The Monopolist’s Burden

tl;dr We need to be careful of the faults of decentralised systems, yet reassured by the strength of the principles underlying them. (Part of a series of posts.) 


Take up the Monopolist’s burden —
And reap his old reward:
The blame of those ye better,
The hate of those ye guard
Paraphrasing R Kipling



It can be instructive to compare Tim Berners Lee to Mark Zuckerberg. For example, why aren’t there any media articles holding Tim responsible for all the web sites that carry misinformation and viruses? He did invent the web that propagates all these horrors, didn’t he? Similarly, why don’t we hold the ARPANET or the US military responsible for all the email scams we receive in our inboxes? And yet we hold Mark and his company responsible for all the terrible things taking place on Facebook. Isn’t he just providing a communication utility and platform much like email and the web? Isn’t he just reaping the old reward of providing a great way for us to connect to each other using our real identities? Do we not remember the days before facebook, when it was impossible to verify identities on social networks, the days when we could not easily find nor connect to our old friends? Why should it matter that it is one company that has attracted so many users and presumably created value for them, rather than a decentralised system like the world wide web, which is based on a public communication protocol? 

There are many ways to think about these questions, but I pose them here to first make the point that decentralised systems too can also be plagued by a variety of problems – identity theft, ransomware and child pornography web sites are among the dark sides of the internet.   

And in many cases, the solutions to the problems plaguing open networks seem much harder to resolve than centralised ones. If we think there is an issue with Facebook or Twitter, we know that there is a company behind them that controls all the software running their web sites. We know that it is technically possible for Twitter or facebook to ban a “bad” actor from their sites if need be. So, we can shout and write nasty articles and sue them and ask Mark to “fix it, already”.  But if we are outraged by a nasty web page or get caught in a phishing email, there is no one to shout at - no one person or company we can point at to solve the problem or to ban a web site. And the more decentralised and the more rigid a decentralised system may be, the harder it will be to solve the problem. This is something that any proponent of any decentralised system must be continuously wary of. 

We should all be careful what we ask for.

Yet, problems on decentralised networks can also get solved, even if there is no one person we can ask to solve them. Take spam. A few years ago, it was quite common to get emails from Nigerian princes for example – a problem not totally dissimilar to the misinformation plaguing companies like Twitter and facebook today. And in this particular case of email spam, the fact that these emails are rare today seems to indicate that the participants in the decentralised email protocol succeeded in solving the problem. Yet, as pointed out to me by a very knowledgeable friend, the resolution of email spam cannot be really used as an argument in support of decentralised power structures in general –the reason this particular problem was solved is that a very few large companies dominate email services. So, as my friend pointed out, it was not the dispersion of the decentralised email protocol that drove the resolution but the power of the large oligopolies dominating the service. Although this may be true, I would argue that the concentration of players in the market is not necessarily the critical indicator here. Rather, it is underlying market structure they are operating in, and the system of governance surrounding it. Even if it was a handful of trillion-dollar behemoths that solved the email spam problem, they were on a level playing field competing to offer better services to their users and to solve such problems for them. Imagine an alternate world where Google had invented email, and that it controlled 100% of all email traffic from the get-go. Then, could we have expected Google to resolve the email problem in a new or innovative way? Isn’t it more likely that they would be entrenched in the way they had done things in the past, that they would be constrained by the business models and methods that had allowed them to dominate 100% of email traffic, and thus be blind to new ways to solve the spam problem? 

Indeed, monopolies do stifle innovation.

But stifling innovation is not the only problem with monopolies - it is the values, the ethics and dynamics that are reflected in the underlying market structure and their systems of governance. It is as much a philosophical question than an economic one. 

As our lives are increasingly being led online, our interactions and our data-trail are also becoming part of our Being. Our Self is reflected in, and to some extent even defined by its existence on the internet. So, it becomes even more important to think of the systems of governance we are creating through the lens of political theory. 

The questions facing us now are not dissimilar to the existential dilemmas which we faced in the mid 20th century, when we grappled with the egalitarian promise of centrally planned communist economies versus the seemingly unjust and certainly unruly and messy market economies of Western democracies.  It was not just that centrally planned economies stifled innovation and created inefficient economies. It was also about the structure of the system we were striving for – the values it incorporated, the rights it bestowed on citizens and the freedoms it upheld.  

We can also draw analogies to the early 20th century, when Europe was still a dominant Colonial power. At the time, a pro-Colonialist might have argued that things would be much “worst” under a “native” ruler, and point to the many good things Western Civilisation had burdened to bring to the colonies. Arguably, using a measure like GDP, that assertion may well have been correct. For the sake of argument, let us assume it was - that indeed, colonialism led to higher GDP. Similarly, we can even assume that by some measures, the Colonial leadership provided more effective management, and a superior legal system for its colonised subjects. I would digress to note that an officer of the highest honesty and moral fibre within a particular world-view can be seen to commit heinous crimes from other perspectives. But even if we ignore this dissonance, even if we assume that the autocracy of Colonialism engendered an orderly system which created greater wealth for the colonised and a far better legal system, where incorruptible courts could punish and ban “bad” actors, we would still be wrong. We would still be overlooking those most valuable attributes that were of paramount importance to the colonised: their freedom and their autonomy.

So too, with data. 


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