A Practical Navigator for the Internet Economy

Executive Summary

Given the speed with which it occurs,  the impact of technology change, first on business and the way it creates and markets new products and on national “security" and the way in which it operates in the no holds barred atmosphere post 9/11 we have had quite an upheaval  in the way in which online digital technology interacts with customers and with citizens of hollowed out nation states.   As Moore's law continues to progress the digital tools available to examine the behavior of individuals grows ever more fine-grained.   Adam Curtis the well-known BBC documentarian  in his four-hour long Century of the Self (2002) explained the rise of public relations and marketing firms at the end of World War II by means of focusing on the development of marketing campaigns influenced by the ideas of Sigmund Freud where commercials on broadcast media were used to convince members of the general public that they really had to have things like Betty Crocker cake mixes that would free housewives from the drudgery of having to make cakes from scratch.

This was the birth of consumer oriented mass marketing that gave us our consumer focused automobile-based society of commuters in suburbs of the 1950s.  with the second decade of the 21st century the basic ideas remained and the basic techniques of selling state based on the same general principles but  digital technology created an explosion of specialized products that catered to differing versions of the “self”.  What was new here is that someone with something to sell could track and develop a customer base at the level of individual people.   To deal successfully with a population be they those who make up the class of one’s customers  or for the occasion  of law enforcement those whose behavior appeared to demand surveillance.   Suddenly understanding behavior patterns became all the rage.  And prediction of behavior the all-encompassing goal.  The perceived needs above marketing and “security” collided head-on with the need to preserve privacy.  Marketing was one thing but put it together  with government efforts to secure security from terrorism and the resolve has been a volatile  and indeed a flammable mixture.

This COOK Report focuses on  trying to understand trends that developed independently and in parallel but have become mixed into a confluence  of events and outcomes where fears are stoked  that the tracking of one’s customers on the web   is done as a result of a  purposeful design narrow choices and force one’s customers into feudal domains where their economic viability will depend on strength of the walled garden built for them by their feudal overlord.

We present summaries of monographs published during the winter of 2014-2015 that focus equally on the nasty issues underlying the national security agency surveillance campaigns and on commercial issues via a new technology class called black box algorithms.  Such algorithms like, for example, Google’s page rank must be taken on faith because they are trade secrets and as a trade secrets may not be subject to independent verification or criticism and unlike patents they never expire.  Combined with this is what these authors portray as a changing and rather sinister business model for the Internet namely that all the free tools that we give you: like Yahoo chat forums; or Google's Gmail or Google plus circles; or Facebook pages; or Amazon prime are in effect honeypots designed to extract the maximum amount of data about the intimate details of our personal lives.  The product that powers the Internet is not the advertising they but rather it is the extraction and sale of our personal data sets  into an unregulated environment.

Combined with the latest fads of data mining and so-called big data, this creates a situation where, in many cases the most intimate details of our private lives are captured within Facebook pages or Google plus circles where it will be picked up by unregulated data brokers and become a part of a personal dossier for sale to credit bureaus, health insurers,  auto insurers,  brokers who do background checks for employers before they offer candidates jobs and the like.  This creates a situation  wear given the inability of the average person to track or otherwise control his personal data, youthful indiscretions will always be able to be dug up and used against someone.

It all comes back to the destruction of privacy a concept which legally is less well enshrined in the United States than in Europe.  Shoshana Zuboff,  Harvard Business School Professor Emeritus, stands out among the critics thanks to a three-year long campaign of sounding the alarm about the coming dominance of Google.   Her broadest and most general paper is an April 2014 essay in FAZ called “Dark Google.”   Here she focuses on what she chooses to see as a symbiotic relationship between Google and the National Security Agency where, in 2010, in response to a successful hacking of Google’s network from mainland China Google found itself forced to go to the NSA to seek security protection for its network.

Zuboff claims that Google became dominant by identifying and moving in on what she calls “social blank areas.”  A blank area occurs where technology creates an opportunity to do something that has not been done before.  Such „blanks” occur when earlier meanings and practices no longer apply, but new ones have yet to be created. Google’s rapid rise to power was possible because it ventured into this kind of blank area.   One such area was Street View  given the  plunge and the cost of digital storage it became possible  to outfit an automobile with a camera  that would present the viewer with what he or she would see if in that car driving down that street.  Okay and with enormous implications for privacy but something that, beginning in 2007, Google just went out and did without asking permission.   Google's critics argue  that because Google was able to do this on a scale that no one else could it was a further example of how Google’s technology invaded privacy.  There would be only one “Street View”  and that would be the one created by Google.

Zuboff also claim’s that what Google wants to arbitrate is user’s conception of Reality which is the experience where Google is guiding a mobile user’s use of Google maps to find a nearby restaurant.  Google is offering advice that depends on the location of that user in  the "real world."  Let us point out  that Yahoo, Facebook and many commercial  “data broker”s are just as much to blame as Google for these various forms of privacy intrusion. But we go into this here in as much detail as we have because Google’s scope is so much larger than any of its other competitors and Zuboff’s research has focused on it in full detail.

Zuboff’s criticism of Google  is more focused on Europe than the United States  because, it may be argued, that  under European law,  privacy has been deemed to be a human right.   European nation states will continue to show their relevancy to their citizens by pursuing legal rulings  on  "the right to be forgotten.”  In other words they are insisting  that  a third party may become involved in deciding whether some unregulated data mining company can acquire arrest records and sell them over the web for a fee with no possibility of checking their accuracy or relevancy to whatever situation is involved.

We summarize  comments  of Robert Scheer’s  They Know Everything About you; Bruce Schneier; Data and Goliath;  Frank Pasquale, The Black Box Society; Jacob Silverman, Terms of Service; Trebor Scholz, Digital Labor: The Internet as Playground and Factory: Shoshana Zuboff; “Dark Google,” “The Big Other,” etc.
The big and unanswered question  is one of privacy.  Will we ever establish any bounds on the assumed right that if someone puts digitized information on an Internet Web server, it must be true enough, it must be valid enough to allow third parties to vacuum it up and resell it for profit?   Of course if you are the target of such information, you may hire a lawyer and try to take the offending party to court.   Never mind that if you are a member of the 99%,  you probably don’t have the money necessary to do this.   And very often, if you are “ordinary”  enough,  you very likely will never find out that there was any information on the Internet that could or actually did harm you.

We are under no illusion that any benevolent regulatory force or other kind of force for that matter will step forward to ameliorate the current unbalanced situation anytime soon.  Is much more likely that we will gradually accrete a body of case law that would go, one would hope, in a democratic direction.  But there is no guarantee that either.  We have gone to this effort because we hope that a better informed public might lead to better results.

Interestingly enough there are some efforts at pushback being undertaken in order to prevent the complete poisoning of the advertising mechanisms that do presently enable the commercial Internet.  Don Marti is one of the leading figures working toward reform in this area.  Our next issue will feature many comments from him  as well as very astute commentary from our Arch Econ list as to what seems to be possible and what not.  That issue may also be shaped by some material that we hope could exert a prophylactic role on educational reforms in Kansas City that may help to create classes of cooperative problem solvers as opposed  to the current graduates who can memorize and take tests but who are not good in thinking for themselves.   Finally we are even hopeful of being able to comment on the revised material from Andrew Odlyzko who last March offered us a look at a revision of his earlier 2014 essay.

Learning enough to shape or control the data streams that we emit by the very fact of our use of the network is not an easy task.  But increasingly there is more pushback against our being tracked without our knowledge or permission.   The revelations of Edward Snowden have already created change to the point where the majority of Internet data flows are now encrypted.  At the beginning of 2013 no one would have dared to imagine a scenario that could yield such a result.  But it did happen and we do have the result.  Future surprises are out there and no one knows what they shall be.