Academia
Wenar on why you shouldn’t try to help poor people
In all the discussion of Leif Wenar’s critique of Effective Altruism , I haven’t seen much mention of the central premise: that development aid is generally counterproductive (unless, perhaps, it’s delivered by wealthy surfers in their spare time). Wenar is quite clear that his argument applies just as much to official development aid and to the long-standing efforts of NGOs as to projects supported by EA. He quotes burned-out aid workers “hoping their projects were doing more good than harm.”
Wenar provides some examples of unintended consequences. For example, bednets provided to fight are sometimes diverted for use as fishing nets. And catching more fish might be bad because it could lead to overfishing (there is no actual evidence of this happening, AFAICT). This seems trivial in comparison to the lives saved by anti-malarial programs
Update Wenar’s claim about bednets, as presented by Marc Andreessen, was thoroughly refuted by Dylan Matthews in Vox earlier this year. (footnote 1 applies) End update
It’s worth pointing out that, on Wenar’s telling, a project that gave poor people proper fishing nets (exactly the kind of thing that might appeal to the coastal villagers befriended by his surfer friend) might be even worse for overfishing than the occasional diversion of bednets.
Wenar applies his critique to international aid programs. But exactly the same kind of arguments could be, and are made, against similar programs at the national level or subnational level. It’s not hard to find burned-out social workers, teachers and for that matter, university professors, who will say, after some particularly dispiriting experience, that their efforts have been worse than useless. And the political right is always eager to point out the unintended consequences of helping people. But we have plenty of evidence, most notably from the last decade of austerity, to show that not helping people is much worse.
Reading Wenar, I was particularly struck by this casual dismissal of the lifesaving effects of programs like the WHO campaign against malaria and the PEPFARs aid initiative, which I initially found quoted with approval by Brian Leiter [1]
“The claim that there is “not much to show for [aid]” is simply false. Even among the “bottom billion”—the population of countries that have experienced the weakest economic growth over the last few decades—quality of life has increased dramatically. In 1950, life expectancy in sub-Saharan Africa was just 36.7 years. Now it’s 56 years, a gain of almost 50% … In reality, a tiny amount of aid has been spent, and there have been dramatic increases in the welfare of the world’s poorest people.”
Now this is pure hooey. Even aid’s biggest boosters would cringe at the implication that aid had caused a 50 percent increase in sub-Saharan life expectancies. And what follows this astonishing statement is a tangle of qualifications and irrelevancies trailing off into the footnotes. To anyone who knows even a little about aid, it’s like MacAskill has tattooed “Not Serious” on his forehead.
I’m not an expert on classical logic [2] but I can count at least three fallacies here: guilt by assocation, an argument from incredulity and a false dichotomy. First, the fact the claim being attacked is supported by someone silly like McAskill says nothing about its truth value. Second, apart from anecdotes about disgruntled aid workers, Wenar offers nothing more in rebuttal than ‘I don’t believe it’.
Third, and most importantly, even if it’s not true that all of the increase in life expectancy is due to aid, that doesn’t prove that there was no contribution. Suppose that all the aid provided since the end of colonial rule (approaching one trillion $US) had only increased African life expectancy by one year, and had achieved nothing else. That’s still at least a billion years of extra life. To achieve that same gain with medical interventions in the rich countries of the world, it would be necessary to spend at least $US50 trillion (at the margin, interventions have typically already been adopted unless they cost more than $50-100 000 per life year gained)
Why, apart from the unpopularity of people like McAskill and SBF, has this shoddy stuff been taken seriously? Attacks on aid programs have a clear appeal on the ideological extremes of right and left, and a more diffuse appeal based on sloppy reasoning. The rightwing view is that aid (whether foreign aid or domestic social welfare programs) promotes dependency among recipients, when what is needed is trade and free markets. The far-left mirror image is that aid is designed to pacify the recipients who would otherwise mobilise as a revolutionary force. The sloppy middle view, typically associated with terms like ‘band-aid’, starts from the correct premise that, in a better world, aid would not be necessary, and goes on to to the non sequitur that giving aid is inconsistent with hopes for that better world.
Finally coming to the capitalized version of Effective Altruism, it’s true that it provides a way for predatory rich people to salve their consciences. But rich predatory people have always sought such salves. It’s better to use the guilt money to give effective help to poor people than to endow elite colleges and opera companies for other rich people (see, most recently, the Sacklers). If you don’t like this conclusion, the right response is to change the system that rewards destructive behavior with massive piles of wealth, while leaving billions of people in poverty. [3]. Until that effort succeeds, aid is the least bad option (and there is no reason not to do both).
[1] I’m aware that Leiter is something of a polarising figure. So bringing him in might be seen as an ad hominem on my part. If so, turnabout is fair play, I say.
[2] Modal logic is much more useful in the theoretical work I do.
[3] Ingrid’s work on limitarianism is having some impact here.
The Free Speech Union’s Key Role in Developing Government Legislation
Toby Young resigned from the board of higher education regulator the Office for Students (OfS) in 2018 after controversy over a string of offensive tweets directed at women as well as comments about working-class students and eugenics.
In 2020, Young launched the Free Speech Union (FSU), and in 2023 Professor Arif Ahmed, a former Advisory Council member of the FSU was appointed to be the OfS’s new “free speech czar” tasked with protecting academics and students who make controversial comments due to legislation the FSU lobbied for, advised on, and amended.
From being forced to resign, Young now leads an organisation which is involved in developing Government legislation such as the Higher Education (Freedom of Speech) Act and has begun working with councils to “to enshrine free speech in its policies, procedures, code of conduct and constitution.”
Miriam Cates MP speaking at the Northern Research Group conference in Doncaster in 2023.
Photo: Danny Lawson/PA Images/Alamy
When Miriam Cates MP was contacted by Byline Times to offer a right of reply for another article, the response came not from her office but from the account of Samuel Armstrong.
Armstrong’s role as a freelance political consultant for individual MPs, groups of MPs and political campaigns, demonstrates how the FSU works closely with elements of the Conservative Party to shape legislation.
His current anchor clients are the FSU, where he is Legislative Affairs Director, and the New Conservatives grouping of MPs, for which Cates is a director, and which received a £50,000 donation in December from the Dubai-based Legatum Institute Foundation, the investment fund behind GB News.
Armstrong's role for the FSU entails working with the FSU’s Legal Advisory Council to draft and propose amendments to bills that are frequently either taken up or proposed in a different format by the government.
His LinkedIn profile says “Unlike all too many, we really get into the nitty-gritty of the legislative process and use all the levers of Parliamentary procedure to win.”
Major recent campaigns have included the Higher Education (Freedom of Speech) Act, changes to the Online Safety Bill, the Workers Protection Bill being dropped, and Payment Services Regulations.
Think Tanking Academia
FSU member Professor Abhishek Saha explained the organisation's role in producing the Higher Education Bill in an article for the US-based Heterodox Academy in February 2024, providing insight into how legislation is being created through the input of think tanks and the FSU.
In February 2021, the UK Government issued a policy paper setting out proposals to strengthen protections for free speech in response to reports published by the think tanks Cieo, Policy Exchange, and Civitas. All three reports faced criticism.
As reported by openDemocracy, Civitas’ report was produced by compiling often misleading media reports and looking at university websites, marking down universities if they had anti-racism training or procedures to anonymously report harassment, concluding that “universities have adopted, wholesale, a mutation and splicing of past radicalisms that include Marxism, postmodernism, feminism, Freudianism, and Maoism”. Research by the BBC’s Reality Check team contradicted this.
Initially lobbying for the bill when the Government was weighing up its merits, the FSU then advised the Government on what to include in the legislation and worked on its amendments.
On 7 December 2022, the House of Lords voted to remove the Bill’s statutory tort clause completely. The tort mechanism allows civil claims to be brought in the County Court against higher education providers and student unions if they breach their new free speech obligations.
Saha explains in the Heterodox Academy article that he then met with Claire Coutinho MP in February 2023, and says the FSU convinced the Government to amend Clause Four, not to address concerns, but to further expand the tort mechanism so that financial losses from legal action included subtler forms of loss, for example, humiliation, loss of reputation, or restriction of access to research data.
Another amendment added in the Commons was an expansion of the bill’s academic freedom protections to beyond an individual’s “field of expertise”.
The Commons voted 283 to 161 to reinstate the tort in full and it was passed in the Lords on 10 May 2023 after it was agreed that a complainant would need to have exhausted the free speech complaints scheme before going to court unless bringing civil proceedings for an injunction only.
Setting the Boundaries of Debate
The legislation’s complaints system will be overseen by the OfS’s new Director for Free Speech and Academic Freedom, Professor Arif Ahmed. Appointed to the position in August 2023, he left the post of Commissioner to the Equality and Human Rights Commission which he’d been appointed to in late 2022 by Kemi Badenoch MP.
Ahmed was previously a member of the FSU’s Advisory Council and was part of the group of academics focused around Cambridge University that developed into the FSU.
Despite its stance against cancel culture, the FSU website “celebrated” the “critical role” played by Ahmed after his campaign at Cambridge forced plans to allow anonymous reporting of microaggressions to be dropped, and resulted in the resignation of Stephen Toope, Vice-Chancellor of the University in 2021.
Details of the new complaints system have yet to be released, however on 25 March, when Ahmed was interviewed on the Today Programme regarding what would be considered a breach of free speech, he was unable to provide examples, stating that each case would be judged on individual merit.
Subsequently, the OfS announced a consultation period, lasting until 24 May, on proposed new guidance for higher education providers and students’ unions on fulfilling “new free speech duties which are expected to be from August this year”.
Ahmed will have considerable influence in setting the boundaries of debate in higher education. Critics have raised concerns that the threat of large financial sanctions could create a climate of fear where individuals feel unable to challenge abusive or derogatory comments.
This March, Bromley Council in London has passed a proposal to “enshrine free speech” above “HR-style inquisition and political snitching” after councillors worked for many months with the FSU to write the policy. The policy will protect strongly held beliefs and allow councillors to “challenge, without repercussions.” The FSU is hoping other councils will follow Bromley.
On Shallow Ponds and Effective Altruism
In the wake of the sentencing of SBF last week there were two mighty takedowns of effective altruism: one (here) “The Deaths of Effective Altruism Sam Bankman-Fried is finally facing punishment. Let’s also put his ruinous philosophy on trial” by Leif Wenar (Stanford) at Wired; the other and better written, “Neo-Utilitarians Are Utter Philistines” by Justin Smith-Ruiu (Paris) at his (here) Substack (Hinternet). In response Richard Pettigrew (Bristol) wrote a rather sensible criticism, “Leif Wenar’s criticisms of effective altruism” at his blog (Richard’s Substack). On of our very own, Chris Bertram, shared it it on social media with a note that Wenar’s piece was shared widely without “a sober assessment of the merits of his arguments.”
Now, I am an avid reader of Pettigrew’s blog because more than anyone today, he makes on-going debates in formal epistemology and decision-theory available to wide audiences in a relatively fair and relatively accessible fashion. And like the very best blogs, he also shows the salience of different debates within some specialist area to other areas of philosophy (and the sciences/life). I also find Pettigrew rather judicious generally.
Now, the effect of Pettigrew’s piece is to offer a kind of rehabilitation of effective altruism as an imperfect and wiser tool (more attentive to practical, local knowledge) that allows one to do at least something about mitigating awful suffering. I quote Pettigrew’s take-home message before I step back from the debate (and then join it):
Lurking here is our collective susceptibility to the pull of Singer’s shallow pond thought experiment (which Pettigrew also draws on in his piece). (Wenar even calls it “the most famous argument in modern philosophy.”) And because of this susceptibility we (professional philosophers) find it so difficult to abandon effective altruism, and we often find the takedowns of it so crappy.
Pettigrew reconstructs Wenar’s argument as having two parts: one is about the negative externalities of our actions; and second is about the uncertainty of the effect of our actions:
Pettigrew nicely shows that neither is sufficient to undermine continued commitment to effective altruism. He then also criticizes (quite rightly) Wenar’s own hyper-individualist proposed alternative. In fact, Pettigrew then adds, “too often, criticisms of the movement have found fault without offering a workable alternative that recognises the extreme suffering and hardship that exists as well as the enormous relative wealth of many people in countries like the UK, the US, and Europe.” Crucially, absent a better alternative effective altruism is left standing as an imperfect tool that allows one to do at least something about mitigating awful suffering.
Now, I suspect Pettigrew would grant that were effective altruism to make the world worse (did more harm than good) then critics would not be required to articulate a better alternative. My own uncalculated opinion is to stipulate that GiveWell is a net benefit to the world, but this is not obviously true of effective altruism as a movement (with key commitments to ‘earning-to-give’ and ‘long-termism’) which went all in on SBF and also seems to have been captured intellectually by the economic interests of Billionaires (and those with a PhD who need a research intensive positions). It is not implausible to worry that given the status quo that the economic opportunities which one pursues in earning-to-give may itself generate net-harms to the world’s most suffering (either directly or as externalities).
In fact, I may be too charitable [ha!] to GiveWell. Pettigrew ignores an important element of Wenar’s argument. And this also points to an important further difference between saving a child in a shallow pond and what we might call ‘long distance altruism.’ Wenar suggests it is utterly predictable that while the impact on those that suffer most is unclear such long distance altruism is (i) a net beneficiary to those who work for NGOs and make careers in aid agencies and their infrastructure [let’s stipulate for the noblest of motives] and (ii) distorts local incentives/power structures that disadvantages those that suffer most. (This is just one reason why critics of modern development-aid often describe it as neo-colonialism.)
So, where are we? One may well think, as Pettigrew seems to imply, that the shallow pond thought experiment shows us that absent better alternatives effective altruism is the way forward, the only game in town as it were. Pettigrew can grant that the causal chain between donor and recipient is much longer; that intermediaries will capture some of the (ahh) rents; that it is predictable that there are unforeseeable (negative) effects and externalities of donations, and that long distance charity shifts incentives among recipients in ways that are undesirable. Such imperfections are part and parcel of ordinary agency. Indeed, I myself see no reason to criticize folks who give to or work at GiveWell.
But it’s not true that there are no workable alternatives at all to effective altruism to reducing the extreme suffering and hardship over the medium and aggregate term. For example, South Korea was really a very poor country half a century ago. Within a generation it has become a very wealthy place (even though it was run by a corrupt and cruel dictatorship for part of this history and spent quite a bit of GDP on defense). Whatever the multiple causes of its development are I am fairly confident charitable giving by outsiders is not to be listed among the most significant. One can repeat that claim for many of the billions that have left extreme poverty behind in the past half century.
What I am hinting at is that while the shallow pond may be a good model to help us think about our immediate duties, it is a bad model to help us think about the relationship between would be donors and the suffering poor in the context of development. I have four important features in mind. The first three are familiar from the scholarly literature.
First, Wenar and Pettigrew both focus on distance/length of the causal chain between would-be-donor and recipient(s) in their arguments. But what neither mentions explicitly in their posts is that the distance involves borders and dramatic institutional and political differences. While donor and recipient live in one global world, their wealth differences are, at least in part, an effect (and a cause) of international and domestic rules/institutions (etc.) that structure their interactions and also generate unequal opportunities. In the case of Wenar this omission is a bit odd (as even a modest glance at the chapter titles of his Blood Oil: Tyrants, Violence, and the Rules that Run the World reveals).
Second, to change rules and institutions is generally out of any individual hands, but involves collective and political action. As I noted in my series of pieces (The first here; second here; third here; fourth here; fifth here; sixth here) on MacAskill’s What We Owe to the Future (and Population ethics more generally) what’s been so odd about effective altruism is that the need for collective action is fully internalized in its DNA; it presents and understands itself as a world-historical ‘movement.’ But the collective action among effective altruism has not been generally oriented toward institutional, political, or regime change. (One can’t help wonder whether this isn’t an effect of being geared toward recruitment of those that benefit most from the economic and educational status quo.)
Nineteenth century Benthamite-radicals saw this differently and promoted education, open borders, free trade, impartial justice systems, secure property rights, representative government, etc. Many of these are still worth pursuing globally. (One may well add to this list reducing the bargaining power of extractive industries, etc.) Given that even Pettigrew grants some of the harms of existing altruism, it is worth asking whether in many cases promoting better institutions and rules (and free trade/movement) may do better in the aggregate and over time than any direct charitable giving.
I don’t claim originality. Back in the day, in a famous article, Wenar himself noted that “citizens of affluent countries can abolish the disastrous “might makes right” rule by using their own institutions to enforce the basic principles of legal trade.” As Wenar notes many ordinary consumer transactions rely on the theft of property from the poorest people who are systematically denied the benefits from ‘their’ resources.
Third, the shallow pond doesn’t ask us to explore how the drowning child got in the situation in the first place. It would be unseemly to do so, after all. This is a feature and not a bug of any forward looking approach (like utilitarianism and the decision-theoretic approach focused on the expectation of good that Pettigrew himself promotes). Now, one might recoil from doing so from a noble desire to avoid victim blaming of the child or its care-givers. But the world’s most suffering may be suffering in virtue of not just bad existing rules/institutions, but also grave historical injustices and oppression (and subsequent lock-in). Effective altruism deliberately brackets history (for the cultural damage this does see also Justin Smith Rui), and, thereby, leaves, say, reparations off the table.
Let me put my own cards on the table, and get to the fourth and final point. The philosophies of the past and the philosophy developed today is often inevitably intertwined with the exercise of power. What makes Benthamite-radicalism, warts and all (and I tend to emphasize the warts), so admirable intellectually in its historical incarnation was its willingness to recognize its own theorizing as itself a kind of (discursive) power in shaping the ends of ‘philanthropy’ (by which it meant individuals and governments), and its inevitable reliance on power to actualize its ends. (On Bentham’s own political realism I warmly recommend this piece by James Vitali.) And yet today in professional philosophy when we model influentially (with thought experiments like the shallow pond and, say, the out of control trolley) how to think of our agency, we deliberately bracket the complexities of power and politics entirely. Until we learn to see this as a category error, it’s unlikely we can exercise our agency in wise ways.
- A slightly different version of this essay was first published (here) at Digressionsnimpressions.
Indiana’s DEI Law
Here in the U.S., my home state of Indiana has a new state-mandated DEI initiative: The law specifies that:
“Each board of trustees [of a public college] shall establish a policy that provides that a faculty member may not be granted tenure or a promotion by the institution if, based on past performance or other determination by the board of trustees, the faculty member is:
(1) unlikely to foster a culture of free inquiry, free expression, and intellectual diversity within the institution;
(2) unlikely to expose students to scholarly works from a variety of political or ideological frameworks that may exist within and are applicable to the faculty member’s academic discipline; or
(3) likely, while performing teaching duties within the scope of the faculty member’s employment, to subject students to political or ideological views and opinions that are unrelated to the faculty member’s academic discipline or assigned course of instruction.”[i]
Coverage of the law in The Chronicle of Higher Education emphasizes the practical difficulties with implementation as well as the law’s likely unintended consequences. Meanwhile, many teachers at these institutions vehemently oppose the law on academic freedom grounds. I’m sympathetic with these criticisms. The law is ominous indeed. It seems intentionally vague, with intellectual diversity serving as a pretext for lashing out against teachers perceived to be indoctrinating students, and it affords boards ample flexibility to punish teachers whether or not they’re doing any such thing.
But I wonder if college teachers shouldn’t make a different kind of argument against this law: Why not question the law’s premise, that intellectual diversity is our critics’ cause and not our own?
After all, the law is right in an important respect: We should hold ourselves accountable for fostering “a culture of free inquiry, free expression, and intellectual diversity within the institution,” for exposing students to “a variety of political or ideological frameworks” within our disciplines, and for practicing humility about the limits of our expertise. Assume for a minute what I believe to be true: Some of the public that distrusts us, that worries that we’re idealogues indoctrinating their children, some of the people who fit that description are persuadable. In intellectual diversity, we could loudly and publicly find shared cause with those critics. We could applaud the purported end goals of this law even as we take issue with the means through which the law purports to pursue them. And we could really think about what better means of pursuing them we can devise. What are the best pedagogical practices for fostering intellectual diversity? How can we hold ourselves and each other accountable for developing and practicing those skills? What affirmative steps can we take to foster a genuinely fruitful intellectual diversity among students and teachers?
We’re having these conversations. Can we find ways to have them with our persuadable critics? It seems to me that a crucial first step is to openly agree with our critics on three things: We are not currently nailing it on intellectual diversity; we should hold ourselves responsible for doing better; and good ideas for how to do so can come from outside our institutions. We should agree with our critics on those things even as we make the case that laws like Indiana’s are not the solution—and even as we reject the casting of higher education as hostile or indifferent to intellectual diversity.
[i] The law does other things too: It institutes board-conducted, post-tenure reviews, and it requires the boards’ diversity committees to “make recommendations to promote recruitment and retention of underrepresented students,” where the word “underrepresented” replaces the word “minority” in the law as it stood prior to this change. (That latter change strikes me as a good one, and some version of post-tenure reviews seems good too, though not those conducted by boards of trustees.)
Daniel Kahneman has died
Daniel Kahneman, who was, along with Elinor Ostrom, one of the very few non-economists to win the Economics Nobel award, has died aged 90. There are lots of obituaries out there, so I won’t try to summarise his work. Rather, I’ll talk about how it influenced my own academic career.
When I was an undergraduate, in the late 1970s, economic analysis of decisions under uncertainty was dominated by the expected utility (EU) theory of von Neumann and Morgenstern. The mean-variance approach, still popular in finance, was regarded as, at best, a special case of the correct EU theory. Some early theoretical challenges, notably from French theorist Maurice Allais around 1950 had been thoroughly refuted, at least to the satisfaction of most in the field. (A more fundamental critique by Daniel Ellsberg (later famous for leaking the Pentagon Papers) had been shunted into the “too-hard” basket.)
The first big challenge to this consensus came in a 1974 paper by Kahneman and his long-time collaborator Amos Tversky (already a big name in the field of measurement theory) who found that judgements about probabilities were characterised by a variety of systematic biases, based on misleading heuristics. This set off a surge of interest in challenges to EU, including a revival of the criticisms made by Allais.
One of the key ideas here was that rather than take an arithmetic average of the utilities yielded by different possible outcomes of an uncertain, people might place more weight on low-probability outcomes like winning the lottery or dying in a plane crash. Unfortunately, the obvious approach of transforming probabilities into weights doesn’t work. Think about a choice which yields lots of different outcomes, each with a small probability and a utility close to, but below 1. The weighted average procedure will yield a value greater than 1, implying that the choice would be preferred to getting 1 with certainty. This is obviously silly (the technical term is a violation of dominance)
In 1979, while working on my undergraduate honours thesis, I came up with a solution to this problem. If the transformation is applied to the cumulative probability of getting an outcome less than or equal to some given value, rather than to individual probabilities, only the probabilities of extreme outcomes (like lottery wins and plane crashes) are overweighted and violations of dominance are avoided. This approach is now called rank-dependent utility theory
In the same year, Kahneman and Tversky published the first version of a generalized version of EU called prospect theory. Among other changes, Kahneman and Tversky used probability weighting in the problematic form described above. They avoided dominance violations in a rather ad hoc fashion, by “editing” out dominated prospects.
My own idea took the usual tortuous process to publication, eventually appearing in the (then new) Journal of Economic Behavior and Organization in 1982. It didn’t attract much attention at first, but eventually got noticed by some of the leading figures in the newly developing field of generalized expected utility theory, and even by Allais, who had returned to the topic after an absence of many decades. Finally, in 1992, Kahneman and Tversky incorporated the rank-dependent idea into their cumulative prospect theory, which became the standard version of prospect theory.
To the extent I have any fame as an economic theorist, it’s mostly due to this work. And, if you are going to engage in debate on policy issues, the credibility gained from having a (moderately) big name in economic theory makes it hard for rightwing economists to dismiss you.
So I owe a big debt to Kahneman (as well as Tversky). He will be missed.
Uber, but for Human Communication
You open the app and immediately the algorithm shows you what you want.
All the drivers in the world—and the algorithm someone finds the one who will get you where you want to go, as cheaply as possible!
Uber makes it harder to sustain the myth of “the algorithm.” As I wrote in Mother Jones last month, there are three inputs to the quality of a recommendation algorithm. We tend to focus on consumer data and machine learning expertise, but the third is usually the most important: the size/quality of the “content library” from which recommendations are drawn.
This is easy to think about when it comes to Uber’s “recommendation algorithm.” Geolocation has become mundane; we can at least imagine the process involved in matching drivers and riders, even if we don’t know the technical details.
The Uber recommendation algorithm works better when there are more Uber drivers, near you and willing to accept the lowest wage possible.
Improvements to the Uber recommendation algorithm therefore require interactions with systems external to the app itself: lobbying governments, dealing with lawsuits from disabled riders, breaking drivers’ unions, and even pushing for the development of cars without human drivers.
Despite all the technical flash and “new media” sheen, the same is true for TikTok.
The economists tell us that the producers of both short car rides and short-form video are “rational actors”—they derive more utility from posting/driving than from whatever else they might be doing, so what’s the problem? Both parties benefit or else the transaction wouldn’t take place.
The problem is that the profit margin of these 100-billion-dollar companies depends on running a two-sided market in which they allocate all of the benefits from this transaction to the consumers, leaving the producers with as little surplus as possible, just at the margin between quitting and continuing to work.
In our award-winning paper “Fifteen Seconds of Fame: TikTok and the Supply Side of Social Video,” my co-authors and I demonstrate that TikTok has been remarkably successful in incentivizing the production of short-form video. Compared to YouTube, a dramatically higher percentage of people who leave comments (on political videos, in our case) also produce videos for the app.
This is the basis of the magic of “the algorithm.” TikTok can only show you videos about Capricorn cottagecore carnivores because someone posted videos about Capricorn cottagecore carnivores.
The overall effect of Uber’s algorithm maximizing consumer welfare (at the expense of producer welfare) is up for debate; obviously everyone likes cheap cab rides, but there’s also something to be said for stable, comfortable employment as a bulwark against populism or even more radical politics. Citizens don’t cease to be voters when they clock in.
The situation for TikTok is different because media is not a “normal good” like cereal or cab rides—it is an “information good,” with very different properties. Most salient are evaluation (you can only check whether a TikTok is any good by consuming it — and they’re all unique) and non-rivalrous consumption (unlike a given bowl of cereal, my watching a given TikTok doesn’t mean that you can’t also watch that TikTok).
The above is true of all social media, not just TikTok. But the platform is unique in transcending the social network in favor of the recommendation algorithm. More than 2/3 of time on the app is spent on the algorithmically-generated For You Page. This makes TikTok different from YouTube, Instagram (pre-2021) and Twitter (pre-X).
The latter are truly social networks; the follower/following action is central to how information circulates. This made it possible for creators to accumulate network capital. If your account has a million followers, there’s a certain amount of exposure guaranteed for your posts. From the perspective of creators as economic actors, this ensured a degree of stability and security.
The centrality of algorithmic recommendation removes that stability. Much of the magic of “the algorithm” is the ability to force every creator to compete with every other creator, regardless of the number of followers they’ve accumulated. The “reserve army of the unverified” summoned up by the algorithm enforces precaritazation among all of the posters—just like Uber’s algorithm represents a precaritization of drivers vizaviz the previous taxi system, in which scarcity and safety was enforced by regulation.
Again, in the Uber case, the clearly benefits from lower costs. But for an “information good” like a social media post, the social welfare implications are far less clear. Certainly, many observers seem to think that our information environment is less healthy than it was in the previous, more restricted and regulated media regime.
But there’s another key way in which “the algorithm” is different on TikTok. Uber drivers don’t get addicted to driving in the way that TikTok creators become addicted to posting.
Addiction, in the economic framework, can be thought of as a persistent cognitive bias. Gamblers at a casino are obviously not maximizing their expected returns; they’d end up with more money just sitting on the couch.
The logic of variable rewards is essential to cultivating this bias in gambling addicts. The possibility of hitting it big on the next spin makes it extremely difficult to stick to rational utility maximization; this is literally the mechanism that drives BF Skinner’s operant conditioning. Natasha Dow Schüll’s classic book Addiction by Design explains how the designers of gambling machines take this logic into account to get people hooked on slot machines.
And TikTok’s algorithm works in exactly the same way. In contrast to the social network, in which explicit followers serve as the base audience for each post, TikTok increases the variance in the viewership for any given post — making it much more likely that one will go viral.
To test this, ask a young person if any TikTok post by them or someone they know has gone viral; when I do this to a class of 35 undergrads, usually one or two of them have gone viral themselves. But then ask the same about a post on any other platform. You’ll find that this is much rarer, and that the possibility of going viral is explicitly part of the appeal of TikTok.
Or if you prefer peer-reviewed quantitative analysis, our paper finds significantly higher inequality in the viewership for a given account on TikTok than on YouTube.
So this is the central engine of TikTok, and another way in which “the algorithm” is different here than for Uber: creators are actually posting an irrational amount, investing more time and energy than they rationally should, because they are mistaken about the costs and benefits. Going viral is like the high of winning a big bet, or like the high of getting high: it programs you mostly to want to get high again.
Karthik Srinivasan provides quasi-experimental evidence that this is the case:
“After going viral, producers more than double their rate of content production for a month.”
Many states have a monopoly on gambling — and they still buy ads, in order to make their citizens make a mistake.
That’s terrible — but we shouldn’t replicate it for TikTok, the Uber…but for human communication.
Programming note: It’s Ban TikTok Week over at my personal blog. In a experimental departure, I’ll post one short article a day — so if you’re interested, head over there and subscribe, I won’t be clogging up the Crooked Timber pipes. For background, see my talk “The United States Should Ban TikTok” presented at the Notre Dame Keough School of Global Affairs in November 2022.
Capitalism Is Dead – Long Live Capital
In his latest book, Technofeudalism, the maverick academic-turned unlikely Minister of Finance-turned enfant terrible of European politics Yanis Varoufakis argues that capitalism has ended. It has not, however, been destroyed by the workers of the world – it has been killed by capital itself. The idea, in a nutshell, is the following. As a response to the combined effect of the privatisation of the internet on the one hand, and the nearly no-strings-attached way with which states have injected eye-wateringly large sums of money into banks and large businesses after the 2008 financial crisis on the other, rent has supplanted profit as the main driver of the global economy. As Varoufakis put it, “Insane sums of money that were supposed to re-float our economies in the wake of the financial crisis and the pandemic have ended up supercharging big tech’s hold over every aspect of the economy.” Against the backdrop of a privatised digital world, post-2008 and then post-2020 public investments into the economy have not stimulated growth, because they have not triggered increased investments. Instead, they have enabled “cloudalists” to become digital rentiers, capable of exercising passive control over workers; over users who de facto work for them for free (by sharing and generating precious data); and crucially, over old-school capitalists.
The reference to feudalism is quite literal: capitalists, according to Varoufakis, are still doing very well, but they are no longer running the show. They have turned into (very well-off) vassals, who have to pay their dues to techno-feudal lords (Amazon; Google; Apple; Meta) – say, in order to selling and/or advertise on such platforms. The reason why this is the case is that rent-based capital has, just like under pre-industrial feudalism, supplanted profit-based capital as the driver of the economy. The fundamental system is no longer one where the capitalist extracts value from workers to generate as much profit as possible and be competitive in the market; re-invests in new machineries, technologies, etc., in order to make profit extraction ever more efficient; and thereby generates growth and innovation. It has rather become one where big tech bosses act like feudal lords – rentiers who own digital, rather than natural, “land” and can extract value (albeit in slightly different ways) from everyone who want or need to use their platforms. Like medieval lords, their power and wealth comes from sheer rent – for which, in a certain sense, they do not need to “do” anything.
Varoufakis is no naïve (not on all fronts, at least) so he qualifies this claim in several ways. Most importantly, people like Elon Musk and Zuckerberg still project a businessman-like image of hyper-activism, innovativeness, insatiability, and creativity. They appear to be constantly after “the next big thing.” This is not just for show: of course they compete, and of course competition requires coming up with new ideas. But many feudal lords were not lazy, either: competing for power and dominance is hard work – yet, it is still different from the competition based on profit and market dynamics which constitutes the backbone of capitalism.
The most interesting idea in the book is how the metaphor of feudalism (although he doesn’t see it as a metaphor at all, of course) enables us to see the connection between two particularly prominent phenomena of the last couple of decades. On the one hand, the incredible rise in inequality and the idea that we are ever more under the power of an ever richer, ever more dominant few. On the other, the common perception that we are more and more isolated from one another – that “the algorithm” and echo chambers send down distorted and distorting rabbit holes. Varoufakis suggests that the rent-based digital power of big tech is the connection: these new overlords are both the new rent-based aristocracy – thus explaining the rise in inequality – and the atomisation and customisation of our experiences on their platform is the result of their own special brand of the “Divide et Impera” strategy:
“Imagine the following scene (…). You are beamed into a town full of people going about their business, trading in gadgets, clothes, shoes, books, songs, games and movies. At first, everything looks normal. Then you begin to notice something odd. It turns out that all the shops, indeed every building, belong to a chap called Jeff. He may not own the factories that produce the stuff sold in his shops, but he owns an algorithm that takes a cut for each sale and he gets to decide what can be sold and what cannot.
(…) Except that isn’t all. Jeff (…) also owns the dirt you walk on, the bench you sit on, even the air you breathe. In fact, in this weird town everything you see (and don’t see) is regulated by Jeff’s algorithm: you and I may be walking next to each other, our eyes trained in the same direction, but the view provided to us by the algorithm is entirely bespoke, carefully curated according to Jeff’s priorities. Everyone navigating their way around Amazon – except Jeff – is wandering in algorithmically constructed isolation.
This is no market town. It is not even some form of hypercapitalist digital market. Even the ugliest of markets are meeting places where people can interact and exchange information reasonably freely. In fact, it’s even worse than a totally monopolised market – there, at least, the buyers can talk to each other. Not so in Jeff’s realm, where everything and everyone is subject not to the disinterested invisible hand of the market but to an algorithm that works for Jeff’s bottom line and dances exclusively to his tune.” (The longer version of this description can be read here)
Some of Varoufakis’s critics on the left find that this reading idealises the market, and encourages a nostalgic view of market competition as something good, dynamic, egalitarian even. Unlike classical liberals, however, those on the traditional left have always seen markets as the very basis of capitalist class domination. I understand this concern – but I must say I don’t really care much about whether Varoufakis is right or whether, for better or worse, we are still living under capitalism (see also another similar line here).
I find the insight that we no longer live in a common market – which of course relies on a set of intuitions that have been around for a while and have been hinted at by many, but which has never been spelled out quite as clearly – uniquely valuable regardless: it’s this specific opacity that we have we fight against, because we operate in a social world where we can no longer even rely on having the same benchmarks, the same reality in front of us. Depending on how we use the digital platforms of the cloud-based overlords, we end up having a different perceptions of…well, potentially everything. Against this background, the individualistic exhortation to “pierce our bubble” and try to get out of our echo chambers is just as futile as the idea that climate change will be solved by me learning to recycle a little bit better. The problem is systemic: this is the special way in which cloudalists consolidate their dominance.
This might be the end of capitalism; it’s transformation into something even more sinister; or simply a new brand of global market economy. Maybe Varoufakis’s technofeudalism is yet another seriously mistaken prediction of capitalism’s death. Yet the idea that fighting it requires grappling with how to escape collectively from “carefully curated isolation” remains a crucial insight. If only we knew how.