The New Masters of the Universe: From Silicon Valley, a New Elite Is Coming
spiked-online.com
spiked-online.com
But, I think one of its flaws is that it lumps Tech and Entertainment/Media into the same category. These industries are somewhat different.
For example, tech employment can be relatively robust for people in San Francisco and the Valley at the same time as Southern California's entertainment production workers are losing their jobs to other US states which offer relatively large tax incentives to production companies and studios.
And, I think, as a point of comparison, it's interesting that, in recent years, the California legislature handed the entertainment industry a large boost in tax credits for productions it kept in state (as opposed to competitors like Louisiana and Georgia).
And that's an important difference. I haven't seen the legislature giving, say, Yahoo, a special tax holiday if it can just get its act together and stop laying off people. And the state government's reaction to Uber has not been particularly friendly either. I see some antagonism to Tech in state and local government. And the Tech industry is still viewed as a monstrously fat tax cow by the government.
Still, the article's portrait of California as a "bifurcated" economy has some truth. The state contains a huge number of poor and middle class people who do not directly benefit from "Software Valley's" jobs machine. (The main thing they receive from it is some government services paid for by taxes on that machine's workers.)
What I always wonder is how Silicon Valley can have such an utterly monstrous cost of living problem, exacerbated by public policies that explicitly favor landowners and incumbent residents over scrappy young arrivals with new ideas and small budgets, and the tech industry doesn't just move somewhere cheaper out of sheer self-interest.
Generation after generation the thing is working - may be something in the air? :)
Of course, most of us have no idea what it will be -- some radical advance in biotech such as CRISPR[1], huge advances in 3-D printing, virtual reality workplaces, cold fusion, discovering and harnessing gravitons, virtually-sentient robotic devices, teleportation of physical objects....
When this happens--and given the rate of acceleration of new discoveries in our hyper-connected, 24x7 world, it's definitely "when" and not "if"--we will experience massive economic disruption that will be exploited by a new generation of visionaries. Those visionaries won't necessarily be the same people who are really good with javascript. It will be yet another class, and the javascript folks will become the elders, like Gates and Ellison.
Should be an interesting time; hope I'm around to see it and take part in it!
[1] https://books.google.com/books?id=ILJ_pfMgLqsC&pg=PA293&lpg=...
About 5-6 years ago, it occurred to me that:
- information is the new oil
- politics is the exchange of power
- in 2030 or so, we will have someone with a tech background as president.
Then they exchanged this power for political power.
Information is like oil in that everybody needs it. You can't build a house, open a restaurant, import shoes, etc. without energy, and you can't do any of it without information either. Whereas you can open a restaurant without building a house. These two things are special and fundamental.
Now we have the flow of information concentrated in the hands of the very few. We rent our devices from Apple and Google, and they exercise control over what apps you run on it, and what content is surfaced through searches. Things that happen on Facebook can change the course of your life.
In the near future, there will be undoubtedly be someone who exchanges this immense power for political power, just as the Bushes did. I'm not saying this is good or bad -- it's just a fact, in an almost mathematical sense.
From my understanding, Apple is a little different in that as far as I can tell, they make money off of, you know, you - selling you things directly, not off of selling your information to third parties. I mean, they do control what you can and can't install on your device, but they do so not in service of collecting more data on you, but in service of getting you to buy more stuff from them. Because their money ultimately comes from you rather than from advertisers, they ultimately have different aims.
(if this is wrong, please correct me.)
This is relevant because Your whole thesis rests on the idea that the currently-popular business model of "give consumers free stuff in exchange for personal data" will remain stable, that the "advertising based" model will win over the apple model.
And maybe it will. I don't know. But right now? it looks like the apple model has won the high end, while the "give you stuff in exchange for your personal information" dominates the low end. Now, personally, I wouldn't bet money that the current situation is stable; in part because of this huge economic inequality, and because the people you really want as customers are paying for the services with money rather than with personal information. There is an argument to be made that a lot of this personal data collected by the cellphone companies who make their money through collecting data is mostly personal data of the poor, because wealthier people use the cellphone company who charges you money.
I mean, you could be right, certainly, but my point is just that things haven't settled out yet. We're still in the part of the economic cycle where we simply don't know what will stick after the "dumb money" leaves the system.
You could argue that they are nibbling around the edges, and "most stuff you want" is in the App Store. But I still see it as a huge amount of control.
They also seem to auto-complete what's typed into the Safari address bar, which heavily influences the sites you visit. And they choose the default search provider. Defaults matter.
My thesis doesn't really rest on profit from advertising vs. devices. I agree that they are different, but I'm just saying that these companies have a lot of power in the abstract sense. True, some of that power could be more exchangeable for political power. Maybe Facebook and Google are more powerful politically than Apple, just because they deal more directly with information.
Apple has control, sure, like Microsoft did in the '90s. More, really, because it was harder for Microsoft to lock competing application developers out than it is for apple. And yeah, the perception I had was that Microsoft was all about control... but it was about control over your desktop, like Apple has over your phone, not about control over personal data that it can use to better sell stuff. Microsoft used that control to make programs that you didn't pay them for work less well (and Apple does the same) - You can make a good argument that it's a bad and maybe even scary thing, but it's straightforward and very different from someone who wants control in exchange for your personal data.
I would very much compare apple to microsoft in the '90s, only with less market share (and I think it's really interesting that Apple asserts control in ways that Microsoft would have loved to in the '90s, and Apple does it without anything close to a monopoly)
>They also seem to auto-complete what's typed into the Safari address bar, which heavily influences the sites you visit. And they choose the default search provider. Defaults matter.
This is an example of how that sort of power could get scary, and raising concerns about this makes a lot of sense.
But that really has nothing to do with my point.
But my point was just that apple presents a counterargument to this idea that information will be the new oil. The Apple counterargument is that it's possible that collecting a bunch of data on users in order to sell advertising is... less valuable than we think. Less valuable than simply charging people for premium (both in quality and margin) goods and services. I mean, sure, personal data for targeted advertising is clearly worth something - but right now, we seem to think that it's worth more than the rest of the advertising-supported media industry put together, and... it's possible that we are wrong, and that using user data to sell advertising just isn't as huge of a deal as we think it is. Maybe instead of the new oil, that sort of information is the new, say, wood pulp. That sounds a lot more reasonable to me.
The idea is that Apple, like Microsoft in the '90s, sure, could use their power over your desktop for evil... but gaining power over your desktop isn't why they write programs. Companies that release free softare in exchange for user tracking have a very different model; their goal is to collect user data, in part because they really do think that 'information is the new oil' - which, like, I said, may very well turn out to be the case, but is not a settled thing yet, not by a long shot.
For you to understand my point, you also need to understand that I was also assuming that by "information" you meant "personal data" in the sense of personal data that is used to convince advertisers that they should pay more for ads because they are better targeted - which may or may not be what you meant, but it was what I was responding to. If you meant something different by 'information' of course, none of what I wrote makes any sense.
A good example of the latter is using social graphs for very targeted campaigns to sway voters, which only appeared in the 2008 and 2012 elections. [1]
Apple does have all that personal data too -- your device usage patterns, location, app installs, browsing habits, e-mail, calendar, etc. It just seems like they use it less (for the time being). They have the potential to capitalize on that, but haven't done it to a great extent.
Your point is taken -- Apple has a more lucrative business in selling devices than Google or Facebook have in pure information. Although, I don't necessarily think this is fundamental, and it could easily change in the next 5-10 years. I expect information to continue to become more important and more lucrative.
I don't think the fact that Apple makes more money from devices necessarily refutes the idea that information is the new oil. I guess you could say that computer hardware is fundamental too, in that basically everybody needs it, but I don't really think it is as fundamental as information or oil.
I guess what happened with both information and oil is that a small group of companies monopolized them. If you choose not to use Facebook, there is not a great alternative, because your friends aren't there. Similarly, there are few alternatives to many of Google's services. In the case of oil, control was through mechanisms like OPEC and Western military power.
Apple has had tremendous success with computer hardware, but they don't have a monopoly. I don't think the computer hardware business is as prone to monopolies as software and information.
[1] Not sure if these are the best articles, but voter targeting as a new and advancing technology is pretty well documented:
http://bigthink.com/age-of-engagement/obama-2012-the-most-mi...
https://www.washingtonpost.com/politics/how-the-obama-campai...
Also see : http://www.dailydot.com/politics/search-engine-manipulation-...
>I expect information to continue to become more important and more lucrative.
whereas I am arguing for the opposite. I certainly don't know that I'm right or not, but I do think that the valuations of the companies that give away services in exchange for personal data are betting that you are right and I am wrong. Apple... I believe apple is betting my way. I believe (and certainly don't know for sure) that apple is being much more cautious about user's data because they know that, well, this is part of why they are getting my money, and I assume the same can be said for a fairly large group of consumers.
>Apple has had tremendous success with computer hardware, but they don't have a monopoly. I don't think the computer hardware business is as prone to monopolies as software and information.
I believe that apple is best thought of as a software company, like Microsoft. Apple gets involved in hardware because by controlling the hardware, they can make their software better, and charge more for it.
Modern Apple hardware isn't particularly amazing or innovative compared to the competition. I mean, it's not terrible (except the keyboards, but that's just a matter of taste.) - it's not behind the curve in terms of hardware, but it's not really ahead of the curve, either, unless we're talking about fashion (and personally, I think it goes both ways. You'd be embarrassed to use an apple in the '90s because they were kind of terrible. it's possible that they are cool now because they actually work pretty well. It's a "smart" thing to use - It's possible that fashion is following function here.)
It's interesting, because before last year, I had not owned or even seriously used an apple device in the 30+ years I've used computers. I really want to control my own software. I had a n900 for a long time, then one of the keyboarded android phones... and I worked so hard to install my own android build and control my own software for so long, but because the phone hardware market is so fractured, doing so on a phone is way harder than doing so on a laptop, so while I run linux or bsd on all my servers, desktops and laptops (aside from the one game machine) - I have an apple phone, because I have decided that I don't have the time to sysadmin my phone, and apple sysadmins my phone in ways that aren't annoying and offensive.
But yeah... things haven't settled out yet, so it's possible apple will go the 'mine user data route' - but the thing is, I don't think they can do that without significantly hurting the customer experience that their products provide.