by
Tim O'Reilly
archive/dissertation
Nick Srnicek,
Douglas Rushkoff,
Robert W. McChesney,
Christian Fuchs,
Tim O'Reilly,
Franklin Foer,
McKenzie Wark,
Mark Andrejevic,
Evgeny Morozov,
Wolfgang Streeck
possibly relevant for my dissertation
Meanwhile, there is an incentive to cut income for ordinary workers. Cutting wages drives up net income and thus the price of the stock in which executives are increasingly paid. Those executives who are not motivated by cupidity are held hostage. Any CEO who doesn’t keep growing the share price or who considers other interests than those of the shareholders is liable to lose his or her job or be subject to lawsuits. Even Silicon Valley firms whose founders retain controlling positions in their companies are not immune from pressure. Because so much of the compensation of their employees is now in stock, they can only continue to hire the best talent as long as the stock price continues to rise.
aligns with what i said in my contractor piece
Algorithmically derived knowledge is a new source of asymmetric market power. Hal Varian noted this problem in 1995, writing in a paper called “Economic Mechanism Design for Computerized Agents” that “to function effectively, a computerized agent has to know a lot about its owner’s preferences: e.g., his maximum willingness-to-pay for a good. But if the seller of a good can learn the buyer’s willingness-to-pay, he can make the buyer a take-it-or-leave it offer that will extract all of his surplus.” If the growing complaints of Uber drivers about lower fares, too many competing drivers, and longer wait times between pickups are any indication, Uber is optimizing for passengers and for its own profitability by extracting surplus from drivers.
Once companies take money from venture capitalists, they are committed to aiming for an exit. A typical venture fund is a partnership with a ten-year time horizon. Most of the investments are made within the first two to three years, with some money reserved for additional investment in the companies that are most promising. Once an entrepreneur takes money from a venture capitalist, he or she is promising to sell or go public within the lifetime of the fund. Yet VCs know that the vast majority of their deals will fail. Jon Oringer, the founder and CEO of Shutterstock, put it well in his advice to entrepreneurs: “What venture capital firms do is spread some number of millions of dollars to some number of companies. They’re not really rooting for every single one. All they need is for a few of them to succeed. It’s the way the model works. They have a totally different risk profile than you do. This is your only game in town. For the venture capital firm, it’s one of a hundred games in town.”
good explanation of VC funding. could be useful
The skills needed to take advantage of new technology proliferate and are developed over time through communities of practice that share expertise with each other. Over time, the new skills are routinized and it becomes easier to train lots of people to exercise them. It is at that point that they begin to affect productivity and improve the wages and incomes of large numbers of people.
[...]
[...] As coding becomes routinized, the educational needs of those practicing it become less demanding. For many types of programming, people need the equivalent of vocational training rather than an advanced software engineering or math degree. And that’s exactly what we see with the rise of coding academies and boot camps.
he agrees with my coding bootcamp theory!
[...] Companies with new technologies are free to disrupt almost any industry they choose—journalism, television, music, manufacturing—so long as they don’t disrupt the financial operating system churning beneath it all. Hell, most of the founders of these digital companies don’t seem to realize this operating system even exists. They are happy to challenge one “vertical” or another, but the last thing they do when they’ve got a winner is challenge the rules of investment banking, their own astronomical valuation, or the IPO through which they cash out. Winning the digital growth game is less a new sort of prosperity than it is a new way to execute business as usual: old wine in a new bottle. It’s not that making money is so wrong; it’s that the premises of venture capital and the stock market—as well as their real effects—are never even questioned. The winners have, in some fundamental way, been duped.
ahh i love this
This disproportionate relationship between capital and value—or invested money versus actual revenue—is the hallmark of the dominant digital economy. If anything, the digital economy has laid bare the process by which cash, labor, and productive assets from the real, transactional marketplace are extracted and converted into frozen capital—all in the name of growth. Once money has been “captured” in a stock price, it tends to just sit there as if in a bank vault. This, in turn, puts pressure on the company to make more money, faster, in order to justify the new total value of all the stock. The disparity between a company’s net worth and its revenues gets even more extreme. Strangely enough, the companies do keep growing, but they don’t create or produce any value.
i really like how he nails the way the digital world just accelerates/reveals how the economy operates. need to come up with a variety of ways to refer to this
This is why the leading voices today are those that still treat the emerging digital economy as Industrialism 2.0 or, as Massachusetts Institute of Technology professors Erik Brynjolfsson and Andrew McAfee put it in the title of their respected business book, The Second Machine Age. It’s no wonder such ideas captivate the business community: for all their revolutionary bravado they are actually promising business as usual. Workers will continue to be displaced by automation, corporations will remain the major players in the economic landscape, and it’s up to people to keep up with the pace of technological change if they want to survive. This is not a revolutionary vision but a reactionary one. Everything is supposed to change except the economic platform and its bias toward growth—which is probably the most arbitrary piece in the whole puzzle.
love that he (rightly) calls them out for being reactionary
The unsustainable endgame is an economy based entirely on marketing and advertising. In its currently inflated state, the entirety of advertising, marketing, public relations, and associated research still accounts for less than 5 percent of gross domestic product (GDP), by the very most generous estimates.27 Furthermore, unscrupulous Web site owners have now learned to use robotic ad-viewing programs to juice their revenue from pay-per-click advertising. Most of these bot programs run secretly on the computers of everyday users in the form of malware, a kind of minivirus that co-opts a computer’s processing power. Bots now comprise an estimated 25 percent of all online video ad viewers and 10 percent of all static display ads. In 2015, advertisers are projected to lose $6.3 billion in pay-per-click fees to these imaginary viewers.28 Consider the irony: malware robots watch ads, monitored by automated tracking software that tailors each advertising message to suit the malbots’ automated habits, in a human-free feedback loop of ever-narrowing “personalization.” Nothing of value is created, but billions of dollars are made.
Though ingenious, Lanier’s solution could actually dehumanize things even further. If we are paid chiefly for our data, then we are all performing for the machines instead of one another. We are earning money not for the ways we create value for people but for all the passive activities that happen to be data intensive. Our only value to this digital economy comes from those aspects of ourselves that can be quantified. It may solve the problem of getting a whole bunch of activity back “on the books,” but to what end? So we can register some credits on a balance sheet? Must we accept “the books”—presumably, the double-entry ledger—as the fundamental operating system?
The problem with trying to get all human activity back on the books is that the books themselves are not neutral. They are artifacts of a very specific moment in human history—the beginning of the Renaissance—when the two-column ledger was instituted and everything came to be understood as a credit or a debit in a zero-sum game of capital management. Feeding more activity to the ledger simply cedes more of humanity and business alike to a growth-centric industrial model that was invented to thwart us to begin with.
a very specific critique of Jaron Lanier to draw on for diss
Besides, learning code is hard, particularly for adults who don’t remember their algebra and haven’t been raised thinking algorithmically. Learning code well enough to be a competent programmer is even harder. Although I certainly believe that any member of our highly digital society should be familiar with how these platforms work, universal code literacy won’t solve our employment crisis any more than the universal ability to read and write would result in a full-employment economy of book publishing.
It’s actually worse. A single computer program written by perhaps a dozen developers can wipe out hundreds of jobs. Digital companies employ ten times fewer people per dollar earned than traditional companies. Every time a company decides to relegate its computing to the cloud, it is free to release a few more IT employees. Most of the technologies we are currently developing replace or obsolesce far more employment opportunities than they create. Those that don’t—technologies that require ongoing human maintenance or participation to work—are not supported by venture capital for precisely this reason. They are considered unscalable because they require more paid human employees as the business grows.
link this to Patrick's NS piece
point of tech is to wipe out jobs