Thank you, co-chairmen Zimmer and Collins. It's such a pleasure to be here today.
As you know, I hail from the Harvard Business School, where I am a professor emerita. More importantly, I am the author of this book on surveillance capitalism. I say that because I want you to know that any statements and conclusions I reach today are amply supported by the information and analysis in that work. I might add that my scholarly work on the digital future began in the year 1978. I'll let you do the math on that.
My remarks this morning cover some highlights of a longer written statement that I have submitted to the committee. I add for the record that I am deeply committed to the work of this very important group. That includes continuing to support your work in any way I can, off-line or in future meetings, as we engage in this world-historic challenge.
The Internet is now an essential medium of social participation, and it is owned and operated by private surveillance capital. The questions of law and regulation that this committee seeks to explore cannot be answered without a clear grasp of surveillance capitalism as a novel economic logic defined by distinct economic imperatives that compel specific practices. I don't want to repeat everything that I talked about last night. Roger has touched on some of the key issues, as has Jim, so I will skip ahead to the idea of economic imperatives.
What we see in surveillance capitalism is the unilateral claiming of private human experience, its translation into behavioural data and their fabrication into prediction products, which are sold in a new kind of marketplace that trades exclusively in human futures. When we deconstruct the competitive dynamics of these markets, we get to understand what the new imperatives are. First of all, it's scale. They need a lot of data in order to make good predictions; economies of scale. Secondly, it's scope. They need varieties of data to make good predictions. Ultimately, in the third phase of this competitive struggle, it was discovered that the most predictive data comes from actually intervening in human behaviour, intervening in the state of play, in order to have predictions that come closer and closer to actual observations so that they can guarantee outcomes to their business customers. That is how you win in human futures markets.
I'll share with you one brief quote from a data scientist that rings in everybody's ears when they hear it. He said to me, “We can engineer the context around a particular behaviour and force change that way.... We are learning how to write the music, and then we let the music make them dance.”
Friends, this is behavioural modification, systemically institutionalized on a global scale, mediated by a now-ubiquitous digital infrastructure. It began online. It travelled off-line into the real world on our telephones, our cellphones, and ultimately now we live in a world of devices, which allows this to be amplified and perpetuated. This digital architecture is growing every day. I call it the “big other”. It is at this new level of competitive intensity that it is no longer enough to automate information flows about us. The goal now is to automate us. The goal is to automate us not only as individuals, not only as small groups, but increasingly also on the scale of populations. The goal is to have surveillance capitalism's computational analysis that favours its own commercial outcomes replace democracy and governance as we know it.
In fact, at this very moment in the city of Toronto, Alphabet-owned Sidewalk Labs is spinning its own new euphemisms, which it calls “governance innovation”. This is Orwellian code for the deconstruction of local democracy in favour of Sidewalk's computational rule, which is, in the final analysis, a reincarnation of a kind of absolutist tyranny that we thought we had left behind us in the 18th century, now served with cappuccino and draped in ones and zeroes.
Surveillance capitalism assaults democracy from below and from above. From below, it is a direct assault on human autonomy and agency essential for the possibility of a democratic society. From above, it is marked by asymmetries of knowledge and power the likes of which human history has never seen.
I want to move on to the question of what is to be done, because this is what we really didn't have time to discuss very much last night, and build on Jim's excellent, excellent recommendations, all of which I agree with.
Surveillance capitalism has thrived in the absence of law, as we all know. I take that as a positive sign, because what this means is that we have not failed to rein in this rogue mutation of capitalism. The real issue is that we haven't really tried. The accompanying good news is that our societies have experience in reining in the raw excesses of a destructive capitalism. We did it to end the Gilded Age. We did it to mitigate the Great Depression. We did it in the post-war era. We did it in the seventies to save creatures, air, water, workers and consumers. We know how to do this. This is what democracy is for. It is time to do it again.
The great business historian Tom McCraw wrote a brilliant history of regulation in the 20th century, the 19th and 20th centuries. He identified several phases of regulatory regimes, starting in the late 19th century with the muckrakers and moving into the early 20th century with the progressives. Later, in the New Deal and in the early 1970s, the regulatory frameworks were run by legal minds, legal scholars and legal experts. Finally, by the late 1970s, the eighties and right down to today, it's the economists who have held sway.
But this has been a changing dynamic, and what he notes is that at the end of the day, when you look at the more than a century of regulatory issues and regulatory frameworks, the emphasis has come down on fairness and justice over narrow considerations of economic growth. McCraw asks this question: The economists' hour will not last; what is it that will come next?
I want to tell you what it is that will come next. The next great regulatory vision will be framed and implemented by you and by us. It will be elected officials, citizens and specialists, allied in the knowledge that, despite its failures and shortcomings, democracy is the one idea to emerge from the long human story that enshrines the people's right to self-governance and asserts the ideal of the sovereign individual, which is the single most powerful bulwark against tyranny. We give up these ideas at our peril, but only democracy can impose the people's interests through law and regulation.
McCraw also warns that regulators have failed when they did not adequately frame strategies appropriate to the particular industries that they were regulating. The question is, what kind of law and regulation today will be 21st-century solutions aimed at the unique 21st-century complexities of surveillance capitalism?
There are three arenas in which legislative and regulatory strategies can effectively align with the structure and consequences of surveillance capitalism.
Briefly, first, we need lawmakers to devise strategies that interrupt and in many cases outlaw surveillance capitalism's foundational mechanisms. This includes the unilateral taking of private human experience as a free source of raw material and its translation into data. It includes the extreme information asymmetries necessary for predicting human behaviour. It includes the manufacture of computational prediction products, based on the unilateral and secret capture of human experience. It includes the operation of prediction markets that trade in human futures.
Second, from the point of view of supply and demand, surveillance capitalism can be understood as a market failure. Every piece of research over the last decades has shown that when users are informed of the backstage operations of surveillance capitalism, they want no part of it. They want protection. They reject it. They want alternatives.
We need laws and regulatory frameworks designed to advantage companies that want to break with the surveillance capitalist paradigm. Forging an alternative trajectory to the digital future will require alliances of new competitors who can summon and institutionalize an alternative ecosystem. True competitors who align themselves with the actual needs of people and the norms of market democracy are likely to attract just about every person on earth as their customers.
Third, lawmakers will need to support new forms of citizen action—collective action—just as, nearly a century ago, workers won legal protection for their rights to organize, to bargain and to strike. New forms of citizen solidarity are already emerging in municipalities that seek an alternative to the Google-owned smart city future, in communities that want to resist the social costs of so-called “disruption” imposed for the sake of others' gain, and among workers who seek fair wages and reasonable security in the precarious conditions of the so-called gig economy.
Citizens need your help but you need citizens, because ultimately they will be the wind behind your wings. They will be the sea change in public opinion and public awareness that supports your political initiatives. If, together, we aim to shift the trajectory of the digital future back toward its emancipatory promise, we resurrect the possibility that the future can be a place that all of us might call home.
Thank you.