A warning from The Magic Mountain

Two days ago, much of the world’s financial and economic elite sat through a jeremiad from the billionaire George Soros. Speaking at the World Economic Forum in Davos – famously the site of Thomas Mann’s novel The Magic Mountain – Soros spoke of the dangers of populist leaders who have tried to establish “various forms of dictatorship and mafia states.” (Although he focused mainly on Europe and the US, Soros also noted the “electoral fraud on an unprecedented scale” in Kenya, Zimbabwe and the Democratic Republic of Congo, and the bravery of citizens in those countries who are “literally risking their lives to resist the slide into dictatorship.”) While Russia is the leading global example of kleptocratic misrule, Soros warned that Trump is an aspiring Putin, mercifully constrained by the US Constitution and “a vibrant civil society.”

The unflattering comparisons didn’t stop there. Left to themselves, Soros warned that Kim Jong Un and Trump would both “risk a nuclear war in order to keep themselves in power.” One imagines that Trump – who has always been sensitive to the good opinion of other billionaires – would be less put out by this remark than Soros’s  sneer that although the Trump administration is “a danger to the world” it will likely prove no more than a “purely temporary phenomenon that will disappear in 2020, or even sooner.”

Further condemnation awaited the US IT giants Facebook and Google. Soros called them “ever more powerful monopolies” that hinder innovation and subvert democracy, affecting “how people think and behave without them even being aware of it.” These companies control half of the internet’s global advertising revenue, but greed has pushed them to chase even larger profits. Most of their revenue used to come from ads (“Their true customers are the advertisers.”), but both companies are now earning huge sums from “selling products and services directly to users.” Personal information from their user databases enables them to “exploit the data they control, bundle the services they offer and use discriminatory pricing to keep for themselves more of the benefits that otherwise they would have to share with consumers.”

Despite their monopolization of digital platforms, these companies (European regulators usually add Amazon and Apple to the list), have shirked most of their obligations. They pay nothing for user-generated content, they assume ownership of users’ digital identities and histories, and they mine this data for behavioural insights that help them sell our attention more profitably, or to seduce us into buying more of their products and services.

Soros argues that “internet monopolies have neither the will nor the inclination to protect society against the consequences of their actions” and that profit-seeking often leads them into casino-like schemes which “hook gamblers to the point where they gamble away all their money, even money they don’t have.” Even worse may lie in store. He warns that something “harmful and maybe irreversible is happening to human attention” because “social media companies are inducing people to give up their autonomy.” Our attention has already become sufficiently malleable, for authoritarians to use the IT giants’ user-driven behavioural insights to serve their nefarious political ends. If we surrender our autonomy, Soros warns, “people who grow up in the digital age will have difficulty in regaining it.”

Karl Popper’s introduction to his classic book The Open Society and Its Enemies mentions “reactionary movements which have tried, and still try, to overthrow civilization and to return to tribalism.” Popper warned against defeatist tendencies which argue that democracy is a transient achievement that must eventually give way to “some form or other of totalitarianism” or that industrial societies must inevitably adopt “the methods of collectivist planning.” Against these counsels of despair, Popper posits the radical freedom of an open society. He argues that “sweeping historical prophecies are entirely beyond the scope of scientific method. The future depends on ourselves, and we do not depend on any historical necessity.”

George Soros understands Popper’s rationale almost uniquely well. (His pro-democracy foundation, established in 1993, is called the Open Society Institute.) Soros’s long record of supporting democratic institutions, mainly within post-Soviet Europe, also gives him a certain moral authority to denounce the new authoritarians and their enablers. Happily, although he fears that emerging strong men could use technology for “totalitarian control the likes of which not even Aldous Huxley or George Orwell could have imagined” Soros ultimately concludes that the dominance of American IT monopolies has peaked, that their “days are numbered” and they will soon be undone by “regulation and taxation.”

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