George Soros, the billionaire financier, who once bet against the Bank of England, has described Facebook and Google as a threat to society.
There are two ways to make money. You can create something that in some ways adds to global wealth, or you can do it via rent seeking.
George Soros, net wealth $8 billion, who leapt to infamy by shorting the pound in 1992, ahead of sterling being ejected from the ERM, the forerunner of the euro, and then shorting the currencies of Thailand and Malaysia in 1997, got rich by rent seeking.
Of course, since then he has gone all soft and cuddly and moralistic.
Speaking at Davos, he said: “Mining and oil companies exploit the physical environment; social media companies exploit the social environment.” He continued: “This is particularly nefarious because social media companies influence how people think and behave without them even being aware of it. This has far-reaching adverse consequences on the functioning of democracy, particularly on the integrity of elections.”
His critique got even stronger, he said they “deceive their users by manipulating their attention and directing it towards their own commercial purposes” and “deliberately engineer addiction to the services they provide”. He said this “can be very harmful, particularly for adolescents”.
And finally: “The power to shape people’s attention is increasingly concentrated in the hands of a few companies. It takes a real effort to assert and defend what John Stuart Mill called ‘the freedom of mind’. There is a possibility that once lost, people who grow up in the digital age will have difficulty in regaining it. This may have far-reaching political consequences.”
So is he right?
Actually, it is not so much Google and Facebook that determine what we see across their channels, it is algorithms. And in the age of machine learning, deep learning and neural networks, algorithms will increasingly design themselves based on their analysis of human behavior giving us what we want. As such, Facebook and Google are reflections of ourselves - for good and evil.
There needs to be regulation of such algorithms - but what would you prefer, a world run by elites who made their money by rent-seeking, or one that gives us what we want, by using AI to find out precisely what this?