The Canadian writer and academic, professor of Digital Economy at the Department of Humanities at King’s College London, bases his research on the interaction of political economy and new digital technologies. He analyzes the threats and opportunities of the new economic-social panorama from the emergence of digital, with a perspective of radical rupture. He was editor of “Millennium: Journal of International Studies”. He is co-author of the “Accelerationist Manifesto” (2013), together with Alex Williams, which had a great global impact. They have also published in four hands “Inventing the future. Post-capitalism and a world without work”, in 2017, where they explore a restructuring of the labor market in which people are freed thanks to technological intervention. In 2016 he published “Platform Capitalism”, which was published in Argentina in 2018; and in 2022 he published “After Work: The Fight for Free Time” with Helen Hester.
What is the digital economy? Is there any area of the economy where it is not involved?
—Today everything is digital, the idea of a kind of independent technology sector separated from the rest of the economy no longer holds. We might consider manufacturing as an obvious example, but even primary sectors like agriculture are now increasingly digital. Smart farming is one of the big topics in this field, and it is integrating with digital technologies everywhere. So I think the digital economy is just today’s economy, there’s no sort of separate independent sector.
—In your book you mark the global financial crisis of 2008 as a turning point, towards job insecurity and wage stagnation. How do you relate the financial crisis that began in 2008 with what you call “austere platforms,” stagnation? of wages and the fall in savings?
—It is not a coincidence that companies like Uber and Deliveroo and all these types of sharing economy companies began to emerge in the 2010s, after the global financial crisis, and the main reason is two elements. One is that there are huge amounts of unemployment in many countries, so you have a reserve army of labor that basically looks for work whenever possible, regardless of what kind of salary or working conditions they may have. So there are a lot of people who are open to the idea of the platform economy and take a job in the platform economy to begin with. The other key aspect is a kind of zero interest rate environment, which emerges after the financial crisis. Central banks, in response to the financial crisis, reduce interest rates to zero and effectively negative rates, in an effort to get economies growing again. This sets off this chain reaction where, effectively, traditional investment tools that could have generated a decent return are no longer generating it. That is why investors are now looking for other, riskier investment possibilities. And I think many Silicon Valley companies become the focus of these investors, simply because they seem to offer great returns, even though Uber recently turned a profit for the first time. I think it’s lost something like $35 billion over the course of ten years. A huge amount of money has been invested in these companies, even when they are not profitable. But, for investors who are looking for a sort of short-term play and not looking for some kind of long-term stability or investment, these companies have offered the opportunity to make some decent money. So there’s all this capital, which is, getting out of things like bonds, traditional types of investments, and moving into funding Silicon Valley companies. That gives rise to all these new sharing economy platforms. So we have the combination of free-flowing capital, on the one hand, and a group of free-floating workers who are looking for work. The two things combined lead to the platform economy as we know it.
One of the central points of the book is the topic of data as the new raw material, which must be extracted, and the activities of users, the natural source of this raw material that would drive a great change, an advanced capitalism of the 21st century. What is that change like, what social and cultural transformations does it entail?
-Yeah. On the one hand, there is an argument from some digital economy scholars who say that users themselves work for companies like Facebook, that when you make changes to your profile, talk to friends on social media platforms, you are doing unpaid work for these companies when producing data. My argument goes more or less against that, I don’t think it’s a meaningful way of thinking about work or production to conceive of the users of these platforms as unpaid workers. I think a better way to look at this kind of thing is to say, “These platforms provide infrastructure for different groups of people to come together.” They are intermediaries that connect different individuals, companies, software developers, all of these things will come to a platform like Facebook and interact. Facebook then has the ability to record data about what is happening, to really know how people act, how they interact with their friends, with the news, with the company’s pages. Facebook has a platform that hosts all of these users and can collect a huge amount of data. So this has been the rise of these massive platforms over the last 15 or 20 years, which have been able to collect an insurmountable amount of data. Facebook, Google, Microsoft, Amazon, Alibaba, Tencent, these are the companies that have huge amounts of unparalleled data. This gives them enormous capacity to do other things. One is that this data allows them to conduct targeted advertising in ways that other companies simply cannot compare. So all the big digital advertisers, Facebook and Google, are dominant with a huge advantage, but also Amazon, Apple, these other companies that collect a lot of personal data, can target ads and basically have a monopoly on any type of online advertising. , that’s one aspect. The other is the merger with AI, even before things like ChatGPT and the rise of generative AI. We already had artificial intelligence trained on image recognition and language recognition and all kinds of things like that, which required a lot of data. What we’re seeing with generative AI is kind of an interesting development, where basically all of this data that’s been collected is now being processed into these models, and new content can be produced from these AI models, so that the Control of all that data gives them control over this new artificial intelligence technology as well. From 2012 onwards, a kind of deep learning revolution towards generative AI, today it has been dominated by big tech companies who have a lot of data to begin with.
—In the book you say that platforms have a natural tendency toward monopolization, and you make a distinction between the different types of platforms, cloud, industrial, digital, and austere platforms. Could you briefly distinguish these types of platforms?
—Platforms have a natural tendency to monopolize due to network effects. Network effects are the basic idea that the more people are on a particular platform, the more valuable that platform is to everyone. A simple example is Facebook, or even Twitter, is a very good recent example, where there is a kind of concentrated mass of people that even if you don’t like Mark Zuckerberg’s privacy policies or Facebook, even if you don’t like what Elon Musk is doing with Twitter, the mere fact that there are so many people on these platforms means that it is very difficult to leave. And if you’re going to join a social media platform, you’re going to join one that your friends, your family are already on, or your colleagues. So network effects is the reason why these platforms tend to grow bigger and bigger. Now, that’s changing a bit with artificial intelligence. Beyond that, there are different types of platforms, there are platforms that, for example, could allow for a greater type of interdependence with other platforms. Threads is an interesting example of this, where they promise to not just be some kind of closed shop where, if you’re on Threads, Facebook’s social network is some kind of competitor to Twitter. If you’re on Threads, the promise is that you’ll be able to talk to people on other social media platforms like Mastodon and Blue Sky and things like that, which is a really interesting change from a very closed network in terms of Facebook to something much more open and interdependent with other social media platforms.
—What alternatives do you see to fight against the almost inevitable monopolizing trend that platforms such as Amazon, Google, or Meta lead to? Is regulating them by governments an alternative or do they have greater power?
—Regulation is a good first step, many of the European Union’s policies are quite significant attempts to regulate, even if they do not necessarily solve everything. We will have to see. This year a new regulation of the European Union will come to light, for example, the Digital Services Law and the Digital Markets Law, if I remember correctly. These things will have a pretty significant impact on the larger platforms and we’ll have to see exactly how they react, and whether they have any kind of positive impact or not. But I think regulation for the most part overlooks key issues around the concentration of profits and power. Not much attention is paid, for example, to changing the ownership structures of these types of companies. So the idea is basically that these companies are huge, they’re owned by a handful of people and investment bodies, but we’re not going to play around with that. We will sort of put some rules in place about what they can and can’t do, but we will effectively leave Big Tech in its current state of existence. So I think that is a real limit for many of the existing policies, whether it is the European Union, the United States or also China. These three types of big places where regulation is starting to happen, none of them are really thinking about changing the ownership structure or, for example, breaking up one of these companies, which I think is a much more significant step and probably, more appropriate for the kind of changes that are needed to truly address the power of Big Tech. However, I think another key issue, which hasn’t really been addressed by any regulator, has to do with digital advertising. Digital advertising is the source of income for many of these companies, it is also the driver of surveillance and data collection for many of these companies. So the reason why these companies are trying to get more and more data on people, and monitor more and more of our lives is simply because that allows for better targeted advertising, it allows for better revenue, and that allows for better results, the results. finals of their quarterly reports. I think that is the fundamental question, at least in the current technological issue. Today’s technological world is that these companies are driven, by the nature of their business models, to ignore privacy, collect more and more data about us, and create more and more surveillance models. Basically, this hasn’t been addressed by any kind of regulator so far, and I think that really needs to be looked at more.
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by Jorge Fontevecchia