This article published in Bloomberg should give us pause, because it’s not only in China where real estate leverage has become too big to fail. (And our POTUS is a real estate magnate.) In the aftermath of the financial crisis of 2008, real estate portfolios were not allowed to fail and Fed credits were used to protect excessive investment. Now we have a stark divide in the fundamental values of real estate versus the inflated prices of a product that is tax-subsidized and priced solely on the margin. As a speculative trading asset rather than basic shelter, housing has now become the tail that wags the dog of our lives. This is pretty insane, and plants us back in the age of land feudalism.
The problem, which is not only a US problem but a global one, is excess cheap credit that has led to a generational credit-debt bubble in the private and public sectors. It promotes the imbalance between China and the rest of the world and drives inequality world-wide. It reflects coordinated central bank policy under the leadership of the US Federal Reserve that was made possible by the untethering of fiat currencies – giving governments world-wide discretion over the value of their currencies. We’ve tried to grow faster than our productivity warrants. It has greatly increased systemic risk, price volatility, and uncertainty over price signals. For example, what is a house really worth? $100K of materials or $5 million based on the marginal value of land? Or how much somebody can borrow against it?
Ultimately, the value of scarce land will have to be taxed accordingly, an idea put forth by Henry George more than a century ago.
This property developer is borrowing even more to expand into unlikely projects, such as electric vehicles. But there’s a method to the madness.
There’s a lot working against China’s most indebted property firm. China Evergrande Group is sitting on $113.7 billion in debt and its core profit fell 45% in the first half of the year. Real-estate growth is slowing, with banks under orders to curb home loans. President Xi Jinping’s refrain that houses are for living in, not speculation, has been cropping up more frequently.
Time to rein things in, right? Not Evergrande. The company, whose portfolio already includes theme parks and a football club, now wants to become the world’s biggest electric-vehicle maker in the next three to five years. It’s burning through precious cash – 160 billion yuan ($22 billion) – to build factories in Guangzhou.
Investors are voting on this folly with their feet. The company’s shares have fallen 30% this year, making Evergrande the worst performer among Hong Kong-listed Chinese developers. The property firm’s borrowing costs are among the highest in the offshore dollar market and its bonds are tumbling.
For anyone gawking at Evergrande’s improbably ballooning debt load, just waiting for the doomsday clock to strike midnight, there’s a valuable lesson: This firm is too big to fail. Evergrande is one of China’s biggest developers – with projects in 226 cities – and its billionaire founder, Hui Ka Yan, is the country’s third-richest man. With property accounting for about a quarter of China’s gross domestic product, any instability in the sector has proven too much for Beijing to stomach. Time and again, the government has reluctantly reopened the credit spigots to boost a flagging real-estate market. Just look at 2008, 2011 and 2014. [As we have in the US, leading to a big gap between those who own real estate and those who rent or would like to buy.]
Crucially, Evergrande has China’s largest land reserve, with 276 million square meters (905 million square feet) of gross floor area, according to Citigroup Inc. While the developer has a lot of exposure to China’s smaller cities, where growth is slowing rapidly, it also dominates redevelopment in big, rich cities such as Shenzhen, where profit margins are robust.
Land is scarce in Shenzhen, and urban renewal – demolishing old, low-density buildings to make way for high-rise apartments – is widely seen as the answer to the city’s growing population. These projects also give Evergrande access to cheap lots, which helps keep its land costs among the lowest of its peers, according to Toni Ho, an analyst at RHB Securities. If the protests in Hong Kong accelerate China’s plans to make Shenzhen the the next “global cosmopolis,” according to state-run Xinhua News Agency, Evergrande could be in a plum position.
The company’s diversification into electric cars is sure to bleed money for years, and competition is getting stiffer. During his visit to China last week, Elon Musk managed to score a tax break for Tesla Inc. But carrying out one of Xi’s signature projects has its perks: For example, clean-car manufacturers can get land much more cheaply from local governments than real-estate developers. That helps explain why a host of firms including Country Garden Holdings Co. and Agile Group Holdings Ltd. are jumping in.
Being in Beijing’s favor and securing low-cost inputs is no bad thing for a cash-strapped developer like Evergrande. Maybe there’s a method to the madness of its wild spending.
The Gig Economy has merely exposed the lie that our labor is the most valuable asset we own. Rather, our man-hours have been depreciated drastically in the last 50 years. Much of this has been due to the explosion in capital credit after the abandonment by Nixon in 1971 of the gold peg under the Bretton Woods international monetary regime. This has led to capital-labor substitution, technological innovation, and productivity increases that have reduced the demand for labor, both skilled and unskilled. It’s made some of us richer.
The second contributing factor has been capital mobility under globalization and the liberalization of the populations of the developing world. This has led to a vast increase in the supply of both skilled and unskilled labor. China and India, for the past 30 years, but we still have Africa and South America in the pipeline.
The combined effect of these policies and geopolitical trends has driven the marginal price of labor down towards the subsistence level. We need to think outside this shrinking box. Btw, union organization will do nothing to reverse these trends unless the focus is not on controlling the supply of labor and artificially raising wages. Asset ownership, risk sharing, and personal data ownership are key.
(Note: We can’t really expect Vanity Fair to tackle these issues.)
In the heart of San Francisco, the gig economy reigns supreme. Walk into a grocery store, and a large number of shoppers you see are independent contractors for grocery-delivery start-up Instacart. Step outside, and cars with black-and-white Uber stickers or flashing Lyft dashboard lights are sitting, hazards on, blocking the bike lane as they wait for passengers. Cyclists zigzag around the cars, many hauling bags branded with various logos—Caviar, Postmates, Uber Eats—as they deliver food to customers around the city. You can stand on a street corner and count the number of gig-economy workers walking by, as I often do; sometimes it’s 2 out of every 10. On some corners, like the one near the Whole Foods on 4th and Harrison, I’ve counted 8 out of every 10.
The gig-economy ecosystem was supposed to represent the promised land, striking a harmonious egalitarian balance between supply and demand: consumers could off-load the drudgery of commuting or grocery shopping, while workers were set free from the Man. “Set your own schedule,” touts the Uber-driver Web site; “Be your own boss,” tempts Lyft; “Make an impact on people’s lives,” lures Instacart. These companies have been wildly successful: Uber, perhaps the most notorious, is also the most valuable start-up in the U.S., reportedly worth $72 billion. Lyft is valued at $11 billion, and grocery delivery start-up Instacart is valued at just over $4 billion. In recent months, however, a spate of lawsuits has highlighted an alarming by-product of the gig economy—a class of workers who aren’t protected by labor laws, or eligible for benefits provided to the rest of the nation’s workforce—evident even to those outside the bubble of Silicon Valley. A July report commissioned by the New York City Taxi and Limousine Commission found that 85 percent of New York City’s Uber, Lyft, Juno, and Via drivers earn less than $17.22 an hour. When the California Supreme Court ruled in May that delivery company Dynamex must treat its gig workers like full-time employees, Eve Wagner, an attorney who specializes in employment litigation, predicted to Wired, “The number of employment lawsuits is going to explode.”
Of course, the threads of this disillusionment are woven into the very structure that has made these start-ups so successful. A few weeks into my tenure at Uber, where I started as a software developer just a year after graduating from college, still blindly convinced I could make the world a better place, a co-worker sat down next to my desk. “There’s something you need to know,” she said in a low voice, “and I don’t want you to forget it. When you’re writing code, you need to think of the drivers. Never forget that these are real people who have no benefits, who have to live in this city, who depend on us to write responsible code. Remember that.”
I didn’t understand what she meant until several weeks later, when I overheard two other engineers in the cafeteria discussing driver bonuses—specifically, ways to manipulate bonuses so that drivers could be “tricked” into working longer hours. Laughing, they compared the drivers to animals: “You need to dangle the carrot right in front of their face.” Shortly thereafter, a wave of price cuts hit drivers in the Bay Area. When I talked to the drivers, they described how Uber kept fares in a perfectly engineered sweet spot: just high enough for them to justify driving, but just low enough that not much more than their gas and maintenance expenses were covered.
Those of us on the front lines of the gig economy were the first to spot and expose its flaws—two months after leaving Uber, I wrote a highly publicized account of my time there, describing the company’s toxic work environment in detail. Now, as Silicon Valley struggles to come to terms with its corrosive underpinnings, a new vein of disquiet has wormed its way into the Slack chats and happy-hour outings of low-level rank-and-file engineers, spurred by a question that seems to drown out everything else: What have we done? It’s a question that I, too, have been forced to grapple with as I notice how my job as a software engineer has changed the nature of work in general—and not necessarily for the better.
The risk, we agreed, is that the gig economy will become the only economy.
Gig-economy “platforms,” as they’re called, take their inspiration from software engineering, where the goal is to create modular, scalable software applications. To do this, engineers build small pieces of code that run concurrently, dividing a task into ever smaller pieces to conquer it more efficiently. Start-ups function in a similar way; tasks that used to make up a single job are broken down into the smallest possible code pieces, then partitioned so those pieces can be accomplished in parallel. It’s been a successful approach for start-ups for the same reason it’s a successful approach to writing code: it is perfectly, beautifully efficient. Across so-called platforms, there are no individuals—no bosses delegating tasks. Instead, various algorithms run on the platform, matching consumers with workers, riders with the nearest driver, and hungry customers with delivery people, telling them where to go, what to do, and how to do it. Constant needs and their quick solutions all hummingly, perpetually aligned.
By now it’s clear that these companies represent more than a trend. Though it’s difficult to accurately determine the size of the gig economy—estimates range from 0.7 to 34 percent of the national workforce—the number grows with each new start-up that figures out how to break down another basic task. There’s a relatively low risk associated with launching gig-economy companies, start-ups that can engage in “a kind of contract arbitrage” because they “aren’t bearing the corporate or societal cost, even as they reap fractional or full-time value from workers,” explains Seattle-based tech journalist Glenn Fleishman. Thanks to this buffer, they’re almost guaranteed to multiply. As the gig economy grows, so too does the danger that engineers, in attempting to build the most efficient systems, will chop and dice jobs into pieces so dehumanized that our legal system will no longer recognize them. [Note: yes, labor contracts will be obsolete and meaningless, which means asset ownership is the only defensible right.] And along with this comes an even more sinister possibility: jobs that would and should be recognizable—especially supervisory and management positions—will disappear altogether. If a software engineer can write a set of programs that breaks a job into smaller increments, and can follow it up with an algorithm that fills in as the supervisor, then the position itself can be programmed to redundancy.
A few months ago, a lunchtime conversation with several friends turned to the subject of the gig economy. We began to enumerate the potential causes of worker isplacement—things like artificial intelligence and robots, which are fast becoming a reality, expanding the purview of companies such as Google and Amazon. “The displacement is happening right under our noses,” said a woman sitting next to me, another former engineer. “Not in the future—it’s happening now.”
“What can we do about it?” someone asked. Another woman replied that the only way forward was for gig-economy workers to unionize, and the table broke out into serious debate [Labor contracts, union or otherwise, will be legally ill-defined and indefensible]. Yet even as we roundly condemned the tech world’s treatment of a vulnerable new class of worker, we knew the stakes were much higher: high enough to alter the future of work itself, to the detriment of all but a select few. “Most people,” I said, interrupting the hubbub, “don’t even see the problem unless they’re on the inside.” Everyone nodded. The risk, we agreed, is that the gig economy will become the only economy, swallowing up entire groups of employees who hold full-time jobs, and that it will, eventually, displace us all. The bigger risk, however, is that the only people who understand the looming threat are the ones enabling it.
Mr. Kotkin offers a powerful warning for US politics. In a world where the nation-state and national sovereignty are the organizing principles of global politics, a national identity is the necessary glue that holds democracies together and strengthens them against chaotic change. Multiculturalism and identity group tribalism only weaken democratic societies.
By Joel Kotkin
City Journal, August 7, 2019
This week, the troubled state of American democracy was on display in the reactions to the mass shootings in Texas and Ohio. To the establishment Left, led by the New York Times, the El Paso shooter operated as if he were a white nationalist acting on orders from Donald Trump. Some on the right, meantime, linked the Dayton shooter’s actions to Antifa. In a healthy political environment, Americans, regardless of political views, would consider these tragedies the heinous actions of disturbed people, motivated mostly by a dangerous combination of madness and ideology. But in our warped political climate, everyone assumes that their enemies want to kill them.
Our political polarization reflects a decline in the notion of American identity. Tribalism on the left has supplanted foundational ideals of citizenship. Representative Ayanna Pressley recently insisted that blacks, Hispanics, gays, and members of other minority groups must promote identity-first politics over any notion of the common good; failure to do so, she suggested, is a betrayal of the group. In addition, progressive Democrats have effectively championed open borders, advocating the removal of criminal penalties for border-crossers, who also would get free health care not readily available to most American citizens. Such views represent the triumph of identity politics over the civic ideal of E Pluribus Unum.
The Left’s positions, according to Jeh Johnson, Homeland Security secretary under Barack Obama, are “unworkable, unwise,” and lack support of “a majority of American people or the Congress.” And yet our press, cultural institutions, and universities—all controlled by progressives—amplify those views each day, shaping an angry younger generation with little use for citizenship, free speech, open dialogue, democracy, or capitalism. Some 40 percent of millennials, for example, favor limiting speech deemed offensive to minorities—well above the 27 percent that prevails among Gen Xers, 24 percent among baby boomers, and just 12 percent among the oldest cohorts. Many millennials also dismiss basic constitutional civil rightsand support socialism over free markets.
While progressives seek to impose their agenda, some populist conservatives are understandably resentful at being told by 1 percenters like Beto O’Rourke that they are beneficiaries of “white privilege” and are members of the “male patriarchy.” Most Republicans, according to Pew, worry that foreigners are remaking and undermining the country’s identity. Considering the country’s demographic trajectory, this politics has a limited shelf life. A return to 1950s America is no more likely than the mass expulsion of Trump’s white “deplorables.”
Fighting for a robust and inclusive American identity won’t be popular with our corporate elite. “Transnational class formation”—long linked by various parts of the industrial and financial aristocracy—is becoming more pronounced. The late Peter Drucker, considered the father of management thinking, suggested that national citizenship may no longer be “meaningful” in a world connected by digital technology and global markets. Many top firms including Amazon, Apple, Chevron, and General Electric refuse even to identify as American companies. Like feudal lords loyal to the European Christianitas, not their locale, this corporate elite increasingly identifies with global markets and a cosmopolitan, post-national worldview. Since Trump’s election, many companies, including Google, have grown reluctant to work with the U.S. military, immigration agencies, and police departments, while assisting the surveillance agenda of authoritarian China.
Given their post-nationalist inclinations, it’s not surprising that many corporate powers—notably in tech—prefer unlimited immigration. This partly reflects the non-native share of the tech workforce, which has reached 24 percent nationwide, compared with 16 percent for the rest of labor force. In Silicon Valley, it’s roughly 40 percent. Though they defend open borders, tech leaders express little concern for the native-born, largely white middle class. Immigrants, suggests Steve Case, former CEO of AOL, should replace our troubled, indigenous working class.
Such positions invite backlash from those who live outside the charmed circle. After all, if uneducated migrants want to enter the country, they won’t settle in Malibu, posh parts of San Francisco, or the Upper East Side, but instead in working- and middle-class neighborhoods. They’ll compete for housing and jobs in hardscrabble neighborhoods, but they won’t bid up the price of houses in exclusive enclaves or threaten well-paid jobs in the executive suite or at universities.
Our present trajectory is ruinous; it will exacerbate political antagonism and likely produce even more politicized violence. The only solution to greater polarization lies in reestablishing the norms of a civic nationalism that transcends identity politics of all kinds.
Developing a renewed sense of American identity won’t be easy. As a lifelong Democrat, I saw nothing remotely unpatriotic in the rhetoric of George McGovern—a World War II hero—and certainly not from Jimmy Carter or Bill Clinton. Yet today, according to Gallup, only 22 percent of Democrats today say that they are “proud to be Americans,” down from 65 percent in 2003, when the widely disliked George W. Bush was in the White House. Modern progressives generally reject any thought of American exceptionalism, maintaining, in the words of Pete Buttigieg, that America was “never as great as advertised.”
It’s hard to build a positive agenda without some sense of national pride and shared culture. Fortunately, America’s founding principles—rule of law, protection of minority rights, market-based capitalism—are not dependent on race and heritage. Unlike Europe, we don’t have one great historic tradition that we must embrace or lose. By contrast, America, based on ideas that transcend race, boasts a remarkable record of incorporating newcomers, first from Ireland and Germany, then Italy and Eastern Europe, and more recently from Latin America and Asia. These generations of new Americans constitute the secret sauce that makes this country work and could sustain it in the future.
This expansive civic nationalism also represents an economic imperative. Due to sharply lower birthrates, most of our prime competitors—the EU, Japan, and even China—are on the verge of demographic collapse. Europeans may need immigrants, but their welfare states, slow growth, and lack of cultural cohesion will make absorbing these newcomers problematic at best. Most Asian countries have little interest in large-scale immigration.
America’s future will depend on believing in a shared mission. Calling progressives “Communists” or conservatives “fascists” gets us nowhere. Convincing young people, particularly young men, that they have no future won’t dissuade them from authoritarian views—or even violence. The road to sanity starts with a renewed embrace of a shared American identity that transcends all others.
“…the oldest and simplest reason of bankruptcy in finance: lending money to people who can’t pay it back.”
I reprint this article in full with citation from Quillette. The tone might sound a bit strident, but the warning signals pointing to a form of 21st-century feudalism are real. We’re seeing this in the CA housing crisis today and in the divergence in wealth and incomes since 1980, driven by cheap credit and technology. The oligarchs of tech have been able to leverage their wealth to dominate entertainment and information. They have set their sights on politics and the ideological politics of the tech industry are particularly disturbing and contradictory to its genesis in free-market entrepreneurialism.
You see, the idea here is to socialize the costs of wealth concentration and information centralization, using politics to buy off the unwashed masses who provide the raw material for their business models. Makes one feel good with noblesse oblige of the oligarchy, using the middle class’s money though.
Success can go to the brain.
June 18, 2019
By Joel Kotkin
There seems to be no good reason why a thoroughly scientific
dictatorship should ever be overthrown.
~Aldous Huxley, Brave New World Revisited
The recent movement to investigate, and even break up, the current tech oligarchy has gained support on both sides of the Atlantic, and even leapt across the gaping divide in American politics. The immediate concerns relate to such things as the control of key markets by one or two firms, the huge concentration of wealth accruing to the tech elite and, increasingly, the oligarchy’s control over and manipulation of information pipelines.
What has not been discussed nearly as much is the end game of the oligarchs. What kind of world do they have in mind for us? Their vision of what our society should look like is not one most people—on the Left or Right—would like to see. And yet, unless unchecked, it could well be the world we, and particularly our children, will inhabit.
Almost 40 years ago, in his book The Third Wave, the futurist Alvin Toffler described technology as “the dawn of a new civilization” with vast opportunities for societal and human growth. But instead we are lurching towards what Taichi Sakaiya has called “a high-tech middle ages.” In his landmark 1973 work, The Coming of Post-Industrial Society, Daniel Bell predicted that, by handing ultimate economic and cultural power to a small number of technologists and financiers the opportunity to monetize every aspect of human behavior and emotion, we would be handing them the chance to fulfill “a social alchemist’s dream: the dream of ordering mass society.”
The New Aristocracy
Like the barbarian princes who seized control of western Europe after the fall of Rome, the oligarchs have captured the digital landscape from the old industrial corporations and have proceeded to concentrate it in ever-fewer hands. Like the Medieval aristocracy, the ruling tech oligarchy—epitomized by firms such as Amazon, Google, Facebook, Apple, and Microsoft—have never produced a single coherent political manifesto laying out the technocratic vision of the future. Nevertheless, it is possible to get a sense of what the internet elite believe and, more tellingly, to see the outlines of the world they want to create.
This tiny sliver of humanity, with their relatively small cadre of financiers, engineers, data scientists, and marketers, now control the exploitation of our personal data, what Alibaba founder, Jack Ma calls the “electricity of the 21st century.” Their “super platforms,” as one analyst noted, “now operate as “digital gatekeepers” lording over “e-monopsonies” that control enormous parts of the economy. Their growing power, notes a recent World Bank Study, is built on “natural monopolies” that adhere to web-based business, and have served to further widen class divides not only in the United States but around the world.
The rulers of the Valley and its Puget Sound doppelganger now account for eight of the 20 wealthiest people on the planet. Seventy percent of the 56 billionaires under 40 live in the state of California, with 12 in San Francisco alone. In 2017, the tech industry, mostly in California, produced 11 new billionaires. The Bay Area has more billionaires on the Forbes 400 list than any metro region other than New York and more millionaires per capita than any other large metropolis.
For an industry once known for competition, the level of concentration is remarkable. Google controls nearly 90 percent of search advertising, Facebook almost 80 percent of mobile social traffic, and Amazon about 75 percent of US e-book sales, and, perhaps most importantly, nearly 40 percent of the world’s “cloud business.” Together, control more than 95 percent of operating software for mobile devices, while Microsoft still accounts for more than 80 percent of the software that runs personal computers around the world.
The wealth generated by these near-monopolies funds the tech oligarchy’s drive to monopolize existing industries such as entertainment, education, and retail, as well as those of the future, such as autonomous cars, drones, space exploration, and most critically, artificial intelligence. Unless checked, they will have accumulated the power to bring about what could best be seen as a “post-human” future, in which society is dominated by artificial intelligence and those who control it.
What Do the Oligarchs Want?
The oligarchs are creating a “a scientific caste system,” not dissimilar to that outlined in Aldous Huxley’s dystopian 1932 novel, Brave New World. Unlike the former masters of the industrial age, they have little use for the labor of middle- and working-class people—they need only their data. Virtually all their human resource emphasis relies on cultivating and retaining a relative handful of tech-savvy operators. “Software,” Bill Gates told Forbes in 2005, “is an IQ business. Microsoft must win the IQ war, or we won’t have a future.”
Perhaps the best insight into the mentality of the tech oligarchy comes from an admirer, researcher Greg Ferenstein, who interviewed 147 digital company founders. The emerging tech world has little place for upward mobility, he found, except for those in the charmed circle at the top of the tech infrastructure; the middle and working classes become, as in feudal times, increasingly marginal.
This reflects their perception of how society will evolve. Ferenstein notes that most oligarchs believe “an increasingly greater share of economic wealth will be generated by a smaller slice of very talented or original people. Everyone else will increasingly subsist on some combination of part-time entrepreneurial ‘gig work’ and government aid.” Such part-time work has been growing rapidly, accounting for roughly 20 percent of the workforce in the US and Europe, and is expected to grow substantially, adds McKinsey.
Of course, the oligarchs have no more intention of surrendering their power and wealth to the proletariat than the Commissars did after the 1917 revolution in Russia. Instead, they favor providing what Marx once described as a “proletarian alms bag” to subsidize worker housing, and provide welfare benefits to their ever expanding cadre of “gig” economy serfs. The former head of Uber, Travis Kalanick, was a strong supporter of Obamacare, and many top tech executives—including Mark Zuckerberg, Y combinator founder Sam Altman, and Elon Musk—favor a guaranteed annual wage to help, in part, allay fears about the “disruption” on a potentially exposed workforce.
Their social vision amounts to what could be called oligarchal socialism, or what the Corbynite Left calls “fully automated luxury communism.” Like the original bolshevist model, technology and science, as suggested by billionaire tech investor Naval Ravikant, would occasion “the breakdown of family structure and religion” while creating the hegemony of a left-wing identity-centered individualism.
Life in a world dominated by these oligarchs would depart from the model of democratic and competitive capitalism that emerged over the last half-century. Rather than hope to achieve upward mobility and the chance to own property, the new generation will be relegated largely to the status of rental serfs. For the next generation, this promises a future not of upward mobility and owned houses, but of rented apartments and social stagnation. Here in California, Facebook is leading the drive to vastly expand this kind of housing, where the serfs and technocoolies can lose themselves in what Google calls “immersive computing.”The poor, most of whom simply want opportunity, will be relegated to permanent dependent status.
The World They Are Creating
To get a preview of the society the oligarchs want to create, the best place to look is where oligarchal domination is most complete. Wired magazine’s Antonio Garcia Martinez has called Silicon Valley “feudalism with better marketing.” In Martinez’s view, the new aristocratic class is an “Inner Party” of venture capitalists and company founders. Well below them is an “Outer Party” of skilled professionals, well paid, but forced to live ordinary middle-class lives due to high housing prices and high taxes. Below them lies the vast population of gig workers, whom Martinez compares to sharecroppers in the South, “…with the serfs responding to a smartphone prompt rather than an overseer’s command.” Further below still lie those who constitute, in Martinez’s phrase, “the Untouchable class of the homeless, drug addicted, and/or criminal.”
California, and particularly the Bay Area, already reflects this neo-feudal reality. Adjusted for costs, my adopted home state suffers the overall highest poverty rate in the country, according to the US Census Bureau. Fully one in three welfare recipients in the nation live in California, which is home to barely 12 percent of the country’s population, while a 2017 United Way study showed that close to one in three of the state’s families are barely able to pay their bills. Today, eight million Californians live in poverty, including two million children. Roughly one in five California children lives in deep poverty and nearly half subsist barely above that.
For all its protestations of progressive faith, the Golden State now suffers one of the highest GINI rates—the ratio between the wealthiest and the poorest—among the states. Inequality is growing faster than in almost any state—it now surpasses that of Mexico, and is closer to that of Central American banana republics like Guatemala and Honduras than it is to developed countries like Canada and Norway. There’s even the return of medieval diseases such as Typhus tied to the growing homeless encampments. We could soon even see the return of Bubonic plague, although the mainstream media seems to be ready to blame this, like most ills, on climate change as opposed to failed social policy.
Urban website CityLab has described the tech-rich Bay Area as “a region of segregated innovation,” where the rich wax, the middle-class wanes, and the poor live in increasingly unshakeable poverty. Some 76,000 millionaires and billionaires call Santa Clara and San Mateo counties home. At the other end are the thousands of people who struggle to feed their families and pay their bills each month. Nearly 30 percent of Silicon Valley’s residents rely on public or private assistance.
As recently as the 1980s, the San Jose area boasted one of the country’s most egalitarian economies. But in the current boom, cost-adjusted wages for middle class workers, Latinos, and African Americans in Silicon Valley actually dropped. Many minorities labor in the service sector in jobs such as security guard, for around $25,000 annually, working for contractors. There’s ever-greater segregation of minority and low income families, workers forced into mobile home parks or sleeping in their cars, as well as some of the nation’s largest homeless encampments. According to the Brookings Institution, in the last decade, increasingly tech-dominated San Francisco has suffered the most rapid growth in inequality while the middle class family heads towards extinction.
Needed: An Alliance of Progressives and Conservatives against the Oligarchy
Americans, enamored of the entrepreneurial spirit, were initially slow to see in the tech oligarchy a threat to the future of the republic. But public skepticism, notably in California, towards the tech lords is growing; many on both sides of the political divide see them much like modern versions of the gilded age mogul, successfully playing the political system to avoid regulation, anti-trust action, and taxes.
Yet overcoming the oligarchs will not be easy. Far more than the old industrial giants, they enjoy unprecedented sway through their manipulation of the information pipelines, as is widely evidenced in de-platforming of largely conservative voices on outlets such as Facebook, YouTube, and Twitter. Nearly two-thirds of readers now get their news through and their dominance among younger generations is, if anything, more overwhelming. As the Guardian put it: “If ExxonMobil attempted to insert itself into every element of our lives like this, there might be a concerted grassroots movement to curb its influence.”
To this influence, they have added control over what is left of the traditional media they have helped to undermine. Often getting bargain basement prices, the oligarchs have been able to buy up prestigious outlets, including the New Republic in 2012, the Washington Post in 2013, the Atlantic in 2017, and Time last year.
In the coming political storm, the oligarchs will also retain some supporters on both the Left and Right, all aided by a huge, growing, and politically hermaphroditic lobbying operation. Some California progressives have backed the oligarchs on privacy and Senator Kamala Harris, one of the leading Democratic contenders, has gained widespread support from the oligarchs. Meanwhile, on the Right, some libertarians at places like the Wall Street Journal and conservative think-tanks, continue to defend the oligarchs as the rightful winners of dogged economic competition.
But these well-placed defenders may not be enough to fend off regulatory assaults, particularly as more people recognize how the world being created by the tech elites offers little promise for the middle class, democracy, or free thought. Rather than the saviors many once saw, the oligarchs now represent a clear and present danger to the most basic foundations of our democracy. Resisting them represents the great imperative of our era.
Joel Kotkin is a Presidential Fellow in Urban Futures at Chapman University and Executive Director for the Center for Opportunity Urbanism. His last book was The Human City: Urbanism for the Rest of Us (Agate, 2017).
This essay by Victor Davis Hanson is worth reprinting in full (with citation). Our current politics is so focused on the Trump phenomenon that people miss the fact that this all started long before Trump set his sights on the POTUS. Trump is a symptom, not a cause.
We may all have laudable goals for society, but it matters how we attain them.
What is going on with the unending Brexit drama, the aftershocks of Donald Trump’s election and the “yellow vests” protests in France? What drives the growing estrangement of southern and eastern Europe from the European Union establishment? What fuels the anti-EU themes of recent European elections and the stunning recent Australian re-election of conservatives?
Put simply, the middle classes are revolting against Western managerial elites. The latter group includes professional politicians, entrenched bureaucrats, condescending academics, corporate phonies and propagandistic journalists.
What are the popular gripes against them?
One, illegal immigration and open borders have led to chaos. Lax immigration policies have taxed social services and fueled multicultural identity politics, often to the benefit of boutique leftist political agendas.
Two, globalization enriched the cosmopolitan elites who found worldwide markets for their various services. New global markets and commerce meant Western nations outsourced, offshored and ignored their own industries and manufacturing (or anything dependent on muscular labor that could be replaced by cheaper workers abroad).
Three, unelected bureaucrats multiplied and vastly increased their power over private citizens. The targeted middle classes lacked the resources to fight back against the royal armies of tenured regulators, planners, auditors, inspectors and adjustors who could not be fired and were never accountable.
Four, the new global media reached billions and indoctrinated rather than reported.
Five, academia became politicized as a shrill agent of cultural transformation rather than focusing on education — while charging more for less learning.
Six, utopian social planning increased housing, energy and transportation costs.
One common gripe framed all these diverse issues: The wealthy had the means and influence not to be bothered by higher taxes and fees or to avoid them altogether. Not so much the middle classes, who lacked the clout of the virtue-signaling rich and the romance of the distant poor.
In other words, elites never suffered the firsthand consequences of their own ideological fiats.
Green policies were aimed at raising fees on, and restricting the use of, carbon-based fuels. But proposed green belt-tightening among hoi polloi was not matched by a cutback in second and third homes, overseas vacations, luxury cars, private jets and high-tech appurtenances.
In education, government directives and academic hectoring about admissions quotas and ideological indoctrination likewise targeted the middle classes but not the elite. The micromanagers of Western public schools and universities often preferred private academies and rigorous traditional training for own children. Elites relied on old-boy networks to get their own kids into colleges. Diversity administrators multiplied at universities while indebted students borrowed more money to pay for them.
In matters of immigration, the story was much the same. Western elites encouraged the migration of indigent, unskilled and often poorly educated foreign nationals who would ensure that government social programs — and the power of the elites themselves — grew. The champions of open borders made sure that such influxes did not materially affect their own neighborhoods, schools and privileged way of life.
Elites masked their hypocrisy by virtue-signaling their disdain for the supposedly xenophobic, racist or nativist middle classes. Yet the non-elite have experienced firsthand the impact on social programs, schools and safety from sudden, massive and often illegal immigration from Latin America, the Middle East, Africa and Asia into their communities.
As for trade, few still believe in “free” trade when it remains so unfair. Why didn’t elites extend to China their same tough-love lectures about global warming, or about breaking the rules of trade, copyrights and patents?
The middle classes became nauseated by the constant elite trashing of their culture, history and traditions, including the tearing down of statues, the Trotskyizing of past heroes, the renaming of public buildings and streets, and, for some, the tired and empty whining about “white privilege.”
If Western nations were really so bad, and so flawed at their founding, why were millions of non-Westerners risking their lives to reach Western soil?
How was it that elites themselves had made so much money, had gained so much influence, and had enjoyed such material bounty and leisure from such a supposedly toxic system — benefits that they were unwilling to give up despite their tired moralizing about selfishness and privilege?
In the next few years, expect more grassroots demands for the restoration of the value of citizenship. There will be fewer middle-class apologies for patriotism and nationalism. The non-elite will become angrier about illegal immigration, demanding a return to the idea of measured, meritocratic, diverse and legal immigration.
Because elites have no answers to popular furor, the anger directed at them will only increase until they give up — or finally succeed in their grand agenda of a non-democratic, all-powerful Orwellian state.
(C) 2019 TRIBUNE CONTENT AGENCY, LLC.
Despite his global fame, Leonardo da Vinci’s reputation as an artist is based on just 20 paintings still known to exist. While a few works have been lost or possibly destroyed over the centuries, there’s another reason we have so few genuine works by the master: the Italian artist was notorious for beginning and never completing artworks. He toiled on plans for the Sforza Horse, intended to be the largest cast bronze sculpture ever, off and on for 12 years before abandoning it. A commissioned mural of the Battle of Anghiari was plastered over when the master painter failed to complete the work. Some researchers even believe the Mona Lisa is unfinished, something mentioned by Leonardo’s first biographer.
Looking at the scant details of his life and his penchant to procrastinate and abandon artworks, two neuroscientists have presented a possible reason for Leonardo’s behavior in the journal Brain. They suggest that the artist may have had Attention Deficit and Hyperactive Disorder (A.D.H.D.).
“While impossible to make a postmortem diagnosis for someone who lived 500 years ago, I am confident that A.D.H.D. is the most convincing and scientifically plausible hypothesis to explain Leonardo’s difficulty in finishing his works,” co-author Marco Catani of King’s College London says in a press release. “Historical records show Leonardo spent excessive time planning projects but lacked perseverance. A.D.H.D. could explain aspects of Leonardo’s temperament and his strange mercurial genius.”
In the paper, the researchers report that while Leonardo dedicated “excessive” time to planning out his ideas, his perseverance waned when it came to executing them. “Leonardo’s chronic struggle to distill his extraordinary creativity into concrete results and deliver on commitments was proverbial in his lifetime and present since early childhood,” they write.
“in learning and in the rudiments of letters he would have made great proficiency, if he had not been so variable and unstable, for he set himself to learn many things, and then, after having begun them, abandoned them.”
When Leonardo was older and began apprenticing in the workshop of painter Andrea del Verrocchio in Florence, his inability to execute became more apparent. There, he received his first commissions, and though he planned the works extensively, he ultimately walked away from them. In 1478, he received his first commission as a solo painter for an altarpiece in the Chapel of San Bernardo. Despite taking an advance of 25 florins, Leonardo did not deliver.
This may explain why Leonardo stayed in Verrochio’s workshop until the relatively advanced age of 26 while other painters set off on their own. When he left the atelier, it wasn’t as a painter, but as a musician working for the Duke of Milan.
When the Duke of Milan finally let Leonardo go after 20 years of service, the artist wrote in his diary that he had never finished any of the many projects the Duke had commissioned from him. Even the pope got on his case; after working for the Vatican for three years he was dismissed by Pope Leo X who exclaimed, “Alas! this man will never do anything, for he begins by thinking of the end of the work, before the beginning.”
Novelist and contemporary Matteo Bandello, who observed Leonardo during the time he worked on The Last Supper, provides one of the few glimpses we have of these work habits:
“I have also seen him, as the caprice or whim took him, set out at midday, […] from the Corte Vecchio, where he was at work on the clay model of the great horse, and go straight to the Grazie and there mount on the scaffolding and take up his brush and give one or two touches to one of the figures and suddenly give up and go away again”
Besides these biographical tidbits, Emily Dixon at CNN reports there are other signs of A.D.H.D. Leonardo is known to have worked continuously through the night, alternating cycles of short naps and waking. He was also left-handed and some research indicates he may have been dyslexic, both of which are associated with A.D.H.D. At age 65, Leonardo suffered a left-hemisphere stroke, yet his language centers were left in tact. That indicates that the right hemisphere of his brain contained the language centers of his brain, a condition found in less than 5 percent of the population and prevalent in children with A.D.H.D. and other neurodevelopmental conditions.
While this study may feel like a slam dunk diagnosis, Jacinta Bowler at ScienceAlert cautions that these type of postmortem diagnoses are alway problematic. That’s because, in many cases, medical professionals don’t have the skills to properly critique or place into context historical documents and may interpret things incorrectly. And anecdotes, short biographies and diary entries are no substitute for a direct examination.
Graeme Fairchild of the department of psychology at the University of Bath tells Dixon at CNN that diagnosing Leonardo with A.D.H.D. could be a positive. It shows that “people with A.D.H.D. can still be incredibly talented and productive, even though they might have symptoms or behaviors that lead to impairment such as restlessness, poor organizational skills, forgetfulness and inability to finish things they start,” he says.
It also highlights the fact that the disorder affects adults too, not just children as some think. “For many people, A.D.H.D. is a lifelong condition rather than something they grow out of, and it certainly sounds like Leonardo da Vinci had major problems in many of these areas throughout his life,” says Fairchild.
Leonardo recognized his difficulties with time and project management and sometimes teamed up with other people to get things done. But he also beat himself up for what he saw as his lack of discipline. Even at the end of his life, he regretted his failures and reportedly said “that he had offended God and mankind in not having worked at his art as he should have done.”
Catani tells Kate Kelland at Reuters that Leonardo could serve as the poster child for A.D.H.D., which in the public mind is often associated with low IQ or misbehaving children. He says there are many successful people with the problem, and they can be even more successful if they learn how to manage or treat the disorder.
“Leonardo considered himself as someone who had failed in life – which is incredible,” he says. “I hope (this case) shows that A.D.H.D. is not linked to low IQ or lack of creativity, but rather the difficulty of capitalizing on natural talents.”
In fact, recent research indicates that adults with A.D.H.D. are often more creative than those without, giving them a leg up in certain fields.
Obviously, it is a way to hear about news and opinions. It also helps us to manage FOMO, the fear of missing out on trends and memes and fun things our friends are doing. And it gives us a chance to self-promote and virtue-signal.
I repost this article in full because I think it makes very good points about what people are doing on Twitter and why. Focusing on social behaviors and instincts helps us understand where social media needs to go. Republished from The New Atlantis:
When a set of arrangements is making people miserable, coercion is often a big part of the explanation. Think of authoritarianism, discrimination, or vigilantism, where individuals suffer because of conditions they can’t change, imposed by others possessing power.
But in some cases, incentives, not coercion, are to blame. This happens often in markets and in personal relationships — and it’s true also of Twitter. The environment is such that free people, making individually rational decisions, harm themselves and the group as a whole, creating suboptimal but — paradoxically — highly stable outcomes. History, economics, psychology, and sociology are rife with examples. Or, looking to game theory, we might say that Twitter is a dilemma in which we are all prisoners.
When misery is caused by coercion, the solution is typically straightforward: Stop those with illegitimate power from hurting people. But when misery is caused by voluntary activity, the proper intervention is less clear. Respect for liberty generally requires avoiding the use of a central authority — whether the state or Silicon Valley algorithmic overlords — to override the lawful, morally permissible choices of individuals. Even when there is general agreement that peoples’ choices are causing damage to themselves or others, authorizing an authority to intervene also means authorizing it to decide what the right outcomes are, what constitutes enough social “damage” to justify intervention, what kinds of penalties should be applied and when, and so on. State authorities, when granted such power, may well go on to claim they’ve found negative externalities warranting suppression of people’s choices in other areas — how they spend their income, where they live, which organizations they join, how they raise their children. There is always a technocrat, a redistributionist, or a “nudger” convinced that the world would be much improved if her learning and sense of justice could replace everyone else’s.
No one is forced to use Twitter. It is a mess founded on voluntary choices. So, although it may be doing harm to individuals, degrading public discourse and social norms, we should begin by appreciating that its users must be currently assessing that their participation provides them greater benefits than costs.
A fruitful approach might therefore not be to bemoan Twitter’s downsides or to infringe upon individuals’ liberty to speak and associate in this way, but to start by understanding what the utility is that keeps people on the platform. We may then appreciate that Twitter is bound to change — perhaps even to fix itself — as users change their assessment. Our aim should be to seek not engineering or policy solutions but a gradual, organic transformation of the platform by the users themselves.
What benefits does Twitter offer its users? Obviously, it is a way to hear about news and opinions. It also helps us to manage FOMO, the fear of missing out on trends and memes and fun things our friends are doing. And it gives us a chance to self-promote and virtue-signal. Although these are usually derogatory terms, they can also simply acknowledge that we have a need to be recognized for our worth and to be seen as on the side of the angels. Many journalists and other content providers are also under pressure by business managers to prioritize “engagement,” which manifests in everything from clickbait headlines to provocative content to engaging directly, if often pointlessly, with users on social media. Twitter also serves as a virtually cost-free venting mechanism, catharsis at the fingertips. Your fury can be decompressed almost instantaneously with nothing but a few keystrokes.
These benefits have a common feature. They all enable us to feel like we matter — that we are part of something, that we’re being heard, that we’re on the right side. In an era of profound dislocation, Twitter offers something resembling community. We can find our tribe and our anti-tribe. We can speak and get a reaction. By simply typing a few words and hitting “tweet,” we are given voice. With every reply, like, retweet, and new follower we are given a sense of efficacy. The prospects of our meme or witty retort going viral offers us the potential of mattering a great deal.
Unfortunately, with Twitter the costs of bad behavior are generally delayed or are felt by individuals other than the actor: It’s the target of the outrage mob rather than the instigator who loses her job; the full consequences of destroying social norms are only felt far down the line. So the typical user’s short-term cost–benefit analysis approves more tweeting and fails to warn against Twitter’s anti-social use.
Of course, we make many of our decisions in less analytical and more impulsive ways, especially when we are feeling anxious, disconnected, or under assault. Splurging on that pricey item, yelling at a friend, or relapsing into an addiction doesn’t make sense in the long term, but by a calculation in the moment it does make sense, when the benefits feel so immediate and exaggerated, and the costs so abstract and distant. Similarly, our hunger for meaning and connection is so acute in this historical moment that we inflate social media’s immediate gains and discount its future costs.
However, because so many users have had years of experience with Twitter, its corrosive consequences, once far on the horizon, can now be felt by many of us. We have witnessed its depressive and isolating effects, and we have seen how it harms relationships and civil discourse. We should recognize the platform’s trouble with profits in recent years as a lagging indicator of its social costs.
The good news is that, because voluntary systems allow for a gradual, evolutionary process of self-reform, we can expect that behavior on Twitter may improve on its own.
Voluntary associations, unlike systems of coercion, include participants’ right of exit. Those engaged can disengage at any time and for any reason. Second, norms and traditions are highly malleable, since they are not encoded in legislation. Dissenters can arise at any moment to challenge them. The shifting views and actions of countless individuals then continuously remold the communities and systems of which they are part. Consider customs related to manners, courting, chivalry, child-rearing, and so on. These didn’t change suddenly or at the direction of a central authority; shifts were organic and gradual, but their influence was systemic in scale.
There have already been high-profile examples of fed-up media figures, politicians, and celebrities quitting Twitter. These instances of exit are likely to be bellwethers, not outliers: Other users will likely follow suit, and this could cause a cascade. A platform with fewer users and less attention offers the remaining users less voice, efficacy, and sense of community. The benefit part of the cost–benefit ratio will drop — which will make remaining users less willing to bear the costs, perhaps decreasing their willingness to tolerate bad behavior.
Gradual changes in norms on the platform could lead to even more significant improvements in the average Twitter user’s experience. For instance, there is currently a clear incentive to join a mob vilifying someone who has done something you find objectionable. Doing so is virtually costless to the participant, and it can contribute to the effort to get the offender chastened or fired. But a change of certain norms might well produce a new sense of proportion. People might become less willing to offer gut-wrenching public apologies for minor infractions, and employers might become more willing to privately admonish and forgive transgressors. If so, the wind would be taken out of the mob’s sails. Similarly, if Twitter users begin reprimanding those who dredge up a public figure’s embarrassing tweets from when she was 14, that practice could disappear. Or, if journalists agree to stop engaging with anyone disrespectful or anonymous, disrespect and anonymity could decrease.
A social-media community is not an institution, a forced or planned entity instituted by a powerful authority. It is more like a garden; it forms organically and with decentralized tending, but not centralized direction. The path to altering an institution is clear: Whatever powerful device, such as legislation or regulation, that was employed to bring it about can be employed to change it. Organic formations, on the other hand, emerge through voluntary responses to conditions and incentives. And they evolve because of voluntary responses to changes in these conditions and incentives. If we want Twitter and social media to change, we need to approach the problem more like gardeners, not engineers.
In our Information Age, social media engagement has become ubiquitous, and contagious. According to recent surveys, internet users are now spending an average of 2.3 hours per day on social networking and messaging platforms (the most popular being Facebook and YouTube).
This proliferation of online social networks (OSNs) has had both good and bad consequences. In What Technology Wants, technology author Kevin Kelly gushes with the promise of social connection:
Right before my eyes, I saw online networks connect people with ideas, options, and other people they could not possibly have met otherwise. Online networks unleashed passions, compounded creativity, amplified generosity.[i] (italicsmine)
In Alone Together, psychologist and author Sherry Turkle examines how technology, in turn, shapes our social interaction:
People love their new technologies of connection. They have made parents and children feel more secure and have revolutionized business, education, scholarship, and medicine. …They have changed how we date and how we travel. The global reach of connectivity can make the most isolated outpost into a center of learning and economic activity. The word “apps” summons the pleasure of tasks accomplished on mobile devices, some of which, only recently, we would not have dreamed possible…[ii]
Nonetheless, we’ve witnessed how this wondrous technology also imposes a Faustian bargain, with implications for our social relationships, mental health and happiness, and our public discourse. Turkle presents a large body of evidence that portrays the tech generation as increasingly insecure, isolated, and lonely. We’ve discovered that digital connections offer the illusion of companionship without the commitment of friendship. We are drawn to the comfort of connection without the demands of intimacy. Facebook offers us hundreds of “friends,” but not a single one to confide in. What’s happening, Turkle discovered, is that as we expect more from technology, we expect less from each other.
On the societal level, social media has come under fire for promoting political propaganda and fostering malicious or even violent behavior, polarizing democratic societies into uncompromising bubbles. The negatives are starting to outweigh the positives.
In order to better manage this technology, we need to investigate the positive and negative effects of OSNs so we can enhance the good, minimize the bad, and, if possible, eliminate the ugly. Let us start by summarizing these mixed effects:
1. The Good: social media has enriched opportunities for social connection and genuine friendship across distances, much as the telephone did a century ago. It has enabled decentralized peer-to-peer information sharing that can be essential during times of crisis. Social media has increased the potential for serendipity in social relationships and social participation. Finally, social networking has aided in building more robust communities among like-minded users and also enabled connections across diverse groups.
2. The Bad: social media engagement is often contagious (and is designed to be that way) and can become addicting. This can lead to asocial behavior with personal narcissism and status seeking. As a substitute for real human connection, it can lead to emotional isolation and severe anxiety due to fear of missing out (FOMO). Public metrics, like the number of friends, can contribute to feelings of inferiority and despair. Social networking can erect barriers as well as break them down.
3. The Ugly: the competition for status on social networks can lead to malicious gossip and bullying. Emotional isolation increases the potential for violent anti-social behavior, such as that promoted by the Unabomber. Social media has generated misinformation and political propaganda on a large scale, diminishing our trust in social institutions and enabling malignant actors to organize their mischief. Lastly, it has empowered the invasion of our personal privacy, often through our own ignorance of the dangers.
What separates the good from the bad and ugly? Largely it is the nature of the content and the context in which it is shared. Much of the deterioration of online content and interaction can be attributed to the advertising revenue models of the platforms, where the business incentives of the platforms do not align well with the social needs and wants of users. Social media giants like Facebook and YouTube generate huge advertising revenues from free, user-generated content. It is not in their interest to guard user privacy, but rather to promote all data sharing to monetize. They reap no meaningful benefit by costly monitoring of users or content, so their platforms have become playgrounds for trolls, flamers, bullies, hackers, propagandists, and digital media addicts.
Turkle observes that the psychological logic of social networks can be stated thus, “I share, therefore I am.” This is a degenerate form of René Descartes’s famous proposition, “I think, therefore I am.” One might smartly identify one major problem of social networking as “I share before I think.” There’s certainly some truth to that, but the psychology goes deeper than this. Turkle argues that we have used OSN technology to alleviate social isolation, but also to avoid the emotional intimacy that often makes social relationships uncomfortable, but ultimately rewarding.
Many who have felt this odd tension have disengaged completely, as reflected in attrition rates for OSNs. But with so many benefits, the public will not abandon social networking; rather, we must and will transform it. Consider the fact that Facebook is actually a centralized global gossip network. Even given the benefits of gossip for monitoring social behavior in small communities, a global gossip network makes no sense from a social human psychology perspective.
So, how do we promote good effects and weed out the bad effects? First, the sharing of content becomes meaningless if the actual content is devoid of meaning. The blessing and curse of the Information Age is Too Much Information. Given the constraints of the time and energy required for attention, why are we distracting ourselves with nonsense on social media?
If we look at Maslow’s hierarchy of psychological needs, we find the pinnacle of self-actualization occupied by moral thinking, creativity, and problem-solving. These provide meaning to our inner lives. At the next stage down we find self-esteem, confidence, and mutual respect, while at the third level we find social connection and belonging. Below these are the crucial stages of personal security and physiological needs. The first four stages of human needs are necessary, but the meaning of our lives is attained through the final stage at the top of the pyramid. One might expand Descartes’s proposition to: “I think, I create, I imagine; therefore I am.”
Meaningful information is valued more than trivia, but what is meaningful? That depends somewhat on the context of social interaction. Friendships tend to focus on highly personal and particular information and content, i.e., photos of your dog or last night’s homemade casserole. Larger scale networks lean toward more universal ideas, content, or information. Huge centralized platforms, what we might call Big Social, are seeing less engagement, with a wide range of new niche platforms stealing the attention and devotion of people who prefer decentralized and peer-to-peer interactions outside a system of attention control based on advertising. These niche competitors will be less focused on sharing and more on what is being shared and with whom. To promote meaning in human interaction social media needs to be more about imagining, creating and collaborating. Such connections are more in tune with the human than the technological. These activities enhance our mental health rather than distract us. Psychological studies show that creative stimulation and interaction can help reverse debilitating addictions.
Who we share meaning with, in what context, is becoming more crucial to online engagement. User anonymity provides cover for anti-social behavior as anonymous users can do and say anything without being sanctioned or censored. Fake user accounts lead to fake information and uninhibited abuse of community trust. It’s like going to a masquerade ball and entrusting your valuables to masked actors who cannot be identified. The loss of privacy in the context of meaningful social interaction is secondary to building trust and reputational capital through accountability, which makes privacy less salient.
Appropriate technological and business model design should be able to solve this problem because technology tackles the tasks of searching, filtering, sorting, connecting, and reconnecting far more efficiently than serendipitous face-to-face social interaction. A good example is online dating, with the stark comparison between eHarmony and Tinder. Social networking should help us coordinate rather than segregate. It should enable us to harmonize our social interactions in a positive direction, according to complex matrices of particular interests, while also allowing us to filter out unwanted noise and negativity.
This networking challenge is best addressed by empowering human assets within the network, rather than relying solely on mechanistic algorithms based on network metrics. As Turkle says, real communities are constituted by physical proximity, shared concerns, real consequences, and common responsibilities. Also by real people. Online connectivity relaxes the physical proximity constraint, but the shared human imperatives of socialization remain, even when we connect through a computer interface.
Looking into the future of social media and social networking, we can summarize the aforementioned qualities it will likely need to embody:
1. The future will be decentralized. We have little need for a centralized global gossip network. Rather platforms will be built on peer-to-peer interactions, which means decentralized control;
2. Content matters. Content is valued by participants in the social community. Content that does not enhance the value of the network needs to be screened out, by users and/or the design of the network;
3. No anonymity. Community networks will reward reputational capital and reciprocity through verified identities, so there is a negative carry cost to anonymity. This, along with potential sanctions, helps minimize threats by bad actors;
4. User engagement in managing network dynamics is essential. User control not only encourages participation and engagement in the community, but it also places responsibility and accountability for engagement in the right hands. The human element is critical;
5. Scale matters, especially for social engagement. Everything else is broadcasting. Larger sharing networks can be filtered and segregated into smaller entities for engagement, without losing connection to the larger community.
The future will be better.