The Internet Is Not the Answer (17 page)

Standage may be right about the writing being on the wall. But if antiquity really is retweeting itself, it’s in the form of the Greek myth of Narcissus. Nicholas Carr famously argued in his 2011 book
The Shallows
, a finalist for the Pulitzer Prize, that the Web is shortening our attention spans and making our minds less focused and more superficial.
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Probably. But the personal revolution is certainly making us more parochial and unworldly. Just as Instagram enables us to take photos that are dishonest advertisements for ourselves, so search engines like Google provide us with links to sites tailored to confirm our own mostly ill-informed views about the world. Eli Pariser, the former president of
MoveOn.org
, describes the echo-chamber effect of personalized algorithms as “The Filter Bubble.”
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The Internet might be a village, Pariser says, but there’s nothing global about it. This is confirmed by a 2013 study by the Massachusetts Institute of Technology showing that the vast majority of Internet and cell phone communication takes place inside a hundred-mile radius of our homes and by a 2014 Pew Research and Rutgers University report revealing that social media actually stifles debate between people of differnet opinions.
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But the reality of the Web is probably even more selfie-centric than the MIT report suggests. With more than a quarter of all smartphone use taking place on Facebook and Instagram, most Web communication these days actually takes place inside that intimate hundred-
millimeter
radius between our faces and our mobile devices. The real
myth
is that we are communicating at all. The truth, of course, is that we are mostly just talking to ourselves on these supposedly “social” networks. In her bestselling 2011 book, the MIT professor Sherry Turkle describes this condition as being “alone together.” It’s a brilliantly terse description of an Internet in which the more social we become, the more we connect and communicate and collaborate, the lonelier we become.

And yet, for all its sad narcissistic inanity and even sadder existential angst, it would be a mistake to see Instagram’s problems in primarily cultural terms. Selfie culture is a big enough lie, but it’s actually billions of dollars and hundreds of thousands of jobs less dishonest than the economics of selfie culture. And it’s here—in the quantifiable realm of jobs, wages, and profit—that we can find the most disturbing implications of the shift from the Kodak to the Instagram moment.

Original Sin

“The personal is the political,” was a liberation cry of the sixties countercultural revolution. But, rather than being political, today’s personal revolution is all about money and wealth. In our digital age, the personal is the economic. And there’s nothing liberating about it at all.

Just as the Kodak tragedy decimated the economic heart of Rochester, so the Internet is destroying our old industrial economy—transforming what was once a relatively egalitarian system into a winner-take-all economy of what Tyler Cowen calls “billionaires and beggars.” Rather than just a city, it’s a whole economy that is losing its center. For all Silicon Valley’s claims that the Internet has created more equal opportunity and distribution of wealth, the new economy actually resembles a donut—with a gaping hole in the middle where, in the old industrial system, millions of workers were once paid to manufacture valuable products.

This economic inequality mirrors the feudal arrangement on Instagram in which Justin Bieber has 11 million followers and follows nobody at all. It’s creating what the MIT economists Andrew McAfee and Eric Brynjolfsson call an economy of “stars and superstars.” This new digital economy is a primary reason why life has become so much tougher for many of us over the last twenty-five years. And it’s why the Internet—or, at least, the business model of Internet companies like Instagram, Google, Twitter, Yelp, and Facebook—isn’t the ideal platform for building an equitable economy in the networked twenty-first century.

In contrast with the dishonesty of selfie economics, the rules of the industrial Kodak economy were as crystalline as the images delivered on Kodachrome film. As Michael Moritz noted about what he called the “second phase” of the industrial revolution in northeastern US cities like Detroit, Pittsburgh, and Rochester, factories were “isolated” from consumers.
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And just as there were clear walls separating workers and consumers, their economic roles were also clearly demarcated: workers were paid cash in exchange for their labor and consumers paid cash in exchange for Kodak’s products. “You press the button, we do the rest”—which involved the development and manufacture of their physical products, which were then shipped, via retail channels, to consumers. But “the rest” required significant investment in both capital and labor. That was the center of the old industrial economy—where Kodak created enormous value and was thus worth $31 billion a quarter century ago. So, back in 1989, those 145,000 unionized Kodak workers in the many research facilities, photo labs, and factories dotting the entire Rochester area were employed to invent and manufacture products that were then sold to consumers. Just as Instagram is the anti-Kodachrome product, so it’s also the anti-Kodak company building an anti-Kodak economy. At first glance, Instagram appears to offer a much better deal for everyone than Kodak. The gray Rochester factory has been upgraded to a Mexican hippie resort. A tall dude lies in a hammock on a Pacific beach and, inspired by his girlfriend, invents an awesome photo-sharing app. Two months later, that free app is available for instant download. Three years later, the billion-dollar app has become “a second plotline” for its 150 million users with
Meanwhile on Instagram
being the preface for a whole generation of Internet users. “Software,” as Marc Andreessen likes to boast, “is eating the world.”
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Everybody wins. One hundred and fifty million people can’t be wrong? Right?

Wrong. “There’s a catch though,” as James Surowiecki warns in a 2013
New Yorker
piece titled “Gross Domestic Freebie,” about the Instagram economy. And it’s a very big catch indeed. “Digitalization doesn’t require a lot of workers: you can come up with an idea, write a piece of software and distribute it to hundreds of millions of people with ease,” Surowiecki explains. “That’s fundamentally different from physical products, which require much more labor to produce and distribute.”
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Instagram is a perfect example of Surowiecki’s catch. Software might be eating the world, but it’s ravenously consuming our jobs, too. When Kevin Systrom had his “aha” idea on that Mexican beach he had one partner at Burbn, another Stanford graduate, a Brazilian-born engineer named Mike Krieger. Together, Systrom and Krieger wrote the initial software and used the Apple app store to distribute the app. And even when they sold Instagram to Facebook for a billion dollars in April 2012, Instagram still only had thirteen full-time employees working out of a small office in downtown San Francisco.

No, that’s not a typo. Instagram really did have just
thirteen full-time employees
when Facebook paid a billion dollars for the startup. Meanwhile, in Rochester, Kodak was closing 13 factories and 130 photo labs and laying off 47,000 workers. And these thousands of Kodak employees weren’t the only professional victims of selfie economics. Professional photographers have been badly hit, too. Between 2000 and 2012, the number of professional photographers, artists, and photographers working on American newspapers fell from 6.171 to 3,493—a 43% drop at a time when pictures have become “more sexy” than words and we are taking trillions of photos a year.
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So who, exactly, is doing the work, providing all the labor, in a billion-dollar startup that employed only thirteen people?

We are. All 150 million of us are members of the new Snap Nation. Kevin Systrom’s creation is the quintessential data factory of our new digital economy. In contrast with the old industrial factory—that former skyscraper, on the corner of Factory and State in downtown Rochester—these twenty-first-century factories are as ubiquitous as selfies, existing wherever there is a networked device. You may be reading this on one right now. You almost certainly have one in your pocket or on your desk. And it’s our labor on these little devices—our incessant tweeting, posting, searching, updating, reviewing, commenting, and snapping—that is creating all the value in the networked economy.

It’s not just Instagram, of course, that has been able to build a massive business with the tiniest of workforces. There’s WhatsApp, the San Francisco–based instant-messaging platform that was acquired by Facebook for $19 billion in February 2014. In December 2013, WhatsApp handled 54 billion messages from its 450 million users, yet it only employs fifty-five people to manage its service. “WhatsApp is everything wrong with the U.S. economy,” argues Robert Reich, who served as secretary of labor in the Clinton administration, about a service that’s not providing any jobs and is compounding the winner-take-all economics of the digital marketplace.
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It’s one of the greatest ironies of our supposedly technology- rich digital age. In contrast with the industrial economy, the quality of the technology is secondary. When Facebook and Twitter fought a bidding war to acquire Instagram, they weren’t competing for Kevin Systrom’s cheap, off-the-shelf photography filters or the code he and Mike Krieger slapped together in a few months. What they were paying for was you and me. They wanted us—our labor, our productivity, our network, our supposed creativity. It’s the same reason Yahoo acquired the microblogging network Tumblr, with its 300 million users and just 178 employees, for $1.1 billion in May 2013, or why in November 2013 Facebook made its $3 billion cash offering for the photography-sharing app Snapchat with its mere twenty employees.
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And that’s why Evan Spiegel, Snapchat’s twenty-three-year-old, Stanford-educated CEO, turned down Facebook’s $3 billion offer for his twenty-person startup. Yes, that’s right—he actually
turned down
$3 billion in cash for his two-year-old startup. But, you see, Spiegel’s minuscule app company—which, six months after rejecting Facebook’s $3 billion deal, was negotiating a new round of financing with the Chinese Internet giant Alibaba at a rumored $10 billion valuation
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—isn’t really as tiny as it seems. Its “workers” actually include around 25% of all cell phone users in the United Kingdom and 50% of all cell phone users in Norway, who, according to Spiegel, “actively” use the Snapchat app.
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Data factories are eating the world. But while this has created a coterie of boy plutocrats like Evan Spiegel, Kevin Systrom, and Tumblr’s twenty-seven-year-old CEO, David Karp, it certainly isn’t making the rest of us rich. You see, for the labor we invest in adding intelligence to Google, or content to Facebook, or photos to Snapchat, we are paid zero. Nothing at all, except the right to use the software for free.

“It wasn’t always like this,”
TechCrunch
reports about our new data factory economy. “To earn a profit, companies used to have to do the dirty work themselves. They hired huge staffs in real factories to sew textiles or build cars. People worked for wages and bought products. But technology changed all that.”
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Yes, technology has, indeed, changed
all that.
Some argue that while this might be bad for the old industrial working class, it is actually beneficial for consumers, who, while not being paid for their labor, nonetheless get to enjoy free products like Google’s search engine, Twitter’s timeline, Yelp’s restaurant reviews, and YouTube’s videos. In our so-called attention economy, they argue, these services also provide us with the platforms to be visible and enable us to build what Fordham University professor Alice Marwick calls our “micro celebrity” in the social media age.
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“Wikipedia is great for readers. It’s awful for the people who make encyclopedias.” Thus suggests the
New Yorker
’s Surowiecki.
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But is this really correct? Take Instagram, for example. While Systrom’s free photo app is certainly “awful” for Kodak workers and professional photographers, is it really “great” for the rest of us?

Instagram sits in the center of today’s perfect storm of technological, social, and economic change. It enables “addicts” like James Franco to broadcast his
Hello this is me
photos to his 1.5 million followers. It’s the ideal fix for our narcissistic and voyeuristic age—a personalized, customized, and easy-to-use app that encourages us to tell lies about ourselves. But, along with being a tool that misrepresents the world, Instagram is pitching us a gigantic lie, too. It is selling us the seductive idea that we own this technology. That it’s ours.

But the problem is that we don’t own any of it—the technology, the profit, maybe not even “our” billions of photographs. We work for free in the data factory and Instagram takes not only all the revenue from their business, but the fruits of our labor, too. In December 2012, after some controversial changes to the wording of Instagram’s terms of service, Kevin Systrom had to vociferously deny that Instagram intended to sell users’ photos or their data to third parties.
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Yet the question of who actually owns Instagram’s content remains as fuzzy as its photos. As a July 2013 white paper by the American Society of Media Photographers (ASMP) noted, most Instagram users don’t “understand the extent of the rights that they are giving away.” The company’s “onerous” terms of use, the ASMP white paper reported, “gives Instagram perpetual use of photos and video as well as the nearly unlimited right to license the images to any and all third parties.”
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