[LINK] Will Digital Networks Ruin The Middle Classes?

Kim Holburn kim at holburn.net
Thu Jan 9 14:14:45 AEDT 2014


http://www.nytimes.com/2014/01/07/opinion/nocera-will-digital-networks-ruin-us.html?ref=opinion&_r=1

> The most important book I read in 2013 was Jaron Lanier’s “Who Owns the Future?”


....

> On the contrary: “What I came away with from having access to these varied worlds was a realization that they were all remarkably similar,” he writes. “The big players often gained benefits from digital networks to an amazing degree, but they were also constrained, even imprisoned, by the same dynamics.”
> 
> Over time, the same network efficiencies that had given them their great advantages would become the instrument of their failures. In the financial services industry, it led to the financial crisis. In the case of Wal-Mart, its adoption of technology to manage its supply chain at first reaped great benefits, but over time it cost competitors and suppliers hundreds of thousands of jobs, thus “gradually impoverishing its own customer base,” as Lanier put it to me.

....

> 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.
> 
> It is Lanier’s radical idea that people should get paid whenever their information is used. He envisions a different kind of digital economy, in which creators of content — whether a blog post or a Facebook photograph — would receive micropayments whenever that content was used. A digital economy that appears to give things away for free — in return for being able to invade the privacy of its customers for commercial gain — isn’t free at all, he argues.

....

> Still his ideas about reformulating the economy — creating what he calls a “humanistic economy” — offer much food for thought. Lanier wants to create a dynamic where digital networks expand the pie rather than shrink it, and rebuild the middle class instead of destroying it.


-- 
Kim Holburn
IT Network & Security Consultant
T: +61 2 61402408  M: +61 404072753
mailto:kim at holburn.net  aim://kimholburn
skype://kholburn - PGP Public Key on request 







More information about the Link mailing list