The internet, its many evangelists tell us, is the
answer to all our problems. It gives power to the
people.
It’s a platform for equality that allows everyone
an equal share in life’s riches. For the first time in
history, anyone can produce, say or buy anything.
But today, as the internet heads towards putting
more than half the world’s population online, all
this promise has evaporated.
The dream has become a nightmare, in which I
fear we billions of network users are victims, not
beneficiaries.
In our super-connected 21st-century world, rather
than promoting economic fairness, the net is a
central reason for the growing gulf between rich
and poor and the hollowing out of the middle
classes.
Rather than generating more jobs, it is - as I will
explain - a cause of unemployment. Rather than
creating more competition, it has created
immensely powerful new monopolists such as
Google and Amazon in a winner-takes-all
economy.
Its cultural ramifications are equally chilling.
Rather than creating transparency and openness,
it secretly gathers information and keeps a watch
on each and every one of us.
You need only have read the stories this month
about how smart TVs can spy on us in our living
rooms to realise that Orwell’s vision in Nineteen
Eighty-Four, of a Big Brother society, is becoming
a reality.
Because such TVs are connected to the internet,
they can watch us and listen to us, then beam
that information around the world for companies
to use for commercial gain.
And thanks to the explosion in social media,
rather than creating more democracy, the internet
is empowering mob rule.
This month, after years of social networks being
scarred by appalling personal abuse and bullying
- leading to several suicides - Twitter, which has
288 million users a month, finally admitted there
was ‘no excuse’ for its failure to stop its users
sending vile messages to the targets of their
hatred.
The company’s boss, Dick Costolo, admitted: ‘I’m
frankly ashamed at how poorly we’ve dealt with
this issue. It’s absurd.’
An increasingly common kind of online attack
involves the threat of rape against women.
For, rather than encouraging tolerance, the
internet has unleashed such a distasteful war on
women that many no longer feel welcome online.
Pornography is so ubiquitous on the internet, and
controls denying access so inadequate, that many
parents rightly feel their children are at serious
risk.
And when people are not looking online at other
people with no clothes on, they are looking at
themselves.
Rather than fostering an intellectual renaissance,
the internet has created a selfie-centred culture of
voyeurism and narcissism.
Far from making us happy, it is provoking and
channelling an outpouring of anger at the world
around us.
Of course, the internet is not all bad. It has done
tremendous good in connecting families, friends
and work colleagues around the world.
The personal lives of three billion internet users
have been transformed by the incredible
convenience of email, social media, e-commerce
and mobile apps.
Yes, we all rely on and even love our ever-
shrinking and increasingly powerful mobile
devices. Yes, the internet can, if used critically, be
a source of great enlightenment in terms of the
global sharing of ideas and information.
The app economy is already beginning to
generate innovative solutions to some of the
most pervasive problems on the planet, such as
mapping clean water stations in Africa and
providing access to credit for entrepreneurs in
India.
But the hidden negatives outweigh the positives.
Under our noses, one of the biggest ever shifts in
power between people and big institutions is
taking place, disguised in the language of
inclusion and transparency.
Rather than providing a public service, the
architects of our digital future are building a
society that is a disservice to almost everyone
except a few powerful, wealthy owners.
It’s easy to forget the crusading intentions with
which the internet revolution began. But then the
mantle passed from the techno wizards and
visionaries to businessmen.
The internet lost a sense of common purpose, a
general decency, perhaps even its soul. Money
replaced all these things.
Amazon reflects much of what has gone wrong.
Now by far the dominant internet retailer, it has
achieved this position by crushing or acquiring its
competitors and selling everything it can lay its
hands on.
It has felt the need to expand so ruthlessly
because in its type of e-commerce, margins are
extremely tight and economies of scale vital.
In 2013, Amazon made sales of $75 billion (£49
billion) but returned a profit of just $274 million
(£178 million).
To succeed, it has to make itself a virtual
monopoly, stifling rivals along the way. Inside the
company this is known as the Gazelle Project,
after founder Jeff Bezos instructed one of his
staff that ‘Amazon should approach small book
publishers the way a cheetah would pursue a
sickly gazelle’.
The book trade - which is where Amazon began -
was initially quite enthusiastic about the new
arrival but now sees it as a predator as shops
close down, unable to compete.
In Britain there are fewer than 1,000 bookshops
left, down a third in a decade.
As Amazon expands into more retail sectors -
from clothing, electronics and toys to garden
furniture and jewellery - it is having the same
effect there.
The impact on jobs is huge. While bricks-and-
mortar retailers employ 47 people for every £65
million in sales, Amazon employs just 14, making
it a job-killer rather than a job-creator.
‘Robotisation’ in its warehouses may reduce job
numbers even further, until eventually Amazon
eliminates the human factor from shopping
completely. The ‘Everything Store’ is becoming
the ‘Nobody store’.
Then there is Google, which discovered the holy
grail of the information economy with its search
engine sifting and indexing the mass of digital
material on the worldwide web.
Last year Google processed 40,000 search queries
a second, equal to 1.2 trillion searches a year. It
controls around two-thirds of searches globally,
with 90 per cent dominance in markets such as
Italy and Spain.
The service is free to use. Advertising pays the
bills and makes the profits.
The irony is that Google was invented by a couple
of idealistic computer science graduate students
who so mistrusted advertisements that they
banned them on their homepage. Now it is by far
the largest and most powerful advertising
company in history, valued at over £260 billion.
Unlike Amazon, its profits are mind-bogglingly
high. In 2013, it returned nearly £10billion for its
investors, from revenues of nearly £39billion.
And Google’s power increases every time we
access it. Its search engine becomes more
knowledgeable and useful the more it is used.
Every time we make a Google search, we are
helping it to grow the product.
Last year Google processed 40,000 search queries
a second, equal to 1.2 trillion searches a year
Even more valuable, from Google’s point of view,
is what it learns about us. And Google, for better
or worse, never forgets. All our digital trails are
crunched to provide Google and its corporate
clients with our so-called ‘data exhaust’.
From this concept other internet services have
developed, including Facebook, Wikipedia, the
business networking site LinkedIn, and self-
publishing platforms such as Twitter and
YouTube.
Most pursue a Google-style strategy of giving
away their tools and services free, relying on
advertising sales for revenue. In the process, they
have created significant wealth for their founders
and investors.
On the surface, this seems like a win for
everyone. We all get free internet tools and the
entrepreneurs become super-rich.
But there is a catch. All of us are, in fact, working
for Facebook and Google for nothing,
manufacturing the very personal data that makes
these companies so valuable.
The result is another massive loss of jobs.
Google needs to employ only 46,000 people,
compared with an industrial giant like General
Motors, which is worth just a seventh of Google’s
£260 billion but employs just over 200,000 people
in its factories.
For all the claims that the internet has created
more equal opportunity and distribution of wealth,
the new economy actually resembles a doughnut
— with a gaping hole in the middle where millions
of workers were once paid to manufacture
products.
Take the photo app Instagram, which allows
anyone to share their own snaps online for others
to see. When it was sold to Facebook for £651
million in 2012, it had just 13 full-time employees.
Meanwhile, Kodak was closing 13 factories and
130 photo labs and laying off 47,000 workers.
It is, frankly, our fault for choosing to live in a
crystal republic where cars, mobile phones and
televisions - hooked up to the internet - watch us
Or WhatsApp, the instant messaging platform for
which Facebook paid £12.4 billion. In one month
it handled 54 billion messages from its 450
million users, yet it employs only 55 people to
manage its service.
That’s because we are the ones doing most of
the work. In this e-world, the quality of the
technology is secondary.
What’s important — and what is actually being
traded when these companies change hands — is
you and me: our labour, our productivity, our
network, our supposed creativty.
Yet for our input in adding intelligence to Google,
or content to Facebook, we are paid nothing,
merely being granted the right to use the software
free. And that’s what is driving the new ‘data
factory’ economy.
The whole point of the free Instagram app is to
mine its users’ data. Our photos reveal to
Instagram more and more about our tastes, our
movements, our friends. The app in effect
reverses the camera lens.
We think we are using Instagram to look at the
world, but actually we are the ones being
watched. And the more we reveal about
ourselves, the more valuable we become to
advertisers.
From social media networks such as Twitter and
Facebook to Google, the world’s second most
valuable company, the exploitation of our
personal information is what counts. These
companies want to know us so intimately so they
can package us up and, without our consent, sell
us back to advertisers.
Another great irony in all this is that the internet
was created by public-minded technologists such
as the English academic Professor Sir Tim
Berners-Lee, inventor of the World Wide Web, who
were all indifferent to money, sometimes even
hostile to it.
Yet the internet they produced with such high
humanitarian hopes has triggered one of the
greatest accumulations of wealth in human
history.
Jeff Bezos has made £19.5 billion from his
Amazon Everything Store that offers cheaper
prices than its rivals. Facebook co-founder Mark
Zuckerberg has accumulated his £19.5 billion by
making money out of friendship.
In 25 years, the internet has gone from the initial
idealistic banning of all forms of commerce to
transforming absolutely everything into profitable
activity. Especially our privacy.
Tim Berners-Lee never imagined that his ‘social’
creation to help people to work together more
easily could be used so cynically, both by private
companies and by governments. Yet that’s what
is happening.
Jeff Bezos has made £19.5 billion from his
Amazon Everything Store that offers cheaper
prices than its rivals
As the internet transforms every electronic object
into a connected device, we are drifting into a
world where everything — our fitness, what we
eat, our driving habits, how hard we work — can
be profitably quantified by companies such as
Google.
Faceless data-gatherers wearing all-seeing
electronic glasses watch our every move. Our
networked society is like a claustrophobic village
pub, a frighteningly transparent community in
which there are no longer any secrets or any
anonymity.
We are observed by every unloving institution of
the new digital surveillance state, from big data
companies and the Government to insurance
companies, healthcare providers and the police.
Google and Facebook boast that they know us
more intimately than we know ourselves. They
know what we did yesterday, today and, with the
help of predictive technology, what we will do
tomorrow.
And it is, frankly, our fault for choosing to live in
a crystal republic where cars, mobile phones and
televisions — hooked up to the internet — watch
us.
Far from being the answer to our problems, the
internet, whose pioneers believed it would save
humanity, is diminishing our lives.
Instead of creating more transparency, we have
devices that make the invisible visible. The
sharing economy is really the selfish economy.
Social media is, in fact, anti-social. And the
success of the internet is a huge failure
