Tech companies are ripping society apart (and this is only the beginning)


We are in the grip of a technology revolution and, as many are quick to point out, we’ve been here before. The industrial revolution in the 1800s saw a fundamental shift in the way that society operated, but despite the disruption to traditional livelihoods broad ideas about capitalism and the economy remained true. This analogy is used to reassure anyone worried about robots taking jobs & technology companies running rampant. Society will adapt and things will return to some sort of equilibrium.

I believe that this view is misguided. There are elements of the current technology revolution that are leading us towards the most unequal dystopia imaginable. These aren’t unintended consequences that can be cleaned up later like the smog rising from industrial factories: these are paradigms embedded directly in the current technology revolution that, left unrestrained, will corrode the very fabric of society.

1. Today’s technology creates vast wealth for a tiny few

Technology’s aim is to reduce cost. A store front used to cost money; with the web it’s now free. A map used to cost money to print; now maps are available on your smartphone for free. This has two effects: creating more abundance for consumers, and more wealth for technology companies. An online shop is cheaper than a physical shop because an online shop employs no one and costs no rent. In addition to this, a physical shop can only service a few dozen customers whilst a digital shop can service millions. Essentially this means that for a lower cost a shop owner can generate many millions of times more revenue and profit - with very little associated costs.


As more and more jobs are replaced this shop analogy will hold true for every industry we interact with: abundance for many, profit for few. This has started happening already: since 2003 the top 1% of wage earners have seen their annual household income rocket in comparison with other groups. If this wasn’t bad enough each year we will see greater increases for a smaller percentage. 1% will become 0.9, 0.8 and so on until the cost base of operating most industries is so low that just a handful of people will be profiting.

2. Today’s technology replaces good jobs and replaces them with terrible & insecure jobs

As technology companies there is job growth in some areas. Amazon is now one of the largest employers in the US. This is a problem, though, as the vast majority of Amazon’s (and most technology company’s) jobs involve low skilled, low paid work, in Amazon’s case inside fulfilment centres. In early 2017 their CFO said that “The headcount [we’re adding] is predominant[ly] still the headcount in our fulfillment area.” As artificial intelligence capabilities increase these jobs will be replaced (one of the key problems now is that robots can’t grip very well) with equally low skilled jobs like cleaning and delivering, and in the meantime there is no opportunity for employees to move up within Amazon. There is a clear divide between the engineering class and the lower skilled work done by the vast majority of employees.

The fulfillment centre of the future

This is compounded by the fact that there is a clear divide among demographics: almost all of the high paid engineering work is done by white or asian middle and upper class men. Technology companies typically generate a tiny number of high skilled jobs that often go to well educated people from a privileged background. These high skilled jobs will stay but the low paid jobs will go. As low skilled worker’s wages stagnate because of an increase in supply due to automation more money will be freed up to pay high skilled engineers. Again, this is already happening: wage growth amongst the top 10% has increased substantially in recent years yet in the bottom 10% it has actually decreased.


3. Today’s Technology is almost impossible to tax

One would hope that the societal damage that is being caused by technology companies would be offset by an increase in tax payments. Ironically though technology companies pay even less then their historical counterparts.


Through a combination of tax loopholes (operating in the UK, based in Dublin, Luxembourg or similar) and writing off any profit as expansion cost whilst delivering the actual value through an increase in stock price, technology companies are simply not paying enough tax.

The disruption to society can be solved through retraining and reskilling but these initiatives cost vast amounts of money.

4. Workers can’t be protected from technology by traditional institutions


It used to be trade unions that lobbied for workers and protected them, to some extent, against the excesses of capitalism. Unions today are becoming more and more irrelevant. Many jobs today are insecure and irregular: people have portfolio careers and so don’t neatly fit into the union mould. Collective bargaining works less well when there’s an oversupply of people ready to pick up where you left off, and the lobbying power of technology companies in government prevents genuinely progressive legislation from being written.

There are signs that the traditional union model is being replaced by something more flexible but we’re still a long way off. While unions organise, technology companies have taken the initiative and offered readily available work - as long as workers accept the insecurity (often called “freedom” by tech companies).

What next?

Society gives business a licence to operate. A genuine conversation needs to be had about the impact of today’s technology on the society of the future. There are real dangers that left unregulated technology will push society to a point of no return, increasing radical and potentially unsavoury political actors to take advantage of this dissatisfaction. There is a chance to avert this nightmarish future, but we need to act now.


Bitcoin, the environment & Crypto Offseting

Bitcoin may be good at many things, but being a decent transactional currency isn’t one of them. As an ING economist argued today Bitcoin’s transaction fees and slow speeds mean that buying and selling things with the cryptocurrency simply isn’t realistic. Even the most vocal supporters of Bitcoin admit that it will never replace fiat currencies as ways to transact on a day to day basis. Instead, they argue, Bitcoin is really a ‘store of value,’ more similar to gold than the US dollar.

There is a problem with Bitcoin of a store of value, though. Whereas gold is a metal dug out of the ground, a Bitcoin is really a representation of an amount of past computing power. It takes a certain amount of energy to crack a computational puzzle and generate Bitcoin. It's easy in the beginning, but as more computers join the network the challenge gets harder and harder. These computations are also calculated every time a transaction is registered on the network.

Every 100 Bitcoin transactions can power a home for an entire year - and the amount of energy consumption increases every day.

To demonstrate just how damaging the environmental impacts of Bitcoin are, I created Crypto Offset - a website designed to help you calculate and then offset the damage done by holding crypto currency.

Despite Bitcoin’s idealist roots, it is substantially more environmentally damaging than all other world currencies put together. As it’s a decentralised network, and proof of work is central to how Bitcoin functions, it’s unlikely that this gas guzzling will stop any time soon. Hopefully future crypto currencies will take lessons from this and aim to reduce the environmental devastation of the technology.


How to catch a thief

I had the pleasure recently to be featured in a Barclays video about fraud online. Cyber fraud is a critical global issue, and a large amount of it happens because people, rather than technology, are compromised.
You can watch the video here.


Artificial Intelligence, Ethics & GDPR

Discretion has been a critical part of society’s decision making for as long as societies have existed. Rather than making absolute decisions in legal systems, for example, judges are able to decide proportionate decisions based on mitigating and aggravating factors. A key responsibility of a judge is to write a judgement (and you can read them if you like); without explanation and justification the conclusion a judge comes to is invalid.

Discretion is also a key part of philosophy & ethics. In the classic philosophical thought experiment the trolly problem you have the choice of killing one person to save five by switching a lever on the track. In this thought experiment the outcome is the least important element. Simply to assert that "I'd flick the lever" is to misunderstand the question. Explaining how you reach your decision gives rise to some of the most important ethical and legal questions. Discussion about the topic helps us to analyse what sort of society we live in and what values we live by. These are not trivial questions: killing one to save ten turns you into judge and jury, weighing one life against another. Inaction demonstrates your indifference to human life: if you won’t kill one to save five, would you kill one to save fifty, or ten thousand? And what if that one was your child?

In most studies conducted, 90% of people given the option would kill one to save five. The psychologist David Navarette even conducted this experiment in virtual reality, with the one person screaming to add an element of realism (I'm unsure how this passed the ethics committee..). Nine out of ten people still flicked the lever. Howeve, if the one person is your child, parent or sibling, though, this goes down to 33%. The discretionary factors tell us something about the society we live in (whether we like it or not): we're broadly utilitarian but this changes dramatically if we know or love the people involved.

The role of artificial intelligence in this sort of decision making is becoming more relevant every day. As AI replaces humans as the drivers of cars, the diagnosers of disease and the arresters of criminals the traditional discretion based “fuzzy” decision making that has fuelled ethical debates since Ancient Greece is being replaced.


MIT has already applied the classical trolly problem to a self driving car that has had a brake failure, allowing you to create elaborate and often ridiculous ethical situations. Should a self driving car kill four people in a car or people crossing the road? What if some of those people are elderly? Or babies? Or dogs? Though this situation sounds absurd it is an indication of real world artificial decision making that will soon be taking place. Germany has recently issued legislation to say that a self driving car “must do the least amount of harm if put into a situation where hitting a human is unavoidable, and cannot discriminate based on age, gender, race, disability, or any other observable factors”. This is a sort of discretion blind, politically correct & ultimately easy piece of legislation to pass. To parallel it back to the trolly situation, this is like saying “thou shalt not kill,” but if this is the case then why do 90% of people flick the switch? And this isn’t the only problem. For a start, how can a self driving car predict what sort of damage will be done to each individual? What about the damage to those in the car? And what if the people involved are relatives of the drivers - does that make a difference? If artificial intelligence is to be reflective of the society we live in then should we programme in photos of family and friends to say that under no circumstances should we harm these people, as in the trolly experiment findings?


These AI ethical codes are common in today’s world. Sage, the SaaS accountancy platform has an “ethics of code” including principles like “AI must be held to account — and so must users.” But when we say “held to account” the question is: to whom? In the self driving car example, a decision will be made based on factors that the car has seen before - creating an average of human biases and morality. Pretending that self driving cars can always make the “ethical” and “right” decision is to misunderstand the entire point of ethics. There is no right answer. Whether I kill one to save ten, or I ignore the train tracks all-together, no decision is ideal or right.

Perhaps the answer is to prevent computers from making ethical decisions at all. In the GDPR legislation that is coming in to force next year, some of the key individual rights introduced are the “rights related to automated decision making including profiling”. This essentially means that any decision making process made “without human intervention,” will have to be documented - and that if decision are made in this way the individual has a right to “obtain human intervention.” Essentially this will mean automated decisions being made, a user appealing, and a “human” within the business simply rubber stamping the computer’s judgement.

Despite this legislation the ethical and societal questions remain essentially unsolved. The words “Artificial Intelligence” belie the simplistic principles that underpin AI. AI doesn’t know why it makes the decisions that it does, just that it is solving the problem in the most efficient way possible. Asking a piece of artificial intelligence software why it made a decision is like asking a giraffe why its neck is so long. Natural selection provides a key performance indicator: survival, and animals experiment and mutate in the hope that they’ll find a way to survive for longer than their peers. There are no ethical systems outside the human world because ethics is a human construct. Simply asserting that AI must play by the “right” ethical rules is simplistic and dangerous; creating a one size fits all model that leads to compliance box ticking rather than substantive change.


The next technology revolution will come from a government


Whilst crypto currencies like Bitcoin and Ethereum continue to accelerate in value, debates about the true value of these currencies and the blockchain technology on which they’re based have continued to rage. At the Blockchain Summit last week in London companies and entrepreneurs speculated about a world where everything - from you driverless car to your AI assistant - will eventually be “blockchainised”. The reasons given ranged from efficiency saving to, as a consultant NHS anaesthesiologist put it: “the fact that no one trusts governments or authorities any more.” Ironically, though, what is holding back the development of blockchain technology is the fact that at the moment people do trust centralised authorities more than decentralised technologies.

One only has to look at images of the Bitcoin mines where precious coins are stored to think that regulation may be a good thing - if only to stop the devastating environmental effects that use of the Bitcoin and Ethereum blockchains cause. In addition to this, speculation about the regulatory compatibility of cryptocurrencies also creates a huge amount of uncertainty. When a blockchain is meant to create the most trusted conditions for transactions to execute it’s slightly off-putting that governments will not officially endorse the technology.

And yet blockchain and particularly smart contracts do have the opportunity to revolutionise the way that transactions about the future are perceived and executed. What all blockchains that you might hear about currently lack is trust. If I don’t know that Ethereum is going to be around in five years because it will be replaced by its sexy successor NEO, it’s unlike I’m going to feel comfortable purchasing a twenty year bond based on Ethereum. The only institution in the world that has the authority needed to back an open & public blockchain are governments themselves.

The Chinese government has countless think tanks looking into the benefits of Blockchain, as well as a consortium of companies like Tencent and Alibaba that will ultimately come together to create a state sponsored blockchain. Like GPS - a technology developed by the US military and given (currently) free to the world - a state sponsored blockchain will be the trusted, open and public source of truth in the future, the only question is: which country will get there first. One thing is for sure, it’s extremely unlikely the country will be Britain. Whilst Estonia has already experimented with minting its own crypto currency and launching a blockchain, the UK government didn’t even send anyone to the London based Blockchain Summit.

When the implications for blockchain technology are fundamentally political and social it is desperately sad that the authority that should be taking an interest in regulating and adopting this technology is not just silent but deeply ignorant about its capabilities. Whilst China plows ahead with brave blockchain regulation and large scale investment the British government - at a time when we need innovation most - remains firmly rooted in the past.