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[...] Google continues to maintain that it doesn’t want human judgment blurring the autonomy of its algorithms. But even spelling suggestions depend on human judgment, and in fact Google developed that feature not only by means of algorithms, but also through a painstaking, iterative interplay between computer science experts and human beta testers who report on their satisfaction with various results configurations.[...]
[...] we can’t hope to reform the information economy without fundamentally changing the incentives at its core. Wu’s postmaterialism would have been a good fit for the roaring nineties, when a rising tide of Internet firm profits seemed to be lifting many parts of the economy. But the economic crisis that has overtaken the United States since 2008 makes our time in many ways more similar to Franklin Roosevelt’s era than Bill Clinton’s. A small cadre of the lucky, the talented, and the ruthless are taking an enormous share of the revenues generated by new Internet technologies. They keep their methods strictly proprietary while reaping huge returns from content put out in the open by others. Like the megafirms and CEOs that the New Deal helped bring to heel, the leaders of our largest tech firms have been very quick to misequate personal enrichment with the public good.
once again, I feel vindicated
From the tech and telecom craze of the late 1990s to house price escalation from 2002 to 2006, asset bubbles are a predictable consequence of black box finance. Insiders who understand their true dynamics can sell at the top, reaping enormous windfalls. But their gains represent “a claim on future wealth that neither had been nor was to be produced.” By creating the illusion of enormous value in securities like CDOs and CDSes, black box financiers make their own fees (ranging from a fraction of a percent to over 30 percent in the case of some hedge funds) seem trivial in comparison. When the mirage dissipates, the desert of zero productive gains becomes clear. But in this harsh new economic reality, the money “earned” by the speculators has all the more purchasing power, arrayed against the smaller incomes of those who did not take advantage of the bubble.
the quote on future wealth comes from an excellent book review by Benjamin Kunkel's https://www.lrb.co.uk/v34/n09/benjamin-kunkel/forgive-us-our-debts
take the quote from kunkel and repurpose it for the latest tech bubble
In the context of massive Internet firms, competition is unlikely. Most start-ups today aim to be bought by a company like Google or Facebook, not to displace them. [...]
[...] Legislators are beginning to address that by proposing bills that would make long-term unemployment an illicit basis for hiring decisions. But number crunchers may simply feed “length of time since last job” into their hiring models, and if that factor is weighted heavily, it could be utterly decisive. Future legislators need to take into account the ease with which big data mongers can do an end run around law designed for an analog age. For example, in the case of “time since last job,” they may allow it to be up to 15 percent of a “hiring score,” but no more. Just as accounting rules had to adjust to accommodate firms increasingly complex and fractional interests in other firms, laws governing credit and employment decisions need to become far more specific about the extent to which a forbidden ground of decision making can enter into scores meant to influence decisions.
However ambitiously American finance regulators may set standards, their efforts are compromised by the internationalization of major firms, which plead that any stringent national standard for recording information may make it harder to do business overseas. They want to wait for international coordination—a process that could take decades. Or they could simply move their trading overseas.
the perils of living in a world with national regulatory regimes but globalised capital
[...] Playing catch-up with the banks and the scorers and the Internet giants just reinforces their power over us. We should be challenging their rules, not trying to keep ahead of them.
The importance of credit reputation grows as public assistance shrinks. Austerity promotes loans as a lifeline for an insecure precariat. Students who once earned state scholarships are now earning profits for government or private lenders. In our “market state” and “ownership society,” private credit rather than public grant is the key to opportunity. Would-be homeowners, students, and the very poor are forced back on commercial credit to buy places to live, to prepare for careers, or even just to pay the costs of day-to-day living. By and large, private lenders are simply looking to generate more private wealth, rather than to invest long term in individuals or communities. [...]
It is not helpful to have politicians across the political spectrum meekly submitting to this technolibertarianism—assuming that bureaucrats, and by extension themselves, are inherently incapable of influencing technical innovation. We must curb the tendency to reify the tech giants—to assume that their largely automated ways of processing disputes or handling customer inquiries are, inevitably, the way things are and must always be. Until we do, we enforce upon ourselves an unnecessary helplessness, and a self-incurred tutelage.
The arbitrariness of many forms of reputation creation is becoming clearer all the time. I will not recapitulate here the problems of discrimination (racial, political, economic, and competitive) that we examined earlier. Unfairness in today’s Internet industries should be obvious by now, and is another important reason to be wary of reification. “The Internet” is a human invention, and can be altered by humans. [...]
Our technologies are just as much a product of social, market, and political forces as they are the outgrowth of scientific advance. They are intimately embedded in social practices that rely on human judgment. [...]
[...] Above all, what are these giant salaries and bonuses really for? What value does society derive from the work that they theoretically compensate?
referring specifically to finance but applies everywhere tbh