Category Archives: Economics

Edge: Jaron Lanier – The Local-Global Flip

Via Edge:

We used to think that information is power and that the personal computer enabled lives. But, according to Jaron Lanier, things changed about ten years ago. He cites Apple, Google, and Walmart as some of the reasons.

In a freewheeling hour-long conversation, Lanier touches on, and goes beyond the themes he launched in his influential 2006 Edge essay “Digital Maoism: The Hazards of the New Online Collectivism.” What he terms “The Local-Global Flip” might be better expressed as “The Lanier Effect“.

Some excerpts from the transcript:

“The Apple idea is that instead of the personal computer model where people own their own information, and everybody can be a creator as well as a consumer, we’re moving towards this iPad, iPhone model where it’s not as adequate for media creation as the real media creation tools, and even though you can become a seller over the network, you have to pass through Apple’s gate to accept what you do, and your chances of doing well are very small, and it’s not a person to person thing, it’s a business through a hub, through Apple to others, and it doesn’t create a middle class, it creates a new kind of upper class. … Google has done something that might even be more destructive of the middle class, which is they’ve said, “Well, since Moore’s law makes computation really cheap, let’s just give away the computation, but keep the data.” And that’s a disaster.

… If we enter into the kind of world that Google likes, the world that Google wants, it’s a world where information is copied so much on the Internet that nobody knows where it came from anymore, so there can’t be any rights of authorship. However, you need a big search engine to even figure out what it is or find it. They want a lot of chaos that they can have an ability to undo. … when you have copying on a network, you throw out information because you lose the provenance, and then you need a search engine to figure it out again. That’s part of why Google can exist. Ah, the perversity of it all just gets to me.

… What Wal-Mart recognized is that information is power, and by using network information, you could consolidate extraordinary power, and so have information about what could be made where, when, what could be moved where, when, who would buy what, when for how much? By coalescing all of that, and reducing the unknowns, they were able to globalize their point of view so they were no longer a local player, but they essentially became their own market, and that’s what information can do. The use of networks can turn you from a local player in a larger system into your own global system.

… The reason this breaks is that there’s a local-global flip that happens. When you start to use an information network to concentrate information and therefore power, you benefit from a first arrival effect, and from some other common network effects that make it very hard for other people to come and grab your position. And this gets a little detailed, but it was very hard for somebody else to copy Wal-Mart once Wal-Mart had gathered all the information, because once they have the whole world aligned by the information in their server, they created essentially an expense or a risk for anybody to jump out of that system. That was very hard. … In a similar way, once you are a customer of Google’s ad network, the moment that you stop bidding for your keyword, you’re guaranteeing that your closest competitor will get it. It’s no longer just, “Well, I don’t know if I want this slot in the abstract, and who knows if a competitor or some entirely unrelated party will get it.” Instead, you have to hold on to your ground because suddenly every decision becomes strategic for you, and immediately. It creates a new kind of glue, or a new kind of stickiness.

… It can become such a bizarre system. What you have now is a system in which the Internet user becomes the product that is being sold to others, and what the product is, is the ability to be manipulated. It’s an anti-liberty system, and I know that the rhetoric around it is very contrary to that.

Visit the Edge site to read a response by Douglas Rushkoff.
Rushkoff also has a related piece at CNN: Are jobs obsolete?

Witness: To The Last Drop

An episode of the Al Jazeera documentary series Witness called To The Last Drop:

The small town of Fort Chipewyan in northern Alberta is facing the consequences of being the first to witness the impact of the Tar Sands project, which may be the tipping point for oil development in Canada.

Al Jazeera Witness

The local community has experienced a spike in cancer cases and dire studies have revealed the true consequences of “dirty oil”.

Gripped in a Faustian pact with the American energy consumer, the Canadian government is doing everything it can to protect the dirtiest oil project ever known. In the following account, filmmaker Tom Radford describes witnessing a David and Goliath struggle.

Part 1:

Part 2:

Niall Ferguson: Civilization: Is The West History?

A 6-part documentary series from the UK’s Channel Four in which Niall Ferguson asks why it was that Western civilization, from inauspicious roots in the 15th century, came to dominate the rest of the world; and if the West is about to be overtaken by the rest. It accompanies his book Civilization: The West and the Rest.

Niall Ferguson (.com)Ferguson reveals the killer apps of the West’s success – competition, science, the property owning democracy, modern medicine, the consumer society and the Protestant work ethic – the real explanation of how, for five centuries, a clear minority of mankind managed to secure the lion’s share of the earth’s resources.

Competition: The first programme in the series begins in 1420 when Ming China had a credible claim to be the most advanced civilization in the world: ‘All Under Heaven’. England on the eve of the Wars of the Roses would have seemed quite primitive by contrast.

Science: In 1683 the Ottoman army laid siege to Vienna, the capital of Europe’s most powerful empire. Domination of West by East was an alarmingly plausible scenario. But Islam was defeated: not so much by firepower as by science.

Civilization Cover (Amazon)Property: Professor Ferguson asks why North America succeeded while South America for so many centuries lagged behind. The two had much in common (not least the subjugation of indigenous peoples and the use of slavery by European immigrants), but they differed profoundly on individual property rights, the rule of law and representative government.

Medicine: The French Empire consciously set out to civilize West Africa by improving public health as well as building a modern infrastructure. Yet in other European empires – notably Germany’s in southwest Africa – colonial rule led to genocide. What was the link from medical science to racial pseudo-science?

Consumerism: Today the world is becoming more homogenous and, with increasingly few exceptions, big-name brands dominate main streets, high streets and shopping malls all over the globe.

Work: The sixth element that enabled the West to dominate the rest was the work ethic. Max Weber famously linked it to Protestantism, but the reality is that any culture, regardless of religion, is capable of embracing the spirit of capitalism by working hard, saving, and accumulating capital.

An on-line version of the documentary was in this spot, but as can be expected, it didn’t take long to be removed from YouTube.
Other official sources: Channel 4,

You can also watch his lecture Empires on the Edge of Chaos on (from ABC’s Big Ideas) or The Ascent of money: An evolutionary approach to financial history from Gresham College.

Another thematically related lecture: Ian Morris: Why the West Rules – For Now

Update: Does Islam Stand Against Science? (The Chronicle of Higher Education)
A contrary view of Ferguson’s output: Pankaj Mishra reviews ‘Civilisation’ by Niall Ferguson