Our Comrade the Electron: technology as centralizer

Maciej Cegłowski's Webstock 2014 talk is called OUR COMRADE THE ELECTRON, and it's an inspired rant about the relationship of technology to power and coercion. It asserts that the decentralizing of power attended by the growth of technology in the 1990s was a blip, and that the trend of technology will be to further centralization.

I disagree. I think that Cegłowski has conflated "technology" with "technology under neoliberalism" -- that the concentration of technology since the 1990s coincides with the creation of like the WTO and the abolition of things like the Glass–Steagall Act, and the overall concentration of wealth and power into fewer hands. Technology is related to centralized power, but it is not entirely the cause of it -- rather it is in a feedback loop with it, and the two fuel each other.

For me, the interesting question isn't "does technology centralize or doesn't it?" We've seen technology do both. For me, the interesting question is, "How can we make technology into a force for decentralization?"

There's a long-held view of the world that breaks it into "artsies and techies" -- the two cultures. From where I sit, though, the two cultures are "people who believe in finance" and "people who think finance is a corrupt and corrupting force in the world." All the interesting nerds I know make art, and all the interesting artists I know nerd out on technology. But the one thing that seems to separate us into two camps is whether we think the world of finance is a giant con game or a legit enterprise.

In the 90's, it looked like the Internet might be an exception, that it could be a decentralizing, democratizing force. No one controlled it, no one designed it, it was just kind of assembling itself in an appealing, anarchic way. The companies that first tried to centralize the Internet, like AOL and Microsoft, failed risibly. And open source looked ready to slay any dragon.

But those days are gone. We've centralized the bejesus out of the Internet now. There's one search engine (plus the one no one uses), one social network (plus the one no one uses), one Twitter. We use one ad network, one analytics suite. Anywhere you look online, one or two giant American companies utterly dominate the field.

And there's the cloud. What a brilliant name! The cloud is the future of online computing, a friendly, fluffy abstraction that we will all ascend into, swaddled in light. But really the cloud is just a large mess of servers somewhere, the property of one American company (plus the clouds no one uses).

Orwell imagined a world with a telescreen in every room, always on, always connected, always monitored. An Xbox One vision of dystopia.

But we've done him one better. Nearly everyone here carries in their pocket a tracking device that knows where you are, who you talk to, what you look at, all these intimate details of your life, and sedulously reports them to private servers where the data is stored in perpetuity.


Notable Replies

  1. How about Disney's Classic "Out Friend the Atom" explaining how friendly nuclear technology would be...including radiation for cattle.

    /actually I rather like this film...it does have some good points. As in the Genni can not be put back into the bottle.

    //the putting radioactive stuff in cattle feed and corn is a bit over the top....but in the day radiation was considered a 'magic bullet' for all type of things.

  2. Certainly finance is as corrupt and corrupting as a society allows it to be. At the same time finance or some equivalent is inevitable in any reasonably complex culture. It is needed to direct resources to worthwhile activities. The "technology" of trade has varied with time and culture, approaching but nowhere achieving, the goal of making the incentives encourage fair and honest dealing.

    Successful systems have seemed to exist for long periods of time and the current "western civilization" model really isn't all that bad. It's mechanisms for accommodating changes in conditions are unfortunately a weak point with too much profit from manipulating the rule making system.

    Clearly, eternal vigilance is the price of liberty in this as well as much else, thank you for watching your areas of interest and watching out for those using thermite on the train tracks.

  3. I don't think we can let modern finance off the hook that easily. Many "parties" to these "arrangements" are coerced and/or deceived into participating. Therefore the standard that a party "feel" they might benefit is completely inadequate.

    In the housing crisis and subsequent Great Recession of 2008-9, anyone who had a mutual fund or 401k was a (nominally consenting) participant. After all, we'd signed the check that deposited our money in the mutual fund, right? Well, no. Consent on the basis of deception is not informed consent. And when the deception goes far, far up the advice chain; when the advisors of the advisors of the advisors all believed the bullshit about Grade A tranches of mortgage-backed securities, you cannot turn around and blame the victims for their consent.

    Consider that finance is both a vital and necessary part of a modern economy, and a gigantic con game. The practitioners provide enough benefit so that some fraction of the economy can't survive without them. But they obfuscate and monopolize the system so thoroughly that alternatives could never emerge and survive. That gives the practitioners the freedom to rake in gigantic (and more to the point -- not optimal on a system-wide basis) profits.

  4. You are conflating my first and only posting (so far) with that of another poster. I agree that whack-a-mole is dull and unproductive, but "artificial scarcity" is not something I find plausible either.

    For me, the distinguishing feature is the long and dubious chain of information provenance on the financial side. Since you mention autos: when I go searching for a new car, I crack open Consumer Reports. Now, not only does CR have a reputation for honest dealing, a reputation they have clear incentives to maintain, but they buy the damn cars themselves, they drive them, and they examine them in their own garages. The buck stops after pretty much one link in the chain. Compare financial advice where there is no shortage of advice and advisors, but very little taking of responsibility for that advice.

    Alternatives to a system that rewards with such obscene profits that corruption is inevitable. Why, for example, do you have to be a friend of the right broker in order to get in on an IPO? Isn't the "P" in IPO supposed to be "Public"?
    It would be a financial innovation if an IPO returned more money to the issuing company, and the insiders siphoned off less. But do I expect such an innovation to ever emerge from the current system? I'm not holding my breath.

  5. An artificial inflation of supply, but mostly the supply of financing, much less of housing. The creation of derivatives and the vast sums to be made on them drove Wall Street to demand an ever increasing supply of mortgages, regardless of quality. The large majority were refinances made on existing homes, not new construction. Since every dollar represented by an actual mortgage was leveraged up about 50 times by side bets made by the financial industry, that is where the house of cards was built- in finance. Ratings agencies and investment banks colluded to take advantage of the new technology to make vast sums without actually building anything. The housing bubble was real, but it would never have threatened the global economy but for the bubble in derivatives. It was the proximate trigger, but not the source of the crisis.

    What distinguishes the sale of financial assets from most (but not all) other kinds of assets or services is extreme asymmetry of information. That's what makes people feel like they are being conned- and very often they have been right. Markets that have a great deal of asymmetry of information need effective regulation or supervision in order for non-experts to feel they are not being taken advantage of. In the Recent Events, even a lot of "experts" were deceived, often quite deliberately, about what they were buying. That kind of defines a con. And no, all purchases are not defined by taking advantage of someone in any kind of a con- most, in fact, involve people on both sides exchanging something they personally value less for something they personally want more, in full knowledge and with eyes wide open. That's what makes economies work. It's when that social contract is broken that we run into trouble.

    A financial sector is necessary, and it should be innovative, but it can't exist as a free for all that looks a lot like a criminal enterprise- not if it is to serve the greater good, or even be sustainable.

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