Eight years ago, the link aggregator Digg caused an uproar: content would be ordered based on user activity. Today, we take that for granted. In 2010, it spelled the end of Digg. A commenter with the handle blue_beetle lamented, “If you’re not paying for it, you’re not the customer; you’re the product being sold.” Simplistic, sure, but it got the point across: we had entered an age in which entire business models could rest on the idea of collecting your information—not something we should necessarily be comfortable with. Fast forward eight years, and the blue_beetle’s comment is as relevant as ever. We have come to accept data as the basis for every online transaction, a condition as obvious as it is easy to forget.
Last month, Zuckerberg testified before the Senate and touched on this very problem. At one point, Zuckerberg confirmed that Facebook would always offer a free version, and reiterated his commitment to the mission of “bringing the world closer together” through a universally affordable service. One senator then asked him how he sustained a business model in which “users don’t pay for your services.” Zuckerberg’s reply was essentially a more polished version of blue_beetle’s comment: “Senator, we run ads!”
Such a question might have seemed funny to those born in a data-centered world, but this all points to a greater transition into a new kind of economy. My colleague Chapman Caddell expounded earlier last week on a few of the economic aspects of our data-centrism, but the larger point is that we have forgotten that our online activity comes with a price.
The truth is that for those of us who have yet to join the workforce, the majority of the economic value we have contributed to society is in the form of data—the raw material we supply Facebook and others, so they can produce “market intelligence” and sell it for ad revenue. Today, we have something close to a secondary economy based on an “attention currency.” Here, data plays a central role: I can get you to pay me more attention if I target you with an ad that I already know you’ll be interested in.
This is a problematic deviation from neoclassical economics, which assumes that, for the most part, consumers spend rationally to maximize utility. This premise is the key principle behind the idea of the invisible hand of the market that supposedly drives economic activity close to its point of highest social value. Now we start to see the absurdity of our condition: do a quick search for “why is facebook so addictive” and you will find a number of ways in which you are constantly tricked to stay on the platform. Here, the neoclassical assumption of “rational self-interest” falls apart: you lose control of your attention expenditure, and the more attention you spend, the more data you lose. The more data you lose, the more vulnerable you are to the advertisers that fought for your attention in the first place—advertisers that have a vested interest in your irrational behavior.
Granted, ad-tech still translates into revenue for the companies that use it. In formally economic terms, the companies that target you with their ads through your data are Facebook’s true customers. Blue_beetle’s uncomfortable truth aside, is there still some “market efficiency” to salvage from this model if we frame it around money instead of attention?
If you revise the premises and consider what advertisements are fundamentally about, the answer is no. They have some entertainment and informational value, but their primary goal is to mask real value and motivate you to desire a certain item more—in economic terms, they distort the price mechanism that ostensibly makes markets efficient. Successful ads also have the effect of transferring demand from one firm to another, rather than creating new demand through innovation or optimization. Ironically, this hypercapitalistic version of the free market—where profit-seeking is so intense that companies extract value from raw human attention—turns the logic of efficient markets on its head.
But our data-centrism’s most tragic blow to society is in another market entirely: the labour market. Facebook’s own former Data Science lead, Jeffrey Hammerbacher, gave up on the mission of connecting the world with his own lament: “The best minds of my generation are thinking about how to make people click ads.” A nod to a phenomenon with which we are all too well-acquainted. Trying to make people click ads builds a career like nothing else, and pays very handsomely—perks made possible through the steady flow of billions of dollars worth of attention-currency. But rationalizing doesn’t change the pure tragedy of the facts: hundreds of thousands of would-be medical researchers, political leaders, and technology pioneers go into glorified marketing each year. The true cost of data-centrism are the years of progress—technological, civic, or otherwise—that we fail to actualize as some of the best minds of the generation turn to serve it.
At the heart of the deranged hypercapitalism that brought us to this point, however, there are humans capable of thought and action. We are not self-interested utility machines: and if any of this strikes you as perverse, something must be done. It falls to us as individuals to make moral and political statements in career choice and product usage, actively questioning whether our actions fall in line with our values and beliefs. Escaping from the invisible quicksand of the market won’t be easy—but it all begins with acknowledging that it exists.
Lucas Sato
Photo: Strings, 16 March 2017, JohnsonGoh
Stanford Sphere 