Shoshana Zuboff’s ‘Big Other’ and ‘Surveillance Capitalism’ as Future Economic Models

Shoshana Zuboff’s recently published article on what she has termed Information Civilization is a compact and helpful analysis of the kind of internet economies that are emerging in the early twenty-first century. This blog post is a commentary on that text. She takes Google’s Chief Economist Hal Varian as her foil, referencing his two articles Computer Mediated Transactions (2010) and Beyond Big Data (2013).

In essence, Varian argues in the first paper that transactions that are mediated by computers are becoming the norm, and that that mediation will enable significant changes to the structure of modern economies for a considerable time. Previously hidden parts of the market – partially reflected in Adam Smith’s metaphor of the Invisible Hand – were no longer hidden; indeed they were becoming increasingly and simultaneously both knowable and predictable. In the second paper, Varian identifies four applications or ‘uses’ – data extraction and analysis, monitoring and contracts, personalization and communication, and continuous experimentation. Zuboff looks at all four ‘uses’ in turn.

Data Extraction and Analysis

Zuboff separates the ‘economic’ data in ‘computer mediated transactions’ from other data (computer mediated flows) in arriving at a quasi-definition of ‘big data’, though in truth big data bears no such distinction. Data is data, transactions are exchanges within a data context, and value takes many forms, all of which are subjective. The abstract behaviour of people and environment is correlated with behaviours and actions of people and machines, and the job of the data scientist is to design the conditions within which a desired outcome can be achieved. Zuboff describes the data collection process as having a ‘formal indifference’ to the data subject.[1]

Zuboff strays somewhat in the analysis by comparing Henry Ford’s mass production capitalism and this new incarnation. Ford acknowledged that the worker as consumer (and therefore as customer) meant that fair wages needed to be paid in order that circulation of value in the economy persisted, and people kept buying cars. Zuboff stands this beside Google’s apparent lack of reciprocity, as ‘a break with this past’. Not just Google is under indictment here of course, just as it wasn’t only the Ford Motor Company, but the model itself. I don’t see the connection. The people who pay Google for their ‘stuff’ are the advertisers. Google is a B2B business, it doesn’t sell stuff (by and large) to consumers.  The exception might be where the argument abandons money as the exclusive good to be exchanged for commodities, and embraces data as a thing of real value in and of itself; but I don’t think Zuboff is at that point.[2]

In defining ‘surveillance capitalism’, she describes investment in ‘surveillance assets’ as ‘surveillance capital’. Two things are of concern here. First, the transformation of data economics will require that we completely re-evaluate what we mean by capital. Second, while surveillance capitalism is a really good metaphor for the business that is occurring today – new companies developing ever more clever ways to collect data from people and then monetize it – it doesn’t quite capture what it becomes, once the transformation is complete. It may or it may not be inexorable – as John Danaher put it in his post on the article, ‘there’s a battle of ideas to be fought here.’ That battle may be between the Corporation and the State – more on that later.

Monitoring and Contracts

Zuboff deals with the issue of contract in a most compelling way. She quotes Hannah Arendt, for whom ‘human fallibility in the execution of contracts is the price of freedom.’ For Zuboff, Varian’s removal of that fallibility is therefore a very bad thing.  It’s worth quoting her at length to give a sense for how pissed off she really is about this. ‘Varian’s vision of a computer-mediated world strikes me as an arid wasteland – not a community of equals bound through laws in the inevitable and ultimately fruitful human struggle with uncertainty. In this futurescape, the human community has already failed. It is a place adapted to the normalization of chaos and terror where the last vestiges of trust have long since withered and died. Human replenishment from the failures and triumphs of asserting predictability and exercising over will in the face of natural uncertainty gives way to the blankness of perpetual compliance.’

She reminds me both of Hobbes description of man in the State of nature – lives that are ‘solitary, poore, nasty, brutish, and short’ (Leviathan Chapter 14) and of D-503 and his comrades of One State in Zamyatin’s ‘We’, supposedly the inspiration for Orwell’s 1984, which quite obviously inspired Zuboff’s metaphor of Big Other. There is concurrently the normalization of chaos and terror (also perhaps channelling Herzog’s ‘civilization is like a thin layer of ice upon a deep ocean of chaos and darkness’) and the complete annihilation of trust, though this seems to be the natural condition anyway: no successful Capitalist has ever sought or depended on altruism. It is quite the opposite – capitalists feed on and encourage avarice and self-interest. ‘Greed, for want of a better word, is good,’ as Gordon Gekko famously put it in Wall Street. And there is the ‘blankness of perpetual compliance,’ an almost drug-induced stasis, perhaps represented by the blue-pill dystopia in the Wachowskis’ The Matrix, where reality is a manufactured dream, experienced by people who are perpetually sleeping in cocoons maintained and run by the Machine, the Matrix.

Zuboff’s insight on the redistribution of privacy rights is a real gem. As she puts it, ‘In the conventional narrative of the privacy threat, institutional secrecy has grown, and individual privacy rights have been eroded. But that framework is misleading.’ The purpose of companies like Google is to acquire secrets and sell them, in essence. In so doing, they are anxious to protect their secrets, their knowledge, their data. It is also the case that the secrets are never truly revealed, at least in the conventional commercial model. If Google finds out that I am likely to want to buy skis, it will sell that information to a ski trader. It will not, however, share the information – the secrets – with the trader. Google won’t tell the ski trader why it thinks that I am likely to buy skis just that – on a scale of 0-100 – I’m a 65. Google may know that I ski every year, that I’ve been searching for ski repair, and that my wife has been searching for ski holidays, but all the ski trader knows from Google is ‘65’. There are of course non-commercial models, where for example the Government might demand access to information, and that’s a whole other story. It may remain possible that Google exposes scores to the NSA or other agencies as appropriate, but States being as they are, they may insist on getting the haystack, not just the location of the needle.

She ends this piece with another provocative and compelling suggestion that the usurpation, or redistribution of rights from the individual to Big Other represents a shift in sovereignty, the first hint that we may be looking at a fundamental transformation of the State.  She describes this as ‘…an automated coup from above: not a coup d’état, but rather a coup des gens.’ Without knowing it, the State may be ceding power, first in commerce, then in trust, contract, and rule of law. There are of course two sides to this. The State retains a say in taxation, security and regulation, and this perhaps is where Danaher’s ‘battle of ideas’ finds its battlefield.

Personalization and Communication

In this third section, Zuboff deals with Varian’s discussion on predictive services, machines knowing what you want before you know it yourself. There are vast amounts of information required to support such services, and consumers need to be willing to share that information in order to participate. Non-participation, however, has become extremely difficult for what Zuboff refers to as ‘effective life’, and the imperceptibility of the risks or costs of surveillance beyond a kind of discomfort make the trade even more difficult to resist. Zuboff takes some time to consider Varian’s claim (based on Adam Smith and others) that the way to predict the future is to look at what the rich have today, that the poor aspire to. Varian’s example is personal assistants; it seems to me we should look at security and privacy!

There is some evidence that resistance is growing. At the very least, models are changing. Zuboff points to several studies that show that online behaviour is changing based on increased awareness of privacy issues. One study points to ignorance rather than apathy being behind younger online obliviousness to privacy concerns. There are companies designing more private experiences, such as SnapChat which allows transient image sharing, though these companies remain wedded to the data ecosystem for business monetization.

Continuous Experimentation

The shortest section in her article, but possibly one of the most interesting once she gets to the book, deals with Varian’s reference to the potential to mine everything for interesting things. We don’t know yet what is genuinely knowable from big data, and one’s propensity to buy stuff for advertising purposes is only the tip of the iceberg. In a world where everything is monitored, measured, and analysed, what are the patterns that we can see?

Zuboff puts it somewhat jarringly when she describes this as ‘a new business frontier comprised of knowledge about real-time behaviour that creates opportunities to intervene in and modify behaviour for profit.’ This invokes things like behavioural economics, choice architectures and the extent to which we retain free will in this brave new world. There are certainly opportunities created to intervene in behaviour, in the same way as television advertising does that today. To suggest that it is possible to modify behaviour, while not wrong (advertising works, after all), might be a little strong. After all, if technology and big data can in fact modify our behaviour, and machines can ultimately be used to control us, then maybe we never really had free will in the first place, and are already in effect subject to ‘the blankness of perpetual compliance.’

Conclusion

While not part of the formal conclusion, Zuboff’s reference to Polanyi in the preceding two paragraphs probably belongs there. The historian and economist describes three ‘fictions’ that underlay the market economy of the twentieth century. ‘The first was that human life can be subordinated to market dynamics and be reborn as ‘labor.’ Second, nature can be subordinated and reborn as ‘real estate.’ Third, that exchange can be reborn as ‘money.’ She continues to quote Polanyi directly ‘‘[T]he commodity fiction,’ he wrote, ‘disregarded the fact that leaving the fate of soil and people to the market would be tantamount to annihilating them.’’

Zuboff argues that a fourth fiction emerges under surveillance capitalism, a fictional reality. Reality is to be understood in this context as the measured and perceived behaviours of people and machines, modelled and commoditized, that which can be mined.

Polanyi’s commodity fiction harkens back to Marx and the commodity fetish, and notions of value.  Value is a subjective and relative thing, allowing economies to function. The commoditization process, whereby raw materials and labour can be objectified and objectively valued, is a similarly necessary economic function. These are all, of course, fictions, insofar as they are constructs of our imagination, indeed of our shared imaginations. That they are fictions should not be seen as pejorative in any way; in this sense all economics is a fiction. Alternately put, these ‘fictions’ are neither lies nor untruths; they are stories that help us to describe our world. With reality ‘fictionalized’, Zuboff says that ‘there are no individuals, only the world-spanning organism and all the tiniest elements within it.’ Maybe that’s true Kantian cosmopolitanism then. Is that such a bad thing?

Zuboff asks the question ‘will surveillance capitalism be the hegemonic logic of accumulation of our time, or will it be an evolutionary dead-end that cedes to other emerging information-based market forms?’ Paul Mason’s PostCapitalism comes to mind, a little lighter and more optimistic, perhaps. Certainly sharing, peer-to-peer and informal economic structures that are community based seem to have some credibility in emerging economies. One must also bear in mind the future of the State. These movements are happening in ‘white space’ where the State apparatus has no control or permission, as Zuboff puts it ‘legally and socially undefended territory’. Yet the State still controls Security and Regulation and Taxation, and maintains Weber’s classic monopoly on the use of force. The State will roar before this battle is done.

Shoshana Zuboff has a new book coming out in 2016, entitled Master or Slave? The Fight for the Soul of Our Information Civilization.

 

 

[1] Coffee and Big Data

To understand big data in the context of ‘computer mediated transactions’, let’s take an example. A classic economic transaction, in a ledger, may state that a Coffee Store owner sold a Cappucino to a customer on Thursday 12^th April 2013. It could be further abstracted – ten coffees were sold that day; $280 worth of business was done on that day; or $1,890 that week. This information is collected in the ledger in classic accounting terms in order to aid business planning, and for accounting, banking and taxation purposes. Separately, ledger entries may be made for ordering coffee supplies, and milk, and for paying barista wages.

Now, let’s computerise everything, such that the transaction is a computer mediated one. Suddenly, we know exactly when the coffee was served, to whom (the coffee was ordered through an app), what blend was used (the coffee machine is connected too), and who was the barista. Aggregated, we can model the frequency of customer visits, the variability of orders, and the duration (via location data from the app) that the customer stayed in the restaurant.

Correlating that data with unstructured data available from connected ecosystem feeds like Facebook and Twitter, we can analyse sentiment (did he tweet saying he liked the coffee?), we can collect weather data to see if weather influences buying, and we can analyse prior behaviour and sentiment to analyse whether certain events influence behaviour, such as his team winning or losing, frequency of social media engagement, and spending patterns in other areas.

All of this data feeds back to cost modelling in the coffee store – how much of what coffee should be ordered and when, how to roster which staff, how to optimise the experience. Sometimes the data can betray counter intuitive insights – for example, waiting in line might be good at some times, and not good at other times.

Back to the concept of Varian’s Computer Mediated Transactions – the question becomes how do we define a transaction? The engagement between the customer and the coffee store is not necessarily one that has a clear beginning and end, and at each point there are exchanges of value going on. Arguably, there is no clear beginning, nor a clear end to the engagement; buying events, where monetary value passes from one to the other, may simply be important events within a continuum of engagement.

[2] For example, as this recent FT video explains, cars themselves are seeing value seep away from the manufacturer, and towards the software; in turn, the software ‘value’ is in the data, as the car becomes more like a commerce platform that happens to transport people. There are two kinds of true value in this environment: commodities such as steel and rubber, and data. Even the labour in the manufacturing process becomes redundant through robotics and 3D printing.