) com) on Mon Aug 12th, 2013 at 10:59:54 AM EST
[ Parent ]
Lanier picked a ridiculous comparison and then blithely went on.  Others have pointed that out, some with ridiculous comparisons of their own.

I brought it up because it is characteristic of the assumptions Lanier bases his thinking on and because he never backs it up.

Yet, the question of whether we are reducing employment through the Internet and what kind of employment we are creating with it are important questions.  They will not be answered by such silly comparisons though.

Solar IS Civil Defense

by gmoke on Mon Aug 12th, 2013 at 01:14:33 PM EST
[ Parent ]
Metatone:
new industries have not arisen that provide mass employment the way the old ones did

it's the coming age of leisure, innit?

there's a field a mile from my house, where the farmer grows barley, oats or wheat. one day on my way home i saw the thresher at work, so stopped to chew the fat with the old boys. they told me that field, when they were children, took 10 days to two weeks to harvest for ten people, working even by moonlight to get in the sheaves before the first storms of late summer.

now the thresher does the whole thing in 45 minutes!

yet how many social planners are thinking about what to do with all those workers' energy?

ditto the industries outsourced to cheap labour countries...

i don't see any longterm solution barring a 'citizen's wage', an acceptance that relaxation and leisure do wonders for quality of life, and that work can be many things other than your 'job', especially if said job does not exist...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Aug 12th, 2013 at 01:26:13 PM EST
[ Parent ]
melo:
how many social planners

There are such things?

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Aug 12th, 2013 at 01:59:40 PM EST
[ Parent ]
...does it take to change a lightbulb?

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Mon Aug 12th, 2013 at 02:11:01 PM EST
[ Parent ]
how many lightbulbs does it take to make a social plan?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Mon Aug 12th, 2013 at 09:22:03 PM EST
[ Parent ]
what else is government, really?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Mon Aug 12th, 2013 at 09:20:03 PM EST
[ Parent ]
There are a thousand worthwhile things to be done with that time and energy, including taking a nap. The problem is that everything that cannot be monetized must be eradicated.

Experience keeps a dear school, but fools will learn in no other. -- Dr Johnson
by melvin (melvingladys at or near yahoo.com) on Wed Aug 21st, 2013 at 10:12:04 PM EST
[ Parent ]
As Galbraith pointed out in The Affluent Society (yes the same book again, it is a great book, everybody should read it), already in 1957 that society produced everything needed, indeed great effort was needed to create all new wants that more production could satisfy.

He also pointed out the already existing solution: the growing New Class that don't really do production or farming, but instead do intellectual labor and is handsomely rewarded for that. He also notes that there is nothing to prevent the New Class to keep growing, indeed it makes society better for the inhabitants of the New Class, increases competition for manual laborers which drives up wages, and also lessens the strains ever expanding production.

What we are seeing now is not the disappearance of jobs, it is the disappearance of good jobs. They are good because good conditions were enforced in an era of full employment. Todays new jobs are created in an era of purposefull high unemployment which means crappy conditions for newly created jobs, and of course continued high unemployment (because that is a feature, not a bug).

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon Aug 12th, 2013 at 03:01:20 PM EST
[ Parent ]
but then came vance packard's 'hidden persuaders'...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Mon Aug 12th, 2013 at 09:23:50 PM EST
[ Parent ]


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