Friday, 10 January 2014

"Will Digital Networks Ruin Us?"

Joe Nocera writes of the "most important book" he read in 2013, Jason Lanier's "Who Owns the Future".
Lanier's first thesis is that "... the same network efficiencies that had given them [the big players in the digital world] their great advantages wold become the instrument of their failures."  Goodbye Google, then, and Facebook, Twitter....
There are two additional components to Lanier’s thesis. The first is that the digital economy has done as much as any single thing to hollow out the middle class. (When I asked him about the effect of globalization, he said that globalization was “just one form of network efficiency.” See what I mean about a universal theory?) His great example here is Kodak and Instagram. At its height, writes Lanier “Kodak employed more than 140,000 people.” Yes, Kodak made plenty of mistakes, but look at what is replacing it: “When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people.”Which leads nicely to Lanier’s final big point: that the value of these new companies comes from us. “Instagram isn’t worth a billion dollars just because those 13 employees are extraordinary,” he writes. “Instead, its value comes from the millions of users who contribute to the network without being paid for it.” He adds, “Networks need a great number of people to participate in them to generate significant value. But when they have them, only a small number of people get paid. This has the net effect of centralizing wealth and limiting overall economic growth.” Thus, in Lanier’s view, is income inequality also partly a consequence of the digital economy.
Lanier's radical idea is that people should get paid whenever their information is used.
Have a read, it's worth it.