In the digital economy, data is the most valuable form of currency.
Companies mine it to learn about consumers and sell their products more effectively.
But what about the tension between ownership and the ubiquity of data?
Computer scientist and author Jaron Lanier says fortunes are made from the data that companies access about us.
His proposal to fix the digital economy: we should all own our own data, and companies — whether it’s Google or Citibank — should pay us every time any bit of our data is used.
Lanier writes about this “information economy” in his new book, “Who Owns the Future?.”
Book Excerpt: ‘Who Owns the Future?’
By Jaron Lanier
Prelude: Hello, Hero
An odd thing about this book is that you, the reader, and I, the author, are the immediate protagonists. The very action of reading makes you the hero of the story I am telling. Maybe you bought, or stole, a physical copy, paid to read this on your tablet, or pirated a digital copy off a share site. Whatever the prequel, here you are, living precisely the circumstances described in this book.
If you paid to read this, thank you! This book is a result of living my life as I do, which I hope provides value to you. The hope of this book is that someday we’ll all have more ways to grow wealth as a side effect of living our lives creatively and intelligently, with an eye to doing things of use to others.
If you paid to read, then there has been a one-way transaction in which you transferred money to someone else.
If you got it for free, there has been a no-way transaction, and any value traded will be off the books, recorded not in any ledger but rather in the informal value systems of reputation, karma, or other wispy forms of barter. That doesn’t mean nothing has happened. Maybe you’ll get some positive strokes over a social network because of what you say about the book. That sort of activity might benefit us both. But it’s a kind of benefit that is unreliable and perishable.
The clamor for online attention only turns into money for a token minority of ordinary people, but there is another new, tiny class of people who always benefit. Those who keep the new ledgers, the giant computing services that model you, spy on you, and predict your actions, turn your life activities into the greatest fortunes in history. Those are concrete fortunes made of money.
This book promotes a third alternative, which is that digital networking ought to promote a two-way transaction, in which you benefit, concretely, with real money, as I do. I want digital networking to cause more value from people to be on the books, rather than less. When we make our world more efficient through the use of digital networks, that should make our economy grow, not shrink.
Here’s a current example of the challenge we face. At the height of its power, the photography company Kodak employed more than 140,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only thirteen people.
Where did all those jobs disappear to? And what happened to the wealth that those middle-class jobs created? This book is built to answer questions like these, which will only become more common as digital networking hollows out every industry, from media to medicine to manufacturing.
Instagram isn’t worth a billion dollars just because those thirteen employees are extraordinary. Instead, its value comes from the millions of users who contribute to the network without being paid for it. Networks need a great number of people to participate in them to generate significant value. But when they have them, only a small number of people get paid. That has the net effect of centralizing wealth and limiting overall economic growth.
Instead of enlarging our overall economy by creating more value that is on the books, the rise of digital networking is enriching a relative few while moving the value created by the many off the books.
By “digital networking” I mean not only the Internet and the Web, but also other networks operated by outfits like financial institutions and intelligence agencies. In all these cases, we see the phenomenon of power and money becoming concentrated around the people who operate the most central computers in a network, undervaluing everyone else. That is the pattern we have come to expect, but it is not the only way things can go.
The alternative introduced in this book is not a utopian idea; it won’t be hard to foresee its annoyances and messiness. However, I will argue that monetizing more of what’s valuable from ordinary people, who turn out to be the uncompensated sources of the data that make networks valuable in the first place, will lead to a better future.
That will make power and clout more honestly distributed, and might even lead to a persistent middle class in an information economy, which would otherwise be an impossible goal.
Excerpted from the book WHO OWNS THE FUTURE? by Jaron Lanier. Copyright © 2013 by Jaron Lanier. Reprinted with permission of Simon & Schuster.
- Jaron Lanier, author of “Who Owns the Future?”
ROBIN YOUNG, HOST:
The Obama administration is denying reports that the NSA has unfettered access to 75 percent of all U.S. Internet traffic, although the NSA did admit that it overstepped its bounds inadvertently, collecting thousands of Internet communications from Americans with no ties to terrorism. A court has ordered the agency to stop. Well, our next guest says maybe they should also pay for the data. Computer scientist and guru Jaron Lanier's latest book is "Who Owns the Future?" He joins us now. And Jaron, it's not just the government. You say large companies are also gathering data and creating inequality because they're making money off of information they're collecting for free?
JARON LANIER: Yeah, that's absolutely true. So what happens is you share information on social media or just by using free email services that are scraped by whoever pays for your email. And what happens is that you think, oh, this is very nice. All the data is open, I'm sharing. But actually, there's this other kind of data that's being created which is behavioral models of you, predictive models of you. And that data is stored away and is very, very well protected, and it lives in these remote giant data centers.
You know, and they have their own power stations as if they were little cities, and they often have to have their own little rivers to cool them and everything. And that data is like super-sacrosanct. The NSA doesn't get to see it, I suspect. And the problem with that kind of data is that it's a little too useful for its own good. What happens is over time whoever is paying to use the data can get just enough of an advantage to concentrate income and power in the way that's never really happened before in human affairs. I'll give you just a simple example, if I may.
YOUNG: Sure. Yup.
LANIER: Let's think about what happened to American health insurance. Up until computers got cheap, to run a good health insurance company meant trying to insure as many people as possible, and setting the rates as well as possible to cover the cumulative risk of everybody. But then after computers got cheap, it became easier to make a good business by insuring as few people as possible, because you only want to insure the people who will need insurance the least.
And the difference between the two cases is whether you can really make predictions about individuals or not. And with enough data and a big enough computer, you can start to think in terms of individuals instead of just the broad society.
YOUNG: So what you're saying is that these giant computers - and you say almost any ascendant center of power, you will find a giant computer at the core. And you say that because of these giant computers and all of us who have this data, they can then take all of that information and become very wealthy by - in the case of insurance companies - only choosing to insure people who don't need insurance.
LANIER: Right. So it has this way of kind of making financial services and insurance and a lot of the sort of big pieces of our society dysfunctional. But then there's this other thing going on which also plays into the picture, which is the improvement of technology that gives rise to more and more automation. And so right now, this is really a problem more on the horizon than with us.
But if you imagine the world 20 years from now, when vehicles will probably be driving themselves and factories will probably be automated, there might not be as many factories, because you might have 3-D printers or other little devices right at your home that just create things for you. There might be automated robotic nurses. Such things have been demonstrated, even though we find it hard to imagine today.
And so the problem with that is that as you have more and more automation, in theory, that should make the world better, because you're taking over jobs that people might get tired doing, might find dangerous, and so forth. I mean, it can be really a good thing. But, you know, what if people didn't make a living? You know, it's an old problem that goes back to the 19th century. And the thing about it is if you look at automation, without fail, it only works because of big data gathered from people.
The example I like to use is you can already get an automatic translation of some text that you upload to some company. You can turn English into Spanish. But the only reason that's possible is because there have been tons of example translations that have been taken from real people...
YOUNG: OK. So...
LANIER: ...and they're rehashed to create the new translation.
YOUNG: And this is the information, for free. We're going to pick up there with tech guru Jaron Lanier in one minute, HERE AND NOW.
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YOUNG: It's HERE AND NOW.
And we're speaking with tech guru Jaron Lanier about his belief that anyone who uses our data - business or government - should pay us for it. And before the break, he made the point that companies and governments are using supercomputers to suck up our online information for free, and then using it for their benefit. And, Jaron, you were starting to make the case that this is a part of a rise in income inequality. Is that right?
LANIER: Right. So there's been a lot of concern about the rise of income inequality in the developed world since the financial troubles of the last decade. And if you look at rising income inequality, it's always associated with some big computing scheme at this point. And the problem with that is that it's just not sustainable. We can't go on that way.
But it's also not fair, because whenever somebody runs a giant hedge fund based on making bets on what people are really doing, whether they'll repay their mortgages or not, whenever somebody runs a giant social media company based on selling advertising that's fine-tuned to behavioral models of people, they're using data from real people. So, you know, in the long-term, as - you know, people will say, well, how much is all this data really worth? Well, you know what? It's actually already worth a lot.
If you just add up how much you save by being a member of a buying club at the supermarket, plus being a member of frequent flyer clubs and all that, it's already thousands of dollars a year. And the more automation there is, you know, I think we'll get up to the poverty line, I don't know, in 10 years, 15 years. So the thing is if we just pay people for the data that's honestly taken from them at regular market values, we can create a sustainable society, even with really high technology. We don't have to create unemployment.
YOUNG: How would you do that, though?
LANIER: You know, it's actually easier than what we're doing. What we're doing with the Internet is technically really convoluted, because we first throw away all the information about where data came from. And then we have to reconstitute it by constantly re-uptaking the entire Internet into search engine computers and calculating where the data came from to re-contextualize it. It's a kind of an insane scheme. So if we just kept track of where data came from in the first place, it would be really easy to calculate little, tiny payments that would accrue to people if their data was used.
You know, and this was actually the original proposal for making computer networks back from the mid-20th century. It was like - we kind of lost track somewhere in the last couple of decades, but this is not some radical new idea. This is just going back to what used to be the conservative kind of obvious thing to do, when it all started.
YOUNG: But you also add because there's something new going on, which is that the government's taking data and you say the government should pay for, what, if they have a security camera, for instance, they should pay you if you're on it?
LANIER: Yeah. OK. So, here's the problem. If we make data be absolutely free, our personal data, we're giving an infinite license to use it to the government, because if it's free, there's no bill. And you can say, well, we should make laws about what the government could do. But, you know, programmers are smarter than lawyers, if I can say that to all the lawyers who are listening. And whenever the law says, a programmer will, you know, maneuver around it in three seconds.
But if the data cost money, that's a general solution that - I'm not saying we don't need laws, but if we have a combination of economy and laws, I think we can moderate the government. And the power the people have always had over governments is the power of the purse, you know. And if there's no budgetary limit, how do you expect to restrain data spying, you know? I mean, budget is the method of sizing government, and if we don't make use of it, we won't size our government in the information age.
YOUNG: Well, in putting the government aside, just when it comes to companies, corporate American taking data...
YOUNG: ...and making things out of it, you say you could experiment with 3D printing, because a lot of people are already using these 3D printers to make, you know, whatever they want. It's a hobbyist craze, as you write. We've talked about it quite a bit.
YOUNG: But you say that techies like yourself should setup a trial system in which people pay each other for their printable designs.
LANIER: Well, it might be a little too late for 3D printing, because 3D printing is already on the rise, and it's kind of risen up as an open source model thing where people just share designs. But there'll be all kinds of other examples of things that come up. But 3D printing, it might still be possible. You know, what I want to ask my technical friends is: Why are we so ideological about this? There's such - there's so much certainty, so much passion around these abstract ideas like open sourcing things and making information free.
Why can't we just do an experiment? Let's challenge our own orthodoxy and see what happens, just in some example like this, like 3D printing that comes along, because if it works well, that would be a huge lesson. So, you know, experimentalism is what we really need right now, because what we're doing is really not working.
YOUNG: Yeah. Well, you've had your critics. Evgeny Morozov raised some objections in the Washington Post. He says you're the utopian, and that we'd all then be - with your theory, we'd all be making money just by being consumers. So that if you go to buy something and your data is then used and you're paid for that, you're paid for being a consumer.
LANIER: Right. Well, you're paid for being a human being who makes choices. You're paid for being an intelligent person who's contributing overall to society through an information system. And I think a lot of the people like Morozov who criticize it really would prefer to live in a sort of - some sort of communist or socialist system where the machines get really good. And then as Marx foresaw, there'd be some committee that decides who should get what, because we don't need to work anymore, something like that. I don't believe in that future.
I think that if we get away from market systems entirely and rely just on trying to reach agreement with each other, if we just rely on committees and government in attempts to reach consensus, we end up in sort of the hellhole of a hippie group house or something, you know. It just doesn't work among people. We're just too ornery as creatures to make that sort of thing work. So it's - he's basically proposing an alternate utopia. And if anybody can make it work, you know, I'd like to see it. But so far, this sort of balance of government and market seems to have gotten the best results, and I just want to keep it going as technology gets more advanced.
YOUNG: Well, and just when - staying on government for a second, you point out that there's another place where these huge computers that suck up everything, and they're on these huge facilities that, as you say, have their own rivers to cool them, they're like mini-cities, this benefits candidates, as well. It's gotten to the point where the candidate with the biggest siren server - and you call them sirens, because they're like the Sirens of mythology.
YOUNG: They're so - they can't be resisted, because they're just so compelling, this idea that you could have all this data. You say the candidate with the biggest one is going to win.
LANIER: Well, it's not necessarily the very biggest computer, but the most effective computer. But, generally, that's the biggest one, too. So in the Obama election - and I want to say, I'm an Obama supporter. So this isn't an attack on Obama, but it just is a matter of fact, that he used technology better than his competition. And I don't want to live in a democracy where computation is what, you know, determines election results. I want to live in a democracy where ideas and people determine election results, and I'm concerned we're losing that.
YOUNG: Yeah. Just one last thought. Others have said why not just demand better wages and benefits for workers?
LANIER: That's great, as long as there are jobs. I mean, the problem that we're facing here is that we're reducing the nature of what a job is. So, right now, like, let's say if you're a freelance journalist, as - this is a field you might be familiar with...
LANIER: ...you're just fewer...
LANIER: Do I need to say more? Do I need to finish this thought?
YOUNG: The point is it's, you know, your work is...
YOUNG: ...your work is taken, and you're often not paid...
YOUNG: ...if you're not online. Jaron Lanier, a tech guru, if there ever was one. His new book is "Who Owns the Future?" and he is suggesting that we be paid for the data that is scooped up online. Jaron, provocative thought. Thank you so much for raising it.
LANIER: Thanks for having me on.
JEREMY HOBSON, HOST:
And, Robin, we are already hearing from listeners at hereandnow.org about this. One writes: Well, this sounds great at first. But we are paid for our data. Our online searches, maps, pictures are all free - which reminds me of something a wise person once said, Robin: If you're getting something for free on the Internet, you're not the customer. You are the product.
YOUNG: I think you just paraphrased everything Jaron just said.
HOBSON: All right. There you go.
YOUNG: By the way, I love...
HOBSON: And in just a few seconds.
YOUNG: ...I love his laugh. So, your thoughts out there. How much would you pay a month for Facebook or Google? Is that the way it should be? Should we maybe pay to keep our data private, or should we be paid for our data? Your thoughts at hereandnow.org. From NPR and WBUR Boston, I'm Robin Young.
HOBSON: I'm Jeremy Hobson. This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.