Peter Thiel’s latest bet

Peter Thiel is the only prominent Silicon Valley figure to publicly support Trump during the election campaign. He famously spoke at the Republican Convention. This is what he said:

Good evening. I’m Peter Thiel. I build companies and I’m supporting people who are building new things, from social networks to rocket ships. I’m not a politician. But neither is Donald Trump. He is a builder, and it’s time to rebuild America.

Where I work in Silicon Valley, it’s hard to see where America has gone wrong. My industry has made a lot of progress in computers and in software, and, of course, it’s made a lot of money. But Silicon Valley is a small place. Drive out to Sacramento, or even just across the bridge to Oakland, and you won’t see the same prosperity. That’s just how small it is.

Across the country, wages are flat. Americans get paid less today than ten years ago. But healthcare and college tuition cost more every year. Meanwhile Wall Street bankers inflate bubbles in everything from government bonds to Hillary Clinton’s speaking fees. Our economy is broken. If you’re watching me right now, you understand this better than any politician in Washington D.C.

And you know this isn’t the dream we looked forward to. Back when my parents came to America looking for that dream, they found it right here in Cleveland. They brought me here as a one-year-old and this is where I became an American. Opportunity was everywhere. My dad studied engineering at Case Western Reserve University, just down the road from where we are now. Because in 1968, the world’s high tech capital wasn’t just one city: all of America was high tech.

It’s hard to remember this, but our government was once high tech, too. When I moved to Cleveland, defense research was laying the foundations for the internet. The Apollo program was just about to put a man on the moon–and it was Neil Armstrong, from right here in Ohio. The future felt limitless.

But today our government is broken. Our nuclear bases still use floppy disks. Our newest fighter jets can’t even fly in the rain. And it would be kind to say the government’s software works poorly, because much of the time it doesn’t even work at all. That is a staggering decline for the country that completed the Manhattan project. We don’t accept such incompetence in Silicon Valley, and we must not accept it from our government.

Instead of going to Mars, we have invaded the Middle East. We don’t need to see Hillary Clinton’s deleted emails: her incompetence is in plain sight. She pushed for a war in Libya, and today it’s a training ground for ISIS. On this most important issue Donald Trump is right. It’s time to end the era of stupid wars and rebuild our country. When I was a kid, the great debate was about how to defeat the Soviet Union. And we won. Now we are told that the great debate is about who gets to use which bathroom. This is a distraction from our real problems. Who cares?

Of course, every American has a unique identity. I am proud to be gay. I am proud to be a Republican. But most of all I am proud to be an American. I don’t pretend to agree with every plank in our party’s platform; but fake culture wars only distract us from our economic decline, and nobody in this race is being honest about it except Donald Trump.

While it is fitting to talk about who we are, today it’s even more important to remember where we came from. For me that is Cleveland, and the bright future it promised. When Donald Trump asks us to Make America Great Again, he’s not suggesting a return to the past. He’s running to lead us back to that bright future.

Tonight I urge all of my fellow Americans to stand up and vote for Donald Trump.

What’s intriguing about that speech is that — except for its endorsement of Trump — it could have been written by thousands of other critics of the neoliberal elites who have misgoverned the US (and other countries) since the 1980s. I agree with most of it — as did Larry Lessig.

“What’s striking about this speech”, Lessig writes, “is, except for its references to Trump”, 

how obviously true it is. Something has gone wrong in America. Growth is not spread broadly. Technical innovation is not spread broadly. We were a nation that tackled real and important problems. We have become a nation where — at least among politicians — too much time is spent arguing over the petty. “Who cares?” about which bathroom someone uses — which coming from a gay libertarian must mean, “it’s none of your business.” The wars of the last generation were stupid. We need to focus on building a “bright future” that all of America can share in.

What’s puzzling about this speech is how this brilliant innovator could predicate these words of a Donald Trump presidency. Maybe the excuse is that they were written before the true insanity of that man became unavoidably obvious. Who knows?

Thiel is a really interesting and complicated guy. He’s a born contrarian, but with a genius for making good bets. (The first was PayPal, of which he was a co-founder; another was Facebook, in which he was the first major investor). His book, Zero to One is simultaneously a fascinating and irritating read. He infuriates — and terrifies — journalists because of the way he used his wealth to pursue, and eventually destroy, Gawker. In achieving that he demonstrated that anyone who is sufficiently rich and sufficiently vengeful can render toothless the First Amendment.

As I said, Thiel has a talent for making big, contrarian bets. With the 20/20 vision of hindsight, it looks as though his gamble on Trump has paid off. At any rate, the New York Times now reports that he has become a key player in Trump’s transition team. So he is probably the person behind Trump’s decision to ‘summon’ the leaders of the big tech companies to a meeting at Trump Tower. “The agenda”, says the Times,

is undisclosed and perhaps still under consideration, but it is unlikely to produce the sort of love fest that existed between President Obama and Silicon Valley. Tech culture celebrates disruption as the tool that produces a better future for all. Many of Donald J. Trump’s supporters, on the other hand, see it as pushing them down.

How to reconcile these views is the task of Peter Thiel, the billionaire investor and Facebook board member whose role is to formulate a tech policy for the new administration. Mr. Thiel secured this position by making a contrarian bet on Mr. Trump’s candidacy, which paid off. The round-table invitations are from Mr. Thiel; Jared Kushner, Mr. Trump’s son-in-law; and Reince Priebus, the incoming chief of staff.

It’s not clear at the time of writing how many of the Valley’s billionaire geeks will roll up. My hunch — knowing the aphrodisiac effect of power — is that most of them will, though some will sneak in via the service entrance.

UPDATES * Kara Swisher is claiming that Tim Cook (Apple), Larry Page (Google), Sheryl Sandberg (Facebook) and perhaps Jeff Bezos (Amazon) are planning to obey the call. * Scott Rosenberg has some stirring advice on what they should tell the Troll-in-Chief.

Reactionary rhetoric

” I must have an inbred urge toward symmetry. In canvassing for the principal ways of criticizing, assaulting, and ridiculing the three successive “progressive” thrusts of Marshall’s story, I have come up with another triad: that is, with three principal reactive-reactionary theses, which I call the perversity thesis or thesis of the perverse effect, the futility thesis, and the jeopardy thesis. According to the perversity thesis, any purposive action to improve some feature of the political, social, or economic order only serves to exacerbate the condition one wishes to remedy. The futility thesis holds that attempts at social transformation will be unavailing, that they will simply fail to ‘make a dent.’ Finally, the jeopardy thesis argues that the code of the proposed change or reform is too high as it endangers some previous, precious accomplishment.”

From Albert Hirschman’s The Rhetoric of Reaction: Perversity, Futility, Jeopardy, 1991.

How do you throw the book at an algorithm?

This morning’s Observer column:

When, in the mid-1990s, the world wide web transformed the internet from a geek playground into a global marketplace, I once had an image of seeing two elderly gentlemen dancing delightedly in that part of heaven reserved for political philosophers. Their names: Adam Smith and Friedrich Hayek.

Why were they celebrating? Because they saw in the internet a technology that would validate their most treasured beliefs. Smith saw vigorous competition as the benevolent “invisible hand” that ensured individuals’ efforts to pursue their own interests could benefit society more than if they were actually trying to achieve that end. Hayek foresaw the potential of the internet to turn almost any set of transactions into a marketplace as a way of corroborating his belief that price signals communicated via open markets were the optimum way for individuals to co-ordinate their activities.

In the 1990s, those rosy views of the online world made sense…

Read on

Making algorithms accountable

pasquale-book

As the world becomes increasingly driven by algorithms that are, effectively, ‘black boxes’, issues of responsibility, liability and accountability are becoming acute. Two researchers — Nicholas Diakopoulos of the University of Maryland, College Park and Sorelle Friedler from Data & Society are proposing five principles that might be helpful. They are:

Responsibility. “For any algorithmic system, there needs to be a person with the authority to deal with its adverse individual or societal effects in a timely fashion. This is not a statement about legal responsibility but, rather, a focus on avenues for redress, public dialogue, and internal authority for change”.

Explainability. “Any decisions produced by an algorithmic system should be explainable to the people affected by those decisions. These explanations must be accessible and understandable to the target audience; purely technical descriptions are not appropriate for the general public.”

Accuracy “The principle of accuracy suggests that sources of error and uncertainty throughout an algorithm and its data sources need to be identified, logged, and benchmarked.”

Auditability “The principle of auditability states that algorithms should be developed to enable third parties to probe and review the behavior of an algorithm… While there may be technical challenges in allowing public auditing while protecting proprietary information, private auditing (as in accounting) could provide some public assurance.”

Fairness “All algorithms making decisions about individuals should be evaluated for discriminatory effects. The results of the evaluation and the criteria used should be publicly released and explained.”

Not rocket science, but useful. What I like about this work is that it adds value. We all know by now that algorithmic decision-making is problematic. The next step is to figure out what to do about it, given that algorithms are here to stay.

Facebook’s (shirked) editorial responsibilities – contd.

The story continues. This from today’s Guardian:

The scrutiny over Facebook’s treatment of editorial content has been intensifying for months, reflecting the site’s unrivaled power and influence in distributing news alongside everything else its users share on the site.

Fake or misleading news spreads like wildfire on Facebook because of confirmation bias, a quirk in human psychology that makes us more likely to accept information that conforms to our existing world views. The conspiracy theories are also amplified by a network of highly partisan media outlets with questionable editorial policies, including a website called the Denver Guardian peddling stories about Clinton murdering people and a cluster of pro-Trump sites founded by teenagers in Veles, Macedonia, motivated only by the advertising dollars they can accrue if enough people click on their links.

The Pew Research Center found that 62% of Americans get all or some of their news from social media, of which Facebook accounts for the lion’s share. Yet an analysis by BuzzFeed found that 38% of posts shared on Facebook by three rightwing politics sites included “false or misleading information”, while three large leftwing pages did so 19% of the time.

LATER This from Buzzfeed:

“If someone is right-wing, and all their friends are right-wing, and that is the news they share on Facebook, then that is the bubble they have created for themselves and that is their right,” said the longtime Facebook engineer. “But to highlight fake news articles in the [news] feed, to promote them so they get millions of shares by people who think they are real, that’s not something we should allow to happen. Facebook is getting played by people using us to spread their bullshit.”

Spot on. That’s the key to it.

Facebook: still growing

From today’s New York Times:

The social network on Wednesday reached the latest milestones in its quest to dominate the world, topping 1.79 billion monthly visitors as of the end of September, up 16 percent from a year ago. Facebook also added a record number of new daily users and said for the first time that more than one billion people regularly used its network exclusively on their mobile device every month.

And those numbers do not even include Facebook’s other properties, such as the photo-sharing service Instagram and the messaging service WhatsApp.

Facebook’s user growth defies the usual trajectories for social media companies, which often start strong out of the gate and then sharply slow down. Twitter, which added four million new visitors last quarter, now serves a user base roughly one-sixth the size of Facebook’s. Snapchat, while popular among young users, has about 150 million daily users, about half as many as Twitter…

Facebook, Instagram and Twitter help cops to track minorities

From Technology review:

Our love of social media makes it easy for us to be spied on—so could we just use it less? An investigation by the American Civil Liberties Union reveals that Facebook, Twitter, and Instagram supplied police in Ferguson and Baltimore with data that was used to track minorities. The companies packaged up and provided data from public posts to a company called Geofeedia, which analyzes digital content to provide surveillance information to law enforcement agencies. The companies have now cut off, or at least modified, their supply of data—but it’s a reminder of how we all, perhaps unwittingly, enable a surveillance society. Spying as a result of digitizing our lives isn’t a new phenomenon, but it’s getting worse because we’re all so keen to connect. Much of the data is public, too, so simply banning police access won’t work. Tristan Harris, an ex-Googler, has an idea, borne out of a desire to be less beholden to the smartphone, that could ease the problem by encouraging us to step back from Facebook et al. He wants to introduce new criteria, standards, and even a Hippocratic oath for software designers to stop apps from being so addictive. If we can wean ourselves off social media even a little, its power for spying could, perhaps, be commensurately diminished.

How times change

chartoftheday_5403_most_valuable_companies_2006_vs_2016_n

“Last Friday, for a brief period of time, Apple, Alphabet (Google), Microsoft, Facebook and Amazon were the five most valuable publicly traded companies in the world, relegating ExxonMobile, the long-time leader in this category to a sixth place. And even though the oil company has since clawed its way back into the Top 5, the composition of the list clearly illustrates how important the digital economy has become over the past few years.

Ten years ago, the list of most valuable companies was dominated by big oil and multinational conglomerates. These days, it’s companies such as Google, Facebook and Amazon dominating the headlines.”

Source

Digital Dominance: forget the ‘digital’ bit

Some reflections on the symposium on “Digital Dominance: Implications and Risks” held by the LSE Media Policy Project on July 8, 2016.

In thinking about the dominance of the digital giants1 we are ‘skating to where the puck has been’ rather than to where it is headed. It’s understandable that scholars who are primarily interested in questions like media power, censorship and freedom of expression should focus on the impact that these companies are having on the public sphere (and therefore on democracy). And these questions are undoubtedly important. But this focus, in a way, reflects a kind of parochialism that the companies themselves do not share. For they are not really interested in our information ecosystem per se, nor in democracy either, if it comes to that. They have bigger fish to fry.

How come? Well, there are two reasons. The first is that although those of us who work in media and education may not like to admit it, our ‘industries’ are actually pretty small beer in industrial terms. They pale into insignificance compared with, say, healthcare, energy or transportation. Secondly, surveillance capitalism, the business model of the two ‘pure’ digital companies — Google and Facebook — is probably built on an unsustainable foundation, namely the mining, processing, analysis and sale of humanity’s digital exhaust. Their continued growth depends on a constant increase in the supply of this incredibly valuable (and free) feedstock. But if people, for one reason or another, were to decide that they would prefer to be doing something other than incessantly checking their phones, Googling or updating their social media statuses, then the evaporation of those companies’ stock market valuations would be a sight to behold. And while one can argue that such an outcome seems implausible, because of network effects and other factors, then a glance at the history of the IT industry might give you pause for thought.

The folks who run these companies understand this. For if there is one thing that characterizes the leaders of Google and Facebook it is their determination to take the long, strategic view. This is partly a matter of temperament, but it is powerfully boosted by the way their companies are structured: the founders hold the ‘golden shares’ which ensures their continued control, regardless of the opinions of Wall Street analysts or ordinary shareholders. So if you own Google or Facebook stock and you don’t like what Larry Page or Mark Zuckerberg are up to, then your only option is to dispose of your shares.

Being strategic thinkers, these corporate bosses are positioning their organizations to make the leap from the relatively small ICT industry into the much bigger worlds of healthcare, energy and transportation. That’s why Google, for example, has significant investments in each of these sectors. Underpinning these commitments is an understanding that their unique mastery of cloud computing, big data analytics, sensor technology, machine learning and artificial intelligence will enable them to disrupt established industries and ways of working in these sectors and thereby greatly widen their industrial bases. So in that sense mastery of the ‘digital’ is just a means to much bigger ends. This is where the puck is headed.

So, in a way, Martin Moore’s comparison2 of the digital giants of today with the great industrial trusts of the early 20th century is apt. But it underestimates the extent of the challenges we are about to face, for our contemporary versions of these behemoths are likely to become significantly more powerful, and therefore even more worrying for democracy.


  1. Or GAFA — Google, Apple, Facebook, Amazon — as our Continental friends call them, incorrectly in my view: Apple and Amazon are significantly different from the two ‘pure’ digital outfits. 

  2. Tech Giants and Civic Power, King’s College London, 2016.