The Data Factory – How Your Free Labor Lets Tech Giants Grow The Wealth Gap
m.techcrunch.com
m.techcrunch.com
Its really too bad that this article lets slip a critical point here. Yes, you don't really need much money to start doing something these days; it doesn't take more than a computer and an internet connection to start making music, or writing books, or getting a youtube channel going, or selling stuff on eBay or Amazon or Etsy or whatever.
But in all of these things, the wealth distribution is crap. I've heard the stories about the spectacular success of this writer or that one that sold an ebook on Amazon after being rejected by publishers and made millions of dollars, and its naturally never mentioned how many thousands or tens of thousands of people have tried doing exactly that and walked away with a pittance or nothing. It's no different from the millions of people that want to become actors, or singers, or whatever; most of them fail. A 1% or 5% or 10% chance at a big success is not a replacement for a stable, decently paying job for the vast majority of people.
And things are only going to go farther in this direction. I honestly don't see a solution to this aside from basic income. More/free/better educational resources aren't going to change this problem. Teaching everyone programming (insert other currently stable/growing industry here) isn't going to change this problem. Heck, programmers already deal with this on the app markets; what percentage of apps/developers walk away with 90%/99%/99.9% of the revenue?
A lot of these tools are built on open source frameworks, but rely on the network effect for their staying power and financial momentum. You could do the distribution yourself, but you'll have to do it on the open internet, not on a "Internet of Things" that is supported by the walled garden purveyors. This isn't too difficult to do, but is obviously out of the scope of something a musician might attempt.
What I'm getting at is that if they do charge too much, they'll end up undercut by some other media, unless they gain a "standard for enterprise" market saturation, then they can charge what they want since they own all the customers capable of buying your product. Since as soon as someone becomes "standard for anything", the NSA soon comes knocking at your door for a piece of your data pie, thus fueling the creation of yet more "gardens" until what end, I don't know.
Like most of the U.S. economhy, it works because it is a free exchange in which both parties gain something. I could easily keep my data away from Facebook. But then I would not benefit from their services.
I think the real issue is hidden in the article--opportunity today is incredibly rich for those who have the right education...which not everyone has.
There are two issues here, actually. The first is whether our public education system is preparing youth to seize future opportunities. On the whole, I think the answer is at best mixed--but it seems solvable. We can improve our schools and make the students next year smarter than the year before. At least we have the concept of free public education as a platform.
The second is what happens to adults who lost their industries? Can a 40-something factory worker or lumberjack learn how to create Android apps that generate revenue? The answer here seems a lot worse. Not only does it seem harder for middle aged folks to radically change their professions, there are no free, and few low-cost institutions helping them do it. Online schools like Khan Academy seem exciting, but are very far from being proven answers to this problem.
There do seem to be openings in the middle--providing services to the educated people who can build moneymaking technologies. For example, I believe there continues to be a shortage in nurses nationwide. It's not easy to become a nurse or PA, but at least there are a lot of good community college programs for it.
One way to compensate for the suffering caused by economic dislocation is to reduce the hardship of not having a job. More unemployment and welfare aid, with less degrading means testing would help. Better would be a basic income, with income earned from working always a bonus on top.
I.e. I've interviewed a number of people in the past year or so. I only recommended hiring one of them.
Can you tell me what sort of position was this for (developer, scientist, "unicorn"*, etc)?
Were the parameters for this candidate search "find us someone regardless of price" or was there some notion of "market rate" attached to it?
This sentiment comes from the idea that businesses facing a "shortage" can always hire good candidates by just raising their salaries. That is true, but it does not disprove a shortage--it just proves that good employees can be recruited from competitors if the wage is high enough. But if there actually is a shortage, all that does is move the shortage around.
There's also the issue of what is a sustainable salary expense in a given industry. Sure Inova could staff up with top-notch nurses if it paid them all $300k per year. But then how much would they have to charge patients to stay in business?
In the end, this a fun and easy argument to make because it requires no actual data about a given industry--just a preconception that businesses are cheap and manipulative. (Which they sometimes are--but again, that doesn't mean there's not a shortage.)
why does Dynamic Systems 101 goes out of the window when it comes to proponents of supply/demand economics? Positive feedback in a system - like rising prices increase supply - is not necessarily leads the system to equilibrium, in many cases it is a recipe for the system to swing even more widely out of equilibrium. What do they teach these days in colleges?!
We think that things would be better for everyone if we could train more people to be effective programmers.
The answer is that it is very difficult for people to change industries. It would be like if you needed gold for a product you're manufacturing, but only iron was available. No matter how much you're willing to pay for it, iron won't do what gold does. Only mining, or transmutation, can give you what you need.
We're mining new developers and nurses by educating youth. The question is, can we transmute factory workers?
[1] Just using these industries as examples.
The shortage should then be eliminated organically by more people being attracted to the higher wages. Therefore I tend to agree with the GP, if you are hearing about a shortage, it is probably just that employers are looking to avoid raising wages, so they are trying to make the market correct more quickly.
Yes, eventually, but how long does that take? A temporary shortage is still a shortage while it persists.
And it takes more than just being attracted to high wages; job applicants need to have the skills and experience to satisfy the demands of the position. How do they get those? If they're a laid-off 40-something parent of 2 with a high school education? That's the big question.
As far as I understood, the key point of data factories is that they are a new paradigm for organizing work. Many aspects are pretty obvious to folks hanging out in HN. A few key differences to earlier models: companies don't anymore employ workers directly, but more and more act as mediators between consumers and producers. Distance between consumers and data factories is shorter than between consumers and traditional factories, which gives new, previously unseen efficiency to the feedback loop and allows data factories to direct their efforts (or efforts of 3rd party producers) better than - let's say - a traditional car manufacturer.
“It’s tough if you’re poor, it’s tough if you’re middle class. It means you have to have the right education to work at [the tech giants]. If you’re not like us, it’s tough
The key point of data factories is that they are economically disenfranchising the vast majority of the population. The 'new paradigm' isn't for organizing work, its getting your consumers to do the work for you. If we weren't so wrapped up in the VC/HN/Web Tech echo chamber it would probably be easier to realize that this mode of economic growth is at best unsustainable and at worst destructive to the longterm health of a modern economy.
It would be great for startups to focus less on social and ads and more on how technology can be leveraged to raise the living standards for everyone.
If we look at "where are the jobs going", one large part is automation, yes. Another large part is "shadow work": work that was once done by a paid employee but is now shifted onto the customer.
If forcing people off their ancestral lands to get them into factories was exploitation, how much more exploitative is it for business to lay off workers and then demand that paying customers do the actual labor?
Why does anyone consider it acceptable to disemploy workers, exploit customers, and then call it "technology"?
I agree. When we automated away agricultural work, we found new things for workers to do. Now we're automating away the service economy, but nothing has sprung up to take it's place.
Do you have any ideas in this direction? all the sites I know of that are focused on finding shit work for the lower classes (taskrabbit, etc..) usually end up being criticized for replacing full-time work with part-time work without benefits that pays poorly and isn't stable.
Can you give an example of such a business? even a hypothetical one?
I mean, if the standard is "technology that can be leveraged to raise the living standards for everyone" that's a little easier. there's lots of opportunities for organization on the internet. But actually creating jobs without destroying more jobs? that's... difficult.
i think a lot of conclusions one can derive from pondering a situation like this one - "there is an order backlog of 800 Boeing 787 planes" and "there are a lot of unemployed people". Even if we suppose that these unemployed people possess necessary skills, the situation would still be pretty much the same as there is a lot of business/financial, technological, and societal/governmental complexity in the situation.
To compare, the unique situation of Great Depression allowed to plow right through the complexity and put people to work. Nobody (in wide sense, i.e nor people nor institutions) has the guts and skills/abilities/resources to put much more people to work on building planes in the current situation.
I... disagree. Yes, there is bullshit surrounding hiring and firing folks. But it's not extreme bullshit. I have managed to do it. It's not impossible.
If, for whatever reason, you absolutely can't hire someone to run payroll for you and keep track of your workman's comp bills, there are plenty of companies that do that and only that; trinet is one. The idea being that your employees are officially employed by trinet, who handles all the HR bullshit (Not hiring, of course, but the real bits of HR... managing benefits, taxes, workers comp, unemployment, and all that happy horseshit.) You just pick the folks you want and send trinet a wad of money every month.
What? In what universe do the employees at YouTube or Facebook or Etsy "not do much work"? How do these only "seem" like useful services -- is somebody saying they're not? How do traditional factories "distribute money"? If Twitter is getting "free labor" please tell me how, so I can get in on it too.
Sure, there's a shift towards concentration of wealth, but paragraphs like the above one make zero sense.
Which is a perfectly valid criticism. In absolute numbers, the amount of hours collectively put in by YouTube users to create content is much larger than the number put in by YouTube/Google employees to serve that content.
Right now, however, there is basically very little actual negotiation between the platform provider and the content creator. The former gets the vast majority of all revenue; the latter mostly works for free. We consumers enjoy our free, ad-supported video site, but YouTube might as well just be the new record company (especially with the all the take-downs and region restrictions!).
> Right now, however, there is basically very little
> actual negotiation between the platform provider and the
> content creator. The former gets the vast majority of
> all revenue; the latter mostly works for free. We
> consumers enjoy our free, ad-supported video site
[1] http://www.innojazz.com/2013/03/revenue-split-of-itunes-albu...
Also, next time through a disclaimer in that you work for Google.
> Also, next time through a disclaimer in that you work for Google.
Comparing Youtube to the mob is not a valid argument.
There's just something slimy about taking that much of a cut from someone's work. Its disgusting.
> I'd argue Android's ecosystem and investment is
> enormous compared to Youtube, and they take a smaller
> cut from apps/in-app purchases than Youtube.
> There's just something slimy about taking that much of
> a cut from someone's work. Its disgusting.
There are countless other examples industry-and-job-destroying innovations, and from a long-term historical standpoint they've always been a huge net win for humanity. And none of them required us to convert to socialism to prevent mass starvation.
And yet, this time around, innovation is evil somehow if it results in labor being done by software rather than people? The essay alludes to global financial collapse, but doesn't explain how that's supposed to happen. Are we supposed to guess? Or, more likely, just feel general outrage at the 1% and not think too hard?
He also claims that the minimum wage hasn't kept up with inflation. That's totally false -- the minimum wage in the U.S. was established in 1938 at $0.25/hr. That would be $4.14 in today's dollars, and we're at nearly double that!
"A single $800 Samsung Galaxy S4 has the same power as 375 IBM 3340 computers that cost a total of $33 million in 1973."
The 3340 is a DASD ( direct attached storage device), not a computer. The big computer for IBM in 1973 would have been a 370/158.
"In 1973, IBM introduced the IBM 3340 'Winchester' disk drive, the first significant commercial use of low mass and low load heads with lubricated platters. This technology and its derivatives remained the standard through 2011. Project head Kenneth Haughton named it after the Winchester 30-30 rifle because it was planned to have two 30 MB spindles; however, the actual product shipped with two spindles for data modules of either 35 MB or 70 MB. The name 'Winchester' and some derivatives are still common in some non-English speaking countries to generally refer to any hard disks (e.g. Hungary, Russia)."[1]
Yes, 70 megabytes was the capacity of a mainframe-sized disk drive in those days.
[1] https://en.wikipedia.org/wiki/History_of_hard_disk_drives#19...
Wage stagnation, growing unemployment and a decline in work started in the 70s -- well before most of these tech companies came on the scene (or had that much impact on the world). It seems to me that some people want to blame tech companies and new technology for something that's been a much wider effect across more platforms for a lot longer.
One thing we do have to think about is how the economy would have to adapt if the true cost to produce critical goods became zero. Capitalism's supply and demand theory will become inadequate in such a case.