Very interesting article by Joel Kotkin, who researches the economics and politics of cities. It portrays a future that resembles feudalism more than free market democratic capitalism. I’d optimistically venture there will eventually be a more humanist backlash against the future dominance of technology.
The unaffordable Bay Area, Google’s new neighborhood ‘built from the internet up,’ and China’s police state each offer glimpses of what the tech giants plan to sell the rest of us.
The drive to redesign our cities, however, is not really the end of the agenda of those who Aldous Huxley described as the top of the “scientific caste system.” The oligarchy has also worked to make our homes, our personal space, “connected” to their monitoring and money machines. This may be a multibillion-dollar market soon, but many who have employed such devices at home—appliances that track our activities and speak to us like loyal servants—find them “creepy,” as they should, given that their daily activities are fed back to enrich the high-tech hive mind. Both the city and house the future may owe more to Brave New World than Better Homes and Gardens.
This is a vision of the urban future in which the tech companies’ own workers and whatever other people with skills the machines haven’t yet replaced are a new class of urban serfs living in small apartments, along with a much larger class of dependent persons living on “income maintenance” and housing or housing subsidies provided by the state. “Bees exist on Earth to pollinate flowers, and maybe humans are here to build the machines,” observes professor Andrew Hudson-Smith, from University College London’s Centre for Advanced Spatial Analysis. “The city will be one big joined-up urban machine, and humans’ role on Earth will be done.”
Below are excerpts from a fascinating series of articles by The Guardian (with links). The articles address many of the ways that Internet 2.0 network media models such as Google, Facebook, YouTube, Instagram, etc. are transforming, and in many cases undermining, the foundations of a democratic humanistic society. These issues motivate us at tuka to design solutions to the great question of life’s meaning.
Personally, I don’t believe this dystopia will come to pass because humans are quite resilient as a species and eventually our humanist qualities will dominate our biological urges and economic imperatives. We have free will and ultimately, we choose correctly.
Perhaps that is an overly optimistic opinion, but Internet (or Web) 3.0 technology is rewriting the script with applications that reassert human control over the data universe. We will build more humanistic social communities that employ technology, with the emphasis always on the human. We see this now with the growing refusal to surrender to Web 2.0 by tech insiders.
See excerpts and comments below.
“If politics is an expression of our human will, on individual and collective levels, then the attention economy is directly undermining the assumptions that democracy rests on.” If Apple, Facebook, Google, Twitter, Instagram, and Snapchat are gradually chipping away at our ability to control our own minds, could there come a point, I ask, at which democracy no longer functions?
There are 1.5 billion YouTube users in the world, which is more than the number of households that own televisions. What they watch is shaped by this algorithm, which skims and ranks billions of videos to identify 20 “up next” clips that are both relevant to a previous video and most likely, statistically speaking, to keep a person hooked on their screen.
Company insiders tell me the algorithm is the single most important engine of YouTube’s growth. In one of the few public explanations of how the formula works – an academic paper that sketches the algorithm’s deep neural networks, crunching a vast pool of data about videos and the people who watch them – YouTube engineers describe it as one of the “largest scale and most sophisticated industrial recommendation systems in existence”.
We see here the power of AI data algorithms to filter content. The Google response has been to “expand the army of human moderators.” That’s a necessary method of reasserting human judgment over the network.
The primary focus of the article then turns to politics and the electoral influences of disinformation:
Much has been written about Facebook and Twitter’s impact on politics, but in recent months academics have speculated that YouTube’s algorithms may have been instrumental in fuelling disinformation during the 2016 presidential election. “YouTube is the most overlooked story of 2016,” Zeynep Tufekci, a widely respected sociologist and technology critic, tweeted back in October. “Its search and recommender algorithms are misinformation engines.”
Apparently, the sensationalism surrounding the Trump campaign caused YT’s AI algorithms to push more video feeds favorable to Trump and damaging to Hillary Clinton. One doesn’t need to be a partisan to recognize this was probably true for this particular media channel and its business model that values more views more than anything else.
However, this reality can also be distorted to present a particular conspiracy narrative of its own:
Trump won the electoral college as a result of 80,000 votes spread across three swing states. There were more than 150 million YouTube users in the US. The videos contained in Chaslot’s database of YouTube-recommended election videos were watched, in total, more than 3bn times before the vote in November 2016.
This, unfortunately, is cherry-picking statistical inferences concerning the margin of voting support. What was significant in determining the 2016 election outcome was not 80,000 votes across three states, but a run of popular vote wins in 2,623 of 3,112 counties across the U.S. This 85% share could not be an accident, nor could it be due to the single influence of disinformation, Russian or otherwise. The true difference in the election was not revealed by the popular vote total or the Electoral College vote, but by the geographical distribution of support. One can argue about which is more critical to democratic governance, but this post is about electronic media content, not political analysis.
The next article further addresses how technology is influencing our individual behaviors.
Justin Rosenstein had tweaked his laptop’s operating system to block Reddit, banned himself from Snapchat, which he compares to heroin, and imposed limits on his use of Facebook. But even that wasn’t enough. In August, the 34-year-old tech executive took a more radical step to restrict his use of social media and other addictive technologies.
A decade after he stayed up all night coding a prototype of what was then called an “awesome” button, Rosenstein belongs to a small but growing band of Silicon Valley heretics who complain about the rise of the so-called “attention economy”: an internet shaped around the demands of an advertising economy.
The extent of this addiction is cited by research that shows people touch, swipe or tap their phone 2,617 times a day!
There is growing concern that as well as addicting users, technology is contributing toward so-called “continuous partial attention”, severely limiting people’s ability to focus, and possibly lowering IQ.One recent study showed that the mere presence of smartphones damages cognitive capacity – even when the device is turned off. “Everyone is distracted,” Rosenstein says. “All of the time.”
“The technologies we use have turned into compulsions, if not full-fledged addictions,” Eyal writes. “It’s the impulse to check a message notification. It’s the pull to visit YouTube, Facebook, or Twitter for just a few minutes, only to find yourself still tapping and scrolling an hour later.” None of this is an accident, he writes. It is all “just as their designers intended”.
Tristan Harris, a former Google employee turned vocal critic of the tech industry points out that… “All of us are jacked into this system. All of our minds can be hijacked. Our choices are not as free as we think they are.”
“I don’t know a more urgent problem than this,” Harris says. “It’s changing our democracy, and it’s changing our ability to have the conversations and relationships that we want with each other.”
…
Harris believes that tech companies never deliberately set out to make their products addictive. They were responding to the incentives of an advertising economy, experimenting with techniques that might capture people’s attention, even stumbling across highly effective design by accident.
“Smartphones are useful tools,” says Loren Brichter, a product designer. “But they’re addictive. Pull-to-refresh is addictive. Twitter is addictive. These are not good things. When I was working on them, it was not something I was mature enough to think about.”
The two inventors listed on Apple’s patent for “managing notification connections and displaying icon badges” are Justin Santamaria and Chris Marcellino. A few years ago Marcellino, 33, left the Bay Area and is now in the final stages of retraining to be a neurosurgeon. He stresses he is no expert on addiction but says he has picked up enough in his medical training to know that technologies can affect the same neurological pathways as gambling and drug use. “These are the same circuits that make people seek out food, comfort, heat, sex,” he says.
“The people who run Facebook and Google are good people, whose well-intentioned strategies have led to horrific unintended consequences,” he says. “The problem is that there is nothing the companies can do to address the harm unless they abandon their current advertising models.
But how can Google and Facebook be forced to abandon the business models that have transformed them into two of the most profitable companies on the planet?
This is exactly the problem – they really can’t. Newer technology, such as distributed social networks tracked by blockchain technology, must be deployed to disrupt the dysfunctional existing technology. New business models will be designed to support this disruption. Human behavioral instincts are crucial to successful new designs that make us more human, rather than less.
James Williams does not believe talk of dystopia is far-fetched. …He says his epiphany came a few years ago when he noticed he was surrounded by technology that was inhibiting him from concentrating on the things he wanted to focus on. “It was that kind of individual, existential realization: what’s going on?” he says. “Isn’t technology supposed to be doing the complete opposite of this?”
The question we ask at tuka is: “What do people really want from technology and social interaction? Distraction or meaning? And how do they find meaning?” Our answer is self-expression through creativity, sharing it, and connecting with communities.
Williams and Harris left Google around the same time and co-founded an advocacy group, Time Well Spent, that seeks to build public momentum for a change in the way big tech companies think about design.
“Eighty-seven percent of people wake up and go to sleep with their smartphones,” he says. The entire world now has a new prism through which to understand politics, and Williams worries the consequences are profound.
The same forces that led tech firms to hook users with design tricks, he says, also encourage those companies to depict the world in a way that makes for compulsive, irresistible viewing. “The attention economy incentivizes the design of technologies that grab our attention,” he says. “In so doing, it privileges our impulses over our intentions.”
That means privileging what is sensational over what is nuanced, appealing to emotion, anger, and outrage. The news media is increasingly working in service to tech companies, Williams adds, and must play by the rules of the attention economy to “sensationalize, bait and entertain in order to survive”.
In the wake of Donald Trump’s stunning electoral victory, many were quick to question the role of so-called “fake news” on Facebook, Russian-created Twitter bots or the data-centric targeting efforts that companies such as Cambridge Analytica used to sway voters. But Williams sees those factors as symptoms of a deeper problem.
It is not just shady or bad actors who were exploiting the internet to change public opinion. The attention economy itself is set up to promote a phenomenon like Trump, who is masterly at grabbing and retaining the attention of supporters and critics alike, often by exploiting or creating outrage.
Orwellian-style coercion is less of a threat to democracy than the more subtle power of psychological manipulation, and “man’s almost infinite appetite for distractions”.
“The dynamics of the attention economy are structurally set up to undermine the human will,” Williams says. “If politics is an expression of our human will, on individual and collective levels, then the attention economy is directly undermining the assumptions that democracy rests on.” If Apple, Facebook, Google, Twitter, Instagram, and Snapchat are gradually chipping away at our ability to control our own minds, could there come a point, I ask, at which democracy no longer functions?
Our politics will survive and democracy is only one form of governance. The bigger question is how does human civilization survive if our behavior becomes self-destructive and meaningless?
The dominance of Google, Facebook and Amazon is bad for consumers and competition [And suppliers.]
NOT long ago, being the boss of a big Western tech firm was a dream job. As the billions rolled in, so did the plaudits: Google, Facebook, Amazon, and others were making the world a better place. Today these companies are accused of being BAADD—big, anti-competitive, addictive and destructive to democracy. Regulators fine them, politicians grill them and one-time backers warn of their power to cause harm.
Much of this techlash is misguided. The presumption that big businesses must necessarily be wicked is plain wrong. Apple is to be admired as the world’s most valuable listed company for the simple reason that it makes things people want to buy, even while facing fierce competition. Many online services would be worse if their providers were smaller. Evidence for the link between smartphones and unhappiness is weak. Fake news is not only an online phenomenon.
But big tech platforms, particularly Facebook, Google, and Amazon, do indeed raise a worry about fair competition. That is partly because they often benefit from legal exemptions. Unlike publishers, Facebook and Google are rarely held responsible for what users do on them; and for years most American buyers on Amazon did not pay sales tax. Nor do the titans simply compete in a market. Increasingly, they are the market itself, providing the infrastructure (or “platforms”) for much of the digital economy. Many of their services appear to be free, but users “pay” for them by giving away their data. Powerful though they already are, their huge stockmarket valuations suggest that investors are counting on them to double or even triple in size in the next decade.
There is thus a justified fear that the tech titans will use their power to protect and extend their dominance, to the detriment of consumers (see article). The tricky task for policymakers is to restrain them without unduly stifling innovation. [Blogger note: Mostly they are interested in continuing to exploit their monopsony power over suppliers – and customers are valuable suppliers of free data.]
The platforms have become so dominant because they benefit from “network effects”. Size begets size: the more sellers Amazon, say, can attract, the more buyers will shop there, which attracts more sellers, and so on. By some estimates, Amazon captures over 40% of online shopping in America. With more than 2bn monthly users, Facebook holds sway over the media industry. Firms cannot do without Google, which in some countries processes more than 90% of web searches. Facebook and Google control two-thirds of America’s online ad revenues.
America’s trustbusters have given tech giants the benefit of the doubt. They look for consumer harm, which is hard to establish when prices are falling and services are “free”. The firms themselves stress that a giant-killing startup is just a click away and that they could be toppled by a new technology, such as the blockchain. Before Google and Facebook, Alta Vista and MySpace were the bee’s knees. Who remembers them?
However, the barriers to entry are rising. Facebook not only owns the world’s largest pool of personal data, but also its biggest “social graph”—the list of its members and how they are connected. Amazon has more pricing information than any other firm. Voice assistants, such as Amazon’s Alexa and Google’s Assistant, will give them even more control over how people experience the internet. China’s tech firms have the heft to compete but are not about to get unfettered access to Western consumers.
If this trend runs its course, consumers will suffer as the tech industry becomes less vibrant. Less money will go into startups, most good ideas will be bought up by the titans and, one way or another, the profits will be captured by the giants.
The early signs are already visible. The European Commission has accused Google of using control of Android, its mobile operating system, to give its own apps a leg up. Facebook keeps buying firms which could one day lure users away: first Instagram, then WhatsApp and most recently tbh, an app that lets teenagers send each other compliments anonymously. Although Amazon is still increasing competition in aggregate, as industries from groceries to television can attest, it can also spot rivals and squeeze them from the market.
The rivalry remedy
What to do? In the past, societies have tackled monopolies either by breaking them up, as with Standard Oil in 1911, or by regulating them as a public utility, as with AT&T in 1913. Today both those approaches have big drawbacks. The traditional tools of utilities regulation, such as price controls and profit caps, are hard to apply since most products are free and would come at a high price in foregone investment and innovation. Likewise, a full-scale break-up would cripple the platforms’ economies of scale, worsening the service they offer consumers. And even then, in all likelihood one of the Googlettes or Facebabies would eventually sweep all before it as the inexorable logic of network effects reasserted itself.
The lack of a simple solution deprives politicians of easy slogans but does not leave trustbusters impotent. Two broad changes of thinking would go a long way towards sensibly taming the titans. The first is to make better use of existing competition law. Trustbusters should scrutinize mergers to gauge whether a deal is likely to neutralize a potential long-term threat, even if the target is small at the time. Such scrutiny might have prevented Facebook’s acquisition of Instagram and Google’s of Waze, which makes navigation software. To ensure that the platforms do not favor their own products, oversight groups could be set up to deliberate on complaints from rivals—a bit like the independent “technical committee” created by the antitrust case against Microsoft in 2001. Immunity to content liability must go, too.
Second, trustbusters need to think afresh about how tech markets work. A central insight, one increasingly discussed among economists and regulators, is that personal data are the currency in which customers actually buy services.[Yes.] Through that prism, the tech titans receive valuable information—on their users’ behavior, friends and purchasing habits—in return for their products. Just as America drew up sophisticated rules about intellectual property in the 19th century, so it needs a new set of laws to govern the ownership and exchange of data, with the aim of giving solid rights to individuals. [Exactly. Facebook is NOT free.]
In essence, this means giving people more control over their information. If a user so desires, key data should be made available in real time to other firms—as banks in Europe are now required to do with customers’ account information. Regulators could oblige platform firms to make anonymised bulk data available to competitors, in return for a fee, a bit like the compulsory licensing of a patent. Such data-sharing requirements could be calibrated to firms’ size: the bigger platforms are, the more they have to share. These mechanisms would turn data from something titans hoard, to suppress competition, into something users share, to foster innovation.
None of this will be simple, but it would tame the titans without wrecking the gains they have brought. Users would find it easier to switch between services. Upstart competitors would have access to some of the data that larger firms hold and thus be better equipped to grow to maturity without being gobbled up. And shareholders could no longer assume monopoly profits for decades to come.
An excerpt I find particularly relevant to the tuka model:
The token architecture would give a blockchain-based identity standard an additional edge over closed standards like Facebook’s. As many critics have observed, ordinary users on social-media platforms create almost all the content without compensation, while the companies capture all the economic value from that content through advertising sales. A token-based social network would at least give early adopters a piece of the action, rewarding them for their labors in making the new platform appealing. “If someone can really figure out a version of Facebook that lets users own a piece of the network and get paid,” Dixon says, “that could be pretty compelling.”
Here’s a review of Franklin Foer’s new book, World Without Mind: The Existential Threat of Big Tech. What we’re seeing here is the slow breaking of the next wave of tech, from Web 2.0 to Web 3.0, where the users take back control and are treated as more than mindless sources of data. It took a long time to transition the world out of feudalism and we’re still in the very early stages of throwing off the yolk of data exploitation and tyranny. Algorithms cannot guide humanity.
Acquiring and deploying it to change the world through technological innovations can inspire great confidence and self-certainty in the person who possesses the knowledge. And yet, the confidence and self-certainty is nearly always misplaced — a product of the knower presuming that his expert knowledge of one aspect of reality applies equally to others. That’s one powerful reason why myths about the place of knowledge in human life so often teach lessons about hubris and its dire social, cultural, and political consequences.
Franklin Foer’s important new book, World Without Mind: The Existential Threat of Big Tech, is best seen as a modern-day journalistic retelling of one of those old cautionary tales about human folly. Though he doesn’t describe his aim in quite this way, Foer sets out to expose the foolishness and arrogance that permeates the culture of Silicon Valley and that through its wondrous technological innovations threatens unintentionally to wreck civilizational havoc on us all.
It’s undeniable that Silicon Valley’s greatest innovators know an awful lot. Google is an incredibly powerful tool for organizing information — one to which no previous generation of human beings could have imagined having easy and free access, let alone devising from scratch, as Larry Page and Sergey Brin managed to do. The same goes for Facebook, which Mark Zuckerberg famously created in his Harvard dorm room and has become a global powerhouse in a little more than a decade, turning him into one of the world’s richest men and revolutionizing the way some two billion people around the world consume information and interact with each other.
That’s power. That’s knowledge.
But knowledge of what?
Mostly of how to program computers and deploy algorithms to sort through, organize, cluster, rank, and order vast quantities of data. In the case of Facebook, Zuckerberg obviously also understood something simple but important about how human beings might enjoy interacting online. That’s not nothing. Actually, it’s a lot. An enormous amount. But it’s not everything — or anything remotely close to what Silicon Valley’s greatest innovators think it is.
When it comes to human beings — what motivates them, how they interact socially, to what end they organize politically — figures like Page and Zuckerberg know very little. Almost nothing, in fact. And that ignorance has enormous consequences for us all.
You can see the terrible problems of this hubris in the enormously sweeping ambitions of the titans of technology. Page, for instance, seeks to achieve immortality.
Foer explains how Page absorbed ideas from countercultural guru Stewart Brand, futurist Ray Kurzweil, and others to devise a quasi-eschatological vision for Google as a laboratory for artificial intelligence that might one day make it possible for humanity to transcend human limitations altogether, eliminating scarcity, merging with machines, and finally triumphing over mortality itself. Foer traces the roots of this utopianism back to Descartes’ model of human subjectivity, which pictures a spiritual mind encased within and controlling an (in principle, separable) mechanical body. If this is an accurate representation of the mind’s relation to its bodily host, then why not seek to develop technology that would make it possible to deposit this mind, like so much software, into a much more durable and infinitely repairable and improvable computer? In the process, these devices would be transformed into what Kurzweil has dubbed “spiritual machines” that could, in principle, enable individuals to live on and preserve their identities forever.
The problem with such utopian visions and extravagant hopes is not that they will outstrip our technological prowess. For all I know, the company that almost instantly gathers and ranks information from billions of websites for roughly 40,000 searches every second will some day, perhaps soon, develop the technical capacity to transfer the content of a human mind into a computer network.
The problem with such a goal is that in succeeding it will inevitably fail. As anyone who reflects on the issue with any care, depth, and rigor comes to understand, the Cartesian vision of the mind is a fiction, a fairy tale. Our experience of being alive, of being-in-the-world, is thoroughly permeated and shaped by the sensations, needs, desires, and fears that come to us by the way of our bodies, just as our opinions of right and wrong, better and worse, noble and base, and just and unjust are formed by rudimentary reflections on our own good, which is always wrapped up with our perception of the good of our physical bodies.
Even if it were possible to transfer our minds — our memories, the content of our thoughts — into a machine, the indelible texture of conscious human experience would be flattened beyond recognition. Without a body and its needs, desires, vulnerabilities, and fear of injury and death, we would no longer experience a world of meaning, gravity, concern, and care — for ourselves or others. Which also means that Page’s own relentless drive to innovate technologically — which may well be the single attribute that most distinguishes him as an individual — would vanish without a trace the moment he realized his goal of using technological innovations to achieve immortality.
An immortal Larry Page would no longer be Larry Page.
Zuckerberg’s very different effort to overcome human limits displays a similar obliviousness to the character of human experience, in this case political life — and it ends with a similar paradox.
Rather than simply providing Facebook’s users with a platform for socializing and sharing photos, Zuckerberg’s company has developed intricate algorithms for distributing information in each user’s “news feed,” turning it into a “personalized newspaper,” with the content (including advertisements) precisely calibrated to his or her particular interests, tastes, opinions, and commitments. The idea was to build community and bring people together through the sharing and dissemination of information. The result has been close to the opposite.
As Facebook’s algorithms have become more sophisticated, they have gotten better and better at giving users information that resembles information they have previously liked or shared with their friends. That has produced an astonishing degree of reinforcement of pre-existing habits and opinions. If you’re a liberal, you’re now likely only to see liberal opinions on Facebook. If you’re conservative, you’ll only see conservative opinions. And if you’re inclined to give credence to conspiracy theories, you’ll see plenty of those.
And maybe not just if you favor conspiracy theories. As we’ve learned since the 2016 election, it’s possible for outside actors (like foreign intelligence services, for example) to game the system by promoting or sponsoring fake or inflammatory stories that get disseminated and promoted among like-minded or sympathetic segments of the electorate.
Facebook may be the most effective echo chamber ever devised, precisely because there’s potentially a personalized chamber for every single person on the planet.
What began with a hope of bringing the country and the world together has in a little over a decade become one of the most potent sources of division in a deeply divided time.
And on it goes, with each company and technology platform producing its own graveyards full of unintended consequences. Facebook disseminates journalism widely but ends up promoting vacuous and sometimes politically pernicious clickbait. Google works to make information (including the content of books) freely available to all but in the process dismantles the infrastructure that was constructed to make it possible for people to write for a living. Twitter gives a megaphone to everyone who opens an account but ends up amplifying the voice of a demagogue-charlatan above everyone else, helping to propel him all the way to the White House.
Foer ends his book on an optimistic note, offering practical suggestions for pushing back against the ideological and technological influence of Silicon Valley on our lives. Most of them are worthwhile. But the lesson I took from the book is that the challenge we face may defy any simple solution. It’s a product, after all, of the age-old human temptation toward arrogance or pride — only now inflated by the magnitude of our undeniable technological achievements. How difficult it must be for our techno-visionaries to accept that they know far less than they’d like to believe.
6:05 AM, Oct 28, 2017 | By Irwin M. Stelzer The Weekly Standard
Uber comes along and ends the rainy days and nights of waving fruitlessly at cabs with flashing “off duty” signs, and governments respond to pressures from threatened incumbents by making life difficult or impossible for the welfare-enhancing newcomer.
Amazon spares consumers the chore of driving to malls, picking through racks, and perhaps finding a tolerable substitute for what they really, really want, and the tax man and the regulator come sniffing around.
Google puts the world’s intellectual output at everyone’s disposal, Apple puts enormous communicating power in citizens’ pockets, and Facebook links far-flung people with similar interests, only to find that the power their successes convey prompts governments to search for new constraints. And a cut of the revenues.
Unfortunately for the tax collectors, they are forced to play whack-a-mole with the Internet giants who can always find another way of moving profits from the greediest of their pursuers. Until the tax men accept the fact that they will always be one step behind the lawyers and accountants who shield their clients’ well-gotten gains from the pursuers, the profit-mole will never get whacked.
The obvious solution is to tax revenues in the country in which they are earned—it is a lot easier to total up sales receipts, and tax them, than to try to estimate the reasonableness of fees an international company charges itself for use of its own intellectual property, lodged in the sunny Caribbean or rainy Ireland.
But the taxation problem is the least of the worries of what we might call this era’s Fab Four—Amazon, Apple, Google, and Facebook. (The New York Times’ Farhad Manjoo includes Microsoft in what he calls The Frightful Five). They are now seen by critics as simply too big and, with the exception of Apple (which faces stiff competition) possessing market power that exceeds that of companies that competition authorities in days past dismembered—Rockefeller’s Standard Oil being the most notable of the old giants cut down to size by regulators.
The solution being mooted in academic seminars and the halls of Congress (when its members are not busy dodging presidential tweets) is utility-style regulation of the prices and the soaring profits of these companies. That solution is still a gleam in the eye of some politicians, right and left: they are reluctant to take steps that might curb the activities of businesses enormously popular with the public. But it is now a policy goal of companies who compete with the Internet giants on what they deem an unlevel playing field. At minimum, they are turning to the courts for relief: Yelp, the site on which you can express your pleasure with, or hurl brickbats at, businesses you patronize, has filed an antitrust action against Google, making much the same claims as produced the search-engine’s creator whopping fine in Europe.
Regulation is a tempting goal for policy makers here and in the European Union who feel it essential that they gain control over how people will use the internet to shop, travel, date, learn, and interact in the future. This is especially compelling for E.U. regulators, who feel that unless they somehow control the business practices of leading Internet companies the (ugh) Americans will have too much power in Europe.
I have been involved in regulation for enough decades to know the slowing-to-deadening effect regulation can have on innovation and customer service—not as bad as unregulated monopoly, but nowhere near as good for consumers as competition. Try hard to remember when the pre-break-up AT&T would not allow you even to attach a shoulder cradle to your phone—it being classified as a “foreign attachment”—and compare that with the range of communications devices available since the monopoly’s break-up. Or consider the quality of service you get from your quasi-monopoly cable company, at bundled prices bordering on the absurd, which is why, given the chance, millions are cutting the cord as competition rears its lovely head in the entertainment business.
Better to nourish competition in these new markets than to call in the regulators. Which is what the European Commission says it is trying to do. It has decided that Google has a dominant position in search—a finding with which the company, which I once served as a consultant, disagrees—and fined it $2.7 billion for favoring its own services when consumers search for maps, or shopping sites.
That’s a rather standard application of competition policy to the activities of companies found to be using their power in one market to disadvantage competitors in others. The EC decision raised hackles at Google’s Mountain View, California headquarters, and raised eyebrows in America because of the size of the fine and because once again the Brussels crowd has targeted an American company. Whether the newly installed Trump antitrust team will agree with the EC that Google possesses sufficient market power to warrant similar action is uncertain.
Amazon presents a different problem. It is big and getting bigger. The new $5 billion ancillary headquarters for which it is site-searching will employ a staff of 50,000 workers, supplemented at Christmas by some of the 120,000 Amazon recruits to cope with the Christmas rush. Some 238 cities and regions are offering gifts of taxpayer cash in the hope of persuading Jeff Bezos that his company will live happily ever after in their domain. Amazon now controls half of all internet retail business. But only 8 percent of all retail sales are transacted over the Internet, meaning that Bezos’ half represents only 4 percent of all retail sales. As Manjoo puts it, “Amazon . . . is still a minor satellite compared with Walmart’s sun.” So what’s the problem?
For one thing, that 4 percent share of the total retail market can mask Amazon’s devastating effect on specific market segments: think what has happened to bookstores faced with Amazon’s huge inventory and low prices. More worrying, Amazon has the power to strangle a potential rival in their cradles. Shortly after Blue Apron took its food-kit service public, Amazon filed to trademark a copycat service. Blue Apron shares immediately plunged 12 percent on investor fears that Amazon would eat Blue Apron’s lunch. A possible remedy would be to consider an established antitrust interdiction that, in certain circumstances, prohibits pre-announcements that contribute to the maintenance of market power.
Better that than having a utility-style regulatory commission deciding whether Prime service is fairly priced, or whether plans to provide customers with a special lock and Amazon employees with a camera-monitored key so they can deliver packages when the customer is not home is a good idea, rather than leaving it to customers to decide.
For now, I leave it to the political class to cope with the power these companies seem to have over the nature and reliability of the news they purvey. And to the sociologists to take on Facebook, and the cultural effects of all those friendships formed without even so much as a face-to-face hello, air kiss, or man hug.
Below is a recent op-ed printed in the Washington Post regarding the state of affairs for streaming music content. Mr. Fakir makes many legitimate points, as there’s no valid reason for streaming services not to have to pay royalties on music recorded before 1972. However, while copyright law is important for aging or retired artists who rely on performance royalties, the long-term problem for creative digital content is far more intractable.
The true problem for professional artists is that the supply of content has exploded while the price has collapsed. This is basic economics: when supply increases faster than demand, prices must fall. The explosion of supply is due to digital technology, which has caused production and distribution costs to plunge almost to zero. Now everybody and anybody can release music on Apple or publish books on Amazon or take thousands of digital photos on their phones.
So the real problem is too much content, reducing the market price while increasing the search costs for consumers. Plunging revenues have also hollowed out the promotion and marketing industries that serve creative content. So now artists not only create, they have to promote and distribute, paying with precious time or money for vendor services upfront. This is a Catch-22 for struggling artists – they have no money unless they sell product and yet can’t sell product unless they spend first on promotion. Meanwhile, digital distribution is monopolized by the big tech companies like Google, Apple, Facebook, and Amazon (GAFA).
Solutions?
First, technology offers the next disruption. Creative industries need on online clearinghouse for content that is curated by the network of creators, curators, and consumers. Think Facebook for content only.
Second, GAFA does not make the bulk of their revenues from content sales, but rather from the monetization of the data that flows through their networks. A network of creators, curators, and consumers need technology tools to build, manage, and monetize their personal peer networks. Blockchain technology offers the possibility of constructing such a distributed network for sharing content. Essentially, this is what the big tech servers do with our information data.
In sum, what we face is a globalized niche market where the main problem is less about price and getting paid and more about connecting creators with consumers to build new sources of value. (Note: even sharing free content creates data network value, like on Facebook.) New developments in technology can help us recapture and reinvigorate “the culture industry,” where we take back control of our creative content so we can reap the value we create and sustain a thriving creative ecosystem together.
We’re ripping off some of the best musicians of the last century. It needs to stop.
By Duke FakirDecember 28, 2017
Duke Fakir is a founding member of the Four Tops and a member of the Rock and Roll Hall of Fame.
I’m a lucky man. I’ve been a performer and recording artist for most of my life. As a founding member of the Four Tops, I’ve been blessed to travel the world making music with my dearest friends, and we’ve seen our records hit the top of the charts. It’s a privilege I’ve never taken for granted, and I’m proud to say that our music has stood the test of time.
I’m also an activist who has spent years fighting to change laws that exploit artists. Our copyright system does not always provide fair compensation for performers and musicians, and I know that not everyone has been as fortunate as I have.
My fellow artists and I have argued for economic justice and fairness for so long, it can feel like the same empty answers keep coming around, and you never really get to anywhere new. And “the same old song” just isn’t good enough anymore.
That makes this moment critical. After years of “hurry up and wait” in Washington, powerful forces in Congress are attempting to fix one of the worst abuses faced by older artists: the “digital rip-off” of all recordings made before 1972.
Right now, digital radio stations such as SiriusXM and iHeartRadio pay royalties to artists for most of the music they play. It’s real money: Digital streams make up half of all music business revenue, pushing $4 billion a year. A lot of that money goes to independent artists, backup singers, session players, and sidemen — including a generation of lost greats who may have played a lot but didn’t get paid a lot. It’s money these folks count on to pay rent, buy groceries, cover medical bills and support their families.
But there’s a catch: Those same stations don’t pay royalties on music recorded before 1972 — not because it’s right or fair or the music is any less valuable. After all, we’re talking about some of the most iconic music ever recorded. But because federal copyright law doesn’t cover recorded music before 1972, some of the huge services that play music from the ’40s, ’50s, ’60s and early ’70s have managed to get away with this inequity, daring anyone who disagrees to sue. Songwriters and music publishers may be getting paid — as well they should! — but the artists and the owners of the sound recordings are not.
This digital rip-off has been a disaster for many older artists, diverting the fruits of their labors — funds that should be their lifeline — to the balance sheets of some of the wealthiest companies in the world. Digital radio earns millions every year from the exploitation of pre-’72 music, from big band to Motown to the British Invasion. Yet artists who recorded those classics — many of whom are no longer able to tour — struggle for basic food, shelter, and medical care. It’s ridiculous, it’s unfair, and it’s about time we make it illegal.
Change is long overdue, but a chance to right this wrong is at hand. A bipartisan new bill called the Classics Act is moving quickly through Congress. The bill would require digital radio to treat all music the same, regardless of when it was recorded, ensuring that the same royalties are paid for older songs as for new material. It would open a world-changing lifeline for musicians from back in the day — bringing basic economic fairness to this key corner of the music world.
Don’t get me wrong — like most artists, I love radio, in all its forms. We’re proud that listeners want to hear our music, and we’re always happy to work with our colleagues to support their platforms, to help promote what they do and to connect with them and their music-loving customers. All we want is to be paid fairly.
We’ve been stuck for a long time in the fight for fairness for music creators. And the Classics Act isn’t the end of the road. We need to finally ensure the payment of a fair performance royalty for terrestrial radio and close the loopholes that allow big tech companies to collect huge profits while paying next to nothing for music.
A great piece of music should earn its fair share, whether it was recorded in 2002 or 1962. And right now, this is a problem that Congress has a chance to fix. In the meantime, I’ll keep singing. And I’ll keep fighting for what’s right. “I can’t help myself!”
What exactly is creativity? So many of us assume that creativity is something we had as a child but we lost, or something allocated to rarified individuals that we can only admire from afar.
But science has shown that, in many ways, we are all wired to create. The key is recognizing that creativity is multifaceted—on the level of the brain, personality, and the creative process—and can be displayed in many different ways, from the deeply personal experience of uncovering a new idea or experience to expressing ourselves through words, photos, fashion, and other everyday creations, to the work of renowned artists that transcends the ages.
In today’s world, creative thinking is needed more than ever. Not only do many businesses seek creative minds to fill their ranks, but the kinds of complex social problems we face could also use a good dose of creativity.
Luckily, creativity is not reserved for artists and geniuses alone. Modern science suggests that we all have the cognitive capacity to come up with original ideas—something researchers call “divergent thinking.” And we can all select from a series of ideas the one most likely to be successful, which researchers call “convergent thinking.”
The major creative industries of music, photography, print, and video have all been disrupted by digital technology. We know this. As Chris Anderson has argued in his book Free, the cost of digital content has been driven towards zero. How could this be a bad thing? Well, TMI (Too Much Information — in this case, Too Much Content) is the curse of the Digital Age. It means creators make no money and audiences can’t find quality content amidst all the noise.
The end result will be a staleness of content and stagnant creative markets, i.e., the slow death of culture. So, how did this happen and what do we do about it?
theweek.com/articles/731764/genius-stupidity-silicon-valley
