Jaron Lanier

Jaron Lanier: The Digital Economy Since Who Owns The Future?

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October 8, 2015 — Jaron Lanier, computer scientist and author of Who Owns the Future? and You Are Not a Gadget, discussed how the current digital economy, driven by automation and efficiency, is on track to leave large segments of society behind economically.

A primary problem, according to Lanier, is that “we’ve created only half of the economy.” While platforms and services such as Uber and Facebook provide what Lanier calls “informal benefits,” such as convenience, they have not created wealth for the majority of people using them. Instead, wealth, and more importantly, power, information, and data, have become concentrated in large companies, while ordinary users find themselves in increasingly precarious work arrangements, with decreasing privacy and control.

Lanier argues that this trend is not sustainable. “You can’t have an economy in which there’s just a tiny, hyper-fortunate formal part, and then a vast, not necessarily impoverished, but insecure, informal part.” This economic system “no longer associates risk with reward,” said Lanier. Although everyone producing videos on YouTube has to self-finance their projects and take some risk, only a very small number are actually able to make money from their videos. This results in a Zipf distribution, as opposed to a bell curve, with the bell curve being associated with the creation of a middle class, said Lanier. “It’s really a casino type of economics.”

An additional problem is that despite the growth of automation, workers are often still needed behind the scenes – resulting in their work becoming invisible and devalued. As an example, language translation applications are “marketed as if they’re magic brains that just understand language…but there’s nothing of the kind,” said Lanier. “What we do is we gather many, many examples of real translations from people and then we statistically couple them with things to be translated.” Because language is always changing to reflect current events or slang, the human component is still very much needed. “What’s really going on is we’re just finding a different way to present the productivity of real people…we steal from millions of people a day to make it work.”

“If that’s the prototype of the future, if there are going to be more and more of these cloud services that run the driverless cars and make our clothes and 3D print our objects…if we’re going to keep on doing that and pretend that people are obsolete buggy whips, when in fact we still need them, then not only is it unfair, but we gradually artificially shrink the economy on paper because we’re refusing to acknowledge the value,” said Lanier.

If people can’t be compensated for their work – or for the data or information they share online that others profit from, “then we have to admit that the whole market mechanism is not something that we’re accepting,” and move to other options such as a basic income model, said Lanier. He noted that getting people to pay for services or information – such as news, music, or software – is a challenge in today’s digital economy precisely because of the precarious economic situation facing so many people. “If we’re not paying [people], asking them to pay is ridiculous,” said Lanier. “If they’re earning money from the same economy, then paying into it is going to make more sense to them. The resistance to paying for information is absolutely natural for someone who has been economically disempowered.”

A possible solution could be a system that pays people for not only their work, but also for their data or other information they provide, perhaps through micropayments. “There has to be some way you price information, there has to be a way that people can make individual decisions about what to do about their own information that’s tenable…I think we do need to find some way to update economics to take account of this information-centric world we’re building,” said Lanier.

Lanier also addressed, among other topics, privacy, ideology in technology, educational technology and MOOCs, the current dystopian streak in science fiction, the impact of technology on ideas about personhood and spirituality, and the details of how micropayments could be used to pay people for their online activity and data. Listen to the full audio recording above.

Article and photo by Nilagia McCoy of the Shorenstein Center.