“We love the excess of availability”

The disruption brought by Big Data and technological change is reconfiguring society on a scale so massive that our political systems are ill-equipped to deal with it. The best answer, argues Viktor Mayer-Schönberger, is to look back at evolution.

You’ve been studying the impact of Big Data on society for years. How would you summarise its effect?

VIKTOR MAYER-SCHÖNBERGER: We will witness a period in the coming years that resembles the phase of internal social conflict we experienced in the Enlightenment, a public and societal debate on whether we should become more rational in our views and our decision-making. At the time, the Enlightenment went against the grain of so many longheld beliefs, superstitions and dogmas; it led to large social upheaval but also to tremendous progress. We have continuously pursued the Enlightenment programme without ever returning to the original assumptions.

What few of us realised in the 1970s, 1980s and 1990s is that humans are quite biased and far from the rationalist descriptions of the Enlightenment. So, making ourselves behave more rationally has inherent limitations. That’s where Big Data comes in: Used correctly, it can help us overcome some of our human biases and lead to a somewhat more diverse, or at least less emotionally biased, view of the world. Of course, that may be disconcerting to some because we humans also indulge in our biases.

The rise of populist parties in Europe

Does this phenomenon also underlie the resurgence of populism in many democracies?

Absolutely. Our assumptions and prejudices give us comfort. We like to cling to the populist fear even if the data analytics suggest otherwise. In addition, from the 1950s until the 1970s, many in the West were content with second-best, as long as it offered economic and social progress. Back then, there was no perceived finite end to resources and, accordingly, there were fewer emotional quarrels about them. That has changed.

It seems to have led to a kind of cognitive dissonance: We can now customise products for ever smaller groups in societies and yet we still expect a piece of the bigger pie.

That is true, and in a way, we are still like the proverbial kid in the candy store. We love the excess of availability. In the 1970s, my parents were content to go on a vacation with me to Italy and considered it a badge of honour to lie on the beach next to the Müllers, the Meyers and the Hubers. We all got the same beach. Today, that’s not good enough anymore. We don’t want to be part of the group that gets the same thing, we want difference. At the same time, a lot of people now realise that the pie is finite – and that exacerbates fears of being on the losing end of the distributive struggle.

On the one hand, we’re speaking about consumerism, but on the other, about the political and societal system that holds us together. Certainly, both are connected, especially in democratic theory, but if we look at Big Data, it has the potential to change both in different ways. How has the realisation that the pie is finite altered our preferences?

We’ve now grown up in a world of diverse preferences. We know that we don’t have to follow in everyone else’s footsteps. We’ve grown accustomed to a world in which, in theory at least, most of our preferences are fulfillable. And now we yearn for their fulfilment. When you look at the first wave of e-commerce, it was all about getting the best price. With all the new recommendation algorithms, we now want precisely the right good or service. With this comes a sense of entitlement.

Is the perfectly customised good still utopian or is it already a reality?

I don’t think it’s utopian anymore. But as usual, we have high expectations that aren’t always met. Although it has never denied or confirmed the rumours, it is estimated that Amazon generates a third of its profits from its recommendation engine. It’s not because Jeff Bezos hypnotises us to buy his wares; it’s because we look at it and we say, “Yes, that’s exactly what I want.” This improved matching of supply and demand creates consumer surplus and value. The same is true in the travel industry. The fact that travel platforms enable us to find exactly the right flight and ride share is amazing. Thirty years ago, we mostly bought standard package holidays.

The mobility industry has already been shaken up by technological change to a considerable extent, and its giants are increasingly under pressure.

Absolutely. And they completely misread the situation: As they continued to discuss the utility of the diesel engine, Uber was already preparing for the driverless age and pushing shared rides, which increase efficiency but reduce the demand for drivers and cars. If I were in the car industry, I’d be concerned not only that my sales are going to decrease but also that I will be selling to large fleet managers rather than individuals. These fleet managers will have much greater bargaining power than you and me. In crude terms, the ecosystem that the car manufacturers have built to milk society is falling apart. My concern is that one half of the industry is in denial and the other is too blind to see it.

Many car manufacturers would argue that those days are still far away. As long as China only has 25 cars per 100 citizens versus the approximately 70 in most advanced economies, there is still room for the market to grow.

That is a dangerous argument. China is increasingly implementing environmental policies that make many gas-guzzling cars obsolete, while at the same time promoting electric vehicles. By contrast, German car manufacturers haven’t yet become champions of e-mobility. We see similar trends in the financial industry. There’s a reason Deutsche Bank is laying off tens of thousands of its employees: The business model of being intermediaries in the monetary chain is quickly growing obsolete and is no longer creating as much value.

At this point, should we be focusing on the micro level, such as business models, or on the macro level, in the form of systemic overhaul?

It depends who you talk to. Policymakers have to look at the macro level, whereas normal people are more concerned with the micro level. The real problem for policymakers is not a single issue, but rather the reconfiguration of society on a massive scale. Our political systems aren’t very resilient to the tensions that result from this.

Earlier, you suggested that the core of the Enlightenment was the intellectual shift to rationalism. But wasn’t it also about technological change?

I am rather careful about granting any agency to technology. There were societal changes that enabled technological ones and vice versa. This influence has always been going in both directions. What we see at the beginning of the 19th century, for example, is the rise of commerce. Along with it came better reporting and accounting in firms that in turn led to better decision-making. So, it’s not a simple technical change that “did it”. It’s also about structural changes. Together, they create economic opportunities that have been driving change.

And it is hard to predict the consequences of technical innovations. For instance, Thomas Edison invented the phonograph and thought it would be used to send messages, while Alexander Graham Bell believed that the telephone he invented would be used to listen to concerts. And, of course, once their inventions were released to the public, they were reimagined and appropriated, ultimately being used in the exact opposite way. Technology is far more plastic than we think and can be adapted to the needs of individuals.

Nonetheless, I would still argue that without the invention of the steam engine, the story would have been completely different.

That is true. However, the steam engine had also been around for a while before it took on such a central role. It was initially much less efficient than human work. It required the invention of the governor, for instance, to make it more controllable. Even this story is far more complicated than it seems on the surface.

Who should we be turning to for predictions about the changes the future will bring? Comparative historians?

Evolutionists. At the end of the day, that is what we have to come back to. Quite some time ago, we abandoned the notion that evolution is a simple, linear process. Instead, we now speak of punctuated equilibria, which are long phases of relative stability and short phases of radical change. And when there is radical change, evolution does not hunker down – it goes into overdrive. The solution in times of unpredictability is to try everything, which increases the chances of discovering a solution that works.

If you take that together with what you said at the beginning about the crisis of democracy, is the idea that we need to see how we can combine civil liberties and economic prosperity and then adapt the solution in different democracies?

I started off as a lawyer. In Singapore, we applied comparative law by considering best practices in other regions of the world and adapting them. That may sound nice, but it was a rather silly idea in retrospect. Every legal system is wedded to its specific sociological, political and economic context.

So, I’m very hesitant to jump quickly to universal recipes or advocate “best practices”. What may work in one society may not work in another. That’s also true for the forces that undermine democracy. If you look at the rise of populist movements, from Alternative for Germany to Italy’s Lega to National Rally in France, they have some similarities, but also a lot of differences, as can be seen from the difficulties they have had in forming a joint faction in European Parliament. Populism is a very loose category.

We all have friends scattered around the globe, which makes it easy to come to the realisation that we are living in relatively undogmatic times. At the same time, this produces dissenting voices in the populist camp.

That is not something incredibly novel. It happens from time to time. In Europe, the 1920s were an era in which many old dogmas were discarded. That was a time of liberation, but it also sowed the seeds of what was to come.

Similarly, Erasmus of Rotterdam taught about religious freedom a few years before religious wars broke out across Europe.

Yes. These periods of change and opening recur from time to time, and they always come with the risk of a backlash. European economic integration reached its first zenith in the 1890s and then it declined. It took until 1970 for Europe to become as economically integrated again as it was back then. I wrote my master’s thesis in the late 1980s on the United States Supreme Court confirming a law criminalising homosexuality. That’s almost unthinkable today. We have come a very long way in 30 years. But for the proponents of Enlightenment, this means not solace but the need for vigilance: Nothing is irrevocable, as much as I would like it to be.