Cashing In on Your Data

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Oral-B, a Procter & Gamble company, this year launched its SmartSeries Bluetooth toothbrush — an essential appliance for what the firm calls “the well-connected bathroom.” It connects to your smartphone, where its app tracks brushing tasks (have you flossed? cleaned the tongue? rinsed?) and highlights areas of the mouth (visualised on the phone screen) that deserve more attention. More importantly, as the toothbrush’s website proudly announces, it also “records brushing activity as data that you can chart on your own and share with dental professionals.” What happens to that data — whether it goes to these dental professionals, or your insurance company, stays with you or is appended to your data already owned by Facebook and Google — is a controversial question.
The realisation that data produced by everyday appliances, smart toothbrushes or smart toilets, can be monetised has produced an interesting resistance against the data-hoarding attitudes of Silicon Valley giants, who mint billions while we only get free services. A populist critique has emerged: Let’s challenge these data monopolies and replace them with small-scale entrepreneurs. Each of us can become a freelance data stockbroker with our own portfolio — selling access to our genome if a pharmaceutical company needs it, or disclosing our location for a discount at a local restaurant.
Several recent books — Social Physics by Sandy Pentland, Who Owns the Future by Jaron Lanier — endorse this agenda. They promise the seemingly impossible — economic security and a future of privacy. If data is treated as property, strong property rights and modern enforcement technologies should ensure that no third party gets a free ride. Thanks to the Internet of Things and the proliferation of smart devices, our every act can be observed, and monetised: There’s someone, somewhere, willing to pay for knowing what song we whistle in the shower. The only reason it hasn’t happened yet is because our shower doesn’t have sensors and isn’t connected to the net.
The battle lines are clear. If Google fills our houses with smart thermostats like Nest, then Google will monetise our shower whistling. Google integrates data from different streams — self-driving cars, smart glasses, email — and its helpfulness is a function of its ubiquity. To get the best from it, we should let Google’s services fill in all the vacant areas of our digitised everyday existence. The size of Google’s data reservoirs makes competition unrealistic, a point not lost on smaller companies. The other option is to follow the populist calls of Pentland and Lanier and thwart Google’s ambitions by insisting that data automatically belongs to the users, or demanding that they at least share in Google’s profits.
Both of these positions, for all their apparent differences, belong to one political programme, representing two intellectual traditions. As the British sociologist Will Davies shows in his new book, The Limits of Neoliberalism, the future offered to us by Lanier and Pentland fits into the German “ordoliberal” tradition, which sees the preservation of market competition as a moral project, and treats all monopolies as dangerous. The Google approach fits better with the American school of neoliberalism that developed at the University of Chicago. Its adherents are mostly focused on efficiency and consumer welfare, not morality; and monopolies are never assumed to be evil just because they are monopolies — some might be socially beneficial. For all its claims to innovation and disruption, the contemporary technology debate neither innovates nor disrupts: In assuming that information is a commodity, it operates firmly within a sole neoliberal paradigm.
While an alternative view of information would require grounding it in the non-economic realm — around the idea of the common, beloved by radical democrats, or something else — we might ask why the commodity status of information is accepted so uncritically. The current moment provides the answer: Technology today is a deus ex machina, which can create jobs, stimulate the economy, and make up for taxes lost to the offshoring schemes of wealthy elites and corporations. Not to treat information as a commodity would mean closing the only untainted avenue open to policymakers.
This deus ex machina aspect of modern technology is poorly understood, even by perceptive observers of the financial crisis. In his 2013 book Buying Time, the German sociologist Wolfgang Streeck argues that, from the early 1970s, when the first signs showed of the impending collapse of the welfare model secured by the post-war compromise, western governments used tricks to buy more time and avoid overdue structural transformations: rampant inflation, public debt and, eventually, tacit encouragement of the private sector to provide cheap debt to households. The austerity agenda that followed was a moralistic response that punished ordinary citizens for sins they hadn’t committed.
Streeck does not mention information technology but its time-buying function is obvious. It produces new, entrepreneurial jobs — once everyone learns how to code and build their own apps — and unlocks immense economic value. The British government grasped this early on, embarking on ambitious, if controversial, schemes to sell patient data to insurance companies (popular protest forced a backtrack) and student admissions data to mobile operators and energy drink companies. A recent report on personal data and the British economy, supported in part by Vodafone, holds that more than £16.5bn could be made if it were easier for consumers to manage — sell — their personal data. The government’s task is to ensure that new data management intermediaries can legally insert themselves between consumers and service providers.
These government-led efforts to buy time from above are supplemented by efforts — mostly by Silicon Valley start-ups — to buy time from below. The hope is that services like Uber (for cars) and Airbnb (for apartments) can turn analogue assets into profitable services, supplementing their owners’ income. As Brian Chesky, CEO of Airbnb, puts it, “Now with record unemployment, massive income inequality, we actually have this gold mine under our feet. It used to be [that] we lived in a world where people created their own content, but now we can create our own jobs and maybe even our own industries.” Indeed.
Silicon Valley, always quick to capitalise on counterculture, appropriated the communal gift-oriented rhetoric of earlier efforts to transcend the neoliberal agenda, presenting start-ups like Uber and Airbnb as part of the “sharing economy” — the utopian future beloved by anarchists and libertarians, where individuals can deal with each other directly, bypassing large intermediaries. What we are witnessing, however, is the replacement of service intermediaries, like taxi companies, with information intermediaries like Uber — which is backed by those admirers of anarchy, Goldman Sachs.
Since established taxi and hotel industries are detested, the public debate has been framed as a brave innovator taking on sluggish, monopolistic incumbents. Such skewed presentation, while not inaccurate in all cases, glosses over the fact that the start-ups of the “sharing economy” operate on the pre-welfare model: social protections for workers are minimal, they have to take on risks previously assumed by their employers, and there are almost no possibilities for collective bargaining.
The proponents of the “sharing economy” justify such precariousness with rhetoric worthy of Friedrich Hayek: once we replace laws with feedback mechanisms — so the market attests to the quality of the driver or the host — we can dispense with pre-emptive regulation. As Fred Wilson, a prominent venture capitalist, put it recently, “when we reach a place where systems are truly self-governing and self-regulating, we will not need regulators.” Ubiquitous feedback loops — in reality, just quality signals provided by market participants — would get us there.
The digitisation of everyday life and the rapaciousness of financialisation risk turning everything — genome to bedroom — into a productive asset. As Esther Dyson, a board member of 23andme, the leader in personalised genomics, said the company is “like the ATM that gives you access to the wealth locked within your genes.” This is the future that Silicon Valley expects us to embrace: Given enough sensors and net connections, our entire life becomes a giant ATM. Those refusing this would have only themselves to blame. Opting out from the “sharing economy” would come to be seen as economic sabotage and wasteful squandering of precious resources that could accelerate growth. Eventually, the refusal to “share” becomes tinged with as much guilt as the refusal to save or work or pay debts, with a veneer of morality covering up — once again — exploitation.
It’s only natural that the less fortunate, under the burden of austerity, are turning their kitchens into restaurants, their cars into taxis, and their personal data into financial assets. What else can they do? For Silicon Valley, this is a triumph of entrepreneurship — a spontaneous technological development, unrelated to the financial crisis. But it is only as entrepreneurial as those who are driven — by the need to pay rent — into prostitution or selling their body parts. Governments might resist this tide but they have budgets to balance: Uber and Airbnb will eventually be allowed to exploit this “gold mine” as they please, boosting tax revenues and helping citizens make ends meet.
The “sharing economy” won’t supplant the debt economy; they will coexist. The increased liquidity of data, combined with more and better tools of analysis, already allows banks to tap the techniques of Big Data to extend credit to “unbankables” while identifying and excluding the true deviants. This would only raise anxiety over debt. Start-ups like ZestFinance, which studies 70,000 data points — including how you type and how you use your phone — already help banks decide whether online applicants are worthy of a loan. A scheme pioneered in Colombia by Lenddo, another tech-savvy lending start-up, links the approval of credit cards to applicants’ activity on social media, so now their every click can affect their suitability for credit — a point not lost on Douglas Merrill, the co-founder of ZestFinance, who says that “all data is credit data.” Well, if all data is credit data, then all life — captured by digital sensors in the world around us — beats to the rhythms of debt.
The useful idiots in Silicon Valley have their usual defence. If the poor ask for credit, why not help them get it? That an increased demand for loans might have something to do with unemployment, cuts in social services and a collapse of real wages, and that a different economic policy might reverse such trends, making payday loans — and the Big Data tools for extending them — less relevant, is beyond the imagination of the digital futurists in Silicon Valley. Their only task is to build tools for solving problems as they come — and not as political and economic critique might re-imagine them.
In this, Silicon Valley is like any other industry: Unless there’s profit in it, corporations won’t call for radical social change. However, the rhetorical reservoir available to Uber, Google or Airbnb is much deeper than that of Goldman Sachs or JP Morgan. If you complain about them, you will be described as a hater of capitalism or Wall Street or the bailouts — a socially acceptable, if somewhat tiresome, critique. To criticise Silicon Valley, however, is to invite accusations of technophobia and nostalgia. A political and economic critique of technology companies — and their cosy relationship with the neoliberal agenda — is recast as a cultural critique of modernity. Critics are presented as retrogrades, staring in disgust at soul-crushing dams.
Some technology critics, with their laments of cultural decline enabled by Twitter and e-books, are partly to blame. Instead of engaging with attention and distraction socio-economically — as was done with earlier media by Walter Benjamin and Sigfried Kracauer — we get Nicholas Carr, with his embrace of neuroscience, or Douglas Rushkoff, with his biophysiological critique of acceleration. Whatever the salience of such interventions, they end up decoupling the technological from the economic, so that we end up debating how the screens of our iPads condition the cognition of our brains — instead of debating how the information gathered by our iPhones conditions the austerity measures of our governments. To be critical of technology today should mean questioning how it and its boosters let the current system buy more time, and stave off an even more existential crisis.
Evgeny Morozov is the author of To Save Everything, Click Here: Technology, Solutionism, and the Urge to Fix Problems that Don’t Exist, Allen Lane, London, 2013.
Copyright © 2014 Le Monde diplomatique—used by permission of Agence Global
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