Nearly one quarter of US children in poverty

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By Andre Damon
23 July 2014

Nearly one in four children in the United States lives in a family below the federal poverty line, according to figures presented in a new report by the Annie E. Casey Foundation.

A total of 16.3 million children live in poverty, and 45 percent of children in the US live in households whose incomes fall below 200 percent of the federal poverty line.

The annual report, titled the Kids Count Data Book, compiles data on children’s economic well-being, education, health, and family support. It concludes that, “inequities among children remain deep and stubbornly persistent.”

The report is an indictment of the state of American society nearly six years after the onset of the financial crisis in 2008. While the Obama administration and the media have proclaimed an economic “recovery,” conditions of life for the vast majority of the population continue to deteriorate.

The report notes that the percentage of children in poverty hit 23 percent in 2012, up sharply from 16 percent in 2000. Some states are much worse. For almost the entire American South, the share of children in poverty is higher than 25 percent.

These conditions are the product of a ruthless class policy pursued at all levels of government. While trillions of dollars have been made available to Wall Street, sending both the stock markets and corporate profits to record highs, economic growth has stagnated, social programs have been slashed, and public services decimated, while prices of many basic items are on the rise. Jobs that have been “created” are overwhelmingly part-time or low-wage.

“We’ve yet to see the recovery from the economic recession,” said Laura Speer, associate director for policy reform and advocacy at the Annie E. Casey Foundation, who helped produce the report. “The child poverty rate is connected to parents’ employment and how much they are getting paid,” added Ms. Speer in a telephone interview Tuesday.

“The jobs that are being created in this economy, including temporary and low-wage jobs, are not good enough to keep children out of poverty,” she added.

The Kids Count report notes, “Declining economic opportunity for parents without a college degree in the context of growing inequality has meant that children’s life chances are increasingly constrained by the socioeconomic status of their parents.” The percentage of children who live in high-poverty communities has likewise increased significantly, with 13 percent of children growing up in communities where more than 30 percent of residents are poor, up from 9 percent in 2000.

Speer added that, given the significant run-up in home prices over the previous two decades, “the housing cost burden has gotten worse.” She noted that the share of children who live in households that spend more than one third of their annual income on housing has hit 38 percent, up from 28 percent in 1990. In states such as California, these figures are significantly higher.

“In many cases families are living doubled up and sleeping on couches to afford very expensive places like New York City,” she added. “Paying such a large share of your income for rent means that parents have to decide between whether or not to pay the rent or to pay the utility bills. It’s not a matter of making choices over things that are luxuries, it’s choosing between necessities.”

The report concludes, “As both poverty and wealth have become more concentrated residentially, evidence suggests that school districts and individual schools are becoming increasingly segregated by socioeconomic status.”

In most of the United States, K-12 education is funded through property taxes, and there are significant differences in education funding based on local income levels. “Kids who grow up in low-income neighborhoods have much less access to education: that’s only been exacerbated over the last 25 years,” Speer said.

The Kids Count survey follows the publication in April of Feeding America’s annual report, which showed that one in five children live in households that do not regularly get enough to eat. The percentage of households that are “food insecure” rose from 11.1 percent in 2007 to 16.0 percent in 2012. Sixteen million children, or 21.6 percent, do not get enough to eat. The rate of food insecurity in the United States is nearly twice that of the European Union.

According to the US government’s supplemental poverty measure, 16.1 percent of the US population—nearly 50 million people—is in poverty, up from 12.2 percent of the population in 2000.

The Kids Count report notes that the ability of single mothers to get a job is particularly sensitive to the state of the economy, and that the employment rate of single mothers with children under 6 years old has fallen from 69 percent in 2000 to 60 percent ten years later. This has taken place even as anti-poverty measures such as Temporary Assistance for Needy Families (TANF) have been made conditional on parents finding work.

The report noted that enrollment in the federal Head Start program, which serves 3- and 4-year-olds dropped off when the “recession decimated state budgets and halted progress.” It added that cutbacks to federal and state anti-poverty programs, as well as health programs such as Medicare and Medicaid, are contributing to the growth of poverty and inequality.

With the “sequester” budget cuts signed by the Obama administration in early 2013, most federal anti-poverty programs are being slashed by five percent each year for a decade. “Programs like head start, LIHEAP [Low Income Home Energy Assistance Program], and other federal programs are really a lifeline in a lot of families,” Speer said.

Since the implementation of the sequester cuts, Congress and the Obama administration have slashed food stamp spending on two separate occasions and put an end to federal extended jobless benefits for more than three million long-term unemployed people and their families. These measures can be expected to throw hundreds of thousands more children into poverty.

The rise of data and the death of politics

Tech pioneers in the US are advocating a new data-based approach to governance – ‘algorithmic regulation’. But if technology provides the answers to society’s problems, what happens to governments?

US president Barack Obama with Facebook founder Mark Zuckerberg

Government by social network? US president Barack Obama with Facebook founder Mark Zuckerberg. Photograph: Mandel Ngan/AFP/Getty Images

On 24 August 1965 Gloria Placente, a 34-year-old resident of Queens, New York, was driving to Orchard Beach in the Bronx. Clad in shorts and sunglasses, the housewife was looking forward to quiet time at the beach. But the moment she crossed the Willis Avenue bridge in her Chevrolet Corvair, Placente was surrounded by a dozen patrolmen. There were also 125 reporters, eager to witness the launch of New York police department’s Operation Corral – an acronym for Computer Oriented Retrieval of Auto Larcenists.

Fifteen months earlier, Placente had driven through a red light and neglected to answer the summons, an offence that Corral was going to punish with a heavy dose of techno-Kafkaesque. It worked as follows: a police car stationed at one end of the bridge radioed the licence plates of oncoming cars to a teletypist miles away, who fed them to a Univac 490 computer, an expensive $500,000 toy ($3.5m in today’s dollars) on loan from the Sperry Rand Corporation. The computer checked the numbers against a database of 110,000 cars that were either stolen or belonged to known offenders. In case of a match the teletypist would alert a second patrol car at the bridge’s other exit. It took, on average, just seven seconds.

Compared with the impressive police gear of today – automatic number plate recognition, CCTV cameras, GPS trackers – Operation Corral looks quaint. And the possibilities for control will only expand. European officials have considered requiring all cars entering the European market to feature a built-in mechanism that allows the police to stop vehicles remotely. Speaking earlier this year, Jim Farley, a senior Ford executive, acknowledged that “we know everyone who breaks the law, we know when you’re doing it. We have GPS in your car, so we know what you’re doing. By the way, we don’t supply that data to anyone.” That last bit didn’t sound very reassuring and Farley retracted his remarks.

As both cars and roads get “smart,” they promise nearly perfect, real-time law enforcement. Instead of waiting for drivers to break the law, authorities can simply prevent the crime. Thus, a 50-mile stretch of the A14 between Felixstowe and Rugby is to be equipped with numerous sensors that would monitor traffic by sending signals to and from mobile phones in moving vehicles. The telecoms watchdog Ofcom envisions that such smart roads connected to a centrally controlled traffic system could automatically impose variable speed limits to smooth the flow of traffic but also direct the cars “along diverted routes to avoid the congestion and even [manage] their speed”.

Other gadgets – from smartphones to smart glasses – promise even more security and safety. In April, Apple patented technology that deploys sensors inside the smartphone to analyse if the car is moving and if the person using the phone is driving; if both conditions are met, it simply blocks the phone’s texting feature. Intel and Ford are working on Project Mobil – a face recognition system that, should it fail to recognise the face of the driver, would not only prevent the car being started but also send the picture to the car’s owner (bad news for teenagers).

The car is emblematic of transformations in many other domains, from smart environments for “ambient assisted living” where carpets and walls detect that someone has fallen, to various masterplans for the smart city, where municipal services dispatch resources only to those areas that need them. Thanks to sensors and internet connectivity, the most banal everyday objects have acquired tremendous power to regulate behaviour. Even public toilets are ripe for sensor-based optimisation: the Safeguard Germ Alarm, a smart soap dispenser developed by Procter & Gamble and used in some public WCs in the Philippines, has sensors monitoring the doors of each stall. Once you leave the stall, the alarm starts ringing – and can only be stopped by a push of the soap-dispensing button.

In this context, Google’s latest plan to push its Android operating system on to smart watches, smart cars, smart thermostats and, one suspects, smart everything, looks rather ominous. In the near future, Google will be the middleman standing between you and your fridge, you and your car, you and your rubbish bin, allowing the National Security Agency to satisfy its data addiction in bulk and via a single window.

This “smartification” of everyday life follows a familiar pattern: there’s primary data – a list of what’s in your smart fridge and your bin – and metadata – a log of how often you open either of these things or when they communicate with one another. Both produce interesting insights: cue smart mattresses – one recent model promises to track respiration and heart rates and how much you move during the night – and smart utensils that provide nutritional advice.

In addition to making our lives more efficient, this smart world also presents us with an exciting political choice. If so much of our everyday behaviour is already captured, analysed and nudged, why stick with unempirical approaches to regulation? Why rely on laws when one has sensors and feedback mechanisms? If policy interventions are to be – to use the buzzwords of the day – “evidence-based” and “results-oriented,” technology is here to help.

This new type of governance has a name: algorithmic regulation. In as much as Silicon Valley has a political programme, this is it. Tim O’Reilly, an influential technology publisher, venture capitalist and ideas man (he is to blame for popularising the term “web 2.0″) has been its most enthusiastic promoter. In a recent essay that lays out his reasoning, O’Reilly makes an intriguing case for the virtues of algorithmic regulation – a case that deserves close scrutiny both for what it promises policymakers and the simplistic assumptions it makes about politics, democracy and power.

To see algorithmic regulation at work, look no further than the spam filter in your email. Instead of confining itself to a narrow definition of spam, the email filter has its users teach it. Even Google can’t write rules to cover all the ingenious innovations of professional spammers. What it can do, though, is teach the system what makes a good rule and spot when it’s time to find another rule for finding a good rule – and so on. An algorithm can do this, but it’s the constant real-time feedback from its users that allows the system to counter threats never envisioned by its designers. And it’s not just spam: your bank uses similar methods to spot credit-card fraud.

In his essay, O’Reilly draws broader philosophical lessons from such technologies, arguing that they work because they rely on “a deep understanding of the desired outcome” (spam is bad!) and periodically check if the algorithms are actually working as expected (are too many legitimate emails ending up marked as spam?).

O’Reilly presents such technologies as novel and unique – we are living through a digital revolution after all – but the principle behind “algorithmic regulation” would be familiar to the founders of cybernetics – a discipline that, even in its name (it means “the science of governance”) hints at its great regulatory ambitions. This principle, which allows the system to maintain its stability by constantly learning and adapting itself to the changing circumstances, is what the British psychiatrist Ross Ashby, one of the founding fathers of cybernetics, called “ultrastability”.

To illustrate it, Ashby designed the homeostat. This clever device consisted of four interconnected RAF bomb control units – mysterious looking black boxes with lots of knobs and switches – that were sensitive to voltage fluctuations. If one unit stopped working properly – say, because of an unexpected external disturbance – the other three would rewire and regroup themselves, compensating for its malfunction and keeping the system’s overall output stable.

Ashby’s homeostat achieved “ultrastability” by always monitoring its internal state and cleverly redeploying its spare resources.

Like the spam filter, it didn’t have to specify all the possible disturbances – only the conditions for how and when it must be updated and redesigned. This is no trivial departure from how the usual technical systems, with their rigid, if-then rules, operate: suddenly, there’s no need to develop procedures for governing every contingency, for – or so one hopes – algorithms and real-time, immediate feedback can do a better job than inflexible rules out of touch with reality.

Algorithmic regulation could certainly make the administration of existing laws more efficient. If it can fight credit-card fraud, why not tax fraud? Italian bureaucrats have experimented with the redditometro, or income meter, a tool for comparing people’s spending patterns – recorded thanks to an arcane Italian law – with their declared income, so that authorities know when you spend more than you earn. Spain has expressed interest in a similar tool.

Such systems, however, are toothless against the real culprits of tax evasion – the super-rich families who profit from various offshoring schemes or simply write outrageous tax exemptions into the law. Algorithmic regulation is perfect for enforcing the austerity agenda while leaving those responsible for the fiscal crisis off the hook. To understand whether such systems are working as expected, we need to modify O’Reilly’s question: for whom are they working? If it’s just the tax-evading plutocrats, the global financial institutions interested in balanced national budgets and the companies developing income-tracking software, then it’s hardly a democratic success.

With his belief that algorithmic regulation is based on “a deep understanding of the desired outcome”, O’Reilly cunningly disconnects the means of doing politics from its ends. But the how of politics is as important as the what of politics – in fact, the former often shapes the latter. Everybody agrees that education, health, and security are all “desired outcomes”, but how do we achieve them? In the past, when we faced the stark political choice of delivering them through the market or the state, the lines of the ideological debate were clear. Today, when the presumed choice is between the digital and the analog or between the dynamic feedback and the static law, that ideological clarity is gone – as if the very choice of how to achieve those “desired outcomes” was apolitical and didn’t force us to choose between different and often incompatible visions of communal living.

By assuming that the utopian world of infinite feedback loops is so efficient that it transcends politics, the proponents of algorithmic regulation fall into the same trap as the technocrats of the past. Yes, these systems are terrifyingly efficient – in the same way that Singapore is terrifyingly efficient (O’Reilly, unsurprisingly, praises Singapore for its embrace of algorithmic regulation). And while Singapore’s leaders might believe that they, too, have transcended politics, it doesn’t mean that their regime cannot be assessed outside the linguistic swamp of efficiency and innovation – by using political, not economic benchmarks.

As Silicon Valley keeps corrupting our language with its endless glorification of disruption and efficiency – concepts at odds with the vocabulary of democracy – our ability to question the “how” of politics is weakened. Silicon Valley’s default answer to the how of politics is what I call solutionism: problems are to be dealt with via apps, sensors, and feedback loops – all provided by startups. Earlier this year Google’s Eric Schmidt even promised that startups would provide the solution to the problem of economic inequality: the latter, it seems, can also be “disrupted”. And where the innovators and the disruptors lead, the bureaucrats follow.

The intelligence services embraced solutionism before other government agencies. Thus, they reduced the topic of terrorism from a subject that had some connection to history and foreign policy to an informational problem of identifying emerging terrorist threats via constant surveillance. They urged citizens to accept that instability is part of the game, that its root causes are neither traceable nor reparable, that the threat can only be pre-empted by out-innovating and out-surveilling the enemy with better communications.

Speaking in Athens last November, the Italian philosopher Giorgio Agamben discussed an epochal transformation in the idea of government, “whereby the traditional hierarchical relation between causes and effects is inverted, so that, instead of governing the causes – a difficult and expensive undertaking – governments simply try to govern the effects”.

Nobel laureate Daniel Kahneman

Governments’ current favourite pyschologist, Daniel Kahneman. Photograph: Richard Saker for the Observer
For Agamben, this shift is emblematic of modernity. It also explains why the liberalisation of the economy can co-exist with the growing proliferation of control – by means of soap dispensers and remotely managed cars – into everyday life. “If government aims for the effects and not the causes, it will be obliged to extend and multiply control. Causes demand to be known, while effects can only be checked and controlled.” Algorithmic regulation is an enactment of this political programme in technological form.The true politics of algorithmic regulation become visible once its logic is applied to the social nets of the welfare state. There are no calls to dismantle them, but citizens are nonetheless encouraged to take responsibility for their own health. Consider how Fred Wilson, an influential US venture capitalist, frames the subject. “Health… is the opposite side of healthcare,” he said at a conference in Paris last December. “It’s what keeps you out of the healthcare system in the first place.” Thus, we are invited to start using self-tracking apps and data-sharing platforms and monitor our vital indicators, symptoms and discrepancies on our own.This goes nicely with recent policy proposals to save troubled public services by encouraging healthier lifestyles. Consider a 2013 report by Westminster council and the Local Government Information Unit, a thinktank, calling for the linking of housing and council benefits to claimants’ visits to the gym – with the help of smartcards. They might not be needed: many smartphones are already tracking how many steps we take every day (Google Now, the company’s virtual assistant, keeps score of such data automatically and periodically presents it to users, nudging them to walk more).

The numerous possibilities that tracking devices offer to health and insurance industries are not lost on O’Reilly. “You know the way that advertising turned out to be the native business model for the internet?” he wondered at a recent conference. “I think that insurance is going to be the native business model for the internet of things.” Things do seem to be heading that way: in June, Microsoft struck a deal with American Family Insurance, the eighth-largest home insurer in the US, in which both companies will fund startups that want to put sensors into smart homes and smart cars for the purposes of “proactive protection”.

An insurance company would gladly subsidise the costs of installing yet another sensor in your house – as long as it can automatically alert the fire department or make front porch lights flash in case your smoke detector goes off. For now, accepting such tracking systems is framed as an extra benefit that can save us some money. But when do we reach a point where not using them is seen as a deviation – or, worse, an act of concealment – that ought to be punished with higher premiums?

Or consider a May 2014 report from 2020health, another thinktank, proposing to extend tax rebates to Britons who give up smoking, stay slim or drink less. “We propose ‘payment by results’, a financial reward for people who become active partners in their health, whereby if you, for example, keep your blood sugar levels down, quit smoking, keep weight off, [or] take on more self-care, there will be a tax rebate or an end-of-year bonus,” they state. Smart gadgets are the natural allies of such schemes: they document the results and can even help achieve them – by constantly nagging us to do what’s expected.

The unstated assumption of most such reports is that the unhealthy are not only a burden to society but that they deserve to be punished (fiscally for now) for failing to be responsible. For what else could possibly explain their health problems but their personal failings? It’s certainly not the power of food companies or class-based differences or various political and economic injustices. One can wear a dozen powerful sensors, own a smart mattress and even do a close daily reading of one’s poop – as some self-tracking aficionados are wont to do – but those injustices would still be nowhere to be seen, for they are not the kind of stuff that can be measured with a sensor. The devil doesn’t wear data. Social injustices are much harder to track than the everyday lives of the individuals whose lives they affect.

In shifting the focus of regulation from reining in institutional and corporate malfeasance to perpetual electronic guidance of individuals, algorithmic regulation offers us a good-old technocratic utopia of politics without politics. Disagreement and conflict, under this model, are seen as unfortunate byproducts of the analog era – to be solved through data collection – and not as inevitable results of economic or ideological conflicts.

However, a politics without politics does not mean a politics without control or administration. As O’Reilly writes in his essay: “New technologies make it possible to reduce the amount of regulation while actually increasing the amount of oversight and production of desirable outcomes.” Thus, it’s a mistake to think that Silicon Valley wants to rid us of government institutions. Its dream state is not the small government of libertarians – a small state, after all, needs neither fancy gadgets nor massive servers to process the data – but the data-obsessed and data-obese state of behavioural economists.

The nudging state is enamoured of feedback technology, for its key founding principle is that while we behave irrationally, our irrationality can be corrected – if only the environment acts upon us, nudging us towards the right option. Unsurprisingly, one of the three lonely references at the end of O’Reilly’s essay is to a 2012 speech entitled “Regulation: Looking Backward, Looking Forward” by Cass Sunstein, the prominent American legal scholar who is the chief theorist of the nudging state.

And while the nudgers have already captured the state by making behavioural psychology the favourite idiom of government bureaucracy –Daniel Kahneman is in, Machiavelli is out – the algorithmic regulation lobby advances in more clandestine ways. They create innocuous non-profit organisations like Code for America which then co-opt the state – under the guise of encouraging talented hackers to tackle civic problems.

Airbnb's homepage.

Airbnb: part of the reputation-driven economy.
Such initiatives aim to reprogramme the state and make it feedback-friendly, crowding out other means of doing politics. For all those tracking apps, algorithms and sensors to work, databases need interoperability – which is what such pseudo-humanitarian organisations, with their ardent belief in open data, demand. And when the government is too slow to move at Silicon Valley’s speed, they simply move inside the government. Thus, Jennifer Pahlka, the founder of Code for America and a protege of O’Reilly, became the deputy chief technology officer of the US government – while pursuing a one-year “innovation fellowship” from the White House.Cash-strapped governments welcome such colonisation by technologists – especially if it helps to identify and clean up datasets that can be profitably sold to companies who need such data for advertising purposes. Recent clashes over the sale of student and health data in the UK are just a precursor of battles to come: after all state assets have been privatised, data is the next target. For O’Reilly, open data is “a key enabler of the measurement revolution”.This “measurement revolution” seeks to quantify the efficiency of various social programmes, as if the rationale behind the social nets that some of them provide was to achieve perfection of delivery. The actual rationale, of course, was to enable a fulfilling life by suppressing certain anxieties, so that citizens can pursue their life projects relatively undisturbed. This vision did spawn a vast bureaucratic apparatus and the critics of the welfare state from the left – most prominently Michel Foucault – were right to question its disciplining inclinations. Nonetheless, neither perfection nor efficiency were the “desired outcome” of this system. Thus, to compare the welfare state with the algorithmic state on those grounds is misleading.

But we can compare their respective visions for human fulfilment – and the role they assign to markets and the state. Silicon Valley’s offer is clear: thanks to ubiquitous feedback loops, we can all become entrepreneurs and take care of our own affairs! As Brian Chesky, the chief executive of Airbnb, told the Atlantic last year, “What happens when everybody is a brand? When everybody has a reputation? Every person can become an entrepreneur.”

Under this vision, we will all code (for America!) in the morning, drive Uber cars in the afternoon, and rent out our kitchens as restaurants – courtesy of Airbnb – in the evening. As O’Reilly writes of Uber and similar companies, “these services ask every passenger to rate their driver (and drivers to rate their passenger). Drivers who provide poor service are eliminated. Reputation does a better job of ensuring a superb customer experience than any amount of government regulation.”

The state behind the “sharing economy” does not wither away; it might be needed to ensure that the reputation accumulated on Uber, Airbnb and other platforms of the “sharing economy” is fully liquid and transferable, creating a world where our every social interaction is recorded and assessed, erasing whatever differences exist between social domains. Someone, somewhere will eventually rate you as a passenger, a house guest, a student, a patient, a customer. Whether this ranking infrastructure will be decentralised, provided by a giant like Google or rest with the state is not yet clear but the overarching objective is: to make reputation into a feedback-friendly social net that could protect the truly responsible citizens from the vicissitudes of deregulation.

Admiring the reputation models of Uber and Airbnb, O’Reilly wants governments to be “adopting them where there are no demonstrable ill effects”. But what counts as an “ill effect” and how to demonstrate it is a key question that belongs to the how of politics that algorithmic regulation wants to suppress. It’s easy to demonstrate “ill effects” if the goal of regulation is efficiency but what if it is something else? Surely, there are some benefits – fewer visits to the psychoanalyst, perhaps – in not having your every social interaction ranked?

The imperative to evaluate and demonstrate “results” and “effects” already presupposes that the goal of policy is the optimisation of efficiency. However, as long as democracy is irreducible to a formula, its composite values will always lose this battle: they are much harder to quantify.

For Silicon Valley, though, the reputation-obsessed algorithmic state of the sharing economy is the new welfare state. If you are honest and hardworking, your online reputation would reflect this, producing a highly personalised social net. It is “ultrastable” in Ashby’s sense: while the welfare state assumes the existence of specific social evils it tries to fight, the algorithmic state makes no such assumptions. The future threats can remain fully unknowable and fully addressable – on the individual level.

Silicon Valley, of course, is not alone in touting such ultrastable individual solutions. Nassim Taleb, in his best-selling 2012 book Antifragile, makes a similar, if more philosophical, plea for maximising our individual resourcefulness and resilience: don’t get one job but many, don’t take on debt, count on your own expertise. It’s all about resilience, risk-taking and, as Taleb puts it, “having skin in the game”. As Julian Reid and Brad Evans write in their new book, Resilient Life: The Art of Living Dangerously, this growing cult of resilience masks a tacit acknowledgement that no collective project could even aspire to tame the proliferating threats to human existence – we can only hope to equip ourselves to tackle them individually. “When policy-makers engage in the discourse of resilience,” write Reid and Evans, “they do so in terms which aim explicitly at preventing humans from conceiving of danger as a phenomenon from which they might seek freedom and even, in contrast, as that to which they must now expose themselves.”

What, then, is the progressive alternative? “The enemy of my enemy is my friend” doesn’t work here: just because Silicon Valley is attacking the welfare state doesn’t mean that progressives should defend it to the very last bullet (or tweet). First, even leftist governments have limited space for fiscal manoeuvres, as the kind of discretionary spending required to modernise the welfare state would never be approved by the global financial markets. And it’s the ratings agencies and bond markets – not the voters – who are in charge today.

Second, the leftist critique of the welfare state has become only more relevant today when the exact borderlines between welfare and security are so blurry. When Google’s Android powers so much of our everyday life, the government’s temptation to govern us through remotely controlled cars and alarm-operated soap dispensers will be all too great. This will expand government’s hold over areas of life previously free from regulation.

With so much data, the government’s favourite argument in fighting terror – if only the citizens knew as much as we do, they too would impose all these legal exceptions – easily extends to other domains, from health to climate change. Consider a recent academic paper that used Google search data to study obesity patterns in the US, finding significant correlation between search keywords and body mass index levels. “Results suggest great promise of the idea of obesity monitoring through real-time Google Trends data”, note the authors, which would be “particularly attractive for government health institutions and private businesses such as insurance companies.”

If Google senses a flu epidemic somewhere, it’s hard to challenge its hunch – we simply lack the infrastructure to process so much data at this scale. Google can be proven wrong after the fact – as has recently been the case with its flu trends data, which was shown to overestimate the number of infections, possibly because of its failure to account for the intense media coverage of flu – but so is the case with most terrorist alerts. It’s the immediate, real-time nature of computer systems that makes them perfect allies of an infinitely expanding and pre-emption‑obsessed state.

Perhaps, the case of Gloria Placente and her failed trip to the beach was not just a historical oddity but an early omen of how real-time computing, combined with ubiquitous communication technologies, would transform the state. One of the few people to have heeded that omen was a little-known American advertising executive called Robert MacBride, who pushed the logic behind Operation Corral to its ultimate conclusions in his unjustly neglected 1967 book, The Automated State.

At the time, America was debating the merits of establishing a national data centre to aggregate various national statistics and make it available to government agencies. MacBride attacked his contemporaries’ inability to see how the state would exploit the metadata accrued as everything was being computerised. Instead of “a large scale, up-to-date Austro-Hungarian empire”, modern computer systems would produce “a bureaucracy of almost celestial capacity” that can “discern and define relationships in a manner which no human bureaucracy could ever hope to do”.

“Whether one bowls on a Sunday or visits a library instead is [of] no consequence since no one checks those things,” he wrote. Not so when computer systems can aggregate data from different domains and spot correlations. “Our individual behaviour in buying and selling an automobile, a house, or a security, in paying our debts and acquiring new ones, and in earning money and being paid, will be noted meticulously and studied exhaustively,” warned MacBride. Thus, a citizen will soon discover that “his choice of magazine subscriptions… can be found to indicate accurately the probability of his maintaining his property or his interest in the education of his children.” This sounds eerily similar to the recent case of a hapless father who found that his daughter was pregnant from a coupon that Target, a retailer, sent to their house. Target’s hunch was based on its analysis of products – for example, unscented lotion – usually bought by other pregnant women.

For MacBride the conclusion was obvious. “Political rights won’t be violated but will resemble those of a small stockholder in a giant enterprise,” he wrote. “The mark of sophistication and savoir-faire in this future will be the grace and flexibility with which one accepts one’s role and makes the most of what it offers.” In other words, since we are all entrepreneurs first – and citizens second, we might as well make the most of it.

What, then, is to be done? Technophobia is no solution. Progressives need technologies that would stick with the spirit, if not the institutional form, of the welfare state, preserving its commitment to creating ideal conditions for human flourishing. Even some ultrastability is welcome. Stability was a laudable goal of the welfare state before it had encountered a trap: in specifying the exact protections that the state was to offer against the excesses of capitalism, it could not easily deflect new, previously unspecified forms of exploitation.

How do we build welfarism that is both decentralised and ultrastable? A form of guaranteed basic income – whereby some welfare services are replaced by direct cash transfers to citizens – fits the two criteria.

Creating the right conditions for the emergence of political communities around causes and issues they deem relevant would be another good step. Full compliance with the principle of ultrastability dictates that such issues cannot be anticipated or dictated from above – by political parties or trade unions – and must be left unspecified.

What can be specified is the kind of communications infrastructure needed to abet this cause: it should be free to use, hard to track, and open to new, subversive uses. Silicon Valley’s existing infrastructure is great for fulfilling the needs of the state, not of self-organising citizens. It can, of course, be redeployed for activist causes – and it often is – but there’s no reason to accept the status quo as either ideal or inevitable.

Why, after all, appropriate what should belong to the people in the first place? While many of the creators of the internet bemoan how low their creature has fallen, their anger is misdirected. The fault is not with that amorphous entity but, first of all, with the absence of robust technology policy on the left – a policy that can counter the pro-innovation, pro-disruption, pro-privatisation agenda of Silicon Valley. In its absence, all these emerging political communities will operate with their wings clipped. Whether the next Occupy Wall Street would be able to occupy anything in a truly smart city remains to be seen: most likely, they would be out-censored and out-droned.

To his credit, MacBride understood all of this in 1967. “Given the resources of modern technology and planning techniques,” he warned, “it is really no great trick to transform even a country like ours into a smoothly running corporation where every detail of life is a mechanical function to be taken care of.” MacBride’s fear is O’Reilly’s master plan: the government, he writes, ought to be modelled on the “lean startup” approach of Silicon Valley, which is “using data to constantly revise and tune its approach to the market”. It’s this very approach that Facebook has recently deployed to maximise user engagement on the site: if showing users more happy stories does the trick, so be it.

Algorithmic regulation, whatever its immediate benefits, will give us a political regime where technology corporations and government bureaucrats call all the shots. The Polish science fiction writer Stanislaw Lem, in a pointed critique of cybernetics published, as it happens, roughly at the same time as The Automated State, put it best: “Society cannot give up the burden of having to decide about its own fate by sacrificing this freedom for the sake of the cybernetic regulator.”

 

Nestlé is bottling water straight from the heart of California’s drought

The company is exporting a seriously limited resource with no oversight

 

Nestlé is bottling water straight from the heart of California's drought

As residents of California are urged to conserve water and the state considers placing a mandatory restriction on outdoor water usage, Nestlé is trucking away undisclosed amounts of the precious resource in the form of bottled water.

The Desert Sun has an in-depth report of controversy brewing around the company’s bottling plant, which draws water from a drought-stricken area for its Arrowhead and Pure Life brand water. Because the plant is located on the Morongo Band of Mission Indians’ reservation, it’s exempt from oversight by local water agencies and is able to keep confidential information — such as the amount of groundwater it’s pumping and water levels in its wells — that other plants would be required to disclose. As a result, critics contend, it’s impossible to know just how much of the limited resource the plant is extracting to send elsewhere.

Here’s more from the Desert Sun:

“They’re entitled to use the groundwater basin, too. Everyone is. But it’s just a shame that this water is not being used locally. It’s being exported,” said David Luker, general manager of the Desert Water Agency. He said DWA’s position has been that the Morongo tribe should have to report its water use just like other entities.

“I don’t believe there’s any way to force them to fork over groundwater pumping information unless there’s discovery in a lawsuit,” Luker said. But he said the level of concern about the bottling plant in the area doesn’t seem to have grown to a degree that leads to such action.

Other concerns are raised by people who live in a neighborhood of mobile homes near the bottling factory. Some say they wish the plant would provide more jobs because many are unemployed. Others say despite living next to the Arrowhead plant, their local water service is poor, with sputtering faucets and frequent breaks in water lines.



“The reason this particular plant is of special concern is precisely because water is so scarce in the basin,” Peter Gleick, who wrote the book on bottled water, told the Desert Sun. “If you had the same bottling plant in a water-rich area, then the amount of water bottled and diverted would be a small fraction of the total water available. But this is a desert ecosystem. Surface water in the desert is exceedingly rare and has a much higher environmental value than the same amount of water somewhere else.”

Nestlé refused to let the Desert Sun tour the Morongo facilities or release any data about water levels in its wells, but in an emailed statement stood by its operations. “We proudly conduct our business in an environmentally responsible manner that focuses on water and energy conservation,” the company said. “Our sustainable operations are specifically designed and managed to prevent adverse impacts to local area groundwater resources, particularly in light of California’s drought conditions over the past three years.” What that ignores, however, is the basic fact that bottled water is anathema to the concept of environmental responsibility: we’re talking about a process that uses multiple times the amount of water bottled just to produce its packaging. Drought aside, the controversy highlights some of the basic contradictions of the $12.2 billion industry — and if there’s anything that’s going to open our eyes to its wastefulness, this should be it.

Lindsay Abrams is an assistant editor at Salon, focusing on all things sustainable. Follow her on Twitter @readingirl, email labrams@salon.com.

http://www.salon.com/2014/07/14/nestle_is_bottling_water_straight_from_the_heart_of_californias_drought/?source=newsletter

Could you “free” yourself of Facebook?

A 99-day challenge offers a new kind of social media experiment

Could you "free" yourself of Facebook?
(Credit: LoloStock via Shutterstock)

Let’s try a new experiment now, Facebook. And this time, you’re the subject.

Remember just last month, when the monolithic social network revealed that it had been messing with its users’ minds as part of an experiment? Writing in PNAS, Facebook researchers disclosed the results of a study that showed it had tinkered with the news feeds of nearly 700,000 users, highlighting either more positive or more negative content, to learn if “emotional contagion occurs without direct interaction between people.” What they found was that “When positive expressions were reduced, people produced fewer positive posts and more negative posts; when negative expressions were reduced, the opposite pattern occurred.” More significantly, after the news of the study broke, they discovered that people get pretty creeped out when they feel like their personal online space is being screwed with, and that their reading and posting activity is being silently monitored and collected – even when the terms of service they agreed to grant permission to do just that. And they learned that lawmakers in the U.S. and around the world question the ethics of Facebook’s intrusion.

Now, a new campaign out of Europe is aiming to do another experiment involving Facebook, its users and their feelings. But this time Facebook users aren’t unwitting participants but willing volunteers. And the first step involves quitting Facebook. The 99 Days of Freedom campaign started as an office joke at Just, a creative agency in the Netherlands. But the company’s art director Merijn Straathof says it quickly evolved into a bona fide cause. “As we discussed it internally, we noted an interesting tendency: Everyone had at least a ‘complicated’ relationship with Facebook. Whether it was being tagged in unflattering photos, getting into arguments with other users or simply regretting time lost through excessive use, there was a surprising degree of negative sentiment.” When the staff learned that Facebook’s 1.2 billion users “spend an average of 17 minutes per day on the site, reading updates, following links or browsing photos,” they began to wonder what that time might be differently applied to – and whether users would find it “more emotionally fulfilling.”



The challenge – one that close to 9,000 people have already taken – is simple. Change your FB avatar to the “99 Days of Freedom” one to let friends know you’re not checking in for the next few months. Create a countdown. Opt in, if you wish, to be contacted after 33, 66 and 99 days to report on your satisfaction with life without Facebook. Straathof says everyone at Just is also participating, to “test that one firsthand.”

Straathof and company say the goal isn’t to knock Facebook, but to show users the “obvious emotional benefits to moderation.” And, he adds, “Our prediction is that the experiment will yield a lot of positive personal experiences and, 99 days from now, we’ll know whether that theory has legs.” The anecdotal data certainly seems to support it. Seductive as FB, with its constant flow of news and pet photos, may be, you’d be hard-pressed to find a story about quitting it that doesn’t make getting away from it sound pretty great. It’s true that grand experiments, especially of a permanent nature, have never gotten off the ground. Four years ago, a group of disgruntled users tried to gather momentum for a Quit Facebook Day that quietly went nowhere. But individual tales certainly make a compelling case for, if not going cold turkey, at least scaling back. Elizabeth Lopatto recently wrote in Forbes of spending the past eight years Facebook free and learning that “If you really are interested in catching up with your friends, catch up with your friends. You don’t need Facebook to do it.” And writing on EliteDaily this past winter, Rudolpho Sanchez questioned why “We allow our successes to be measured in little blue thumbs” and declared, “I won’t relapse; I’ve been liberated. It’s nice not knowing what my fake friends are up to.” Writing a few weeks later in Business Insider, Dylan Love, who’d been on FB since he was an incoming college student 10 years ago, gave it up and reported his life, if not improved, remarkably unchanged, “except I’m no longer devoting mental energy to reading about acquaintances from high school getting married or scrolling through lots of pictures of friends’ vacation meals.” And if you want a truly persuasive argument, try this: My teenager has not only never joined Facebook, she dismissively asserts that she doesn’t want to because “It’s for old people.”

Facebook, of course, doesn’t want you to consider that you might be able to maintain your relationships or your sense of delight in the world without it. When my mate and I went away for a full week recently, we didn’t check in on social media once the whole time. Every day, with increasing urgency, we received emails from Facebook alerting us to activity in our feeds that we surely wanted to check. And since I recently gutted my friend list, I’ve been receiving a bevy of suggested people I might know. Why so few friends, lonely lady? Why so few check-ins? Don’t you want more, more, more?

I don’t know if I need to abandon Facebook entirely – I like seeing what people I know personally and care about are up to, especially those I don’t get to see in the real world that often. That connection has often been valuable, especially through our shared adventures in love, illness and grief, and I will always be glad for it. But a few months ago I deleted the FB app, which makes avoiding Facebook when I’m not at my desk a no-brainer. No more stealth checking my feed from the ladies’ room. No more spending time expressing my “like” of someone’s recent baking success when I’m walking down the street. No more “one more status update before bed” time sucks. And definitely no more exasperation when FB insistently twiddles with my news feed to show “top stories” when I prefer “most recent.” It was never a huge part of my life, but it’s an even smaller part of it now, and yeah, it does feel good. I recommend it. Take Just’s 99-day challenge or just a tech Sabbath or just scale back a little. Consider it an experiment. One in which the user, this time, is the winner.

Mary Elizabeth Williams Mary Elizabeth Williams is a staff writer for Salon and the author of “Gimme Shelter: My Three Years Searching for the American Dream.” Follow her on Twitter: @embeedub.

http://www.salon.com/2014/07/11/could_you_free_yourself_of_facebook/?source=newsletter

Facebook Is Studying You

 …Your Mom, Your Makeout Buddy, and Your 9/11 Conspiracy Theories

| Thu Jul. 10, 2014 6:00 AM ED

Facebook users and privacy advocates erupted in anger recently after New Scientist drew attention to a 2012 study in which Facebook researchers had attempted to manipulate users’ moods. “The company purposefully messed with people’s minds,” one privacy group complained to the Federal Trade Commission.

But the mood study is far from the only example of Facebook scrutinizing its users—the company has been doing that for years, examining users’ ethnicities, political views, romantic partners, and even how they talk to their children. (Unlike the mood study, the Facebook studies listed below are observational; they don’t attempt to change users’ behavior.) Although it’s unlikely Facebook users have heard about most of these studies, they’ve consented to them; the social network’s Data Use Policy states: “We may use the information we receive about you…for internal operations, including troubleshooting, data analysis, testing, research and service improvement.”

Below are five things Facebook researchers have been studying about Facebook users in recent years. (Note that in each of these studies, data was analyzed in aggregate and steps were taken to hide personally identifiable information.)

1. Your significant others (and whether the relationship will last): In October 2013, Facebook published a study in which researchers tried to guess who users were in a relationship with by looking at the users’ Facebook friends. For the study, Facebook researchers randomly chose 1.3 million users who had between 50 and 2,000 friends, were older than 20, and described themselves as married, engaged, or in a relationship. To guess whom these users were dating, the researchers analyzed which of the users’ friends knew each other—and which ones didn’t. You might share a ton of college friends with your old college roommate on Facebook, for example. But your boyfriend might be Facebook friends with your college friends, your coworkers, and your mom—people who definitely don’t know each other. Hence, he’s special.

Using this method, researchers were able to determine a person’s romantic partner with “high accuracy”—they were able to guess married users’ spouses 60 percent of the time by just looking at users’ friend networks. The researchers also looked at a subset of same-sex couples, to see whether that changed the results. (It didn’t.)

Facebook then decided to see whether it could use this method to predict whether a relationship is likely to last. For this part of the experiment, researchers looked at about 400,000 users who said that they were “in a relationship” and watched to see whether those users said they were single 60 days later. The researchers concluded that relationships in which Facebook’s model correctly identified the partner were less likely to break up, noting that the results were especially accurate when the two people had been together less than a year. (So basically, if you’re only introducing your boyfriend to your friends, and not your mom, your relationship might be less likely to last.)

2. How your mom talks to you: For this study, Facebook looked at how parents and their kids talk to each other Facebook. (Fun fact: On average, parent-child pairs wait 371 days after joining Facebook before becoming “friends.” Tell your little sister to stop ignoring your mom’s friend request.) The researchers examined three months of communication data pulled from September 2012. This data included comments, posts, and links shared on other users’ timelines, but not chat messages. According to the researchers, that wasn’t a privacy decision—chats are simply “too short and noisy for substantive language analysis.” Here are some of the top phrases that researchers noticed parents using in messages to their young children:

And here’s what parents are writing to their adult children, after they’ve developed filthy minds and drinking problems:

Facebook also noted that “what parents say when they’re not talking to their children is just as revealing; they use higher levels of ideology (agree but, obama, our government, policies, people need to, ethics), swearing and slang (ctfu, lmao, fucker, idk), and alcohol and sex terms (tequila, glass of wine, that ass, sexy). Ew.

3. Your ethnicity: In this older study, from 2010, researchers wrote that “the ethnicity of a user base is an important demographic indicator that can be used for marketing, compliance, and analytics as well as a scientific tool for understanding social behavior,” but lamented that “unfortunately, ethnic information is often unavailable for practical, legal, or political reasons.” So researchers came up with a solution: They determined the ethnic breakdown of US Facebook users by using people’s names and data provided by the Census. Tested on Facebook, the researchers’ proposed model “learned” that Latoya is more likely to be a black name and Barb is more likely to be white name. “Using both first and last names further improves estimates, largely by making better distinctions between White and Black,” the researchers wrote.

Once researchers had that data set, they started doing other studies. For example, the researchers examined pairs of people in romantic relationships on Facebook, as broken down by ethnicity. They also noted that their research suggested that “individuals’ ethnicity can be predicted through their social ties” and tried to predict users’ ethnicity based on the average ethnicity of their friends. (You should definitely not play this game at your next dinner party.) The researchers also compared users’ self-identified political views with their ethnicities, noting that “whites are more frequent in the Libertarian, Conservative, and Very Conservative categories.” The researchers did note that their research method comes with a caveat, “While ethnicity is an important factor in understanding user behavior, it is often only a proxy for other variables, such as socioeconomic status, or education. A complete analysis should control for all such factors.”

4. How you respond to conspiracy theories: In the spring of 2014, Facebook published a study on how rumors spread on the social network. The researchers looked at rumors identified by the rumor-debunking website Snopes.com that fall into a number of different categories, including politics, medicine, horror, “glurge” (i.e., sentimental stories that usually aren’t true), and 9/11. Then, the researchers found rumors posted on Facebook as photos, and gathered 249,035 comments in which people commented on the rumor with a valid link to Snopes.Ultimately, the researchers found reshared posts that received a comment that linked to Snopes were more likely to be deleted. So, feel free to keep telling your friends that the Russian sleep experiment story is BS.

5. If you’re deleting posts before you publish them: For this 2013 study, Facebook looked at how often users start typing a post or comment, and then at the last minute, decide not to publish it, which they called “self-censorship.” The researchers collected data from 3.9 million users over 17 days. They noted when someone started typing more than five characters in status update or comment box. The researchers recorded only whether text was entered, not the keystrokes or content. (This is the same way Gmail automatically saves drafts of your email, except that Facebook logs the presence of text, not actual content.) If the user didn’t share the post within 10 minutes, it was marked as self-censored. Researchers found that 71 percent of all users censored content at least once. The researchers also noted that women were less likely to self-censor, as were people with a more politically diverse set of friends.

How Modern Houses Can Watch You

http://homedesignlover.com/wp-content/uploads/2011/11/best-modern-house-design.jpg
Presto Vivace (882157) links to a critical look in Time Magazine at the creepy side of connected household technology. An excerpt:
A modern surveillance state isn’t so much being forced on us, as it is sold to us device by device, with the idea that it is for our benefit. … … Nest sucks up data on how warm your home is. As Mocana CEO James Isaacs explained to me in early May, a detailed footprint of your comings and goings can be inferred from this information. Nest just bought Dropcam, a company that markets itself as a security tool allowing you to put cameras in your home and view them remotely, but brings with it a raft of disquieting implications about surveillance. Automatic wants you to monitor how far you drive and do things for you like talk to your your house when you’re on your way home from work and turn on lights when you pull into your garage. Tied into the new SmartThings platform, a Jawbone UP band becomes a tool for remotely monitoring someone else’s activity. The SmartThings hubs and sensors themselves put any switch or door in play. Companies like AT&T want to build a digital home that monitors your security and energy use. … … Withings Smart Body Analyzer monitors your weight and pulse. Teddy the Guardian is a soft toy for children that spies on their vital signs. Parrot Flower Power looks at the moisture in your home under the guise of helping you grow plants. The Beam Brush checks up on your teeth-brushing technique.
Presto Vivaci adds, “Enough to make the Stasi blush. What I cannot understand is how politicians fail to understand what a future Kenneth Starr is going to do with data like this.”
~Slashdot~

Let’s nationalize Amazon and Google

Publicly funded technology built Big Tech

They’re huge and ruthless and define our lives. They’re close to monopolies. Let’s make them public utilities

Let's nationalize Amazon and Google: Publicly funded technology built Big Tech
Jeff Bezos (Credit: AP/Reed Saxon/Pakhnyushcha via Shutterstock/Salon)

They’re huge, they’re ruthless, and they touch every aspect of our daily lives. Corporations like Amazon and Google keep expanding their reach and their power. Despite a history of abuses, so far the Justice Department has declined to take antitrust actions against them. But there’s another solution.

Is it time to manage and regulate these companies as public utilities?

That argument’s already been made about broadband access. In her book “Captive Justice,” law professor Susan Crawford argues that “high-speed wired Internet access is as basic to innovation, economic growth, social communication, and the country’s competitiveness as electricity was a century ago.”

Broadband as a public utility? If not for corporate corruption of our political process, that would seem like an obvious solution. Instead, our nation’s wireless access is the slowest and costliest in the world.

But why stop there? Policymakers have traditionally considered three elements when evaluating the need for a public utility: production, transmission, and distribution. Broadband is transmission. What about production and distribution?

The Big Tech mega-corporations have developed what Al Gore calls the “Stalker Economy,” manipulating and monitoring as they go. But consider: They were created with publicly funded technologies, and prospered as the result of indulgent policies and lax oversight. They’ve achieved monopoly or near-monopoly status, are spying on us to an extent that’s unprecedented in human history, and have the potential to alter each and every one of our economic, political, social and cultural transactions.

In fact, they’re already doing it.

Public utilities? It’s a thought experiment worth conducting.

Big Tech was created with publicly developed technology.

No matter how they spin it, these corporations were not created in garages or by inventive entrepreneurs. The core technology behind them is the Internet, a publicly funded platform for which they pay no users’ fee. In fact, they do everything they can to avoid paying their taxes.



Big Tech’s use of public technology means that it operates in a technological “commons,” which they are using solely for its own gain, without regard for the public interest. Meanwhile the United States government devotes considerable taxpayer resource to protecting them – from patent infringement, cyberterrorism and other external threats.

Big Tech’s services have become a necessity in modern society.

Businesses would be unable to participate in modern society without access to the services companies like Amazon, Google and Facebook provide. These services have become public marketplaces.

For individuals, these entities have become the public square where social interactions take place, as well as the marketplace where they purchase goods.

They’re at or near monopoly status – and moving fast.

Google has 80 percent of the search market in the United States, and an even larger share of key overseas markets. Google’s browsers have now surpassed Microsoft’s in usage across all devices. It has monopoly-like influence over online news, as William Baker noted in the Nation. Its YouTube subsidiary dominates the U.S. online-video market, with nearly double the views of its closest competitor. (Roughly 83 percent of the Americans who watched a video online in April went to YouTube.)

Even Microsoft’s Steve Ballmer argued that Google is a “monopoly” whose activities were “worthy of discussion with competition authority.” He should know.

As a social platform, Facebook has no real competitors. Amazon’s book business dominates the market. E-books are now 30 percent of the total book market, and its Kindle e-books account for 65 percent of e-book sales.  Nearly one book in five is an Amazon product – and that’s not counting Amazon’s sales of physical books. It has become such a behemoth that it is able to command discounts of more than 50 percent from major publishers like Random House.

They abuse their power.

The bluntness with which Big Tech firms abuse their monopoly power is striking. Google has said that it will soon begin blocking YouTube videos from popular artists like Radiohead and Adele unless independent record labels sign deals with its upcoming music streaming service (at what are presumably disadvantageous rates).   Amazon’s war on publishers like Hachette is another sign of Big Tech arrogance.

But what is equally striking about these moves is the corporations’ disregard for basic customer service. Because YouTube’s dominance of the video market is so large, Google is confident that even frustrated music fans have nowhere to go. Amazon is so confident of its dominance that it retaliated against Hachette by removing order buttons when a Hachette book came up (which users must find maddening) and lied about the availability of Hachette books when a customer attempts to order one. It also altered its search process for recommendations to freeze out Hachette books and direct users to non-Hachette authors.

Amazon even suggested its customers use other vendors if they’re unhappy, a move that my Salon colleague Andrew Leonard described as “nothing short of amazing – and troubling.”

David Stratfield of the New York Times asked, “When does discouragement become misrepresentation?” One logical answer: When you tell customers a product isn’t available, even though it is, or rig your sales mechanism to prevent customers from choosing the item they want.

And now Amazon’s using some of the same tactics against Warner Home Video.

They got there with our help.

As we’ve already noted, Internet companies are using taxpayer-funded technology to make billions of dollars from the taxpayers – without paying a licensing fee. As we reported earlier, Amazon was the beneficiary of tax exemptions that allowed it to reach its current monopolistic size.

Google and the other technology companies have also benefited from tax policies and other forms of government indulgence. Contrary to popular misconception, Big Tech corporations aren’t solely the products of ingenuity and grit. Each has received, and continues to receive, a lot of government largess.

The real “commodity” is us.

Most of Big Tech’s revenues come from the use of our personal information in its advertising business. Social media entries, Web-surfing patterns, purchases, even our private and personal communications add value to these corporations. They don’t make money by selling us a product. We are the product, and we are sold to third parties for profit.

Public utilities are often created when the resource being consumed isn’t a “commodity” in the traditional sense. “We” aren’t an ordinary resource. Like air and water, the value of our information is something that should be publicly shared – or, at a minimum, publicly managed.

Our privacy is dying … or already dead.

“We know where you are,” says Google CEO Eric Schmidt. “We know where you’ve been. We can more or less know what you’re thinking about.”

Facebook tracks your visits to the website of any corporate Facebook “partner,” stores that information, and uses it to track and manipulate the ads you see. Its mobile app also has a new, “creepy” feature that turns on your phone’s microphone, analyzes what you’re listening to or watching, and is capable of posting updates to your status like “Listening to Albert King” or “Watching ‘Orphan Black.’

Google tracks your search activity, an activity with a number of disturbing implications. (A competing browser that does not track searches called DuckDuckGo offers an illustrated guide to its competitors’ practices.)  If you use its Chrome browser, Google tracks your website visits too (unless you’re in “private” mode.)

Yasha Levine, who is tracking corporate data spying in his “Surveillance Valley” series, notes that “True end-to-end encryption would make our data inaccessible to Google, and grind its intel extraction apparatus to a screeching halt.” As the ACLU’s Christopher Soghoian points out: “It’s very, very difficult to deploy privacy protective policies with the current business model of ad supported services.”

As Levine notes, the widely publicized revelation that Big Data companies track rape victims was just the tip of the iceberg. They also track “anorexia, substance abuse, AIDS and HIV … Bedwetting (Enuresis), Binge Eating Disorder, Depression, Fetal Alcohol Syndrome, Genital Herpes, Genital Warts, Gonorrhea, Homelessness, Infertility, Syphilis … the list goes on and on and on and on.”

Given its recent hardball tactics, here’s a little-known development that should concern more people: Amazon also hosts 37 percent of the nation’s cloud computing services, which means it has access to the inner workings of the software that runs all sorts of businesses – including ones that handle your personal data.

For all its protestations, Microsoft is no different when it comes to privacy. The camera and microphone on its Xbox One devices were initially designed to be left on at all times, and it refused to change that policy until purchasers protested.

Privacy, like water or energy, is a public resource. As the Snowden revelations have taught us, all such resources are at constant risk of government abuse.  The Supreme Court just banned warrantless searches of smartphones – by law enforcement. Will we be granted similar protections from Big Tech corporations?

Freedom of information is at risk.

Google tracks your activity and customizes search results, a process that can filter or distort your perception of the world around you.  What’s more, this “personalized search results” feature leads you back to information sources you’ve used before, which potentially narrows our ability to discover new perspectives or resources.  Over time this creates an increasingly narrow view of the world.

What’s more, Google’s shopping tools have begun using “paid inclusion,” a pay-for-play search feature it once condemned as “evil.” Its response is to say it prefers not to call this practice “paid inclusion,” even though its practices appear to meet the Federal Trade Commission’s definition of the term.

As for Amazon, it has even manipulated its recommendation searches in order to retaliate against other businesses, as we’ll see in the next section.

The free market could become even less free.

Could Big Tech and its data be used to set user-specific pricing, based on what is known about an individual’s willingness to pay more for the same product? Benjamin Schiller of Brandeis University wrote a working paper last year that showed how Netflix could do exactly that. Grocery stores and other retailers are already implementing technology that offers different pricing to different shoppers based on their data profile.

For its part, Amazon is introducing a phone that will also tag the items around you, as well as the music and programs you hear, for you to purchase – from Amazon, of course. Who will be purchasing the data those phones collect about you?

They could hijack the future.

The power and knowledge they have accumulated is frightening. But the Big Tech corporations are just getting started. Google has photographically mapped the entire world. It intends to put the world’s books into a privately owned online library. It’s launching balloons around the globe that will bring Internet access to remote areas – on its terms. It’s attempting to create artificial intelligence and extend the human lifespan.

Amazon hopes to deliver its products by drone within the next few years, an idea that would seem preposterous if not for its undeniable lobbying clout. Each of these Big Tech corporations has the ability to filter – and alter – our very perceptions of the world around us. And each of them has already shown a willingness to abuse it for their own ends.

These aren’t just the portraits of futuristic corporations that have become drunk on unchecked power. It’s a sign that things are likely to get worse – perhaps a lot worse – unless something is done. The solution may lie with an old concept. It may be time to declare Big Tech a public utility.

 

Richard (RJ) Eskow is a writer and policy analyst. He is a Senior Fellow with the Campaign for America’s Future and is host and managing editor of The Zero Hour on We Act Radio.

http://www.salon.com/2014/07/08/lets_nationalize_amazon_and_google_publicly_funded_technology_built_big_tech/?source=newsletter

The 17,000 Dow: Surging towards a disaster

http://timedotcom.files.wordpress.com/2014/07/140702_inv_17000_1.jpg?w=501&h=321

Photo Time, Inc.

7 July 2014

The rise of Wall Street’s Dow Jones Industrial Average to an all-time high above 17,000 last week is another sign of the explosive contradictions building up within the American and global financial system.

Since hitting its low point of 6,547 on March 9, 2009 following the financial crash of September 2008, the Dow has climbed by more than 10,000 points, and is now over 250 percent what it was barely five years ago.

At the same time, following the official recession of December 2007 to June 2009, US gross domestic product has experienced its worst “recovery” of any comparable period since World War II, with output falling by almost 3 percent in the first quarter of this year. Investment in the real economy remains stagnant as corporations pile up cash rather than expand productive activity, and use the money to fund share buy-back operations, mergers and acquisitions and other, essentially parasitic, financial operations.

Internationally, the situation is no better or, in some cases, worse. Large segments of the economies of the advanced countries are either experiencing stagnation or outright recession. Output in the euro zone has yet to return to the levels of 2007.

According to calculations by the Bank for International Settlements (BIS), a consortium of the world’s central banks, the output of the major economies is around 8 percent below where it would have been had pre-2008 trends continued.

In the so-called “emerging markets,” once hailed as the saviours of the world economy, there is increasing nervousness over the state of financial markets amid fears that a major withdrawal of “hot money,” highly sensitive to any interest rate increases in the advanced economies, could precipitate another global financial crash.

Even though it is still experiencing growth rates of around 7.5 percent, China is widely regarded as being highly vulnerable to the bursting of the financial bubble created by the massive expansion of credit following 2008. It is estimated that in the past six years, credit has increased by an amount equivalent to the finances of the entire US banking system.

And yet, amid this worsening situation, US and global stock markets, fuelled by the injection of ultra-cheap money from the major central banks, keep powering upwards.

This process cannot continue indefinitely. The endless accumulation of wealth, as money seemingly miraculously transforms itself into even greater amounts of money, is inherently unsustainable. The entire financial system resembles a kind of inverted pyramid in which massive financial wealth rests upon a narrowing real economic base, making the whole system extremely vulnerable to even a small disturbance.

As this possibility increases, the policies of the central banks serve not to prevent a financial disaster, but rather to fuel the very conditions that are leading inexorably to one.

The events of the past week have been highly revealing. They demonstrate the extent to which the whole world economy, and the jobs, social conditions and livelihoods of billions of working people, are subject to the dictates of a tiny financial elite.

The week began with a warning from the BIS that present monetary policies were creating the conditions for a repeat of September 2008, possibly on a bigger scale. But this was immediately countered with the assertion that any attempt to halt speculation by ending the supply of ultra-cheap cash would bring about an economic collapse. So present policies have to be continued, notwithstanding the fact that they are leading to a disaster.

Last Wednesday, in her most significant public comments since taking up the post in February, US Federal Reserve Chair Janet Yellen insisted that the present policy of providing an endless supply of cash to financial markets would continue into the indefinite future.

She ruled out any action on monetary policy to prevent the emergence of dangerous asset bubbles and the kinds of parasitic and outright criminal policies that led to the crash of 2008, on the grounds that it would do too much damage to the economy, leading to the growth of unemployment. “Macroprudential regulation” should be used to control the financial system, she asserted.

However, any such regulations ultimately rest on enforcement procedures, above all against the biggest financial and investment firms, which, as the US Senate’s Permanent Subcommittee on Investigations report of 2011 made clear, engaged in criminal activity. However, the bringing of criminal charges was ruled out by Attorney General Eric Holder in March 2013, when he told a congressional panel that if prosecutions were launched against the largest institutions, they would “have a negative impact on the national economy, perhaps even the world economy.”

In other words, both US monetary and legal authorities are completely beholden to the banks and financial corporations.

When asked about the ability of the banks to create a “parallel universe” shadow banking system outside the purview of would-be regulators, Yellen admitted she did not have a “great answer” to that problem. But this admission of bankruptcy did not stop others from endorsing her remarks.

European Central Bank (ECB) President Mario Draghi, who recently reduced interest rates set by the ECB to zero and below, backed the stand of his American counterpart. He insisted that “macroprudential” measures, not monetary policy, had to be “the first line of defence against financial stability risk.”

Others quickly chimed in. Bank of England Deputy Governor John Cunliffe said tightening monetary policies to curb asset values risked hurting the economy and should be seen as “the last line of defence.”

Sweden’s central bank, the Risbank, after a battle within the governing board, decided that actions speak louder than words and cut interest rates by 50 basis points, declaring it was for “other policy areas” to manage rising household debt and housing markets.

Bank of America strategists were clearly delighted that the wealth bonanza would continue, saying the message from the Fed, the ECB and the Risbank was that that monetary policy would stay “loose,” with “macroprudential” policies taking care of any financial stability risks.

While the promotion of financial parasitism has been enshrined as official policy, further adding to the wealth of the already super-wealthy, the offensive against the working class deepens.

Outlining the need for austerity measures, Australian treasurer Joe Hockey declared that while the world was “awash with money,” governments had no money. These phenomena are two sides of the same coin. The driving down of living standards and the imposition of mass poverty is based on the recognition that, in the final analysis, the only way of putting value into financial assets is to extract it from the working class.

The claim that “macroprudential” regulation can avert a catastrophe is a cruel hoax. Apart from the fact that financial markets develop ways of side-stepping such regulations as soon as they are developed, there is the issue of the regulators themselves.

In the US, at the very heart of the global financial system, they are drawn directly from the ranks of the banks and finance houses or from the legal firms that have acted for them in proceedings aimed at thwarting attempted controls. Such individuals view their term of “public service” merely as a means of enhancing their “market value” when they return to make millions in the world of corporate finance.

As for those who rise up through the ranks, they view their term of office as a mere stepping stone to enter the “parallel universe.” And on the off-chance that someone might emerge who actually believes in regulation, they can easily be dispensed with by means of a sex exposé or some other form of scandal.

The situation is the same elsewhere, as exemplified by the fact that the head of the ECB, Mario Draghi, is a former international vice-president of Goldman Sachs.

Twist and turn the present economic and financial system in whatever way one chooses, there is no way to prevent a catastrophe other than through its complete expropriation, the institution of public ownership and the implementation of a socialist program.

Nick Beams

Net neutrality is dying, Uber is waging a war on regulations, and Amazon grows stronger by the day

Why 2014 could be the year we lose the Internet

Why 2014 could be the year we lose the Internet
Jeff Bezos, Tim Cook (Credit: Reuters/Gus Ruelas/Robert Galbraith/Photo collage by Salon)

Halfway through 2014, and the influence of technology and Silicon Valley on culture, politics and the economy is arguably bigger than ever — and certainly more hotly debated. Here are Salon’s choices for the five biggest stories of the year.

1) Net neutrality is on the ropes.

So far, 2014 has been nothing but grim for the principle known as “net neutrality” — the idea that the suppliers of Internet bandwidth should not give preferential access (so-called fast lanes) to the providers of Internet services who are willing and able to pay for it. In January, the D.C. Court of Appeals struck down the FCC’s preliminary plan to enforce a weak form of net neutrality. Less than a month later, Comcast, the nation’s largest cable company and broadband Internet service provider, announced its plans to buy Time-Warner — and inadvertently gave us a compelling explanation for why net neutrality is so important. A single company with a dominant position in broadband will simply have too much power, something that could have enormous implications for our culture.

The situation continued to degenerate from there. Tom Wheeler, President Obama’s new pick to run the FCC, a former top cable industry lobbyist, unveiled a new plan for net neutrality that was immediately slammed as toothless. In May, ATT announced plans to merge with DirecTV. Consolidation proceeds apace, and our government appears incapable of managing the consequences.

2) Uber takes over.

After completing its most recent round of financing, Uber is now valued at $18.2 billion. Along with Airbnb, the Silicon Valley start-up has become a standard bearer for the Valley’s cherished allegiance to “disruption.” The established taxi industry is under sustained assault, but Uber has made it clear that the company’s ultimate ambitions go far beyond simply connecting people with rides. Uber has designs on becoming the premier logistics connection platform for getting anything to anyone. What Google is to search, Uber wants to be for moving objects from Point A to Point B. And Google, of course, has a significant financial stake in Uber.



Uber’s path has been bumpy. The company is fighting regulatory battles with municipalities across the world, and its own drivers are increasingly angry at fare cuts, and making sporadic attempts to organize. But the smart money sees Uber as one of the major players of the near future. The “sharing” economy is here to stay.

3) The year of the stream.

Apple bought Beats by Dre. Amazon launched its own streaming music service. Google is planning a new paid streaming offering. Spotify claimed 10 million paying customers and Pandora boasts 75 million listeners every month.

We may end up remembering 2014 as the year that streaming established itself as the dominant way people consume music. The numbers are stark. Streaming is surging, while paid downloads are in free fall.

For consumers, all-you-can-eat services like Spotify are generally marvelous. But it remains astonishing that a full 20 years after the Internet threw the music industry into turmoil, it is still completely unclear how artists and songwriters will make a decent living in an era when music is essentially free.

We also face unanswered questions about the potential implications for what kinds of music get made in an environment where every listen is tracked and every tweet or Facebook like observed. What will Big Data mean for music?

4) Amazon shows its true colors.

What a busy six months for Jeff Bezos! Amazon introduced its own set-top box for TV watching, its own smartphone for insta-shopping, anywhere, any time, and started abusing its near monopoly power to win better terms with publishing companies.

For years, consumer adoration of Amazon’s convenience and low prices fueled the company’s rise. It’s hard, at the midpoint of 2014, to avoid the conclusion that we’ve created a monster. This year, Amazon started getting sustained bad press at the very highest levels. And you know what? Jeff Bezos deserves it.

5) The tech culture wars boil over.

In the first six months of 2014, the San Francisco Bay Area witnessed emotional public hearings about Google shuttle buses, direct action by radicals against technology company executives, bar fights centering on Google Glass wearers, and a steady rise in political heat focused on tech economy-driven gentrification.

As I wrote in April

Just as the Luddites, despite their failure, spurred the creation of worker-class consciousness, the current Bay Area tech protests have had a pronounced political effect. While the tactics range from savvy, well-organized protest marches to juvenile acts of violence, the impact is clear. The attention of political leaders and the media has been engaged. Everyone is watching.

Ultimately, maybe this will be the biggest story of 2014. This year, numerous voices started challenging the transformative claims of Silicon Valley hype and began grappling with the nitty-gritty details of how all this “disruption” is changing our economy and culture. Don’t expect the second half of 2014 to be any different.