Monday, 11 January 2016


with Dirk Helbing (ETH Zurich and TU Delft)

In Europe, you triggered the discussion about the Citizen Score, which has also been characterized as data dictatorship.[1] How did we get to the point that different companies and countries are now building information systems for behavioral and social control?

The world faces a series of global problems that are so severe that there is little interest to discuss them in public. 

So far, the financial, economic and debt crisis has not anywhere been comprehensively solved. There are still major economic risks. Peace is unstable, and we are witnessing the spread of terrorism and cybercrime. The digital revolution will destroy about 50 percent of today's jobs. So we must reinvent half of the economy and we have perhaps only 20 years for this. Global climate change will probably cause the greatest mass extinction since the death of dinosaurs, as well as extreme weather, droughts, mass migrations and wars. Nobody would have thought that the biggest problem is not the finite reserves of oil and coal, but their enduring availability at low cost. Nevertheless, there are mounting resource bottlenecks at a global level. This concerns nitrogen, phosphorus and water, for example. Therefore, feeding the world might become a problem. Based on an overall global average of all raw materials, the world consumes 1.5 times the resources actually available. Thus, there are either more than 1 billion people too many in the world, or we have to use resources more economically. But attributing the problem just to overpopulation would be too simple. It is the industrialized countries that consume 3.5-4.5 times the amount of renewable resources.

What results from this?

Clearly, this will lead to massive challenges. If we continue as before, massive waves of refugees, wars, terrorism, and revolutions are the obvious consequences. We can no longer keep these problems at bay; due to the strongly networked and interdependent nature of the world, they will sooner or later come back to us like a boomerang. So we must increasingly ensure that humane living conditions prevail everywhere.

In the past, we could ease the stress on resources through globalization, by exploiting resources located elsewhere in the world. The revolution in the area of information and communication technologies (ICT) made it possible to outsource production to low cost countries and avoid the associated environmental pollution in industrialized countries. For a long time, that seemed like a smart move. But then China grew to rival US hegemony, which implies the risk of dangerous military conflicts.

In the recent decades, the USA has focused on the production of knowledge, inventions and creative products, because that is where all value creation chains begin. To sit at the source promises the greatest commercial gains. In order to protect the commercial value of ideas, surveillance technologies were put in place (e.g. against Bit Torrent downloads of music and movies). Today, these technologies are used by many popular Internet platforms to study our intentions. They increasingly penetrate our private spheres of life. This is claimed to happen for the sake of a better user experience, through innovations such as personalized services. At the same time, however, our privacy was stolen in order to get more easy access to our money and life, or to sell it back to us expensively. If we do not pay attention, we might soon lose our freedom and our rights.

How have these new technologies changed politics?

The new technologies have also played into the hands of governments - including the personalized advertising that is often used to offer free information services. States have become beneficiaries of the total surveillance of citizens and customers by the private sector. That is why they have done little to curb these developments so far. To justify it, security arguments were put forward, although mass surveillance is statistically no more successful in countering terrorism than conventional investigative work.

Why is this the case?

Data analyses are not perfect. They produce many false positives, resulting in lists with too many suspects. For example, most of the Paris terrorists were on such lists. It was also known in advance that at least one of them had radicalized, and another one was taught to shoot at a police sports club. The problem of the Big Data approach is that the number of suspects exceeds the number of actual terrorists by far, making it difficult to decide who to concentrate on. In a sense, it is not possible to see the forest for the trees. From the point of view of Big Data analysis, one could say that everyone is a suspect. This does not only pose legal concerns; it also does not work well.

And what happens now?

If you ask business people, many of them will tell you that the world's problems would best be solved if the state stopped interfering with them. The argument is that companies are more efficient than public institutions (which, however, are supposed to execute orders, not to be innovative). Additionally, the idea is that the most efficient companies will prevail. Finally, a few monopolies will remain, which use the world's resources in the most efficient way thanks to "economies of scale". Therefore, international agreements such as TTIP and TISA essentially seem to minimize the influence of politics and the state and to privatize goods and services which were previously public. It is likely that public administration will also be privatized on a large scale. There are significant changes ahead, and that's why nobody wants to talk about this. Sadly, the debate about chlorinated chicken distracts the public from the truly fundamental points.

Why are politicians doing this?

These changes promise benefits for policymakers too. They would get a kind of digital scepter, a tool to control society and the behavior of people. Some believe that the world could be optimized with it, but I have serious doubts that this can ever work. The deal with the business world seems to be that harmful products would not be forbidden (or if they were, then citizens would have to pay for lost profits). Instead, the state would manipulate the opinions, decisions and behavior of citizens using personalized information. This would mean a digital takeover. For the consumer and citizen it would mean gradual disempowerment. In the end, however, this would be bad for policymakers too. "Big nudging" is not efficient enough to solve the global problems caused by human behavior (to ensure healthy and environmentally friendly behavior, for example). Therefore, a "citizen score" would sooner or later be introduced and each of our behaviors (and our likely behaviors and those of the social contacts influencing us) would be positively or negatively rated, such that our own future would be increasingly determined by the state. Sooner or later, we would end up with a form of digital totalitarianism, or data dictatorship. The victims of this "brave new world" would be the citizens. They would lose their freedom but would anyway have to pay for the sustainability costs (and for lost profits in case the state decided to withdraw from certain harmful technologies). In spite of this, the problems would not be resolved. Not only do these costs sum up to amounts that nobody could ever pay for. We would also be confronted with new problems and even bigger ones.

What are you talking about?

We would end up with a Feudalism 2.0, where, thanks to the use of digital technologies, resources and power would be concentrated in the hands of fewer and fewer people. As a result, less and less resources would be used to solve everyone's problems. The fate of all of us would depend on the decisions of very few people. Basic principles of justice and democracy, which were achieved over centuries, would be sacrificed. But that is not all: the economic development would be pretty bad. Most products would be manufactured by robots. Many services would be generated by algorithms using artificial intelligence. There would be a huge army of unemployed people. Purchasing power would collapse and bring the economy down. Most companies would go bankrupt. About 40 percent of top 500 companies would disappear in 10 years' time. 

As citizens would not be appeased with bread and games in the long run, there would be political and social unrests, revolutions and wars. That happened already during the transition from the agrarian to the industrial society, and later to the service society – thus, it should be a warning to us. As a result of such developments, many people would not only lose their jobs, but also their lives. Cynically enough, some people view this as the solution to our problems. But this time, it could mean the end of human civilization (due to the possible use of ABC weapons). Even if it would not come so bad, given that we live in a multicultural globalized world, the next conflict would not only take place between alliances of countries. The war would be everywhere — in the middle of our modern society. In the end something akin to the Nuremberg trials would take place again, to bring those to justice, who were responsible for the foreseeable disaster. It would really be wiser to take another historical path.

What alternatives do we have?

We need massive innovation. A citizen score would be absolutely counterproductive for this. It would promote opportunism and conformism, rather than increasing people’s readiness to take risks and to question existing solutions — something, which is absolutely essential now.

It is also high time to make the Big Data and Artificial Intelligence tools currently available, such as “cognitive computing”, accessible to all scientists or even all interested people. This would significantly increase the capacity and speed of innovation and ensure greater transparency and democratic control.

We also need a fundamentally new approach to innovation that puts more emphasis on open innovation than today, in order to offer all of the products and services that are currently not provided by large companies. Citizen science, so-called Fablabs (public centers for communities of digital hobbyists), as well as initiatives to mobilize civil society are becoming increasingly important. The key word is co-creation, which means that citizens can augment information, knowledge, services and products in a largely open information and innovation ecosystem. Obviously, this does not preclude commercialization. On the contrary, it would create opportunities for everyone to earn money with data. The citizens and the customers would become partners. The participatory society of the future will not only build on large global corporations. Businesses of all types and sizes and self-employment will play an even bigger role than today. This is a good thing because monopolies are known to be comparatively little innovative, and they rarely care about products and services that will not generate a significant return, say, of 20 percent.

What else could be done?

I spend a lot of time thinking about the right framework for a "Plurality University", which would generate knowledge in real time (as much as this is possible) and would share it instantly worldwide. In the digital age, we must reinvent innovation, from research to publication to teaching. 

We also need to think more about ways to foster the spirit of experimentation. Too many inventions are merely modest improvements of existing ideas, so-called linear innovation, which extend the life cycle of "old" products. Instead, we need to encourage radically new ideas, sometimes referred to as "disruptive innovations". In many places of the world, this will need more venture capital. The latter could, in part, come from investment funds. Today, companies funnel unprecedentedly high dividends to their shareholders, which means that they could afford to invest more. Instead of paying out all surpluses as dividends, some of this money could form part of a venture capital fund to invest in innovations.

And how do we ensure that innovations lead to more sustainable products?

Sadly, the hope that the planet would recover from all stresses and strains by itself has not materialized. Externalities, which refer to the external costs or benefits associated with products, services or interactions, need to be measured and priced. Big Data and the Internet of Things (IoT) make it increasingly possible to do this. In fact, this is probably the only way to save liberty.

Interestingly, the measurement and pricing of externalities would make regulation largely unnecessary. Nowadays, however, many entrepreneurs and inventors are hampered by over-regulation. We need to sweep this out of the way.

Finally, if we were to trade externalities such as  financial derivatives, this would create entirely new financial markets. That would unleash enormous economic potential. A multi-dimensional financial system would also allow enirely new applications such as self-organizing socio-economic systems, which require various incentive mechanisms. In many cases, the application of decentralization approaches and self-organization principles could increase the resource efficiency by 30 to 40 percent.

But how would you reduce the number of conflicts in the world?

First of all, the competition for scarce resources needs to be mitigated. This can be achieved by the combination of several measures. First, resources need to be used more efficiently (see above). Second, recycling techniques need to be advanced. Third, a quickly growing pool of data must be opened for everyone's value creation, and the principles of the sharing economy should be applied to an increasing number of areas of social and economic life, including how urban space is managed and used. This would enable a higher standard of living for more people while decreasing the consumption of resources. In order to reduce war and terrorism, we need to pay more attention to the living conditions in the rest of the world. This is particularly true of North Africa and the Middle East. That would perhaps be the most effective way to protect European security interests.

Furthermore, we must learn that, in a multicultural society, punishment mechanisms often do not cause social order, but rather escalation of conflict. This has been observed not only in the Middle East, but also in Ferguson, and many other places. Therefore, we need new mechanisms to promote coordination and cooperation in a multi-cultural world. This is one of our recent research areas. Certain reputation mechanisms are promising in this regard, but also qualification, competition, communication and matching mechanisms. 

Last but not least, engaging in a "Cultural Genome Project" could achieve a better understanding of the success principles, on which different cultures are built. This would allow us to combine them in innovative ways and enable us to generate new social and economic value. The greatest potential of this approach lies directly on today's cultural fault lines. By the way, we will also build some of these cultural success mechanisms into the Nervousnet platform, so that our "data for all" approach will lead to responsible use.

Wouldn't the Nervousnet platform make people’s lives even more transparent than today?

No, because we take informational self-determination seriously. The data storage is decentralized and we use procedures to anonymize, encrypt and "forget" data. Each user will be able to decide for themselves which data they want to produce or share. Imagine that all the data you generate is sent to a personal data store, where it can be sorted and managed by category. Given appropriate legal regulations, you would then be able decide what kind of data to share with whom, and for what purpose. Thus, more trusted companies would have access to more data. This would stimulate competition for trust, and the data-driven society would be built on trust again.

All of this sounds exciting, but do you really believe your ideas will ever be implemented?

Yes, I think so, for two reasons. First of all, because we are forced to be much more innovative than today. Second, because it would bring great benefits to everyone to implement these proposals. I am just not sure whether it will take a societal catastrophe — the ultimate failure of the totalitarian and feudal approach — to change our current way of thinking. In the worst case, this would mean a kind of Armageddon. However, I think we should be clever enough to avoid this. Luckily, there are also encouraging signs.

What are they?

The USA have started to invest in a new strategy. They are betting on a combination of reindustrialization on the one hand, and citizen science and combinatorial innovation on the other. Even Google has embarked on a new strategy with the founding of Alphabet, which aims to make the company less dependent on personalized advertising. And Apple has recognized the value of privacy as a competitive advantage. As always, the United States is faster! I admire the will and ability of the United States to always be at least one step ahead.

People increasingly understand that the digital economy is not a zero-sum game. In the area of the Internet of Things, Google has engaged in open innovation, and it recently made its Tensorflow Artificial Intelligence software open source. Tesla Motors has opened up many of its patents, and many billionaires have recently promised to donate large sums of money for good. So, we see many signs of change. The benefit of open information exchange is becoming increasingly evident. Sharing information often increases the value of information, inventions, and companies. If properly organized, the digital economy provides almost unlimited possibilities because intangible goods can be reproduced as often as we like. In fact, more and more money will be earned in virtual worlds. This relates not just to computer games; Bitcoin has even shown that bits can be transformed into gold. Almost nobody believed that this were possible. 

So, the only question is when Europe will finally make use of the fantastic opportunities afforded by the digital revolution. We are entering a digital age that increasingly frees itself of material limitations. I find this absolutely fascinating!

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