Does Big Data demand a New Social Contract?

Dear Reader,
The NYT this morning had a great long piece out on the City's work to leverage data in tackling public problems.  The early results are impressive:
...a geek squad of civic-minded number-crunchers working from a pair of cluttered cubicles across from City Hall in the Municipal Building... dug up data from the Business Integrity Commission, an obscure city agency that among other tasks certifies that all local restaurants have a carting service to haul away their grease. With a few quick calculations, comparing restaurants that did not have a carter with geo-spatial data on the sewers, the team was able to hand inspectors a list of statistically likely suspects.  The result: a 95 percent success rate in tracking down the dumpers.
The leader of the office of envisions this open data infrastructure becoming a department embedded in the fabric of the city akin to a police, fire or water deparment.  That analytical power offers enormous potential but also tremendous risk, exceeding perhaps even Orwell's imagination.  Witness the volume of information available -- proverbial fuel for this analytical fire:

What the city knows about its 8 million residents is staggering. Contained in public archives is information about their boilers and their sprinkler systems, the state of their local taxes, the number of heart attacks and fires that occur inside their buildings and whether they have ever logged complaints about roaches or construction noise. Additional data is gathered about their businesses, their commuting habits and their children’s test scores.

If a parking meter sits outside their apartment, the city knows how many cars have parked there on any given day, the number and dollar amount of tickets handed out and, of course, the identities of those who have received them.

Beyond Big Brother concerns, there's also the question of what happens to all the workers whose jobs are no longer necessary due to added efficiency.  Sure there's the standard market answer that they'll relocate to another sector but remember big data theoretically might transform everything.  As Netscape co-founder Mark Andreesen says, "Software is eating the World."  And there's good reason to wonder whether everyone can be a data analyst or software engineer.  Jaron Lanier, a brilliant Silicon Valley philosopher and technologist whose book we have reviewed on these pages, eloquently points out the broader risks of a world fully integrated into big data:

What will the future economy look like if technology keeps advancing the way it does and we do nothing?

Well, identify almost any human role in our current society, and imagine that being aggregated into a software scheme in the future where the people don’t get directly paid anymore.  We can already say that there are virtual editors of newspapers. In the future nearly every existing job will be gradually weakened because of cloud software. The only one left standing at some future date is the owner of the largest computer on the network. Whoever has the biggest computer wins in our current system.

Which creates a huge need to recognize that data doesn't just emerge spontaneously out the void.  By and large the data that companies like Google and Facebook make billions from is created by real humans:

Also one of the earliest computers was an automated loom. Let us suppose in the future there is some sort of automatic loom that can just turn out clothing for you. Where does the design for the clothing come from? Somebody might say: from an artificial intelligence algorithm, running on cloud software, using big data. But this data actually comes from a large number of people who have been anonymized and disenfranchised. If there was proper counting of where the data came from we would see that even in this highly advanced hypothetical automated loom, there would be real people who make the data possible to create a design.
There is certainly something to his argument that the "lords of the cloud" are gaining a larger and larger slice of the economic pie -- ties in fact to the broader need for a new social contract.  The craftsmen of abstraction -- think the Silicon Valley crowd and Hedge fund types -- have done extremely well over the past few decades. While many of your more mundane "brick and mortar" types -- like factory workers -- have struggled against the tides of globalization and technological advancement. This growing power of big data and sophistication of robotics if anything portends an acceleration of that trend. And kudos to Jaron for thinking deeply about these challenges and taken the important step of offering solutions to the problems he sees:  

Describing ‘humanistic information economics’ you say everyone should be entitled to universal commercial rights when it comes to data. Can you explain how this would work?

Currently if you have a big computer then you get to keep your data secret, and you have tremendous rights, nobody can touch it, the government can’t even see it. Google’s computers, for instance, have to go through an elaborate system of legal requests. Now what I would like to see is a situation where everybody has commercial rights to data: so everyone is a first class citizen that shares the same interests with anyone that has a bigger computer.

How could this be done? 

I am advocating a certain kind role for government in this scheme: for the simple reason that if you rely on a private concern like a Facebook or a Google to own your personal identity in the world for you, it makes you particularly vulnerable. Primarily because companies die over time, and they also go through periods of corruption and dysfunction. So we cannot have [so called] too-big-to-fail-digital companies. People must have some self-determination, and some social mobility, independently of whether some company is failing or not. Otherwise you cannot have an authentic market, and you cannot have real capitalism.

An important idea and one that receives far too little discussion in our mainstream discourse.  Know this Stag Staffer for one is going to be reading Lanier's new book Who Owns the Future? and is looking forward to diving deeper.