Facebook is the dominant
social network in Europe, with 349 million monthly active users. Google has
something like 94% of market share for search in Germany. The servers of Europe
are littered with the bodies of dead and dying social media sites. The few
holdouts that still exist, like Xing,
are being crushed by their American rivals.
In their online life,
Europeans have become completely dependent on companies headquartered in the
And so Trump is in charge in
America, and America has all your data. This leaves you in a very exposed
position. US residents enjoy some measure of legal protection against the
American government. Even if you think our intelligence agencies are evil,
they're a lawful evil. They have to follow laws and procedures, and the people
in those agencies take them seriously.
But there are no such
protections for non-Americans outside the United States. The NSA would have to
go to court to spy on me; they can spy on you anytime they feel like it.
This is an astonishing state
of affairs. I can’t imagine a world where Europe would let itself become
reliant on American cheese, or where Germans could only drink Coors Light.
In the past, Europe has shown
that it's capable of identifying a vital interest and moving to protect it.
When American aerospace companies were on the point of driving foreign rivals
out of business, European governments formed the Airbus consortium,
which now successfully competes with Boeing.
A giant part of the EU budget
subsidize farming, not because farming is the best use of resources in a
first-world economy, but because farms are important to national security, to
the landscape, to national identity, social stability, and a shared sense of
who we are.
But when it comes to the
Internet, Europe doesn't put up a fight. It has ceded the ground entirely to
American corporations. And now those corporations have to deal with Trump. How
hard do you think they'll work to defend European interests?
The Feudal Internet
The status quo in May 2017
looks like this:
There are five Internet
companies—Apple, Google, Microsoft, Amazon and Facebook. Together they have a
market capitalization just under 3 trillion dollars.
Bruce Schneier has called this
feudal Internet. Part of this concentration is due to network effects, but
a lot of it is driven by the problem of security. If you want to work online
with any measure of convenience and safety, you must choose a feudal lord who
is big enough to protect you.
These five companies compete
and coexist in complex ways.
Google and Facebook are on
their way to a duopoly in online advertising. Over half of the
revenue in that lucrative ($70B+) industry goes to them, and the two
companies between them are capturing all of the growth (16% a year).
Apple and Microsoft have a
duopoly in desktop operating systems. The balance is something
like nine to one in favor of Windows, not counting the three or four people
who use Linux on the desktop, all of whom are probably at this conference.
Three companies, Amazon,
Microsoft and Google, dominate cloud computing. AWS has 57% adoption,
Azure has 34%. Google has 15%.
Outside of China and Russia,
Facebook and LinkedIn are the only social networks at scale. LinkedIn has been
able to survive by selling itself to Microsoft.
That is the state of the
feudal Internet, leaving aside the court jester, Twitter, who plays an
important but ancillary role as a kind of worldwide chat room.
Google in particular has come
close to realizing our nightmare scenario from 1998, a vertically integrated
Internet controlled by a single monopoly player. Google runs its own physical
network, builds phone handsets, develops a laptop and phone operating system,
makes the world’s most widely-used browser, runs a private DNS system, PKI
certificate authority, has photographed nearly all the public spaces in the
world, and stores much of the world’s email.
But because it is run by more
sympathetic founders than Bill Gates, because it builds better software than
early Microsoft did, and because it built up a lot of social capital during its
early “don't be evil" period, we’ve given it a pass.
It's not clear that anyone can
secure large data collections over time. The asymmetry between offense and
defense may be too great. If defense at scale is possible, the only way to do
it is by pouring millions of dollars into hiring the best people to defend it.
Data breaches at the highest levels have shown us that the threats are real and
ongoing. And for every breach we know about, there are many silent ones that we
won't learn about for years.
A successful defense, however,
just increases the risk. Pile up enough treasure behind the castle walls and
you'll eventually attract someone who can climb them. The feudal system makes
the Internet more brittle, ensuring that when a breach finally comes, it will
Each of the big five
companies, with the important exception of Apple, has made aggressive user
surveillance central to its business model.
This is a dilemma of the
feudal internet. We seek protection from these companies because they can offer
us security. But their business model is to make us more vulnerable, by getting
us to surrender more of the details of our lives to their servers, and to put
more faith in the algorithms they train on our observed behavior.
These algorithms work well,
and despite attempts to convince us otherwise, it’s clear they work just as
well in politics as in commerce.
So in our eagerness to find
safety online, we've given this feudal Internet the power to change our offline
world in unanticipated and scary ways.
These big five companies
operate on a global scale, and partly because they created the industries they
now dominate, they enjoy a very lax regulatory regime. Everywhere outside the
United States and EU, they are immune to government oversight, and within the
United States the last two administrations have played them with a light touch.
The only meaningful attempt to regulate surveillance capitalism has come out of
the European Union.
Thanks to their size and
reach, the companies have become adept at stonewalling governments and evading
attempts at regulation or oversight. In many cases, this evasion is noble. You
don’t want Bahrain or Poland to be able to subpoena Facebook and get the names
of people organizing a protest rally. In other cases, it’s purely self-serving.
Uber has made a sport of evading all authority, foreign and domestic, in order
Good or bad, the lesson these
companies have drawn is the same: they need only be accountable to themselves.
But their software and
algorithms affect the lives of billions of people. Decisions about how this
software works are not under any kind of democratic control. In the best case,
they are being made by idealistic young people in California with imperfect
knowledge of life in a faraway place like Germany. In the worst case, they are
simply being read out of a black-box algorithm trained on God knows what data.
This is a very colonial
mentality! In fact, it’s what we fought our American War of Independence over,
a sense of grievance that decisions that affected us were being made by
strangers across the ocean.
Today we're returning the
favor to all of Europe.
Facebook, for example, has only one manager
in Germany to deal with every publisher in the country. One! The company
that is dismantling the news industry in Germany doesn’t even care enough to
send a proper team to manage the demolition.
Denmark has gone so far as to appoint
an ambassador to the giant tech companies, an unsettling but pragmatic
acknowledgement of the power relationship that exists between the countries of
Europe and Silicon Valley.
So one question (speaking now
as an EU citizen): how did we let this happen? We used to matter! We used to be
the ones doing the colonizing! We used to be a contender!
How is it that some dopey kid
in Palo Alto gets to decide the political future of the European Union based on
what they learned at big data boot camp? Did we lose a war?
The lack of accountability
isn’t just troubling from a philosophical perspective. It’s dangerous in a
political climate where people are pushing back at the very idea of
globalization. There's no industry more globalized than tech, and no industry
more vulnerable to a potential backlash.
China and Russia show us that
the Internet need not be a world-wide web, that it can be subverted and
appropriated by the state. By creating a political toolkit for authoritarian
movements, the American tech giants may be putting their own future at risk.
Given this scary state of the
world, with ecological collapse just over the horizon, and a population
sharpening its pitchforks, an important question is how this globalized,
unaccountable tech industry sees its goals. What does it want? What will all
the profits be invested in?
What is the plan?
The honest answer is: rocket
ships and immortality.
I wish I was kidding.
The best minds in Silicon
Valley are preoccupied with a science fiction future they consider it their
manifest destiny to build. Jeff Bezos and Elon Musk are racing each other to
Mars. Musk gets most of the press, but Bezos now sells
$1B in Amazon stock a year to fund Blue Origin. Investors have put over
$8 billion into space companies over the past five years, as part of a push
to export our problems here on Earth into the rest of the Solar System.
As happy as I am to see Elon
Musk and Jeff Bezos fired into space, this does not seem to be worth the
collapse of representative government.
Our cohort of tech founders is
feeling the chill breath of mortality as they drift into middle age. And so
part of what is driving this push into space is a more general preoccupation
with ‘existential risk’.
Musk is persuaded that we’re
living in a simulation, and he or a fellow true believer has
hired programmers to try to hack it.
Larry Ellison has
put $370M to anti-aging research, as if anybody would want to live in a
world with an immortal Larry Ellison. Our plutocrats are eager to make death an
Now, I’m no fan of death. I
don't like the time commitment, or the permanence. A number of people I love
are dead and it has strained our relationship.
But at the same time, I’m not
convinced that a civilization that is struggling
to cure male-pattern baldness is ready to take on the Grim Reaper. If we’re
going to worry about existential risk, I would rather we start by addressing
the two existential risks that are indisputably real—nuclear war and global
climate change—and working our way up from there.
But real problems are messy.
Tech culture prefers to solve harder, more abstract problems that haven't been
sullied by contact with reality. So they worry about how to give Mars an
earth-like climate, rather than how to give Earth an earth-like climate. They
debate how to make a morally benevolent God-like AI, rather than figuring out
how to put ethical guard rails around the more pedestrian AI they are
introducing into every area of people's lives.
The tech industry enjoys
tearing down flawed institutions, but refuses to put work into mending them.
Their runaway apparatus of surveillance and manipulation earns them a fortune
while damaging everything it touches. And all they can think about is the cool
toys they’ll get to spend the profits on.
The message that’s not getting
through to Silicon Valley is one that your mother taught you when you were two:
you don’t get to play with the new toys until you clean up the mess you made.
The circumstances that have
given the tech industry all this power will not last long. There is a limited
time in which our small caste of tech nerds will have the power to make
decisions that shape the world. By wasting the talents and the energies of our
brightest people on fantasy role play, we are ceding the future to a more
practical group of successors, some truly scary people who will take our tools
and use them to advance a very different agenda.
To recap: the Internet has
centralized into a very few hands. We have an extremely lucrative apparatus of
social control, and it's being run by chuckleheads.
The American government is
also being run by chuckleheads.
The question everybody worries
about is, what happens when these two groups of chuckleheads join forces?
ABSTRACT: Using panel data on
individual labor income histories from 1957 to 2013, we document two empirical
facts about the distribution of lifetime income in the United States. First,
from the cohort that entered the labor market in 1967 to the cohort that
entered in 1983, median lifetime income of men declined by 10%–19%. We find
little-to-no rise in the lower three-quarters of the percentiles of the male
lifetime income distribution during this period. Accounting for rising
employer-provided health and pension benefits partly mitigates these findings
but does not alter the substantive conclusions. For women, median lifetime income
increased by 22%–33% from the 1957 to the 1983 cohort, but these gains were
relative to very low lifetime income for the earliest cohort. Much of the
difference between newer and older cohorts is attributed to differences in
income during the early years in the labor market. Partial life-cycle profiles
of income observed for cohorts that are currently in the labor market indicate
that the stagnation of lifetime incomes is unlikely to reverse. Second, we find
that inequality in lifetime incomes has increased significantly within each
gender group. However, the closing lifetime gender gap has kept overall
lifetime inequality virtually flat. The increase within gender groups is
largely attributed to an increase in inequality at young ages, and partial
life-cycle income data for younger cohorts indicate that the increase in
inequality is likely to continue. Overall, our findings point to the
substantial changes in labor market outcomes for younger workers as a critical
driver of trends in both the level and inequality of lifetime income over the
past 50 years.