Who Owns the Future?

Introduction to the Paperback Edition

Prelude

PART ONE
First Round

1 Motivation

2 A Simple Idea

First Interlude: Ancient Anticipation of the Singularity

PART TWO
The Cybernetic Tempest

3 Money as Seen Through One Computer Scientist’s Eyes

4 The Ad Hoc Construction of Mass Dignity

5 ‘Siren Servers’

6 The Specter of the Perfect Investment

7 Some Pioneering Siren Servers

Second Interlude (a Parody): If Life Gives You EULAs, Make Lemonade

PART THREE
How This Century Might Unfold,
from Two Points of View

8 From Below: Mass Unemployment Events

9 From Above: Misusing Big Data to Become Ridiculous

Third Interlude: Modernity Conceives the Future

PART FOUR
Markets, Energy Landscapes, and Narcissism

10 Markets and Energy Landscapes

11 Narcissism

Fourth Interlude: Limits Are for Muggles

PART FIVE
The Contest to Be Most Meta

12 Story Lost

13 Coercion on Autopilot: Specialized Network Effects

14 Obscuring the Human Element

15 Story Found

Fifth Interlude: The Wise Old Man in the Clouds

PART SIX
Democracy

16 Complaint Is Not Enough

17 Clout Must Underlie Rights, if Rights Are to Persist

Sixth Interlude: The Pocket Protector in the Saffron Robe

PART SEVEN
Ted Nelson

18 First Thought, Best Thought

PART EIGHT
The Dirty Pictures (or, Nuts and Bolts:
What a Humanistic Alternative Might Be Like)

19 The Project

20 We Need to Do Better than Ad Hoc Levees

21 Some First Principles

22 Who Will Do What?

23 Big Business

24 How Will We Earn and Spend?

25 Risk

26 Financial Identity

27 Inclusion

28 The Interface to Reality

29 Creepy

30 A Stab at Mitigating Creepiness

Seventh Interlude: Limits Are for Mortals

PART NINE
Transition

31 The Transition

32 Leadership

Eighth Interlude: The Fate of Books

Conclusion: What Is to Be Remembered?

Afterword to the Paperback Edition

Appendix: First Appearances of Key Terms

Notes

Acknowledgments

Follow Penguin

Introduction to the Paperback Edition

A story from the history of music turned me into a digital idealist when I was only a teenager, in the 1970s. African American slaves were forbidden to play drums for many years, because drums could be used as a form of communication. Slave owners feared that drums could play a role in organizing revolts.

Throughout human history, humans have been their own worst enemies, and whenever someone is oppressing someone else, the oppressor seeks to control the tools of communication. Digital networks seemed to me and my compatriots to present a new twist on this old game. A digital network by its nature must constantly adapt to flaws and errors by routing around them. Dominating a digital network would therefore be hard. Digital networks might become the drums that would never be silenced!

That was the starting idea, way back from before the Internet came into existence. It still sounds right to me, and some version of it must be workable, but the particular, strange way we’ve built our networks has backfired.

Right now is the time when people are learning how to live with digital networks as we’ve made them so far. Once you understand this, current events that might seem unrelated to each other – and might also appear to be rather senseless – will suddenly fit into a coherent story. For instance, two gargantuan malfunctions in the United States that exploded during the period between the hardback and paperback editions of this book seemed to be unrelated at first glance. But look a little deeper and they can be understood as mirror images of each other.

The first malfunction was when the United States was nearly torn asunder by the extraordinary struggle over ‘Obamacare.’ Portions of the government were temporarily shut down and the nation teetered on reneging on its debt obligations. While there are various useful ways of thinking about the Obamacare conflict, it’s also important to remember what the conflict was about.

On a literal level, we were fighting about how society integrates ‘big data.’* As explained in these pages, the advent of big data reversed the motivations of insurance companies. Back in the ancient days before cheap, connected computation, the primary way an insurance company could increase its profits was by insuring more and more customers. After the appearance of big data, motivations perversely inverted; the road to increasing profit was to insure only those who could be determined by algorithms to need insurance the least.

This strategic reversal left vast numbers of Americans uninsured. Since Americans are fundamentally compassionate, this did not result in the uninsured dying in the streets outside hospital emergency rooms. Instead, the public paid for health care in the most expensive way possible, by treating people only in emergency conditions. This, in turn, resulted in a drag on the economy, a decrease in personal freedom (since people were locked into jobs in order to keep insurance), and a lessening of economic growth and innovation. It also resulted in decreased overall health in the nation.¹ Obamacare is a method of reversing the reversal by demanding that many more people be insured, and that insurance companies compete in a way that’s somewhat reminiscent of the days before big data.

No one disputes that big data can be an essential tool in medicine and public health. Information is by definition the raw material of feedback, and therefore of innovation. But there is more than one design for integrating big data into society. Because digital technology is still somewhat novel, it’s possible to succumb to an illusion that there is only one way to design it. Is it conceivable to use big data in such a way that both people and their economy get healthier? That is the kind of question addressed by this book.

The second malfunction exploded around Edward Snowden’s leaks, which revealed that the National Security Administration was overstepping its charter, snooping on everyone, friend and foe, undermining the encryption that secures our transactions, and turning the consumer-facing world of ‘free’ internet services into an Orwellian monster

The NSA has been hard-pressed to show specific benefits that have come out of algorithmically spying on everyone. Old-fashioned intelligence work on the ground has been delivering results, like locating Osama Bin Laden, while the hope for automatic security through big data algorithms has simply not been realized. The bombing of the Boston marathon took place the same week as the American publication of this book, and no number of hidden city-sized server farms, metadata analysts, or street cameras prevented it.

In fact, the crazy stretch of the NSA’s digital Hoovering demanded such a large labor pool of techies that it compromised its own discipline, making the appearance of a Snowden inevitable. Completely aside from whether one is supportive or horrified by the NSA’s strategies in the age of big data, the undeniable fact is that it has made itself less competent.

The NSA and American health insurance companies fell prey to exactly the same disease, which is a form of institutional addiction. They became addicted to what I call a ‘Siren Server.’ A Siren Server is a powerful computational resource that out-computes everyone else on the network, and seems to grant its owners a guaranteed path to unbounded success at first. But the benefits are illusory, and lead to a grand failure before too long.

The Snowden leaks made people all over the world feel violated. We don’t know who has read our most tender emails. It feels bad, and if we ever get used to that feeling, that would feel even worse.

But at the same time, why was everybody in the world pouring all their personal information into computers owned by big corporations? The NSA forced its way into those private computers in secret, but why did anyone think that near unanimous consumer support of a titanic surveillance industry would not eventually morph into a surveillance state?

The dramatic cliffhanger of our age is whether we – meaning all of us, not just those who tend the Siren Servers – will learn to overcome their lure.

This is the overarching drama which unites otherwise contradictory trends. For another instance: On the one hand, computer networks are said to be disrupting centralized power of all kinds and giving it to the individual. Customers can bring corporations to their knees by tweeting complaints. A tiny organization like WikiLeaks can alarm the great powers with nothing but encryption and net access. Young Egyptians were able to organize a nearly instant revolution through their mobile phones and the Internet.

But then there’s the other trend. Inequality is soaring in rich countries around the world, not just the United States. Money from the top one percent has flooded our politics. The job market in America has been hollowed out; unpaid internships are common and ‘entry-level’ jobs seem to last a lifetime, while top technical and management posts become ever more lucrative. The individual appears to be powerless in the face of tough prospects.

The disruption and decentralization of power coincides with an intense and seemingly unbounded concentration of power. What at first glance looks like a contradiction makes perfect sense once you understand the nature of modern power.

Dissect almost any ascendant center of power, and you’ll find a Siren Server at the core. It’s a state of affairs that stings me especially hard, because it was partially brought on by the angelic intentions of early digital idealists. We thought the world would be a better place if everyone shared as much information as possible, free from the constraints of the commercial order. It was an utterly reasonably idea. We were building the drums that could not be silenced. Surely an ability to route around the artificial blindness that has traditionally sealed brutality in place would bring about an era of improved fairness and decency.

Why did the ideal of free information sharing fail? Because it ignored the nature of computation. If a bunch of pre-computational people are sharing openly, there might be problems – as the history of socialistic experiments has taught us. But on the other hand, at least in special circumstances, there’s no guarantee they will fail.

If those same people have a computer network, however, then there IS a guarantee that whoever among them has the most effective computer will gain information superiority. People are created equal, but computers are not. A top computer can bring limitless wealth and influence to that lucky computer’s owner and the onset of insecurity, austerity and unemployment for everyone else.

In the past, power and influence were gained by controlling something that people needed, like oil or transportation routes. Now to be powerful can mean having information superiority, as computed by the most effective computer on a network. In most cases, this means the biggest and most connected computer, though very occasionally a well-operated small computer can play the game, as is the case with WikiLeaks. Those cases are so rare, however, that we shouldn’t fall into the illusion of thinking of computers as great equalizers, like guns in the Wild West.

Siren Servers are usually gigantic facilities, located in obscure places where they have their own power plants and some special hookup to nature, like a remote river that allows them to cool a fantastic amount of waste heat.

This new class of ultra-influential computers comes in many costumes. Some run financial schemes, like high-frequency trading, and others run insurance companies. Some run elections, and others run giant online stores. Some run social network or search services, while others run national intelligence services. The differences are only skin deep.

The motivation for Sirenic omni-ogling is that it leads to marginally effective behavioral models of both inanimate phenomena like financial events and of human beings. These models are far from perfect, but are just barely good enough to predict and manipulate people gradually, over time, shaping tastes and consumption in even more effective and insidious ways than subliminal advertisements could supposedly do. A slight, sessile advantage accumulates and amplifies, like the soaring tide of compound interest.

Manipulation might take the form of paid links appearing in free online services, an automatically personalized pitch for a candidate in an election or perfectly targeted offers of credit. While people are rarely forced to accept the influence of Siren Servers in any particular case, on a broad statistical basis it becomes impossible for a population to do anything but acquiesce over time. This is why companies like Google are so valuable. While no particular Google ad is guaranteed to work, the overall Google ad scheme by definition must work, at least for a while, because of the laws of statistics. Superior computation lets a Siren Server enjoy the magical benefits of reliably manipulating others even though no hand is forced.

Since networking got cheap and computers became enormous, the financial sector has grown fantastically in proportion to the rest of the economy, even though it has done so by putting the rest of the economy at increased risk. This is precisely what happens naturally, without any evil plan, if you have a more effective computer than anyone else in an open network. Your superior calculation ability allows you to choose the least risky options for yourself, leaving riskier options for everyone else.

A Siren Server gains influence through self-effacement. There is a Zen quality to it. A big computational-finance scheme is most successful when the proprietors have no idea what they finance. The whole point is to make other people take risks, and knowledge means risk. The new idea is to have no idea whether the security you bundled is fraudulent or not.

Once this principle is understood, the seeming contradiction – that power is being more and less concentrated at the same time – melts away. An old-fashioned exercise in power, like censoring social network expression, would reduce the new kind of power, which is to be a private spying service on people who use social networking.

We must learn to see the full picture, and not just the treats before our eyes. Our trendy gadgets, smartphones and tablets, have given us new access to the world. We regularly communicate with people we would never even have been aware of before the networked age. We can find information about almost anything at any time. But we have learned how much our gadgets and our idealistically motivated digital networks are being used to spy on us by ultra-powerful, remote organizations. We are being dissected more than we dissect.

Back at the dawn of personal computing, the ideal that drove most of us was that computers were tools for leveraging human intelligence to ever-greater achievement and fulfillment. I remember early Apple brochures that described personal computers as ‘bicycles for the mind.’ This was the idea that burned in the hearts of early pioneers like Alan Kay, who a half century ago was already drawing illustrations of how children would someday use tablets.

But the tablet is no longer just a physical form for a device; it enforces a new power structure. A ‘tablet,’ unlike a ‘computer,’ only runs programs approved by a single, central, commercial authority. That it’s lightweight and has a touchscreen is less important than the fact that the owner has less freedom than owners of previous generations of digital devices.

A tablet doesn’t really enable one to fully run one’s own affairs on one’s own terms. A personal computer is designed so that you own your own data. PCs enabled millions of people to run their own affairs. The PC strengthened the middle class. Tablets are instead optimized for delivering entertainment, but the real problem is that you can’t use them without ceding information superiority to someone else. In most cases, you cannot even turn them on without giving over personal information.

By the time tablets finally found success in reality, Steve Jobs announced that personal computers were actually like ‘trucks.’ They were tools for vaguely burdened working-class guys in T-shirts and visors; most consumers would surely prefer cars. Flashy cars. This formulation suggests that sexy people prefer the superficial gloss of status and leisure to the actual attainment of influence or self-determination. The problem isn’t Apple, but a characteristic of the whole industry. Microsoft once upon a time saw itself as a tool company. But what seems to have won consumers’ hearts most is Microsoft’s XBOX, which is more like a content delivery system.

This triumph of consumer passivity over empowerment is heartbreaking. It does seem that consumers for the moment prefer to not to be as smart or empowered as I am sure they, meaning we, could be. This would be a bleak enough observation even without the concurrent rise of the surveillance economy. Not only have consumers prioritized flash and laziness over empowerment, but we have also acquiesced to being spied on all the time. The two trends are actually one.

The only way to sell a loss of freedom, so that people will accept it voluntarily, is by making it look like a great bargain at first. Consumers were offered free stuff (like search and social networking) in exchange for acquiescing to being spied upon. The only power a consumer has is to look for a better deal. The only way to say no to that deal is to transcend the role of consumer once in a while.

To be free is to have a zone around you that is private, where you can be with your own thoughts, your own experiments, for a time, between confrontations with the larger world. When you are wearing sensors on your body all the time, such as the GPS and camera on your smartphone, and constantly piping data to a mega-computer owned by a corporation that is paid by ‘advertisers’ to subtly manipulate you by tweaking the options immediately available to you, you gradually become less free.

It’s not just that you’re making far away people rich, even if you are not getting rich yourself, but that you are accepting an assault on your own free will, bit by bit. In order to make tech into something that empowers people, people have to be willing to act as if we can handle being powerful.

If we demand free services in the present, we must also learn that we’ll actually pay a price for them in the future. We must demand an information economy in which a rising tide raises all boats, because the alternative is an unbounded concentration of power. A surveillance economy is neither sustainable nor democratic.

The Internet has often been compared to the Wild West, with its dreamers and schemers, its glimmering promise of free land (primarily accessible, of course, through a monopolized railway). We have evolved out of these something-for-nothing schemes before, and we can do so again.

The story of our times is that humanity is deciding how to be as our technological abilities increase. When will we grow proud enough to be a match for our own inventions?

Prelude

HELLO, HERO

An odd thing about this book is that you, the reader, and I, the author, are the immediate protagonists. The very action of reading makes you the hero of the story I am telling. Maybe you bought, or stole, a physical copy, paid to read this on your tablet, or pirated a digital copy off a share site. Whatever the prequel, here you are, living precisely the circumstances described in this book.

If you paid to read this, thank you! This book is a result of living my life as I do, which I hope provides value to you. The hope of this book is that someday we’ll all have more ways to grow wealth as a side effect of living our lives creatively and intelligently, with an eye to doing things of use to others.

If you paid to read, then there has been a one-way transaction, in which you transferred money to someone else.

If you got it for free, there has been a no-way transaction, and any value traded will be off the books, recorded not in any ledger but rather in the informal value systems of reputation, karma, or other wispy forms of barter. That doesn’t mean nothing has happened. Maybe you’ll get some positive strokes over a social network because of what you say about the book. That sort of activity might benefit us both. But it’s a kind of benefit that is unreliable and perishable.

The clamor for online attention only turns into money for a token minority of ordinary people, but there is another new, tiny class of people who always benefit. Those who keep the new ledgers, the giant computing services that model you, spy on you, and predict your actions, turn your life activities into the greatest fortunes in history. Those are concrete fortunes made of money.

This book promotes a third alternative, which is that digital networking ought to promote a two-way transaction, in which you benefit, concretely, with real money, as I do. I want digital networking to cause more value from people to be on the books, rather than less. When we make our world more efficient through the use of digital networks, that should make our economy grow, not shrink.

Here’s a current example of the challenge we face. At the height of its power, the photography company Kodak employed more than 140,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When it was sold to Facebook for a billion dollars in 2012, Instagram employed only thirteen people.

Where did all those jobs disappear to? And what happened to the wealth that those middle-class jobs created? This book is built to answer questions like these, which will only become more common as digital networking hollows out every industry, from media to medicine to manufacturing.

Instagram isn’t worth a billion dollars just because those thirteen employees are extraordinary. Instead, its value comes from the millions of users who contribute to their network without being paid for it. Networks need a great number of people to participate in them to generate significant value. But when they do, only a small number of people get paid. That has the net effect of centralizing wealth and limiting overall economic growth.

Instead of enlarging our overall economy by creating more value that is on the books, the rise of digital networking is enriching a relative few while moving the value created by the many off the books.

By ‘digital networking’ I mean not only the Internet and the Web, but also other networks operated by outfits like financial institutions and intelligence agencies. In all these cases, we see the phenomenon of power and money becoming concentrated around the people who operate the most central computers in a network, undervaluing everyone else. That is the pattern we have come to expect, but it is not the only way things can go.

The alternative introduced in this book is not a utopian idea; it won’t be hard to foresee its annoyances and messiness. However, I will argue that monetizing more of what’s valuable from ordinary people, who turn out to be the uncompensated sources of the data that make networks valuable in the first place, will lead to a better future.

That will make power and clout more honestly distributed, and might even lead to a persistent middle class in an information economy, which would otherwise be an impossible goal.

TERMS

It would be impossible to only use preexisting terminology to communicate the ideas in this book. The problem is not that there are no relevant, familiar terms, but that all the preexisting terms have baggage or common uses that are just enough askew from what I need to say that they bring more confusion than clarity. So unfamiliar terms and expressions will appear. An appendix contains a list of some of these terms, along with the pages on which they first appear. Think of it as the high-priority index.

Jaron Lanier