Facebook is not a panacea for the world's problems. It is causing more!

I am no Luddite.  But, there is not a day that goes by without me wondering and worrying that this latest version of the Industrial Revolution might really be the job killer that Luddites have always feared.

Reading George Packer's essay in the New Yorker and this piece on Jaron Lanier in Salon add to my worries.  Here is what Packer writes in his blog, in a follow-up to his original piece:

life inside Silicon Valley can be a paradise (for its winners) of opportunity and reward. Meanwhile, life outside falls further and further behind. All those highly paid engineers, with their generous stock options and unheard-of buying power, aren’t making the Valley more equal—they’re making it less so. 

As one who grew up in the Valley, and as one who attended high school there, Packer is an insider as much as he is an outsider now.  He writes in his essay about the economic reality of the Silicon Valley, which is home to more than fifty billionaires and thousands of millionaires:

There are also record numbers of poor people, and the past two years have seen a twenty-per-cent rise in homelessness, largely because of the soaring cost of housing.  After decades in which the country has become less and less equal, Silicon Valley is one of the most unequal places in America.

This new and improved Digitial Economy, version 2.0, as opposed to the internet boom of the 1990s, is changing the economic and geographic landscape that doesn't seem to be getting the attention it deserves.  

Lanier arrives at this with an example:

“Here’s a current example of the challenge we face,” he writes in the book’s prelude: “At the height of its power, the photography company Kodak employed more than 140,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people. Where did all those jobs disappear? And what happened to the wealth that all those middle-class jobs created?”

Of course, this is not the first time I am blogging about such worries.  In a recent one, I referred to Twitter, which, Packer writes, threatened to move its headquarters away from San Francisco, and I wrote then:

At $10 billion, the company might still be quite a bargain.  For that kind of a valuation, Twitter employs only about 1,600 people.  And even that draws a remark as to whether that many are really needed!
@bill_gross What are 800 developers doing all day at a product that hardly changes? 800? That's like 80 Instagram-like Start-Ups. #wondering— Michael Hirschbrich (@MicHirschbrich) March 8, 2013

Jobs aren't being created directly, nor as multipliers, as they were in the past revolutions.  The result shows up geographically, as Packer notes:

San Francisco is becoming a city without a middle class.  Pockets of intense poverty, in districts like the Fillmore and the Tenderloin, are increasingly isolated within the general rise of exorbitantly priced housing.  

Lanier adds:

We kind of made a bargain, a social contract, in the 20th century that even if jobs were pleasant people could still get paid for them. Because otherwise we would have had a massive unemployment. And so to my mind, the right question to ask is, why are we abandoning that bargain that worked so well?

At Ramesh's post on Apple's tax avoidance, even when disagreeing, we both agreed on the need to rewrite the social contract.  A contract with the people on so many different levels.

Packer asks:

Why has a revolution that is supposed to be as historically important as the industrial revolution coincided with a period of broader economic decline?  I posed the question in one form or another to every one I talked to in the Bay Area. ... Few of them had given the topic much consideration.

Evgeny Morozov wants us to rethink technology:

a) What problems are worth tackling, and what problems look like problems only because we have technologies for solving them? 

b) Which of the “real” problems should be solved by governments and which ones by technology companies—given that it's technology companies that run much of this new infrastructure? What do we lose or gain once it's private technology companies that are tackling problems like climate change or obesity? 

c) If we do decide that, at least for some problems, technological fixes are OK and that private companies can be allowed to help with solving them, what should be the principles and values guiding problem-solving? Tech companies, like all companies, have a bias toward efficiency, but efficiency may not be the value to optimize in attempts to solve important public problems.

Yes, it is not merely about efficiency.  There is a lot more to humanity and life than efficiency alone.  How do we rethink technology in terms of the problems of the day and those we can anticipate in the future?  Why aren't we doing technology along those lines?  Packer's response is this:

It suddenly occurred to me that the hottest start-ups are solving all the problems of being twenty years old, with cash on hand, because that's who thinks them up.

That might be a tad too harsh, and exaggerated, yes.  But, there is also a great deal of truth in it.  Packer quotes a young entrepreneur on his colleagues:

"They actually think that Facebook is going to be the panacea for many of the world's problems.  It isn't cynicism--it's arrogance and ignorance."

If there is any student or one younger than me reading all these: you have been warned.
(Full disclosure: I use Facebook and Twitter, and use them a lot.)