The tech elite ignores inequality at its peril

Image by by Bluerasberry

Google’s new self-driving prototype car will sit at the head of “the long tail” curve if it’s a hit while services such as Uber and AirBnB sweep up the other end.

Several years ago when media companies were still working out what the “long tail” meant to them, Clay Shirky shared a key nuance that made the whole picture clearer for me. He told me that the middle of a power law curve is the most dangerous place to be because you are irrelevant there. He was right.

Photo by O’Reilly Conferences

I was reminded of this while attending O’Reilly Media’s Next:Economy event in San Francisco, where people talked about artificial intelligence, platforms, networks and ecosystems creating and destroying labour markets.

In today’s world, artificial intelligence such as that seen in Google’s self-driving cars is at one end of that power law curve of services, ie the top of the curve, and marketplaces such as Uber and AirBnB are sweeping up the other end — the long tail of services.

If the lessons of the now-famous 2004 Wired article by Chris Anderson about the long tail prove relevant then companies serving the middle market are going to suffer. According to Shirky’s “middle power law problem” the stuff that happens in between artificial intelligence and niche human-powered labour will become irrelevant.

Image by Keith Hopper

Middle management will be replaced by the long tail of tasks performed by a vastly more efficient labour market.

A lot of the discussion at the event was focused on workers — their needs, rights and future prospects. Sebastian Thrun of Udacity even suggested that higher education degrees in social sciences were a waste of time because the new economy puts a premium on skills.

But there was a baked in assumption among many speakers that these big changes were already happening, and that it was just a matter of time before we were all deploying services or being deployed in service of something or somebody.

Interesting questions start to emerge, such as will we still need to own a car if one can appear in front of us ready to take us where we want to go at any given moment for a reasonable price?

Of course, people need to model the computing that sits at the top of the curve, and that will become a lucrative area of work. In fact, Facebook is hiring AI trainers now. Alex Lebrun said this was a huge area of growth. “We will need more and more trainers because the more you know the more you know you don’t know. There will always be new domains to learn about.”

Many speakers at the event acknowledged that the gap between the people at the top and those at the bottom was only increasing — this is an alarming trend.

Self-proclaimed “zillionaire” and early Amazon investor Nick Hanauer of Seattle-based Second Avenue Partners expressed great concern for the stability of society. He said: “You must match tech innovation with civic innovation. Uber is fantastic, but we have to find a way to accommodate that innovation in society.”

He used the fight to increase the minimum wage as an example of the types of battles that will lead to more dramatic social problems, perhaps revolutions. “Trickle down economics is a way to bully people into not exercising their rights,” he said. “The threat becomes: ‘If you force us to pay our workers fairly we will fire them.’”

In a letter to his fellow plutocrats in Politico, Hanauer wrote:

“The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th century France. Before the revolution.

And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last. If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us.”

I find it difficult to imagine inequality reversing from its current trajectory without something dramatic happening. Perhaps this is a place where the middle may play an important role over time, though fighting against irrelevance seems like a losing battle too.

I did notice an apologetic tone among many of the speakers at the event. There seemed to be an awareness that the change was both beyond anyone’s control and that it was heading straight for many innocent people who were unwittingly in its way.

If there is still time to assert some cultural values into the technological framework of this next wave of change then hopefully people will consider infusing their automated marketplaces with more humanity.

Photo by Joi Ito

In his 2003 essay, Power Laws, Weblogs, and Inequality, Shirky wrote:

“Given the ubiquity of power law distributions, asking whether there is inequality in the weblog world (or indeed almost any social system) is the wrong question, since the answer will always be yes. The question to ask is, ‘Is the inequality fair?’”

If the entire world becomes a unified workforce on these new platforms then the people shaping these platforms should heed the warnings from the likes of Hanauer, or they will regret admitting that he was right when billions of pitchforks are aimed at them.

As Zeynep Ton described in one of the closing talks of the day, providing a decent living for your workforce or pursuing “human-centred operations strategies” creates stronger long-term profits. Her research may provide some answers that solve everyone’s needs and avert angry mob mentality that otherwise seems inevitable.

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Originally published at on November 24, 2015.