Friday, January 15, 2016

The Real Powerball

As I was reading the Guardian on another sleepless night I found the below opinion on the Tech Sector which despite being a year old is quite pertinent and yes Morozov is a known agitator with regards to the tech sector, but then you then read the article that follows about the World Bank report.  And from that report is an issue about  their concerns  with regards to Silicon Valley and their role in furthering income inequality via a reduction in job skills and access to information and in turn accountability to the larger community in which it is intended to serve.

 I have long been lamenting this idolization or what I call the Jobs Affect of believing that technology is somehow special, distinct or different that mainstream industries or businesses and therefore exempt from disdain or at least suspicion is misplaced.

I have long said that the Silicon Valley is the West's version of Wall Street only more insidious and duplicitous. Here is another tale of Nest and its failure to save the world or well even this person's home from failing. The self driving cars that are crashing and of course computers that can keep an eye on you. And all of that data that is collected as we know is used by Governments and Organizations to monitor your behavior, your patterns and used for whatever purpose, financially lucrative or otherwise, against you.

Again, the reality is that we appreciate what technology allows but at one point are we allowing them too much. They are like the Powerball where it just gets larger and larger but does anyone really win? Lotteries are not about the winners on the receiving end, and in gambling the house always wins.

Silicon Valley likes to promise ‘digital socialism’ – but it is selling a fairytale
Evgeny Morozov

The tech industry says it can tackle inequality, and governments are keen to let it try. The choice that citizens now face is not between the market and the state, but between politics and non-politics

The Guardian UK
Saturday 28 February 2015

The outside world might regard Silicon Valley as a bastion of ruthless capitalism but tech entrepreneurs fashion themselves as believers in solidarity, autonomy and collaboration.

These venture humanitarians believe that they – and not the wily politicians or the vain NGOs – are the true champions of the weak and the poor, making the maligned markets deliver material benefits to those on the fringes of society. Some of the valley’s in-house intellectuals even cheer the onset of “digital socialism,” which – to quote digital thinker and environmentalist Kevin Kelly’s 2009 cover story in Wired – “can be viewed as a third way that renders irrelevant the old debates.”

Leaving aside the battles over the true meaning of “sharing” in buzzwords like “the sharing economy”, one can discern an intriguing argument in all this self-congratulatory rhetoric. The magnanimous Silicon Valley really wants to be the perfect antidote to the greedy Wall Street: if the latter yields an ever greater increase in income inequality, the former helps to bridge the gap in consumption inequality.

That is, you might be earning less and less than your rich neighbour, but both of you also pay less and less – it’s probably nothing – for listening to music on Spotify, doing research on Google, or watching funny videos on YouTube. Soon, this logic might apply to internet access itself:, Facebook’s flagship initiative in the developing world, offers users nominally free access to basic online services including Facebook or Wikipedia. Once education, health and other services move to the cloud, one can see Silicon Valley playing an even greater role in these matters. Couldn’t Google notify you of any developing symptoms, once you share your everyday health data? Wouldn’t that offer some basic healthcare to people who would otherwise not be able to afford it? And, in the absence of other options, who could possibly object to Google saving lives?

Silicon Valley’s oft-repeated tales of “user empowerment” are made of these kinds of promises. Set against the background of the failing welfare state, unable to cope with the promises it made to its own people, Silicon Valley offers us a new social net: we might be forced to sell our cars and default on our mortgages, but we would never lose access to Spotify and Google. Death of starvation is still a possibility but death of content starvation is no longer in the cards.

But before those cars and homes disappear, Silicon Valley could also help us turn them into a productive asset. Thanks to startups like JustPark – a trendy app which allows property owners to rent their underused parking space to desperate drivers – even the income inequality gap can be bridged, if only by a little bit. Ordinary citizens should rejoice: not only would they pay nothing for basic services – they could supplement their stagnant regular income by monetising their previously “dead” capital.

This claim to being the world’s great equaliser is the very factor that makes Silicon Valley into a non-stick industry impermeable to social criticism. But the premises of its venture humanitarianism are not as rigorous and unshakable as they seem. There are at least three possible lines of attack.

First, a nominal increase in equality of consumption does not always entail a corresponding increase in individual autonomy – in fact, it might have the opposite effect. To take advantage of all the opportunities offered to us by Silicon Valley – including such fancy-sounding projects as – one must first agree to share one’s data in exchange for free services. One has to be very naive to believe that this data is not going to shape how we live the rest of our lives, especially when insurance companies and banks are so eager to incorporate it in their decision-making.

The end result will be more social complacency as we start adjusting our behaviour, expecting that everything we do will affect everything else. It also means that those who can actually afford to pay for all those services that the rest of us are getting for free will enjoy an even greater autonomy in the future: think of the people who don’t already have to worry about qualifying for a mortgage or a loan. They are not the ones who would worry how Uber drivers rank them or whether skipping the gym might give them trouble with their insurer.

Second, Silicon Valley’s empowerment fairy tale is just that: a fairy tale. It conceals the fact that the nominally free information available on Google is not equally useful to an unemployed graduate and a secretive hedge fund with access to sophisticated technology to turn data into trading insights. The same goes for attention-channelling services like Twitter: they are not equally useful to an average person with 100 followers and a prominent venture capitalist followed by a million people.

Therefore, it seems obvious that equalising access to communication services does not in itself eliminate or even weaken other types of inequality. But should we even worry about those other types, if equality of consumption is all that matters? We certainly must. Silicon Valley, after all, has done little to equalise things like home ownership and there is no prospect of it ever disrupting the world of real estate.

In other words, to make other types of inequality less relevant, Silicon Valley would need to also become the go-to provider of free housing and food: only then one could plausibly argue that your hedge-fund neighbour’s outsize pay is beside the point, since all your own basic needs are covered anyway.

This, however, raises the third and most troubling question: why bother to have a state at all, if Silicon Valley can magically provide basic services, from education to health, on its own? Even more important, why still pay taxes and fund non-existent public services, which are to be provided – on a very different model – by tech companies anyway? This is a question that neither the state nor Silicon Valley is prepared to answer. One feels, however, that the modern state wouldn’t mind having the tech companies play a greater role, allowing it to concentrate on the one task it likes most: fighting terror.

The citizens, who are not yet fully aware of these dilemmas, might eventually realise that the actual choice we are facing today is not between the market and the state, but between politics and non-politics. It’s a choice between a system bereft of any institutional and political imagination – where some permutation of hackers, entrepreneurs and venture capitalists is the default answer to every social problem – and a system, where explicitly political solutions that might question who – citizens, firms, the state – ought to own what, and on what terms, are still part of the conversation. However one chooses to call the world that Silicon Valley is helping to usher in, “digital socialism” it clearly isn’t.

Silicon Valley tech firms exacerbating income inequality, World Bank warns

Perhaps most high-profile examination of how tech giants impact economy
Shortcomings can be overcome if government increases public access to web

World Bank report Silicon Valley tech firms income inequality

‘The risk is that states and corporations could use digital technologies to control citizens, not to empower them,’ the World Bank report said.

Danny Yadron in San Francisco
The Guardian
Thursday 14 January 2016

Google democratized information, Uber democratized car rides, and Twitter democratized publishing a single sentence.

But to the World Bank, the powerful Washington-based organisation that lends money to developing countries, Silicon Valley’s technology firms appear to be exacerbating economic inequality rather than improving it.

It’s not a new argument in California’s San Francisco Bay, where protesters have blockaded Google’s commuter buses and local activists try to curtail new development for tech company headquarters. But the 330-page report released on 14 January is perhaps the most high-profile examination of how specific American tech giants impact the global economy.

“Second, some of the perceived benefits of digital technologies are offset by emerging risks,” the report says. For instance, it says: “Many advanced economies face increasingly polarized labor markets and rising inequality – in part because technology augments higher skills while replacing routine jobs.”
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“The economics of the internet favor natural monopolies, the absence of a competitive business environment can result in more concentrated markets, benefiting incumbent firms. Not surprisingly, the better educated, well connected, and more capable have received most of the benefits – circumscribing the gains from the digital revolution.”

“Regulatory puzzles are posed by firms such as Amazon, Facebook, and Google ... These firms confound conventional competition law because they do not act as traditional monopolies. The risk is that states and corporations could use digital technologies to control citizens, not to empower them,” it continued.

The report goes on to say that many of the shortcomings of American tech firms can be overcome if governments can increase public access to the web. Technology firms such as Google and Facebook are working on projects to offer free internet to parts of Africa and India.

For those projects to work, the companies need to offer internet access with no strings attached, the World Bank says. At one point, it calls out Facebook’s recent efforts to provide free internet access to consumers in some countries – but only to access Facebook.

“The recent trend to develop services in which some basic content can be accessed free of data charges (such as Facebook’s Free Basics or, while other content is subject to data charges, would appear to be the antithesis of net neutrality and a distortion of markets,” the report says. “Nevertheless, some defend the practice as a means of extending internet use in low-income countries.”

In the US, politicians and nonprofits have often attacked Wall Street banks and oil companies as sources of corporate profits that don’t help the rest of society. The World Bank report suggests it may not be long until tech joins their ranks.

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