At its very beginning, capitalism was underpinned by faith in competitive markets. In the liberal fantasy, spearheaded by Adam Smith, bakers, brewers and butchers labored within markets so cut-throat that none could make more money than the bare minimum necessary to keep their small, family-owned businesses running. This in turn provided us with our daily bread, ale and meat.

Then came the second industrial revolution and the conglomerates whose market power would make Smith weep with joy. This was the era of Big Business and the “robber barons”. And so another — neoliberal — fantasy was created, to justify the new big beasts that were now monopolizing almost every market that mattered. Joseph Schumpeter, a former Austrian finance minister who made America his home, was the new creed’s most effective advocate. Progress, he argued, is impossible in competitive markets. Growth needs monopolies to fuel it. How else can enough profit be earned to pay for expensive research and development, for new machines, new product lines and all the paraphernalia that helps innovation take root? To monopolize markets, conglomerates need to dazzle us with remarkable new products that kill off the competition, like Henry Ford’s Model-T or Apple’s iPhone. Should we worry about all that concentrated power? No, Schumpeter reassured us. Once they reach their pinnacle, these monopolies get flabby and complacent and, eventually, they’re brought down by some upstart: one example being Toyota’s toppling of General Motors.

More recently, Peter Thiel, Palantir’s co-founder, said something that many thought was a restatement of Schumpeter’s dictum: “Competition is for losers!” While the pioneers of Big Business like Thomas Edison and Henry Ford would have agreed wholeheartedly, what Thiel was implying went beyond their wildest imagination. It went much further even than Schumpeter’s pseudo-Darwinian idea that progress comes through the rise and fall of monopolists in an endless struggle for existence.

What Thiel was saying is that today, winners do not just kill off the competition to monopolize a market. No, they keep going until they kill the market itself and replace it with something quite different: a kind of cloud fief that lacks all of the ingredients of a proper market — indeed that lacks all of the advantages that liberals and neoliberals alike recognize in the machinery of decentralized markets. In fact, today’s winners —the Magnificent Seven, plus Thiel’s own Palantir — are reviving an economic model that all of us thought dead and buried after the fall of the Soviet Union: economic planning systems that match buyers and sellers outside anything that can be usefully described as a market. 

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Gosplan was the Soviet Union’s State Planning Committee, the engine room of its command economy. Its remit was to match the supply and demand of critical resources (oil, steel, cement) but also consumption goods (food, clothes, appliances), without using market prices. Once buyers and sellers were matched, prices were assigned with a view to achieving political and social objectives (such as to ensure basic affordability, or subsidize certain industries) — not to balance markets. 

Gosplan was disbanded immediately after the red flag was lowered over the Kremlin on Boxing Day of 1991, but it is now back. Where? In the algorithms powering Jeff Bezos’s Amazon, Peter Thiel’s Palantir and the rest of Big Tech’s digital platforms that pretend to be, but are not, markets.

Before you protest the audacity of my claim, think of what happens when you visit Amazon. Unlike when you visit a shopping mall, either with friends or mingling with strangers, the moment you follow the link to amazon.com, you exit the marketplace and enter a space of pristine isolation. It’s just you and Jeff Bezos’s algorithm. You type, say, “espresso machines” into the search box and the algorithm matches you with a number of vendors. However, to achieve what it was coded for, the algorithm had started working months, even years, earlier. 

Over that period, you will have revealed to it many of your whims and desires through your searches, purchases, clicks and reviews. Using these cues, as well as data from other sources, the algorithm has trained you to train it to know you even better, enabling it to advise you on what books, music and films to buy. It has already won your trust. So, now that you are in a hurry to replace your broken espresso machine, the chances are that you will choose one of the top search results it has given you. 

The algorithm knows your spending pattern. It knows how to guide you to the espresso machine with the highest price you are prepared to pay, all in order that Amazon can collect up to 40% of it the moment you click the purchase button. It is an extortionate cut, but the espresso machine’s makers tolerate it, because they know that if they don’t, their company will never appear in the top search results of anyone prepared to pay for their product. As AI improves, this power to manipulate your behavior increases — and this is why Big Tech’s valuations are going through the roof.

This is nothing less than a capitalist, privately-owned, super high-tech reincarnation of the USSR’s Gosplan. Amazon’s software matches you with particular vendors and bans you from talking to any seller or even from observing what other buyers are doing — unless of course it calculates that it serves its own purposes to let you see a small selection of them. As for the price you pay, this follows (rather than precipitates) your being matched with a seller. Rather than being the variable that equilibrates demand with supply, prices in Amazon fulfill another role: that of maximizing Jeff Bezos’s cloud rents.

In this sense, prices in Amazon and other Big Tech platforms function in a manner far closer to Gosplan than to any farmers’ market, money market or shopping mall you have ever experienced. In fact, had the Soviet leaders lived to witness the workings of Silicon Valley’s Big Tech, they would be kicking themselves, lamenting that it was American capitalists who perfected their Gosplan model, complete with a surveillance system that would make their KGB henchmen green with envy. 

Gosplan failed to turn into a success story as it lacked Big Tech’s greatest weapon: cloud capital, that is, the algorithms, data centers and optic fiber cables working as an integrated network to train you to train it. As you impart your data, cloud capital learns how to input desires into your mind and then satiate these desires by selling you stuff within its privately owned version of Gosplan. 

But, is there really a difference — I hear many of you ask loudly — between Thomas Edison and Jeff Bezos? Are they not cut from the same cloth of megalomaniac monopolists seeking to dominate markets and our imagination? Yes, despite their similarities, there is a difference — and it is gigantic. Edison’s and Ford’s capital was productive. It produced cars, electricity, turbines. Bezos’s cloud capital produces nothing, except the enormous power to encase us in his cloud fief where traditional capitalist producers are squeezed for cloud rents and we, the users, provide our free labor. With every click, like and review, we enhance the power of cloud capital. 

Once upon a time, an old Trotskyite told me that the Soviet Union, in the name of socialism, had created a form of industrial feudalism. Independent of whether he was right or not, his comment is pertinent today in relation to Big Tech. Come to think of it, while the trading process on platforms like Amazon is reminiscent of the USSR’s Gosplan mechanism, it is also the case that the enormous sums that Amazon, Uber, Airbnb etc, charge the actual producers of the goods and services peddled on their sites are akin to the ground rents that the landed gentry used to charge their vassals — except that, here, they are cloud rents that accrue to the owners of cloud capital. So, just as the Soviet Union generated one kind of feudalism in the name of socialism and human emancipation, today, Silicon Valley is generating another kind of feudalism — technofeudalism, I have called it — in the name of capitalism and free markets. 

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The parallel extends to the state. The USSR was meant to be a workers’ paradise in contrast to the USA whose raison d’être was to be a haven for capitalist producers. It turns out that both promises were false. As Big Tech’s cloud capital accumulates and concentrates into fewer and fewer hands, states are becoming dependent on corporate techlords. By outsourcing core functions — archives, health data, even military software — to rented cloud infrastructure, governments lease back their own operational capacity from Amazon Web Services, Microsoft, and Google. This dependency enables a new dimension of technofeudal power.

From this perspective, just as the Soviet Union was a feudal-like industrial society pretending to be a workers’ state, the United States today is performing a splendid impersonation of a technofeudal state, with repercussions that extend to every realm of state activity, including health services, education, the tax office, our borders and faraway battlefields. 

In Ukraine and Gaza, and along our militarized borders, cloud capital is trained to extend its reach. Amazon’s AI tool Rekognition is used by law enforcement, including ICE, while Palantir’s vast surveillance software runs on Amazon’s cloud. Through Project Nimbus, Amazon and Google provide the Israeli military with advanced cloud and AI capabilities, reportedly enabling rapid, AI-driven targeting in Gaza with minimal human oversight. 

Let us briefly return to the comparison with the early 20th century’s original monopolist capitalists. Whether we admire or abhor the Magnificent Seven’s stock market valuations, it is helpful to keep this in mind: the old capitalist giants, the “robber barons”, actually produced things. The new technofeudal lords produce a new social order. They have replaced the invisible hand of the market with the visible, algorithmic fist of the cloudalist. 

Free-market enthusiasts have nothing to celebrate and much to regret. But it will take a brave soul amongst them to stare reality in the face. Just like pro-Soviet Marxists remained in denial that the Soviet experiment had failed for many years after 1991, so  free-market ideologues refuse to see that capitalism begat a form of capital — cloud capital — that replaced markets with something out of the Soviet past. In the process, it has killed capitalism. 

It was a fitting finale for America’s first reality TV family, and a preview of our current predicament. Long before Facebook collected our data or TikTok monetized our confessions, the Louds were at the vanguard of an industry that would ultimately spawn Big Brother, the Kardashians, and a whole raft of reality TV shows obsessed with domestic spectacle.

But, more importantly, the Louds revealed a cultural transformation already underway — one where we, the public, would willingly and enthusiastically invade our own privacy, turning intimate life into public performance.

On 11 January 1973, millions of viewers gathered at 9pm: to witness a household unraveling in real time. That evening, PBS began broadcasting An American Family, a 12-hour documentary series with a difference.

The Loud family seemed ideal subjects for the experiment. William C. Loud, 51, and his wife Pat, 47, lived with their five children on a mountain drive in Santa Barbara, California. Their lifestyle embodied the American Dream that family sitcoms like The Brady Bunch had idealized: affluent, attractive, seemingly stable. Producer Craig Gilbert had chosen them from hundreds of volunteers precisely because they appeared to represent the ideal.

But Gilbert’s revolutionary vision was to disrupt the model. An American Family would get beneath the veneer and offer “a real view of middle-class life”. Unlike traditional documentaries, with scripts and a presenter controlling the story, the cameras would simply roll and capture whatever happened.

Gilbert’s 300 hours of raw footage, filmed over seven months, revealed the dirty laundry behind the facade. In one episode, Pat demanded her philandering husband leave; they went on to divorce. Their eldest son Lance, 20, was living a hedonistic lifestyle in New York’s Chelsea district, becoming the first openly gay person portrayed in a family context on American television.

The media responded swiftly and brutally. Newsweek‘s cover featured a group shot of the family with the strap line “Broken Family”. Inside, the magazine branded them “affluent zombies” whose “shopping carts overflow, but their minds are empty.” The New York Times dissected each member with surgical precision. It called Lance an “evil flower”, “camping and queening about like a pathetic court jester,” and described him as “a Goyaesque emotional dwarf.” It condemned Delilah, just 16, for never grieving “for the migrant workers, the lettuce pickers, the war dead,” and for lacking an interest in “philosophy or poetry” or any “adolescent idealism.”

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The Louds had unwittingly become harbingers of a far broader social transformation. Private life — that bourgeois creation of separate spheres, domestic sanctity, and clear boundaries between public and personal — had taken centuries to establish. The idea of privacy as “the right to be let alone” was 100 years old, immortalized in a famous 1890 Harvard Law Review article. Yet by the Seventies, this carefully constructed edifice was crumbling. The collapse of the public-private divide that would later characterize our digital age had already begun, before Mark Zuckerberg was even born.

Instead of retreating from the limelight that had so wounded them, the Louds embraced it entirely. They were among the first to become famous simply for being themselves, and the experience changed them forever. Pat Loud wrote an autobiography, prefiguring the “warts and all” memoir boom of the Nineties; Bill modeled in his bathrobe for Esquire. Delilah appeared as a “bachelorette” on The Dating Game, and all five children performed as a rock band on The Dick Cavett Show. Lance posed naked for Screw magazine.

“Television ate my family”, Lance proclaimed in the aftermath, and certainly the cameras never really turned off. When he was dying from an AIDS-related disease, filmmakers Susan and Alan Raymond dropped everything to capture his last two months in Lance Loud! A Death in an American Family. Lance wanted to be filmed one last time to show the bonds of affection that survived in his family. His dying wish was to prove to the American people that the Louds were not broken.

Pat Loud always stood by the family’s decision to take part. She pushed for greater openness in everyday life: the therapeutic mantra of the moment. “We opened the doors in a lot of houses and blew out a lot of dust,” she said. “If families are going to make it, that’s how. Not with secrets, or little slots to fit into, or a lot of propaganda from parents.”

She was articulating what had become the dominant cultural orthodoxy: that secrecy was pathological, that privacy enabled dysfunction, and that psychological health demanded full disclosure. Malcolm Bradbury’s novel The History Man, published the same year the documentary aired, satirized the spirit of the age. Its antihero, Howard Kirk, a radical sociology lecturer, sits with his lover Myra and his wife Barbara, with whom he has an open marriage. “It is called The Defeat of Privacy,” Kirk tells them of his new book. “It’s about the fact that there are no more private selves, no more private corners in society, no more private properties, no more private acts.”

These ideas went back decades. In 1950, sociologist David Riesman had prophetically announced from the pages of Time magazine that the “character” of Americans was fundamentally changing, a thesis that dominated cocktail party conversations throughout the decade.

In his bestselling follow up The Lonely Crowd, Riesman revealed how foundational sources of meaning were crumbling. Traditional authorities — church, family, and established social hierarchies — were giving way to mass education and the emerging media landscape of radio and television. Simultaneously, the economy was shifting from agriculture and industry toward services and sales, demanding fewer risk-taking entrepreneurs and more gray-suited conformists who could work and play well with others.

Riesman predicted that these forces were creating a move from “inner-directed” to “other-directed” personalities. Rather than drawing guidance from traditional authorities or cultivating rich inner lives, Americans were developing a social radar, constantly attuned to peer expectations and seeking approval from those around them. As Riesman observed: “The other-directed person wants to be loved rather than esteemed.”

Riesman, then, had anticipated the “narcissistic” self, immortalized in Christopher Lasch’s 1979 book, The Culture of Narcissism, one that would become increasingly comfortable with the self-invasion of privacy and indeed actively require it: all in search of an approving audience. The ancient maxim “know yourself” became “recognize me.”

Riesman’s study was also formative for the American sociologist Todd Gitlin, one-time leader of the Students for a Democratic Society (SDS). Teaching his Berkeley students in the Eighties, who themselves were surrounded by confessional talk-show hosts like Phil Donahue and Oprah, Gitlin found that his students struggled to understand the distinction between private and public lives. The idea of being inwardly focused made no intuitive sense to them. These students had been born into a world that was fundamentally other-directed at every level.

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But Gitlin himself had helped create this world. Throughout the Sixties, the SDS, which grew from 30,000 recorded supporters to an estimated 100,000 members across over 300 chapters, played a crucial part in the turn towards the narcissistic self: by politicizing authenticity. SDS became a core component of the counterculture movements that dominated student activism, helping to reshape how an entire generation understood the relationship between personal experience and political action.

“The time has come for a reassertion of the personal,” announced Tom Hayden in the infamous “Port Huron Statement” of 1962, the SDS’s founding manifesto. Students once believed in American values, it said, but that belief was now shattered, and they were looking “uncomfortably at the world we inherit.” The new goal would be finding meaning in a life that is “personally authentic”, an agenda that marked a highly individualistic turn for a Left politics with roots in class solidarity.

Indeed, the New Left turned away from class struggle and drew on existentialist currents to advocate for politics rooted in individual experience and personal growth. As Gitlin recalled in his memoir, The Sixties: Years of Hope, Days of Rage, the decade was fueled by a passion to “bring political commitment into private life, and make private values count in public.” The aim was to overcome the “treacherous” liberal schism between public postures and private evasions. This shift was influenced by popularized psychoanalytic theories of unconscious repression, developed by Sigmund Freud at the turn of the century. Later interpretations of his work, particularly by the German-born social critic Herbert Marcuse, recast psychoanalysis as a manual for liberation.

But it was a particular strain of feminists who put the boot into private life far more forcefully than any tech giant ever could. Organizations like New York Radical Women and Radical Mothers rejected the feminism of Betty Friedan. Friedan’s The Feminine Mystique (1963) had awakened millions of women to “the problem that has no name” — the stifling boredom and unfulfillment of suburban domesticity — and launched the modern women’s movement. But while Friedan sought equality through legislation and workplace reform, believing women could balance careers with traditional roles like marriage and motherhood, radical feminists wanted to change things from the inside out.

An early rule of the New York Radical Women was that members couldn’t generalize about oppression unless they first shared testimony from their own lives; political positions had to be forged in personal experience. Gatherings often began by going around the room listening to women’s day-to-day problems. These “consciousness-raising groups” spread like wildfire. In 1973, at their peak, 100,000 American women belonged to them. Their aim was to analyze society from personal experience. “Feelings are Facts” rallied one woman at a so-called abortion “speakout” in New York.

This thinking crystallized in Carol Hanisch’s influential 1970 essay “The Personal is Political”, a phrase that would shape how entire generations understood the boundary between public and private life. For centuries, the liberal tradition had maintained a clear distinction: public life was the realm of politics, economics, and civic engagement, while private life remained a sanctuary, free from public interference. But “the personal is political” obliterated this distinction.

Kate Millett, also immortalized in 1970 as Time’s “Mao Tse-tung of Women’s Liberation”, turned her fire on the private domain. Women’s oppression couldn’t be addressed solely through public changes, she argued; it stemmed from private relations and even the language that culture reinforced. The struggle had to move away from the narrow world of chairmen and parties and expand to include “power-structured” relationships.

In the end, Millett was rejected by the movement she helped found, as it collapsed into factionalism. Yet the die had been cast: and indeed the social trends embodied in Louds have only grown in speed and scale over the intervening decades. From the late Nineties, for instance, The Real World and Survivor, later mirrored by Naked Attraction and Love Island, have dominated TV screens and then our laptops. Intimate confession and recognition of the “true” self is now a mainstay of contemporary discourse. Being “false”, or worse a hypocrite, is a deadly modern sin. Social media platforms would later accelerate and monetize these trends, of course, but they surely didn’t invent them.

All the while, our public life has incorporated things that were once reserved for the private sphere — crying, confessing to crimes, follies, and misdemeanors — while the civil discourse of politics and formal manners have fallen away. Think of Queen Elizabeth II being criticized for her lack of emotion when Princess Diana died, or Meghan and Harry broadcasting their private woes to the world. Even substantive policy debates about literally life-and-death matters like assisted suicide or abortion have become entirely about feelings: caring, being kind, or expressing anger. Personal experience trumps evidence. Cool reasoning has no place.

For their part, the private lives of public figures are scrutinized 24 hours a day. The public person, whether an artist, professional, or politician, cannot be separated from the private, and the private is deemed what truly matters. This shift extends to political combat itself. The current modus operandi, from the exposure of Trump’s locker room bragging to the recent Labour casualty Paul Ovenden, who lost his job when someone leaked old WhatsApp messages, sees the exposure of private conversations as a weapon to take down political opponents.

Today, there is little distinction between the public and private world. Intimacy floods the public realm while light shines on the private. Instead, we have embraced a narrow, impoverished conception of privacy, always a protean concept, not as protection from authority and public scrutiny, and as a sanctuary for the inner self and a shelter for intimacy — but merely as data protection.

Through it all, we blame the convenient scapegoat of the moment: the internet. But this gets the timeline wrong. By the time social media arrived, we were already living in a post-private world. The digital revolution simply gave us more efficient tools to do what we were already doing: performing our identities, seeking validation through revelation, and treating intimacy as a public commodity.

This matters, because if we misdiagnose the problem, we’ll never find the cure. All the digital detoxing and platform regulation in the world won’t restore what was lost long before the internet was ever invented. Far better, then, to face up to how we voluntarily dismantled the very idea that some things should remain hidden, that mystery and restraint might be virtues, and that not everything must be shared.

The business models of technology giants like Google and Facebook clearly violate people’s privacy, as does state surveillance. But we would be kidding ourselves if we thought that technology alone has undermined the moral status of privacy and private life. The cameras that Lance Loud invited into his hospice room were not smartphones or CCTV cameras. They were the logical endpoint of a cultural revolution that began decades earlier. And we let them in ourselves.

Such forecasts were hasty. So was much of the investment. The railway bubble burst, and speculators suffered bruising losses. Three decades later, a similar bubble arose in the US. This bubble, like the British one, was soon to burst. Around 18,000 businesses failed within two years.

As a share of American GDP, investment in artificial intelligence has surpassed the telecoms boom of the dotcom bubble. In its degree of concentration, it stands second only to the railroad boom of the late 19th century. AI, then, might be approaching a moment of truth. The technology was meant to speed up the economy; now, it appears to be slowing it. Unless the trend is soon reversed, the biggest tech companies might be in for a sharp revaluation.

In fact, if you remove those companies from the stock index, so-called American exceptionalism disappears. Outside the top 10 companies, the indices have been stagnating since the start of 2025. Similarly, minus that top 10, corporate earnings have been flat for the past three years — coincidentally, the period that followed the release of ChatGPT, the event that sent the AI boom into overdrive. With the sector’s capital expenditure having risen tenfold in just the past three years, the AI bubble is now sucking up more than half of America’s investment. So insatiable is this bubble that there may not even be enough cash in America to satisfy OpenAI. Sam Altman attempted to rustle up additional cash by going abroad, seeking to raise $7 trillion from the UAE and other investors.

That rush to the top doesn’t leave much for everyone else. With all that money pouring into AI, investment in the rest of the economy has begun to decline, slowing growth. That helps to explain the rapid deceleration in the US economy now underway, a marked contrast to the recent good fortune of the “Magnificent Seven” tech companies. With job growth flat, consumption now adds less to the economy than a handful of massive AI investments.

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And the gains made by AI are, for now at least, someone else’s loss. Not only is the industry sucking in capital, but it is ravenous for electricity. Data centers consume 10 times the power of traditional servers, and are helping raise American electricity prices — up some 6.5% over the past year. AI centers also consume huge volumes of water for cooling, leading to supply strains and increased prices in many areas. That keeps upward pressure on the inflation rate, raising costs to both consumers and businesses alike and slowing the interest-rate cuts that might facilitate investment in small and medium firms.

In short, the US is currently placing its money on one huge bet: that AI will unleash a productivity revolution so great it will ultimately re-start the economy it’s presently impeding. Americans are doing their bit to make it happen, with ordinary retail investors driving the stock market rally of the last few months and OpenAI, the makers of ChatGPT, reporting that Americans prompt their chatbot some 330 million times a day. 

Yet for all that, we’ve yet to see much evidence of a transformation in output. Over the same three years that the AI revolution has been in full swing, labor productivity has grown at barely 1% a year, maintaining a decades-long trend of declining growth across Western countries. And while some might retort that productivity revolutions unfold over many years — several decades passed between the invention of the steam engine and electricity and significant changes in labor productivity — the maths behind the AI boom make little sense. Unlike the railroads built in the late 19th-century US bubble, which are still around today, AI investment is going into data centers that are set to depreciate rapidly. Nvidia, for instance, warranties its GPUs for only five years. 

In short, this bet needs to pay off soon. And while the record profits at the tech giants leading the American AI boom might suggest that’s already happening — Nvidia’s earnings have quintupled and its share price increased tenfold in the last three years — those results don’t actually tell us much. Nvidia isn’t making money off AI so much as the AI mania, capitalizing on the sale of its chips — the “picks and shovels” of the new goldrush — to other companies that then use them to build AI. In a recent earnings statement, Meta said it did not expect the gains of its AI investment to materialize for another two years. Instead, it is still making money off advertisers on its Facebook and Instagram sites, just as Apple still makes its money from iPhone sales.

The record profits of the Magnificent Seven, therefore, do not support a narrative of economic transformation. Instead, we’re awaiting the breakthrough application that will lift economic productivity to a new plateau. Enthusiasts maintain that, once the technology spreads, AI will add one percent or more to America’s annual rate of economic growth. But there’s no shortage of skeptics who question the calculations behind that optimism.

Among them is Goldman Sachs’ Jim Covello, who says that for AI to justify the current wave of investment, it must solve a trillion-dollar problem. It’s hard to see that happening. Daron Acemoglu has argued that AI’s productivity impact will be negligible, because once it gets through the easy-to-learn tasks which are currently exciting everyone, like search tools, the returns will rapidly diminish. This contention is borne out by recent macroeconomic research from Japan. The neuroscientist Eric Hoel calls this the “supply paradox of AI”: “the easier it is to train an AI to do something, the less economically valuable that thing is. After all, the huge supply of the thing is how the AI got so good in the first place.” Take the example of copy-writers. Because so many of them produce so much material, they become easy to replace. Their knowledge is cheap. This phenomenon won’t carry over to fields where knowledge is expensive.

Instead, a closer look at Meta’s bottom line may reveal what’s really going on, and why the optimistic view of AI’s productivity impacts could rest on shaky foundations. The company credits its new AI for helping steer more customers to its products, thereby boosting sales and revenue. We see a similar trend at Google, whose searches previously led people to websites, but which now keep them on the Google site where they can read quick summaries of the linked content: more eyeballs on Google, more ad revenue to it, but less for all those sites.

In other words, the tech giants have been using AI to capture revenue that previously went elsewhere. On the face of it, that’s the market doing its thing, and it’s that very possibility which excites corporate executives. They believe AI will reduce their need for labor, allowing them to similarly suck up money that would have gone elsewhere — in this case, to their workers.

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This, arguably, has been the tale of the information age: new technology doesn’t necessarily raise economy-wide output that much. Instead, it replaces labor and directs the resulting cost-saving to owners, helping to worsen income and wealth inequality. Just as the websites that make those AI summaries possible are now being plundered to the benefit of the AI giants, the LLM chatbots they’re developing are trained using content whose creators receive no compensation. Without that motherlode of free inputs, involuntarily subsidized by their creators, AI might make no sense. As one investor put it in 2023, “imposing the cost of actual or potential copyright liability on the creators of AI models will either kill or significantly hamper their development.”

That route to higher profits raises two problems. The first is that the resulting inequality could stoke a political populism that makes the economy more fragile. We might never have got the volatile policy-making of this Trump administration were it not for the sense of malaise caused by globalization’s decimation of industrial towns and industrial jobs. If AI really displaces workers, one can’t rule out a radically redistributive politics of the Right or Left. If anything, current trends favor it.

But in addition to the possibility that the AI revolution could end up eating itself, this type of job destruction can produce an economic paradox. While professionals might lose jobs to AI, not everyone will. Microsoft recently commissioned a study estimating which jobs will be most affected by AI and least; not surprisingly, those most insulated from its effects are manual laborers and personal-care workers (including health care), with knowledge-workers taking the biggest hit.

In other words, the jobs AI will disrupt least lie in those sectors of the economy where labor productivity tends not only to be lowest, but most resistant to transformation. This gives rise to what’s known as the Baumol-Bowen effect. As workers displaced by AI are forced to take new jobs in lower-skilled occupations, their productivity will decline. In consequence, the needle on economy-wide productivity may budge little.

It may yet be that someone will invent an application for AI that transforms productivity across the economy and lifts everyone’s output and income to a new plane. But time may be running short, because right now, the boom is becoming a bust for many.

So: are we facing another railroad episode? It’s certainly true that AI is starting to resemble a speculative bubble, not unlike the dot-com boom. Although the Magnificent Seven are making profits that justify their valuations, their future growth depends on the AI revolution continuing for years at its current rate or greater.

But that growth depends on AI being deployed in revolutionary new ways. If that doesn’t happen, then those growth prospects will change, and the markets could tumble. Given the weighting of the big tech companies in the US stock market — Nvidia alone is worth nearly a tenth of the market’s total value — a fall in share prices could not only hurt all those retail investors who rode the wave, but ricochet through the financial system.

In the long term, it might be good for America if the market goes back to investing in all the other sectors of the economy. In the short term, if this bubble bursts, it will be very painful. Both investors and the Trump administration are going all-in on their AI bet. If it succeeds, they’ll parade like champions. But if it fails, they’ll be running for the exits. And given last week’s lackluster response to ChatGPT’s newest update, investor patience may be wearing thin.

I can still, like in a recurring nightmare, remember the tone of voice of the techie who finished my purchase of my first iPhone. “Welcome to Apple”, he said, as if he were immersing me into a bath of smugness. If we were acting a scene, the subtext would have been completely clear: I was in now and would never get out again. AI firms are now inviting me — inviting us — in just the same way.

But I am not falling for it again. We have to decline. We have to collectively boycott artificial-intelligence products while there’s still time. Because AI is no good for us — no good for our minds, creativity, or competence — and as it gets jammed down our throats, we are the only ones with the power to refuse.

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Looking back, I understand why I caved to Apple all those years ago. It really would have been social suicide to try to make my way in the 2010s professional class with anything other than a MacBook Pro and an iPhone. Apple really was better than anything else. But I regret that moment, all the same. Every intuition I had knew that opting in to companies like Apple, Google, and Facebook was a fool’s bargain.

The upside was a few years feeling like I was part of the future as I sipped my lattes and floated through the dawning post-industrial era with my sleek silver Apple gadgets. But I’m still paying the price for that: every time I log in to my bank account now, it’s like peeling barnacles off the hull of a ship to get rid of all the new charges that Apple and Google have concocted. Enshittification — the apt coinage by Cory Doctorow that turns out be, like, the word of the century — has revealed itself to be virtually a law of nature. Exactly as Doctorow analyzed it, platforms inevitably “abuse … customers to claw back all value for themselves”.

As AI emerges as the must-have technology of the shiny new future, and everybody starts naming their ChatGPT bots and having philosophical conversations with them, I have decided — formally, as of writing this essay — to opt out. The train is leaving the station without me. I still have not downloaded an AI app of any kind to my phone. And if this was, up until now, owing more to torpor than high principle, then thank God for laziness.

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AI can only lead to dependence on a technology, which really means dependence on Silicon Valley overlords looking to rip off their customer base. It’s exactly the same dynamic that we’ve all been experiencing and bemoaning for the last 20-odd years. And you can probably plug-and-chug all your own favorite statistics to tease out what that has meant: the average American spending close to five hours a day on his smartphone, while friendship rates have plummeted and teen depression, anxiety, self-harm, and suicidality have spiked.

If you prefer, you can focus on attention span and the finding that the mere presence of a smartphone in a test setting impairs results. As the Silicon Valley apostate and head of the Center for Human Technology, Tristan Harris, put it: “Tech’s race to the bottom of the brain stem to extract information is an existential threat — using our [attention] to upgrade machines is ‘downgrading’ humans”.

Yet it seems that AI is here to stay. Big Tech is all-in on it, and governments aren’t close to getting their act together for meaningful regulation, with President Trump, for instance, reversing Joe Biden’s modest executive order erecting guardrails. But there is still personal choice in the matter, and now is the moment for those who care about human creativity and self-reliance to draw a line in the sand. No, I’m not talking about abandoning tech altogether. But we can, for example, click down below Google’s AI offerings to look at actual links. And we can generally go about living our lives in our sad old way without the benefit of AI “personal assistants” or bot “best friends” or whatever it is that the new technology is supposed to deliver to us.

To be honest, this stance of mine does make me feel like an Amish buggy driver whipping my carriage horses a little harder while the bicycles go whizzing past me; like the weirdos you occasionally see on city streets laboriously tapping out a message into a flip phone like they’re a living museum. But let’s try to get outside the hype for a moment and think through what AI actually is.

AI is basically text-predict combined with data mining. That’s it. It’s a super-Google that goes into the body of texts and rearranges the words into a very pleasing facsimile of a cogent argument. There’s no “intelligence” behind it, in the sense of a computer actually thinking. I’m not the first to be reminded of the story of Clever Hans, the horse that could count and toured widely at the turn of the 20th century.

What Hans was doing really was very cool: he would be given a mathematical question, and he would tap out the answer with his hooves. And Hans was right more often than not. But this was not, as it turned out, because Hans had mastered a numerical system, but because he was sensitive to the crowd and could feel the excitement cresting as he approached the correct number.

AI is more or less the same thing — it uses our wonder to convince us of a simulacrum of intelligence when what we are really witnessing is, in a sense, our own childish excitement at a trick of anthropomorphization: we are pleased by the sight of a calculator imitating something of our mental processes. Our tendency, unfortunately, is to give AI a kind of epistemological deference, to believe that this mash-up of data represents some kind of authority.

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Meanwhile, in the role of Hans’s trainer are the programmers who are influencing AI to give us whatever it is they want us to hear. The disastrous rollout of Google Gemini in 2024 really ripped away the curtain and showed us the strange little man playing with the knobs. Google’s corporate culture at the time happened to be very woke and, lo, the artificial “intelligence” started generating images of black Nazis.

But even if Gemini overtipped its hand, the same dynamics are obviously at play in every other AI model. The people pushing AI now are the same sorts who spent the 2010s promoting web 2.0 as a new vision of freedom and global connectivity, all while destroying traditional media and ripping off as much private data as they possibly could and cheerfully selling it to advertisers. By 2020, the freedom talk was gone and “fighting disinformation” (read: censoring wrong-thought) was in.

This recent history raises an important question: why in the world should we trust these people ever again?

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To be sure, we are already fairly late in the game. Even if we don’t use products like Grok and ChatGPT, chances are, we use more rudimentary forms of the same technologies. We use a version of AI to get around and to translate our ideas into other languages. These are remarkable achievements. But they do infantilize us. I’m pretty sure that, if my phone were taken away from me, I couldn’t find my own way from my home to my place of work. And they hinder our self-motivation: I’m also pretty sure that I’ve been much slower to learn foreign languages because I know, at some level, that Google Translate makes it unnecessary.

Do we really want to accelerate the decline in general competence even further? And in exchange for what? Many people remain mystified as to what actual service AI is supposed to provide. The current selling point is that AI gives you a “personal assistant”, but to be honest, I wasn’t aware until Google CEO Sundar Pichai announced “a personal Google, just for you” that I needed a personal assistant. I feel perfectly capable of buying my own airline tickets and booking my own restaurant tables.

What I was aware of needing was meaning and focus in my life: I wanted, for example, to translate the ideas for novels inside me into actual novels. I wanted to be the best, most self-reliant version of myself that I could manage. As for a machine writing a novel for me in a matter of milliseconds — I have no idea how that could possibly generate authentic pride or produce anything other than a cavernous inner emptiness?

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My hope for the past three years had been that AI would just sort of go away. In the Nineties, we expected ourselves to be overrun by clone armies (certainly, my sixth-grade science teacher gave many speeches to that effect). It didn’t come to pass. Could something similar transpire with AI?

That seems increasingly unlikely. For one thing, AI has already changed the face of war, and the AI arms race between the United States and China guarantees that AI will be a major presence in our lives. There was a brief moment in 2023-2024 when it was possible to imagine our AI anxieties going the way of Nineties clone fears. That was when Italy banned ChatGPT and the Biden administration issued its (since-overturned) regulations. But now we are plowing full steam ahead.

All that matters now is individual choices. Unwary, I fell for the techno-optimism of the past two decades and ended up with a diminished attention span and a bunch of mysterious subscription charges to show for it. Well. Fool me once, shame on me. Fool me twice, shame on Sam Altman. I know, much better now, the folly of turning over my own mental powers to a bunch of techies promising a brilliant future.

I’m not making that mistake again. Nor should you.

I have seen tenured university professors post the most simple-minded memes about everything from manspreading to microaggressions. I have seen published writers buy into conspiracy theories around Trump and Biden alike. I have seen a sheer unity of sentiment dominate on issues from Covid-19 to Ukraine, demarcating increasingly limited bounds of dissent. I have watched people go from dismissing masks to evangelising them, from criticising mass media to reposting MSNBC (or Fox), from attacking Big Pharma to worshiping at the altar of Pfizer. I have seen civil wars over pronouns, literary awards, and memes. Throughout it all there has been increasing intolerance within every micro-sect, the price of disagreement turning far more quickly into stigma than ever before.

Ten years ago it was different. A general sense of bonhomie and celebration reigned. Discussion was polite; when there was disagreement, it petered out into acceptance of differences. More than anything, there wasn’t any particular impression that Facebook was looking over our shoulders at the discussion. And there wasn’t any particular sentiment that discussion mattered. We were sitting around a water cooler, shooting the shit, talking about politics and society as we would about baseball. Today, there is the incessant sense that every discussion counts, the insecure paranoia that any deviation from the right moral path is just a step down the slippery slope toward fascism — or communism, take your pick.

Is Facebook responsible for this evolution? Yes and no. Facebook the company is only partly responsible, but Facebook the service absolutely is. The heightened tone of political discourse since Brexit and Trump’s election has put the fear of god into elites and hoi polloi alike, every side convinced they are losing ground to forces with unchecked power. The Trump years became a nonstop doomscroll of panic in every direction at once. A brief glance at the other side was no better: evil corporations and Congress were hamstringing Trump’s attempts to clean the swamp, whether it was Google, George Soros, or Alexandra Ocasio-Cortez.

And yet it is Facebook that has done more than any person or company — except possibly Twitter — to produce this outcome. The story begins with FarmVille.

In the beginning, Facebook lacked a clear revenue model. Computers could learn what Amazon users wanted to buy and what Google search users were interested in, but it was hard for them to figure out what Facebook users wanted because most of the time they were just talking, and computers do not understand human speech well.

FarmVille (and its clones CityVille, CastleVille, etc.) changed this. Zynga’s addictive game hooked players into paying money to keep their crops from drying up and animals from dying, and rewarded them for advertising the game to their Facebook friends, further spreading the gospel of FarmVille. The model did not make users happy. It made them miserable, as they were always playing catch-up to keep their farm alive. Yet people continued playing. The game was free to play, but you had to pay to win.

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Facebook made a remarkable portion of their revenue from Zynga’s offerings alone. By 2013, the FarmVille model had more or less burnt itself out, as there were too few who were willing to go along with its exploitative gameplay model past a certain point. The lesson, however, remained: The attention and engagement of Facebook users needed to be focused on more lucrative pastimes than merely commenting on each other’s status updates.

In the subsequent years, Facebook went through several more iterations of seeking the most viral content, all of which drew users away from the original, unprofitable model of engaging with friends and toward models of clicking, liking, sharing, and above all reacting. FarmVille had made people feel urgent and important, if only to an imaginary digital farm. There were other ways to provoke those emotions. The mid-2010s saw an explosion of clickbait in all its forms, with countless outlets on the Left and Right spitting out outrage article after outrage article in order to gain the most shares and clicks. Viral content took other forms: Buzzfeed‘s listicles, a silly dress that looked blue to some people and gold to others, and personality tests of every stripe. Engaging with and sharing this content replaced much of what Facebook had been, and the company benefited greatly, because it use this content to sell ads.

So when Facebook, reeling from the increased toxicity of rabidly angry content being spread across its platform, started de-ranking news articles and links in general starting in 2017 and 2018, it wasn’t clear what was going to fill the gap. The supposed goal was to restore civility and interpersonal connections, like what Facebook used to be. The problem was, what Facebook used to be still didn’t pay. So Facebook entered an era of genuine uncertainty, first claiming that they were going to emphasise encrypted, private communications, toying with a cryptocurrency that never took off, and finally settling on a nebulous metaverse strategy that Mark Zuckerberg is currently betting the company on.

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But where did that leave Facebook users? The past did not simply disappear. Years of clicking, clickbait, and anger have quite visibly melted the minds of many people whom I knew to have been brilliant independent thinkers, but who now hop on the agreed-upon issue or outrage of the day and pontificate using received ideas that would put Bouvard and Pecuchet to shame. I was hardly immune to this tendency, prone to mindlessly Liking or forwarding something that happened to prick my dopamine receptors.

The 2010s sorted us all into our like-minded bubbles, and if everyone agrees on something within a bubble, then those people must be experts to have such uniformity of agreement. “I believe in science!” “MAGA!” “Masks4All!” Even in the absence of clickbait, hashtags and slogans now take their place, serving the same viral purpose that outrage bait and hate-clicks once did.

This is where Facebook is today. Their pursuit of engagement and attention spun far beyond what they had even intended, until they were left with an audience that had gone beyond being dumbed down into dumbing itself down. Controversy has forced Facebook into the reluctant role of ad hoc and inadequate censor, banning people for innocuous (if rude) comments while letting malignant conspiracy theories run unchecked. And everywhere, everyone is convinced that their little discussion group has the power to change the world if only it could be sufficiently policed and weaponised.

The opposite is true, of course. Having fired our dopamine receptors with the increasing sense that what we do on Facebook is consequential, our only way back to sanity is to realise that our opinions on Elon Musk buying Twitter or even Russia invading the Ukraine mean very little to most of our friends, and practically nothing to the world at large. But then there would be less reason to go on Facebook, save for its original purpose of just shooting the breeze. Facebook prefers that its users feel important, needed, and urged to participate. With the metaverse beckoning, expect more of the same.

On the one hand, hundreds of thousands of small and medium businesses were forced to shut down, triggering one of the worst jobs crises since the Great Depression. In 2020 alone, workers around the world cumulatively lost $3.7 trillion in earnings — an 8.3% decline.

On the other, a handful of mega-corporations, particularly in the Big Tech and Big Pharma sectors, have made a killing, raking in hundreds of billions more in “pandemic super-profits” than over the previous four-year average. Topping the list are behemoths such as Amazon, Apple, Microsoft, Alphabet (Google), Facebook, Pfizer, Johnson & Johnson, AstraZeneca and Merck.

The success of the Tech giants — Amazon, Apple, Microsoft, Alphabet, Facebook — is easily explained. As people found themselves confined to their homes, they turned to the internet for pretty much everything: shopping, dining, working, schooling, entertainment, socialising, even sex. In other words, what represented a curse for countless small and medium traditional businesses, represented a blessing for a handful of corporate behemoths.

The golden egg for the pharmaceutical companies, however, came later with the vaccines: the companies behind two of the most successful Covid-19 vaccines — Pfizer, BioNTech and Moderna — made combined profits of $34 billion in 2021. And if the “new normal” ends up including permanent booster shots, such super-profits will become the norm. Crucially, these profits are then distributed to shareholders who predominantly belong to the richest 1% of society. It’s hardly surprising then that billionaires around the world saw their wealth increase by $3.9 trillion just in 2020. As Oxfam starkly put it in a recent report: “The wealth of the 10 richest men has doubled, while the incomes of 99% of humanity are worse off”.

To see what this means in practice, one need only turn to Latin America, whose billionaires increased their wealth by 52% during the pandemic. In Mexico, meanwhile, multimillionaires saw their wealth increase by 31.4% in 2021 alone. On the other hand, over the last two years, 78 million people in the region were plunged into extreme poverty, while 13% of children abandoned education altogether.

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In Africa, where low-income countries predominate, the picture is equally stark. A report this month noted that not only had GDP fallen by as much as 7.8% in some cases, but that remittances from abroad had fallen by 25%. In a context where remittances from rich countries accounted for over half of private capital flows to Africa shortly prior to the pandemic, this has had a devastating effect on the daily economy, with over 40 million additional people in extreme poverty.

Couple this with a debt crisis, and it is not surprising that the impact on daily lives has been devastating: in Angola, a recent report described how youth unemployment doubled to nearly 60% in the past two years. Meanwhile, the continent’s billionaires have seen an uptick in their fortunes, as elsewhere; a January report from Nigeria found that Africa’s 18 billionaires had seen their wealth increase by 15% in 2021 alone.

Yet in many ways this is a global phenomenon; on every continent, there has been a hyper-concentration of wealth, and poorer communities have suffered. Wealth has been further racialised, with minority communities suffering the most in rich countries, and poorer continents the worst affected.

Why, then, have Left-leaning commentators supported the policies that have led to these terrible outcomes?

The usual explanation is that these impacts were an inevitable impact of the pandemic. And yet the evidence for this is weak, not least because most of those affected by the virus have been elderly people often beyond an age of active employment. In Africa, a 1% increase in mortality from Covid in a country like Nigeria cannot explain the 20% collapse in formal employment. In fact, Tanzania — one of the very few countries that did not impose Covid restrictions in 2020 — was also almost the only country in Africa to see its GDP increase, by as much as 5% according to some reports. Meanwhile in Sweden, where restrictions were much milder than in the rest of Europe, the country returned to pre-pandemic levels of production by the middle of 2021, in contrast to many other European countries (while registering lower per capita mortality rates than many other countries).

And so it seems that the staggering increase in inequality, and in the concentration of capital, must be the consequence of the Covid response measures, not of Covid-19. What, then, are some of the likely consequences of this massive accumulation of capital by a tiny number of people, expropriated from SME owners and the global working class?

A dystopian future seems to be emerging from the ashes of the pandemic — one in which not only is wealth more concentrated than ever in the hands of a small elite, but in which practically every sector of the economy is dominated by a handful of all-powerful mega-corporations. Perhaps it’s unsurprising, then, that those who have most profited from the pandemic response, such as Bill Gates and Mark Zuckerberg, also supported that response and removed information from their portals which criticised it.

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However, there’s a further element that makes this scenario even more disturbing, if possible, and that is the growing consolidation not only within, but also between, sectors. This becomes evident when we look at the investment funds that actually “own” these corporations. BlackRock and Vanguard are the two largest asset management firms in the world, respectively managing $10 and $8 trillion. That’s 3.7 and 3 times more than the UK’s annual GDP. These two funds are the top “owners” of all the major Big Pharma (Pfizer, Johnson & Johnson, Merck), Big Tech (Facebook, Twitter) and Big Media (New York Times, Time Warner, Comcast, Disney, News Corp) corporations. Even more worrying is the fact that despite having shareholdings of “only” 5-7% in these companies, there is growing evidence that institutional investors such as BlackRock and Vanguard try to influence company management and boards on strategy.

It would appear that these funds also coordinate among themselves. When analysing the voting behaviour in board meetings of the two funds, researchers found that they coordinate it through centralised corporate governance departments. This is hardly surprising if we consider that BlackRock and Vanguard are also each other’s main institutional investors: in other words, they partially “own” each other through cross-shareholding. So, we are effectively in the presence of a single super-entity that “owns” and controls a huge chunk of the Western economy. While this was already the case before the pandemic, the latter has accelerated this trend. More importantly, it has brought to the surface the way in which these funds, through their cross-sector corporate control, can “harmonise” these companies’ behaviour to further their interests.

We can see this in the case of debate around pandemic strategies on social media, and the censorship exercised today by social media platforms against any critical voice, no matter how qualified. A good example might be the removal from YouTube of a video of a senior editor of the British Medical Journal, Peter Doshi, discussing the Pfizer Covid vaccine trial in a US Senate hearing — in which among other things Doshi had questioned the accuracy of the reporting of the Pfizer vaccine effectiveness.

This is worrying in itself. But it becomes even more worrying when we consider that the companies selling the vaccine, the media outlets shaping the mainstream vaccine narrative and the social media platforms enforcing that narrative are, to a large degree, “owned” and controlled by the same two funds: BlackRock and Vanguard, which, incidentally, are raking in billions from the vaccines. This harmonisation among sectors (and between the latter and governments) points to the rise of a new ultra-powerful complex — the techno-media-pharma (TMP) complex. This is evident in increased “synergies” between these sectors: take Google’s growing investments in the health, pharmaceutical and pandemic-prevention sectors, for example, or Amazon’s investment in Covid-19 research.

Of course, none of this would be possible without the active support of governments, which create an enabling environment that rewards participants in the TMP complex. This is evident, for example, in the secrecy, overpricing, cronyism, and inefficiency that has characterised Covid procurement deals: Covid tests, PPE, vaccines, and now vaccine passport technologies have all been parcelled out to transnational corporations without proper tendering processes or legislative oversight. In other words, this is not a scenario in which governments disappear, but rather one that relies on increasingly powerful and authoritarian state apparatuses furthering the interests of big capital.

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This is hardly surprising when we consider the extent to which these corporate giants have meshed with our political systems. The US is a good case in point. Obama was very close to Eric Schmidt, CEO of Google, who later became a close collaborator of the Pentagon in developing military applications of AI. Today, Biden’s economic policies are heavily influenced by the director of the National Economic Council, Brian Deese, a former BlackRock executive. This ultra-elite is now in a position to shape every aspect of our lives — and it’s frankly terrifying.

If the Left is to recover from the catastrophic policies that it has supported during the pandemic, it must begin by recognising that it is lazy and misplaced to denounce those who point out these inconvenient truths: that wealth is hyper-concentrated as never before, that this is as a result of the policy choices during the pandemic, that these choices were unprecedented, and have been supported by those who enriched themselves enormously along the way, and censored any alternative point of view.

If we don’t want a world dominated by a very few ultra-wealthy people, and their vision for retaining that wealth, an unprecedented collective effort will be needed to fight for a different future. The huge TMP conglomerates will have to be broken up and their profits used for the benefit of all humanity, and not just their shareholders. This will be the struggle against the post-pandemic capitalist nightmare — and we are already losing.

Johann Hari used to be a star columnist at The Independent, and popped up in numerous other publications. After his various misdeeds came to light in 2011, he briefly disappeared, then reinvented himself as a non-fiction author and highly successful TED Talk speaker.

Maybe there’s nothing wrong with this transformation. He did, after all, apologise — after a fashion — for the plagiarism and the malicious editing. Perhaps he’s now a reformed character, worthy of rehabilitation. But as Jeremy Duns has pointed out, Hari has never provided a full account of everything he did wrong. His articles are still online without any flags from the newspapers that published them — and some of them make quite, well, surprising assertions.

But what if his books really are that good? They must have done something to earn such laudatory quotations and blurbs from varied luminaries including Hillary Clinton, Elton John, Russell Brand, George Monbiot, Glenn Greenwald and Tucker Carlson. On the back of all this support, and some heavy marketing, his books have been best-sellers.

Unfortunately, the books are not, in fact, that good. In his first, Chasing the Scream — in which he announced that “everything you know about addiction is wrong” — Hari hadn’t quite changed his ways. Even though he posted audio clips of his interviews online (a concession born of the ethical lapses he’d previously committed), actually listening to the clips revealed that, in very many cases, he seemed to be misconstruing what his interviewees said.

The neuroscientist Dean Burnett wrote an exasperated critique of an extract from Hari’s second book, Lost Connections, which asked “is everything you know about depression wrong?” Hari’s condemnatory attitude to anti-depressant drugs, for example, wasn’t exactly nuanced, and he made some truly bizarre (and bizarrely untrue) points — for example that, “if your baby dies at 10am, your doctor can diagnose you with a mental illness at 10.01am and start drugging you straight away”.

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Hari’s third book, Stolen Focus: Why You Can’t Pay Attention, published yesterday, is not much better. Which is frustrating, because the phenomenon Hari addresses — the feeling that, with so many distractions around in the modern, online-centric world, it’s harder than ever to focus — is one many of us experience. Hari says that he and almost everyone around him feels this way, and describes a several-months-long “digital detox”, where he went to live in a small town on Cape Cod with no smartphone and no internet.

But that’s all anecdotal: does Hari actually present any evidence that shortening attention spans is a society-wide problem? There’s a study on how topics appear and disappear on Twitter more quickly now than a few years ago; some research on how many distractions office workers experience; and a dodgy-sounding but headline-ready statistic about how often we “touch our smartphones” each day (2,617 times, apparently).

It’s not until more than halfway through the book, page 176, that Hari drops what should be a bombshell: “We don’t have any long-term studies tracking changes in people’s ability to focus over time.” In other words, he quietly admits that there isn’t really any strong scientific evidence for the main thesis of the book. That’s despite how true the attention problem seems to many of us. It must be said that, on closer inspection, the people I know who complain the loudest about not being able to focus are people who have still managed to write tons of columns, scientific papers, or even books in the past years: even Hari mentions in passing that he wrote a 92,000-word novel while on his Cape Cod getaway, turning the story from an interesting self-help tale into a grotesque humblebrag.

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Clearly, we need some better data to understand how deep and widespread an issue this actually is. But let’s give Hari the benefit of the doubt, and consider how he tries to explain the phenomenon.

Most of the book is dedicated to the causes of our collective attentional problems. The first is, unoriginally, social media. Isn’t it very revealing, Hari writes, that there’s no button on Facebook that you can press to help you meet up with your friends in person? Facebook won’t, he says, “alert you to the physical proximity of somebody you might want to see in the real world”. Hari explains that the whole business model of social media precludes the encouragement of joys like looking your friends in the eye or giving them a hug, and instead is based on keeping you fixated on your screen, scrolling endlessly, never leaving the house.

Except Facebook does have exactly the feature that Hari claims doesn’t (and couldn’t) exist. It’s called “Nearby Friends”. It gives you a little map of where your friends are physically at that moment (if they have opted in). It’s been available since 2014. A two-second Google search would have enlightened Hari. Maybe he wrote that part of the book while he was in internet-free isolation.

The more you think about Hari’s objections to social media, the sillier they become: for years Facebook has been one of the main tools people use to arrange meet-ups and in-person events. It can and does introduce us to people who become our friends in real life. People don’t just use social media because we’re mindless drones, hoodwinked by Big Tech. But Hari barely mentions its benefits, and instead regurgitates (though thankfully, with citation) the catastrophic view put forward by many before him, including Tristan Harris and Jaron Lanier.

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Indeed, many of the other causes Hari identifies are rehashings of previous pop-science and pop-psychology books: we aren’t sleeping enough (Why We Sleep); kids don’t play outdoors any more (Free Range Kids and The Coddling of the American Mind); we don’t eat the right foods (a million diet books). Of course, it’s not a crime to write a book that doesn’t provide any new information. But Hari’s irritating, breathless style turns every single fact he “discovers” into a startling revelation, every single expert he speaks to into the absolute best in the world. Hari’s research — a series of interviews for a pop-psychology book — becomes an intense, globetrotting journey of personal discovery. His mind is so often blown that it’s little wonder it has such difficulty in paying attention.

It’s not just that Hari thinks he’s discovered earth-shaking new information. (As Dean Burnett wrote of Lost Connections, Hari “repeatedly presents well-known concepts and ideas … as fringe concepts that he’s discovered through his own efforts”.) He also thinks he’s a hard-nosed scientific truth-seeker. At the start of the book, he solemnly assures us that: “I studied social and political sciences at Cambridge University, where I got a rigorous training in how to read the studies these scientists publish [and] how to assess the evidence they put forward”.

What makes this risible isn’t just that he’s touting his undergraduate degree as if it makes him an expert (a fairly substantial proportion of the population also have one). It’s that Stolen Focus exhibits no talent for assessing evidence. A few times there’s a small concession to a flaw in a study, or to the fact that scientists disagree on a point — but Hari fails to add any of the necessary uncertainty to his argument. After a cursory mention of the “other side,” he usually just blunders on regardless, assuming his argument is right.

The book builds up to Hari’s ultimate theory for why we have all these attentional problems: it’s capitalism itself! Our blinkered focus on economic growth, Hari writes, puts us in a rat-race that ruins the workings of our brains. We should abandon the idea of growth, he argues, and aim for what the economic anthropologist Jason Hickel calls a “steady-state economy”.

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Never mind all the evidence for the benefits of economic growth in alleviating grinding poverty and hellish disease, particularly in the Global South. Never mind Hari’s own assertion that poverty can be another cause of attentional problems. What’s more important than the world making progress is that he, Johann, sometimes has a bit of trouble focussing on his next book.

Hari’s call to kill capitalism is not the only embarrassing, student-level politics in Stolen Focus. He thinks we should have an activist movement called “Attention Rebellion” to do, well, he never actually says what. He thinks we should nationalise Facebook — which would, to be fair, probably solve the problem of how distracting it is, by making it unusably slow and terrible.

When focused on the individual who is easily distracted, he does provide some realistic advice. But that includes things like: pre-commit to getting tasks done; use special software to restrict access to social media; get some decent sleep. It’s all pretty obvious (if, in many cases, easier said than done). With Hari, as was once said about Freud, “what is new in his theories is not true, and what is true in his theories is not new”.

And yet, despite all this, it seems that the media establishment — especially outside the UK, where his unethical past is less known — just can’t get enough of him. His first book is apparently being made into a documentary series presented by Samuel L. Jackson. And from what he’s said in interviews, more non-fiction is forthcoming — not to mention the Cape Cod novel. But this is a writer who’s shown himself again and again to be either untrustworthy, unoriginal, or uninformed. If he’s right to say that our moments of focus are becoming ever-more precious, isn’t it time we started paying attention to someone — anyone — else?

Only hours later, some Twitter wag superimposed a map of the Mediterranean over the continental United States, and got 10,000 retweets after adding the caption: “Scientists say this map represents the US in 30 years if we don’t reverse climate change.” Happily, Reuters Fact Check were on hand to point out that this was inaccurate.

Today a new breed of media prefects are waiting to weigh in on whether the President shat himself, or whether the Adriatic will drown the population of Cincinnati. Fact-checking sites have exploded: from PolitiFact to News Guard to the European Journalism Training Association’s EU Fact Check. But as ever with bodge jobs, they are a solution to the problems created by the last bodge job.

Fifteen years ago, in a kinder gentler age of the libertarian internet, a few amateur sleuths over at Snopes would bust urban myths about disappearing hitchhikers or In The Air Tonight. They didn’t “check facts” so much as deliver zingy reports on the genesis of rumours. But more and more, the fact check has become the epistemic peg around which everything else is expected to pivot.

Social media giants, as the Facebook leaks revealed, are very aware that they’ve built a world that thrives on cheap talk and rumour. They know they can’t put that genie back in the bottle without dismantling their entire business model. So in a world that requires politicians to puff their cheeks and fume about how something must be done, the giants have taken to paying for fact checks. These are the tithes they pay, the indulgences they gain. Chucking some change at fact-checking is very cost effective way of buying up the most facile tier of public opinion, and keeping the regulators from the door that bit longer.

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Take the British fact-checking company, Full Fact. In 2019, it was paid £1.1 million by Facebook, and £206,500 by Google, a sum that has allowed them to take on a staff that would be the envy of many of the newsrooms they pass verdicts on. It is only a small irony that, after reducing reporters to desk-bound re-writers by stripping newspapers of their funding model, Big Tech is paying to have some of their reporting fibre reinserted, by recruiting a new breed of professional to back leap in afterwards.

Full Fact says that its funding doesn’t compromise its integrity. But the fact that the boilerplate California progressives over at Facebook and Google chose to fund them in the first place obviously does. How could they not make decisions based on keeping the giants on side? The Intercept journalist and professional gadfly Glenn Greenwald picked up on this principal-agent problem only a few weeks ago, tweeting that:

Two of the hugest scams are "fact-checking" agencies and those that purport to fight "extremism" online. They all push the same ideology, are run by the same small set of people (see below), and are usually funded by the same small handful of billionaires: https://t.co/te8BxuYtXL

— Glenn Greenwald (@ggreenwald) October 13, 2021

Greenwald was picking up on comments from NSA whistleblower Edward Snowden about NewsGuard. As the two dissidents point out, as well as Big Tech there is Big NGO: overly moneyed world changers such as Bill And Melinda Gates Foundation, and George Soros’ Open Society group, give conspicuously. It’s hard to imagine anyone in their NGO echelons arguing for, say, “closed borders” or “foreign aid reductions”. And it is just as hard to imagine the fact-checkers they have funded actively aiming to check a certain kind of fact that is values-aligned.

During the summer of George Floyd, for instance, fact checkers raced to the scene of facts that supported the BLM cause. For instance, they dismantled “a bar graph showing ‘murder of blacks and whites in the US, 2013’ broken down by the races of the perpetrators”, as Reuters Fact Check described one anti-BLM meme. “While the graph itself is accurate, the way it is presented is misleading,” they then concluded. Some might have said the same thing about the way they headlined the piece: “Misleading bar graph presents distorted interpretation of black and white murder rates.”

But even beyond how the tech giants select their checkers, who funds them, or what that funding model incentivises, there will always remain a simple question of irreducibility. At what point does the eternal human mist of subjectivity, data and language ever actually congeal into one perfect cube called a “fact”?

Stephen Ceci and Wendy Williams, both professors at Cornell University, lay out some of this in Scientific American. Confronted with a crowd bearing placards, they noted, experimental evidence suggests that those of a certain political bent will see a mob; those of another will see a rights struggle.

This experimental evidence closely correlated with the real-world evidence last year, during the BLM Summer: while 69% of Republicans considered the videotaped demonstrations in Portland, Kenosha and New York to be riots, only 30% of Democrats did. When Keynes said “When the facts change, I change my mind”, he forgot to add that when the mind changes, the facts go with it.

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The litany of comedy fact checks is long. “After about five years, approximately half of [German] refugees are employed” is rated by EU Fact Check as “mostly true,” even though 51% are unemployed — and even of the employed, only 68% are actually in full time work. The reason for the rating is apparently that the timeline of the study doesn’t exactly coincide with the length of the claim. “Does the timeline of events on Jan. 6 prove Trump could not have incited the attack?” CNN’s Fact Check asks this week. “This is misleading,” it happily concludes.

And the full weight of systemic and cognitive bias on display is evident in one immortal zinger that came from Associated Press’s Fact Check Unit a year ago:

“President Donald Trump claimed accomplishments he didn’t earn on the pandemic, energy and veterans at a Republican convention finale that also heard Black Lives Matter baselessly accused of coordinating violent protests across the country.” 

Often, the outcome simply depends on the framing. If asked to “prove” something “false”, the conditions will be very different from if you are asked to “prove” it to be “true.” Many will unconsciously adjust the settings to match the outcome preferred.

A hundred years ago, Ludwig Wittgenstein eviscerated the “logical positivist” philosophical movement, which wanted to create an algebra of human meanings. He showed how there was no single way of coding a statement so that it could be parsed as “true” or “false” that didn’t in turn leave it subject to huge error bars of ambiguity. If only someone had passed the message onto the fact checking industry, it might have saved everyone some time.

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Are the conspiracy cranks a little bit right?

By Gavin Haynes

If there’s no such thing as objectivity, there’s still impartiality. And fact checkers can’t even manage that. They were meant to bring back the rigour that had been throttled out of journalism. Instead, they’re most comprised of sweaty 23-year-olds in graduate jobs rummaging through the usual partisan sources, then comparing them with the often progressive-partisan fact mills of Wikipedia then spitting out the appropriate Woozle. No wonder many have intuited that a red flag from a fact checker actually denotes “things that might be true but are unsayable in the present climate”.

One solution proposed by the Cornell duo of Williams and Ceci involves leaning into that polarised political climate. Rather than having a single set of fact checkers, you should have two rival teams, recruited precisely for their ideological differences. But even here, the authors are quite gloomy in their prognosis. We shouldn’t imagine that this will get us to the “truth”, they warn. But it will at least reveal the underlying human biases that might be skewing our perception of it.

That might turn out to be a more useful function than they realise. The problem that confronts all of us is to neither lapse into cynicism about the existence of facts, nor slip into hubris about our ability to see them. In order to do that, we need to treat fact-checkers not as arbiters, but as just another branch of the media-political system that it seeks to impose its writ upon. Perhaps sensing that the game is up — or merely sensing that they have to expand to fit the donor funds on offer — fact checking orgs have increasingly begun to write what are essentially articles. In other words, they’re ripe to be red flagged, ripped apart or rinsed by others.

There are some who want to celebrate today — principally Dorsey, along with the small number of other people who have become unimaginably rich off the platform. But for everybody else on the planet, I suspect we should welcome the anniversary with roughly the same enthusiasm that we would the emergence of the Ebola virus. For the further away we have come from Twitter’s birth, the clearer it has become that the platform is a source of unimaginable harm to almost every aspect of society.

In the early days, it didn’t feel like this. Like Facebook, Amazon, Google and the other Big Tech monoliths, it all started out so well. Twitter was actually fun back then. People said whacky things. There were cat videos. There was Follow Friday and friendships were made. As professional and amateur newshounds took to the platform, it became the fastest way to learn about any developing story.

If something was going on, Twitter was there first, certainly ahead of the BBC or any of the other news establishments who had to lumber through the old legal and editorial hurdles, rather than enjoying the lightning-quick response time of social media. Politics is a drug, and the most successful drugs provide an instant hit. But they are also the most dangerous, and the downsides soon started to assert themselves.

Soon many started using the site in a game of competitive grievance, or competitive sanctimony. They took obvious glee in targeting victims who had transgressed some moral code; the obvious righteousness of these online crusaders meant they rarely recognised themselves as the aggressors or bullies.

And soon it became apparent that, while everyone was on the site, everyone also hated it. Those on the ideological Left began to turn against the platform when it became clear that it allowed their opponents on the Right to spread “hate”, a scourge which they defined generously. Just as they used it themselves to spread their message.

This all reached its nadir with Donald Trump, whose presidency is to many people the most concrete result of Twitter. The world watched aghast as Trump was able to say often the craziest of things to millions upon millions of followers, speaking unfiltered and directly — in a way the old news media would never have allowed. When he won the presidency and then thanked Twitter for the helping him to get it, many of these natural Twitter followers lost their faith in the platform. How could they have let it happen? It was their platform, after all, this noisy minority of the American and British electorate. Indeed, if you had read UK Twitter ahead of the 2019 election, you would have been absolute certain of a Jeremy Corbyn landslide. Where were these millions of Tory voters who didn’t like Jeremy?

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By Douglas Murray

Twitter began to ask itself the same questions, and finally, after Trump’s response to the disturbances of 6 January, the decision was made to chuck the most famous and powerful man in the world off the platform. He went the way of Katie Hopkins into the next world (aka Parler) along with a string of others. Just this past weekend an odious little toad and anti-Semite called Nick Fuentes was chucked off the platform. Very few people were sorry to see him go.

But Trump’s removal was the most audacious sign yet that the platform was willing to make editorial decisions. It could no longer pretend that it was simply a neutral platform — it had become a curated outlet. The suspicion grew, too, that they were playing more insidious games behind the scenes. Twitter had always denied the practice of shadow-banning, which is when a user’s tweets mysteriously stop appearing, before it was eventually confirmed by Twitter that they were doing exactly that.

Yet all of this is as nothing compared to the devastating virus-like effect that Twitter has had across the public arena.

It has undeniably coarsened public discourse. There are commentators and journalists for whom I used to have some respect, but who use Twitter so constantly that I read their work with ever less anticipation and regard. There is almost no prominent figure on Twitter who hasn’t lowered themselves in one’s estimation. There are those who use the platform as a venue to carp about everything that their contemporaries, rivals or friends are saying. They berate other journalists, as though they are masters of the genre whose verdict is final. The pleasant communal hackery of old has been replaced by a melee of endless fall-outs, unnecessarily initiated and often with irreparable results.

The platform has also given the greatest possible voice to the general scold: the type of person who achieves great pleasure in taking offence and even causing someone to lose their livelihood or reputation — the “I am offended by that” or “I don’t find that funny” brigade. Where once people simply shrugged, now they “take to Twitter”, in the annoying parlance, to show that they are unimpressed, or to tell people off for saying something which they disagree. There is a performative rage which the platform has encouraged, and which people find it hard to withdraw from once they are caught up in it. It’s addictive. It’s thrilling.

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And then there is the chihuahua effect: the way in which any small, yappy animal can distract the platform for at least a day at a time. Would-be chihuahuas can get the hang of this very easily. You simply say something silly and instead of the grown-ups just ignoring the small yappy dog, all respond to it. A whole day can go by in which some relatively good minds and a great many more mediocre ones have done almost nothing but got themselves in a lather about how annoying the small yapping dog is.

There are countless other reasons to loathe the platform: photos of dinner; stories of deeply dull train journeys or traffic jams; glimpses into the mundane aggravations which are bad enough in your own life without needing to read those of others. People misery-share their lives and the sadness and anger proves infectious. It is all a colossal waste of time, of course, yet is by no means the worst aspect of the all-powerful site.

That has been illustrated once again these past few days, with the anonymous racist abuse posted at black England footballers. Twitter acted as a megaphone for the most hysterical of these bigots, and highlighted the platform’s complete inability to sensibly and reasonably offer judgements about the actual state of the world we live in.

It made it seem as though these racists are vast in number. As though they are powerful and need the full force of every arm of the state to unite against them and quell them. Never mind that many of these tweets came from outside the UK, and that they were utterly dwarfed in number by supportive messages.

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The New York Times, whose correspondent seems to spend an awful lot of time news gathering on Twitter, even went as far as to describe these as “racist attacks”, never missing a chance to take a swipe at Britain. But we live in a country which is by every standard one of the least racist on earth, with statistics all demonstrating a vertiginous fall-off in people holding prejudice attitudes. Britain is one of the countries most unbothered, indeed most favourable, about things such as interracial marriage, or living next door to someone of a different race.

We have one of the most diverse cabinets in the world and our public square, from television and film to our national football team is visibly and un-controversially multi-ethnic. And yet reading Twitter you’d have no idea of that. No wonder that in Britain, as in the US, young people think that they live in such a racist society, beyond redemption. Here on this platform a very few shrill voices can be so magnified that people mistake that sound for the country as a whole. And so, 15 years after its launch, Twitter has become not just a megaphoning platform, but a distorting one, and the distortion continues to have a toxic impact on real life.

Crocker’s meltdown racked up more than 2 million views in the first 24 hours, and scored him appearances on CNN, MSNBC, The Today Show and the rest. It was in response to another, far more high-profile breakdown: the public psychiatric implosion of Britney Spears herself, whose forensically-documented mental health issues dominated celeb gossip for years, and culminated in the imposition of a “conservatorship” in early 2008.

Spears is now contesting the conservatorship, with another hearing scheduled for today. But it’s perhaps less a question of whether Britney can escape conservatorship, than of whether any of us can escape a culture and politics now dragging us all into a similar state.

Britney Spears first entered the public eye aged 11, as a star on the Disney Channel’s The Mickey Mouse Club alongside Justin Timberlake. She was 16, in 1998, when she donned a schoolgirl outfit straight out of a porno-flick for the video to Hit Me Baby One More Time. The song shot to no. 1 and catapulted Spears to megastar status, right at a hinge moment in our celebrity culture: the transition to the digital era.

But as the internet became a mass social phenomenon, the certainties that seemed so solid at the End of History began to melt away, even as the web sent the culture that promoted them roaring into overdrive. Britney’s megastardom and mental breakdown encapsulated that moment: a sweet, heady, fruit, perfectly ripe and moments from rotting.

Her Noughties videos drip with baroque, jaded eroticism: a pure End of History vibe. From XXX schoolgirl she blossomed to bondage-gear comic-book villainess; rubber-clad space vixen; dive-bar stripper. The images play with innocence violated, kink and commerce, class inequality and love and uncontrollable desire.

It’s all overlaid with a glossy knowingness that suggests for those who only know how to play the game, everything is within our grasp. We all have freedom, this imagery hints, to warp and disrupt every imaginable social and cultural norm. We can do so because we know liberal capitalist democracy has triumphed, history has ended, and the world has been flattened to a giant playground for freedom, sex, and shopping.

But even as the pre-internet music industry was manufacturing Britney Spears as a global megastar along well-trodden entertainment-industry lines, this entire approach to celebrity was under attack by something new: the attention economy.

Internet-dazzled futurists at the time pointed to the emerging landscape of social media and virality, the self-creating media stars of YouTube and the like, and extolled the promise of ‘disintermediation’ to give the whole world a voice. But if the digital revolution created new ways to find an audience, it did so in no small part by destroying and replacing the “legacy” media.

As reporters gave way to “citizen journalists” and vloggers, the once-clear boundary between celebrities and their audience wavered. Crocker himself epitomises this shift: he is one of the first individuals to become internet-famous, rather than having acquired fame offline. He initially went viral on MySpace, before his weeping YouTube defence of Britney took off.

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The emergence of figures such as Crocker drove an appetite for intimate-feeling, rough-and-ready voyeuristic material. Meanwhile, the sheer endlessness of the internet drove a suddenly bottomless hunger for content, whether true or not, which put paid to any residual self-restraint or journalistic integrity in the brutal contest for eyeballs.

Though Spears had been famous for years, digital-age celebrity was something new. Publications such as Valleywag and Popbitch spawned a thousand imitators all fighting for clicks. Paris Hilton, who (along with Spears and another former child star, Lindsay Lohan) formed the Holy Trinity of Noughties celeb-gossip, describes the paparazzi in this era as “out of control”. “Fighting over getting the shot, pushing each other against my car, scratching it with their cameras. It was overwhelming and frightening.”

Many of the songs on Blackout, the 2007 album Spears released shortly before her breakdown, convey a sense of relentless exposure and — as in “Piece of Me” — of being devoured, bite by bite.

In February 2007, Spears appeared at a hair salon. As a mob of paparazzi hammered on the salon doors, Spears demanded the stylist shave her head. When the stylist demurred, Spears grabbed the clippers and did it herself. According to the hairdresser, she declared: “I’m sick of people touching my hair”: as though making herself ugly might stop people touching her, staring at her, wanting a piece of her.

It didn’t work. Later that year, another swarm of paparazzi photographed Spears strapped to a gurney, being wheeled away into an ambulance.

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But her longing to re-assert personal boundaries, and some measure of private existence, wasn’t in the interests of those around her. Following a similarly public breakdown over roughly the same period, Lindsay Lohan more or less abandoned celebrity, and has since largely disappeared from the limelight. But rather than allowing Spears to withdraw like Lohan did, the Britney-industrial complex sent her to rehab, then deprived her of personhood with the “conservatorship” legal arrangement — before putting her back to work as Britney Spears the celebrity.

Since she was deprived of control over her own affairs, Spears has released three albums and undertaken four stadium tours. We could debate whether or not this is an ethical thing to ask of someone who is deemed by the courts not to have capacity to manage her own affairs. But from the point of view of the fame machine, Spears’ inner life and personhood are largely beside the point. For there’s no money in privacy.

Lohan retreated into private life, and has been (by celebrity standards) skint ever since. Spears made, or was forced to make, the opposite trade – and the Britney-industrial complex has cashed in. Where she was reportedly down to her last few million at the point of breakdown, the New Yorker reports that she’s worth more than $60m now.

In the intervening years, the collapse between public and private that drove Spears and Lohan to breakdown has come for all of us. Every public social media post positions us as our own paparazzi: curators of our own micro-celebrity mythos, in exchange for the dopamine hit of one more “like” or “share”.

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And in a world where privacy is increasingly meaningless, the fantasy-worlds of movie and music seem increasingly don’t cut it. Stronger, more intimate stuff is what garners the clicks. We’ve moved on from voyeuristically documenting the mental health difficulties of attractive young celebrities; now, it’s a race to give a platform to whatever is darkest and most baroque in the human psyche.

Chris Crocker’s own career trajectory epitomises the insubstantiality and sleaze of this new environment. Since 2007, he has cycled through every form of digital-era micro-celebrity imaginable, including attempts at reality TV and a music career, a stint in porn, and recent migration to — where else? — the intimate-seeming subscription porn website OnlyFans.

The hunt for dark, intimate, click-worthy curiosities has spawned a whole genre of (often female) confessional, including an entire sub-genre devoted to women losing things up their vaginas. If it’s not confessional, it’s grotesque: a Netflix dating show dresses contestants in given prosthetic makeup so a shark and a devil can go on a date. Drag queens read stories to children in public libraries. A male who identifies as a woman “breastfeeds” a real newborn baby on US television, and it’s treated not as child abuse but entertainment.

More subtly, every time we post, like, or share, we’re part of it. We’ve all acceded to the trade that was forced on Spears: hyper-visibility, at the expense of a private inner life. What does “privacy” even mean, in a world where hundreds of millions of people are happy for Google to index the content of their private emails in exchange for bottomless email storage?

It’s ironic, then, that Spears should have launched her legal campaign to end her conservatorship in 2020. For the pandemic has given us all a taste of the Britney lifestyle. Under Covid we were all suddenly in conservatorship: mediated, surveilled, shorn of autonomy, every movement controlled. And, also, pressured to go on working even as the norms of what we thought about citizenship dissolve around us, real-world social institutions collapse, and we transfer ever more of our inner lives into the attention economy.

The end of history, it turns out, actually was peak liberal democracy. We all laughed at Crocker, but he wasn’t just complicit in the new economy. He was also right about its tradeoffs. “All you people care about is making money off her,” he sobbed. “She’s a HUMAN!!!”. Crocker recognised the way Britney Spears’ personhood was already collateral damage, in the rush to transform her into a never-ending source of lucrative content.

Her song ‘Gimme More’ was fitting, Crocker declared, because “All you people want is more, more, more. Leave BRITNEY ALONE!!!” But instead of listening, we turned him into a meme. And now it’s too late: we’re all memes as well, passing figures in a parade of grotesques, our personhood discarded in exchange for free apps, hygiene theatre or a moment in the online limelight..

We need to reclaim a sense of what we won’t offer up to the entertainment machine: to find a way back to some measure of private life, as Lohan did. For it’s already becoming clear that a culture willing to replace private life with never-ending public carnival will be governed as Britney Spears is governed. It will be run as a therapeutic conservatorship by those who know best, whether we like it or not.

The Sleep Number Bed is typical of smart home devices, as Harvard business school Professor Shoshana Zuboff describes in The Age of Surveillance Capitalism. It comes with an app, of course, which you’ll need to install to get the full benefits. Benefits for whom? Well, to know that you would need to spend some time with the 16-page privacy policy that comes with the bed. There you’ll read about third-party sharing, analytics partners, targeted advertising, and much else. Meanwhile, the User Agreement specifies that the company can share or exploit your personal information even “after you deactivate or cancel … your Sleep Number account.” You are unilaterally informed that the firm does not honor “Do Not Track” notifications. By the way, the bed also transmits the audio signals in your bedroom. (I am not making this up.)

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By Matthew Crawford

The business rationale for the smart home is to bring the intimate patterns of life into the fold of the surveillance economy, which has a one-way mirror quality. Increasingly, every aspect of our lives — our voices, our facial expressions, our political affiliations and intellectual predilections — are laid bare as a data to be collected by companies who, for their own part, guard with military-grade secrecy the algorithms by which to use this information to determine the world that is presented to us, for example when we enter a search term, or in our news feeds. They are also in a position to determine our standing in the reputational economy. The credit rating agencies and insurance companies would like to know us more intimately; I suppose Alexa can help with that.

Allow me to offer a point of reference that comes from outside the tech debates, but can be brought to bear on them. Conservative legal scholars have long criticized a shift of power from Congress to the administrative state, which seeks to bypass legislation and rule by executive fiat, through administrative rulings. The appeal of this move is that it saves one the effort of persuading others, that is, the inconvenience of democratic politics. 

All of the arguments that conservatives make about the administrative state apply as well to this new thing, call it algorithmic governance, that operates through artificial intelligence developed in the private sector. It too is a form of power that is not required to give an account of itself, and is therefore insulated from democratic pressures. 

In machine learning, an array of variables are fed into deeply layered “neural nets” that simulate the binary, fire/don’t-fire synaptic connections of an animal brain. Vast amounts of data are used in a massively iterated (and, in some versions, unsupervised) training regimen. Because the strength of connections between logical nodes is highly plastic, just like neural pathways, the machine gets trained by trial and error and is able to arrive at something resembling knowledge of the world. The logic by which an AI reaches its conclusions is impossible to reconstruct even for those who built the underlying algorithms. We need to consider the significance of this in the light of our political traditions.

When a court issues a decision, the judge writes an opinion in which he explains his reasoning. He grounds the decision in law, precedent, common sense, and principles that he feels obliged to articulate and defend. This is what transforms the decision from mere fiat into something that is politically legitimate, capable of securing the assent of a free people. It makes the difference between simple power and authority. One distinguishing feature of a modern, liberal society is that authority is supposed to have this rational quality to it — rather than appealing to, say, a special talent for priestly divination. This is our Enlightenment inheritance. It appears to be in a fragile state. With the inscrutable arcana of data science, a new priesthood peers into a hidden layer of reality that is revealed only by a self-taught AI program — the logic of which is beyond human knowing.

The feeling that one is ruled by a class of experts who cannot be addressed, who cannot be held to account, has surely contributed to populist anger. From the perspective of ordinary citizens, the usual distinction between government and “the private sector” starts to sound like a joke, given how the tech firms order our lives in far-reaching ways.

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The danger of safetyism

By Matthew Crawford

Google, Facebook, Twitter and Amazon have established portals that people feel they have to pass through to conduct the business of life, and to participate in the common life of the nation. Such bottlenecks are a natural consequence of “the network effect.” It was early innovations that allowed these firms to take up their positions. But it is not innovation, it is these established positions, and the ongoing control of the data it allows them to gather, that accounts for the unprecedented rents they are able to collect, as in a classic infrastructure monopoly. If those profits measure anything at all, it is the reach of a grid of surveillance that continues to spread and deepen. It is this grid’s basic lack of intelligibility that renders it politically unaccountable. Yet accountability is the very essence of representative government. 

Mark Zuckerberg has said frankly that “In a lot of ways Facebook is more like a government than a traditional company.” If we take the man at his word, it would seem to raise the question: can the United States government tolerate the existence of a rival government within its territory? 

In 1776, Americans answered that question with a resounding ”No!” and then fought a revolutionary war to make it so. The slogan of that war was “don’t tread on me.” This spirited insistence on self-rule expresses the psychic core of republicanism. As Senator Amy Klobuchar points out in her book Antitrust, the slogan was directed in particular at the British Crown’s grant of monopoly charters to corporations that controlled trade with the colonies. 

Today, the platform firms appear to many as an imperial power. The fundamental question “who rules?” is pressed upon America once again.

This is an edited version of Matthew B. Crawford’s testimony before the US Senate Judiciary Committee on June 15th 2021.

Perhaps channelling such hyperbole, President Biden recently suggested that he wants to “make America California again”. Yet before leaping on this particular train, he should consider whether the California model may be better seen as a cautionary tale than a roadmap to a better future in the digital age.

The on-the-ground reality — as opposed to that portrayed in the media or popular culture — is more Dickensian than utopian. Rather than the state where dreams are made, in reality California increasingly presents the prototype of a new feudalism fused oddly with a supposedly progressive model in which inequality is growing, not falling.

California now suffers the highest cost-adjusted poverty rate in the country, and the widest gap between middle and upper-middle income earners. It also has one of the nation’s highest Gini ratios, which measures the inequality of wealth distribution from the richest to poorest residents — and the disparity is growing. Incredibly, California’s level of inequality is greater than that of neighbouring Mexico, and closer to Central American countries like Guatemala and Honduras than developed nations like Canada and Norway.

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It is true that California’s GDP per capita is far higher than these Central American countries, but the state has slowly morphed into a low wage economy. Over the past decade, 80% of the state’s jobs have paid under the median wage — half of which are paid less than $40,000 — and most are in poorly paid personal services or hospitality jobs. Even at some of the state’s most prestigious companies like Google, many lower (and even mid-level) workers live in mobile home parks. Others sleep in their cars.   

The state’s dependence on low-wage service workers has been critical in the pandemic, but it now suffers among the highest unemployment rates in the nation, outdone only by tourism-dominated states like Hawaii, Nevada and New Jersey. Los Angeles, the home of Hollywood, now has the highest unemployment rate of the nation’s top ten metropolitan areas, higher even than New York.

But that hasn’t stopped California from portraying itself as a progressive’s paradise, publicly advocating racial and social justice. The state just passed a Racial Justice Act to monitor law enforcement, endorsing reparations (although California was never a slave state) and is working to address “systemic” racism in its classrooms. This “woke” agenda was taken to a new extreme this week when the San Francisco School Board decided to rename 44 schools because they were named after people connected to racism or slavery. The district’s Arts Department, originally known as “VAPA”, also decided to re-brand because “acronyms are a symptom of white supremacy culture”.

Unsurprisingly, changing school names has little effect on the daily lives of minorities. In fact, minorities do better today outside of California, enjoying far higher adjusted incomes and rates of homeownership in places like Atlanta and Dallas than in San Francisco and Los Angeles. Almost one-third of Hispanics, the state’s largest ethnic group, subsist below the poverty line, compared with 21% outside the state. Meanwhile, one fifth of African Americans and over two-thirds of noncitizen Latinos, including the undocumented, are the edge of poverty.

The reality today is certainly a stark change from the 1980s, when the technology industry created lots of middle class jobs. Hewlett Packard was an exemplar of enlightened management and employee benefits; it was long noted for its informal way of running its business and worked particularly hard to involve its line workers in helping define and reach the company’s goals. Yet in recent years, Valley companies have become ever more abstract and digital, with fewer jobs requiring working and even middle-class employees.

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By 2015, nearly 30% of Silicon Valley’s residents relied on public or private financial assistance. Once a beacon of middle-class aspiration, it has become “fragmented and divided,” note two Leftist researchers, Chris Benner and Manuel Pastor, “with the high-tech community largely isolated from the broader region and particularly those parts of the region that are less fortunate”. Rather than “a capitalism we can believe in”, the Bay Area has become “a region of segregated innovation,” where the upper class waxes, the middle class wanes, and the poor live in poverty that is becoming impossible to break out of. Silicon Valley, as we know it today, has essentially collapsed into “feudalism with better marketing”.

Yet for most of its 170-year history as a state, California was a magnet both for ambitious Americans and foreigners. The newcomers helped create the farms, drill oil wells, engendered Hollywood, the aerospace, and technology industries. The California dream was, in a sense, America on steroids. Even when high costs and the rise of other areas — Texas, North Carolina, Arizona, Washington State — slowed and eventually reversed domestic migration, people from abroad continued to pour in to pick up the slack.

This is increasingly no longer the case. California’s population is — for the first time in its modern history — falling. Millennials, particularly when they start having families, are heading to other states, a process that has been accelerated by the pandemic. Once the ultimate land of youth, the Golden State is now ageing 50% faster than the rest of the country. In time, the wheelchair could replace the surfboard as the symbol of the state. And as millennials flee the state and other expensive coastal regions, immigrants are no longer coming in large numbers. Instead, as demographer Wendell Cox explains, they are increasingly moving inland to cities like Houston, Nashville, and Orlando.

Californian officials try to cover up these shortcomings by pointing to the huge capital gains tax receipts they receive from large tech companies, and those derived from IPOs. Together these have created an enormous tax windfall estimated at $26 billion that allows the state to enjoy an annual surplus even in hard times. That’s partly why, when Governor Newsom recently defended his economic track record, he predictably pointed to the new round of IPOs to assure us that the state’s growing billionaire class is “doing pretty damn well”.

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Yet Newsom currently faces a determined recall campaign, which could trigger an election if it attracts enough signatures. For in spite of his optimism, opportunities and avenues for growth, the Governor’s preening and inconsistent lockdown activities — such as closing outdoor dining despite no evidence of its dangers, and being caught eating un-socially distanced at the hyper-expensive French Laundry restaurant — have angered large swathes of the state’s population. Not only have these incidents exposed his cluelessness, but also the political class’ imperviousness to the needs of non-elite business and ordinary citizens of the state.

And this is all at a time when we are starting to see the unravelling of the precise policies on social justice, climate and taxes that are widely viewed among progressives as role models for the future. These policies have not brought about greater racial harmony, enhanced upward mobility and widely based economic growth. They are not even exemplars in reducing climate change, but, at best, shift the burden of saving Gaia onto the working class while their jobs and resources generate wealth elsewhere.

Clearly California is not the avatar of brighter future, particularly in an age of heightened competition from hungrier, more motivated and less carbon-obsessed places like India and China; indeed, California increasingly cannot compete, even for most high-end jobs, with American upstarts like Texas or Arizona. So before the state — and the President — entertains any notion of sensibly “exporting” its model, California’s leaders need to embrace the biblical notion of “physician cure thyself” and demonstrate that our state is the harbinger of a better future, rather than a feudalistic past.

Sound too good to be true?

Other countries are already using contact-tracing apps. Contact-tracing is also used in sexually transmitted infections, where previous partners may be contacted with advice to get themselves a test. But whereas we tend to remember our sexual partners, we tend not to remember everyone who shared our train carriage or served us in a shop several days before we had symptoms. That’s where technology could help.

I write constantly about the threat to privacy of letting our smartphones share data that reveals where we go, what we do, and who shares our personal space. And although these are exceptional circumstances, we should not stop valuing our privacy. Emergency measures have a habit of becoming the new normal. And information about who we’ve been close to could be of interest to all sorts of people, from blackmailers to over-enthusiastic police officers enforcing their own interpretation of “necessary activities”.

Let’s compare some of the contact-tracing technology already in use, to see how the UK could avoid the pitfalls while harnessing our phones to battle the virus.

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The Chinese app, AliPay HealthCode, raises some red flags. It assigns users a unique QR code which displays red, yellow or green, indicating your health status, and which determines how much freedom of movement you’re permitted. How that risk category is calculated remains opaque, though it uses proximity to known infected individuals or hotspot locations in that calculation. It sends your identity and location directly to a server accessible by the police, who can use it to enforce the quarantine demanded by your colour status. Use of the app is not compulsory, but even local movement may be impossible without it.

South Korea uses existing sources of data when tracing contacts, rather than a specific app (though they do have an optional app to monitor infected people in mandatory quarantine). They use interviews, supplemented with CCTV footage, smartphone location data, and even credit card records, to reconstruct an individual’s pre-diagnosis activities. They have been criticised for making public the locations and activities where others may have been infected, which has led to individuals being publicly identified, and deterred others from getting tested.

Israel has already allowed its internal security agency, Shin Bet, to access cellphone geolocation data, and that can now be used for coronavirus tracking. Cellphone users who have been close to known infected individuals may receive text messages telling them to self-isolate. However, Israel’s Association of Public Health Physicians criticised the project, asking why no health professionals were involved in designing it. The Ministry of Health then launched a location-based app, Hamagen, on an opt-in basis, also using GPS data.

Singapore’s TraceTogether app supplements interview-based contact-tracing in a similar way to South Korea’s. TraceTogether doesn’t collect data on where you have been, because it only wants to identify who has been within infectible range. To do this, it uses Bluetooth.

Where geolocation-based apps use the cellphone’s GPS function, and its connections to the nearest cellphone towers, Bluetooth exchanges signals, not with a cellphone network, via a tower, but with other Bluetooth-enabled devices within a few metres.

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Good news if you want to identify people at risk from the cellphone’s infectious owner, without handing over to a central database lots of personal data about where you were. All the app needs is Bluetooth’s Relative Signal Strength Indicator readings to approximate how close you were to another device, and for how long.

As the app’s ‘How Does TraceTogether Work?’ page puts it: “This proximity and duration information is stored on one’s phone for 21 days on a rolling basis – anything beyond that would be deleted. No location data is collected.” The data stays on each person’s phone unless they test positive for Covid-19, in which case they’re asked to hand it over to Singapore’s Ministry of Health (MOH).

The MOH works with them to trace their contacts for the previous 14 days. There’s a legal requirement to help MOH map recent activities if requested, including producing other data held on your phone in other apps. But it’s not compulsory to use TraceTogether at all.

Several other countries are introducing apps modelled on this app: the pandemic has spurred a worldwide rush of innovation and technical experimentation.

Most of us would welcome the chance to contain the spread of the virus without having to stay locked down until a vaccine arrives. But do we have to trade our privacy by turning everyone’s phone into a tracking device? Perhaps not.

More than 25 scientists across eight European universities decided that, rather than wait for others to produce bad apps, they would write their own. Or at least, write the basic code that others could use, and make it freely available. And the result was DP-3T.

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Like Singapore’s TraceTogether, DP-3T is designed around Bluetooth’s capacity for device-to-device communication. Like TraceTogether, it transmits and receives ID codes that can later be used to reconstruct whether a sick person has been close enough to infect you. But it has some important refinements that mean no centralised body ever needs to know who has been close to whom.

Instead of transmitting codes that can be linked back to the person using the app, a DP-3T app transmits a random jumble of letters and numbers that changes regularly. Other devices receiving the codes won’t even know if this is the same device as yesterday, which is an important layer of protection for anonymity. Each device running the app will store all the codes sent and received.

If one person does get a diagnosis of Covid-19, they get a passcode from the healthcare professional making the diagnosis, which allows them (just once) to upload their “sent” codes from the pre-symptomatic contagious period to a database. This gives the database no information about the patient’s identity, location, or anything else, just the codes transmitted during the relevant period.

All the other phones running the app have access to the database of codes, but only to cross check against the codes in their own “received” file. The app can do this regularly and automatically, and alert the user if the level of exposure means they should self-quarantine, or get tested.

Everyone keeps control of their own data, the centralised database contains only anonymous codes from infected people, and nobody has the whole picture. It is possible to have both contact tracing and privacy.

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Is this the basis for the NHSX app being developed, which is also designed to use Bluetooth to track proximity?

Probably not.

“All data will be handled according to the highest ethical and security standards, and would only be used for NHS care and research,” according to Hancock’s announcement, “and we won’t hold it any longer than is needed.” But this implies that data from the app will be uploaded to a central database, where it can be used for other purposes. The fact the government felt the need to say that the police would not have access to the data suggests that it won’t be anonymous.

The public’s appetite to put the app on their phones will be reduced even further by the revelation that NHSX has teamed up with Palantir, a data-processing giant that works with the CIA (which part funds it). Palantir will be processing, not controlling the data, but our government has a patchy record on transparency over data retention and use.

However, a few developments over Easter weekend could force NHSX to radically rethink their project.

On Good Friday, Apple and Google released a joint statement, in itself a sign of the unprecedented times we are living in. They plan to design contact-tracing technology, either apps or the digital infrastructure on which apps can be built, which looks very like the DP-3T model. The two tech giants also announced another change that sounds like a minor technical detail, but could be more significant for the NHSX app. It concerns the way Bluetooth runs on Apple, and newer Android, devices.

When I asked a Singaporean friend about the TraceTogether App, he told me, “It’s a pain to use,” because it needs Bluetooth to be running all the time. But because Bluetooth is a digital blabbermouth, dishing out your data to any local device that wants to know, Apple devices don’t allow it to run in the background while you’re doing anything else, or while your phone is locked. Google’s newer Android systems run along the same lines.

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This means that if you want the TraceTogether app to work “you have to leave it on and … ‘upside down’ in your pocket to go into Low Power mode,” says my Singaporean app user,  “but of course everything’s haywire if you leave your phone unlocked in your pocket as you walk around!” At best, you pocket-dial your ex. At worst, a pickpocket has access to your entire life.

Dilemma for Google, and especially for Apple. It makes a big point of privacy, and of keeping your data on your device instead of on somebody else’s database. Could it allow Bluetooth to run when the app is not active, but for approved Covid-19 apps only?

This in effect, is what it has said it will do. But its definition of approved Covid-19 apps is drawn more narrowly than many expected. In fact, Apple devices will only allow Bluetooth to run in the background for more privacy-friendly, decentralised contact tracing systems, like DP-3T.

The solution to the Bluetooth privacy problem is that the exchanging and storing of randomly generated codes will happen, not in an app, but securely within the operating system. Data will leave the device only for explicitly authorised uploading to an approved database. The only other interactions possible with external databases will be queries about matching numbers. The app could potentially export any risk scores it has calculated for you, but not the codes sent and received by Bluetooth.

It sounds like a minor detail. But it could be a big spanner in the works for the NHSX app, if it doesn’t conform to that decentralised model. The app wouldn’t work with the phone locked or while you are using it for anything else. This inconvenience has been a big barrier to uptake in Singapore, where few people are using it, certainly fewer than the 60% of the population that public health experts have estimated as the minimum needed to make it work.

All these developments will have taken the NHSX project by surprise. It now faces a choice between carrying on with an app that’s less convenient to use, and that fewer people will trust, or starting again with a different model, delaying rollout, and denying them access to data that could be useful for research and for planning.

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In the long run, however, adopting the DP-3T model has huge advantages. It makes it easier for lots of us to download and run an app, without worrying about whether we’re releasing data to big corporations and government bodies to use for other purposes. It avoids setting precedents for centralised databases of who we spend time with. And it’s the foundation for internationally-compatible anti-Covid-19 digital solutions, which we may need for some time to come.

So, quick redesign, and Matt Hancock can roll out the app and get the UK back to normal life in a couple of weeks?

Sadly, it’s not quite that simple.

Allowing app users to self-diagnose opens the door to false alarms by hypochondriacs (or schoolkids who aren’t happy their school reopened). Medical validation needs readily available Covid-19 tests, so that professionals can authorise uploading the codes. Society needs to facilitate people going into self-quarantine, getting tested themselves, and locking themselves away for weeks, without delays. And a majority of the population needs to be using the app, but not everyone has a smartphone equipped with low-energy Bluetooth.

Automated alerts can’t replace detailed contact tracing, as practised in South Korea and Singapore. But interview based contact-tracing is labour intensive. Contact-tracing tens of thousands of cases individually would be an immense task for a health service that can’t even pick up every 111 call.

However, a widely used app in conjunction with testing could be a workable compromise, reducing the transmission rate to a scale that the NHS can handle, while allowing people for whom the risk is acceptably low to return to work, and to a more normal life.

How low a risk is acceptable, and how normal life should be, are political questions. No app can answer those.

I did know Divya Narendra, who sued Zuckerberg for allegedly stealing his social network idea. And I’m pretty sure the Winklevoss twins, the other two partners who lost out to The Facebook, cut in front of me in the photo booth line at our 10 year college reunion. I also met the actor who played Mark Zuckerberg in The Social Network while he was shooting across the street from my grad school apartment. I came home one day to find him — Jesse Eisenberg — sitting on my front step. We exchanged awkward nods as I went inside.

So my connections with Zuckerberg are indirect. But even so, I feel a sympathy for him and for the social media revolution he started. I was Facebook user number 2795, and have stuck with the site as it has ballooned and evolved over the last 15 years.  It has amassed immense power and influence, which have led to it making clear errors with major consequences. But its success has also led to it becoming a target for anyone looking for a symbol to attack in the name of battling corporate greed and malfeasance.

Facebook and Zuckerberg have, as a result, come under increasing scrutiny. EU regulators, acting on various antitrust and data collection concerns, have launched a number of investigations. These have been stepped up by Margrethe Vestager, the EU’s “digital czar”, who has been given expanded powers to aggressively go after big tech companies.

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But the greatest pressure against Facebook has come from its home country. After admitting to various violations of its users’ privacy, the company reached a key settlement with the United States Federal Trade Commission, which included a record $5 billion fine. Calls to dismantle the tech giants continually ring out — expect them to get louder over the course of this election year. The most prominent voice is that of Massachusetts Senator Elizabeth Warren, whose plan to “break up big tech” includes undoing Facebook’s acquisitions of the mega-popular photo-sharing site Instagram and messaging service WhatsApp.

Zuckerberg told employees in a closed-door meeting (that was later leaked to The Verge) that it would “suck” for Warren to win the presidency. In response, Warren tweeted:

What would really “suck” is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy. https://t.co/rI0v55KKAi

— Elizabeth Warren (@ewarren) October 1, 2019

With approximately 2.4 billion active users, or roughly one third of the world’s population, Facebook is a massively powerful entity. Just under 8% of the world’s web traffic goes through Facebook, second only to the 12% that goes through Google. It’s no wonder she’s targeting it. But while quite large, these figures are significantly smaller than the 70% of all web traffic that Senator’s campaign page incorrectly attributed to the two websites.

It has also snapped up potential rivals, such as Instagram and WhatsApp, and is actively seeking ways to stop the growth of competitors such as Chinese short form video site Tik Tok (a virtual meme-creating machine that has become immensely popular around the world, especially among a teenage audience ). Facebook even attempted to launch its own cryptocurrency, the Libra, sparking regulatory concerns across Europe and the US that have largely sidelined that project for now.

Monopolistic intentions aside, of particularly great concern is the impact it had on on the 2016 US presidential election. And what might happen this year. Although Donald Trump and his supporters are loathe to admit it, Facebook’s sway was probably large enough to account for Trump’s razor-thin electoral victory over Hillary Clinton.

The New York Times recently published a story based on an internal post written by Facebook executive Andrew Bosworth that extensively addressed the impact the website had on Trump’s election (Bosworth later made his post public).

While admitting that “we were late on data security, misinformation, and foreign interference”, Bosworth argues that the overall impact of Russian Facebook ads and Cambridge Analytica data-mining were negligible to the actual election results — a conclusion that is questionable given that a shift of only 80,000 votes in key swing states would have swung the overall election. It has become clear, however, that the much larger impact Facebook had on the election was not the result of nefarious methods but simply the fact the Trump campaign used Facebook more effectively than the Democrats.

In Bosworth’s own words:

“So was Facebook responsible for Donald Trump getting elected? I think the answer is yes, but not for the reasons anyone thinks. He didn’t get elected because of Russia or misinformation or Cambridge Analytica. He got elected because he ran the single best digital ad campaign I’ve ever seen from any advertiser. Period.”

In deciding on the response to Facebook’s role in the 2016 election, we must separate the fact that Facebook allowed unethical practices that undermined a free and fair vote, from the fact that Facebook’s influence contributed to a victory for Donald Trump. Faulting the company for doing damage to democracy is legitimate; faulting it for helping a candidate that you oppose win is not. The latter is the type of thinking that dictators use to justify internet censorship and social media blackouts, and should not factor into serious debates about how to best address the real concerns posed by Facebook or big tech.

Bosworth’s post says that, despite being a Hillary Clinton supporter in 2016, and having a strong personal incentive to change the rules of the website so that the Trump campaign won’t be as successful in 2020, he and the other decision-makers at Facebook were putting principles ahead of politics and not changing the rules to try to achieve a preferable political outcome. Government regulators in the United States and Europe should exercise similar restraint.

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A company as large and powerful as Facebook will always have enormous potential to do good or harm to entire nations, and even shape the world economically, politically and socially. And with great power, every Spider-Man fan knows, comes great responsibility. The problem with placing that responsibility in the hands of a corporation is that Zuckerberg, his executives and Facebook’s shareholders are in the business of making money, not serving society. The solution to this potential problem, however, is not attack or demonisation, but good old-fashioned regulation.

Zuckerberg himself has called for greater government regulation over Facebook and other internet companies, and while this is obviously a ploy to prevent some more radical solution from being imposed on the company, it’s also the right move. Our governments’ jobs are to serve the public interest. And to the extent that the government can adopt regulations that protect and serve users and customers, while also allowing for entrepreneurs and innovators like Zuckerberg and the people at Facebook to both enjoy the fruits of their labour and have the freedom to continue innovating, then this should be the first option.

Those regulations may be difficult to manage, and may require extensive cooperation between governments. But there are existing models, such as the United States’ Federal Communications Commission, that can be adapted to the new challenges of digital media. Any new regulations must also have teeth in order to be effective. For example, the recent FTC settlement with Facebook not only fined the company billions but, more importantly, also set up a system of oversight that exposes Zuckerberg and other executives to personal liability should they further violate privacy regulations.

Now oversight is only as powerful as the political will and technical capacity to enforce it, which means that regulators must remain vigilant about holding tech giants to account. If the Zuckerbergs of the tech industry display an unyielding pattern of cheating or evading the rules, then more drastic measures should be taken. But the idea of breaking up the tech giants being a foregone conclusion, rather than an option on the table, seems to serve politics more than the public interest.

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For example, undoing Facebook’s acquisitions of Instagram and WhatsApp might well decrease some of the company’s influence over users and over the social media market, but it could also prevent the company from implementing “end-to-end encryption” that could improve user privacy.

This benefit to users is not, of course, Facebook’s motivation here – the company sees this platform integration as an opportunity to increase user’s time on their apps and help their targeted ad strategy. But if the company’s profit motive leads it to make changes that benefit consumers, then regulators (who are currently contemplating a move to block this integration, in case they later decide to break apart the companies) would better serve the public by guiding the process in a way to maximise consumer benefit and minimise potential harm. Limits, for example, could be put on the extent to which Facebook will internally share user data across the platforms or restricting what the company or its third party clients are allowed to do with that data.

Again, such vigilance would be technically complicated, but the benefits to user privacy would present a social good to consumers, particularly as internet privacy remains a growing concern in the face of governments (both democratic and authoritarian) which are becoming increasingly skilled at surveillance and cyber-policing of their populations.

Facebook detractors have blamed the site for being coopted by authoritarian governments and other anti-democratic forces. Its experiment at providing free internet services in the Philippines most probably facilitated the winning campaign of Rodrigo Duterte. The platform has been used by a number of dictatorial regimes to spread pro-government propaganda and even hate speech in countries like Myanmar. All the more reason to break up Facebook and limit its activities, critics argue.

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But any vacuum left in the digital universe is likely to be filled with alternatives that only exacerbate the anti-democratic aspects of social media. It was recently revealed, for instance, that ToTok, a popular new WhatsApp-like messaging application recently launched in the Middle East, is literally a spy tool for the United Arab Emirates government.

The government of Vietnam, meanwhile, has had a hand in launching hundreds of local social media sites to compete with Facebook, figuring that these alternatives would be easier to control. Most notably, China has developed several alternatives to the American-based social media sites – Renren, Weibo, WeChat and more – that are required to conform to strict censorship laws and sometimes actively participate in mass surveillance on behalf of the Chinese government.

There’s a reason why Facebook has faced long-term blocks in China and a number of the world’s other ultra-oppressive regimes such as Iran and North Korea. Though the site can be manipulated, Facebook’s size and independence also grants it a level of autonomy and influence that makes it resistant to being fully coopted by authoritarians and threatening to dictators. Since 2011, when Facebook and other media sites were instrumental in the Arab Spring and subsequent mass movements, the site has temporarily been banned during periods of protests in countries such as Egypt, Iran, Pakistan, Sri Lanka, Sudan, Syria, Vietnam and Zimbabwe. If authoritarians fear the power of a website this much, that should give us pause to think about the social benefit it provides and incentivise our appointed and elected officials to find solutions that do not throw out the baby with the bathwater.

Facebook was created to satisfy a student demand for across-campus connection — a demand that was not being met by our university’s administration. After it launched in 2004, I waited a couple of weeks before signing up. At the time, I remembered Zuckerberg’s previous project, a “who’s hotter?” student photo comparison site called Facemash that had been shut down by the university for using student’s photos without their permission (and being kind of creepy). By the time I finally set up a Facebook account, I figured that it was not a scam or an illicit site, and if it was, at least plenty of people would be scammed alongside me.

Nearly 16 years later, both the appeal and the concerns I had back then over Facebook have been magnified to a global scale. And just as Harvard’s administration reined in the worst of undergraduate Mark Zuckerberg’s impulses, in turn setting the stage for him to launch his revolutionary social media site, it’s now up to our governments to responsibly monitor the ever-evolving landscape of Facebook and big tech.

They must do so in a way that eliminates the excesses of the tech giants but allows their social benefits — which range from confronting authoritarian regimes to simply connecting friends — to flourish. Let’s hope they’re up to the challenge.

That was the year the UK voted for Brexit, and the US voted for Trump, so yes, you could say that we saw major political changes. But Foroohar falls into the trap of seeking explanations for the status-quo-shaking votes of 2016 in technology, instead of asking what has changed in politics. There’s a whiff of disillusionment from somebody who thought technology was going to change everything for the better, and then doesn’t like the changes that actually happened.

Whether good or evil, Foroohar seems to ascribe supernatural powers to technology, or at least to the companies that create and provide it.

Let me backtrack for a moment. This is a highly readable and thoroughly researched book. In particular, it’s good to learn about the business side of Silicon Valley from somebody who has spent years reporting on the big companies whose businesses make our business their business. Foroohar even turned poacher for a while, working for a dotcom startup shortly before the first bubble burst at the beginning of this century, before going back to being gamekeeper at the Financial Times.

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It makes a refreshing change to look at the FAANGs — Facebook, Amazon, Apple, Netflix and Google — not as magical communities of wizards (good or evil) creating technology in some kind of other-worldly, post-material universe, but as companies that employ people, sell stuff and seek profits.

It’s useful to explore in what ways they’re just like the dominant industries of earlier eras, the railway or oil companies that formed monopolies, lobbied politicians for regulation that would hamper their competitors but not them, and discouraged their employees from organising for better lives.

It’s also useful to look at what’s different about Big Tech. Google’s chief economist, Hal Varian, describes how the importance of data to Silicon Valley rests on capturing relationships with consumers in digital form, enabling companies to both access and understand us on a mass scale. This lends itself to a new form of natural monopoly, as we gravitate to platforms that are more popular, concentrating data about us with a few big companies. This in turn advantages those companies, and the bigger they grow the more they can simply buy up the competition, as Facebook did to Instagram and WhatsApp.

But sometimes Foroohar’s description  of what’s changed sounds overblown, even mystical. “A smartphone’s powers are both unknowable and immensely powerful in the way that magic, by definition, is,” she asserts, contrasting the new tech to old tech such as cars, light bulbs and telephones. But hang on, isn’t electricity also “silent and invisible”, as she puts it? How many of us even today could explain how electricity is generated, how a landline telephone connects us to somebody many miles away, or even the workings of an internal combustion engine? And as for the financial structures that keep the amps flowing and the automobiles rolling, they are as opaque as they have always been.

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True, the business models of Google and Facebook, which provide free services to millions of users while getting their income from selling adverts, are not the same as railroads and oil companies, which made their money by selling goods and services to the people who used them. But they’re not utterly different from magazine publishers whose real profits came from advertisers, not the cover price.

In fact, the more I read, the more I felt that Big Tech is not as different from past industries as it would like us to believe, or as Foroohar appears to have believed until her recent disillusionment.

Interviewing the former Google Chief Ethics Officer, Tristan Harris, she tells us: “He saw something that most people ‘on the inside’ didn’t: that we had reached a tipping point in which the interests of the tech giants and the customers they supposedly served were no longer aligned.”

I have two problems with this revelation. First, the users of free services are not the customers. Remember the aphorism — if you’re not paying for the product, you are the product. We users of free internet platforms, apps and email are served only in the sense that a buffet is served: on a platter, pre-sorted for easier targeting by advertisers. We should never have expected our interests to be the priority of these platforms. Dinner tables are not designed for the comfort and happiness of the sandwiches.

And second, even from the point of view of the real customers, the ones paying to advertise to us or to access data about us, who would be naïve enough to assume that the customers’ interests are aligned with the interests of the sellers? True, most companies want satisfied customers who will keep coming back, but one side wants to turn a profit and the other to bag a bargain.

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“Their goals are not your goals,” says Harris, perhaps revealing more about the unworldliness of tech company insiders than about the constant nature of capitalism. Call me a cynical old Marxist, but nobody should be allowed to leave home before understanding that life is a constant process of negotiating conflicts of interest, and that no tech company is going to love you like your mother does.

Bringing us back to ‘2016: the year it all changed.’

Foroohar has already told us some of the history of how technology was designed to keep us online and interacting for as long as possible, using behaviourist theories of human psychology. She has also told us the story of her 10-year-old son, bamboozled into spending a lot of (her) money while playing FIFA Mobile, notching up $947.73 on one credit card bill. “I couldn’t help it!” he tells her, “… the game just kind of took over.”

“He described a kind of brain fog, a trance, in which he simply lost himself.”

—

So what changed in 2016?

Not the way Big Tech is involved in political campaigning as well as commercial advertising. Foroohar herself notes that politicians have been using data and marketing techniques for years, and that Facebook, Twitter and Google played important roles in the 2012 US presidential election (working for both sides). She could have pointed to UK examples too, as all major British political parties borrowed strategies, software and people from successful US campaigns.

What changed seems to be Foroohar’s own attitude to how Big Tech is used. Methods that Barack Obama and Hillary Clinton used became “dark”, “dirty” and “corrupt” when Donald Trump’s campaign uses them. She describes the Facebook investor Roger McNamee as being “shocked, as were most people, by the outcome of Brexit”. Which is a bizarre way to describe a majority vote on a high turnout. We can probably assume that more than 17 million British people were not shocked, though they might have been pleasantly surprised to find their Leave votes on the winning side.

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There is much to criticise about the way data and social media platforms are used in political campaigning. Microtargeting, in particular, allows political parties to evade arguing for principles that could unite a majority of voters, by instead sending different messages to different voters, tailoring their policies for niche audiences. More broadly, the reduction of politics to a marketing exercise, using the same tools as those that sell us soap or shiny gadgets, is a travesty of democracy. That’s why a few of us started raising the alarm well before 2016.

But because Foroohar points the finger at technology, instead of politics, her remedies are technical, not political. Ironically, they involve asking those same tech companies to control political messaging, and to take responsibility for political campaigns.

Much as it pains me, I agree with Mark Zuckerberg, who said (in a statement that Foroohar calls “truly stunning”): “I find the notion that people would only vote some way because they were tricked to be almost viscerally offensive.”

Foroohar takes seriously the challenge of Big Tech companies, and the monopolies they hold not just in services but — through data — in relationships with us, the public. She calls for more discussion by democratic governments about what can be done to defend the interests of citizens, rather than narrowly defined consumer rights. There is much to learn and discuss in this book.

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But as she looks to the same powerful companies to exert more control over how democracy works, I am reminded that her model for the pernicious influence of gadgets and games designed to bypass our rational selves is her 10-year-old son. Children don’t (so far) have the vote, precisely because we don’t expect them to have the necessary powers of judgment and self-control. We also don’t let them buy houses or drive cars, sign contracts or have their own credit cards (which is how Foroohar ended up with that $900 bill).

But we are not children. If we let ourselves be bamboozled into voting for something we don’t believe, that’s our responsibility. If politicians seek to address our fears and resentments instead of our hopes and our capacity to weigh up arguments, it’s those politicians who should be held to account, not the platforms they use to find and target us.

And we should know better than to blindly trust a big company to do what’s best for society, just because its services are free, its founders are cool, and it once had the motto, “Don’t Be Evil.”

Mindsets are an idea in educational psychology that have become fashionable in the past decade or so, mainly through the work of Professor Carol Dweck, a Stanford researcher. People with “fixed” mindsets, according to the theory, believe that abilities are fixed: if they aren’t good at, say, maths, they think “guess I’m just not good at maths”, and give up.

People with “growth” mindsets, on the other hand, think “I need to practise more at maths if I’m going to get good at it”. The really interesting claim, though, is that through the use of relatively minor interventions – things like praising a child for “working hard”, rather than for “being clever” – you can instil a growth mindset. And that doing so dramatically improves children’s outcomes at school and beyond.

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By Tom Chivers

I should, here, declare a conflict of interest, which is that I wrote a piece in 2017 that was sceptical of growth mindset, questioning whether the statistics behind it stand up. So I have publicly nailed my colours to the mast on this topic, and the laws of motivated scepticism dictate that I will therefore tend to find problems with the research. So, bear that in mind as you read on.

Growth mindset has become something of a phenomenon. When I wrote my piece in 2017, I reported that hundreds of British schools were using mindset interventions in class; things like the poster my son made. CBeebies helpfully informs you how to instil a growth mindset in your preschooler. The University of Portsmouth’s “Changing Mindsets” programme has been going since 2012 and has worked with thousands of pupils in years five and six “across Britain”. The Guardian this year called it “arguably the most popular psychological theory in education”.

It’s also hugely popular outside education: Google, Nasa, the British government and Bill Gates have all recommended it. New York Magazine, back in 2007, did a whole big feature about how you should never praise your kids for being clever, because if you did they’d turn out to be feckless weaklings who give up at the first hurdle (I paraphrase).

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But despite all this excitement, when other scientists tried to find what the original researchers found, they often struggled. Tim Bates of Edinburgh University was the first researcher I became aware of who was explicitly trying to replicate it. His three studies of 624 children aged between 10 and 12 found no effect: children’s IQ did not improve, nor did their educational attainment, or their ability to get over setbacks.

One large, preregistered study by David Yeager, a longtime collaborator of Dweck’s, looking at 12,000 ninth-graders (14- to 15-year-olds) in the US, has apparently found a link. It’s not published yet, and the preprint has – unusually – been taken down for revisions, but it’s still available here (PDF download link). It found apparently real, but tiny, impacts: if I’m reading it right, the “effect sizes” – the statistical measure of the impact – were all below 0.15. Effect sizes of less than 0.2, by convention, are not large enough to be considered “small”. According to the paper: “On a 4-point grade metric (‘A’ = 4.0, ‘B’ = 3.0, etc.), the average treatment effect was 0.03 grade points.”

(For comparison, I worked out an effect size in one of the studies in Dweck’s original 1998 paper, and found it was 1.6! That is huge.)

Another pair of meta-analyses found that the correlation between growth mindset and academic achievement, on a scale where 0 is “totally random, no link” and 1 is “perfect 100% correlation”, was 0.1, although it was a bit higher (0.19 and 0.15) for children and adolescents.

They also found that smaller studies – but not larger ones – were more likely to find results that were more positive than average, which is what you’d expect if many of the more negative results were quietly being hidden in desk drawers, a problem called “publication bias”.

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More amazingly, the meta-analysis found that mindset interventions only correlated significantly with academic achievement when “the manipulation check failed” – that is, the students’ mindset had not in fact changed. If your growth mindset intervention actually invokes a growth mindset, then it won’t help! That suggests that the data is, according to a psychologist friend, “very noisy and messy”.

And, last month, the Portsmouth “Changing Mindsets” programme finally reported, having undergone an independent assessment by the Educational Endowment Fund, which was supporting it with a £300,000 grant. It found: nothing.

That’s not quite how they write it up. They say that pupils “who received the growth mindset workshops made an average of two additional months’ progress in English and maths”, but that “the findings were not statistically significant” – i.e. there’s a strong possibility that they are pure fluke. When they gave teachers the growth mindset training, children actually did worse, by about the equivalent of two months’ progress – but again, non-significant, so very likely pure chance.

The effect sizes range from -0.11 to +0.18, hovering around the zero mark – so even if it turns out that they are real, they’re small. But under the usual conventions of scientific publishing, these are null results.

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For what it’s worth, my bet is that there is some small but non-zero effect of mindset interventions on learning, although I would not be at all surprised to learn that it’s entirely ineffective. But assuming it’s real, this tiny effect does not come for free.

The Portsmouth programme’s workshops cost about £400 per pupil per year, apparently. The average spend per English primary school pupil in 2017/18 was £4,700; for secondary school, £6,200. So we’re talking about spending 7% of the total money per pupil on mindset interventions. Other interventions, such as that studied in the Yeager paper, were cheaper. But the effects are so small that we need to think very carefully about whether they’re cost-effective.

There’s folk-wisdom here that we can all agree on and in fact is kind of obvious: if you believe that you can’t improve on your abilities, you won’t work to improve them. But we all know that practice makes you better at things. Still, most of us also think that practice only gets you so far. While we can all learn to play the violin, only some of us can play at Carnegie Hall. Most of us are both growth and fixed mindsets, in the end.

Anyway, we quietly ignored our son’s “homework”. The poster was forgotten. Hopefully his mindset will survive.

Others are potentially riskier: in a show of hands, all the candidates at the first Democratic candidates’ debate said they would extend cheap healthcare insurance rights to undocumented immigrants, something that Obamacare explicitly does not do. It could fly, but plainly it’s a change, and a risk.

My point is that the argument about leftism versus centrism is now over: the sands have shifted. The whole party has moved; of that there is no doubt. Even Joe Biden senses it, standing there at the second debate like an elderly fish out of water, eyes bulging, mouth gulping, waiting for the coup de grâce to be delivered.

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But here is the challenge for the party. If Biden is despatched, or when Buttigieg burns out and Beto O’Rourke completes a political implosion matched only in recent times by Jeb Bush, can there be an organising theme to the Democratic party; a theme that brings together its range of new positions and says to the nation ‘This is what we see America looking like, feeling like, in the decades to come’?

The party is facing a gulp-and-go-for-it moment much more significant than campaigning for tighter gun control or socialised healthcare for all, or free college or reparations for the descendants of slaves.

One top-tier candidate is offering a proper revolution, a wrenching and highly visible change from the politics of the last few decades. That candidate is Senator Elizabeth Warren, and revolution is a promise to destroy the cosy relationship between the Democrats and corporate America – all of it, but one section of it in particular. Elizabeth Warren is promising to blow up big tech.

To understand how subversive this is, you have to look at how interlinked have become the interests and the personnel of the Democratic party and the tech giants. The tech firms employ entire air-conditioned minibus-fulls of former Obama White House people. All the swankiest Martha’s Vineyard parties bring together Googlers and Facebookers and Cisco Systems nerds with the bigwigs of the Democratic party.

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When Uber was on the up and wanted to open up business in a new American city, it used to begin with a call to the mayor from David Plouffe, Obama’s campaign chief, who moved seamlessly to the ride-share company, and would begin his patter thus: “Sure love your city, I’m now working for Uber and would love to talk.”

Few Democrats failed to call back. These were pals talking to pals. Never mind the working hours of the drivers or the fate of unionised taxis. All hail, the match-up of the uber-rich tech trendies with their knowledge of, well, everything everyone does and thinks, and the Democrats. A match made in the cloud.

Even their enemies saw it as potentially mutually beneficial and genuinely threatening to all those who might oppose these forces. As a result, the geographer Joel Krotkin predicted last year that the post-Trump Democratic party was heading into a new political settlement:

“Oligarchical socialism allows for the current, ever-growing concentration of wealth and power in a few hands — notably tech and financial moguls — while seeking ways to ameliorate the reality of growing poverty, slowing social mobility and indebtedness. This will be achieved not by breaking up or targeting the oligarchs, which they would fight to the bitter end, but through the massive increase in state taxpayer support.”

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Krotkin saw the tech bosses using government spending – provided by the Democrats – as the only politically sustainable way of keeping the populist pitchforks away.

“Theoretically, the Democrats moving to the left should terrify the oligarchs. Yet increased income guarantees, nationalized health care, housing subsidies, rent control and free education could also help firms maintain a gig-oriented economy since these employers do not provide the basic benefits often offered by more traditional “evil” corporations in energy, manufacturing and basic business services.”

Elizabeth Warren will have none of this. Alone among the likely winning candidates – of Left and further Left – she is committed, expressly and repeatedly, to breaking up big tech. And in case the giants of the West Coast think it’s a shtick to placate rubes in flyover states, her campaign team have paid for a billboard that greets commuters leaving San Francisco for Menlo Park (home to Facebook), Mountain View (Google) and Sunnyvale (Apple). It reads: Break Up Big Tech. It has a number to call to join the team.

Her reasoning is simple but intensely discomforting for Democrats. Tech (and Wall St, and the health insurance industry) have too much of a hold over the US economy, and more importantly too much hold over democracy. She would refuse their money. She would not take their calls. She would do to Facebook what the Supreme Court did to Standard Oil in 1911.

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This would free up the nation to take decisions about taxation, about healthcare, about every area where, at the moment, lobbying clogs up the system. ‘Corrupts’ is the word she uses.

This is what change looks like. It is possible now because (as Bernie Sanders showed in 2016) in the age of social media, viable campaigns can be run without corporate money. But it is also useful – in the age of Trump – to have some demons upon whom critical eyes can focus. This could be a properly populist campaign about who runs America. The Democrats could come out for the little guy more convincingly with Warren than with any other candidate. A plan to reset the United States along more egalitarian lines is not to be sniffed at.

I know, President Trump calls her Pocahontas in honour of her ludicrous claim of native American heritage (she has the same claims as millions of other Americans) and she is lacking in humour and perhaps in likeability.

But Warren is a proper radical. She has a plan to strangle oligarchical socialism before it is born, a plan to combine a leftist agenda with an old-style concern for ordinary working people. Of all the Democrats standing this year, she feels like the most serious, the most focused, and I suspect the most threatening to America’s modern aristocrats.

They helped to lift almost a billion people out of extreme poverty between 1990 and 2010. And they drove the so-called ‘Great Enrichment’ – the period since the late 18th century in which real per capita income has risen by 3,000%.

In general, then, open markets are a boon. And the modern rhetoric of ‘free markets’ has had huge value: in the fight against communism in the 1970s and 1980s, in highlighting the dangers of modern socialism in states such as Venezuela, and in making the case for the modern international trading order.

But like all rhetoric, free market rhetoric is better used for put-downs than for policy. It often misses the complexities of modern tech-enabled markets, and underplays the role of the state in creating and sustaining markets. Moreover, it smuggles in a host of mistaken assumptions and ideas, with potentially dire longer-term consequences. Markets are not merely mathematical constructs; they have social and cultural functions as well as economic ones. And they are all different – some very different indeed, from others.

In my recent book on Adam Smith, and in a new essay in Britain beyond Brexit by the 2020 Conservatives, I address these issues directly. What matters is not the rhetoric of free markets, but what that rhetoric often, paradoxically, impedes: the reality of effective competition. More effective competition requires better ways to think about markets, and new means to tackle the lurking monopolies of the tech giants.

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It also means we need to bust the myths.

Myth 1: the truth is that in the modern world there are very few, if any, entirely free markets – markets that do not rely on any external rules or regulations at all. Even the most devout free-market theorists recognise that property rights need to be clear, public and enforceable, and that generally means law, police, courts and other institutions of the state. Some will actively argue for patent, copyright and other laws protecting intellectual property, but these are themselves significant infringements on market freedoms.

This catalogue merely scratches the surface. In fact, there are many things that generally cannot be legally bought and sold at all: people, body parts, hard drugs, votes, court decisions, public qualifications, the outcome of sporting contests. Then there are items that in many countries can only be sold under licence: guns, alcohol, and many medicines.

There are regulations on who is allowed to work: on child labour, on immigration, on the professions and the qualifications needed to enter them. There are regulations on organisational form: companies, associations, partnerships, mutuals, cooperatives, employee-owned firms, charities. There are entry requirements for some industries, such as tests on ownership, capital and track record in banking.

And then there are rules on product safety, on weights and measures and on conditions of trade, such as the right to a refund. The global foreign exchange markets are often thought of as the nearest thing to a perfectly free market. It is true that they are astonishingly large and astonishingly liquid. The Bank for International Settlements estimated, for example, that trading averaged $5.1 trillion a day in April 2016. Yet they are also very closely bound by rules and regulations.

Myth 2 concerns how markets function. Markets are far from identical to each other, and do not all operate to a single equilibrating mechanism. Markets for food products are very different from asset markets; financial markets differ radically from labour markets; markets in primary goods are different from secondary or resale markets in those goods.

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To take a few examples: in product markets, buyers know fairly precisely what they are getting in advance. This is not the case in labour markets, despite the best efforts of recruitment consultants. In financial markets, the edge for participants generally lies not in serving some need in the real economy, but in knowing what their competitors are doing and second-guessing them.

The British housing market has evolved into a form of proxy savings vehicle in which price inflation, far from being despised, is actively welcomed by owners keen to see their properties increase in value. The owners’ reliance on mortgage finance makes them preternaturally sensitive to interest-rate changes, conditioning both domestic politics and central bank monetary policy. The German housing market, by contrast, is dominated by rental and leasehold properties, reducing both political tolerance of and economic exposure to house price inflation.

Myth 3 is about culture. Markets shape our lives, our homes, our possessions – even the music we listen to. And yet, they do much more that this. They shape our expectations of others, our manners and our capacity to trust, and those things in turn shape them.

Markets are not merely antiseptic objects of expert study, or neutral tools of public policy. The people who trade in them are not economic automata operating purely in accordance with financial incentives. On the contrary, markets are subject to ‘animal spirits’. These are the human passions of confidence or pessimism in the face of the unknown, as well as the human instinct to be moved by stories and narratives, and to react to unfairness or corruption.

In sum, markets constitute a created, constructed order. Of course, foolish government interventions can undermine or even destroy markets. But far from being intrinsically opposed, states and markets rely on and benefit from each other. Indeed, they rely on each other more and more today, as competition increases pressure on public resources, private property rights become more contested, and globalisation drives the need for enforceable international standards.

The old bromide that “the private sector makes the money and the public sector spends it” misses a deeper and more interesting truth: that both require each other to function effectively. To take a recent example: the Space Industry Act 2018 sets out law to enable a person or company to put a private satellite in space from a UK launch site, and to cap their liability. The result is expected to be a new era of British space entrepreneurship — all made possible by an Act of Parliament.

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What does this mean? As an ideology, neoliberalism is dead. Meanwhile, the debate we as a society need to have – the debate about what markets are and should be for, about the limitations of the idea of ‘market failure’ and the role of the state – has been left by the wayside.

Modern technology has brought with it rapidly increasing complexity in markets, as choices proliferate for consumers. Public attention has rightly focused so far on the use of intra-company transfer pricing and other devices to reduce tax payments to a minimum, and on escalating concerns about privacy and the manipulation of public opinion. But we also need to think again about competition policy.

Companies such as Google, Apple and Facebook enjoy gigantic and increasing asymmetries of power and information versus the individual consumer. These asymmetries allow them the scope to exploit their consumers, both in specific segments, in groups, or individually in ways that run counter to established norms of fair dealing and justice.

These businesses are modern titans which bestride their markets as completely as did the old oil and railway trusts. They are hard for government or regulators to scrutinise, because they are closed systems. But at the same time their status as networks means the normal armoury of regulatory tools against market monopoly or oligopoly is far less effective.

In due course, the world will need to have a deep debate about the astonishing power, and the astonishing absence of accountability, of the technology platforms. But in the meantime, we can look at competition policy. More transparency and disclosure are a prerequisite in this regard, yet markets all being different from one another, different levers will be needed to achieve it.

The Standard Oil Company was broken up after 1911 under the Sherman Act into a host of smaller (but still enormous) oil and gas companies, including what would become Exxon, Chevron, Conoco, Mobil, Amoco and Sohio (the latter two later bought by BP).

Few if any people seriously believe that Google could be effectively broken up into different regional or business units, or that to do so would generate economic value. But that approach might work better for Amazon, with a split between its marketplace and product provider functions, and national or regional services working from a common back office but competing against each other in the marketplace.

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As for Google and Facebook, we can lift an idea developed by the father of economics and social psychology, Adam Smith. Human shoppers can be supported by new algorithmic consumers – that is, by pieces of software able to compare and contrast different offers in the digital marketplace and make choices on the human’s behalf.

Imagine trying to choose the best home insurance in such a world, instead of poring for hours over dozens of sites and hundreds of products, or using potentially costly price-comparison sites. You could have your personal online assistant do it for you, in its own time and using networked computational power.

Over time, such online assistants are likely to become commonplace; still more so if data comes to be seen as a public good created by individuals, rather than simply accumulated by companies. These digital agents could, in principle, make automatic purchases subject to individual guidelines, negotiate transactions, and even build coalitions with other digital consumers automatically in order to get keener prices or elicit new products.

There is no reason why an array of new businesses should not emerge to enable this levelling of the playing field to take place. They will require coordinated regulatory intervention, but there is no reason to think that any of this is technically, economically or politically impossible.

These ideas come from recognising the limitations of free-market rhetoric, grasping the possibilities offered by a really deep understanding of markets, and pushing hard for more, and more effective, competition. They can potentially set the new trading and trust-busting standards of the digital future.

Then, with impeccable timing, on Tuesday, 14 May, the National Labor Relations Board released a month-old letter finding that Uber drivers are not legally employed by the company and are therefore ineligible for federal protection for collective bargaining. The company’s fortunes turned on a dime, the share price was in free-fall no more, and as of this writing, its value is above where it began. Tens of billions of dollars hinged on that favourable regulatory decision.

Back in 2012, when Facebook’s IPO started badly, there was an epidemic of hand-wringing about the gullibility of financial markets in valuing big-name tech stocks. But the situation was easily remedied – $1 billion was all it took to shut down the competition from upstart Instagram and seal Facebook’s domination of worldwide social media, to the tune of over $50 billion a year of revenue.

Coming hot on the heels of global euphoria about the liberating power of social media in the Arab Spring, Facebook looked like that rarest of species, the company that does well by doing good. With the floatation the public was offered a piece of the action.

But the value in Facebook turned out not to come from global emancipation but from its opposite – global dominance of the social networking market. It is a service that claims to foster human connection and interaction, but for a price – and that price is one that users, and governments, are increasingly unwilling to pay. There seems to be a disconnect between Facebook’s value to investors and its value to society – they push and pull in different directions. Uber is in a similar place now.

Uber, like Facebook, experienced a long train of popular congratulation as the globally disruptive innovator shaking the dust out of urban taxi markets. It offered to revolutionise local transportation, and investors couldn’t wait to get involved. Uber raised $11.5 billion through nearly 20 funding rounds, ultimately valuing the company at $68 billion.

But a reckoning is coming. As indeed it is for Facebook.

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By Carl Miller

The “techlash” is highlighting the degree to which tech’s business models consist of running roughshod over everyone else’s privacy, security, democracy, environment, and livelihoods, and cashing out in spectacular Wall Street fashion before the public truly understands what hit them and how much autonomy they’ve lost.

Uber is no different – though its model has its own peculiar quirks. The platform’s value depends on its ability to charge what it wants to riders, whilst paying as little as possible to its drivers. It classifies the drivers as independent contractors, so as to escape adhering to labour standards, avoid contributing to social insurance, and enabling it to offload the cost of capacity it doesn’t use. It relies on there being as many drivers logged on at peak times as possible – for customer convenience – without having to pay for their availability. The drivers bear the risk of a quiet night.

Uber, and other gig economy ‘platforms’ have been celebrated as creating venues for individual entrepreneurship, a new path for upward mobility. In the case of Uber this seems a stretch. The driver may differentiate the service offered by providing riders with bottles of water, ambient music, good conversation, or no conversation, according to tastes, but the most they can hope for is a higher rating, which does not automatically translate into more rides and revenue. Rather, high ratings are needed to maintain Uber’s strict minimum to stay on the platform. It’s more like the scores of Roman scribes, dutifully copying down set texts, being told that they are the authors of history – Uber drivers control very little of their individual “enterprises”.

Alex Rosenblat’s book Uberland details how Uber’s business model works: bonus-based driver compensation directs drivers to work where and when Uber needs them, whilst penalising them for time spent logged into any other ridesharing platform. The bonus-based pay schedule closes off any other opportunities they might have: if they log-off before they earn the bonus, then the whole shift will turn out not to have been worthwhile. Even with the bonus they just barely break even.

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Uber has, for the most part, escaped regulatory intervention to force re-classification of drivers as its own employees, which would compel them to absorb some of the risks that drivers currently bear. Just recently, both the Department of Labor and the National Labor Relations Board issued opinions highly favourable to gig economy platforms, holding that such platforms don’t exercise sufficient control over drivers to qualify as their employers.

The NLRB’s general counsel stated: “The drivers had… complete control of their cars and work schedules, together with freedom to choose login locations and to work for competitors of Uber.”

As Rosenblat and other scholars’ work has shown, this statement is empirically false – the fact that Uber drivers can operate outside the bounds of what its compensation system incentivises is a dead letter if they can’t make a living by doing so. The UK Court of Appeals also found that the categorisation of drivers as independent contractors engages a “high degree of fiction”.

Meanwhile, the company has also challenged its drivers’ right to collective bargaining even outside federal protection. When Seattle tried to grant Uber workers that power, the city was sued by the Chamber of Commerce at Uber’s behest. It argued that such a union of independent contractors would violate the US antitrust laws.

The federal antitrust agencies weighed in on Uber’s side, and a federal appeals court agreed. As a result, the ordinance was amended to exclude collective bargaining over wages. But Uber continues to claim that the whole concept of driver collective bargaining on any matter violates the federal antitrust laws.

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The irony seems lost on Uber that while it has used antitrust regulation against its drivers, it has managed to avoid any antitrust scrutiny on its own account, even as it fixes prices and wages for these supposedly independent businesses. A private class action against Uber on those grounds was set to go to trial in New York in 2016, but the company successfully sent the case to arbitration, where it hasn’t been heard from since.

No public enforcer has yet alleged that Uber’s non-employment of its drivers constitutes grounds for price-fixing antitrust liability. In fact, if anything, antitrust enforcers have viewed Uber’s business model as introducing much needed competition into urban taxi markets, and have encouraged local officials not to question it. So, between lax labour law and lax antitrust, Uber is able to operate a business model that depends on controlling drivers without being responsible to them as an employer.

In this way, Uber’s profitability hinges on continued regulatory forbearance, as the market response to the NLRB letter showed. Far from being an innovative company challenging comfortable monopolies hiding behind state power, Uber is itself dependent on government regulators for its continued success. The intricacies of labour law and antitrust law, developed in a time before the platform economy, continue to be debated. But at the heart of the controversy is the question of who should have the power to determine drivers’ working conditions – the government, through employment law, drivers themselves, through union participation, or – as now – Uber.

But even with the deferential treatment it receives from regulators, Uber is operating at an enormous loss and has no immediate way of reversing the hemorrhage. Given its cheap ride strategy, it doesn’t generate enough operating revenue to both pay drivers enough to stay on the platform in the long run and generate a return for shareholders. It is already trying to increase the prices its habitual customers are used to, but that has not yet come near to solving its basic cashflow problem.

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The fact that it has enjoyed privileged access to investors and their wealth is also a big part of the company’s success at acquiring market share at the expense of legacy taxi companies. At least so far, these investors have viewed Uber’s aggressive pricing and the trampling of local regulations as likely to pay off in the long run, with a dominant market share and significant pricing power, or through the ability to phase drivers out entirely and move to full automation.

For most of the big-name tech IPOs, the companies aren’t looking primarily to raise cash. That’s because the public equity market has transformed from a source of capital with which to finance investment, expansion, and growth, into a means by which insider shareholders can diversify their risk: an IPO gives founders and early venture capital backers the big exit they have been waiting for, and a way to cash-in before the true costs of the business model catch up with them.

That dynamic is certainly at play in Uber’s case: should regulators go the other way on the employee/contractor categorisation – which the UK Supreme Court may well do if Uber loses its appeal – then it is useful to have already cleared a way out for investors. In the meantime, investors can take advantage of market optimism (and well-timed letters of support from the US regulators). Unusually, Uber also actually needs the money. In the real world, as opposed to in the purely digital realm, the runway to world dominance is a little rougher, though no less assured as long as investors are willing to strap down for the bumpy ride.

But even though it needs the money, Uber has not been willing to cede control, nor has it had to. The typical Silicon Valley IPO retains total control over operations among the insiders through a dual-class share structure: the insiders retain full voting power in their ‘old’ stock, and the ‘new’ stock they sell on the public markets comes with no voting rights. No matter how much of the company is ultimately made available to the public, no outside investors can ever challenge the founders’ control over their company. The company is still run in the interests of shareholders – and often at odds with the interests of society – but it is a sub-set of privileged, insider shareholders, whose interests are even less aligned with the average public-facing pension fund and institutional shareholder.

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For as long as it remains in need of infusions of cash, Uber’s management and core group of founders may not be able to maintain the complete independence enjoyed by other tech behemoths such as Facebook, Amazon, and Google. Otherwise, it would need to raise fares, potentially curtail its geographic coverage, and lower its world-bestriding ambitions for autonomous vehicles. It probably has not yet tested the patience of late-coming partners such as Softbank and the Saudi Arabian Investment Authority, if only because these investors aren’t necessarily seeking the highest return, but rather American companies where they can stash their wealth. Others might not be so forgiving.

Uber’s long-term viability as a going concern will depend on whether the regulatory rope-a-dope it has played to date is permitted to continue. The recent backlash in the form of drivers’ strikes and policy-makers worried about the ability of gig economy platforms to exercise control while evading responsibility may also start to put pressure on the company. Perhaps they will finally constrict the legal grey area where it has been permitted to grow with a great deal of deference and little in the way of limits.

But in the meantime, the IPO has simply confirmed that the real Silicon Valley business model is the concentration of wealth and power at the top. And it reminds us there are few protections for those who rely on the permission of powerful gatekeepers to earn a living.

Indeed, one of those rulers, the villainous Queen Cersei, puts on a hypocritical show of piety – while empowering the Sparrows to move against her rivals at court. Too late, Cersei realises she has created a monster she can’t control and she too falls victim to its zealotry.

It’s a marvellous study in power politics, in particular the cluelessness of the high-and-mighty in the face of a grassroots revolution they didn’t see coming.

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First broadcast in the Spring of 2015, the storyline gained a special saliency in the UK – where the Corbynite takeover of the Labour Party was about to take place. It helped that the leader of the Sparrows, ‘the High Sparrow’, bore such a resemblance to Jeremy Corbyn. Jonathan Pryce was rightly praised for his portrayal of the role – a subtle but chilling combination of personal humility and swivel-eyed fanaticism.

The following year, it was America’s turn – with the Trumpian takeover of the Republican Party. On this occasion there was rather less in the way of personal humility, but once again a ruling establishment was overwhelmed by a radicalised rank-and-file.

The latest example of this phenomenon comes not from politics, but business – specifically the tech industry.

In an in-depth report for Fortune, Beth Kowitt documents the growing power of employee activism within Google and other big tech companies:

“As the so-called techlash has cast a pall over the entire sector, organized employee pushback is slowly becoming part of the landscape: Amazon workers are demanding more action from the company on battling climate change; at Microsoft, employees say they don’t want to build technology for warfare…

“But nowhere has the furor been as loud, as public, and as insistent as it has been at Google. That’s no surprise to Silicon Valley insiders, who say Google was purpose-built to amplify employee voices. With its ‘Don’t be evil’ mantra, Google was a central player in creating the rosy optimism of the tech boom.”

We’re not talking about conventional industrial action here. This is a highly skilled, well-paid workforce. In Silicon Valley, company employees are the cosseted insiders – with a lot less to personally complain about than the outsourced workforce.

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However, this is about a lot more than pay and conditions:

“…Silicon Valley [is] a place that has long worshipped at the altar of meritocracy and utopian techno-futurism. But in the past few years, the industry’s de facto mission statement—change the world (and make money doing it!)—has been called into question as examples of tech’s destructive power multiply, from election interference to toxicity on social media platforms to privacy breaches to tech addiction. No one is closer to tech’s growing might, as well as its ethical quandaries, than the employees who help create it. “

Rather like the characters in the Mitchell and Webb “Nazis” sketch, tech employees are taking a look at themselves and asking “are we the baddies?”.

For a long time, a rebellious, anti-establishment culture was not only tolerated but encouraged by the tech companies. If you’re in the business of disrupting entire industries by developing breakthrough products then what you need is an insurgent force of t-shirted mavericks, not an army of grey-suited corporate clones.

But the incentives are changing. The disruptors have become the new establishment – and thus want to keep a lid on their own tradition of dissent. However, this comes an awkward time. The fresh talent these companies need to recruit and retain is no longer drawn from the devil-may-care individualists of Generation X, but from the Millennial and Post-millennial generations. This lot seek meaning as well as money from their careers – and what they find meaningful is strongly influenced by the orthodoxies of the middle-class Left.

These may be the days of the ‘woke corporation’, when big companies seek to associate themselves with progressive causes, in the hope their own corporate sins go unnoticed. However, media-savvy Millennials aren’t so easily fooled. It doesn’t matter how many millions a big company spends on diversity training and other good works, its activist employees won’t be happy if it’s also chasing billions from defence contracts.

Unlike the more downtrodden kind of worker, it’s hard to threaten alpha-geeks with unemployment. The big tech companies are the kings of ‘clustering’ – i.e. the geographical concentration of an industry in a few high profile, urban centres. This gives employers access to the widest possible pool of talent, but it also maximises options for talented employees.

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Big tech, therefore, is in a tight spot – dependent on a footloose workforce (or should that be a wokeforce?) that can afford to move on should their employers not meet their exacting ethical standards.

On the other hand, it is quite funny. The tech lords, having exploited their own unconventional image, and pandered to political correctness, now find themselves on the receiving end of the radicalism they once used as a weapon. Indeed, the Sparrows of the tech industry might just prove to be the most effective means of keeping its power in check:

Knowledge workers of the world unite, you have nothing to lose but your troubled consciences!

1. Refit our democracy for the digital age

One of the few things that unites the majority of the electorate is the idea that democracy isn’t working. People on both sides of the Brexit fence feel betrayed and ignored, and their overwhelming sense is that democracy did not do what it was supposed to. Voters, some say, didn’t know the facts. Parliament, say others, haven’t listened to the people. Ultimately, the whole thing exposed differences that government has been unable to reconcile.

We need a new wave of politicians who are determined to change democracy. They need to look across the globe of how to weave technology and democracy together to give people a clearer idea of the facts, as well as new opportunities with which to participate in decisions, and to bring to the fore consensus, rather than division.

New online political spaces with completely different kinds of plumbing to Twitter or Facebook are possible. As people propose solutions and respond to them, the ones that are seen are the ones not only your group, but the majorities of other groups can find agreement in as well. Digital spaces that can surface consensus are ones that, slowly but surely, politicians can begin weaving into decisions.

2. Fund the police to fight crime online

Behind the very visible problems with our political processes are those kept well  hidden. None is more serious or neglected than cybercrime.

The way crime happens has changed enormously since the turn of the century. Half of crime now happens through the internet, at least in part through romance scams, online fraud, ransomeware or prodigious amounts of intellectual property theft.

Crime in digital form poses a particular and extremely difficult challenge to our police force. In investigation after investigation, the police find the victims of crime in one country, the evidence in another, and the perpetrators in a third, fourth and fifth. Crime on the internet travels like the wind across borders. Much less able to cross those borders are the law enforcement officers trying to stop it.

The moment crime began to migrate online, everyone thought it was falling. In fact, it was transferring to online venues most people didn’t know existed. That has produced a dangerous and lingering political fiction: that it’s possible to cut crime and police budgets at the same time. We have 21,000 fewer officers than in 2010, and budgets are now down by a fifth.

Our government must commit to a complete overhaul of the police system and stump up enough money to fund it. Crime has changed. The police must do the same.

3. Dismantle the digital monopolies

A tiny number of software giants have eaten entire sectors of the economy. Today’s dominant media companies – Spotify and iTunes – are software companies, and so are the world’s largest advertising (Google, Facebook), telecoms (Skype), recruiting (LinkedIn), taxi (Uber) and payments (PayPal) firms.

They have been swept to the top by a new commercial logic, based on network effects and enormous amounts of data. The largest networks create the most data, which makes those networks smarter and better, causing more people to use them, which produces even more data, and on and on it goes. Normal capitalism creates a field of competitors. This logic has created a tiny number of dominant winners that no-one can compete with.

Put bluntly, capitalism is broken. Dismantling the monopolies of the digital age has to be central to the agenda of any government that cares about free markets and opening up competition, consumer rights, and challenging the system’s vast concentration of power and control.

4. Take information warfare seriously

No-one can claim not to have been dimly aware that something was happening in the run up to the EU referendum. During the election campaign of Donald Trump, the alarm bells grew a little louder. A strange new kind of ‘information warfare’ has broken out as the Internet and social media are weaponised to interfere in elections, debates and the general politics of liberal democracies. Given that Brexit will be swiftly followed by a general election, we need to take the threat seriously.

Much like cybercrime or the new species of monopoly, the challenge information warfare poses undercuts the way that we protect ourselves. Again, the solution begins with political will. Our security apparatus needs to be reformed to monitor campaigns and detect these threats. The security treaties we’ve signed up to, especially NATO, need to be changed to recognise that there are some forms of attack that really can happen through Tweets, memes and viral posts. Authorities need to be encouraged by politicians to name, sanction and respond to at least the worst cases of information warfare, as and when they happen.

5. Speed up law-making

My last pledge is the most important but also the most difficult to deliver. The Government must move more quickly. Pledges will mean nothing if they remain pledges. They have to become law. It can take years to pass a parliamentary bill into law, and for good reason. They need to be debated and scrutinised line by line. After amendments are passed, those need to be scrutinised too.

Yet, the looming threats facing politics over the coming decade are now changing as quickly as the technologies that are woven through them. Politics must contend with, and of course govern, a reality that is accelerating all around them.

This issue will be at the heart of many of the most serious problems in future politics. It’ll cover everything from your rights in the workplace to your experience as a consumer, the health of a free press to the health of the environment.

How do you make the law move faster without sacrificing oversight? I don’t know the answer, as I don’t think anyone does yet. But anyone who takes this question seriously – who recognises that this is the existential question not just of political ideology but the relevance of politics itself – well, they have my vote.

The early internet was a pretty innocent undertaking. Its architects were similarly-minded, collegial academics scattered across a range of elite universities and defence science laboratories. They knew that computers needed a common language, a common series of rules, if they were ever going to be able to talk to each other. There were a number of competing visions, but one protocol eventually won. It emerged to define the internet: called TCP/IP.

Transfer Control Protocol/ Internet Protocol. Even its name is unimaginably boring. Hardly anyone knows how the protocol works, and the vast majority of people who rely on it every day don’t know that it exists. But this tangle of code is undoubtedly more important than any law, any charter or covenant, for enshrining the rights, at least online, that you enjoy today. Just a series of rules, TCP/IP was written into the way the internet worked, and it reflected that innocent time.

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The internet, TCP/IP says, must be free to use. It is a network that any computer, anywhere can join. All the data that passes through the internet, it says, must be treated equally, and computers are entirely disinterested about what that data is. And because of the way that it works, the internet would have no reigning authority or centre. No-one would be – really could be – in charge of it. It was a vision for a free-wheeling, open, democratic network of networks.

As the decades have passed, however, the internet has grown beyond the wildest, most unguarded imaginations of the people who first built it. From an innocent network of researchers, it is now more likely to be seen as a playground for hate criminals, information warfare officers and organised cybercriminals.

And yet TCP/IP has maintained its innocent outlook, still letting anyone join, still treating all data as equal still, essentially, trusting people to be who they say they are. Its architects might have imagined the internet as an escape from the tawdry geo-political struggles that blighted offline life, but it is now a key battleground where those very conflicts are being fought.

As the internet has fallen from its state of innocence, protocols – those powerful, forgotten, mysterious things – are now part of that struggle. There is now a competitor to TCP/IP, a very different kind of protocol, that has been rising in popularity. 

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It is called Digital Object Architecture, or, another acronym, DOA. Created in the 1990s, by one of the original inventors of the internet, Bob Kahn, DOA has another way of managing information. Unlike TCP/IP, data isn’t anonymous. Everything on the internet gets its own, unchanging digital fingerprint, whether a device, document or a person. Everything gets an identity number that doesn’t change.

DOA has been used to manage libraries and online academic repositories. But it is now being proposed to make the internet more secure. Forged identity is one of the main reasons crime is so easy to commit on the internet, and DOA would likely help change that. A hacker would struggle to impersonate you, because they wouldn’t have your unique identifier. Likewise, a fraudster would struggle to pretend to be your bank. Your financial records, your medical data, your social media profile – everything could be tagged to ensure that only certain people could look at it. It would weave identity and security into the fundamental way that the internet works.

For its backers, however, DOA may solve an even bigger problem than cybercrime. The internet, as it stands, has always been very difficult for states to control. In order to work, huge databases may have to be built, where every digital object is uniquely tagged, and where information is added, tracked and queried. Whomever controls the DOA registry becomes the centralised gatekeeper to all the information, resources and devices on the internet. It would create an unprecedented concentration of power to control and manage online life. And who would probably own the DOA registries? Governments. 

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There are reports – confirmed and unconfirmed – that DOA has begun to be rolled out. China may have been first in 2014. In May 2016, the Russian Minister of Communications Nikolay Nikiforov, said “Russia is interested in designing alternative ways of addressing on the internet, such as the DONA [an authority to implement DOA]”. On 16 October 2016 South Africa signed an agreement to use DOA. It’s not clear who else is using it, and that, of course, is part of the problem.

Human rights always exist in tension with one another, and these protocols that run the internet are at the very centre of one of the most important of these tensions. It’s a lot harder for any State to control an internet governed by TCP/IP, but it’s also easier for criminals to flourish. DOA would likely make cybercrime more difficult, but the price would be that governments would have a level of control over digital life that at the moment they simply do not have.

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This is a big deal. Different governments will take different views on the right protocols for the future. Western governments will probably give DOA a wide berth, whilst others have already adopted it. If that’s the case, we might be heading towards the ‘splinternet’ – a fracturing in the basic way that the internet works across geo-political divides. Some countries will use one protocol, and others another.

But underlying any kind of geo-political fracture in the internet is, for me, a more fundamental concern. Historically, human rights need to be protected by more than governments. They need high public visibility and the aggressive, vocal advocacy of civic society.

Internet protocols may become one of the most important battlegrounds where we fight for our online rights, freedoms and responsibilities. But surrounded by an alphabet soup of international agencies, legalese and impenetrable technical verbiage, they are difficult to explain, to understand, to raise any kind of awareness about. For all but a small handful, they are simply too impenetrable and boring to feel angry about. And that is a huge, huge danger.

Last week I wrote about the fury provoked by Amazon’s search for a second HQ – and the special favours and subsidies offered by cities and states vying to play host. It was, said the critics, a grotesque example of corporate welfare.

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Of course, Amazon is not the only tech giant to come under political pressure – whether at home or abroad.

But what does it all amount to? Will we see concerns about the power and practices of the FAANGs turn into something like the antitrust reforms of the early 20th century?

In a convincingly pessimistic article for Vanity Fair, William D Cohan doesn’t think so:

“On Wall Street, however, bankers are betting that Americans don’t really care about reining in Silicon Valley—and that Congress, for the most part, doesn’t really care, either.”

Well, the bankers of Wall Street should know all about the failure of government to properly regulate an out-of-control industry. They certainly recognise a weakness of political will when they see it.

Cohan mentions a conversation he had with a Wall Street executive whose job was to ascertain the likelihood of meaningful regulation for the tech sector:

“His point was that there still is no natural, large constituency for regulating any of the major tech companies that dominate portions of the U.S. economy. What legislators and aides were conveying, this person told me, was that they believed the outrage was limited… the congressional staffers told my source, ‘We’re not getting calls on this. Nobody’s marching on Washington because they’re upset about Facebook. When we go home to our districts, nobody’s showing up in our town halls and complaining about Instagram or complaining about Amazon.’”

So, the reason why the politicians aren’t really bothered is because we’re not. But why don’t we care?

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Cohan points out that tech companies are hard to regulate because many of the services they provide are free to the public. How does one assess the harm done by a monopoly when, for most people, there is literally no price to pay?

This also explains the lack of public anger. Unlike, say, a utility company, there is no bill waiting on the doormat at the end of each quarter, no final demand for payment, no risk of disconnection. And even with the tech products one does have to pay for, there are usually cheaper options to switch to – options which include going more or less tech free. To a considerable extent these are services that we want rather than need to consume.

Of course, in a broader sense, there is a price to be paid for the growing dominance of the tech companies: the loss of shops in the High Street; the decline of print media; the control and exploitation of personal data; the disruption caused by platform capitalism on independent businesses in a variety of sectors from taxis to tourism; the impact of the distraction economy on economic productivity; the effect of social media on mental health; one could go on.

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However, these are second and third order effects – things that the public may lament, but which they don’t link directly to the services that FAANGs provide to them. Or, when we do make the link, we have to admit that we’re actively complicit – regretting the demise of the local bookshop while ordering books from you-know-who.

It’s hard to get angry at businesses whose power is based on our all-too-eager cooperation.

But this is precisely why politicians need to take the lead. The whole point of representative democracy is to mobilise the diffuse, and therefore individually powerless, interests of the public, against the concentrated and highly-motivated interests of powerful corporations. We need saving from their – and our – our worst instincts.

‘Vulture capitalism’ is a play on the words ‘venture capital’. It refers to practices like the purchase and asset-stripping of an ailing company. Nasty stuff, but a bigger threat is ‘vampire capitalism’ – which is also extractive, but much more attractive. After all, the most dangerous kind of predator is not one that overpowers its prey, but charms it.

The FAANGs are not wholly villainous. Much of what they do is impressive and occasionally life-enhancing. Nevertheless, we need politicians to keep them in check. This might not be the time for sharpened stakes, but a bit of garlic wouldn’t go amiss.

Today, the $740 billion former bookseller’s tentacles stretch far beyond e-commerce: into bricks-and-mortar retailing, air cargo, cloud computing and AI – technologies that are, or will become, the backbone of countries such as the USA and the UK. It has combined traditional market dominating techniques with an unrivalled understanding of its customers’ online behaviour, to awesome effect. And concern about monopolistic behaviour is increasingly being voiced.

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Everyone used to understand what a monopoly was, and nearly everyone, other than monopolists themselves, understood that it represented the failure of capitalism rather than its apex. When one company dominates a market then the good things that come from competition between producers, such as quality, variety and innovation, are likely to come to an end. Without competition, there’s little incentive to do any of these expensive things, and both consumers and the wider economy loses out.

Then in the 1970s a new idea emerged from America’s law schools that turned this thinking on its head. The size of the company no longer mattered: the only criterion by which it should be judged, or a takeover blocked, was consumer welfare. To put it crudely, a firm like Amazon could be as big as it wanted as long as it kept prices low. Today to be concerned about the ‘bigness’ of companies is to go back to the popularist goals of the past, argues Professor Daniel Crane of the University of Michigan.

By the second decade of the 21st century, that reinterpretation of the law has had – if you are cynical – its intended effect. We are living in a new age of concentration, where a few corporate giants like Amazon dominate the economy. The ratio between the cost of a good or service and its selling price in the wider economy – often seen as evidence of market dominance – has risen in advanced economies by 43% since the 1980s.  The combined revenue of the tech giants – Alphabet, Amazon, Apple, Facebook and Microsoft – is larger than the GDP of more than 90% of the world’s nations. Start-ups are even founded with the sole purpose of being acquired by one of these Big Five.

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Then, in 2016, an unknown law student decided to dust down some forgotten textbooks hidden away on the top floor of her university library. Early in 2017, Lina Khan published ‘Amazon’s Antitrust Paradox’ in the Yale Law Journal. The one word that Big Tech didn’t want to see in the public conversation – monopoly – was back, and at the worst moment. For the first time, Big Tech was caught in a bipartisan squeeze in Congress as real political pressure built up over the abuse of customer data and fake news.

Khan’s argument was simple. Once laws that were designed to prevent one company controlling a market had been pushed to one side, companies like Amazon were able to gain market dominance through anticompetitive practices. This gave them control of the infrastructure that many businesses and other parts of the economy depend on. Khan suggests that either Amazon should be regulated more forcefully to ensure competition – or that it should be recognised as a natural monopoly like the water or gas supply, and run as a publicity utility.

Now, Amazon, Google and the other modern monopolies have a battle on their hands. Worryingly, it looks like they have a formidable range of weapons to fight it with – and Khan and her allies have already been labelled as “hipster radicals.”

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By Charlotte Pickles

Big Tech’s lobbying dates back 20 years, but the scale of it has grown significantly. In America, five years ago Amazon spent $3.5 million on lobbying, last year they spent $13 million. In just a few years, Amazon’s lobbying operations have gone from almost nothing to rival Google. To defend its sprawling empire from the politicians that are circling the tech giant has assembled the biggest lobbying team of any tech company in Washington: 28 in-house lobbyists, compared to Apple’s and Facebook’s eight. 

Perhaps more disturbing is the influence that companies like Amazon and Google have that you can’t see. Both regulatory capture, where the regulators identify too closely with the companies they are trying to control, and policy capture, when commercial interests so infiltrate governments that they can affect the design of measures relevant to their activities, should concern us.

Since 2005, concern has grown over Google’s political influence after research showed that it had poached at least 65 government officials from all over the European Union. During the same period, 15 ‘Googlers’ have been appointed to government positions in Europe, thus penetrating to the heart of the decision-making process. In the UK, Google has targeted for recruitment civil servants from key parts of the government machine like the Treasury and No. 10. This revolving door between politics, tech and regulators is a key characteristic of crony capitalism.

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Then, of course, there is the ‘dark money’ – the think tanks, research institutions and publications who enjoy their journey on Big Tech’s gravy train and can be used to shape the debate. Last year a critic of Google was fired from the New America Foundation, when he posted an article in support of the European Commission’s antitrust regulators. The think tank has received over $20 million from Eric Schmidt, co-founder of Google, his family trust and the company itself.

Then in July 2018, US activists really woke up to the power of Amazon, and the damage it could do to democracy, when the company used its influence to repeal a law passed by its home city of Seattle that imposed a small employee ‘head tax’ on large corporations. The purpose of the tax was to fund affordable housing in a city whose horrendously high costs are partly down to the very same tech companies. Many were left with the feeling that Amazon was too powerful to tax and regulate.

If politicians can be persuaded to act, the big question is how to tackle the problem. The traditional anti-monopoly medicine would be to break up these large conglomerates into their smaller component pieces. Amazon could easily be split into retail, cloud, logistics and video production. Alphabet (Google’s parent company) could be broken up into divisions such as Google Search and YouTube.

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Others are thinking about an updating of the vision behind the BBC. In Britain, the think tank IPPR argues that the digital economy should be reorganised as a “digital commonwealth”, to be an open, collective resource for the common good. The major digital platform companies would be regulated like broadcasters and mobile providers. Where large digital companies have the advantage of existing data when moving into a new market, such as banking or mobility, they would be compelled to open it up for others to use. And a new public service corporation would ensure that public data is widely available for innovation and public good.

This is already being done in other industries. In the energy industry, consumers who share their data with new firms such as Switchd can already get better access to cheaper prices, and the process will only get better, faster and more automated as energy suppliers share more of their data digitally. Banks and other financial institutions are also opening up their data for others to access, use and share. Customers are doing something similar by sharing data from their accounts with third parties they trust.

In the end, the convenience of Amazon’s platform has turned us into lazy consumers who would give up almost anything in return for same day delivery. But if we are not careful it won’t just be the High Street that we have abandoned. Big Tech has the will and the wallet to bypass traditional regulators, and that leaves few options other than to turn them into social enterprises that serve the common good.

In 1911, the breakup of John D Rockefeller’s monopolistic Standard Oil Company prevented one man from having a stranglehold on the fuel that America depended on. If data is the new oil, then perhaps it’s time we stopped a handful of men from controlling the lifeblood of every advanced nation.

Further reading

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By Charlotte Pickles

Though they provide different functions and services, this immense power resides in a shared business model: the extraction and analysis of data and the control of digital infrastructure – from mapping to cloud computing – that underpins all digital technology. And as a result of this control, they are also poised to dominate artificial intelligence markets, extending their power far into the future.

Further reading

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Profiting from data generates a circular, expansive dynamic: the more data that is captured, the greater the potential for revenue. As such, the impulse to accumulate more and more dominates the strategies of the tech giants, and dictates how they develop and deploy their technology. By instinct, they seek to move into more markets, buying out more competitors, driven by their voracious appetite for more data and infrastructure. Amazon, for example, has filed for 5,860 patents, while Alphabet has acquired over 190 businesses since its foundation.

These companies will counter, accurately, that in the process they provide many benefits. Consumers get useful services at low to no immediate cost, with greater convenience through coordination, and with more personalisation. Businesses get access to new markets and experience lower transaction costs. At a societal level, their platforms increase access to information, and enable social connections and greater efficiency.

But this business model is driving platforms to behave in ways that create serious economic, social and political problems. By acquiring innovative start-ups and limiting access to their large datasets, platforms are almost certainly limiting the innovation potential of the economy.

Further reading

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As the digital giants increasingly dominate their markets, their profits are soaring, and with relatively low levels of employment these labour-light digital firms are helping drive inequality. Their dominance in advertising markets has already eroded news media, while social network platforms have potentially been used to manipulate democratic proceedings. And as the power of the tech monopolies grows, these problems will grow with them.

In the face of such concentration, defenders of open and inclusive innovation must have a strategy for reining in the digital giants. So far, the development of the modern digital economy has largely been determined by powerful market actors, with little proactive response from government. Without action, the boundless ambition of the universal platforms threatens to undermine democracy, accelerate inequality and concentrate economic power.

The goal must be to move from conditions of ‘enclosure’, where data and infrastructure are dominated by a few tech giants, to an open and innovative digital ‘commons’, where they are organised as a collective resource. In the process, this can unlock a wave of more inclusive innovation and enterprise, supporting the revival of democracy.

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There are, of course, limits to what the UK can achieve with domestic levers ­– the digital economy is international. Nonetheless, we are not powerless. Much more can be done with bolder policymaking, and IPPR’s new report, The Digital Commonwealth, sets out an ambitious reform strategy to build a ‘digital commonwealth’.

First, we should strengthen competition law to foster innovation. The Competition and Markets Authority should be reformed so that it is better able to regulate tech companies. This should include a new requirement for major digital companies to open up their data upon entry to new markets in which they have a major advantage as a result of their existing data.

Second, where platform giants provide vital infrastructure services such as searching, matching, or communicating, under monopolistic conditions, we should regulate those activities and companies as public utilities. This should be done through a new Office for Digital Platforms, which should include powers to open up the data of the digital giants in cases and markets that are deemed to be in the public interest.

Further reading

To save democracy, we must disrupt it

By Carl Miller

Third, to better drive the curation and productive use of public data, a new public service corporation, Digital UK, should be created. This would establish a Digital Citizen Account and ‘public data stores’ through which useful insights from pooled, anonymised data could be shared. It could also oversee the creation of a national data portal, which would provide a single site linking to private- and public-sector data. Under appropriate privacy and security conditions this could provide an immense and shared resource for civil society, enterprise, and local communities to build better products and services.

Finally, we should learn from the cities at the cutting edge of digital governance, such as Barcelona, and get local authorities to set up Local Digital Commonwealth Strategies. These would aim to support the development and adoption of local platform services – from community decision-making apps to innovative businesses – leveraging public sector data sources and personal data from the opening-up of private sector data. This would ensure that value is retained and circulated among communities where the data is generated, to provide economic, social and environmental value.

Taken together, this is an ambitious agenda to rein in the power of the tech giants and foster inclusive innovation. The alternative – a status quo that will enable widening inequality and the growing concentration of economic and technological power – is the route to deepening democratic and social crisis. It is time we acted with an ambition fit for the machine age.

Much less reported this year, but hugely more significant, was what happened next inside DeepMind’s laboratories. Their new prototype, AlphaGo Zero, was not taught the game by humans, but given the basic rules, and left to learn by playing games against itself. It was then pitted against the original AlphaGo, and won by 100 games to zero.

This month, four hours after starting to play chess, it beat a grand-master using tactics never seen before in the game’s history. The implications are both exciting and frightening…

…Exciting because of the potential problem-solving capacity of technology that is able to learn for itself and, also, to test theories that humans have never considered…

…But frightening because the more ingrained into our world that AI technology becomes, the more power we are investing in computers that are capable of rapid independent learning and decision-making that is beyond our comprehension – and to some degree our control.

And just imagine advanced AI systems being programmed by a hostile power to test for and exploit weaknesses in our own technical infrastructure, or indeed to hack into inferior AI systems attached to that infrastructure, and re-program them to wreak havoc.

It does not bear thinking about, which may be why it’s been so little reported. Perhaps we need a computer to think it through for us.

***

Introduction to this Under-reported series.

Summary guide to all under-reported articles in this series.

In the Boston Globe he writes of his desire to become better acquainted with another mysterious continent – his own:

“Coastal, global, and utterly educated, I frequently encounter an America I do not know well — the America that has sent people like me to read ‘Hillbilly Elegy,’ ‘White Trash,’ and ‘Strangers in Their Own Land’ in search of understanding.”

Of course, books are no substitute for direct experience – and what better way to experience America’s ‘flyover country’ than a road trip? However, being based abroad, Muspratt turned to Google Street View.

If you’ve never used it, Street View is a wonder of the modern age – a vast database of panoramic images captured by vehicle-mounted cameras moving along millions of miles of road. Arrows within each image let you click forwards and backwards to the next or the previous image (or left and/or right at road junctions). You can carry on clicking ad infinitum, ‘travelling’ any distance you choose.

Most users just want to check out a short stretch of road or a single building, but Muspratt had a more ambitious itinerary:

“I started at the easternmost point on the US mainland – West Quoddy Head, Maine – and clicked westward once, and then again and again. Petabytes of Google imagery later, I found myself halfway across the country with a journal full of small-town historical anecdotes and screenshots of the open road. It is the Great American Road Trip, done virtually.”

This certainly requires patience, but compared to a highly edited travelogue or news report, Street View gives you an unposed, unspun view of the places you’re seeing:

“I’d been streaming America in the uncompromising volumes and divisive tones of 24-hour news cycles and now-now-now social media. I needed doses of the America I hoped still existed, of less angst, more commonality.”

So, travelling click-by-click, what does the great American road trip reveal?

“America is deeper than Twitter and Facebook feeds would suggest; America is, yes, great.

“Still, it is impossible to miss something else in Street View America: vacant and derelict buildings are endemic; inequality runs visibly rampant. From rural Maine to the Rust Belt’s heartland and west, I cannot click but minutes without encountering an abandoned home or gutted Main Street. An hour in West Virginia and central Ohio downloads enough barren steel industry apparatus and one-bar, one-post-office town centers that the disconnect from wealth – and Washington – is palpable.”

The cultural elites tend to live in global cities where the world is laid out before them; different languages, cultures, cuisines can be sampled – or not – without effort or commitment. When the elites do leave their cities it is to rural or suburban retreats where only some of the people and places they have to share a country with are on view – i.e. their sort of people; their sort of places.

Tools like Google Street View give us all a chance to break out of our bubbles. To see the nations we belong to as they really are. The view is a distant one, but unlike almost any other medium it is unfiltered and undiluted:

“Street View travel is my awakening. It is one thing to read narratives and case studies of our national fracture. It is another to actually see it, face-to-screen, by scrolling slowly through one disenfranchised town after another in a sequence so sure that the breadth and depth of the Trump-American landscape feels as infinite as Google itself.”

Book your trip now.

Because once a start-up starts up, the very last thing it wants to have to do is compete, face markets, and meet the challenge of innovation. It wants to rise rapidly to dominance, destroy competitors, and quash any innovative and potentially disruptive upstarts. A rising star company is as interested in market capitalism as  Lenin. If you doubt me, ask Zuckerberg (Facebook), or Page and Brin (Google), or Bezos (Amazon); although, of course, you might not get a candid response.

If you want a straight answer, go to Peter Thiel, venture capitalist-cum-entrepreneur, co-founder of PayPal, and Facebook’s first outside investor. Not to mention always worth listening to, as he speaks his mind. “Competition is for losers,” he wrote in the Wall Street Journal [1.  Peter Thiel, in the Wall Street Journal for September 12, 2014: “Competition Is for Losers: If you want to create and capture lasting value, look to build a monopoly.” https://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536.]. Every company should aspire to become a monopoly. Monopolies are good things.

The monopoly conundrum

Of course, monopolies are nothing new, and governments since at least the days of Roman Emperor Justinian have been pushing back[2.  Sir Edward Coke writes in his judgment in “the Case of Monopolies” “For we read in Justinian that monopolies are not to be meddled with, because they do not conduce to the benefit of the common weal but to its ruin and damage.” https://en.wikipedia.org/wiki/Darcy_v_Allein.].

Sometimes they’ve taken advantage of cosy relationships with business favourites; sometimes they’ve broken them up. It may make sense for a power or water company to be a sole supplier, and in that case governments have often used regulation to control their prices.

But the classic monopolies of the 20^th century involved industries like steel and railways. In 1902, America’s most flamboyant President, Teddy Roosevelt, confronted the leading tycoon of his generation, J. Pierpoint Morgan, and fired the first salvo.

Morgan’s Northern Securities Corporation was an effort to control a large slice of America’s railways, and – why else? – enforce monopoly pricing. Roosevelt used the 1890 Sherman Act to stop this railway gamble in its tracks. And the US went on to break up the “trusts”[3.  On US anti-trust law: Marvin Ammori, in Wired for October 16, 2012: “Monopolies: Anti-Trust Law Protects Consumers, not Competitors.” https://www.wired.com/2012/10/antitrust-is-supposed-to-protect-consumers-not-competitors/.], as they are known in the United States, in industry after industry[4.  Some background here: Elena Holodny, “19 robber barons who built and ruled America,” in Business Insider for July 29, 2017. https://uk.businessinsider.com/robber-barons-who-built-and-ruled-america-2017-7.].

Is the new economy different?

In place of the old industrial and banking giants that used to dominate the global economy, we now have tech companies. Three of them have grown into vast monopolies.

Amazon dominates e-commerce. Among many striking statistics, it owns 74% of the e-book market. But it’s into other things too, like selling cloud storage and, just recently, buying Whole Foods, a US supermarket chain.

Facebook displaced early social-networking pioneers like MySpace and now commands 77% of mobile social traffic, with two billion monthly users. The aim is to sign up everyone on the planet. Excluding China, where the service is banned, they’re half-way there.

Google brushed aside Yahoo and other early search machines – and has never been challenged since. It now has 88% of global search advertising. Its aim, of course, is to have absolutely everyone use it to access all the world’s knowledge.

What’s more – and this is potentially sinister – between them, Facebook and Google account for 75% of referrals to major news and entertainment sites[5.  Some data sources on Facebook and Google: Adam Hartung, “The Trend To Facebook Referrals Is A Risk To Google Search.” https://www.forbes.com/sites/adamhartung/2017/05/26/the-trend-to-facebook-referrals-is-a-risk-to-google-search/#242e21a16715. “40 Essential Social Media Marketing Statistics for 2017.” https://www.wordstream.com/blog/ws/2017/01/05/social-media-marketing-statistics.].

Social networking and search are offered “free” to consumers in exchange for data. And data, as The Economist magazine has said[6.  “The world’s most valuable resource is no longer oil, but data,” The Economist, May 6, 2017 https://www.economist.com/news/leaders/21721656-data-economy-demands-new-approach-antitrust-rules-worlds-most-valuable-resource.], is the new oil. They use (our) data to target ads, and they sell it on to others for similar purposes. From one point of view, both Google and Facebook are in the same business: advertising driven by user data.

Amazon is different. Its business model has been to build e-commerce market share to the exclusion of all else, including (at the moment) profits. Like the robber baron monopolies of the early 20^th century, its approach has been predatory. It destroyed much of high-street bookselling, including the large US bookseller chain Borders. It fought viciously with the Hachette publishing group to keep book prices where it wanted them. A monopoly to customers in several sectors, in publishing it has operated as a “monopsony” – a dominant buyer, who can set prices with suppliers in the way in which monopolists set them for consumers.

The key to making monopolist profits, of course, is to stay a monopolist. Peter Thiel’s defence of monopolies includes the idea that they are “serial” in nature; in due course, a fresh disruptor will come along and send the current one packing. But this is disingenuous. If you’re a monopolist, absolutely everything depends on stopping that from happening. The incumbent advantage of these huge global companies is formidable. And if someone could become a threat? Buy them, like Facebook’s done with Instagram and WhatsApp.

What would Teddy do?

While Amazon sells things for cash, Facebook and Google seem to give things away. One estimate has it that these online “freebies” are worth $280 billion a year. One result is that users tend not to see themselves as “customers” and tend not to see Facebook and Google as “real” companies – like BP, Starbucks and British Airways.

Of course, this “free” use is not the result of generosity on the part of Zuckerberg, Brin and Page. It’s an optical illusion. Their business model makes it highly profitable for them to offer users social media and search services in exchange for their data. An illustration of the scale of data being bartered by users: in 2012 Max Schrems, an Austrian law student, asked Facebook for all his data. What he got was a pdf that ran to well over 1,000 pages[7.  Olivia Solon, in Wired for December 28, 2012: “How much data did Facebook have on one man? 1,200 pages of data in 57 categories.” https://www.wired.co.uk/article/privacy-versus-facebook You can download your own data: https://www.idownloadblog.com/2016/01/18/how-to-download-facebook-archive/.].

Neither Facebook nor Google has offered a subscription-based alternative to their obscure barter business model. Why? Because it would alert their billions of users to what is really going on, as we hand over data and privacy for service.

Breaking up is never easy

Three huge challenges face any effort to treat Facebook and Google and Amazon as the anti-competitive monopolies that they are.

First, users like them. And because most people are users, that means that most people like them. They have become integrated into our daily lives in complex ways.  They just don’t look like overbearing corporate giants run by the 21^stcentury equivalent of the “robber barons” that Teddy Roosevelt tackled head-on. While Bezos is plainly a businessman, his company has a genius for consumer-friendliness. Zuckerberg, Page and Brin still look enough like kids who make fun stuff – and have joined the ranks of the multi-billionaires by some kind of fluke. The effect is dangerously disarming.

No-one refers to any of them as “tycoons” or “moguls”. The intimacy of our engagement with their businesses – we use their services in bed and in the bathroom and in the car – has blinded most of us to the fact that these young men have inherited the corporate mantle of JP Morgan and Andrew Carnegie – and that they run their companies just as ruthlessly[8.  Natasha Bertrand, “How Amazon’s Ugly Fight With A Publisher Actually Started,” in Business Insider for October 7, 2014. https://www.businessinsider.com/how-did-the-amazon-feud-with-hachette-start-2014-10?IR=T .].

Second, as we’ve noted, we don’t pay Facebook and Google directly for their services – in contrast to the widely disliked cable and phone companies whose monthly bills are costly. The obscure data-for-service barter system they have developed leaves most users barely aware that they are consumers at all.

Third, these three companies have mastered the lobbying process; they are powerful players in Washington (and other capitals). As a recent article in the Financial Times by Rana Faroohar pointed out, “Big Tech has quietly become the dominant political lobbying power in Washington … to avoid regulatory disruption of its business model, which is now the most profitable one in the private sector.”[9.  Rana Faroohar, “Release Big Tech’s Grip on Power,” in the Financial Times, June 18, 2017. https://www.ft.com/content/173a9ed8-52b0-11e7-a1f2-db19572361bb?mhq5j=e6.] They don’t just lobby politicians – the process is more sophisticated. According to Faroohar, Google alone has funded more than 140 Washington-related organizations with grants and sponsorship – to make friends and quieten criticism, “trying desperately and in myriad ways to avoid the ‘m’ word.”[10.  Ibid: “Over the past few years, Big Tech has quietly become the dominant political lobbying power in Washington, spending huge amounts of cash and exerting serious soft power in an effort to avoid regulatory disruption of its business model, which is now the most profitable one in the private sector.”]

So where do we start?

A modest proposal

Even if monopoly pricing (the main monopoly bugbear) is not present (Amazon, at the moment, makes little profit) or obscure because of barter (Google and Facebook), governments must ensure the integrity of the market. They need to encourage innovation, and therefore a fair crack of the whip to new entrants as they challenge incumbents. So why permit takeovers of challengers? Why not push for tech solutions such as open APIs[11.   API stands for Application Programming Interface – the protocols that enable one programme to speak with another. If they are made public, people from other companies can develop applications that interface with them. So, for example, you might not need Facebook Messenger to chat with someone using the service.] to set developers free to innovate?

Why can’t there be a dozen companies, some data-bartering, others subscription-based, enabling Facebook-type service – and inter-connected like our phone companies are?

Second, markets need pricing. Never before have we had major enterprises operating on the basis of a foggy barter. Data-for-service deals need to be explicitly priced, and cash alternatives (service for cash, or cash for your data) offered.

Third, to the extent that any of these companies is a natural monopoly like a water company – because, for example, that’s the only way to capture network effects or deliver economical service –  it must simply join the list of regulated industries.

Fourth, monopsony effects (such as Amazon’s dominance of book-buying from publishers) are legitimate concerns if the integrity of the marketplace – as the health of small business – is seen as in the public interest.

Winning through freedom

It was Adam Smith who pointed out long ago that capitalism magically transforms the pursuit of private profit into a winning situation for all of us. But that is true only if the market is free to do its work. As the factors behind the monopolistic growth of the Unholy Trinity become increasingly prevalent in the global internet economy, securing a win for the consumers of the 21^st century will require us to challenge their pretensions and encourage new entrants to compete with them.

This will involve facing down powerful interests, but that’s hardly new.

In 1602, Sir Edward Coke, doyen of English jurists, faced off against Queen Elizabeth I herself. In what is known as “The Case of Monopolies”[12.  Key facts are given in the Wikipedia entry on Darcy v. Allein. https://en.wikipedia.org/wiki/Darcy_v_Allein.] he struck down a monopoly (for playing cards) that the Queen had handed to a courtier. Darcy Esquire v Thomas Allin, London Haberdasher and the arguments Coke used in his judgment are just as relevant today.

Still, from time-to-time, it’s worth contemplating the potential (and actual!) good that these companies can achieve for the world.

There’s a great example in a recent report by Timothy B Lee for ArsTechnica. It concerns the unfortunately named ‘Project Loon’ – which is a Google endeavour to use high altitude balloons as a global communications network:

“…the idea of providing Internet service via balloons sounds crazy—indeed it has sounded crazy since Google first announced the effort, dubbed Project Loon, in 2013. But Google… is deadly serious about making balloon-powered Internet access a real thing.”

In normal circumstances, ground-based towers are a much better bet for mobile communications. But what about places in the world where there aren’t any?

One such place is Puerto Rico after the devastating impact of Hurricane Maria:

“Cell phone companies on the island are still working to repair infrastructure after the hurricane took 95 percent of the island’s cell phone towers out of service.”

So X, Google’s company devoted to technological ‘moonshots,’ is sending a fleet of balloons to serve as cell phone towers in the sky. ‘We are now collaborating with AT&T to deliver emergency Internet service to the hardest hit parts of the island,’ writes Alastair Westgarth, who leads the company’s balloon-based Internet efforts.

This is an experimental technology with plenty of hurdles to overcome:

“There’s a big, obvious challenge, of course: wind. If you send a balloon up 20 kilometers in the air, it will quickly blow away from the desired coverage zone. Past balloon-based transmission schemes have tethered balloons with a cable, but that limits how high the balloons can go and it increases the cost and complexity of the system.”

The original plan was to have sufficient balloons in the air so that if one drifted out of range another would drift into it. The trouble is that things that move around independently of central control have a tendency not to distribute themselves evenly. Think of buses in a busy city. You wait for ages and then three come along at once. Perhaps a closer analogy is clouds. There are millions of the things floating around and yet some places can go weeks, months or even years without seeing any.

That’s the trouble with being at the mercy of the wind.

Balloons, being balloons, can’t directly control their horizontal direction of travel. The vertical, though, is another matter:

“The balloons have on-board pumps that allow them to move up and down.

“‘From our millions of kilometers of test flights, we’ve been able to develop sophisticated models that allow us to more accurately predict the wind patterns at different altitudes,’ a Project Loon post said in 2016. ‘Using this data, our software algorithms are able to determine which altitude has a wind pattern that gives us the best chance of keeping our balloons close to the areas where we want them.’”

This is brilliant – a tribute to the genius of the engineers. But it also tells us something really important about innovation, which is that it isn’t always about the methodical execution of some perfectly conceived grand theory. It is at least as much a process of tinkering, of learning by doing, of making it up as you go along.

There is a lesson here for all sponsors of innovation, whether public or private. To expect to succeed only by doing what you already know how to do is to condemn yourself – and all those who depend on you — to stagnation. The more extensive the control that a government, or a company, has over the economic resources of a nation, the greater the responsibility it has to make room for experimentation and diversity.

Due to their immaterial nature, digital services are geographically indeterminate. This makes it easier for tech companies to minimise their tax liabilities in any particular nation. Of course, avoiding tax is not the same thing as evading it – as Google recently demonstrated in a courtroom victory over the French government. But what of the charge that the big tech companies are ‘dodging’ tax (implying a moral lapse if not a legal one)? A particular complaint is that companies that sell vast amounts of online advertising, like Facebook and Google, pay very little corporation tax in the countries where the advertising is sold.

Writing for CapX, Tim Worstall comes to the tech giants’ defence:

“…the basic underlying principle of the international taxation system – tax should be paid where value is created. Intellectual property is an ever rising portion of value being created and when we come to things like software platforms it’s by far the majority.”

He goes on to cite a counter-argument from Richard Murphy:

“I know that it will be claimed to be due to the intellectual property having been developed in the USA. But let’s be candid; IP is worthless without a customer and it is UK customers who create the value added in this country, and not the IP as such”

Worstall is not impressed with Murphy’s logic:

“It’s worth just savouring that. JK Rowling created considerable intellectual property with her books, but it’s the readers who provide it, so therefore JK must be paying tax everywhere else and not in the UK – or perhaps only in the UK on her UK sales.”

The JK Rowling analogy is a revealing one, but not quite as Worstall might wish. He is right when he says that customers don’t create value (rather, they pay for it). But while that applies to Ms Rowling’s readers, it doesn’t apply to the users of Facebook – who don’t pay anything. Instead, the customer is the advertiser who pays Facebook for drawing its users’ attention to adverts. As the new old saying goes: ‘if something is free, then you are the product’.

Unlike the Harry Potter reader, the Facebook user is the (unpaid) co-producer of what Facebook sells. Obviously, as a digital platform, Facebook is essential to the whole enterprise – and it’s fair that the foreign-owned intellectual property on that platform should be taken into account. But let’s draw a parallel with another kind of platform – a North Sea oil rig.

Without the engineering brilliance of companies like Shell or BP there would be no North Sea oil industry. However, no one can deny that much of the value of what they produce comes from the natural resources that they extract – resources that properly belong to the nation not the oil companies. That’s why the North Sea oil industry has its own special tax regime, one that allows private enterprise to make a profit, but ensuring that the nation gets its due.

We should treat the big tech companies in a similar way. If the value co-produced by a nation’s collective attention (and sold on to advertisers) can’t be individually remunerated, then it should be nationalised – and taxed accordingly. Yes, the platform should have a fair share of the profits, but so should the nation.