Op-Ed : Wells King
Conservatives are waking up to the threats to freedom posed by Big Tech. But current debates center around questions of censorship and monopoly power. While these are vital issues, conservatives must grapple with the full extent to which digital technologies have transformed the basic patterns of our social and economic life.
Digital technologies have revolutionized existing markets and extended market logic to new domains by reducing or eliminating barriers to entry and transaction costs, allowing buyers and sellers to find each other, negotiate, and conclude their exchanges with once-unimaginable efficiency. The benefits are enormous: cheaper, better, and more tailored products; greater competition and faster innovation; new opportunities for entrepreneurs and greater convenience for consumers.
But greasing the gears of commerce to whirl unimpeded, in the process sweeping aside norms, institutions, and relationships we often take for granted, has costs as well. Prosperity requires markets to deliver enough efficiency and disruption to produce growth but not so much as to risk disintegration of society. This tension becomes most apparent when the market mechanism extends beyond the traditional realm of goods and services. The faster and easier the buying and selling of car parts the better, generally speaking. But as human nature and non-market concerns play a larger role, the picture becomes more complicated.
The most economically significant of these markets is the labor market, in which people’s time and effort are the objects of exchange, and prices are the wages that they rely upon to support their families. Digital technologies have transformed traditional employment at almost every stage — from the job-search process and sophisticated scheduling tools to robotic employee surveillance.
But outside the traditional workplace, digital technologies also supported the rapid growth of the so-called “gig economy.” Gig work is nothing new. Absent the Internet’s emergence, no one would take much notice of the plumber, taxi driver, or lawyer who advertised his phone number in the yellow pages and awaited calls.
What modern online platforms like Uber and TaskRabbit do is make the market for such labor much more market-like, commoditizing the service offered, allowing anyone to offer or purchase it with ease, and intensifying price competition along the way. How these platforms treat workers can be difficult to discern. Workers set their own rates and choose their own jobs on some platforms; on others, their rates are set and tasks are assigned by algorithm.
While gig platforms remain a relatively small segment of the labor market, market forces and technological advances are expanding the gig economy’s frontiers to jobs that can be performed entirely online. For instance, Amazon operates Mechanical Turk, a marketplace for the performance of discrete online tasks such as completing a survey or classifying a picture, which typically yields hourly earnings below $2. But a wide range of jobs could potentially be recast in this manner — from the diagnostic work done by doctors to the testing and bug-fixing performed by software engineers. Digital technologies, by accelerating market forces, portend a globalized labor market in services — like what has already occurred in the manufacturing sector through international trade.
In other areas, meanwhile, digital technologies have created entirely new markets for some of our most personal, non-market goods: our private information and attention.
Businesses have always sought to collect data on their customers and operations to improve their products and increase their profits. In 1956, International Business Machines (IBM) introduced the first magnetic hard disk, weighing more than a ton and able to store 5 megabytes of data.
Today, Google and Facebook store nearly 5,000 megabytes of data on the typical 20-year-old Internet user — everything from search history and online shopping cart to face, voice, location, career, hobbies, relationships, finances, and so on. Many online services are designed specifically to facilitate the gathering of such data — Google Calendar, for instance extracts information from every entry logged by a user.
These data enable carefully targeted services and advertisements, thus providing the economic basis for much of the digital economy. Individual targeting doubles the effectiveness of online advertising, and advertisers have flocked to the format. Google and Facebook alone generated $230 billion in advertising sales in 2020, accounting for 80% and 98% of their respective revenue.
But collected data are also routinely aggregated, repackaged, and sold. In the $200 billion data brokerage industry, firms assemble data from disparate sources to create individual profiles available for purchase. When a customer makes an online purchase, his name, email, physical address, and phone number are often sold to data brokers. Cell-phone companies sell customer location data, allowing third parties to track a user’s location at any moment. Many apps sell location data to advertisers. A 2014 Federal Trade Commission (FTC) report found that one data broker amassed 3,000 data points for nearly every American consumer — data that can be purchased by the U.S. government and foreign governments as well as private companies.
Users do not necessarily appreciate how their data are being used. They consent to all manner of agreements and invite their apps to use their location, and many fail to exercise the control that they have. In fact, users generally seem to appreciate the quality and convenience that data collection enables, as well as the free services made possible by the targeting of ads. Data feed into algorithms that target eerily relevant advertisements and special offers, while curating the news feeds where a majority of Americans get their news and the recommendations made for further reading and viewing.
Targeting attention-grabbing content has become integral to the business model of tech companies. Television, not the internet, first prompted the observation that consumers of free media are the product, not the customer. But in the digital age, every element of the equation has become amplified. Media themselves have become more immersive, and platforms are designed to retain as well as entertain — maximizing so-called “user engagement.”
Content providers not only target content based on user data, but use “A/B testing” to constantly refine their product design and function in search of “stickiness” — keeping users engaged longer and bringing them back sooner. Features such as “infinite scroll” and “autoplay” aim to eliminate breaks in the experience when a user might turn away; YouTube’s personalized recommendations account for more than 70% of the time spent watching.
Platforms also work constantly to reengage users via “push” notifications. People are significantly more likely to engage with an app if they receive regular notifications and are 50% more likely to make an in-app purchase if prompted. Perhaps this explains why the average smartphone user checks his smartphone 96 times and receives 46 mobile notifications each day.
Is there anything wrong with building products that users can’t seem to stop using? Technologist Nir Eyal writes that “habit-forming products” are a response to an “imperative for … survival” in the market that requires “stay[ing] relevant in users’ minds.” That seems sensible enough. In fact, far from lamenting popular online platforms, most users would pay $25–$50 per year for them.
But the true costs of hyper-targeted, immersive media run deeper. Nearly one-third of Americans aged 18–44 report feeling anxious if they have not checked Facebook in the previous two hours. Social media triggers the same regions of the brain as cocaine, and internet use has been linked to changes in cognition such as memory processing and to reduced gray matter in the brain — an effect similar to that observed from substance abuse or gambling. The sheer volume of exposure may increase distraction and reduce the ability to prioritize tasks. In just the last decade, the average attention span has fallen from 13 to eight seconds — less than that of a goldfish.
The downstream consequences can affect our body politic as well. As Yuval Levin warned nearly two decades ago, Americans become “swaddled in our own preferences,” consuming personalized content that limits “our experience of new and different ways of thinking.” News feeds push news items that reinforce users’ own priors and preferences. People obviously enjoy this, but the nation may suffer if its markets deliver enormous profits to whoever can provide the most comprehensive cocooning service.
In response to the public outcry over these issues, some digital media and device creators have already added features that allow users to constrain themselves. If consumers understand what they’re getting and what they’re giving, then perhaps the super market is be performing as intended. To the extent that other non-market values matter, they will have to be asserted politically. America’s policymakers must decide whether they have a role to play in reining in digital tech and returning control to users.
Wells King is the research director at American Compass. This piece was adapted from a set of policy primers for Lost in the Super Market: Navigating the Digital Age, originally published by American Compass.
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