Politics and the Attention Economy
Part III of the attentionecono.me Code Conference digest
The final part of my Code Conference digest (part I, part II). Politics meets the attention economy, Steve Case argues for more evenly distributed venture capital and some notable media executives. Also — in the footnote — my Unicorn Index idea.
Hillary Clinton, former U.S. Secretary of State
A big part of the Clinton interview is about the information war surrounding the election and the alleged role Russian hackers played in it. I’m not a political commentator and definitely not an intelligence expert. But there are a few aspects that fit right into the topics I write about. I’ll stick to those.
“Weaponized information”
Clinton uses the, admittedly catchy, term weaponized information to talk about many of the issues that occurred during the election. The term is highly problematic though. It subsumes, for instance, fake news stories and their distribution via targeted campaigns, as well as information that was obtained via hacking and subsequently spread by the media. Those two are very distinct issues though.
If we aspire to get the most accurate understanding of a) what happened, b) how today’s information system works and c) how to make societies more robust against exploits, then by all means do we need a nuanced and detailed understanding of the situation. Catch phrases that gloss over the details aren’t helpful.
The influence of “weaponized information” on the election’s outcome
Clinton appears to regard “weaponized information” as the major reason for her loss. I am not sure that this is the best way to look at it.
Sure, Comey’s announcement regarding the FBI’s probe into Clinton’s communication just before the election very likely had an impact on undecided voters. While the announcement itself doesn’t fit the weaponized information narrative, it certainly is a second order effect of the email hack. Still, the actual manifestation of this event was largely driven by traditional media’s reporting, as Nate Silver shows in his in-depth breakdown of the Comey Letter Case.
When it comes to the fake news aspect of “weaponized information”, it’s pretty save to say that any narrative that claims fake news had a big influence on the result is likely an overstatement. I’ve mentioned the fake news study by Hunt Allcott and Matthew Gentzkow several times. It is the most thorough analysis of the issue I’ve come across. It doesn’t draw a definitive conclusion — which is very hard to do, particularly because accurately measuring fake news’ impact and second-order reach (i.e. spread via cable news, word-of-mouth) is extremely challenging; I covered some further problems here — but the paper gives many good reasons why blaming the election’s outcome on fake news is very likely a convenient narrative but little more.
That statement is not to be confused with me saying fake news isn’t an important issue. It is (as I’ve written about here)! Yet, not on the grounds of a false narrative — but because its future potential is very troublesome, given the ongoing changes in our global media and information system. The real problem with focusing post-election analysis on the fake news issue is that such analysis doesn’t look at the deeper, structural issues which led to the result.
That is to say: It’s probably worth looking at why Trump won (despite his many shortcomings and his outrageous behavior), instead of asking why Clinton lost. The latter is an analysis of campaign tactics and tries to explain why a few percentage points shifted in the last week. The former is to ask why those percentage points were enough to make Trump the winner — why did a considerable amount of American people consider voting for him the day before Comey’s letter broke? I‘m certain that fake news wasn’t the major reason.
Microtargeted Democracy
Another issue that Clinton raises is extremely relevant. She talks about the data advantage the GOP has built since the last election. As a result of the defeat in 2012, the party allegedly invested heavily in an expansive database of voter information which was then used as the foundation of Trump’s campaign. This data was then combined with the data from Cambridge Analytica.
For those of you who don’t know: Cambridge Analytica is a company that employs data — a mix of psychographic and online profile data, to be precise — in order to micro-target political messaging. In blunt terms: The idea is to build very specific profiles of what people like, believe in and want to hear, and then supply them with messages that fit the profile.
The role of Cambridge Analytica in the Trump campaign was part of a few bigger stories at the beginning of the year (which I summarized, in German, in this podcast). There are good reasons to be skeptical of the proclaimed effectiveness of Cambridge Analytica’s technology.
But there are very good reasons to believe that micro-targeting will continue its march into political communication and campaigning. Companies will continue to work on the technology because, once it works, it is the holy grail of political campaigning. The data trail every individual leaves grows. And our data analytics capabilities improved a lot lately, specifically because of machine learning algorithms’ capability to analyse large sets of data.
So, it’s fair to assume that we will get there, though it likely takes time and several more years of iteration. Nonetheless, this poses a question: is micro-targeting compatible with the democratic process? The basic idea of democracy is that the public can form an opinion about a party’s or candidate’s proposed agenda. These agendas have to be publicly available — which the mass media system ensured — so the public can compare the options. Oh, and of course any agenda had to be consistent. Otherwise it would have gotten picked apart.
The very idea behind micro-targeted political messaging is in direct opposition with that. There, you tell individuals “what they want to hear”. The information isn’t public in the traditional sense, but only visible to the subset of recipients (think emails, targeted posts in social networks) and therefore not easily verifiable or comparable. I regard that as highly problematic and pretty much not in tune with a healthy democracy.
Jeff Bewkes, CEO Time Warner
Bewkes talks about the motivation behind selling to AT&T (still a pending deal, to be sure, depending on the outcome of the Department of Justice’s review). In short: AT&T’s direct-to-consumer distribution and data; which itself is valuable and could create leverage over other distributors: if a new format is popular with AT&T customers, other distributors will want to show it as well. Plus, content hasn’t been more valuable than it is today in a long time. Bewkes’ fiduciary duty to shareholders certainly played a role in the decision as well.
He also makes a few good points regarding the interplay between a company’s business model and the type of content it needs to create, a topic I wrote about when looking at Netflix’s content portfolio. The rest of the interview: CNN’s coverage of the election, net neutrality (Bewkes surprisingly technically-adapt response at one point [likely rehearsed, but nonetheless]: “Are you talking about preferential bit access and flow-through? Or are you talking about advertising data?”), free speech. Not many surprising things overall, but watching Bewkes is always fun.
Shari Redstone, President National Amusement, Vice Chair Viacom & CBS
Shari Redstone is one of the most powerful women in media. The interview starts of with a segment on her VC company Advancit Capital which invests in early stage companies “at the intersection of media, entertainment and technology”. She also talks about her long history in eSports and gaming, why the merger between Viacom and CBS didn’t happen, the challenges both companies are facing, and the state of the NFL.
Steve Case, CEO Revolution
Steve Case is the CEO of VC firm Revolution Ventures, former AOL CEO and author of The Third Wave: An Entrepreneur’s Vision of the Future. While his interview with Walt Mossberg is not precisely in the realm of attentionecono.me, it’s very interesting.
Case talks about the problems that result from the concentration of Venture Capital in the Bay Area and about his work to overcome that. His Third Wave thesis: as technology starts to enter more and more real-world industries (e.g. health or agriculture), tech companies are going to be more distributed across the US again. At the same, he argues, speeding this process up might be critical in overcoming the growing polarization in the US.
I co-sign this and, being from Germany, I think there is also an international dimension to the topics he tackles. Silicon Valley is the epicenter of the global digital economy — which increasingly is equivalent to the economy — and has an outsize influence not only on the global economy but also on broader, societal developments. So, distributing successful tech companies more evenly isn’t only important to the US, it’s an international issue as well.
The key to get there is evenly distributed venture capital. Though there are other solutions in theory, I believe it’s fair to state that venture capital is indeed the most efficient and practical way to finance innovation.¹ Case tries to convince VCs to broaden their horizon. It’s a cause worthy of support.
¹ Crowdfunding is a particularly interesting alternative. It would allow a bigger number of people to invest in startups and profit from the most dynamic part of the economy. But there are still legal limitations in many jurisdictions (one of the few areas where we Germans are ahead of the field). Plus some practical problems: startup investing is high-risk, takes a strongly diversified portfolio, intelligently developed investment theses and so forth. It’s hardly a good playground for hobbyists.
While I think its fair to argue that VC funding plays a role in the concentration of wealth (though you might disagree), it is the best proven way to catalyze innovation — which in turn (and in the long-run) tends to benefit broader parts of society.
Here’s an alternative idea how to make early-stage growth accessible to more people: the equivalent to an index fund, but not for stock indexes but VC funds. Basically an entity that invests, as a Limited Partner, in all relevant VCs and collects money on the open market. I’d call it the Unicorn Index.
