(Roughly) Daily

Posts Tagged ‘platforms

“Do for the future what you’re grateful the past did for you. (Or what you wish the past had done for you.)”*…

A love letter to infrastructure…

The Nobel Prize–winning developmental economist Amartya Sen describes income and wealth as desirable “because, typically, they are admirable general-purpose means for having more freedom to lead the kind of lives we have reason to value. The usefulness of wealth lies in the things that it allows us to do—the substantive freedoms it helps us to achieve.” This is also a fairly good description of infrastructural systems: they’re a general-purpose means of freeing up time, energy, and attention. On a day-to-day basis, my personal freedom doesn’t come from money per se—it mostly comes from having a home where these systems are built into the walls, which became abundantly clear during the coronavirus pandemic. Stable housing and a salary that covered my utility bills meant that, with the exception of food and taking out the trash, all of my basic needs were met without my ever even having to go outside. It’s worth noting that this is an important reason why guaranteed housing for everyone is important—not just because of privacy, security, and a legible address, but also because our homes are nodes on these infrastructural networks. They are our locus of access to clean water and sewage, electricity, and telecommunications.

But the real difference between money and infrastructural systems as general-purpose providers of freedom is that money is individual and our infrastructural systems are, by their nature, collective. If municipal water systems mean that we are enduringly connected to each other through the landscape where our bodies are, our other systems ratchet this up by orders of magnitude. Behind the wheel of a car, we are a cyborg: our human body controls a powered exoskeleton that lets us move further and faster than we ever could without it. But this freedom depends on roads and supply chains for fuels, to say nothing of traffic laws and safety regulations. In researcher Paul Graham Raven’s memorable formulation, infrastructural systems make us all into collective cyborgs. Alone in my apartment, when I reach out my hand to flip a switch or turn on a tap, I am a continent-spanning colossus, tapping into vast systems that span thousands of miles to bring energy, atoms, and information to my household. But I’m only the slenderest tranche of these collective systems, constituting the whole with all the other members of our federated infrastructural cyborg bodies.

The philosopher John Rawls once offered up a thought experiment, building on the classic question: How best should society be ordered? His key addition was the concept of a “veil of ignorance”: not just that you would live in the society you designed, but that you wouldn’t know ahead of time what role you would have within it. So, while you might want to live in a world where you are an absolute ruler whose every whim is fulfilled by fawning minions, the veil of ignorance means that there is no guarantee you wouldn’t be one of the minions—in fact, given the numerical odds, it’s a lot more likely. Positing a veil of ignorance is a powerful tool to consider more equitable societies.

Seen from this perspective, shared infrastructural systems provide for the basic needs of—and therefore grant agency to—members of a community in a way that would satisfy Rawls. Universal provision of water, sewage, electricity, access to transportation networks that allow for personal mobility, and broadband internet access creates a society where everyone—rich or poor, regardless of what you look like or believe—has access to at least a baseline level of agency and opportunity.

But here’s the kicker: it’s not a thought experiment. We’ve all passed through Rawls’s veil of ignorance. None of us chooses the circumstances of our birth. This is immediate and inarguable if you’re the child of immigrants. If one of the most salient facts of my life is that I was born in Canada, it’s also obvious that I had nothing to do with it. But it’s equally true for the American who proudly traces their family back to ancestors who came over on the Mayflower, or the English family whose landholdings are listed in the Domesday Book. Had I been born in India, my infrastructural birthright would have been far less robust as an underpinning for the life of agency and opportunity that I am fortunate to live, which stems in large part from the sheer blind luck (from my perspective) of being born in Canada.

Our infrastructural systems are the technological basis of the modern world, the basis for a level of global wealth and personal agency that would have been unthinkable only a few centuries ago. But those of us who have been fortunate enough to live as part of a collective cyborg have gained our personal agency at an enormous moral cost. And now anthropogenic climate change is teaching us that there are no others, no elsewhere.

For millennia, these systems have been built out assuming a steady, predictable landscape, allowing us to design long-lived networks where century-old aqueducts underlay new college campuses. But this predictability is becoming a thing of the past. More heat in the atmosphere means warmer weather and shifting climates, with attendant droughts, wildfires, and more frequent and severe hurricanes. But it also increases uncertainty: as the effects of greenhouse gases compound, we may reach tipping points, trigger positive feedback loops, and face other unprecedented changes to climates. Engineers can’t design systems to withstand hundred-year storms when the last century provides little guide to the weather of the next. No matter where in the world you reside, this is the future we will all have to live in. The only question that remains is what kind of world we want to build there.

Our shared infrastructural systems are the most profound and effective means that we’ve created to both relieve the day-to-day burdens of meeting our bodies’ needs and to allow us to go beyond their physiological limits. To face anthropogenic climate change is to become a civilization that can respond to this shifting, unpredictable new world while maintaining these systems: if you benefit from them today, then any future in which they are compromised is recognizably a dystopia. But that “dystopia” is where most of the world already lives. To face anthropogenic climate change ethically is to do so in a way that minimizes human suffering.

Mitigation—limiting the amount of warming, primarily through decarbonizing our energy sources—is one element of this transition. But the true promise of renewable energy is not that it doesn’t contribute to climate change. It’s that renewable energy is ubiquitous and abundant—if every human used energy at the same rate as North Americans, it would still only be a tiny percentage of the solar energy that reaches the Earth. Transforming our energy systems, and the infrastructural systems that they power, so that they become sustainable and resilient might be the most powerful lever that we have to not just survive this transition but to create a world where everyone can thrive. And given the planetwide interconnectedness of infrastructural systems, except in the shortest of short terms, they will be maintained equitably or not at all.

Ursula Franklin wrote, “Central to any new technology is the concept of justice.” We can commit to developing the technologies and building out new infrastructural systems that are flexible and sustainable, but we have the same urgency and unparalleled opportunity to transform our ultrastructure, the social systems that surround and shape them. Every human being has a body with similar needs, embedded in the material world at a specific place in the landscape. This requires a different relationship with each other, one in which we acknowledge and act on how we are connected to each other through our bodies in the landscapes where we find ourselves. We need to have a conception of infrastructural citizenship that includes a responsibility to look after each other, in perpetuity. And with that, we can begin to transform our technological systems into systems of compassion, care, and resource-sharing at all scales, from the individual level, through the level of cities and nations, all the way up to the global.

Our social relationships with each other—our culture, our learning, our art, our shared jokes and shared sorrow, raising our children, attending to our elderly, and together dreaming of our future—these are the essence of what it means to be human. We thrive as individuals and communities by caring for others, and being taken care of in turn. Collective infrastructural systems that are resilient, sustainable, and globally equitable provide the means for us to care for each other at scale. They are a commitment to our shared humanity.

Bodies, agency, and infrastructure: “Care At Scale,” from Debbie Chachra (@debcha), via the indispensable Exponential View (@ExponentialView). Eminently worth reading in full.

See also: “Infrastructure is much more important than architecture“; and resonantly, “Kim Stanley Robinson: a climate plan for a world in flames.”

* Danny Hillis’ “Golden Rule of Time,” as quoted by Stewart Brand in Whole Earth Discipline

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As we build foundations, we might recall that it was on this date in 1904 that the first balloon used for meteorologic research in the U.S. was released near St. Louis, Missouri. The balloon carried instruments that measured barometric pressure, temperature, and humidity, that returned to Earth when the balloon burst.

The first weather balloon was launched in France in 1892. Prior to using balloons, the U.S. used kites tethered by piano wire– the downsides being the limited distance kites could ascend (less than 2 miles), the inability to use them if the wind was too light or too strong, and potential for the kites to break away.

Since this first launch, millions of weather balloons have been launched by the National Weather Service and its predecessor organizations.

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Written by (Roughly) Daily

September 15, 2021 at 1:00 am

“Create more value than you capture”*…

As Donald Trump’s presidency careened to its ignominious end, with a mob of his supporters storming of the US Capitol, Facebook and Twitter banned the US president for inciting the violence. With that act, the scope of the political power wielded by Big Tech became impossible to ignore.

Whether these platforms have too much political power is a debate that is just beginning. Their outsize economic power, though, is unquestionable. The combined market capitalization of the five largest US tech platforms – Alphabet (Google), Amazon, Apple, Facebook, and Microsoft – rose by $2.7 trillion in 2020. Following the addition of Tesla to the S&P 500, the Big Six tech firms now represent nearly one-quarter of the index’s valuation. And with the spread of COVID-19, the leading digital platforms have become de facto essential service providers, enabling a mass transition to remote and isolated living.

And yet the political pressure on Big Tech has continued to rise. There is a growing consensus that platforms have been abusing their power, driving profits by exploiting consumer privacy, crushing the competition, and buying up potential rivals.

The economics of platforms is different from the economics of traditional offline and one-sided markets. Policymakers therefore need to reconsider some of their most basic assumptions, asking themselves whether they are even focusing on the right things.

A key challenge is to determine how the value of data diverges from the value created by providing a data-generating service. Platforms have the power to shape how decisions are made, which in turn can alter the value of the data being amassed. The implication, as Google co-founders Larry Page and Sergey Brin foresaw in a 1998 paper, is that advertisers or any other third-party interest can embed mixed motives into the design of a digital service. In the case of internet search, the advertising imperative can distract from efforts to improve the core service, because the focus is on the value generated for advertisers rather than for users.

As this example shows, it is necessary to ask who benefits the most from the design of a given service. If a platform’s core mission is to maximize profits from advertising, that fact will shape how it pursues innovation, engages with the public, and designs its products and services.

Moreover, it is important to understand that even if antitrust authorities were empowered to break up companies like Google and Facebook, that would not eliminate the data extraction and monetization that lie at the heart of their business models. Creating competition among a bunch of mini-Facebooks would not weed out such practices, and may even entrench them further as companies race to the bottom to extract the most value for their paying customers…

Digital markets do not have to be extractive and exploitative. They could be quite different, but only if we ourselves start to think differently. We need to recognize, as Adam Smith did, that there is a difference between profits and rents – between the wealth generated by creating value and wealth that is amassed through extraction. The first is a reward for taking risks that improve the productive capacity of an economy; the second comes from seizing an undue share of the reward without providing comparable improvements to the economy’s productive capacity.

For the past half-century, corporate governance has rested on the notion of shareholder value. The result is an economy in which it is increasingly important to differentiate firms that are actually driving innovation from those that are not. There is no shortage of firms that are engaged merely in financial engineering, share buy-backs, and rent-seeking, extracting gains from actual risk takers while under-investing in the goods and services that generate value.

The digital economy has accelerated this conflation of wealth creation and rent extraction, making it all the more difficult to differentiate between the two. The issue is not just that financial intermediaries are shaping how value is created and distributed across firms, but that these extractive mechanisms are embedded within user interfaces; they are baked into digital markets by design…

The proliferation of such practices shows why we need to focus more on the “how” of wealth creation, and less on the “bottom line.” An economy that produces wealth from privacy-respecting innovations would not function anything like one that encourages the systematic exploitation of private data.

But building a new economic foundation will require a shift from the shareholder model to a stakeholder model that embodies a deeper appreciation of public value creation. Wealth and other desirable market outcomes are collectively co-created among public, private, and civic domains, and should be understood as such. Policy analysis and corporate decision-making can no longer be guided solely by concerns about maximizing efficiency. We now also must consider whether wealth generation is actually improving society and strengthening the ability to respond to social challenges.

After all, the fact that platforms are creating wealth does not mean they are creating public value. A firm with access to massive amounts of data and network effects could, in theory, use its position to improve social well-being. But it is unlikely to do so if it is operating under a framework that prizes the generation of advertising revenue over everything else, including the performance of products and services…

Today’s digital economy has grown up around a business model of data and wealth extraction, confounding traditional antitrust paradigms and undermining the public and social value that otherwise could be derived from technological innovation. An acute diagnosis of a fundamental structural challenge, and thoughts on steps to address it– Mariana Mazzucato (@MazzucatoM), Tim O’Reilly (@timoreilly), and colleagues: “Reimagining the Platform Economy.” Do click through to read piece read the entire piece.

* Tim O’Reilly

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As we dig deep, we might recall that it was on this date in 2005 that YouTube was founded and registered (though it didn’t launch until November of that year). The creation of three PayPal vets (Chad HurleySteve Chen, and Jawed Karim), it was bought by Google one year after launch (in November 2006) for $1.65 billion. Operating as one of Google’s subsidiaries, it is now (per Alexa Internet Rankings) the second most trafficked web site, after its parent’s search page.

YouTube logos over time

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Written by (Roughly) Daily

February 14, 2021 at 1:01 am

“In a free market the people are free, the ideas are locked up”*…

 

gift

 

Back when I first studied gift exchange, I dismissed its economic importance—after all, it reflects only a tiny portion of all our transactions. Perhaps it might interest an anthropologist, but only as a kind of curiosity item, a refreshing but impractical alternative to the real substance of economic life. But as I see it now, the gift economy is much larger than I realized—in fact, it’s almost as large as the transaction-based economy. For a start, I’ve seen its predominance in my own life. My wife and I don’t charge my children for their meals or the hours of service we provide them. My friends dealing with elder care or community service or church activities operate off-the-grid, so to speak—at least from a conventional economic perspective. These are gift exchanges, pure and simple, and they are everywhere you look, even in a modern capitalist society.

But I’m concerned here with a different class of activities, ones that straddle these two spheres—and are hard to classify for that very reason. Artistic or creative pursuits, endeavors that are typically pursued for the intrinsic joy of sharing one’s gifts, are also frequently commoditized and placed on the market. Are they part of the gift economy or the transaction economy?…

The estimable Ted Gioia explores: “Gratuity: Who Gets Paid When Art Is Free.”

[image above: source]

* Lewis Hyde, The Gift: Creativity and the Artist in the Modern World

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As we share and share alike, we might recall that it was on this date in 1927 that Mae West was sentenced to 10 days in a workhouse on Roosevelt Island (known then as “Welfare Island”) and fined $500 for obscenity for her play Sex… despite the fact that the play had run over a year before the police raided, and had been seen by 325,000 people– including members of the police department and their wives, judges of the criminal courts, and seven members of the district attorney’s staff.

In the event, she served eight days of her sentence, receiving two days off of time for “good behavior”– and the resulting publicity did great things for Ms. West’s notoriety nationwide.

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Written by (Roughly) Daily

April 19, 2020 at 1:01 am

“Of course our lives are regulated. When you come to a stop sign, you stop; if you want to go fishing, you get a license; if you want to shoot ducks, you can shoot only three ducks. The alternative is dead bodies at the intersection, no fish, and no ducks. OK?”*…

 

Regulation

 

After a characteristically-clear explanation of the ways in which the “monopoly practice” concerns around Google, Amazon, and the other on-line giants are different from those the U.S. has traditionally tried to manage– they limit/manage choice– the ever-illuminating Tim O’Reilly argues for a fresh approach to anti-trust:

So how are we therefore best to decide if these Big Tech platforms need to be regulated?

In one famous exchange, Bill Gates, the founder and former CEO of Microsoft, told Chamath Palihapitiya, the one-time head of the Facebook platform:

“This isn’t a platform. A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it’s a platform.”

Given this understanding of the role of a platform, regulators should be looking to measure whether companies like Amazon or Google are continuing to provide opportunity for their ecosystem of suppliers, or if they’re increasing their own returns at the expense of that ecosystem.

Rather than just asking whether consumers benefit in the short term from the companies’ actions, regulators should be looking at the long-term health of the marketplace of suppliers—they are the real source of that consumer benefit, not the platforms alone. Have Amazon, Apple, or Google

earned

their profits, or are they coming from monopolistic rents?

How might we know whether a company operating an algorithmically managed marketplace is extracting rents rather than simply taking a reasonable cut for the services it provides? The first sign may not be that it is raising prices for consumers, but that it is taking a larger percentage from its suppliers, or competing unfairly with them.

Before antitrust authorities look to remedies like breaking up these companies, a good first step would be to require disclosure of information about the growth and health of the supply side of their marketplaces. The statistics about the growth of its third-party marketplace that Bezos trumpeted in his shareholder letter tell only half the story. The questions to ask are who profits, by how much, and how that allocation of rewards is changing over time…

Data is the currency of these companies. It should also be the currency of those looking to regulate them. You cannot regulate what you don’t understand. The algorithms that these companies use may be defended as trade secrets, but their outcomes should be open to inspection.

An important read: “Antitrust regulators are using the wrong tools to break up Big Tech.”

* Molly Ivins

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As we bust trusts, we might recall that it was on this date in 1974 that the Supreme Court handed down its unanimous decision in United States v. Nixon, ordering him to deliver tape recordings and other subpoenaed materials to a federal district court.  Special prosecutor Leon Jaworski had subpoenaed the tapes as part of on-going impeachment proceedings; the White House had sued to quash; and the decision is widely viewed as a crucial precedent limiting the power of any U.S. president to claim executive privilege.

nixon_sony source

 

 

Written by (Roughly) Daily

July 24, 2019 at 1:01 am

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