Internet Naysayer Doesn’t Go Far Enough

In the “The Dangers of Web Tracking” (August 6 Wall Street Journal) Internet skeptic/critic Nicholas Carr describes how we are and could be tracked, profiled and identified from our online activities.  But the dangers he cites are flimsy and he seems to shy away from naming the danger that concerns him.

Carr offers three dangers. 

The first is crime, e.g.,  identity theft and the frauds enabling by the theft.  Yes, the data generated by our online activities add to the data generted by our use of credit cards, store cards, toll tags, catalogs, warranties, etc., but theft and fraud have no special tie to online tracking.

Second, prediction can blur into manipulation but Carr doesn’t define the latter   If he means behavior-based persuasion, that’s as old as the hills. Every salesman listens to what customers say with their mouths and with their eyes, heads, shoulders, hands and feet and then adjusts the sales pitch accordingly.  Most persuasion encounters are feedback-governed interactions and until recently a task for humans.  In the field of human-computer interaction (HCI), two questions gained a lot of attention early on: could computers teach and could computers persuade?  Marketers are figuring  out the latter in their workaday activities; in specific a lot of interactive design involves mapping out diverse consumers’ different decision paths en route to a purchase and then laying in at each step along  the path the content and/or tools that will lead the customer onward.  This is SOP.  But even ”persuasion” may be too strong a term.  Many designers say instead that they’re helping the customer buy.  If something is wrong with being persuiaded by a machine, I’d like to know what that is.  Labelling it manipulation doesn’t help.   

Third and his greatest danger is the chilling effect of surveillance.  He writes, ” When we feel that we’re always being watched, we begin to lose our sense of self-reliance and free will and, along with it, our individuality.”   It is certainly true that the machine does not care about us as individuals.   Rather we are persons in a population who can be differentiated into groups, some of which are more likely than others to respond to certain persuasions.  Whether the continuous surveillance of our activities for the purpose of parsing us into probabalistic groups erodes our self-reliance, free will and individuality — or even the sense of same — is arguable at best.

Earlier in the piece Carr hints at the danger that I think he actually fears:  specifically, that government could identify those whom it considers opponents.  The headline on the WSJ’s online edition tried to make the point.  This is not paranoia.   To the contrary it’s an axiomatic truth. 

All governments, everywhere and always, have not just a potential but an actual tendency to encroach on the rights of those they are to protect.  Many governments have gone too far; they can and should be prevented and it requires the level of citizen awareness and vigilance that Carr calls for.    Americans don’t like to think that our government could take such a turn, but it did and recently.  Members of the “greatest generation” remember the 1950s Red Scare led by Joseph McCarthy; baby boomers in the anti-war movement can testify to egregious overreaching by both police and FBI.    

If we’re going to deal with the dangers of web tracking, we need to be more forthright in naming them.

WSJ’s Flawed Exposé of User Tracking

There’s an old PR saying—“Never argue with someone who buys ink by the barrel and paper by the ton.”   So, I won’t post this comment on the Wall Street Journal’s web site but will share it here.

Its research on user-tracking software, “The Web’s New Gold Mine: Your Secrets,” reported in three full pages of its July 31-August 1, 2010 weekend edition, is solid on facts but wrong on the one fact upon which its argument depends.  After introducing the types of user behavior collected by cookies, Flash cookies and beacons, the fifth paragraph asserts that this data is packaged into profiles about individuals.   This is wrong as a matter of fact.

Individual-level data are stored in what’s called a record.  Database administrators perform certain hygiene procedures on records and they’re continually updated with fresh individual-level data, but records as such are raw material; they just sit there until someone queries the database.   When that happens, the software scans the data inside each record and sorts the records into groups that comform in greater and lesser degrees to the query.  The resulting group portraits are profiles.  

Typically, the software is designed so that profiles express a probability.  Measuring the variability of individuals on one or more attributes (the raw material), it differentiates these persons as more likely than those persons (the profiles) to behave in the way desired by a business marketer or a government administrator (the query).  This statistical differentiation then becomes the basis for real-world discrimination: treating these persons differently from those persons, in the service of business profits or government efficiency.  Social statistics at birth and all its descendents since including user-tracking software parse populations into probabilistic groups.  The method cannot say—and does not want to say—anything at all about individuals as such. 

That’s why consumers, despite telling pollsters that they are “concerned” or “very concerned” about online privacy, don’t use the privacy protecting tools that have long been available.  They know that this surveillance does not threaten them as individuals.  Scare-mongering about privacy by the media and activists only perpetuates the belief that individuals are important to business and government.  Fortunately, we aren’t.

Imaginative Hedonism

Review:  Colin Campbell, The Romantic Ethic and the Spirit of Modern Consumerism

This important book aspires to complement Max Weber’s The Protestant Ethic and the Spirit of Capitalism. Specifically, just as Weber provided an historical account for the rise of “instrumental rationality” that drives the sphere of production, Campbell offers an historical account of the rise of “imaginative hedonism” that drives modern consumption.

His central theme is that pleasure itself was redefined in the 18th century. In former times, it was sought through the senses: food, sex, music, laughter. Thus, elites had banquets, harems, musicians, and clowns while the masses had carnivals, their annual taste of the same. The modern economy, according to Campbell, replaced the sensory experience of the body with the emotional experience of the imagination – daydreams of finer lifestyles, novel consumer goods, exotic experiences et al. Centrally important, these images are created or modified by the individual for self-consumption. In other words, it is not the buying, owning or consuming but the imagining – “the ability to create an illusion known to be false but felt to be true” – that pleasures us. Moderns became adept at what Campbell calls “autonomous imaginative hedonism” long before there was media or advertising; it’s not our wants but our wanting that is insatiable.

The book is organized in two parts. The first half is critical and dissects the inadequacies of economic explanations of wants and their origins in terms of increasing population, increasing standards of living and other macro trends and of sociological explanations that rely on emulation effects. The second half is historical. Like Weber Campbell anchors his account in the Calvinist strain of 17th century Protestantism but the legacy that he follows leads to the 18th century pietistic cults of sensibility and melancholy, then on to Sentimentalism (sensibility + Christian benevolence), culminating in 19th century Romanticism and finally democratizing as bohemianism in the early 20th century.

Densely argued and quite long, this is not an easy read. Moreover, those who prefer their historical explanations anchored in a society’s organization of power and wealth will not likely be convinced by a history of ideas based sermons, novels and philosophy. Finally, the scope is limited largely to Great Britain with some attention to France and Germany.

Those weaknesses pale when compared with this volume’s three important contributions. First, the argument makes room for the pursuit of pleasure along side the pursuit of wealth in understanding the evolution of modern society. Similarly, it makes room for emotion along side reason in that evolution. Second, it explains why we embrace rather than reject an everyday life diffused by the shimmers of advertising. Finally, it puts the consumer as the active and creative force at the center of consumerism.

Three Cheers for Cyber-sociology

Review: Clay Shirky, Here Comes Everybody (New York: Penguin, 2008)

Three virtues–sociological, political and historical–make this book important.

For part of the 19^th and most of the 20^th centuries, the role of groups in our collective life has been on the wane.  Modernism is anchored in individuality; consumerism is centered in self-expression; privatism promotes social isolation.  Books such as The Lonely Crowd (1950) and Bowling Alone (2000) have ably documented this situation.   Clay Shirky argues that digital media counter-balance this historical trend because they enable groups to organize easily and autonomously and for both short and long term goals.  IMHO that is the big picture import of this book: it’s a pioneering sociological exploration of this empowerment.

Shirky thinks that the resulting groups will in general improve our lives if only because these groups form autonomously around their own members’ goals.  There’s logic but not necessity in that view, as Shirky knows.  Each group will have its own impacts—greater and lesser benefits as well as unintended consequences, positive and/or negative—that could, moreover, extend beyond its members.  Only time will tell where this empowerment nets out at the societal level.  Still, his politics lean in a power-to-the-people direction and the book’s second virtue is to present this potential as an opportunity available to all today with some leanings en passant about how to leverage it.

Decades from now, this book will be important for an historical reason: it’s an eyewitness account of a dynamic situation.  Shirky does propose basic principles that underlie successful group formation and they have practical “how to” value. But he does not serve up some neat and tidy model.  Quite the contrary, he describes with enthusiasm the diversity—on many dimensions—of the groups being formed today via this empowerment.  This first-hand account by an informed observer, conscious of his biases and comfortable with the messiness of reality, has value on that score alone.

In short, three cheers for three virtues.

Housing Meltdown and Data Breaches Have Same Flaw

The housing meltdown and data breaches share the same fundamental flaw: risk and reward are not connected.

In the housing market two Government Sponsored Enterprises (GSE) — Fannie Mae and Freddie Mac (Federal National Mortgage Association and Federal Home Loan Mortgage Corporation) — hold half of all mortgages. Their business — buying mortgages and then issuing mortgage-backed securities — succeeded in many ways and in large part because everyone believed the US government stood behind these loans in case of default. With risk transferred to the government, Fannie and Freddie focused solely on reward, making profits by accepting debt from borrowers whom I wouldn’t trust to hold my groceries, and when these subprime and Alt-A mortgage debtors defaulted, triggering the larger meltdown, the Treasury—that would be you and me, bucko—had to step in.

Data security has the same problem. Publicly disclosed data breaches are rising rapidly. According to the Identity Theft Resource Center, there were 449 disclosed breaches by August 22 compared with a 446 total for all of 2007. When these breaches occur, the harm falls on the consumer — that would be you and me, bucko – but not on the companies responsible. Some 44 states do require them to disclose data breaches but there are loopholes, e.g., only business in certain industries, only if a business suspects the data will be used to commit fraud etc. and there’s rarely a penalty as long as the breach is disclosed. In fact, there’s rarely a penalty for not disclosing – even though that’s a crime – and even when there is a penalty it’s minor — $10,000 in Arizona, for example. The only way to curb data breaches is to connect risk to reward – either allow individuals to hold businesses liable in court or introduce regulations that would impose stronger criminal and civil penalties

The threat of risk disciplines the pursuit of reward. Without risk, someone is certain to get screwed — that would be you and me, bucko.

W.H. Auden on Datamining

The Unknown Citizen
W.H. Auden

 

He was found by the Bureau of Statistics to be
One against whom there was no official complaint,
And all the reports on his conduct agree
That, in the modern sense of an old-fashioned word, he was a saint,
For in everything he did he served the Greater Community.
Except for the War till the day he retired
He worked in a factory and never got fired,
But satisfied his employers, Fudge Motors Inc.
Yet he wasn’t a scab or odd in his views,
For his Union reports that he paid his dues,
(Our report on his Union shows it was sound)
And our Social Psychology workers found
That he was popular with his mates and liked a drink.
The Press are convinced that he bought a paper every day
And that his reactions to advertisements were normal in every way.
Policies taken out in his name prove that he was fully insured,
And his Health-card shows he was once in hospital but left it cured.
Both Producers Research and High-Grade Living declare
He was fully sensible to the advantages of the Instalment Plan
And had everything necessary to the Modern Man,
A phonograph, a radio, a car and a frigidaire.
Our researchers into Public Opinion are content
That he held the proper opinions for the time of year;
When there was peace, he was for peace:  when there was war, he went.
He was married and added five children to the population,
Which our Eugenist says was the right number for a parent of his generation.
And our teachers report that he never interfered with their education.
Was he free? Was he happy? The question is absurd:
Had anything been wrong, we should certainly have heard.

The Devil in the Data?

People get creeped out by data but usually can’t explain why. One reason is that the devil doesn’t lie in the data but in the algorithms–the rules that process the data.

These rules rule. They sit atop the data and crunch it into something meaningful. They could be arguable and could lead to errors of various types but, largely invisible, they are beyond critique.

Fortunately, the Federal Reserve Bank of Boston recently issued a report on redlining by credit-card companies that offers an excellent example of exactly what makes people ill at ease with the machinations of data.

The top-line finding is that credit-card companies discriminate among customers, offering higher credit lines to similarly qualified residents of White neighborhoods than to residents of Black neighborhoods.

“After controlling for the influence of such other place-specific factors as crime, housing vacancy rates, and general population demographics, the paper finds qualitatively large differences in the amount of credit offered to similarly qualified applicants living in Black versus White areas.”

Obviously, having less credit available is a disadvantage but that’s only the half of it.  The other half is a rule that compounds the problem.

In determining an individual’s credit score, the credit-card companies’ rule compares the amount borrowed to the amount available. The smaller this ratio, the higher the credit score. So, two individuals with the same loan and same history of timely repayment will get different credit scores based on the different amounts of credit that were available to them—a factor about which they can do nothing.

There are numerous problems here. Racism is one.  That is a particular version of another and more general problem: the ethics of applying a group-based parameter—here, neighborhood-based credit lines—to an individual’s profile—here, his or her credit-worthiness. But what creeps people out is their “sense” that calculations, judgments and decisions about them are being made behind the scenes in mysterious ways that could be damaging and over which they are powerless.

This concern is are neither paranoid not Luddite. People are right to be concerned and they’re concerned for the right reasons. There’s more to the datascape than data. Over and above data are the invisible rules that determine what data ultimately mean.

 Unfortunately, these conerns are being addressed by politicians in a slew of proposed laws to regulate Internet advertising.  IAB CEO Randall Rothenberg offers a comprehensive and well grounded critique of these ill-conceived initiatives.   But fending off government interference in the marketplace will not address the root problem.   That would require the data-crunching community–public and private–to introduce and examine their practices through the lens of ethics in addition to the lens of optimization.  

 

Wall Street’s Cock-eyed Cyber-Optimist

Today’s Wall Street Journal introduced a weekly column, entitled “Information Age,” about the “ways in which digital technology is transforming business, politics and our society” and penned by the WSJ’s former publisher, L. Gordon Crovitz.  In his debut offering, entitled “Optimism and the Digital World,” Crovitz proudly admits that “My own bias is that as information becomes more accessible, individuals gain choice, control and freedom.”   Presumably the newly empowered will respond with many huzzahs and much rejoicing.

I have two huge problems with this framework.

First, what’s the context of this emancipation?  Choice among what–channels that all offer the same escapist content?  Control over what–the commercial messages to which we decide to pay our attention?  Freedom to do what–buy this or that product?  Praising the means (process) while neglecting the ends (substance) is an old and by now well recognized sin of omission.

Second, the optimism that Crovitz derives from “the accelerating impact of technology” is arguable.  Ray Kurzweil, pioneer of artificial intelligence, came to a different conclusion in The Singularity is Near (New York, 2005).  Simply put, Kurzweil argued that the increased speed with which new technology can solve humanity’s biggest problems has, ironically, created a heigthened frustration with the gap between what is and what could be.  Make no mistake: Kurzweil is a huge optimist about technology-based problem-solving; he’s just not a cock-eyed optimist.  Rather, he grasps our contradictory responses to progress; in many cases our simultaneously contradictory responses.  If “Optimism and the Digital World” typifies the content to come, a similarly nuanced understanding will not likely be found here.  I eagerly await Clovitz’ next offering but I’m not sanguine.  Caveat lector.

44% Don’t Trust Any Company

Almost half of us (44%) don’t trust what any company in any industry says, according to a November survey of US consumers by Harris Interactive, and that’s grown worse in recent years.  The poll asked, “Which of these industries do you think are generally honest and trustworthy–so that you normally believe a statement by a company in that industry,” and then listed 17 industries. ”Supermarkets” did best: a third of us (32%) trust our grocery store.  We trust other industries even less.  Since 2003 those who don’t trust any industry has grown 7%. 

For the industry breakout and trend data, click industries-that-are-trustworthy.

Neo-Con Riff: P.J. O’Rourke’s On The Wealth of Nations

 

 

Neo-Con Con Exposed: A Comment on P.J. O’Rourke, On The Wealth of Nations (Atlantic Monthly Press, 2007). 

 

You don’t have to read P. J. O’Rourke’s On The Wealth of Nations because you already know the contents—a libertarian rant from a neocon wiseacre.  But, seriously, folks, you shouldn’t read it because it misrepresents Adam Smith and misleads readers. Fortunately, most of the book’s flaws can be traced to one cheap trick at the very outset.

In the second sentence, O’Rourke transforms Smith’s economic principles—the pursuit of self-interest, the division of labor and free trade—into “practical truths” (never defined), timeless and universal.  Elevating them out of history is what enables O’Rourke to wield them as slogans in bludgeoning his usual bugbears—politicians, liberals, reporters et al.

One example—his treatment of the “pursuit of self-interest’—suffices to illustrate this systemic problem.  First, the “self” to which Smith referred was a new phenomenon.  Of course, some form of self is intrinsic to being human: the human mind is aware of itself.  What emerged in the 17^th century and flowered in the next, however, was the self as a legitimate social agent.  Rather than address the appearance of individuality, autonomy and personal fulfillment, O’Rourke assumes these facets of the modern self were there all along, had been repressed and were now unleashed, and moves quickly to one of his many ahistorical platitudes.  In this case “[S]elf-interest makes the world go round…since the world began going around—a little secret everyone knows.” 

Almost as important, Smith did not champion just any definition of self-interest but a Franklin-esque version that emphasized emotional control and rational calculation, that stood in sharp contrast to the unruly passions of aristocratic traditions and that would in theory produce certain social virtues.  Either ignorant of or ignoring the historical context and its content, O’Rourke just rushes about waving the banner of “natural liberty” (never defined)—the “practical truth” that corresponds to the pursuit of self interest.

He uses the same sleight of hand with Smith’s two other principles—the division of labor and free trade.

No one expects logic from comics.  Hyperbole and jarring juxtaposition are their stock in trade, and at these O’Rourke’s book excels.  But as a guide to the seminal work of an 18^th century political economist for literate 21^st century readers, this book insults both.