Just when the neoliberal model appears to be mired in a global crisis of economic stagnation and has lost any pretense of legitimacy, a new sector of the globalized economy has emerged that is not only registering healthy profit margins, but is reviving the neoliberal ideology itself, under a new guise.  In effect, a handful of transnational Internet corporations, through a process of rapid oligopolistic concentration, now dominate the new digital economy.

The raw material these enterprises covet is data, which they extract from almost every on-line transaction and communication, taking place around the world.  Google, Apple, Facebook, Amazon and Microsoft (the so-called GAFAM), are among the main exploiters of these symbolic goods, that Internet users and transactions provide them with and that are then concentrated in the US, constituting a new source of wealth and power.  Thus, this data mining activity represents a new form of extractivism responding to a neo-colonizing logic, the full implications of which most governments, especially those in the global South, are unaware of, or powerless to prevent.

The issue goes far beyond just collecting and processing data for selling to advertisers.  These data are also the raw material of artificial intelligence (AI) and of the algorithms that organize and regulate ever more aspects of our lives and societies. These processes are most often defined in secret, according to company criteria, which can generate problems when the public interest is affected and democratic mechanisms are circumvented.

One of the most visible examples has been the conflicts certain cities have had with businesses such as Uber, whose software connects informal vehicle drivers with private passengers, but under Uber’s own terms, often creating a serious conflict with registered taxi drivers and the public system that regulates their service, as well as evading labour rights as they claim not to be an employer.

The problem can become much more complex when, for example, formerly public services of so-called “smart cities”, such as traffic management or the electricity grid, begin to be run by private tech companies according to their own criteria, whose decisions can potentially override local councils.  The algorithms they create and the data they generate are usually reserved as the property of the company; so once a contract is in operation, even if they are not satisfied with the service, it becomes almost impossible for a city council to take the decision to rescind it, because the whole city could be left in chaos until a new system can be put in place.

Only a few global actors at present have the sufficient capacity to collect and manage such huge quantities of data resources, and the fact that they are mainly US-based transnational corporations – and the US government itself – is due to a great extent to the control that country exercises over the global Internet.  Even the major powers face difficulties in countering the monopolization this entails; and for most developing countries it looks way out of reach.

Following the revelations of Edward Snowden, governments in the global South were alerted at least to the dangers of electronic spying by the US National Security Agency (NSA). In the case of South America, in 2012, the presidents of the Union of South American Nations (Unasur -- which groups together the 12 independent nations of the subcontinent) responded by commissioning the region’s Council on Infrastructure and Planning (COSIPLAN) to install a South American optic fiber ring in order to establish a certain level of sovereignty over intra-regional communications, which currently pass mainly through the US.  They also mandated the region’s Defense Council to develop a plan of cyber defense and cyber security.^[1] However, these are very partial responses and the dangers of new threats related to data extraction, algorithms and AI does not yet seem to be on the regional agenda; much less how to adequately respond.

Data: the key to artificial intelligence

For an analysis of these challenges, we conversed with Belarus-born journalist and essayist, Evgeny Morozov, best known for his polemical critique of Silicon Valley as an extension of US power, who describes the current situation in these terms: “the project of most American technology firms at this point is to keep on growing internationally, expand as much as they can, and do so in order to extract as much data as they can -- about the behaviours, anxieties and desires of local populations -- which can then be packaged and sold for advertisers; but also, it can then inform and help them build much better artificial intelligence projects”.

This, Morozov explains, is an aspect which many people fail to understand: “they think that the problem here is the commodification of audiences and nothing else.  But I think that’s a very mistaken view because, ultimately, what it also allows to do is to build these immensely powerful artificial intelligence platforms that can then help automate, not just a lot of commercial services, but also a lot of the functions that we previously associated with the State; and not just in terms of security, crime and terrorism fighting, but also increasingly in terms of education, health and other things”.  As an example, the analyst (who has been living in recent years in the US and Europe), quoted the news that Microsoft can now apparently infer the probabilities that an Internet user has pancreatic cancer, even before they are diagnosed, just by looking at their Internet search queries; this “hints at what this massive aggregation of data, combined with all sorts of highly individualized health diagnostic services, can actually do.”

A precondition for the AI project of such corporations, Morozov explains, is that everybody must be online and exchanging (which is at present the case of only about half the world’s population).  Therefore, many of these firms are now providing subsidized connectivity through programs such as Facebook’s Free Basics (recently defeated, at least partially, in countries like India^[2]) or Google’s project Loon (connectivity with drones and balloons).

“There’s also a vision of unlocking people’s ‘inner entrepreneurial potential’,” continues our interviewee.  So the argument goes that “now that they’re online, and they have the tools and the apps, they can all become this kind of ideal types that people like Hernando de Soto dreamt the local populations could be.  Once you give them the tools, you can end up with this extremely neoliberal utopian dream vision where everyone gets out of poverty solely by becoming an entrepreneur.” Thus, he concludes, Silicon Valley is integrating the historical vision long advocated by the World Bank and IMF, among others.

Latin America: the challenge of technological sovereignty

With respect to what steps Latin American governments might be able to take to start addressing these issues, Morozov emphasized technological sovereignty.  “Even an initial technological sovereignty used to be on the agenda of policy makers in this region who are already preoccupied with other types of sovereignty: food sovereignty, energy sovereignty, some kind of infrastructural sovereignty, and I think all of that is very good and constructive.  The problem is that if you don’t understand the implications for sovereignty that data networks and sensors pose, you might miss out on your other fights.  The fact that a company like Monsanto now moves in and purchases every single big-data start-up working in agriculture, or a company like IBM buys the Weather Channel that is the company that basically has the best ability to predict weather, with all sorts of implications for agriculture and other domains, to me implies that even a question like technological sovereignty is not a stand-alone issue at this point.  It’s something that fuses with other fights for sovereignty; and if the project to restore and preserve sovereignty is still alive in this region and elsewhere, you cannot do it without bringing technological issues to the table.”

Among others things, this would mean questioning the solutions for data ownership that are put forward by the tech companies, which, according to Morozov, can be summed up as: 1) “forget about data because if data stays with us, Google and Facebook, we’ll offer you all those subsidized services, so don’t even think about it as a political thing;” and 2) “data is by default private property and you have to have a strong private property regime around that and facilitate markets”. 

This, he continues, would mean renewing the on-going debate on property regimes, understanding that “there are more political units in the world than just individuals interacting through the market” whose problems are solvable “as long as you are willing to accept that the market will step in and help you resolve them either by purchasing an app or by surrendering all your data to Google or Facebook”.  It would also mean thinking about “the ways in which communities, cities, nation states and so forth can still find ways to pull this data together in order to better plan…”  But, he speculates, who still talks about planning? Apart from a few Latin American countries, “the only actors doing organized planning at this point are giant firms.”

Evgeny Morozov, who considers the tech firms now practically run Western politics, emphasizes that “the ability of Latin American governments to resist Silicon Valley is ultimately a function of their ability and desire to resist neoliberalism as such”.

The anti-neoliberal governments that have predominated in South America over the past decade, and the renewed initiatives of regional integration, autonomous of the global powers, such as Unasur and ALBA^[3], would potentially have represented one of the few areas of the world with the political capacity to take on these issues collectively.  However, the impact of the economic crisis, added to the recent political changes in countries such as Argentina, Brazil and Venezuela^[4] make this possibility much less likely.

In this complex political and economic situation of the region, Morozov recognizes that the conditions are not favorable for taking on these issues and the political will is lacking.  Moreover, understandably, even in the countries with progressive governments, the fight for the basic survival of their project is taking precedence over such considerations.  “Politically, I understand how difficult this situation is for any left-standing government in Latin America that still wants to resist the neoliberal strait-jacket,” he adds.

(To be continued)

- Sally Burch is a journalist with ALAI