Cheap cab ride? You must have missed Uber’s true cost

When tech giants such as Google and Uber hide their wealth from taxation, they make it harder for us to use technology to improve services

A striking French taxi driver protests against Uber in Paris.
A striking French taxi driver protests against Uber in Paris. Photograph: Charles Platiau/Reuters

To understand why we see so few genuine alternatives to US technology giants, it’s instructive to compare the fate of a company like Uber – valued at more than $62.5bn (£44bn) – and that of Kutsuplus, an innovative Finnish startup forced to shut down late last year.

Kutsuplus’s aspiration was to be the Uber of public transport: it operated a network of minibuses that would pick up and drop passengers anywhere in Helsinki, with smartphones, algorithms and the cloud deployed to maximise efficiency, cut costs and provide a slick public service. Being a spinoff of a local university that operated on a shoestring budget, Kutsuplus did not have rich venture capitalists behind it. This, perhaps, is what contributed to its demise: the local transport authority found it too expensive, despite impressive year-on-year growth of 60%.

On the other hand, “expensive” is everything that Uber is not. While you might be tempted to ascribe the low costs of the service to its ingenuity and global scale – is it the Walmart of transport? – its affordability has a more banal provenance: sitting on tons of investor cash, Uber can afford to burn billions in order to knock out any competitors, be they old-school taxi companies or startups like Kutsuplus.

A recent article in The Information, a tech news site, suggests that during the first three quarters of 2015 Uber lost $1.7bn while booking $1.2bn in revenue. The company has so much money that, in at least some North American locations, it has been offering rides at rates so low that they didn’t even cover the combined cost of fuel and vehicle depreciation.

Uber’s game plan is simple: it wants to drive the rates so low as to increase demand – by luring some of the customers who would otherwise have used their own car or public transport. And to do that, it is willing to burn a lot of cash, while rapidly expanding into adjacent industries, from food to package delivery.

An obvious but rarely asked question is: whose cash is Uber burning? With investors like Google, Amazon’s Jeff Bezos and Goldman Sachs behind it, Uber is a perfect example of a company whose global expansion has been facilitated by the inability of governments to tax profits made by hi-tech and financial giants.

To put it bluntly: the reason why Uber has so much cash is because, well, governments no longer do. Instead, this money is parked in the offshore accounts of Silicon Valley and Wall Street firms. Look at Apple, which has recently announced that it sits on $200bn of potentially taxable overseas cash, or Facebook, which has just posted record profits of $3.69bn for 2015.

Some of these firms do choose to share their largesse with governments – both Apple and Google have agreed to pay tax bills far smaller than what they owe, in Italy and the UK respectively – but such moves aim at legitimising the questionable tax arrangements they have been using rather than paying their fair share.

Compare this with the dire state of affairs in which most governments and city administrations find themselves today. Starved of tax revenue, they often make things worse by committing themselves to the worst of austerity politics, shrinking the budgets dedicated to infrastructure, innovation, or creating alternatives to the rapacious “platform capitalism” of Silicon Valley.

Under these conditions, it’s no wonder that promising services like Kutsuplus have to shut down: cut from the seemingly endless cash supply of Google and Goldman Sachs, Uber would have gone under as well. It is, perhaps, no coincidence that Finland is one of the more religious advocates of austerity in Europe; having let Nokia go under, the country has now missed another chance.

Let us not be naive: Wall Street and Silicon Valley won’t subsidise transport for ever. While the prospect of using advertising to underwrite the costs of an Uber trip is still very remote, the only way for these firms to recoup their investments is by squeezing even more cash or productivity out of Uber drivers or by eventually – once all their competitors are out – raising the costs of the trip.

Both of these options spell trouble. Uber is already taking higher percentages from its drivers’ fares (this number is reported to have gone up from 20% to 30%), while also trying to pass on more costs related to background checks and safety education directly to its drivers (through the so-called safe rides fee).

The only choice here is between more precarity for drivers and more precarity for passengers, who will have to accept higher rates, with or without controversial practices like surge pricing (prices go up when demand is high).

Moreover, the company is actively trying to solidify its status as a default platform for transport. During the recent squabbles in France – where taxi drivers have been rioting to get the government to notice their plight – Uber has offered to open up its platforms to any professional taxi drivers who would like a second job.

Needless to say, such platforms – with properly administered and transparent payment, reputation and pricing systems – ought to have been established by cities a long time ago. This, along with the encouragement and support of startups like Kutsuplus, would have been the right regulatory response to Uber.

Unfortunately, there’s very little policy innovation in this space and the main response to Uber so far has come from other Uber-like companies unhappy with its dominance. Thus, India’s Ola, China’s Didi Kuaidi, US-based Lyft and Malaysia’s GrabTaxi have formed an alliance, allowing customers to book cabs from each other’s apps in countries where they operate. This falls short of creating a viable support system where innovators like Kutsuplus can flourish; replacing Uber with Lyft won’t solve the problem, as it pursues the same aggressive model.

The broader lesson here is that a country’s technology policy is directly dependent on its economic policy; one cannot flourish without the active support of the other. Decades of a rather lax attitude on taxation combined with strict adherence to the austerity agenda have eaten up the public resources available for experimenting with different modes of providing services like transport.

This has left tax-shrinking companies and venture capitalists – who view everyday life as an ideal playing ground for predatory entrepreneurship – as the only viable sources of support for such projects. Not surprisingly, so many of them start like Kutsuplus only to end up like Uber: such are the structural constraints of working with investors who expect exorbitant returns on their investments.

Finding and funding projects that would not have such constraints would not in itself be so hard; what will be hard, especially given the current economic climate, is finding the cash to invest in them.

Taxation seems the only way forward – alas, many governments do not have the courage to ask what is due to them; the compromise between Google and HM Treasury is a case in point.

 

http://www.theguardian.com/commentisfree/2016/jan/31/cheap-cab-ride-uber-true-cost-google-wealth-taxation?CMP=fb_gu

Facebook, Instagram and Twitter are killing the web

Iran’s blogfather:

Hossein Derakhshan was imprisoned by the regime for his blogging. On his release, he found the internet stripped of its power to change the world and instead serving up a stream of pointless social trivia

‘For a while, I was the first person any new blogger in Iran would contact’ ... Hossein Derakhshan
‘For a while, I was the first person any new blogger in Iran would contact’ … Hossein Derakhshan. Photograph: Arash Ashoorinia for the Guardian

Late in 2014, I was abruptly pardoned and freed from Evin prison in northern Tehran. In November 2008, I had been sentenced to nearly 20 years in jail, mostly over my web activities, and thought I would end up spending most of my life in those cells. So the moment, when it came, was unexpected. I was sharing a cup of tea when the voice of the floor announcer – another prisoner – filled all the rooms and corridors: “Dear fellow inmates, the bird of luck has once again sat on one fellow inmate’s shoulders. Mr Hossein Derakhshan, as of this moment, you are free.”

Outside, everything felt new: the chill autumn breeze, the traffic noise from a nearby bridge, the smell, the colours of the city I had lived in most of my life. Around me, I noticed a very different Tehran from the one I had been used to. An influx of new, shamelessly luxurious condos had replaced the charming little houses I was familiar with. New roads, new highways, hordes of invasive SUVs. Large billboards with advertisements for Swiss-made watches and Korean TVs. Women in colourful scarves and manteaus, men with dyed hair and beards, and hundreds of charming cafes with hip western music and female staff. They were the kind of changes that creep up on people; the kind you only really notice once normal life gets taken away from you.

Two weeks later, I began writing again. Some friends agreed to let me start a blog as part of their arts magazine. I called it Ketabkhan – it means book-reader in Persian.

Six years was a long time to be in jail, but it is an entire era online. Writing on the internet had not changed, but reading – or, at least, getting things read – had altered dramatically. I’d been told how essential social networks had become, so I tried to post a link to one of my stories on Facebook. It turned out Facebook didn’t care much. It ended up looking like a boring classified ad. No description. No image. Nothing. It got three likes. Three! That was it.

It became clear to me, right there, that things had changed. I was not equipped to play on this new turf — all my investment and effort had burned up. I was devastated.

Blogs were gold and bloggers were rock stars back in 2008 when I was arrested. At that point, and despite the fact the state was blocking access to my blog from inside Iran, I had an audience of around 20,000 people every day. People used to carefully read my posts and leave lots of relevant comments, even those who hated my guts. I could empower or embarrass anyone I wanted. I felt like a monarch.

The iPhone was a little over a year old, but smartphones were still mostly used to make phone calls and send short messages, handle emails, and surf the web. There were no real apps, certainly not how we think of them today. There was no Instagram, no SnapChat, WhatsApp. Instead, there was the web, and on the web, there were blogs: the best place to find alternative thoughts, news and analysis. They were my life.

It had all started with 9/11. I was in Toronto, and my father had just arrived from Tehran for a visit. We were having breakfast when the second plane hit the World Trade Center. I was puzzled and confused and, looking for insights and explanations, I came across blogs. Once I read a few, I thought: this is it, I should start one, and encourage all Iranians to start blogging as well. So, using Notepad on Windows, I started experimenting. Soon I was writing on hoder.com, using Blogger’s publishing platform before Google bought it.

Then, on 5 November 2001, I published a step-by-step guide on how to start a blog. That sparked something that was later called a blogging revolution: soon, hundreds and thousands of Iranians made it one of the top five nations by the number of blogs. I used to keep a list of all blogs in Persian and, for a while, I was the first person any new blogger in Iran would contact, so they could get on the list. That’s why they called me “the blogfather” in my mid-20s – it was a silly nickname, but at least it hinted at how much I cared.

The Iranian blogosphere was a diverse crowd – from exiled authors and journalists, female diarists, and technology experts, to local journalists, politicians, clerics, and war veterans . But you can never have too much diversity. I encouraged conservatives inside Iran to join and share their thoughts. I had left the country in late 2000 to experience living in the west, and was scared that I was missing all the rapidly emerging trends at home. But reading Iranian blogs in Toronto was the closest experience I could have to sitting in a shared taxi in Tehran and listening to collective conversations between the talkative driver and random passengers.

There’s a story in the Qur’an that I thought about a lot during my first eight months in solitary confinement. In it, a group of persecuted Christians find refuge in a cave. They, and a dog they have with them, fall into a deep sleep and wake up under the impression that they have taken a nap: in fact, it’s 300 years later. One version of the story tells of how one of them goes out to buy food – and I can only imagine how hungry they must have been after 300 years – and discovers that his money is obsolete now, a museum item. That’s when he realises how long they have been absent.

The hyperlink was my currency six years ago. It represented the open, interconnected spirit of the world wide web – a vision that started with its inventor, Tim Berners-Lee. The hyperlink was a way to abandon centralisation – all the links, lines and hierarchies – and replace them with something more distributed, a system of nodes and networks. Since I got out of jail, though, I’ve realised how much the hyperlink has been devalued, almost made obsolete.

Nearly every social network now treats a link as just the same as it treats any other object – the same as a photo, or a piece of text. You’re encouraged to post one single hyperlink and expose it to a quasi-democratic process of liking and plussing and hearting. But links are not objects, they are relations between objects. This objectivisation has stripped hyperlinks of their immense powers.

At the same time, these social networks tend to treat native text and pictures – things that are directly posted to them – with a lot more respect. One photographer friend explained to me how the images he uploads directly to Facebook receive many more likes than when he uploads them elsewhere and shares the link on Facebook.

Some networks, like Twitter, treat hyperlinks a little better. Others are far more paranoid. Instagram – owned by Facebook – doesn’t allow its audiences to leave whatsoever. You can put up a web address alongside your photos, but it won’t go anywhere. Lots of people start their daily online routine in these cul-de-sacs of social media, and their journeys end there. Many don’t even realise they are using the internet’s infrastructure when they like an Instagram photograph or leave a comment on a friend’s Facebook video. It’s just an app.

But hyperlinks aren’t just the skeleton of the web: they are its eyes, a path to its soul. And a blind webpage, one without hyperlinks, can’t look or gaze at another webpage – and this has serious consequences for the dynamics of power on the web.

More or less all theorists have thought of gaze in relation to power, and mostly in a negative sense: the gazer strips the gazed and turns her into a powerless object, devoid of intelligence or agency. But in the world of webpages, gaze functions differently: it is more empowering. When a powerful website – say Google or Facebook – gazes at, or links to, another webpage, it doesn’t just connect it , it brings it into existence; gives it life. Without this empowering gaze, your web page doesn’t breathe. No matter how many links you have placed in a webpage, unless somebody is looking at it, it is actually both dead and blind, and therefore incapable of transferring power to any outside web page.

Apps like Instagram are blind, or almost blind. Their gaze goes inwards, reluctant to transfer any of their vast powers to others, leading them into quiet deaths. The consequence is that web pages outside social media are dying.

Even before I went to jail, though, the power of hyperlinks was being curbed. Itsbiggest enemy was a philosophy that combined two of the most dominant, and most overrated, values of our times: newness and popularity. (Isn’t this embodied these days by the real-world dominance of young celebrities?) That philosophy is the stream. The stream now dominates the way people receive information on the web. Fewer users are directly checking dedicated webpages, instead getting fed by a never-ending flow of information that’s picked for them by complex and secretive algorithms.

The stream means you don’t need to open so many websites any more. You don’t need numerous tabs. You don’t even need a web browser. You open the Facebook app on your smartphone and dive in. The mountain has come to you. Algorithms have picked everything for you. According to what you or your friends have read or seen before, they predict what you might like to see. It feels great not to waste time in finding interesting things on so many websites. But what are we exchanging for efficiency?

In many apps, the votes we cast – the likes, the plusses, the stars, the hearts – are actually more related to cute avatars and celebrity status than to the substance of what’s posted. A most brilliant paragraph by some ordinary-looking person can be left outside the stream, while the silly ramblings of a celebrity gain instant internet presence. And not only do the algorithms behind the stream equate newness and popularity with importance, they also tend to show us more of what we have already liked. These services carefully scan our behaviour and delicately tailor our news feeds with posts, pictures and videos that they think we would most likely want to see.

Popularity is not wrong in and of itself, but it has its own perils. In a free-market economy, low-quality goods with the wrong prices are doomed to failure. Nobody gets upset when a quiet Hackney cafe with bad lattes and rude servers goes out of business. But political or religious opinions are not the same as material goods or services. They won’t disappear if they are unpopular or even wrong. In fact, history has proven that most big ideas (and many bad ones) have been quite unpopular for a long time, and their marginal status has only strengthened them. Minority views are radicalised when they can’t be heard or engaged with. That’s how Isis is recruiting and growing. The stream suppresses other types of unconventional ideas too, with its reliance on our habits.

Today the stream is digital media’s dominant form of organising information. It’s in every social network and mobile application. Since I gained my freedom, everywhere I turn I see the stream. I guess it won’t be too long before we see news websites organise their entire content based on the same principles. The prominence of the stream today doesn’t just make vast chunks of the internet biased against quality – it also means a deep betrayal to the diversity that the world wide web had originally envisioned.

The centralisation of information also worries me because it makes it easier for things to disappear. After my arrest, my hosting service closed my account, because I wasn’t able to pay its monthly fee. But at least I had a backup of all my posts in a database on my own web server. But what if my account on Facebook or Twitter is shut down for any reason? Those services themselves may not die any time soon, but it is not too difficult to imagine a day when many American services shut down the accounts of anyone from Iran, as a result of the current regime of sanctions. If that happened, I might be able to download my posts in some of them, and let’s assume the backup can be easily imported into another platform. But what about the unique web address for my social network profile? Would I be able to claim it back later, after somebody else has possessed it?

But the scariest outcome of the centralisation of information in the age of social networks is something else: it is making us all much less powerful in relation to governments and corporations. Surveillance is increasingly imposed on civilised lives, and it gets worse as time goes by. The only way to stay outside of this vast apparatus of surveillance might be to go into a cave and sleep, even if you can’t make it 300 years.

Ironically enough, states that cooperate with Facebook and Twitter know much more about their citizens than those, like Iran, where the state has a tight grip on the internet but does not have legal access to social media companies. What is more frightening than being merely watched, though, is being controlled. WhenFacebook can know us better than our parents with only 150 likes, and better than our spouses with 300 likes, the world appears quite predictable, both for governments and for businesses. And predictability means control.

Middle-class Iranians, like most people in the world, are obsessed with new trends. Since 2014 the hype is all about Instagram. There’s less and less text on social networks, and more and more video, more and more images, still or moving, to watch. Are we witnessing a decline of reading on the web in favour of watching and listening? The web started out by imitating books and for many years, it was heavily dominated by text, by hypertext. Search engines such as Google put huge value on these things, and entire companies – entire monopolies – were built off the back of them. But as the number of image scanners and digital photos and video cameras grows exponentially, this seems to be changing. Search tools are starting to add advanced image recognition algorithms; advertising money is flowing there.

The stream, mobile applications, and moving images all show a departure from a books-internet toward a television-internet. We seem to have gone from a non-linear mode of communication – nodes and networks and links – toward one that is linear, passive, programmed and inward-looking.

When I log on to Facebook, my personal television starts. All I need to do is to scroll: New profile pictures by friends, short bits of opinion on current affairs, links to new stories with short captions, advertising, and of course self-playing videos. I occasionally click on the like or share button, read peoples’ comments or leave one, or open an article. But I remain inside Facebook, and it continues to broadcast what I might like. This is not the web I knew when I went to jail. This is not the future of the web. This future is television.

Soon the internet will be a collection of mobile apps rather than of websites. And the money these apps generate will be out of monthly subscription, instead of advertising – something like cable television with its various theme-based packages, and its primetime. (Already if you want to post anything to a social network, you have to do it early morning or late night, when most people are using the app.)

Sometimes I think maybe I’m becoming too strict as I age. Maybe this is all a natural evolution of a technology. But I can’t close my eyes to what’s happening: a loss of intellectual power and diversity. In the past, the web was powerful and serious enough to land me in jail. Today it feels like little more than entertainment. So much that even Iran doesn’t take some – Instagram, for instance – serious enough to block.

I miss when people took time to be exposed to opinions other than their own, and bothered to read more than a paragraph or 140 characters. I miss the days when I could write something on my own blog, publish on my own domain, without taking an equal time to promote it on numerous social networks; when nobody cared about likes and reshares, and best time to post.

That’s the web I remember before jail. That’s the web we have to save.

Hossein Derakhshan (@h0d3r) is a Tehran-based author. He is currently working on an art project called Link-age to promote hyperlinks and the open web.

 

http://www.theguardian.com/technology/2015/dec/29/irans-blogfather-facebook-instagram-and-twitter-are-killing-the-web

 

Google Accused of Tracking School Kids After Promising Not To

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In a complaint (PDF) filed Tuesday with the Federal Trade Commission, the Electronic Frontier Foundation (EFF) claims that “despite publicly promising not to, Google mines students’ browsing data and other information, and uses it for the company’s own purposes.” The EFF says Google’s practice of recording everything students do while they’re logged into their Google accounts, regardless of the device or browser they’re using, puts the company in breach of Section 5 of the Federal Communications Act.

Mouthbreathing Machiavellis Dream of a Silicon Reich

COREY PEIN   

One day in March of 2014, a Google engineer named Justine Tunney created a strange and ultimately doomed petition at the White House website. The petition proposed a three-point national referendum, as follows:

1. Retire all government employees with full pensions.
2. Transfer administrative authority to the tech industry.
3. Appoint [Google executive chairman] Eric Schmidt CEO of America.

This could easily be written off as stunt, a flamboyant act of corporate kiss-assery, which, on one level, it probably was. But Tunney happened to be serious. “It’s time for the U.S. Regime to politely take its exit from history and do what’s best for America,” she wrote. “The tech industry can offer us good governance and prevent further American decline.”

Welcome to the latest political fashion among the California Confederacy: total corporate despotism. It is a potent and bitter ideological mash that could have only been concocted at tech culture’s funky smoothie bar—a little Steve Jobs here, a little Ayn Rand there, and some Ray Kurzweil for color.

Tunney was at one time a prominent and divisive fixture of the Occupy Wall Street movement. Lately, though, her views have . . . evolved. How does an anticapitalist “tranarchist” (transgender anarchist) become a hard-right seditionist?

“Read Mencius Moldbug,” Tunney told her Twitter followers last month, referring to an aggressively dogmatic blogger with a reverent following in certain tech circles.

Keanu Reeves cartoon

Keanu cartoon by Pete Simon

Tunney’s advice is easier said than done, for Moldbug is as prolific as he is incomprehensible. His devotees, many of whom are also bloggers, describe themselves as the “neoreactionary” vanguard of a “Dark Enlightenment.” They oppose popular suffrage, egalitarianism and pluralism. Some are atheists, while others affect obscure orthodox beliefs, but most are youngish white males embittered by “political correctness.” As best I can tell, their ideal society best resembles Blade Runner, but without all those Asian people cluttering up the streets. Neoreactionaries like to see themselves as the heroes of another sci-fi movie, in fact, sometimes boasting that they have been “redpilled,” like Keanu Reeves’s character in The Matrix—a movie Moldbug regards as “genius.”

“Moldbug.” The name sounds like it belongs to a troll who belches from the depths of an Internet rabbit hole. And so it does. Mencius Moldbug is the blogonym of Curtis Guy Yarvin, a San Francisco software developer and frustrated poet. (Here he is reading a poem at a 1997 open mic.)

According to Yarvin, the child of federal civil servants, he dropped out of a graduate computer science program at U. C. Berkeley in the early 1990s (he has self-consciously noted that he is the only man in his immediate family without a PhD) yet managed to make a small pile of money in the original dot-com bubble. Yarvin betrayed an endearingly strange sense of humor in his student days, posting odd stories and absurdist jokes on bulletin board services, contributing to Wired and writing cranky letters to alternative weekly newspapers.

Yet even as a student at Brown in 1991, Yarvin’s preoccupations with domineering strongmen were evident: “I wonder if the Soviet power ladder of vicious bureaucratic backbiting brings stronger men to the top than the American system of feel-good soundbites,” he wrote in one board discussion.

Yarvin’s public writing tapered off as his software career solidified. In 2007, he reemerged under an angry pseudonym, Moldbug, on a humble Blogspot blog called “Unqualified Reservations.” As might be expected of a “DIY ideology . . . designed by geeks for other geeks,” his political treatises are heavily informed by the works of J.R.R. Tolkien and George Lucas. What set Yarvin apart from the typical keyboard kook was his archaic, grandiose tone, which echoed the snippets Yarvin cherry-picked from obscure old reactionary tracts. Yarvin told one friendly interviewer that he spent $500 a month on books.

Elsewhere he confessed to having taken a grand total of five undergraduate humanities courses (history and creative writing). The lack of higher ed creds hasn’t hurt his confidence. On his blog, Yarvin holds forth oneverything from the intricacies of Korean history to contemporary Pakistani politics, from the proper conduct of a counterinsurgency operation to macroeconomic theory and fiscal policy, and he never gives an inch. “The neat thing about primary sources is that often, it takes only one to prove your point,” he writes.

In short, Moldbug reads like an overconfident autodidact’s imitation of a Lewis Lapham essay—if Lewis Lapham were a fascist teenage Dungeon Master.

Yarvin’s most toxic arguments come snugly wrapped in purple prose and coded language. (For instance,“The Cathedral” is Moldbuggian for the oppressive nexus of liberal newspapers, universities and the State Department, where his father worked after getting a PhD in philosophy from Brown.) By so doing, Moldbug has been able to an attract an audience that welcomes the usual teeth-gnashing white supremacists who haunt the web while also leaving room for a more socially acceptable assortment of “men’s rights” advocates, gun nuts, transhumanist libertarians, disillusioned Occupiers and well-credentialed Silicon Valley entrepreneurs.

When Justine Tunney posted her petition online, the press treated it like comic relief that came from nowhere. In fact, it is straight Moldbug. Item one, “retire all government employees,” comes verbatim from a 2012 talk that Yarvin gave to an approving crowd of California techies (see video below). In his typical smarmy, meandering style, Yarvin concluded by calling for “a national CEO [or] what’s called a dictator.”

“If Americans want to change their government, they’re going to have to get over their dictator phobia,” Yarvin said in his talk. He conceded that, given the current political divisions, it might be better to have two dictators, one for Red Staters and one for Blue Staters. The trick would be to “make sure they work together.” (Sure. Easy!)

“There’s really no other solution,” Yarvin concluded. The crowd applauded.

This plea for autocracy is the essence of Yarvin’s work. He has concluded that America’s problems come not from a deficit of democracy but from an excess of it—or, as Yarvin puts it, “chronic kinglessness.” Incredible as it sounds, absolute dictatorship may be the least objectionable tenet espoused by the Dark Enlightenment neoreactionaries.

Moldbug is the widely acknowledged lodestar of the movement, but he’s not the only leading figure. Another is Nick Land, a British former academic now living in Shanghai, where he writes admiringly of Chinese eugenics and the impending global reign of “autistic nerds, who alone are capable of participating effectively in the advanced technological processes that characterize the emerging economy.”

These imaginary übermensch have inspired a sprawling network of blogs, sub-Reddits and meetups aimed at spreading their views. Apart from their reverence for old-timey tyrants, they espouse a belief in “human biodiversity,” which is basically racism in a lab coat. This scientific-sounding euphemism invariably refers to supposed differences in intelligence across races. It is so spurious that the Wikipedia article on human biodiversity was deleted because, in the words of one editor, it is “purely an Internet theory.” Censored once again by The Cathedral, alas.

“I am not a white nationalist, but I do read white-nationalist blogs, and I’m not afraid to link to them . . . I am not exactly allergic to the stuff,” Yarvin writes. He also praises a blogger who advocated the deportation of Muslims and the closure of mosques as “probably the most imaginative and interesting right-wing writer on the planet.” Hectoring a Swarthmore history professor, Yarvin rhapsodizes on colonial rule in Southern Africa, and suggests that black people had it better under apartheid. “If you ask me to condemn [mass murderer] Anders Breivik, but adore Nelson Mandela, perhaps you have a mother you’d like to fuck,” Yarvinwrites.

His jargon may be novel, but whenever Mencius Moldbug descends to the realm of the concrete, he offersfamiliar tropes of white victimhood. Yarvin’s favorite author, the nineteenth-century writer Scot Thomas Carlyle, is perhaps best known for his infamous slavery apologia, “Occasional Discourse on the Negro Question.” “If there is one writer in English whose name can be uttered with Shakespeare’s, it is Carlyle,” Yarvin writes. Later in the same essay Yarvin calls slavery “a natural human relationship” akin to “that of patron and client.”

As I soldiered through the Moldbug canon, my reactions numbed. Here he is expressing sympathy for poor, persecuted Senator Joe McCarthy. Big surprise. Here he claims “America is a communist country.” Sure, whatever. Here he doubts that Barack Obama ever attended Columbia University. You don’t say? After a while, Yarvin’s blog feels like the pseudo-intellectual equivalent of a Gwar concert, one sick stunt after another, calculated to shock. To express revulsion and disapproval is to grant the attention he so transparently craves.

Yet the question inevitably arrives: Do we need to take this stuff seriously? The few mainstream assessments of the neoreactionaries have been divided on the question.

Sympathetic citations are spreading: In the Daily Caller, The American Conservative and National Review. Yet the conservative press remains generally dismissive. The American Spectator’s Matthew Walther calls neoreactionism “silly not scary” and declares that “all of these people need to relax: spend some time with P.G. Wodehouse, watch a football game, get drunk, whatever.”

TechCrunch, which first introduced me to Moldbug, treats the “Geeks for Monarchy” movement as an Internet curio. But The Telegraph says, yes, this is “sophisticated neo-fascism” and must be confronted.Vocativ, which calls it “creepy,” agrees that it should be taken seriously.

The science fiction author David Brin goes further in his comment on a Moldbug blog post, accusing the blogger of auditioning for the part of Machiavelli to some future-fascist dictator:

The world oligarchy is looking for boffins to help them re-establish their old – pyramidal – social order. And your screeds are clearly interview essays. “Pick me! Pick me! Look! I hate democracy too! And I will propagandize for people to accept your rule again, really I will! See the fancy rationalizations I can concoct????”

But your audition materials are just . .  too . . . jibbering . . . loopy. You will not get the job.

As strange as it sounds, Brin may be closest to the truth. Neoreactionaries are explicitly courting wealthy elites in the tech sector as the most receptive and influential audience. Why bother with mass appeal, when you’re rebuilding the ancien régime?

Moldbuggism, for now, remains mostly an Internet phenomenon. Which is not to say it is “merely” an Internet phenomenon. This is, after all, a technological age. Last November, Yarvin claimed that his blog had received 500,000 views. It is not quantity of his audience that matters so much as the nature of it, however. And the neoreactionaries do seem to be influencing the drift of Silicon Valley libertarianism, which is no small force today. This is why I have concluded, sadly, that Yarvin needs answering.

If the Koch brothers have proved anything, it’s that no matter how crazy your ideas are, if you put serious money behind those ideas, you can seize key positions of authority and power and eventually bring large numbers of people around to your way of thinking. Moreover, the radicalism may intensify with each generation. Yesterday’s Republicans and Independents are today’s Libertarians. Today’s Libertarians may be tomorrow’s neoreactionaries, whose views flatter the prejudices of the new Silicon Valley elite.

In a widely covered secessionist speech at a Silicon Valley “startup school” last year, there was more than a hint of Moldbug (see video below). The speech, by former Stanford professor and Andreessen Horowitz partner Balaji Srinivasan, never mentioned Moldbug or the Dark Enlightenment, but it was suffused with neoreactionary rhetoric and ideas. Srinivasan used the phrase “the paper belt” to describe his enemies, namely the government, the publishing industries, and universities. The formulation mirrored Moldbug’s “Cathedral.” Srinivasan’s central theme was the notion of “exit”—as in, exit from democratic society, and entry into any number of corporate mini-states whose arrival will leave the world looking like a patchwork map of feudal Europe.

Forget universal rights; this is the true “opt-in society.”

An excerpt:

We want to show what a society run by Silicon Valley would look like. That’s where “exit” comes in . . . . It basically means: build an opt-in society, ultimately outside the US, run by technology. And this is actually where the Valley is going. This is where we’re going over the next ten years . . . [Google co-founder] Larry Page, for example, wants to set aside a part of the world for unregulated experimentation. That’s carefully phrased. He’s not saying, “take away the laws in the U.S.” If you like your country, you can keep it. Same with Marc Andreessen: “The world is going to see an explosion of countries in the years ahead—doubled, tripled, quadrupled countries.”

Srinivasan ticked through the signposts of the neoreactionary fantasyland: Bitcoin as the future of finance, corporate city-states as the future of government, Detroit as a loaded symbol of government failure and 3D-printed firearms as an example of emerging technology that defies regulation.

The speech succeeded in promoting the anti-democratic authoritarianism at the core of neoreactionary thought, while glossing over the attendant bigotry. This has long been a goal of some in the movement. One such moderate—if the word can be used in this context—is Patri Friedman, grandson of the late libertarian demigod Milton Friedman. The younger Friedman expressed the need for “a more politically correct dark enlightenment” after a public falling out with Yarvin in 2009.

Friedman has lately been devoting his time (and leveraging his family name) to raise money for the SeaSteading Institute, which, as the name suggests, is a blue-sea libertarian dream to build floating fiefdoms free of outside regulation and law. Sound familiar?

The principal backer of the SeaSteading project, Peter Thiel, is also an investor in companies run by Balaji Srinivasan and Curtis Yarvin. Thiel is a co-founder of PayPal, an original investor in Facebook and hedge fund manager, as well as being the inspiration for a villainous investor on the satirical HBO series Silicon Valley. Thiel’s extreme libertarian advocacy is long and storied, beginning with his days founding the Collegiate Network-backed Stanford Review. Lately he’s been noticed writing big checks for Ted Cruz.

He’s invested in Yarvin’s current startup, Tlon. Thiel invested personally in Tlon co-founder John Burnham. In 2011, at age 18, Burnham accepted $100,000 from Thiel to skip college and go directly into business. Instead of mining asteroids as he originally intended, Burnham wound up working on obscure networking software with Yarvin, whose title at Tlon is, appropriately enough, “benevolent dictator for life.”

California libertarian software developers inhabit a small and shallow world. It should be no surprise then, that, although Thiel has never publicly endorsed Yarvin’s side project specifically, or the neoreactionary program in general, there is definitely a whiff of something Moldbuggy in Thiel’s own writing. For instance, Thiel echoed Moldbug in an infamous 2009 essay for the Cato Institute in which he explained that he had moved beyond libertarianism. “I no longer believe that freedom and democracy are compatible,” Thiel wrote.

Thiel’s eponymous foundation funds, among other things, an institute to advance the ideas of a conservative Stanford academic, René Girard, under whom Thiel studied as an undergraduate. In 2012 Thiel delivered a lecture at Stanford that explained his views regarding the divine rights of Silicon Valley CEOs. The lecture did address some of Girard’s ideas about historical “mimetics,” but it also contained a heavy dose of Moldbuggian thought. Thiel says:

A startup is basically structured as a monarchy. We don’t call it that, of course. That would seem weirdly outdated, and anything that’s not democracy makes people uncomfortable. We are biased toward the democratic-republican side of the spectrum. That’s what we’re used to from civics classes. But the truth is that startups and founders lean toward the dictatorial side because that structure works better for startups.

Might a dictatorial approach, in Thiel’s opinion, also work better for society at large? He doesn’t say so in his Stanford lecture (although he does cast tech CEOs as the heirs to mythical “god-kings” such as Romulus). But Thiel knows where to draw the line in mixed company. Ordinary people get so “uncomfortable” when powerful billionaires start talking about the obsolescence of participatory government and “the unthinking demos,” as he put it in his Cato essay. Stupid proles! They don’t deserve our brilliance! “The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom,” Thiel wrote.

It is clear that Thiel sees corporations as the governments of the future and capitalists such as himself as the kings, and it is also clear that this is a shockingly common view in Thiel’s cohort. In a 2011 New Yorkerprofile, George Packer wrote:

Thiel and his circle in Silicon Valley may be able to imagine a future that would never occur to other people precisely because they’ve refused to leave that stage of youthful wonder which life forces most human beings to outgrow . . . . He wants to live forever, have the option to escape to outer space or an oceanic city-state, and play chess against a robot that can discuss Tolkien, because these were the fantasies that filled his childhood imagination.

Packer is perhaps too generous to his subject. But he captures the fundamental problem with these mouthbreathers’ dreams of monarchy. They’ve never role-played the part of the peasant.

Corey Pein is a writer and reporter in Brighton, England. He offers free samples at coreypein.net.

 

http://thebaffler.com/blog/mouthbreathing-machiavellis#

Is the dotcom bubble about to burst (again)?

General-view-of-the-Santa-009

In Silicon Valley, millions of dollars change hands every day as investors hunt the next big thing – the ‘unicorn’, or billion-dollar tech firm. There are now almost 150, but can they all succeed?

Have you heard the story about the tip from the shoeshine boy, a Brit called James Pallot asks me on my last day at TechCrunch Disrupt. I have, I say, though later I Google it to get the facts straight.

It’s attributed to Joseph Kennedy, paterfamilias of the Kennedy clan who, in 1929, was getting his shoes shined by a young boy who was also making confident predictions about which stocks would rise. For Kennedy, it was a moment of revelation. He sold his portfolio. Not long afterwards, Wall Street crashed and the world was plunged into the greatest depression ever seen. So a tip from the shoeshine boy is a sign that the bubble is about to burst. That the wave of confidence will finally crash upon the shore. That the jig is up.

Pallot used to be the digital editorial director of Condé Nast in New York and now he has a startup. But then, we’re at the world’s biggest startup conference in San Francisco, a few miles down the road from Silicon Valley where the world’s greatest concentration of technology startups first started up.

His company is in the booming field of VR, or virtual reality, which is to 2015 roughly what Rubik’s Cubes were to 1982, though with rather bigger potential consequences. Pallot claims it’s the logical next step for journalistic content. In 20 years’ time, you won’t be reading this on the page, I’ll probably be leading you by the hand through a 3D rendering of a virtual TechCrunch conference floor. Or, more likely, you’ll be leading yourself and I’ll be claiming jobseeker’s allowance.

But anyway. In the meantime, Pallot asks me if I’ve heard of the tip from the shoeshine boy. I have, I say, and tell him it’s been on my mind. Because for three days, I’ve been hearing about “unicorns” – a Silicon Valley term for companies that have been valued at more than $1bn. When this usage was first coined, less than two years ago, there were 39 of them. Today, there are 147. Or as Matthew Wong, a senior analyst at CB Insights, tells me: “The funding is at levels that we haven’t seen since 2000.”

As those with longer memories will recall, that was the year the dotcom bubble burst. It needs explaining because there are an awful lot of people at TechCrunch whose memories simply don’t go back that far: the typical startup founder is male and in his 20s. Back in 2000, Google was less than 18 months old and Facebook wasn’t even a glimmer in Mark Zuckerberg’s eye – he was still at high school. (At 31, he’s now practically Silicon Valley’s elder statesman.)

Everything has changed. And is changing at an ever-faster pace. Eight years ago, TechCrunch launched its Disrupt conference with 45 startups. This year, there are 5,000 of them. Over three days I talk to founders of companies from San Francisco and Texas and Uruguay and Beirut and Stockholm and Tel Aviv and Warsaw. There are apps for crowdfunded mortgages and cheaper divorces and better sex. There’s “Expedia for golf” and “Facebook for cars” and “Nest for water” and “Tinder for dogs”. There’s a virtual reality teddy bear, a device that claims it will be able to read your emotions via a contact lens in your eye and another that will automate your home cannabis farm (marijuana is a big deal in Silicon Valley right now). I miss the panel on nuclear fusion startups but they’re around.

They’ve all paid upwards of $3,000 (£1,900) to be here and they’re all trying to attract the attention of Silicon Valley’s biggest beasts. The VCs – venture capitalists to you and me. The money guys.

“How do you spot them?” I ask Peter Becronis, the founder of a real estate startup called Owner’s Vault. “Oh, it’s easy,” he says. “They’re all men, older guys who are in jeans and brown boots and perhaps a blue jacket. Oh, and a good watch. They’re the ones who shuffle past you trying not to catch your eye.”

It’s a long shot for the likes of Becronis to be here, but not a total pipe dream. Because hundreds of startups are being funded each month. Vast sums of money are changing hands. Crunchbase, TechCrunch’s sister site, lists the deals that are being done on a daily basis. On the day I write this, I check it and find 24 companies that have just received funding, including Kreditech, which got $92m (it uses “big data and complex machine-learning algorithms to credit score everyone worldwide”) and Medium, which received $57m (it’s a platform that has found another new business model that seems to involve not paying journalists).

Every month the amount of money being invested in early-stage startups goes up. And every month, more and more people are starting to use the B-word. Bubble. The last time this amount of money was swilling around, we know how it ended. “Back then, a lot of websites launched but that’s all they were, websites,” Mike Butcher, TechCrunch’s editor-at-large, tells me. “Now in 2015, all those technologies that were predicted – AI, drones, VR – have all turned up. The innovation is real. And it just continues to get bigger and bigger. There are more VC firms here than you can poke a stick at.

“Is it a bubble?” he asks and then answers the question himself, vividly, if not entirely clearly. “It depends. How many unicorns can you fit through the eye of a needle? Anyway, unicorns are over. It’s all about decacorns now. Companies that are worth tens of billions of dollars.”

In 2000 the bubble was in publicly listed companies – organisations like the then upstart AOL, which bought Time Warner for $164bn, the largest merger in America business history, and then most spectacular blow-up. Or in Britain,Lastminute.com, whose share price peaked at 511p before crashing to 80p a month later. Both companies survived, unlike many, but it was a long struggle back up for both of them. (In a neat bit of circularity, AOL bought TechCrunchalong the way.) In 2015, it’s private money flowing into companies that may or may not go public one day.

The shoeshine boy wouldn’t be tipping stocks in 2015, but what would he be doing? I ask Ned Desmond, the chief operating officer of TechCrunch. He thinks for a moment. “He would probably be an Uber driver who has his own angel investment line,” he says.

But James Pallot tops that. He’s flown in from JFK and had his shoes shined in the airport. “And the guy had a startup. I literally got a tip from the shoeshine boy! He was trying to find an investor for his national shoeshine franchise.” But then, in many ways, there has never been a better time to be a startup. Niko Bonatsos, a VC with General Catalyst Partners, tells me that the sheer number of companies at TechCrunch “speaks volumes about how the barriers to entry have been removed. It’s really easy to start a company. And lots of companies from other parts of the world see this as a lottery ticket. And for some of them, it will be. It’s the survival of the fittest. And the luckiest.”

Pallot and his co-founder are currently “bootstrapping” their company, Emblematic Group, which is creating virtual reality news content. “Bootstrapping” is Silicon Valley jargon. It means getting by with what you’ve got. It’s how people have set up companies since the dawn of capitalism. You start a business with a bit of money you already have and you try to attract customers and build it from there.

“Bootstrapping” is how you figure out if there’s a market and, if so, how you reach it. It’s also, like, totally 20th century. The reason 5,000 companies pay $3,000-plus to come to TechCrunch is because Silicon Valley has another model. People – strangers – will give you vast sums of cash to build your company into a global brand overnight. If you can deliver the killer pitch. The pitch that convinces the valley’s top VCs that you are the next Facebook, the next Uber, the next Airbnb.

“It doesn’t work like this in the rest of the world,” Ned Desmond tells me. “In Indonesia or Turkey or wherever, normal business culture demands collateral and security. Venture investing has none of that. You are investing in potential.” You’re gambling, basically. Silicon Valley, in 2015, is a giant casino. And the bets are so large because the potential payoffs are so huge. The next Google has to start somewhere.

So is it a bubble? “Everything is cyclical,” says Desmond. Does he remember the last crash? “I was there! I was in it. It was terrible. We had just launched a magazine, Business 2.0. Even the name sounds so cringeworthy now. We launched in May 2000 with a record number of advertisements. We had 150 ad pages. A year on, we had 15.”

This is not exactly an answer, so I try again. Is it a bubble? “We published a graph showing the unicorns. It’s a hockey stick. It’s near vertical growth.”

CONTINUED:

http://www.theguardian.com/technology/2015/oct/04/is-dotcom-bubble-about-to-burst-again?CMP=fb_us

 

Kids Who Use Computers Heavily in School Have Lower Test Scores

In top performing nations, teachers, not students, use technology.

For those of us who worry that Google might be making us stupid, and that, perhaps, technology and education don’t mix well, here’s a new study to confirm that anxiety.

The Organization for Economic Cooperation and Development (OECD) looked at computer use among 15-year-olds across 31 nations and regions, and found that students who used computers more at school had both lower reading and lower math scores, as measured by PISA or Program for International Student Assessment. The study, published September 15, 2015, was actually conducted back in 2012, when the average student across the world, for example, was using the Internet once a week, doing software drills once a month, and emailing once a month. But the highest-performing students were using computers in the classroom less than that.

“Those that use the Internet every day do the worst,” said Andreas Schleicher, OECD Director for Education and Skills, and author of “Students, Computers and Learning: Making the Connection,” the OECD’s first report to look at the digital skills of students around the world. The study controlled for income and race; between two similar students, the one who used computers more, generally scored worse.*

Home computer use, by contrast, wasn’t as harmful to academic achievement. Many students in many high performing nations reported spending between one to two hours a day on a computer outside of school. Across the 31 nations and regions, the average 15-year-old spent more than two hours a day on the computer. (Compare your country here).

Back in the classroom, however, school systems with more computers tended to be improving less, the study found. Those with fewer computers were seeing larger educational gains, as measured by PISA test score changes between 2009 and 2012.

“That’s pretty sobering for us,” said Schleicher in a press briefing. “We all hope that integrating more and more technology is going to help us enhance learning environments, make learning more interactive, introduce more experiential learning, and give students access to more advanced knowledge. But it doesn’t seem to be working like this.”

Schleicher openly worried that if students end up “cutting and pasting information from Google” into worksheets with “prefabricated” questions, “then they’re not going to learn a lot.”

“There are countless examples of where the appropriate use of technology has had and is having a positive impact on achievement,” said Bruce Friend, the chief operating officer of iNACOL, a U.S.-based advocacy group for increasing the use of technology in education. “We shouldn’t use this report to think that technology doesn’t have a place.”

Friend urges schools in the U.S. and elsewhere to train teachers more in how to use technology, especially in how to analyze real-time performance data from students so that instruction can be modified and tailored to each student.

“Lots of technological investments are not translating into immediate achievement increases. If raising student achievement was as easy as giving every student a device, we would have this solved. It’s not easy,”  Friend added.

In a press briefing on the report, Schleicher noted that many of the the top 10 scoring countries and regions on the PISA test, such as Singapore and Shanghai, China, are cautious about giving computers to students during the school day. But they have sharply increased computer use among teachers. Teachers in Shanghai, Schleicher explained, are expected to upload lesson plans to a database and they are partly evaluated by how much they contribute. In other Asian countries, it is common for teachers to collaborate electronically in writing lessons. And technology is used for video observations of classrooms and feedback. “Maybe that’s something we can learn from,” said Schleicher.

In addition to comparing computer use at schools with academic achievement, the report also released results from a 2012 computerized PISA test that assessed digital skills. U.S. students, it turns out, are much better at “digital reading” than they are at traditional print reading. The U.S. ranked among the group of top performing nations in this category. In math, the U.S. was near the worldwide average on the digital test, whereas it usually ranks below average on the print test.

The digital reading test assesses slightly different skills than the print test. For example, students are presented with a simulated website and asked to answer questions from it. Astonishingly, U.S. students are rather good at remaining on task, clicking strategically and getting back on track after an errant click. By contrast, students in many other nations were more prone to click around aimlessly.

Interestingly, there wasn’t a positive correlation between computer usage at school and performance on the digital tests. Some of the highest scoring nations on the digital tests don’t use computers very much at school.

In the end, 15-year-old students need good comprehension and analysis skills to do well in either the print or the digital worlds. This study leaves me thinking that technology holds a lot of promise, but that it’s hard to implement properly. Yes, maybe there are superstar teachers in Silicon Valley who never get rattled by computer viruses, inspire their students with thrilling lab simulations and connect their classroom with Nobel Prize-winning researchers. But is it realistic to expect the majority of teachers to do that? Is the typical teacher’s attempt to use technology in the classroom so riddled with problems that it’s taking away valuable instructional time that could otherwise be spent teaching how to write a well-structured essay?

Perhaps, it’s best to invest the computer money, into hiring, paying and training good teachers.

* In reading, students who used the computer a little bit did score better than those who never used a computer. But then as computer use increased beyond that little bit, reading performance declined. In math, the highest performing students didn’t use computers at all.

Jill Barshay, a contributing editor, is the founding editor and writer of Education By The Numbers, The Hechinger Report’s blog about education data. Previously she was the New York bureau chief for Marketplace, a national business show on public radio stations.

 

http://www.alternet.org/education/kids-who-use-computers-heavily-school-have-lower-test-scores-major-worldwide-study-finds?akid=13514.265072.xVwtFY&rd=1&src=newsletter1042914&t=18