04/18/2014 09:45 am ET | Updated Jun 18, 2014

Beyond Network Feudalism


Our civilization has a new reality. Computers meshed together by digital networks have transcended the system that built them becoming a new reality, a place where duplicating and moving information has near zero marginal cost. This alone has changed the nature of the world; we have a virtual playground where the reality of scarcity we have known and endured is largely gone.

Now Jeremy Rifkin endeavors to take us one step further. In Zero Marginal Cost Society, he argues for the next step in the human journey, applying the principles and benefits of zero marginal cost virtual space to physical reality. Decentralized renewable energy production at near zero post-investment cost enveloped in ubiquitous wireless computing and sensing networks, the Internet of Things (IoT). The pervasive truth of existence in a capitalist system, Rifkin maintains, is giving way to a hybrid economy; incorporating both traditional capitalism and the growing segment of technologically empowered peer-to-peer individuals Rifkin so eloquently calls the "Collaborative Commons."


Yet there is a specter looming large over this world. The Internet that appears distributed is fundamentally centralized. Right now there are key players that sit atop the largest networks reaping all the financial rewards. Google is the portal to the world's information and Facebook links over 1.2 billion users. Networks themselves have value for their structure and their data. Whatsapp selling to Facebook for $19 billion is only the beginning. These networks connect distributed users but are dependent on communications infrastructure and cloud computing controlled by others. We migrated computing into the cost effective cloud and now face a situation where most new web apps and services to facilitate the peer-to-peer society and economy are built atop a centralized "stack." The data and interactions users engage in, from pictures of cats to literal dollars, are funneled toward central servers with value being siphoned from the data flows. Centralized fortunes are built atop free data users provide. Moreover, the world's governments can roam the networks and cloud-stored data to survey the digital landscape at will, seeing almost whatever they desire.

Data is emerging as the new "oil," the new resource, the ultimate distillation of all civilization into an exponential pool of zeros and ones. Already the global economy is built from networks and powered by data. Economic value on Earth is steadily being digitized; "currency" was long ago. As we envelop the world in a unified Internet framework we are facing a dark truth: in a world of free-flowing data, the biggest computer wins.

Once we have the Internet of Things and its free-flowing data, the new global power rests with those who can extract insights: those who can "refine the oil." As Rifkin highlights, the build-out of IoT infrastructure will be expensive and intensive, but after initial investment in infrastructure the marginal operating costs are trivial. Every networked person might have access to IoT data, but businesses and governments have the computing power and expertise to do far more with that data. They do not need ownership of the data. Finding value in the investment comes down to applying massive computing power to find insights in the data flows. Insight is emerging as the new "profit," the new ultimate value.

Even if existing companies and interests fade away, new power-hungry actors will inevitably emerge empowered by the Internet of Things and its free-flowing data. These new actors will place themselves and their computing power at the zenith of massive networks, pooling exponential data. A computing arms race seeking value in exponential data pools will define the 21st century. From immense data amazing things are forged, even Artificial Intelligence. Data is not some nebulous ether; it is the resource building the new world.

Networks create vast wealth through data, but are structured incorrectly enabling only individuals at their figurative centers to truly win. Fortunately there are other options. We can build systems that organize and bind us together directly without giving singular entities control. We can build true, rather than illusory, peer-to-peer networks. Wireless mesh networking can send data directly in a web of laterally connected devices. This technology already exists in Apple's iOS 7 and enables device-to-device messaging apps like Firechat. Approaches like Bittorrent can be applied to more than just file transfers but to messaging too. The block chain that powers Bitcoin represents the realization of a grand dream: a globally verified database with a public ledger. No one owns the Bitcoin network, it owns itself. Cryptocurrencies like Bitcoin could enable a truly independent peer-to-peer and global Collaborative Commons by providing a decentralized means to directly exchange verifiable value.

As computing power becomes ever more important, it is also becoming more distributed and ubiquitous. From Folding@home to cryptocurrencies to often-nefarious botnets, it is possible to solve singular computing tasks using many disparate networked computers that are not under central ownership. The Bitcoin network is already more powerful than the top 500 supercomputers on Earth combined. Distributed computing could become quite pervasive as the Internet of Things expands and billions of computers blanket the Earth, potentially sharing processing resources with each other as needed creating a dynamically scaling mesh of global computing power. In this way the worry of a few powerful players owning all relevant computing power might be assuaged, but likely never truly eliminated. Quantum computing looms and the risks of unreasonably centralizing that power must not be underestimated.

Zero Marginal Cost Society excites with potential and gives us a kind of permission to rethink everything. Rifkin describes technology within our reach that can build a more just, humane, and sustainable global economy for every human being. Of course there will be forces actively corrupting the dream; the desire for control is not set to vanish. If we truly empower individuals and create network structures that properly reward collaboration we can build a much more fair and creative world. If we continue moving forward with business as usual we risk building a new feudal world, where cyber lords reign over networks unwittingly constructed by their cyber serfs.

John Hanacek is a futurist writing on implications of technology in society for Atlantic Council's FutureSource blog, he maintains a personal blog and tweets about emerging science and technology.