It is the classic Silicon Valley playbook: offer free services so long as you can monetise your own benevolence. A deal struck between Google and the Sri Lankan government to cover the entire country with free WiFi is merely the latest example. In just a few months, the search giant has volunteered to provide fast internet to a scattering of American public housing projects and run free public WiFi for New Yorkers.
Facebook is doing something similar, betting that connecting people via its internet.org initiative will eventually pay off via advertising.
This trade-off has become familiar to anyone who uses a search engine or a web-based email provider: a nominally free service in exchange for personal data. But these may just be the beginning. As Silicon Valley aggregates many other types of data related to health, education, transportation, energy, the range of such free services will expand dramatically. It is even possible to imagine that their scope might one day encompass so much as to become a de facto replacement for the welfare state.
Consider, for example, the healthcare business. In the past, its main job has been to cure disease, and in many parts of the world its efforts have been paid for by the government. That is about to change.
Our physical activity can now be constantly monitored by wearable sensors, holding out the promise that the focus of healthcare provision can shift from making people better to preventing them from becoming ill in the first place. Diseases will be detected by patients themselves, at a very early stage, and technology companies rather than governments will foot the bills. What was once a publicly funded safety net will become a private smorgasbord of free services.
Technology giants have already disrupted every industry they have touched. Now the disrupters are turning on social democracy itself.
Granted, the Silicon Valley model of welfare provision might seem strange. For one thing, it is volatile: funded by advertising, it might collapse any day.
And its services are often a mere shadow of the universalist ambitions inherent in a state school system, or a public broadcaster such as the BBC. It might say “free” on the cover, but look inside and there are hidden constraints. Internet.org gets you online and costs you nothing. But this “online” is limited only to a handful of apps — Facebook, of course, among them.
An inferior internet connection is better than none at all — this, at least, is how Silicon Valley justifies itself. The same would go, perhaps, for education and healthcare, too.
If companies can make a profit trading personal data for services that the state used to pay for out of taxes, it is perhaps tempting to let them. But where would it leave today’s political parties?
On past form, parties of the right and centre-right will lean towards the Silicon Valley option; the additional welfare it provides is a nice and unexpected bonus. The radical left will opt to lessen their dependence on internet entrepreneurs in much the same way that a previous generation of leftists fought ExxonMobil and United Fruit.
What of the parties of the centre left? They have most to lose, as an endorsement of the Silicon Valley’s welfare model would be a declaration of their own irrelevance. Broadly sympathetic to the idea of putting more of the economy in private hands, they can neither attack Silicon Valley nor offer better welfare. And they increasingly lack credibility. Germany’s Social Democrats, for instance, might not like the precarity of the “gig economy”. But is it really so different from their own “minijobs” labour reform from a decade ago?
The choice is unenviable. But if Silicon Valley takes on the welfare state at its own game, the champions of social democracy must either disrupt then, or be disrupted themselves.