‘Ill fares the land, to hastening ills a prey,
Where wealth accumulates and men decay’
Oliver Goldsmith, The Deserted Village (1770)
It’s fair to say that property lacks the pizazz of cooler political concepts like liberty, equality, and fraternity. Property is what tenants rent from landlords, not what revolutionaries cry as they leap over the barricades. Yet property has been one of the most bitterly contested concepts in political history. In the last century, leftists demanded that large swathes of the private sector be brought into public ownership. On the libertarian right, theorists like Robert Nozick argued that taxation was ‘on a par with forced labor’ because it forced individuals to work for the benefit of someone else.1 The cleft between left and right concealed a deeper disagreement about the nature of property: what it truly meant to own something, and what could rightfully be done with things that were owned. This chapter describes a possible future in which vast amounts of wealth become concentrated in the hands of a tiny economic élite. It also proposes some ways that we might prevent this from happening.
From the earliest days of the digital revolution, people had a vague but palpable sense that the distribution of computing power would have significant consequences for social justice. As Tim Wu explains, the invention of the personal computer was an ‘unimaginable’ moment: ‘a device that made ordinary individuals sovereign over information by means of computational powers they could tailor to their individual needs’.2 Until then, computing power had been the preserve of large companies, governments, and university laboratories.3 Steve Wozniak, who co-founded Apple with Steve Jobs, saw computers as ‘a tool that would lead to social justice.’4
The idea of property will assume pre-eminent importance in the digital lifeworld, largely because (in economic terms) it will be more worthwhile to own things than to do things. Those on the wrong side of the ownership/labour divide could face real hardship. Property and social justice will be closely intertwined.
The analysis in this chapter is based on some fairly mainstream economic theory. I do not presume to develop or depart from that theory. On the contrary, I bring in only as much as is necessary to explain the problems that we’re trying to untangle. Let’s get started.
In the digital lifeworld, those who own things will grow richer faster than those who do things.
There are two ways to earn a living. The first is through labour: wages, salaries, and bonuses received in exchange for productive work. The second is through capital: assets that produce wealth. Examples of capital include land that yields rents, shares that yield dividends, industrial machinery that yields profits, and intellectual property that yields royalties.5 Since the early 1980s, the share of overall income yielded by capital has steadily grown in relation to the share earned by labour. In Capital in the Twenty-First Century (2013), Thomas Piketty predicts that the rate of return on capital will continue to outpace overall economic growth.6 If that’s right, then it means, on average, that those who own capital will enjoy higher returns than those who labour for a living. Inequality between labourers and capital-owners will grow over time.7
Looking to the digital lifeworld, it’s useful to distinguish between a few types of capital: good old-fashioned capital, productive technologies, and data. Each of these will help to generate wealth in a different way.
Good old-fashioned capital—land, shares, industrial machinery, and so forth—will be an important source of income in the digital lifeworld. The value of a particular item of capital will always depend on how productive and how scarce it is. The more productive and scarce it is, the greater the wealth it is likely to generate.8
In The Second Machine Age (2014) Andrew McAfee and Erik Brynjolfsson suggest that in the future, production will depend less on physical assets and more on intangible ones like intellectual property, organizational capital (business processes, production techniques, and the like), and ‘user-generated content’ (YouTube videos, Facebook photos, and online ratings). They also emphasize the importance of so-called ‘human capital’.9 Elsewhere they suggest that ‘ideas’ will grow in economic importance, and the ‘creators, innovators, and entrepreneurs’, capable of generating ‘new ideas and innovations’ will reap ‘huge rewards’.10 I agree with McAfee and Brynjolfsson on the importance of intellectual property: patenting something lends it an artificial scarcity which, with a bit of luck, can send its value through the roof. That’s why Microsoft took out more than 2,500 patents in 2010 compared with a few hundred eight years earlier.11 It’s also prudent to expect that organizational capital and brilliant ideas could make the difference between competing capital-owners. As for ‘user-generated content’ I prefer the broader category of data discussed below.
Depending on what you think of the technological unemployment thesis discussed in chapter seventeen, however, you may be sceptical of McAfee and Brynjolfsson’s insistence on the importance of human capital (people’s skills, knowledge, and experience). Yes, an educated and agile workforce will fare better in the initial stages of technological unemployment, when displaced workers are scrambling to secure new jobs. But if there aren’t enough jobs for humans to do, no matter how skilled or well-trained they are, then the overall economic importance of human capital will decline even if a few superstar innovators still make a killing.
If the technological unemployment thesis is right, or even partially right, then the wealth that currently flows to labourers will increasingly be redirected toward the owners of the labour-saving technologies that replace them. For the same reason, it will pay to own capital-augmenting technologies that make good old-fashioned capital itself more productive. These productive technologies (both labour-saving and capital-augmenting) are likely to include intangible things like machine learning algorithms and software platforms, as well as hardware like robots, drones, sensors, ‘smart’ appliances, industrial machines, nanobots, 3D printers, and servers. Of course, no productive technology will guarantee a permanent economic advantage for its owner. The edge gained by automating a factory evaporates as soon as other factories do the same.12 Patents can protect inventions for a time, but the pace of technological development means that even the most powerful systems could be quickly superseded—particularly if it takes years to get a patent. There will be a ferocious fight among capital-owners to develop and purchase the most profitable productive technologies.
Data may become one of the most important forms of capital in the digital lifeworld.13 As we know, it’s been called a ‘raw material of business’, a ‘factor of production’, and ‘the new coal’.14 Why is it so precious? It’s partly that it can be used for targeted advertising. It’s also valuable in the work of various other industries, from agricultural technology to management consultancy. The supreme economic importance of data in the digital lifeworld, however, will derive from its role in building AI systems. Machine learning algorithms can’t learn without access to plentiful data. You can’t train an AI system to identify melanomas without hundreds of thousands of images of melanomas. You can’t train an AI system to predict the outcome of legal cases without feeding it thousands of precedents (a learning process I also underwent as a junior lawyer). Data will be the economic lifeblood of the digital lifeworld. Whoever controls its flow will wield considerable economic clout.
Stepping back, the key economic distinction in the digital lifeworld will be between those who own capital and those who do not. Capital-owners will have the opportunity to accrue more and more wealth; those with only their labour to sell will find it increasingly hard to make ends meet. ‘For whosoever hath,’ says Matthew 13:12, ‘to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath.’
It’s not just that wealth will increasingly flow to those who own capital and away from those who labour. The class of capital-owners itself could shrivel into a tiny élite. Even in our time, wealth is already gathering in the hands of ever-fewer firms, themselves employing ever-fewer people.
The general trend in American economic life is toward concentration in the hands of a few big players. In the last two decades, nearly three-quarters of industries have seen an increase in concentration.15 There are four dominant airlines, four cable and internet providers, four main commercial banks. Perhaps most troubling of all, virtually all of America’s toothpaste is made by just two manufacturers.16
Concentration in the tech industry is particularly striking.17 Nearly 80 per cent of mobile-based social media traffic runs through platforms owned by Facebook (including Instagram, WhatsApp, and Facebook Messenger).18 Nearly 80 per cent of search advertising revenue goes to Google’s parent company, Alphabet.19 Google’s mobile software, Android, has more than three-quarters of the smartphone market.20 Amazon accounts for nearly half of all online retail.21 The combined value of Alphabet, Amazon, and Facebook is about the same size as the GDP of Canada.22
A common strategy among these firms is to acquire huge cash reserves which allow them to extend their commercial advantage by buying and absorbing rival start-ups. In the decade to July 2017, Alphabet, Amazon, Apple, Facebook, and Microsoft together made 436 acquisitions worth $131 billion.23 ‘Not since the turn of the twentieth century,’ writes Jonathan Taplin, ‘when Theodore Roosevelt took on the monopolies of John D. Rockefeller and J. P. Morgan, has the country faced such a concentration of wealth and power.’24
Growing in wealth, big tech firms increasingly raid entirely new markets. Remember when Amazon was an online bookstore? In 2017 it acquired the organic food-retailer Wholefoods and its 400 physical grocery stores. Remember when Google was just a search engine? In the year to mid-2017, its parent company Alphabet acquired, among many other interests, Owlchemy Labs (a VR studio), Eyefluence (eye tracking and VR technology), Cronologics (a smartwatch startup), and Urban Engines (location-based analytics).
The general trend is toward digital services that try to serve as many of our needs as possible. In China, WeChat has evolved into a sort of Renaissance App, enabling its 889 million users to ‘hail a taxi, order food delivery, buy movie tickets, play casual games, check in for a flight, send money to friends, access fitness tracker data, book a doctor appointment, get banking statements, pay the water bill, find geo-targeted coupons, recognize music, search for a book at the local library, meet strangers . . . follow celebrity news, read magazine articles, and even donate to charity’, all on one platform.25
We see, even now, an unprecedented concentration of wealth in the hands of a few tech firms. And these firms employ surprisingly few people. As Klaus Schwab notes, in 1990 the three biggest companies in Detroit had a combined market capitalization of $36 billion and employed more than a million people. In 2014, the three biggest companies in Silicon Valley had a market capitalization of about $1.09 trillion, about thirty times higher, but employed only 137,000 people, about ten times fewer.26 When Google acquired YouTube in Google in 2005, its valuation meant that each employee was worth more than $25 million. This was considered remarkable at the time. Then in 2012 Facebook acquired Instagram for $1 billion when it had just thirteen employees, giving it a valuation of around $77 million per employee. When Facebook acquired WhatsApp in 2014, for a whopping $19 billion, WhatsApp had just fifty-five employees, meaning a price of $345 million for every employee.27
This book is not about Amazon, Alphabet, Facebook, Microsoft, or Apple. I do not know if these firms will dominate the economy of the digital lifeworld as they do today’s. But there are structural reasons why digital technology is likely to facilitate the concentration of more and more wealth in the hands of fewer and fewer people and corporations. Probably the most important, besides automation, is the network effect. The economy is increasingly interconnected in a web of overlapping networks, which have a number of important characteristics. Firstly, they are generally united by standards: shared rules or practices that set the rules of cooperation among members. Secondly, the more people adopt a given standard (by joining the network and abiding by its rules) the more valuable that standard becomes.28 Metcalfe’s Law holds that the value of a network increases exponentially with the number of nodes attached: doubling the number of nodes means quadrupling the value, and so on. This means ever-increasing pressure on non-members to join. Failure to be part of a popular social network can be seen as weird and eccentric. In business, failure to secure a sales platform on Amazon can mean devastation for a retailer. Finally, a networked economy rewards first movers. If you can get out ahead of the competition, every additional user/member will contribute to the acceleration of growth—and before long it’ll be too late for others to catch up. An upstart rival to Facebook may offer superior functionality but it’ll be worthless as a social network if it doesn’t reach a critical mass of members.
The big tech firms mentioned above have all benefitted from the network effect. As soon as Microsoft Windows became the standard operating system for personal computers, it was always going to take decades for other firms to establish a rival standard. Facebook sits at the apex of the social network it provides (often called a ‘platform’), setting the standards in the code that constitutes the platform. It can determine, coordinate, and mediate the activity of the network members while hoovering up more and more precious data, which in turn increases in value the more that is gathered. The combined effect? It becomes almost impossible to challenge the behemoths. Competition is probably not, as is sometimes claimed, a click away—and even if it were, the likely outcome would be the replacement of one dominant platform with another.
Although networks benefit platform-owners and those who set network standards, that’s not the only group they benefit. They also make it possible for others to dominate networks, at least temporarily, with the help of powerful digital technology. If people and technology are connected in a seamless web, then those with the best technology will always have an advantage. Take the example of financial trading, which now largely takes place online. The rise of automated and high-frequency trading has caused an explosion in financial activity—mostly to the disadvantage of human traders.29 As Jaron Lanier explains:30 ‘if you have a more effective computer than anyone else in an open network [then] Your superior calculation ability allows you to choose the least risky option for yourself, leaving riskier options for everyone else.’ Lanier’s point may remind you of the discussion of bots and democracy in chapter thirteen. If deliberation takes place over an open network and one group brings a horde of powerful AI bots to argue their case, then they’ll end up dominating the discussion. It’s like bringing a gun to a knife-fight.
The network effect, and the ability to dominate a network using powerful digital technology, partly explain why tech and finance have grown more than any other sector since the 1980s, rising from about 10 per cent to 40 per cent of market capitalization.31
Whether you own the platform or dominate the network, the point is the same: in an increasingly networked economy, those with the most productive digital technologies will do better and better. And the possible gains are astronomical. Meanwhile, those without capital will see their economic position declining over time.
What does the increasing importance of capital, together with a structural tendency toward concentration, mean for the distribution of wealth in the digital lifeworld? The worst-case scenario is a perfect storm of ever-growing inequality between a tiny rich élite and a poor majority:
Over time, more wealth flows to capital-owners and less to workers. Using productive technologies, capital-owners control an increasing amount of economic activity while employing a shrinking number of workers. Capital comes to be concentrated in the hands of a small number of firms, themselves controlled by a small number of people. Relying on the network effect, these firms accrue huge cash reserves that enable them to acquire more capital and expand into new markets. With the data they gather, they develop AI systems of astonishing capacity and range. Large swathes of the population—former workers, failed capitalists—find themselves with no capital and no way to earn a living. Those with a stake in the successful firms enjoy a growing slice of an expanding economic pie. The wealth gap between the tiny élite of owners and the rest expands radically.
It’s a Wealth Cyclone: a swirling vortex centred on an increasingly narrow point, growing stronger over time as it sucks in everything around it and destroys the stragglers in its path. The injustice in such an economic system is obvious, whether you care about equality of outcomes or merely equality of opportunity. While it’s not unusual in historic terms for the gains from capital to exceed the gains from labour, the difference in the digital lifeworld will be that the traditional path from non-ownership to ownership, labour, may itself disappear over time. Abraham Lincoln described the capitalist system as he envisaged it in 1859: ‘The prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself . . . and at length hires another beginner to help him.’32 What hope for the ‘prudent, penniless beginner’ in the digital lifeworld, who can’t even sell his labour to begin with?
To see how the Wealth Cyclone might be averted, we need first to look deeper at the logic that underpins our system of property.
Imagine a time before anyone could hold a piece of the world in their hands and say, ‘this is mine’. The Stoics, in ancient Greece, believed that the world was originally owned by everyone.33 John Locke, probably the most important philosopher of property, also believed that God gave the world ‘to mankind in common’ but that ‘every man has a property in his own person’.34
At some point long ago, humans began to divide the earth and its contents among themselves. For Locke the idea of ownership was born when humans first applied their ‘labour’ to things in the world, ‘removing them out of that common state’.35 Once the idea of property took hold of the human imagination, it could not be forgotten. More and more of the world came to be owned by humans, not always by savoury means. For the young Jean-Jacques Rousseau, this marked humanity’s downfall:36
The first man who, having enclosed a plot of land, took it into his head to say this is mine and found people simple enough to believe him, was the real founder of civil society. What crimes, wars, murders, what miseries and horrors would the human race have been spared, had someone pulled up the stakes or filled in the ditch and cried out to his fellow men: ‘Do not listen to this imposter! You are lost if you forget that the fruits of the earth belong to all and the earth to no one!’
Some say that most of today’s privately owned property can be traced back to diabolical acts of plunder in the past. In the first volume of Capital (1867) Karl Marx writes that, ‘conquest, enslavement, robbery, murder . . . play the great part’.37
The system of property we have today has four basic characteristics. First, to state the obvious, property tends to refer to things. Real property is land and buildings. Personal property is moveable things like cars, books, and jewellery. Intangible property covers things that can be owned but which don’t have physical form—shares, interests, debts. Intellectual property is a type of intangible property. It mainly refers to human creations protected by patents, copyrights, and trademarks. The second characteristic of private property is that it’s easily alienable: it can be transferred through sale or gift according to rules that are well known. Third, there are clear rules about what you can and can’t do with the things you own. (By and large, full ownership of personal property means you can do what you like with it.) Finally, people’s property rights cannot lightly be violated. The Roman statesman Cicero wrote that ‘the first care’ of the ‘man in administrative office’ was to ensure ‘that everyone shall have what belongs to him and that private citizens suffer no invasion of their property rights by the state’.38 Together, these four characteristics make up what I call the Private Property Paradigm.
The Private Property Paradigm is just one way of structuring a system of ownership. As I noted way back in chapter four, property in ancient Babylon included people as well as things. And in early Greek and Roman law, property was virtually inalienable as it ‘belonged’ not to individuals but to families, including dead ancestors and unborn descendants.39 J. K. Rowling’s Harry Potter novels contain the delightful idea of goblin property. As Aaron Perzanowski and Jason Schultz explain it, ‘goblins are skilled metalsmiths. And they are deeply attached to the items they craft, regarding themselves as the true owners of those items, even after their sale.’ They quote Rowling:40
Goblin notions of ownership, payment, and repayment are not the same as human ones . . . To a goblin, the right full and true master of any object is the maker, not the purchaser. All goblin-made objects are, in goblin eyes, rightfully theirs . . . They consider our habit of keeping goblin-made objects, passing them from wizard to wizard without further payment, little more than theft.
Why, then, do we have the Private Property Paradigm rather than some other system? Several points can be made in its favour. First of all, it is said to encourage and foster prosperity. No one would work hard or take risks if they knew that their earnings could be snatched away at any moment. ‘A person who can acquire no property’, says Adam Smith in Wealth of Nations (1776), ‘can have no other interest but to eat as much and to labour as little as possible.’41 It’s also said that the right to private property is needed to prevent interference from the state in one’s private affairs. ‘We are rarely in a position’, writes Hayek in The Constitution of Liberty (1960), ‘to carry out a coherent plan of action unless we are certain of our exclusive control of some material objects . . . The recognition of property is clearly the first step in the delimitation of the private sphere which protects us against coercion.’42 Put more positively, private property is necessary for human flourishing. Owning property allows us to exercise our will in the real world of things. This argument is usually attributed to G. W. F. Hegel, who, in the German tradition, saw fit to explain it as impenetrably as possible: ‘The person must give himself an external sphere of freedom in order to have being as Idea. The person is the infinite will, the will which has being in and for itself, in this first and as yet wholly abstract determination. Consequently, this sphere distinct from the will, which may constitute the sphere of its freedom, is likewise determined as immediately different and separable from it.’43 (No, me neither.)
There is a high degree of consensus over the value of the Private Property Paradigm, and it seems to be hardening over time: the eye-watering top income rates of tax in some developed countries in the 1980s would be politically radioactive today. It’s also reflected in law throughout the developed world. The first protocol to the European Convention on Human Rights, for instance, provides that no one ‘shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law’.
Most of us have made our peace with the idea that the state will take some of our property in the form of tax, although we hope that the money is spent efficiently. In times of war or emergency, we may accept that the state has the right to requisition private land or vehicles. But otherwise, we know that what’s ours is ours.
Our commitment to the Private Property Paradigm comes with certain consequences for distributive justice, however. Although it allows for economic growth and prosperity, it also makes the redistribution of wealth more difficult. This is because it reduces the acceptable scope and extent of state interference in the market. ‘Wherever there is a great property,’ wrote Adam Smith, ‘there is great inequality. For one very rich man, there must be at least five hundred poor.’44 Karl Marx and Friedrich Engels, who were open to the idea of abolishing private property itself, wrote in the Communist Manifesto (1848):
You are horrified at our intending to do away with private property. But in your existing society, private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths.45
What would they have made of the Wealth Cyclone?
Thomas Jefferson once observed that ‘Stable ownership is the gift of social law, and it is given late in the progress of society.’46 He believed that in a self-governing society, the people must decide which system of property rights is most favourable to their purposes. That’s possibly why he left property off the list of inherent and inalienable rights that otherwise included life, liberty, and the pursuit of happiness.47
I submit that a Wealth Cyclone generating massive and systemic inequality would not be consistent with the demands of social justice. We may need to devise a new way of organizing property rights. The challenge is to find a system that preserves the economic wonders unleashed by technology while allowing more people to share in them. In the next section, I sketch out six possible alterations to the Private Property Paradigm. These are not the only options but they may provide a helpful starting point.
One way to counteract the Wealth Cyclone would be to levy a tax on capital or the profits earned by it. In Capital in the Twenty-First Century, Piketty argues for a ‘progressive global tax on capital’ as the ‘ideal’ way to avoid ‘an endless inegalitarian spiral’ and regain control over ‘the dynamics of accumulation’.48 A Robot Tax of the kind proposed by Bill Gates could be targeted at productive technologies.49 There may even be ways of taxing the usage or flow of data. Whichever the chosen model, the principle is that some of the wealth generated by the ownership of capital should be skimmed off and spent for the benefit of those who have no capital to their name. This public spending could take the form of a universal basic income (UBI) of the kind described in chapter seventeen.
Conceptually, the idea of taxing capital is not a radical departure from the Private Property Paradigm. Taxes take a share of the wealth generated by capital rather than the capital itself. Many forms of capital are already taxed in this way. In the digital lifeworld, however, there would have to be a difference in scale, mainly because the takings would have to pay for a lot more than they do currently. Today, prosperous tech firms frequently pay less tax than other companies.50 In 2016, for instance, the European Union estimated that Apple Ireland paid an effective tax rate of less than 0.01 per cent on profits of more than $100 billion.51 This kind of practice will become increasingly unsustainable.
It’s important to recognize, however, that even a UBI paid for by a tax on capital could still leave colossal inequalities between those who own capital and those who do not. For the sufficientarian, who cares only that everyone has enough, this might be satisfactory. But for those who care about reducing inequality, it would have to be a very high tax indeed. Some say that the ‘B’ in UBI should be removed and taxes on capital and productive digital technologies should be used pay for a high quality of life for everyone. This is the idea of ‘fully automated luxury communism’.52 Somewhere between these positions, taking into account the importance of financial incentives to capital-owners, it might be said that any tax on capital should be set at such a rate that it guarantees the largest return that can be spent for the benefit of the least well-off. A 95 per cent tax that stifled production would not fit the bill.
A second approach, departing sharply from the Private Property Paradigm, would be to bring certain capital assets under the direct ownership of the state, perhaps through some form of compulsory purchase. What could be said in favour of such a drastic step? To start with, state ownership need not encompass all forms of capital, as in a true ‘command economy’, but only the most important ones. Imagine, for instance, a postage system that delivers goods through a network of automated drones. Or a fleet of land, water, and air-based automated vehicles that serve as a system of public transportation. You wouldn’t necessarily want these ‘utilities’ to be owned and operated privately. What if they refused to serve rural areas? What if they excluded the poor by setting their prices too high? Some forms of capital, like these, will be essential for the common wealth of the digital lifeworld. Rich and poor alike will rely on them for the economy to function. That makes them decent candidates for nationalization, so that their operations can be directed for the benefit of all. One can also imagine discrete items of productive digital technology, like industrial-scale 3D printers, being held in public ownership.
The potential problems with state ownership, however, are legion. We know that public administration can be incompetent, inefficient, corrupt, and unaccountable (although so too can private ownership). Entrepreneurs may not bother to innovate in the private sector if they think that the fruits of their hard work will be confiscated by the state. The twentieth century taught us that sweeping state ownership can lapse into authoritarian dictatorship. Too much concentration of wealth and power in the hands of any body—private or public—is dangerous. That’s why some have instead argued for a cooperative model, whereby consumers or workers collectively own or govern the digital systems that generate wealth.53
A less intrusive approach than outright nationalization might be to give individuals rights of use and profit through a system of usufructuary rights. A usufruct, which sounds like the kind of candy your grandfather gives you, is a lesser kind of property right than full ownership. Instead of giving you the full title to a thing (enabling you to sell it or exclude others from using it), it gives you the right to use and profit from it along with others who share the same right. Early property rights often took this form. They gave people the legal right to use land but not to ‘own’ it for themselves.54 Usufructuary rights are powerful because they attach to the capital itself. The right survives even if the capital changes hands.
Imagine the owner of a powerful facility that provides, via the cloud, important computing resources like processing power, data storage, and AI software. That firm will probably do very well for itself in the digital lifeworld, possessing as it does a powerful resource of productive technology. A system of usufructuary rights would permit non-owners—small businesses, communities—to use that technology, some of the time, for their own entrepreneurial purposes. The owner would retain legal title and most of the profits, while the community would gain valuable rights of access. There could, of course, be rules about the extent and purposes of third-party use. Perhaps use would only be permitted outside normal working hours and not in competition with the capital-owner. Such rules could be enforced using blockchain technology.
A system of usufructuary rights would work well with wealth-generating platforms like Improbable, founded in 2012, which allow users to simulate complex scenarios in vast virtual worlds. Improbable has already been used to simulate the outbreak of an infectious disease, the effects of a hurricane on a stretch of inhabited coastline, and—most volatile of all—the fluctuations of the UK housing market.55 It’s an invaluable economic asset. Should access to it be limited to big firms and national governments? A system of usufructuary rights would be less burdensome to capital-owners than full nationalization while preserving many of the advantages associated with private ownership. At the same time, it would help to neutralize the Wealth Cyclone by allowing the asset-poor to enjoy some of the most important benefits of ownership without actually having to buy anything (or indeed having ‘to clean, to repair, to store, to sort, to insure, to upgrade, to maintain’).56
Another way to hold capital is in a commons—as a shared pool of resources owned by no one and subject to no property rights (or very restricted ones). As James Boyle explains in his masterful book The Public Domain (2008), some assets are already in the commons because they are not capable of being owned. The English language is an example. Other assets, like the works of Shakespeare, are in the commons because the property rights attached to them have expired.57 In the digital lifeworld we might create a much larger and richer commons of shared assets.
The most obvious candidates for commons-based ownership are intangibles (information goods) like ideas, inventions, designs, blueprints, books, articles, music, designs, films, images, and software. They’re well-suited because they don’t get used up like other types of capital: one person’s use of an information good doesn’t stop another person from using it again (or even simultaneously). As the other Susskinds argue, it may eventually be possible to digitize and automate the work of professionals like doctors and lawyers, meaning that even ‘practical expertise’ could be held in a commons.58 In the field of AI and machine learning, Google’s TensorFlow already offers an open source library of computational resources. IBM, Microsoft, and Amazon have also made some of their machine learning systems available via the cloud. These are positive developments.
Commons-based ownership of capital is not a new idea, however, and it’s controversial. Rival groups disagree over the role of intellectual property rights—mainly patents and copyrights—that place artificial legal restrictions on the copy or use of human
creations. One group, call them the propertarians, advocate for strong property rights. They say that if people are allowed to reproduce expensive goods at low cost there will be no incentive to produce them in the first place. Why write a great textbook, they ask, if everyone will download it for free while you receive nothing? Why dissipate precious capital if there’s no prospect of earning a return? The effect of the internet, they argue, is to destroy the market for goods that are cheap to copy. Propertarians disdain the idea that resources could be left to the commons. With sombre faces they tell of the ‘tragedy of the commons’, when land was held colectively and nobody bothered to put in place the flood protections, drainage systems, or systems of crop rotation needed to preserve its value. Everyone hoped that someone else would do it and no one did.59 The only solution, they say, is for the state to step in with the ‘market-making’ device of intellectual property law, i.e. rights excluding others from using the goods unless they pay.60 Intellectual property law encloses information goods into discrete items of property, such that each individual patent- or copyright-owner is incentivized to do the best they can with what they have.
On the other side of the debate are a group I call the commonsists, a vanguard of scholar-activists armed with handworn copies of the US constitution and a healthy dose of sass. They argue forcefully against the strengthening of intellectual property rights and what Boyle calls the ‘second enclosure movement’:61
What if we had locked up most of twentieth-century culture without getting a net benefit in return? What if the basic building blocks of new scientific fields were being patented long before anything concrete or useful could be built from them? What if we were littering our electronic communication space with digital barbed wire and regulating the tiniest fragments of music as if they were stock certificates?
The truth, as Boyle explains, is that we are doing all of these things. Digital Rights Management (‘DRM’) technology is now commonplace and trying to circumvent it is a crime.62 Despite the early promise of the internet, completely free access to things like books, music, and films is still quite rare.
The commonsist position is that intellectual property rights may be necessary but the ‘goal of the system’ should be ‘to give the monopoly only for as long as necessary to provide an incentive’.63 Is it really necessary, they ask, for copyright to last for seventy years after the death of the author? ‘I am a great admirer of Ms. Rowling’s work,’ says Boyle, ‘but my guess is that little extra incentive was provided by the thought that her copyright will endure seventy rather than merely fifty years after her death.’ 64 Commonsists insist that creators and producers are motivated by a variety of incentives as well as money: fame, altruism, and creative and communal instincts.65 Hence the success of open-source projects like Wikipedia and Linux.
At the heart of the commonsist argument is the belief that instead of fostering innovation and progress, excessive property rights blunt and stifle our creative powers. Locking inventions and creations up in patents and copyrights means that the next generation of producers must pay to build on them, which in practice may prevent them from doing so at all.66 A commons of shared cultural resources, by contrast, would allow for creative adaptation, editing, remixing, parody, co-option, correction, criticism, commentary, and customization.67
Debate over the merits of the commons will continue to rage as long as intangible assets like ideas, inventions, designs, and software grow in economic importance. Recall McAfee and Brynjolffson’s prediction that those capable of generating ‘new ideas and innovations’ will reap ‘huge rewards’.68 But justice requires us to ask: what about those who are not so capable? Or who never had the opportunity to make their ideas known? As with all types of property, intellectual property rights primarily benefit those who already own information, knowledge, and ideas. A commons-based system might even unleash a great hunger to learn: more people signed up for Harvard’s free online courses in a single year than have attended the actual university in the nearly 400 years since it was founded.69
It might be objected that creators deserve great riches for their genius even if that leads to inequality. Why should my invention be owned by anyone other than me? It’s not an unreasonable objection, but it’ll become harder to sustain in the digital lifeworld, where access to ideas, knowledge, and information could mean the difference between stratospheric wealth and destitution. Surely, at the very least, we should make sure that property rights go no further than necessary to foster innovation.
‘By and large,’ argue Susskind squared, ‘it would be better to live in a society in which most medical help, spiritual guidance, legal advice, the latest news, business assistance, accounting insight, and architectural know-how is widely available, at low or no cost.’70 The same is true of great ideas and inventions. The question is where the balance should be struck between private property and the commons. That’s a question of justice as well as economics. It’s certainly not just a matter for tech firms and their lawyers.
The ‘sharing economy’ offers another possible model of ownership for the digital lifeworld. These days, the term is used loosely to describe most forms of ‘peer-to-peer’ online transactions conducted online. The best example is Airbnb, which allows people to rent out their vacant residential properties to strangers. Sharing, with or without strings attached, is nothing new. What’s new is the scale and extent enabled by digital technology.71 At a glance, the ethos of the sharing economy resembles that of the commons. But there are a couple of key differences. First, in a commons no one strictly owns any of the stuff held in common, while in a sharing economy individuals retain the title of their property while letting others use it. Second, in the sharing economy, people tend to pay owners for their goods and services, while this would be antithetical to the ethos of the commons.
The sharing model is interesting because it encourages sellers to monetize assets that would otherwise be economically useless. And it offers purchasers the benefits of possession without the associated burdens of ownership. Thinking about the digital lifeworld, one might imagine a system that enabled people to share day-to-day items using a fleet of airborne drones that shuttle goods from one place to another:72
[Let’s say] you could just snap your fingers and have something magically appear in your hand whenever you wanted it [at] no cost, and it was instantaneous. You have a hammer in your home. You probably have a power drill. You use it one-10,000th of the time, maybe one-100,000th of the time . . . it could be shared by thousands of people, really safely, making everybody wealthier functionally because they would get the hammer when they need it without having to pay for the hammer and drain the world’s resources by making all of these hammers that go almost entirely unused.
How does the sharing economy fit with our notions of social justice? Because it’s essentially just another type of market, it will always favour those with something to ‘share’ and money to spend. If, theoretically, the whole economy were a sharing economy then the poor would do pretty badly. They’d be constantly ‘asset stripping’ their own homes in order to find things to rent out.73 This would be a particular problem in the digital lifeworld, where we already expect an imbalance between asset-haves and asset-have-nots. Moreover, it increasingly looks like the people who benefit most from the sharing economy are not the participants but the platform-owners themselves: Uber, Airbnb, and the like. As Jonathan Allen explains, the early wealth effects of the sharing economy are hard to calculate but any wealth created ‘will be highly concentrated in the hands of technology founders and early investors’.74
At its heart, the sharing economy doesn’t really disrupt the Private Property Paradigm. The critical issue in the long-run, I suggest, will be what is shared. Sharing items of comfort, convenience, and amusement may help the asset-poor to make the most of what little they have, but it won’t make them any wealthier over time. If, by contrast, what’s shared is itself capital or productive technology then the sharing economy might just help to counteract the Wealth Cyclone.
There are many things we could do with data. Data use could be subject to a tax. It could be held in a shared commons, free for general use or subject to constraints. It could be purchased and held by the state. It could be rented, ‘shared’, or loaned for charitable purposes. Evgeny Morozov suggests that it could accrue to a ‘national data fund, co-owned by all citizens’ with commercial access subject to heavy competition and regulation.75
Personal data—data about people—presents a special case because it seems to have its own logic of accumulation. I call it the Data Deal. The main method used by firms to gather personal data is to provide free or heavily discounted services, often personalized to the needs of each consumer, such as web search, access to platforms and networks, messaging and email, maps and guidance, videos and images, software and AI tools, and cloud storage. In exchange for these services, individuals surrender their data to the tech firms (knowingly or not).
From an economic perspective the Data Deal has the merit of efficiency. Our individual data is worth almost nothing, but by gathering together the data of millions, tech firms can create products, services, and platforms of value. From a political perspective, however, the bargain is a little more questionable. We know that increased scrutability is one of the consequences of a highly quantified society. Those with the data have a good deal of power (see chapter seven). There are also obvious implications for privacy and dignity. For now, let’s focus on the Data Deal from the perspective of distributive justice.
At first glance, there’s nothing overtly unjust about firms taking something for which we have little economic use (our data) and turning it into valuable social goods (for us) and profits (for them). We all benefit from free stuff, the poor arguably more than the rich. Plus, most of us don’t see it as a sacrifice to get rewarded for data that would otherwise lie unused.
Nevertheless, the Data Deal is open to criticism. First, there is the inequality objection. Whatever its other merits, it leads to extraordinary disparities in wealth. It funnels vast riches toward tech firms while ordinary people get no financial compensation at all. Even a UBI skimmed from the profits made from personal data would barely scratch the surface of this inequality. The Data Deal, in short, contributes to the Wealth Cyclone.
Next there is the exploitation objection. On this view, the Data Deal is tantamount to exploitation because it involves the unjust extraction of economic value from ‘uncompensated or low-wage labor’.76 Just as the capitalist system is sometimes accused of paying workers less than the full value of their labour, the Data Deal is said to compensate people less than the full value of their data. On this view, Facebook’s users ‘have become the largest unpaid workforce in history’.77 Tech guru Jaron Lanier argues that people should be compensated monetarily for the data they provide.78 He proposes a system of ‘micropayments’ that allows people to earn ‘royalties’ on the ‘tens of thousands of little contributions’ made by their data over the course of their lives: ‘If observation of you yields data that makes it easier for a robot to seem like a natural conversationalist, or for a political campaign to target voters with its message, then you ought to be owed money for the use of that valuable data.’79
The exploitation objection is seductive but problematic. It assumes that firms would still be motivated to provide free services even if they had to pay for our data. It also glosses over the value of the social goods we do receive. It’s hardly exploitation if we get something that we value in exchange for our data—and it’s wrong to assume that hard cash is the only thing we value. Social networking platforms, global maps, search engines: these are not trivial things. They improve our lives. Andreas Weigend calculates that if Facebook had paid no dividends to shareholders and instead shared its 2015 profits between all its users, each user would have got about £3.50 for the year. As he puts it: ‘Is having unlimited access to a communication platform for a year worth more to you than a cappuccino?’80 As time goes on, the more data that’s taken from us, the more we’ll rightly expect in return. Moreover, some people’s data is always likely to be more valuable than others’, perhaps because they are from a group of particular interest to advertisers. Under Lanier’s system, these lucky folk would enjoy greater data windfalls than others. Is that just? Why should some receive more for their data than others? Despite these difficulties, however, the exploitation objection is important, particularly when levelled at systems that provide no direct value to those whose data they extract. Where’s the bargain in that?
A third objection to the Data Deal holds that it’s unjust for other people to make economic use of our data without our informed consent. Call this the knowledge/consent objection. It’s wrong for a burglar to steal your TV even if he leaves a wad of cash equal to the value of what was taken. By the same logic, it’s wrong for a digital system to take people’s data without properly informing them about it. ‘Aha!’ a lawyer might respond, ‘but you clicked “accept” on the Terms and Conditions when you signed up to the service! Didn’t you?’ As we’ll see in chapter nineteen, it’s dubious whether signing a long and legalistic document ten years ago is an adequate way to ensure ongoing knowledge and consent on the part of ordinary people. Tech firms should inform people more clearly, concisely, and regularly which data is being extracted and for what purposes it’s going to be used. This is partly a matter of ethics: if you knew that your data was going to be used for nasty purposes then you might conscientiously refrain from trading it in. But it’s also a matter of economics: the more we understand the true value of our data, the easier it will be to assess whether the bargain in question is a fair one.
There’s a final and more profound structural objection to be levelled at the Data Deal. As time goes on, it seems, society will increasingly divide itself into two classes: those who are able to process data usefully and amass wealth as a result, and those who are only able to sell their data in exchange. As well as leading to inequality, this will contribute to a serious imbalance in economic power. The direction of economic life will increasingly be shaped by a small group of entrepreneurs and industrialists who decide what data is needed and which services should be offered in return. Must the majority sell its personal data and take what it’s given without complaint? ‘Data unions’ are one possible response to this structural imbalance, according to Pedro Domingos:81
The twentieth century needed labor unions to balance the power of workers and bosses. The twenty-first needs data unions for a similar reason. Corporations have a vastly greater ability to gather and use data than individuals. This leads to an asymmetry in power . . . A data union lets its members bargain on equal terms with companies about the use of their data.
Another response might be to make sure that the technologies used to process data (both hardware and software) do not become the sole preserve of a tiny group of owners.
We’ve seen that, in the future, questions of distribution and recognition will increasingly be decided by code. Those who write the algorithms will wield awesome economic power. The line between software engineers and social engineers will grow blurry. At the same time, wealth will increasingly flow to those who own capital, particularly productive technologies, and data. Those who own productive digital technologies will be the prime economic beneficiaries of the transition into the digital lifeworld. These changes cannot go unnoticed by political theorists. The old ways of thinking will no longer do.
The economic structure of the digital lifeworld is significant for reasons other than social justice. The means of force, scrutiny, and perception give the tech firms that own them a degree of power; but that power is magnified many times over for firms that become the single or dominant provider of a particular digital system. Recall from chapter eleven the idea of Digital Confederalism: that the best way to preserve liberty is to ensure that people can move between systems according to whose code they prefer. Digital Confederalism requires that for any important liberty—communication, news-gathering, search, transport—there must be a variety of available digital systems through which to exercise that liberty, and it must be possible to move between these systems without adverse consequences. As we see in chapter nineteen, a world of big tech monopolies could make this impossible.