January 2019 – Sheila Kennedy

We The Raw Material

A recent article in the Guardian began with a paragraph that struck me as incredibly important, not just as an introduction to the subject-matter of the article (Surveillance Capitalism) but as an explanation for our tribalized and angry age.

We’re living through the most profound transformation in our information environment since Johannes Gutenberg’s invention of printing in circa 1439. And the problem with living through a revolution is that it’s impossible to take the long view of what’s happening. Hindsight is the only exact science in this business, and in that long run we’re all dead. Printing shaped and transformed societies over the next four centuries, but nobody in Mainz (Gutenberg’s home town) in, say, 1495 could have known that his technology would (among other things): fuel the Reformation and undermine the authority of the mighty Catholic church; enable the rise of what we now recognise as modern science; create unheard-of professions and industries; change the shape of our brains; and even recalibrateour conceptions of childhood. And yet printing did all this and more.

Why choose 1495? Because we’re about the same distance into our revolution, the one kicked off by digital technology and networking. And although it’s now gradually dawning on us that this really is a big deal and that epochal social and economic changes are under way, we’re as clueless about where it’s heading and what’s driving it as the citizens of Mainz were in 1495.

These paragraphs were a lead-in to a description of Shoshana Zuboff’s new book, in which she describes “Surveillance Capitalism.” Zuboff is a Harvard Business School professor, and her basic insight is that the changes being made are less about the nature of digital technology and more about a “new mutant form of capitalism” that uses tech for its purposes.

It works by providing free services that billions of people cheerfully use, enabling the providers of those services to monitor the behaviour of those users in astonishing detail – often without their explicit consent.

“Surveillance capitalism,” she writes, “unilaterally claims human experience as free raw material for translation into behavioural data. Although some of these data are applied to service improvement, the rest are declared as a proprietary behavioural surplus, fed into advanced manufacturing processes known as ‘machine intelligence’, and fabricated into prediction products that anticipate what you will do now, soon, and later. Finally, these prediction products are traded in a new kind of marketplace that I call behavioural futures markets. Surveillance capitalists have grown immensely wealthy from these trading operations, for many companies are willing to lay bets on our future behaviour.”

The essential point being made is that we live in an era of both state surveillance and its capitalist counterpart, in which digital technology is separating people into two groups: the watchers (invisible, unknown and unaccountable) and the watched–the “raw material.” We can limit state surveillance through the law, but at this point, there is no law restraining the use of our data by Facebook, Google, et al.

This has profound consequences for democracy because asymmetry of knowledge translates into asymmetries of power.

I have no way of evaluating either the accuracy or the imminence of this threat. And that brings me back to the article’s opening paragraph. We are living in a time of profound change, and anyone who says they know where that change is taking us is smoking something very strong.

We are “raw material” in so many ways…..

Comments

It’s Complicated

The usual reason economists oppose monopolies is that when a business effectively dominates a particular market, it is able to raise prices. A monopoly has effectively eliminated the competition that keeps prices low. The higher prices harm consumers, and allow the company to rake in more profit than it would otherwise be able to generate.

One of the criticisms of the current administration (a criticism that tends to get lost among the mountain of others) is that enforcement of anti-trust laws has been somewhere between lax and non-existent.

Despite their almost-universal support for vigorous anti-trust enforcement, however, few economists identified a relationship between monopolies and the growth of inequality. As a post from Inequality.org informs us, that may change.

Andrew Leigh is both a member of the Australian Parliament and an economist, and his recent research is making waves.

Working with a team of Australian, Canadian, and American analysts, he’s been studying how much the prices corporate monopolies charge impact inequality.

The conventional wisdom has a simple answer: not much. Yes, the reasoning goes, prices do go up when a few large corporations start to dominate an economic sector. But those same higher prices translate into higher returns for corporate shareholders.

Thanks to 401(k)s and the like, the argument continues, the ranks of these corporate shareholders include millions of average families. So we end up with a wash. As consumers, families pay more in prices. As shareholders, they pocket higher dividends.

But this nonchalance about the impact of monopolies, Andrew Leigh and his colleagues counter, obscures “the relative distribution of consumption and corporate equity ownership.” Average families do hold some shares of stock, but not many. In the United States, for instance, the most affluent 20 percent of households own 13 times more stock than the bottom 60 percent.

In other words, when prices rise, low- and middle-class families pay and wealthy families profit. According to Leigh and his fellow researchers, this redistribution from the less affluent to the wealthy via corporate concentration has shifted 3 percent of national income out of the pockets of poor and middle-class families and into the wallets of the affluent.

The research also shows that corporations grow large because there are incentives to growth to which their executives respond.

Indeed, firm size determines how much executives make more than any other factor, as research has shown repeatedly over the years. Executives don’t have to “perform”— make their enterprises more efficient and effective — to make bigger bucks. They just to need to make their enterprises bigger.

Executives, in short, have a powerful incentive to grow their companies, and that powerful incentive, as the latest research from Andrew Leigh and his colleagues shows, isn’t just making these executives richer. It’s leaving our societies much more unequal.

An obvious lesson from this research is that we need much more robust anti-trust enforcement. Another remedy, just now being tried, is a requirement that corporations publish the pay ratio between their CEOs and their workers. (Portland, Oregon imposes an “inequality tax” on companies reporting too wide a disparity.)

Evidently, size does matter–at least, in corporate America.

Comments

Rejecting Science

Watching the Trump Administration, I am reminded that there are many kinds of collusion.

The dictionary defines collusion as secret agreement or cooperation for an illegal or deceitful purpose. The Mueller investigation is pursuing a particularly egregious form–one that, if proven, would legally be considered treason. Americans are focused on that allegation to a degree that overshadows other activities by this Administration–activities that involve a more “homegrown”variety of collusion, and tend to carry less serious legal labels.

Trump’s war on science in cooperation with favored industries is, in my view, every bit as treasonous as his relationship with Russia.

The Guardian recently documented that assault.

Donald Trump’s administration is cutting programs scientists say are proven to protect Americans, from pollution safeguards to teen pregnancy prevention and healthier school lunches, with effects that could last for years.

Experts who have worked in the federal government under Republicans and Democrats say both have sometimes put politics ahead of science but none have done so as blatantly as Trump. And they warn the consequences could continue long into the future.

“It’s as egregious as I’ve ever seen it, starting from the very top with the president just denying the existence of science, manipulating the system on behalf of special interests,” said the former surgeon general Richard Carmona, who testified to Congress that the George W Bush administration pushed him to weaken or suppress public health findings.

Science writer Timothy Ferris has noted the connection between science and liberal democracy; in his book The Science of Liberty, he also documented the historical connection between anti-science and totalitarianism. As he writes, new scientific knowledge exposes prior ignorance and error, a process that doesn’t pose a problem for democratic regimes, since fallibility is a given in such cultures, “but it leaves totalitarian leaders clinging to outmoded doctrines in a changing world.” He quotes China scholar H. Lyman Miller,

Just as the scientific community operates according to anti-authoritarian norms of free debate…so science prospers in an external environment that similarly tolerates pluralism and dissent…Scientific dissidents espoused a strong form of liberal political philosophy that grew out of the norms of their profession.

The assault on science, on evidence and on the proper process for achieving reliable data is an assault on liberty and democracy. Refusing to act on the basis of scientific evidence that inconveniences political allies not only causes significant harm to public health and the environment, it is an attack on reason, progress and the rule of law.

In my view, such behavior is every bit as treasonous as taking orders from Vladimir Putin.

Comments

George Will On Our “Shabbiest” President

When one self-regarding man undertakes to analyze another, it can get interesting.

I typically find George Will to be just this side of insufferable. If we are talking about people who clearly take themselves way too seriously, he may well set the bar for the category. That said, he is clearly very intelligent, and occasionally he’s even insightful. (I’m told by baseball fans that his observations about the game are excellent.)

At any rate, his recent description of Donald Trump in “The Shabbiest U.S. President Ever” strikes me as “on the money.”

The current iteration of the Republican Party doesn’t escape Will’s wrath, and he’s properly scornful of the Senate’s unwillingness to act as part of an independent branch of government. But he saves most of his considerable vocabulary of insults for Trump.

The president’s most consequential exercise of power has been the abandonment of the Trans-Pacific Partnership, opening the way for China to fill the void of U.S. involvement. His protectionism — government telling Americans what they can consume, in what quantities and at what prices — completes his extinguishing of the limited-government pretenses of the GOP, which needs an entirely new vocabulary. Pending that, the party is resorting to crybaby conservatism: We are being victimized by “elites,” markets, Wall Street, foreigners, etc.

After 30 years of U.S. diplomatic futility regarding North Korea’s nuclear weapons program, the artist of the deal spent a few hours in Singapore with Kim Jong Un, then tweeted: “There is no longer a nuclear threat from North Korea.” What price will the president pay — easing sanctions? ending joint military exercises with South Korea? — in attempts to make his tweet seem less dotty?

Will spends a few sentences berating the media for its “lazy” fixation on “Trump as shiny object.” Then he gets serious.

Dislike of him should be tempered by this consideration: He is an almost inexpressibly sad specimen. It must be misery to awaken to another day of being Donald Trump. He seems to have as many friends as his pluperfect self-centeredness allows, and as he has earned in an entirely transactional life. His historical ignorance deprives him of the satisfaction of working in a house where much magnificent history has been made. His childlike ignorance — preserved by a lifetime of single-minded self-promotion — concerning governance and economics guarantees that whenever he must interact with experienced and accomplished people, he is as bewildered as a kindergartener at a seminar on string theory.

Which is why this fountain of self-refuting boasts (“I have a very good brain”) lies so much. He does so less to deceive anyone than to reassure himself. And as balm for his base, which remains oblivious to his likely contempt for them as sheep who can be effortlessly gulled by preposterous fictions. The tungsten strength of his supporters’ loyalty is as impressive as his indifference to expanding their numbers.

This strikes me as an accurate–indeed, a perceptive– description.

I just can’t help wondering what a similarly penetrating examination of George Will would look like.

Comments

A Few Thoughts On The Recent Shutdown…

According to a number of reports, Donald Trump’s poll results declined significantly during the government shutdown. Since I cannot fathom why anyone still does support this ridiculous and pathetic man, I’ll leave it to others to mull the implications of those polls.

The shutdown and its aftermath were instructive, however, on a number of dimensions.

First and foremost, it delivered a striking rebuttal to the GOP’s constant refrain that government is never the solution, it’s the problem. A post to Daily Kos noted that the constant media references to 800,000 government employees understated the wider effect of the shutdown: at least 40 million people were affected in one way or another. Many endured long security lines at the airport, and uncertain safety in the air. Others couldn’t get tax questions answered (no one answered the IRS phones).

Businesses that depend upon patronage from government employees have seen steep declines: everything from food trucks at the National Mall to landlords accepting Section 8 vouchers, to cafes and delis accustomed to drawing their lunch crowds from nearby government buildings have seen fewer customers.

It’s not just business. Even anti-government ideologues rely on federal food inspections. Even elderly Fox News viewers expect and need their Social Security checks. Local governments require the dependable remittance of federal program dollars. The list goes on.

The shutdown also exposed a previously unappreciated risk to private companies and not-for-profit organizations that do business with government–or more accurately, do the government’s business. Millions of Americans are effectively government workers due to the terms of outsourcing contracts–what we like to call privatization. (Estimates of the number of people who–although not technically employed by government– work full-time delivering government services run as high as 18 million.) The shutdown idled millions of those contract workers–and unlike employees who actually get their paychecks from government–they won’t be paid for their enforced “vacation.”

And of course, economists are busy calculating the amount of the economic “hit” caused by the shutdown, and estimated to be in the billions.

All of this damage was the consequence of a profoundly stupid demand for a wall that will never be built and would do nothing to deter undocumented immigration or drug traffic if it were.

The voters who still support this President want that wall as a symbol, not a barrier; they want to send a message to folks south of the border. We don’t want your tired, your poor, your huddled masses yearning to breathe free–at least not if their skin is brown or black. I am more convinced than ever that Trump’s support comes from people who embrace a mythical American past in which white guys ruled the roost–where women were subservient and dependent, and other men were inferior by definition.

I do wonder how those supporters rationalize away the fact that Trump folded–completely caved–by accepting exactly the deal he’d initially rejected, and that the ignominious end to his bluff was engineered by a highly competent woman.

That last fact is responsible for my shadenfreude.

I think I love Nancy Pelosi.

Comments