IN 2011, in Davos, the World Economic Forum (WEF) hailed the birth of a new “asset class” – data. Going into raptures, they proclaimed data as the new oil. The WEF love for data has only grown with time. In 2019 it has declared that data is not merely oil, it is “super oil”: unlike the universe of oil, which is bound to the physical world and therefore finite, super oil or the data universe, is unbounded and growing exponentially. As long as machines can produce and consume ever larger amounts of data, the immaterial world of money and data can expand infinitely. No wonder the fat cats in Davos, the club of the rich, are salivating about the huge amounts of money to be made from this ever expanding data universe.
Let’s pass over some simple, mundane questions: can people eat data or wear it, the sort of questions are likely to be asked in the real, living and physical universe. Let’s consider the data universe instead, and the ever-growing data universe fuelling continuous financial growth. The new data universe turns out to be even more unequal than the one we know. Its “growth” does not create jobs; indeed, it creates job loss. Twenty-six individuals now own wealth equal to that of the bottom half of the world’s population. Yes, it creates wealth, but for whom?
Two recent books attempt to answer what is happening in the real world. Professor Shoshanna Zuboff of the Harvard Business School and no radical, writes in The Age of Surveillance Capitalism, that the object of collecting, processing and using data is no longer to service our needs better. It is to automate us, to modify our behaviour, producing a “behavioural surplus” that fuels the digital economy. The threat is not to sell us goods that we do not need, because it knows us so well, but the ability to change the way we interact with the external world, producing more wealth for itself. According to Zuboff, this outcome has darkened the digital dream, and caused its rapid mutation into surveillance capitalism. Professor Tim Wu, who coined the term net neutrality, has a slightly different take. He writes in The Attention Merchants that attention capital – capturing our attention – is the key driver of the digital economy. Those who control our attention, control the economy.
For both Wu and Zuboff, digital monopolies are a form of rogue capitalism that is creating a dystopian society. Wu suggests the solution lies in returning power to the people, by acting through the State, to break-up these new monopolies. The same way that it did in the era of oil monopolies. Zuboff believed earlier in something she calls “advocacy capitalism” which would liberate the power of the data for the consumer, and not the capitalists, a belief that had no moorings in the real world of capital. For both, an alternate to capitalism or an alternate to private property, is not a solution on offer.
Whether critical or rosy, these views of the digital economy capture only certain aspects of today’s world. They do not explain why digital monopolies are the fastest growing monopolies the world has ever seen. If we take the top five companies in the Fortune 500 list by market capitalisation today (2018), they are all digital monopolies. While collecting raw data and processing it makes up the key element of this growth, we need to understand the other elements that go into the making of digital monopolies.
There are three elements to the current growth of digital monopolies. One is the change in the structure of capital itself, a change that predates the growth of Google and Facebook, the key players in Wu and Zuboff’s account. This is the rapid increase in intangible assets in the composition of capital that starts in the late 70’s. Till then, capital was largely machinery and factories. The first transition from brick and mortar economy to what was talked of then as the knowledge economy, was powered by intellectual property; or as we should call it, enclosure of knowledge. The core of this change is the Trade in Intellectual Property Rights Agreement – patents, copyrights, industrial designs, etc – and the conversion of GATT into the current WTO regime. Along with the pharmaceutical companies, software companies such as Microsoft, IBM and hardware companies such as Apple, are a part of this transformation.
The second transformation – in capitalism – was the explosive growth of data, the subject matter of this piece, as a consequence of falling cost of personal computers, later the smart phone. This is the age of Google and Facebook, the two digital monopolies, whose combined worth is more than the GDP of most countries.
The growth of data monopolies such as Google and Facebook is most visible today, obscuring the third major transformation that is underway. Evgeny Morozov, one of the foremost technology analysts today, writes about this phenomena as platform capitalism, one in which consumers and producers meet via digital platform monopolies that are monopolies to sellers who produce goods or provide services, as well as to consumers, who buy such goods or services. They are the old fashioned two-sided monopolies of large trading monopolies such as Walmart recast into the new digital age. This is not only Amazon, the digital counterpart to the brick-and-mortar Walmart; they are also Uber, Airbnb, and many others, from neighbourhood grocery stores, micro-finance, taxi services, etc. Data is important here, but not in the way people think.
Most people reduce the question of data to a question of ownership: whether the data belongs to the companies that collect and process it, or to the individuals whose data is being collected. Both frames conceive of data as property, their only question being who owns this property. Other assumptions, such as data is neither a commodity nor property, but a part of the digital commons, are left out of the debate.
Those who take a narrow view of data – of merely protecting our privacy – miss out two aspects of data. The first point is that the most useful data is not our personal demographic data: who we are in terms of age, gender or ethnicity that we conceivably own. It is the data of our social interactions, which does not belong exclusively to us. This is why the film on Facebook, is called “The Social Network”. The second is that a huge amount of data today is collected from sensors, cameras and devices. They belong to larger collectives, towns, municipalities, and other such entities; not individuals.
If data is the new oil – or the new super oil as WEF sees it – the question of who controls this data and its flow is not just an economic issue. As we have commented earlier, it is deeply a political question as well. Great Britain built its colonial empire (over which the sun never set), on the back of naval control of the oceans. Who controls the data and its flow will decide who will rule the world in the 21st century.
This is the context in which we have to view the recent move by the World Economic Forum to initiate e-commerce negotiations within the World Trade Organisation (WTO). The “negotiations” are all about control over data and its flows: no restrictions on digital platforms; open collection of peoples data; and no taxes on digital goods. In effect, a blatant plea for a neocolonial data regime.
Indian big capital has been showing interest in controlling the data of Indians. Mukesh Ambani has already pitched in. The dream here? Exercising control over India’s data for their private gain, with the Indian State giving them access to the Aadhaar ecosystem built with public money.
Yes, there is the question of who will control data. But the critical question has to do with the purpose. Is data being collected and processed for the benefit of digital monopolies – global or Indian? Or is it for public good? The demand of the Googles or the Ambanis that data of people should belong to digital monopolies will create a far more unequal world. A Luddite reaction to this development may be to smash physical and algorithmic machines. The right response is working out a socialist trajectory different from the dystopian one of ever-growing digital capital. That means re-imagining our digital future with people at its centre, not capital.