Thank you for allowing me the opportunity to suggest that we should all get a little more political about the digital economy emerging around us. Indeed, along with the politics surrounding climate change, I believe that digital politics is one of the most important conversations facing humanity in 2019. As I hope to underscore, the emerging relationship between technology and society is inescapably political, since there are stark choices to be made. There are emerging battles to be fought over how we shape our digital future and, in turn, how our digital future comes to shape us.
Over the next few minutes, I will first outline a dystopian view of this future. I’ll then make the argument that the measures needed to avoid this, and to achieve a utopian future, are currently wholly under-served by the polarised, C20 labour-capital arguments of both the ‘political left’ and the ‘political right’. Instead, we need our leaders to start a national conversation about the digital economy, in which the polarities of labour and capital – and the extreme positions of those who argue for each – are significantly reframed. I’ll then end by highlighting a couple of examples of how such a reframing might work, and then I hope we’ll have an interesting discussion!
So, to the dystopian view. A few years ago, back in 2012, a couple of MIT professors, Erik Brynjolfsson and Andrew McAfee, started talking about a ‘race against the machine’. They were, of course, talking about how our use of artificial intelligence, or AI, would grow exponentially, bringing about social and economic change at a pace that would rapidly outstrip our ability as a society to cope. Today, of course, AI continues to outpace us: one of my favourite sites, deepindex.org, lists the range of tasks technology can now perform. The list includes playing Pac-man without eating ghosts; creating never-ending death metal, finishing Schubert’s Unfinished Symphony; predicting how long your relationship will last; learning ‘common decency’; analysing the world’s toilets; and ‘being your friend’. Perhaps more helpfully, it also lists driving tanks, discovering new viruses and planets, delivering pizza, fraud detection, and harvesting strawberries.
Perplexingly, mainstream society has been relatively slow to cotton on to what is going on here. Whilst most of us are still getting used to what Davos’ Klaus Schwab termed the ‘third’ industrial revolution – websites, emails, ecommerce, and latterly social media – and happy consuming the fruits of some of the early disruption this has wrought (think Amazon, or Spotify, Uber or Tripadvisor), Schwab’s ‘fourth’ revolution refers to an opportunistic swarm of data-driven, algorithmic actors that is eyeing up a great many of the traditional models of social and economic exchange– and associated ways of living that we all take for granted – as Lunch.
Lulled, perhaps, into a somatic stupor by all that streaming entertainment and limitless consumer choice, mainstream society has spent much of the past decade busy Not Noticing that the race against the machine has been accelerating. During the last 2-3 years however, a slew of rows has persuaded more of us that these issues aren’t only the concerns of MIT professors and the Silicon Valley scene. Think for example of Cambridge Analytica, the EU antitrust enforcement on Big Tech, the fights over net neutrality, Huawei investment in UK 5g, election transparency, tax regimes, cryptocurrencies, trafficking on the dark web, monopolistic mergers, algorithmic bias, the inhumane working practices for the precariat, job replacement, and sheer inequality of opportunity, to name but a few.
Even then, it has often felt that we have tended to discuss each of these issues in isolation, like disconnected fires to be put out separately, or single nodes whose connecting network remains darkly obscured from view. In January this year however, Shoshana Zuboff’s scary tome The Age of Surveillance Capitalism appeared. Surveillance Capitalism charts the set of relationships associated with the latest economic incarnation of capital which has morphed from products, to mass production, to managerial capitalism, to servitisation, to financial engineering, and now to the exploitation of raw data about our behaviour. Though the book might perhaps have been improved with some merciless editing, it is important in being the first to articulate the way in which all of these activities are connected.
Zuboff illuminates the growing unease that many of us are experiencing about data, and Big Tech, with an explicitly economic, and therefore political, take on what’s happening. She talks of Big Tech ‘strip-mining’ the data ‘exhaust’ generated in our everyday activities as a ‘behavioural surplus’ to be sold on for profit to those seeking to shape and control our preferences, consumer choices and very identities – an insidious creep that we need to wake up to before it’s too late because it leads to a concentration of power that is fundamentally antidemocratic.
MIT professors Brynolfsson and MacAcfee argue that the technology itself drives inequality in three ways that make this problem even worse. First, technology rewards the educated: in the US, graduate salaries have risen 25% since the mid-1970s, whilst non-graduates’ have dropped 30%. Second, automation and platform businesses reward capital over labour, because they can sell more things to more people globally via the internet at almost zero marginal cost; the more they sell, the more data patterns they gather, and the more informed and powerful they become. Various authors have drawn attention to this ever-larger share of corporate income flowing to capital rather than labour. For example, in 2013, the combined wealth of the bottom half of the world’s population (over 3.6bn) was the same as the top richest 8 individuals: think about that for a moment. Third, the internet rewards superstars: as AI expert Max Tegmark points out, Harry Potter author JK Rowling became the first writer to join the billionaire club, and got much richer than Shakespeare, because her stories could be transmitted in text, movies, and games to billions of people at low cost; the problem for the rest of us is that there are only a few opportunities to be the next JK Rowling.
The dystopian view that emerges – and I believe it is a distinct possibility – is of a small cadre of democratically inscrutable and unaccountable surveillance capitalists in control of the knowledge, the money, and the power – a previously unencountered and thus alien dynamic that interacts together as a self-reinforcing, and accelerating, spiral. Although we in society may be guilty of having woken late to this emerging ‘wild west’ of data, or surveillance capitalism, those who lead us appear still to be in deep slumber. With the notable exception of a few parliamentary interrogations (one of which was simply ignored by Facebook’s Mark Zuckerberg), the odd report, and the formation of new units such as the Office for AI and Centre for Data Ethics and Innovation, there has been almost no mainstream political discussion about what this emerging landscape means for the traditional Left and Right – and almost no evidence of these searing issues in the party manifestos, which from this perspective feel as if they had been written circa 1986. This is odd, given political desires to ‘heal’ the current divisions over Brexit – which are probably just the early tremors of what may be to come, should this leaderless ‘wild west’ be allowed to continue.
So much for the dystopian view. However, the good news is that maybe the spiral can be reversed. About the same time as ‘the race against the machine’, MIT’s Erik Brynolfsson came up with an intriguing phrase: “digital Athens.” The Athenians led leisured, meaningful lives as democratic citizens involving debate, art, and literature, because they had slaves to do the actual work. As Brynolfsson reminds us, the dream for half a century has been that productive automation could leave most of us as leisured citizens, living stimulating lives in Athenian style – with the machines doing the work of the slaves. Whilst perhaps a bit simplistic, the notion of a ‘digital Athens’ encourages us to start to think as a society about how we lead meaningful, stimulating lives that have more to do with social, rather than economic, activity. For example, there’ll be lots of roles such as caring and nursing, that we’ll continue to need – where humans are likely to be valued over robots for the foreseeable future – and yet these are currently some of the lowest economically valued roles we have. To paraphrase Douglas Adams, if I don’t want to spend my twilight years being nursed by some ‘plastic pal who’s friendly to be with’, but want instead to enjoy the empathy, kinship and companionship of a fellow human, then we will need to start to find a way to incentivise and recognise socially, as well as economically valuable activity.
A key way to do this is to implement a universal basic income, and free services. Finland’s experiment with this showed that it increased wellbeing and quality of life, but not employment – which is fine because we would progressively use it instead of economic employment. This is not only a great solution to freeing us up to lead more socially valuable, meaningful, and caring lives – but is in fact probably an inevitability in any case. This is because more and more economically valuable jobs are being submerged and commoditised by the rising tide of technology: think of the 10 million truckers in the US shortly to be automated, or the imminent severe disruption of 1 in 5 jobs in the UK. In fact, pretty much any process-driven role that can be governed with an algorithm and enhanced by data, from accounting to warehouse work; last week for example, the BBC reported that Amazon had deployed 200,000 robots to 50 of its locations. Failure to offer an alternative source of income to these and the countless other millions whose livelihoods will be displaced will result in progressive economic and social disenfranchisement and erosion of civil society, as turbocharged data capitalism develops the present divisions of Brexit into vigilantism and lawlessness. To the ‘tech optimists’ who argue that the internet will replace these lost livelihoods with new jobs, Max Tegmark points out that of those occupations in the US having over a million workers in 2015, the first new occupation created by computer technology appears in 21st place; all the rest have been around for over a century.
As with climate change, part of the reason we’ve been so slow to respond is that we lack the political lenses to conceptualise systemically what we’re looking at. We continue to use traditional measures of economic health that miss the catalysing, as well as disruptive, impact of digital technology cross-sectorally across our economy – a collective myopia that enables us to kick the can down the road for the next generation to sort out. We also peer at the problem through the C20 polarities of labour and capital. On the capital side, it appears clear that regulation and taxation regimes have been caught napping by the rise of Big Tech, and we need an urgent response to the unique ability of platform businesses to accrue unlimited wealth to their owners; it is no accident that Amazon’s Jeff Bezos is the richest human that has ever existed, because the platform business model is the most ruthlessly efficient capital accumulation engine ever devised by humankind. This isn’t Jeff’s fault for being clever; it’s the rest of ours, for being so slow on the uptake as to what’s going on. The traditional Right will have to accept that these sorts of businesses have broken free from the sort of social contract that regulated earlier forms of capitalism, and that they need to be taxed and regulated in a way that will feel uncomfortable for some. As Matt Hancock put it the other day, (June 2019), policies will need to be less libertarian and more liberal.
However, the traditional Left will need to re-imagine its own response to these developments, away from the lens of organised labour; union blocs will hold little sway against the unstoppable march of automation and machine learning. Indeed, it is possible to reimagine the notion of social class itself for the internet age. This is particularly the case with the comforting delineation between ‘public’ and ‘private’ sector, which confuses the real class interests emerging in the digital age. For example, you’re a lonely, house-bound patient and I’m a community nurse: you want my visits to last longer, and I want to be paid properly and valued socially. In a digital sense, our class interests are the same: the reason neither of us can have what we want is that our basic socioeconomic transaction is mediated by an array of managers, suppliers, and back office functions, all of which used to be indispensable in the C20 but which could increasingly be done more effectively, and far more cheaply, by machine – leaving lots more resources to invest in community nurses, which is the only part of all this the lonely, house-bound patient actually cares about.
In this sense, although they obviously do this unawares, much of the panoply of process-driven administration that overhangs our various public service activities but could perhaps be consumed as a public utility uses up precious resource that could instead improve and expand the caring and serving itself. Ironically, as the Institute for Government has already shown, these roles are mushrooming even as their contribution to the public good decreases. In a Marxian sense, these functions form a discrete rent-taking class – regardless of whether they sit in public or private sector; put most simply, technology is opening up a gulf between the cost of these functions as we could consume them if we simply organised ourselves better, and the current cost of what people are paid to perform them. The difference between these two constitutes rent paid to a separate class of public and private sector managers and administrators, skimmed off in salary and contracts, and the result is cuts to the front line.
 he shape of the Civil Service: remaking the grade. Petr Bouchal, Institute for Government, 23 October 2014.
As an example of what is possible, Buurtzorg, the much-studied community nursing organisation in Holland has been able to achieve a 7,000 to 30 frontline to back-office ratio by freeing itself of its bureaucratic class. This has resulted in happier patients and employees, as well as saving money. In an article for Guardian Public Leaders, I speculated that achieving a similar ratio in the UK could save £35bn every year (that’s 670m every week – sorry, Boris) – money that is currently extracted in rent by public and private sector corporates, but which theoretically could be redirected away from public administrators towards more public servants, for which demand continues to outstrip supply.
To those who say that such a prize is impossible for our own public services, given their siloed, bureaucratic structure, I would retort that we simply lack the political imagination and engagement to make this happen. Achieving a ‘digital Athens’ – people looking after people, and leading socially meaningful, and thus rewarding lives – requires a national conversation about effects of digital tech in exposing the fundamentally extractive nature of middle management and bureaucracy in an age where this can be done better and much more cheaply by machines.
So where does government come in?
In response to what is a manifestly unsustainable situation, I suggest that our political leaders need to do three things.
First, politicians should muster the bravery to start an honest national conversation about social value in the internet age, and about how we are going to support those whose economic livelihoods are replaced by tech- and data-driven models.
Second, politicians need to learn how to run internet-enabled platform organisations.
And third, government should use its inherent size to scale platforms much more quickly, and develop incentives to drive the right ecosystem of cross-sectoral service provision.
Let me go through each in detail.
Firstly, the state needs to conduct a difficult public conversation about replacing the traditional public-private sector categorisation with a distinction between public administrators (and their private sector partners) on one side, and public servants (alongside recipients of public services) on the other. Such a conversation will start to distinguish those activities that offer social value – which cannot be replaced by technology – from those offering merely economic value, which increasingly will be. Until this happens, we will lack the language to plan for and support a gradual shift over coming decades towards more meaningful socially valued activities, and to understand and support those affected as their economic wellsprings dry up, eventually via some form of universal basic wage.
The second thing our leaders can do is, to get educated about how internet-enabled platform organisations work. As a nation, we could lead the world in figuring out how to embed public versions of this unprecedented economic engine within the heart of the state; in working out how the smarts of Amazon and other platform organisations that are changing our world so much, can be replicated in the public domain for the public good. This way, citizens get the personalised, configured services they cannot currently have, and the huge profitability, and priceless data, generated by the platform is retained for public good. If our politicians are to harness digital disruption for our collective benefit, rather than wring their hands helplessly on the sidelines as disruption is ‘done’ to us, we will need to invest in their education. A digital government academy for those who aspire to lead us, and for those who aspire to make policy on our behalf, would be an essential step towards such basic literacy; to date, no such senior education has been offered to anyone in UK government, or is indeed seriously planned.
There are plenty of examples of genuine, digitally-informed leadership along these lines within UK government: for example, Financial Conduct Authority’s Open Banking initiative, the Department for Transport’s open data portal, Localgovdigital’s collaboration platform, Land Registry’s recent blockchain project, and NHS Jobs, to name a handful. Most such initiatives are driven by senior leadership, not ‘digital’ teams, and all aim fundamentally to transform government’s value proposition to citizens – not just modernise its technology – but these examples of real digital leadership are like small boats, floundering in an ocean of clapped-out, C20 legacy ideas and narrow interests that dominate our public services.
Take health, for example. Put simply, what should be the role – the ‘strategic play’ – of the Department of Health, and NHS, in the emerging digital health information economy? Could the government be the one to unleash, broker, and regulate an unprecedented ecosystem of data-fuelled innovation and investment by tech and health specialists for the benefit of the British public? Or will the huge informational power, and profit, that will accrue to whomever grabs the platform position be hoovered up by either Big Pharma or Big Technology instead? In this model, the obsolete silos of ‘public’ and ‘private’ sector are replaced by an engine in which the state controls and regulates the platform and much of the data for the public good, and surrounds itself with an ecosystem of interconnected, informed activity from public, private, and third sectors that is capable of seeing beyond mere treatment to ensuring we do not get sick in the first place (to see where this is heading, look at the Evergreen app). To meet this, ultimate, ‘user need’, government – has to ‘deliver’ less, and co-ordinate more – especially around data. Exactly the same principle applies to local government, and to education, where ‘localism’ needs redefining in legislation as the freedom to innovate and invest around scaled infrastructural platforms, instead of the freedom to replicate bureaucratic organisations countless times over.
Whereas much of the UK’s ‘digital narrative’ during the past ten years may have been about supplanting legacy technology and commercial structures with in-house development capability within government, this vision of a state-curated, vibrant health, social care, educational, or local service data economy geared around improving quality of life makes the conventional notion of ‘digital’ in the public sector – the idea of ‘digital’ teams of public servants building stuff to meet ‘user needs’ – look a little tired, and irrelevant. If government is to redefine its purpose for the digital era to maximise the potential benefits to citizens, it will need to work much harder on interoperability to connect the market with the data, and tax and regulate accordingly.
The third thing our political leaders can do is therefore to establish a Department of Civic Platforms and Innovation as a policy hub, incubator and market-maker, tasked with a pan-economy digital activism that includes regulatory and competition policy, trust, entrepreneurial backing, civic and private sector partnerships, public data stores, targeted platform investments, and technology assimilation and diffusion. This would combine the sort of entrepreneurial state activity called for by economists like Mazzucato with the digital technocratic ability to maximise its effectiveness.
 Nagy Hanna (2018) offers a useful list of functions here.
A Department of Civic Platforms and Innovation would be uniquely positioned to drive economic demand across millions of citizens, stimulating an ecosystem of innovation and investment, attracted by all that demand, and informed and excited by the phenomenal quantity of data this generates. In other words, platforms represent an extraordinary, and brand-new, policy lever for an unprecedented, digital Keynesianism that would allow our government to consolidate demand and stimulate supply across the UK economy – and indeed, beyond – using little more than imagination, and a relatively basic understanding of how internet companies make their money. As students of platform models know well, the reason that new platforms such as Uber make no money for the first few years is that they must scale: that is, drive traffic to their platform. Organised correctly with the right vision, government could use its inherent size to scale platforms much more quickly than commercial organisations are able to do, and use all that data to develop incentives that would drive the right ecosystem of cross-sectoral service provision.
To summarise, I have suggested that achieving a ‘digital Athens’, instead of a digital dystopia, will require robust, informed engagement, and I believe, courage, from our leaders. First, the value discussion. They will need to ease a painful transition from economic to social value, and plan for the universal basic income this will involve. They will need to lead a difficult national conversation in which the traditional and comforting polarities of Left and Right, Public and Private sectors, are supplanted with a digitally-informed understanding of class that engages with C21 socioeconomic realities. Second, the digital academy. Our leaders need the skills to replace tired and failing public institutions based on C20 designs, with centrally-stewarded digital economies that are fit for brokering frictionless C21 social and economic transactions, and benefiting from their data. If they don’t ‘get’ this stuff, they won’t get my vote. And third, the Department. We will need a politically empowered unit with the backing to take ‘the smarts’ of the likes of Amazon and put them to the service of the UK economy for the benefit of us all.
As I say, none of this will be easy. The traditional Right will dislike these ideas, because they acknowledge the new challenges that surveillance capitalism presents to the C20 models of capitalism with which they are more familiar – and the associated need for more regulation. They will also experience a queasiness about the ‘something for nothing’ model of universal basic income, as well as the notion of a digitally-resurrected Keynesian role for the state, albeit more entrepreneurial than previous models. The traditional Left will dislike these ideas because of their challenge to traditionally organised labour blocs, which include the reassuring identities of public and private sectors. They will also find it difficult to modernise their notions of class, especially when the new versions cut clean across these sectors to expose shameless rent-taking within each. And both Left and Right, whilst each readily acknowledging a respective lack of new policy ideas for the coming century, will need to shake off a respective complacency about their convictions from the last. To hijack Jane Austen, let us hope for better things; but better still, find the leadership and the courage to bring them about.