Like most, I find every remark surrounding the 2020 election explosive. Notice as each party rebrands its relationship to business. Senator Warren saber rattles at Amazon. President Trump does too. Andrew Yang embraces big tech but caveats with universal basic income. Taxes? Guns? Such relics, one can hope, will be sidelined to Bezos, automation, and the technocrats at large.
Something fundamental has changed in the market. Rockefeller was demonized for wanting the oil. How quaint this seems today! Amazon and Google want your entertainment, cars, apparel, groceries, drones—anything software can touch.
These ambitions aren’t differences of degree but in a paradigmatic shift. Capitalism commented on economies of agriculture and manufacturing. The digital economy is different. It is, in Kevin Kelly’s analogy, like trying to describe the behavior of liquids by the rules of solids.
We face a new version of capitalism: platform capitalism, and how we respond to it ultimately impacts our sovereignty as citizens and as a species. It may be the biggest ruse ever.
Economies of Scale vs. Critical Mass
Capitalist apologetics misunderstand how the tech giants grow. Specifically, this is the difference between economies of scale and critical mass. At first, they look similar. With scale, they’re different beasts.
Termed by Adam Smith, economies of scale dictate efficiency increases nonlinearly with growth. If a car factory doubles its size, its output will more than 2X. At doubled size, qualitative shifts occur in worker collaboration, air ventilation, assembly line flow and so on. China’s Foxconn isn’t like tens of thousands of strip-mall-iPhone-repairmen in a warehouse, it’s a different animal.
This is why capitalism reveres tycoons. Rockefeller was so obsessive over operations, he cut the price of his oil barrels from $2.50 to 95 cents by buying acres of white oak timber, kilns to dry the wood, assembly factories, and horse wagons to ship the finished goods to Cleveland. This efficiency allowed him to reinvest more capital into other schemes to then raise more capital. Setting aside skepticism for a moment, this obsession resulted in widely accessible oil prices.
What’s changed is the introduction of a new category of value: platforms. Platforms are digital interfaces that connect people to goods, services, or other platforms. Platforms never compete with goods or services, even if they resemble them. Rather, they operate on a second, abstracted order that organizes the various industries.
As the newest form of value, platforms show correspondingly new behaviors. Primarily, this is through critical mass. Via network effects, critical mass describes the point where entities grow because of their size and to the exclusion to the rest of the market. Linguists point out multiple oddities in the English language, but it’s too big to replace. A few people drinking eventually can become a party accepted at face value. Past a certain point, some things have so much momentum they preclude other options.
This describes platform growth. A platform’s first priority is to grow a crowd that people want to join. Bigger crowds are more profitable and are harder for competitors to move. They don’t need to diffuse their operations across the country like Standard Oil. Platforms need brand awareness and for people to log on.
How do you cross into this glorious territory? Essentially: with financial ingenuity. If growth is the first priority, everything can be subordinated to it. This doesn’t mean sacrificing quality. On the contrary, it requires creating an impractically great product while convincing investors that profits are coming later. You hit critical mass and then ‘monetize at scale’.
And so Amazon charges for shipping, later. Medium limits article reading later. Privacy scandals come later. Data auctioning to Brexit, Steve Bannon, and China come later. Obnoxious banner and interstitial ads come later. The suspension of value that used to be free but is now ‘Premium’ compared to the substandard, sunken, free model – comes later. Critical mass comes first.
What results is a skewed version of capitalism. Quality wins, but only with the implicit agreement that it’s unsustainable. Facebook would’ve been screwed if Cambridge Analytica leaked in 2005. Now it’s too big to be killed.
Abuse of Power: We are the products, not the customers
Though platforms are a distinctive value form, they’re ultimately transient. The harvest must come. The financiers must eat. This is acceptable since critical mass no longer needs customers to be the point.
Privacy scandals are one layer of the abuse. Beyond mom and pop shops using targeted advertising ‘just to get the word out’, more and more exposes show Facebook sells galaxies of data to multinational corporations, Steve Bannon’s Cambridge Analytica, Brexit, China, and anyone, really, willing to throw down. Thus, platforms transition into a B2B or B2G data auctioneer.
The underlying sickness, not the symptoms, is what should concern us most. In platforms, the user is lured in by a seemingly free, impartial experience. Then, they become fodder to be experimented on, monitored, and tinkered with. In the words of Jaron Lanier – godfather of VR – we are the platform’s products, not its customers.
The underlying sickness, not the symptoms, is what should concern us most. In platforms, the user is lured in by a seemingly free, impartial experience. Then, they become fodder to be experimented on, monitored, and tinkered with. In the words of Jaron Lanier – godfather of VR – we are the platform’s products, not its customers.
We are, for example, to click and scroll by any means necessary. Reacting to user interest, Instagram will push content from hashtags in self-harm, bulimia, and suicidal behavior. In one case, Instagram nudged a teenager to suicide with more hashtagged pictures of self-harm. Currently, the father is pressing charges.
This is likewise with political media. Yes, mainstream Washington deserves scorn. Political dialogue becomes impossible, however, when the algorithms only reward the most inflated and radical content. As both sides retreat into their echo chambers, it becomes impossible to hear each other across the gap.
Apologists will counter that platforms give people what they want. They’ll neglect that this technology is addictive. Innumerable MRI scans are proving social media is indistinguishable from drugs in the brain. It’s literally what AI PhDs observe in the abstract as they optimize scroll time and click-through rates. Facebook gives people what they want, but this logic also validates drug dealers, big tobacco, big sugar, and other predatory entities we ban kids from and regulate.
Even while social media incentivizes radical content, however, it’s clear it does so with a slant left. ‘Learn to code’ was originally a left-wing meme for unemployed coal miners:
Whether or not these journalists meant well, it should be karma to take your own medicine. When Buzzfeed, Vice, and other publishers fired thousands of journalists, however, the critics couldn’t. Their meme inverted on them as users told them it was fine they were fired since coding is the industry of the future.
The complaints mounted until Jack Dorsey took action. Thousands of primarily conservative twitter accounts were de-platformed. And so even as ISIS and Antifa continue tweeting, when journalists feel hurt people get banned.
Again, the underlying power structure, not left vs. right, should be the concern. A capitalist would argue that nothing stops people from joining Gab, 4Chan, or starting their own platform. If we’ve entertained critical mass thus far, however, we’d understand they don’t have a chance at the same scale. The analogy isn’t “you can’t go to McDonald’s, go to Burger King”. It’s some combination between being banned from using dollars, getting your utilities cut off, and being forcibly removed from the public square.
These are all symptoms of unchecked power. When medieval kings failed, it was always clear who would get the guillotine. Today’s technocrats apologize to Congress, admit that mistakes were made, that, once more, they’re very sorry, but that they were merely trying to connect the world. A fine is paid, and the bureaucrats leave confident they’ve fulfilled their duties.
Nationalize, Not Bust
Thus the conclusion is as predictable as the title: nationalization. Under normal circumstances, the state would trust bust the monopolies to clear room for competition. Because the data they’ve harvested, however, the scope of platforms exceed the free market. The platforms have reached into issues that the state must reclaim for itself.
Suppose, for example, a startup disrupts Facebook. As Facebook’s advertising revenue is cut off, this could force them to auction off data to more unaccountable entities besides China or Cambridge Analytica. This is a national security issue. The platforms have become opportunistic with their hoards of data. The onus is on the state to properly secure and contain it.
Platforms are also tinkering with Strong AI. Google Executives, like Ray Kurzweil, writes manifestos on how AI can and should replace human self-determination. The rest of Silicon Valley is fairly unanimous that AI should replace driving, healthcare, and major state decisions. It is, to a large extent, the righteous cause that rationalizes the data hoarding.
Yet whether AI can be controlled is still ambiguous. Taken seriously, a Strong AI would look at human intelligence the same way we look at dog intelligence. It will have qualitatively different thoughts that may be totally independent of human morality.
Yet whether AI can be controlled is still ambiguous. Taken seriously, a Strong AI would look at human intelligence the same way we look at dog intelligence. It will have qualitatively different thoughts that may be totally independent of human morality.
Besides Kurzweil, the late Stephen Hawking was emphatic AI is an existential risk for humanity. Elon Musk repeatedly warns: “We’re summoning the demon”. These demonstrably brilliant men are on the inside and know that skewed incentives are at play.
The digital economy’s full ramifications have blindsided us. The response doesn’t merely require regulation or trust busting. In the name of national and human security, the profit motive must be totally divorced from managing data or gambling with Strong AI. As such, the only practical solution is to nationalize these companies.
