Most mornings I sleep as late as possible, but on the first Friday each month for the last 5 years up through last summer I have awakened when it’s still dark outside. Despite the early hour, timid excitement would pull me from slumber, and I would roll over, grab my phone from from my bedside table, and peer through blurry eyes at my latest push notifications, hoping to see one from the Washington Post about the previous month’s unemployment rate, as determined by the Bureau of Labor Statistics.
Since the Great Recession began, the media portrayed joblessness as the worst symptom of a bad economy, which in turn was dragging down President Barack Obama’s political fortunes. As an Obama believer, each of those mornings I hoped that a falling unemployment rate would increase President Obama’s popularity. Last summer unemployment fell below 6%, the midterm elections showed us that the president remains unpopular. Economic anxiety, the media now says, has more to do with stagnant wages than the rate of employment. Nobody is happy who is locked into a job with little opportunity for financial advancement; nobody is happy who is working a lower paying job than they used to without much hope for returning to their previous standard of living.
I've been determined to understand why an economy that is growing at 5% in the last quarter is failing to increase living standards for most of its people. I am tired of listening to mainstream liberals and conservatives blame each other for every economic problem; neither camp understands what's happening in society or what to do about it. But Jaron Lanier, a "digital idealist," describes what's causing these trends more accurately than most, if not all, of our political and cultural leaders.
In his 2013 book Who Owns the Future?, Lanier shows how the growing use of algorithm-driven software by businesses and institutions to collect and analyze huge amounts of personal data for commercial means, and nascent innovations in automation and robotics, are making it harder for people of average wealth and education levels to find good jobs. As should be expected when trying to predict the future, Lanier's ideas are theoretical and sometimes farfetched. But they are worth keeping in mind as we move into a highly networked and automated future, where information, rather than labor, is the "primary object" through which money is made.
Who Owns the Future? reaches further than can be analyzed in one blog piece; what follows constitutes a distillation of what I found to be his most compelling narrative.
Before the Internet, businesses and other institutions relied on human workers to record, analyze, and transmit information. Since the rise of the Web and rapid decline in computing costs, many industries have been "disrupted" by new companies who primarily rely on computers to collect, process, and transmit information through software. What we are seeing, according to Lanier, is a slow change from an economy that relies on human labor to one that relies on human information.
This phenomenon is long underway and should be evident to an urban millennial. Many of our favorite companies are built around their use of computers to absorb and process huge amounts of data (data users very often give over freely). Google, Facebook, Uber, Amazon, Travelocity, and Spotify are just a tiny fraction of such companies. Think about it: our favorite Internet-based companies may look like they perform different functions based on the variety of products and services they sell, but fundamentally all they are doing is analyzing as much information as possible and using it to deliver you a product or service.
We, everyday citizens with everyday problems to deal with, are enamored with these new services and the level of convenience they offer. Many things that used to truly be a pain in the ass have become relatively painless in just the last couple of years because of these companies. This scale of data processing is only something a huge group of computers can do. Companies, and whole industries, that come from the old world --- where only humans knew how to analyze and transmit data --- can't possibly find a way to gather, process, and use information on this level. We citizens, self-interested economic actors that we are, start viewing old world companies who rely more on humans to analyze and communicate information as slow and inefficient by comparison. The companies whose modes of operation rely on humans start to fail. Once the power of software starts to fulfill core functions, entire industries shed hundreds of thousands of jobs.
The travel industry is a great example. It used to be that if you wanted to find housing and transportation in a foreign country where you had no friends or relatives, you'd have to call a travel agent. The travel agent maintained a network of hotels and car services, and knew how to get the best deal for her clients. Online services like Travelocity, Orbitz, and Expedia maintain all that information on the Web. It makes no sense for airlines and hotels to pay travel agents to find customers when their users can just hop on a computer, browse options, and book their choice in the space of a few minutes. Today there is little need for travel agents. The services that replaced them -- Travelocity, et al --- employ a few thousand people to maintain their computers, build updates and fixes into their algorithms, and market the services to new users. But they don't employ nearly as many people as the hundreds of thousands of travel agents they've put out of work.
The music industry is another example. Brick-and-mortar record stores and the staff to support them are largely unnecessary since users can buy whatever songs they want from iTunes, or stream them on Spotify. Meanwhile, these services provide artists and record companies far less in royalties than album sales once did, further reducing the revenue available to support a recording industry. Sure, Apple employs people on its iTunes team, and Spotify has employees too, but not as many as the record industry they have gutted.
Lanier's demonstration of how Amazon out-competes retailers who used to have a geographical advantage as local sellers is so spot-on that I'll just quote it directly:
"A 'bot' program in the Amazon cloud monitors the price of books you sell everywhere else in the world; it automatically makes sure Amazon is never undersold. There is no longer a local intelligence advantage for piercing by small local sellers. This leaders to bizarre outcomes, such as books being priced for free through Amazon simply because they are being given away as part of a promotion elsewhere. Therefore promotions for ordinary, small sellers become more expensive or riskier than they otherwise would be. Information supremacy for one company becomes, as a matter of course, a form of behavior modification of the rest of the world."
One could argue that laid-off travel agents and studio technicians can find jobs elsewhere, and that they themselves benefit from these great services that caused the elimination of their jobs and the jobs of others like them. That's true.
Here's the problem, though: the jobs that are getting eliminated usually came with relatively high guaranteed pay and health benefits, but unless the laid-off travel agents know how to code, most of the new jobs available to them tend to be low-level service jobs in fast food, retail, or home care, which pay close to minimum wage and often don't offer health insurance or other benefits. So as more and more of the companies that are delivering the leading services and products in our economy rely on digital networks and automation, our middle class, average people who "work hard and play by the rules," as Bill Clinton would say, is slowly moving from obsolete jobs that at least paid reasonably well to crappier jobs that make it much harder to support a family and have some time left over to enjoy life.
This is why Obama’s approval rating has remained so stubbornly low. The more industries that are disrupted by software, the fewer decent-paying jobs there are overall.
Growing use of software and algorithms throughout the economy will go hand-in-hand with ongoing advances in robotic automation to further undermine jobs and industries that have always relied on human labor. The process of automation is underway, but less visible to the average citizen for the time being (though this will likely change very soon). You may have heard that many companies that outsourced manufacturing jobs overseas in the last decade of the 20th century have been moving manufacturing operations back to the US. That's true, but the jobs aren't coming back with those manufacturing operations. That's because developments in robotics have enabled the automation of many assembly line functions that humans fulfilled only recently. This process has been going on for a long time, but it has increased in recent years. And it's about to get truly crazy.
Self-driving cars seem impossible, but they are already licensed to drive on public roads in many states, and their introduction to the mainstream will come much sooner than people thought even just a couple of years ago. Their economic impact will be significant. As Lanier points out, "a giant portion of the global middle classes works behind a wheel…a traditional entry ramp into economic sustenance for fresh arrivals to big cities like New York would be gone." We think the taxi drivers are upset about car-sharing services--imagine how they'll react when they learn that nobody will ever need their services again.
Health care is another industry whose (slightly more distant) future will also probably lie in automation, according to Lanier. He claims that, in Japan, robots are "already able to handle delicate tasks, like certain surgical subroutines," and as advances proceed, they will legitimately disincentivize the hiring of human nurses and other caregivers. Of course, any medical robot's operating system, like the software algorithms that are in such heavy use today, "will be utterly dependent on cloud software that in turn will be dependent on observing millions of situations and outcomes."
You wouldn't be alone if, on reading this, you think Lanier sounds like some kind of paranoid combination technophile-socialist. He certainly didn’t do his credibility many favors with his writing style, which is often, if not the majority of the time, quite vague and "out there," with a lot of extended metaphors, some of which work well but many of which seem entirely too farfetched. His concepts stretch across so much different subject matter that it's hard to follow him as he zips from ancient Athens to your computer screen, using futuristic words to make sure his meaning holds together logically, but still leaving behind the careful reader. The book is also just too long, and at times tedious to work through.
But Lanier’s knowledge of technology and understanding of the trends therein runs deep, and we shouldn’t dismiss his ideas out of hand just because he needed more editing. We also shouldn’t blame him for sounding a little crazy when trying to predict the future. The value of his work lies in the way he re-frames common understandings of how societies develop, and his recognition of how information technology is bringing about what renowned urbanist Richard Florida has called "a tectonic shift to a fundamentally new economic order: the shift from an industrial economy to an idea-driven creative economy." Lanier's worldview, wherein digital networks and automation will fundamentally reshape human life in a way that will outdo the Industrial Revolution, is closer to the truth than our polarized national discourse reflects, and is too little understood by most of our leaders in politics and culture.
If information technology is harming prosperity, then what can we do about it?
Perhaps an update to our understanding of the requirements for economic success, and a corresponding upgrade to our education system to ensure widespread intellectual creativity and technical skill, will suffice to ensure that most people have a well-paying job. In an economy where menial labor is exchanged for wages, and wages exchanged for consumable goods, people have only needed basic literacy and work ethic to achieve financial security. Now that is clearly not enough. Our material-based economy is built around the idea that only a small minority of workers gets to have a say in what physical goods are made, and how; the rest of us are meant to follow instructions, take home our paychecks, and consume.
What if all people were empowered to be creative in their work, or to exercise high technical skill or leadership? What if creativity could be humanity’s competitive advantage? If our education system could be upgraded so that all citizens were equipped, and expected, to utilize their creativity to come up with new ideas, products, and applications that made even better use of the computing algorithms and machine technologies that are developing, then perhaps everybody could achieve financial security. If this took place, we would become a society of creators and thinkers, much happier and more psychologically fulfilled than a society of mere consumers.
150 years ago, some contemporary thinkers were gravely worried about the future of human labor during the transition from an agrarian to an industrial economy; what they didn't realize was that the new economy would be so robust that it would, through geographic re-organization and a change to worker skills and lifestyle, provide opportunities for former farm workers to find employment and enjoy a better life. Maybe society could similarly reinvent itself in the 21st century. To me, this is the best-case scenario for the human experience.
But if we accept Lanier's theory in totality, simple update to our notion of labor to require creativity may not go far enough in addressing the fundamental problem. According to this line of thinking, there will come a day when all human labor will be made obsolete by machines running algorithms based on personal data gathered from humanity. Lanier’s solution is to compensate people financially every time some of their personal data is used to make money. To accomplish this, he suggests that every citizen be given a unique online "identity" to track their activity, not unlike how one uses Facebook to log into many online services, but for all online activity, across all applications and platforms. This would establish data "provenance" for every citizen, and enable the tracking of every bit of personal data from collection all the way through use in an algorithm. Micropayments would be given to the original user in proportion to how much money was made using each tidbit of personal data. This idea, if implemented fully, should lead to economic security for most humans. But it will present a monumental technical and cultural challenge to get society to accept that the era of exchanging labor for wages has passed. And if they aren’t working in some fashion, what will people do with their time?
Figuring all of this out is not within the scope of this blog post; it will take the hard work of multiple generations. But the sooner we begin the debate, the better, and we need to urge the rise of political and cultural leaders who can grasp the full extent of the transition that our society is undergoing. Nobody among our current leadership seems to get it; both main ideological camps, liberal and conservative, seem only interested in trying to return us to some version of the past. In the face of this, Lanier is one of the first thinkers I've come across who is looking for a solution to our social stratification and anxious malaise that takes into account the fundamental ways that recent technological developments are reshaping our world. He should be applauded for being among the first to grapple with what, if anything, humanity can do to ensure widespread social welfare in an economy where information, rather than labor, is the "primary object.”
Do I sound crazy? Please challenge me. I want to debate this topic; I want other people to be thinking about it. The Internet is enabling things we never thought possible and can conceivably impact every aspect of life. We need to be thinking about how the fundamental advances in information collection, processing, and transmission will affect our society in the arc of history.