Surveillance Capitalism
Surveillance Capitalism is a new economic order that claims human experience as free raw material for hidden commercial practices of extraction, prediction and sales.
By 2018 the global “smart-home” market was valued at 36 billion USD.
We are the source of surveillance capitalism’s surplus. Surveillance capitalism’s actual customers are the enterprises that trade in its markets for future behavior. Surveillance capitalism is not technology; it is a logic that imbues technology and commands it into action.
Extracting human experience is not enough. The most-predictive raw-material supplies come from intervening in our experience to shape our behavior in ways that favor surveillance capitalists’ commercial outcome. Personalization is one of the main areas covering this new model.
August 9, 2011, setting the stage for surveillance capitalism: Apple promised a digital dream of new solution to old economics; police shooting in London sparked riots and Spanish citizens asserted their rights to human future when they challenged Google by demanding “the right to be forgotten.”
Concept of “individualization” should not be confused with the neoliberal ideology of “individualism”. Since the second half of the twentieth century, the individualization story has taken this new turn toward a “second modernity”. The first modernity suppressed the growth and expression of self in favor of collective solutions, but by the second modernity, the self is all we have.
The free-market creed originated in Europe as a defense against the threat of totalitarism. Inequality of wealth and even rights was accepted. But that is not the right way. Piketty extensive research may be stated simply: capitalism should not be eaten raw.
Existential contradiction of the second modernity that defines our conditions of existence is that we want to exercise control over our own lives but everywhere that control is thwarted. We live in the knowledge that our lives have unique value, but we are treated as invisible. As Zygmunt Bauman wrote this is a yawning gap between the right of self-assertion and the capacity to control the social setting that make it feasible.
In 2007 Facebook launched Beacon, enabling advertisers to track users across the internet.
With each corporate transgression it became more difficult to ignore the possibility that the pattern of violations signaled a feature, not a bug.
This mutation of capitalism should be based on serving the consumer. But it didn’t go in that way. Every search, like and click was claimed as an asset to be tracked, parsed and monetized by some company, all within a decade of the iPod’s debut.
On August 9, 2011, event ricocheted between two wildly different visions of a third modernity. One was based on the digital promise of democratized information in the context of individualized economic and social relations. The other reflected the harsh truths of mass exclusion and elite rule. In Spain The Spanish Data Protection Agency recognized that not all information is worth immortality. Also, The Court of Justice of EU announced its decision to assert the right to be forgotten as a fundamental principle of Eu Law in May of 2014. Free flow of information matters, but not as much as the safeguarding of dignity, privacy and data protection.
Behavioral surplus
Google is to surveillance capitalism what the Ford Motor Company and GM were to mass-production-based managerial capitalism. Hal Varian was the main protagonist of Google model. He has been described as the Adam Smith of the discipline Googlenomics and the godfather of its advertising model. Varian explored the theme of “computer-mediated transactions and their transformational effects on the modern economy. He identifies four such new uses:
- Data extraction and analysis
- New contractual forms due to better monitoring
- Personalization and customization
- Continuous experiments
During the early period, behavioral data were put to work entirely on the user behalf. User data provided value at no cost and that value was reinvested in the user experience in the form of improved services. It is inaccurate to think of Google’s users as its customers: there is no economic exchange, no price and no profit. Users are source of material. Google first revenue depended on licensing deals with portals. But when push from VC capitals for profit started, owners allowed marketing component to be introduced in the business model.
The behavioral data available for uses beyond service improvement constituted surplus and Google use this surplus to build their profit model with advertising. All this happen during 2002 and surveillance capitalism took root.
The combination of every-increasing machine intelligence and ever-more-vast supplies of behavioral surplus would become the foundation of an unprecedented logic of accumulation. Google proprietary methods enable it to surveil, capture, expand, construct and claim behavioral surplus, including data that users intentionally choose not to share.
Elements of Google model were: behavioral surplus, data science, material infrastructure, computational power, algorithmic systems and automated platforms.
Surveillance capitalism was invented by a specific group of human beings in a specific time and place. It is not an inherent result of digital technology.
Ford’s inventions revolutionized production. Google’s inventions revolutionized extraction and established surveillance capitalism’s first economic imperative: the extraction imperative. Surveillance capitalism demands economies of scale in the extraction of behavioral surplus.
Two popular terms – digital exhaust and digital breadcrumbs – connote worthless waste: leftovers lying around for the taking. Google was followed by Facebook. Their goal was to turn big numbers of users into money. That was what Sheryl Sandberg did.
Behavioral surplus defines Google’s earning success. Puzzle goes like that:
The logic – non-market transactions are translated into material used in market transaction. The behavioral surplus.
The means of production – mainly machine intelligence. Predictions are strong due to enormous amount of data – behavioral surplus.
The products – the company sell the predictions that only they can produce.
The marketplace – prediction products are sold into a new kind of market that trades exclusively in future behavior.
The MOAT
Page grasped that human experience could be Google’s virgin wood, that it could be extracted at no extra cost online. We can talk about an act of digital dispossession.
Page and Brin were the first to introduce a dual-class share structure to the tech sector with Google’s 2004 public offering.
The online world is not truly bound by terrestrial laws…it’s the world’s largest ungoverned space. And that is why companies like Google and Facebook can use this field and push the limits of surveillance capitalism. Andy Grove formula is that high tech runs three-times faster than normal business and the government runs three times slower and that results in nine-times gap.
A cyberlibertarian Frank Pasquale is defining surveillance capitalism as being built on free speech fundamentalism. One of the main exit points for all problems of internet-based companies is Section 230 of the Communications Decency Act of 1996, which shields website owners from lawsuits and state prosecution for user-generated content.
CIA also wanted in tech game. In 1997 CIA director George Tenet declared that CIA needs to swim in the Valley. They establish venture firm in the Valley – Q-Tel. In 2009 both Google and Q-Tel both invested in Recorded Future, start-up that monitors every aspect of the web in real time in order to predict future events.
Fortifications have been erected in four key arenas to protect Google:
- The demonstration of Google’s unique capabilities as a source of competitive advantage in electoral politics.
- A deliberate blurring of public and private interests through relationships and aggressive lobbying activities.
- A revolving door through of personnel who migrated between Google and Obama administration.
- Google’s intentional campaign of influence over academic work.
The elaboration of surveillance capitalism
Google’s supply chain began with Search but steadily expanded to encompass new and even-more-ambitious territories far from clicks and queries. Eric Schmidt put it in the worlds that the goal of the company is customer satisfaction. That Google is one product: customer satisfaction.
Tim Wu joined Harvard Business School’s Michael Luca and a team of data scientists from Yelp to research hidden mechanisms in Google Search function. They discovered that Google was systematically corrupting Search results to favor its own content and downstream products. Google is acting both as a search engine and content provider.
With growth of mobile usage and Android Google was becoming even stronger. Google realized that digital dispossession goes through predictable sequence of stages: incursion, habituation, adaptation and redirection.
Incursion started as entry into undefended space: e-mail, telephone, web page and more. The company has learned to launch incursion and proceed until resistance is encountered.
Second stage is habituation. People habituate to the incursion with some combination of agreement, helplessness and resignation.
Adaptation is about mask it to follow government regulations
And redirect is about design it in a way that they appear to be compliant with social and legal demands.
Google cycle of trying to expand the limits of extraction was repeated first at Search, then with Gmail and elaborated with Street View. A novel iteration of Google’s online ad markets was real-time, real-world trading and behavioral futures. Your future.
Facebook was the most aggressive competitor for behavioral surplus. From other three Microsoft was the first that turned toward surveillance capitalism. Apple and Amazon were later in the game. Microsoft tried with Cortana and Bing. In 2016 they acquired LinkedIn.
Even some other companies from different industries went on the path of surveillance capitalism. Verizon, AT&T and Comcast all went shopping and some acquisitions showed that companies were shifting towards behavioral surplus. Verizon bought AOL in 2015 for 4.4 billion. In 2017 they bought the most valuable assets from Yahoo.
Surveillance capitalism was born digital, but it is no longer confined to born-digital companies.
The division of learning in society
Conquest pattern is a design that unfolds in three phases:
- The invention of legalistic measures to provide the invasion with a gloss of justification.
- A declaration of territorial claims.
- The founding of a town to legitimate and institutionalize the conquest.
John Searle is claiming that all of institutional reality and therefore all of human civilization is created by declarations.
Eric Schmidt asked for trust, but Google’s “declarations” ensured that it did not require our trust to succeed.
When we look at modern dilemmas of knowledge, authority and power, we should ask our self: Who knows, who decides and who decides who decides. New reality is claiming: the machine knows, market form and its business models decide and financial capital with its goal of shareholder-value maximization is deciding who decides. People, process and things are reinvented as information.
The division of learning is to us, member of second modernity, what the division of labor was to our grandparents and great-grandparents, pioneers of the first modernity.
Google and Facebook both are running their search for information, but they do it differently. Google is known as “full stack AI company”.
The division of learning in society has been hijacked by surveillance capitalism.
The reality of business
Mark Weiser introduced ubiquitous computing. He is talking about the most profound technologies as the ones that disappear. They weave themselves into the fabric of everyday life until they are indistinguishable from it. He also introduced the prediction imperative and economies of scale that accommodate economies of scope and economies of action. Behavioral surplus must be vast but it must also be varied. But the surest way to predict behavior is to intervene at its source and shape it. The process invented to achieve this goal is economies of action.
Extraction is not enough; now it must be twinned with execution. The IoT will serve as a key enabler in the transformation of business models from guaranteed levels of performance to guaranteed outcomes.
Ubiquitous computing is meaningless without the ubiquitous sensing that conveys the experience for computation.
The tension is that no things counts until it is rendered as behavior, translated into electronic data flows and channeled into the light as observable data. Everything must be illuminated for counting and herding. Translate ubiquitous data into ubiquitous knowledge and action.
Google’s Hal Varian identified four new uses of computer mediation of transaction:
- Data extraction and analysis
- New contractual forms due to better monitoring
- Personalization and customization
- Continuous experiments
Insurance companies are trying to reduce uncertainty in car insurance. They are supporting introduction of telematics for driving observation. By introducing gamification for rewarding and punishing performance of drivers. But by collecting all this data, new potential markets open, like co-marketing, health surplus monetization, smart car platform input.
Regarding the annihilation of contract, the invention of uncontract, Varian’s idea is that with behavioral modification you can introduce the feature of uncontract. The uncontract is not a space of contractual relations but rather a unilateral execution that makes those relations unnecessary.
The IoT is all push, not pull. Most consumers do not feel a need for these devices. You can say exponential and inevitable as much as you want. The bottom line is that the Valley has decided that this has to be the next big thing so that firms here can grow.
Rendition: from experience to data
Why is our experience rendered as behavioral data in the first place? What is the gap between experience and data? Rendition describes the concrete operational practices through which dispossession is accomplished, as human experience is claimed as raw material for datafication and all that follows, from manufacturing to sales. There can be no surveillance capitalism without rendition.
Smart home and its IoT are the canvas upon which the new markets in future behavior inscribe their presence.
Under surveillance capitalism, rendition is typically unauthorized, unilateral, gluttonous, secret and brazen.
The rendition of your body begins quite simply with your phone. Mobile advertising, the ultimate form of geo-targeting is the holy grail of advertising. We talk about location-based marketing. Wearable and their applications are another significant proving ground in the act of body rendition.
Merging smart cities and m-health can produce smart health. Surveillance capitalism would also like to enter the vast opportunity of facial recognition activities. And it will fight regulation in this area.
The prediction imperative transforms the things that we have in things that have us in order that it might render the range and richness of our world, our homes and our bodies as behaving objects for its calculations and fabrications on the path to profit.
Rendition from the depths
Fact that the luxuries of one generation or class become the necessities of the next has been fundamental to the evolution of capitalism during the last five hundred years.
Google Now signaled a new breed of prediction products. There was a time when you searched Google, but now Google searches you. Talk is another frontier where big companies are trying to cross it in their search for behavioral surplus.
Intimacy as we have known it is compromised, if not eliminated. Solitude is deleted. The children will learn first that there are no boundaries between self and market.
Personality analysis for commercial advantage is built on behavioral surplus – the so-called meta-data or mid-level metrics – honed and tested by researchers and destined to foil anyone who thinks that she is in control of the amount of personal information that she reveals in social media.
IBM in 2015 announced that Watson Personality Service was open for business. IBM assesses each individual across twelve categories of needs:
- Excitement
- Harmony
- Curiosity
- Ideal
- Closeness
- Self-expression
- Liberty
- Love
- Practicality
- Stability
- Challenge
- Structure
It identified values defined as motivating factors influence a person’s decision-making across five dimensions:
- Self-transcendence/Helping others
- Conservation/Tradition
- Hedonism/Taking pleasure in life
- Self-enhancement/Achieving success
- Open to change/Excitement
In 2015 an eight-year-old startup named Realeyes won a reward from the EU Commission for a project code-named SEWA: Automatic sentiment analysis in the wild. The SEWA project is a window on a burgeoning new domain of rendition and behavioral surplus supply operations known as affective computing, emotion analytics and sentiment analysis.
Make them dance
The new power is action. The intelligence of IoT means that sensors can also be actuators. Now the real aim is ubiquitous intervention, action and control. The real power is that now you can modify real-time actions in the real world.
Conditioning is model of operation already explained by B. F. Skinner. Conditioning at scale is essential to the new science of massively engineered human behavior.
Facebook put a lot of effort to understand users’ vulnerability and to use them in order to create a motivational condition.
Every threat to human autonomy begins with an assault on awareness, tearing down our capacity to regulate our thoughts, emotions and desires. Gaming is becoming increasingly efficient tool to alter human behavior. Pokemon Go was a good example.
Regulators are trying to impose some control. Research in the manipulation of human behavior is considered unethical.
The public had made Beyond Freedom & Dignity a bestseller but had just as surely rejected Skinner’s argument that there were cultural matters more important than preserving and extending individual freedom.
The surveillance capitalists’ ability to evade our awareness is an essential condition for knowledge production. Knowledge, authority and power rest with surveillance capital, for which we are merely human natural resources.
The right to future tense
This act of will is my claim to future tense. To make a promise is to predict a future. To fulfill a promise through the exercise of will turns that prediction into fact. Will is the organ with which we summon our futures into existence.
Uncertainty is not chaos but rather the necessary habitat of the present tense. Life inclines us to take actions and to make commitments even when the future is unknown.
With so many people rejecting the practices of surveillance capitalism, how is it that this market form has been able to succeed:
- Unprecedented: earlier incursions of behavior modification at scale were understood as an extension of the state and we were not prepared for the onslaught from private firms.
- Declaration as invasion
- Historical context
- Fortifications
- The dispossession cycles
- Dependency
- Self-interest
- Inclusion
- Identification
- Authority
- Social persuasion
- Foreclosed alternatives
- Inevitabilism
- The ideology of human frailty
- Ignorance
- Velocity
We need laws that reject the fundamental legitimacy of surveillance capitalism’s declarations and interrupt its most basic operations.
Two species of power
Under surveillance capitalism, the means of production serves the means of behavioral modification. Machine processes replace human relationships so that certainty can replace trust.
There can be no guarantee of outcomes without the power to make it. This species of power – instrumentarianism is defined as the instrumentation and instrumentalization of behavior for the purpose of modification, prediction, monetization and control.
Total loyalty – the psychological basis for domination – can be expected only from the completely isolated human being.
Instrumentarian power moves differently than totalitarian. Totalitarism operated through the means of violence, but instrumentarian power operates through the means of behavioral modification. Instrumentarianism is a market project that converges with the digital to achieve its own unique brand of social domination.
The phrase that captured the new scientific perspective was the “Other One”. Human behavior would yield to scientific research only if psychologists learned to view humans as others. This viewpoint of observation was an absolute requirement for an objective science of human behavior.
Skinner imagined technologies that would pervasively institutionalize the viewpoint of the Other-One as they observed, computed, analyzed and automatically reinforced behavior to accomplish the vast changes that he believed were necessary.
Skinner’s vision is brought to life in the relentless pursuit of surveillance capitalism’s economic imperatives and the ubiquitous digital apparatus that surveillance capitalism creates and harnesses to its novel aims. The knowledge that now displaces our freedom is proprietary. The knowledge is theirs, but the loss of freedom belongs solely to us.
Big Other and the rise of instrumentarian power
Ubiquitous digital apparatus is called Big Other. Power is now identified with ownership of the means of behavioral modification that is Big Other.
The dream of a technology of behavioral prediction and control – for which Skinner had endured such public scorn – is now a flourishing fact. This prize now attracts immense capital, human genius, scientific elaboration, governmental protection, ecosystems of institutionalization and the glamour that always has and always will attach to power.
The instrumetarian power is regarded as the certain solution to uncertain social conditions is evident in the ways in which it is called into action by the state.
Although China’s social credit vision is invariably described as digital totalitarism and is often compared to the world of Orwell’s 1984, it is better understood as the apotheosis of instrumentarian power fed by public and private data sources and controlled by an authorian state.
The difference between surveillance capitalism in the West and China’s emerging social credit systems pivot on the patterns of entanglement and engagement between instrumentarian and state power.
A utopia of certainty
Although instrumentarianism and totalitarianism are distinct species, they each yearn toward totality, though in profoundly different ways.
The notion that Big Other will solve all of humanity’s problems while empowering each individual is usually dismissed as mere techno utopianism, but it would be a mistake for us to ignore this rhetoric without examining its purpose.
We march in certainty, like the smart machines. We learn to sacrifice our freedom to collective knowledge imposed by others and for the sake of their guaranteed outcomes. This is the signature of the third modernity offered up by surveillance capital as its answer to our quest for effective life together.
The instrumentarian collective
Applied utopianism executives such as Page, Nadella and Zuckerberg do not say much about their theories. One outstanding example is the work of Alex Pentland, the director of the Human Dynamic Lab within MIT’s Media Lab. Pentland refers to his theory of society as social physics. Pentland and his student have spent the last two decades determined to invent the instruments and methods that can transform all of human behavior, especially social behavior, into highly predictive math. They developed sociometer. These devices were used by many Fortune 1000 companies.
Digital breadcrumbs record our behavior as it actually happened.
New digital systems are required that must be integrated, holistic, responsive, dynamic and self-regulating. We need radical rethinking of societies systems. We must create a nervous system for humanity that maintains the stability of our societies’ systems throughout the globe.
Pentland prefers population to societies, statistics to meaning and computation to law. He sees the stratification of the population coded not by race, income, occupation or gender but rather by behavior patterns that produce behavior subgroups and a new behavior demographics that can predict disease, financial risk, consumer preferences and political views with between 5 to 10 times accuracy of the standard measures.
Instrumentarian society is a planned society, produced through total control of the means of behavioral modification. Individuality is a threat to instrumentarian society, troublesome friction that sucks energy from collaboration, harmony and integration. Instrumentarian society defines the ultimate institutionalization of a pathological division of learning. Who knows? Who decides? Who decides who decides?
Of live in the hive
Pentland celebrates Facebook as the perfect milieu for effective social pressure and tuning.
What will happen with our children growing in this environment? Adolescence has always been a time when recognition from others was important. Adolescence was officially discovered in the United States in 1904 by Stanley Hall.
Facebook’s single most momentous innovation in behavioral engineering is the now equally ubiquitous Like button, adopted in 2009. On the supply side, the Like button was a planet-size one-way mirror capable of exponentially increasing raw-material supplies.
Yesterday it was the Like button, today it is augmented reality and tomorrow there will be new innovations added to this repertoire.
One consequence of the new density of social comparison triggers and the negative feedback loops is a psychological condition known as FOMO (fear of missing out). Social comparison can make people do things that they might not otherwise do.
Facebook is a prototype of instrumentarian society, not a prophecy.
We are to live in the hive; a life that is naturally challenging and often painful, as any adolescent can attest, but the hive life in store for us is not a natural one. Men made it. Surveillance capitalism made it.
The right to sanctuary
Darhl Pedersen defines privacy as a boundary control process. Pedersen’s research identifies six categories of privacy behaviors:
- Solitude
- Isolation
- Anonymity
- Reserve
- Intimacy with friends
- Intimacy with family
No surveillance capitalist will voluntarily provide data from the shadow text. Only law can compel this challenge to the pathological division of learning. We need synthetic declaration that are institutionalized in new centers of democratic power, expertise and contest that challenge today’s asymmetries of knowledge and power.
Paradiso calls it revolution and Pentland says it is the death of individuality. Nadella and Schmidt advocate the machine hive as our role model, with its coercive confluence and preemptive harmonies. Page and Zuckerberg understand the transformation of society as a means to their commercial ends.
A coup from above
Surveillance capitalist are no different from other capitalist in demanding freedom from any sort of constraint.
Satya Nadella of Microsoft understands all physical and institutional spaces, people and social relationships as indexable and searchable. All of it subject to machine reasoning, pattern recognition, prediction, preemption, interruption and modification.
Users are sources of raw material for a digital-age production process aimed at a new business customer.
Surveillance capitalism’s successful claims to freedom and knowledge, its structural independence from people, its collectivist ambitions and the radical indifference, enabled and sustained by all three now propel us toward a society in which capitalism does not function as a means to inclusive economic or political institutions. Surveillance capitalism is a boundary-less form that ignores older distinctions between market and society, market and world or market and person.
The rise of instrumentarian power is intended as a bloodless coup.
Surveillance capitalism arrived on the scene with democracy already on the ropes. Surveillance capitalist quickly learned to exploit the gathering momentum aimed at hollowing out democracy’s meaning and muscle.
