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  • feedwordpress 13:43:08 on 2018/09/06 Permalink
    Tags: Book Related, , , , , , , , ,   

    Facebook, Twitter, and the Senate Hearings: It’s The Business Model, Period. 

    “We weren’t expecting any of this when we created Twitter over 12 years ago, and we acknowledge the real world negative consequences of what happened and we take the full responsibility to fix it.”

    That’s the most important line from Twitter CEO Jack Dorsey’s testimony yesterday – and in many ways it’s also the most frustrating. But I agree with Ben Thompson, who this morning points out (sub required) that Dorsey’s philosophy on how to “fix it” was strikingly different from that of Facebook COO Sheryl Sandberg (or Google, which failed to send a C-level executive to the hearings). To quote Dorsey (emphasis mine): “Today we’re committing to the people and this committee to do that work and do it openly. We’re here to contribute to a healthy public square, not compete to have the only one. We know that’s the only way our business thrives and helps us all defend against these new threats.”

    Ben points out that during yesterday’s hearings, Dorsey was willing to tie the problems of public discourse on Twitter directly to the company’s core business model, that of advertising. Sandberg? She ducked the issue and failed to make the link.

    You may recall my piece back in January, Facebook Can’t Be Fixed. In it I argue that the only way to address Facebook’s failings as a public square would be to totally rethink its core advertising model, a golden goose which has driven the company’s stock on an six-year march to the stratosphere. From the post:

    “[Facebook’s ad model is] the honeypot which drives the economics of spambots and fake news, it’s the at-scale algorithmic enabler which attracts information warriors from competing nation states, and it’s the reason the platform has become a dopamine-driven engagement trap where time is often not well spent.

    To put it in Clintonese: It’s the advertising model, stupid.

    We love to think our corporate heroes are somehow super human, capable of understanding what’s otherwise incomprehensible to mere mortals like the rest of us. But Facebook is simply too large an ecosystem for one person to fix.”

    That one person, of course, is Mark Zuckerberg, but what I really meant was one company – Facebook. It’s heartening to see Sandberg acknowledge, as she did in her written testimony, the scope and the import of the challenges Facebook presents to our democracy (and to civil society around the world). But regardless of sops to “working closely with law enforcement and industry peers” and “everyone working together to stay ahead,” it’s clear Facebook’s approach to “fixing” itself remains one of going it alone. A robust, multi-stakeholder approach would quickly identify Facebook’s core business model as a major contributor to the problem, and that’s an existential threat.

    Sandberg’s most chilling statement came at the end of of her prepared remarks, in which she defined Facebook as engaged in an “arms race” against actors who co-opt the company’s platforms. Facebook is ready, Sandberg implied, to accept the challenge of lead arms producer in this race: “We are determined to meet this challenge,” she concludes.

    Well I’m sorry, I don’t want one private company in charge of protecting civil society. I prefer a more accountable social structure, thanks very much.

    I’ve heard this language of “arms races” before, in far less consequential framework: Advertising fraud, in particular on Google’s search platforms. To combat this fraud, Google locked arms with a robust network of independent companies, researchers, and industry associations, eventually developing a solution that tamed the issue (it’s never going to go away entirely).  That approach – an open and transparent process, subject to public checks and balances – is what is desperately needed now, and what Dorsey endorsed in his testimony. He’s right to do so. Unlike Google’s ad fraud issues of a decade ago, Facebook and Twitter’s problems extend to life or death, on-the-ground consequences – the rise of a dictator in the Philippines, genocide in Myanmar, hate crimes in Sri Lanka, and the loss of public trust (and possibly an entire presidential election) here in the United States. The list is terrifying, and it’s growing every week.

    These are not problems one company, or even a heterogenous blue ribbon committee, can or should “fix.” Facebook does not bear full responsibility for these problems – anymore than Trump is fully responsible for the economic, social, and cultural shifts which swept him into office last year.  But just as Trump has become the face of what’s broken in American discourse today, Facebook – and tech companies more broadly – have  become the face of what’s broken in capitalism. Despite its optimistic, purpose driven, and ultimately naive founding principles, the technology industry has unleashed a mutated version of steroidal capitalism upon the world, failing along the way to first consider the potential damage its business models might wreak.

    In an OpEd introducing the ideas in his new book “Farsighted”, author Steven Johnson details how good decisions are made, paying particular attention to how important it is to have diverse voices at the table capable of imagining many different potential scenarios for how a decision might play out. “Homogeneous groups — whether they are united by ethnic background, gender or some other commonality like politics — tend to come to decisions too quickly,” Johnson writes.  “They settle early on a most-likely scenario and don’t question their assumptions, since everyone at the table seems to agree with the broad outline of the interpretation.”

    Sounds like the entire tech industry over the past decade, no?

    Johnson goes on to quote the economist and Nobel laureate Thomas Schelling: “One thing a person cannot do, no matter how rigorous his analysis or heroic his imagination, is to draw up a list of things that would never occur to him.”

    It’s clear that the consequences of Facebook’s platforms never occurred to Zuckerberg, Sandberg, Dorsey, or other leaders in the tech industry. But now that the damage is clear, they must be brave enough to consider new approaches.

    To my mind, that will require objective study of tech’s business models, and an open mind toward changing them. It seems Jack Dorsey has realized that. Sheryl Sandberg and her colleagues at Facebook? Not so much.

     

     

     

     
  • feedwordpress 14:20:01 on 2018/08/27 Permalink
    Tags: Book Related, , , , , , ,   

    The Accountable Capitalism Act: It’ll Never Happen, But At Least Now the Conversation Will 

    The past week or so has seen a surge in commentary on the role of corporations in society, a theme familiar to readers of this site. While it might be convenient to peg the trend to Senator Elizabeth Warren’s newly minted Accountable Capitalism Act (more on that in a second), I think it’s more likely that – finally – our collective will is turning to our most logical and obvious instrument of social change, namely, the instrument of business.

    We humans like to organize ourselves into social units. They range from the informal (pickup basketball games) to the elaborately structured (Senate hearings). Our ability to harness collective will is unsurpassed in the animal kingdom, it’s one of our key evolutionary adaptations, driving the success of our species across the globe.

    As I’ve argued elsewhere, one of our most sophisticated social structures is the corporation, which has co-evolved with our various systems of government over the past half millennium or so. The very first corporations were in fact formed (or chartered) by governments – the Dutch East India Company is the most common example of this. In the past century, however, corporations have largely sought to shake the yoke of government regulation – and nowhere have corporations won more freedoms than in the United States, where firms are now considered legal persons with an unrestrained right to “free speech” (IE, the ability to fund political positions).

    So this is where we are today: Large corporations have the legal right to exercise unlimited influence over our political sphere, and the commercial imperative to control (and profit from) nearly all our society’s data. That kind of power will necessarily produce a backlash, on that’s found an articulate, but highly unlikely, argument in Senator Warren’s proposed legislation. From the release announcing the Accountable Capitalism Act:

    For most of our country’s history, American corporations balanced their responsibilities to all of their stakeholders – employees, shareholders, communities – in corporate decisions. It worked: profits went up, productivity went up, wages went up, and America built a thriving middle class.

    But in the 1980s a new idea quickly took hold: American corporations should focus only on maximizing returns to their shareholders. That had a seismic impact on the American economy. In the early 1980s, America’s biggest companies dedicated less than half of their profits to shareholders and reinvested the rest in the company. But over the last decade, big American companies have dedicated 93% of earnings to shareholders – redirecting trillions of dollars that could have gone to workers or long-term investments. The result is that booming corporate profits and rising worker productivity have not led to rising wages.

    Additionally, because the wealthiest top 10% of American households own 84% of all American – held shares-while more than 50% of American households own no stock at all – the dedication to “maximizing shareholder value” means that the multi-trillion dollar American corporate system is focused explicitly on making the richest Americans even richer. 

    Here are a few of the act’s key proposals:

    • Companies with more than $1 billion in revenues must register with, and agree to be regulated by, a new Federal oversight body known as the Office of United States Corporations.  By registering, firms are obliged to “consider the interests of all corporate stakeholders – including employees, customers, shareholders, and the communities in which the company operates.” This enshrines what is often called a “multi-stakeholder philosophy,” the underpinning of B Corps like Patagonia and Kickstarter, into federal law.
    • A corporations’ workers would be empowered to elect at least forty percent of their firms’ board of directors.
    • Long term restrictions on the sale of stock by board directors and corporate officers – three years for stock buy backs, and five years for everything else. This is to insure that a large firms’ managers plan for the long term.
    • A prohibition on political spending of any kind without approval from 75 percent of both directors and shareholders.

    There’s more, but I think you’ve got the point – this is a sweeping and presently impossible piece of legislation that radically rethinks the governance of our most powerful corporations. It guts corporate political spending, upends business’s current compensation structure (often based on stock grants), radically reshapes board governance (giving a near majority control to workers), and creates a massive conservative bogeyman in the form of yet another Federal government oversight entity. In today’s political environment, Warren’s legislation is DOA.

    But in tomorrow’s? Quite possibly not. Senator Warren is widely considered a front-runner for the Democratic nomination in 2020, and her initial opponent won’t be Trump – it’ll be Bernie Sanders, whose supporters likely will find plenty to love in Warren’s new plan.

    Regardless of whether the act has any chance of passing without a strong Democratic majority in both houses of Congress, Warren has smartly identified a central issue in our country’s political conversation, and declared it to be fundamental to the Democrats’ platform for 2020. It’s about time someone did.

    More recent reading on the role of capitalism in our society: 

    Louis Hyman: It’s Not Technology That’s Disrupting Our Jobs

    L.M. Sacasas: Technopoly and Anti-Humanism

    Tom Wheeler: Time to Fix It: Developing Rules for Internet Capitalism

    Neil Irwin: Are Superstar Firms and Amazon Effects Reshaping the Economy? 

     

     

     

     
  • feedwordpress 17:07:06 on 2018/08/01 Permalink
    Tags: Book Related, , geopolitics, , , , , , , ,   

    Google and China: Flip, Flop, Flap 

    Google’s Beijing offices in 2010, when the company decided to stop censoring its results and exit the market.

    I’ve been covering Google’s rather tortured relationship with China for more than 15 years now. The company’s off again, on again approach to the Internet’s largest “untapped” market has proven vexing, but as today’s Intercept scoop informs us, it looks like Google has yielded to its own growth imperative, and will once again stand up its search services for the Chinese market. To wit:

    GOOGLE IS PLANNING to launch a censored version of its search engine in China that will blacklist websites and search terms about human rights, democracy, religion, and peaceful protest, The Intercept can reveal.

    The project – code-named Dragonfly – has been underway since spring of last year, and accelerated following a December 2017 meeting between Google’s CEO Sundar Pichai and a top Chinese government official, according to internal Google documents and people familiar with the plans.

    If I’m reading story correctly, it looks like Google’s China plans, which were kept secret from nearly all of the company’s employees, were leaked to The Intercept by concerned members of Google’s internal “Dragonfly” team, one of whom was quoted:

    “I’m against large companies and governments collaborating in the oppression of their people, and feel like transparency around what’s being done is in the public interest,” the source said, adding that they feared “what is done in China will become a template for many other nations.”

    This news raises any number of issues – for Google, certainly, but given the US/China trade war, for anyone concerned with the future of free trade and open markets. And it revives an age old question about where the line is between “respecting the rule of law in markets where we operate,” a standard tech company response to doing business on foreign soil, and “enabling authoritarian rule,” which is pretty much what Google will be doing should it actually launch the Dragonfly app.

    A bit of history. Google originally refused to play by China’s rules, and in my 2004 book, I reviewed the history, and gave the company props for taking a principled stand, and forsaking what could have been massive profits in the name of human rights. Then, in 2006, Google decided to enter the Chinese market, on government terms. Google took pains to explain its logic:

    We ultimately reached our decision by asking ourselves which course would most effectively further Google’s mission to organize the world’s information and make it universally useful and accessible. Or, put simply: how can we provide the greatest access to information to the greatest number of people?

    I didn’t buy that explanation then, and I don’t buy it now. Google is going into China for one reason, and one reason alone: Profits. As Google rolled out its service in 2006, I penned something of a rant, titled “Never Poke A Dragon While It’s Eating.” In it I wrote:

    The Chinese own a shitload of our debt, and are consuming a shitload of the world’s export base of oil. As they consolidate their power, do you really believe they’re also planning parades for us? I’m pretty sure they’ll be celebrating decades of US policy that looked the other way while the oligarchy used our technology (and that includes our routers, databases, and consulting services) to meticulously undermine the very values which allowed us to create companies like Google in the first place. But those are not the kind of celebrations I’m guessing we’d be invited to.

    So as I puzzle through this issue, understanding how in practical terms it’s really not sensible to expect that some GYMA pact is going to change the world (as much as I might wish it would), it really, honestly, comes down to one thing: The man in the White House.

    Until the person leading this country values human rights over appeasement, and decides to lead on this issue, we’re never going to make any progress. 

    Google pulled out of China in 2010, using a China-backed hacking incident as its main rationale (remember that?!).  The man in the White House was – well let’s just say he wasn’t Bush, nor Clinton, and he wasn’t Trump. In any case, the hacking incident inconveniently reminded Google that the Chinese government has no qualms about using data derived from Google services to target its own citizens.

    Has the company forgotten that fact? One wonders. Back in 2010, I praised the company for standing up to China:

    In this case, Google is again taking a leadership role, and the company is forcing China’s hand. While it’s a stretch to say the two things are directly connected, the seeming fact that China’s government was behind the intrusions has led Google to decide to stop censoring its results in China. This is politics at its finest, and it’s a very clear statement to China: We’re done playing the game your way.

    Seems Google’s not done after all. Which is both sad, and utterly predictable. Sad, because in today’s political environment, we need our companies to lead on moral and human rights issues. And predictable, because Android has a massive hold on China’s internet market, and Google’s lack of a strong search play there threatens not only the company’s future growth in its core market, but its ability to leverage Android across all its services, just as it has in Europe and the United States.

    Google so far has not made a statement on The Intercept’s story, though I imagine smoke is billowing out of some communications war room inside the company’s Mountain View headquarters.  Will the company attempt some modified version of its 2006 justifications? I certainly hope not. This time, I’d counsel, the company should just tell the truth: Google is a public company that feels compelled to grow, regardless of whether that growth comes at a price to its founding values. Period, end of story.

    I’ll end with another quote from that 2006 “Don’t Poke a Dragon” piece:

    …companies like Yahoo and Google don’t traffic in sneakers, they traffic in the most powerful forces in human culture – expression. Knowledge. Ideas. The freedom of which we take as fundamental in this country, yet somehow, we seem to have forgotten its importance in the digital age – in China, one protesting email can land you in jail for 8 years, folks.

    …Congress can call hearings, and beat up Yahoo, Google and the others for doing what everyone else is doing, but in the end, it’s not (Google’s) fault, nor, as much as I wish they’d take it on, is it even their problem. It’s our government’s problem….Since when is China policy somehow the job of private industry?

    Until that government gives (the tech industry) a China policy it can align behind, well, they’ll never align, and the very foundation of our culture – free expression and privacy, will be imperiled.

    After all, the Chinese leaders must be thinking, as they snack on our intellectual property, we’re only protecting our citizens in the name of national security.

    Just like they do in the US, right?

     
  • feedwordpress 14:13:11 on 2018/07/30 Permalink
    Tags: bay area, Book Related, , , marin, moving, , , transition   

    On Leaving the Bay Area 


    I first moved to the Bay area in 1983. I graduated from high school, spent my summer as an exchange student/day laborer in England (long story), then began studies at Berkeley, where I had a Navy scholarship (another long story).

    1983. 35 years ago.

    1983 was one year before the introduction of the Macintosh (my first job was covering Apple and the Mac). Ten years before the debut of Wired magazine. Twenty years before I began writing The Search, launching Web 2.0, and imagining what became Federated Media. And thirty years before we launched NewCo and the Shift Forum. It’s a … long fucking time ago.

    According to my laptop’s backup program, which daily and plaintively reminds me of my nomadic existence, it’s been 35 days since I left my home in Marin for good. For the past five weeks  (and the next three) my wife, my youngest daughter and I have lived out of suitcases; in hotels and Airbnbs, across ten or so cities: Boulder, Cincinnati, Florence, New Orleans, Middletown (RI), Tisbury, and of course a few visits to New York and the Bay (mainly to see our two older kids, who live in Berkeley now). It’s actually been rather thrilling, to be without an address or a home. But even as we embarked, we knew where we’d eventually end up: We’re moving to New York City.

    In the past few weeks we’ve found a home (in West Chelsea, near the High Line), and on August 15th we’ll become eager, anxious, and excited residents of Manhattan.

    Taking stock of 35 years is exhausting. Moving from a home that’s borne the weight of your collective memories for so long… well, it forces reckoning, it shakes you by the shoulders, it demands repair. If you’ve been wondering why I’ve not been writing much, why I’ve been relatively quiet after months of nearly daily posts… here you have it.

    I can’t explain in a headline, or even a few sentences, why we decided to leave the Bay. But if you’ll bear with me, I’ll do what I do, which is write till I’m done, and hope to explain myself to the extent you might care to know.

    First things first: My wife is from New York, and when I courted her from out in California (and I really did court her), I promised that once this Wired thing played out (I foolishly thought it’d be a few years, if that), we’d move back to her home state. Her mother and brother live in New York, and I always have wanted to live there as well. If you’re at heart a writer, a thinker, and a creator of stuff, you have to live at least once in the most vibrant city in the world.

    But as things turn out, three years in California stretched to five, then our first child was born, and we moved to a place we loved: Marin.  Replete with a truly majestic mountain, a community of extraordinary humans, and a lifestyle built for sending down roots, Marin lulled us into near senescence. Five more companies and two more children came, and with them a commitment to schools, to people we came to love, to the companies we struggled to build.

    But even with all that, over the past five or so years, I’ve felt that the industry which once challenged, thrilled, and engaged me was … missing something. A few things actually. NewCo was, in a small way, my attempt at identifying those things and responding to them. Identifying and celebrating companies that valued mission and purpose over profit and growth, in cities around the world, not just in the Bay area…that seemed the right thing to do five years ago. And while NewCo was not a barn burning success as a business, it thrived as an idea, and along the way my founders and I met incredible leaders, thinkers, and fellow travelers.

    But after more than three decades and six companies started in San Francisco, I’m ready to take a break from the West, from the Bay, and from the Valley. Truth be told, the place is starting to annoy me a bit more than I’m comfortable with.

    I can rationalize San Francisco’s adolescent fits – it’s trying to grow up, and it’s terrible at it – and it seems our industry is trying to press past its bro culture and blinkered focus on tech for tech’s sake. But to be honest, it’s the lack of networked, lateral thinking that’s left me wanting. It feels like nearly everyone in the Bay area is so busy making companies (guilty), they don’t have time to have conversations about much more than … making companies.

    I’ve spent my career chasing essentially one story: the impact of technology on society. Whenever I travel to New York, I find a different approach to that narrative. Sure, folks want to talk shop, but they also want to find connection points to culture, to social issues, to politics, to ideas and to the rest of the world. I feel like a lot of the Valley is habitually talking to itself about things that aren’t that interesting anymore. There’s a much bigger story to chase, and the density of connection and dialog about that story feels way more present in NYC. So I’m headed there, to see what might come of it.

    That said, there are thousands of amazing minds in the Valley who are also fascinated by the story I’m chasing. It’s just hard to connect the dots, given how spread out the damn place is – Marin to San Jose can be a two hour slog, both ways. I’ll be back, frequently, but now as a reporter of sorts, with a mission of understanding tech from an outsider’s point of view. I’ve been in NYC at least once a month for the past few decades. Now I’ll be just flipping the bit, as it were.

    How does this effect my current work with NewCo and Shift? Not much, truth be told. NewCo’s festivals around the world are now all run by wonderful partners who have them well in hand. The Shift site is moving to a open web domain, and keeping the Medium site as well, so our readers there can stay in touch with us. And Shift Forum will continue, but probably be a bit later than usual this coming year, given the disruption this move has driven through my life. I’m in remarkable conversations with a number of folks about what else I might do in New York, and as those conversations yield news, I’ll keep you guys informed about them here.

    So for now, goodbye, Bay area, and thank you for making me who I am. And hello, New York – I’m a bit nervous about what you have in store, but I’m jumping in without reservation. If you live there, let me know. I look forward to the conversation.

     
  • feedwordpress 17:53:30 on 2018/07/22 Permalink
    Tags: , Book Related, , , , , , ,   

    The Tragedy of the Data Commons 

    Before, and after?

    A theme of my writing over the past ten or so years has been the role of data in society. I tend to frame that role anthropologically: How have we adapted to this new element in our society? What tools and social structures have we created in response to its emergence as a currency in our world? How have power structures shifted as a result?

    Increasingly, I’ve been worrying a hypothesis: Like a city built over generations without central planning or consideration for much more than fundamental capitalistic values, we’ve architected an ecosystem around data that is not only dysfunctional, it’s possibly antithetical to the core values of democratic society. Houston, it seems, we really do have a problem.

    I know, it’s been a while since I’ve written here, and most of my recent stuff has focused on Facebook. I’ve been on the road the entire summer, and preparing to move from the Bay area to NYC ( that’s another post). But before you roll your eyes in anticipation of yet another Facebook rant, no, this post is not about Facebook, despite that company’s continued inability to govern itself.

    No, this post is about the business of health insurance.

    Last week ProPublica published a story titled Health Insurers Are Vacuuming Up Details About You — And It Could Raise Your Rates.  It’s the second in an ongoing series the investigative unit is doing on the role of data in healthcare. I’ve been watching this story develop for years, and ProPublica’s piece does a nice job of framing the issue. It envisions  “a future in which everything you do — the things you buy, the food you eat, the time you spend watching TV — may help determine how much you pay for health insurance.”  Unsurprisingly, the health industry has  developed an insatiable appetite for personal data about the individuals it covers. Over the past decade or so, all of our quotidian activities (and far more) have been turned into data, and that data can and is being sold to the insurance industry:

    “The companies are tracking your race, education level, TV habits, marital status, net worth. They’re collecting what you post on social media, whether you’re behind on your bills, what you order online. Then they feed this information into complicated computer algorithms that spit out predictions about how much your health care could cost them.”

    HIPPA, the regulatory framework governing health information in the United States, only covers and protects medical data – not search histories, streaming usage, or grocery loyalty data. But if you think your search, video, and food choices aren’t related to health, well, let’s just say your insurance company begs to differ.

    Lest we dive into a rabbit hole about the corrosive combination of healthcare profit margins with personal data (ProPublica’s story does a fine job of that anyway), I want to pull back and think about what’s really going on here.

    The Tragedy of the Commons

    One of the most fundamental tensions in an open society is the potential misuse of resources held “in common” – resources to which all individuals have access. Garrett Hardin’s 1968 essay on the subject, “The Tragedy of the Commons,” explores this tension, concluding that the problem of human overpopulation has no technical solution. (A technical solution is one that does not require a shift in human values or morality (IE, a political solution), but rather can be fixed by application of science and/or engineering.) Hardin’s essay has become one of the most cited works in social science – the tragedy of the commons is a facile concept that applies to countless problems across society.

    In the essay, Hardin employs a simple example of a common grazing pasture, open to all who own livestock. The pasture, of course, can only support a finite number of cattle. But as Hardin argues, cattle owners are financially motivated to graze as many cattle as they possibly can, driving the number of grass munchers beyond the land’s capacity, ultimately destroying the commons. “Freedom in a commons brings ruin to all,” he concludes, delivering an intellectual middle finger to Smith’s “invisible hand” in the process.

    So what does this have to do with healthcare, data, and the insurance industry? Well, consider how the insurance industry prices its policies. Insurance has always been a data-driven business – it’s driven by actuarial risk assessment, a statistical method that predicts the probability of a certain event happening. Creating and refining these risk assessments lies at the heart of the insurance industry, and until recently, the amount of data informing actuarial models has been staggeringly slight. Age, location, and tobacco use are pretty much how policies are priced under Obamacare, for example. Given this paucity, one might argue that it’s utterly a *good* thing that the insurance industry is beefing up its databases. Right?

    Perhaps not. When a population is aggregated on high-level data points like age and location, we’re essentially being judged on a simple shared commons – all 18 year olds who live in Los Angeles are being treated essentially the same, regardless if one person has a lurking gene for cancer and another will live without health complications for decades. In essence, we’re sharing the load of public health in common – evening out the societal costs in the process.

    But once the system can discriminate on a multitude of data points, the commons collapses,  devolving into a system rewarding whoever has the most profitable profile. That 18-year old with flawless genes, the right zip code, an enviable inheritance, and all the right social media habits will pay next to nothing for health insurance. But the 18 year old with a mutated BRCA1 gene, a poor zip code, and a proclivity to sit around eating Pringles while playing Fortnite? That teenager is not going to be able to afford health insurance.

    Put another way, adding personalized data to the insurance commons destroys the fabric of that commons. Healthcare has been resistant to this force until recently, but we’re already seeing the same forces at work in other aspects of our previously shared public goods.

    A public good, to review, is defined as “a commodity or service that is provided without profit to all members of a society, either by the government or a private individual or organization.” A good example is public transportation. The rise of data-driven services like Uber and Lyft have been a boon for anyone who can afford these services, but the unforeseen externalities are disastrous for the public good. Ridership, and therefore revenue, falls for public transportation systems, which fall into a spiral of neglect and decay. Our public streets become clogged with circling rideshare drivers, roadway maintenance costs skyrocket, and – perhaps most perniciously – we become a society of individuals who forget how to interact with each other in public spaces like buses, subways, and trolley cars.

    Once you start to think about public goods in this way, you start to see the data-driven erosion of the public good everywhere. Our public square, where we debate political and social issues, has become 2.2 billion data-driven Truman Shows, to paraphrase social media critic Roger McNamee. Retail outlets, where we once interacted with our fellow citizens, are now inhabited by armies of Taskrabbits and Instacarters. Public education is hollowed out by data-driven personalized learning startups like Alt School, Khan Academy, or, let’s face it, YouTube how to videos.

    We’re facing a crisis of the commons – of the public spaces we once held as fundamental to the functioning of our democratic society. And we have data-driven capitalism to blame for it.

    Now, before you conclude that Battelle has become a neo-luddite, know that I remain a massive fan of data-driven business. However, if we fail to re-architect the core framework of how data flows through society – if we continue to favor the rights of corporations to determine how value flows to individuals absent the balancing weight of the public commons – we’re heading down a path of social ruin. ProPublica’s warning on health insurance is proof that the problem is not limited to Facebook alone. It is a problem across our entire society. It’s time we woke up to it.

    So what do we do about it? That’ll be the focus of a lot of my writing going forward.  As Hardin writes presciently in his original article, “It is when the hidden decisions are made explicit that the arguments begin. The problem for the years ahead is to work out an acceptable theory of weighting.” In the case of data-driven decisioning, we can no longer outsource that work to private corporations with lofty sounding mission statements, whether they be in healthcare, insurance, social media, ride sharing, or e-commerce.

     

     

     
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