The Surveillance Economy and Extreme Income Inequality: You Can't Have One Without the Other

hello hello so actually in truth I'm sort of using you guys what happened I was last year I did a lot of public speaking and then around October I just realized I can't stand it I needed to just retract and be at home with my family and all that so I've spent a few happy months just kind of being more private and I get sort of insular and weird like a sort of Berkeley weirdo you know and and I but in a couple weeks I have the paper backs watching I have to go to New York and my first scheduled public thing was going to be to be on Kabir and then on Charlie Rose and stuff and I'm realizing oh jeez II know I'm totally out of practice coming out of my cocoon and talking to people so I just wanted to do like one thing before I go full bore and like all this stuff so I'm using you to kind of try to break out of the cocoon and remember how to be with the real world out there again so you're the real world such as it is of and I'm wondering is if this is really a good calculation on my part but anyway yeah I know hey there how you doing oh gosh so um alright so what I'm going to do is I'm talk a little bit about my last book cause who called who owns the future and some of the ongoing work related to it some of the controversy that surrounded it so is anybody here read it a bit curiosity oh so few people so the I wrote some new chapters for the paperback that are about more recent research and events that have happened so if those of you who've read it and unless you would prefer to never have any more contact with it what might enjoy seeing the nice stuff - let us begin about 35 years ago I was a teenager and I had the good fortune to be able to link up with some of the top computer science minds in that era and get into the game pretty early and there was this idea back then that started to take hold in people my age mostly and it was this notion that if you look at the course of human history you see one pattern over and over and over again which is that people struggle for power over each other and those who gain power are often quite cruel and needlessly so and furthermore the method by which power is retained usually includes controlling communication and information and then you combine that with a very interesting realization that you can't make digital networks work at all unless they correct for blockages of communication the packet switch network routes around blocks and that sort of thing you put those two together and you think wow you know digital networks might have something to do with improving this horrible pattern of human social behavior that's existed throughout throughout history the particular example that always got me was the banning of drumming among slaves in the United States where you think like how like just the the astonishing petty perversity of banning drumming because of the theory that maybe it could be used to communicate codes that would have something to do with planning rebellions but if the drums had been packets and US packet switch networks they wouldn't have been bana becuz they would have routed around the plantations right so speaking roughly so there's this idealistic notion that an open digital network might just be able to be a kind of a remedy and that idea has found expression in a lot a lot of different forms but almost all of those forms appeared initially and articulated initially in a rather small social circle in the early 80s some of the examples were the the open source movement which was pretty much started by Richard Stallman who was a crazy friend of mine where I had more crazy entanglements than you believe and there were other other versions of it this sort of fetish that hackers have with encryption was another aspect of that that if we can combine encryption with an open network then we have this ability to be immune to the powers-that-be although at that time we didn't know the NSA existed yet I don't know if it did actually but anyway there was this whole thing I was very much part of it I helped articulate it since I'm also a musician as Ken mentioned I particularly helped articulate this idea that if you just let the music business become open instead of copyright driven if you just shared your music for free that would ultimately be better for people it would all the whole system would reformat itself in a way that would ultimately turn out through better for people that's still a very dominant idea of course that's still considered I think on the cutting edge of coolness or something all these years later which astonishes me so around the turn of the century I started to really feel that the idea wasn't working and this is one of those moments where there's a conflict between one's abstract ideals and then empirical results they don't they didn't agree with each other so the abstract ideal was that openness should should turn around and help everybody the reality I was seeing is that it was helping some people sort of infinitely and then hurting other people and there wasn't a lot in between it was turning the human affairs into a zip curve or a power-law or long tail whatever whatever term you prefer on the the people who were benefitting were in many cases people I had directly helped I had been a consultant helping set up some of the early high frequency trading concerns some of the early elaborate financial concerns I had I consulted to Amazon Fannie Mae trying to think of all these crazy places way back like in the 90s and no Amazon would be later but anyway the the thing is the P people who ended up in control of the hub computers in an open network didn't just benefit they became they got the fastest and biggest fortunes and concentrations of power in history I mean it just was astonishing the transformation that took place earlier in the 80s when you went to a meeting like the Davos meeting in Switzerland or something the rich powerful people either were sheiks who control the oil fields or they might be Greeks who controlled shipping lines it was all transportation and physical materials by the turn of the century there was this transformation where the most wealthy people were the people who controlled a digital hub the people who were just routing those packets with the biggest computer and that was a really strange transformation so those people were not just doing well but they were kind of doing too well and I was part of that wave have done well in that world so I'm not complaining personally at all I've been on the good side of it but what really bothered me is I was absolutely convinced earlier that open culture and open digital systems and a rejection of the boundaries imposed by systems like copyright would be good for musicians for journalists for photographers for people like that and I you know I can still state the old theory I can still state the old rhetoric because I did make some of it up I really know it and yet when I looked at the results in the real world it just didn't agree I started to see once again a sort of a perverse situation where a real world not hypothetical imaginary musicians or journalists but real world journalists and musicians and photographers were being sorted into a zip curve or a winner-takes-all curve where before they'd had a strong middle class so it's not that there were no winners at all but it's just that there was a sharp cutoff between a very small number of winners and then a vast sea of losers and that is not what it was like before if you look at the data for musicians around the turn of the century it's really astonishing how large a middle class was of musicians but according to data from the Internal Revenue Service there were I think that here I'm doing this from memory so I might have the slightly wrong but I think there were 300,000 musicians making over $100,000 a year that they reported and if you know musicians the way I know them you know that that's underreported if anything and so that's like a big middle class a big good strong middle class and the vast majority of those by far we're not famous we're not stars but they were people who worked in orchestra pits or recording studios that whole world went away it was replaced by a phantasm there's still you can read mainstream news articles that still report that there's this huge class of people who are doing really well in the sharing economy and yet whenever you try to actually find them and count them they disappear now I haven't done that for the most recent versions of the sharing economy so I don't know exactly what's going on with the people who drive for uber or that or the people who rent out their places to Airbnb or whatever however what I found for musicians is that people in the idealist Silicon Valley world just assume there were tens of thousands hundreds of thousands of musicians doing great by promoting themselves for free over our networks I did everything I could define them I asked for people to point them out to me one by one I tried to go to sites where they congregate there are a certain number of fake ones you can find which people with trust funds who pretend they're making it but in terms of people who were plausibly real they exist but just handfuls I mean they're incredibly tiny numbers for instance I recently last year I did an inventory of the hip hop world globally working with a lot of top hip hop artists trying to just gather these people who are the people who've promoted themselves online and are now actually making a living and we came up with a number of about 50 so I celebrate those people that's great if Amanda Palmer can raise money for a tour and Kickstarter that's great but if you actually count the numbers we're talking about handfuls of people like it's just crazy given the app given the social sort of illusion that their whole classes of people who are rising up we've moved from hundreds of thousands to dozens now we might be at the beginning of semester maybe they'll be hundreds of thousands and ten years that would be great however it's been stagnant now we're more than a decade and a half in to the switch and we haven't seen it budge it's really really stagnant now on top of this is a sort of though I would say a confusion about what wealth is that's been brought about so they're people who are saying well if I can lower my costs through the digital sharing economy and I can get cheaper rides through ride-sharing service and I get I can get cheaper places to crash through living place sharing service and blah blah why do I need to make as much money anyway but the problem with this is that it's thrusting almost everybody into what we call an informal economy where you don't build up wealth and then concentrating all the wealth with the people who run the networks that facilitate the sharing economy now the problem with an informal economy is that it doesn't have any the engineering term is hysteresis anybody know that term its internal staying power or momentum so the idea the idea behind wealth is not is that you don't have to sing for your supper for every meal if you're wealthy you can afford to get sick or stay home with a sick child you can afford to get old you can afford to have a relative in need and take care of them for a while it gives you the latitude to not have to sing for your supper for every every meal and that makes every difference in the world because the reality of people in the reality of biology is that were not superheroes who are young forever and will live forever but were these fragile people who who suffer all kinds of life contingencies in reality is kind of random and that's the difference between wealth and bargains you know and so the reason why in the developing world billions of people are hoping to get out of the informal economy and into a formal economy is to get that benefit and yet somehow because of the sexiness of the new generations of young people who've grown up with the rhetoric I'm afraid I helped invent have gotten this crazy idea that the informal economy is the cool economy there's some people who think that the informal economy is a that the informal economy is some sort of a passageway to a kind of a more socialist or communitarian solution and I have to remind them about all that power and wealth being concentrated and that's where that fails if this were only the sharing economy and there wasn't this incredible concentration of super wealthy people facilitating it that might be a scenario but it's precisely not what's happening what's happening is we're creating a new super elite of whom I'm a pseudo member I guess I'm a marginal member of it but I have a lot of friends who are definitely members of it and they're nice people you know I do think one of the things that's very hopeful about this time is that we have the nicest best in tangent best intended most pleasant most charitable super elite in history I think and that's now of course that doesn't do any good if nobody acts know if that you know it could be a lost potential but there's extraordinary potential there we're not we're not dealing with creeps for the most part there are creeps in the Silicon Valley late there more of them in the global financial elite but you know mostly they're kind of cool kids they're the kinds of kids who graduate at the top of their class in math or computer science from here those are the people who end up going and building these things so given that it's absolutely worth talking about these ideas on the level I think it's not appropriate to create an us in them situation of emiti towards the people who have been the big winners in the system because none of us saw it coming I was totally surprised by how it turned out nobody understood what was happening I assure you I was there there was not an evil plan it just we were naive anyway it was just it was a worthy experiment it was an honorable worthy experiment it might have worked it just turned out it didn't just like in science experiment you know hypotheses sometimes are proven wrong and I think that's what happened in this case it was honorable the only dishonor would come as if we ignore the results so far and you know it's very hard it's incredibly challenging to the human psyche to overcome illusions that happen to benefit you tremendously even if they hurt other people it's a gigantic spiritual leap I think is the right term for it so don't expect some sort of instant transformation so what I want to do now is go into a bit more detail about the patterns that have emerged and how it turns out that informations really work on a large scale the first thing to understand is a little bit of very basic under a bit of basic wisdom about the limits of statistics actually so what big computing can do is gather big data and perform operations on it which are statistical so understanding exactly what statistics is and what what it isn't is absolutely crucial to understanding big data and big networks there's been a tendency in the big computer world the big Network world to want to equate statistical correlations with absolute wisdom this comes up a whole lot I can give you so many examples of it I'll just give you a couple one of them is my friend and neighbor Chris Anderson's idea he was he was the editor in chief of Wired for a long time now he sells drones instead but he he published a famous paper called the end of theory and I think there was another version of it called the end of science but the basic idea was that if you have enough big data you can plot future events why do you need scientists coming up with theories for prediction because big data replaces that now here's the thing about it if we lived in an entirely different universe in which there wasn't structure but just a continuity of possibilities then that would be true so if if I was moving my hand this way and when it hit the lectern it just continued to interpenetrate it that would be a different kind of universe than the one we live in we live in a universe that's governed by conservation principles and exclusion principles and they're they're quite fundamental so far as we can tell and they result in structure so that my hand cannot interpenetrate the lectern now the reason I'm making such a fuss about that is that if you gather statistical data about my hands motion and some algorithm in somebody's remote computer is plotting it it'll predict that it'll just pass through right and so what happened but the interesting thing about it is that it's almost always the case that a statistical plot forward will be correct for some period of time so there's a very interesting kind of you could call it a teasing effect that happens with big data and big computers where there's always initial positive feedback that you've become God and our admission and then there's a sudden crash or failure of that but during that gap when you feel as though you're omniscient and have a perfect understanding of reality it's awfully hard to hear arguments that it might not be true so I mean there's so many examples of this I hardly know where to start the world of finance provides in a way the most delicious examples a great well one I remember very clearly because I need some of the principles was in the 90s an outfit called long-term capital management now since I this is this is an audience if if I may say so an audience of people of many many of you will remember what this is when I speak to groups of undergraduates they often have never heard of it and I always tell them you should learn about it because you'll be paying for it your whole life c- on though you might as well know what it is but of course what it was was one of the early attempts to make a perfect financial machine out of a big computer so what this thing did is it gathered a bunch of data it plotted forward it seemed to be perfect it seemed to be the absolute ultimate money machine and because of this mistaken idea about how science works and how reality works because of this mistake in epistemology there was this idea that a perfect money machine would also be absolutely perfectly and without question adding order and reducing risk in the overall marketplace so it must be win-win for everybody but of course what actually happened is it concentrated a huge ton of wealth while it was working and then it hit a structural flaw and it crashed so big that it required an enormous bailout which is the thing we're all paying for now I I was around I knew some of the people and I am convinced that long-term capital management was innocent very much like our early ideas I think it's it's a confusing area and it was very new at the time and it would have been plausible and honourable to think that this this crazy idea could work because sometimes crazy ideas turn out to be true I mean look at the create like quantum field theory works and it's just insane so given that some really crazy unlikely stuff has turned out to work why not this so was it wasn't I think we have to limit our condemnation of the first people on the scene who might have been confused however then came Enron now likewise I tell I tell undergraduates you know you're going to be paying for Enron you should know about it Enron at this point was not innocent that was a deliberate scam using some of the same techniques and once again it used statistical correlations to accumulate wealth they'd hope to get out of it and wash their hands before it crashed but they didn't quite those people were nasty I had interactions with them as well so that was a real fake then it happened again with the mortgage-backed securities very similar thing but on a much larger scale and I could go into some of the degrees of difference between these different these events I mean long-term security was gathering purely numeric data from markets Enron was starting to look at natural language data as well very much like very much in the way that Google scrapes the scrapes the web all the time for search they were trying to scrape the world for signals that might influence their decisions automatically and so forth when we get to the mortgage-backed security era instead of just one player you have a class of players who are more coordinated I think than we sometimes realize they were still small but they were multiple players spread out over continents anyway the same mistake over and over again so there's an initial period of false verification of your omniscience where statistics is perfect because it hasn't encountered structure yet and then you hit structure and then there's a massive failure so in my view this is an inevitable mode of failure if you're going to believe in statistics over structure now the problem is we don't know how to represent structure in all cases in other some cases where we can you know no real science is actually hard to do and there's a I try to make a distinction between two kinds of big data big data used by scientists is a very different thing than big data used by business big data used by scientists is still evolving we haven't really formalized what scientific method looks like for big data we haven't really agreed on a standard set of analogs to the tradition of peer review and publication and replication all these things we have ad hoc approximations of them that vary from time to time so we have a long way to go but at least it's real science and everyone understands how hard it is a great example is genomics which or stem cell research any of these things where you gather enormous amounts of data you do very broad experiments in parallel and you make slope slope progress you know there's not a magic bullet one of the characteristics about Big Data is it's less amenable to sudden analytic breakthroughs you know if you if you go back into the history of science over the last few centuries there were these moments when a smart person sitting somewhere suddenly has this a ha breakthrough and they come up with a simple elegant analytic description of events which then can be tested and proves to be true and they make this huge leap and this is the image we have of oh I don't know an Einstein or a Newton or somebody like that big data is not like that big data is this massive slow collaborative empirical incremental process all evidence points to it being absolutely as significant as the traditional leaps of analytic thinking and yet we have to get used to its character and it's a little hard it's we're all impatient little children who want instant treats but big data doesn't give you that however it does give you the illusion of that which is where the trickery comes in and I think that's how we've all fallen into this trouble so what happens with big business big data well it's a funny thing they're the first company to really delve into it I think was Walmart which is something that's not often recognized but back in the in the 80s was the first time people started to understand you could use big computers and networks to calculate an advantage over everybody with statistics that was kind of when the revelation happened and it's been kind of Moore's law driven it depends how expensive the computers and networks are and in the 80s that expense was still a lot but it was already getting to be plausible to use it for business advantage so in 87 we saw the first flash crash from automated trading for instance and that's when Amazon started to get this idea well you know if we gather a bunch of date a bunch of data we can use it to make better decisions than our competitors and just win based on data on missions some amazing idea and at the time it's hard to realize now it was a pretty avant-garde idea I mean I remember when I consulted for them and they were they were like sort of weird visionary people actually you know so it worked the thing they optimized was not their consumer marketplace but their supply chain so what they did is they gather data about every little link in the chain of how a product is moved by truck from here to here where it's manufactured where the raw materials come from they tried to build a model of everything that happens that results in a product getting in the store and then whenever they want to negotiate with the supplier or somebody getting transportation any any kind of value in the link they were able to estimate what their bottom line would be and they were so good at it that they were able to negotiate people right down to the bottom and so what it did is it basically forced out their competition because nobody else could figure out what they were doing everybody else ended up with worse margins and higher prices in their stores now um once again this was one of the first times it happened and I think it would be wrong to condemn these people because nobody could understand the implications of such a huge experiment I think there were a lot of good results of it I think despite all of our complaints about labor in China and so forth at that time those who are around will remember that in the 70s and 80s there was an ambient error that the rise of China might be a very violent one it might be a very confrontational one during the the rapid industrialization of China there have been many years when Walmart by itself has been responsible for I think like 15% of Chinese exports it's just an insanely high number so what happened was this optimization of the supply chain smooth the path for this giant power to enter into a cooperative economy in the world and it might have Spiritist World War you know it's not an implausible claim so I don't want to I'm not trying to give a simplistic condemnation we're all use is a big data have turned out terribly that would be quite a mistake but at the same time the criticisms leveled at Walmart I think are quite accurate that it's impoverished its own customer base to the point where its own future is limited and that's that's got to be stupid in the big picture but it's it's it's a painted itself into a corner now what can I do so anyway that was the first attempt the next big milestone in applying big data tour de neri people was from Sergey Brin at Google so I don't know if the story is true I never really asked him but he's a great he's great I should say once again here's a person who I think is really an admirable decent good guy I don't there's no reason to condemn these people at all in fact they deserve a lot of admiration but at any rate Sergey claims that when he was a Stanford student he came up with this to impress a girl on a date because I guess Stanford women want to know your business plan or something so so you know okay we'll do search but we're not going to charge for it because that would be overhead and complicated let's just do advertising now here's what the problem is with that once again entered into innocently but the broad implication of using advertising as the model for computational business is profoundly dysfunctional the first thing is to understand that the term advertising is come to mean something entirely different than it used to mean advertising used to be a form of persuasion it used to be somewhat romantic sometimes annoying cloying form of persuasion but that's what it was I've worked in the ad business weirdly enough I did jingles the music for ads so I've been on the other side of that one too and there's plenty of reasons to be annoyed with ads there's plenty of reasons to think that ever advertising has made the pharmaceutical industry insane for instance where it spends more on ads than on research and all that so but but then maybe there's an argument and I think it's a legitimate argument that advertising has helped smooth the path to modernization in many cases since people are so habit bound and that's a good thing modern the modern world has been gressive lee kinder than the past you have to understand how bad the past was to appreciate modernity and many people don't but at any rate whatever you think of traditional advertising the new thing is not that instead it's link placement now there's a critical concept which is the cost of choice so nobody reads through the first three million web results on a search right because it would take you too much time you can go through a page maybe a couple pages but nobody goes that far and so the truth is that because the number of possibility is available over a network is so large the easiest ones become vastly more likely as destinations than the farther ones so when there's paid for options put in front of you that are easy it effect effectively becomes micro management of human behavior now this is a subtle thing because there's two different perspectives here and once again this has to do with understanding statistics on one level you can say hey nobody forced you to follow this link or that nobody forced you to do this or that you're free it's your responsibility and that's true as far as it goes however broadly statistically it's just true that people have a finite amount of attention a finite amount of energy a finite amount of just what they can deal with on many levels and so statistically you do micromanage a population that way and so it fundamentally corrupts the information system because it means like if you're saying well our our search engine is pure of heart but then on the side or the paid for links well the thing is they're right there it corrupts the whole process so what it does is it allows third parties to pay for micromanagement of what you do now once again you can say oh well it's just links on the side of a page just ignore them who cares hey could somebody try to close that door oh I appreciate it so much but then again as technology becomes more and more intimate as we start entering the world of wearables and implants and all this and we will just because of human fragility we're all going to choose to use medical implants that'll really help us as that data starts getting gathered and you start getting at paid options put in front of you it really starts to erode personal privacy and then personal identity and person and free will and this is a concept that this is a concept they sometimes have trouble getting across because we're so used to the metaphor of a person being just like a little computer and the big bigger computer of the internet but let me let me propose this it's at least possible that what it means to be a human being is something we don't quite understand we don't really know how the brain encodes information we don't know how it works we can't reproduce it we don't really know where the sense of experience comes from to say it's an illusion of a complex computer doesn't really say anything because well as I was point out experience is the one thing that is introduced if it's an illusion even an illusion of experience is still an experience you know you see that it gets to be a tricky area of thought so if there might be something special about personhood the thing about personhood is that in order to exercise that there needs to be a little bit of a zone around it where you can get to know yourself get to experiment with yourself in between engagements with the larger world and if the device is cut so closely to you that feedback from them is being entered right into your immediate personal experience that guides you that manipulates you you are losing some free will you're losing some freedom on a really fundamental level if we were absolutely confident in the perfect onions wisdom and benevolence of the remote computers that do that well fine I guess but good luck with that you know that's not the way it is so for one thing because they can't represent reality anyway they're too stupid totally aside from their intent and we're making sense I've just made a leap into philosophy that's a little harder to follow I understand okay good so so what happens is there's a weird trick that takes place when you make advertising become the only official business plan of network information services which is kind of what's happened the easiest way to see it I think is by considering language translation so I should say I love the technology of language translation I've been interested in it for a long time it's fascinating there's the berkeley community is one of the centers of expertise in the world in it and it's just interesting stuff so the history of it is way back in the late 50s a very lovely and generous mentor of mine named Marvin Minsky had once assigned or so I don't know this is the legend but I heard it from him so I think it's probably true he signs some graduate students a summer project of coming up with the perfect parser to translate between natural languages now once again this is one of those things that was honorable at the time to us now it seems ridiculous but at the time nobody knew and remember MIT and that time is also where Chomsky was and Noam Chomsky had this idea of a compact simple representation of the structure of language right so it was not there was it within the intellectual world of the time it was a respectable idea they came back unable to do it and the problem of being able to process natural language remained stuck for many many years but then as the cost of computation came down some folks at IBM labs actually had this idea of just gathering a very large corpus a very large body of examples of real natural language translation and performing correlations to create new translations and suddenly they started getting performance that was the breakthrough so today we're still basically doing that there's some refinement to be done in the algorithms and all that but it's still basically a problem that works on big data so every night algorithms at Google and Microsoft and IBM and maybe three or four other places in the world scour the entire web and a bunch of other sources for the very latest translations because language is a mobile target language is not as a living thing not a dead thing they scour the whole world they take in millions of documents from real people who've done translations and then when you want to enter in a document to be translated phrase by phrase word by word your document is matched up with instances that have already been translated by real people and the reason the result is a mash-up where pastiche of those correlations and you know what it's okay it's not perfect but it's good enough to get by in a lot of cases so it's amazing but there's a real tricky he's a tricky thing that's happened here to the role of people so let's consider the real human translators who are generating all those documents that are scraped every night so I've been corresponding with the professional societies of translators around the world and they've seen a precipitous drop in their own employment in the last few years since automated translation got good it's it's reminiscent of what happened to journalists and musicians and photographers and so on but the weird thing here is that just as with justice with writers and musicians it's not that nobody is interested in what they do I mean if nobody was interested in music YouTube would just collapse right so it's not that people aren't interested in it it's just their efforts have been mashed up in such a way that they're not the ones who benefit anymore they've been disenfranchised even though they're still needed so this is very strange situation where even though they're in a way being more utilized than ever in a way they're more essential than ever and a way their efforts are reaching more people than ever and yet somehow they're getting its and here there's a crucial distinction on the one hand you can complain that they're not getting paid as much which is something to worry about but the much more key idea which is a little different as I explained is they're not having they're not having options for wealth anymore when they do get paid it's more and more piecemeal it's more and more by the page or something there aren't jobs there aren't there aren't positions with security there isn't wealth there isn't any form of royalty there isn't tenure all those things are getting harder and harder to come by so it's a so it's important to both things are true they're getting paid less but even more importantly they're being forced more and more into the informal economy the economy of teaching assistance as opposed to tenure let's say in a campus context so the tricky thing here is that we have a technology which I happen to think is great really useful a benefit to the world we have this huge body of people who are essential to the function of that technology the problem is not the algorithm I don't think there's such a thing as an evil algorithm the problem is not the computers they're just Turing machines doing their thing the problem isn't even the entrepreneurs who offer decent people really in my experience it's just that the ideology has disenfranchised these people who are still essential that's where the screw up is it's a philosophical problem and you have to ask why why must it be this way because just as with Walmart you know if you disenfranchise a big chunk of the population it's it's one thing creative destruction is one thing if you're saying well buggy whips buggy whips are obsolete so buggy what makers are going to lose their jobs that's fine as long as there's new jobs coming up but if you say and in this case there are new jobs feeding these algorithms being a contributor crucial or corpus is a new job but if you say it should be unpaid not only do you destroy that population you gradually destroy the whole economy here's another way to put it on a macroeconomic level if you insist on saying that a whole bunch of the activity in the economy is not going to be on the ledgers because it's part of the sharing economy your Ledger's won't record the economic growth that you should and in a market economy if you don't have economic growth you have a zero-sum game or worse than people turn on each other and it becomes cruel so if you know even if you're a 9r and you know fanatical libertarian you have to admit that markets are kind when they're growing and if they should be growing but we artificially limit our accounting to create the illusion that they're not that's got to be stupid all right does that make sense all right so the thing I want to point out here is that I can voice this complaint either in the language of the left or the language of the right I just did that in the left the languages we're disenfranchising people who shouldn't be in the language of the right is we're using bad accounting to pretend there isn't economic growth when there actually is it doesn't matter which language it is this problem transcends this stupid tiresome old left-right to bid it's a different problem okay still following me all right great this is so now so so here we run into this funny world of these manichaean conflicts that people live by so I find I'm often introduced as somebody who's turned against technology when I hope it's absolutely clear that I haven't I so there's the end there's this sort of anti technology people versus the pro technology people that's a phony debate that's not even worth having in my opinion the left versus right debate has also been made absolutely obsolete by big data I hope I've demonstrated that and I think the good news there is that there's a possibility of Concilium so that might be superior to the ones available before but then having said all that we're still left with a question what do you do about it where to from here and I don't think there's any magic silver bullet here I think this is a tough problem in my last book I've proposed one solution which I'll describe to you which a lot of people really like a lot of people really really hate and I'm aware of five or six paths forward that have been proposed and I can I'll mention some of the other ones too but I don't think anyone really knows precisely what the best way is out of this dilemma it's in a way a dilemma it's a childish dilemma it's very simply that if you happen to be able to get in a position close to one of the biggest computers you get such amazing benefits and such an illusion of omniscience that you just can't believe it isn't so and everybody who finds himself in that position repeats the mistake whether they're at a hedge fund or the NSA or an insurance company or a search company or social network they're all the same and I'll call those things by the way siren servers because homers sirens don't actually grab you and throw you on the rocks it's you who lets yourself become a nutcase so anyway my solution is actually in a way very retro if you go back in the history of digital networks the very first proposal for how to build a digital network is from 1960 now I should say in terms of the history of descriptions of networks um there's a very rich history more than most people realize the potential for interesting communication networks was explored in fiction in the 19th century in a variety of ways and the best example is probably I think it's 1907 iam Foresters short story the Machine stops which roughly describes our present world and includes Facebook and Skype pretty well and and it's kind of interesting you should look at it if you haven't and then there's a famous 1940s piece by guy named Dan of our Bush called mimics how we may how we may think and the mimics was a proposed device it would work on microfiche but was sort of enhanced to include some of the features we think of as in digital networks but the first proposal that actually used digital information as a basis with an understanding of it was from Ted Nelson at Harvard 1960 and the interesting thing about it he was the very first person on the scene and sometimes the first person on the scene is able to have a clearer view than people who come later and Ted's very first idea was precisely to address this economic problem which is just incredible and the reason why is that this economic problem has a long history I mean this question of whether new technologies throw people out of work or not was the original obsessive question that motivated Marx to think about an alternative approach to economics it's been this huge thing for a long long time which I could go into so there's a very long history of it and what he was looking at is hey did a digital network which had never been conceived before would be way to address this thing in any way and so what he proposed and remember this is not somebody taking this idea of a digital networking then applying these ideas to it this is the first expression of the idea of a digital network just to be very clear about that so his thought was you know we could make a thing called a digital network where somebody made use of somebody else's efforts in some way there would be a link that would keep track of that and then when they made any money from what they did there would be an automatic royalty that would pay back instead of the present system of all-or-nothing benefits where you either get tenure or you don't you either win the copyright or you don't you get the patent or you don't you get the taksim down or you don't instead of that world very crude total cut-offs there'd be this gradual world where people would automatically as a matter of course be able to use anything would be the open world and yet it would be a radically compensated world - it was a really interesting idea Ted is still with us he lives on a houseboat in Sausalito he's getting honored at Chapman College in a couple of months with a special Lifetime Achievement Award where I'm going to go down to speak down in LA or Orange County actually and it's an amazing thing now the problem was that Ted is the quintessential countercultural person like I look Connor contra cultural because of my hair but Ted's really countercultural and he's just oh he's just really a hippie beatnik and instead of just getting a bunch of programmers Theo to build this they have to be some sort of collective and they have to I don't know it just it just got it just got burdened by the cultural excesses of the time Oh am i overtime or something well tell me give me sense of where I'm at in the time oh my god is that one it's just stuff all right I'll wrap this up in two sentences I'll wrap this up in two sentences then I'll take questions if people want to stay sorry about that I don't so for the first ten years of thinking about networks through the 60s this was considered what a digital network would be and then during the 70s and 80s and 90s gradually lost those qualities piece by piece very particular technical qualities like whether links are two-way or one-way that sort of thing until by the time the web was born and then the modern digital economy all of those economic ideas have totally been divorced so that the only from the design of network so the only beneficiaries are the people who own the biggest computers so getting it right the first time would have been a lot better than trying to claw our way back to getting it right but I don't think we have any other choice so there's two sentences long put them all right so that's the talk questions well you were first I feel free to go if you have to done yeah my question as you mentioned the best we've ever had probably human history maybe not the best but the nicest nice ok yeah I guess sort of my question is it's not so much how nice they are it's something that you touched on during your college is that just fact that they are Li and that they are in the system and that they're sort of a prevailing ideology system makes it very difficult to get things like this like distribute distributed compensation mechanism running I'm interested in your thoughts on yeah technology like how sure that I guess in a sense yeah sort of sort of that aspect this is how we can work together it's the worst thing that you happen is working well okay so in my view there's some successes in history that are worth considering as precedents for how to improve the situation and in particular I'm really interested in the post-war period in the twentieth century we had decades of of stability and a growing middle class and general betterment in the developed world with you know Pacific Rim in Asia North America Europe anyway really kind of amazing so how did that happen and in my view there was a confluence of two things that made it happen one was the labor movement which was a sort of a softened version of leftism that just thought you know argued that within a market system labor should be able to coordinate their negotiations instead of being forced to negotiate as Singleton's the other one though is a little less well known and really needs to be known which is that the major industrialists of the late 19th century and early early 20th century had come to realization that if they didn't make their customers rich they couldn't become as rich as they wanted to be so the most famous example which is hauled out often but I think it should be is Henry Ford and I think what makes the example so powerful is that he was such a bastard we have a genuinely none charitable racism cream so there's absolutely no sense of this guy having any goodwill towards anybody and if you think I'm talking about immediately you should hear his own descendants talk about him he was just a bad guy he was kind of a fascist but the thing is he was a greedy fascist and what he did is he insisted that his own factory workers be paid enough that it would force his other industrialists to pay their factory workers more so that they'd be able to afford cars and so there's this interesting unintentional cooperation between labor and management which nobody would want to admit to but it did happen because without that you can't have economic growth and exactly the same argument applies if you're running one of the big siren servers now you can either extract wealth from a stagnant economy or you can grow an economy and grow with it which choice gives you more so you know it's a little complex but overall you're better off supporting a strong economy and this is also by the way why we should support and equitably like I mean I'm I'm a one-percenter I guess weirdly enough at this point of my life and yet I realize this society I live in is infinitely more important than personal wealth to one's experience you know so at some point enlightened self-interest is precisely the motivator so if we can get through to a creep like Henry Ford it ought to be able to get through the very decent overlords of Silicon Valley and Wall Street that's not to say it'll happen instantly but I think there's a lot of hope for it because it happened before no cuu but I want to get to Carlo but I I want to do the Oracle oh ok ok ok Carlo and then your flow there thank you very much now you mentioned that we have this inequality and distribution of wealth and there are some people on the top and they're actually you know probably good people and well-meaning and all of that but I think in a way they're paired now with other entities and they're called corporations and they seem to be another entity that's also at the top and it seems much harder to control these entities because they have their own logic and we could for instance say why don't we tax corporations like individuals on a very progressive rate in order to control growth but I think these corporations would not in their self-interest allow this to happen so can we hope that maybe the few well-meaning individuals are strong enough to stand up against these other partners at the top hmm well the thing to understand is that the the siren server regime is superior to the corporate regime at this point siren servers tend to be so tightly held that the only major one where there's corporate governance is Microsoft all the others are so tightly held that if if the status of Corporation has changed through Moodle and move like that they just they would privatize so so you have to understand that this system is far far more powerful than the existing power structure of the idea of the corporation it just supersedes it so it would just be jettisoned in a second we've already seen that happen in the financial services industry where it was able to jettison all the structures that were constraining it the power concentration of having a top information server I didn't even get into the influence on elections and there's a lot of stuff I didn't get to but the amount of power concentration is such that traditional structures aren't that relevant to it thank you I'd like to ask you about access and wealth and bring in your or the case of your your musicians and the case of your translators and I see two different things happening here and how they're related I would like to ask you about one is access consumer access has brought the disappearance of musician say of opera because consumers instead of going to a local opera will go online and get the big stars who accumulate wealth and all the others appear by real data that's actually not true but go on yeah where is the disappearance of translators we don't have a consumer access to the network but we have a production access to network in other words the reason translators are disappearing here is because India is producing them translations being done in India rather than here so our local translators are disappearing so there's access a consumer access and production access which seem to be redistributing wealth in different ways the one to the top and the other more to the masses they're just in a different country but they're the masses or even more masses than we are look any ideas a lot to say there one thing I'm realizing there's a huge branch of my argument I just didn't have time to make which is that what's happened with the pure Information industries now like translators and musicians will happen to you transportation manufacturing health care everything else energy waste management all those things will get robota sized or made hyper efficient through information systems so that this is the prototype for the whole of the economy that's a crucial thing to understand because if you're only talking about what's sometimes called the creative classes that would be a small part of the economy and it might sound a little whiny to be too worried about it as a member of it but in fact it's it's everything that's occasionally but then all right so this gets in there's a bit of networked math here which is really fascinating which is absolutely crucial to answering your question let's first talk about the example of musicians you talk about people going for the most famous well here's something really amazing if there are two broadly speaking or two prominent network structures that bring people contact with music these days one is what we call a hub and spokes model which would be like iTunes where you have a central authority and everything connects through it if you look at what people are exposed to on that it tends to be zipfian you tend to have a power-law or long tail with everybody going to the top thing so the Beyonce down or something like that but if you have a thickly connected network where people communicate with each other and there's not really a central authority and there are a lot of examples of that one would be a Facebook like system social networking but the massive collaboration collaborative systems like Linux or Wikipedia or another example even though Wikipedia is more centralized than people like to admit but they're more they're more thickly connected anyway then the distribution of information that others that an average person is exposed to has a middle-class hump to it like that instead of the zip curve you get a strong middle and so it actually shifts so in fact an ethically connected network you don't tend to see this concentration that's a crucial empirical result which surprised me but it's been replicated many times now so that's that's interesting and to me it's a sign of hope it means that if that were monetized would get a middle class out of it in the middle class is the only way to have a non corrupt democracy so it's a whole chain of thoughts I didn't get up get into it all right um and then as far as production versus just consumer versus sourcing all right this is another whole interesting story so I can borrow an idea from early Marx if I may while repudiating Marx utterly who liked it mark says Marx and Henry Ford are kind of the same they're people whose ideas played out really badly in some ways but they had they were they had some good so then Marx is nicer than Henry Ford but I still think his ideas played out just dismal II anyway marks um Marx didn't view globalization as distinct from optimization or obsolescence he viewed them all as part of the same process and I do too so if the network can optimize where the work is done and can offshore something effectively that's just part of the same overall ability of a central computational ability to optimize other people to its advantage now it has to be said that the way this progress is always is that initially you move it on you move it to wherever the Qi as people are and then you even automate them away so we move many Walmart optimizes the world to move manufacturing to China and then robots will bankrupt China suddenly it's true that there are some services that have moved translation to India but then automated translation will bankrupt those very quickly so it's the same process over and over again and it will apply to every sector of the economy it should be viewed not as two different ideas in opposition but as part of the same process hi hi I'm Matt and I've lived a lot in Europe and the housing is a lot more egalitarian there now Google is being hated now because of the Google buses because of all the evictions in San Francisco yeah don't the founders care about their legacy I mean they could get a hundred year loan at 0% interest for a hundred billion dollars buy apartment buildings let all those working stiffs stay there with their families instead of kicking people out in the street I know they're not stupid but don't they care about how they're viewed I have well you know this is a tough this is a tough issue um where any of you here when I debated Peter Norvig with Neil Stevenson on campus awhile ago so if you remember Peter who's Karen you know Peter's great right he's great guy but you know we were talking about this stuff and he was saying well you know maybe what should happen is we should just be the people who are left behind by digital optimizations or automations we should just start paying them just a stipend to be alive and that's an idea that's gaining some currency around the world there's a move to do the Switzerland for instance and if you look at one among the peat among the Silicon Valley sort of elites there's a tremendous sense of guilt for the damage we've done to journalism in private discussions a lot of people will say wow these horrible wars in the Middle East during the Bush years Afghanistan and Iraq maybe Afghanistan had to have but Iraq didn't like what a stupid thing and maybe if we'd have a stronger stronger press it would have helped but we had just destroyed it and so now what you're seeing is Silicon Valley people propping up the press so basically I mean if you gradually Silicon Valley is paying for our journalism you have I mean the the New York Times is a funny case but a guy who runs a cellphone Network which I view is just a siren server of a certain kind don't sneer times and then the guy from Amazon just bought the Washington Post and on and on there all these things so it's being propped up and as the cable companies eventually follow those will also be propped up but you know should we do it for the whole society and here you run into this issue that patronage like having Borges be your landlord like no matter how good they are at first their kids will probably be not as good like I don't think it's a good setup for a society so I mean I understand the impulse to say there they're so rich why don't they just fix it but the problem with it is that that would concentrate and on it would enshrine a kind of power that they shouldn't have you know and so I understand the impulse and by the way they do care from the ones I know not all look let's just be really honest there's some Larry Ellison cares less than somebody like Sergey I mean like their variations and their personalities but you know most of them are good most of them are decent people and from their point of view is like well we did the best thing out of this kind of we were just trying to you know reduce global climate change and emissions and congestion we're trying to do this good thing why do people want like our buses like so from their perspective they're trying to do the right thing and it's it's a tough one I mean there was this event that happened a while ago where some of the protesters of one of the buses near the Astra BART station followed a googol guy home and surrounded his house when he was in there with his kid and I'm like that's just crazy guys come on like it's always possible to make enemies of each other but this is way premature here like we should right so I mentioned their other solutions the one I I just described one path that I'm interested in there's some other ideas but I do think asking them to fix the problem with their money is not the right long-term thing it just will enshrine it'll enshrine a superclass I don't think it's the right idea but I mean I understand where it's coming from them all right hey thanks

Channel: CITRIS

Views: 64,842

Rating: 4.8898759 out of 5

Keywords: Data and Democracy, CITRIS, Berkeley Center for New Media, Data and Democracy Initiative

Id: VSH9gOqevRc

Length: 66min 3sec (3963 seconds)

Published: Wed Feb 19 2014

Reddit Comments

[u/[deleted]]

Well this was fucking terrifying and only helps to confirm my fear that I’m already obsolete. They cut this son of a bitch off too early, he had another hours worth to talk about. Good share.

[u/ghostiebehindyou]

Well, that was fascinating, off to watch more of him...

[u/Floxxomer]

Great talk.

[u/toroawayy]

Listen to his podcast w/ Ezra Klein. It's pretty amazing

[u/HungryGeneralist]

This guy is talking about what we should all be talking about - thanks for sharing, this is a name I'll remember :)

[u/[deleted]]

I found this talk enlightening and uplifting. We all know how f'ed up things are. Our overloads are generally benevolent or disinterested. The question is how to convince the benefactors of the status quo to force structural change to the economic system.

Guarenteed 'special' status? Market immune wealth? Why should they give up anything? Aside from the kindhearted idealism that equality yield a better safer world.