Tag: economics

Are Americans Dumber in the Information Age?

Information is the oxygen of the modern age. It seeps through the walls topped by barbed wire, it wafts across the electrified borders. … The Goliath of totalitarianism will be brought down by the David of the microchip.
– Ronald Reagan, The Guardian, 1989

The knowledge and power of the Information Age will be within reach not just of the few, but of every classroom, every library, every child. 
– Bill Clinton, Second Inaugural Address —

Remember the promise?  The most hardscrabble kid in America (in the world) will be able to reshape her destiny with the wealth of knowledge that will be freely available to her through the Internet. Tyrants will melt in the sunlight of so much information that every citizen will carry in the palm of his hand. Prosperity will be enjoyed by more people in more places than ever before.  And despite a great deal of statistical and anecdotal evidence to the contrary, technologists are still selling this same message.

CISCO currently runs a commercial about the near future of interconnectivity, envisioning a world that moves like a well-tailored suit to accommodate every human need or whim  — a place where an ambulance tells traffic lights to turn green en route to a hospital. How do we not raise an eyebrow at this image in particular while the US government was only recently shut down because we can’t all agree that every citizen has the right to be in that ambulance? How is it that we are more (or at least as) divided on so many basic issues?  Doesn’t everybody have the Internet? Yes. And unfortunately, it tells everyone exactly what he wants to hear.

About a week ago, the Organization for Economic Co-operation and Development (OECD) released the results of a two-year study that tested thousands of adults in 23 countries on basic skills in literacy, math, and use of technology.  Americans scored very poorly for a highly-developed nation, especially in the tech and math departments. Yellow journalists and humorists couldn’t resist the urge to offer variations on Americans being the dumbest people on Earth, but I like this more sober assessment by Sadhbh Walshe, writing for The Guardian, in which she focuses on wealth inequality as a very likely culprit in America’s score.  It’s really no surprise that people with money can afford better educations and, therefore, do better in life and continue to be people with money, who raise kids who will get better educations.  Ditto the cycle of poverty, poor education, and continued poverty for a growing number of Americans.

But what happened to the expectation that the Internet would help universalize education, or at least fill in the gaps for those less privileged?  We’ve had a whole generation grow up appended to these devices and their applications.  So, why do things seem to be getting worse, not only in education itself, but also with regard to overall prosperity? The internet industry will go to great lengths to protect the sanctity of the web from even the most imaginary threats to its design as a never-ending and unregulated bazaar, but the dreamy images in the advertising are a stark contrast with real human experience.  We buy the pitch about a 15-year-old girl in the slums of Detroit looking up astronomy data and becoming head of NASA, but we ignore the more typical reality that thousands of 15-year-old girls in middle-class suburbia are getting bullied online or being pressured to snap a few naked “selfies” or more likely just using these technologies to attend to the same, not-so-educational, matters that have long been the purview of teenage girls.  Meanwhile, that girl in the slums of Detroit has yet to benefit in any tangible way from the expansion of all this so-called innovation that, by nearly every measure, only seems to feed the economic cancer of our age — wealth consolidation.

In his new book, Who Owns the Future, Jaron Lanier compares the mortgage-backed securities crisis and media piracy in order to draw attention to the cultural trend that wants to tear down systems — Lanier calls these levees — claimed by one group or another to be barriers to prosperity.  “The Wall Street mogul and the young Pirate Party voter sang the same song,” writes Lanier. “All must be made fluid.  Even victims often cheered at the misfortunes of people who were similar to them.” The design of the digital age leads to wealth consolidation, and not even by capitalists like those of the early 20th century, who at least built infrastructure, but by hucksters who bundle worthless debts into phony securities or who trade in trafficking your family photos or an artist’s work without permission or payment.

When it comes to addressing the ill-effects of digital technology — whether it’s about media piracy or rape threats against a journalist or just the general diffusion of bad information — academics, lawyers, and hacktivists rush to the defense of the systems and their designs. Thus the conversation remains theoretical and cold while we continue to ignore the flesh-and-blood realities of everyday life.

Rime of the Corporate Manager

“Nor any drop to drink.”

It was a year ago this week that I first launched this blog, and when a friend shared the above video the other day, it reminded me why I choose to write about digital-age issues, the rights of artists and creators, and the assertion of the humanistic over the technological:  it’s because I believe the economics of the internet  too often reflect exaggerated corporate values disguised as social values.  I’ve produced videos similar to this one, have sat down with CEOs to record no small amount of gibberish in my career, but Nestle CEO Peter Brabeck-Letmathe appears to be a paragon in the art of believing one’s own bullshit.  When a guy calls “extreme” the assertion that water is a human right, it’s probably time to break out the pitchforks and torches. If the molecule that makes all life possible isn’t a human right, then there are no human rights. Of course, Nestle has long been featured in many a rogues gallery among watchdog organizations for a range of abuses around the world, including its purchase of cocoa harvested by child slaves in Africa.

There’s nothing wrong with corporations, just corporate culture; and it’s my belief that for about a half-century, we’ve been nurturing a mindset so detached from social responsibility that it should really be no surprise when executives at the top of the hill espouse viewpoints bordering on depravity. More to the point, this dissociative behavior is not exclusive to wealthy CEOs. For everyone you know who might want to defenestrate the architects of the mortgage-backed securities fraud, you probably know just as many people who privately think, “I wish I’d been in on that.” And the truth is these corrupt bubbles are often pumped up as much by greedy individuals and small entities tailgating the bigger players in these schemes.  We have trained ourselves to pursue short-term, high-return ventures regardless of their value or toxicity to society overall. And the sad reality is that the economy we have fostered leaves us with little choice other than to become social cannibals. As the middle class in the developed world is hollowed out by the schemes of the uber-wealthy, those in the middle begin to recognize that a modest and sustainable existence is nearly impossible; and so we become schemers ourselves, assuming that the only security lies in rapid wealth accumulation by whatever means. Victims be damned.

I have believed for a long time that our economic woes are cultural more than they are systemic, and if this is true, it means things will have to get really bad before a new generation redefines its principles out of necessity.  And that brings us to the massive influence of Silicon Valley and the many populist promises of Web 2.0.  The marketing is an ongoing montage of human potential, entrepreneurism, innovation, global connectivity, and a better quality of life for more people — all set to the tune of some world-music anthem. To watch the commercials, one gets the idea that all we need is to endow every individual with a smartphone, and human potential becomes limitless. If we just plug in, we can all live beautiful, upper-middle-class lives, dress like hipsters, and share our beautiful experiences with one another through social media.  Meanwhile, I meet more American millennials who have no idea what they want to do with themselves, partly because jobs are scarce and the market is flooded with educated people.

The underlying message emanating from the internet industry is indeed one that promotes tearing down existing systems (i.e. “barriers”) because technology “empowers the individual.”  And there is some truth in these promises evidenced by many entrepreneurial and grassroots enterprises that would not exist without the digital revolution; but there is also an illusion of personal empowerment that I think blinds many to the same old corporate interests behind all the feel-good PR.

My concern is that the internet industry, both tangibly and ideologically, represents everything that’s already dangerous about corporate culture, only on steroids. Take a step back from the apparent vastness of the web and consider how few major corporations profit from most of our activity.  Name another Facebook.  Name another Amazon.  Name another Google.  Web 2.0 is a highly circumscribed environment owned by a small number of corporations that don’t employ very many people. Moreover, if we’re going to be brutal about it, the most successful web business are fundamentally exploitative in nature. Whether we’re talking about social media, a news aggregator, music streaming, some sophomoric diversion site, a YouTube, or a torrent, the business model is clear — drive traffic to paying advertisers without investing much or anything in the production of content.  This is the underlying reason why the industry is antagonistic to intellectual property (and sometimes even privacy) rights — because such constructs are just a nuisance to the money-for-nothing model that is the foundation of most of these self-proclaimed innovations in the market.  “Water is not a human right” is a message that supports Nestle’s bottom line. “Privacy and IP aren’t civil rights” are messages that support the bottom line of most high-profit web companies.

We may be in danger of very rapidly expanding the WalMart model throughout multiple sectors of the economy by having too much faith in these technological promises. The big-box retailer is monopolistic and exerts excessive pressure on suppliers.  As consumers, we see lower prices at the store but too often fail to realize that we’re part of a vicious cycle that actually leaves us with fewer dollars to spend in the first place and even forces manufacturers to export labor overseas where workers may be mistreated in the production of inferior goods.  We see this same, unilateral bargaining power as Apple’s new music streaming service negotiates licensing rates with the major publishers; we’ll see it as YouTube negotiates with entities like the NFL and as Google inserts itself more directly into the filmed-entertainment business.  Instead of diversity and competition, which the web promises, we seem to be fostering consolidated wealth and power not seen since the days of John D. Rockefeller. And although many people have come to look at the WalMart model holistically, we still tend to look at web enterprises only as consumers benefiting from all the cheap and free stuff.

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Photo by Haje

There are social, moral, and financial reasons to be wary of our exuberant embrace of models that rapidly devalue goods and services, or principles like privacy, intellectual property, or common decency. Nevertheless, every day, some lobbyist or paid consultant or academic with a book to sell will extoll the value of devaluation. Not only do many of these theories remind me of Mr. CEO of Nestle defining water as a “food stuff,” it reminds me of an old joke . . .

A guy buys firewood at $1.50/lb and sells it to his customers for $1.25/lb. When he realizes he’s not making any money, he decides he needs a bigger truck.