Why Tech Might Actually Be The Solution To Capitalism's Addiction Problem

from the problem-not-a-problem dept

Source: The Atlantic

Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, published a frightening article about technology and capitalism in the April edition of The Atlantic magazine. MacGuineas contends that the tech companies are manipulating us into using their products, addicting our children to potentially harmful devices, and stealing our extremely valuable data in exchange for “free” services.

The Masses Are Not So Easily Manipulated

MacGuineas warns us of “habit-forming” products and the “Orwellian art of manipulating the masses”:

Many technology companies engineer their products to be habit-forming. A generation of Silicon Valley executives trained at the Stanford Behavior Design Lab in the Orwellian art of manipulating the masses. The lab’s founder, the experimental psychologist B. J. Fogg, has isolated the elements necessary to keep users of an app, a game, or a social network coming back for more. One former student, Nir Eyal, distilled the discipline in Hooked: How to Build Habit-Forming Products, an influential manual for developers. In it, he describes the benefits of enticements such as “variable rewards”—think of the rush of anticipation you experience as you wait for your Twitter feed to refresh, hoping to discover new likes and replies. Introducing such rewards to an app or a game, Eyal writes approvingly, “suppresses the areas of the brain associated with judgment and reason while activating the parts associated with wanting and desire.”

Except the masses aren’t so easy to manipulate. One experiment on online shopping behavior found that the whales in the market are not influenced much at all by advertising: “More frequent users whose purchasing behavior is not influenced by ads account for most of the advertising expenses, resulting in average returns that are negative.” Arguably the most famous line in the history of the advertising industry comes from nineteenth-century retailer John Wanamaker: “Half the money I spend on advertising is wasted, the trouble is I don’t know which half.”

Even with the advent of microtargeting based on behavioral and contextual data, there is still a debate within the industry about whether advertising is worth the cost. A 2014 piece in The Atlantic by Derek Thompson is simply titled, “A Dangerous Question: Does Internet Advertising Work at All?” Thompson comes to a bleak conclusion: “The more we learn which half of advertising is working, the more we realize we’re wasting way more than half.”

There’s also reason to believe that advertising and other persuasive techniques are less effective in the internet age than they used to be. We have moved from an environment of information scarcity — in which companies had some amount of control over their brand image — to one of information abundance. As Thompson put it,

Think about how much you can learn about products today before seeing an ad. Comments, user reviews, friends’ opinions, price-comparison tools: These things aren’t advertising (although they’re just as ubiquitous). In fact, they’re much more powerful than advertising because we consider them information rather than marketing. The difference is enormous: We seek information, so we’re more likely to trust it; marketing seeks us, so we’re more likely to distrust it.

Even if targeted advertising is very ineffective at influencing consumer decisions, maybe cutting-edge machine learning algorithms — the ones used to recommend content in social media feeds — can still make a big impact on user behavior. Consider this recent story from the NYT (emphasis added):

Google Brain’s researchers wondered if they could keep YouTube users engaged for longer by steering them into different parts of YouTube, rather than feeding their existing interests. And they began testing a new algorithm that incorporated a different type of A.I., called reinforcement learning.

The new A.I., known as Reinforce, was a kind of long-term addiction machine. It was designed to maximize users’ engagement over time by predicting which recommendations would expand their tastes and get them to watch not just one more video but many more.

Reinforce was a huge success. In a talk at an A.I. conference in February, Minmin Chen, a Google Brain researcher, said it was YouTube’s most successful launch in two years. Sitewide views increased by nearly 1 percent, she said — a gain that, at YouTube’s scale, could amount to millions more hours of daily watch time and millions more dollars in advertising revenue per year.

YouTube’s “most successful launch in two years” netted the platform a less than 1 percent increase in views. Across a billion users this is a significant achievement. But from the perspective of the individual YouTube user, this change is barely noticeable. Some people seem to believe that humans are sheep and tech companies are shepherds that can guide them wherever the profit motive leads. But the data contradicts this thesis at every step.

MacGuineas also leaves out some crucial context about Eyal’s book Hooked. As he told Ezra Klein in an interview for Vox, Eyal wrote the book not only to explain how Big Tech was trying to influence us but also to democratize these tools for small- and medium-sized businesses. The hope was that once small competitors had the same tools and strategies as the tech giants, there would be a more level playing field in the market. The techniques described in Hooked are now common knowledge across many industries and therefore it is unlikely that consumer decisions between product A and product B are distorted on the margin.

It’s also worth noting that Eyal recently wrote another book called Indistractable: How to Control Your Attention and Choose Your Life. The goal of the book is to provide readers with tips, strategies, and advice for aligning their short-term behavior with their long-term goals. People should be accountable for the decisions they make about how to spend their time and money and books like Indistractable are useful in helping individuals make the best choices for their self-interest in the long run.

MacGuineas also chooses to cite an odd example of the harms caused by the tech industry:

And [the tech companies] do, in fact, manipulate our behavior. As Harvard Business School’s Shoshana Zuboff has noted, the ultimate goal of what she calls “surveillance capitalism” is to turn people into marionettes. In a recent New York Times essay, Zuboff pointed to the wild success of Pokémon Go. Ostensibly a harmless game in which players use smartphones to stalk their neighborhoods for the eponymous cartoon creatures, the app relies on a system of rewards and punishments to herd players to McDonald’s, Starbucks, and other stores that pay its developers for foot traffic. In the addiction economy, sellers can induce us to show up at their doorstep, whether they sell their wares from a website or a brick-and-mortar store. And if we’re not quite in the mood to make a purchase? Well, they can manipulate that, too. As Zuboff noted in her essay, Facebook has boasted of its ability to subliminally alter our moods.

Pokémon Go is ostensibly and actually harmless. When an augmented reality video game nudges you to walk by a Starbucks, you do not suffer any tangible consumer injury. You still retain your autonomy and the research shows that tiny nudges like this have almost no effect on your ultimate choices. It would be unsurprising if in the near future companies pulled their spending from Pokémon Go because it proved to be ineffective, like so much of the rest of the advertising industry.

Teens Are Addicted to Their Screens — and Not Much Else

According to Common Sense Media, “US teens spend an average of more than seven hours per day on screen media for entertainment, and tweens spend nearly five hours.” MacGuineas finds this usage alarming, calling tech products “addictive” and “potentially harmful”:

American society has long treated habit-forming products differently from non-habit-forming ones. The government restricts the age at which people can buy cigarettes and alcohol, and dictates places where they can be consumed. Until recently, gambling was illegal in most places, and closely regulated. But Big Tech has largely been left alone to insinuate addictive, potentially harmful products into the daily lives of millions of Americans, including children, by giving them away for free and even posturing as if they are a social good. The most addictive new devices and apps may need to be put behind the counter, as it were—packaged with a stern warning about the dangers inherent in their use, and sold only to customers of age.

This much screen time sounds excessive, and maybe it is. But while the use of technology by teenagers (e.g., smartphones, social media, video games) has been trending up over the last 20 years, risky behavior (e.g., drugs, alcohol, cigarettes, sex) has been trending down for almost every category:

Source: Washington Post

Which of these is “capitalism’s addiction problem”? Given how many risky behaviors are on the decline, tech products may be capitalism’s addiction solution rather than its problem.

Now, as Jonathan Haidt has shown, there is some valid concern about the effect social media has on certain subgroups, in particular pre-teen girls. The rate of non-fatal self harm in this group nearly tripled between 2000 and 2015. But does this mean we need government regulators to ban these products for everyone?

Not quite. Haidt recommends simple advice for parents to protect their kids: “I am on a campaign to encourage parents to adopt 3 norms: 1) all screens out of bedroom 30 min before bedtime; 2) no social media until high school; 3) time limits on total daily device use (such as 2 hrs or less).” Given the evidence, these kind of limits seem reasonable for mitigating the harms caused of letting children use technology at too young an age.

Pay for Facebook? Who, me?

Lastly, MacGuineas also thinks regulators should require people to pay for Facebook:

Perhaps the most immediate and important change we can make is to introduce transparency—and thus, trust—to exchanges in the technological realm. At present, many of the products and services with the greatest power to manipulate us are “free,” in the sense that we don’t pay to use them. But we are paying, in the form of giving up private data that we have not learned to properly value and that will be used in ways we don’t fully understand. We should start paying for platforms like Facebook with our dollars, not our data.

The logic here is: 1. Your data is more valuable than you realize. 2. Therefore, you should be forced to pay Big Tech companies to access services that are currently free. It also betrays a certain level of privilege to ignore the fact that many people, especially those in the developing world, cannot afford to pay for these digital services. And while it may feel different in our own solipsistic worlds, the sad truth is that our personal data is not worth nearly as much as MacGuineas and others claim.

The prices from the data broker market are startling low:

  • “General information about a person, such as their age, gender and location is worth a mere $0.0005 per person, or $0.50 per 1,000 people.”

  • “Knowing that a woman is expecting a baby and is in her second trimester of pregnancy, for instance, sends the price tag for that information about her to $0.11.”

  • “For $0.26 per person, buyers can access lists of people with specific health conditions or taking certain prescriptions.”

  • “[T]he sum total for most individuals often is less than a dollar.”

Given the reality of the market valuation of our personal data, we should just take the free services.

The tropes in this article are nothing new for those who have been following this debate over the last few years. The false narrative that tech is especially addictive and harmful has been on the rise for quite some time now. Unfortunately that doesn’t make it any more true.

Alec Stapp is the Director of Technology Policy at the Progressive Policy Institute

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Comments on “Why Tech Might Actually Be The Solution To Capitalism's Addiction Problem”

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Mike Masnick (profile) says:

Pay option

I’ve never understood the argument that we need to force companies to offer a paid-option, as if that will somehow solve all the privacy problems. I don’t pay for Google or Facebook. While I now have a (small, independent) privacy-protected ISP, I spent years giving AT&T and Comcast tons of money, and don’t trust them to protect my privacy at all. Similarly, I pay a huge sum to my mobile phone provider… and they’ve been engaged in much worse privacy practices.

That’s not an excuse for Facebook or Google, but it makes me scratch my head when people suggest with a straight face that if you pay for a service, that will magically make those companies respect your privacy. What world do you live in? We have real world evidence that that’s not the case.

Anonymous Coward says:

Re: Pay option

It’s not just "paying for Facebook"; it’s paying for, specifically, a Facebook that’s free of advertising and data mining because you’re paying for it.

Q: What do you call the guy who pays all your bills?
A: "Boss."

When your income is coming from users rather than advertisers, you have an incentive to keep your users best interests at heart, rather than your advertisers’ best interests at heart. It’s really that simple.

This comment has been deemed insightful by the community.
Mike Masnick (profile) says:

Re: Re: Pay option

When your income is coming from users rather than advertisers, you have an incentive to keep your users best interests at heart, rather than your advertisers’ best interests at heart. It’s really that simple.

Again, that sounds nice in theory, but is utter bullshit in practice. My mobile phone company sells my location data all the time. They have the incentive to keep my best interests at heart? Come on.

By that SAME logic, you would have to note that to keep advertisers happy, sites that offer free services paid for by advertising, should need to keep their users best interests at heart, to keep them from going elsewhere, and harming their advertisers best interests.

Anonymous Coward says:

Re: Re: Re: Pay option

Again, that sounds nice in theory, but is utter bullshit in practice. My mobile phone company sells my location data all the time. They have the incentive to keep my best interests at heart? Come on.

…yes, if you ignore the most relevant part of what I actually said, it’s easy to come to a conclusion that what I said is wrong. Let’s look at it again:

It’s not just "paying for Facebook"; it’s paying for, specifically, a Facebook that’s free of advertising and data mining because you’re paying for it.

Of course you aren’t getting that from your mobile phone company; that’s not part of the deal you have with them. In a service where an explicit part of the contract was that customers were their only source of revenue, you’d better believe things would be different!

Mike Masnick (profile) says:

Re: Re: Re:2 Pay option

In a service where an explicit part of the contract was that customers were their only source of revenue, you’d better believe things would be different!

One you literally cannot limit revenue streams like that.

Second, my mobile phone service does not come with advertising, so it already meets your criteria.

So, sorry, but your insistence on this point is just silly.

Anonymous Coward says:

Re: Re: Re:3 Pay option

The fact that you pay doesn’t mean necessarily that you have stopped being the product.

Also, that neither means that whatever company is going to tell you the whole truth, even if the law says otherwise.

"It’s not a crime you don’t get caught. And ever if you get caught, fishes and people have one thing in common: their memory."

Michael says:

Re: Re: Pay option

But this continues to ignore telecom services that we pay (a lot) for and they have zero respect for their customers.

Giving someone money does not give them incentive to treat you better, giving customers options and providing transparency about how you are actually being treated is incentive because your customers or audience can dry up if you are not doing a good job.

This comment has been deemed insightful by the community.
Anonymous Anonymous Coward (profile) says:

Re: Re: Pay option

So we make data brokers illegal in the US and they move overseas and continue brokering. Oh, I guess they would need to stay out of the EU, but there are plenty more places they could go.

However, I don’t see any way to stop the collection, without seriously changing the way the Internet works, if that is even possible. The EU made it so one should be able to stop it, and look at the problems they are having with that.

Anonymous Coward says:

Re: Re: Re: Pay option

So we make data brokers illegal in the US and they move overseas and continue brokering.

Regulation is not so easy to avoid, and we don’t need draconian "US rules apply worldwide" laws. You can make it illegal for US companies to give data and money to non-compliant foreign entities. So, sure, Facebook (for example) could vacate the country to avoid US law, but then they couldn’t accept advertising money from US companies. US credit card and apartment companies couldn’t run credit checks with, or give credit data to, non-compliant foreign data brokers. Etc.

Scary Devil Monastery (profile) says:

Re: Pay option

"I’ve never understood the argument that we need to force companies to offer a paid-option…"

Because that’s never been the actual goal.

Anyone with basic marketing knowledge knows damn well that although everyone will want to use a free service, a paid service requires active recruitment.

We know plenty of companies who would love to see people stop using Facebook, Google, and other current platforms én másse because it certainly is in their best interest to no longer have massive tech giants able to pour lobbying money and lawyers into efforts upholding section 230, the push for net neutrality, unbiased search engines, etc.

Hell, if anyone leaked MacGuineas personal emails and a planned "collaboration against Goliath" came up, addressed to a Sony executive, I wouldn’t be surprised.

Uriel-238 (profile) says:

Re: The game industry as an example

The 2010s were a dark time for AAA gaming, in which the free-to-play user-antagonistic tools that were used to monetize mobile games (really to create purchase-based-cybercrack in game form) were translated over to PC and console games (that still cost full price before in-game transactions).

The practice of inserting microtransactions into games (often combined with lootboxes, in which the item is randomized and concealed until after it is purchased, like baseball cards) led to controversies not only about whale-hunting and predatory markets, but also incidents in which children emptied their parents’ bank accounts buying lootboxes looking for a favorite sports star.

(Curiously, western society is terrified of exposing kids to sex or violence, but is fine with of making toddlers engage in real-money transactions and gambling mechanics for which they are not prepared and don’t understand. Both PEGI and the ESRB have been super resistant to mature-scoring microtransactions and lootboxes)

This has served to dispel the myth that paying customers are valued and respected. Now companies can look to predatory alternatives to contractrarianism (creating a win/win agreement) to compel the end user to pay money, leaving them with no further responsibility to serve the customer.

Curiously, we have the same approach in politics, where political parties often focus on radicalizing issues and team-loyalty rather than a public-serving platform, and as such are not scrutinized heavily by the common voter.

Anonymous Anonymous Coward (profile) says:

My addiction

I am only addicted to Techdirt, but I don’t look at their advertising (which I allow (we do have a choice here) in order to help fund them even though I already pay). I also have a certain amount of browser controls that keep third parties out of the mix. Then there is my VPN which not only encrypts my connection (even from my ISP) but disguises my location (except from my ISP). Then I also clear my browsing data, cookies and other browser collectibles regularly and change my passwords (complex via a password manager) several times per year.

The problems as I see it has several aspects. First, getting several billion people to follow some or all of the above practices. The second is similar to the roadblock the entertainment silos are going to face. Just how many Internet sites (that are currently free) will any one individual fund? And, as pointed out in the article above, will people in less economically advantaged situations be able to afford whatever the asking prices will be? In addition, one of the features of a site like Facebook (which I do not use) is that it give one access to many countries and many cultures around the world (which is a good thing and not the reason I don’t and won’t use Facebook), and silos won’t let that happen.

ECA (profile) says:

If the world is a stage,

well lets ask the first Problem.
HOW many adverts is enough? TV/cable/sat and All the others tend to OVER DO IT.. Allot of this started in the old days and comic books. we went from a few pages of adverts to Every other page. Read 2 pages, skip 2 pages.
We get so many Commercials that we loose 20 min. on a 1 hour Show.
Then we went to the net, Using AOL, Compuserve, and all the rest Took over and Adverted to us, then Direct to the Net and we GOT HIT SO HARD… All the bots, virus, Trackers, Backdoors, Email with Spam bombs in them that placed TONS of crap on our systems that was never seen.
I hope we learned allot about Advertisers.
And the smart people dont believe anything except PROTECT your system. How many of us think MS windows security is There to protect us?? I have at least 3 other progs on my computer to do the same or better.

On with the show..
There are Options to advertising. but they wont listen. They wont think. That all the Children have been Beaten to death over the years of TV. Every Show has had 4 commercial breaks every 1/2 hour..WHO needs a potty break every 5-10 min??
Iv sent msg to many sights about To many Scripts and adverts, and HOW they could give us more adverts..IF’
They would Publish a notice on the front page of being responsible for the CRAP that is sent to us with any trackers, bots, Virus from Adverts.
OR, they simply become the advertisers for their Own site. Dump the Old Corps, and let the Companies that wish to advert Contact them and ask to advert. First party adverts arnt Blocked most times. And then the Site IS’ responsible for what they send to us in adverts but they can tract them, as well as the Advertising Company, very easily, not using 3rd parties.

Then we are the targets of many Rotten fruits:
Why dont these folks ASK us what we would like? besides NO ADVERTS. Directly. YT could solve allot of their problems with adverts by asking us the type of commercials we would like, IF WE HAD TO WATCH.. ASK us to watch a few. Then leave us alone. I wouldnt mind watching a few When I get to a site, preferably those realated to the SITE Im going to. We do goto sites we prefer. Like the Alcohol tobacco, and Firearms sites. Lets see the adverts, as well as those FROM those sites. Advert for yourself..not the others..

Anonymous Coward says:

The constant attempt to blame tech is annoying at best and misleading at worst, I’d say. People will judge, compare, denigrate, undermine, devalue, etc. if, for instance, social media was taken out of the equation. Not having platforms to do so is not going to make people want to be attention whores less. It makes it harder, perhaps, but won’t eradicate the fundamental mechanic of getting dopamine boosts when others give you superficial approval. We’d be better off educating and giving people less motivation to be bullies and negative influences instead of just putting a hole-ridden bandage on the issue.

crade (profile) says:


The trouble with all these services is not that people are not paying for them, The trouble is 100% in that we have allowed agreements that are not agreements. The terms of service crap is the entirety of the privacy problem. All a company has to do is make it difficult enough to interpret their terms so that most people will just make assumptions instead and they can get away with anything whether they are getting paid or not is completely irrelevant.

Setup some ISS privacy standards companies can voluntarily agree to, Gold, Silver, Copper, Shit and lastly AT&T and define clearly what they mean in both legal and plain terms, companies can advertise that they adhere to one or the can be assumed as AT&T if they don’t want to participate.. Let companies get sued for claiming to meet when they don’t then companies charge more if they claim the top level privacy standard and let people decide if it’s worth paying for.

Koby (profile) says:

Cable's Promise

The logic here is: 1. Your data is more valuable than you realize. 2. Therefore, you should be forced to pay Big Tech companies to access services that are currently free.

I remember back in the days that the reason that we had to pay for cable TV was because eventually they were going to remove all the ads. Instead, they kept the ads, and kept charging for service. I promise you that pay-for-content will continue using your information while also charging you for it.

Anonymous Coward says:

Given the evidence, these kind of limits seem reasonable for mitigating the harms caused of letting children use technology at too young an age.

The evidence mentioned in this story is that use of social media can cause trouble. There’s no citation about "screen time" in general causing trouble. Had my computer use been limited to 2 hours a day when I was a kid, I probably wouldn’t have ended up with a technology job. "Excessive" computer use got me a pretty lucrative career (although, till I was about 15, there was no internet, just a stack of PC manuals and maybe the occasional hour on a BBS when my family could spare the phone line).

Excessive TV didn’t get me anywhere, but probably didn’t much hurt, and keep in mind that for kids that’s going to count against "screen time" these days. A 2-hour limit for all uses of technology—communication, entertainment, homework, extracurricular learning, porn—starts to seem much less reasonable.

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