William Davidow and Michael Malone ask us to reimagine what Patrick Henry’s proclamation to “Give me liberty or give me death” means at a time when the companies that control the internet also increasingly control the overall economy and our very lives—at a time when “Suddenly commercial enterprises, not repressive governments, are what pose the direct threats to our individual freedoms and privacy.”
The Autonomous Revolution: Reclaiming the Future We've Sold to Machines by William H. Davidow & Michael S. Malone, Berrett-Koehler
What constitutes unreasonable search in a world where our every online movement and interaction is tracked, where the GPS on our smartphones follows our physical presence everywhere we go and doubles as a recording device that can be easily hacked? Where do we turn if we feel we’ve been discriminated against by an algorithm? What does due process look like when algorithms are making decisions that fundamentally affect our quality of life, by ascertaining things like our creditworthiness or employability, even predicting the future behavior of people on trial or those who are incarcerated? What recourse do we have when our personal data has been breached time and time again online with little consequence for the companies we entrusted our information with, but one ill-considered social media post in our youth can brand us for life? How do we fight against commercial enterprises manipulating our emotions to control our behavior (Facebook, for instance, has already filed a patent for “emotion detection” technology)? Perhaps most importantly, what do we do when the “good jobs” that formed the backbone of the middle class for the last three quarters of a century—jobs that were not very good until our ancestors organized and fought to make them more so—disappear as automation in almost every sector of the economy displaces them?
William Davidow and Michael Malone take on all those questions and more in their new book, The Autonomous Revolution, posing potential answers while acknowledging they don’t have a monopoly on good ideas to address such weighty societal concerns. (Unfortunately, while they don’t have a monopoly on good ideas, monopoly is a very real concern of theirs, but more on that later.)
Davidow and Malone’s previous collaboration, The Virtual Corporation, published in 1992, predicted a paradigm shift taking place in the workplace as information technology and networked personal computers changed the way that work was organized. That has certainly come to pass—much more quickly than even they imagined, and with much wider ramifications. Indeed, that is what led Davidow and Malone to write this new book about how the paradigm shift they explored in The Virtual Corporation is entering every aspect of our lives, often in troubling ways:
Having been present at the birth of social networking, massive multiplayer games, autonomous vehicles, modern artificial intelligence, and all of the defining new technologies of the twenty-first century, we have watched with growing dismay, even horror, at how many of these developments have morphed into increasingly malevolent threats to human privacy and liberty.
They ask us to reimagine what Patrick Henry’s proclamation to “Give me liberty or give me death” means when those companies that control the internet also increasingly control the overall economy and our very lives, at a time when “Suddenly commercial enterprises, not repressive governments, are what pose the direct threats to our individual freedoms and privacy.” We can debate if that is true for the poor, for refugees, and for those that are currently living under or trying to flee from repressive governments, or whether it will be true if we turn to more authoritarian government ourselves in response to this current phase change. After all, the last one spawned many different forms of government:
The Industrial Revolution gave rise to republican democracy, modern capitalism, Communism, Fascism, and Romanticism.
The divisiveness, polarization, and populism that could lead in a more authoritarian direction is something the authors address. All of them are on the rise because it seems as if all the institutions (and the social contracts around them) we built up over the course of the Industrial Revolution, especially in the aftermath of The Great Depression and Second World War, are no longer working properly—that they are now facing an existential crisis. In fact, Davidow and Malone pondered a different subtitle for the book: “Why nothing seems to work anymore.” They suggest part of the reason is that we tend to view the Autonomous Revolution as a continuation of the Industrial Age, when it is actually a phase change that breaks with previous precedent.
They borrow the term “phase change” from physics. Think of water and ice, which while chemically the same, have very different physical qualities that require different rules (fluid dynamics vs. solid mechanics) and different tools to work with. It is more complex in human social systems and societies, but the authors suggest we are going through a third such phase change in our history, when a substitutional equivalence has changed at least one fundamental way of how we interact with the world around us. The first two phase changes were the Agricultural and Industrial Revolutions, and they were defined by one major equivalence each: the substitution of farming for hunting and gathering, and the substitution of mechanical power for muscle power. The Autonomous Revolution upon us now will be driven by three such equivalences: Information Equivalence, in which we substitute virtual processes for physical ones; Intelligence Equivalence, with which we replace and enhance human minds with artificial intelligence, and; Spatial Equivalence, where experiences that once took place in physical space are being transferred to virtual space.
The Agricultural Revolution gave rise to what we now see as civilization itself. The Industrial Revolution resulted in an industrial society organized around jobs that has shifted over 80 percent of the population off the farm and into urban centers, and in which “corporations such as General Motors, Standard Oil, and U.S. Steel … achieved the scale and power of nations in just a matter of decades.” Davidow and Malone note that the “good jobs” that industrial firms like that provided, with decent salaries, benefits, relative security, and self-esteem and solidarity tied to the workplace, have been a relatively recent phenomenon that “has been with us for less than seventy-five years.” And they are becoming increasingly rare again.
The technologies that are replacing previously institutional services are often cheap and free to use, driving down both costs and profits, and rarely create new markets or secondary benefits as Industrial Age technologies did (think of the automobile > highways > suburbs > shopping centers, etc.). They are, in the authors’ words, “efficiency engines” that fail to produce ancillary opportunities or added jobs, but remove the need for jobs altogether by replacing humans with machines, and actually decrease the size of markets. Think of the newspaper business, postal service, and even Hallmark, which have all seen precipitous job losses. Think of streaming music platforms that have made it easier than ever to get music, and grown into multibillion-dollar businesses in the process, but have shuttered retail record stores, and “eliminated far more jobs than they’ve created, directly or indirectly,” at the same time that “they have greatly reduced the flow of revenue to artists.” As they explore how the rise of autonomous vehicles will upend transportation and the trucking industry, and how information proxies like the financial services industry and much of physical retail will be automated, we understand how those job losses are just just early harbingers of what is to come.
The picture they paint of the future is largely one of increased abundance, but also of an increased concentration of wealth and income inequality. That is, if there are opportunities left to make any income at all—opportunities that are already in decline, leaving many already un- and underemployed.
The immediate consequence of this has been large numbers of people living lives of despair.
Our economy is now bipolar, with a traditional economy at one end and a virtual one at the other. The traditional economy is biased toward inflation. The economy at the other end, the Autonomous Economy, is biased toward deflation.
“The middle class,” the authors observe, “is mired in this bipolar trough.” The cost of basic necessities like food, housing, and healthcare is rising—sometimes dramatically—and that is before throwing in the cost of higher education, which has left so many burdened by debt before they even get started in jobs where, if they still exist, wage stagnation has resulted in real incomes that haven’t risen in more than a generation.
They also assert that the link between increases in per capita GDP and overall quality of life has been broken. Contrary to others’ popular prognosis, they show how worker productivity has, in fact, increased, but it is non-monetizable productivity—especially for workers, and often even for employers. Clayton Christensen’s theory of "disruptive innovation" may still hold true, as new businesses and new business models replace older ones…
But this time things will also be different, because many of the businesses that replace existing ones will make markets smaller. … Newspapers were big business, but the online news services that replaced them employ fewer people and make less money. An application that facilitates the direct transfer of funds will generate less revenue per customer than a credit card company does.
This is one of the reasons why they believe the idea that we are in the midst of a Fourth Industrial Revolution is not only inadequate, but false—that it doesn’t accurately describe the extent or type of the change we find ourselves in. And if we don’t face that reality, we risk applying old rules and solutions to what are fundamentally new phenomena and challenges:
Industrial Revolutions have been about physical products that are produced by physical machines and distributed by physical trucks, trains, and ships, in environments controlled by human hands and minds. The Autonomous Revolution is about autonomous workers, autonomous systems, and of a life lived sometimes in the physical world, sometimes at the intersection of the virtual world and the physical world, and others times completely in virtual space. Humans controlled the machines that replaced their muscle power, but the autonomous machines that we have created will increasingly control us.
To imagine what those kind of structural transformations look like, consider just the recent changes in how we create and consume media:
The physical infrastructures that support media have changed … Screens, smartphones, and fiber optic cables have replaced newstands, delivery trucks, and printing presses. Media business models are different. … In the past, broadcast television was free and you paid for your local newspaper. Today, you subscribe to online video services but can read hundreds of newspapers, from every corner of the world, on your screens for free.
All of this took place rather seamlessly to us as consumers of the media, but not to those who work in those industries. Of course, some propitiously positioned companies have built platforms that have brought them enormous wealth and power in this transformation. Just as previous phase changes in the Agricultural and Industrial Revolutions have given rise to powerful empires, Davidow and Malone explain how…
New Empires are emerging today—in many ways bigger and more powerful than the greatest empires of the past. But they are arising in a territory never anticipated—the virtual realm—and in the forms of corporations such as Facebook, Google, and Amazon.
That is why there is and will continue to be increasing pressure to treat platform companies like Facebook, Apple, Google, and Amazon like public utilities (that is, regulated utilities), just as we did with the once private companies that have become the public utilities of today.
If we were capable of converting them into utilities in the early twentieth century to better serve the public interest, we should be capable of defining the new utilities of the future, perhaps creating them from existing private companies, and in the process determining effective ways to regulate their behavior.
Such utilities in particular, and the Autonomous Age in general, will require massive new investments in infrastructure, which is why the authors suggest that construction and the trades, not white-collar work, “could well turn out to be the Last Stand of the Good Job.” They also suggest that much, if not most, of that work will be driven by the free market, even if some private enterprises morph into publicly regulated utilities. But even as we pursue aggressively free-market approaches, Davidow and Malone encourage subsidising socially useful work that is now unpaid or grossly underpaid, like child and elder care, to provide meaning and income in an increasingly jobless future. They also propose the idea of information fiduciaries, which would hold our information where we have access to it and control over how we want it shared, which would both help protect our privacy and provide new business opportunities for credit rating services and other online information brokers like Google, Facebook, and the like.
There are many other early indicators and warnings, and potential remedies (many that they are uncomforable with but clear-eyes about) covered in the book. But perhaps their greatest proposal is their call for a more rigorous, open, civic and civil discourse and debate on the changes ahead, and challenges and potential opportunities they pose:
As we go forward to confront the challenges facing us, it is extremely important to listen to divergent opinions, pay attention to those who analyze the situation from different perspectives, and view with caution the pronouncements of those who know everything about technology and understand nothing about its social consequences.
The Autonomous Revolution is a great addition to that debate. Even “An increasingly jobless future isn’t such a terrible thing to contemplate,” the authors believe, “if everyone shares in the general prosperity.” We have the opportunity to make this new revolution in virtual space lead to us living better lives in the physical world, one in which human growth isn't tied to an outdated model of economic growth, and in which, as John Maynard Keynes imagined in his 1928 essay on the “Economic Possibilities for Our Grandchildren,”
“the economic problem is not—if we look into the future—the permanent problem of the human race.”
To make that the reality instead of a more Orwellian outcome, we must write new rules to govern the Autonomous Revolution even as we hold fast to “our sacred values, such as democracy, equality, and liberty and freedom for all.”