industryterm:consumer-facing internet

  • ’Who Owns the Future ?’ Why Jaron Lanier Remains a Digital Optimist » Knowledge Wharton
    http://knowledge.wharton.upenn.edu/article/owns-future-jaron-lanier-remains-digital-optimist

    Lanier: I don’t think social media per se is to blame — rather it’s the use of the consumer-facing Internet to achieve a kind of extreme income concentration in a way that’s similar to what has happened in finance during the last 20-25 years. I don’t think there was any evil scheme in Silicon Valley to make this happen. For example, Google didn’t have any roadmap from the start that said, wow, if we collect everybody’s personal information we can gradually be in a position to tax the world for access to transactions, or have an ability to manipulate outcomes using the power of statistical calculations on big data.

    But in a sense, the basic scheme was foretold at the start of computing, when terms such as cybernetics were used more often, and people like Norbert Wiener were discussing the potential of information systems to let people manipulate each other, and how this could create power imbalances. Silicon Valley rediscovered these old thoughts, but in a way that was too immediately profitable to allow for self-reflection. You see a very similar pattern emerging in Silicon Valley to what happened in finance: the use of large-scale computation to gather enough data to gain an information advantage over whoever has a lesser computer.

    The mistake that happens again and again in these systems is that somebody believes they have the ultimate crystal ball because their statistical correlation algorithms are predictive, which they are, to some extent, for the very simple reason that the world isn’t entirely chaotic and random. Just as a matter of definition, big data algorithms will be predictive, and the bigger your computer and the more fine-tuned your feedback system, the more predictive they will be.

    But, also by definition, you will inevitably hit a stage where statistics fail to predict change, because they don’t represent causal structure. That’s the point at which companies such as Long-Term Capital Management fail, mortgage schemes fail, high-frequency trading fails — and that’s where companies such as Google and Facebook would fail if we gave them a chance. However, if you construct an entire society around supporting the illusion that the falsehood of ultimate cognition is actually true, then you can sustain the illusion even longer. But eventually it will collapse.

    Among technical people, there’s a lot of talk of revolution — everybody wants to be god-like. Everybody wants to be the one who reforms the world, to be the one who oversees the singularity. It reminds me a lot of the people who once said they would oversee the Marxist revolution, and that everything would turn out alright. The problem is that you imagine you will be in control but you won’t. Probably all that will happen is you will hurt a lot of people. This idea that we are barreling toward a singularity and that we’re going to change everything is inherently foolish, immature and cruel. The better idea is trying to construct, however imperfectly, incremental paths that make things better.

    Take the taxi medallion system, which in itself is far from perfect and in some cases completely corrupt, but nonetheless has been the route to the middle class, especially for generations of immigrants. There are now Internet companies like Uber that connect passengers directly with drivers of vehicles for hire. Anyone can spontaneously compete with taxi drivers. What this does is create a race to the bottom, because these companies are choosing a kind of efficiency that creates a power law where whoever runs the Uber computer does very well, but everybody else pushes down each other’s incomes. So although such attacks on levees create efficiency from a certain very short-term perspective, they do so by creating power-law outcomes that undermine the very customer base that can make the market possible. This idea eventually eats itself and self-destructs.

    In fact, what has driven me to write the books I’ve written is that when you’re in the tech industry you’re constantly hearing this rhetoric about how we’re creating so much wellbeing and good in the world. When you actually look out there, you see that it’s true for tiny spikes of people who are doing well, but that overall, the middle classes are sinking, overall there are huge looming problems. I just can’t accept that disconnect.