Note: Jaron Lanier is one of the most important thinkers in our world right now. Most of the ideas in this post are from Lanier’s book Who Owns The Future. Anything in quotes is directly from Lanier.
The most powerful entities in today’s word are those that have the most data and the most powerful computers to crunch this data in a meaningful way. They are the “gargantuan cloud computer services that are concentrating wealth and influence in our era.” Whether they are “national intelligence agencies, the famous silicon valley companies with nursery school names, the stealthy high finance schemes and others,”…”they use their gigantic corporate repositories of information about our lives for huge benefit by a super-rich few.” So says Jaron Lanier in his book Who Owns The Future.
The siren server business model is to suck up as much data as possible and use powerful computers to create massive profits, while pushing the risk away from the company, back into the system. The model currently works by getting people to freely give up their data for non-monetary compensation, or sucking up the data surreptitiously.
All these schemes are quite similar. The biggest computers can predictably calculate wealth and clout on a broad, statistical level. For instance, an insurance company might use massive amounts of data to only insure people who are unlikely to get sick. The problem is that the risk and loss that can be avoided by having the biggest computer still exist. Everyone else must pay for the risk and loss that the Siren Server can avoid.
Siren Servers suck all data and a vast majority of profits, putting traditional businesses out of business and concentrating wealth and power in the hands of a small, elite few. Instead of paying people in dollars for their data, siren servers pay them in candy or lower front end costs. They convert industries that used to have a bell curve distribution into industries that have winner take all, star systems.
- Instagram – Takes your data in exchange for taking photos, putting filters and sharing them.
- Twitter – Takes your data in exchange for connecting with friends and reading the news.
- Foursquare – Your location data in exchange for restaurant reviews and social networking
- Facebook – Takes your data in exchange for being able to brag about yourself and stalk your friends.
- Amazon – Give us your reviews for free and purchase data and we’ll give you lower upfront prices.
- Huffington Post, Medium – Give us your content for free and we’ll give you “exposure.”
- Google – Use gmail, google docs, search, browser, android, blogger, youtube, calendar, google plus for free, in exchange for using your data.
All of these services then take your data and use it to concentrate wealth and power for themselves.
Put another way, what is Facebook worth with zero users? Zero dollars. But Facebook has 1.1b users and is worth $110b. All 1.1b users create monetary value for Facebook whenever they add a friend, post an update, add a photo or like a page. But the vast majority never see a dime.
So who gets monetary compensation on Facebook? Zuckerberg, who controls the entire company. The small group of VCs who invested. The public shareholders. And maybe a few million people who have businesses that run on top of Facebook. So if Facebook is worth $0 with 0 users, why do only a tiny percentage of people actually get any monetary compensation from Facebook?
Short term, the model works. Brilliantly. The company makes huge profits and eliminates competition from the marketplace, and gives people a useful new service. But long term, as more and more industries go to the siren server model, and more compensation is pushed off the books, how do people have income? How do they survive? In the internet age, fewer people are getting financially compensated for their actions that have real monetary value to others. We’ve designed technology to push value off the books for more people. See the candy graph above.
Fine you say. Facebook is just entertainment. But what happens when Google perfects the driverless car? Or a software company is able to write an algorithm to perform surgeries? Or take care of people in nursing homes? Or clean city streets? Or even write most basic computer code? All these software companies are able to perfect these tasks by watching real humans perform the task hundreds of thousands, if not millions, of times. Once they get the data for free or cheap, these future Siren Servers will be able to sell their software for money and take over the market, pushing monetary compensation to an elite few and eliminating the old industries.
There was always creative destruction and new industries have always replaced old ones. But the difference today is that we’ve decided to allow our inputs to be compensated with candy, rather than money and that these servers are now powerful enough to transform industries from what used to be a bell curve shaped distribution to a winner take all, star system.
Our decision to give our data away for candy instead of money to companies that push risk away from themselves and have little to no skin in the game is producing massive inequality and unemployment, eliminating the middle class. It paints a bleak picture of our future unless we change.
What do you think?
If you’re interested in reading more, pick up Jaron Lanier’s two books, You Are Not a Gadget and Who Owns the Future, or list to one of his podcasts.