Thursday, June 25, 2015

The Logic of Surveillance Capitalism

You have probably noticed it already. There is a strange logic at the heart of the modern tech industry. The goal of many new tech startups is not to produce products or services for which consumers are willing to pay. Instead, the goal is create a digital platform or hub that will capture information from as many users as possible — to grab as many ‘eyeballs’ as you can. This information can then be analysed, repackaged and monetised in various ways. The appetite for this information-capture and analysis seems to be insatiable, with ever increasing volumes of information being extracted and analysed from an ever-expanding array of data-monitoring technologies.

The famous Harvard business theorist Shoshana Zuboff refers to this phenomenon as surveillance capitalism and she believes that it has its own internal ‘logic’ that we need to carefully and critically assess. The word ‘logic’ is somewhat obscure in this context. To me, logic is the study of the rules of inference and argumentation. To Zuboff, it means something more like the structural requirements and underlying principles of a particular social institution — in this instance the institutions of surveillance capitalism. But there’s no sense in getting hung up about the word. The important thing is to understand the phenomenon.

And that’s what I want to do in this post. I want to analyse Zuboff’s characterisation and assessment of the logic of surveillance capitalism. That assessment is almost entirely negative in nature, occasionally hyperbolically so, but contains some genuinely provocative insights. This is marred by the fact that Zuboff’s writings are esoteric and not always enjoyable to read. This is largely due to her opaque use of language. I’m going to try to simplify and repackage what she has to say here.

Zuboff identifies four key features in the logic of surveillance capitalism. In doing so, she explicitly follows the four key features identified by Google’s chief economist, Hal Varian. These four features are: (i) the drive toward more and more data extraction and analysis; (ii) the development of new contractual forms using computer-monitoring and automation; (iii) the desire to personalise and customise the services offered to users of digital platforms; and (iv) the use of the technological infrastructure to carry out continual experiments on its users and consumers.

Each of these four features has important social repercussions. Let’s look at them in more depth.

1. Data Extraction and Analysis
The first feature of surveillance capitalism is probably the most obvious. It is the insatiable appetite for data extraction and analysis. This what many refer to under the rubric of ‘big data’ and what people worry about when they worry about data protection and privacy. Zuboff says that there are two things you need to understand about this aspect of surveillance capitalism.

First, you need to understand the sources of the data, i.e. what it is that makes it fair to refer to this as the era of ‘big data’. There are several such sources, all of which feed into ever-increasing datasets, that are far beyond the ability of a human being to comprehend. The most obvious source of data is the data from computer-mediated transactions. The infrastructure of modern computing is such that every computer-mediated transaction is recorded and logged. This means that there is rich set of transaction-related data to be mined. In addition to this, there is the rise of the so-called internet of things, or internet of everything. This is the world being inaugurated by the creation of smart devices that can be attached to every physical object in the world, and can be used to record and upload data from those objects. Think about the computers in cars, lawnmowers, thermostats, wristwatches, washing machines and so on. Each one of these devices represents an opportunity for more data to be fed to the institutions of surveillance capitalism. On top of that there are the large datasets kept by governments and other bureaucratic agencies that have been digitised and linked to the internet, and the vast array of private and personal surveillance equipment. Virtually everything can now be used as a datasource for surveillance capitalism. What’s more, the ubiquity of data-monitoring is often deliberately hidden or ‘hidden in plain sight’. People simply do not realise how often, or how easy it is, for their personal data to be collected by the institutions of surveillance capitalism.

Second, you need to understand the relationship between the data-extracting companies, like Google, and the users of their services. The relationship is asymmetric and characterised by formal indifference and functional independence. Each of these features needs to be unpacked. The asymmetry in the relationship is obvious. The data is often extracted in the absence of any formal consent or dialogue. Indeed, companies like Google seem to have adopted an ‘extract first, ask later’ attitude. The full extent of data extraction is often not revealed until there is some scandal or leak. This was certainly true of the personal data about wi-fi networks extracted by Google’s Street View project. The formal indifference in the relationship concerns Google’s attitude toward the content of the data it extracts. Google isn’t particularly discriminating in what it collects: it collects everything it can and finds out uses for it later. Finally, the functional independence arises from the economic use to which the extracted data is put. Big data companies like Google typically do not rely on their users for money. Rather, they use the information extracted as a commodity they can sell to advertisers. The users are the product, not the customers.

It is worth dwelling on this functional independence for a moment. As Zuboff sees it, this feature of surveillance capitalism constitutes an interesting break from the model of the 20th century corporation. As set out in the work of economists like Berle and Means, the 20th century firm was characterised by a number of mutual interdependencies between its employees, its shareholders and its customers. Zuboff uses the example of the car-manufacturing businesses that dominated American in the mid-20th century. These companies relied on large and stable networks of employees and consumers (often one and the same people) for their profitability and functionality. As a result, they worked hard to establish durable careers for their employees and long-term relationships with their customers. It is not clear that surveillance companies like Google are doing the same thing. They do not rely on their primary users for profitability and often do not rely on human workers to manage their core services. Zuboff thinks that this is reflected in the fact that the leading tech companies are far more profitable than the car-manufacturers ever were, while employing far fewer people.

For what it’s worth, I fear that Zuboff may be glorifying the reality of the 20th century firm, and ignoring the fact that many of Google’s customers (and Facebook’s and Twitter’s) are also primary users. So there are some interdependencies at play. But it might be fair to say that the interdependencies have been severely attenuated by the infrastructure of surveillance capitalism. Companies really do require fewer employees, with less stable careers; and there is not the same one-to-one relationship between service users and customers.

One final point about data extraction and analysis. There is an interesting contrast to be made between the type of market envisaged by Varian, and made possible by surveillance capitalism, and the market that was beloved by the libertarian free-marketeers of the 20th century. Hayek’s classic defence of the free market, and attack on the centrally-planned market, was premised on the notion that the information needed to make sensible economic decisions was too localised and diffuse. It could not be known by any single organisation or institution. In a sense, the totality of the market was unknowable. But surveillance capitalism casts this into doubt. The totality of the market may be knowable. The implications of this for the management of the economy could be quite interesting.

2. New Contractual Forms
Whereas data extraction and analysis are obvious features of surveillance capitalism, the other three features are slightly less so. The first of these, and arguably the most interesting, is the new forms of contractual monitoring and enforcement that are made possible by the infrastructures of surveillance capitalism.

These infrastructures allow for real-time monitoring of contractual performance. They also allow for real-time enforcement. You will no longer need to go to court to enforce the terms of a contract or terminate a contract due to breach of terms. The technology allows you to do that directly and immediately. Varian himself gives some startling examples (I’m here quoting Zuboff describing Varian’s ideas):

New Contractual Monitoring and Enforcement: “If someone stops making monthly car payments, lenders can ‘instruct the vehicular monitoring system not to allow the car to be started and to signal the location where it can be picked up.’ Insurance companies, he suggests, can rely on similar monitoring systems to check if customers are driving safely and thus determine whether or not to maintain their insurance or pay claims.” 
(Zuboff 2015, 81)

I can imagine similar scenarios. My health insurance company could use the monitoring technology in my smartwatch to check to see whether I have been doing my 10,000 steps a day. If I have not, they could refuse to pay for my medical care. All sorts of social values could be embedded into these new contractual forms. The threat of withdrawing key services or disabling products will be ever-present.

Zuboff argues that if such a system of contractual monitoring and enforcement becomes the norm it will represent a radical restructuring of our current political and legal order. Indeed, she argues that it would represent an a-contractual form of social organisation. Contract, as conceived by the classic liberal writers, is a social institution built upon a foundation of trust, solidarity and rule of law. We know that we cannot monitor and intervene in another person’s life whenever we wish, thus when we rely on them for goods and services, we trust that they will fulfil their promises. We have recourse to the law if they do not. But this recourse to the law is in explicit recognition of the absence of perfect control.

Things are very different in Varian’s imagined world. With perpetual contractual monitoring and enforcement, there is no real need for social solidarity and trust. Nor is there any real need for the residual coercive authority of the law. This is because there is the prospect of perfect control. The state need no longer be a central mediator and residual enforcer of promises. Indeed, there is no real need for the act of promising anymore: you either conform and receive the good/service; or you don’t and have it withdrawn/disabled. Your promise to conform is irrelevant.

This new contractual world has one other important social repercussion. According to Zuboff, under the traditional contractual model there was a phenomenon of anticipatory conformity. People conformed to their contractual obligations, when they were otherwise unwilling to do so, because they wished to avoid the coercive sanction of the law. In other words, they anticipated an unpleasant outcome if they failed to conform. She believes that Varian’s model of contractual monitoring and enforcement will give rise to a distinct phenomenon of automatic conformity. The reality of perpetual monitoring and immediate enforcement will cause people will instinctively and habitually conform. They will no longer choose to conform; they will do so automatically. The scope of human agency will be limited.

This is all interesting and provocative stuff. I certainly share some of Zuboff’s concerns about the type of monitoring and intervention being envisaged by the likes of Varian. And I agree that it could inaugurate a radical restructuring of the political-legal order. But it may not come to that. Just because the current technology enables this type of monitoring and intervention doesn’t necessarily mean that we will allow it do so. The existing political legal order still dominates and has a way of (eventually) applying its principles and protections to all areas of social life. And there is still some scope for human agency to shape the contents of those principles and protections. These combined forces may make it difficult for insurance companies to set-up the kind of contractual system Varian is imagining. That said, I recognise the countervailing social forces that desire that kind of system too. The desire to control and minimise risk being one of them. There is a battle of ideas to be fought here.

3. Personalisation and Customisation of Services
The third structural feature of surveillance capitalism is its move towards the customisation and personalisation of services. Google collects as much personal data as it can in order to tailor what kinds of searches and ads you see when you use its services. Other companies do the same. Amazon tries to collect information about my book preferences; Netflix tries to collect information about my viewing habits. Both do so in an effort to customise the experience I have when I use their services, recommending particular products to me on the basis of what they think I like.

Zuboff thinks that there is something of a ‘Faustian pact’ at the heart of all this. People trade personal information for the benefits of the personal service. As a result, they have given up privacy for an economic good. Varian thinks that there is nothing sinister or worrisome in this. He uses the analogy of the doctor-patient or lawyer-client relationships. In both cases, the users of services share highly personal information in exchange for the benefits of the personal service, and no one thinks there is anything wrong about this. Indeed, it is typically viewed as a social good. Giving people the option of trading privacy for these personalised services can improve the quality of their lives.

But Zuboff resists this analogy. She argues that something like the doctor-patient relationship is characterised by mutual interdependencies (i.e. the doctor relies on the patient for a living; the patient relies on the doctor to stay alive) and are protected and grounded in the rule of law. The disclosures made by are limited, and subject to an explicit consensual dialogue between the service user and service provider. The relationship between Google and its users is not like this. The attempts at consensual dialogue are minimal (and routinely ignored). It is not characterised by mutual interdependencies; it often operates in a legal vacuum (extract first, ask questions later); and there are no intrinsic limits to the extent of the information being collected. In fact, the explicit goal of companies like Google is to collect so much personal information that they know us better than we know ourselves.

The Faustian pact at the heart of all this is that users of these digital services are often unaware of what they have given up. As Zuboff (and others) put it: surveillance capitalism has given rise to a massive redistribution of privacy rights, from private citizens to surveillance companies like Google. Privacy rights are, in effect, decision rights: they confer an entitlement to choose where on the spectrum between complete privacy and total transparency people should lie. Surveillance capitalism has allowed large companies to exercise more and more control over these kinds of decisions. They collect the information and they decide what to do with it.

That said, Zuboff thinks people may be waking up to the reality of this Faustian pact. In the aftermath of the Snowden leak, and other data-related scandals, people have become more sensitive to the loss of privacy. Legal regimes (particularly in Europe) seem to be resisting the redistribution of privacy rights. And some companies (like Apple in recent times) seem to be positioning themselves as pro-privacy.

4. Continual Experimentation
The final feature of surveillance capitalism is perhaps the most novel. It is the fact that technological infrastructure allows for continual experimentation and intervention into the lives of its users. It is easy to test different digital services using control groups. This is due to the information collected from user profiles, geographical locations, and so on. There are some famous examples of this too. Facebook’s attempt to manipulate the moods of its users being the most widely-known and discussed.

Varian argues that continual experimentation of this sort is necessary. Most methods of big data analytics do not allow companies to work out relationships of cause and effect. Instead, they only allow them to identify correlational patterns. Experimental intervention is needed in order to tease apart the causal relationships. This information is useful to companies in their effort to personalise, customise and generally improve the services they are offering.

Zuboff gets a little bit mystical at this stage in her analysis. She argues that this sort of continual intervention and experimentation gives rise to reality mining. This is distinct from data-mining. With continual experimentation, all the objects, persons and events in the real world can be captured and altered by the technological infrastructure. Indeed, the distinction between the infrastructure and the external world starts to breakdown. As she puts it herself:

Data about the behaviors of bodies, minds and things take their place in a universal real-time dynamic index of smart objects within an infinite global domain of wired things. This new phenomenon produces the possibility of modifying the behaviors of persons and things for profit and control. In the logic of surveillance capitalism there are no individuals, only the world-spanning organism and all the tiniest elements within it. 
(Zuboff 2015, 85)

I’m not sure what Zuboff means by an ‘infinite domain of wired things’. But setting that aside, it seems to me that, in this quote, with its mention of the “world-spanning organism”, Zuboff is claiming that the apotheosis of surveillance capitalism is the construction of a Borg-like society, i.e. a single collective organism that consumes reality with its technological appendages. The possibility and desirability of such a society is something I discussed in an earlier post.

5. Conclusion
To sum up, Zuboff thinks that there are four key structural features to surveillance capitalism. These four features constitute its internal logic. Each of the features has important social and political implications.

The first feature is the trend toward ever-greater levels of data extraction and analysis. The goal of companies like Google is to extract as much data from you as possible and convert it into a commodity that can be bought and sold. This extractive relationship is asymmetrical and devoid of the mutual interdependencies that characterised 20th century corporations like General Motors.

The second feature is the possibility of new forms of contractual monitoring and enforcement. The infrastructure of surveillance capitalism allows for contracts to be monitored and enforced in real-time, without the need for legal recourse. This would constitute a radical break with the classic liberal model of contractual relationship. There would be no need for trust, solidarity and rule of law.

The third feature is the desire to personalise and customise digital services, based on the data being extracted from users. Though there may be some benefits to these personal services, the infrastructure that enables them has facilitated a considerable redistribution of privacy rights from ordinary citizens to surveillance capitalist firms like Google and Facebook.

The fourth, and final feature, is the capacity for continual experimentation and intervention into the lives of the service users. This gives rise to what Zuboff calls reality-mining, which in its most extreme form will lead to the construction of a ‘world-spanning organism’.

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