Network Capitalism
Big Data, Algorithms & Aldous Huxley
When viewed through the prism of “network capitalism” Facebook’s recent acquisition of WhatsApp for $19bn looks like good value.
The consensus is that Facebook acquired the company because it was fearful of losing its grip on the youth market, who favoured mobile communications, to a system that apparently their parents didn’t use. And, as a theory has it, with the world shifting to mobile internet it only makes sense for Facebook to demonstrate its chops in the mobile world. This might also account for why it acquired Instagram.
Facebook recently announced an initiative to provide access to the Internet for those in developing countries. SocialEDU, in partnership with mobile operators, will provide free mobile Internet access and educational content initially to citizens living in Rwanda, but the plan is to roll the Internet out to the entire planet. Facebook hired Deloittes to prepare a researched report that demonstrated the economic and social benefits of expanding Internet access. It is also reported that Facebook are seeking to acquire Titan Aerospace, a manufacturer of sub-orbital drones that could be used to provide Internet access across remote or rural areas such as those that are typical in developing nations.
I’d like to suggest an alternative reason for Facebook’s recent acquisitions and their demonstration of altruism towards developing world communities.
Facebook, like our other great digital mega corporations including Google, Amazon, Apple and even Netflix, have genuinely figured out how the new world works providing salient lessons that other would be global megalomaniacs would be wise to follow. These corporations understand the value of data. Not just any old data, but your data. Personal data is the global currency of network capitalism and these organisations are playing in a high stakes game.
Google was probably the first company to really understand the principles of network capitalism and properly exploit them. There were many search engines before Google, but their genius was first in their PageRank algorithm and second in their ability to tune this algorithm to advertising. Of course being incredibly smart people who surrounded themselves with the right people at the right time didn’t hurt a bit but the understanding that data, and lots of it, could be turned into something extremely valuable was the secret sauce.
To expand the quantity and quality of this data as well as provide context Google has built an empire of applications that nearly all of the connected world uses including maps, video, mail, education, chat and a heck of a lot more. Each of these applications provides further data points that tell Google more about us, data that can be used by algorithms to customise our experience of the digital world whether we like it or not. A search on one of their tools will mean that suddenly the blogs and newspaper sites you visit are populated with relevant advertising and content.
Google’s investment in mobile and wearable platforms are just another form of data acquisition, but with much higher granularity where the amount of data that we are leaking, as connected citizens, is astounding. Google, vacuums it all up for analysis by its algorithms. No wonder the world and its shareholders are anticipating Apple’s move into wearable computing. Apple are losing the data war against Google, and they know it.
Expect equally massive investments in sensor companies, e.g NEST, and “Internet of Things” style start-ups that will generate data with even deeper levels of granularity about the way you live your life.
Google and Facebook are true embodiments of the oft quoted, “if the product is free then you’re probably the product” statement. The problem for us is that we haven’t figured out a value for our own data beyond giving it away in exchange for communicating with our friends and the convenience that Googles apps provide us. There also isn’t a great understanding of exactly what data we are giving away. But let’s return to the valuation of WhatsApp and we’ll start to get an idea. $19bn for 450 million users who send 1bn messages a day means that each user data is worth about $42. Ok, there’s an argument that suggests WhatsApp users pay for their service, but are Facebook going to really give up on all that location and content sharing data?
To be clear, I’m not suggesting that any of these companies are evil or bad. I’m only pointing out their genius in capturing all our data and monetising it. There are so many examples that confirm this that it’s hardly worth debating. One only has to see the actions of Microsoft buying Skype and Nokia, Apple’s activities around iPhone, iTunes, AppleTV and its own mapping systems, Amazon’s investment in hardware platforms, the valuation of Twitter, to see that data is the new oil. The great industrial capitalists of our times are the leaders of these mega corps. Plus ça change…
Big data, like the Web, was originally an idea based around scientific advancement. Facilities like CERN would provide huge dollops of data that would require fast and unbiased analysis via sophisticated algorithms running on networked computer farms to reveal the secrets of the universe. This, of course, can still happen and who knows what might be possible if we have sufficient computing power and algorithmic sophistication to sequence everybody’s DNA. Cures for cancer perhaps?
The flip side is what this might do to human consciousness. There is a raft of social and political theory from Marx through Gramsci to Adorno that express concerns about what happens when one social group dominates another, creating a hegemony where power is constituted in the realm of ideas and knowledge. Under such domination popular culture is akin to a factory producing standardised cultural goods used to manipulate mass society into passivity. Consumption, therefore, of pop cultures easy pleasures made available by the mass communications media renders people docile and content, no matter how difficult their circumstances.
Take Netflix for example. The average user of Netflix leaks an impressive amount of data including their location, devices and viewing habits at a really granular level. Never before have television operators had access to such precise information. Jonathan Friedland, Communications Director for Netflix said, “We know what people watch on Netflix and we’re able with a high degree of confidence to understand how big a likely audience is for a given show based on people’s viewing habits”. The result of this was that Netflix was able to analyse viewing data that showed an overlap between circles of viewers who enjoyed films starring Kevin Spacey, films directed by David Fincher and lovers of the 1990’s BBC series “House of Cards”. This insight lead to its decision to commission its remake of the series to wide acclaim. Think of this as data driven creativity if you will.
Across every spectrum of society, we can see the easy wins afforded by the tsunami of data that is upon us and rapidly increasing computing power which, if we are to believe our futurology pundits, will create supercomputers 1,000 times faster than the human brain by 2030. Unbridled network capitalism will ensure that no stone is left unturned in the reinvention of education, healthcare, science, media, employment, entertainment and even governance creating a society that is not unlike the one Aldous Huxley predicted in his novel Brave New World.
Drawing from Neil Postman’s “Amusing Ourselves to Death” it was Orwell who feared that the truth would be hidden from us whereas Huxley feared that the truth would be hidden in plain sight in a sea of irrelevance. Orwell feared we would become a captive culture, Huxley feared we would become a trivial culture. Huxley remarked that the civil libertarians and rationalists that oppose tyranny failed to take into account mankind’s insatiable appetite for distractions. In summary, Orwell feared that what we hate would ruin us, Huxley feared that what we love will ruin us.
When Edward Snowden revealed that government agencies had identified and were exploiting the opportunities afforded by big data, algorithms and ever increasing computing power many of us assumed that Orwell’s nightmare had come to pass. But perhaps this is only the beginning. Perhaps an algorithmic society based on big data, that tells us the what rather than the why, is much more like Huxley’s Brave New World.
After all, the numbers don’t lie.
Or do they?
Graham Brown-Martin is the author of the forthcoming book “Learning {RE}imagined, how the connected society is transforming learning” to be published by the World Innovation Summit for Education in Autumn 2014. You can follow him on Twitter (@GrahamBM)
