Is the Internet Really an Epic Failure?

This is a translation of a blog post by Jyrki Kasvi on 22 December 2014: “Onko internet tosiaan eeppinen moka?“. Kasvi is a former two-term member of the Finnish parliament (and now again a candidate in the upcoming elections), doctor in engineering, and a well-respected expert on IT in the political arena. He is a member of the Greens of Finland. Keen’s 10 points are taken directly from his short description.

On December 8, Finnish magazine Tekniikka & Talous (Technology and Economy) had a story about Andrew Keen’s book: “The Internet is Not the Answer” that will be published in January. In his book, Keen stakes a claim that the Internet is one of the grandest mistakes by humankind. Andrew Keen is a well-known critic of the Internet, who thinks that the Internet makes a mockery of culture by granting everyone an equal opportunity to publicly express theirselves and their opinions. With the following 10 points he now declares that the Internet is wrecking havoc on everything else as well.

“#1 Rather than redistributing power and wealth, it has created supersized 21st century monopolists like Amazon & Google.”

On this I largely agree with Keen, but how did it really come to this? Yes, the Internet was to level the playing field for competition, and so it did. It is for this reason that the Internet also enables ‘monopolies’ of electric services. When everyone is competing equally within a few clicks, all end up using the same, most popular choice giving the best user experience. It seems that there is market for only one Google, Facebook, Amazon, YouTube, PayPal, etc. at a time. Certainly there are local services bound to certain language or cultural context, for example the Chinese have Baidu and Taobao, and Russians have Yandex and VKontakte. There is always the option to create even better service and then climb to become the new king of the hill, like when Google toppled Alta Vista or Facebook took over from MySpace.

On the other hand, in other electric services like gaming industry the competition is fierce, and especially because of the Internet. In any case, giving up openness and freedom and creating artificial limitations for competition is no solution. Videoconferencing systems are a good example how lack of openness only hinders development; expensive video conference studios are not being used because the systems from different service providers are not compatible. And this entire business sector has withered. What would you do with a ‘phone’ that could only call phones from the same manufacturer?

“#2 Instead of creating jobs, it has created $19 billion Internet startups like WeChat that only employ 55 people.”

This is not so much about the Internet but about a much wider digital change in the workplace and in the economy leading to accelerated innovation and greatly increased effectivity of labor. Because of the Internet and other IT technologies, some dozens of employees are able to provide service for hundreds of millions of consumers. This facilitates new business models such as freemium where the basic service can be offered for free. Then it is enough that a small fraction of the consumers buys the extra services in games like Clash of Clans, or that paying customers are in fact the advertisers like in Facebook.

Keen forgets how many startups there are that are not worth billions. It is all about the Internet enabling an actual flood of innovation that the market is filtering for gems. The Internet is like a ‘million monkeys’ as an innovation environment. For one true breakthrough there is 10 pretty good ideas and probably thousands of failures. The Internet economy has dramatically accelerated this process. The progress has been especially stunning in open innovations such as drones. And, in fact, this is nothing new. For instance, the development of the technology of photography was begun when the French government in 1839 bought the patent for the daguerreotype from Louis Daguerre and gave it to the public. Also at that time a new form of expression was met with much hesitation. Surely photography, just a simulacrum of reality, could not be culture.

On the other hand, there are many economists that share Keen’s concern Number 2; as the development of technology has gotten further, the number of employees the top tech companies have has gotten ever smaller. Instagram had only 13 employees when Facebook bought it in 2012 for about one billion dollars! The value of one employee could be taken as about 77 million dollars. Are there investors willing to invest to more traditional companies whose value is in something else than a hundred million users like Instagram then had (now 300 million)?

Actually, it is a bit amusing that Keen is coming out against the Internet now when digitalization is having its first real effects. For example, the internet of things will change economy and the society much more drastically than this Internet of people, not to mention robots and artificial intelligence.

Essential question is whether digitalization is a similar force of creative destruction that steam and electric power were; the economy and society adapted to these new technologies in about one generation after which they generated new kinds of growth and prosperity. Or are we facing something else, a whole new kind of transition that mankind has no reference point for?

“#3 As the Snowden NSA leaks have revealed, rather than creating a healthily transparent society, it is destroying our privacy and enabling both governments and private companies to spy on us all the time.”

True, but the other side of the matter is the possibility that the Internet has provided for the citizens to monitor actors like NSA that we hardly knew about before the Internet. Officially, the NSA didn’t even exist for several decades! Without the Internet there could be no Snowden, Assange or Manning.

The Internet itself was not the main factor in the rapid growth of the scale of espionage but rather big data. NSA and its counterparts have only now had enough memory to collect the entire data communication of the world and enough computing power and the right algorithms to analyze it. Those capabilities NSA would have also without the Internet. Then people would be using other means for communication, and whatever those communication networks would be, NSA would be tapping into them as well. Espionage is no modern invention. The question ‘Who watches the watchmen?’ was important already in the ancient Rome.

“#4 Rather than democratizing wealth, the Silicon Valley economy of multi billion dollar startups like Airbnb is compounding the chasm between rich and poor.”

And with the same breath is Keen defending his own favorite elite that used to decide what artists, what opinions were worthy of publicity. And which weren’t.

Here Keen is intentionally mixing melons with strawberries. It is true that new technologies create new wealth, transfer economic and some societal power to new actors. And as the economy transforms, differences in income often also grow. The history of technology, however, demonstrates that it is a political choice how the new wealth is divided.

“#5 Rather than a cultural renaissance, online piracy and the ‘free’ content of the blogosphere and social media have decimated the music, newspaper, photography and book industries.”

This is Keen’s central message and it is here, as I see it, that he is in the wrong the most.

Because of the Internet people are producing and consuming more content than ever! We ARE living a new renaissance, but it is not following Keen’s elitistic ideal. Now, unlike ever before, the public is reachable by anyone, and instead of the gatekeepers of the one-way media, it is the users of the contents that decide what is newsworthy and interesting.

I think culture should never be a privilege only for those with an ability to pay, but that the society needs library and rental fee like systems to ensure the reach of culture to those who could not afford it otherwise. Certainly most of the ‘content’ flooding the Internet is rubbish, but even then it is free creativity that provides more lasting and valuable culture than a top-down controlled content creation.

Furthermore, it is true that adopting the business models of the new content economy is a major challenge for both the content creators and the consumers. Consumers need a wholly updated media consumer skill set to build a comprehensive view of the world, when the nightly news broadcast and the culture pages in the daily paper are no longer the only accepted reality.

Consequently, the content creators must be bold and question the familiar ways of operation that used to be financially solid. This is not only an issue of new distribution channels like Spotify for music but an entirely new ways to do business. For instance, a networking service for music producers FindMySong has changed the music industry more than Spotify or piracy have been able to.

“#6 Rather than advancing democracy, anonymous networks like Reddit and 4Chan have empowered the rule of the mob.”

In a liberal democracy everyone must be able to acquire knowledge and express their points of view freely without intimidation. In practice, this requires online anonymity in many countries. This is why masking one’s face is legally allowed in public demonstrations in Finland, even though this rule is frequently challenged.

Anonymity can be certainly be abused, both online and on the streets, but for me that price is well worth the open society it brings. As an example, employees of the Lutheran Church were able participate masked in a demonstration against its personnel policy that discriminated against sexual minorities and therefore didn’t have to fear facing negative backlash at work.

Keen also conveniently forgets the role social media has played in the revolution in the Philippines, the Arab Spring, the demonstrations following Iran’s presidential elections and most recently in the Maidan square in Kiev.

“#7 Rather than improving tolerance, self-broadcasting networks like Twitter and Facebook are compounding an online pandemic of racism, sexism and bullying.”

True, but the social media is equally flooded with tolerance, multiculturalism and equality. The Internet has just made visible also the ugly phenomena and the repugnant ideologies of our society.

As a positive result, we can no longer close our eyes and say that we in Finland or in the US or elsewhere don’t have people who think like that.

“#8 Rather than a cultural renaissance, it has sparked an selfie-centric era of invidious narcissism on networks like Instagram.”

I understand that it can be very annoying when the average people start to behave in the very same manner than the popular icons of the conventional media.

“#9 The so-called “sharing economy” of networks is actually the selfish economy of ethically challenged entrepreneurs like Uber CEO Travis Kalanick.”

Capitalism is founded on selfish principles. Neither are the old taxi companies nor hotels charitable non-profit organizations; they are staunchly defending their own model of business against those of Uber, Lyft or AirBnB.

Had Keen wanted to be completely honest, he could have also pointed to Linux, Wikipedia and WWW with Linus Torvalds and Tim Berners-Lee. Uber and Lyft may have their own baggage, but Keen is knowingly mudding the waters by mixing Uber’s business model with the more than challenging personality of the CEO.

“#10 It puts us all to “work” in “data factories” like Tumblr and Pinterest for free as they grow rich from the data we provide them about ourselves every day.”

Have I become a slave if I am willing to do something for free?

It is a fact that the content, pictures, texts, videos are fuel for the actual business of many new-media companies. Content is the price we (willingly) pay for the service we expect. Neither are Tumblr or Pinterest charitable organizations who run their servers just for the fun of it … nor does any publishing house print books for us to read just for the joy of culture.

Final thoughts

It must surely be offensive to Andrew Keen from his point of view to have his thoughts criticized on a blog, for a text becomes meaningful in his world only when its publication has been decided by an editor, the text has been edited by professionals of the editorial staff, there has been a fee paid to the author, and the readers are paying their subscriptions.

Keen has it right on that the Internet is not a self-evident or unavoidable phase in the story of the mankind. For example, the Soviet universities had their data networks that was also called the Internet. Soviet scientists did not like using their system, however, because it was programmed to be monitored and was strictly controlled. Instead they build a connection through Finland to the western Internet. Perhaps Keen would have thought it better that the Soviet Internet had spread to the West.

Regardless, Keen’s upcoming book is a must read, as soon as it’s available. And without the Internet I would have never heard about it.


Basics of Information Warfare for Business Marketing

Translation of Tommi Hermunen‘s blog post Informaatiosodankäynnin perusteet on the Digitalist Network website on August 5, 2014.

The believers on the digital are, if not delusional, then at least misguided.
“Internet makes decision making easy. You can find objective views about a hotel, a restaurant or a movie.”

Claim #1: People are not objective. Not even when they have all the possible information.

The web has so much info that you can’t take it all in. That is why you make up your truth using only a small fraction of what you see.

We are being manipulated. The information I see is different from what you see. The same product has a different price for you than for your neighbor. We are forced to create different truths of the world because we receive different sets of information.

The most dangerous thing for forming the truth is that the internet is a trend and craze machine. It has become impossible to fathom the scales on which the fads happen.

Claim #2: The victor in information war is the one whose truth prevails.

In the same way as countries wage war with their propaganda, each comment, text and upload you post is competing for attention and acceptance. You may not feel like calling this competition “war”, but the same rules apply.

We google to find the information that won the fight. The public opinion has changed, because the message was received – as intended or by accident.

You could think that a country with a nuclear weapon, and no neighbors with any, had no need for propaganda. What does Israel need 400 social media soldiers for?

Claim #3: The truth on the internet is unfair.

The role of ethos on the web is diminished. Anyone can participate in the discussion and the message is merited more on cleverness than expertise. Thumb-ups on the Facebook or TripAdvisor scores may not be impartial.

The web is a battleground for truth. A text having referenced sources doesn’t automatically make it true. It may, however, be enough for the masses – especially the impatient users of social media.

In this environment a brand name is not treated fairly. The relation between the brand and the customer has the same imbalance as there is between Russia and the western media in the Ukrainian crisis. One is guided by a set of rules, the other is not.

The web is the weapon of mass destruction of today. Live with it.

Simply put: Things we have no personal experience on are made true by the web. Everyone creates their own truth with the information available. And information is created and shared by people whose motives you probably don’t know.

How can a brand succeed in its marketing and get its message across in an environment so chaotic and sometimes hostile?
Communicate a lot. Communicate honestly. And hire pros.