Data as Post-Industrial Labor

by Jan 5, 2019

Emerging technologies such as artificial intelligence, advanced robotics, cloud computing, and the internet of things, among others, are promising one of the most profound economic transformations since the First Industrial Revolution. Despite the vastly increased productivity and output quality promised by the technologies that characterize the so-called “Fourth Industrial Revolution”, there nonetheless remains a widespread anxiety about the implications of recent technological developments. Concerns range from the possibility of mass unemployment, the threats to privacy, transparency, and accountability that an increasingly digitized economy presents, and the worry that these new technologies will only accelerate the growth in economic inequality seen around the world in recent decades.

While there has been much technical discussion in academic circles about resolving these issues, these discussions rarely involve the individuals most affected by the social changes enabled by innovation. This is why “Data As Labor” (DAL) presents a more optimistic and inclusive response to issues posed by economic transition than other, more technocratic, policy solutions. To explain why this inclusivity is essential and how it is accomplished several topics will be covered in the remainder of this piece: the role of technological anxiety in fueling populism, the “Post-Industrial” character of the digitized economy, and the means by which DAL returns dignity to work.

Transition Anxiety and Populism

While the current economic transition is accelerating due to the industrialization of many of the emerging technologies mentioned in the opening, the fundamental force behind this transition has been operating for decades. Digitization began in the 1970s as the “information technology boom” brought computers into the modern workforce. This led to a rising demand for high skilled employees to perform cognitive tasks, exemplified by the explosion in consulting jobs, and low skilled employees to perform the manual labor that computers could not perform. The middling jobs, however, which were those that had some cognitive load, but were mainly the exercise of rote tasks, experienced a shift in demand due to digitization. These jobs either absorbed new functions, being folded into high paying jobs, or were split up into simple component tasks, replacing a single middle-income employee with several much lower paid alternatives.

This process itself has made even those new low paying jobs less secure, for the more narrow and quantifiable their output is, the most susceptible they are to automation by technologies around the corner. We are experiencing a loss by humans in what Jan Tinbergen referred to as the “race between education and technology.”

The acute awareness by workers of their more diminished role and the inaccessibility of the new, better jobs being created has been fuel to the fire of populism around the world. It must be noted that people may not always be aware of the technological basis of their shift in circumstances, as digitization is often more infrastructural to an organization than replacing a worker with a robot, but workers nonetheless notice the clear impact this has on their material and emotional circumstances. Those that can articulate these concerns are best able to draw their attention and capture their hearts and minds.

It is for this reason that Mark Carney, Governor of the Bank of England, warned in a speech earlier this year of a new “Engels’ Pause”, which would embolden anti-capitalist movements across the world. He commented that the economic conditions around the world today are reminiscent of those in Great Britain in the early decades of the 19th Century when the First Industrial Revolution was in full bloom. As a result of outdated institutions that failed to incentivize capital formation, the gains from new technologies accrued only to the few who had enough capital to run factories. This period, from 1800-1830, saw rapid productivity growth, but declining wage growth, and simultaneously marked the rise of Marxist philosophy. While one could develop academic arguments about the transitional nature of the declining conditions of workers and present technocratic solutions, these would not stir the sentiments of workers living through the period, since it is akin to denying their immediate needs.

Populists today make the same arguments as communists then. Right populists blame immigrants for “stealing jobs” by undercutting wages, lessening opportunity for low skilled workers to earn a living, while Left populists argue that the productivity gains are being stolen by corporate executives who, out of malign self-interest, seek to dehumanize and degrade their workforce. In contrast to technocratic solutions to problems of transition anxiety, these arguments carry far more emotional resonance with workers, even if they are incorrect and dangerous.

For this reason it is not simply enough to acknowledge that economic transition will work out in the long-run as it had with previous industrial revolutions, nor is it enough to take a “wait and see” approach which incrementally responds to the issues posed by new technologies as they appear. A proactive approach needs to be taken which does not provide easy solutions like populists do, but rather arranges institutional mechanisms to take seriously the anxieties of the disenfranchised, and evolve with their welfare at its core.

The Post-Industrial Society

Such an approach to provide an inclusive and optimistic alternative to both populism and technocratic decision-making requires an understanding of what the economy will look like after transition. Economic transition can best be understood using Clark’s Sector Model, which divides the economy into four sectors of the workforce. The first two industrial revolutions, the Industrial and Technological Revolutions, occurred back to back throughout the 19th and early 20th Centuries and were characterized by a transition from the primary sector, dominated by raw material production such as agriculture and fishing, to the secondary sector, dominated by refinement and manufacturing. The third, or Digital Revolution, which occurred in the later decades of the 20th Century, and provided the foundations for the modern technologies of today’s transition, marked a decline in the secondary sector and the rise of the tertiary sector, characterized by service jobs, and the birth of the quaternary sector, typified by “knowledge work”.

 

The fourth, or Post-Industrial Revolution, currently underway will result in the dominance of this quaternary sector of the economy, with the value of human labor being in its creative and unquantifiable capacity. The institutions that dominate the current post-war rules-based international order are, however, wholly inadequate to deal with the value created in a post-industrial economy. Capitalism in its current form is an industrial capitalism, and its institutions are best suited to material, rather than digital, production. As a result, transition has resulted in exacerbating inequality as the physical materials supporting the production of data are the units of capital which receive the majority of the economic reward. This is clear in the example of cloud computing, a field in which large technology companies such as Amazon and Microsoft, which provide the physical servers upon which the cloud rely, are the main profiteers of a process that is physical in only a part of its value chain. These physical materials are costly and the barriers to entry are high allowing owners to receive an economic rent from their economies of scale. While there are numerous businesses that profit off the cloud infrastructure, the physical maintenance of the cloud commands most of the value produced.

Institutional adaptation to post-industrial economic conditions needs to acknowledge the intrinsic value of digital production irrespective of its physical foundations in order to ensure widespread prosperity. Anti-Big Tech sentiment has been on the rise recently, as attested by the several Congressional hearings that took an antagonistic tone in 2018, but these companies are often responding simply to the incentives created by the institutional framework in which they operate.

Successful transitions through industrial revolutions required changes to all manner of institutions in order to overcome the perverse incentives created by outdated ones. The 19th Century featured changes in law, such as the establishment of corporations, the development of limited liability, and the protection of physical property, as well as changes in culture which raised the social standing of merchants. The early 20th Century, during the Technological Revolution, saw innovation in management and education, as new techniques of production were necessary for industrialization and diffusion, and social causes like the High School Movement raised the skill level of workers to better take advantage of new productive technologies.

Post-Industrial institutional change is not simply policy change. It is not about changing particular regulatory errors, or using the mechanisms of industrial capitalism to respond to post-industrial challenges. The particular concerns of a digitized economy, such as a legal definition of data that understands its philosophy, its production method, and its value is essential. Following this a culture which attaches to digital work an equal respect that it does to physical work will allow for greater dignity for workers of all varieties. Institutions, such as intellectual property and organizational communication practices, need updating so that they do not present barriers to management innovation and technological diffusion. And education needs to respond to digital realities and the structure of an economy dominated by knowledge work, rather than its current emphasis on memorization and discipline, concerns more suited for an industrial era. The RadicalxChange movement provides insights into to many of these institutional adjustments, but at the core of this post-industrial institutional update is the need to see Data as Labor.

Data as Labor and Digital Dignity

Should We Treat Data as Labor: Moving Beyond “Free”, Glen Weyl’s co-authored paper with Jaron Lanier of Microsoft Research, Leonard Goff of Columbia University, and Imanol Arrieta Ibarra and Diego Jiménez Hernández of Stanford University, argues that seeing people’s online lives as a source of work, rather than as either sources of distraction or inputs for non-digital forms of production, can lead to digital dignity. The paper articulates that the current treatment of data as a capital input leads to concentration of data ownership, while neglecting the process by which data is produced. By acknowledging that the data collected is produced through certain relationships with users, individuals will grow attachment to their online identities, as well as gain greater voice and control over their digital lives.

While the contributions of an individual’s data to a single platform tend to be low, and the value of data tends to increase with aggregation, providing the incentive for individuals to care about the value of their data is vital in changing institutional dynamics. This change is likely to lead to the rise of data unions, which manage pools of data produced by individuals from various sources, thereby providing them more of the value they have produced. Given that a rising share of national income in the United States is going to profits, having such intermediaries lay claim to these large profits, and return a portion of them to users of large platforms would halt the trend towards rising inequality created by productivity boosting technologies. These unions, as the labor unions before them, would provide a means for participation for users in crafting the direction of the digital economy. Fundamentally, this would lead users to reframe their understanding of their online lives as productive, allowing them to derive a sense of meaning from what they do.

DAL contrasts with arguments for Universal Basic Income, and other technocratic solutions, which seek to provide for material needs, but admit the inevitability of people being unemployable in a digital economy. It is not enough to supply the material needs of individuals, a sense of community and meaning that only work can foster is necessary. The opioid crisis currently devastating the lives of the unemployed highlights the sense of alienation and isolation common to workers today. Only by returning dignity to work by making people understand their productive capacity can solutions connect with ordinary people and pull their hearts and minds from populist sway. In this way, DAL provides correctives to both legal and cultural issues presented by the transition to a Post-Industrial economy.

In its concern with dignity, the philosophy of Data As Labor finds common ground with Catholic Social Teaching, one of the longest standing social philosophies to argue for an alternative to left and right, socialist and capitalist reasoning. Catholic Social Teaching is rooted in the values of solidarity, that each individual is worthy of infinite value and should always act in accordance with understanding the infinite values of others regardless of their station in life, and subsidiarity, that decisions should always be made at the smallest or most decentralized unit of authority. Through this it shares not only the methods, but the vision of RadicalxChange, to build a society founded on the pursuit of social justice, the common good, and respect of personal liberty. While one may be religious and the other secular, this shared concern allows them to share a view of work that stands in stark contrast to the instrumentalist conceptions that dominate modern discourse.

In Catholic Social Teaching, work is seen as valuable in and of itself, for work perfects both the individual and the community. When one works with purpose, they seek to create something that is pleasing, improving their skills at their craft, and appreciating what they have made. The product of one’s labor is often also made for others, so that in perfecting one’s own work, one also satisfies the needs of others, pursuing the common good. This conception differs greatly from the current discussion of work, which often makes labor and physical capital interchangeable. The dominance in economic language of the phrase “human capital” reveals how far the view of labor has degraded from one of dignity to one of pure instrumentality.

In sharing these concerns with Catholic Social Teaching, the RadicalxChange movement goes further, by developing a practicable set of solutions in tune with 21st Century material conditions. As the quaternary sector dominates the economy, our lives are increasingly digitized, and more of our interactions with others occur online. In seeing the digital world as a well-spring of work, this sort of digital dignity can renew meaning in people’s lives, and quell the anxieties that dominate their political considerations.

Conclusion

The anxieties associated with post-industrial transition cannot be brushed aside, nor can they be resolved by tinkering with legislation alone. Not enough is understood about the digital economy to fully predict its impact, but its clear rise makes it too important to ignore. Effective transition can occur democratically, not in the sense that each individual votes on the future they would like to see, but that an avenue exists by which all stakeholders can play a role in setting course. DAL in this sense is not a set of concrete solutions to transition problems, but an organizing force that best voices everyone’s concerns and needs.

Technological change is not exogenous to a society. New technologies do not magically appear, immediately producing social and economic impacts. Instead, technologies are produced within a society, shaped by its institutions and power dynamics. Through seeing Data as Labor, and shifting control over the foundational input of new technologies away from the few and to the many, a more inclusive method of development is unleashed, one that respects each individual’s dignity. It is only on this path that the transition can be smooth and anxiety free.

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