The “Obscure” Road to Serfdom

This is a discussion on the mechanisms of power in the context of Big Data on personal information and the raise of the “Information Oligarchs” (companies that have too much control over the flow of information). It presents a pathway to serfdom through economic means rather than political ones depicted in Road to Serfdom, by F. Hayek (the work was presented in September 2015 at the Cybersecurity in Romania Congress, and November 2015 Wine Hat Cybersecurity Conference in Torino, Italy)

We live in an world with physical limitations. Nothing in this world can be infinite, instantaneous, ideal, it is prevented by the laws of physics and we humans often forget that with all the wonderful abilities we possess, we are in fact full of imperfections. Nerve impulses travel around 120m/s, very slow by comparison, our brain capacity is large but limited so in a world with infinite granularity we are forced to select: our sight focuses and sees only a tiny fraction of reality, our hearing filters out sound that are deemed irrelevant, we need repetition to remember, we have an attention span and we forget with time. We depend on energy, food, and we are conditioned by the basic need to propagate our species. We call them adaptations as they are necessary for our very survival, but at the same time they also are, weaknesses.

Cooperation, Competition & Power in Limited Resources Environments

This is important because in a competitive world such as ours, we, all living things, rely on OUR strength and the weakness of others to survive. It is especially important to note, that even in the case of a packing system, where individuals rely on cooperation usually because they cannot survive on their own, members still exploit the weaknesses of others to acquire better social status. In a limited resource environment, it is the principle of POWER, which places a member of a pack on different levels of access to resources. More power results in better access to sustenance and gene proliferation and is usually associated with fit individuals who are important to the survival of the pack. Less power means limited access to resources and the protection of the pack in exchange for a lesser contribution. It is then absolutely natural that all individuals of any packing system will be inexorably driven to acquire more power over their peers. It is this duality of “need for cooperation” and “need to compete” which makes packing systems so dynamic and there has to be a strong mechanism of checks and balances to ensure the long term stability of such social systems. There is a fine line up to which point a member can exploit the weaknesses of others, beyond which it becomes abuse, and abuse destabilizes a pack.

Power as a Dynamic System

As a scientific formalism, a dynamic system is a system that evolves in time, in such way that future state of the system depends on both the present state of the system and a transfer function. The state of the system describes how the system is right now, in terms of numbers, and the transfer function describes how the system operates, a set of steps, which applied to the current state will take the system to the next state, and this goes on and on. In reality, everything is a dynamic system, be that an engine, the atmosphere, the planetary system, the gas burning in an oven, the human body, or human society, they all evolve dynamically in time. Within his formalism, feedback occurs when some aspect of the output of the system is fed back into the system so that they influence future outputs, and they can be of two kinds:
positive feedback, which is characterized by fact that the process amplifies future outputs, and
negative feedback, which does exactly the opposite, it attenuates.

An example of positive feedback would be the heat output in a nuclear reactor: fission produces heat, which increases fuel’s capacity to react, which produces even more heat, and so one. Positive feedback has the tendency to destabilize the system. Left unchecked, it will always end up in a runaway effect. Other popular examples are audio feedback at a concert or global warming. Negative feedback has exactly the opposite effect, it tends to choke the system. A good example is the flotation device in the toilet container: as the water level raises, it pushes up the device, slowly closing the opening and slowing down the flow of water, until water cannot enter any more and the system halts. These are just a few examples but in fact every system in nature, has a large combination of well balanced positive and negative feedbacks that ensure their stability over time. There is however a very important aspect with respect to the ability of feedbacks to balance each other out. There is a limit up to which point we can apply corrective effect of the opposite feedback, beyond that, the system will die like an underpowered car engine or will melt down like a nuclear reactor.

If we apply this concept of positive and negative feedback to the to the dynamics of “power” in a group we can identify a few major feedback branches:

• The Desire for power: It is a positive feedback that amplifies over time. The more power is accumulated the more power is desired because it emphasizes the benefits of having power. This can be exacerbated by the scarcity of resources.
• The Apathy for power: A negative feedback based on exactly the opposite principle. The less power is accumulated the lesser the desire becomes as it tends to auto-diminish it’s benefits. Such phenomenon could be triggered by an overabundance of resources. For example, wolf packs disassemble in summer because the abundance of food and absence of sexual activity due to its natural cycle does not justify any more the need to fight for supremacy in the group. And so it is much more convenient to just abandon the pursuit for power and live in a hierarchy less system.
• The Accumulation of power: a polarized feedback driven by the desire for power, where the more power is accumulated in the hands of a member, the easier it will be to accumulate even more power. It is of course a positive feedback.
• The Resistance to power: another polarized reactionary feedback also driven by the desire for power, in which, the more power is accumulated in the hands of a member, the stronger will be the resistance of others, which makes it more difficult to accumulate power. This would be a negative feedback which of course depends strongly on our ability to observe the phenomenon of power accumulation in the first place. Otherwise we will be faced with a system that will become overpowered by a positive feedback. It is very similar with the automation industry where we place sensors to read the sate of the system and trigger reactions. For example in a nuclear reactor the rise of temperature in the reactor will trigger the lowering of the insulation devices which will cause reactions to slow down and allow for the coolant to decrease the temperature. If the temperature sensor is not operating properly, then we have a problem.

The Mechanisms of Power & Power Singularities

To circle back to our time evolution graphics within human context, we will have as steady state a normal society, with its ups and downs presently equivalent with democracy. We will have a dead system which stands for anarchy, or a collapsed societal order, and different kind of dystopia in the upper part with some runaway oligarchic power system like tyranny. These two degenerate states to the power system, anarchy and tyranny are a consequence how humans relate to the concept of power and society’s inability to correct itself. While anarchy is almost self explanatory, it is the lack of any social order and the concept of power does not exist nor would this discussion make any sense, tyranny does need a little analyses.

Tyranny is a power singularity. It occurs when a representative entity of the society acquires absolute power over their peers while the other enter a state of complete loss of freedom. We can say that an individual lost its freedom when that individual has no more options, not even leaving the pack as that would be equivalent with its demise, therefore it will be obligated to submit to the will of the tyrant, effectively becoming a servant. This is a state that never occurs in nature, but one that can be found all across human history on both local and global scales. It seems, that as a species, we are prone to miss that critical point of no return and always follow down on the runaway path.

The mechanism of power in nature is relatively straightforward. It is based solely on the capabilities of the individual that desires to ascend into the power hierarchy. Healthy, strong or otherwise capable individuals will work their way into a position of power by using their aptitude: lions, wolves and other predatory creatures will use brute force, other animals like elephants will respect the elder in the group for their knowledge of food sources and field orientation capacity. Weaker, less able, individuals will submit to the leader for the benefits of living in the group. I will call this mechanism, the political way, because it is basically the corresponded of the political power system found in humans, where the leader openly assumes its desire to ascend into power and will use methods to persuade the others to accept him/her into this position of power.

Humans have an additional method for ascending to power, which while absent in the animal kingdom, is just as efficient in providing results. This method implies assuming control of resources, therefore I will call this the economic way. This method is radically different from the political method because it is indirect by nature. The one seeking power will not assume directly its desire to ascend and the relation of “accepted subordination” does not exist between those that hold power and those that do not. At least not in the way it exists in the political system. The possession of power is usually conferred by the subordination of the individuals towards the resources which the individual in power has control over. So this method is not a direct one, but rather one mediated by the need for resources. In fact if this need for resources would not exits, this method would not produce results any more. So it is only available in the context of limited resource systems.

Because of its open nature, political method is relatively easy to understand, everybody understands an open challenge and while people or other pack animals will accept power, this has a temporary character. Subordinate individuals will constantly challenge the leadership of the one(s) in power, individually or by forming groups. On the other hand, the economic method is not very easy to understand, given it’s concealed nature and the lack of the direct relationship. An important role in this lack of understanding is played by the weaknesses I mentioned before: limited attention span, memory capacity, forgetfulness, the need to measure the risk (lack of courage), and so on. The rules of engagement are also very different. While politically it is completely acceptable to challenge a leader’s position it is utterly inadmissible to challenge someone’s ownership (or control) over resources.

These differences in nature (direct vs. obscure) gives these two pathways very different characters. Political power has a faster ascent, it can have sizable influence very fast (over an entire country or more), while economic power is a lot slower. On the other hand political power is more interactive, antagonistic in nature, people see and understand it better therefore political tyrannies don’t last very long, while economic ones are incredibly difficult to overthrow because once resources are under control, control over politics follows and people run out of options: they become serfs.

Owing to politics open nature, states have always been the usual suspects for oligarchic behavior. Because of this, we, the democratic society, are better equipped to defend ourselves against such behavior. The distance from cause to effect is a lot shorter, so negative outcomes are easier to predict. We developed a vigilance towards these attitudes, we have institutions like the free press which harbor professionals that vigorously monitor political activities and quickly recognize misbehavior, we have democratic rules like the separation of power in states, the election system, where we can sanction politicians. There is an inside feel that we can never be too careful about individuals or groups that seek power. Against the appearances, all this means that there is a relatively healthy dose of negative feedback on the account of society that are likely to keep political systems in check.

The Obscure Economic way

On the other hand, we regard entrepreneurship as the hallmark of freedom. People who go into business, do so in search of independence, self sustainability. This is mostly an accurate image on small, local scale but on large corporative level this behavior can give way to more ambitious tendencies that are on par or even worse with those who seek power more directly. Unfortunately these sinister sides to the free market hide behind the positive image of small businesses. The connection between cause and effect become so blurred to a degree that they become very difficult to notice, let alone understand. It is easy to miss the long term consequences given that we don’t even perceive the cause. Yet in retrospect we can see that most of human history was in fact a long chain of societal orders that were based on exploitation of our kin. Slavery, the cast system, feudalism are all economic power systems. Feudalism for example, as lengthy as it was, it was especially characterized by an almost complete lack of political hierarchy.

Even Friedrick von Hayek, a very famous economist, and an adamant opposer of any centralized system (he even advocated at some point that currency should be regulated by the free market) recognized and proposed for the existence of a state who amongst others would protect its citizens from the abuses of free market. Most notably from what he calls “the exploitation of ignorance” which in other terms means those things we are prone to miss because of our innate weaknesses. He understood that the free market can only function as far as there is reciprocal respect and weaknesses of other people are not being abused.

A contemporary of Hayek, George Orwell, the author of the famous novel 1984 in which he envisions the dystopic world dominated by a the political oligarchy ENGSOC and BigBrother, responded to Hayek’s novel, The Road to Serfdom, with his own warning regarding the lack of control over the free market. After deeming the centralized, collectivist, state worse that Spanish Inquisition, he warns that left unchecked, the free market could become even worse than collectivist states.

This dialog was happening at the end of world war 2, the rise of socialism and communism in the eastern block. Both these iconic symbols of the fight for freedom and democracy recognized the epic danger that reside within economic power systems. Because contrary to political system, we as a society, have really weak negative feedback caused by a severe inability to observe the point of no return until it is too late. In other words, our temperature sensor with respect to the economic system, is not working properly.

Information as Economic Resource

This inability of us to observe the obscure path that makes some people economic tyrants and the rest of us serfs is the core plot for this work. There is an emerging economic resource that is extremely important to this discussion. A resource that is about to play an important role in the balance of power (people vs. wannabe despots): … INFORMATION.

In human society information is extremely important. The decisions we take are governed by the information we have, … or we don’t have. The quality of these decisions and the outcome of our actions depend heavily on the accuracy of information we possess and because we live in a competitive society where each individual seeks power, information about the “other individuals” is a decisive resource. It gives an individual political and / or economic advantage over their peers. Wars are won with information, political campaigns are won with information or disinformation for that matter. The same is true for economic and marketing campaigns. So in today’s society, in a democratic system, where each individual contributes with their decision to the outcome of the balance of power and where it is not OK to use force to impose power, information is an extremely valuable resource; and control of information and information flow is the key to achieving and staying in power.

We do not realize this because it happens automatically but let us make a thought experiment here: suppose you are blindfolded, in the middle a windy bridge without railing and you want to reach the side. I am on the side, I can see, and I am guiding you with the terms “solid” or “water”, meaning that in front of you there is the “bridge” so you can take a step or the “water” meaning that if you step you take a dive. Because of your precarious situation, it is critical that you get very accurate information from me at every step otherwise you risk falling into the water. You depend on this information and because I have control of this information you depend on me. And although there is no power hierarchy between us in this scenario, not in the political sens, whether you like it or not, weather you realize it or not, I own you … It’s uncomfortable, isn’t it?

Of course this is a greatly exaggerated scenario, within a very tight context: impaired sensors, a single source of information and almost no margin for error. But let us see. Let’s assume there are 10 people giving you instructions and each has a slightly different opinion … Now you are in a very tough situation, because you will have to trust one of the voices to guide you to safety and there is no other parameter to measure against the truthfulness of the voice but the very fact that you are alive. This is in fact very similar to the way we get information today, it is very difficult to distinguish the accuracy, quality or truthfulness of the information that gets to us.
I am enumerating these to emphasize how important different aspects of the information are to our existence. It’s not enough if we have information, we have to have information that is accurate, complete, otherwise it is just as if we didn’t have any information at all, or even worse. There are so many aspects to the information that can be tainted with in order to deliver misleading or give us only “sufficient enough” liberty to take our very next decision but at the same time keep us trapped.

It’s true, reality is not only a “step, turn” sequence of decisions, it’s much more complex, but we do live in a world with constraints: we need a house to live in, we need a source of revenue to keep us going, this source of revenue depends on the society, we cannot any more go out to hunt in the forest. Our lives are not that simple any more, we need to provide education to our children, we need to make sure we stay healthy, so if you think about it we ARE on a winding bridge and the steps we take every day do depend on the information we have, on information that gets to us. Most of this information is not direct information, hands on that we took with our sensors (eyes, ears, etc). It is information that is collected and preprocessed by somebody, mediated to us by yet somebody else. Remember this is information based on which we live our lives, we vote, we engage in a credit, we pick a profession, really life altering decisions so all these entities that provide this information to us have a really tremendous power over us. Because we trust them, and take the information from them for granted, they have it in their power to alter and filter this information in such ways as to keep us just sufficiently informed to do exactly what is good for them. To me, this is very scary…

Tyrannic States vs. Information Oligarchs

Historically speaking, information control and manipulation used to be the instrument of states and their information agencies but with our society being ever more connected, with more and more information traveling in ever more structured manner combined with the exponential increase in computation power and a corresponding decrease in the cost of storage capacity we are heading for a perfect storm, a critical point from where might not be a way back. It will not happen at the hand of states, but rather at the hand of what I like to call “Informational Oligarchs”, companies that control information flow TO and FROM massive groups of people.
This bidirectional aspect of information flow is extremely important because it emphasizes the level of absolute trust that people put onto those who actually do what Hayek calls “exploitation of ignorance”. People disclose everything about themselves to these service providers and accept all information that is channeled towards them. It is in fact a complete self induced serfdom mediated by information flow and driven by ignorance.

In his novel 1984, Orwell describes the totalitarian regime lead by the allegorical Big Brother as a regime that dominates through control of information:

• hidden cameras and microphones in houses were listening to what people say,
• history was constantly rewritten and adapted to the “truth” dictated by the leading oligarchy
• children were indoctrinated at young age and thought to report insubordinate behavior to the authorities, especially on their parents

Interestingly these were exactly the methods used in many countries ravaged by communism, and even in our present days, there are still countries where propaganda, disinformation and information collection is used to keep people at bay. A surprising example is the recent attempt of present Turkish government to seize control of the largest media group at the advent of elections in Turkey. Of course these are extreme cases of delusion of power which are all too obvious and relatively easy to spot, but still are difficult to act upon, exactly because of the power of information.

Imagine a more subtle approach, but which can be even more manipulative than the previous one. One that allows people the illusion of choice. With the plethora of personal information that is collected about individuals as well ass masses combined with the power of analytics, what we call together “Big Data on Personal Information” an accurate behavioral picture can be plotted about both individuals and groups of individuals. Under the pretext of bringing better service to “us”, companies go about and gather every bit details of our lives and our selves that they can get their hands upon. And they really can get their hands on an impressive amount of personal information:

• Complete record of browsing history
• Complete GPS track of literally every movement of a person makes
• Sexual and political affiliations
• family status
• personal connections
• education
• possessions
• shopping habits
• wifi passwords

Independently of each other, most of this personal information does not have any real value, which alleviates the concern and makes us more open to giving out this information. But again, this is nothing more than the inability of us, as a society, to grasp the entire picture, because put together this information they tell a story:

• Purchases of a certain medication on-line can hint towards a chronic disease
• GPS records of trips to an AA center can disclose addiction problem
• GPS records of two phones sleeping side by side in a hotel room on regular basis can speak about infidelity
• Articles of a certain kind speak about rebellious behavior.

Present, Future & the Illusion of Choice

In fact the power of analytics on these seemingly random data is so big that a supermarket chain in the US called Target is credited to being able to predict pregnancy so accurately that they know when women are pregnant before they themselves find out with a pregnancy test. They can also accurately predict the stage of the pregnancy and the child’s delivery date, which doctors can’t predict. All this from shopping habits.

Another example like this is that police can tell if a person is going to be uncooperative when stopped in traffic by analyzing their social networking feed. So now they know ahead when stopping a person to aggressively as a preemptive action. But is this normal? How would you feel if the police dragged you out from the car with a gun to your head because your “feed analyses” gave a false positive, or because maybe you are driving your husbands car and he’s been deemed uncooperative.

These are all technologies that are available with today’s already collected data. Imagine now what can be done when a company can synchronize a device that monitors people pulse and sweat, for example a smart watch or other wearable, with him surfing the web and reading articles. The changes in heart rate and sweat can accurately predict a person’s emotional state, the types of article that effects him or her. It can function like a real time, permanent lie detector on millions of people simultaneously. I am sure Orwell would be impressed about the capabilities of THIS Big Brother.

So how is this bad? On every possible level. Because this “thought police” can actually predict what people are going to think before they think it. When people can’t hide anything, from behavior to emotions to physical state they run out of options not because they are physically constrained but because the options that are presented to them are in fact rigged (manipulated) so people choose among the options that are presented to them. Hence the illusion of choice.

We have a limited capacity for information input, we have a short attention span and we need to spend time and energy to inform ourselves. Therefore it is natural that we so easily accept that someone selects and filters the information FOR us. We call it “personalized content” and “Augmented Reality” that people follow blindly, but I have to wonder about the economic interest behind it: does it help me, or control me. Is all reality what I need to see there? Are all the options that lead me to a good future, there? Or does the decoration prevent me from seeing what I would need to see and what I would otherwise naturally be inclined to observe. Do we really see the pine tree in the Christmas tree? Or what we see is happiness and joy of holiday which makes us purchase more and eat more and not care for a moment the hardships of tomorrow. But what would become of us if people thought they lived in an eternal Christmas?

In 2012 Facebook carried out a mood control experiment on little short of 700.000 people, without asking their permission of course, in which they filtered the content to present only positive feeds to one of the control groups and negative feeds to the other. Of course people were affected, we are empathic by nature. When 9/11 happened I was affected. I was watching the TV and could not believe my eyes and I am nowhere near New York. The Japan Tsunami affected us. The first step on the moon affected us, the launch of the International Space Station and so on. So the article goes and asks:

• “Could the CIA incite revolution in Sudan by pressuring Facebook to promote discontent?”
• “Could the owners of Facebook swing an election by promoting Upworthy [a website aggregating viral content] posts two weeks beforehand?” (could the owners of Facebook turn the elections the way the want to by promoting certain kinds of posts).

The answer to both these questions is yes. It’s a simple matter of tweaking information flow the right way and channeling it towards the right people. Revolutions can be silenced or incited. 700.000 people, that’s a sizable city of drones…

You may find this term exaggerated, but it’s not. In 1990, right after Romania got rid of the communist regime, on paper at least, I was living in my birth city, Targu Mures. It is city of mixed ethnicity, about half Romanian half Hungarian, in the middle of Transylvania. In March that year, politicians instigated people to such a degree that they jumped at each other’s throats by the tens of thousands. They were fighting each other like dogs with rabies after coexisting there for hundreds of years. I am half Romanian and half Hungarian and I never up to that point faced the concept of ethnicity. All Romanians in my neighborhood spoke Hungarian and vice versa. And still, a handful of politicians were able to turn these people against each other. It really is possible to mess with people’s heads by poking into their emotions.

But even if our social networks don’t turn against countries, they can certainly alter people’s behavior to suit their economic interest. The same article mentions that: “If Facebook, say, decides that filtering out negative posts helps keep people happy and clicking, there’s little reason to think that they won’t do just that.”. Eternal Christmas can really boost sales.

Too Much Concentrated Power

In my view, this is simply too much power. I believe we need to raise an alarm and start educating people about this mind trap they are heading into. They need to understand that while it may seem useless it is essential that they keep their personal information preventing these companies from using it against them in the future. With the right combination of attitude and with the help of emerging tools privacy can be protected, and done on a large enough scale can preserve democracy and the health of the society.

I also believe that states need to understand that while abusing people’s privacy may ease their work of preventing criminality in the short term, on the long run they will be facing a much bigger threat. Analytics on entire population of a country can put a country in a fishbowl leaving no leverage or room for negotiations on any matter, leaving entire countries pray to giant corporations or organizations with financial interest. States need to involve themselves more not in the control of personal information, but rather in the protection of personal information of their citizens, into disclosure of information analytics and ownership of the results, because their future, their countries future, societies future in general depends on it.

References

• http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/
• http://www.theguardian.com/media-network/2015/feb/13/samsungs-listening-tv-tech-rights
• http://mashable.com/2015/02/10/smart-devices-listening/#l.njJbcMf5kU
• http://www.hotforsecurity.com/blog/google-downloaded-audio-listeners-without-users-consent-chromium-users-say-is-your-microphone-on-12093.html?utm_source=SMGlobal&utm_medium=SMGlobal&utm_campaign=H4S
• http://www.bbc.com/news/technology-32916002
• https://www.schneier.com/books/data_and_goliath/
• http://www.iea.org.uk/sites/default/files/publications/files/upldbook43pdf.pdf
• http://www.ted.com/talks/catherine_crump_the_small_and_surprisingly_dangerous_detail_the_police_track_about_you
• http://www.theguardian.com/technology/2014/jun/29/facebook-users-emotions-news-feeds