Monday, September 19, 2016

Notes on Jaron Lanier's Who Owns the Future?

"Every day more photos are taken with the iPhone than any other camera."

“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 Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people. Where did all those jobs disappear? And what happened to the wealth that all those middle-class jobs created?”

_Who Owns the Future?_ by Jaron Lanier
NY:  Simon and Schuster, 2013
ISBN 978-1-4516-5496-7

(1)  Maybe you bought, or stole a physical copy, paid to read this on your tablet, or pirated a digital copy off a share site.
NB:  No library, first paragraph of the book

(12)  Nonspecialist doctors have already lost a degree of self-determination because they didn't seize the centers of the networks that have arisen to mediate medicine.  Insurance and pharmaceutical concerns, hospital chains, and various other savvy network climbers were paying better attention.
NB:  US-centric

(18)  When music is free, wireless bills get expensive, insanely so.
NB:  US-centric

(19)  Lately, network-empowered finance has amplified corruption and illusion, and the Internet has destroyed more jobs than it has created.
NB:  Any data to back that up?

(20)  In the event that something a person says or does contributes even minutely to a database that allows, say, a machine language algorithm, or a market prediction algorithm, to perform a task, then a nanopayment, proportional _both_ to the degree of contribution _and_ the resultant value will be due to the person.
NB:  like copyright?  for how long?

(45)  We just went through taxpayer-funded bailouts of networked finance in much of the world, and no amount of austerity seems enough to fully pay for that.
NB:  No Keynes

(46)  Unfortunately it turned out that buying a home, one of the principal strategies of that movement [Rich Dad, Poor Dad], summarily turned into an invitation to be scammed.
NB:  Why?  A network effect?

(51)  The peasant's dilemma is that there's no buffer.  A musician who is sick or old, or who has a sick kid, cannot perform and cannot earn.
NB:  No healthcare and no social security

...Please notice how similar music is to mortgages.  When a mortgage is leveraged and bundled into complex undisclosed securities by unannounced third parties over a network, then the homeowner suffers a reduced chance at access to wealth.  The owner's promise to repay the loan is copied, like the musicians' music file, many times.

(52)  To put it another way, the promise of the homeowner to repay the loan can only be made once, but that promise, and the risk that the loan will not be repaid, can be _received_ innumerable times.  Therefore the homeowner will end up paying for that amplified risk, somehow.  It will eventually turn into higher taxes (to bail out a financial concern that's "too big to fail,"), reduced property values in a neighborhood burdened by stupid mortgages, and reduced access to credit.
NB:  Bailout banks but not homeowners is a choice

(54)  Finance got networked in the wrong way.  The big kinds of computation that have made certain other industries like music "efficient" from a particular point of view were applied to finance, and that broke finance.  It made finance stupid.

(56)  The latest waves of high-tech innovation have not created jobs like the old ones did….  This is documented in Martin Ford's book_The Lights in the Tunnel_.

(60)  Misrepresented assets flowed through Great Recession-era funds that were bailed out, but as of this writing most of the beneficiaries have escaped any of the downsides, which were radiated out to taxpayers and ground-level investors.
NB:  ass-backwards;  he treats the net as prime mover rather than financialization

……the primary business of digital networking as come to be the creation of ultra secret mega-dossiers about what others are doing, and using this information to concentrate money and power.
NB:  NSA information inequality and Big Data/Big Servers

(61)  We are not benefiting from the benevolence of some artificial intelligence super being.  We are exploiting each other off the books while those concentrating our information remain on the books.  We love our treats but will eventually discover we are depleting our own value.

That's how we can have economic troubles despite there being so much wealth in the system, and during a period of increasing efficiencies.  Great fortunes are being made on shrinking the economy instead of growing it.  It's not a result of some evil scheme, but a side effect of an idiotic elevation of the fantasy that technology is getting smart and standing on its own, without people.
NB:  Naive

(66)  It seems as though online services are bringing bargains to everyone, and yet wealth disparity is increasing while social mobility is decreasing.  If everyone were getting better options, wouldn't everyone be doing better as well?
NB:  And it's only the net driving this?

… When health insurance companies turned into digital networks, general-practice physicians became somewhat marginalized, serving increasingly as nodes in a scheme run by statistical algorithms and, to a lesser degree, pharmaceutical concerns.
NB:  US only?

(67)  instead of economics being about a bunch of players with unique positions in a market, we devolve toward a small number of spying operations in omniscient positions, which means that eventually markets of _all_ kinds will shrink.
NB:  Late stage capitalism, economic and political totalitarianism

(72)  In the network age there can be collusion without colluders, conspiracies without conspirators.

(86)  …the United States, which has ever-fewer manufacturing jobs to protect anyway.
NB:  Really?  Conventional wisdom masquerading as insight.  US manufacturing jobs have stabilized and the sector may actually be growing after declining since WWII.

(115)  When correlation is mistaken for understanding, we pay a heavy price.  An example of this type of failure was the string of early 21st century financial crises in which correlations created gigantic investment packages that turned out to be duds in aggregate, bringing the world to indebtedness and austerity.  Yet few financiers were blamed, at least in part because the schemes were complex and automated to such a high degree.

(135)  "See, in the old days, they worried that technology would make people obsolete and it didn't happen.  Similar worries today are just as silly."

To that I say, "I agree completely that the fears were wrong then and wrong today, in terms of what's actually true.  People are and will always be needed.  The question is whether we'll engage in complete enough accounting so that people are honestly valued.  If there's ever an illusion that humans are becoming obsolete, it will in reality be a case of massive accounting fraud.  What we're doing now is initiating that fraud.  Let's stop."
NB:  Taylorism, no Weiner and Human Use of Human Beings

(153-154)  Health insurance companies in America, by using cloud computer analysis to mostly insure people who didn't need insurance, similarly ejected risk into the general system.  But there wasn't some giant vastness to absorb the waste.  Instead, the economies in which finance and insurance could exist in the first place were weakened.

(167)  What if the eHarmony algorithm analyzed a customer and calculated that she was gay even though she had never realized that before?
NB:  Does he not know eHarmony has refused gay clients?

(184)  If people are paying money to use your server, don't accept any of it directly if you can possibly avoid that.  You should be a broker between buyers and sellers to the degree that's possible  You can then earn commissions, placement fees, visibility fees, or any number of other fees yet to be conceived, but without taking any responsibility for the actual events that took place.
NB:  cash vs credit - credit costs

…….These click-through agreements are the grandiosely verbose descendants of the Zen koan about a tree falling in a forest that no one hears.
NB:  Not a koan

(200)  Spymaster Siren Servers thrive in all countries by now.  We tend to hear more about the excesses of foreign ones in China or even Britain, but the trend is universal.

… When governments engage in the Siren Server game, they get good at it fast.  (It appears that governments are getting better at getting ahead of citizen cyber-movements than commercial schemes, which consistently outwit regulators.)
NB:  First admission of big corruption, he implies that commercial Siren Servers exist before government Siren Servers

(201)  Economic interdependence has lessened the chances of war between interconnected nations.
NB:  Friedman's naive McDonald's theory of peace - no two countries with McDonald's will declare war against each other.

(207)  And it's not Facebook's fault!  We, the idealists, insisted that information be demonetized online, which meant that services about information, instead of the information itself, would be the main profit centers.

That inevitably meant that "advertising" would become the biggest business in the "open" information economy.  But advertising has come to mean that third parties pay to manipulate the online options in front of people from moment to moment.  Businesses that don't rely on advertising must utilize a proprietary channel of some kind, as Apple does, forcing connections between people even more out of the commons, and into company stores.  In either case, the commons is made less democratic, not more.
NB:  No Ostrom;  intellectual property rights

(223) Ted Nelson's Xanadu:  The first principle is that each file, or whatever unit of information the thing is built of, exists only once.  Nothing is ever copied.

(224)  The pre-digital world had evolved a set of laws and conventions for how people could reflect and reuse each other's expressions.  This is the familiar and uncomfortable web of logistics and procedures including copyright, fair use, libel laws, and so on.
NB:  Extended and undermined at the same time

(225)  IN a Xanadu-like system, you could extract a misleading out-of-context passage of a politician's video because that would be a free speech right.  You wouldn't need permission.  But the link back to the original would always be right there. 

(227)  A core technical difference between a Nelsonian network and what we have become familiar with online is that Ted's network links were two-way instead of one-way.  In a network with two-way links, each node knows what other nodes are linked to it.

That would mean you'd know all the websites that point to yours.  It would mean you'd know all the financiers who had leveraged your mortgage.  It would mean you'd know all the videos that used your music.

(240)  A more incremental path to security would not answer the hard philosophical questions about such concepts as copyright, but it would make them less contentious.  In a world in which a person starts to earn royalties on tens of thousands of little contributions made over a lifetime of active participation on the 'net, it will matter a little less if there is a conflict about attribution in some minority of those cases.
NB:  Siren Server, what about people who don't make information contributions?

…. If everyone gets a taxi medallion, then medallions become worthless.  That also means speculators can buy up medallions and corner the market, undoing the original purpose.  What we should seek instead is a system where value _increases_ as more and more people participate in it.
NB:  Already happened in Boston and NYC and not how taxi medallions have ever worked

(246)  In humanistic information economics, provenance is treated as a basic right, similar to the way civil rights and property rights were given a universal stature in order to make democracy and market capitalism viable.
NB:  Civil rights and property rights now being systematically removed.

(257)  The crazy network-based wealth of inscrutable investors lately can serve as both a warning and an inspiration.  What I'm arguing is that just because networked finance boomed at everyone else's long-term expense, there's no reason in principle a similar outbreak of lucky-starism couldn't happen much more broadly, so that more people could enjoy the fruits of modernity based on more complete accounting.
NB:  His model is kleptocratic finance

(274)  You meet a future spouse on an online dating service.  The algorithms that implement that service take note of your marriage.  As the years go by, and you're still together, the algorithms increasingly apply what seemed to be the correlations between you and your spouse to matching other prospective couples.  When some of them also get married, it is automatically calculated that the correlations from your case were particularly relevant to the recommendations.  You get extra nanopayments as a result.

(278)  Financial concerns, through the magic of digital networks, can now take risks without paying for those risks, while gaining benefits for successes.  It's sometimes called "too big to fail."
NB:  It's not just a network effect but planned legalization of criminality

(286)  There can't a a different kind of dollar just for certain stores.
NB:  Never heard of local currencies?

(289)  Mortgages were a reliable, clean mechanism for many years.  What happened in the early 21st century was exceptional, and caused by the poor use of digital networks.

(293)  A liberal might be inclined to extend the safety net, perhaps including a highly evolved version of the public library.  In such a place you might be able to print out the medical prosthetic you need for free.  In that scenario, the state would serve as a surrogate customer for information services for those who cannot afford to be customers directly, beneficiaries would have access, but perhaps not in precisely the most convenient way.
NB:  First mention of libraries

(300)  If homeowners with mortgages had been owed something resembling royalties whenever a mortgage was leveraged, then there would not have been over leveraging.  The cost of risk would have been built in from the start, and would have been paid for by the investor creating the risk.  Benefits would have been shared with those who were creating the fundamental value:  homeowners who promised to pay the mortgages.  Economic symmetry would have prevented investors from taking risks on other people's uninformed behavior, using yet other people's money.

(311)  No amount of regulation can keep up with perverse incentives, given the pace of innovation.  This is also why almost no one was prosecuted for financial fraud connected with the Great Recession.
NB:  Um, no

(363)  The human mind is particularly susceptible to engagement by rapid-fire feedback that taunts on the edge of granting treats.  Semi-random feedback is a more intense dominator of attention than consistent feedback.

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