Written by Twone
Data, as the new currency of this era, not only circulates in the market, but also flows in the blood of social relations.
Like the tip of an iceberg floating in the ocean, beneath the surface of individual data lies complex social relationships and potential power dynamics. When unequal forces cause these icebergs to collide, not only do they create waves in the data, but also profound social impacts. In the sea of data, how can we ensure that everyone can navigate safely, draw a more just data map, safeguard individual rights, and navigate a clear path?
After finishing the introduction, Chapter 1, and Chapter 2 last week, this time we will read Chapters 3, 4, and 5 of "Radical Markets". The themes of these chapters are immigration, investment, and big data, respectively.
After the intense discussion last week about COST/Harberger taxes, the students of Raw School expressed their dissatisfaction with the last three chapters, saying, "Is that it? It's not radical enough."
So, let's talk about what the last three chapters are about and why they may seem less exciting compared to the institutional reforms discussed in the first two chapters.
And, especially for these three grand propositions that are closely related to ordinary people's lives, particularly the last chapter: Data as Labor, how can we extend and relate them to our own thinking?
VIP (Visas Between Individuals Program): Second-class Citizens & Legalized Slavery?#
The reviews of this book on Amazon are polarized. Those who gave it five stars believe that it does propose new possibilities for problem-solving different from the existing system. Those who gave it one star are largely due to the policy suggestion described in this chapter - the "Visas Between Individuals Program" (VIP). Some even call it a "contemporary slavery contract."
So, what is VIP? Let's take a look together.
Background: Increasing Inequality between Nations and the Strong Demand for Immigration#
In the 16th and 17th centuries, mercantilism dominated colonialism and trade, emphasizing state control of the economy to stimulate wealth accumulation. During this period, there was support for unrestricted acceptance of immigrants, but caution was exercised towards emigration, as it reduced the size of the domestic labor force.
In the early 20th century, inequality between nations intensified, and the economic advantages of immigration increased, leading to complex attitudes, including the emergence of nationalism and racism, and the implementation of immigration restrictions by some countries.
After World War II, the inequality between rich and poor countries intensified, and the benefits of liberal immigration increased significantly, especially in areas where poor countries border wealthy countries.
And now, immigration has become the primary path to happiness and prosperity for the majority of people in the world.
Understanding the Benefits and Costs of Immigration to Understand the Reality of VIP#
From a definition standpoint, wealthy countries are more abundant in capital than labor compared to poor countries. This difference leads to trade and immigration activities that are usually beneficial to the capital owners of wealthy countries and the laborers of poor countries, but may have adverse effects on the laborers of wealthy countries and the capital owners of poor countries.
This concept is crucial because only by understanding the inequality in the global distribution of capital and labor can we explain why the author proposes the policy suggestion of the "Visas Between Individuals Program" (VIP) to attempt to redistribute the global allocation of capital and labor more efficiently through individual choice and market mechanisms.
What is VIP (Visas Between Individuals Program)?#
The "Visas Between Individuals Program" (VIP) is a proposal to reform the current immigration system by allowing direct guarantees of entry between individuals.
This program allows ordinary citizens to directly provide entry guarantees for foreigners, without relying solely on government quotas and regulations. Its core idea is to enhance immigration mobility, advocating for more efficient matching of immigration demand and receiving country opportunities through individual choice and market mechanisms. It also seeks to provide immigrants with more opportunities and dignity by reducing bureaucracy and improving efficiency.
Controversy of "Contractual Serfdom"#
A prerequisite for the implementation of the VIP system is to allow foreign workers to work under conditions below the minimum wage.
This point has been particularly criticized because it may put immigrants in a disadvantageous labor condition, which, in some people's eyes, bears a resemblance to historical "contractual serfdom".
Although immigrants can choose to leave freely, their economic dependence may limit this freedom, making it a form of potential exploitation. This could lead to a new form of contemporary slavery.
Thought Question: If you wanted to immigrate, would you find VIP more attractive than traditional immigration methods?#
Dismembering the Octopus: Antitrust Measures#
The Thousand Faces of Monopolists#
The term "monopoly" originated from the time of Aristotle, who extracted and created this concept from discussions with the mathematician and philosopher Thales. Thales monopolized the olive oil press market by foreseeing a bountiful olive harvest, demonstrating the application of philosophy in business practice.
However, in the early modern era, the form of monopolies changed, often involving individuals or groups authorized by the state to dominate specific markets. For example, the Standard Oil Company was metaphorically depicted as a giant octopus in cartoons of that era, with its tentacles reaching into the market and state legislatures, vividly depicting its monopolistic position in multiple fields.
How to Dismember the Octopus#
The author proposes a simple and radical reform suggestion to avoid the concentration risk in investment markets: prohibit investment institutions from diversifying investments within a single industry, but allow them to invest across industries.
Investment institutions can choose to remain small in scale, achieving comprehensive diversification within and outside the industry, or choose to be larger in scale but only diversify partially between different industries.
This strategy can be simplified into one rule: when an investment institution may influence corporate governance, prohibit any investor from holding more than 1% market share in the same company.
At the same time, index funds are allowed as an exception, allowing investors to pursue maximum diversification and scale.
Thought and Discussion: Is this approach too weak?#
In the article, it is proposed that only the government can stop the pace of monopolies and presents the simple suggestions above. However, investment institutions often act covertly, and even if regulations are established to prevent investors from holding more than 1% of shares in the same company, the "octopuses" will surely find countless ways to circumvent and manipulate the rules.
In the discussion, the students of Raw School were not satisfied with the proposed approach in the book. Just as an octopus has eight legs, cutting off one tentacle may result in the growth of three new limbs.
Data as Labor (DaL): How Have We Become Invisible Workers in the Digital Economy?#
This chapter may be the closest to everyone.
You may not have considered immigration, or you may not care about the "distant" monopolistic giants, but at this moment, as you sit in front of the screen reading this article, you are undoubtedly influenced by the data information of today's society.
To put it more bluntly: your reading behavior at this moment has already added "1" to the reading count of this article in the machine learning algorithm.
Most People Are Unaware of Their Role as "Data Producers"#
How have we become data workers without even realizing it? Think about the following scenarios:
Why can Google Maps better plan your trips?
Why do Facebook and Instagram make it easy for you to share your daily life?
Why can social media platforms like TikTok and Xiaohongshu accurately recommend short videos and content that you like?
...
These tech giants use the data we provide - from route choices to social interactions, and every photo and video we upload - to continuously improve their services and targeted advertising. Although we are key participants in this process, most people are unaware that they play the role of "data suppliers" in the digital economy, rather than just passive content consumers. This lack of awareness means that we fail to recognize the value and potential of our own data.
Data Producers Are Not Adequately Compensated#
In the current digital economy, tech giants like Facebook, Google, and Microsoft earn record profits by collecting public data on the internet for free. These companies turn every click, search, and interaction of users into valuable data through the public's limited understanding of artificial intelligence (AI) and machine learning (ML). However, despite being the key drivers of this process, data producers - ordinary users - rarely receive fair compensation or recognition.
This phenomenon not only reflects income inequality but also reflects the widespread disregard for the labor value of data producers. In this context, many people are increasingly concerned about the potential mass unemployment caused by AI, even though, in fact, we are more reliant than ever on human data input to drive the development of the digital economy. This contradiction reveals a deep-rooted problem in the structure of the digital economy: the labor of data producers is widely exploited but rarely rewarded and respected.
Different Attitudes Towards Data: The Diamond-Water Paradox#
In the digital age, data is everywhere, but Hal Varian, Google's chief economist, argues that the truly scarce resource is the talent and computing power to understand and process this data.
This view treats data as a widely available natural resource, like water, with its true value lying in its transformation into useful assets by technology and capital.
This echoes the ancient diamond-water paradox. Water, although essential in daily life, lacks high exchange value due to its abundance, while diamonds, despite their limited use, are highly valuable.
Although data is valuable overall, the marginal value of individual data points is not high due to its abundance, similar to the case of water. However, the marginal value of data is not constant and is influenced by the importance of the problem being addressed. For example, in speech recognition technology, achieving near-perfect accuracy is more important than incremental improvements in accuracy. Therefore, the last few percentage points of accuracy improvement can greatly increase the marginal value of data.
Technserfs and Technofeudalism#
The fundamental logic of technofeudalism is astonishingly similar to that of ancient feudal systems: in feudal times, serfs provided labor to the nobility in exchange for survival and the right to use land; similarly, today, countless users provide the market value of their produced data to tech giants in exchange for convenient information services.
Under this system, although users seem to benefit, they are more like slaves of technology - working on digital land without receiving their fair share.
This phenomenon not only manifests in direct exchanges of services but also has deeper implications in the recognition of the value of user labor. When users realize that their online activities - whether social media interactions or content creation - actually create broader value for tech giants, they may reassess the fairness of this exchange.
Uniting Data Workers Worldwide?#
Although technological development has strong economies of scale, it also brings buyer monopoly power, which often leads to inadequate labor compensation and hinders economic development and fairness.
This is not a new phenomenon but a classic theme throughout economic history and one of the core ideas of Marxian economic theory.
Just as industrial workers in the industrial age needed unions for collective bargaining, ensuring labor quality and promoting career development, data workers also need some form of organization to help them ensure the high quality of data, protect their rights, and effectively navigate complex digital systems without increasing individual burdens.
Perhaps it is time to launch a global data worker movement, encouraging data workers worldwide to unite and fight for their legitimate rights as modern digital laborers.
This is not only an economic struggle but also a battle for fairness and technological ethics.
Extended Thinking: How Sovereign Individuals Respond to the Current Data Situation#
"Radical Markets" was completed in 2018, but at that time, discussions about data and labor were not as intense and profound as they are today. In just a few years, whether it's AI, big data, or the frequent interaction between humans and information flow, profound changes have taken place.
In today's world, surrounded by countless streams of information, everyone has become more or less a data provider for technology companies, streaming platforms, or platforms. People provide their behavioral data and are then analyzed and optimized by algorithms to deliver a new round of consumption.
Do you think "Data as Labor" (DaL) should be implemented? If so, how can the value of individual data contributions be fairly and transparently evaluated and compensated? (e.g., there may be significant differences in the value of data generated by different users; what mechanisms can ensure fair and transparent evaluation of contributions and provide reasonable compensation?)
At the same time, during the implementation of DaL, what privacy and security issues may arise? (e.g., privacy breaches, data security risks, etc.; as well as possible legal and technical means to mitigate risks)
There are many more in-depth considerations, such as how individuals can actively buy and sell their own data instead of passively losing control over it; whether more public and collective forms of governance are needed to address the unjust social relationships and information harm caused by dataization...