Every time I hit the “I Agree” tag on a commercial, government or health care web site I have mixed feelings. One is positive because agreement will give me passage to a flow of information between me and the site owner. The other is trepidation because I am uncertain how my personal information will be used. These hits occur by the millions every hour. With every hit, the volume of data under the control of the various data aggregators mushrooms.
Never before, humanity as a whole has given away a valuable good (in this case private personal information) at such a huge scale in return of benefits we can hardly grasp and without any competitive mechanism that would give us some bargaining power. Once our data are collected, they are compiled, spliced, diced and analyzed to yield as much information about our identity, habits and relationships. Then the scary part comes: the manipulation of our emotions and the programming of our next moves. From my reading on the subject, I have come down to understanding this business as a three-stage process: data collection; information processing; manipulation and programming of human action.
The private data industry is nothing resembling the perfect competition of Economics 101 textbooks. It is highly oligopolistic and anti-competitive. It is part of what Shoshana Zuboff (NYT Jan. 26, 2020) calls Surveillance Capitalism. It is concentrated in the hands of few players, the most formidable being the Big Four: Amazon, Google, Facebook and Microsoft. The private data industry works like a natural monopoly. That is, the firm that first achieves a critical volume in its business is the one that keeps expanding thwarting competition from others. As someone put it, “it doesn’t make sense for you and your friend to be on different Facebook-like platforms if the two of you cannot communicate.” But these giants don’t leave things to chance. Once a potent start-up rival appears on the horizon, they buy it out. They devour their competitors as if they are playing Pac Man.
According to Zuboff, the concentration of private data leads to epistemic inequality, that is, an uneven distribution of knowledge. A few large players know a lot more about everyone and everything than the rest of us. And because private information about us can be gleaned from the release of data by our relations, we have no idea what the data aggregators know about us.
I have limited footprint in social media but from my occasional online buying I know that each time we buy an item, we are prompted to consider other items that presumably appeal to our taste or that of cohort groups. By analyzing our information, data aggregators can infer our preferences and influence our choices. Now, if such firms are really able to coral large numbers of consumers to buy their suggested goods and services, you can plan the production and sales of manufacturers and vendors. The until a few years ago unpredictable consumption patterns of millions of people now become a little more predictable. Project this line of data-information processing-manipulation longer and longer and you arrive close to a centrally planned economy. With hindsight, we can say Lenin misspoke when he said “The capitalists will sell us the rope with which we will hang them.” Instead, he should have said “The capitalists will sell us the data to plan them.” Had the Soviet Union survived thirty more years, this could have possibly happened.
Corporations are, after all, mini planned economies. One of the first things I learned as an MBA student was the value of planning. To plan what millions of consumers will purchase is a very inexact science. But if you have access to information and behavioral buying patterns provided by big data aggregators you can reduce the uncertainty to manageable levels. This means corporations have a big interest in manipulated and programmed activities which makes them natural allies of the data aggregators. This means there is a strong lobby willing to resist serious government oversight. The US Congress, for one, has been quite inactive in relation to this matter. Data collection and oligopoly on information and knowledge are, however, too important to ignore for the health of an open economic and democratic society.
These thoughts are echoed in the article “Can technology plan economies and destroy democracy?” by Benedetto Cristofani in the Christmas 2019 edition of The Economist. This article as well as Zuboff’s piece in the NYT and another related article by Yuval Harari (author of Sapiens) in the October 2019 issue of The Atlantic make the same points. Namely, exploitation of private personal data diminishes individual autonomy. Individual autonomy is based on diffuse and decentralized information. When information is concentrated in the hands of a few players, individuals can be herded toward behavior that is not necessarily optimal to them.
Ironically, surveillance capitalism is the perverse result of a democratic system averse to regulation of large business as it slowly slides toward economic and political oligarchy. As such, surveillance capitalism is the exact opposite outcome of what libertarians, the defenders of individualism, would advocate for but are unwilling to block. In this new world, the arguments of unfettered market evangelists, like the Austrian Economist Friedrich Hayek and the American economist Milton Friedman, that free markets and democracies are superior to command economies and centralized political systems thanks to the free flow of information and knowledge are severely challenged. Private data in the hands of Artificial Intelligence could move the “invisible hand” more efficiently than free markets. But this “invisible hand” would be waved by a centralized cabal not by multitudes of autonomous individuals.
The end result of these possibilities and warnings may exaggerate the capabilities of information technologies and lie years ahead. But so did a lot of other transformative human inventions at the time they were imagined. So, it’s not too early to start reflecting and deliberating on what lies ahead.
Let's Reason 
One wonders whether, or how, Adam Smith would have amended his treatises taking into account the information-gathering oligopolistic characteristics of the current marketplace.
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