Monday, January 20, 2020

The Value of Personal Data


In some countries, all mineral rights are owned by the government.  In these countries, your family may have owned a plot of ground for generations.  But if the government thinks there's oil under it, they can come in, drill a well in your back yard, and make millions off the oil they find—and not give you a cent.  And it's all legal.

Other countries with different traditions regarding property rights view this situation as unjust.  In the U. S., for example, mineral rights usually vest in the property owner, which is how many otherwise dirt-poor Texans got rich when oil was discovered on their previously worthless land.

What goes for land that you buy should also go for things that you do.  If your actions lead to the creation of something that is of value, it would seem only fair that you should receive the properly evaluated equivalent for that value—in money or other valuable and exchangeable form. 

In Don't Be Evil, journalist Rana Foroohar describes how large tech companies such as Facebook, Amazon, and Google, as well as many smaller ones, collect data from us that is estimated to be worth nearly $200 billion.  When you click on a link, or lately even talk about certain things in the hearing of your personal assistant or your mobile phone, that information is noted, logged, and used to sell advertising and other things that the giant tech companies get real money for.  And as the Internet of Things grows with its ability to track our movements and other actions, this data stream will only get bigger. 

What do you get in exchange for providing the lifeblood of commerce for these firms?  They would say that you receive lots of free stuff in return—free web searches, a free personal Facebook page, free ads for things you may want to buy, and so on.  And this is true.  But it is far from the ideal free-market exchange of value, in which both parties come on a more or less even footing to an agreement after sharing essential information and comparing the potential exchange with any others that they might make with other parties.  

To put this situation in perspective, Faroohar points out that $200 billion is more than the total value of the annual U. S. agricultural output.  In other words, it's as if the large food companies (ConAgra, Tyson Foods, etc.) took everything that U. S. farmers grow, but paid them nothing for it.  Nobody would put up with that, and nobody would keep farming for very long either.

But just living an ordinary life these days means that you constantly do things that produce little bits of valuable data for the likes of Facebook, Google, and Amazon, whether you really mean to or not.  And in a technical sense, it is perfectly legal.  The cadres of tech-company lawyers who write the incomprehensible boilerplate on every software agreement that you lie about reading before being able to use the software make sure of that. 

One of the good outcomes of the otherwise horrific Nuremberg Trials of Nazi war criminals was the development of the Nuremberg Code, which has since been adopted to govern experiments involving human subjects.  One of the core principles of the code is that participants must give informed voluntary consent to being experimented on.  In other words, they must clearly understand the possible consequences of participating in the experiment and be able to say yes or no freely after making an informed decision.

If we regard the entire data-mining exploits of the big tech companies as a large-scale long-term experiment on the public, it is easy to see that we as individuals are at a vast disadvantage compared to the firms that profit from the data we generate.  Withholding our data would be difficult or impossible, especially when we don't even know that we're providing it (e. g. when Alexa or your mobile phone eavesdrops on your conversations).  And we have no idea what consequences will result from our actions.  And I include among these consequences the fact that the rich monopolies represented by the above-named firms get even richer, while in exchange I receive certain services that are convenient, true, but have value that I would be hard put to estimate in dollar terms.  Even if I did, it's doubtful that the value I perceive as getting from these firms would come anywhere close to the money they make off me by mining it.

The fact that I have to go through mental contortions even to think this way shows how deeply disguised the process is.  As an engineer, I'm trained to think of worst-case scenarios, and if I let my imagination wander in that direction with regard to the situation of data mining, I might come up with something like this:  The U. S. economy becomes even more two-tiered, with a very small number of very wealthy people working for or associated with the largest monopolistic tech firms, and everybody else on some kind of government-paid dole to keep them from starving, because most other jobs have vanished.  Research and development dries up here and moves to China, where most future technology developments happen under the firm control of the government there. 

I could go on, but I think I have made sufficiently clear the point that every day, with every click on a site associated with the largest tech firms, we allow them to obtain data that we make, but that they profit from. 

I do not pretend to have a good solution to this problem.  When similar situations arose in the past, such as during the "robber-baron" period of the 1800s when railroads monopolized essential transportation and commodities, the government had to intervene with countervailing forces embodied in things like the Interstate Commerce Commission and antitrust laws.  If the economy, the job market, and society in general is not to be further hollowed out by the activities of the large online tech firms, which are now indisputably having a negative effect on the political viability of our democracy, something needs to be done.  But I'm not sure what. 

Sources:  Rana Faroohar's book Don't Be Evil was published by Random House in 2019. The statistic about the value of data mined from the public being worth an estimated $197.7 billion by 2022 is on p. 25

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