Who counts?

I had been looking forward to reading The Ordinal Society by Marion Fourcade and Kieran Healy, and it hasn’t disappointed. My copy is covered in sticky notes marking interesting points.

What do they mean by the term? It is the world created by Silicon Valley built on the digital traces we all create using its services and that “stratifies individuals through a myriad of differentiated methods of matching, scoring and classification. Those methods have both a practical application and a moral valence. The ordinal society is both a means of social organization and a mode of first person experience.” The book brings the lens of sociological theory – Mauss, Deleuze, and Bourdieu feature most prominently – to the now-familiar effects of digitalization.

This makes it orders of magnitude more persuasive than the dreadful but influential Age of Surveillance Capitalism of Shoshana Zuboff. The Ordinal Society traces the evolution of digital capitalism from the initial stages of a gift exchange structure – it was all free and so wonderful nobody much minded the gradual development of data extraction business models – through the subsequent collection and use of data, development of classifications and then the increasingly extractive and financialized business models of digital platforms. The classification of individuals and association of these categories with profits created rankings of people which almost unavoidably turned into apprasial of relative moral worth. “The data imperative was a cultural and political accomplishment, beyond the economic search for efficiency.” The data brokerage business is one of the most dynamic but also least well-understood of modern industries – including on the dark web. And while “social life is messy”, the digital world needs orderly (binary) constructs. These lead to decisions that are hard to challenge – one’s digital identity might have been denied right of entry to another country before the flight has taken off. The book coins the term ‘eigencapital’ (in a broad analogy to cultural capital) to capture the concept of the data asset that is one’s individual identity (based on the eigenvectors of information constructed from a dataset).

What use is your eigencapital? One example the book gives is that it is embodied in the amount of time people need to wait to access services. Higher eigencapital people might get access to a better-staffed phone number and call centre, or get a place higher up the queue for a chatbot to respond: “Sociologists have long studied queues and lines as structures that allow for both control of status.” (I’d never thought of this but it makes sense of my mill-worker parents’ obsession with never being late for anything ever.) Queuing data amplifies this social dynamic.

Anybody sentient in the UK in recent weeks will have become aware of the Post Office Horizon scandal: the very existence of digital data makes people believe in its truth (and there is a dreadful – albeit rebuttable – presumption in UK law that computers are right and people are wrong). The use of machine learning systems and now generative AI is massively amplifying all the ways this can lead to unfreedom and injustice. “At their best these approaches really do perform astonishingly well. But their scale and complexity invites a kind of deference to the oracle, both in terms of its care and feeding on the one hand, and its pronouncements, on the other.”

The sections on digital identity and money reminded me of Dave Birch’s wonderful book Identity is the New Money. Dave had tremendous foresight; the issues he raised then are currently key issues in the debate about Digital Public Infrastructure. The Ordinal Society has examples like the collection of sensor data from cars turning auto manufacturers into financial services companies, and the infamous John Deere case. ‘Servitization’ is becoming more widespread across the economy although to what extent is unclear. The book also has a section on crypto and DAOs, an area I’ve never really got to grips with.

It ends pessimistically: “Public goods and collective goals are being dissolved in the acid bath of individualization and competition, leaving us increasingly alone in a hyperconnected world whose social ordering is precisely metered and, in its factitious way, inarguably ‘right’. Life in the ordinal society may well be unbearable.” Funnily enough, I ended up less pessimistic, if only because this would be so unbearable the revolution would happen first. Still, we have a lot of work to do to force the toxin of data and engagement-driven business models into retreat.

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Digital design

Over the holiday weekend I read (among other things*) Digital Design: A History by Steven Eskilson. I enjoy reading design books in general – a window into a more glamorous specialism than economics. This one covers a range of aspects, from the design of gadgets (from the IBM Selectric typewriter to Apple’s dominance in this arena) to fonts to web design to data visualisation to architecture. So it’s quite eclectic, and includes using digital tools to design (as in architecture) as well as the design of digital artefacts. But one theme that emerges across all these areas is the lasting influence of Bauhaus (about which I read a terrific book last year,  a biography of Gropius by Fiona McCarthy, a while back). Digital Design also a very handsome book with loads of images. Screenshot 2024-04-02 at 11.48.02* Robin Ince’s Bibliomaniac and two thirds of The Currency of Politics by Stefan Eich, which I’ll write about another time.


Platforms and information

I was quite excited by the prospect of reading Matchmakers and Market: The Revolutionary Role of Information in the Economy by Yi-Cheng Zhang. But it didn’t quite work for me, perhaps because the intended audience isn’t clear. The reason for excitement is clear: what the digital economy does is change the possibilities for the use of information in production and consumption. As the classic Hayek article observed, ‘the use of knowledge in society’ is the fundamental challenge of economic organisation. Yi-Cheng Zhang is a physicist and more relevantly the honorary director of Alibaba’s Complexity Research Centre. I hadn’t heard of this but it sounds like it should be delivering some very interesting insights.

However the book – very short – is written in a non-technical manner about how digital platforms operate. It’s key point is a concept labelled ‘infocap’, a sort of possibility frontier for the economic agent’s knowledge. There is an information asymmetry between individuals (who can’t know all there is to know about a firm’s products) and firms (who do know this but can’t know all about an individual’s range of preferences, although they can try to alter these). This is an interesting lens on the familiar platform economics but I think people who have read about platforms will not find much new, while although there are no equations the writing is a bit dense for non-specialists who haven’t read the platforms literature. (There are also loads of typos, so presumably the book wasn’t copyedited. I’m the kind of reader who feels the need to take up a pencil and correct these as I go.) I wish the book had actually been more formalized to highlight what might be new.

So, in short, I’d direct economists to the Belleflamme and Peltz text, The Economics of Platforms, and non-economists to a general read such as Platform Revolution by Marshall Van Alstyne, Geoffrey Parker and Sangeet Paul Choudary, or Cusamano, Gawer and Yoffe’s The Business of Platforms.

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Internet empires – their rise and decline?

Has the American Empire simply moved online? That’s the argument made in an enjoyable polemic by Sean Ennis, Internet Empire: The Hidden Digital War. It’s a book with two strands. One about wars and empires through history: what motivates conflict, how empires grab territory when the economic advantages outweigh the costs of maintaining the colonies, why empires either collapse or survive.

This is braided with an account of how the US (and, thanks to protection of its domestic market, China) won near-global dominance of the internet and the money to be made from the internet for its own companies. Marvellous technology, an economic system favouring enterprise and investment, and active policy support from successive US governments have created the market-dominant players who shape modern life.

Hence, “The core thesis of this book is that the modern-day internet structure is economically equivalent to what, in prior times, would have been an empire acquired through aggression into new territories.” The aggression this time has involved weapons such as effective lobbying/political blackmail over tax and trade policies, control of domain names, non-enforcement of antitrust policies to enable the giants to grow, and so on. It’s an interesting analogy although I’m not persuaded that commercial and actual conflict/conquest are really similar.

The US succeeded where France’s earlier Minitel system did not, the book argues, because Minitel was a closed interface system run by a state-owned incumbent telco – whereas in the US, AOL tried this approach in the early internet days but dropped this when the attractions of the open internet to users became both evident and available through browsers and the web. “The unquestionable French lead in the release of digital technology was squandered by the country.”

This prompts two reflections. One is that the book – in asking with Europe has no internet giants – ignores the advantage of scale. When there are high fixed costs and netwrok effects, the bigger the addressable market the better.

The other is that if open beats closed in the end, are the current internet giants undermining their own success? For what they are trying to do is tie users in ever-more tightly, and exploiting this captive market to degrade their services – just think how much search results have deteriorated on Google or Amazon. Meanwhile Mr Musk is similarly degrading the attractiveness of Twitter. The width of the open goal they are presenting to newcomers with their own great technology is increasing by the day. Regulators and competition authorities can help by mandating more, much more, open data and interoperability – as the Bundeskartellamt seems to be doing.

Still, as the book concludes, we can all do something. It ends with a list of To Dos: use multiple platforms – click away from Google. Buy direct from sellers even if it’s a bit less convenient. Go to the local high street to shop. Pay for a newspaper. In short, give up just a bit of the convenience and cost-saving to keep the digital giants on their toes and maybe open the way for new ones to come along. I’m sceptical individual action will make a big difference although happy to encourage the use of Hirschman’s Exit and Voice disciplines. It’s going to take policy choices, and almost certainly by the EU, to reshape digital markets.

Internet Empire The Hidden Digital War

Spending our time, the ultimate scarce resource

On the face of it, The Internet Is Not What You Think It Is: A History, A Philosophy, A Warning by Justin Smith and Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman are pretty different. The former a philosophical disquisition on the parallels (and differences) between historical communication networks and today’s internet of disinformation. The latter a self-help guide to being less busy and happier.

What they have in common is identifying digital platforms as the cuplrit gobbling up our time and attention through addictive design – that familiar ‘swipe down to refresh’ for a dopamine hit – and a business model that requires human fodder. One travels by way of classical Indian philosophers and the Enlightenment, the other via useful advice from popular psychology. Both have at their heart a concern with the manipulation of how we spend our time. I read them one after the other and enjoyed both – and both with more useful insight than the much-hyped Surveillance Capital doorstop.

Have I stopped scrolling so much? Not yet. I will be trying to take some of Burkeman’s advice in the hope of stopping feeling constant pressure to empty that inbox, tick off the whole to do list. As we’re stuck with the internet, it makes sense to resist the way it manages us humans. I don’t think Smith would reckon much for my chances. Wish me luck.

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