Three Phases of the Digital Economy
James Bridle wrote a very interesting, and quite important, essay today, about the web and it’s implosion into a chamber of horrors. I want to build on it for a moment, and share with you what I see: three phases of the digital economy.
We lionize the little titans of industry of the digital economy, but we forget: the web and the internet, when they were invented, were never capitalist creations. We forget that they were created not by digital industrialists, but by idealists, academics, thinkers, people who were enjoying playing with possibility. The internet was created by DARPA, and the www by CERN. In other words, both were products of (shock, horror) socialism, and as products of socialism, they held no inherent allegiance to capitalism. Let us set the stage there.
Now the first real stage of the web, the one that I grew up in, was wild and beautiful and strange. Money poured in, from venture capitalists who were often just men wearing britches a little too big for them, from corporations, from hedge funds, from everywhere and nowhere. This phase of the web was what we might call pre-capitalist. There was nothing at all being maximized, usually, only odd and half-crazy ideas being thrown against a great wall of human possibility, and occasionally, when one somehow caught fire, some fresh-faced MBA grad would be hired, who would try to maximize “attention”, but who knew how that was counted, or even what it was, in the first place? So the idea that profits were things to be relentlessly maximized was still not even a twinkle in this digital economy’s eye.
And then came the stage of capitalism. The few winners — Facebook, Google, Youtube, and so on, for the digital economy is always and ever a set of natural monopolies, tending to one possible winner in every market, thanks to network effects — held a utopian bent now. Through them, we thought, society’s ill could be if not fixed, then at least bettered. Do no evil. A town square in every smartphone. And so on. Yet before they could do any of that, they went public, and having gone public, they came under pressure to do what capitalist organizations do: maximize profits, or shareholder value, which is the same thing, only under a slightly different time horizon, and damn the costs to people, society, or democracy.
Let us for a moment assess those costs. Social media, which is the vast, vast majority of the digital economy now, makes people lonelier, unhappier, and more miserable, in every way that has been counted yet. It corrodes democracy in spectacular, implosive ways, not like an acid, but more like a bomb, shifting elections in months, poisoning people’s minds with perfect precision.
We have created in this phase of the digital economy humanity’s most perfect predatory machines. They do not kill us. They invisibly induce us to kill one another, with subtle whispers and screaming demons, and should you think that is exaggeration, I suggest you take a look at where “mass shooters”, that terrible and American phrase, are radicalized, where people are taught healthcare is bad for them, and climate change does not exist, even while I sit typing in this a tropical New York winter.
Perfect predatory machines. What do I mean? Digital economy companies, social media platforms, do not create anything. They are like banks and ad agencies, in that they only allocate what other people create. But now, in the service of maximizing profits, they are allocating the greatest bads society has — for society does not just have goods, but also bads — hate, spite, fear, fury, and calling them goods. They are showering those bads upon us day and night, while we laugh and eat and sleep.
But why? Why this convergence between what is most profitable, and what is most hateful? It is very simple. What is most hateful is also what is most controversial. What is most controversial is what captures the most attention. What captures the most attention is what is most profitable. And so more and more grotesque and ugly controversies must be ginned up to keep this vicious cycle going, and as Bridle notes, they are truly ugly things, like videos of people drinking bleach, and so on. The algorithms of the engineers who have never read books about what it means to be a human optimize near perfectly for bads, because bads sell perversely: when people do not have to pay for them, when advertisers will pay, people will gawk forever, and say: “see how bad this is!”. And yet, slowly, somehow, the bad itself is that way normalized as the merely tenable.
Thus, in this capitalist phase of the digital economy, the few winners of this game will only keep winning what they must have, what their machines optimize for, a quantity we might simple be honest and call hate-profit, by bringing you, me, society, and democracy, to ruin.
Now let us ask: what happens next? Well, two things. Sane societies will regulate this lunacy, and regulate it swiftly and severely. Europe is beginning to, and China, like much of Asia, simply does not allow US style internet use at all. Now, these companies might be able to profit for another decade or two by eating what is left of America, because America, of course, is so averse to regulation that its kids can be mowed down in churches and the nation only says “durrr freedom!”, but the world is not this easily tricked. So: one, regulation. And two, if the digital economy is smart, courageous, and wise, movement, progress, “innovation”, transformation. Of a very special kind.
The third phase of the digital economy is post-capitalism, just as it is for any kind of economy. A post capitalist economy is one that maximizes well-being, human potential, life itself, not just profit. As a simple example, US style capitalism maximizes profits, but life expectancy falls, and a post-capitalist system would maximize life expectancy instead, by giving people public healthcare. In just the same way, the digital economy is going to have to do three things to make a post-capitalist transition.
One, it is going to have to choose those dimensions of human possibility it wishes to improve. Social media makes unhappier, dumber, lonelier, remember? Maybe those are the three dimensions that should be improved instead, maybe they are others, it doesn’t matter. What does matter, two, is that these dimensions of improvement are then prioritized above profits. Why? Very simply, three, because if they are not, then these companies will cease to exist — not as organizations, but, in the same way that Twitter has, as things people value, like, enjoy, treasure, love, appreciate, respect. They will only be something like burdens that we bear, places we glumly go because we must, and no organization can build a future that way, at least not one that is worth having. Such organizations themselves cannot attract good or wise or intelligent people, they cannot do beautiful and noble things, and for that reason, they are more like little hells than anything else.
So. The www and the internet were given to us by (shock, horror, surprise!) socialism. But then, because America is caught fast, at least, in a capitalist death grip, they made the sure, slow transition through anarchic pre-capitalism to optimistic, utopian capitalism, and at last into predatory capitalism, which is where capitalism, unrestrained, must always end. And yet that is not the end of the story. Already, there is a post capitalist wave spreading across the globe, whether it is in new kinds of social democracy or new forms of currency and so on. Even here, at Medium, where you can signal how much an essay really improved your intellect or life is a tiny example of optimizing for well-being, not just profitability. So the question for the digital economy is only this: who will be stuck in the dead past, and who will have the courage and wisdom to step into the future?
Umair November 2017