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The Internet's Network Efficiencies Are Destroying the Middle Class

Unknown Lamer posted about 3 months ago | from the computers-don't-kill-executives-do dept.

Businesses 674

Hugh Pickens DOT Com writes "Joe Nocera writes in an op-ed piece in the NYT that the same network efficiencies that have given companies their great advantages are becoming the instrument of our ruin. In the financial services industry, it led to the financial crisis. In the case of a company like Wal-Mart, the adoption of technology to manage its supply chain at first reaped great benefits, but over time it cost competitors and suppliers hundreds of thousands of jobs, thus gradually impoverishing its own customer base. Jaron Lanier says that the digital economy has done as much as any single thing to hollow out the middle class. Take Kodak and Instagram. At its height, 'Kodak employed more than 140,000 people.' Kodak made plenty of mistakes, but look at what is replacing it: 'When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people.' Networks need a great number of people to participate in them to generate significant value says Lanier but when they have them, only a small number of people get paid. This has the net effect of centralizing wealth and limiting overall economic growth. It is Lanier's radical idea that people should get paid whenever their information is used. He envisions a different kind of digital economy, in which creators of content — whether a blog post or a Facebook photograph — would receive micropayments whenever that content was used. 'If Google and Facebook were smart,' says Lanier, 'they would want to enrich their own customers.' So far, he adds, Silicon Valley has made 'the stupid choice' — to grow their businesses at the expense of their own customers. Lanier's message is that it can't last. And it won't." The micropayments for content idea sounds familiar.

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674 comments

Instagram didn't replace Kodak (4, Insightful)

Luthair (847766) | about 3 months ago | (#45887083)

Kodak was replaced by a whole slew of companies that make components for digital cameras, cell phones, picture hosting, digital frames, etc.

Re:Instagram didn't replace Kodak (5, Insightful)

Anonymous Coward | about 3 months ago | (#45887221)

I think you might be missing the point. He's saying that the new information/digital economy requires less people to run it and is therefore reducing the overall number of jobs.

Whether he chose Instagram/Kodak as an example or any of a variety others doesn't really matter. His point isn't wrong. Though I think the micro-payments that he's pushing sound like permanent DRM and something out of Stallman's "Right to Read" story.

Re:Instagram didn't replace Kodak (2)

BobMcD (601576) | about 3 months ago | (#45887283)

Whether or not his point is wrong is completely disconnected from that terrible example. The quality of that comparison is rather like how a peanut compares to a car.

Re:Instagram didn't replace Kodak (1)

jythie (914043) | about 3 months ago | (#45887481)

I guess it depends on which narrative you read into it. I rather agree with the AC, I didn't see it as a 'X replaced Y' example but instead one of what kind of workforce highly valued companies require using two examples that the audience is likely to be familiar with.

Re:Instagram didn't replace Kodak (2, Interesting)

Mashdar (876825) | about 3 months ago | (#45887495)

The quality of that comparison is rather like how a peanut compares to a car.

There are a whole lot of peanuts out there. The complexity of products is growing swiftly, and engineering hours are reasonably well paid hours. Complete vertical integration is pretty much dead, so comparing any empire of the past to any consumer front-end today is disingenuous.

As for whether or not overall worker pay is lower, nearly all free and competitive markets are a "race to the bottom" because consumers are rarely informed enough to purchase anything other than the least expensive (or most hyped) product. If this affects the job market. the consumers get the jobs they deserve. (Shit jobs for shit products and shit pay, because they wanted those shit products.)

The Internet doesn't kill jobs, people kill jobs. (TM)

Re:Instagram didn't replace Kodak (0)

Anonymous Coward | about 3 months ago | (#45887589)

Hard outer shell with nuts inside?

Re:Instagram didn't replace Kodak (2)

MightyYar (622222) | about 3 months ago | (#45887427)

It's not only "Stallman-esq" DRM (can I say that?), it doesn't change the fundamental problem. People aren't providing free content because it is too hard to get paid for it. They are providing free content because that is what is expected from the internet - people won't pay for it. You can have the most convenient, zero overhead cost currency possible and people still won't click on the pay article or video, they will click on the free one.

And any DRM scheme that is pervasive enough to protect all content on the internet will be easily defeated... the keys will be all over the place.

Re:Instagram didn't replace Kodak (1)

jythie (914043) | about 3 months ago | (#45887519)

Well, they could potentially use something similar to compulsory licensing. Take some common or critical part of the internet (say, backbone traffic) and associate a fee or tax on that with distribution based off some kind of centralized usage statistics. Abstract it away from the end consumer so they are not directly aware of it.

That is how it could work, though historical examples of such systems have not been all that helpful to industries, so I do not think it would be a very good solution.

Re:Instagram didn't replace Kodak (4, Informative)

Thornburg (264444) | about 3 months ago | (#45887353)

I'd like to say "mod parent up", but it's already at 5.

This "article" lost all credibility the moment they claimed that Kodak was replaced by Instagram. Kodak was functionally dead long before Instagram was a twinkle in someone's eye. If I was going to try to pin one company as replacing Kodak, it would have to be Apple, since more photos are taken with iPhones than with any other single manufacturer's cameras. I guess that's a less sensational claim, since Apple employs ~90,000 people and is still growing.

As to the real reason for Kodak's demise, they waited too long to go digital, and they screwed it up when they did go mainstream digital. For example, early mainstream Kodak digital cameras used more compression on their JPGs so you could fit more into the tiny built-in memory or small Smartmedia cards. Unfortunately for Kodak, most people care more about the quality of the images than the number they can fit on a card. I'm sure that market research said people wanted to be able to take more pictures, but it didn't actually drive sales. Kodak persisted in this for long enough that the reputation for poor image quality stuck even after they stopped using excessive compression by default.

Re:Instagram didn't replace Kodak (2)

drinkypoo (153816) | about 3 months ago | (#45887395)

Kodak cameras were just always horrible to use, with the worst interfaces of all the major names. Except, sadly, sometimes polaroid of all people would screw it up worse

Re:Instagram didn't replace Kodak (5, Informative)

jythie (914043) | about 3 months ago | (#45887559)

Eh, the 'real reason' for Kodak's demise had little to do with Apple or consumer products in general. Kodak was killed by corporate raiding, a corrupt CEO got stock payoffs for short term gains due to selling off one profitable division after another, leading to long term failure of the company. We tend to focus on Kodak's consumer products on sites like this because, well, we are average consumers and our world revolves around us, but we are not the only market and the lion's share of Kodak's revenue did NOT come from retail products.

Re:Instagram didn't replace Kodak (1)

jonbryce (703250) | about 3 months ago | (#45887567)

I would name Nokia as the company that replaced Kodak, because while the iPhone may be the most popular camera phone now, it came fairly late to the game and replaced other camera phones from companies like Nokia, not Kodak cameras or other cameras with Kodak film.

Re:Instagram didn't replace Kodak (1, Insightful)

multisync (218450) | about 3 months ago | (#45887431)

Not only that, Lanier seems to be confused about who Facebook's customer is. Hint: it's not the user.

Here We Go Again (1, Insightful)

Anonymous Coward | about 3 months ago | (#45887089)

It's the Internet's fault! It took ur jerbs! It is wrecking the middle class. The Internet cause the financial crisis, not unmitigated greed and stupidity.

Give me a fucking break. How did this half-wit get published by the NY times?

Re:Here We Go Again (5, Insightful)

i kan reed (749298) | about 3 months ago | (#45887239)

Because "divert blame from the upper class" has become a lucrative job with lots of cash coming in.

Re:Here We Go Again (0)

Anonymous Coward | about 3 months ago | (#45887465)

It is not very effective though. The upper class appears to be the universal boogeyman again.

Re:Here We Go Again (1)

SpockLogic (1256972) | about 3 months ago | (#45887287)

It's the Internet's fault! It took ur jerbs! It is wrecking the middle class. The Internet cause the financial crisis, not unmitigated greed and stupidity.

Give me a fucking break. How did this half-wit get published by the NY times?

What?

By responding to your post I have created new content and I want to be paid for it. You may want a second payment for the quoted portion ...

OK, I know that's not going to happen so I'm off to spend some mod points on something more interesting.

Re:Here We Go Again (5, Insightful)

Applehu Akbar (2968043) | about 3 months ago | (#45887337)

Also because "blame technology for its inherent evil" is the default reaction to technological change of the academic handwringer class from which our journalists and columnists are drawn.

Re: Here We Go Again (2, Insightful)

Anonymous Coward | about 3 months ago | (#45887341)

Took the words out of my mouth. Automation is change and change can be very harsh. One thing about change is that it's futile to try and prevent it or hope that it won't happen. Technology at its core displaces technologies before it. Either go with the flow and learn to take advantage of it or get swept up in it's aftermath - a tough pill to swallow for some but a harsh reality.

Re:Here We Go Again (2)

mangu (126918) | about 3 months ago | (#45887521)

How did this half-wit get published by the NY times?

Hint: they also publish the bullshit that Paul Krugman writes.

It's easy to say that internet companies only employs X people, while forgetting that they do not charge users for whatever they provide.

I, for one, think the greatest economic advantage is when we are able to get things for free. There's no need to "monetize" everything.

But how... (5, Funny)

Anonymous Coward | about 3 months ago | (#45887091)

...do we throw our wooden shoes into the Internet?

WHA ?? (-1)

Anonymous Coward | about 3 months ago | (#45887099)

No way !! It is not !! It is China !!

Kodak paid for their lack of vision (0)

ackthpt (218170) | about 3 months ago | (#45887109)

Same way Henry Ford paid for his stubborn "You can have any color you want as long as it is black" mentality paved the way for General Motors and their dozens of models and several colors to choose from.

How about writing something about how rich people are getting by developing all sorts of new efficient internet technologies and service companies?

Re:Kodak paid for their lack of vision (1, Insightful)

circletimessquare (444983) | about 3 months ago | (#45887165)

which rich people?

silicon valley elite, sure

plutocrat class based on manipulating rules?

does not apply

Re:Kodak paid for their lack of vision (4, Insightful)

gmclapp (2834681) | about 3 months ago | (#45887247)

The reason you could only have black was because at the time of the assembly line's advent, the only 'fast-drying' paint available was black. When GM came along, different colors had been developed to meet the demand. Which Ford also used.

FYI

Re:Kodak paid for their lack of vision (0)

Anonymous Coward | about 3 months ago | (#45887599)

The reason you could only have black was because at the time of the assembly line's advent, the only 'fast-drying' paint available was black. When GM came along, different colors had been developed to meet the demand. Which Ford also used.

  FYI

Yeah, we know.

The point is not colors themselves, the point is that Henry Ford / Ford Motor remained focused on standardization and production efficiency too long, to the exclusion of personalization and customization. After a point, automobile production became so efficient and costs were so low that people were willing to spend a few bucks extra for a differentiated product. Ford was slower to recognize this and make the transition (though it did, eventually.)

Re:Kodak paid for their lack of vision (4, Informative)

Anonymous Coward | about 3 months ago | (#45887399)

Kodak was fucked over by inept management. At the beggining of the digital switchover, Kodak was actually one of the pioneers and the future was bright. But management thought this new digital thingamajiggies were a fad, so there we are. They could easily be where Canon or Nikon are now, basically owning the professional market, or Sony, owning the sensor market. But, alas, they went the way of Polaroid, instead of going the way of Canon.

The final nail in the coffin came a few years later when their braindead CEO had the brilliant idea to gamble the company's future on... printing! On a day and age where 95% of all photographs taken were already viewed on a screen of some sort, he decided that printing was a fabulous idea. Yeah, that went well.

Anyhoo, I miss Kodak, I still have a freezer full of film, enough to last me a good 10 years before I run out. I only shoot film recreationally now, probably less than 50 rolls a year. But I miss Kodachrome, Tech Pan and Verichrome Pan already, and will miss Portra NC, PlusX and TriX or Double X, which despite being motion picture film stock was widely used around the world by still photographers. Thankfully I have almost 500ft in deep freeze, as well as a shitload of TriX.

Re:Kodak paid for their lack of vision (1)

Anonymous Coward | about 3 months ago | (#45887463)

Developing new "innovative" web technologies is slowing pretty rapidly, simply because the market becomes more and more saturated and mature. There are only a few really useful applications to be developed and they are mostly about removing work. The fact is relatively simple, the internet is not creating more jobs than it is destroying. This is not the same scale as when industrialization happened, the amount of jobs rendered useless by software is nearly unimaginable. There is literally software that creates software now. So you have new technologies that remove work for humans that aren't created by humans, there is no new industry springing up to transition to, just a loss of jobs.

seriously (-1)

Anonymous Coward | about 3 months ago | (#45887113)

An awful summary written about a complete fluff article....do /. editors even read the crap that makes the front page?

Micropayments != Full Time Employment (0)

Anonymous Coward | about 3 months ago | (#45887117)

Enough said.

What about all the new jobs in the "digital" age? (5, Insightful)

cbeaudry (706335) | about 3 months ago | (#45887137)

This guy is a moron.

He's completely ignoring all the new jobs in the last 10-15 years that have been created over the years:

- Build and maintain networks
- Building data centres (construction)
- Network management and services (ISPs, etc...)
- IT support (hundreds of thousands of jobs and probably millions, small consultant companies and mom and pop shops)
- Research has tremendously increase

Seriously, his story is almost the same as "Robotics and Automation" is stealing all our jobs. But then they forgot the support industry for these new technologies.

Things change, its the way of things, people need to adapt and go back to school... or become salesmen :)

Re:What about all the new jobs in the "digital" ag (1)

Fluffy the Destroyer (3459643) | about 3 months ago | (#45887227)

I was about to write that but you took the words out of my mouth. This also applies to other other domains as well. Replacing "jobs" with another. But I would complain if x companie shuts down to open up in a 3rd world country just to save money... now thats a different story but doesn't apply here in any case.

Re:What about all the new jobs in the "digital" ag (0)

Anonymous Coward | about 3 months ago | (#45887573)

Even with the advent of the Internet, jobs in IT change. When I was in high school, the job of having media and running around reimaging PCs was a decent low-level job because it consisted of bringing a parallel port CD-ROM drive, a floppy with drivers, and a CD in its caddy with the OS. Then companies started using Ghost, and one could make a golden corporate image. However, times have changed. A reimage is done by a PXE boot in most cases, or if on a locked-down subnet, done by a USB flash drive.

Evolving and retooling is a part of life. I know that the skills I picked up in high school (AppleShare/LocalTalk file server administration and HyperCard) are absolutely useless today. The skills I learned in college (BSD/Linux/IRIX/Solaris) administration are partially useful, but that has changed as UNIX has evolved. Windows NT was on the sidelines, but come late 1990s and 2000, its successors have become a core part of the server room for better/worse.

In fact, IT has brought more jobs. Storage administrators, SAN administrators, security admins, compliance admins, eDiscovery departments, and so on.

Blame the death of the middle class on where it needs to be -- flooding markets with low cost, inexperienced H-1B workers, offshoring, and the disinterest by government in protecting industries from industrial espionage, then wondering why some foreign company has the same technology for a lot cheaper.

Re:What about all the new jobs in the "digital" ag (5, Informative)

TheCarp (96830) | about 3 months ago | (#45887323)

That just says there are sectors that are booming. This shift has left a lot of people behind. what you are ignoring is all the lower skill jobs. Now when I say lower skill, I don't mean McDonalds; I mean any job you could do with a 2-4 year non-technical degree and on the job training.

It used to be, you go to college, prove you can read, write, and take training, and you were almost garaunteed a middle class lifestyle supporting job. The entire economy was based around the plethora of these jobs.

My favorite example is the paralegal. They still exist, yes. However, it used to be a single lawyer with a big case would hire an auditorium full of paralegals just to study case law and review documents. Those days are gone, that job is done by a small handful of people. An entire auditorium reduced to maybe 2-4 people.

That is why you are seeing people with college degrees working at McDonalds and those with less education struggle to get even the shit jobs that they used to be considered "stuck with". We have seen the huge rise of part time, low wage employment.

But yes, our sector is booming and it is great. That is partially because we empower everyone else to hire less people, and use the ones they do hire more efficiently.

Re:What about all the new jobs in the "digital" ag (5, Insightful)

trackedvehicle (1972844) | about 3 months ago | (#45887523)

I decided to log-in and repost my answer as non-AC:

In both cases (digital economy/Internet and robotization) the net result is increased productivity and a smaller workforce. It is true that some new jobs are created, but they are fewer than the ones replaced.

The only solution, really, is some sort of socialist system, with higher taxes for the high-earners so that everyone has a fair share of the increased productivity. And with bigger strides in robotization, this will be mandatory, or else we'll have revolts and heads will literally roll, which would be unpleasant.

Re:What about all the new jobs in the "digital" ag (4, Insightful)

TWX (665546) | about 3 months ago | (#45887329)

Unfortunately there's way too much neglect in the industry right now. I drive around the city that I live in and more than half of the pedestals are cracked open, with plastic bags wrapped over the distribution blocks to keep water off of them. The cable and phone companies are neglecting their infrastructure and given the number of years that this has been a problem, they don't seem interested in hiring the staff or paying for the materials to fix these problems correctly.

As far as data centers, network management, and the like, the industry has headed toward ever smaller and more powerful machines, virtualization, and equipment that needs less knowledge to support it. Autoprogramming switches, that sort of thing. It's also becoming more prevalent to outsource instead of having staff on-hand, so that's not exactly helping to push us toward full employment either.

In short, it's all screwed up.

Re:What about all the new jobs in the "digital" ag (1)

Anonymous Coward | about 3 months ago | (#45887345)

These jobs require different skill sets. Retraining 10-15 years ago would have cost $1000-$2000 for a computer, many books and more importantly a lot of time.

Not everyone is suited to work in tech or understands computers.

On concentration of wealth:
Some of these jobs are also being downsized. Data centres staffing has likely been reduced over time.
Many ISPs have gone out of business in favor of major Telco operations.

I'm not trying to be an ass about your points. I know how hard it is to find work after moving back to a smaller city I know well. The quality and quantity of jobs just aren't there.

Re:What about all the new jobs in the "digital" ag (2)

DogDude (805747) | about 3 months ago | (#45887347)

None of the things you mention provide many jobs, especially compared to the industries being replaced. It's not as simple as you seem to be making it out to be.

Re:What about all the new jobs in the "digital" ag (0)

Anonymous Coward | about 3 months ago | (#45887397)

In both cases (digital economy/Internet and robotization) the net result is increased productivity and a smaller workforce. It is true that some new jobs are created, but they are fewer than the ones replaced.

The only solution, really, is some sort of socialist system, with higher taxes for the high-earners so that everyone has a fair share of the increased productivity. And with bigger strides in robotization, this will be mandatory, or else we'll have revolts and heads will literally roll, which would be unpleasant.

Re:What about all the new jobs in the "digital" ag (4, Informative)

Waffle Iron (339739) | about 3 months ago | (#45887507)

- Build and maintain networks
- Building data centres (construction)
- Network management and services (ISPs, etc...)
- IT support (hundreds of thousands of jobs and probably millions, small consultant companies and mom and pop shops)
- Research has tremendously increase

Continued developments in server and infrastructure technology are introducing major efficiency, automation and density improvements that will significantly reduce the need for jobs in all but the last of those points. So you better start looking for the next trend now.

Re:What about all the new jobs in the "digital" ag (2, Informative)

DarkOx (621550) | about 3 months ago | (#45887555)

Most of those jobs are white collar though and often require substantial investments in education which statistically pays off, but statistically works out and works out for an individual are not always the same.

There are still jobs like welder, that people can still go get hired and trained to do right out of high school but these are rapidly disappearing.

Labor saving technology created opportunities for just about everyone on; automation is creating opportunities for capital owners, and certain groups of white collar middle class workers that fall into some prerequisite conditions; but its not helping helping everyone.

Its largely leaving the jobs that are so low skill and low wage they are not worth anyones trouble to automate ( cleaning, final assembly, landscaping ) and jobs that require (or at least appear to require) intelligence and decision making we can replicate with a machine.

Re:What about all the new jobs in the "digital" ag (1)

Anonymous Coward | about 3 months ago | (#45887563)

Nowhere near the number of jobs lost have been created. we're talking scales of 40 to 50 people replaced with a single computer which takes maybe 2 full people to manage when you consider a person is probably responsible for multiple computers. Robotics is another industry where far fewer people are employed especially since 3d printing is a real thing. You can deny it all you want, but that doesn't change the fact that there is significant evidence to show that there are far less jobs than there used to be seems to be strongly tied with the advent of machination

Re:What about all the new jobs in the "digital" ag (1)

rogoshen1 (2922505) | about 3 months ago | (#45887565)

Not all jobs are equal. For a middle class to exist you need large numbers of workers creating things of value. that is not IT, that is not robotics repair/maintenance, and it's certainly not tech support. (yes all of those things you listed can pay well -- but at the end of the line, something somewhere of value must be created to pay for them.)

Overpopulation destroys Middle Class (3, Interesting)

little1973 (467075) | about 3 months ago | (#45887151)

limited resources divided by more people = people are poorer

More efficient use of resources can somewhat mitigate this process but see Jevos paradox:

http://en.wikipedia.org/wiki/Jevons_paradox [wikipedia.org]

Re:Overpopulation destroys Middle Class (2)

Bing Tsher E (943915) | about 3 months ago | (#45887473)

That's a zero-sum point-of-view. People are resources, and people create resources. More people = more resources.

Re:Overpopulation destroys Middle Class (1)

BobMcD (601576) | about 3 months ago | (#45887537)

Maybe in a Soylent Green sort of way, but typically people are a net drain on resources.

Re:Overpopulation destroys Middle Class (0)

Anonymous Coward | about 3 months ago | (#45887533)

We don't have limited resources. We have more resources available than we need to cloth and feed, and provide living conditions for much more than our current population. That we are not fully utilizing the capability to do so is a separate issue.

The problem is not that we have limited resouces. It's that we have more labor than we can use. Progress isn't the faulty element.

sorry will not work (0, Insightful)

Anonymous Coward | about 3 months ago | (#45887155)

http://steshaw.org/economics-in-one-lesson/contents.html
http://steshaw.org/economics-in-one-lesson/chap16p1.html

and these also talk to this...

http://steshaw.org/economics-in-one-lesson/chap14p1.html
http://steshaw.org/economics-in-one-lesson/chap15p1.html
http://steshaw.org/economics-in-one-lesson/chap21p1.html

You can not create economic scarcity where there is none today. Not without adding some sort of value to it. It is why many websites have failed when they decide to put up a paywall. People are used to 'free' as in 0 dollar cost (usually some sort of time cost). When you start to charge for it people may just decide it was not even worth free.

If you go thru with this plan all you will do is end up hurting everyone.

Rand warning (1, Interesting)

Chrisq (894406) | about 3 months ago | (#45887157)

In the UK at least the middle class is the hardest hit by taxes, increasing prices, increased transport costs - everything. Those on low wages get generous benefits while the middle class get taxed. The conservatives give the truly wealthy tax breaks that others cannot take advantage of. If this will help people move out of the middle class to either of the opposite ends its doing them a favour. I'm sick of explaining to the kids that I cannot afford a PS4 for their Christmas because travel costs to work are going up and tax allowances being reduced, at the same time that kids of a single mother who works in Tesco's part time can easily afford it - and then tell us how a charity is giving them a holiday in Benidorm in the summer. I'll be lucky if we can afford a week in Southend-on-sea.

Re:Rand warning (1)

Fluffy the Destroyer (3459643) | about 3 months ago | (#45887277)

In the UK...visit the province of Québec in Canada. 14,975% tax with what you virtually buy anything that has solid matter in the province and for the income tax which I don't have the numbers directly because its progressive income tax., its around 30% and more if you have a higher salary...you pay more. When I started I payed around 25% but the higher the salary I got, the more I payed. Last time I checked it was around 45% so its too freak'n high if you ask me.

Re:Rand warning (1)

Chrisq (894406) | about 3 months ago | (#45887425)

In the UK...visit the province of Québec in Canada. 14,975% tax with what you virtually buy anything that has solid matter in the province and for the income tax which I don't have the numbers directly because its progressive income tax., its around 30% and more if you have a higher salary...you pay more. When I started I payed around 25% but the higher the salary I got, the more I payed. Last time I checked it was around 45% so its too freak'n high if you ask me.

Looks good compared to a VAT rate of 20%, income tax 40% tax for most of the middle class (£32-000 to £150,000), and 12% National insurance (total 52% deducted). And that's before council tax, fuel duties (on petrol/diesel) and excise duties (on alcohol), etc.

Re:Rand warning (0)

KillaBeave (1037250) | about 3 months ago | (#45887299)

Translated for us 'Mericans

"In the US at least the middle class is the hardest hit by taxes, increasing prices, increased transport costs - everything. Those on low wages get generous benefits while the middle class get taxed. The conservatives give the truly wealthy tax breaks that others cannot take advantage of. If this will help people move out of the middle class to either of the opposite ends its doing them a favor. I'm sick of explaining to the kids that I cannot afford a PS4 for their Christmas because travel costs to work are going up and tax allowances being reduced, at the same time that kids of a single mother who works in Wal-Mart part time can easily afford it - and then tell us how a charity is giving them a vacation in the Bahamas in the summer. I'll be lucky if we can afford a week in Atlantic City."

Whinging (0)

Anonymous Coward | about 3 months ago | (#45887327)

I'm sick of explaining to the kids that I cannot afford a PS4 for their Christmas because travel costs to work are going up and tax allowances being reduced, at the same time that kids of a single mother who works in Tesco's part time can easily afford it - and then tell us how a charity is giving them a holiday in Benidorm in the summer. I'll be lucky if we can afford a week in Southend-on-sea.

This sounds to me like you have chosen to live in the suburbs, too far from work. It sounds like you could afford a PS4 and more if you did one or more of the following things:
Find a job closer to home. (perhaps, Tesco.)
Moved house closer to work.
Got on the dole , like the Tesco part-timer you facetiously cited.

You're right though, from a percentage aspect and a total volume aspect, the middle class is providing the greatest tax revenue. The extremely wealthy individual is paying a lower percentage than yourself, but they are also paying many orders of magitude more actual pounds than you ever will. And, lest you forget, the middle class are also the largest consumers of said tax revenue. Roads for you to get from the burbs to work, public transport, police, fire brigade... the middle class majority consume the majority of these services. If you look at it objectively, the current system is "largely" fair.

It doesn't make you feel any better, but it does sound like you are avoiding some very logical decisions that could change your circumstance, but you choose not to.

Re:Whinging (4, Insightful)

Chrisq (894406) | about 3 months ago | (#45887585)

I'm sick of explaining to the kids that I cannot afford a PS4 for their Christmas because travel costs to work are going up and tax allowances being reduced, at the same time that kids of a single mother who works in Tesco's part time can easily afford it - and then tell us how a charity is giving them a holiday in Benidorm in the summer. I'll be lucky if we can afford a week in Southend-on-sea.

This sounds to me like you have chosen to live in the suburbs, too far from work. It sounds like you could afford a PS4 and more if you did one or more of the following things: Find a job closer to home. (perhaps, Tesco.) Moved house closer to work. Got on the dole , like the Tesco part-timer you facetiously cited.

Partly true - tough my job moved further from me. Moving has a very high fixed cost (stamp duty on buying a new house, estate agents fees, solicitor's fees, and the actual move). With the workplace in a more expensive area moving would probably never save me money, and certainly the payback time would be many years. not to mention kids are settled in school.

You're right though, from a percentage aspect and a total volume aspect, the middle class is providing the greatest tax revenue. The extremely wealthy individual is paying a lower percentage than yourself, but they are also paying many orders of magitude more actual pounds than you ever will. And, lest you forget, the middle class are also the largest consumers of said tax revenue. Roads for you to get from the burbs to work, public transport, police, fire brigade... the middle class majority consume the majority of these services. If you look at it objectively, the current system is "largely" fair.

It doesn't make you feel any better, but it does sound like you are avoiding some very logical decisions that could change your circumstance, but you choose not to.

Though as a group they are the largest beneficiaries individually they are not. The lower paid get many benefits, and you only have to hear about how much some of the ultra-rich get for "set aside land", grants for maintaining their "buildings of historical interest", and schemes like the Duke of Northumbaland's "Alnwick garden charity" that gets grants and lottery money to improve the land - that will revert to his personal ownership after 20 years.

Re:Whinging (2)

Bert64 (520050) | about 3 months ago | (#45887591)

Moving closer to work is often not an option... Companies like to concentrate themselves all in the same place, which means most of the space in the area becomes occupied by businesses and what little residential property there is becomes obscenely expensive.
And then due to the density of businesses all in one place, you get severe overcrowding on any transport systems serving those areas during the peak business travel hours.

If companies would spread themselves out more, and also spread their working hours out more then it would solve most of the transport problems, and save most people an absolute fortune in wasted time and money.

A dollar a year keeps facebook away. (1)

csumpi (2258986) | about 3 months ago | (#45887159)

Let's say facebook has 1b active users. Let's say they have a revenue of $6b. Let's say from the $6 per user revenue, they kick $1 back to each user per year.

Yeah, still no thank you.

Outsourcing is much, much worse (1)

Anonymous Coward | about 3 months ago | (#45887161)

Here in New England, outsourcing has shipped thousands of jobs to India and other places. There used to be a vibrant software economy here; not anymore, but the tech economy in India is booming.

Re:Outsourcing is much, much worse (1)

Bing Tsher E (943915) | about 3 months ago | (#45887547)

There used to be a vibrant hard goods economy in New England. I recently bought a pipe wrench that was made in Massachusetts.... it's decades old and I bought it at a thrift store.

General Radio used to make some of the very best electronics test gear- in Massachusetts.

The software economy shifting out is just another stage in the same process.

Internet Caused The Financial Crisis? (5, Insightful)

Jason Levine (196982) | about 3 months ago | (#45887167)

Here I thought the financial crisis was caused by lenders approving loans they knew people wouldn't be able to pay off and then packaging those loans together and pawning them off on other people and so on through the pyramid until the entire scheme inevitably collapsed. Nope. It wasn't greed on the part of the bankers and lenders. It was the Internet! Technology is to blame. And do you know who's behind technology? Scientists! Yup, if we'd all go back to being completely ignorant and subservient to the rich folks who tell us what to think then everything would go back to those wonderful days when everyone was happy.

[/sarcasm]

Wait... who put these extra-strength rose colored glasses on my face?

Re:Internet Caused The Financial Crisis? (1)

mjr167 (2477430) | about 3 months ago | (#45887307)

No! Technology destroys jobs! Its the tech's fault! We must all go back to wearing grass skirts in mud huts because anything man made or modified is bad and anything that occurs naturally is good.

Re:Internet Caused The Financial Crisis? (4, Informative)

netsavior (627338) | about 3 months ago | (#45887437)

There is a kernel of truth there. The 1990s saw a radical re-tooling of our banking infrastructure, especially in home loans (this is where I worked from 1998-2012). Internet transactions allowed banks to outsource, consolidate, and "internetize" things like credit checks (even credit disputes and recoveries), appraisals, surveys, title policies, tax settlement, flood hazard determinations, insurance policies, and even underwriting. By 2005 the large bank I worked for could literally do 100% of the paperwork in 36 seconds (that was the fastest recorded time for all 5 phases while I worked there) once data collection was done on the client side. This was an impossibility before radical adoption of the internet.

30 days and 50 eyeballs would have caught MANY irregularities that slipped through during the subprime heyday. The re-tooling allowed executives free reign to dial in risk to whatever level they wanted, independent of all of the "people" based safety nets in the past. Real people, who are really face to face with a young family aren't going to sell them a foreclosure bomb as eagerly as a system that is told to run at 10% expected default rate will.

So, while widespread subprime exploitation by executive mandate did cause the financial crisis, it is impossible to defeat the conscience of 200,000 employees, but internet enabled lending workflows intentionally had no such safety mechanism.

F`uck a Gnaa (-1)

Anonymous Coward | about 3 months ago | (#45887171)

ffel obligated To every day...Like

Once upon a time (4, Interesting)

Anonymous Coward | about 3 months ago | (#45887185)

Once upon a time 100% percent of GDP was produced by farmers but rising farming efficiency rendered many farmers unnecessary. Once upon a time the vast majority of the middle classes worked in factories but rising efficiency from automation made many redundant. Once upon a time all administrative tasks where written and calculated by hand by vast numbers of office workers. New forms of economy rise whenever efficiency pushes people out of work. But I can't pretend that I'm not a little worried. Any such new form of economic activity will need time and stability to form.

Network efficiencies led to the financial crisis? (5, Insightful)

93 Escort Wagon (326346) | about 3 months ago | (#45887191)

I stopped reading the summary right there - that was one of the dumbest things I've seen claimed in a long, long time.

Maybe network efficiencies caused Hurricane Sandy to hit New York, too...

Re:Network efficiencies led to the financial crisi (2)

Fluffy the Destroyer (3459643) | about 3 months ago | (#45887313)

It did, it sucks electricity out of those power plants. In turn, those power plants when they use more electricity creates heat because of those datacenters. by creating heat the temperature of a that region shift and changes too fast which in turn changes the humidity level, the wind and lastly creating the Hurricane /sarcarms

The middle class IS being destroyed (1)

Anonymous Coward | about 3 months ago | (#45887197)

But it's only because the companies are the puppetmasters of Congress and small businesses have no way to compete.

There is no technological determinism. (5, Interesting)

mbone (558574) | about 3 months ago | (#45887199)

The billionaires are destroying the middle class, by extracting their wealth; Internet efficiencies are just one means they use to do that. This is, simply put, not inevitable, and if the power structures were different, the Internet would be enriching, not destroying, the middle class.

How to change that, and the end game if it is not changed, are left as exercises for the reader.

Re:There is no technological determinism. (0)

Anonymous Coward | about 3 months ago | (#45887375)

The billionaires are destroying the middle class

Come now, the millionaires are doing their part as well.

But, in the end, Capitalism is really just a big ponzi-scheme, in which the big players distort the rules to ensure they come out on top.

It's a cute idea that doesn't fix the problem.. (3, Insightful)

davidannis (939047) | about 3 months ago | (#45887213)

even if the problem was not oversimplified. The problem is less that productivity increased but more that political power is more concentrated. I get micropayments for some of my content now, using Google's adsense. It's not enough to buy a cup of coffee a day and I've worked at it. Fundamentally, the problem is how society is structured and the balance between the power of labor and capital. We've seen other great revolutions in productivity from the agricultural to the industrial revolutions. When society distributes those gains more equitably, civilization flourishes and standards of living go up.

Instagram != Kodak (1)

Anonymous Coward | about 3 months ago | (#45887257)

What a weird analogy to make.

Kodak produced film. They also developed film. They were integral to the entire camera process at one point.

Instagram doesn't produce anything, doesn't develop anything (digital images don't really need that), and aren't integral to anything other than Facebook.

Heck, Shutterfly would be a better (though still bad) analogy to make. And they have much more than 13 employees (their website says that they have over 1000).

Luddites... (0)

Anonymous Coward | about 3 months ago | (#45887259)

How is this different than the wagon makers or whatever crying that the automobile was killing their industry? Move on. There are other lines of work.

Instagram did not kill Kodak (0)

sjbe (173966) | about 3 months ago | (#45887279)

'Kodak employed more than 140,000 people.' Kodak made plenty of mistakes, but look at what is replacing it: 'When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people.

Stupid argument. Instagram isn't what killed Kodak and Instagram wouldn't even indirectly compete with Kodak. Kodak built their business around selling film rather than around selling cameras. Kodak was a at its core a chemical company, not a consumer electronics firm. When the need for film went away with the advent of digital cameras Kodak wasn't able to shift their business model. They are a classic example of the Innovators Dilemma [wikipedia.org].

It's called "Capitalism" (3, Insightful)

Ralph Spoilsport (673134) | about 3 months ago | (#45887293)

Marx barked about this back in the 19th century. This is not news. The most expensive part of a business is labour. If profit is the most important thing, then labour must be squeezed. So, if online profits are the most important thing, then online labour at no cost is perfect. Lanier is wrong - this is not a call to micropayments, this is a call to (a non-soviet form of) socialism, a socialism of organised networks based on telekommunist principles of contribution and guaranteed wages in a socialised economy.

shocking (0)

Anonymous Coward | about 3 months ago | (#45887295)

Content creator espouses economy where content creators get money.

There's plenty of work to do... (3, Interesting)

evilRhino (638506) | about 3 months ago | (#45887365)

It's not as though this is a new problem, wealth concentrated in few hands. It can be solved the same way it was in the past. Increase the income tax at the highest levels to 75% for incomes over $1 million and use the revenue gains for public works projects. Make University level education free. Invest in research like the human genome project. Rebuild all the countries bridges and highways. Demolish ruined buildings and create public parks. The money is there and the manpower is here.

Micropayments you say... (1)

zyche (784345) | about 3 months ago | (#45887379)

"For that comment and 50 cents you can get a cup of coffee"

(or whatever a cup of coffee costs these days)

It's the Productivity dummy ! (1)

macpacheco (1764378) | about 3 months ago | (#45887387)

In Economics parlor, ever increasing productivity is destroying the middle class.
There are many enablers of the never ending productivity gains the world is seeing, including ultra low cost world wide communications (internet being just one form of that), ever advancing computers / it technology, robotics, more fuel efficient transportation.
Blaming it on the Internet shows the author has a very strong agenda against the internet. Instead of an interest in exposing the whole issue.

Adwords made me plenty of money.. (1)

xtal (49134) | about 3 months ago | (#45887443)

Lots of other small entrepreneurs too.

The author hasn't thought things out very well.

NO (0)

Anonymous Coward | about 3 months ago | (#45887445)

Greed is destroying the middle class.

The Elysium Problem (1)

BobMcD (601576) | about 3 months ago | (#45887447)

Reading the linked Lanier article reminds me of the movie Elysium. If you didn't see it, eventually the protagonists claw their way up from the dirty world to the clean one, making everyone a citizen of the clean one, where all the wealth must be shared.

The problem with this is lack of foresight. See, if everyone lives in the same world, which will it be? It'll be the dirty one. There's just no getting around it. So instead of a world of haves and have-nots, we have a world made up entirely of have-nots.

It may be 'fair' but is it 'better'?

Same point made by the article. Instead of a world where people have skills and people need to pay for them, everyone can do their own stuff, and everyone shares the poverty of not having skills.

Wrong (0)

Anonymous Coward | about 3 months ago | (#45887451)

Another article making the argument indirectly that if only we all did things much less efficiently we'd somehow be much better off...

I'm not sure this is the problem (4, Insightful)

bravecanadian (638315) | about 3 months ago | (#45887455)

I think it is only one of the methods.

We might have finally reached the tipping point where there will be no new sector for all the displaced workers to migrate to.

Agriculture > Industry > Knowledge workers.. each shift seems to have required progressively less workers which is why we now have the Service sector. ie. crap jobs where people are treated like disposal items.

With the price of automation falling and the playing field internationally being so unfair to manual labour in most developed countries.. how can there continue to be a middle class? I don't see it.

Where are displaced people supposed to find jobs now when every industry has become more and more efficient with technology while using less and less people?

Post-facto rationalization (5, Informative)

argStyopa (232550) | about 3 months ago | (#45887457)

This smells distinctly like someone had an idea ("The internet is destroying the middle class!") and then busily started beavering away trying to jam every square peg into that round-hole of conclusion.

Kodak was absolutely NOT destroyed by the internet, not by any way. It was annihilated by digital CAMERAS. It's only with a staggering misunderstanding of recent history and a stunning lack of historical memory that someone could assert that something released in 2010 destroyed a company that was shedding jobs a half-decade before. (15000 jobs cut in 2004 alone).

To suggest that "the internet" led to the financial crisis is simply ignorant; the (most recent) financial crisis had its roots in the subprime-mortgage industry, which (depending on whom you believe, and probably your politics) was a failure of collusive non-regulation, unbridled mercenary greed, the Democrats, the Republicans, or the Illuminati. Only by a complete misunderstanding of the circumstances could one believe that electronic trading (I guess?) might have had something to do with it, but EVEN THEN fund traders don't use the interwebs, they have dedicated lines because even a 0.5 second delay would mean a massive competitive disadvantage.

NETWORKS are allowing companies of any size to compete successfully around firms like Wal-Mart and Target (who themselves destroyed small-town businesses). Networks mean everyone's competing in a flatter environment, informationally - that's a good thing, pretty much per economics 101. (Well, it's not good for the non-competitive; are they a 'protected class' now?)

Joe Nocera, by the way, is a "business" columnist/commentator who has a penchant for taking a reasonable position to silly extremes, so I guess this isn't such a surprise.

Short sighted choices (2)

Bert64 (520050) | about 3 months ago | (#45887469)

Businesses always choose their own profit margins over the wellbeing of their customers. They consider customers are only there to be exploited, without considering the long term effects...
For instance look at outsourcing production to places like china... The cheap laborers who make your goods in china aren't paid enough to buy them, and neither are the now unemployed people in your home country. By keeping people employed back home you might have to pay your workers more, but a healthier economy would also ensure more potential customers.

Same horror story in 1950s movie "Desk Set" (0)

Anonymous Coward | about 3 months ago | (#45887489)

http://en.wikipedia.org/wiki/Desk_Set

Actually, I am sure the fear of technology taking jobs goes back way before that. Isn't that what the "Luddite" thing was about?

Ahem... Google Rewards? (1)

BamaPookie (25952) | about 3 months ago | (#45887491)

'If Google and Facebook were smart,' says Lanier, 'they would want to enrich their own customers.'

Isn't that what Google Rewards does?

Internet spreading wealth to the world (1)

n2hightech (1170183) | about 3 months ago | (#45887513)

What the internet did is move wealth around the whole world. The US is still a very wealthy nation. Our poor are middle class compared to much of the rest of the world. Look at the TED talk on demographics and you see the standard of living around the world is improving. One of the big drivers of that is the ability to shift work to where labor is least expensive. That drives up wages in those areas and increases demand for more products many of which we make and ship around the world. Yes some in the US have suffered because instead of competing with local talent they have to compete with the world. Humanity as a whole has the highest standard of living it has ever had and that cannot be a bad thing. The internet has had some little part in helping this happen. As for wealth concentration I believe that is also a good thing. Individuals with massive wealth can create amazing things that just would never happen if wealth is widely distributed. When wealth is politically controlled it is wasted. In a free market to stay wealthy one must serve to benefit their customers. The internet is the biggest most open market for ideas ever devised. If you have a good idea it can be spread to the whole world in hours or days in the past good ideas took lifetimes to spread.

It's the computer revolution generally (2)

sandbagger (654585) | about 3 months ago | (#45887515)

The internet is a component of that. I have a deck of COBOL cards in a box somewhere and yep, it all goes back to that. All of the clerking and moving bits of paper around jobs are gone. There are no more mail rooms in companies, no more box stacking jobs, there are no more middle managers. I could buy a car anywhere in the world using my phone in under a minute.

We're either looking at medieval rates of income disparity or much higher taxes to prevent revolution. I think what will happen is that some countries (the EU/Canada/Australia/Japan) will use the US as a dirty lab for some of the higher risk stuff of capitalism while maintaining a firewall to maintain civilization.

You're not getting the central thesis here (0)

Anonymous Coward | about 3 months ago | (#45887577)

The central premise is not that tech sector jobs replace more than an equivalent amount of prior employment. They should as that's the entire point of technological development in a free market economy. Rather, the point is that this isn't a good thing a priori. In some cases, technological development extends the utility of a single worker while freeing up others to work in other fields/directions. This only occurs, broadly speaking, when the economy is working at sub-saturating levels of employment, which has or had been the case for most of human history. But we've reached a point of consumption/production where employment is not saturating. That wages have not risen for much too long. This leaves people unemployable. This leaves people poor and unable to consume. Technological development (some not all) in this case can make the economy less value creating. Amazon and Walmart replace low skilled workers with automation. In our current economic situation, these employees can no longer find work anywhere that matches their low skill level. They become drags on the economy reducing the effective value created. Rinse, repeat. The question isn't whether we are at this stage, but rather whether it is reversible. Can we retrain workers fast enough to accommodate the rapid pace of technological development? I am not so sure. Wetware is a bit slow on the uptake.

Which leads to the real point, I think: We should stop focusing solely on increasing economic efficiency and focus instead on providing a basal quality of life for everyone. Technology is still needed and indeed serves as the basis for the newer way of approaching the economy, but we can choose to escape the technological Malthusian cycle we've just entered, and spend more of our technological development on solving actual issues that matter to quality of life...

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