If you’re sceptical of that claim, so was William Harvey, the celebrated physician (he discovered the circulation of the blood) who conducted Tom Parr’s post-mortem. On the other hand, when I shared Parr’s story recently with a leading ageing researcher, she replied, “It could be true, you know; I wish I had some of his DNA.”

Slowing the ageing process is something that has long preoccupied humanity. But should it be a top priority for our scientists? Aubrey de Grey, the researcher and activist, likes to say things like: “Ageing is just like smoking: it’s really bad for you.” He wants it to receive the same focus we place on cancer and heart disease. But who exactly will benefit?

The rich have always lived longer, and evidence is mounting that the rich-poor divide is getting wider every year. According to one recent study, the wealthiest 1% of American men actually live 15 years longer than the poorest 1%. And the gap just grew by around 2.5 years at the top; at the bottom it barely shifted.

What’s more surprising is to find the same trend on this side of the Atlantic. The UK’s insurance industry’s Longevity Science Panel report that a boy born today in the top 20% will outlive one born in the bottom 20% by 8.4 years. That gap has widened 1.2 years since 2001. But the most startling recent study focused on literacy. The life expectancy gap between boys born in the least and most literate parts of the country is a staggering 26 years.

For the UK, with its commitment to universal free healthcare and focus on equity of social opportunity, these data suggest an embarrassing failure of policy and practice. Each year that passes marks a step further into inequality at the core, between who lives and who dies.

What’s more, this process is likely to speed up. Expensive techniques could enable the wealthy to live much longer. For them, becoming a centenarian could be the norm; perhaps living even longer lives than that of Jeanne Calment, the world’s oldest documented person, who died at 122.

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This is not just talk. There’s evidence that the ageing process is reversible in both mice and human cells – enough to persuade investors to jump in. Google has put $1.5 billion into a firm called Calico, which hopes to extend the human life span by “coming up with a breakthrough as important, and as useful, as the transistor”. Its research guru is Cynthia Kenyon, perhaps the world’s most famous age research scientist. In the words of the MIT Technology Review, “Calico is, in effect, an elite university research group housed within a corporate bunker.”

Amazon’s Jeff Bezos and Facebook board member Peter Thiel aren’t far behind – they’re funding Unity Biotechnology, which aims to make a person functional and free of the diseases associated with aging for as long as possible. Meanwhile, Ray Kurzweil, the ultimate tech optimist who has long proclaimed the coming “singularity”, reckons “we will reach a point around 2029 when medical technologies will add one additional year every year to your life expectancy”. If he’s right, in 11 years’s time we shall essentially stop ageing.

Which leaves us facing two sets of challenges. First, what to do about the current situation – the growing inequity in health outcomes. And, second, how to prepare for a future of much bigger advances in longevity – for those who can pay.

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By Nigel Cameron

Back in 1948, the year the NHS was founded, the global community decided that health was a human right. According to the Constitution of the World Health Organisation (WHO): “The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being.” Everyone should have an “equal opportunity” to attain it. Not just a ‘right’ to access treatment – the right to go and see a doctor – but to achieving a standard of health.

Successive governments, despite social equity rhetoric, have failed to prevent the poor from falling further behind in the race for life. There is a lot more to healthcare, but longevity is a key criterion for success. Politicians and the press tend to be distracted by waiting lists and A&E delays – legitimate concerns, like chronic underfunding. But outcomes are the key. I’m doubtful the Longevity Science Panel numbers will feature on battle buses at the next General Election, but perhaps they should.

Then what of the longer term? If the kind of research Google and others are investing in pays off, we can imagine more and more people being able to afford to slow their ageing process, so they can continue living active lives beyond their 100th birthday – perhaps decades beyond.

These scenarios have been explored by Sonia Arrison, in 100 Plus, in which she sketches out how life-extending discoveries will change our social and economic worlds. Lynda Gratton and Andrew Scott, in their The 100 Year Life consider how to make your centenary a blessing not a curse, and in his latest book New Methuselahs the philosopher John Jefferson assesses the ethical agenda – deciding, on balance, that life extension is a good thing, while proposing a policy to mitigate over-population.

But not everyone wants to live a lot longer, even if they could. In a detailed poll of American attitudes, the Pew Trusts asked if people would want treatments “that slowed the aging process … and allowed the average person to live decades longer, to at least 120 years.” A majority of 56% said no.

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The development of a growing class of centenarians raises many challenges. Over-population; impact on pensions – funding for retirement is already squeezed as longevity assumptions shift. Since the idea is to prolong healthy lives, people could continue to work longer. But that underlines the potential impact of more fit elderly people needing jobs – just as the development of AI/robotics already threatens ‘full employment’. Advocates push back that our economies and social lives have flourished during the doubling of global life expectancy since 1900 and can be expected to adjust when it happens again.

From a policy perspective, if we are committed to “the highest attainable standard of health” as a human right, then we have two options in preparing for a costly jump in longevity: prevent it, or work to share the benefits.Simply outlawing life extension would be difficult. Other countries would need to agree. Age-slowing therapies would most likely be introduced incrementally, in any case. And any ban would lead to an inevitable illicit market. But controls to ensure equity could play a part.

In parallel, we need a policy of sharing the benefits, through a combination of government subsidy/provision and limiting patent protection so cheaper, generic, versions of therapies could be quickly available.

The Harvard age researcher David Sinclair is not the only expert to suggest that the first person to live to 150 has already been born. I hope they get buried in Westminster Abbey, alongside Old Parr, while there’s still room.

In sub-Saharan Africa as a whole, growth in 2018 is forecast by the World Bank to be 3.1%, rising to 3.6% next year. If you exclude the “big three” – Nigeria (2.5%), South Africa (1.1%), and Angola (1.6%), where oil prices and other special factors come into play – it’s closer to 5%. And the 3.1% average for all 49 nations obscures an even more interesting statistic – Africa hosts six of the world’s ten fastest growing economies:

“Most of 2018’s top performers are non-commodity intensive economies. The list is led by Ghana (8.3%) … Ethiopia (8.2%), Côte d’Ivoire (7.2%), Djibouti (7%), Senegal (6.9%) and Tanzania (6.8%).”

For comparison: while the US just announced an annual growth rate of 4.1%, according to a recent Bloomberg report it’s likely a blip (driven by the short-term impact of tax reform and anticipation of a trade war); the recent norm has been around 2%. The latest UK figure is a miserly 1.2%.

The African game-changer has been the mobile phone. By 2019, according to the World Economic Forum report, there will be 930 million mobile phones in Africa, which works out at almost one for per person: “There is greater mobile penetration than electricity penetration. Now, people are able to connect, get news, trade, get access to healthcare and even transfer money.”

It may seem counter-intuitive, but could the lack of traditional infrastructure actually be enabling this? I put this to Dr. Nagy Hanna, global innovation guru and former head of strategy with the World Bank.[1. Nagy Hanna’s books include Mastering Digital Transformation: Towards a Smarter Society, Economy, City and Nation (Innovation, Technology, and Education for Growth) (Emerald Publishing, 2016)] “That’s half the story. But yes – there are no legacy systems. There are mobile-based systems. Moving fast to a cashless society.” So what’s the other half? “The other story that is promising is the development of innovation hubs. Mostly in South Africa but also Kenya, Ghana – they’re not evenly spread.”

Innovation hubs in the West have historically been funded by venture capital. The most famous is Silicon Valley’s Y Combinator that has nursed a succession of star starts-ups including DropBox and AirBnB.

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In Africa it’s a different story. In some cases, foreign aid is funding the hubs, Dr. Hanna tells me. In others, it’s smaller-scale private/local funding, mostly tailored to small-scale enterprises. Local inventers and innovators flock to them. “These are well-educated people…. Their problem is scaling up – to have a major impact on development.”

Major western companies are showing increasing interest. “The hope is that multinationals will move in, fund, bring scale. IBM, CISCO, Apple, are all engaged.” That’s because they see vast potential. Given the pace of both economic and population growth in these countries the potential of their markets is huge. What’s more, Dr. Hanna says, through participating in the local innovation scene in booming economies like Kenya and Ghana, these major companies “have a big opportunity to learn how to meet unique African needs and challenges.”

Of course, working in an environment without legacy infrastructure brings its own special problems. For example, logistics bottlenecks, which offer particular challenges to e-commerce, including high transport costs. There’s also a continuing need for a more business-friendly environment right across the continent. Kenya, for example, is still ranked number 91 in the world for business-friendliness. It takes an entrepreneur 25 days to set up a business in Kenya – in the United States, where I live, it literally takes less than half an hour.

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By Ian Birrell

Yet Kenya is an African success story, and host to one of the most innovative tech applications worldwide – the mobile banking app M-PESA. In the west we getting used to various payment systems that use our mobile phones, but M-PESA, launched over a decade ago, was way ahead of the game. (For comparison, Apple Pay was launched in 2014.) The statistics are stunning. M-PESA processes 48% of Kenya’s entire GDP. It’s used by 93% of the adult population.

Unlike more complex western systems, M-PESA doesn’t need an app – it’s based in the phone itself (many Africans do not have smartphones); SMS (texts) facilitate money transfers. Since it was launched, the number of ATMs in the country has dropped by a third. And its success exemplifies the need for western companies to engage on the ground – and the opportunity when they do. In the case of M-PESA, the prime mover was Vodafone’s Kenyan subsidiary, Safari.com. And, as is often the case with wildly successful innovations, the original goal was quite limited – to manage micro-lending.

Will these fast-growing African economies be the successors of the Asian tigers? Aid agencies funding innovation hubs and multinationals taking the long view and seeing vibrant markets down the road are marvellous signs of hope. But the real challenge lies in the hands of governments. Countries like Kenya are steeped in colonial-era regulation and a post-colonial tradition of heavy-handed political leaders. For Africa to realise its economic potential, those nations need to work their way up the business-friendly rankings, enabling them to capture the energies that technology and its entrepreneurs are letting loose. Getting rid of red tape is now the challenge.

In the UK there is ‘Silicon Roundabout’– actually London’s Old Street Roundabout near which tech start-ups have congregated. In Scotland there is ‘Silicon Glen’– not actually a glen at all, but a reference to geographically dispersed Scottish high tech.

New York City has ‘Silicon Alley’. In one of the more orchestrated efforts to develop a Silicon Valley lookalike, billionaire former Mayor Michael Bloomberg got universities to compete for the opportunity to house a new and improved version of the Valley in city property. When a joint venture between Cornell University and Israel’s Technion beat Stanford to the punch, Bloomberg declared: “New York City’s goal of becoming the global leader in technological innovation is now within sight.”

But by far the biggest government-driven effort to duplicate the Valley is Russia’s Skolkovo Innovation Center.  Dubbed “Russia’s answer to Silicon Valley” by the Financial Times, it was launched in 2012 with the promise of $4.2 billion in funding from the Russian state. The goal: to host 1,000 start-ups scattered across various different fields of science and technology. Six years on, its most newsworthy outcomes have been links to not one but two separate spy scandals.

As the Financial Times drily observed:

“Even in a country with an embedded entrepreneurial culture, it took decades for Silicon Valley to become a driving force for US innovation.”

What is it that made “the Valley” so special? In her classic book Regional Advantage: Culture and Competition in Silicon Valley and Route 128, academic AnnaLee Saxenian compared the culture that made the Santa Clara valley such a success with Route 128, its equivalent near Boston, Massachusetts.

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When Don Hoefler came up with his name for the nascent cluster of semi-conductor firms in northern California, the Boston area – with its uniquely powerful concentration of universities, including Harvard and MIT – already hosted a group of highly successful tech companies. In her book Saxenian describes “what differentiated California’s Silicon Valley from the tech industry outside Boston, which started out stronger than its West Coast rival but withered in the 1980s and 1990s.”

Back in the ‘70s and ‘80s, Route 128 was referred to as “America’s Technology Highway” because “there were a lot of very big, very successful technology companies — Wang, Data General, DEC, Prime Computer.” These companies have since become much less significant, and in some cases disappeared altogether. No-one talks about Route 128 as “America’s Technology Highway” any more.

As Saxenian sees it, they were tech companies with old-style corporate culture – they were “classic post-war American companies”, just like the car companies that in the mid-20^th century dominated Detroit, “with vertical hierarchies and career ladders.”

The contrast with the Valley could hardly be more stark – “a story of ever-evolving networks, of workers who leap from startup to startup, of companies that fail and then recombine with other failures into big successes”, says Saxenian in a Harvard Business Review interview.

“What I learned was that being able to innovate very quickly, being able to be first to market with new products, being able to adapt to crises and to change quickly was much more of an enduring advantage for the region. The dynamism of Silicon Valley was rooted in a structure that was very decentralized and very flat and allowed for very rapid change.”

There was something else going on too. Together with technologies and a dynamic work culture, the Valley created venture capital — “the idea that people with good ideas can be funded to start businesses, they don’t have to have money from their family or from the state.” It’s striking that Fairchild Semiconductor, the firm that pioneered the silicon-based industry, is also regarded as the first company to benefit from “venture capital.”

Have contemporary government and private-sector “Silicon Valley” learned from this analysis – analysis that helped shape the Valley’s subsequent understanding of itself? New York City is the place to watch. In 2017, tech start-ups pulled in a total of $11.5 billion in investment. For comparison, in a bumper year for Silicon Valley, investments totalled $84.2 billion. [1. For comparison, the figure for the UK of just under $4 billion was the highest in Europe.]

In a fascinating review of the city’s start-up culture, Bloomberg news puts it like this: “New York Will Never Be Silicon Valley. And It’s Good With That.”

“The city is a long way from fulfilling the tired trope of becoming the “next Silicon Valley.” But New York techies like it that way…. Investors, founders and employees point to all the things that make New York one-of-a-kind as the reason tech is growing in America’s biggest city: the presence of other industries like finance, media and advertising, much more gender and racial diversity and the metropolis’s centuries-old status as a center of global commerce.”

In other words, it’s things that make New York City unlike Silicon Valley that are contributing to its maturing high-tech sector – including proximity to mature industries and to the mature financing offerings available from Wall Street.

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And the shape of things keeps changing.  In New York City there is a start-up backed by $250 million from iconic Silicon Valley VC firm Andreeson Horowitz. Disruptive art and healthcare platforms are located at the heart of their respective industries. The major tech players, including Google, Amazon, and Facebook, are all establishing major offices in America’s commercial capital.

The idea of establishing new Silicon Valleys to repeat the innovative efforts of the digital disruptors of the past 30 years is starting to look dated and even nostalgic. This is especially significant with Artificial Intelligence and the Internet of Things set to disrupt mature industries in almost every sector of the economy. Yet the lessons of Regional Advantage still need to be learned – not least as the tech giants are beginning to look increasingly like the vast, hierarchical, Route 128 companies of 1970s Boston.

The biggest shift of the late 20^th century, a shift set to engulf the 21^st, is from labour to capital as a factor of production. As with the first Industrial Revolution, the core issue is the reallocation of resources that will result from the application of new technology.

Second only to resisting invasion by a foreign power, full employment has long been the core concern of political leaders. It’s the key to public sentiment – and re-election. It’s a key reason why Trump made a big deal out of criticising offshoring, competition from China, and cheap immigrant labour – even if the bigger challenge to jobs is automation.

Unemployment numbers have in fact been low in recent years. Yet something strange has been happening in the United States and, to a lesser extent, to other industrialised economies. Despite full employment, wages have been depressed. What’s more, plenty of people have ended up without jobs – and not even looking for jobs, which is why their absence from the workforce is hidden from the headline unemployment rate. As candidate Trump claimed back in 2016: “The five percent figure is one of the biggest hoaxes in modern politics.” He was onto something.

Male ‘workforce participation’ is the term economists use for men of prime working age who have jobs – and it has been steadily eroding for decades. Between 1954 and 2016 it dropped from 98% to 88%. In other words, a lot of people disappeared from the unemployment stats because they stopped searching for work. They decided to occupy themselves in other ways – by taking ‘early retirement’ on the golf course, caring for their grandchildren, playing video games, or falling into a spiral of addition. They became the ghosts of the unemployment statistics.

John Maynard Keynes, doyen of 20^th-century economists, foresaw just this situation nearly a century back. With a somewhat ironic turn of phrase he spoke of the emergence of a “new leisured class”, as machines take jobs.

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Alongside the new jobless, we have many more people who do have jobs but whose standard of living has been increasingly depressed. The income stats are terrifying. According to Oxford economist Carl Frey and his colleagues, between 1979 and 2013 “the real wages of the vast majority of Americans … stagnated or even declined”. Productivity rose 64.9%, yet for 80% of the workforce wages went up by only 8.2%.

The shift in reward to the owners of capital has been immense. According to Frey, “A prime explanation is the robot revolution, which has contributed to both joblessness and wage reductions, especially among American men.” Specifically, “Diffusion of robots . . . has caused unemployment and wage reductions in particular among workers in blue collar jobs without a college degree.” Frey remarks that this “mirrors” the first four decades of the Industrial Revolution in the UK – when incomes stagnated or fell. “A large segment of the workforce has become detached from the engine of growth.”

What does this mean for an American working family? “The income distribution of 1979 would leave today’s top 1% with $1 trillion less in annual income and [add] $11,000 for a family in the bottom 80%.” These are astonishing numbers. It is unsurprising that with such a diminishing share of income going to workers there is a growing sense of political disenchantment – even radicalism. As Frey notes, from an economist’s point of view if workers don’t accept the “market reallocation” of their value, they will seek other kinds of redress.

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But what technology takes away, it also gives back. It is those same developments in digital technology driving automation that have granted the disaffected, and those who wish to play on their disaffection, the tools to hit back.

The disenchanted flyover voter – mid-life, male, lacking in education – does not need to be a social media activist, just a consumer. He can connect with like-minded people and access content to stoke his frustrations.

Enter Brad Parscale, head of digital for the Trump campaign. In a remarkably candid interview with the US television network CBS, Parscale laid out the Trump strategy to capture the hearts and minds of the disaffected voters in key states.

Apparently, Facebook offers political campaigns specialists who are “embedded” in the campaign and help drive it. Parscale claims he was able to ensure all the Facebook people embedded with him were actual Trump loyalists, though Facebook denies that campaigns had a choice in whom to accept. Either way, the Trump campaign signed on to the highly sophisticated marketing game. They tested 50-60,000 messages a day, up to 100,000 some days. The goal? As Parscale puts it, to reach “15 people in the Florida Panhandle” – micro-targeting voters based on their concerns.

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And on top of this Facebook targeting, Donald Trump’s mastery of Twitter enabled a torrent of rabble-rousing tweets to be delivered directly to his followers, further stirring up discontent. And we now know that Russia has been aggravating the situation – both through ads from spurious organisations, and groups led by fake individuals. The goal has been to induce division by playing on the fears, legitimate and otherwise, of disaffected flyover Americans – and it is working.

Emerging digital technologies are pouring fuel on the flames of disaffection felt by flyover communities – both through their impact on labour markets, undercutting jobs and holding wages down, and in enabling those feeling aggrieved to find like-minded individuals and access content that reinforces their sense of disenfranchisement. Mitigating the impact of the Fourth Industrial Revolution on its losers must surely be a priority.

Procreation, that most mysterious of human activities, had been pulled off by a bunch of scientists – and the result was the first ‘test tube baby’, born to a delighted pair of infertile parents.

Less than 20 years after The Pill had arrived on the scene, science was stepping in again: this time not to prevent conception, but to create life. But her arrival was also darkly symbolic, the physical manifestation of the potential threat that science and technology could pose to the most precious and personal dimension of our lives.

Would the mystery of human conception soon be replaced by the ‘Bokanovsky process’ that powered the baby factories of Aldous Huxley’s Brave New World?

What’s more, this new technology meant scientists in the lab now had access to human embryos. Embryos that had previously been observed in vivo (in the womb) were now for the first time in the history of the human species accessible in vitro (literally, in a glass – a glass testtube). This brought with it a deeply divisive ethical issue: what are our obligations to an embryonic member of our own species?

After years of scaremongering headlines and much public angst, Margaret Thatcher’s government decided the answer was to appoint a Commission of Enquiry to determine a legal framework for this Brave New World technology. It did so in 1982 and appointed Mary Warnock, a philosopher and writer, as chair.

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Her committee arrived at two core conclusions. First, it approved the use of IVF technology and, subject to certain restrictions (such as a ban on contracts for surrogacy), recommended that it be available in the National Health Service. It suggested the government set up an expert committee to regulate the field and keep track of new developments – the Human Fertilisation and Embryology Authority. Second, it advised that the government should permit research on the human embryo, but only for up to 14 days after fertilisation.

After the conclusions were published in the Warnock Report, in 1984, debate focused mainly on this latter issue: should human embryos be biological material for laboratory experiments? Or should they be regarded as embryonic human beings and safeguarded from abuse?

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While the Report’s “14 days” recommendation did become the basis for public policy in the UK, it’s interesting to note that there was dissent from two groups within the committee. Dissent B, which garnered three votes, argued that nothing should be done to prevent the implantation of an embryo created by IVF. In other words, there should be no research use of so-called “spare” embryos created for implantation but not required. Dissent C, with four votes, argued a middle way: “spare” embryos could be used for research, but there should be no deliberate creation of embryos for research purposes. So, taken together, seven votes out of 16 against creating research embryos; a close vote. (A detailed summary here.)

That’s particularly interesting, since the one international treaty on bioethics – the European Convention on Human Rights and Biomedicine, opened for signature in 1997 – specifically prohibits the creation of embryos for research. It’s no surprise that while as a member of the Council of Europe the UK was involved in negotiating this treaty, it has refused to sign it.

Britain might actually have invented the technology and then proposed an ethical/legal framework but other nations haven’t followed suit. Germany and France, have prohibited or severely limited such research and in the United States, where federal government funding is the core issue, both parties have refused to endorse creating embryos for research [1. The closest they have come was George W. Bush’s compromise decision to fund research on existing cell-lines. I was sitting round a Washington table with several members of Congress and assorted conservative leaders, back in early 2001 – facing Secretary for Health and Human Services Tommy Thompson. We were trying to persuade him not to fund research that destroyed human embryos. Our main spox was there on behalf of the Catholic Church; as a Presbyterian, I’d been asked to second him. I tried a little levity. “My Secretary,” said I, in my distinctive English accent, “perhaps I should apologise on behalf of my former nation for inventing in vitro fertilisation and causing you all this trouble.” The Congresspersons sat stony-faced, but Thompson – a genial man – enjoyed the joke, though remained unpersuaded. Shortly after, President Bush took the decision out of his hands.]

This week, exactly 40 years after Louise’s ‘miraculous’ arrival, those early ‘playing God’ fears have intensified. The Nuffield Council on Bioethics, which has long functioned as the UK’s unofficial national bioethics committee, announced a few days ago that it was “morally permissible” to edit the DNA of a human embryo, sperm or egg to alter a future person’s characteristics. Nor did they rule out the alteration of cosmetic traits and “enhancements” – inevitably triggering designer baby headlines.

The report, Genome Editing and Human Reproduction: Social and Ethical Issues, specified that engineering efforts “must be intended to secure, and be consistent with, the welfare of the future person”, and “they should not increase disadvantage, discrimination or division in society”. But for the first time we have a major report recommending the green light to inheritable genetic changes that go beyond efforts to correct inheritable disease.

As we know, notions of the “welfare” of the person and society come and go. Just what kind of interventions that now seem a good idea may be seen as damaging and subjective in a generation or two’s time?  Are we so sure that, in 2018, we have things right?

Way back in 1943, C. S. Lewis, literary scholar, broadcaster, Christian layman, and perhaps the top public intellectual of his day, wrote a short book with the stunning title The Abolition of Man. He foresaw a future science that would enable us to design our children, and their children, in perpetuity. He pointed out that this make them the creatures of our power over the future. Our choices, however well-intentioned, will shape who they are.

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This is dangerous territory. Should the passing beliefs of today, good or bad, be the criteria that shape the genes of our babies, grandchildren, descendants tomorrow?

Forty years back, a startling new technology opened up options good and bad. The provocative Nuffield report indicates that difficult decisions lie ahead.

Meanwhile, let’s wish a happy birthday to Louise Brown.

It is true that the British Industrial Revolution, which spanned much of the 18^th and early 19^th centuries, led to more jobs, better jobs, and ultimately the huge increases in wealth and comfort that frame modern life. “Prior to 1750, per capita incomes in the world doubled every 6,000 years; thereafter, it has taken some 50 years.”[1. Carl Benedikt Frey et al., in Oxford Review of Economic Policy, 2 July 2018]

But researchers have been looking in more detail at the costs involved in this huge jump in prosperity, at what effect the new machines had on the working population. They have unearthed disturbing facts that we need to remember as we face fresh changes ahead.

We tend to think of automation as using machines to do routine work. But at the core of the Industrial Revolution was the opposite. The heart of Britain’s hugely successful textile industry was the “domestic system” – skilled craftsmen working their looms at home. The new machines took this work into factories, and made it simpler. So unskilled operators could now provide most of the labour.

One effect of this was a big increase in child labour; the machines were designed so they could be operated by children, and they made up around half the factory hands. Having lost their skilled work, the craftsmen now faced fresh competition for the new, lower-paid, machine-based jobs.

This led to the most startling effect of all: an astonishing increase in the number of unskilled labourers. As pointed out in a recent speech to the Trades Union Congress by Andy Haldane, chief economist of the Bank of England, between 1700 and 1850 the proportion of unskilled workers in the British labour force actually doubled, from 20% to 40%. Of course, many of these workers did have skills, but they were skills no longer in demand in the economy. To find work they had to compete with farm labourers and others for unskilled jobs. It was, literally, generations before the situation turned around.

Oxford economist Carl Benedikt Frey sums up the research:

“Technological progress has created prosperity for mankind at large, yet it has always created winners and losers in the labour market. During the days of the British Industrial Revolution a sizeable share of the workforce was left worse off by almost any measure as it lost its jobs to technology.”

“During the first six decades of the Industrial Revolution, ordinary Englishmen did not see any of the benefits of mechanization: as output expanded, real wages stagnated, leading to a sharp decline in the share of national income accruing to labour.”[2. Oxford Review of Economic Policy]

To be more specific, the academics found that, according to best estimates, while output per worker increased by 46%, real wages rose by just 14%. But as working hours also increased by 20%, hourly wages actually declined in real terms.

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No wonder the Luddites resisted the new technology – weaving machinery introduced in the textile industry – which threatened their livelihoods. There had been machine-breaking before, and petitions, and demonstrations. But the Luddites took protest to a new level. Their efforts were short-lived. The government in London sent the army north in 1813 to quell the revolt, and soon after, 24 ring-leaders were swinging from public gallows and dozens more transported to Australia.[3. It was rough justice. Here is an affecting account of the hanging of 14 of them, based on local newspaper reports. The men sang a hymn as they walked to the scaffold. Between them, they left 57 fatherless children.]

David Ricardo, the nation’s most famous economist after Adam Smith, is credited with developing the theory of comparative advantage which is the basis of globalisation. Ricardo lived through the Industrial Revolution, could see what was going to happen and agreed in principle with the Luddites: “I am convinced, that the substitution of machinery for human labour, is often very injurious to the interests of the class of labourers”, though he considered it pointless for the government to oppose new technology, since “it will be done abroad” anyway.

Introducing the technology was therefore the lesser of two evils: “By investing part of a capital in improved machinery,” he wrote, “there will be a diminution in the progressive demand for labour; by exporting it to another country, the demand will be wholly annihilated.”

As we look ahead in the 21^st century, economists have labeled the coming changes, powered by AI and robotics, as the “Second Machine Age” (two MIT economists) or the “Fourth Industrial Revolution” (World Economic Forum). If we are on the cusp of a “revolution” that parallels the original Industrial Revolution in impact and scope, its implications for labour markets could indeed be catastrophic.

Automation then becomes a major political challenge. Because one big difference between then and now is that in the days of the Luddites, the workers did not have the vote. Economic deprivation is a potent driver of the rise of populism in contemporary politics, especially in the United States, as my UnHerd colleague Henry Olsen has been explaining. Most of those who have lost out blame bad trade deals, off-shoring, and the immigration of cheap labour. If their resentments begin to focus on technology, a fresh Luddism would be a potent force.

We should heed these sobering words from Frey: “Although the Industrial Revolution began with the arrival of the factory, it ended not just with the construction of the railroads but also the publication of the Communist Manifesto.”

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Why aren't we more worried about the new slave economy?

By Nigel Cameron

Bezos has asked 238 North American cities if they could help out funding his next big Amazon office. Specifically, he asked for help to “offset its costs for building and operating its second headquarters.”

Meanwhile, as my colleague James Bloodworth makes depressingly clear in a new audio documentary for UnHerd, Amazon is engaging in exploitative workforce practices – not fussed about employee welfare, but aggressive in pursuing ‘corporate welfare’.

Demands for subsidies and sweeteners are not new, American companies have become adept at squeezing the public purse. In 2013, for example, Boeing gouged a historic $8.7 billion out of the state of Washington just by threatening to move. [1. Lydia DePillis, ‘The state’s tax deal with the company now runs to the year 2040’, CNN Money, 13 February 2018]

Further reading

Platform cooperativism – an alternative to technopoly

By Peter Franklin

This is how it works: corporations come to town saying they need to build a big new plant. For local economies that means jobs, often much needed jobs. And once those jobs have been dangled in front of local politicians, the company asks for a nice tax break – otherwise they will go elsewhere. Even worse, these demands are occurring at a time when states and cities are in the throes of a potentially disastrous revenue crisis.

Amazon’s high-profile ‘HQ2’ circus, scouring the nation for a second huge headquarters office base, is an egregious case in point. Bezos’ public bidding (begging) process “has garnered the kind of enthusiasm normally reserved for bids to host the Olympics.”

They say they’re after a location with local tech talent and a pleasant environment, but the real reason for the circus is the bottom line. HQ2 is a bidding war. The most eye-popping of those offers was New Jersey’s at $7 billion in tax incentives.

As Harvard’s Ed Glaeser drily remarks: “At its best, the competition for Amazon has spurred cities to think about how to improve their quality of life more generally,” he said. “At its worst, the competition has become a distraction and a contest for throwing cash at the giant.” [2. Nick Wingfield, ‘Amazon Chooses 20 Finalists for Second Headquarters’, New York Times, 18 January 2018]

The problems inherent in tax-cut bidding wars have recently been illustrated by the efforts of another mega-company, Tesla, and its Nevada battery “Gigafactory.”

Like Jeff Bezos, Elon Musk is a billionaire with fingers in a lot of pies – not only Tesla, but the Boring Company (digging tunnels), SpaceX (rockets), and Solar City (huge batteries). Musk has proved adept at taking government money over many years – one report calculated his car company alone had pocketed $3.5 billion in subsidies and tax breaks, another that the grand total is nearer $5 billion.

And this isn’t just a problem for the United States. Amazon’s vast distribution centre in Swansea was built by the British taxpayer to the tune of £4.9 million – on top of an £8.8 million sweetener to get the company interested in locating in Wales.

Further reading

Warehouse work needn't be worthless

By Polly Mackenzie

The non-profit group Good Jobs First has been tracking the efforts by tech giants to get local governments to pay up, and the remarkable willingness shown by politicians to give away future tax revenues – or even shell out cash. While these deals may have economic merit, it’s hard to tell since politicians interested in short-term acclaim are trading it for long-term costs that their successors will have to bear.

Musk’s latest effort is attracting particular scrutiny. Located in Nevada, the Gigafactory is not just the world’s largest factory, it’s claimed to be the world’s largest building. According to a report on The Verge, having narrowed its search to four states the company initially asked Nevada for $500 million up front, in cash. Nevada baulked, but in the end agreed $1.3 billion in tax breaks spread over the next 20 years.

One economist reckons that will amount to a cost of nearly $200,000 per new job – assuming everything goes according to plan. Of course, if it does not, and the company’s plans end in bankruptcy, there will be nothing for the state to claw back.

As a recent report in The Guardian notes, there’s already evidence of a downside for locals. In a town called Sparks, 20 miles away from the factory, rents and house prices are rising – and forcing out poorer locals. The tax breaks also mean there is little in the way of funds to help local communities handle the influx of new people. While the state claims to help out, according to Sparks’ city manager “despite surging population growth and increased strain on police and fire departments and schools” his budget is flat.

While governments all over the world cut deals to encourage development in poorer areas, that’s not the same thing as having vastly wealthy companies double dipping into the public purse.

It’s plain that corporate welfare deals like these require long-term impact assessments that take into account public welfare issues – from Seattle’s spiralling house prices and homelessness, to the needs of the schools and police and fire services in Sparks. And these assessments need to be the subject of press scrutiny and public debate before decisions are made.

Cities and states – and their citizens – need to wise up.

Suggested listening

Audiocast: How dead-end jobs killed small-town pride

By James Bloodworth

And he has the rare luxury of investors committed to the long term, so he’s free to build market share, cut costs and prices, and diversify into fresh sectors. He’s already building rockets, selling high-end groceries, and publishing the Washington Post newspaper; and Amazon Web Services is the world’s largest supplier of cloud computing storage to governments.

It’s no surprise then that his latest move, a jump into the highly profitable market in prescription drugs, has everyone’s attention. By snapping up start-up PillPack he wiped $11 billion off the shares of Walgreens, CVS, and RiteAid, the three major US prescription retailers.

Suggested reading

Jeff Bezos eats Whole Foods. What’s he up to?

By Nigel Cameron

It’s a huge industry: Americans, particularly older Americans, take a lot of pills. According to a recent report by Sandra Boodman in the Washington Post “Researchers estimate that 25 percent of people ages 65 to 69 take at least five prescription drugs to treat chronic conditions, a figure that jumps to nearly 46 percent for those between 70 and 79.”

Hence PillPack’s product. Once a month they send people who take drugs long-term a batch of “pillpacks” – little envelopes printed with the time and day for every pill or batch of pills you need to take.

Handy though it is, it’s hard to believe that’s why Bezos paid a rumoured $1 billion for the company.

As with the Whole Foods purchase, Amazon is jumping into a completely new market by buying a going concern ­– which is especially useful in this instance given the high regulatory barriers to entry in the pharmacy world. In its five short years PillPack has done the heavy lifting – it’s already licensed to operate in 49 of the 50 states.

Amazon’s enormous retail market – a staggering 64% of US households have signed up for Prime – gives them a big advantage. As with Whole Foods, we should expect discounts for Prime members who sign on to PillPack and vice versa. And given that Amazon’s users tend to be younger, while PillPack’s are older, the acquisition brings big new demographic opportunities.

This will soon go well beyond the traditional mail-order drug market, and that’s why it’s scaring the big retailers. Amazon has been pioneering same-day delivery – and now offers it in two-hours in many locations. Expect a whole new market for urgent, one-off, prescriptions – where the mail-order providers have never been able to compete. No need to drive to Walgreens and hang around for an hour to get your migraine painkiller or your kid’s antibiotics. When the doctor hits send with the prescription, Amazon gets to work and your pills could beat you home.

Yet it’s likely Bezos has his sights set even higher. The US drug market itself is enormous: $580 billion in 2017 and notorious for bloated prices. One reason? The industry has consistently used its political punch in Washington to avoid competition. President Obama submitted to their trade group PhRMA’s demand that the “Obamacare” reforms leave their prices alone (there would have been government buying power to pull them down).

Suggested reading

Time to topple the technopoly

By Charlotte Pickles

President Trump is the latest leader to curry public favour by asking them to lower their prices while doing nothing about it (a new report in Politico notes that hundreds of drug prices have actually just been increased).

It’s worth remembering how Bezos began his empire: by selling books online and using cut-throat tactics to force publishers to go along with him. In the book trade he operated what economists call a monopsony; a monopoly buyer who can dictate prices to suppliers just as a standard monopolist dictates them to consumers. Book publishers, mostly small companies with few political friends, had little choice but to give in.

So here’s the big question: is his plan to go after the drug companies next? And if he does – with his enormous market base, two-thirds of all American households – will he succeed?

It will be a much more equal fight than that against the book sellers. At a market value of $800 billion, Amazon is worth around the same as the four largest pharmaceutical companies together. If his market clout can arm-wrestle them into more competitive pricing then that’s a good thing.

But one thing is clear, PhRMA is not the book trade. Any anti-competitive antics from Amazon won’t just be met in the market place but in the corridors of power where pharmaceutical lobbying is constant. It will be a battle royale, and the winner will be consumers.

When John and Charles Deere first set up shop in 1837, nearly three-quarters of Americans worked the land. Their company has long dominated the market for agricultural equipment today it’s the largest company of its kind in the world.

Yet in 2018, back-breaking agricultural labour is just about over and Deere’s business model has gone digital. The ancient words of the Biblical curse – “In the sweat of your face shall you eat bread” Genesis 3:19 – no longer apply.

While machines from the plough and the adze onwards have made agriculture more and more efficient, the digital revolution is set to have dramatic effects. After decades of preparation, Deere took the key step for customers in 2012 when it launched MyJohnDeere – an information system to help agricultural producers optimise the management of production data, equipment information and farm operations.

In 1994, it created the Precision Farming Group to look for evolving technologies that could make GPS more accurate and cost effective for providing location information to create yield maps. At that time, no one had proven that GPS could be used for vehicle guidance.

Further reading

How social media is creating dangerous legal precedents

By Peter Franklin

Twenty years later Deere is operating one of the most accurate GPS-based location systems in the world, which lets farmers track their planting, harvesting and more to an accuracy of less than an inch.

And unlike in other areas of the economy – from retail to truck driving – where there is anxiety lest jobs be lost to the robots, in the agricultural sector in developed economies it’s increasingly hard to find that 1-2% still needed to plough and reap. And in both the US and the UK, the need for cheap immigrant farm labour has become entangled with wider immigration concerns.

So while there will be short-term disruption, whether for Mexican labourers in California or the farmers fighting John Deere’s software licensing – if your tractor goes wrong, according to a Draconian Deere licensing arrangement, you can’t fix it yourself,  – the core idea that back-breaking agricultural labour will be a thing of the past is wonderful.

Deere’s GPS-controlled tractors are just the tip of the digital iceberg. One report suggests there are already hundreds of thousands of fully-autonomous tractors sold every year. And they are aided by a growing number of specialist robots to carry out all manner of agricultural tasks:

• Using GPS to plant every seed in just the right place. We all know how farmers used to sow – way back, by throwing out handfuls of seed; more recently, they sit on tractors towing a machine around the field that does exactly the same thing. But now: “Autonomous precision seeding combines robotics with geomapping. A map is generated which shows the soil properties (quality, density, etc) at every point in the field. The tractor, with robotic seeding attachment, then places the seeds at precise locations and depths so that each has the best chance of growing.”
• In the same way, both water and fertilizer can be delivered direct to each individual plant but a robot working its way between the rows.
• The same for weeding, and there are options. A robot like AG-BOT II can deliver weedkiller. But it could also target weeds with a laser. Or RoboCrop will hoe the weedy area to destroy them that way.
• The LettuceBot specialises in thinning – deciding which are the weaker plants that need to be removed. Wall-Ye prunes vines.

Meanwhile, the European Commission has been funding efforts to invent specialist harvesting robots since picking soft fruit and other high-value crops is difficult and very labour-intensive. And in California a company called Abundant Robotics has built an apple-picking machine. This is like an enormous vacuum cleaner, but far cleverer:

“The robot’s got to be able to identify an apple, and then after that, tell if it is ripe,” said Dan Swafford, an agricultural technologist at Virginia Tech. “It takes a lot of specialized sensors and cameras to do that, and then they have to be able to pick the fruit without damaging it.”

Further reading

Who’s that watching your every move? Don’t worry, it’s only everyone...

By Peter Franklin

Strawberries? One Belgian company plans to market its machine in 2019. While humans can pick a strawberry in three seconds, the machine takes five, but they’re working to speed it up.

And it’s not just picking. Cattle ranchers in California and sheep farmers in New Zealand are using drones to round up their stock. In China, they are developing swaps of crop-spraying drones and in Japan, an automated lettuce factory is expected to reduce labour costs by 50%.

True it’s bad news for cowboys. But since the world bank has estimated that we are going to need to produce 50% more food by  2050, given the effects of population and climate change, high-input farming practices are going to have to change. By letting robots take the back-breaking strain, farmers can focus on how to feed the world.

It’s Fox that has proved most controversial, run for decades by its flamboyant chief Roger Ailes, and giving powerful support to Donald Trump, both as a candidate, and, especially, as President.

It’s a year since Fox News dropped its slogan “Fair and Balanced.” Not because they wanted to confess to being unfair and unbalanced, but as part of a re-branding effort to ditch every memory of Roger Ailes. Ailes, long-time revered founder and, more recently, disavowed sexual predator. It had been his idea so it had to go.

What do these terms mean though, when applied to a private sector cable news company? It’s a free country, and specifically a free speech country. While Britain’s BBC has a legal obligation, backed by taxpayer funding, to be fair and balanced (though not everyone thinks it is), American private sector broadcasters can do pretty much what they like.

But does Fox over-step the mark? Night after night its suave, high-profile, commentators like Sean Hannity and Laura Ingraham assault the liberal elites and rally socially conservative opinion. Is it basically propaganda? That’s the claim of more than one recent book. But it’s not so simple.

The site Allsides.com, which conducts blind trials of bias in reporting, notes that “Despite all of the controversy and criticism, commentators, news anchors, and reporters at Fox News Channel have responded that news reporting and political commentary operate independently of each other, and have denied any bias in news reporting.” For example, Shepard Smith, chief news anchor, is known for his intensely critical questioning of conservatives.

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To earn big money in US 'news' you should provide heat, not light

By Henry Olsen

Plainly to their surprise, Allsides’ own research suggests a more nuanced view of Fox. On three separate occasions they polled their network with anonymous headlines, and the response each time was that while Fox “leaned right”, Allsides’ earlier designation of the network as “far right” was simply wrong. In response, they decided that Fox, like MSNBC and CNN, needed two separate categories for assessment: opinion and news. In other words, on balance, Fox was no longer “far right” but merely leaning there.

Another approach is to ask how credible Americans find Fox versus other, more ‘mainstream’, media. According to research collected by the website Statista, Fox’s credibility profile is almost identical with that of ABC news.

Of course, private networks like CNN and MSNBC – and Fox – are free to play politics as they choose. The closest thing America has to a neutral BBC style broadcaster is NPR (National Public Radio) and PBS (the Public Broadcasting System, its TV equivalent) – funding is part public, part private, and its mission intended to be non-partisan.

Much like UK conservatives criticise a perceived left-wing bias at the BBC, conservatives in America have consistently claimed that their public outlets are liberal-biased. As a result President Trump recently pushed to eliminate the funding of the Corporation for Public Broadcasting altogether – the body that oversees both NPR and PBS.

I have some sympathy with this view. I have lived in the States for 28 years and have often enjoyed listening to NPR (which in British terms is remarkably similar to Radio 4). But when a politically controversial topic is under discussion, whether abortion or guns or immigration or welfare, I’ve never once heard ‘conservative’ views taken seriously. There are occasional conservative guests, which isn’t the same thing at all.

Which, of course, may help explain why Fox News is so popular (it is the most watched basic cable network). When thoughtful conservatives are pressed on why Fox leans right, they will answer something like this:

“Most reporters and editors are liberal… When you are liberal, and everyone else around you is as well, it is easy to fall into groupthink on what stories are important, what sources are legitimate and what the narrative of the day will be.”

Conservatives need their own NPR, which has a centre of gravity in conservative bias. In other words, Fox.

Except, that isn’t actually a quote from a conservative.

It’s from the former CEO of NPR, Ken Stern – who decided to explore conservative America after he stepped down. His exploration gave him some fresh perspective, not least the realisation that the media was, too often, doing a bad job of reflecting the lives of ordinary Americans. Writing about his travels in flyover America be notes:

“To a man (and sometimes a woman), they looked at media and saw stories that did not reflect the world that they knew or the fears that they had.”

Stern’s admission that the organisation most intended to be ‘neutral’ is anything but helps explain the vigour with which American conservatives have flocked to Fox. And Fox’s claim to be at least as “fair and balanced” as NPR. It is speaking to – and for – swathes of Americans who feel that ‘mainstream’ outlets ignore, or worse disdain, them.

In fact, in an essay for Time, Sally Kohn, a gay left-wing writer and former Fox commentator, neatly captures the problem:  

“During my time at the network I came to realize how condescending I’d been in my views about not only the people who worked at Fox News but the people watching at home. And condescension is just a snooty form of prejudice; we are only condescending to those we feel are inherently beneath us.”

This all illustrates the filter bubble at the heart of American culture. Far more than European societies, the culture of the United States has long been divided in fundamental ways.

Suggested reading

To appreciate what the Today programme does right, watch US cable news

By Douglas Murray

One reason is simply the size and diversity of the nation –  Europeans often forget that the US is around the same size as the whole of the EU.

Another is the fact that it has fewer unifiers than European nations, from history to shared national media. And there’s no question that in recent years a series of issues, from abortion to gay marriage to immigration, have been ‘weaponised’ turned by both sides into red lines in national life.

What may, however, distinguish Fox from generally-liberal NPR and very-opiniated MSNBC is the fact that Fox is, slyly, called Fox News. The implication, of course, is that whether programming is presented as ‘news’ or ‘opinion’, it’s basically all News.

And perhaps that is the real problem. Americans have a range of commercial broadcasters that cater for their convictions, left and (thanks to Fox) right, but they may find it hard to distinguish fact from opinion.

Suggested reading

Forget K*tie H*pkins, the problem lies with the media organisations that give her a platform

By Chris Deerin

I’ve been watching Fox all evening. As I write, it is the Shannon Bream show. It is plainly anchored on the Right, though less oppressively than Laura Ingraham’s an hour earlier – which was all border agents telling us how wonderful they are, just like Trump’s immigration policies.

Yet it’s hard to conclude that Fox is simply ‘propaganda’. Their ‘news’ is generally recognised as news, though they may be selective in what they report. And their ‘opinion’ may be hard-hitting, but at least it takes cognisance of views that are ill represented elsewhere.

And unlike NPR, they don’t pretend to be neutral.

In the United States, President Roosevelt’s wartime science guru, Vannevar Bush, laid out a plan for a post-war government-science partnership that resulted in the National Science Foundation.[1. The report that led to the National Science Foundation (and its equivalent in every developed nation) – Science, the Endless Frontier. His brief and extraordinary essay published in 1945 in Atlantic Magazine, As We May Think actually envisages an “internet” as a hyperlink system based on microfiche! “Consider a future device…  in which an individual stores all his books, records, and communications, and which is mechanized so that it may be consulted with exceeding speed and flexibility. It is an enlarged intimate supplement to his memory.”] The core idea: governments need to fund basic research.[2. The parallel National Institutes of Health, first funded for cancer research, is now the big brother as bioscience has flourished. Current funding: NSF $8 billion. NIH $35 billion.]

A decade later, the Soviet Union’s launch of the world’s first satellite, Sputnik, in 1957, sent shock-waves through America and refocused government minds on innovation. How on earth could this despised centrally-managed regime have beaten the US into space?

In February of 1958 President Eisenhower set up the Advanced Research Projects Agency (DARPA – the D for Defense was added later) with a simple mission: to make sure the US would never again be surprised by developments in new technology.

From the start, DARPA has operated as a unit of the Department of Defense, though it’s been free to think long-term and not feel bound by the need to develop weapons. It’s a nimble organisation, with only a couple of hundred employees – and a budget of $3 billion.

Its approach is to look way into the future and find and fund the smart people who will get us there. Some of its work is seriously secret.[3. I was once asked to help a company get funding from DARPA, and I hired a former DARPA programme manager to make it happen. Then he explained that if DARPA really liked the company’s hush-hush product they might just decide to classify it – make it a state secret. And the company decided to look elsewhere.] But many of its innovations are well known.

Its most recent claim to fame is self-driving cars. Big car companies are now sparring with Silicon Valley start-ups to turn their experimental vehicles into production models, but it was as recently as 2004 that DARPA kick-started this rapid technological development. Instead of splashing out large sums to university researchers, DARPA decided to run a competition. Anyone could compete, their cars had to trundle across 142 miles of desert to get to the finish line, and the winner would take home $1 million. Incredibly given where we are now, every single entry in that first round failed to make it. But DARPA persisted, and in 2005 five vehicles crossed the finishing line, with Stanford University taking home the prize. DARPA moved on to an urban course, and then decided its support was no longer needed.

Suggested reading

Will China overtake America in a driverless car?

By Peter Franklin

Of course, DARPA’s biggest claim to fame is the internet. Or, as it was originally called, the ARPANET. Back in the 1960s there was a simple need: a system that could not be destroyed by a Soviet nuclear attack. Hence the idea of joining up computers – initially between universities – in a network that did not depend on any single hub. And that burning platform led to DARPA funding 70% of all US computer research in the early 60s.

It was two key thinkers working on the project, Vint Cerf and Bob Kahn, who came up with what we now recognise as the internet. The story goes like this: Cerf was hanging around in a hotel lobby and came up with the idea of a new ‘communications protocol’ that would enable networks to connect with each other. It came to be known as TCP/IP. First tested on ARPANET in 1977, it’s the standard we’re still using today. [4. For more details, see the article on ARPANET in Encyclopaedia Britannica]

The outlines of this story are well-known, but its implications less so. Because DARPA and other US government funding agencies did not just invent the internet – they devised the tools that made the digital economy possible; and enormously profitable.

Suggested reading

Project Loon is the upside of Google’s increasingly global reach

By Peter Franklin

As economist Mariana Mazzucato demonstrates in her celebrated book The Entrepreneurial State, for example, every key component in the iPhone was developed by the United States government. [5. Mariana Mazzucato, The Entrepreneurial State. Debunking Public vs. Private Sector Myths. Revised edition, Public Affairs, 2015] And it’s quite a list. Aside from the internet itself, which is the basis of every single 21^st century high-tech company (including the 60+ ‘unicorns’, Silicon Valley start-ups valued at more than $1 billion), the whole succession of technologies that power our devices has emerged from publicly-funded science. From touch-screens to voice-activated Siri (and her equivalents) we have government investment to thank.

In fact, the entire eco-system of the internet was funded by DARPA. This article on “10 amazing DARPA inventions” starts off with the internet, and moves onto hyper-text linking (which led to the World-Wide Web); an early version of Google street-view; the Unix operating system; and GPS.

And while it’s true that Sergei Brin and Larry Page wrote the algorithm that created Google, what’s less well-known is that they made their key discoveries with funding from the National Science Foundation.

Mazzucato’s argument is simple. As a matter of history, the core technologies that enabled Silicon Valley were not developed by Silicon Valley geniuses funded by Silicon Valley venture capital. It was the federal government, chiefly through DARPA, who made the development of these now ubiquitous technologies possible, and who gifted them to anyone who was interested.

American (and, of course, increasingly, Chinese) companies have been very interested, and their vast profits are the fruit of investment by the US taxpayer. Public risk, private profit.

Let’s take Apple, who have sold over a billion iPhones: current net profits are around 20%, its market capitalisation is edging towards one trillion dollars, and at the moment it has nearly $300 billion just sitting in the bank. If anyone has done well out of US public science investment, it’s the company Steve Jobs built.

This story of how a government agency, DARPA, jump-started the digital economy needs to be better known, and one signal service of The Entrepreneurial State has been to help puncture the illusion that the Silicon Valley geniuses came up with it all themselves. It also raises some big questions about who drives innovation, and how it is paid for.

If American taxpayers funded the research that led to the development of the iPhone, shouldn’t those taxpayers share in the rewards? Mazzucato makes a strong case for a clawback, which could be recycled into further public science investments. She may be right, if it can be done in a way that does not inhibit the next round of entrepreneurs. But it’s important to note that these companies already benefit the economy – and therefore the public purse. They pay tax, have created a lot of high-paying (as well as low-paying) jobs, and had the usual multiplier economic impact on their localities and supply chains that vibrant innovative companies produce.

Nonetheless, a windfall tax on digital companies making outsize returns – ring-fenced to fund new research – could be one solution to the Mazzucato challenge. A form of DARPA dividend. It’s worth noting that Apple’s current cash mountain alone could fund DARPA one hundred times over.

Suggested reading

Test article

By Nigel Cameron

A more fundamental question is whether governments should see themselves as “entrepreneurial”, and set out to do just what DARPA did, as a matter of practice. The idea that governments should set industrial policy is hotly contested, with critics tending to characterise such an approach as ‘picking winners and losers’.

It’s ironic that while European governments (and the Japanese) are happier talking like this, it was in the United States, where the rhetoric of free-market capitalism tends to shut down conversations about industrial strategy, that the DARPA-digital lift-off actually took place. There’s a good argument that governments can’t avoid industrial policy choices – either they have one they talk about, or they have one by default. On the other hand, there’s also an argument that the DARPA-digital story is unusual, perhaps unique, and certainly not something that a government could set out to replicate.

Maybe it was unique, but that’s no reason to sit on our hands. Governments have nothing to lose and everything to gain by funding far-sighted research. One of the beauties of the DARPA model has been to keep this separate from the National Science Foundation/National Institutes of Health funding, which suffers from traditional peer review (fellow-experts who tend to strangle really fresh thinking at birth), and also from pressures to make it translate readily into business ideas and profits. The internet is worth trillions, but it took a generation before that became clear.

While there have been huge commercial and economic benefits from these technical advances, it is, however, important to remember that neither Vannevar Bush nor President Eisenhower had profit on their minds as they planned science and technology’s central role in America’s future. Their focus was security – keeping ahead of the Soviet Union. Their efforts succeeded beyond their wildest dreams, in part precisely because the focus was on long-term innovation rather than economic returns. There will always be private capital for the latter.

The clearest lesson from The Entrepreneurial State is that the blue-sky thinking of the mid-20th century paid off in the 21st – but that the original objectives of that research investment could not have foreseen the digital revolution that it spurred.

More from this author

Mission to make money: a new space race is taking off

By Nigel Cameron

Back in the 20^thcentury, developments in science and tech were raising some interesting ethical challenges. So we came up with ‘bioethics’ to thrash out the questions those advances, such as test-tube babies, research on embryos, cloning and surrogacy, were posing. Just because we could do something, did it mean we should?

You need a lot of people in the room to have those conversations. Ethics people, yes. And philosophy people, theology people. People from law, and public policy, and technology, and science, and the humanities. Because issues like these don’t slot into one category or even several. They span the fields of human understanding.

‘Bioethics’ brings them all together, so we’ve had bioethics groups – national and international – seeking solutions. Can we find consensus? What’s fair? Are human rights at stake? Are there limits to what scientists should be able to do – and commercial organisations able to sell?

It’s probably fair to say that they haven’t made all that much progress, possibly because these issues were, really, only on the fringes of our day to day existence.[1.  There’s one international treaty, the European Convention on Human Rights and Biomedicine (written by the Council of Europe), which the UK has declined to sign. There’s the grand-sounding Universal Declaration on Bioethics and Human Rights (written by UNESCO), which like the European Convention takes human rights as the starting-point. Unlike the Convention, the Universal Declaration is not legally binding. On the other hand, it was affirmed by every country on the planet. So it offers the world a common perspective.]

But nearly two decades into the 21st century and the gear has changed;  developments in science and technology have accelerated from the outskirts right into the everyday. Issue after issue concerns all of us. And suddenly we can’t talk about technology without it raising questions about the human condition, to find out who we really are. Perhaps our tech adventure is really a human adventure.

Just look at what’s on the agenda and tell me it isn’t.

CRISPR

For decades scientists have struggled to make changes in the human genome. Dramatically, CRISPR technology makes this possible, even easy. Curing genetic diseases, and making ‘improvements’ to humans is within our grasp. Perhaps for every generation to come. And it’s even not the kind of tech that needs huge labs and investment. ‘Garage biotech’ beckons.

REANIMATING BRAINS

Should we bring brains back to life? It’s possible, with pigs. But what about humans? Researcher Nenad Sestan says: “Hypothetically, somebody takes this technology, makes it better, and restores someone’s [brain] activity. That is restoring a human being. If that person has memory, I would be freaking out completely.”

RADICAL LIFE EXTENSION

We are all living longer, and there’s a serious argument that lifespans could get a lot longer. How much longer? The implications are enormous. We already have leaders in their 70s and 80s. What if the dictators decided they wanted to stay around for another hundred years, if they could? And what about employment, if no one retires?

ARTIFICIAL WOMBS

Scientists have been working on wombs outside the body for many years. As the Hofstra University health blog puts it: “Scientists grapple with …two ethical issues. First, a clear connection occurs between mother and child in the womb that cannot be replicated by an artificial womb. The bonding intensifies a mother’s protective nature, and develops the child’s attachment to its mother. Second, artificial wombs may open a Pandora’s Box of population control and manipulation that can continue without restraint.”

CRYONICS

The idea of freezing someone when they die, and re-animating them once we know how to cure whatever it is they died of, seems simple! Yet freezing is not simple, as every cook knows. However, cryonics is getting better, step by step. What if the wealthy were able to freeze themselves and come back later.

A NEW EUGENICS

As successive technologies are rolled out, the pressure to make sure our children are not merely healthy but smart and in every way congenial to their parents will only grow. Nick Kristoff has written in the New York Times, “My guess is that germ-line gene therapy will arrive a bit further down the road, initially to fix ‘bad genes’ that cause disease, and then moving on to enhance intelligence and performance.”

These developments have consequences that will affect all of us. There are choices we will need to make as individuals and wider questions to be resolved in law for all of us. As both the Council of Europe and UNESCO have made clear, these are issues of human rights. At the moment, though, politics is fixated with Brexit and social care and trade and immigration.

But what if the really big issues of the 21^stcentury are something quite different?

Back in 2015, some of the top names in science and technology – including Stephen Hawking, Elon Musk, and Bill Gates – signed an Open Letter warning that the risks of rogue AI go well beyond Amazon eaves-dropping in your living room (and recording your conversation, and sending it to someone else – which happened to one couple in Portland last week). As Musk, whose business empire spans Tesla electric cars and SpaceX rockets, put it: “With artificial intelligence we’re summoning the demon.”

AI has already raised widespread fears about machines taking our jobs – although it’s a threat that governments have basically decided to ignore (U.S. Treasury Secretary Steven Mnuchin recently stated that it would be 50 or 100 years before there was any impact). Less well recognised by the general public, but still causing concern, is the increasing concentration of power in the hands of a tiny elite, facilitated by this replacement of human labour by capital (in the shape of technology). Bill Joy, co-founder of Sun Microsystems, made this point in his stunning 2000 essay “Why the Future Doesn’t Need Us.” At a practical level, it’s why there’s a rising cry among to break the growing power of the tech monopolies and their super-rich owners.

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But the fundamental threat posed by AI is “existential” – it’s a threat to human existence as we know it. Because we simply have no idea what will happen if machines really do become explosively smart and “take over.” Not just filch our jobs, not just give a handful of super-wealthy individuals the whip hand, but of they become the masters of the human species. Famed inventor and Google executive Ray Kurzweil, whose door-step volume The Singularity is Near has defined the debate, is as optimistic about the pace of change as he is about its benevolent outcomes.

Mathematics professor and sci-fi writer Vernor Vinge (pronounced Vingey), who is credited with coining the term “singularity” in this sense, agrees that “it will probably occur faster than any technical revolution seen so far”, but is less optimistic:

And what happens a month or two (or a day or two) after that? I have only analogies to point to: The rise of humankind. We will be in the Posthuman era. And for all my technological optimism, I think I’d be more comfortable if I were regarding these transcendental events from one thousand years’ remove . . . instead of twenty.[2. Vernor Vinge, ‘Technological Singularity’, presented at the VISION-21 Symposium, 1993]

Founding editor of Wired, Kevin Kelly, is more skeptical. A long-time critic of Kurzweil and those who think like him, Kelly punches back against the core idea of the singularity – that machines will take charge and then be able to solve all our problems, including mortality itself.  He even suggests that Kurzweil’s obsession with the singularity is at root the result of his fear of death (the computer scientists uses such stratagems as caloric restriction and scoffing scores of vitamin tablets to try to slow the ageing process). And while Kelly agrees with the singularity crowd and the Open Letter crowd that we need to take the possibility of AI risk seriously, he’s a lot less worried about a singularity apocalypse.

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This critique is especially notable, since Kelly is not simply a tech enthusiast, he’s something of a fatalist about the future. His latest book, a roundup of the twelve tech trends shaping what comes next, is aptly titled The Inevitable. But in singularity he sees a “cargo cult“, based on false assumptions. He accuses singularity’s proponents of what he calls “thinkism” – the idea that human thinking is the be-all and end-all, and so if machines can do it better than we can they will solve all our problems in a burst of super-human intelligence. He calls it “the fallacy that future levels of progress are only hindered by a lack of thinking power.”

For one thing, he points out, the world does not lack for extraordinarily smart people. But curing cancer cannot come about through smart thoughts; however smart they are, it will need years of trials of treatments and medications. Moreover, there are many kinds of intelligence; it’s not just one thing.

So the question is, where is the limit of intelligence? We tend to believe that the limit is way beyond us, way “above” us, as we are “above” an ant. Setting aside the recurring problem of a single dimension, what evidence do we have that the limit is not us? Why can’t we be at the maximum? Or maybe the limits are only a short distance away from us? Why do we believe that intelligence is something that can continue to expand forever?[3. Kevin Kelly, ‘The Myth of a Superhuman AI’, Wired, April 2017; see also his blog: https://kk.org/thetechnium/the-singularity/]

In a thousand years’ time, he reckons, we’ll still be expecting the singularity to occur soon.

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Concerns about AI risk have spawned a series of efforts to keep this smartest of human inventions under some kind of human control. Kelly himself calls for us to engineer our values into AIs. U.S. congressman Brad Sherman once asked the Science and Technology Committee to fund “non-ambitious AI,” and then convened a hearing on the need for a non-proliferation approach to such technologies. [3. He told me this in personal conversation, and said fellow members of the committee responded by laughing. Here is the hearing, at which I testified: https://fas.org/irp/congress/2008_hr/genetics.pdf]

The Hawking-Musk-Gates letter has helped boost other initiatives aimed at ensuring the safe and ethical development of AI, such as Cambridge University’s Centre for the Study of Existential Risk, the Leverhulme Centre for the Future of Intelligence, and the Berkeley Center for Human-Compatible AI.

“Welcome, singularitarians!” was how the conference chair opened proceedings at a cult-like singularity event I attended a decade back in New York City. Yet even among those most committed to the “singularity” analysis, there are clear differences of opinion, even if they are united in believing that this event will occur relatively soon (Kurzweil has suggested various dates; his latest prediction is for 2043). But they don’t all see things turning out quite as clearly as he does. Peter Thiel, long-time Kurzweil financial backer (and Facebook board member), made it plain when he addressed one recent singularity conference that he is more of a gradualist in his vision (in other words, like Kelly, he doesn’t really believe in the sudden, discrete, singularity idea at all – as some in the audience were quick to point out.) And they are by no means all as optimistic that its arrival will be good news.

So let’s give the last word to Vinge, who’s a much more interesting thinker than Kurzweil: “The longer we humans have our hand on the tiller, the better.”

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By Nigel Cameron

The most organised example of this is the founding of the Center for Humane Technology, whose mission is to “realign technology with humanity’s best interests”. But the most interesting is a clarion call from Facebook co-founder Chris Hughes to re-examine the basic business model that makes these companies tick. It’s this model that has rocketed both Facebook and Google past the banks and oil companies that used to dominate the ranking of the world’s corporate giants to the very top of the list. And it’s turned a handful of entrepreneurs such as Zuckerberg into the wealthiest tycoons on the planet.[1. Chris Hughes, ‘The wealth of our collective data should belong to all of us’, The Guardian, 27 April 2018]

And what’s that model? In one word, barter. It’s the revival of an approach to business that had almost died out in modern societies. When did you last offer the baker a chicken in exchange for a dozen bagels? Or pay the window cleaner in cabbages? Modern economies use money as the means of exchange.

There’s been little focus on the revival of the barter economy that lies at the heart of the business model of Facebook and similar companies. Since we don’t pay money to use their services, they seem to be “free”. But of course they are not. Each time we “like” something on Facebook, or check Google for the opening hours of a restaurant, we’re feeding tiny morsels of data into an enormous machine that has been brilliantly designed to turn that data into truly enormous quantities of cash.

We’re bartering our data. And while each “like” or search inquiry isn’t worth much, the aggregation of billions and billions of these data morsels means Facebook the company – despite all the recent controversies – is worth half a trillion dollars, and every year returns a profit to its investors of a staggering 30%. The company had income last year of $40,000,000,000, almost all of it from advertisements; after expenses, there was a profit of $15,000,000,000.[2. See Matt Egan, ‘Facebook and Amazon hit $500 billion milestone’, CNN Money, 27 July 2017; and Rakesh Sharma, , ‘How does Facebook make money?’, 25 April 2018]

The impact of this data-driven business model has been enormous, driving the growth of a handful of mega-companies. As I argued here on UnHerd, governments have entirely failed to apply traditional pro-competition policies (what in the US is called anti-trust) to prevent any single company from dominating the market.[3. The classic example: Luigi Zingales and Guy Rolnik, ‘A Way to Own Your Social-Media Data’, New York Times, 30 June 30 2017: “When Standard Oil, in the early 1900s, controlled 90 percent of oil refinery capacity in the United States, the federal government used its antitrust power to break it up into more than 30 smaller companies. A similar breakup was imposed 70 years later on AT&T.”]

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One reason for this is that the barter model is thoroughly confusing. Consumers have no idea how much they are “paying” for the service, and are far less aware of the fact that they are in the hands of a monopoly than they would be if there were only one company from which they could buy a car. Facebook looks a bit like a charity, and the idea that its ads are personalised for you can seem like it is doing you a favour. While the Cambridge Analytica scandal over how data was misused has tarnished this image (and hit the stock price), there’s no evidence it has made a long-term difference to how the company is seen and the loyalty of its more than two billion users.

As David Z. Morris pointed out recently, if competitors are to have any chance against these mammoths, governments will need to intervene. For example, Morris suggests, they could require that a portion of the data gathered by a company like Amazon be shared with its rivals. Or, as two University of Chicago professors recently argued in the New York Times, consumers could be given a property right to their own data.

Chris Hughes has a different idea, based on the idea that everyone should benefit. Writing in the The Guardian, this is how Zuckerberg’s Facebook co-founder captures the problem:

Nearly every moment of our lives, we’re producing data about ourselves that companies profit from. Our smartwatches know when we wake up, Alexa listens to our private conversations, our phones track where we go, Google knows what we email and search, Facebook knows what we share with friends, and our loyalty cards remember what we buy. We share all this data about ourselves because we like the services these companies provide, and business leaders tell us we must to make it possible for those services to be cheap or free…

Just like many other business leaders, Mark Zuckerberg describes this as a win-win – people stay in touch with friends and family more often through a free service, and businesses can more efficiently spend marketing dollars to fuel corporate profits, making Facebook free to all. But one party has benefited a lot more than anyone else: Facebook shareholders.

The question, therefore, is how to share that benefit more equally. One option is to clarify in law that we own our own data, and have a system of “data brokers” to sell it to the highest bidder. Another, which Hughes favours, is by taxing the use of data by these companies, and sharing the revenues among people whose data has been harvested. There’s a parallel, he suggests, in the US state of Alaska, where a portion of oil company taxes fund an annual payment of $1,500 to every resident.

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Hughes’ proposal is a creative solution, and before the companies start to complain about an additional tax burden they need to be reminded that neither Facebook nor Google invented the internet, or GPS (the basis of location services), or much else in the architecture that undergirds their business models and their enormous profitability. That technology was developed courtesy of the U.S. government.

What’s more, Google did not even invent the famous Google algorithm that enabled it to beat out early competitors in the search business. Its founders Larry Page and Sergei Brin did the work while they were students, funded by a US government grant.

It was public risk and public investment that got Silicon Valley and its megafauna going on their huge profits. Now the giants are hoovering up our data and turning it into cash, it’s time to take a long hard look at ways to re-structure our relationship with them.[4. On the public investment that underlies the digital companies, see Mariana Mazzucato’s book, The Entrepreneurial State. I discuss her argument briefly here: https://stage.unherd.com/briefings/big-techs-tipping-point/]

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How the big tech companies are eating free markets

By Charlotte Pickles

The theory seems simple enough: each nation should focus on the things it does best, and trade for everything else. It’s attributed to 19th century English economist David Ricardo, since when it has been the basic idea behind “free trade”.[1.  Simple on the surface, comparative advantage is a bit more complex than it seems as it’s not about absolute advantage (A just makes things cheaper than B) but opportunity cost. Also, some writers now attribute the theory not to Ricardo but to James Mill. But Ricardo’s memorable example stands: Portugal should focus on making wine, and Britain on cloth.]

China’s big comparative advantage has been cheap labour, and as a result it’s yanked great swathes of manufacturing out of the US economy. Retail behemoth Walmart, for example, works with 5,000 different Chinese suppliers. That’s a lot of stuff American workers aren’t making any more. On the other hand, that’s a lot of stuff American workers can buy very cheaply.

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Yet this worry has a very 20^th century feel. We should, instead, be looking ahead. For the problem isn’t going to be cheap human labour – it’s going to be nearly-free machine labour. We should be far more concerned about what Norbert Wiener, the “father of cybernetics” called the emergence of a new slave economy.

The conventional wisdom, of course, is that automation is always good for us. It won’t eat our jobs. Like the first Industrial Revolution, every tech disruption since has led to more and better jobs. Some of us have been challenging this view for years, and either been ignored or told not to rock the innovation boat. Make what you will of his politics, Jeremy Corbyn is so far the only political leader in the west to have noted this challenge in a major speech.

In any event, the widely-held view of the first Industrial Revolution is simplistic. Andy Haldane, chief economist of the Bank of England, recently made that clear. It did huge damage done to skilled labour markets that lasted a generation and more.

And Ricardo himself, who was living through the dramatic changes, had more than a little sympathy for the Luddites.[2. The original Luddites were worried about their jobs, and took the law into their own hands – with an occasional riot and many incidents of what was called “machine-breaking”. The government sent in the army. Hangings followed. Things calmed down.] But, believer that he was in comparative advantage, he wrote that if Britain didn’t employ these new technologies other nations would anyway.

Back to the future, in a 2013 report by two Oxford economists, they analyse the susceptibility of 702 different jobs being done by machines. The report concluded that the job most likely to disappear to machines was telemarketing. It struck me when I read the report that that calls from robotic, metallic, voices delivering potted sales pitches would be easy to hang up on. How could a computer programme really “sell”?

Well, Google has just proved once and for all that telemarketers are history. Every single one of them, worldwide. And also everyone else who earns a living talking on the phone. Listen to these sample calls, as a robot makes a hair appointment and books a table for dinner and see if you can tell which of the speakers is a machine. The impact is stunning.

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And so here we are again, on the cusp of an automation revolution in which what economists politely call “technological unemployment” is going to be a major challenge.

In one of the most ridiculous public statements ever, US Treasury Secretary Stephen Mnuchin blithely assured the American public that not only are their jobs safe from automation, but the issue is “not even on our radar screen”. Any such effects are “50 to 100 more years” away.

As an American President keeps faith with his voters by starting a global trade war, we can only imagine what’s in store once he (and they) work out where the real threat to fly-over country jobs lies.

They share two things, these flyover dreamers of the American Dream. They’re determined to do what it takes for a better tomorrow, for themselves and for their families. But their ability to climb by the standard route – by going to college and gaining standard qualifications – is marginal. Which makes them a terrific market opportunity.

It makes them gold-dust to the entrepreneurs of for-profit higher education – regardless of their chances of succeeding. As an article in Forbes put it, “Terrible Outcomes Are Very Profitable.”

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It works through a combination of two factors.

First is the availability of low-cost loans for college – for both tuition fees and living expenses. These are easy to get, even by people with bad credit and zero collateral.[1.  Loans require students to attend “accredited” schools, but in the US accreditation is not directly a matter for government. The gold standard is “regional” accreditation – half-a-dozen groups run by the universities and colleges in each part of the country that assess each other. But other accrediting bodies have been recognised by the Department of Education, including some specially devised for non-traditional and for-profit schools. One problem with this system is that few aspiring students know that “accredited” does not always indicate the same standard, or (for example) whether other schools will accept transfer credits from an institution (a huge issue if you drop out, as most of these students do). It should be noted that many for-profit schools have held regional accreditation, including the largest – the University of Phoenix.]

Second, the flyover dreamers don’t know much about higher education. And because they are hopeful and strongly motivated, they are likely to apply to any old institution regardless of the reputation and the quality of education they might be signing up for. [2.  U.S. Senator Dick Durbin from Illinois, a major critic of the for-profit sector, writes an annual letter to high school principals across the state urging them to warn their students about the problem. It’s full of interesting detail and illustrates the scale of the challenge – in just one state.]

From a marketer’s point of view it’s a dream come true: ill-informed, highly motivated prospects who have access to tens of thousands of dollars of borrowed money. Companies set up institutions with grand names such as the Art Institute of New York, claim 90% success rates at getting students jobs, and persuade gullible hopefuls to get over their heads in debt. [3.  This example is from a PBS (U.S. public television) programme. For making false claims of that kind, the company that owned the “Art Institute” was ultimately fined $95m by the federal government. But Danielle Lopez, who had borrowed $25,000 in the hope of becoming a pastry chef, was – like many, many other – left in the lurch as the programme closed.]

Of course, there’s nothing wrong, in principle, with for-profit education. At the skills-based, hands-on end, private efforts have long played an important role in the sector – from language schools to secretarial schools to schools for bar-tenders. [3.  What’s more, there are some more respectable operators at the higher end, offering full degrees. Strayer University, for example, just signed a deal to train Fiat Chrysler employees. One big problem for prospective students is that there are some institutions, most notably the University of Phoenix, largest such school in the country with over 200,000 students, which straddle both sides of the line. They have many satisfied alumni, but have also been accused of recruiting students with no chance of success, and of active deception.] And there’s everything right about the generosity with which the US government enables students to get hold of funding and take it to any school they choose.

However, for-profit recruiters are using high-pressure sales techniques to press ill-qualified consumers into borrowing large amounts of money and handing it over to them. They’re persuading people to gamble the biggest loan of their lives on a sales pitch – that they’ll end up better off even after repaying the loan and spending years in the programme (when they could have been out earning money).

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So, naturally, for-profit schools throw all the resources they can muster into selling themselves. While typical non-profit institutions spend around 1% of their budget on marketing themselves, one study found for-profits spending 23% (money, of course, not available to spend on the quality of the programme). At one point, the University of Phoenix was the worldwide top advertiser on Google – outspending all the major banks and retailers with a whopping $400,000 a day.

And they target their selling on the most vulnerable people they can find. In her tell-all book Lower Ed former for-profit recruiter Tressie McMillan Cottom spells it out. They go after students who are most eligible for financial aid. “That happens to be the poorest among us,” she says. “And because of how our society is set up, the poorest among us tend to be women and people of color.” She was trained to focus on just these people, and to do whatever she needed to bring them physically into the school so they could sign up before they had second thoughts. After a while she began to wonder if this was really a good idea for them.

There’s a lot of money involved. When they graduated last year, 88% of students from for-profit colleges owed an average of $39,950. As the television programme PBS Newshour sums it up, “Students who attend for-profit college and training programs are more likely to borrow, borrow more and struggle to repay their loans.” Only 27% actually graduate (online programmes: worse) – less than half the number in traditional schools. Either way, almost everyone ends up with debt. [4.  It’s worth noting that under U.S. law student loans, unlike credit card loans and even in some cases tax debts, are not normally dischargeable in bankruptcy.]

And the future? Well, it’s bad news for flyover America. The Obama administration belatedly curbed the worst excesses and shut down the key “accreditation” body run by and for many of the shadier schools – the so-called “Accrediting Council for Independent Schools and Colleges”. But it’s planning a come-back under Donald Trump’s new Secretary for Education, Betsy DeVos.

To get back in business, it will have to pass the scrutiny of the National Advisory Committee on Institutional Quality and Integrity, which vets accrediting bodies. It’s chaired, as the New York Times points out, by one Arthur Keiser. He used to run for-profit Keiser University.

This isn’t sci fi. Nor a visionary effort on the fringes of the economy. Hard-nosed commercial enterprises – as well as some forward-thinking governments – are already lining up to reap the potentially vast rewards the space age goldrush promises.

In the past few weeks, US Commerce Secretary Wilbur Ross has talked about the moon serving as a filling station for rockets to deep space. Defence contractor Northrop Grumman’s innovation blog has enthused about new space sources for platinum and palladium. And Washington’s political newspaper, The Hill, has glowingly reported two current asteroid missions.[1.   Mark R. Whittington, “Two asteroid missions will help shape the economy of the 21st century,” The Hill, April 7, 2018.]

Most telling of all, investment banker Goldman Sachs has joined the chorus with a game-changing report. It concludes: while the “psychological barriers” to asteroid mining are high, the “actual financial and technological barriers are far lower”. Probes can be built for tens of millions. An asteroid-grabbing spaceship for $2.6 billion. That really is not a lot of money in Silicon Valley.[1.  Jim Edwards, “Goldman Sachs: space-mining for platinum is ‘more realistic than perceived’,” April 6, 2017. The full report is apparently private to Goldman Sachs clients, but portions are quoted here and elsewhere.]

Economics at work

Two fundamental economic factors are driving this interest.

First, the so-called “rare earth” minerals which are so vital to digital devices, are hard to get. They are mostly not as “rare” as their name suggests. But they are not abundant and they are costly to extract. Most are mined in China, some in Russia, and their supply has become a national security issue for the United States. They are central to the digital economy.

Second, there has been a huge shift in the cost of getting into space. In the mid-20th-century only the governments of the United States and the Soviet Union could afford it. The costs of the Apollo moonshot were enormous: at its height, in the late 60s, it consumed almost 5% of the entire U.S. federal budget.

Now, according to Business Insider:

The price of spacecraft is plummeting, thanks to reusable rockets from Elon Musk’s SpaceX and Jeff Bezos’s Blue Origin. It used to cost $35 million (£28 million) to send one person up on a Soyuz rocket. Today, Virgin Galactic hopes to get space tourists into space for something like $250,000 (£200,000), Goldman says.

Moreover, it isn’t just the metals on asteroids that have high value. There’s also the water. This as Scientific American notes, can be converted into hydrogen and oxygen – rocket fuel. That’s rocket fuel that would not need to be blasted into space from earth.

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Space Law

As things stand, there are only a couple of explicit restraints on what nations can do up amid the stars. With the Antarctic Treaty as a guide, UN Outer Space Treaty of 1967 declares space to be the common property of all nations. It cannot be “colonized,” or used for military purposes.[3.  The Outer Space Treaty is a truly visionary document; it is hard to see such a consensus arising now for an instrument that placed huge restraints on what nations could do in space. Back then, of course, only the U.S. and U.S.S.R. were serious contenders.  This UN website helpfully also gives related bunding and non-binding space agreements: “Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies.”]

Inevitably, countries are already arguing over whether mining is banned under the Outer Space Treaty. Russia and Brazil claim it is. While there’s no specific reference to mining, they claim it’s prohibited by the ban on seizing territory.

Two other countries, the US and Luxembourg (wealth European mini-state; pop: 500,000), have taken the initiative to provide a legal framework for space mining. Luxembourg, for one, has high hopes of becoming a major player.

According to Etienne Schneider, Deputy Prime Minister:

“Our goal is to put into place an overall framework for the exploration and commercial use of resources from ‘celestial bodies’ such as asteroids, or from the moon.”

Their plan to become the “Silicon Valley of asteroid mining” seems to be working.

Asteroid Missions

Interestingly, it’s the public money that has taken the lead in this particular space race. Rather than waiting for any rulings on asteroid ownership, the United States and Japan have launched experimental missions to asteroids and are expected rendezvous with their targets in a few weeks. Both are experimental missions to find out more about their asteroid’s composition and the viability of recovering material.

The NASA mission, OSIRIS-REx, will arrive at an asteroid called Bennu, currently orbiting the sun about 460 million miles away, in August. According to Asterank, a site that ranks the value of asteroids, there’s $870 billion of minerals to be found there. The probe will make a remote sensing campaign of these, grab some surface materials, and then wait til 2021 to head back to earth with its cargo.

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The Japanese Hayabusa2 is expected to arrive at an asteroid called Ryugu, a rare type of asteroid that contains both volatile material and water-bearing materials, in June 2018. The probe will examine Ryugu remotely and collect a sample before departing in December 2019. Hayabusa2 will arrive back on Earth before the Americans, in December 2020.

Meanwhile, the private companies are still testing their kit. According to Space.com, Planetary Resources’ Arkyd-6 Satellite just “aced” its first big trial. Launched on an Indian rocket, it is now sitting in orbit waiting for the company’s next effort: the Arkyd-300 that will prospect asteroids. A whole group of Arkyd-300s will launch on a single rocket as early as 2020 – and fan out for separate asteroid targets. And the companies know their onions. Chris Lewecki, for example, CEO of Planetary resources, directed two Mars missions for NASA.

The Arkyd-301s will also carry piggyback miniprobes, which will deploy from their motherships and burrow into their target asteroid to get an even closer look at the space rocks.

Star Wars IX

According to Neil deGrasse Tyson, the effervescent TV astronomer: “There’s this vast universe of limitless energy and limitless resources. I look at wars fought over access to resources. That could be a thing of the past, once space becomes our backyard.”

But in gushing about all the resources up there, Tyson makes a fundamental mistake. He assumes we would all be nice to each other if we had enough resources to go around. He forgets – or didn’t realise in the first place – that wars fought for access to resources have been as much about denying them to an enemy as seeking them for ourselves.

Given that China has been tightening its near-monopoly control of rare-earth mineral mining, how would it respond to a sudden huge increase in supply? As Business Insider drily notes, “Successful asteroid mining would likely crater the global price of platinum, with a single 500-meter-wide asteroid containing nearly 175X the global output, according to MIT….”

And what if that happened with gold? Gold’s scarcity is central to the global economy.

If access to these vast new resources is to come without conflict, there will need to be an unusually high level of terrestrial agreement. Wars have been started for a lot less than access to the $700 quintillion Psyche 16.

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Slaying dragons: Britain's national religion, the NHS

By Nigel Cameron

This explains why billions of people around the world were treated to the weird Olympic opening ceremony spectacle of a song and dance routine that celebrated doctors, and nurses, and hospital beds. As if no one else had universal healthcare.

At the heart of the love affair is an obsession with keeping the private sector out. It has blinkered people to the NHS’s failings, preventing much needed reform to raise standards. So the time has come to slay this obsession with public-sector delivered healthcare.

The introduction of free healthcare by post-war British prime minister Clement Atlee was good news for a war-weary nation. Seventy years later, that 1940s sentiment lingers on. It’s supported by a powerful subjective experience. Of course people are grateful when they are sick and in the hands of doctors and nurses. It would seem churlish to think critically about such a service.

Added to this is the long-standing tradition of scare-mongering from the Left, with encouragement from NHS trade unions who have a big vested interest in the status quo – with its 1.7 million employees, it’s the world’s fifth largest employer.

The message is: embrace the NHS, or be cast into outer darkness. Outer darkness, of course, is the United States. Just before the 2017 general election, for example, one GP writing in the Independent newspaper characterised it as a choice “between US-style private health insurance under a Theresa May dystopia, and a public NHS under Jeremy Corbyn’s progressive vision”.

But the contrast with the United States is misleading. Most Americans don’t think they’re in ‘outer darkness’ at all. They have medical insurance. Or special coverage as current and former members of the military. Or they benefit from free provision for the very poor, and subsidised coverage for seniors. Most Americans have access to terrific healthcare.

More dragon slaying

Slaying dragons: Britain's world-leading universities

By James Kirkup

Healthcare scare stories from the US have absolutely nothing to do with the fact that most of this care is provided by private companies. The issue is the lack of universal care. [1. The U.S. set-up is actually rather complicated – more so than its critics or supporters often allow. Both the military medical system and the Veterans’ Administration (for former military) are government-run systems rather like the NHS. Medicaid (free healthcare for the poor) and Medicare (for the retired, who make relatively small payments) work more like the European systems – the government picks up the tab but the private sector delivers the care. “Obamacare”, the expansion of healthcare help for the poor under President Obama, is also built on private sector delivery.]

A more honest comparison would be with the healthcare systems of continental Europe. But loud-mouthed defenders of the NHS status quo never dare to make European comparisons, because they know they would lose the argument.

Because right across Europe there is healthcare for rich and poor alike, even for the homeless. It’s just not healthcare delivered by governments. Like the US, western European countries have healthcare delivered by private companies.

But unlike the US, they cover everyone. The trouble is, the national love affair with the NHS doesn’t allow for learning. If it did, Brits might be a little less enamoured with the status quo.

Having analysed the evidence, the London-based think tank the IEA found that:

“In terms of outcomes, quality and efficiency, [continental] social health insurance systems are consistently ahead of the NHS on almost every available measure.”

Back in 2015, the right-leaning Telegraph reported that “Britain has the worst cancer survival rates in western Europe, according to the largest ever study of the disease…Countries such as France, Italy, and Germany all did far better than the UK, which was on a par with the Czech Republic.”

In 2017 the left-leaning Guardian reported another study which found that “the UK’s improvements [in cancer survival rates] often lag behind those of other European countries”.

Should the UK follow these European countries into a system where the state ensures access while leaving companies to supply healthcare? Perhaps. But that conversation is politically impossible – reform of the NHS is the third rail of British politics.

Even minor, common-sense innovations are resisted. What about a small charge to see a doctor? There’s widespread agreement many visits are a waste of time. Or could there be a fee for a missed appointment?

The NHS has all but replaced the Church of England as Britain’s national religion. But this love affair is doing the British public a disservice.

What are we waiting for? It’s time to slay the NHS dragon.

Cutting out the Middle Man?

Since the early days of the internet, it’s seemed the ideal place for people to rent (and buy/sell) their homes. That’s partly as the process of working with an agent is time-consuming, and partly because it’s costly. What better market for cutting out the “middle man”?

Of course, would-be renters faced challenges back in the days of postcards in newsagents’ windows. But the internet has made everything a whole lot easier for the needy and the greedy alike.

Which is particularly the case in today’s tight markets, where the combination of constrained supply, urgent need, and limited funds can create a perfect storm of gullibility on the part of people desperate for an affordable home.

The more desperate the customer, the easier to scam – and sometimes the unscrupulous come up with fiendishly smart schemes.

Rent boys – and girls – in Britain

The greedy are usually after money. But sometimes, they’re after sex. Last year the BBC reported that online classified ads were targeting vulnerable people for sex in exchange for accommodation. It’s a story to shock:

“One student described how she felt her only option was a “sex-for-rent” deal.

She said she had fled an abusive home and had nowhere to live.

‘He took me into his living room, got me drinks, and then after that it was just straight upstairs and go for it.'”

In a separate article, the BBC told the story of Jason, a 27 year-old homeless man who says he “had to enter a ‘sex-for-rent’ arrangement” to get off the streets:

“I found an advert [online] that offered a room for rent between zero and £300 per month. That was the first clue.”

A year after the BBC investigation, The Guardian has reported that the accommodation-for-sex trend is on the rise: “Words such as ‘intimacy’ and ‘benefits’ are starting to appear in the to-let columns [online].” And the article notes that there have been no prosecutions.[6.  The Guardian article discusses whether such ads are illegal under UK sexual offences law. Meanwhile, in the United States, the recent passage of sex trafficking legislation by Congress has led Craigslist to drop “personal” ads seeking relationships from their U.S. site.]

Suggested reading

The grim reality of renting in Britain

By James Bloodworth

A fake landlord in Munich

Then there are the scammers who aren’t landlords at all – where apartments are advertised, rent requested in advance, but the property doesn’t exist. Munich, for example, is famous for its high property prices, so when Klaus found a bargain online he lost no time in emailing the UK-based owner. Here’s the reply he received:

Dear sir/ms

My name is Peter Shaw I have the 1 room apartment in Munchen for rent. The rent is 350 EUR per month.

I had the apartment with my wife because she was german and last year she died in a car accident that we had . I also lost my hearing in the accident. Now I live in London United Kingdom. The apartment is very big due the fact that it is a one room apartment and it is in a nice area of Munhen. I have received another offers today about 50 proposals and I want yo to know that I only let the apartment if you pay in advance the rent for three months….

The key to the apartment is here with me. I will come and give you the key and we will make the contract.

And – surprise! – “Peter Shaw,” with his tale of woe, wanted the three months’ rent immediately. Klaus had the sense to Google some of his phrases, and found he wasn’t the only one to come across Mr Shaw.

The fact “Peter Shaw” claimed to be in London while he scammed in Germany may have been significant. Apparently the UK police will only help trace scammers from outside the country if there’s more than 5,000 euros involved.[2.  According to an article on the German website, focus.de, “The money is often transferred to Great Britain, explains the Frankfurt commissioner Bernd Osterloh. Then it is usually gone, because the British authorities help the German colleagues usually only from a fraud sum of 5000 euros in the investigation.”]

Depriving would-be renters of their heard-earned cash by advertising fake properties is a common trick in the rental scammer’s book, but perhaps even more worrying are the crooks that are really after your ID. They ask for a copy of your driving licence or passport and three months’ payslips as part of the rental application process and then open a bank account or get a credit card in your name.

Nightmare in Dubai

Here’s another high-priced rental market: Dubai. And another tale of woe. More complex, and much more costly. Bruno had moved with his family to Dubai for work. He searched online and found a flat just a bit cheaper than the going rate in a nice area. After viewing the apartment with the agent, he met with the landlord and agreed to pay a year’s rent up-front.

A few months later the actual owner of the property knocked on his door. Apparently the man he had “rented” it from was a scammer who had himself rented it from the owner – and whose cheques had bounced.

Rental Fraud is shooting up

For a view of the scale of the problem – and one way of combatting it – see this German website listing email addresses and websites that have been used for rental fraud.

The UK actually has a “national fraud reporting centre” to track what’s going on.

In 2015, the number of reports of rental fraud in the UK rose by around a third on the previous year, with Action Fraud, the national fraud reporting centre, recording 2,940 incidents.

In the first nine months of 2016, some 1,891 people said they had been the victim of rental fraud. The Telegraph also reports that 3,200 house hunters contacted the police regarding rental fraud in 2015, up by 44% on the previous year.

The Local Government Association, however, believes this is only the tip of the iceberg – claiming that just 5% of victims choose to come forward and report the issue. With many choosing not to do so because of embarrassment or fear they won’t be believed.

It’s estimated that fake landlords are generating around £775 million each year from rental fraud, with victims losing out around £2,400 on average.[4.  As cited on the helpful website Homelet.co.uk.]

This grim scene leads to a grim observation: with few exceptions, the victims of these scams all over the world are poor people. That’s why they are especially vulnerable – desperation pushes people to take risks. What’s more, they are hardly a core constituency for any government. Where are the high-profile prosecutions of rental scammers to discourage others – and inform the renting public? The relentless government focus on owner occupation must be matched by a relentless focus on policing the low-end rental sector.

Some have pretty much given up on trying to find a way through. Their commitment to the priority of the human experience, and the logic and sweep of their critique of the tech world, can be very powerful. One example at a more theoretical level would be Evgeny Morozov; at a more practical level, Jonathan Taplin. On the other side, there are those utterly immersed in the technosphere, yet thoughtfully so; Kevin Kelly, founding editor of Wired magazine, stands out.

But I find three other kinds of people especially interesting. First, those who have one foot firmly inside the tech arena, but only one. Second, those who have made distinguished contributions in other fields. And third, those who, well, don’t live in their parents’ basements; they’ve put the pieces together and built a 21st-century life.

Tiffany Shlain is all three. As founder of the Webbies, the “Oscars of the internet”, her street cred with the tech community is unimpeachable. She’s also an award-winning film-maker – Connected explored the future of technology – a mother, and a wife. But while she is, effectively, at the very heart of the tech world, what does she really think about it? She can’t surely buy into the naive idea that it’s all just wonderful?

“I’m somewhere in the middle of it all,” she says. “I call myself an opticist – an optimist grounded in a healthy dose of scepticism.”

It’s important, she thinks, for individuals and families to keep things in proportion. Easier said than done. I had just met Sherry Turkle, Professor of the Social Studies of Science and Technology at MIT in Boston, who has spent much of her career asking hard questions about the human side of technology. Most people seem to be just on the run – they simply haven’t thought through how best to use these technologies in their families and their social lives. How do “opticists” like Tiffany make it work?

The social media conundrum

Social media. What are we to do?

By Nigel Cameron

“My family and I have had this practice which has been very life-changing … we are in the ninth year of doing it,” she explains. “We unplug every Friday night, and are off all screens until Saturday night. We’re Jewish but we’re not religious, but we love this ritual of Shabbat. It’s by far the best thing that we’ve ever done. We’re so much more grounded and connected in a deeper way. Having a whole day off, I feel amazing to be going back on again. So it has this dual effect.”

Our conversation is timely because, after years of practice of “technological Shabbat”, Tiffany is producing a book. “There’s an urgent need,” she says, “for something that’s not a ‘quick fix’ like a detox. Not a kind of fad diet, but a lifestyle change in how we relate to the technology.”

The detox parallel, or non-parallel, is intriguing. Detoxes are everywhere – from clinical processes for those with addictions to fad diets. People tend to go for a fad detox when they know they’ve got a problem but aren’t wanting to make long-term changes. It’s the long-term that Tiffany has in mind.

It can’t be easy, then, for her children to shut down their digital lives for the half of the weekend, every weekend.

“I have a teenage daughter who is almost 15, and one who is almost nine. Seeing how much the Tech Shabbats have influenced their mindset and use around technology is very interesting. I do think it makes them have a healthier relationship with technology. When you do something once a week for nearly a decade it changes you in small and big ways.”

Peer groups are an issue, though. Parents are bound to think that the idea is fine in theory, but in practice their children will want to meet their friends, who are glued to their phones. So how do Tiffany’s children feel when, like all kids, they spend so much of their lives among their peers?

Further social media reading

We CAN act to reduce the damage screens do to our children

By Susan Linn

“My oldest daughter, the teenager, she just handles her cellphone in very different ways from many of her friends. She’s a much more balanced way of using it. She’s had all these years of seeing a boundary around it. It’s not like every part of her existence is there. It’s just this thing she uses. She’s not as addicted as I think most teens are. It just changes your whole way of thinking about it.

“A lot of people contact me after I give a talk about it,” she adds, “or they see one of my films. People hear about what we do and they start doing it themselves. It happens a lot on social media – spreading the word, as there’s an urgent need in society right now.”

Not everyone agrees, but there’s a growing consensus that all is not well. And there’s a dearth of middle-ground, practical books for parents and families.

“My book is obviously going to look at our practice a bit, but it’s also going to take a bigger look at technology and society. I do some futuring in it too about what it will be like when we’re all connected, and how much more important it will be to have this space without technology.”

As the role technology plays in our lives ramps up, as Moore’s Law makes us more and more connected, it will be much more important to cherish this space. Which is of course the ancient Sabbath/Shabbat principle. A space without the quotidian not because the quotidian doesn’t matter, but precisely because it does. A space to get it in perspective. Week by week.

“What I love about Shabbat,” Tiffany says, “is that it’s lasted thousands of years through all sorts of technologies. It’s an interesting concept to think about again, of one day of nothing – to have the perspective to be able to create culture and to think about it. So I spend a lot of time in the book looking out into the future – and the past. To understand how we really need to be a witness now, in the present.”

Also from our social media series

Test article

By Tom Chivers vs Nigel Cameron

Witnessing to our times – understanding that we can live with these technologies, and yet also stand back from them to hold them in perspective – is a powerful idea. Especially at a time when some people want to repudiate them and most people are so immersed that they seem unable to gain any perspective at all.

“It’s ironic,” she replies. “When I was starting the Webby Awards over 20 years ago I was clear this technology was going to change absolutely every aspect of how you live, work and play. But I think the problem now is it’s so intertwined we forgot to value what is being displaced – being connected one on one, with no screen. I just knew this wasn’t good – everyone on their screens all the time. Not good for anyone!”

People from the early days of Google and Facebook are now emerging and telling us that their whole idea was to capture our eyeballs and get us hooked. How will that play out as tech gets increasingly pervasive and powerful? The recent Facebook/Cambridge Analytica scandal has highlighted Mark Zuckerberg’s extraordinary influence.

“Well, Mark Zuckerberg now has children,” she points out. “He’ll be awakened to how difficult it is when kids are on technology too much. It’s a fight for our attention.”

So does she think that when his older child is six he’ll regret having launched Messenger Kids – Facebook for six-year-olds?

“Oh yes! I think things will change as he gets older. Just as when you get older you begin to think about time and how you’re spending it. You start asking, What are we all doing here? Who knows how long we have left? You have to spend it in a way that feels good to you. And to reclaim owning your attention.”

I’ve been mulling over that phrase, “Owning your attention…”. Facebook and Google and the rest of them are all after our attention. And they have it for a big slice of every day. But it’s “our” attention. We’re responsible for what we do with it. And Tiffany’s solution is a seductive one:

“Our Shabbat is a most beautiful day. There is no-one to interrupt our attention. No outside input. It’s: how are we going to spend the day? A special time each week when you’re not responding to anyone but yourself and close people around you.”

Tiffany Shlain writes a quarterly newsletter called “Breakfast @ Tiffany’s.” You can find out more about her work at tiffanyshlain.com and follow her on Twitter here.

We take our smartphones for granted (I know I do). Yet we also know that the extraordinary convenience they bring to our busy lives – from real-time public transport info to restaurant reviews to photos of our children to chat with loved ones – can come at a social cost.

The couple on a date who peek at their phones while the partner isn’t looking. The families who gather for dinner, yet each member distracted by a buzz and a screen. The business meetings in which no-one is ever sure of anyone else’s attention. The people who walk across busy roads fixated on a screen. And, of course, “cell yell,” as it has been called – less prevalent now, though far from extinct. Otherwise thoughtful people whose shouted conversations dominate railway carriages and restaurants and airport lounges. The teenagers whose lives seem to revolve around the latest social buzz. And adults also are the victims of “FOMO” – “fear of missing out”. It’s a long list, and we could all make one of our own.

Houston, we have a problem

I’m wary of the pseudo-medical term “addiction” but we all know it can be hard to put these intrusive things in their place. We also know that the mega-companies who run the services we use know that too. Indeed, it’s at the core of their business model. They need our eyeballs, and they need them as much of the time as they can get them.

We’ve all heard the saying that “if you aren’t paying for the product, you are the product.” Social media and search and other internet-based efforts are enormously profitable for this single reason: you hand over vast quantities of information, so they know a lot about you; and they use what they know to advertise to you. We’ve always had ad-supported businesses – such as newspapers, where the price only covers part of the cost, and ads cover the rest; and commercial television.

But there’s a reason why advertisers have been placing 98% of new online business with Facebook and Google rather than, say, The Times or USA Today. The tech platforms can offer precise targeting that conventional publishers cannot match and they can only deliver that precision because they know an awful lot about you. For example, if you ask Facebook to send you everything they have on you – something a good number of people have been doing in the wake of the Cambridge Analytica revelations – they are obliged to do so. It will typically run to more than 1,000 pages. Maybe you didn’t think your life was all that interesting but it is to Facebook and Google – because of what it means they can offer to the world’s other big businesses.

Is there a solution?

Even if we wanted to, we couldn’t just put the clock back – and un-invent the internet, un-invent GPS, un-invent all the other key components that enable our smartphones and leave us with this dilemma.

If there is a solution, it lies in critical thinking. About the business models of the companies whose products and services we engage. About the regulatory environments in which they should operate. And, critically, about how we use our own mobile devices. In our families, in our businesses, and in our personal lives.

That’s the spirit of this UnHerd Deep Dive.

Connections

As we criticise social media, it’s worth recalling how much personal and professional benefit we have received from it. If I review the contributors to this Deep Dive, I am reminded that, of our seven contributors/subjects, I first met two through Twitter and two through Facebook. Here at UnHerd we’re as wary of knee-jerk Luddites as we are of naïve techno-optimists. We like people who think for themselves. And we’re therefore delighted that a range of people who do think for themselves have agreed to help us think all this through.

• Emily Bell was first digital editor of The Guardian newspaper and now leads the Tow Center for Digital Journalism at Columbia University. Effectively providing a guide to how we got here, she reviews the impact of social media on the news industry, from pre-Facebook days to what lies ahead.
• Sherry Turkle is a distinguished MIT professor – and psycho-analyst – who has spent most of her professional life researching the impact of the internet on real people. My meeting with her in Boston in December to discuss her work was published last month as part of UnHerd’s profiling of ‘Free Minds’ series but was originally intended to be part of this series.
• Jean Twenge teaches psychology at San Diego State University. Her cover article in the storied U.S. magazine Atlantic caused a furor by arguing that smartphone use could lead to teenage loneliness, and even suicide. The UK’s BBC public broadcaster recently discussed her controversial claims and I assess their assessment.
• Susan Linn, Harvard psychiatrist and founder of the Campaign for a Commercial-free Childhood (and also, famed ventriloquist!), reviews the research on children and screens.
• David Z. Morris, Forbes business magazine columnist, looks squarely at the business model. The private info of users (you and I) becomes the basis of the mega-profits of mega-corporations. He suggests potential policy solutions.

And by way of framing some of the pros and cons Sally Chatterton, UnHerd’s Deputy Editor, recently acted as umpire in a fifteen minute debate between yours truly and Tom Chivers. Tom, who takes a more upbeat view of new tech’s impact, has also been writing a little for us. Here’s the link to our friendly discussion – face-to-face encounters are nearly always happier things than Twitter debates.

The series will continue tomorrow.

Jeff Bezos’ move astonished everyone. Amazon’s cut-throat, price-focused image was in stark contrast to Whole Foods’ organic, quality (and pricey) approach.

What was he after, and what’s he been up to?

Here’s your quick ten point (via press clippings) guide.

(1) The Bezos Empire

Jeff Bezos, world’s richest man, presides over a vast corporate empire, from book selling (where he started) to outer space (where he hasn’t been doing too well) to cloud storage (Amazon Web Services is the market leader and a huge driver of profit) to – the latest move – selling groceries. He also owns (personally) the Washington Post.

A wonderful chart on MarketWatch pulls it all together.

(2) Making money

Suddenly, Bezos became enormously more wealthy after the acquisition…

CNBC:

“Imagine being a tech company with so little profit that you could buy a grocery store and cut prices – all while improving your margin. Yes, that’s Amazon. In announcing … its $13.7 billion acquisition of Whole Foods on Thursday, Amazon also said that starting next week, it will offer lower prices on popular items…. Amazon’s operating margin for the second quarter was a paltry 1.7 percent. Whole Foods recorded operating profit of 4.8 percent.”

And also MarketWatch:

“Jeff Bezos is having some “fun” on Friday. The $34.39, or 3.6% surge in Amazon.com Inc.’s AMZN, -0.10% stock, after the deal to buy Whole Foods Market Inc. wfm is boosting the the Amazon co-founder and CEO’s coffers by about $2.75 billion.”

(3) Disrupting the food trade

Vanity Fair:

“On the day Amazon announced plans to buy the upscale grocer for $13.7 billion, investors pulled billions of dollars from competing companies, with the market cap destruction totaling almost $40 billion for the 20 worst-performing food and retail stocks on the S&P alone. And the fallout from the potential merger isn’t over.

On Wednesday, meal-kit delivery company Blue Apron announced plans to slash the target share price for its upcoming I.P.O., from $15 to $17 per share to $10 to $11 per share—a dramatic cut for a company that, while unprofitable, was generating significant year-over-year revenue and closing its losses. The new share price would value Blue Apron at about $2 billion, compared to its previously expected $3.2 billion valuation.”

(4) Prime discount

“Prime customers carrying the Amazon Prime Rewards Visa Signature credit cards have a shiny new perk coming their way — the card will now net them the same 5 percent cash back at Whole Foods that it currently captures on Amazon.com.”

(5) Building Prime – and Amazon’s core business

CNBC:

“[Analyst] Nowak … estimated 38 percent of Whole Foods customers, or about 5 million households, are not Amazon Prime subscribers. We expect Amazon to convert half of these shoppers between now and the end of 2019,” he wrote. “We see AMZN’s Prime member growth and engagement, Echo device sales, and consumer web traffic/interest driving solid top line trends and GMV [gross merchandise volume] per customer growth.”

(6) Prices down

Whole Foods has been cutting (some) prices. Forbes:

“Morgan Stanley’s Brian Nowak wrote in a note to clients in August, as the acquisition was finalized, that Whole Foods’ average food-item price was approximately 14% higher than the average grocery store’s. He cited a recent survey in which 70% of consumers who said they didn’t shop at Whole Foods blamed pricing as the primary reason.”

But, as Bloomberg pointed out, “those price cuts were highly selective and carefully chosen for maximum attention”

(7) Prime Now food deliveries

…And, in select US cities, “free” if you can wait 2 hours….

The DAOnline:

“Amazon Prime Now…is operating out of Whole Foods in select cities where it offers rapid delivery in 1-2 hours, at cheaper prices than its competitors. Istacart, Amazon’s main competitor, charges $5.99 for 2-hour delivery, while Amazon charges $4.99, [if you want it in 1 hour] according to Business Insider.”

(8) Squeezing suppliers

NewFoodEconomy:

“Yes, Whole Foods will now ask suppliers with annual sales of more than $300,000 to discount their wholesale price by 3 percent. (The Washington Post and Business Insider have reported three to five percent.)”

This was Amazon’s approach with publishers as it built its book business, and has been a standard Walmart technique.

(9) Revamping inventory

The new Amazon approach to shelf-stacking has caused problems. PJMedia:

“Employees are blaming tight controls on Whole Foods’ order-to-shelf (OTS) inventory system for the shortages. Employees acknowledge that less food is spoiling in storage rooms, but they describe OTS as a ‘militaristic’ system that crushes morale and leads to many items being out of stock,” the United Food and Commercial Workers tweeted.”

(10) Revamping management

And, related, reports The Daily Meal:

“We’ve lost team leaders, store team leaders, executive coordinators and even a regional vice president. Many of them have left because they consider OTS to be absurd. As an example, store team leaders are required to complete a 108-point checklist for OTS.”

“Amazon’s takeover of Whole Foods sent the stock of competing grocery chains plummeting. To understand why, you need to know something much simpler than Amazon’s far-reaching ambitions or possible vision for transformation of the grocery industry: Amazon doesn’t make any money.”

What's it like to work at Amazon?

Test article

By Tim Montgomerie

When you stop by her office at the Massachusetts Institute of Technology, Sherry Turkle, Abby Rockefeller Mauzé Professor of the Social Studies of Science and Technology, doesn’t wave you to a seat in front of a mahogany professorial desk. She offers you your choice of her comfy couches (and, at least in my case, she offers you coffee). For she isn’t simply a sociologist and ethnographer and anthropologist. She’s also a psychologist and psychoanalyst. And while much of her life has been devoted to studying digital technology, her first book was actually about Sigmund Freud. If ever we mere humans needed an advocate in the face of the technological-industrial complex and its devices, we’d hope for someone like her.

1984: Orwell, Turkle, Zuckerberg

There were a mere ten million computers in the entire United States when Sherry Turkle, already a professor at MIT, staked her claim to be the champion of human questions in the dawning digital era. Back in that haunting year, 1984. Back before any one of the companies that dominate today’s internet had yet been heard of. Even before Tim Berners-Lee had come up with the World Wide Web. Somewhat curiously, it was also the year Mark Zuckerberg was born.

In her prescient book The Second Self, she reviewed the rapid spread of what she called the “computer culture,” and reflected that – even then – “in one way or another” it “touches us all.” Grasping in a single phrase what many would come to see as the core question of the 21^st century, she subtitles the volume “Computers and the Human Spirit.”

Reading The Second Self a generation later is an eerie experience.

Take children, for example.

Long, long before Mark Zuckerberg launched Messenger Kids to bring six-year-olds into Facebook, before Mattel launched Hello Barbie, their chatty robot doll, Sherry Turkle was studying “children’s relationships with computers.”

“I found three stages …. First there is a “metaphysical” stage: when very young children meet computers they are concerned with whether the machines think, feel, are alive. Older children, from age seven or eight on, are less concerned with speculating about the nature of the world than with mastering it.” And in adolescence “computers become part of a return to reflection, this time not about the machine but about oneself.”

What distinguishes Turkle’s work from so much commentary on the rise of the digital world is its basis in research. Her observations are rooted in something other than opinion and anecdote. “This work is a field study based on many thousands of hours of interviews and observations,” she writes.

And she’s continued asking questions about the digital revolution and the human spirit ever since – and seeking answers grounded in sober facts and analysis.

Let’s talk

As Carlos Lozada in the Washington Post notes in reviewing her latest book[1.  From “The book that will have everyone talking about how we never talk anymore her latest book”, Washington Post, 1 October 2015: “We think our devices deliver comfort and efficiency, but, in Turkle’s telling, they offer loneliness and disarray. “Every time you check your phone in company,” she reminds, “what you gain is a hit of stimulation, a neurochemical shot, and what you lose is what a friend, teacher, parent, lover, or co-worker just said, meant, felt.””], Reclaiming Conversation, it would be a mistake to lump it together with the stream of “tech-skeptic manifestos.”  “This is a persuasive and intimate book,” he writes, “one that explores the minutiae of human relationships. Turkle uses our experiences to shame us, showing how, phones in hand, we turn away from our children, friends and co-workers, even from ourselves.”

The situation is one familiar to all of us. In Lozada’s summary:

“You’re at the dinner table, or in a meeting, or at a baseball game, or in the classroom, or in your bedroom, or at a bar or, yes, in the bathroom — and you’re on your phone. You might be talking, but more likely you’re texting, posting, swiping, liking, tweeting, buying, browsing or, in my favorite metaphor of digital existence, “refreshing,” as though life’s staleness can be washed away with every new, fully realized screen.”

A super-abundance of conversation, surely!

Closely related...

How smartphones make our young people unhappy

By Peter Franklin

And yet:

“This is the world of incessant connection, and for all the communication it supposedly provides, it’s destroying one essential thing: open-ended conversation. “We are being silenced by our technologies,” Sherry Turkle warns, “in a way, ‘cured of talking.’” And that silence means our ability to relate to others is disappearing, too. “We face a flight from conversation that is also a flight from self-reflection, empathy, and mentorship.”

Three strikes…

While Sherry Turkle’s early work focused on humans and on computers that actually looked like computers, the context today can be summed up as the conjunction of three factors:

1. First, the basic inter-connectedness of the internet, which was dramatically enhanced by the invention of the Web (1991);
2. Second, the development of social media (Facebook was founded in 2004, though AOL, 1985, and MySpace, 2003, were the pioneers);
3. And, third, the near-miraculously explosive deployment of smartphones (iPhone: 2007), putting super-computers into our hands and pockets.

We have become so used to these little devices. It is sobering to be reminded of the impact of “Moore’s Law” – the principle that computer power keeps doubling as the price drops. The numbers are truly astonishing. In the past sixty years, computing power has increased by a factor of one trillion. An iPhone 4, if you can still find one, has the same power as the Cray super-computer of 1985[2.  Read Maddie Stone on The trillion-fold increase in computing power, visualized].

It is these technical developments that have created today’s social media/smartphone challenge.

For great and small, we members of Homo sapiens are rarely far from our smartphones. The single most startling story of the digital revolution is the staggering speed with which the “mobile device” has spread into the hands of billions.

A decade after the launch of the iPhone in 2007, the numbers are stunning. According to a recent Pew study[3.  Among ten findings about smartphones by Pew: “Overall, 12% of U.S. adults were “smartphone-only” internet users in 2016 – meaning they owned a smartphone but did not have broadband internet at home.”], in the United States three-quarters of adults own a smartphone – including 64% of those living in a household with an income of less than $30,000. Half of young adults live in a household that owns three or more of them. As smartphones get cheaper, their global spread continues. One projection is for six billion to be in circulation by the year 2020.

Real life

Over the years, Sherry Turkle has deployed her incessant questioning on several fronts. She has written about simulations, about our capacity to adopt alternative personalities online, about the loneliness that bizarrely can so easily be the concomitant of our endless engagement in digital communication. But it’s here, in her beguiling advocacy of conversation – packed with telling observations and haunting incidents – that her campaign for the human spirit comes to a head. In the words of novelist Jonathan Franzen, she “serves as a kind of conscience for the tech world.”

And in a remarkable tribute, technology icon Kevin Kelly, founding editor of Wired magazine and as far from being a Luddite as one can get, has this to say:

“Smartphones are the new sugar and fat: They are so potent they can undo us if we don’t limit them. Sherry Turkle introduces a lifesaving principle for the twenty-first century: face-to-face conversation first. This heuristic really works; your life, your family life, your work life will all be better. Turkle offers a thousand beautifully written arguments for why you should lift up your eyes from the screen.”

The bottom line

“Why a book on conversation?” asks Sherry Turkle. “We’re talking all the time. We text and post and chat…. Among family and friends, among colleagues and lovers, we turn to our phones instead of each other.”

She begins her book with a quote from Thoreau’s Walden: “I had three chairs in my house; one for solitude, two for friendship, three for society.”

It actually ends, on the back cover, with a review from the Boston Globe: “Talk is cheap, but conversation is priceless.”

***

MORE ON TURKLE, MORE BY TURKLE

FROM TED TALKS, 2012

As we expect more from technology, do we expect less from each other? Sherry Turkle studies how our devices and online personas are redefining human connection and communication — and asks us to think deeply about the new kinds of connection we want to have.

We should hardly be surprised that it is China, the would-be global hegemon, that’s threatening to crush the last petals of digital flower power. The People’s Republic is working on the most comprehensive project for social control that has ever been devised.

The Beijing project combines the business reviewing (credit ratings) and peer reviewing (AirBnb) to create the ultimate Klout score: a measure of the trustworthiness so beloved of the Chinese Communist Party. This information is then immediately accessible upon the scanning of someone’s face. Welcome to the Social Credit System: “basically a big data gamified version of the Communist Party’s surveillance methods”[1.  Rachel Botsman, Wired, October 21, 2017, “Big data meets Big Brother as China moves to rate its citizens.” Adapted from her book, Who Can You Trust? How Technology Brought Us Together and Why It Might Drive Us Apart (Penguin Portfolio, 2017)].

The original plan for the “Social Credit” project goes back to 2014, when it was laid out in a document approved by the Chinese State Council. Despite some delays, after an initial period of voluntary participation, a full – and compulsory – rollout is planned for 2020.

The project is brilliantly simple – and singularly sinister.

Any one thing of which they disapprove will have an impact in every other area of your life.

This from Rachel Botsman’s book Who Can You Trust?

… people with low ratings will have slower internet speeds; restricted access to restaurants, nightclubs or golf courses; and the removal of the right to travel freely abroad with, I quote, ‘restrictive control on consumption within holiday areas or travel businesses’. Scores will influence a person’s rental applications, their ability to get insurance or a loan and even social-security benefits. Citizens with low scores will not be hired by certain employers and will be forbidden from obtaining some jobs, including in the civil service, journalism and legal fields, where of course you must be deemed trustworthy. Low-rating citizens will also be restricted when it comes to enrolling themselves or their children in high-paying private schools…. As the government document states, the social credit system will ‘allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step’.

It is happening already:

In February 2017, the country’s Supreme People’s Court announced that 6.15 million of its citizens had been banned from taking flights over the past four years for social misdeeds…. Another 1.65 million blacklisted people cannot take trains.

As The Conversation reports:

Being a “good citizen” is well rewarded. In some regions, citizens with high social credit scores can enjoy free gym facilities, cheaper public transport, and shorter wait times in hospitals. Those with low scores, on the other hand, may face restrictions to their travel and public service access[2.  “China’s Social Credit System puts its people under pressure to be model citizen”, The Conversation, January 21, 2018].

And here’s an update from Rodion Ebbighausen on the German website Die Welt:  

People who don’t visit their aging parents regularly, for example, will get minus points. The same goes for people who cross the street on a red light or illegally dump their garbage[3.  Rodion Ebbighausen, “China experiments with sweeping Social Credit System,” Die Welt, January 4, 2018].

If you watched the Nosedive episode of the Netflix sci-fi series Black Mirror, this may sound familiar. Though while the Nosedive set-up is nowhere near as comprehensive (or as threatening) as the Chinese project, the core idea is the same: peer evaluations in real time assign significance to everyone.

China may only be the start. As the article in Die Welt notes, China may now export their system to other (repressive) regimes around the world.

It could hardly be more different from the vision of the early internet pioneers, as captured by John Perry Barlow in his 1996 manifesto:

“Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.”

This is not Google Glass, but facial recognition glass connected to Chinese police database. Deployed to a Zhengzhou railway station 5 days ago, it has detected at least 7 fugitives and 26 fake ID holders. #surveillance pic.twitter.com/eXrzRgORam

— FAN Wenxin (@xinwenfan) February 6, 2018

At the back of that, there’s an insidious, creeping uniformity in how we think – both about technology and about what it means to us. The startlingly candid motto of the 1933 World’s Fair in Chicago, one of the 20^th century’s great expositions of human achievement, sums it up. ‘Science Finds, Industry Applies, Man Conforms.'[1.  The World’s Fair: Ron Grossman, May 26, 2013] Is this really what’s going on? First the lab makes the discovery; then the corporation comes up with the product; and then ‘man’ – all of us – do our duty and ‘conform’ by buying the product. If this seems like an exaggeration, just remember that there are now two billion people using Facebook at least once a month. That’s a number more than six times the population of the United States; 30 times that of the UK. It’s close to half the adults on the planet outside China (where it’s banned).[2.  Report from Anita Balakrishnan, June 27, 2017]

Conformity?

The vision set out in the World’s Fair motto is, frankly, chilling. And the tendency of the digital revolution to encourage conformity, not least through the growth of vast corporations with a narrow product focus and enormous – sometimes monopolistic – profitability, both captures the World’s Fair vision and actually makes it creepier. Because the two billion who are ‘conforming’ to the Facebook product would never dream of thinking of themselves as naïve conformists. They are making personal choices, and they have chosen the product because they like it. Just as they do when they check their mobile phones during family dinners, or business meetings, or first dates.

Though it’s worth noting that since they don’t pay cash to get it, few Facebook users think of it in quite those terms. The largely invisible barter system by which they trade data for service makes everyone’s thinking a little foggy.

Machines ‘r’ us?

Behind our consumer engagement with digital technology another debate is in progress. It’s many years since inventor and futurist Ray Kurzweil came up with his model of the ‘singularity’ – that future point when machines become smarter than we are and rapidly ascend an exponential curve of smartness that will leave us humans in the dust. Kurzweil has proposed various dates for this extraordinary event, though 2045 is the most recent.[3.  Ray Kurzweil, The Singularity is Near. When Humans Transcend Biology New York: Viking Books, 2005]

More important than his prediction, though, lies the fundamental idea that machine intelligence is superior to human intelligence, and that humans should be looking forward to living digital lives. Years back the term ‘wetware’ was coined to describe brain matter – by analogy with software and hardware. Of course, as we know, the human brain is not only smart, it is extraordinarily complicated. But machines have beaten us at chess, and at the even more complex game Go. Should we accept the superiority of the machine and aspire to a digital future? Or, to rephrase that, while the machine is plainly better at some things than we are (that’s why we have machines, from the adze and the plough onwards!), does this mean that we should all aspire to be like machines?

When we are looking at our digital devices, it may be helpful to think adze. Obviously, machines are better at doing what they do than a human would be. But can a machine be better than we are at what we do as a whole? Can they be better humans than we are?

That is a very different question, and it’s one that people taking Kurzweil’s view can answer only by defining what we humans do – defining it down – in machine terms. For example, of course machines can have sex with humans (and indeed with each other, which is maybe an even weirder idea), but can they in any sense make love? This approach is in logical terms called a petitio principii – an argument that assumes its conclusion from the start. If we abstract the things that humans do in machine-like terms, it should scarcely surprise us that machines can do what we do. Whether they can be entranced by the beauty of a sunset, enjoy a children’s birthday party, or read Keats and weep is a different question altogether. And while, per Moore’s Law, circuits certainly keep being crammed onto chips and quantum computing suggests that even as cramming becomes impossible ramping up machine intelligence won’t, not everyone agrees that replicating the complexity of the human brain equals producing people.[4.  On Moore’s Law see here. Quantum computing: Abigail Beall, March 23, 2017, summarizes the latest in Wired Magazine.]

The Question of Us

As technology continues to explode around us there’s no more significant question to address than this one: Can we develop and manage our technologies in a manner that will enable and enhance our capacity to live human lives? Behind that, can we think about them in a manner that will keep the human vision – of a human community sustained and empowered by the latest adzes and ploughs – at the forefront? Or is it inevitable that our human story will ultimately be superseded by the story of machines that are ever smarter and faster?

It’s plain that there’s no value in a return to ‘Luddism’. But while progress may be inevitable, what we make of it – in our personal lives and our families and our businesses and our communities and on our planet – is up to us. Does the future offer us privacy – and do we care? Will these vast new technologies drive wealth for all or exacerbate inequity and division? Do we all need to train in STEM or do we suspect that the future will hold a new golden age for the humanities (the stuff that machines will find it hardest to do)? In other words, are we up for a long campaign for a human future?

READ MORE

Ray Kurzweil’s The Singularity is Near. When Humans Transcend Biology (New York: Viking Books, 2005) offers a substantial manifesto for his thesis that Moore’s Law will lead to a machine takeover.

Here’s a critique from Microsoft co-founder Paul Allen in MIT Technology Review.

And a summary of criticisms in tech online newspaper Pando Daily.

China pushes ahead, as the U.S. goes back

Under the provocative title “China is winning the 21^st century space race” Fortune magazine set out what we know about Beijing’s extraterrestrial intentions. Mr. Xi’s ambitions lie far beyond dominating the South China Sea.[1.  Vikram Mansharamani, Fortune, March 31, 2016: “China is winning the 21^st century space race.”]

While we are never quite sure of China’s budgets, the World Economic Forum estimated that in 2013 spending on space was just over $6 billion (against $39 billion for the United States). That was enough to put China second in the global league table: just ahead of Russia ($5 billion) and far ahead of other countries (the UK’s figure was a miserly $367 million).

Yes, far behind the United States. But two facts need to be remembered. First, developing nations are often much better at getting value for money. India’s remarkable 2014 trip to Mars came in at around one-tenth of what it would have cost the U.S. to do the same thing.[2.  For a “staggeringly cheap” $74m. Here is the BBC report. ]

Second, note the trajectory. China’s spending is going up: and (unlike the U.S., where space policy flips with administrations) they have a long-term plan.

Here are some more facts that should worry the west.

• The International Space Station, which has so far cost $150 billion, will be shutting up shop in the early 2020s. Meanwhile, China has been building its own. Already it has astronauts there. It will be fully operational by 2022. Meanwhile, Congress has banned the U.S. from working with China, so will be excluded from any participation.
• “In 2013, China became the third nation—after the United States and the Soviet Union—to soft-land a spacecraft on the moon. In 2014, the country also sent a probe around the moon and back, the first such mission since the 1970s.”
• In 2019 China plans to send a probe to land on the far side of the Moon (a first), and bring back rock samples.
• And then send astronauts.
• And then, to Mars. Initially, an unmanned rover, in 2020, 40 years after the U.S. Viking probe. And then, people.

China has an eye firmly fixed on the future. Hegemony in space is integral to its plan to supplant the United States as the world’s superpower.

For the United States – back to the future

Back in the mid-20^th century past, before the digital revolution deluged us with computing power and mobile devices, the west lived through something that looked like the future at the time, and still looks like it.

The hottest thing in air travel was a supersonic plane called Concorde. We were all watching the Jetsons. And close to 60 years ago a U.S. President promised us a man on the Moon.

The Space Race, kicked off by Soviet Russia with the launch of Sputnik, became an overwhelming American priority. For a decade, politicians of both parties kept faith with President Kennedy’s vision. At one point close to 5% of the entire U.S. federal budget was spent on NASA. The current equivalent figure is closer to one-half a percent.

A man was duly delivered to the Moon a year ahead of schedule. (Personal disclosure: one of the joys of my life was to have shaken the hand of Neil Armstrong. And also discovered that we shared a birthday!)

Then, more than 40 years ago, America just lost interest.

With the Soviets left in the dust, JFK’s promise fulfilled, and fresh demands on budgets (like Vietnam), the vision lapsed. There would be no more men, or women, on the Moon after Apollo 17’s landing in 1972. And the Space Shuttle programme (Plan B), intended to be a low-cost effort, proved a disaster – both for the accountants and, of course, tragically for two of the crews.

After the Shuttle programme ended, even sending Americans to the International Space Station – a collaboration with other nations, famous mainly for Commander Chris Hadfield’s performance of David Bowie’s Ground Control to Major Tom – involved the ultimate humiliation of hitching a ride from the Russians.

As some wag suggested, this sequence would make more sense in reverse. First, Americans get into earth orbit, but depend on other nations (aka, Russia) for lift. Then the U.S. develops its own lift in the form of the Space Shuttle. Finally, heavy lift is established and enables manned exploration of the Moon. A NASA version of Benjamin Button.[3.  Benjamin Button, the title of a 2008 feature film based on the book by Scott Fitzgerald, is the story of man who lives life in reverse; he keeps getting younger.] view comments]]> https://stage.unherd.com/2017/12/will-win-space/?edition=us?appcommentsnew https://stage.unherd.com/2017/12/will-win-space/?edition=us/feed/ 9941 https://stage.unherd.com/2017/11/how-to-be-a-digital-consumer/?edition=us https://stage.unherd.com/2017/11/how-to-be-a-digital-consumer/?edition=us#respond https://stage.unherd.com/wp-content/uploads/2017/11/PA-24731329.jpg?w=526 https://stage.unherd.com/wp-content/uploads/2018/01/nc-pic-stars.jpg?w=96 Nigel Cameron writes about technology, society, and the future. In 2007 he founded the Washington think tank The Center for Policy on Emerging Technologies. His most recent book is Will Robots Take Your Job?

“It’s no use going back to yesterday, because I was a different person then.” [1.  This and other quotes from Lewis Carroll’s Alice in Wonderland, helpfully curated by Jane Carruth at goodreads.] – Alice in Wonderland

The market economy did pretty well for us in the 20th century. Companies produced stuff from cars to record players, and consumers got increasingly savvy about quality and price. About our rights. And about shopping around among competing products. We read Which? (UK) and Consumer Reports (US) and consumerism the movement was born.

Then something weird started to happen: the digital revolution.

We fell down the rabbit hole with Alice into Wonderland, and everything started to look weird.

While it looked as if Amazon had come up with a new way to enable you to buy books, what it had really done was re-create something from the 19th century – the lending library where you have to pay.

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In the beginning was Kindle

Amazon suddenly started offering us digital books – no need to trek to the bookshop, just buy and download!

But “buy” needs to be in quotes. A Kindle book won’t fill your bookshelves, but there are other things you can’t do with it. You can’t sell it, you can’t even give it away, because of course it isn’t really “yours.” You’ve really just borrowed it – or, rather, the right to read it. OK, you’ve rented it. While it looked as if Amazon had come up with a new way to enable you to buy books, what it had really done was re-create something from the 19^th century – the lending library where you have to pay.

Curiouser and curiouser

While you have to pay to rent books on Kindle, there are plenty of digital goods for which you pay nothing at all. That seems wonderful. Something for nothing! But, as the old saying goes, when something seems too good to be true, it usually is. (An old saying we could do with reviving in the digital era.)

The biggest problem is this: when it comes to “free” digital goods and services, because you aren’t using your credit card or getting monthly bills you tend not to think of yourself as a “consumer” at all. You’re just a “user” – a word the digital industry likes –or a “member.” To be a consumer you must buy things, don’t you, with money?

Actually, no. All it takes to be a consumer is to make an exchange, a transaction in the market-place. One of the curiouser ironies of the digital industry is its core business model, which takes us back to the days of primitive societies. They didn’t have cash, yet they still had transactions. We’re back in the history-book concept of barter. I’ll trade a dozen eggs for your chicken.

Barter is trading that doesn’t involve money. Its revival lies at the heart of the digital economy. And it’s one reason barter-based companies like Facebook and Google and many smaller ones are so hard for governments to regulate. Or for consumers to take seriously as companies.

What’s the trade-off?

So, users of Facebook and Google rarely sit down and ask themselves “how much am I paying to post these pictures, or ask these questions?” We just fire up our browsers and jump in. Of course, there are costs involved in our doing so – we pay for broadband cable or some other access to the internet. But we know we aren’t paying for the services we use. Are they some sort of charity?

What we need to be asking ourselves is, Where do these huge corporations make all that money?

There are three kinds of answer. One is simply advertising. Facebook and Google are sucking up more than half the ads on the internet, and the internet is steadily sucking ads from print and other real-world locations. We see ads and we assume this is how we are paying – and we may also know that for a century and more this is how newspapers have operated: the cover price has only covered a fraction of the cost; the rest comes from ads.

But here it’s a lot more complex. Because this is less about ads than about data. Everyone opening the New York Times sees the same ads for Macy’s department store and BMW and Givenchy. No two people using Facebook will ever see the same ads. Because these companies are sucking up enormous amounts of data about their users, analyzing it in ever more complex fashion, and using or selling it to shape our purchasing decisions. If you ask Facebook for all the data they have on you and you’re a typical user, it will run to well over one thousand printed pages.[2.  A well-known case that brought this to light is that of Austrian law student Max Schrems. Kevin Parrish, “User’s Facebook Data Request Produces 1222 Pg PDF on CD.”]

If you’re not paying for it, you’re the product. That is, the service you are using is profitable because it sucks up your data and uses it to target ads at you and everyone you have ever known.

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As Silicon Valley entrepreneur Jeff Hammerbacher famously put it, “The best minds of my generation are thinking about how to make people click ads.” And that’s why mathematicians, who write the formulae that turn your raw data into ads that will make you buy, are in such demand.[3.  Ashlee Vance, “This Tech Bubble is Different” Bloomberg, April 14, 2011.]

But there’s a third way to answer the question, and it’s even more disturbing: If you’re not paying for it, you’re the product. That is, the service you are using is profitable because it sucks up your data and uses it to target ads at you and everyone you have ever known.

Put it like that and it’s a bit more obvious that these really are big businesses, and we really are consumers who pay for what we get.

Alongside the “free” stuff like Google there are also many digital goods and services for which we actually do pay – for example when you buy software like Microsoft Word or download Apple music or movies from Netflix. In many of these cases we’re doing both: paying cash, and also paying in data.

Those “privacy” statements

If we’re paying in data, do we have any say in how much data they take?

Those “privacy” statements that we sign giving permission to companies to search our phones and sell our data are the key. They’re separate from “privacy” settings – on Facebook and other sites – when you can decide how much of your stuff you want other people to see. These are take-it-or-leave-it contracts that rarely give you any choices and hand over your data to the company.

What’s a consumer to do?

‘Would you tell me, please, which way I ought to go from here?’
‘That depends a good deal on where you want to get to,’ said the Cat.
– Alice in Wonderland

There’s one obvious change in the law that could turn the weird world of digital goods into something that better resembled the consumer market-place we understand. We could require companies who seek our data – either as the price of service, or as part of it – to offer a cash alternative. We could require them to give us a consumerist choice.

Facebook for $10 a month – and all your data stays with you? Google for $20, same conditions?

Suddenly we’d all realize we were dealing with huge corporations that make money off us. And we’d be free to make a choice – as to whether we want to buy the product or be it too.

***

READ MORE: Ashlee Vance’s Bloomberg article from April 14, 2011, gives a brilliant insight into the data-ad process by telling the story of a mathematician who started early at Facebook.

view comments]]>

And tomorrow’s city will be “smart”.

Home smart home

We’ve already begun to experience what it’s like for our homes to be “smart”. By which we mean connected, computerised, plugged in to the internet.

You can watch your kids (and their nanny) from work on a smart cam – but now the cam can float in the air, follow people around, and of course in the process guarantee security. Your smart doorbell means you can see who’s ringing it. It may recognise familiar faces, enable you to chat with unfamiliar ones, and of course record details[2.  Cnet].

From your iPad, or through a voice-activated device like Alexa, you can control pretty much everything in your home. “A Smart Home That Thinks About You,” declares one company offering integrated systems that “bring together your lighting, heating & cooling, security, shades and gate entrance devices”[3.  Finite solutions – Bespoke smart home systems. The Independant: 11 best smart phone solutions]. Energy efficiency, sophisticated mood lighting, you name it.

A tale of two (prospective) cities

It’s taking a little time, but the city is getting as smart as your home.

First there are efforts to build whole new smart cities from scratch. Google’s sister company Sidewalk just inked a deal with the city of Toronto to take over a huge slice of waterfront property – 800 acres – and turn it into a 3.3 million square feet of homes and offices.

“They want it to embody the city of the future, a technological test bed for other communities around the world,” wrote Emily Badger in the New York Times; “the world’s first neighborhood built from the internet up.”[4.  Emily Badger, New York Times, October 18, 2017: “Google’s Founders Wanted to Shape a City. Toronto Is Their Chance.”] The Google affiliate’s plans show the interlocking character of an urban environment designed to benefit from embedded digital features. They include “a thermal energy grid that would be carbon neutral, sensors that separate waste from recycling, modular buildings that convert from retail to housing, monitors that track noise and pollution, self-driving transit shuttles, shared-ride taxibots, adaptive traffic lights, delivery robots, heated bike paths and sidewalks that melt snow on their own”. In Toronto, that last point is a strong one.

There’s serious thinking behind the gizmos. Sidewalk is deliberately based in New York City rather than Silicon Valley, with former NYC deputy mayor Dan Doctoroff as boss. Rather than design a utopia in thin air, the idea is to blend the new stuff with what we know about the old. “We all collectively see cities as about friction: good friction and bad friction,” Mr Doctoroff told The New York Times. “Good friction is serendipity, it’s opportunity, it’s diversity, it’s seeing 40 different nationalities on the subway as you commute in the morning. Bad friction is congestion, it’s pollution.”

Bill Gates has also jumped into the fray with an $80m investment in a location that won’t have big problems with snow: Phoenix, Arizona. He’s just bought 25,000 acres with a plan for 80,000 homes, together with commercial and other space[5.  Thuy Ong, in The Verge for November 14, 2017: “Bill Gates is investing $80 million to build a smart city in Arizona.” More here].

And around the world

At the same time, there are efforts worldwide to retrofit smartness into the dumb cities we know and love.

Among many competing claims, Singapore stands out. A research firm recently crowned the city-state as the “smartest city on earth”[6.  Juniper research]. Closer to home, Barcelona was picked as 2015 Global Smart City.

These huge communities are distinguished by their application of digital technology to a series of problems.  “While there are many definitions of a smart city, in general a smart city utilises IoT [Internet of Things] sensors, actuators and technology to connect components across the city, and it impacts every layer of a city, from underneath the streets, to the air that citizens are breathing.”

Some of this is obvious to you and me, some is hidden from view: all the way from apps that track the buses – a huge plus for city-dwellers – to “smart grid” functions that are making power supplies safer, more environmentally friendly and more reliable[6.  Tech Republic]. Sophisticated lighting in public as well as private saves money and delivers much better illumination (and in many cases safety). Traffic lights no longer work on timers but adjust to traffic patterns.

Or to take two very practical examples from London. Drivers in London typically cruise for 12 minutes before they find somewhere to park, causing pollution, congestion and frustration. The City of Westminster has a smart parking scheme: if you use the app it tells you where spaces are available[7.  Smart parking in London]. And if you’re on the bus… on my way in to the UnHerd office this morning a voice advised passengers standing downstairs that there were plenty of seats on the upper deck.

Smart streetlights have been leading the way, both as smart lights (LED) and as easily connected reporting stations for everything from traffic patterns to air quality to crime.

Smart and Happy?

Determined to be top smart city is the city of Dubai, most technologically advanced of all the Gulf states. Partly because of its small size it has been able to implement city-wide initiatives with relative ease – all the way to robot police. It boasts that it “aims to introduce strategic initiatives and develop partnerships to contribute to its Smart Economy, Smart Living, Smart Governance, Smart Environment, Smart People and Smart Mobility dimensions”[8.  Smart Dubai].

What’s notable about Dubai is that its smart city initiative is managed in tandem with its plan to make the city the happiest city on earth. It’s making strides with one of the most innovative of smart city efforts – smart bus stops. Bus shelters are all wheelchair accessible, open 24/7, and air-conditioned. They have free mobile charging points and machines for banking and buying airline tickets. You can pay your bills and make gifts to charity. And some of them have coffee and donut machines too. Rather like the way in which lamp-posts are being used, here we have a creative build-out from a standard service that incorporates many more.

Heaven on Earth?

Of course, there are downsides. Data-gathering that cuts crime and helps traffic flow can also intrude on privacy. Connectedness that facilitates parking and power flow through the grid can be hacked. A focus on “happiness” could be a smart way to keep citizens distracted from politics.

But this is just the start. When we start to speculate about the smart city future – the environment in which we shall all be living out our lives – we need to remember how strange and unfamiliar our app-centred lives would have seemed if they featured in a sci-fi story in the 1960s. Ubiquitous computing – internet-powered everything everywhere – is just in its infancy. Big choices lie ahead.

READ MORE

Much info here: Smartcitiescouncil.com

There is a great deal of interest in developing economies in utilising smart city approaches to infrastructure development and service provision. For example, India:

Swanti.com – a century of smart cities 

And Africa:

Brookings – Smart city initiative in Africa

The internet is marrying the “real world” now – and there are several obscure terms for what’s going on, as “things” get in on the act.

Thing One and Thing Two

The standard phrase is the “Internet of Things” because the basic idea is to use the internet to link up pretty much all the “things” on the planet. If you want a more technical description, you can talk about “cyber-physical systems”,  which does neatly capture what is going on, since we are plugging “cyber systems” into “physical systems” and making hybrids.

But the hot term capturing focus today is “smart cities”, because it’s in the highly concentrated city environment that much of this technology is being installed. 

The passive explanation goes like this: “A smart city is an urban area that uses different types of electronic data collection sensors to supply information used to manage assets and resources efficiently.”[1.  https://en.wikipedia.org/wiki/Smart_city] But there’s a thoroughly active side too. Once self-driving cars and trucks take to the roads, the integration of sensors and vehicles and enormous quantities of data is set to revolutionise our urban environments.[2.  The Wall Street Journal chronicles “The Rise of the Smart City.” Michael Totty, April 16, 2017. https://www.wsj.com/articles/the-rise-of-the-smart-city-1492395120.]

Some observers find the role played by the private sector to be a disturbing feature of this unfolding future. As we noted here on UnHerd[3.  https://stage.unherd.com/the-feed-blog/google-gets-excited-running-actual-analogue-world/], the recently announced plan by Google and the city of Toronto to install a purpose-built “smart city” development raises this question acutely. 

Smart about cybersecurity?

But overshadowing all concerns lies the issue of security.

We’ve become used to announcements that hackers have broken into our data in company after company – and also in government departments[4.  There’s a handy and thoroughly depressing list of major hacks here: https://www.informationisbeautiful.net/visualizations/worlds-biggest-data-breaches-hacks/]. The Yahoo hack was probably the biggest, involving billions of records. The Equifax hack of American citizens’ financial secrets may have been the most worrying in the private sector. In the public sector, the US government’s personnel department – the Office of Personnel Management – lost more than 20 million records, probably to the Chinese (and including large numbers of highly secret security clearances). The UK’s National Health Service, recently hit by the WannaCry virus, seemed oblivious to what an official post-mortem called “basic” precautions.

When personal data is hacked, people worry that their financial identities may be stolen – though the more common it becomes, the less we fret.

In a cyber-physical system, the stakes are much higher. Many people woke up to this threat when, back in 2015, a Jeep Cherokee driving down a US highway was hacked and came close to crashing as the hackers took control of the car[5.  The hack was “friendly” and the driver was a journalist after a story, though despite this fact he came close to calamity.].

“No 9/11 yet”

At an Internet of Things conference last month[6.  The conference was hosted by Forum Global. I was in the chair. https://eu-ems.com/summary.asp?event_id=4336&page_id=9232], the chief legal officer of BlackBerry took to the stage with a startling warning. Unusually for a C-suite exec, Steve Zipperstein started his career as a US federal prosecutor. And he had blunt words for the assembled industry leaders, tech gurus and policymakers in Washington’s National Press Club. 

“We have not yet had our cyber 9/11.” 

The opportunities for disruption being presented by the connectedness of the Internet of Things get greater the more connections there are. A hack – by terrorists, an unfriendly foreign state, or merely crazy people – of “9/11” dimensions is not unthinkable.

That’s one reason widespread cybersecurity incompetence in lesser matters, like what happened inside the NHS or the US Office of Personnel Management, is so disturbing. Once the systems are “cyber-physical”, cities will be as vulnerable as that Jeep Cherokee.

If we want our cities to be truly smart, we need smarter people running security.

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Smart Cities Council

IEEE smart city site

US Department of Homeland Security

Meanwhile, on the other side of the Atlantic, stand-off weapons are also being deployed from bunkers in St Petersburg, Russia, but not against Middle East terrorists. The target is the  United States of America. And – unlike the ballistic missiles that have long threatened American cities – this new class of weapons has actually been used.

Duelling Demonstrations in Texas

On 11 May 2016, journalist Craig Malisow of the Houston Press reported on an armed protest to be staged outside the new Islamic Center in downtown Houston[2.  Craig Malisow, May 11, 2016, Houston Press: “Hate Group Planning Islamic Library Protest Totally Doesn’t Think They’re a Hate Group.”]. “Heart of Texas,” a pro-Texas-independence group with hundreds of thousands of Facebook followers, was on the march.

“Imagine Texas turning in a muslim ghetto full of mosques and ‘Islamic Knowledge’ centers,” read the event’s Facebook page. It continued:

“What would founding fathers say if they knew we’re gonna put up with people who wish to kill us?”

And then, as Craig Malisow puts it, the kicker: “Feel free to bring along your firearms, concealed or not!”

Meanwhile, the group “United Muslims of America” were preparing to defend the centre.

They had made some startling claims on social media: that Hillary Clinton admitted the US had set up both al-Qaeda and the Islamic State, and that Osama bin Laden was a CIA agent. The United Muslims would respond to the Heart of Texas threat with a counter-demo[3.  The Daily Beast, September 27, 2017. https://www.thedailybeast.com/exclusive-russians-impersonated-real-american-muslims-to-stir-chaos-on-facebook-and-instagram].

And on May 21, 2016, the two groups duly faced off outside the Houston Islamic Centre.

Puppets on a string

But things are not quite what they seem. We’ve just discovered that, like US Predator attacks in Syria, the operation to pit these groups against each other was run from a basement – in Russia. The whole thing as in both sides.

“Heart of Texas,” despite its hundreds of thousands of Facebook followers, is a fictitious organisation dreamed up by the Kremlin. And “United Muslims” is made-up, too. Both groups, and both demos, were run from St Petersburg under orders from the Kremlin.

It’s hard to get your head around it. Agents of the Kremlin went far beyond merely posting messages and buying ads on Facebook. They fabricated a whole Muslim group and a gun-toting anti-Muslim, pro-Texas-independence group – and recruited hundreds of thousands of members. Then Kremlin agents decided to pitch their two puppets against each other. All the while, the citizens of Texas who signed up to these Russian fictions were duped into believing they were real.

The sheer chutzpah of this undertaking, and the skill involved in carrying it through, is breathtaking. We’re light years from the Cold War stereotypes of Russian espionage – thick-set men with thick accents in raincoats. The level of sophistication is high, and it’s plain that this whole fresh approach to undermining the West is in its infancy. The open society’s embrace of social media has opened us to this new threat.

In the UK, an inquiry is afoot into the Brexit vote[4.  Jeremy Kahn, November 2, 2017, in Bloomberg: “U.K. Probes Russian Social Media Influence in Brexit Vote.” https://www.bloomberg.com/news/articles/2017-11-02/u-k-probes-russian-social-media-influence-in-brexit-vote].

In France, into the Macron election[5.  Joseph Menn, July 27, 2017: “Russia used Facebook to try to spy on Macron campaign.” https://www.reuters.com/article/us-cyber-france-facebook-spies-exclusive/exclusive-russia-used-facebook-to-try-to-spy-on-macron-campaign-sources-idUSKBN1AC0EI].

And in Germany, too, where there is some surprise that the Russians have not actually caused more trouble[6.  Kim Helmgaard, “There is meddling in Germany’s election — not by Russia, but by US right wing,” in USA Today, September 20, 2017. https://www.usatoday.com/story/news/world/2017/09/20/meddling-germany-election-not-russia-but-u-s-right-wing/676142001/. Colin Daileda, “Why Russia hasn’t successfully screwed with Germany’s election — yet,” in Mashable for September 27, 2017. https://mashable.com/2017/09/22/germany-election-russia-meddling/#aRtTo5HSlkqx].

ISIS terror and now this

The Air Force’s Klein goes home for dinner secure in the knowledge that the US utterly dominates the world in both conventional and nuclear weaponry[7.  The US spends more on defence than China, Russia, Japan, the UK, France, India, and Saudi Arabia combined. https://www.weforum.org/agenda/2017/03/the-us-spends-more-on-defence-than-all-of-these-countries-combined/].

Yet the challenge faced by those with such dominance in traditional power is to cope with non-traditional assaults.

ISIS uses terror to fight back. It costs little, and the effect is huge, and hard to combat in an open society.

And now Russia has awakened to the asymmetric opportunities presented by social media to sow discord among Americans and undermine their confidence in democracy. If the Kremlin can organise hundreds of thousands of right-wing Texans and at the same time catalyse Muslims in defence of the Houston Islamic Centre, what might they try next?

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On the Russian hacking efforts mounted side-by-side with Facebook and other deceptions: Ralph Satter, for the Associated Press, November 21, 2017.

Tal Kopan, October 5, 2017: “FBI chief on Russian hacking: We ‘should have seen this coming.’”

Patrick Marley and Jason Stein, September 22, 2017, USA Today: “Russians tried to hack election systems of 21 states in 2016, officials say.”