“The world is unequal in many dimensions; even life itself is unequally distributed. In the United States and other wealthy nations, only 2 to 6 children out of every 1000 die before age 1, yet there are 25 countries where more than 60 out of 1000 do so. There are 10 countries, all in Africa, where per-capita gross domestic product (GDP) is less than 10% of U.S per-capita GDP. These gaps are a legacy of the Great Divergence that began 250 years ago, in which sustained progress in health and wealth in Europe spread gradually to the rest of the world. Will such gaps continue to be an inevitable consequence of progress?” (Angus Deaton, Science 23 May 2014).
I was always intrigued about how exactly the same processes are occurring in the online world and its economy. Could the Web economy be going through an online great divergence?
Today, many companies focus on leveraging data to optimize their marketing efforts and eventually grow their sales. Companies collect data, such as, a person’s Twitter statuses, Facebook likes etc., to delve as much data about the potential buyer. This data can be used to predict a person ethnicity, gender and even if the person suffers from alcoholism, or whether they are expecting a baby. Using this information, companies decide how to target different people, which business offer to present them to maximize the probability for a purchase. This inherently leads to data redlining, as Kate Crawford described it in her lectures, or in other words – the process of showing different content and possibilities (such as job offers, discounts, life insurance offers, etc.) for different groups of people. Scientific American already mentioned that this decade there is a different internet to the rich and poor, where a bank can show an offer of a loan to a rich, but to a poor that really does need this loan it won’t be shown as the revenue and the risk for the bank might be bigger. The amazing thing is that if in the old days, the poor could see physical evidence that there are richer people (‘wow, look at their houses and yachts’). In the virtual world, the poor can’t even tell they are such, because they get the customized experience. And on top of that, it requires very little data about people to infer information about them. Only very partial view of their behavior and social graph is required. Of course there are always data errors, as Shutterfly discovered last week, when sending mass email congratulating random people for their pregnancies, but the use of this data is pretty much the norm today.
The web is in the middle of a diverging phase of our online economy. Those that will gain strength now will be on the better half of what we might call in the future “the perpetual Inequality on the Web”. Science dedicated an entire section this month to the inequality in the world. What if we could know what we know now before the beginning of those inequalities, i.e., the divergence point? Would we change anything? I believe we would not have. It is part of human healthy economical behavior developing in centuries. It is what we are.