The Great Seduction

The end of the middle

The New York Times' John Markoff tells us that Silicon Valley is "in danger of creating its own digital divide." Markoff (whose paper last week announced the axing of 100 editorial positions) cites the 2008 Index of Silicon Valley, "middle-wage" jobs in the Valley fell from 52% of workforce to 46%, while lower-wage jobs rose to 27% from 22%. Not a huge fall or rise in themselves -- but symbolic, nonetheless, of the structural shift in wealth within the digital economy.

Technology, it would seem, it making us less rather than more equal.

This shift is symbolic too of the massive reallocation of wealth that is taking place within the broader media economy. For all the glib pieties about the "democratization" of media, the truth about the Web 2.0 economy is that it's anything but democratic. That vast sucking sound you can hear is Google, YouTube et al gobbling up obscene amounts of wealth from the rest of the media business. The core economic truth about the Web 2.0 revolution is the causal -- albeit complex -- relationship between the rise of a user-generated-content economy and the fall of the traditional media business. "Middle-wage" jobs in the traditional (ie: human labor centric) media economy -- those of journalists, editors, recording engineers, cameramen -- are fast disappearing, to be replaced by...

By YOU! By the amateur writers on the blogosphere and the amateur videographers on YouTube. The only problem is that Google doesn't pay us for our search engine wisdom, YouTube doesn't reward us for our intellectual labor, Facebook doesn't pay us for our revelations about our taste.

Yeah, it's a blatant scam, perpetrated by a brilliant group of multi-millionaires in Silicon Valley who have discovered the holy grail of media -- convincing all of us to create content for free and then sell advertising around that content. But this Web 2.0 revolution is about as "democratic" as the enclosure of 6,000,000 acres of land in 18th century England.

So when is the left going to wake up to this? When will people who care about maintaining the economic value of human labor come to grasp that Web 2.0 is the worst news for the "middle-wage" creative class since...

 

The dictatorship of the consumer

Great piece in today's FT by Patti Waldmeir on what she calls "the death of self-rule on the internet." Waldmeir is referring to the decision by Ebay to rewrite its constitution so that buyers and sellers will no longer be democratic equals on the site. Because of widespread corruption, Ebay is ending its policy of allowing sellers to rate buyers on the auction site. As Waldmeir says:

Now the company has basically admitted that the cybersouk model does not work: buyers did not tell the truth about sellers, and sellers did not tell the truth about buyers. And in a market where traders lie, the trust that is so central to online commerce cannot flourish.

It's a simple message. The Ebay experiment has failed. Pure self-government doesn't work. Self-policing is great in theory, but problematic in practice. The system intimidated both buyers and sellers and actually created an atmosphere of dishonesty and denial. So a radically democratic Ebay made us less rather than more knowledgeable about each other. But, as Waldmeir suggests, the latest Ebay reform is actually making the problem even worse. The auction site is doing away with the right of the seller to rate the buyer, but not the right of the buyer to rate the seller -- thus creating what she calls "a dictatorship of the consumer":

From now on, Ebayers will not be democratic equals and they will lose a lot of their autonomy: buyers will still be able to rate sellers, raising a red flag to warn others away from merchants who are fraudsters or just plain bad at their business. But sellers will no longer be able to leave negative feedback on buyers - including those who do not pay. Instead, Ebay will step in to help protect honest sellers from dishonest buyers. But most sellers see this as a dramatic shift in the balance of power within Ebay society, and they are right. In future, the Ebay consumer will be king: buyers will easily be able to threaten sellers with negative feedback and sellers will find it much harder to strike back. Many sellers fear the new dictatorship of the consumer.

Unfortunately, Waldmeir's dictatorship of the consumer extends way beyond Ebay. This is the populist, libertarian tsunami that is sweeping over the Web 2.0 economy. The consumer is king, we are told, and is always right. The consumer has the right to vilify merchants, the right to free music, the right to pick political candidates as if they were toothpaste, the right to express themselves on whatever catches their fancy.

But what happens when the Internet consumer has driven the Internet merchant out of existence? What happens when the dictatorship of the consumer is turned upon itself?

Why do conservatives love Obama?

Anyone who has been following the video conversation with my friend Steve Gillmor knows that I'm a passionate Hilary Clinton fan -- the ultimate star-struck political teenybopper. I l confess that I love the liberal lady to death and I'm extremely depressed that Democrats seem to be passing her up for that windbag Harvard Law grad from Honolulu/Chicago (full disclosure: my wife was at HLS at the same time as the fellow -- so I'm very familiar with sanctimonious Harvard Law School windbaggery).

What I can't figure out is why Obama is so beloved by radical conservatives. Reading Peggy Noonan's celebration  of Obama's supposed victory of Hillary in Saturday's Wall Street Journal was surreal enough, but then we had Bill Kristol in today's New York Times delightedly claiming Obama has momentum. As Paul Krugman, the only guy maintaining his sanity in mainstream media's Obamamanic atmosphere, also wrote in today's Times, we are now seeing a cult of personality develop around the freshman Senator from Illinois.

So what's going on here? The Obama people will, no doubt, tell us that their candidate is post-ideology, bipartisan, bringing the country together, talking to real people, blah blah blah. Bipartisanship my arse. Either you are on the left or the right, either you are a liberal or a conservative, either you believe in raising taxes or you believe in dismantling the state. My guess is that it is the radical conservatives who have seen through Obama -- they know he's all windbaggery and no concrete politics, they know that he lacks the experience, the team, the understanding, the ideology, to put America back together again.

Or maybe it's because many neo-cons (including, for example, Kristol's dad, Irving) are ex Trotskyites who have never been able to resist a good cult of personality.

If you want competent government, vote Hillary; if you want to feel good about yourself, vote Obama.

Independent Column

I've started a regular column in the London Independent which is a huge honor, given that the newspaper has published many of my heroes -- Robert Fisk, Neil Ascherson, Howard Jacobson,  James Lawton etc etc. The Independent the liveliest, most relevant and readable English newspaper and I'm really thrilled to be associated with it.

Here's my latest Independent column about the Microsoft-Yahoo!deal. Five free hardback copies of CULT for anyone who can guess the identity of the unhappy Yahoo! exec featured the story (email me at ak@ajkeen.com).