Thread by @economistrent

There is a virtual copy of your life on the internet. Should you be worried? A thread. 1/

newsroom.co.nz/ideasroom/virt…

Matt and I ask in our op-ed what a small country like New Zealand could/should do about collection/exploitation of consumer data. I’ll focus here on the *economics* of what @shoshanazuboff has dubbed #SurveillanceCapitalism 2/

https://twitter.com/jonboguth/status/1211655242166738944

Most people are aware at some level that their online and retail transactions are recorded. “Targeted advertising” sounds harmless enough—indeed it sounds quite useful!—but consider the asymmetry of information it generates. 3/

An observer with access to the “virtual you” can draw inferences about what you know—and, critically, what you don’t know—about products you might consider purchasing. 4/

Consider this: an advertiser who knows you are unaware of the low-priced competitor across town is unlikely to offer you a special discount. In practice, nobody needs to “know” anything, as… 5/

…the scale of collection means that clever and devious marketing experts need play no role in this strategic game: artificial intelligence and machine learning will do the work of systematically picking your pocket. 6/

In the canonical Marshallian competitive market, nearly every consumer enjoys consumer surplus in market exchange: value above and beyond the price paid for a good or service. The aim of surveillance capitalism is to capture that value. 7/

This can happen even with perfectly rational (but imperfectly informed) consumers. There’s no need for a “mind-control ray” to manipulate the masses. Information does the job. 8/

https://twitter.com/doctorow/status/1298631137154052098

But if it’s true that consumers *do* possess human psychological traits (and of course they do), the problems with surveillance capitalism become much, much worse. 9/
theguardian.com/technology/201…

The usual saviour of the consumer—competition!—seems unlikely to solve this problem. The virtual copy of your life available for sale on the internet will be offered not to all comers at a competitive price but… 10/

…to the highest bidder in a secretive auction. The auction winner will be the bidder who is able to extract the highest price from you at the greatest profit; no other seller will have easy access to your attention. 11/

How might this market for the “virtual you” be made more competitive? We could make your personal data available to everyone at the marginal cost of collection (~$0), so targeted ads actually serve the consumer but you can probably imagine many would object to such a scheme. 12/

Surveillance capitalism is a business model that has arisen under the radar. Our virtual lives have been collected, stored, and commoditized without our permission. As a society we can decide that this industry should not exist. 13/

Here’s what privacy law should do: ban the trade in personal data, just as societies once decided to ban the slave trade. Do it now, before it’s too late. 14/14