How do you solve a problem like a Platform?

How do you catch a cloud and pin it down?

How do you find a word that means Platform?

A flibbertijibbet! A will-o’-the wisp! A clown!

Many a thing you know you’d like to tell it

Many a thing it ought to understand

But how do you make it stay

And listen to all you say

How do you keep a wave upon the sand?

Oh, how do you solve a problem like a platform?

How do you hold a moonbeam in your hand?

•  -Modified lyrics to the song “How do you solve a problem like Maria?”

I am going to assume that you have seen the movie “Sound of Music, “and are familiar with the conundrum faced by the nuns with regard to a novitiate named ‘Maria’. While the dilemma is not the same, the lyrics do capture the sentiment that I am trying to express. In this blog post I hope to bring out the complexities of the issues around platforms.

One of the main issues concerns the usage and meaning of the term platform. Gillespie (2010) says that the term platform used to describe digital intermediaries has many meanings depending on who is using it. Gillespie (2010) examines computational, architectural, figurative and political meanings for the term. For a developer, a platform is a “foundational system that supports general purpose computing” (Bogost & Montfort, 2009). To an advertiser, a platform could be a means by which to reach potential customers. To a content creator, a platform could be a stage for self-expression. There are some who claim that a digital intermediary can be called a platform only if it can be programmed (Gillespie 2010). Despite the limitation of the computational definition, a broader interpretation of the term has gained traction amongst users and proponents. (ibid 2010). Gillespie says that the ambiguous term ‘platform’ has been chosen deliberately. The cunning use of this single term allows the owners to simultaneously convey different meanings to multiple stake holders. It allows the owners of platforms to dance around several laws and avoid obligations that any other nomenclature would give rise. In this case, a platform by any other name wouldn’t be just as sweet.

The term platform also describes the purported relationship between the digital intermediary and the users. Gillespie (2010) points to the architectural definition of platforms; “a raised level surface on which people or things can stand.” The question that I would like to ask is do platforms as structures provide support or do they imprison? Are people on top or are platforms on top?

On the surface, it seems as though that individuals derive more value from utilizing the services offered by the platforms. It is undeniable that platforms have made life more convenient. Platforms help us stay in touch with friends and family at all times. They allow users to express themselves and develop unique identities. They have given us access to unlimited information. Platforms allow individuals to buy, sell, share, mobilize support, find and create opportunities. It does seem as though people are on top. However, as more individuals use platforms longer and more frequently, platforms gain critical mass and become more powerful than the individual user.  As more people freely give away personal data in exchange for free services, the platform then gradually rests on top. The rest of this blog post will show that the exchange is unequal.

The process of how platforms have gained dominance has been examined by scholars Poell, Nieborg and Van Dijck in their article titled ‘Platformisation’. In this article, the authors state that management and software studies offer differing but complementary perspectives on platforms. Management studies conceptualize platforms as two sided markets. They refer to a platform’s ability to aggregate users on one side and sellers on the other. Software studies highlight the ability of platforms to collect and process user data. These two perspectives “inform the development of platform infrastructures.” (Poell et al, 2019). One can infer from these two perspectives that platforms have been intentionally designed with the sole purpose of aggregation of users and collection of data.

As platforms start to gain more users, they enable third party developers to build extensions and join their eco-system. They do this by opening up Application program interfaces (APIs) and providing Software Development Kits (SDKs) (Poell et al, 2019). The operation of two-sided markets has the advantage of ‘network effects.’ Direct network effects are “dependent on the number of users on a platform with whom one can interact”. The indirect effect of a two-sided market is that “users can mutually benefit from the size and characteristics of the other side” (ibid, 2019). The network effects produced by operating a multi-sided platform leads to platforms assuming a dominant position. Having gained dominance, platforms adopt strategies that make it difficult for a user to leave a platform. (Ibid, 2019)

Although platforms suggest that they support those who stand on it (Gillespie, 2010), the strategies adopted by them can best be explained by “treating them as economic actors within a capitalist mode of production.” (Srnicek, 2017, p. 8). In his book titled Platform capitalism, the author (Srnicek, 2017, p. 23) argues that “in the twenty first century, capitalism came to be centered upon extracting and using particular kind of raw material: data.” He reasons that with their ability to extract and control large amounts of data, platforms have become the new business model (Srnicek, 2017, p. 9) and that the economy is dominated by a new class that has ownership over information (Srnicek, 2017, p. 23)

Why is data so important? According to Nick Srnicek, “data and knowledge from that data is used to optimize production processes, give insights to consumer preferences, control workers, provide foundation for new products and services.” Additionally “data serves a number of key capitalist functions. They educate and give competitive advantage to algorithms; enable the co-ordination & outsourcing of workers; make possible the transformation of low margin goods into high-margin services.” (Srnicek, 2017, p. 23)

An important fallout of the advancement in ICTs, smartphones and social networking sites is that human social interactions are being recorded in real time and stored as data. (Van Dijck, 2014) This process is called datafication (Mayer-schonberger & cukier, 2013 quoted in Van Dijck, 2014, p. 198). Information about human behaviour that was hitherto unavailable is now accessible by platforms in the form of metadata (Van Dijck, 2014). The processed data is used to predict human behaviour. Van Dijck argues that “scientists, government agencies and corporations, each for different reasons, have a vested interest in… the development of methods that allow for the prediction and manipulation of behaviour.“ (Van Dijck, 2014, p. 203) The ability to predict and manipulate behaviour puts enormous power in the hands of those with that ability. Hence, in a capitalist system, power resides in the hands of those who control the data extraction, storage and analysis. So we can infer that the seemingly benign two-sided platform is actually a two-faced monster.

This brings us to the original question; how do you solve the problem of platforms? Frank Pasquale (2016, p. 310) argues that a counter narrative to platform capitalism has to be developed which shows the darker side of platforms. The cornerstone of this counter narrative is that platforms exacerbate existing inequalities by reducing wages of workers and creating instability. The counternarrative can be used to displace the conventional narrative.(ibid, p. 311)

According to Srnicek (2017, p. 23), the ownership and management of platforms has some inherent problems. Data requires recording. Recording requires a material medium. Data has to be stored which requires massive storage systems demanding huge investments (Srnicek, 2017, p. 23) on the part of platforms in order to be dominant and successful. In the absence of a profitable revenue model and in the face of competition from other firms, such vast data collection, storage and analysis will not be viable in the long run. (Srnicek, 2017)

In the last thirty years, private tech companies have made tremendous investments in building infrastructures that are now essential for the smooth functioning of everyday life. These privately owned and operated infra-structures offer more dynamic and competitive alternatives to governmental infrastructures (Plantin et al, 2018 as quoted in Poell et al, 2019). For example, an email service provider is much more dynamic and competitive than the department of posts and telegraph. However magical they appear, these are infrastructures and have to be treated as utilities like railroads, electricity and telephones.

The multi-dimensional nature of platforms demands the development of a multi-dimensional approach to solving the problems created by platforms. Just as platforms have managed to bring together multiple stake holders, the solutions have to include all stake holders. The solutions have to result in the equitable distribution of the surplus generated (Sen, 2002) by these platforms.

Bibliography

Bogost, I., & Montfort, N. (2009). Platform Studies: Frequently Questioned Answers. UC Irvine: Digital Arts and Culture 2009. Retrieved from https://escholarship.org/uc/item/01r0k9br (Accessed: 2 December 2020)

Gillespie, T. (2010) ‘The politics of platforms’, new media and society, 12 (3), pp. 347-364. doi:10.1177/1461444809342738.

Pasquale, F., 2016. Two Narratives of Platform Capitalism. Yale law & policy review, 35(1), pp.309–319.

Poell, T. and Nieborg, D. and van Dijck, J. (2019). Platformisation. Internet Policy Review,[online] 8(4). Available at: https://policyreview.info/concepts/platformisation [Accessed: 1 Dec. 2020].

Sen, A., 2002. How to judge globalism. The American prospect, p.A2.

Srnicek, N 2016, Platform Capitalism, Polity Press, Oxford. Available from: ProQuest Ebook Central. [1 December 2020].

Van Dijck, J., 2014. Datafication, dataism and dataveillance: Big Data between scientific paradigm and ideology. Surveillance & society, 12(2), pp.197–208.

What do I do when my love is away?
Does it worry you to be alone?
How do I feel by the end of the day?
Are you sad because you’re on your own?

• The Beatles

These lines from the popular song by The Beatles succinctly capture the zeitgeist of our digital mutiverse. In recent discussions about the networked society that we live in, a controversial issue has been whether social networks afford opportunities and enable mobility or do they exacerbate existing inequalities. One the one hand, Rainie and Wellman (2012: pp. 3-20) argue that ‘networked individualism’ allows individuals to create their own complex identity while navigating multiple networks that offer varying forms of support. On the other hand, Van Dijk (2013, pp. 105-124) argues that networked societies lead to more inequality. In this blog post, we will examine both arguments.

Rainie and Wellman (2012: pp. 3-20) explain that ‘Networked individualism’ is the new social operating system. In this system, the individual is at the heart of their personal network. Each individual is connected to other individuals through multiple information and communication technologies. According to Rainie and Wellman (2012: pp. 3-20), this system is more empowering because it offers the individual more freedom, increases their capacity to act while giving them more room to maneuver. Individuals accomplish this by being part of loose diverse networks that do not necessarily overlap. While they may continue to have close emotional bonds with a small group, they turn to wider networks for social and economic needs. The authors classify these networks into havens, bandages, and safety nets (ibid: 2012). Havens provide a sense of belonging. Bandages help individuals cope with stress and safety nets lessen the effects of crises. They argue that easy access to the internet, proliferation of social networking sites and the ubiquity of mobile phones have enabled individuals to manage relationships effectively (ibid: 2012). Relationships, that in the past would have ended with distance, continue to be maintained. Advancements in information and communication technologies (ICTs) have allowed individuals to create media and project their voices to different audiences (ibid: 2012). This allows them to create new networks around themselves.

While there are many advantages to being a networked individual, there are many drawbacks as well. Having to use multiple media to stay connected to networks, the individual is loaded with extra work as relationships become to sustain. Not only do individuals have to actively network, they also have to learn new skills for handling problems. They have to spend more time, energy and effort in nurturing these networks. Some individuals are better able to network than others. The authors acknowledge that uncertainties and insecurities are entwined with the opportunities created by this operating system.

Van Dijk (2013, pp. 105-124) presents a much bleaker picture in the ability of networks to create and exacerbate inequalities. He contends that the new network society is inaccessible to those on the wrong side of the digital divide. This digital divide, characterized by a lack of access to and usage of ICTs, is related to “demographics of income, age, sex and ethnicity” (ibid: 2013).  He explains that the structural properties of social and media networks lead to five types of inequality, which he classifies as “technological, immaterial, material, social and educational.” (ibid: 2013)

Using structuration theory, the author examines the structures of network society (Van Dijk: 2013). He argues that the network society and information society lead to a social structure in which a small group of people are able to form dense networks of overlapping relationships (ibid: 2013). Their central position within the network allows them, not only better access to capital & resources but also allows them to harness and control the flow of information, which is an essential good, in the information society (ibid: 2013). This gives a few, greater power over many, with fewer links in the network or those outside the network (ibid: 2013).

Inequalities in network societies don’t just stem from the properties of the structures, they are also caused by human factors (ibid: 2013). Apart from mobility, the possession of digital skills decides equality in a network society. Survival in the harsh, individualistic, network-society requires sophisticated social skills to be utilized along with proficient digital skills (ibid: 2013). Again, those with a demographic advantage are better equipped with such skills leading to inequalities being exacerbated. The author concludes that the network society creates new inequalities on top of the old ones.

Rainie and Wellman (2012: pp. 3-20) use examples of privileged individuals from the first world to argue their case for the empowering effects of networked individualism. Van Dijk (2013, pp. 105-124) presents a bird’s eye view of the networked society to highlight its shortcomings. In both perspectives, the individual is the basic unit of society. This individual has to constantly fight to maintain their position in the network or face exclusion. Exclusion from the network can have negative outcomes.

Networked societies can be empowering but they come with some inherent inequalities. Government policies must be directed at reducing these inequalities (Van Dijk: 2013) so that every individual may have a reasonable chance to enjoy a comfortable life. But I would rather get by with a little help from my friends

Listen to the song here

Bibliography

Rainie, L, & Wellman, B 2012, Networked : The New Social Operating System, Cambridge: MIT Press. Available from: ProQuest Ebook Central. Accessed 27 October 2020.

Van Dijk J.A.G.M. (2013) Inequalities in the Network Society. In: Orton-Johnson K., Prior N. (eds) Digital Sociology. Palgrave Macmillan, London. Available at: https://doi.org/10.1057/9781137297792_8 . Accessed 27 October 2020

“Today’s banks are still operating with a pawn shop mentality, needing collateral and guarantees are just like pawn shops…China’s financial pawnshop mentality is the most serious” – Jack Ma (Financial Times, November 2, 2020)

This statement was made by Jack Ma, in a speech, before the company he founded was due for an IPO. The rather harsh criticism of China’s banking sector has led to a backlash from financial regulators leading to a suspension of the IPO. Jack Ma, a technocrat & capitalist emerging from a communist country, has highlighted short comings in the present financial system.

From a sociological point of view, this development is quite interesting for this clash is at the intersection of financial capitalism, platform capitalism and the political system. This conflict, at the confluence of technology, finance & policy, has serious implications for wider society. Who do these serve? Do platforms serve the interests of the capitalists, politicians, technocrats or the wider public that ‘use’ these platforms? Given the multiplicity of interests that come under the rubric of platform, should entities such as ANT be allowed to list on a stock exchange? A case could be made for the creation of another type of exchange, perhaps a “social exchange” or “SOCEX” which uses different parameters to value these platforms.  That perhaps is possibly the topic for another blog.

The statement made by Jack Ma questions the intent of banks and regulators. Do they exist to protect the financial system or to further inclusive economic development? If the financial crisis of 2008 revealed anything, it is that the financial system will protect itself before looking out for the interests of the larger public.

Access to credit is necessary for individuals and businesses to grow and help themselves. Banks tend to play it safe when lending and demand collateral from borrowers to secure a loan. This has proved to be a bottleneck as most intending borrowers have little or no collateral. So how can one assess the credit worthiness of a borrower?

Jack Ma proposes a Big Data based credit scoring which uses algorithms and alternate data points to assess credit worthiness. This type of credit scoring is prone to bias and predatory targeting or exclusion of vulnerable groups.

A gap has been created between safe lending based on traditional methods of risk assessment and Big Data based credit scoring. Large numbers of individuals exist who could potentially benefit from alternate methods of credit evaluation. There may be credit worthy individuals, who in the absence of collateral assets to secure a loan, are left without an opportunity to improve themselves. This is a case of structure taking away agency by exclusion. Although it has risks, Big Data definitely has shown the way to such alternate methods. It is now a question of policy makers, bankers, regulators and technocrats to work together to identify problems, create policy and implement solutions that serve all interests.

Bibliography

Ryan McMorrow in Beijing and Henny Sender in Hong Kong, Financial Times, November 2, 2020. https://www.ft.com/content/ea298d72-aa5d-4c4b-b74d-e255f579ab98