Society of the Lanyard

The latest round of the national ID debate had hardly got underway before pundits and commentators were hurling insults. Particularly amusing was the sight of Lewis Goodall being community-noted on X for insulting X users' poor grasp of the subject while being married to an employee of the Tony Blair Institute. Leaving aside his consdescending tone and alledgedly offensive wife, Goodall did make one useful point, though without perhaps fully understanding it, when he accused the debate of being "insular", pointing out that other countries have had ID cards for years with little issue. This is correct, but it misses that the government, and lobbyists like the TBI, are also reluctant to actually examine the use of such schemes in other countries. One obvious reason is that they do not provide evidence for many of the beneficial claims that are habitually made. For example, we know that national IDs will not deter asylum-seekers because those camped out around Calais have already passed through multiple countries with ID regimes which didn't deter them either. Likewise, none of the countries that insist on IDs for employment have managed to do away with the shadow economy.

Deterrence is a common theme across arguments in favour of national IDs: it will deter illegal immigration, it will deter illegal employment, it will deter benefit fraud. But this is no more convincing than the deterrent argument used to justify any criminal law. Making something a crime does not stop it happening, it just clarifies the consequences. The more positive argument for a national ID, that it will improve citizens' access to public services, is nowadays more likely come with citations about how easy it is to report a collision to your car insurer in Poland using the national ID app. I'm pretty sure Poland doesn't have nationalised car insurance, more's the pity, so this is stretching the definition of public services. In other words, the boundary between a digital citizen and a digital consumer has already been erased. Across the EU, national ID schemes have been captured by commercial interests over the last twenty years, which is why they have moved online. Being able to access your bank account securely with your national ID is a greater benefit for the bank than it is for you. 

A typically-breathless report in the Guardian on the subject states that "Estonia claims e-ID saves citizens about five days a year of pre-digital administrative hassle." In other words, it was the digitalisation that reduced the admin overhead, not the national ID. Nobody in the UK is currently spending five days a year routinely negotiating public services online, and obviously the introduction of an ID scheme will not reduce the amount of time you spend sitting in a hospital waiting room or queueing for a bus. One argument you don't hear from the Tony Blair Institute, or anybody else for that matter, is that a national ID scheme will increase the take-up of benefits, by identifying people who are eligible but currently don't claim. It's estimated that UK benefit fraud (some of which is actually just DWP error) amounts to over £6 billion a year while unclaimed benefits are almost four times that at £23 billion. The intersection of national IDs and benefits is always about "efficient allocation", "better targeting" and the prevention of fraud.

The UK's feudal legacy is not to be found in the monarchy or Morris Men - both largely invented traditions of the modern era - but in its parcellised approach to public services, which is reflected in the multiple and not always overlapping identification schemes from NHS numbers to driving licences used to organise it. That may seem strange given that cars are obviously a modern invention and the NHS dates from only 1948, but the point is that the state in its broadest form has always been more fragmentary and blinkered than either its advocates or critics have allowed, and the roots of its disaggregation go a long way back. The welfare state may have offered an embrace from cradle to grave, but it was never the same arms doing the embracing over time, while the dystopian nightmare of an intrusive state ignored the reality of administrative disconnection (the totalitarian fears of Geroge Orwell originated from his experiences in the very exclusive and parcellised environs of Eton and the BBC).

The worry that a national ID scheme would lead to Larry Ellison or Peter Thiel controlling our personal data is a classic case of closing the stable door after the horse has bolted. Partly because of the parcellised nature of personal identification in the UK, they have already scooped up many of our demographic assets with minimal democratic oversight and zero public agreement. For them, the promise of a national ID is the ability to exploit the linkages between the datasets that they already control: the primary key to all the mysteries, if I may be permitted a techno-literate joke. But whether that will lead to greater insight is moot. It's easy enough to sell the state on the vision of making the population ever more legible, but the experience of Big Data has proved underwhelming, particularly in the area of public administration. The fundmental problem is one of triviality: that there isn't much to be learned by extending a particular NHS patient's record to include their driving licence. Even in aggregate, there is unlikely to be a statistically significant correlation between being entitled to ride a motorbike and suffering from shingles.

If the government wanted to implement a national ID card on the cheap it could simply issue everyone who doesn't have one with a driving licence. In these cases the card would simply have blanks on the reverse - i.e. you wouldn't be licensed to drive anything. In many countries, such as the USA, a driving licence is the standard form of (non-compulsory) ID and in the UK plenty of teenagers already use a provisional licence for proof of age in pubs and clubs. But this pragmatic approach, infomed by international practice, isn't what the likes of Lewis Goodall are seeking when they criticise British insularity. Their vision is of a common online identity whose utility to the state is almost incidental to its utility to business. And what particularly attracts journalists who face derision on social media is the prospect of doing away with online anonymity altogether. As they gather at the Labour Party Annual Conference in Liverpool to fret about Starmer's lack of vision, what they see when they look around the conference hall is actually their own vision: a society of the lanyard.

Identity Politics

The case for national ID cards is once more being promoted enthusiastically by the Labour Party and this time by the liberal press as well. And once more the arguments are the same: it will help fight crime, it will reduce benefit fraud, it will squeeze the black economy etc. The suggestion that ID cards will help solve the immigration "crisis" isn't exactly novel, but it is now the headline. What remains fascinating whenever the topic comes up is the complete absence of evidence (speculative assessments by the Tony Blair Institute notwithstanding) to support any of its claimed benefits. What makes it doubly fascinating is that the Windrush scandal has barely passed from memory: an occasion on which the discriminatory interpretation of citizenship led to a cavalier abuse of power and the unnecessary suffering of many people. Bizarrely, some supporters are even claiming that the scandal would have been avoided if everyone had had an ID card; an unprovable counterfactual that completely ignores the actual history of events and the political pressures that led to the performative cruelty of the "hostile environment".

The prominence of immigration has caused some rearrangement of the political forces around the debate. Where once Tory newspapers would have rehearsed both sides of the argument - authoritarian versus libertarian - their opposition to the idea is now muted because of the salience of immigration and their own insistence on the existential threat that it poses to the nation. The Observer, which was previously firmly in the libertarian camp (it ran a "Liberty watch" campaign during the New Labour years), looks like it will provide the forum for the latest debate, though its editorial view, as it shifts further right, is now predictably blithe about the risks. Kenan Malik, for the libertarians, recently outlined the danger of dividing sheep from goats: "Mistreating and abusing citizens is not morally more reprehensible than mistreating and abusing those deemed “illegal”. What it reveals, though, is that if we turn a blind eye to such treatment on the grounds that “it’s only illegals being treated this way”, it will not remain “only illegals”. And once such forms of policing become acceptable, they can easily be transposed to dealing with other groups deemed a social menace, such as strikers or protesters." 

In contrast, Will Hutton has nailed his flag firmly to the authoritarian mast: "Immigration above any other issue fuels populism. Part of the fightback is to douse these flames – say, by introducing universal ID cards so we know who is here, building special purpose centres to house illegal migrants, and processing claims and necessary deportations fast and visibly. This should never be presented as a concession to implicit racism. Rather, it is to keep rules and be fair." While Malik is fairly indirect in his approach, leaving it to the reader to note the implicit mission creep of any ID scheme, Hutton is bracingly direct in his solutionism, which tells something about the respective confidence of the two camps but also about the uncertainty that besets liberals who have hitherto warned us of the danger of identity politics. A national ID scheme appears to flatten the population into a single mass, but it is also identity politics writ large: an extreme form of imagined community. The problem is that while the geographical borders of the country are clear, its demographic limits are not.

We know from the Windrush case that there isn't a clear, dividing line between citizen and non-citizen - between "them" and "us" - so all the talk of rules fairly applied is just hot air. What matters is the political direction and the operational practices of the Home Office. But what Hutton's contribution does make clear is that the introduction of ID cards is the necessary precursor for the mass deportation of people who have been in the country for years. His blunt advocacy is wrapped up in the usual panegyric to Enlightenment values, but it's one that does serious injury to history. Consider this: "The BBC, for example, was established as a public body to use the new broadcast media to disseminate impartial information better to inform and educate British citizens." The corporation was established as a commercial company in 1922, under licence by the GPO, by a cartel of radio manufacturers to provide "orderly management" of the radio spectrum and boost the sale of radio sets. It quickly acquired a political colouring when the establishment realised the benefit in terms of controlling public opinion, notably during the General Strike of 1926. In 1927 it was reconsituted as a public corporation and informal government censor. These facts are well known.

You might wonder why Hutton has dragged the BBC into the debate. The intention is to convince us that a British ID card scheme would be as reassuring as "Auntie". It appears he hasn't been watching BBC TV or listening to the radio of late. If the Tory press sets the agenda for the national broadcaster, don't be surprised if it sets the policy of the Home Office. According to Hutton, "The Overton window of what is acceptable has been moved so far to the right by the populist upsurge." But this confuses cause and effect. It is the political centre - supposedly the repository of Enlightenment values - that has pushed politics to the right since 1980, long before any "populist upsurge". Inevitably, he must drag in the newspaper's obligatory criticism of social media: "But just as the Enlightenment was propelled by a quest for truth and fact, today’s anti-Enlightenment populists are fuelled by social media and disinformation. ... Reform could never have climbed so high, so fast, without a credulous public deluded into thinking social media carries truths that mainstream politicians and media conspire to disguise."

The Enlightenment exploited the novel media of the day to advance its ideas: The Marriage of Figaro being a famous example. Even more pertinent to Hutton's claim was the rise of the scabrous anti-establishment pamphlets that did so much to stoke the French Revolution. Though there is a long tradition of liberals decrying 1789 as the wrong turn that would lead to the gulags, there is no doubt about the central role that Enlightenment ideas had in its gestation and development. The area where Hutton finds common cause with Malik is in the criticism of identity politics: "Have liberals made mistakes? Undoubtedly. Tolerance has mutated into advocacy of minority rights so fierce that the majority feel actively menaced. The charge of being “woke” has some legitimacy." At this point Hutton could be writing for the Sunday Times or Sunday Telegraph. What he cannot apparently see, while Malik shifts uneasily in his seat, is that there is no "majority" defined by their exclusion from minority rights. To suggest otherwise is to drift perilously close to the kind of politics that sees road signs in Welsh or Gaelic, or the mere existence of trans men and women, as an affront.

In the liberal lexicon, populism has always been a synonym for democracy, but in offering ID cards as a counter to it Hutton is reducing it to mere bigotry: that "implicit racism". But even the academics who have made a career out of analysing the subject agree that the primary fuel is economic stress, hence the current wave of populism can be traced to 2008 and its reverberations, notably austerity. It is a common observation that anxiety over immigration is simple displacement, hence it fluctuates in response to media prominence and is often highest in areas with the fewest immigrants. Other factors that have stoked populism include the cartelisation of politics and its related ideological convergence and corruption. Immigration may be seized upon as an issue, but it is not a significant explanatory factor. After all, the great wave of postwar immigration did not lead to more than a few isolated and evanescent cases of populist political advance, and many of those, e.g. Poujadism, had very clear economic roots.

Hutton believes that we, that nebulous "majority", should "go on the front foot to argue for Enlightenment principles, from vaccination to the environment. The entire anti-Enlightenment, anti-truth, disinformation biases of social media must be contested. The success of the Online Safety Act in dramatically lowering harmful content should be built on. Take on the tech giants. Insist information on their platforms is mediated, that anonymity is impossible and that standards of fact in the analogue world are reproduced in the digital world. Even consider launching public social media platforms, reproducing the same thinking 100 years later that justified the BBC." As with his potted history of the Corporation, this is misleading. The Online Safety Act has not dramatically lowered harmful content. It has simply led to the increased use of VPNs. Hutton's suggestion that all online content be mediated and that there be no anonymity is obviously absurd, but making such unrealistic demands is simply seasoning for the less palatable dish that he offers, namely a national ID card that would undermine the traditional liberties that were central to the British conception of the Enlightenment.

Riffing With Rishi

The pandemic has caused a re-evaluation of a number of assumptions about how society should be organised. I'm going to focus here on the voguish topic of working from home (WFH). Outside of the financial sector and public spending, the economic intervention of the state has largely been rhetorical since 2008 and you could be forgiven for thinking that the more recent enthusiasm for "levelling-up" is merely intended to compensate for the class bias of quantitative easing and austerity. But while it seems unlikely that the North of England will blossom as a result of some free-ports and the relocation of a few Whitehall functions, there is reason to believe that the government will play a crucial role in determining whether WFH becomes the new normal for many people. Rishi Sunak's suggestion this week that many workers want the interaction of the office environment suggests that they are not keen to facilitate too much change. But what interests me is not his implicit support for commercial landlords but the explicit idea that offices aid productivity through some combination of "riffing", "spontaneity" and "team-building". 

Low or stagnant productivity growth has been an issue in developed economies since the 1970s, which coincides with a period of rapid growth in whitecollar roles and new office buildings. In 2019 there were more people in the UK working in offices, both as a quantum and as a percentage of the workforce, than at any time in history. Some attribute this record of poor productivity growth over 50 years (albeit with a short interlude in the 1990s) to the failure of IT to replicate the productivity boosts of earlier general purpose technologies (GPTs), like steam power or electric motors. Thus the Solow paradox from 1987: "You can see the computer age everywhere but in the productivity statistics". The question of whether IT wasn't as impactful as previous GPTs, or whether the benefits were simply lagging, appeared to have been answered when productivity growth increased during the last decade of the century, suggesting that businesses had finally worked out how to use those computers. 

Others see declining productivity growth as an artefact of the neoliberal reorganisation of production, and not necessarily something to worry about. The theory is that globalisation simply shifted productivity growth offshore. The developed economies then moved more activity from production to consumption. Support for this theory was provided by the relatively high rates of productivity growth in domestic manufacturing even as it shrank as a proportion of the economy. But it is easy to mismeasure productivity in services, particularly because improvements in quality (the utility to the consumer) cannot be captured as straightforwardly as improvements in quantity. Manufacturing can be more easily compared across firms because they use common technologies. This in turn means that there is less variation in productivity growth: when a new technology appears it is quickly disseminated. In contrast, services exhibit a much wider range of productivity, reflecting greater variations in skill, market structure and intellectual property.

The return to low productivity growth in the 2000s has been explained through the same two mechanisms. In terms of technology, the low-hanging fruit of the IT revolution, such as improvements in supply-chain and backoffice functions, were one-off gains that were quickly exhausted once fast Internet access was deployed in the 1990s, while the distractions of social media since have shown how counter-productive technology can be. IT investment since the millennium has tended to focus on retail rather than production (apps, online buying), which means that productivity gains are more marginal and those that are realised may disappear at the aggregate level because they are distributive (e.g. gaining market share at the expense of a competitor may not translate into increased sectoral output or lower firm production costs). In terms of the organisation of the economy and trade, the reshoring of high-productivity manufacturing has been too slight to redress the impact of globalisation, while growing wealth inequality has continued to feed low-productivity services (from home deliveries for the middle-classes to concierge services for the rich).

It's true that previous GPTs took many years to fully penetrate industry and deliver their benefits, though these lag-times do appear to have speeded-up. For example, the internal combustion engine became prevalent much more quickly than steam engines. It's also the case that legacy GPTs tend to stick around. Consider how steam, diesel and electric trains were all in simultaneous use in the first half of the twentieth century. The reason for the cycle of slow adoption and reluctant abandonment is that work and infrastructure needs to be fundamentally reorganised around the new technology (the 1990s was the era of process engineering, which is what drove many productivity gains). As the optimum arrangement is only discovered through trial and error, and as the changes require large investments, this is inevitably a slow process. In comparative terms, the two decade lag in the realisation of IT's benefits was quite short. This was probably due to its easier substitutability in certain sub-processes (e.g. email replacing paper post) and its rapidly falling unit costs combined with rapidly increasing performance (Moore's Law etc).

Part of the attraction of the shift to WFH in the wake of the pandemic for economists and social scientists is the expectation that it could be both significant in scale and relatively sudden. In other words, we might be able to see the impact on productivity within a few years. Another factor is the belief that a lot of the work on optimisation has already been done by those who pioneered remote working following the deployment of broadband in the 1990s. Video-conferencing is now a mature technology while many firms had already migrated their core systems to the cloud before Covid-19 appeared. The optimistic school of thought holds that all the conditions are in place for a paradigm-shift in working practices. Noah Smith is representative of this but also of the assumption that these changes can occur organically as a result of market forces. Amusingly, some of his vision revives past predictions that never materialised: that we can all become digital crofters; that firms can outsource individual tasks (neither Amazon's Mechanical Turk nor TaskRabbit have proved revolutionary); and that the boundaries between firms will become increasingly blurred (the Coasian ideal).

One area Smith is silent on is labour organisation. He correctly notes that the productivity gains of electricity in manufacturing came with factory reorganisation, from belt-driven machines powered by large steam engines to workstations driven by local electric motors powered through wiring. This "allowed workers to do things when they needed to be done instead of adjusting their workflow to the rhythm of a giant machine". But it also allowed workers to "go slow" or call "lightning" strikes. The twentieth century pattern of industrial relations was set by variable-speed motors and the ability to cut electricity at the flick of a switch. There is always a labour dimension. In an earlier GPT cycle, the move from putting-out in the textile industry to water-powered mills not only concentrated production it concentrated workers and transformed them into wage labour: the traumatic process of proletarianisation. WFH may have few labour organisation implications for managerial and professional staff, but what if it is extended to unionised sections of the labour force? 

WFH potentially allows firms to forgo or reduce some costs, such as office space, but it also allows them to extend exploitation of the worker, notably in the use of the home as a workplace. This is unlikely to be compensated for, not least on the grounds that the worker gains by not having to pay for commuting. In other words, capitalism's historic ability to transfer the burden of various costs onto labour isn't going to change. In simple financial terms it may be about to get gradually worse because housing costs have historically risen faster than transport costs. In a putting-out or piece-rate system the worker usually provides both workplace and tools. As WFH has become more common and more homes have personal computers and Internet connections (if not national broadband), the expectation has grown that the worker will provide and the employer will at best subsidise. This suggests a trajectory in which WFH and the gig-economy increasingly converge (a model being sold as "free-agent entrepreneurship" in some quarters).

One reason why employers are increasingly sanguine about remote working is that they can see the potential for greater work surveillance through technology. This isn't about preventing skiving, as workers with minimal control over their jobs will ultimately be paid on the basis of their measured productivity anyway - e.g. the number of transactions completed or cases processed. This is more about disaggregating the workforce so that productivity can be optimised at the level of the individual. As such, it continues the trend of personal performance management that emerged in the corporate world in the 1980s. In factories you had the traditional problem of soldiering - everyone working at the same pace, often little above the slowest - while in offices the water-cooler became a synecdoche for a culture of work avoidance through the rituals of sociability. WFH offers the potential of fewer distractions and easier monitoring, but also of more granular worker "tuning". The hunt for a better work-life balance is not an initiative of labour but rather capital's continuing determination to raise productivity through greater exploitation.

I suspect that the enthusiasm for working from home will deflate once the pandemic is over. This is not to suggest that the secular trend towards remote and flexible working, with its emphasis on moderation and balance, won't continue, but that we will increasingly see the emergence of different classes of WFH: the professional who manages their own time and goes into a pleasant city-based office for a couple of days of socialising versus the digital peon in a small town whose piece-rate work is closely monitored. Central London will not empty; Mansfield will not be regenerated. Perhaps the most worrying aspect is that those whitecollar roles where trade unions have managed to retain a presence, notably in the public sector, will be increasingly vulnerable to this steady change. Though the technology offers as much opportunity to labour organisation as threat, the reality may be that WFH is combined with a move to greater freelancing and all the disempowerment that entails. Rishi Sunak isn't pushing a conservative narrative in which offices are temples of capital but imagining a world in which atomised labour has to be congregated for indoctrination in a corporate culture.

The Mandate of Heaven

Just as the Chinese concept of the Mandate of Heaven was used to justify both the authority of the emperor and the right of the people to overthrow him, so the concept of totalitarianism has been employed both to advocate democracy and to excuse authoritarian restraints upon it. In a review of Kai Strittmatter's We Have Been Harmonised, which looks at the way technology is being used for social control in China, John Naughton draws a distinction between networked authoritarianism and networked totalitarianism: "An authoritarian regime is relatively limited in its objectives: there may be elections, but they are generally carefully managed; individual freedoms are subordinate to the state; there is no constitutional accountability and no rule of law in any meaningful sense. Totalitarianism, in contrast, prohibits opposition parties, restricts opposition to the state and exercises an extremely high degree of control over public and private life." If Putin's Russia is the pre-eminent authoritarian regime in this definition, then Xi Jinping's China is the pre-eminent totalitarian one (North Korea is eliminated on the technicality of not being "networked").

But it's not at all clear that there is a meaningful distinction to be made between authoritarianism and totalitarianism beyond the specific - and for most people largely irrelevant - point about legal political parties. Viewed from the perspective of a worker or peasant, there was little to no practical difference between the two during the twentieth century, the chances of being shot or starved to death notwithstanding. A dividing line can be drawn around Nazi Germany, the Stalin-era Soviet Union and Mao-era China on the basis of body-counts, but the theory of totalitarianism developed by Hannah Arendt and others was essentially about social control rather than murderous practice, and there are plenty of authoritarians with bloody hands. A cynic might suggest that an authoritarian regime in the twentieth century was simply one that the middle-classes were prepared to tolerate in the interests of restricting democracy and preserving private property. Despite its investment in the technology of social control and the privileged position of the CCP, China may just be another authoritarian regime.

That's certainly one way of reading Tyler Cowen's claim that democracy is not coming to China anytime soon: "If you belong to the Chinese upper class or even middle class along the eastern coast, you may end up asking yourself the following question: Who is more likely to protect my basic economic interests, the current Chinese Communist Party, or a democratic representative of Chinese rural interests? … One recent study has shown that Communist Party members are more likely to have progressive views on issues of gender equality, political pluralism and openness to international exchange than do the Chinese public at large. Again, if you are an elite among the Chinese citizenry, it is not a sure thing that you will do better with democracy than under the Communist Party." That democracy jeopardises vested interests is hardly an insight, but it's still a surprise to see an advocate of free markets admit that it isn't the inevitable product of economic reform.

Unlike Cowen, Naughton isn't prepared to concede that authoritarianism might in fact be the natural outcome of capitalism when unconstrained by organised labour -  in other words, that the emergence of democracy in Western Europe and North America was highly contingent - but this means identifying an additional factor that can explain China's peculiar path. That factor is digital technology: "We thought that if the Chinese wanted to modernise, they would have to have capitalism. And if they had capitalism, they would have to have democracy. And if they wanted to have the internet (and they did), they would have to have openness, which would eventually lead to democracy. All of which turned out to be baloney. Essentially, the CCP decided that they could have their cake and eat it – and they have succeeded. They have embraced digital technology and used its intrinsic affordance of comprehensive surveillance to construct a successful, powerful, growing, networked totalitarian state with global ambitions."

The implication is that the mass surveillance enabled by the Internet has allowed the CCP to prevent capitalism's magic from fostering democracy and a free press. This dovetails with the now dominant belief in the media that the Internet may be a threat to established democracies as well, although paradoxically as much through its lack of restraint (incivility) as through the abuse of bad actors (fake news). Behind this spectre of a disruptive and antisocial technology lies the Cold War-era image of a totalitarian society in which everyone is closely monitored and fearful. One of the revelations of the 1990s was that the USSR had not been anywhere near as totalitarian as the propaganda maintained (revisionist historians had been making this point since the 1970s, but it only came to public consciousness after 1989). The Brezhnev years, now nostalgically recalled by many ex-Soviet citizens because of their stability and modest sufficiency, were marked less by Orwellian fear than Hancockian boredom. What most people were hankering for were better commodities, not a free press. The irony is that the arrival of those commodities has led to more pervasive surveillance in the form of the commercial Internet.

The West has long created imaginary "others" at the level of society as a way of speculating on changes that might be adopted domestically, both benign and malign, from political systems to sexual habits. Though we nowadays think of the Orientalist tradition as a justification for imperialism, it was marked in its earliest phases by an admiring assessment of the strengths of the Ottoman state, an approach that has its modern echoes in newspaper articles praising the achievements of Singapore or indeed China. Much of the positive style of this speculation shifted towards the realm of science fiction in the twentieth century, though its "real world" application lived on in the romantic appreciation of national liberation movements. The negative style was dominated by its political utility, notably in the 1940s literature of totalitarianism and the 1950s to 1980s literature of the Cold War.

Much of the Western speculation about China's "Great Firewall" and the emerging technology of "hyper-surveillance" seeks to recreate that imagined environment of paranoia and intrusiveness, but it is questionable whether there is any more substance to it today than there ever was. The world depicted in 1984 was no more credible, either technologically or socially, than the one depicted by The Martian Chronicles, though its likely that Ray Bradbury was more conscious of the fact that he was really writing about the Mid-West than George Orwell was conscious that he was writing about Eton. Likewise, the tales of China's social-credit system, CCTV networks and facial-recognition software sound scary until you remember that the same technology is already being used extensively or trialled in the West. In terms of remote and automated surveillance at street level, Beijing and London are pretty similar.

Naughton recognises one oddity of our current geopolitical focus: "China’s modernisation means that bipolarity has returned and a formidable alternative to our system has materialised. Yet we remain obsessed with Russia – which is a nuisance rather than an existential threat – and not with China." Perhaps the truth is that we don't want to let go of the dystopia of the USSR. In an age of limited communication and restricted travel, it had the advantage of being obscure and impenetrable, like the mysterious Orient of old. In contrast, modern China is relatively open, highly-visible and for all practical purposes little different to other East Asian states. It's clearly not as "free" as Japan (though that is a de facto one-party state, incidentally), but it's also not as satisfyingly totalitarian as the imaginary Soviet Union of the 1970s.

To make up for this, we have to imagine that the Chinese use of surveillance technology is both more technically advanced and socially pervasive than it is in the West. The Cold War paradigm is no longer appropriate, but the trope of the cunning oriental never goes out of fashion, so there is a ready market for tales of nefarious practice and totalising ambition, as Huawei has found to its cost. Rebecca MacKinnon, who coined the term "networked authoritarianism", has made the point that it is a model of social control that is dependent more on legal coercion, commercial cooperation and warrantless surveillance than on traditional censorship or blunt service denial. In other words, it is about the intersection of the state and the market - they are complementary rather than antagonistic. One reason for the emergence of the term "networked totalitarianism" is that MacKinnon's characterisation applies equally well to Western countries, particularly after the various surveillance scandals of the last decade. We need something stronger to put the Chinese into a class of their own.

A decade ago Yevgeny Morozov noted how US technology could be employed by authoritarian regimes: "Can the Internet empower dissidents and pro-democracy activists? Yes. But it can also strengthen existing dictatorships and facilitate the control of their populations. Washington's utopian plan to liberate the world one tweet at a time could also turn American innovation into a tool for the world's subjugation." Today, the belief is that China may be closer to realising the potential of AI for social control than the West, but this is as much an expression of envy as of fear and at times seems more informed by the speculative fiction of Isaac Asimov's "psychohistory" than by any technical reality. Once more, China is being held up as an example for the West, or more accurately for authoritarian tendencies within Western political establishments: "Even some foreign observers, watching from afar, may be tempted to wonder if such data-driven governance offers a viable alternative to the increasingly dysfunctional-looking electoral model." When people start talking about a totalitarian "threat", the restraint of democracy never seems to be far away.

Surveillance Capitalism

Shoshana Zuboff's The Age of Surveillance Capitalism has been widely criticised for being too apocalyptic about surveillance and too apologetic about capitalism, but this hasn't hindered its success. This week she chided Nick Clegg, Facebook's inhouse apologist, for placing the burden of improving corporate practice on the democratic state, despite this being precisely her own remedy for the ills that she diagnoses. Her thesis comes in two parts: the digital surplus extracted from users by companies like Google and Facebook has moved beyond "improving customer experience" to the creation of "prediction markets"; and these predictions extend beyond targeted advertising to the modification of behaviour. In her own words, "it has become clear that the most predictive data comes from intervening in our lives to tune and herd our behaviour towards the most profitable outcomes." Though this is a criticism of capitalist practice, it is one that admires the ignorance that Hayek postulated and also shares his fear, outlined in The Road to Serfdom, that corporations would embrace "socialist planning" out of self-interest. In other words, this is an analysis that should appeal to an Orange Booker like Clegg.

The chief criticism of her thesis from the left is that she is simply describing capitalist ideology and how it reinforces itself through social processes, particularly consumerism. Her expectation of, and response to, such criticism has emphasised the epochal change as she sees it between a capitalism of mass society - the twentieth century model of social marketing and the commodification of taste - and a capitalism of the individual where corporate risk is mitigated by subtle, personalised coercion: "Data scientists describe this as a shift from monitoring to actuation. The idea is not only to know our behaviour but also to shape it in ways that can turn predictions into guarantees. It is no longer enough to automate information flows about us; the goal now is to automate us." The irony is that Hayek's praise of "how little the individual participants need to know" for the price system to operate is matched by his praise of its ability "to provide inducements which will make the individuals do the desirable things without anyone having to tell them what to do".

There is clearly a large gap between the reality of surveillance capitalism's "prediction products" and Zuboff's totalitarian vision, which can be seen in examples as varied as AdChoices' monomania and the failure of Google Flu Trends. Likewise, there is no obvious theoretical mechanism, let alone empirical evidence, to support the claim that "Surveillance capitalism, run as the code for everyday life, erases both free will and free markets". This rhetoric not only employs the worst kind of Silicon Valley techno-babble (if there is an operating system for everyday life, I would have thought it more likely to be DNA than Google's search history), it also makes a none too subtle attempt to equate free markets with free will, though it's not clear whether Zuboff thinks free will will atrophy if markets are increasingly directed (the Hayekian position) or whether she thinks that the lack of exercise of free will make a mockery of the free market (which is dangerously close to the socialist critique that free will is a mockery if you are poor and socially powerless).

Zuboff is very much in the "saving capitalism from itself" camp, hence the need to present current developments as a perversion of the system rather than as the inevitable and not particularly radical evolution of the capitalist dynamic. This means ignoring much of the social history of surveillance and commercial coercion, from Edward Bernays through Mass Observation to The Hidden Persuaders. Instead, her historical focus is first on the generational break caused by the widespread adoption of information technology, which she sees as having created a fork in the road at the end of the era of Fordist managerialism; and second on the contingent coincidence in the early years of this millennium of the need for Google to monetise its technology, the erosion of the state's caution towards mass surveillance after 9/11, and the favourable environment created by two decades of neoliberal deregulation. In her telling, this combination of factors has encouraged the dominance of surveillance capitalism instead of an "advocacy-oriented" capitalism embedded in political and social institutions (the road not taken).

Where she does rely on social history is more in prognosis than diagnosis: "Surveillance capitalism thrives in the absence of law. In a way, this is good news. We have not failed to rein in this rogue capitalism; we’ve not yet tried. More good news: our societies successfully confronted destructive forms of capitalism in the past, asserting new laws that tethered capitalism to the real needs of people. Democracy ended the Gilded Age. We have every reason to believe that we can be successful again." This is the classic liberal dichotomy of unrestrained capitalism and technocratic regulation. In reality, the restraint of one by the other does not presume democracy: the original UK Factory Acts long-predated universal suffrage. Even in the context of the USA, the boast that democracy ended the Gilded Age ignores the role played in the Progressive Era by competing fractions of capital. The resistance to the encroachment of the market does not necessarily take a political form, even in a democracy, and the idea that laws tether capitalism to the needs of the people, rather than vice versa, is obviously naïve.

Not content with this hyperbole, Zuboff proceeds to cast surveillance capitalism as a threat to our very humanity: "What is abrogated here is our right to the future tense, which is the essence of free will, the idea that I can project myself into the future and thus make it a meaningful aspect of my present. This is the essence of autonomy and human agency. Surveillance capitalism’s 'means of behavioral modification' at scale erodes democracy from within because, without autonomy in action and in thought, we have little capacity for the moral judgement and critical thinking necessary for a democratic society." At root, this is a classic argument against democracy: the mass of people (in modern discourse this is usually reduced to a problematic minority - e.g. "the white working class") lack the judgement and capability necessary to make decisions about the management of the state. This is straight out of Plato's Republic, even if it's embellished with fashionable nods to the Frankfurt School (autonomy, critical thinking).

So, what is to be done? Zuboff is sceptical of personal data ownership as a solution, but her reasoning is that you cannot establish a link between an individual's data and the ultimately valuable predictions that it feeds into. "One example [of a solution] is privacy law’s call for 'data ownership'. It’s a misleading notion because it legitimates the unilateral taking of human experience – your face, your phone, your refrigerator, your emotions – for translation into data in the first place. Even if we achieve 'ownership' of the data we have provided to a company like Facebook, we will not achieve 'ownership' of the predictions gleaned from it, or the fate of those products in its prediction markets." One obvious retort to this problem of identification is common ownership. In other words, treating that aggregate data as a social resource. This idea, advocated by thinkers such as Evgeny Morozov, does not necessarily imply the creation of a nationalised data infrastructure. It could simply mean the effective taxation of the commercial data aggregators.

Zuboff's preferred solution is liberal regulation in which propriety and civic virtue are as important as technocratic diligence. "This means, at the front end, outlawing the secret theft of private experience. At the back end, we can disrupt revenues by outlawing markets that trade in human futures knowing that their imperatives are fundamentally anti-democratic. We already outlaw markets that traffic in slavery or human organs." The problem here is that most of this "theft" at the front end isn't at all secret. We willingly tick the end-user licence agreement because we (rightly) imagine the value of our digital exhaust to be negligible in isolation, and so the investment of time to actually read those voluminous T&Cs simply isn't worth it. We know that its true value is largely in an anonymised aggregate. The parallel with slavery or the sale of organs in this context is ridiculous.

The hunt for the responsible capitalist continues: "We need laws and regulation designed to advantage companies that want to break with surveillance capitalism. Competitors that align themselves with the actual needs of people and the norms of a market democracy are likely to attract just about every person on Earth as their customer." The idea that virtue is attractive is hardly borne out by the reality of the Internet (cf porn, clickbait, cat videos etc), while the idea that the state can encourage and reward good behaviour among "enlightened" firms, though central to conceptions of capitalism from the social democracy of Ed Miliband to the entrepreneurialism of Jeremy Hunt, is not supported by history. Firms are driven by capitalist competition to respond to incentives in an amoral fashion. If aligning with the needs of people conflicts with making a profit, then profit will typically win out.

Zuboff also has a tendency, long-standing in her work, to accept certain firms at their own virtuous estimation, most notably the counter-cultural rhetoric of Apple. This goes hand-in-hand with an over-estimation of the willingness of the state to restrain capitalism for the public good, as opposed to the preservation of property rights: "lawmakers will need to support new forms of collective action, just as nearly a century ago workers won legal protection for their rights to organise, to bargain collectively and to strike. Lawmakers need citizen support, and citizens need the leadership of their elected officials." This potted history ignores that lawmakers have spent most of their time trying to frustrate the rights of workers. Rights were won through struggle against the political system. That this story segues to a vision of a supportive citizenry and an enlightened leadership suggests that Zuboff doubts the unprecedented threat of surveillance capitalism will produce any discernible evolution in our politics, which is odd to say the least.

Evgeny Morozov, in an excellent long essay on Zuboff's intellectual development that places her ideas within the context of American industrial sociology, makes a key observation: "Zuboff’s definition of surveillance capitalism hinges upon whether behavioral surplus is used to modify behavior, not whether data extraction is visible." In other words, her thesis of the pernicious nature of surveillance capitalism rest on the proof that it is effective in its own terms - that it does modify behaviour in a profitable way for capitalists - rather than by virtue of it being pervasive. Given how cheap it is to harvest our data exhaust, compared to pre-digital methods of gathering consumer feedback and preferences, it is possible for capitalists to justify this "surveillance" purely on the grounds of reduced cost even if leads to no, or only marginal, improvements in the effective direction of consumer behaviour. Surveillance capitalism is just a more refined form of capitalism, and the real risk that surveillance technology poses is not to individual autonomy but to collective action against the state.

The Expectations Gap

Last month, the CEO of Grant Thornton, the auditors of Patisserie Valerie, told MPs on the Business, Energy and Industrial Strategy Committee that "We're not looking for fraud", a comment that was taken to be representative of auditors in general. With high-profile failures such as the cake chain and Carillion dominating the media in recent years, this comment sparked some incredulity, thereby highlighting what has come to be referred to as the "expectations gap" in the public understanding of the role of auditors. The purpose of an audit is to independently verify that a company's accounts give a true and accurate picture of its trading status and financial viability, essentially to assure shareholders and debtors (e.g. banks providing financing) that they can rely upon the statutory accounts to accurately gauge risk. This does not extend to assessing the quality of its business - so a firm that is a going concern could still go bankrupt if legitimately anticipated revenue failed to turn up - nor does it include an opinion on a firm's ethical behaviour beyond the conventions of accounting.

The concerns over the audit industry that have emerged since the Enron scandal in 2001 revolve around risk rather than ethics, reflecting a fear among large investors and financial institutions that they are being increasingly exposed by the limitations of the traditional audit. The focus is on firms of the scale of Carillion, not small-fry like Patisserie Valerie, and in particular on businesses with complex intercompany structures that span both the private and public sectors, raising the linked issues of implicit state guarantees and regulatory arbitrage. The expectations gap between what the public expects auditors to be responsible for and what they actually do is not a reflection of popular ignorance but a demand for a more socially-focused role. Though auditors are just business service providers, they are perceived by the public as carrying out a quasi-state function: ensuring that firms are not merely legally-observant in their accounting practices but they are not conducting their business in a manner that might prove damaging to society in the various forms of customers, suppliers and employees.

These two tendencies - the increasing complexity of modern capitalism and the demands for social responsibility - are at root driven by the same trend: the increasing socialisation of capital in the form of firms dependent on institutional shareholdings. The demand for higher ethical standards has long been addressed, if inadequately, by the pabulum of Corporate Social Responsibility (CSR). The demand for greater managerial oversight by institutional investors has been met by legislation on corporate governance, and it is within the latter's ambit that the issue of audit is now being addressed. This means that one problem of the current audit regime, the role of non-executive directors (NEDs) in leading audit committees, is unlikely to be resolved. NEDs have to be clubbable and not ruffle feathers if they are to acquire multiple directorships, with the result that there is little incentive to be hard on either the business or its auditors. Nationalising audit, or at least putting it under the direct control of a state regulator, runs into the problem that it would reduce the power of NEDs and thus call into question the corporate governance regime.

Over and above this there are the traditional objections that a national audit service would represent an excessive incursion by the state into the private sphere, and that the application of a common ethical framework would constrain innovation and enterprise (CSR is optional, after all). More modest calls (e.g. by Labour) for the breakup of the "big four" and the insistence that audit firms should be specialists, rather than loss-leaders used as a platform for upselling, stand a better chance of success, but only if the focus remains on risk management and if state oversight is little more than another "watchdog". What will not be conceded short of nationalisation, and perhaps not even then, is the idea that auditors should assess a firm's social responsibilities. That business should be subject to ethical scrutiny has always been, and remains, anathema. This doesn't mean that ethics will be ignored, but that it will be diverted into the spectacle of personal behaviour, such as "fit and proper persons" tests and disgust at CEO incivility. The Philip Greens and Michael O'Learys of this world will continue to strut the stage, distracting from the theatre itself.

This might all seem a bit dry, but the question of the purpose and organisation of company audits is relevant to the emerging debate over the future management of artificial intelligence, which is nothing is not sexy, at least in its media coverage. This is because both employ the rhetoric of social responsibility but do so in order to preserve established interests. In today's Observer, Will Hutton, who knows a fair bit about capitalist practice but not much about technology, argues for a "smart response" to guard against the sinister abuse of AI. He has a list of measures: "Three seem crucial: maximal transparency and accountability embodied in regulatory oversight and a new Companies Act; methods and digital processes to ensure you own your data and its use; and fast and effective regulation of content. Put another way, we need every organisation deploying digital data to be open and accountable; we need new public interest digital platforms where we can hold our data based on the presumption we own it; and we need another Leveson – a fast and effective mechanism to ensure digital information is not misinformation". This is the classic liberal trifecta: transparency among an elite, secure ownership and civilised censorship.

What is missing in Hutton's analysis is any real understanding of the social context of the technology (this has been a longstanding blind-spot in his oeuvre). For example, he claims that "AI allows the individualisation of your drug treatment and fast and cheap diagnoses of whatever illness you are suffering, along with likely cures". This is nonsense, not least because it is genetic sequencing that might allow such individualisation, not AI, but the wider error here is to fail to see the social reality. Medical research is skewed to the interests of the rich because they have the money to pay for expensive screening and treatments. The idea that AI will produce cheap diagnoses and cures, thereby disrupting a pharmaceuticals industry based on fat profit margins, is naïve. After a gratuitous insult aimed at the Labour Party, which now seems to be obligatory in all Observer comment pieces, Hutton ends with a call to arms that perfectly echoes the fears of an earlier generation of liberals faced with the prospect of universal suffrage: "The task is not to throw up our hands warning that the machines are coming – it is to design a world in which we are their master, not their servant".

The liberal demand that AI be regulated and managed is not motivated primarily by a desire to defend society from its disruptive and destabilising potential, no matter how many times its advocates cite Karl Polanyi, but from the self-interest of existing business sectors. In quoting Shoshana Zuboff's concept of "surveillance capitalism" (a term that is rightly being criticised for having little to do with capitalism), Hutton conflates two completely unrelated technologies. Trawling your Facebook posts to determine what adverts to present you with is not AI, but it is a technique of data personalisation that is eating the lunch of newspapers dependent on advertising. Likewise, claiming that social media is destroying the fabric of civilised life and undermining our politics only makes sense if you cannot imagine either civilisation or politics beyond the frame of elite convention. Both the optimism and pessimism associated with AI reflect expectations of profit more than social benefit. Similarly, the debate over the future of audit is not about preventing fraud or social damage, but mitigating risks to capital.

Sans Papiers

One of the more unusual features of the Windrush scandal has been the eruption of social reality into political debate. This is apparent not just in the way that the square peg of personal circumstance fails to fit the round hole of official approval, but in the evidence that many people will go to some lengths to minimise their contact with state agencies, which raises questions about the state's knowledge of the population and thus the empirical basis for much social policy. It's no secret that 1 in 6 people in the UK don't have a passport of any sort (the question is in the census, after all), yet it has apparently come as a surprise to government ministers that many Britons don't regularly take walking holidays in Switzerland or rent a villa with a pool in the Algarve. It has certainly befuddled them to realise that many natives have a thinner official record than many immigrants, making them more underground that even actual "illegals" who have overstayed their visas. Not since the days when Tory grandees unwisely allowed themselves to be filmed on grouse moors has the gulf in lived experience appeared so wide.

Usually, social reality is kept at arms-length in political discourse in two ways. The first is the convention of representative democracy that allows politicians to ventriloquise the concerns of "ordinary people" and thereby abstract society to the point where diversity is obscured. The problem with this approach is that the vocabulary of the people (what we mean by "immigrant") and the grammar of the politicians (controls, targets, delivery) are both heavily influenced by the media. The structural interests of the latter encourage homogeneity, whether in the form of the nation or the public sphere. The second way that reality is distanced is by irrelevant historicisation, for example the argument over precisely when the decision to destroy the Windrush landing cards was taken. When David Lammy mentions his own parents' journey to the UK, or notes that West Indians were first forcibly removed to the Caribbean by the British slave trade, he is providing context for the sense of hurt but he is distracting from the issue at hand, namely what happened in recent years to lead the majority of politicians to approve a hostile environment that not only targeted the innocent but corroded social trust in schools and hospitals? (the role of the media, again, should be noted).

One reason why historicisation is problematic is that it assumes experience is serial and chronological, when in fact it is anything but. We are familiar with the idea that historical periods do not occur consistently everywhere due to the vagaries of geography - for example, that the moral changes associated with the urban 1960s didn't arrive in the suburbs until the 1970s (the current adaptation of China Miéville's The City and the City on BBC2 provides an absurdist representation of the uneven distribution of the future as well as an unintended metaphor for Brexit). But we remain wedded to the idea that eras have clean breaks and distinct pivots, like the fall of the Bastille or the shot in Sarajevo that rang out around the world. The Windrush scandal itself is constrained by this paradigm, both in its focus on that one ship (with Lord Kitchener doing his a capella calypso for the cameras one more time) and the emblematic year 1948 that also saw the foundation of the NHS. The scandal's scope may now expand to Asians and Africans, whose cases have been under-reported to date, though the media seem more interested in cases from the white Commonwealth and Europe.

What is notable about the Windrush saga is not that a nationality status from the 1950s should have survived undisturbed until the early 21st century but that we are witnessing the collision of data eras. The physical Windrush landing cards turned out to be crucial because they had never been transposed to digital media. Once they were binned, they were lost to history (though I won't be at all surprised if they actually turn up one day). Had they been digitised, the affected individuals could at least have proved when they arrived in the UK, though this wouldn't have been enough to satisfy the Home Office's demand for proof of continuous residence. In practice, the authorities have asked for a year-on-year history of financial transactions, including payslips, bank statements and housing records (e.g. mortgage payments or rentbooks). Outside of years in education, verifiable transactions with the state, such as National Insurance and pension contributions, aren't considered adequate evidence, which shows that this is about more than bureaucratic conformance. What you are being asked to prove is that you were fully integrated into the market, not society.

Some people have noted that the "hostile environment" depends on an informational asymmetry between the individual and the state. Few of us retain more than a minimum of our historical records: a birth certificate, maybe an expired passport, possibly an NHS card. If you want to know your National Insurance number, you probably check a recent payslip. If challenged to prove permanent residence in the UK since birth, most natives would struggle. In contrast, the state holds a lot of data on us and while its ability to connect this across multiple agencies and databases is notoriously poor it has the potential to construct an extensive (if not necessarily always accurate) picture of our lives. In asking for a history of market transactions, the Home Office is adopting a standard of proof that is more appropriate to contemporary data norms: you may not have kept all your old paper bank statements but you can now access all your digital copies online. The issue is that this "life evidence" is increasingly under the control of corporations rather than bureaucracies. If we had invented smartphones with geolocation in the 1940s, proving permanent residence in the UK might have been easier for the Windrush generation.

Predictably, the authoritarian centre (David Goodhart, Tom Harris et al) has been using the Windrush case to advance the idea of national identity cards once more. An ID system, so the thinking goes, would have allowed the Windrush generation to be properly naturalised and illegal immigrants to be rounded up and deported with the minimum of fuss. The suggestion that ID cards would have been a clean and efficient system that would have avoided the creation of the current cack-handed "hostile environment" is disingenuous. It would actually have created an underclass of native-born sans papiers, with an obvious class and race bias, that it would have been difficult to separate from the actual "illegals" (of course, a failure to register for an ID card would itself become illegal). The irrelevance of the suggestion arises not from its impracticality but its cleaving to an old-fashioned approach - "Papers, please!" - at a time when technology is delivering a multi-faceted profile based on market participation and distinguished by private sector management. For all the talk about Home Office incompetence and cruelty, what the Windrush scandal shows is that we are moving rapidly away from the era of paper-driven bureaucracies to one of data-driven markets.

The Delusion of Personal Data

The focus on the billions wiped off Facebook's share price recently, following the revelations around the Cambridge Analytica "data breach", has had the unfortunate effect of reinforcing the popular belief that personal data is a valuable asset. Given that the share price has simply fallen back to where it was 10 months ago, and that Facebook's user growth has been slowing of late (and has even declined in the US), an alternative interpretation is that the market is adjusting by better pricing-in the risk of future user desertion. As its mature user population is ageing and its user growth is now biased towards less valuable regions of the globe, I would have expected this adjustment to happen anyway. In other words, what matters for Facebook's future earnings potential is still its user demographics and the extent of engagement (as that is what matters to advertisers) rather than the quantity or quality of the data that it has managed to collect. While tech-boosters and politicians have been swept up in the promise of Big Data and AI, the data-centric model has yet to really impinge on a stock market that has largely stuck with the user-centric model of the 1990s when it comes to valuing the platform capitalists.

In the early days of the commercial Web, when monetisation was still a conundrum, micropayments were seen by many as the future. You would be charged a fraction of a penny for each page you viewed, the assumption being that you would be discerning in your consumption (the predictions were made long before increased bandwidth and smartphones enabled a tidal wave of promiscuous browsing). Back in 1998, Jakob Neilsen justified micropayments by reference to the equivalent cost of labour. His argument was that the charge would be negligible compared to the value of the user's time, even if the latter was heavily discounted for non-working hours. In the event, micropayments never took off as a way of compensating content-providers, largely because the low (and falling) cost of production meant that there would always be a surfeit of amateurs producing free stuff (the "fame vs fortune" problem noted by Clay Shirky and others). Niche providers, from porn to business intelligence, have had limited success with subscription paywalls, but this clearly was never going to be a generally-applicable model. What was significant about Nielsen's thinking was the suggestive association with time, which helped shift the focus away from "King Content" to the contribution of the user and thus the production of personal data.

As it became clear that what was actually driving the Internet economy was user data and its leverage for advertising, the conceptualisation of personal data as an asset came to the fore. This produced two quite different interpretations. The dominant one is propertarian, or democratic capitalist. In this scheme, each individual would retain ownership of their data and receive a dividend from advertisers for its use. The sums involved would be laughably small at the individual level (though some have seen it as another nudge towards a basic income), but would ensure that the value of the Internet was not monopolised by companies such as Facebook and Alphabet, while the behaviour of abusive advertisers could be kept in check by the discipline of a property-owning democracy. Jaron Lanier is perhaps the leading proponent of this approach, which he outlined in his book, Who Owns the Future? As a number of critics have pointed out, the democratic element of this is weak (essentially it means forgoing payment in order to boycott certain advertisers), while the operation of the necessary infrastructure (a micropayments system orders of magnitude more complex than Neilsen's model) would place more power in the hands of unelected technologists and would be a dream come true for the surveillance state.

The second conceptual approach is a social democratic one in which personal data is aggregated and held in trust, with commercial users charged for access to it and pro-social organisations given discounted or even free access if they can show public benefit. This would be simpler to implement in terms of the financial transactions, though it would entail a significant bureaucracy for licensing and wouldn't easily accommodate novel or unconventional uses of the data. Evgeny Morozov is one of its leading advocates in the media. This approach prefers to see society's data as a collective, natural resource (which chimes with the "data is the new oil" trope) hence the status quo is described negatively as "extractivism", triggering echoes of anticolonialism as much as nationalisation in the proposed solution. If Lanier is guilty of reimagining the autonomous homesteader of Locke, Morozov is guilty of reimagining the sovereign of Hobbes, albeit in the context of a "truly decentralised, emancipatory politics, whereby the institutions of the state (from the national to the municipal level) will be deployed to recognise, create, and foster the creation of social rights to data". The bureaucratic risks of this are as obvious as the surveillance concerns, not least in the inevitable tension that will arise between centralisation and decentralisation.

Where Morozov does have a point is in his criticisms of Lanier and other propertarians for their attempts to subdivide a social value that is meaningless when disaggregated: "one cannot simply take the total revenue of these companies and divide it by the number of individual users to figure out what each of us is due". He also recognises that the production of personal data already depends on publicly-funded infrastructure, not just in the historic sense of the role of schools and hospitals in social reproduction, but in the more immediate and growing role of the state in providing the facilities for the individual creation and capture of data: "a lot of the data that we generate, when we walk down a tax-funded city street equipped with tax-funded smart street lights, is perhaps better conceptualised as data to which we might have social and collective use rights as citizens, but not necessarily individual ownership rights as producers or consumers". For all that, Morozov suffers from the same fundamental belief as Lanier, namely that personal data is a valuable resource (essentially surplus labour) that is being alienated from its producers. But this is a form of vulgar Marxism, not to mention a banal use of the term "exploitation", that confuses what we are obliged to do by necessity with what we choose to do for entertainment or self-actualisation.

The idea that personal data is an asset, and therefore the chief question concerns its ownership, is little advance on the older idea that we users are commodities: "If you're not paying for it, you're the product". The problem is that both of these ideas are suffused with liberal ideology, imagining personal data as an extension of the person and therefore of the highest value. In fact, at the level of the individual, personal data is commercially worthless. I should stress that by "personal data" here I mean attributes and preferences (who I claim to be, what I claim to like). Transactional data (what I actually bought) and network data (who I actually know) are obviously valuable, to both private and state actors, but they are data relationships that I cannot exclusively own, so they are not properly "personal". Personal data is also worthless for many public benefit applications because the individual tells us little about the public at large. It is only in aggregate that data has value, essentially because the randomness of personality is lost in the crowd. However, even this observation can lead us astray if we then assume that value is cumulative: the more data we have, the more valuable the dataset becomes. In reality, value derives from the processability of the data. The promise of the singularity is not that ever more data will provide the raw material for a superior AI but that such an intelligence may eventually transcend the need for more data.

Processability means that the capital value of data is bound up in the structures and logic that translate it into a usable resource: data + intellectual property = capital. When we conceptualise data as an asset, either at the individual or collective level, we elide questions about the creation and ownership of that IP. Platform capitalists are happy to cede a degree of user control over data because it is the IP that really matters. Despite the heroic inventor myth, Mark Zuckerberg is responsible for only a tiny fraction of Facebook's codebase, but he gets the lion's share of its profits. This is because he owns the largest share of the company's IP, which means that he owns the surplus labour arising from the cognitive production of thousands of Facebook (and WhatsApp) software engineers. He also has no intention of ceding control over the IP, any more than he intends to allow minority shareholders a meaningful say: "One of the things that I feel really lucky that we have is this company structure where, at the end of the day, it’s a controlled company. We are not at the whims of short-term shareholders. We can really design these products and decisions with what is going to be in the best interest of the community over time." Substitute "company" for "community" in that last sentence and this is straightforward paternalistic capitalism.

Contrary to the hopes of the liberal press, Facebook and the other platform capitalists are not too worried about attempts by the state to regulate the use of personal data. Most regulatory initiatives to date have taken the route of consumer protection, i.e. obliging data-handlers to observe certain proprieties, which has proven to be weak in practice (consider the difficulty of the UK Information Commissioner's Office in gaining a warrant to investigate Cambridge Analytica). More recently there has been a shift towards framing personal data in terms of property rights, particularly notable in the approach adopted by the EU in the General Data Protection Regulation, which comes into force this May. This will probably be more effective in regulating technology companies, but it won't pose a threat to the model of platform capitalism. Morozov's idea would be more of a threat, simply because it enables unavoidable taxation, though the vagueness of his ideas about how this would work in practice, not to mention the modest nature of contemporary European social democracy, suggest that a capital-friendly compromise is likely. Until we address the intellectual property rights of the platform capitalists, we're looking in the wrong place.

A Genuinely Interesting Post About Car Insurance

Car insurance is so crushingly dull that it has given us some of the most annoyingly crazee TV adverts in history, from Russian-accented meerkats to Iggy Pop's homunculus. I imagine if you're an advertising executive it must be a dream gig: there is no constraint on your imagination and zero risk that you might inadvertantly sully the reputation of the industry. If Michael Winner couldn't queer the pitch, who could? The japery is intended to convince us that car insurance is a necessary evil, so we may as well laugh about it, and not an extortion racket that amounts to roughly 1% of GDP in developed nations. The insistence that we don't think too hard makes it akin to new technology hype, so stories that combine the two, such as asking if driverless cars will be "the death of the insurance industry", almost write themselves.

That particular apocalypse arises from the premise that driverless cars will reduce accidents. The figure of a 90% reduction is often bandied about, but as I've previously noted, this is as reliable as tobacco industry-funded research showing that cigarettes are good for you. It's frequently elided with the vaguely similar claim that 90% of road traffic accidents are caused by human error, which actually means nothing. No doubt 90% of future robot malfunctions will be traced to human error, just as most smartphone or computer failures can be today. I imagine 120 years ago evangelists for cars were suggesting that they would reduce road fatalities by eliminating the risk of horses bolting. The one reliable statistic in all this is that 90% of what you read or hear about driverless cars is cobblers, quite possibly including this post.

According to The Guardian business pages, "The boss of one big motor insurer confessed privately a few months ago that he was mystified as to why his supposedly long-term shareholders never asked him about the threat that driverless cars present to his industry". This may be because they're not idiots. The fundamental assumption behind the "threat" is that fewer accidents mean lower premiums, but this doesn't represent a problem for the insurance industry because fewer accidents means fewer claims. In other words, turnover may reduce but profit margins can be maintained. In fact, the insurance industry might even experience a period of increased margins if it captures the initial efficiency gains of autonomous systems - i.e. premiums may prove "sticky". But while the prophets of doom may well be wrong, insurance does offer a useful angle to think about some of the impacts of driverless cars.

One promise of the robo-chauffeur is that we can move away from sole ownership towards an on-demand model. This idea is already emergent in car-clubs like ZipCar and hire services like Uber, not to mention leasing deals that cover repairs and allow the car to be replaced at the end of the initial lease term. An on-demand model doesn't just commodify the car as a series of rides, it theoretically reduces the number of cars required per capita and increases their utilisation, which will shorten their effective lives. A reduction in the amortisation period, together with the addition of autonomous systems, is likely to result in more expensive cars, while the increased technical complexity of those systems and the heavier wear and tear on the vehicles (even allowing for smoother handling by your robot Parker) will push up repair costs.

An overnight switch to driverless cars is logistically impossible, so the most likely scenario is a gradual transition, i.e. parallel running of "dual mode" cars with older manual vehicles (it doesn't matter for the moment whether the two types share road space or are segregated, though that would have a bearing on accidents). Given the expectation of lower premiums for driverless cars, this logically suggests two classes of insurance premium. But this class distinction will relate to the car, not the driver. This, together with the growth of on-demand cars, will reinforce the idea that insurance should be associated with the vehicle rather than the person, while the higher servicing costs will encourage the idea that this insurance should be extended to cover no-fault repairs. This has already prompted some insurers to suggest that liability for a driverless car should lie with the manufacturer, not least because this removes any dispute over the contribution of the autonomous systems in the event of a claim.

In other words, the anticipated fall in driver premiums (i.e. third-party cover) may be offset by an increase in repair premiums, and that increase may be folded into the cost of manufacture as a mandatory lifetime premium (in the way that a warranty is factored into the sales price today). Car insurance could simply dissolve into the cost of the car and by extension the pay-as-you-drive service. This trend would be reinforced if the need for regular autonomous system upgrades (a mix of hardware, firmware and software) further reduces the effective life of a car because it's simpler to deploy a newer model than rip out and replace its embedded systems. Though the cost of cars may increase with the addition of autonomous systems, their commercial treatment may paradoxically become more like that of commodities that have seen steady declines in their real cost, such as computers.

A consequence of this shift in the insurance model may be that car repair businesses will prove to be more vulnerable to disruption than insurers, both because technical complexity will drive many low-end operations out of the market and because insurers could negotiate better prices with larger repairers through volume deals. The repair companies best placed to negotiate with the insurers, and to bring expertise and volume to bear on costs, will be the car manufacturers. In other words, a likely consequence of driverless cars will be the disapperance of independent garages. Given the tighter relationship between car-makers and insurers, it may also make sense for large manufacturers to go into the insurance business themselves, much as they've already entered the financing market, extending their current provision of service plans to comprehensive service, breakdown and accident cover. The automotive industry has been shifting from commodities to services for decades, so absorbing insurance broking is a logical next step after absorbing premiums into the ticket price.

Another straw in the wind is the development of user or usage-based insurance (UBI), which uses sensors and telematics to analyse driver behaviour and tailor an insurance premium accordingly. Behaviour may currently be little more than the number of miles driven (i.e. connecting the odometer to the Internet), but it can also be extended to analyse driving style (e.g. frequency and strength of braking) and to adjust expected behaviour based on the outside environment (e.g. speed relative to road type). This is another example of the behavioural surplus of surveillance capitalism and how it can be monetised as a prediction product. While the current focus is on insurers as buyers of that product, there are many other possible applications and therefore buyers, particularly if feedback can be given to a hands-free occupant ("turn off here to buy that thing you want").

Driverless cars introduce data capitalists to the motoring industry, which is why Google and Apple are at the forefront of developments. Despite the hype about its prototype cars, Google's likely strategy is to sell autonomous systems (think of them as "appliances", in tech-speak), together with their superior data assets, to traditional car manufacturers. Apple's history is of a manufacturer that expanded into data, but by the specific strategy of locking-in its customers through proprietary technology. While it may be able to develop an iCar, this will probably be a high-end luxury good but quite possibly inferior to what the car manufacturers can produce themselves through the combination of their own technology and buying in Google's, in which case the iCar may prove to be as niche as the iWatch.

Google's model is egalitarian insofar as it wants everybody to provide it with a behavioural surplus. This means that it has an interest not only in making driverless technology available to as many car manufacturers as possible, but also in lobbying governments to move towards making autonomous systems mandatory. This will be easier to do if more people forgo owning a car in favour of hire services, and that means shifting towards inclusive (car-specific) insurance. Apple's model is elitist insofar as it only wants the behavioural surplus of high-worth users. This means it has an interest in driverless cars being introduced through segregation, i.e. in central urban areas favoured by the rich, but it will also want to monopolise the behavioural surplus by excluding third-party services. To that end, folding third-party insurance into an all-inclusive lifetime warranty (i.e. bumping up the ticket price) makes commercial sense.

In either scenario the motor insurance industry could be absorbed into the car manufacuring industry, but it could just as easily revert to a specialist wholesale service, invisible to the wider public, that pools risk for all car-makers, driverless technology manufacturers and data providers. This would make a lot of sense given that a single failure in future autonomous systems has the potential to produce widespread chaos and consequently very large claims (think of the Toyota and VW scandals of recent years). The motor insurance industry isn't going to disappear because of driverless cars, but it is likely to change radically. However this plays out, the one thing that would probably disappear (though this may just be my bias talking) would be those annoying TV adverts. Huzzah for technology.