Move Over Perpetual Motion Machines, There's

Now a Perpetual Data Machine – Big Data!

Now it's data that makes the world go round?
Now it's data that makes the world go round?

It's comfortably accepted by many that what we in the first-world countries currently live in is a post-industrial era, an era in which a transition has been made from manufacturing-based economies to service sector-based economies. But to put truth to the lie, "post-industrialism" is polite speak for "a gutted manufacturing sector whose jobs were offshored to countries where wages were lower, enacted so that deep pockets could be deepened and so that those whose employment existed in higher echelons than the offshored could gain access to cheaper products." *

But if you giddily follow along with the rags and raggees extolling the idea of "post-industrialism" then you couldn't be blamed for then thinking that what we've now entered is no less than the post-energy era. Because according to the article "The World's Most Valuable Resource is No Longer Oil, But Data" via none other than The Economist, "data [is] the oil of the digital era". And not just any data, but Big Data.

As the argument goes, the ubiquity of Internet-connected devices – televisions, smartphones, self-driving-cars, smart... coffee makers... – is creating data in such enormous quantities that the five most valuable listed companies in the world – Alphabet (parent company of Google), Amazon, Apple, Facebook and Microsoft – are all utilizing it in order to entrench their grip on the consumerism-indulgent masses. With even General Electric and Siemens now selling themselves as data firms, and estimates being made that self-driving cars will eventually generate 100 GB of data per second (!?), the assumption is that all this data will empower artificial intelligence (AI) and all its algorithms to "extract more value from data", allowing for such things as the ability to predict when a customer is ready to make a purchase.

The root of this data-as-oil correlation is of course the ECON 101 way of thinking which posits that oil and other energy sources are nothing but mere commodities like anything else. As The Economist also states, while "a century ago the resource in question was oil", the black goo has since been supplanted by "a new commodity" – data. Oil, in effect, is nothing but a resource – a commodity – that ultimately serves no different purpose than zeroes and ones. And with Big Data being the commodity du jour, it should be of little surprise then that the masters of the universe have decided to maximize their "earnings" by not creating a bubble out of it but rather a pyramid scheme:

Technology giants have always benefited from network effects: the more users Facebook signs up, the more attractive signing up becomes for others.

But while pyramid schemes on the scale of Facebook are nothing to scoff at, what the economist's economists at The Economist have also come up with is on par with what only the maddest of mad scientists are capable of: A perpetual data machine.

With data there are extra network effects. By collecting more data, a firm has more scope to improve its products, which attracts more users, generating even more data, and so on.

And so on!

Could the next generation of Elon Musk's Teslas no longer require energy for propulsion
but instead run on nothing but highly refined, pure data itself? (photo by Maurizio Pesce)
Could the next generation of Elon Musk's Teslas no longer require energy for propulsion but instead run on nothing but highly refined, pure data itself? (photo by Maurizio Pesce)

While nations used to judge themselves against such things as the size of their armies and the reach of their nuclear arsenal, the latest unit of measurement nations now seem to judge themselves against is, How big is your Big Data?

So as to not be outdone by the West's charlatan (The Economist again: "The more data Tesla gathers from its self-driving cars..."), the East has unleashed its own charlatan in the form of Jack Ma – Chief Thief of Alibaba, the online retailer which in 2014 became the record holder for the largest IPO in history. As stated by Ma at the Big Data Expo 2015 in Guiyang, China,

未来的制造业要的不是石油,未来的制造业它最大的能源是数据.

My Chinese is unfortunately a bit rusty, so as the translation by a Chinese friend of mine goes, "What the future manufacturing needs in order to go forward is not oil but data." (Although it doesn't provide a direct quote, if you don't trust my friend's translation then you can read a summary of Ma's statement in English here.)

This would be the same Jack Ma who was here in Melbourne back in February proclaiming to an audience at the opening of the first Australian and New Zealand branch of Alibaba that "Australia is a gold mine. The next gold mine". The big gold rushes of actual gold are of course over, as are the oil rushes, the fracking rushes, and so forth. And with the next big thing being Big Data, this implies that even something like a Bitcoin rush would be much too tangible for our sages of the digital era, because the new "gold mine" that Ma envisions is, quite literally, air: "[T]he air, this is what you have, the most unique asset."

The article conveying Ma's vision doesn't relay how exactly a... piece?... of air gets valued (New Zealand already uses Alibaba to sell air to China), but one would imagine it has something to do with the cost of the vessels that the air is... inserted into, or perhaps the labour costs associated with taping up what are still known amongst traditionalists as "empty boxes". For all we know Ma is ready to capitalize on the "empty" shipping containers returning to China after having dropped off all their sweatshop-labour junk in Australia, which on their return unload their "cargo" – "fresh Australian air".

That's not to belittle the tragic fact that China does in fact have serious problems with air pollution (its so-called "airpocalypse"), problems that to a certain extent are due to the previously mentioned "post-industrialism" of the West. Because not only were many of the Wests's manufacturing industries offshored, but so was the associated pollution. This is the underlying reason (or at least one of them) behind Ma's preoccupation with air, Ma stating that, "A lot of [Chinese] people see the product as a supplement to clean their lungs out with fresh Australian air". That beins so, there's so far been no word on whether or not Alibaba warms up the imported air before selling it.

The East's Jack Ma, in competition with the West's Elon Musk to see who can sell the most hot air
The East's Jack Ma, in competition with the West's Elon Musk to see who can sell the most hot air

Returning to the issue of the perpetual data machine, The Economist ponders over whether those controlling Big Data are getting too... big..., bringing in the idea of "antitrust remedies". As it states,

The nature of data makes the antitrust remedies of the past less useful... A radical rethink is required — and as the outlines of a new approach start to become apparent, two ideas stand out. The first is that antitrust authorities need to move from the industrial era into the 21st century.

On and on it goes, but I think that perhaps a more pertinent thing to ponder over is, Since governments (rightly) no longer accept patents for perpetual motion machines, should governments be allowing for the existence of companies that are selling themselves on — and getting valuated upon — the size of what are effectively their perpetual data machines?

That, of course, isn't likely to be considered anytime soon, but what will likely continue to get bandied about are stories about the oh-so-nasty Chinese spying on Americans, and stories about the oh-so-nasty Americans spying on Chinese.

And while issues like Net Neutrality should certainly be taken seriously alongside the privacy issues surrounding all this (big) data collection, one should also be careful to realize that contrary to popular belief, the Internet, Big Data, and all the rest of it are but passing phenomena, implying that perhaps we shouldn't be getting too carried away by sniffing too much of Musk's and Ma's (hot) air.

(photo by Jeremy Keith)
(photo by Jeremy Keith)

* One result of all that is that those in the higher echelons who like stuff (or bigger bank accounts, more exotic vacations, etc.) are emboldened to vote for the offshorers, while the "downsized" and others gravitate towards the people promising to adjust policies in order to revive gutted communities. But when the "offshorer" steals the (undemocratic) Democratic primary from the "adjuster", the "downsized" then gravitate towards the fake "adjuster" for a slew of reasons. The fake "adjuster" then gets denigrated by the "offshorer" and its acolytes, said acolytes not realizing that the fake "adjuster" is not the core problem but rather a symptom. But that, of course, is another story altogether.

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Comments (9)

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Allan Stromfeldt Christensen
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Aug 2014
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Apologies for the delay in getting this post up. I've been consumed with some other FF2F-related work/writing for the past month, and probably will be for some time yet, so posting will be very light for a while – one or two posts a month.

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Venkataraman
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Apr 2017
Venkataraman

Data is like money.

Both have value only in a narrow space.

No limit. Grow money by adding (thanks to my ancestors) zeros. For data include 1s.

They are thought to exist without physical support. When a Facebook stock created at a fraction of a penny is sold for $40, somewhere, someone has lost $40 worth of real material. The pictures of cute babies on Facebook are anchored in data centers run by mega kWhs of electricity.

Maybe more.

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Allan Stromfeldt Christensen
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Venkataraman: "For data include 1s." Haha! I never thought about it that way! I'm going to remember that one and credit you if I use it.

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Joe Clarkson
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Jan 2015
Joe Clarkson

I second Venkataraman's point. Both money and data are abstractions representing physical processes in the physical economy. They are important only as a way of organizing that physical economy, but in that regard they are very important.

Our systems of communication are what allow money and data to exist and is just one more example of the increasing complexity, and brittleness, of the global market economy. Most people's lives depend on the continued functioning of the internet. Lose internet communication and the whole economy shuts down. If the whole economy shuts down, famine begins in a few days. Quite a consequence for an assembly of 0s and 1s. You can't eat them, but you can't eat without them.

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Allan Stromfeldt Christensen
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Joe: "You can't eat them, but you can't eat without them." Hehe, yeah, another good way of putting it. Although one which reminds me of something Wendell Berry once wrote, in that we've become so superstitious that we actually think money [or in this case digibits] brings forth food.

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Shawn
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Apr 2015
Shawn

How much energy will Big Data consume? How much for the Transportation as a Service networks? How much for the complete Internet of things? All these new ideas and services are ultimately energy/resource questions, as I think you are suggesting here. Yes, the economists, and everybody else, assume that energy will just be there. Maybe that is because there really is no alternative anymore, we are in the last seconds of the game, the Hail Mary Pass (U.S. Football Analogy) to the future of unlimited energy has been thrown, the only choice is to hope and pray that the football (technology?) will be caught for the touchdown and save the day.

And more questions. Why do we need big data to move commerce forward? Really? Why? Forward to where? All rhetorical questions Allan. The world seems increasingly silly to those of us who no longer believe in the perpetual growth machine and growth with no consequences.

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Allan Stromfeldt Christensen
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Shawn: And to be blunt, it's because of all this TaaS, the Internet of things, etc. etc., that I've got a really hard time taking climate change all that seriously anymore. Te me, what's essentially being shown is that we're not all that willing to make any sacrifices in our lives. It's seeming to me that climate change is something that's going to have to be mitigated after the fact, not so much avoided. I do hope I'm wrong though.

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Venkataraman
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Apr 2017
Venkataraman

I thought you may be interested in this, if you have not read it already:

What is Eco-Socialism, Who is an Eco-Socialist

in

http://eco-socialist.blogspot.com/2017/06/what-is-eco-socialism-who-is-eco.html

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Allan Stromfeldt Christensen
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Venkataraman: Thanks very much for that! I was kind of debating whether or not I wanted to include in the post the footnote seen above, and then more recently was debating whether or not I should delete it (with a note of its deletion). I rather reluctantly decided to leave it, but now you've given me the opportunity to clarify myself – thanks!

If you look at one of my posts from back in November you'll see that I pictured Obama, Clinton, Sanders and Trump with tractors (or in Trump's case, his pseudo tractor). Sanders is riding a John Deere from the 1960s or something, which is all folksy and stuff, but still industrialism. Like Sarkar described Chavez as being "a good man" in a "petro-socialist" system, Sanders tends to make me think of somebody who's fighting for equality on the Titanic while it's sinking. It's a nice gesture, but a bit daft.

So many thanks for about allowing me to clear that up!

Furthermore, I think Sarkar is absolutely spot-on when he states that "To be a good socialist one only needs to rejects capitalism". But to prefix "socialism" with "eco"? I don't know. Perhaps. But since socialism is very much equated with industrialism, it kind of seems to me like an attempt to attach a nice veneer to the latter. On the other hand, and as Wendell Berry stated, industrialism is a way of thinking based on money, agrarianism is a way of thinking based on the land. But then again, it's not as if agrarianism/agrarians from the past have all been angels – far from it. So maybe.... eco-agrarians? Or is that just an attempt to pull off the same thing as eco-socialist?

Anyhow, with much delay I'm about to start on the next post and might very well end up doing a review of Klein's latest book (which I haven't read yet). We'll see.

By the way, I don't know if you were reading FF2F back then, but back in September of last year I put up the first part of a 4 part series on Naomi Klein. Besides my posts on honeybees it's by far the thing that has garnered the most attention on this blog. You might find them an interesting read.

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