
The “free” economy comes at a cost - joubert
https://www.economist.com/news/finance-and-economics/21727073-economists-struggle-work-out-how-much-free-economy-comes-cost
======
raulk
Certain features of social networks like likes, reactions, recommendations,
etc. trigger micro-dopamine releases in the brain, which in turn keep the
individual craving for more.

The infinity scrolling appeals to our hunger for more and more stimuli, which
in turn has us spend more time browsing the network. That longer exposure
allows FB to monetise even further.

One thing that worries me – and it's not discussed in the article – is the
loss of productivity, as well as cost of the opportunity for the individual.

In fact, individuals who become addicted to social networks may carry a
psychological cost as well, which in turn reflects on the productivity of the
individual inside the global economy system.

You could argue that time spent on Facebook would've been spent on other
leisure activities anyway. But is it true? Much of this time is now spent due
to compulsive behaviour, every 5 minutes, 10 minutes, as soon as you wake up,
before going to bed, etc.

~~~
Clubber
An individual does not owe the world 100% productivity. An individual doesn't
owe the world any productivity. The only time an individual owes productivity
is when there is an agreement for services in exchange for money or something
else of value.

People commonly use productivity to try to quantify something in dollars, but
it's always struck a nerve. It seems like when using that argument, the arguer
assumes the world is owed any type of productivity by nature.

In your argument, you say you are worried that Facebook use results in a loss
of productivity, as if the world is owed productivity. It is not. I'm not
criticizing you, it's a common argument, but it is based on a misconception.
If a person wants to spend almost all their time reading Facebook, or reading
literature, as long as they are neutral with the system (pay for themselves in
some way), that's perfectly fine.

~~~
tareqak
I understand both your view (the worth of an individual is more than simply
the net productive output of said individual), and the view that you are
replying to (the loss to the world expressed in terms of systems thinking
along some dimension).

I think you can actually reconcile both views in terms of happiness i.e. the
global economy measured in terms of happiness generated. With this sort of
model in mind, both you and person you are replying to can both be correct in
that it is possible that social media is sub-optimal compared to some
alternative that delivers some combination of increased immediate happiness
and/or increased probability/reliability/sustainability of future happiness.

~~~
Clubber
Oh, the psychological effects of Facebook I'm certainly not arguing with. I
would imagine there are some issues as there are some plusses. I'm not well
versed in it because I dropped my account years ago, but my wife uses it to
keep in touch with people and groups. Like anything, it depends on how it's
used or how much it's used. I was just concerned with the concept of
productivity cost as a measurement.

I think the Quality of Life indicator represents what you are talking about.

[https://en.wikipedia.org/wiki/Quality_of_life](https://en.wikipedia.org/wiki/Quality_of_life)

------
amelius
> In the second quarter of 2017, Facebook eked an average of $4.65 out of each
> of its users by peppering screens with ads and promoted posts.

I'd gladly pay $5 even per month for Facebook or Google if only they treated
me as a customer instead of the product.

~~~
Maakuth
The thing is they get paid better than that by the advertisers for your
attention. Their ARPU is estimated[1] to be $53 for 2016 and that is across
all the users, not only people who are ready to spend money on online
services. And as a free service, I bet they are quite a bit more resilient to
churn than a similar paid offering would be.

1:
[https://www.forbes.com/sites/greatspeculations/2017/05/24/wh...](https://www.forbes.com/sites/greatspeculations/2017/05/24/why-
facebook-will-maintain-its-arpu-advantage-over-snapchat/#4db659d927b9)

~~~
nightski
What am I missing? That is less than $5 per month and I'd even pay 10-15+.
They could make it optional.

~~~
autokad
My guess is, if the users could pay to opt out, the value of the customers
that couldn't would drop dramatically, and you'd end up paying substantially
more

------
ailideex
archive.is link so you can get past paywall:
[https://archive.is/8hBlt](https://archive.is/8hBlt)

~~~
gogopuppygogo
The most appropriate way possible to load the link criticizing the free
economy.

------
l5870uoo9y
Thought for a second that The Economist was criticizing free trade in general.

~~~
etplayer
It would be nice if they did so, but I know better than to expect such a
profound criticism from a bourgeois paper.

~~~
andreime
What's wrong with free trade?

~~~
jcbrand
I'll try to provide an answer as far as I understand the issue.

Poorer countries with less developed markets are forced to open their domestic
markets to foreign countries and competitors who then completely outcompete
and dominate the local offerings. This prevents local business from developing
and many existing ones go bankrupt in the face of foreign competition. This
tends to leave the local market largely undeveloped in terms of domestic
companies, and results in money flowing out of the country to foreign
shareholders.

Another problem is that so-called "free" trade isn't totally free.

Some of the places that espouse free trade, like the US and Europe, don't
practice what they preach. The most egregious example I can think of is
agriculture subsidies, which effectively prevent (for example) African farmers
from selling their produce in those markets while additionally making produce
(like poultry) from those countries cheaper than local offerings, which again
bankrupts locals.

~~~
ekianjo
> Poorer countries with less developed markets are forced to open their
> domestic markets to foreign countries and competitors who then completely
> outcompete and dominate the local offerings

Poorer countries which can't sell their agricultural goods on the global
market don't fare too well. It goes both ways. Check the level of life in Cuba
for example.

~~~
owebmaster
> Poorer countries which can't sell their agricultural goods on the global
> market don't fare too well. It goes both ways. Check the level of life in
> Cuba for example.

Which proves free trade is a shit of a system for most developing countries.

~~~
ekianjo
If they can't sell, it's not Free Trade.

~~~
owebmaster
In Free Trade is mandatory that every body is able to sell? Because if it is,
it is not that free. I think your concept is wrong.

------
Maakuth
Considering the title, it did feel quite ironic to hit ctrl-w to close tab
after the paywall appeared.

~~~
adjkant
[https://outline.com/](https://outline.com/) is a great tool for this.

------
Eridrus
This meme that you pay for things with your data needs to die. You pay for it
with your eyeballs on advertising. Data is not payment, it's sewage that
people are finding a use for.

~~~
privong
> You pay for it with your eyeballs on advertising. Data is not payment, it's
> sewage that people are finding a use for.

Advertising that is targeted using said data. One might be able to argue that
it once was true (10 years ago?) that data was just a byproduct that people
found a use for. But now it's more explicitly a goal for companies to collect.
I don't think anyone can argue that the data google and facebook collect is
incidental and they're just trying to find some use for it. Collecting users'
data is a core part of their business model.

~~~
Eridrus
> Collecting users' data is a core part of their business model.

Collecting data is part of product strategy, it's not a business model unless
you're actually selling it - which none of the companies people wring their
hands over do.

I worked at a startup where part of the pitch to investors is that we would
get in early and collect all this data that would be expensive and maybe even
impossible to replicate. Well, we collected all the data during the course of
actually providing our service, it just turned out there wasn't a whole tonne
of value in large volumes of unlabeled data.

Every product person hopes that data will make their product better, but not
all data is created equal. If it's not signalling what you want somehow, it's
basically worthless.

------
mdekkers
The whole article is essentially a long moan about how things have changed,
and how the beancounters would like things to go back to normal because right
now they no longer understand how to add stuff up.

Example: _" tiny payments for digital contributions might correct yet another
problem, a misallocation of labour. If companies paid people for useful data,
rather than mopping up what they leave behind as they use online services,
then prices could nudge people towards more productive online activity."_

Correct a problem? A problem for who? Neither the consumer nor the provider
appear to be in any kind of trouble. The use of "mopping up" implies that the
acquisition of data is somehow accidental, and simple an act of unwanted stuff
discarded by the visitor, whilst in truth it is an aggressive and intelligent
machine that flenses data from the visitor. Finally "productive online
activity" is completely fucking meaningless in this context. productive how?
for whom?

Yet another faux-intellectual bullshit piece by the Economist.

~~~
peterhartree
> Correct a problem? A problem for who? Neither the consumer nor the provider
> appear to be in any kind of trouble.

In a recent lecture at the RSA [1], James Williams (former Googler who worked
on metrics and strategy for search advertising) makes the case that:

\- The ‘distractions’ produced by digital technologies are much more profound
than minor ‘annoyances’

\- So-called ‘persuasive’ design is undermining the human will and ‘militating
against the possibility of all forms of self-determination’

\- Beginning to ‘assert and defend our freedom of attention’ is an urgent
moral and political task

I'd recommend giving it a listen. Tristan Harris' recent TED talk offers a
more popular primer [2].

[1] [https://soundcloud.com/the_rsa/are-digital-technologies-
maki...](https://soundcloud.com/the_rsa/are-digital-technologies-making-
politics-impossible)

[2]
[https://www.ted.com/talks/tristan_harris_the_manipulative_tr...](https://www.ted.com/talks/tristan_harris_the_manipulative_tricks_tech_companies_use_to_capture_your_attention)

~~~
mdekkers
Which is interesting, and thanks for the links, but this isn't what the
Economist is talking about. The Economist is talking about the mis-allocation
of labor - not a problem for the producer, not a problem for the consumer, a
problem for the person that has to tot up the stats and make it fit the
framework of capitalism.

It is almost like people don't even care about the actual article, and only
read what they want to see....

