Tech titans are busy privatising our data
When Facebook and Google finally destroy the competition, a new age of feudalism will arrive.
Are we facing another tech bubble? Or, to put it in Silicon Valley speak, are most unicorn startups born zombies?
How you answer these questions depends, by and large, on where you stand on the overall health of the global economy. Some, like the prominent venture capitalist Peter Thiel, argue that virtually everything else – from publicly traded companies to houses to government bonds – is already overvalued. The options, then, are not many: either stick with liquid but low-return products such as cash – or go for illiquid but potentially extremely lucrative investments in tech startups.
If true, this is good news for Thiel and his peers, especially at a time of negative interest rates. And for the rest of us? Well, we are probably doomed.
For several months now, Alphaville, the excellent finance blog of the Financial Times – not your typical bastion of technophobia and capitalism-bashing – has been raising concerns about Silicon Valley’s effect on the rest of the economy. Its writers insist that, for all the highfalutin talk about radical transparency, the data-intensive business model adopted by leading tech firms actually distorts how markets operate, depriving them of essential information needed for the efficient allocation of resources.
How so? Since data – the fuel of advertising markets – is the source of their profits, tech firms are happy to offer, at highly subsidised rates, services and goods that yield even more data. Ultimately there is no limit as to what kind of goods and services those could be: they might have started with browsing and social networking, but they are as happy to track us exercise, eat, drive or even make love: for them, it’s all just data – and data means cash.
All these subsidies, though, make it hard to understand what the underlying goods and services cost. And as these firms transcend our browsers and smartphones and enter into our homes and cars and bodies, we should expect even more distortion of price signals.
cont'd
http://www.theguardian.com/commentisfree/2016/apr/24/the-new-feudalism-silicon-valley-overlords-advertising-necessary-evil
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