5 ms·

This is data capitalism. In ordinary capitalism the rich get richer, and in data capitalism those who have data, build superior products, get more users and thu

This is data capitalism. In ordinary capitalism the rich get richer, and in data capitalism those who have data, build superior products, get more users and thus more data, while others starve. Good datasets can be bought but it is scary in its own way.

bufordsharkley 10y ago
Is open data + copyleft licenses a possibility?
- dunkelheit 10y ago
  It is not always feasible - consider for example the dataset of all gmail messages.
edanm 10y ago
"In ordinary capitalism the rich get richer [...]". Errr, not really? I mean, at a minimum you're making a somewhat controversial statement - lots of people (me included) wouldn't automatically agree that the rich get richer, especially if you're thinking "only" the rich get richer, which is what is implied by the comment above. (As evidence, see established companies that go bankrupt, and new startups which rise from nothing to become dominant players, much like Google itself, which has existed for a relatively brief period, or something like Uber). So let's hope that data capitalism is like regular capitalism!
- dunkelheit 10y ago
  Well, things are of course much more complicated than I have presented in my short comment. And economists are still debating whether Piketty's conclusions are valid. But the dynamic I have described is certainly there. And it can become dominant.
- currysoup_t 10y ago
  Most successful (Valley) startups don't start from nothing, far from it, they start from a vast network of other rich peoples money, usually VC, occasionally the state.
- Ensorceled 10y ago
  Controversial? There are ton of articles like this one: http://www.latimes.com/business/hiltzik/la-fi-hiltzik-ft-graphic-20160320-snap-htmlstory.html http://www.latimes.com/business/hiltzik/la-fi-hiltzik-ft-gra... On growing income inequality and the transfer of wealth to the 1%. You can argue if it's right or wrong but it's a bit of whopper to say it doesn't happen.
  - Chronic9q 10y ago
    I'm rich and part of the financial 1%. I can indeed confirm the rich get richer. I'm not going to enumerate the specific methods, but I do feel bad that middle class or bay area software engineers cannot employ certain financial tricks that only the rich can do. As a teaser, one important thing is to not share information (i.e. Don't blog about financial "hacks"). Call it a corrupt moral compass or whatever you like, but the fact is this behavior is rampant.
    - Yodoshi 10y ago
      I think it is education the is the biggest differentiator of this generation and that boils down to school district (and everything this entails race, wealth etc). That something so important is decided at an early level of one's life that has wide reaching implications is quite frankly a disgrace. Only the most endeavours break the cycle and they are too few and far between that are not really encouraged on most levels of society around the world due to the norms.
    - huac 10y ago
      to anybody curious about this dude's 'financial hacks' - just hire an accountant the vast majority of financial tricks require scale (of capital) - e.g. itemized deductions, business expenses, even tax-loss harvesting - but they aren't secret!
      - guelo 10y ago
        The tricks you mention are only about avoiding taxes, I wouldn't call those "rich getting richer" tricks, I'd call them rich preserving their capital tricks. Rich getting richer is more along the lines of hearing about investment opportunities while golfing with your banker, insider trading, having the capital to play in certain markets that only big money is allowed to play in, being able to take huge risks. Angel and VC investing being in that last category.
- snovv_crash 10y ago
  Rich get richer in capitalism because they have more money to leverage getting better deals and researching better ways to multiply their money than poor people do.
- JohnStrange 10y ago
  This is not controversial at all, this is a well-known and empirically confirmed trend since the mid of last century.
- SEJeff 10y ago
  Pure unregulated capitalism (which America is very much not) is Darwinian in how similar to natural selection. In natural selection the top of the food chain sometimes die off, but in general I agree with the GP poster.
  - FullMtlAlcoholc 10y ago
    I don't think it's a great idea to apply Darwinism to fields outside of biology, especially in the social sphere. It led to a lot of bad science in the past.
    - Chronic9q 10y ago
      It sure as hell seems like natural evolution is being applied to the social sphere. Statistically, children from "well off" families do consistently better across all life pillars (health, money, family, friends) than poorer families. Come on, financially richer families are less fat/obese than poorer families. This is a direct link to living and longevity (Darwinism).
      - FullMtlAlcoholc 10y ago
        Yes, but the two groups exist and are adapted to two totally different environments. I imagine that some in the well off population see the others as a different species. Thusly, strict Darwinism doesn't apply here. To truly see who is more fit, I propose that we take a group of 12, 6 from each class, and drop them off on an uninhabited island. We will places weapons and traps at strategic locations. We shall call this experiment Project Craving Romp.
        SEJeff 10y ago
        May the odds be ever in their favor!
    - oldmanjay 10y ago
      It's pretty hard to say that human interaction is outside biology without invoking the metaphysical
- shoo 10y ago
  I suggest reading Thomas Piketty's book "capitalism in the 21st century". One of Piketty's points is the relationship between the rate of growth of the economy, `g`, and the rate of return on capital, `r`. If the rate of return of capital exceeds the rate of growth of the economy, that is `r > g`, then inequality of wealth increases over time. As they say, "the rich get richer". These conditions (`r>g`) have been observed from historical data under normal conditions (excluding events like world wars), and we expect them to continue into the future, particularly with projections of declining or stabilising global economic growth rates [1]. The period after the two world wars (with relatively high equality) is unusual in history and over we're seeing inequality of wealth increase, inherited capital becoming an increasingly relevant factor, etc. [1] let's ignore the other perspective of whether continual economic growth is actually feasible or desirable given the reality of hard environmental limits.
  - munificent 10y ago
    I haven't read the book, and only have a high school knowledge of economics, but that seems fairly intuitive to me. Wealth is effectively "liquid power" and "power" is the ability to get other people do to what you want. One of the absolute most obvious things you'd want them to do is... give you more power. So I think it's a pretty natural outcome that, absence other forces, any power imbalance will tend to magnify over time. Times in history where the entire economy is growing very fast basically mean new power is raining down on all people uniformly. That will tend to reduce disparity in the same way that adding the same positive number to both the numerator and denominator leads to a fraction closer to one. Of course, this simplified model treats every person as an island. Where the story gets more complex is when you consider people working together in a group. And I think through most of history when you've seen power imbalances get reduced, it's because you've seen people work together to form groups that have greater power than the smaller number of individuals they are pushing against. One of the things that really scares me about the US today is how much we've culturally lost that ability to organize and work together. And, of course, the small number of increasingly powerful people and groups like it that way, as they always have.
- pabloski 10y ago
  Yeah, and guess who are the people behind these falling corporations and these new startups? Yes it is them. The bankers. Wall Street. The Rothschilds. TPTB. Call them as you like, but they money are in the hands of few and without money you cannot build a startup.
ericd 10y ago
Agreed, and we need the data equivalent of antitrust.
- spullara 10y ago
  A company like Google who has a virtual monopoly on search queries can make decisions like removing referrers to downstream sites where they send users thus depriving everyone but Google access to the actual keywords. While doing this that obviously benefits Google greatly, they can also claim it benefits the user as well since their query keywords aren't being shared with a 3rd party. It is complicated to think about monopoly vs privacy in this context.

bufordsharkley 10y ago

Is open data + copyleft licenses a possibility?

dunkelheit 10y ago
It is not always feasible - consider for example the dataset of all gmail messages.

edanm 10y ago

"In ordinary capitalism the rich get richer [...]". Errr, not really? I mean, at a minimum you're making a somewhat controversial statement - lots of people (me included) wouldn't automatically agree that the rich get richer, especially if you're thinking "only" the rich get richer, which is what is implied by the comment above. (As evidence, see established companies that go bankrupt, and new startups which rise from nothing to become dominant players, much like Google itself, which has existed for a relatively brief period, or something like Uber). So let's hope that data capitalism is like regular capitalism!

dunkelheit 10y ago
Well, things are of course much more complicated than I have presented in my short comment. And economists are still debating whether Piketty's conclusions are valid. But the dynamic I have described is certainly there. And it can become dominant.
currysoup_t 10y ago
Most successful (Valley) startups don't start from nothing, far from it, they start from a vast network of other rich peoples money, usually VC, occasionally the state.
Ensorceled 10y ago
Controversial? There are ton of articles like this one: http://www.latimes.com/business/hiltzik/la-fi-hiltzik-ft-graphic-20160320-snap-htmlstory.html http://www.latimes.com/business/hiltzik/la-fi-hiltzik-ft-gra... On growing income inequality and the transfer of wealth to the 1%. You can argue if it's right or wrong but it's a bit of whopper to say it doesn't happen.
- Chronic9q 10y ago
  I'm rich and part of the financial 1%. I can indeed confirm the rich get richer. I'm not going to enumerate the specific methods, but I do feel bad that middle class or bay area software engineers cannot employ certain financial tricks that only the rich can do. As a teaser, one important thing is to not share information (i.e. Don't blog about financial "hacks"). Call it a corrupt moral compass or whatever you like, but the fact is this behavior is rampant.
  - Yodoshi 10y ago
    I think it is education the is the biggest differentiator of this generation and that boils down to school district (and everything this entails race, wealth etc). That something so important is decided at an early level of one's life that has wide reaching implications is quite frankly a disgrace. Only the most endeavours break the cycle and they are too few and far between that are not really encouraged on most levels of society around the world due to the norms.
  - huac 10y ago
    to anybody curious about this dude's 'financial hacks' - just hire an accountant the vast majority of financial tricks require scale (of capital) - e.g. itemized deductions, business expenses, even tax-loss harvesting - but they aren't secret!
    - guelo 10y ago
      The tricks you mention are only about avoiding taxes, I wouldn't call those "rich getting richer" tricks, I'd call them rich preserving their capital tricks. Rich getting richer is more along the lines of hearing about investment opportunities while golfing with your banker, insider trading, having the capital to play in certain markets that only big money is allowed to play in, being able to take huge risks. Angel and VC investing being in that last category.
snovv_crash 10y ago
Rich get richer in capitalism because they have more money to leverage getting better deals and researching better ways to multiply their money than poor people do.
JohnStrange 10y ago
This is not controversial at all, this is a well-known and empirically confirmed trend since the mid of last century.
SEJeff 10y ago
Pure unregulated capitalism (which America is very much not) is Darwinian in how similar to natural selection. In natural selection the top of the food chain sometimes die off, but in general I agree with the GP poster.
- FullMtlAlcoholc 10y ago
  I don't think it's a great idea to apply Darwinism to fields outside of biology, especially in the social sphere. It led to a lot of bad science in the past.
  - Chronic9q 10y ago
    It sure as hell seems like natural evolution is being applied to the social sphere. Statistically, children from "well off" families do consistently better across all life pillars (health, money, family, friends) than poorer families. Come on, financially richer families are less fat/obese than poorer families. This is a direct link to living and longevity (Darwinism).
    - FullMtlAlcoholc 10y ago
      Yes, but the two groups exist and are adapted to two totally different environments. I imagine that some in the well off population see the others as a different species. Thusly, strict Darwinism doesn't apply here. To truly see who is more fit, I propose that we take a group of 12, 6 from each class, and drop them off on an uninhabited island. We will places weapons and traps at strategic locations. We shall call this experiment Project Craving Romp.
      - SEJeff 10y ago
        May the odds be ever in their favor!
  - oldmanjay 10y ago
    It's pretty hard to say that human interaction is outside biology without invoking the metaphysical
shoo 10y ago
I suggest reading Thomas Piketty's book "capitalism in the 21st century". One of Piketty's points is the relationship between the rate of growth of the economy, `g`, and the rate of return on capital, `r`. If the rate of return of capital exceeds the rate of growth of the economy, that is `r > g`, then inequality of wealth increases over time. As they say, "the rich get richer". These conditions (`r>g`) have been observed from historical data under normal conditions (excluding events like world wars), and we expect them to continue into the future, particularly with projections of declining or stabilising global economic growth rates [1]. The period after the two world wars (with relatively high equality) is unusual in history and over we're seeing inequality of wealth increase, inherited capital becoming an increasingly relevant factor, etc. [1] let's ignore the other perspective of whether continual economic growth is actually feasible or desirable given the reality of hard environmental limits.
- munificent 10y ago
  I haven't read the book, and only have a high school knowledge of economics, but that seems fairly intuitive to me. Wealth is effectively "liquid power" and "power" is the ability to get other people do to what you want. One of the absolute most obvious things you'd want them to do is... give you more power. So I think it's a pretty natural outcome that, absence other forces, any power imbalance will tend to magnify over time. Times in history where the entire economy is growing very fast basically mean new power is raining down on all people uniformly. That will tend to reduce disparity in the same way that adding the same positive number to both the numerator and denominator leads to a fraction closer to one. Of course, this simplified model treats every person as an island. Where the story gets more complex is when you consider people working together in a group. And I think through most of history when you've seen power imbalances get reduced, it's because you've seen people work together to form groups that have greater power than the smaller number of individuals they are pushing against. One of the things that really scares me about the US today is how much we've culturally lost that ability to organize and work together. And, of course, the small number of increasingly powerful people and groups like it that way, as they always have.
pabloski 10y ago
Yeah, and guess who are the people behind these falling corporations and these new startups? Yes it is them. The bankers. Wall Street. The Rothschilds. TPTB. Call them as you like, but they money are in the hands of few and without money you cannot build a startup.

ericd 10y ago

Agreed, and we need the data equivalent of antitrust.

spullara 10y ago
A company like Google who has a virtual monopoly on search queries can make decisions like removing referrers to downstream sites where they send users thus depriving everyone but Google access to the actual keywords. While doing this that obviously benefits Google greatly, they can also claim it benefits the user as well since their query keywords aren't being shared with a 3rd party. It is complicated to think about monopoly vs privacy in this context.