by Lucie Greene
Live-streaming video is another powerful new tool with the potential to change political conversation, one that is being used as a virtual citizen-policing tool of police and government activity. Civil rights activist DeRay McKesson live-streamed his arrest at a Black Lives Matter protest in July 2016; the video was rapidly viewed more than 650,000 times. In October 2016, 40,000 watched as actress Shailene Woodley live-streamed her arrest for protesting against the Dakota Access Pipeline. Woodley’s Facebook page was viewed 4.7 million times and the video shared over 88,000 times just ten days after it was posted.
In 2016, J. Walter Thompson charted this in a study dubbed “The Political Consumer.” We examined how celebrity culture, millennials, and brands were becoming more political generally, driven by social media. A nationwide survey of 1,000 U.S. consumers revealed interesting results. Young people view live-streaming on platforms like Facebook Live as more authentic than other media. Fifty-one percent of Generation Z respondents and 56 percent of millennials in the study said live video on social media played an important role in political discussions. (Gen Z is the teenage generational cohort defined by marketers as being born somewhere between the mid 1990s and early 2000s. Today they span roughly twelve to nineteen years old.)
Which again gives Silicon Valley platforms such as Twitter, Facebook, and YouTube a unique vantage point in the political landscape. “I think we’re starting to land on a real power dynamic in terms of these companies. They make those choices, they control those algorithms,” says Phillips. And so, they control the conversation.
Trans-border Systems
In many ways, focusing on geographic governance when it comes to Silicon Valley is beside the point, because this group of businesses transcends geographic legislation and boundaries. While headquartered in the U.S., these businesses move beyond borders and are functioning as transnational communities.
Amazon has already become its own global government system. It sets its own laws, pricing, and terms—the consumer is always first. It is building schools, postal networks, and entertainment from the ground up. It is a truly global commerce company, too, expanding to Japan, India, and beyond. And, as it starts to co-opt every single aspect of how consumers interact with the internet, it is becoming a highly intelligent, highly personalized shopping machine. There’s Amazon Look, which lets us snap our photos of our new and old wardrobe pieces and get crowd-sourced recommendations while recording what we’ve worn every day (and Amazon noting whether we’ve gained weight using photosensitive technology). There’s Amazon Echo being used to fact-check the president’s birthday (inching ground from Google) as well as help consumers shop. There’s Amazon Dash buttons, connected to any given number of household brands, that then informs Amazon how much soda or detergent we need how often. (Little wonder, rather than giving this business to Tide, Coca-Cola, or Colgate, they’re now producing their own private label versions of these products. Amazon is becoming all-seeing and all-knowing. It is also, increasingly, more trusted than the government.)
In 2016, Jane K. Winn, an outspoken professor of law at the University of Washington, published the paper “The Secession of the Successful: The Rise of Amazon as Private Global Consumer Protection Regulator.” It addressed the potent combination of scale and consumer-centric approach within companies such as Amazon. (Winn is an expert in cyber, digital, privacy, and e-commerce law.) She argues that, as the ultimate global consumer-centric company, Amazon has essentially become its own nation-state, serving the needs of its “people,” but, as a result, also harming providers, brands, and, increasingly, governments, too.
Winn describes Amazon as acting like a “private regulator” in this respect: “The rise of global platforms, such as Amazon, Google, Apple, Facebook, and Microsoft, that own global online marketplaces and simultaneously act as their primary regulators, calls to mind the idea of the ‘secession of the successful,’ as described by Robert Reich in 1991—the withdrawal from civil society of the wealthy and powerful into private gated communities.”
This melding of marketplace and regulator is good for consumers in many ways, for now, but bad for suppliers, which are losing control over their prices or terms because of Amazon’s scale. “Amazon’s status as the primary de facto regulator of the marketplace it owns, combined with its single-minded pursuit of customer satisfaction, contributes to relations with its employees and suppliers that are often profoundly problematic,” Winn explains in her paper. “When a platform operator is also the primary regulator of the market it creates, negative spillover effects may occur: squeezing employees and suppliers to ensure that consumers get whatever they want merely pushes conflict from one part of the platform ‘ecosystem’ to another.”
This ultimately does not make online commerce fairer overall, she concludes in her paper. Which could be prophetic. Amazon is consumer-first right now because it’s still trying to win us over. But when it becomes a monopoly, we too will become like its suppliers—forced to abide by its rules, systems, and practices, much like the evil dominating corporations that took over banana republics or dictatorships.
Consumers might be in the driver’s seat at Amazon in the short-term, but the company is set upon monopoly of all consumer purchases. When it owns every category of consumer spending, and every other outlet has been destroyed, it will fully set its own terms. Left with no other options, the consumer will be forced to abide by them.
Winn believes the digital nature of these companies enables them to be much more responsive than governments as civic systems. Unlike governments that are paper-heavy, person-heavy, and still resolutely analog in many instances, digital companies—particularly ones that we interact with constantly—these are living, breathing, measurable, and instantly readable organisms that are extremely agile. They could apply this ability to governance and many government systems.
“There’s a reason why Amazon is the world’s most progressive and effective consumer-protection regulator—everything’s happening in a fishbowl,” says Winn over the phone from Washington one afternoon. “They have all the behavioral data . . . It’s like the old Roman Catholic canon law, or the lex mercatoria of the City of London. Google is a regulator for the Google platform; Apple is a regulator for the Apple platform; Amazon is a regulator for the Amazon platform. And, because everything is happening in the Cloud, and everything is 100 percent transparent, they have the most breathtaking enforcement capacity at practically zero cost. That’s why they’re more effective [at ruling] than governments.”
After all, Uber is able to mediate commissions based on the size of its audience, driver membership, the weather, demand, and any number of factors at rapid pace. Even when it works against drivers. Uber famously tiptoes around the language of employer to avoid having responsibility for worker benefits—they are “partners”! Yet it exerts extraordinary controls over their income and rights. It has flouted the law on frequent occasions, propelled by the endorsement of consumer buy-in and scale.
The use of algorithms, and the fact that we effectively live on these platforms, enables Silicon Valley companies to respond in not just real time but on an anticipatory basis, because they know our behaviors, desires, faults, and positive actions, and they cross-pollinate behaviors in new ways that the government cannot. Under their regime we are constantly measured and monitored beings. All of this, putting privacy to one side, is right now helping us as consumers. It’s creating highly personalized recommendation lists. It’s anticipating when we might need to purchase shampoo and what brand we might like. But as their power becomes all-encompassing, our ability to control their reach will disappear.
Attempts have been made to marshal the borderlessness of this group by creating global trade agreements with the World Trade Organization, but those have been largely unsuccessful. Regional book and entertainment rights, for example, which used to be brokered and sold by geographic area (the reason you cannot watch a movie in a certain country), are becoming less easy
to enforce.
GAFA is eroding these rights in a variety of ways. “We call it statutory obsolescence or creeping deregulation,” says Winn. “There is hard law and soft law. Old-fashioned command-and-control mandatory regulations, such as the speed limit, are hard law. Over the course of the last thirty years, more and more forms of international cooperation, incentives, and collaborative frameworks have emerged—that’s soft law. The government uses the law to invite people to behave in a certain way, but it doesn’t mandate it and it doesn’t punish them for not doing it.” So, they don’t.
Richard Hill, principal of Hill & Associates in Geneva, Switzerland, and a tech policy consultant, believes the reason Silicon Valley’s power on an international stage has been allowed to get so out of hand is that, historically, it’s been linked to America’s geopolitical strategy for dominance. Their strength has been good for business and America’s interests, so it’s not made sense to curtail them—until now.
“You can’t blame Google, you have to blame the government for not doing its job, which is reining these guys in. That’s really the guilty party,” he says. “And to some extent you can’t even blame the U.S. government because this is tied in with its geopolitical and geo-economical strategy.” In other words, these companies have become synonymous with the future, progress, and money for America. Who would want to fight that? Who has the power to?
Efficiencies That Erode
As Silicon Valley’s power grows, government is getting weaker.
The Brookings Institution, a nonprofit public-policy organization whose mission is to “conduct in-depth research that leads to new ideas for solving problems facing society at the local, national, and global level,” conducted a sobering study titled “Local Government 2035: Strategic Trends and Implications of New Technologies.” It shows that many of the technologies being created by Silicon Valley will either put more pressure on government resources or radically reduce revenues. And this change in lots of ways puts Silicon Valley in prime position to take over and provide privatized versions of government services.
The Brookings study paints a picture of local governments whose legislation is behind the times. Regulating drones in terms of privacy and airspace control is just one example, as it requires investment in both technology and year-round resources. There are new privacy rights to protect as more and more aspects of the way we live become powered, and readable, by technology, sensors, and more. Helicopters and airplanes are all tightly controlled. What does it mean when we’re getting Dominos pizzas delivered by drones or autonomous robots on the street? And what guardrails should you put around it? Amazon and Google have reportedly already started creating their own air traffic control system. Where is the state? These are entirely new mediums and behaviors, with real civic implications that governments need to find ways to monitor effectively.
Elsewhere, new technology could displace much-needed revenue. Automated cars will (in theory) eradicate parking tickets, speeding tickets, and other fines: “Cities in California collect, on average, $40 million annually in towing fees that they divide with towing firms. Simply put, the hundreds of millions of dollars generated from poor driving-related behaviors provide significant funding for transportation infrastructure and maintenance, public schools, judicial salaries, domestic violence advocacy, conservation, and many other public services,” the report states. Mobile phones are helping late-running consumers dodge fines by paying for parking meters remotely, further displacing revenue. And if automated cars mean fewer accidents, it will impact revenue to insurance agencies. Silicon Valley technologies, through automation or by creating new things that need regulating, will collectively run down the state even further.
Then there’s the massive job loss due to automation: 47 percent of jobs in the U.S. are at risk of being automated within twenty years, according to the Oxford Martin School at Oxford University’s 2013 study “The Future of Employment: How Susceptible Are Jobs to Computerization?” Robots will replace more workers. The result of all this will be budget deficits and unemployment. “Smart leaders are realizing this ‘inconvenient truth’ about the changing roles of government in the society of tomorrow and are beginning to look for solutions,” says the report. “Finding solutions won’t be easy, but it is a step in the right direction for local governments to take control of their destiny instead of allowing their role to be usurped by technology, citizens, or private entities.”
There is an urgent need for comprehension and foresight on the part of the government, which could course-correct, take advantage of, or mitigate against some of the more troubling effects of all these new products, innovations, and services. After all, with new technologies, historically, new taxes and revenue streams have always emerged. As the car industry boomed, parking and driving regulations became a source of income. New tax structures could be introduced for digital platforms and services. While governments are not fully exploring the long-term impact of innovation, consumers are also propelling them forward. Let’s not forget, most of these new products and services are beneficial and money-saving for people. But would they like them so much if they knew the consequences? Will it take skies, greyed by flocks of drones carrying Dominos pizza boxes, to make people think again? Quite often, these things take a jarring event, or a tipping point, to create clarity. In the UK, the disastrous tragedy of the fire at Grenfell Tower in 2017, which killed seventy-one low-income residents, shone a light on privatization and its pitfalls in replacing the state. It prompted a collective debate about Britain’s national values, and a resurgence of its social conscience. Perhaps something similar will need to break, not bend, to illuminate the power shift happening because of technology.
Hacking the Government
Will the nation-state fight back against Big Technology’s practical and ideological creep on its sovereignty? Part of the reason tech is winning is not simply about money and innovation, but cultural influence. Does government, the state, and even democracy need a rebrand?
Silicon Valley has become part of the American narrative for innovation and invention, and we’re bombarded by the tech-friendly press with the idea that the iconic brands and leaders of Silicon Valley have been the spearhead of innovation, not the government. Yet Silicon Valley was started, and originally funded, by the government in collaboration with Stanford University. But this fact can’t compete with the mythology of bootstrapping Silicon Valley deities leaping on unicorns and saving the world.
In his book The Secret History of Silicon Valley, Steve Blank explains that “In the 1950s and ’60s, the U.S. military funded about a third of all technology research in our research universities, a big number. For example, at Stanford in 1966, 35 percent of all the funding in electronics came from classified programs. And Stanford was not unique. MIT, University of Michigan, Georgia Tech, Caltech, you name it, all were funded by U.S. federal government military programs of the Cold War.”
We don’t give government the credit for any of this because governments aren’t built to promote themselves. Or communicate their achievements unless it’s in the run-up to reelection. Perhaps the government should start a rebrand making the case not only for all it does, but for all the innovative things it has achieved.
An interesting case study is the nonpartisan voter registration and turnout organization Vote.org. Rather than rebranding government, it’s trying to rebrand democracy itself, encouraging people of all ages and backgrounds to vote. Backed by Silicon Valley fund Y Combinator, Vote.org seeks to use technology, mobile messaging, and targeted offline campaigning to encourage people (particularly low-turnout groups) to vote and participate in democracy. Founder and CEO Debra Cleaver has spoken extensively of the need to make democracy and voting habitual and normalized among people of all ages—by approaching it as a marketer. “If Democracy had a CMO, I’d fire them,” she has joked. Meanwhile, her Twitter bio reads: “Voter turnout is low because we live in a country where Columbus Day is a holiday and Ele
ction Day isn’t.”
Vote.org’s campaigning was seen as a key driver in the record black turnout in the 2017 Alabama state election. It spent $658,000 in the final four weeks of the race in a targeted campaign. The group bought 140 billboards around the state. It also sent black voters direct mail and over 600,000 text messages with information on their local polling locations. Maybe government should take a similarly proactive approach.
Megan J. Smith, former CTO under Obama, tried to correct this disconnect between young people and government. Smith, the White House’s third CTO and the first woman to take the job, is a former Google VP. She’s also the woman who, perhaps more than any other, sought to claw back some of the power balance between the government and Silicon Valley—while making sure the government does a few things that Silicon Valley is not doing: one, making itself accessible to a more diverse workforce. And two, giving credit to women in the story of innovation.
Smith has enjoyed none of the adulation that Silicon Valley’s male leaders do, though perhaps she doesn’t court it. She is a genuine tech nerd and completely at odds with how pop culture and media has come to paint the stereotypical type-A cocky Google employee. She’s frequently found at conferences championing the positive sides of technology. I’ve attended tours around the Consumer Electronics Show in Las Vegas led by Smith—gamely and enthusiastically showing a gaggle of women the latest tech innovations. She favors simple grey pantsuits, has bobbed hair, and speaks in a generous, soft-spoken way that belies her massive influence.
