Michael Zimmer explains the logic of corporate control of social networks through three laws:

The three Laws of Social Networking are:

1. Promoting the open flow of personal information allows maximum profitability
2. Allowing user control over their information flows is counter to profit maximization
3. Provide some privacy controls, but make it hard

He explains them here in detail. Here are just excerpts:

1.

“Social networking sites are incentivized to promote the open and unfettered flow of mountains of personal information.

Social networks’ ability to make money through contextual and/or behavioral-targeted advertising is dependent on users sharing information about themselves, their lives, and their interests. Facebook’s Mark Zuckerberg confirms this point when he notes that “as long as the stream of information is constantly increasing, and as long as we’re doing our job… of pushing that forward, I think that’s….the best strategy for [Facebook]“. In short, the best strategy for social networks is to increase personal information flows online, or, again in Zuckerberg’s words, to get “people through this really big hurdle of getting people to want to put up their full name, a real picture, mobile phone number…and connections to real people” online.

2.

“Consequently, creating and promoting robust, easy-to-use privacy settings to allow users to control and possibly restrict the information they share would generally be counter to a social networking service’s strategic interest. This is my Second Law of Social Networking.”

3.

“Social networking sites might build robust privacy settings to appease privacy advocates, but they don’t promote them and/or make them difficult to use so the majority of users don’t bother to change their default settings, thereby keeping the open flows of personal information undisturbed.

This is my Third Law of Social Networking: Provide privacy, but make it hard. Social networking providers will never admit to this, but the evidence is there: default settings are generally set to share all of your information with all of your friends; there are few (if any) help pages to assist users in managing their privacy (compare to what Google has been doing to try to educate users); maintain the philosophy that, no matter what, information wants to be shared among everyone; and build systems that share everything, and only make privacy changes when the pressure mounts (i.e., News Feed, Beacon, etc).”

Interesting contribution on the nature of the “distributed attention economy”, by Julian Kücklich in the IDC mailing list.

Julian Kücklich:

“I think what we see evolving is a system of microstardom and tactical fandom that calls into question the classical power relationship between fans and stars.

So I think we are not dealing with a dyadic system at all, but with something much less structured and, for lack of a better word, more fun (fun also being the mechanism underwriting new forms of (self-)exploitation). Let’s not forget, however, that achieving and maintaining microfame is a form of labour, and one not so dissimilar to the kind of work described in the MechTurk presentation sent around by Matthew yesterday: it’s affective and relational labour, much of which consists in maintaining a good relationship with the “requesters” (or “followers”). It seems to me that the decisive difference between mass media fame and microfame resides in the fact that the former is systemic, while the latter is endemic. In other words: in mass media stars are made, while in multitudinous media stars make themselves by performing their virtuosity across different registers.”

Book: Jodi Dean. Democracy and Other Neoliberal Fantasies: Communicative Capitalism and Left Politics. Duke University Press (Sept 2009)

The above should be an interesting book:

From the publisher:

“Democracy and Other Neoliberal Fantasies is an impassioned call for the realization of a progressive left politics in the United States. Through an assessment of the ideologies underlying contemporary political culture, Jodi Dean takes the left to task for its capitulations to conservatives and its failure to take responsibility for the extensive neoliberalization implemented during the Clinton presidency. She argues that the left’s ability to develop and defend a collective vision of equality and solidarity has been undermined by the ascendance of “communicative capitalism,” a constellation of consumerism, the privileging of the self over group interests, and the embrace of the language of victimization. As Dean explains, communicative capitalism is enabled and exacerbated by the Web and other networked communications media, which reduce political energies to the registration of opinion and transmission of feelings. The result is a psychotic politics where certainty displaces credibility and the circulation of intense feeling trumps the exchange of reasons.

Dean’s critique ranges from her argument that the term democracy has become a meaningless cipher invoked by the left and right alike to an analysis of the fantasy of free trade underlying neoliberalism, and from an examination of new theories of sovereignty advanced by politicians and left academics to a look at the changing meanings of “evil” in the speeches of U.S. presidents since the mid-twentieth century. She emphasizes the futility of a politics enacted by individuals determined not to offend anyone, and she examines questions of truth, knowledge, and power in relation to 9/11 conspiracy theories. Dean insists that any reestablishment of a vital and purposeful left politics will require shedding the mantle of victimization, confronting the marriage of neoliberalism and democracy, and mobilizing different terms to represent political strategies and goals.”

A blurb from Zizek:

“Jodi Dean’s new book provides what we have all been waiting for: the authentic theoretical analysis of how ideology functions in today’s global capitalism. Her diagnosis of ‘communicative capitalism’ discloses how our ‘really existing democracies’ curtail prospects of radical emancipatory politics. Dean demonstrates this status of democracy as a political fantasy not through cheap pseudo-Marxist denunciations, but through a detailed examination of social, symbolic, and libidinal mechanisms and practices. To anyone who continues to dwell on illusions about liberal democracy, one should simply say: ‘Hey, didn’t you read Democracy and Other Neoliberal Fantasies?’”

Author bio:

Jodi Dean is Professor of Political Science at Hobart and William Smith Colleges and Erasmus Professor of the Humanities in the Faculty of Philosophy at Erasmus University in Rotterdam. She is the author of Zizek’s Politics, Publicity’s Secret: How Technoculture Capitalizes on Democracy, and Aliens in America: Conspiracy Cultures from Outerspace to Cyberspace.

From a discussion on the IDC mailing list, about the nature of the exploitation and emancipation of labour in online platforms. The occasion is an upcoming conference on Digital Labor in New York in November 2009.

Pat Kane tells the story of his music band Hue and Cry.

Pat Kane:

“In terms of a debate about whether users’ interactivity with net platforms is a form of exploitation of labor (in the Marxist sense), I’m aware that I might be living a somewhat schizophrenic life. In one domain, I’m a working musician who is part of a UK “legacy” act from the 80’s, Hue And Cry. Since our relaunch in late 2008, our strategy has been to use the enthusiasm of online fandom to reanimate our “brand”, by using flexible and media-rich social networks (particularly Ning) to capture the passions raised both by our live performance, and other traditional outlets of media exposure (radio, TV, press).

Commercially, I should be agnostic-ironic about what networks are best for that purpose. But civically, I’m a supporter of the ‘innovation commons’ of the Net a la Lessig, and would resist any attempt to tamper with the basic end-to-end architecture of the Web (ie, to create tiers of net access with protocols restricted, for whatever reason). I guess I have to stake out my petit-bourgeois, mixed-economy, social-democrat traders’ identity at the beginning. And what I’m looking for from a conference/discussion on ‘the internet and playground and factory’ is a new political economy of the Net that can find a place for creative and sustainable cultural enterprise, within this complex landscape (as Yochai Benkler says in the Wealth of Networks) of market, state and ’sharing’ economies. I feel that the answers may lie as much in welfare and social policy. That is, what kind of social provisions and support can be made for a ‘general intellect’ now active throughout society, as the Italian Marxists say? Does a four day week or a citizens’ income more effectively answer our anxieties about our affective and cognitive ‘lives’ pouring into these networks, than a discourse about how our free labor benefits Google’s bottom line?”

Intriguing suggestion by Andrew Lehman:

“It was clear to me that in preparation for going public, Google was actually seeding its searches with inefficiencies in order to encourage profits. Regarding commercial searches, it’s only got worse with time. By embedding top 10 positions with Wikipedia entries, videos and other tangentially related content, commercial businesses continue to be pushed into the second page, forced to pay Google for ad space.

I recently read that Google has decided to place a heavier emphasis on “brand” or conventional corporate websites when deciding how to rank. It is adjusting its algorithm to make it even more difficult for those businesses without deep pockets to achieve rankings. One could call this the oligarchic algorithm.”

More details here.

In a related analysis, Douglas Rushkoff analyses the commercial aspects of Microsoft’s Bing:

“While it’s clear that Bing brings a more prepared and digested Web to users, it’s equally clear to me that Microsoft is preparing and digesting data in a particular way, hoping to promote commerce-driven behaviors in a way information-centric Google does not. The video demo for Bing exposes Microsoft’s bias. Rather than look up an old girlfriend or figure out who won the 1956 Olympic decathalon, the first two searches the narrator launches are for “Home Depot” and an airplane ticket.

And that’s the way it’s ultimately always been with Microsoft, the plantation master of the digital world. Surrender to the Microsoft mother ship, and she—or at least her big crew in Redmond—promises to make you the most productive worker and, now, the most satisfied customer. Instead of relating to users as content creators, evaluators, and meaning makers, Microsoft takes on that role for itself. Microsoft is the parent, taking care of all that critical thinking in the background, so we can get on with the business of life: producing and consuming.”

We believe there’s good reason to think that value is shifting from knowledge stocks to knowledge flows. Put more simply, we believe that flows trump stocks.

An excerpt from John Hagel in the Harvard Business (Review) blog, where he arguest that a revolution has occured in the way value is created:

” As the world speeds up, stocks of knowledge depreciate at a faster rate. As one simple example, look at the rapid compression in product life cycles across many industries on a global scale. Even the most successful products fall by the wayside more quickly as new generations come through the pipeline faster and faster. In more stable times, we could sit back and relax once we had learned something valuable, secure that we could generate value from that knowledge for an indefinite period. Not anymore.

Now, we are not urging folks to throw all their valuable knowledge into the crowd and wait patiently for something good to happen. We need to be thoughtful about which flows of knowledge we seek to develop and what elements of knowledge stocks we can afford to share. One option is to pursue what we call a “staircase of trust.” Begin by sharing relatively low value knowledge as a way of learning who offers valuable knowledge in return. As these value exchanges develop, they build confidence that certain partners can be trusted to reciprocate in ways that refresh our own knowledge stocks. Then more valuable knowledge can and should be shared. Modular approaches to product and business process design also have the advantage of supporting more selective and staged approaches to knowledge sharing. By participating in “networks of creation” and “economic webs” with robust reputation systems executives can further reduce risk while amplifying the potential for rapid learning and value creation. While there are certainly risks associated with knowledge sharing, the damage from IP theft diminishes as the rate of obsolescence increases. At the same time, the rewards from knowledge sharing go up substantially.”

“Bank finance has nothing to do with either saving or investment. Banks create liquidity ex nihilo, and the entrepreneurs’ opportunity to materialize their plans is not an issue that can be decided by savers. In the real world, entrepreneurial plans depend upon bankers’ choices.”

The latest issue of the European Journal of Economic and Social Systems deals specifically with the issue of “Money and Machinery”, i.e. what is the role of money and finance in the development of our economic system.

Guest editors are Andrea Fumagalli and Stefano Lucarelli known for their work in analyzing the mechanics of cognitive capitalism.

Their introduction is entitled, Money and Technological Change The Role of Financing in the Process of Evolution, and is very much worth reading.

In a gist, the topic of study is:

“The purpose of “Money and technological change” is to collect a number of papers focusing on the understanding of how credit and finance systems effectively operate. At the same time, the papers address the issue concerning both their role in shaping firms’ innovative strategies and determining their performances. Our scope is to show that capitalism is a monetary economy of production in continuous evolution.”

In their introductory essay, they discuss a very important contribution, that shows the crucial role that peer money will play in the next wave of development.

The essay in question is:

Badalian L., Krivorotov V., “Technological shift and the rise of a new finance system: the market-pendulum model”, European Journal of Economic and Social Systems, Vol. 21, No. 2, 2008, p. 231-264.

This essay is an update on the research and theories on long waves of development, as developed by Schumpeter and Kondratieff, as also recently updated by Carlota Perez in het book Technological Revolutions and Financial Capital.

In short, capitalist development is market by long cycles of about 50-60 years. In the first dynamic phase, a number of combined technological innovations is matched to crucial financial innovations, which provide the necessary investment vehicles, so that innovation can occur. But in the second phase, the very pathologies of financialization undercut growth, inevitably leading to a Systemic Sudden Stop, i.e. the very crisis we are going through.

For a new wave to occur, a new set of technological innovations must be matched by a new finance system.

Here is the crucial paragraph:

“The authors define market equilibrium as a period when the market functions at full capacity, and show that this lasts for only a few decades in the mid-movement of a pendulum. As supply-demand imbalances gradually increase, there is a Systemic Sudden Stop (3S), that is, a profound market failure, with scenarios ranging from the stagflation of the 1980s, the Great Depression of the 1930s, and similarly dramatic events in our past and present. These diverse situations were united by a simple fact – purely market-related forces could not resolve them on their own, starting long downturns, or worse, revolutions and wars. The implementation of a radically new technology able to restart growth after a 3S depends on finding a brand-new Accumulation Engine. Badalian and Krivorotov’s market-pendulum shows that the great historic shifts in technology and economic development were caused by the exhaustion of territory under domestication and its ability to feed many more people within a globalizing world. The need for more supplies pushed toward the cultivation of former wastelands, by developing radical technologies able to raise their output. The need in scale efficiencies then flipped the situation to shortages of demand. In this approach, financial systems play a crucial role. Historically, the challenge of living off a much harsher environment required great investments, with uncertain prospects of returns. The authors show that the 2008 crisis may be indicating the upper limits of the US- style financial system, overstretched to its extreme by the sheer size of the globalizing world. This is causing a 3S of an immense size while calling for new forms of financing, much more powerful in their capacity to raise funds and motivate the population.”

But where could such a new system of financing come from?

The answers of the authors are surprising, and create a juncture with our own work investigating monetary transformation and peer-based currency alternatives.

Fumagalli does not provide details of the alternatives described but quotes from Badalian and Krivorotov when they conclude:

“Surprisingly, these financing mechanisms, in their early form, might be available already, presenting a resurrection of old communal customs. Their diversity mirrors the variation of the local geo-climatic conditions including Sovereign Wealth Funds, community selfhelp groups, grassroots organizations, self-organizing virtual marketplaces on the Internet and other self-organizing commons.”

I am of course heartened by these conclusions which confirm the importance of continuing to monitor and study the field of monetary innovation.

And please note that the authors make a crucial analytical step:

far from seeing the new monetary innovation as mere defensive measures against the metldown, undertaken by local communities and affinity groups to become more resilient, they are actually seeing it as a crucial step in the radical reformation of the political economy, a conditio sine qua non for a new long wave of development to occur.

On May 1, 2009, Precario.org published the following Manifesto:

“When knowledge, information and culture become commodities, then knowledge workers are doomed to sink into disownment, weakness and occupational blackmailing. Italy has declared war to intelligence. This concept was launched in France in the recent past: Intelligence has been sacrificed on the altar of market economy and of the most short-sighted, feeble private interest.

What kind of future can have a country in which culture and knowledge have become mere territories to be colonized, fenced and branded? A country where art is on sale, that relies on “foundations”; a provincial country that worships Facebook. We cannot help but be scared: such a simplification of the discourse might well have the aim of destroying any kind of social relationship and individual free expression.

How much space can such a society leave to the production and spreading of knowledge? And how can we possibly re-posses this space and effectively enjoy rights that belong to us aimed at an economic, social and personal development?

Making a whole generation precarious; cutting the funds to research and education, to theatres, museums, public cultural institutions, cinema, publishing and journalistic cooperatives: no doubt, all this is aimed at the flattening and the distortion of contents, messages and the educational and cultural offer. On the whole, the outcomes of such a strategy are disastrous: information, education and culture are progressively losing their role and meaning; consequently the capability of individuals to form their own idea about the world, facts and existence is deeply undermined. Collective action becomes weak, flimsy. Particularism and the insatiable goals of private profit in ever more narrow and priviledged sections of society are slowly prevailing on the common interest and the importance of the public sphere.

The tragic situation described above is worsened by a global economic crisis: we are fully aware that it represents the perfect opportunity to impose even more drastic measures of regulation upon cognitive work. In a country at war against intelligence, the crisis has brought about devastating selective procedures that further undermined the already disadvantageous position in which cognitive work is relegated: it makes it synonymous with mediocrity and social fear and aphasia. Paradoxically, one of the main causes of this crisis lies in the failed recognition of the economic and social value of most cognitive work.

We are the knowledge workers of information and media, of the publishing world and of the cultural industry; of school, university and research; of show business, education, design and comunication; we are determined to not simply suffer your crisis; we want to stem this drift and reverse the trend of this tendency. That’s why we will join and pursue together our common objectives.

We firmly assert the contents of this Chart and will submit it to all those who share our condition.

1) We claim our right to be intelligent, that is to say the right to knowledge and an education completely independent from the aims imposed by the market and the current production schemes. Just like water or the air we breathe, knowledge is a common good - both universal and individual; it is the collective engine able to produce welfare and progress for the greatest number of people: it is not a commodity to be sold or bought on the market of the “owners”, on the basis of the profit and the social control that capital can impose.

2) Both within and outside the workplace, we thus claim the right to a recognition and respect of our skills, independence, competences, professionalism and material and spiritual needs.

3) The main problem for knowldge workers is the lack of the chance to choose and and set themselves against various forms of blackmail; that’s why we also assert our right to self-determination. Which implies the assertion of the right to a guaranteed fixed income. Knowldge work, by its very nature, is mostly not defeasible, even if technologic development wishes it to become such. On the contrary, it is basically flexible and discontinuous. We want an appropriate income also during our non-working periods. We ask for a guaranteed wage in moments of unemployment. We are not only talking about benefits and social security cushions; we want a secured fixed income.

4) We still assert the need of establishing a minimum hourly wage for our work, be it occasional or not. The hourly wage must be established according to the real cost of living and its possible future variations.

5) We demand the possibility to choose the kind of contract we want to stipulate for our work. We thus firmly oppose those unilaterally imposed by companies, which in the past few years has spread to the point of becoming the only natural possibility of employment.

6) We want to meaningful enjoy again both our work and our time. As any type of market contract imposing exclusivity, (partial or a total), limits our intellectual capacity,. action must be taken for a supplementary remuneration.

7) We want freedom of expression, comunication, and learning. Cognitive autonomy is not negotiable. The prostitution of brains is not in the least better than that of bodies. Because knowledge is a common good belonging to the individual and to the whole collectivity, the benefits of knowledge must be socially shared in a perspective of peer-to-peer circulation.

We claim our right to free access to education, updating, personal and cultural growth opportunities without having to pay for them.

9) No matter the steadiness or the subordination of our working conditions, we also claim the basic rights attached to social status: social safety cushions, sick leave, maternity leave, paid holidays, paid parental leave, gratuity and a fair and settled pension at the end of our working cycle.

10) We have seen how economic resources are always available when it’s about saving banks and holding companies. We have seen how, notwithstanding the new system of precarious, “flexible” and discontinuous work, overall productivity and wealth have increased, precisely by virtue of the cooperation and the innovative power of the General Intellect. What is needed, now, is an even distribution of the fruits of the social adjustment that’s alrady taking place. We, here and now, determine to name this distrubution (wages) together with all its consistent rights, “common welfare”. What we claim is precisely this: common welfare.

We firmly believe that the majority of knowledge workers no longer will passively accept the forms of control that the existing productive process wields over education and learning; no longer they will accept its proprietary and hierarchical boundaries and its uncertitude; they will reject the precariuosness and the exploitation brought about by the supremacy of contemporary capitalism over our lives and bodies. The limits posed to freedom and democracy are growing palpable, anachronistic and unbearable.

Knowledge workers, together with the whole precarious multitude that shapes the current labour market, can become the driving force of a new culture, of fresh democratic undertakings based on cooperation, sharing and socialization. They have to claim the free circulation of knowledge, which implies the assertion of a new society no longer based on needs, but on peace and the respect of the natural balance; on the free and joyful cooperation between individuals; on the potentials of machines and on human creativity turned to the service of the collectivity.”

With Adam Arvidsson, I have outlined on several occasions the Crisis of Value facing capitalism, because the exponential rise in use value production (value produced by ourselves, outside of a market setting), is outpacing the linear capability of monetizing them.

A special subcase of this concerns the proprietary platforms, only Google being an exceptional case of having managed a thriving business model based on its ability to micro-target our interests.

This model is not working for YouTube, Twitter and probably a host of other companies.

The article in Slate stresses the high cost of maintaining Youtube, which is losing half a billion dollars a year, the unwillingness of advertisers to be seen amongst low quality user-generated content.

An important question for the future is: if such business model failing turns out to be permanent, and corporations stop financing the platforms, what do we do?

The answer points to distributed infrastructures, where cost can be spread over vast numbers of people, and use the socialized infrastructure of the internet, i.e. what we are already paying to our ISP’s, ans means of financing such peer to peer infrastructures which can bypass proprietary platforms for distribution of user content via centralized platforms.

Thanks for letting me know how realistic such a scenario would be.

Here’s an excerpt from Farhad Manjoo’s article in Slate:

“According a recent report by analysts at the financial-services company Credit Suisse, Google will lose $470 million on the video-sharing site this year alone. To put it another way, the Boston Globe, which is on track to lose $85 million in 2009, is five times more profitable—or, rather, less unprofitable—than YouTube. All so you can watch this helium-voiced oddball whenever you want.

But YouTube’s problems point to a larger difficulty for many Web startups: “User-generated content” is proving to be a financial albatross. Two years ago, Time magazine named “you” its Person of the Year for doing your small part in fueling the Web 2.0 revolution. The magazine argued that by collecting and distributing the creations of millions of individuals, the Web is upending the way we learn about what’s going on in the world around us. There’s no doubt this is true; you experienced the presidential inauguration through millions of pictures captured by ordinary people, and a lot of what you learn these days comes from articles put together by the anonymous hordes who power Wikipedia. Yet even though they’ve changed the way we live, sites that collect and share content produced by all of us haven’t done the one thing many tech evangelists said they’d do—make a ton of money. Or, in many cases, any money.”

The academic journal Capital and Class has a well recommended special thematic issue (Issue no.97
Spring ‘09) on peer production.

The content of this issue is largely derived from the academic conference on peer production that was co-organized by Nottingham Trent University (with network sociality theorist Andreas Wittel) and the P2P Foundation, in November 2007.

The editorial by editors Phoebe Moore and Athina Karatzogianni is available here.

My own contribution, ‘Class and capital in peer production’ is available here.

Here’s the summary:

“This special issue engages with the work of academics and practitioners working in the areas of new media, politics, the global political economy, business, international copyright law, information technology and computer science, digital media, sociology and cybercultural movements, as well as with the new forms of organisations and discussions emerging in organisational-theory-related fields. The peer-to-peer politico-economic model of production is currently having a great impact on business, media and global politics to the extent that social-democratic movements have taken notice of the potential of the new technoscape for social change, just as governments are engaging more and more with the financial benefits, challenges and threats of these informal communities and skills-development environments. Specifically, and relating the title of this issue, the peer-to-peer model is about passionate production. One of the most relevant examples of peer-to-peer production is constituted by the open-source (www.opensource.org) and free software movements (www.fsf.org). These forms of egoless programming facilitate and enable communities to build on each other’s code, software and applications with remarkable results that can be used freely and improved upon by anyone. The networked environment through which these communities operate enables the development of technology that competes with that of multinational corporations like Microsoft. Distributed using a powerful, simple organisational model, free software facilitates local economies, harnessing innovation and allocating scarce resources in a sustainable fashion.

In the same vein, in ‘A definition and criticism of cybercommunism’, Tere Vaden and Juha Suoranta discuss the conditions of restraint and freedom in open-source communities and provide empirical examples to support their thesis that new ethics or modes of knowledge production have initiated but also reasserted the very old-fashioned trends of profit-making and the colonialisation of knowledge. Whether celebrators of flux or prophets of cybercommunism, hackers still need to eat, and they need electricity for their machines of immaterial labour. If we analyse the current trends in some of the crown jewels of the free/open-source movement, such as GNU/Linux development and Wikipedia, we quickly notice that not only is a new ethics or mode of knowledge production initiated but also very old-fashioned trends of profit-making and the colonialisation of knowledge are reasserted. Consequently, for a more full definition and a more precise critique of cybercommunism, we need to pay attention to the various levels of freedom with which self-organising knowledge is conditioned.”