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Podcast episode

French Journalist Guillaume Pitron argues the Digital World is Costing the Earth – EP189

French journalist Guillaume Pitron discusses his book “The Dark Cloud: How the Digital World is Costing the Earth” with guest host Tim Hughes. The book explores the environmental impact of the digital world. Pitron delves into concerns about energy usage, e-waste, and the carbon footprint of the internet. The episode concludes with a debrief of Tim by regular host Gene Tunny on the conversation. 

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You can listen to the episode via the embedded player below or via podcasting apps including Google PodcastsApple PodcastsSpotify, and Stitcher.

About this episode’s guest

Guillaume Pitron is a French journalist, author and filmmaker. He has written two books, published in some fifteen countries, about the natural resources needed for new technology. He has been invited to share his ideas in the French and international media (Le Figaro, BBC World Service, Bloomberg TV, El País, La Repubblica) and at international forums and institutions (Davos, IMF, European Commission, Unesco).

Link to Guillaume’s website:

https://www.en-guillaumepitron.com/

What’s covered in EP189

  • Introduction to this episode. (0:06)
  • What is the dark cloud? (1:27)
  • There is no digital life without rare earths. (3:54)
  • What is the real cost of digital technology? (8:06)
  • What’s the cost to the environment? (13:07)
  • What can we do as individuals to make this better? (17:38)
  • Facebook’s Lapland data center. (22:22)
  • Facebook uses hydro-electricity to run its servers. (24:25)
  • What happens if there’s no water? (28:05)
  • What is the future of the internet going to look like in 10 years? (33:18)
  • Are there any governments around the world that are taking steps forward to regulate the internet? (41:02)
  • What can be done to address this issue? (43:59)
  • What were the main takeaways from the conversation? (48:11)

Links relevant to the conversation

The Dark Cloud book:

https://scribepublications.com.au/books-authors/books/the-dark-cloud-9781922585523

Digital Cleanup Day:

https://www.digitalcleanupday.org/

Jevons paradox:

https://en.wikipedia.org/wiki/Jevons_paradox

It appears the Amiga hard drive Gene’s neighbour in the late 1980s had was a 20MB hard drive:

https://bigbookofamigahardware.com/bboah/product.aspx?id=534

Transcript:
French Journalist Guillaume Pitron argues the Digital World is Costing the Earth – EP189

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Gene Tunny  00:06

Welcome to the Economics Explored podcast, a frank and fearless exploration of important economic issues. I’m your host Gene Tunny. I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode, please check out the show notes for relevant information. Now on to the show. Thanks for tuning into the show. This episode features an interview with French journalist Guillaume Pitro, about his new book, The Dark Cloud, how the digital world is costing the Earth. Guillaume visited Brisbane a few weeks ago for the Brisbane Writers Festival. I was in Adelaide when he visited and so Tim Hughes stood in for me and interview VR. I’m very grateful for Tim. First, I’m going to play the conversation between Tim and Guillaume. And then I’m going to catch up with Tim for a debrief on the conversation. I hope you enjoy it.

Tim Hughes  01:27

Okay, so welcome to Economics Explored. I am Tim, you’re standing in for your host, Gene Tunny. And we’re very excited to have with us today Guillaume Pitro. I’ve pronounced that correctly. Very well. Thank you. And Guillaume has a couple of books out that we’ll discuss. But the main one at the moment is called the Dark Cloud. So again, without any further ado, would you mind just letting us give an overview or give us an overview of the Dark Cloud?

Guillaume Pitron  01:56

Well, again, thank you for receiving me here in Brisbane, I am giving Bitcoin, just to introduce myself in a very few words, a French journalist based in Paris, I am an on the field reporter. That’s what I do most of the time, do documentaries and also write books. The Dark Cloud is my second book published by scribe in Australia. It’s basically a worldwide investigation, which took me two years on the trail of my email. Yeah, if I do send an email to you, for example, you’re sitting just less than a minute away from me, where does my email go? What is the real trip of my email between you and I, and actually, the real distance between you and I is that one metre, it’s several 1000s of kilometres, because this data will actually travel through 4g antennas, Wi Fi boxes, but also submarine cables, constellations of satellites, it will be stored in data centres maybe all around the world. So it’s a huge infrastructure that has been built over the last decades by the digital industry, in order to make us live connected. And we are not aware of the physical impacts of the so called virtual life, and also of the environmental costs of being connected. This is what the book is all about.

Tim Hughes  03:18

That some really interesting because I know that this is a subject that has been talked about quite a lot. And one of the areas that I mean, for instance, particularly here in Australia, so we have a lot of rare earths rare metals at our disposal for mining. So some of the areas that you talk about the the environmental cost, the human cost of our digital technology, our use of digital technology. What are the biggest pitfalls or what are the biggest problems? So you talk about, for instance, you know how far that email goes, for instance, what are the costs of us environmentally and a human cost.

Guillaume Pitron  03:54

For the rarest extraction? Yeah, okay. First, there is no digital life without rare earths rares is you find rare earths into your smartphone. And this is the magnet of your phone, which vibrates is made of iron, boron, and a rare earth, which is called neodymium. So you wouldn’t be able to be on silent mode, if you didn’t have rare earths to make your phone vibrates. Basically, this earth is in a way being extracted in Australia, in the Western Australia region. And most of the barriers are being extracted in China, where I’ve been several times I’ve been in rare earths mines and refining areas north of China, south of China for the last years. So I can tell you that extracting these resources is nothing but virtual, everything that is called virtual stems from a scar in the ground which are called a mine. And the refining process of the rare earth is actually very, very dirty. You need to separate the rare earth using water and chemicals. The water which is very polluted is just being rejected directly into, into the nature, it causes cancers, a lot of problems right for the human health and also for the environment. And you have in your phone not only one rare earths, but you have 60 metals in your phone, whether it’s cobalt and lithium and graphite to run the battery, but also a silver, a bit of gold, you have Indium in your phone, on your phone in gym is a mineral, which in the form of powder, makes your phone tactile, so you wouldn’t be able to leave your modern life without having an tactile screen, which is made six to indium, once again, this is being studied in China. So basically, all these metals come from mine, and it comes at an environmental cost.

Tim Hughes  05:45

So is the is the issue of the processing of those minerals. Is that where the impact is largely found mostly? Yep. And so does that vary around the world, I mean, what was the percentage of where these minerals and metals come from?

Guillaume Pitron  06:02

On the initial basis, these metals would come from third world, underdeveloped countries with less strict regulations and the one we would have, if we were in Australia, or in Europe, or in the United States and Canada, we’ve been offshoring the production of this metals for the last decades, we haven’t wanted to have this metals being extracted on our ground, I may make an exception for Australia, because you’re the world’s most producer of lithium. But most of the time, we just have preferred to let poor countries extracting these resources in a way, which is just not consistent with an environmental standards, not sustainable. So that we could just get the metal refined, cleaned. And we could say how we can use this metals for virtual and clean technologies. This is where the paradox is, I wouldn’t be able to precisely give you a figure like in terms of percentage, it depends from a metal to one another. But most of the time, you will find this resources in China, in Burma, in Indonesia, DRC in Africa, and also in South America, for instance.

Tim Hughes  07:12

So DRC, that’s predominately cobalt. Is that right?

Guillaume Pitron  07:15

Yeah, from the Democratic Republic of Congo DRC, you may extract, this is a country, which extracts and trades about 60% of the world’s cobalt production. And you have no smartphone without such a cobalt, which is being used for batteries.

Tim Hughes  07:33

So it’s really the processes in the extraction and the processing of those minerals and metals. That’s the issue.

Guillaume Pitron  07:41

Most of the environmental costs of the digital world comes from the manufacturing of the tablets, the screens, smartphones, sorry, 4 billion units are being used and speak to you right now around the world. Each of them requires such metals. So manufacturing these devices, these electronic devices, is the main cause for digital pollution. This is very first and foremost, a material pollution or resource production pollution.

Tim Hughes  08:14

I think that leads us into one of the other questions which I was going to ask, because part of the this unseen, this invisible side of our digital technology. One thing is the hardware. And then the other one, which he started off with, which is that you know that an email, for instance, appears to be of very little consequence or very little energy needed. However, that’s not the full story. The energy consumption is one of the big issues as well as that right.

Guillaume Pitron  08:40

So once I’ve said that, making a phone stands for the most important part of the digital pollution, that doesn’t mean then that watching video on streaming, or sending an email doesn’t have a cost, right? Basically, I can give you a figure of if you send an email to someone with a big attached piece like one gigabyte, we roughly consider that sending it emits about 20 grammes of co2 into the atmosphere. 20 grammes is as if I was driving 150 metres with my car in for one gigabyte, for such an email. Yeah, so basically, you see, it’s not that much, but it’s not nothing. And if you keep sending emails and emails, and we send every day 363 billion emails, mostly spams, still. And if you add to that, well, you know the costs for the environment or of you know, swiping on a dating site or watching a video, listen to music. I’m not saying here is that we shouldn’t do that. I’m no the Taliban and coming here to tell you don’t listen to music because it has enormous environmental cost. But I’m just saying, even if it’s the short impacts, little impact for each and every tiny action that you have on your phone, if you multiply that by the 4.5 billion users of internet multiplied by the number of digital interaction that they have every day, that starts meaning something,

Tim Hughes  10:12

The invisible part of it is that normally when there’s a resource involved, water, electricity, etc, we have to pay for it, you know, we pay for them as utilities. And, and so it’s clear, if we leave a tap running, we’re going to have to pay for that. So even though it’s, it’s poor management, it’s expensive. And we can see that. So it seems to be there’s a bit of a disconnect with our use of digital technology. And like I say, understanding really the real cost of this because it’s taken up elsewhere. It’s out of sight, all that information. I mean, I was thinking, for instance, I’ve got 20,000 photos on my phone, I don’t need 20,000 photos on my phone, I got 800 videos, I mean, it just accumulates. So that is sitting somewhere that’s taken up,

Guillaume Pitron  10:58

Actually, the photos on on your phone, there are in the cloud. Yeah. So I mean, you believe that these are on your phone, that may be actually, they may be stored on your phone, but they may be on your Apple drive or whatever things and actually you connect yourself from your phone to an account, which is a server, which is somewhere sitting into data centre, wherever it is. So you access the cloud, because you access the pictures, which are once again outside of your phone.

Tim Hughes  11:29

So there’s a there’s a cost to that.

Guillaume Pitron  11:32

The cloud is a data centre, whatever you use your phone, whenever you want to send an email, you’re not sending an email to someone else’s phone, you’re sending an email to someone else’s account, your Gmail account, which is stored somewhere and this person will connect herself or himself from him his phone or her phone to such a server which is stored with other servers in huge warehouses, which are called data centres. And a data centre can be can be as big as dozen soccer size of a dozen of soccer fields. And you find hubs of data centres all around the world. Washington, DC, Sydney, Paris, Frankfurt, London, Beijing, it says a commonly accepted figure that there are around 3 million data centres around the world where all of our data are stored. And these data centres, you know, cannot break down there cannot be any electricity breakdown. Because that means that you can’t access your emails. And you don’t want that right. So if you want to make sure that you get an access to whatever device, whatever internet service for 24 hours a day, you want to make sure that the data centres are running all the time that the data is being replicated in another data centre. So that if the first data centre runs out of electricity, another one is just working instead of the first one. So you duplicate the infrastructure in order to just you know, secure the service continuity of the internet. And this needs electricity to run. And this is where we realise that there’s some points where the cloud touches the ground. And when it touches the ground, it needs to be fed with electricity, which comes either from coal, or from oil, or from a solar power plant or from a nuclear power plant. And this, again, is a cost.

Tim Hughes  13:28

That currently stands at 10%. Is that right? Yeah,

Guillaume Pitron  13:31

10% of the world’s electricity is being used for digital technologies. And that figure is going is increasing at such a fast pace, that there are some, you know, estimations saying that these 10 person may become 20 persons within a decade.

Tim Hughes  13:48

Okay, so it appears to me that like it seems to be, amongst other things, it’s very much an efficiency situate or an efficiency problem. So for instance, like, if emails and pictures and everything was physical, and we could see them, and we were to put them in our backyard, our backyard would become very messy very quickly, we would be compelled to tidy up. This is out of sight. It’s somewhere else we need to as consumers be aware that there’s a cost to this, which is I guess where you’re coming from? Is that right? This is a sure this is a big message. I mean, very much it opened my eyes massively like this. I had no idea. I knew it was something but again, I didn’t really know what understand these terms cloud, etc. A very fanciful or ethereal, whereas in fact yet as you’re pointing out, they’re real.

Guillaume Pitron  14:36

And this is what’s interesting what you’re saying because that maybe that makes me rebound on Education Day, which has been created a couple of years ago by an Estonian lady. She’s an activist, and she created I forget her name right now, but he she created the first World Digital cleanup day. So basically, you’re not going to go into the streets to clean the rubbish on the sidewalk. You’re going to go back to your phone and your computer, and you’re going to follow a course it’s going to take you a couple of hours during that specific day, usually takes place in March depends from countries to countries in my country, France, it takes place in March. And basically, they’re going to tell you how to clean, not your room, or the sidewalk, but to clean your email to clean your cloud. And you’re going to realise that on the rubbish of your cloud, there had been for years old pictures and old videos, yeah, which were still being, you know, kept in the cloud, running thanks to electricity, and you just didn’t know them. So how do you clean that? And how do you actually make a good contribution to the environment by following such a course. But as you said, it’s about cleaning your digital world in a way. The name of the girl is Anilee Overal.

Tim Hughes  15:51

So could you say that again.

Guillaume Pitron  15:54

Anilee Overal, the Estonian militants who created this world digital cleanup day.

Tim Hughes  16:01

That’s really cool. Because it strikes as being an education, which I guess is a big part of your message is like to let people be aware of it, because people will generally do the right thing. If they know,

Guillaume Pitron  16:12

Oh, yeah, we’re turning virtual. Everything is dematerialised, your paycheck in is a cloud. Okay, why not about the cloud, you know, people don’t really understand what that really means. They don’t understand that all these virtual things are really material, very physical. And the first challenge here, as you say, is to educate. And we are just at the beginning of this process, where we just try to understand what this reality is all about. And how do we educate the young generation, the climate generation, they want to do good, they’re on strike on the Fridays, telling me not to take planes and not to eat meat. But actually, they’re spearheading such kind of a pollution. And they’re just not really aware of that. And so the very first challenge is to make people understand that this is becoming big.

Gene Tunny  17:03

Okay, we’ll take a short break here for a word from our sponsor.

Female speaker  17:09

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Gene Tunny  17:38

Now back to the show.

Tim Hughes  17:42

Part of this is this efficiency, you know, reducing the waste and stopping the habits that produce more waste, you know, so, for instance, if you’re taking photographs to delete the ones you don’t want and try and minimise the ones that you keep thinking about what you send as an email, trying to minimise all of that. And should we be deleting as we go far more because I know that my email for instances and there is this with spam, and all sorts of other things. It’s a massive, I can’t imagine what percentage if it’s easy to put a number on it, it’s okay, if you don’t have one, but spam obviously contributes a lot to it. There’s so much unnecessary information being stored, it’s clear. So we can do some things as individuals, are there any technical or is tech coming to the party with this to try and make it a little bit more efficient.

Guillaume Pitron  18:32

First, where you could do run the next World Digital cleanup day course, maybe all the picture that we’re talking about, I’m just talking about my own example. Yeah, my phone is an iPhone seven, I don’t have much space into my iPhone seven, which is a good thing. So I don’t change my phone. So that, you know, I’m running out of space at some point, so that I have to take my pictures out of the cloud. And I just put them on a hard drive on an external hard drive. And that doesn’t cost much more to the environment that just storing it in this device that puts less picture on the cloud. What you could do personally, individually to, which is a very important thing is to keep your smartphone and other computers as long as you can. Yeah, I mean, once again, my example iPhone seven, I bought it three years ago, it was a secondhand phone already. And for the last three years, I’ve broken it seven times, four times the screen twice, I had to change the battery. And one time I had to change the main button. But that could be repaired. And actually, I still have the same phone and maybe I can keep it for three more years. And maybe once I don’t want it anymore. I can resell it. If we all do this rather than changing our phones on average, every 18 months, 24 months. Yeah, it’s a huge it’s makes a world of a difference because this main pollution impact, which is once again, the manufacturing of the phone, you can developer to issue keep your phone twice as long. So that’s a very important thing to do. And then you ask me another question, which I forgot

Tim Hughes  19:59

well I was going to, part of that was what the tech companies are doing. Like if they’re on board with this, I mean, because clearly, so for instance, in that regard, they’re looking to sell phones, you know, as a business, they’ll be looking to sell their hardware. So, and I know that, in many areas, the quality of many things has dropped in our printers, for instance, like it’s cheaper to buy a new printer than No, nobody gets one fixed anymore, which is an awful waste of resources. And it’s a really bad way of, you know, going around business for us as custodians of this planet, if you like, you know, so is there anybody in the tech space that’s looking to make this better.

Guillaume Pitron  20:39

It starts being something which companies care about, and they care about it, because first, it costs money to change devices every two years, it costs money to run your data on electricity for service company, the digital devices, and running the digital part of the company may account to 30% of the consumption of electricity of such a company. And it’s also becoming a reputational issue you want to have in your company’s new brains from the new data generation very much worried about the, you know, environmental impact of everything they do. You need to have a message here, and you need to do actions. And I’m very much invited myself by companies, which are just like, we want to be better in a way. And suddenly we realise that there is this new chapter of human pollution, which is digital, how do we cope with this? What do we do? And obviously, they’re starting to understand that. And Google and Facebook and Amazon are very much into these things now, because they don’t want to be seen as being ecologically non friendly companies. You know, when you have Greenpeace, you’re flying a huge balloon over the data centres. And the headquarters of Google in California. And what’s printed on the balloon is How clean is your cloud? That is the good for the reputation. So they want first to green, their electricity mix. They want to say, oh, okay, we need electricity. But this electricity come from solar panels and wind turbines. It doesn’t emit any co2. They do offsetting also, which is kind of a problem, in a way kind of a scam. Because you never know, where’s the trees being planted in? I can tell you many more stories about that plane is claimed, basically, yeah, very much. And also, what Facebook is doing is very interesting. Facebook has been moving some of its data centres for European consumers to Lapland, they moved it close to the Arctic Circle to cool your data, because your servers, the servers where your data is, are actually heating to 60 degrees Celsius, that need to be cooled back to 25 degrees. So either you use an air conditioning system, which is very much energy intensive, or why don’t you move the cloud to places where it’s just naturally cold. So your exercise videos of cats and other emails are literally sleeping under metres of snow in the nose of Lapland, where I’ve been? Alright, I’ve been there. I’ve been to send a data centre not inside I was just outside of it. Yeah. But basically, I was where my Facebook account is. Well, the good news for Facebook is to say, well, not only is it cold, so I use less electricity. I don’t need air conditioning devices. But the thing of the thing is, they say whatever electricity I use, it comes from agile electricity plants.

Tim Hughes  23:21

So this is they’ve got one in Sweden. This is face but would you like to tell us more about about that the hydroelectric plants so I’ve

Guillaume Pitron  23:28

been there. I took a train from Stockholm crossed the Lapland in order to meet my friends, because we’re all there. literally speaking. Yeah, there was a lady in the train. And she came to see me she was just she just wanted to discuss her number. She was a tourist. And she said to me, okay, you want to travel? What are you doing here? And I said to her what I was doing and she looked at me she was just like, this is gonna cycle literally speaking, I went to this data centre couldn’t get in and took my stuff on a picture with all this huge warehouse behind thinking my WhatsApp account is here. My I don’t have an Instagram account. Our Instagram accounts are here. My Facebook accounts are here my 600 and something friends are literally here. This is where all of it is. It’s not for the European, the African Middle East consumers, okay for your designers truly, I believe they are storing US States probably in Oregon, where Facebook is. Okay, the data centre from Facebook is in Oregon. So basically there was a story and then I figured out but so the electricity comes from the Lhuillier river. And this is on that reverse that back in the 60s, some electricity dams. Hydroelectricity dams have been built, not for Facebook because no one at the time knew that Facebook would come to an existence, but Facebook is still using this electricity infrastructure in order to actually run my Facebook account. And I found out by travelling through Lapland, that back in the 60s Is the Swedish state had dried up. So small little river for about 15 to 20 kilometres. And this is the driest. This is the longest river ever dried up by human activity in Western Europe, in order to change the direction of the water and feed this hydroelectricity dam, there’s a guy here, a horrible Mo, I had an amazing countering with him because he’s no is in 60s, but even for the times back in the 60s, where suddenly from one minute to the other, this part of the rivers a smaller river just ceased to exist. It’s just disappeared, and is still crying for this Lost River. And is writing is trying to attract Facebook attention, saying, Have you got a single ID about the impacts of running the electricity that makes today your infrastructure work? So that was amazing story that was in place before? Yes, Facebook is not responsible for the, for the building of such an infrastructure. But Facebook does still today use such an infrastructure. And it keeps this river still dried up today.

Tim Hughes  26:15

I mean, I guess, um, any hydroelectric plant that was in Australia, there’s the Snowy Hydro plant down the snowy mountains. I think it’s 2.0. Now, I’m not too sure. But that has been going since the 50s. I believe like a you know, it’s and now they are big, any damage or anything is gonna have consequences, I guess for downstream. It’s the waterways of the world are getting very much challenged by agriculture and the taking of lands and everything. So it’s sort of getting into into different areas in some ways. But what we’re talking about in many ways is resources and not not wasting those resources. And so the amount of electricity used to fund our digital technology, our habits is significant and growing. So water is also one of those resources. Yeah, that’s getting that’s getting challenged. Sorry, gone.

Guillaume Pitron  27:10

No, no, because we are surfing on internet, we are looking videos and streaming. But let’s take it literally these expressions, these phrases, literally, we literally wouldn’t be able to surf on internet, if there was not water for real.

Tim Hughes  27:28

And now when you mean as a resource,

Guillaume Pitron  27:32

as a resource for making the electricity producing the electricity as part of the process as a resource for refining the metals that are being used in your phones and other servers as cranes as a resource for running the air conditioning systems, the data centres, a big data centre may use as much as 600,000 square metres of water every year. So you need such a water for making internet work. And yeah. Is there risks that at some point, you couldn’t serve anymore on internet? Because there is no water?

Tim Hughes  28:06

Well, this is I guess, with any resource, it has to be managed wisely. And with water. There was something with the NSA in America. So we had a quick chat about this before we started recording. So would you mind? Sure, just telling the listeners,

Guillaume Pitron  28:20

the National Security Agency stores that are from everyone. And back, I think it two sons 13 as they started to run their biggest data centre, and they made it run in the city of Bluffdale, which is in the state of Utah. As you will understand this data centre needs water in order to run the cooling systems. The thing is, we are in Utah, which is the secondary states of the United States, some local journalists started to ask the question to the NSA. But what is your consumption of water? The NSA would first reply, I don’t want to tell you because if I tell you how much we are consumed, that will tell you information about how much data store, okay. Eventually, they found out and the NSA replied, and it was clear that the NSA was not consuming that much water, taking water out of the Jordan River, which is just running through Bluffdale city, Byrd suddenly some NGO militants, and we’ve had the moment where it was Snowden hadn’t made the revelations about all this surveillance politican stuff. And they start to think but if the NSA doesn’t have water, there is no operations anymore. What if we strike an action on courts in order to forbid the state of Utah to make water available to the NSA? What if we could afford or to the NSA? Maybe this is the actual tool of the NSA. And if there is no water, we just stopped as a server and stuff, because this is the resource that is being needed for surveillance, which is an amazing story, right?

Tim Hughes  29:58

So with that, so Same with the water would be diverted towards civilian use or towards the NSA is that there

Guillaume Pitron  30:05

was no such a conflict of usages. Okay. So once again, there wasn’t so much question of consumption, so the water would have probably remained in the Jordan River and whatever kind of things. But once again, if the water cannot be fueling the NSA the same way as oil can be fueling a motor of a car. You don’t run this system anymore. And there was a thing a bit crazy ID that this NGO militants were having. They were being supported by also by a local senator or local parliamentary member to stop the civilians literally by by just stopping the availability of such an important resource for such a panopticon.

Tim Hughes  30:48

Right. Okay. So the implications are far reaching, basically. Yeah. Okay. I want to circle back to the question of efficiency. So cryptocurrency? I guess that’s included in our digital technology very much. I know that the the energy consumption for cryptocurrency to perform is really high. I’ve heard statistics that it takes the same amount of energy as Portugal, as a whole country does for all the transactions to happen, especially for the Bitcoin. Yeah, because last year, I think it was last year Aetherium managed to develop a new way of doing their transactions where it’s massively undercut, I think it was 99.9% reduction. That’s right. So that kind of tech, technical, technological improvement, if you like that efficiency, is there anything on the horizon in other areas where we might be able to clean up our act by just reducing the amount of power that we need to run our digital technology,

Guillaume Pitron  31:47

the data centre industry must no respect some specifications, which are being called the P e, u e, the power unit efficiency. So basically, it is a ratio that tells you how much power you need, in order to run a server to run a certain amount of data. And this PUE can be very high, maybe close to two. And then you can go as low as as low as 1.2, which shows that your data centre is kind of more eco friendly. And the more we are going with, you know, investments in researchers, the more the PU E is going down, and the more it’s a good news and the more the industry can say, Look, we’re doing efforts in order to store our data and to run the internet in a more efficient way in a more ecologically friendly way. And once again, this is important that is good. This industry tries for reputational reasons for money reasons to do better, I think is we can take that for granted because we consume more and more and more data. So at the same in the same by the same token at the same time. We keep discovering new ways of using the internet. Yeah, this is new cryptocurrencies. This is maybe tomorrow creating new avatar in the metaverse this in requesting, asking questions to the chat boat chat GPT for Yeah, that’s

Tim Hughes  33:12

the new thing. AI is a massive new one. Definitely arising introduction to this.

Guillaume Pitron  33:18

Yes. And, you know, 10 years ago, we would not have thought that we would be speaking in 2023 about you know, Metaverse and Chad GPT. For what is internet going to look like in 10 years? Nobody knows. But it’s going to be crazy. We are just in the, you know, very early ages of the internet. We’re just turning. We’re just discovering this new technology. Where will it take us in the future? I don’t know, what I’m absolutely sure about is that is going to make us produce more and more and more data. And this is what a techno profits from the Silicon Valley, an American techno profits, cause the Internet of Everything is advocating for the Internet, everything, the internet, the internet of everything is basically we’re going to connect everything, my glass will be connected, your body will be connected with sensors, animals will be connected trees will be connected, we’re going to connect everything because everything that is connected, produces information, produces data speaks to someone else, or some or something else, which is connected. And that is information, which is money and which is power. So we are in a world where on one hand, technologies are getting much better, and much more efficient, very good news. But on the other hand, there is a rebound effects. Oh, because I don’t have any impact on the internet because for each data I produce, it has less and less impact. Why don’t I just you know, produce and consume more data. And the other dynamics here is the fact that in the next 15 years, humankind with will probably produce and consume 50 times more data than what it does today. So there is a race here between the tech nology, which is getting much more efficient, and the fact that our usages of such technologies are getting exponential. So this is where the big story comes. figures tell us that in the next 10 years, the 10%, electricity consumption of the digital world might become 20. And the four persons of co2 emissions, which is more than planes might become eight persons. Yeah, I’m not sure. But if these figures are true, that means that the race is being lost by the technology, and that we consume more new data than the technology is able to offset them in a way,

Tim Hughes  35:35

how much difference can we expect to make through changing our own habits? Like is that just not going to be enough like, because I can’t imagine the way that you say that the way that data is coming to us, it’s coming more and more from different directions. It’s unmanageable, in many ways, on a personal level, to sort of having a habit all in order. What’s the best we can do here? I know, we know, we sort of touched on this week we go back to it. And do we really have to depend, for instance, on the technology changing to suit us, you know, like, rather than us changing our habits to try and manage that amount of data.

Guillaume Pitron  36:12

You’re asking me a difficult question. Yeah. And I wish I would be able to answer to you in a clearer way. But when I look at the way we are using Internet today, when you want to look at the ways young generation is spending, its time, you know, sticked to talk in other kinds of devices. I don’t think there is anything here that relates to the very basic wisdom we should be having while using such devices. And I don’t think any of these new technologies are being offered to us in the future. Whether it’s Metaverse new cryptocurrency is the niche, next version of chat boat would make us use the internet in a more sober way. So I’m a bit worried in a way that we behave like child’s in front of this technology were so much impressed by what they can do. And we don’t want to change our habits. Now, there are limitations, which are starting to appear into the debates, limits to the way we will be using internet in the future. The first one can be ecology, as I speak with you right now, okay, so whenever I am on such devices, I have an impact on the planet. So that may, in the future, play a role in changing your habits, first and foremost, keeping your phone longer. Second, is democracy. We have seen states, including in Europe, trying to, you know, frame the use of certain social networks, because it spreads hatred, because it’s pray to fix news. And we want to protect a beautiful value, which is democracy. So you want to make sure these social networks don’t go too far in the face of such a value, which is democracy. And there’s certainly mutations that I see coming, right now is health, whether it’s your physical health, spending your days on your couch, watching a video on your phone, or whether it’s mental health, and we can’t count today, it’s the number of scientific studies, which are being produced, telling you how that much affects your attention capacities, such tic toc and other kind of things. I would like to believe that ecology, health and democracy may be some hurdles to just keep using these devices, without any real thinking about the impact that they may have. That makes a

Tim Hughes  38:43

lot of sense, because it can feel very insignificant as to what your own contribution might be to a solution such as this problem. But the reality is that we shouldn’t underestimate market pressure. So you know, companies, individuals, demanding or asking of the tech of the companies who are providing the services in this hardware, that they’re not happy with it, they’re not okay with it, and they want it to change. So that kind of pressure coming from the bottom up, is quite likely the thing that will most likely change what happens,

Guillaume Pitron  39:15

I very much agree with you. And we live in such a contradictory age in a way because on one hand, what I’m telling you, in my view, make sense is debatable. But I think we know we can understand this message. And on the other end, everyone understands that the country which in the future will be the most powerful in the cyberspace, cyberspace will, you know hold many strings of the future of geopolitics. So if you want to keep running in this race that we’re all watching right now between the United States and China, you need to be up to date with these technologies. 5g has come to France. And there’s not been such a big debate over the impacts of the environment of 5g antennas. The French that said, but we need to have our own 5g devices. Why not because they know what 5g will be used for. We have no ideas or roughly an ID. But because we don’t want to have Chinese 5g networks installed in France, with potential spying capabilities. So it’s all about geopolitics, accelerating towards the 5g is just because you want to remain independent, sovereign, technologically, independent from the countries, and you will still want to play an important role in the future of geopolitics. So, in a sense, what you were saying just a minute ago is so interesting, because we are codes in this contradictions involved in makes sense, but geopolitics. And independence from other powers makes a lot of sense, too. And I would like to be Macomb my president, or I would like to be Albin ease, and be able to see clearer in the future. How do I make a choice between these two contradictory messages?

Tim Hughes  41:02

That some as funny because that leads me into volley one is going to be one of my, my final questions. So I appreciate the time you’ve given us today. Is there any other any governments that are doing anything in this space, are making positive steps? In my view, what usually happens is what we mentioned before where it’s like, it’s the pressure from the voters, the people at the market demand, you know, that is often the most powerful things. And I think governments around the world are struggling to keep up with this, the speed of this technology. So things are being implemented before legislation can catch up with it. But are there any governments around the world who were making steps forward to try and take responsibility for the direction that this is all going in

Guillaume Pitron  41:45

from an environmental standpoint? So

Tim Hughes  41:47

all all of it really like? Health? Because I think the health perspective you mentioned is really, really valid, because the health implications from this are really quite strong, mentally and physically.

Guillaume Pitron  41:57

I have in mind the example of China, where, you know, there has been some regulations enacted by the state saying that when your Chinese teenager I think I’m not sure when you listen, under 1414, one four years old, you don’t have the right to use tick tock more than like 40 minutes a day.

Tim Hughes  42:17

And is that a regulated it within the household? Or is it on the devices? That’s I wouldn’t be able to tell you because there’s a parent, I know how challenging it is, but it’s not that they can’t be done. But I know, there’s challenges

Guillaume Pitron  42:30

the fact that the state says so in a know how the SLO is being respected. Yeah, tells you something about how the Chinese government can care in a way about the mental health of the young saying, all right, it’s fine to a certain extent with after that, you might get into trouble from mental viewpoint. In the United States, an average a young in the United States is spending seven hours and 22 minutes on internet every day, outside of school. So I would probably mention the Chinese state in terms of environment, the French are doing something right now they have passed a law, which is the first law in the world. I don’t say that they could infringe on here. But basically tackling on a general manner, globally is a question of the impact of internet on the environment. And so there have been many things being decided, whether it is that, you know, the tech companies must inform their consumers about the number of data that have consumed and what it means in terms of co2 emissions. There are some specifications to the data centres, and all this kind of thing. So that is, I think, a good thing that’s just starting, mostly North European countries, Germany are very much in advance when it comes to regulating such kind of ways of using internets, including on the environmental angle. But for the rest of the world, this is just an unknown subject. Yes.

Tim Hughes  43:59

And then that’s good to know that those things are happening in those countries, which is, which is a good start. And I guess it’s sort of points towards the fact that whatever needs to be done, clearly hasn’t been done on any level at the moment, just yet. But whatever can be done. Well, one of the things I guess about this as building awareness, which is what you’re doing is educating, making people understand what the issue is, and what the implications are around the world. The problems with the environment and the human costs that come with this. So that then we can take responsibility for this individually and as communities and countries etc.

Guillaume Pitron  44:36

Yeah, and this is why I quote Stephen Hawking in the beginning of the book, when he says the future is a race between the growing power of technology and the wisdom with which we’re going to be able to we’re going to be able to use it. And the such wisdom can only start with understanding with education. It’s a paradox that the knowledge economy and the knowledge technologies don’t make you knowledgeable about the way the work kind of products is going to take years before we understand all these technologies, which are being up in the air, or donor their feet buried into the ground in the form of wire networks, or laying in the depth of the oceans, in the form of submarine cable optics is going to take years before we really, you know, put some names figures and descriptions over this Leviathan, which we just don’t have an idea of because we haven’t sensed it with our senses. It’s huge battle coming in here, in order to to understand that enormous ecological challenge coming for the decades to come.

Tim Hughes  45:44

Well, that sounds like a good place to wrap this up. Do you have any further closing comments on that gear?

Guillaume Pitron  45:51

Pretty much. I don’t want to be looking like someone was coming to make lessons of normal. Because I use internet every day. I need internet’s to write my books. And I need you to podcast what I’m talking to you about. So I’m going to tell you, you know, you should feel guilty whenever you open your email account, or whatever kind of things. That’s not the position I can hold. And I really would like to make you understand that I’m adopting every day myself, I’m questioning myself all the time. But I keep always in mind this ID, this which is new to us, which is that whenever we will use internet in the future, we’re going to have to make something which we have never done, which is a cost benefit analysis.

Tim Hughes  46:38

Actually, that’s a really good question that I will put to Jim, because that’s his area of expertise. And so the book that you have is the dark cloud. Yep. And that’s now available, we’ll link to everything in the show notes, with some of the things we’ve talked about. And the Estonian activist will make sure she gets a link there. And you also have the rare metals war. So you have you’ve got my first book published was truly a couple of years ago. And I just want to thank you for the work that you do. Because I think it’s so important, you know, and it’s so easy to not be aware of this, I for one was somebody who had a feeling you get a general feeling that things aren’t always as they appear, and that there’s a cost. But thank you for bringing to light, the cost of our digital technology. And also, I would encourage all of us to have these conversations more and to know that it is something that will grow. And that we have a responsibility as we’re here now on this planet to ourselves and future generations to try and sort out this issue sooner rather than later. And if that then comes to how we might vote and what we might do with our personal practices with digital technology. We have the power. We have the power, we have the power. So Graham Photron. Very, merci beaucoup. Merci. Merci. And and thanks for everyone for listening. We’ll have everything in the show notes. And we’ll look forward to seeing you next time. Pleasure. Thank you.

Gene Tunny  48:11

Tim, he is good to be chatting with you again,

Tim Hughes  48:14

playing good to be here, Mike.

Gene Tunny  48:15

Thanks for filling into me for the conversation with Guillaume that was, that was great. I really appreciated it. You had a good conversation with Gam about his book, The Dark Cloud.

Tim Hughes  48:27

Yes, it was fascinating. I really enjoyed it really enjoyed it. Thanks for giving me that chance. And

Gene Tunny  48:32

overall, I mean, how do you think? Or how do you think it went? What were the main takeaways for you?

Tim Hughes  48:39

I was fascinated by what he had to say. And I really appreciate the fact that he was able to bring attention to this issue, because it’s clearly a big issue. And it’s growing. And I thought it was a really good thing to talk about. And to continue talking about because no doubt this is an ongoing problem that we need to work with.

Gene Tunny  48:57

Yeah, it’s important to raise this as an issue. It’s still unclear to me exactly how big a deal this is and how much we should worry about it. I guess what he’s highlighting is that the digital world is not necessarily providing the environmental benefit that people 30 years ago or 20 years ago may have thought it was we moved away from having paper, you know, paper based offices and, and also having more services delivered online rather than us having to travel somewhere or, you know, travel or conferences or whatever. So he’s highlighting that this increasing digital footprint that’s having an environmental impact. I think that’s an important point. It’s still unclear to me exactly. How big a deal this isn’t how much we should be concerned about. I mean, clearly we should be concerned about environmental damage, environmental impacts, and we have various regulations that are that are at attempting to resolve those. There is an issue with climate change, of course. And we know that internationally many countries aren’t really agreeing to on or they’re not they don’t have the framework or the policies in place to really do much about that. I mean, there’s a lot of talk. There’s not a lot of action. Yeah. So that’s, that’s possibly an area where you could argue that better policies are needed. You know, in other cases, there is, well, at least in Australia, there’s very stringent environmental protections. I guess the issue is, well, what if they do you know, that’s what Guillaume was talking about mining in the impact of mining in emerging economies, wasn’t he? So there there are issues. And so perhaps that’s something where it’s worth focusing attention on. And there needs to be there could be some international pressure to improve conditions in those those countries. Did he mention Congo? I’m trying to remember now. Yeah,

Tim Hughes  51:01

he mentioned DRC. And cobalt, most of the cobalt seems to come from there. And without a doubt, it’s the processes with getting these rare earths out of the ground, that are the issues, environmentally, and the human cost of that. So there was really, I mean, I thought it was very clear that there was some big impacts from our digital technology, our digital habits, that we should be aware of. And that can be improved on that was the big, I thought that came over really strongly. So just to repeat some of the figures, he said, 10% of the power that we use currently is running our digital technology. And that’s understandable, there’s going to be an amount that goes into it, we’re highly linked to the internet, really dependent on the all of this new technology. So it’s not surprising that there’s a cost there. However, the rate that that is expected to increase up to 20%. Within the next decade, it currently accounts for 4% of the carbon emissions, and that’s looking to double as well. So this is the tip of the iceberg in the way I guess, there were two main areas that I could see where this inefficiency was a problem. One was in the use of electricity with storing data and unnecessary data, which is, and it was something we were talking about a little bit before we did this wrap up. It’s unknown, I guess as to how much of this data that’s being stored currently in 3 million data centres around the world that Guillaume mentioned, how much of that data is necessary or not, which is, you know, can update for conjecture. But I think personally, we could all see from our own habits, there’s a lot of data that we have, that has been saved, that’s completely not necessary. So there’s an efficiency problem there for sure. That can be improved upon. And whether, you know, for any of us to go through our phones, or whatever storage, we have to retrospectively go through our photos videos is a daunting task that is unlikely to happen to be fair. So if technology can come to the help AI, with some kind of solution with this, which I know they have, they can detect duplicates, and this kind of thing. So that that kind of technology is already there, technology could hopefully come up with something quite clever to try and either compress the amount of data that we have, which is one possibility, I guess, or to somehow diminish the amount of storage that’s needed, because it’s clearly unnecessary for a lot of personal use, we don’t need anywhere near as much as we currently use. You mentioned before that it’s cheap data is cheap, which I think is great for the consumer. But this is, I think, allowing us to have bad habits of just being wasteful with the amount of things that we hold on to just in case or just can’t be bothered to delete because it’s too clunky or too time consuming currently,

Gene Tunny  53:50

well, I think you made a good point there. It’s too. It’s too time consuming. So therefore, if you’re doing this efficiency calculation, you should take into account the fact that if you were to go and clean it up, you’d have to spend all this time doing so. And yeah, I did mention when we were chatting, storage is cheap. And as an economist, I mean, as long as people are facing the irrelevant, or the proper prices at prices, which fully incorporate all the costs, then what’s the problem? I mean, if we want to have a lot of data stored online, there’s no real problem with that. I guess the issue does come if we’re not properly if businesses and are not internalising all the costs that they’re imposing on society if there are these environmental impacts that aren’t properly costed and then priced into the product so that your look that could be an issue, right? I’m not I’m not denying that. But in terms of the you know, the photos I mean, I don’t know how big a bigger deal that is and how big a part of the problem it is. And this 3 million data centres. factoid, that’s not the huge Google or Facebook data centres, there are 3 million of those around the world, he must be talking about various computers, various servers that are associated with different websites around the world. That must be what he’s talking about.

Tim Hughes  55:17

Yeah, I mean, we didn’t go into any detail of the sizes, but clearly, they vary in size, as some of the ones we did talk about with the bigger ones Facebook. Yeah, it’s an Oregon and was it Lapland I forget now, which country was part of that plan? Yeah. And Finland, one of the one of the colder regions, which makes sense, as far as energy expenditure goes, however, I thought it was really clear, like if that were those figures, as they stand 10% is a lot of power. And so there’s a real environmental impact from generating that 10% of electricity. So I think it was really clear that there were impacts big impacts already, which were only expected to grow. So I think whatever inspections can be done, they do need to be considered important, and also to be done as soon as possible. And but I do think that the big steps most likely will be technology steps, you know, somehow of reducing our capacity or not our capacity, but I need to source so much data. So if it’s a compression issue, I don’t know that

Gene Tunny  56:17

well, there is compression already. I think we’re probably solve the compression problem. They’ve got very good algorithms for compressing data. I don’t know how much more efficient we can get on there.

Tim Hughes  56:28

I mean, I’m coming from a non technical background. So I mean, you know, how, for instance, the initial computers were massive, and they became smaller and smaller to the point we had, you know, a small computer in our pocket that can take cameras has all this capability. That is amazing. Yeah. I don’t know how that happens. I just trust that, you know, it has happened. So I just go with it. And I just wonder, like, you know, hopefully, there might be some future leaps and bounds that we can do in the forms of storing data. You know, if that might be something if we might go through the same process of efficiency and finding better ways to to manage this before it gets more of a problem.

Gene Tunny  57:03

Yeah, in terms of storage technology. Yeah. Yeah, I’m not sure. I mean, I’m not an expert on that. Either. You were talking about the, the size, I mean, the compression comes into it, where you reduce something that is 10 megabytes down to two megabytes or whatever. That’s the compression. So it has a smaller storage requirements in terms of storage technology becoming better and, and cheaper. I don’t know. I’m presuming it will. I mean, I remember, back in 1989, my neighbour, Simon had a hard drive for his Amiga computer. And I think it’s stored a couple of megabytes. That was like a big deal for saw.

Tim Hughes  57:48

And that’s the thing, like, you know, neither of us are equipped to sort of see, I mean, clearly, there were constraints. And there are, you know, people are trying to no doubt make this as efficient as possible. Yeah. You know, so if, in, you know, in the meantime, what we can do, though, which are made some really good points is that, you know, we have a couple of options, you know, to store our photos or videos on external hard drives, which, like you said, rightly, before we started recording again, but that would come at a cost, to create that harddrive, etc. But the point being that, once it’s on that it’s not consuming electricity, to keep it stored, it’s not stored in the cloud, etc. So that’s one of the areas I thought was worth mentioning. And again, the digital cleanup day. So he mentioned, I think we worked out it was Anneli overall, as the Estonian activist, and, again, with whatever is at our disposal, now, we can use that technology or that little bit of time, or like, it’s okay. You know, we do the same with our gay marriage, or whatever storage we have at home, I think it’s okay to put a bit of time into into making our digital storage habits more efficient and less, less cluttered. So there’s good information on what does it digital digital cleanup day.org. So if anybody wants to check that out, there’s some good information there. So the other part of the efficiency process was back to what you were talking about with the rare earths and DRC, etc. And that was a big one big takeaway I felt was to hold on to your phone. So that’s in the hardware element of our digital habits, so phones, laptops, tablets, etc. The production of those is where all of this comes into it. And so if we can hold on to our phone, get it fixed. I think GM said he had an iPhone seven, and getting it fixed, meant that he wasn’t then getting the latest one, they’re all perfectly good. I don’t have to have quantum leaps of technology. With these things. You can do everything with, you know, a model that’s a few years old. And so there are definitely things we can do to to help with these current issues and to try and slowed down that dependence on requiring more energy to store and the issues that might come from extraction of these rare earths from different parts of the world.

Gene Tunny  1:00:09

Yeah, I’ll have to look up and put in the show notes. What that the size of that Amiga hard drive was it probably, I think it was a bit more than a couple of media or

Tim Hughes  1:00:19

anything I just said, Jane, are you just thinking about that? You’ve been thinking about that for a while. Sorry. That’s totally fine. I’m used to it. I’ve got three kids. But yeah, so quantum leaps in that regard in a relatively short period of Yeah, exactly.

Gene Tunny  1:00:41

Exactly.

Tim Hughes  1:00:45

That’s another big point, I thought was really interesting was the value that you put on democracy, you know, that we have the opportunity in democratic societies to make change. I thought that was a good point.

Gene Tunny  1:01:01

Yeah. Yeah, I think well, certainly is. Yeah, we hope that the changes are sensible. So I guess the challenge here is to come up with sensible policy recommendations and not just react to the fact Oh, there’s a lot of data, we’re using a lot of energy for the digital world? Well, of course, we are because we’re role online now. So what’s the actual problem? I think we’ve got to make sure the policies are addressed at where the so called market failures are addressed at tackling those who were not properly pricing the costs of, of the environmental impacts. So that’s what I would say.

Tim Hughes  1:01:44

I think one of the main points was this is out of sight. So we’re not we’re not aware of this cost, in power, or in environmental and inhuman impacts. It was just bringing it to the fore to bring it into view, I guess, you know, with with rubbish that we do household waste, etc, we can see that it gets picked up. And it’s it still goes into areas that we may not be so aware of. But we’re aware of that daily. Yeah, contribution to. And I guess this is like there’s a digital landfill that we need to be take some responsibility for. And I guess that was what I felt from from.

Gene Tunny  1:02:24

Yeah, look, I think he makes some good points. So I think it was a good conversation. And from doing the some reading on this, in preparation for our chat, I discovered that there isn’t really a lot of information or a lot of analysis of this. And there’s a great article I found on data camp.com that I’ll link to that goes through the impacts of digital technology in it right. And in that they write despite recent progress to improve corporate transparency, there’s still significant data gaps and blind spots and the evidence of environmentally relevant digitalization impacts, which I think is true. So it’s something that further research would be useful on.

Tim Hughes  1:03:04

Yeah, yeah. It’s a big subject, and no doubt one that’s going to stay with us for as far as we can predict at the moment. So yeah, it was it was good to get that perspective on it.

Gene Tunny  1:03:15

Very good. And one thing I liked about his book is he, he does talk about the economics of it. He talks about the Jevons paradox. I don’t know if you came across that I needed and talk to him about about that. But the idea is that as we become more efficient in something, rather than using less of it, we can actually end up using more of it because it’s, it’s cheaper, so electricity as we become more efficient, and well, if we become more efficient with electricity, so the use of electricity, more efficient lighting and refrigerators and washing machines, then those savings we just ended up, you know, getting more appliances in we that gives us some room to to use more electricity. And it can be that we ended up using more sounds like

Tim Hughes  1:04:03

Parkinson’s Law where yeah, we fill up the available space to do whatever we can. So if we have more money, we spend it if we have more, fill it.

Gene Tunny  1:04:12

Yeah, so I’ll put a link in the show notes on the Jevons paradox, which was originally discovered by a British economist Stanley Jevons. Thing was William Stanley Jevons in the 19th century with regard to coal. So I’ll put some I’ll put a link in about that. And that might be a good topic to cover in a future episode.

Tim Hughes  1:04:34

And there was a cost benefit analysis that Guillaume mentioned.

Gene Tunny  1:04:38

Well, I think he was saying that you really need to do a cost benefit analysis on any measures to deal with these issues. Was that what he was saying? Or you’d want to do a cost benefit analysis of our use of digital technology? Now my feeling is, it’s going to come out in favour of the use of digital technology,

Tim Hughes  1:04:54

for sure. And he was very clear with that, that he’s not against it, like he uses it. And so it’s not a question of, for or against, it’s a question of better use of and better practice in how we, how our hardware is made, and, and also being mindful of how much power is being currently used. And to see that, you know, wherever we can be more efficient in that whole process that we do what we can. And that was where the democracy sort of comes in, you know, we can, as voters, you know, this is something through discussions through this kind of discussion. And the kind of, you know, I guess this is the awareness that Guianas bringing to us. And it’s just making sure that we can have these conversations and talk about it so that, yeah, at some point, it can be better, or we can be less wasteful.

Gene Tunny  1:05:48

Absolutely. And I think he does the point that we’re not going to solve all these environmental challenges. If we just move to renewables and EVs, there’s still going to be environmental impacts that we need to think about. I think that’s a that’s a good point. So anything else, Tim, before we wrap

Tim Hughes  1:06:03

up? No, I really enjoyed it, Gene. And thanks again for giving me the guest spot. I really enjoyed it.

Gene Tunny  1:06:09

Oh, of course. Thank you, Tim. And one thing I should note, as you please check out the show notes, I might put in the the capacity of that Amiga hard drive for 1989. I may have underestimated underestimated that but it was very low relative to what they are now is quite incredible. Was it eight or 20 megabytes? I’m struggling to remember, but I’ll do some research on that. Very good. The 80s wonderful time. Okay, Tim? Yes. Thanks for your time. today. It’s been a pleasure. Right. Oh, thanks for listening to this episode of Economics Explored. If you have any questions, comments or suggestions, please get in touch. I’d love to hear from you. You can send me an email via contact@economicsexplored.com Or a voicemail via SpeakPipe. You can find the link in the show notes. If you’ve enjoyed the show, I’d be grateful if you could tell anyone you think would be interested about it. Word of mouth is one of the main ways that people learn about the show. Finally, if your podcasting app lets you then please write a review and leave a rating. Thanks for listening. I hope you can join me again next week.

1:07:29

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Podcast episode

Modern markets for all w/ Wingham Rowan – EP167

In The New Yorker, Wingham Rowan was described as a “labor reformer” who “wants to reimagine labor markets for the digital age.” In episode 167 of Economics Explored, Wingham talks to host Gene Tunny about the potential of Public Official e-Markets. Wingham is a former British TV presenter who is now the managing director at Modern Markets for All (MM4A), a non-profit seeking to advise governments on the possibilities of new market technologies. 

Please get in touch with any questions, comments and suggestions by emailing us at contact@economicsexplored.com or sending a voice message via https://www.speakpipe.com/economicsexplored

You can listen to the episode via the embedded player below or via podcasting apps including Google PodcastsApple PodcastsSpotify, and Stitcher.

Links relevant to the conversation

Wingham Rowan’s Modern Markets for All website:

http://modernmarketsforall.com/

TheMM4A non-profit:

https://www.mm4a.social

New Yorker coverage of Wingham’s work:

https://www.newyorker.com/tech/annals-of-technology/should-gig-work-be-government-run

CIGI article by Wingham in which he argues “Market platforms are a natural monopoly; governments should dare to think about how they might initiate an alternative version for citizens and businesses.”

https://www.cigionline.org/articles/its-time-to-build-public-utilities-for-essential-digital-services/

Modern Markets Initiative: https://www.modernmarketsinitiative.org/

Articles on workforce scheduling tools:

https://www.businesswire.com/news/home/20151116006112/en/Kronos-Workforce-Central-8-Fastest-Adopted-Product-Release

http://modernmarketsforall.com/wp-content/uploads/2022/06/210120-Kronos-briefing.pdf

NB Kronos has subsequently rebranded as UKG: https://www.ukg.com

On the growth of irregular work hours: 

https://www.nytimes.com/2017/05/31/business/economy/volatile-income-economy-jobs.html

Quality Jobs Index from Cornell University: 

https://qz.com/1752676/the-job-quality-index-is-the-economic-indicator-weve-been-missing

The UK government program (then called “Slivers-of-Time” working): 

https://www.theguardian.com/politics/2010/nov/14/welfare-reform-working-slivers-of-time

The fate of the Universal Credit program which the program was eventually folded into: https://www.theguardian.com/commentisfree/2018/jun/15/universal-credit-colossal-catastrophe-national-audit-office   

Website about MM4A’s gig work markets: www.BeyondJobs.com

The Californian platform in action: www.cedah.video

The local website about the program: www.WorkLB.org

Wikipedia article on the Tobin tax which Wingham mentions a few times:

https://en.wikipedia.org/wiki/Tobin_tax

Transcript: Modern markets for all w/ Wingham Rowan – EP167

N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.

Gene Tunny  00:00

Coming up on Economics Explored.

Wingham Rowan  00:03

The problem I have talking about platforms gene is that our conception of platform technologies at the moment is so distorted by the business models that work for Silicon Valley. They have nothing to do with the potential of these technologies.

Gene Tunny  00:23

Welcome to the Economics Explored podcast, a frank and fearless exploration of important economic issues. I’m your host Gene Tunny broadcasting from Brisbane, Australia. This is episode 167 on public official E-markets. This episode’s guest Wingham Rowan is an advocate for the creation of such markets. Wingham is a former British TV presenter who is now the managing director at Modern Markets For All, a nonprofit seeking to advise governments on the possibilities of new market technologies. In the New Yorker magazine Wingham was described as a labour reformer who wants to reimagine labour markets for the digital age. Please check out the shownotes relevant links and information and for details where you can get in touch with any questions or comments. Let me know what you think about what either Wingham or I have to say in this episode. I’d love to hear from you. Right oh, now from my conversation with Wingham Rowan on modern markets for all. Thanks to my audio engineer Josh Crotts for his assistance in producing this episode. I hope you enjoy it. 

Wingham Rowan, welcome to the show.

Wingham Rowan  01:26

Not at all. Kind of surprised to be here. I’m I’m not an economist. I’m just someone who sort of stumbled into what looks like a potentially very exciting area of economic policy.

Gene Tunny  01:38

Oh, excellent. Yes, yes. Well, I’ve seen your bio, and you’ve been described as a former British TV journalist and now a self identified policy entrepreneur. Could you please tell us how, how did that journey take place, please?

Wingham Rowan  01:55

Yeah, I was a television journalist in Britain in 1994, the ITV network, our main commercial network, was looking to do a show, a nighttime show, a bank software and gaming. And I said, No, no, there’s this newfangled thing coming out of America called the Internet. We need to do a show about this. It’s going to be really exciting. And I convinced them and I produced it, and I hosted it for five years. And in those days, the Internet was all about sex. And it’s often hard for people to understand, but you can actually get bored of working life full of foot fetishists, adult babies, alien abductees, voyeurs, exhibitionists, people who do odd things with champagne bottles. And so, I began, and I’ve always been a bit of a social justice warrior. And I’ve just got fixated on this idea of what is this tech potentially going to do, in terms of economic inclusion, economic opportunity for people on the fringes. And that led me to a think tank in London called Demos, which I was already a member. And I persuaded them to kind of convene a group of experts. And we began to address this. And we eventually came up with a realisation, that you could have online platforms for economic activity, that would be extraordinary in their ability to drive a more inclusive, dynamic, responsive, climate friendly form of capitalism. But it also became clear thinking that through that, governments would have to have some sort of role in initiating them. And we can get into that, and therefore it’s a public policy issue. And over the years, we have refined that public policy. And yeah, after a while, it just became very clear that sooner or later, something like this needs to happen. And somebody’s going to have to be doing the thinking to get it all ready and figure it all out. And that kind of fell into my lap as sort of group organiser. Plus, I really was getting too old to be interviewing people with bizarre sexual fetishes on late night TV.

Gene Tunny  04:10

Right. Yeah, that’s fascinating. So, so back. So how would you describe the the internet? I mean, now, I mean, in terms of what you saw back then, the promise that you that you saw, then the possibilities, we still have to unlock it. Is that that’s what you’re trying to do?

Wingham Rowan  04:31

Absolutely. Yeah, absolutely. Absolutely. And I think what I have to explain is, what with hindsight seems like extraordinary naivety. But back in 95-96, when we were figuring all this out, before I wrote the kind of definitive book about it. It just seemed so obvious. It almost wasn’t worth talking about because it was so obvious that someone else was going to do it. Someone else will pay for someone else, better placed, but broadly if you can imagine a platform for all forms of economic activity that regular people and small businesses engage in. So if I’m an ordinary regular guy, I might want to sell the hours that I want to work today and I might be good at gardening, I might be able to drive a van, I can operate a switchboard, I’ve got a talent for pet care. I’ve been trained to work in a warehouse, and so on, you know, I have a whole range of skills that defy siloing I might have have sold assets that I want to trade, I’ve got a bike I don’t need this afternoon, I’m only going to rent it out to people are completely reliable, someone else will have to handle that checking in and checking it back, because I haven’t got time. But I could get a few dollars for that. And I need a few dollars. If Australia has barbecues don’t they? Well, is there a market you know, where people will want to rent an extra barbecue? What about toys? What about video consoles, beauty aids, all this sort of storage and you stare in the cupboard? You know those massive assets that people could monetize? What about sums I want to lend? I’ve got $30 I don’t need until Monday, how do I lend it not not in some hideously complex login register, create a profile just seamlessly all in one platform that does it all in one place. And I need to be able to do this with data on where my opportunities are, I need a market that supports interventions and investment in my development as gaps in the market become clear. It all needs to be extraordinarily low cost and so on. And what I’m talking about is the public utility, like the electricity supply, the water supply, like roads. I’m not talking about a sizzling Silicon Valley investment opportunity. It’s the antithesis of the model that Silicon Valley eventually came up with. So as I say this all seemed utterly obvious. But no one else seemed to be saying it. So a group of us in London sort of knocked it together, I put out a book for Demos in 97, that sort of fumbled towards some of these conclusions. And then Britain’s, at the time most famous futurist Charles Handy, got involved, very helpful. And through him, I got an international book deal. And a book came out about it all for me in 1999.

Gene Tunny  07:26

Right. And so what was that book Wingham? And have you been a policy entrepreneur since then? Was that what launched you into…?

Wingham Rowan  07:33

No, I still had a day job hosting racy late night TV show. Well, so the first thing to say is the book sank without a trace. So it came out in February 1999. I’m kind of embarrassed to mention the title because it’s now seems so outdated, but it was called Net Benefit. And it was published by Macmillan in Europe, and St Andrews Press in the US and various other publishers around the world. But it absolutely sank like a stone. And by I think April that year, a book called I think Dow 36,000 hit the shelves, and it predicted like the internet is gonna be this explosion of wealth for shareholders. And that dominated the charts for a while. And then a few months later along came Dow 50,000, which said sort of the same thing with a bit more hyperbole. And then I think December that year along came Dow 100,000 by which point? I mean, these are all these books were off in their projections. But they were absolutely right about their core thesis, which is, which was the internet is just going to unlock huge amounts of wealth for investors, it’s not going to turn, it’s not going to be harnessed to create sort of economic platforms for the benefit of people at the economic base. So they were right, I was wrong. But it doesn’t go away. Right? We absolutely need this. And it’s very interesting. When you look at the history of I’m going to call it technology driven public utilities, you see a pattern of decades in the wilderness, and then suddenly it all begins to happen. And that has both fascinated and sustained me in my post television career.

Gene Tunny  09:26

Okay, we might talk about this in a moment? I’ll read from your, you wrote an article didn’t you in the Centre for International Governance Innovation that’s on the web, I’ll put a link in the show notes. Market platforms are a natural monopoly, governments should dare to think about how they might initiate an alternative version for citizens and business. So yeah, be keen to talk about that. One thing I’m wondering is what do you think of the current platforms that exist because there are certainly sharing economy, or whatever you call them, or two sided market platforms that exist. We’ve got Airbnb and then we’ve got Upwork, and Fiverr, and all of that. So what’s your view of the current state of play? And where we need to get to? And why do you think what you’re proposing is superior to that please Wingham.

Wingham Rowan  10:24

Existing platforms suck compared to what’s possible, they really, really do. And so if you want to understand what economic activity platforms can do, and I’m sorry, I have to use quite clunky language, because otherwise we get mixed up with social media and so on, which is outside the scope of this discussion, as far as I’m concerned. So if you want to know what economic platforms can do, look at what’s happened to Wall Street in the last 20-25 years, they have moved from kind of phone based trading and shouting across trading floors, to two platforms that trade with unimaginable precision with virtually zero costs, where risk is all but mitigated, where they have tools like collars on their losses, where they can trade across asset classes instantly, and fluidly. Governments have provided the regulatory background that allows those markets to thrive, these are in almost inconceivably broad, deep platforms, they have powered financialization, the, it’s now so efficient to invest 100 million in the financial markets, and we’ve got this huge suck up out of the mainstream economy. So that’s what’s possible. And when you look at what regular people have to sell, our key economic asset for 99% of us is that time, it’s what employers pay for. So what about markets for selling their time for people selling the time, they’re very different markets, they need very different functionality, they happen to be much more complex. But we do not have anything like markets that approach Wall Street’s level of efficiency, opportunity generation, risk mitigation, and so on. So you mentioned Airbnb, and so on. Uber is another great example. So Uber, as a platform has displaced taxi companies. Well, I talked about Uber because they’ve been subjected to unusual levels of scrutiny. So we know for example, that Uber has systematically missed this. So I’m sorry, when you evaluate an economic platform, don’t focus on what it does for buyers, cool new ways to buy stuff, don’t shift the economic dial, it’s what they do for sellers of whatever is on offer that we need to focus on. So focus on Uber not as a transportation app, but as a labour market, because that’s what it is for a lot of people. Is it a good labour market? No, it sucks. It’s, they take about 30% of your earnings. And they need to do that because they massively subsidised rides when they arrive in a new city to build critical mass and they’ve got to recoup that money. They have been caught systematically misleading drivers because they need an oversupplied market, you get very little data, you get marginal control. You know, Uber decides what, where you’re going, what you’ll be paid. You can’t build a regular client base, you can’t innovate. All the kinds of things that a dynamic market would allow. Uber doesn’t allow, and it’s a silo, you are stuck driving. There’s no progression pathway. You could be driving an Uber this year, and you’d be driving an Uber five years from now, where’s the movement? You know, what, where’s my ability to sell my other talents? That’s what I mean by the breadth of the market now in Wall Street, you know, that, that asset classes can be merged. Because they have the tools that dive into deeply regulated markets across all sorts of asset classes. So no, the existing platforms are awful. They are better than the old way we used to do things classified adverts, adverts in newspaper, sorry, adverts in newsagents windows, but that doesn’t make them the best markets possible. We need to focus on the best markets possible for the economic base. And have we got and we absolutely haven’t. We’ve got hideous inequality of markets. And it’s mostly out of sight. So you read you hear an awful lot about the gig work apps. They’re awful, most of them fail. There’s a famous HBR, Harvard Business Review article called a study of 250 platforms reveals why most of them fail. And when they fail, you know, the entrepreneurs who set them up can write that off to experience. What about the people who were selling their time? You know, when Homejoy the market for home cleaning in the US just collapsed overnight. That just left a whole load of people with their immediate flow of work cancelled their relationships with people who buy their labour canceled, that track record wiped. And so that is the problem, let’s call it market inequality, that people at the top, the big institutions at the top of the economy have trans transition to unbelievably efficient markets and we barely understand them. And people at the bottom have been that I’ve had to follow the buyers of their labour or whatever, into markets that are typically skewed around commoditizing. The workforce driving down labour costs, keeping the market over supplied, locking people into a narrow silo. And you really need to look at, and not so much the gig work apps, but at work for scheduling systems, which run monopsony markets, where one corporate buys the time of their employees, these things have exploded in the last few years get very little coverage, not very well understood, negligible transparency. That’s the world of markets today. You know, these platforms run markets, for labour, for capital, for services and for goods. And markets are totally fundamental to a capitalist economy. And they’re getting more and more so because so many drivers are fragmenting economic activity. And the more you’re driven towards fragmented economic activity, the more you’re in and out of the market. Yeah, sorry. Did I did I go off on a bit of a rant?

Gene Tunny  16:22

No, that was good, that was good. What are the workforce scheduling apps? What ones are you thinking of?

Wingham Rowan  16:30

Well yeah, the most famous, which came out I think, in 2018, is called Kronos Workforce Central Aid. They’ve rebranded subsequently to UKG and their website is full of photos of happy smiling, presumably workers. But there’s actually some documentation, I’m very happy to share it with you that they were using, which they would take to Corporate Finance Directors, presumably, and it would use phrases like manage your workforce without limits, no boundaries. It’s fantastic. It’s an unbeatable proposition. If I’m the finance director of a supermarket chain, hotel chain distribution company, my God, you know, staffing is my biggest cost. And these tools can absolutely box it in and minimise it a lot. Sign it with my needs. But the risk the all the problems are just dumped on low income workers, who often don’t know if they’re gonna go into work today. And if they’re not, they’re left scrambling for extra hours elsewhere. They still got to put food on the table tonight. It’s pretty hideous. And what really motivates us at this end is look at what’s possible. You know, and I think that is the key problem here is politicians and policymakers and think tanks, and economists are focused on well, how do we try to make Silicon Valley play nice. Yeah. And they’re engaged in these endless Whack-A-Mole battles with big tech that, frankly, they’re never going to win. And we can go into why that is. And then instead, they should be asking a completely different question, which is, have we got the best markets now possible in which our citizens and local businesses can pursue their economic potential? And if not, could policy change that?

Gene Tunny  18:28

Right, okay, so are you suggesting we need a common we need common market platforms, we need some sort of, we don’t need separate upwork and a fiver, we need a common platform. How would you describe it?

Wingham Rowan  18:47

Yeah, absolutely. So let’s, can I use a quick historical analogy? Because that’s the easiest way to understand that these things are always easiest to see in hindsight. So every so often, throughout history of the last two centuries, a technology has come along that needed the government to do something that only governments could do to get that technology to its full potential. So one of my favourite examples, for instance, is pumping. Industrial pumping arrived in about 1820, a whole bunch of small companies sprang up to pump river water in cities like London into well off households. And they made quite a bit of money, it was a lot more convenient than going to the river with a bucket. But meanwhile, the poor were just dying of cholera. And a bunch of people said, actually, you know, if we use this technology in a different way to create reservoirs, we could pump clean water 24/7 to everyone, but only government can make that happen because only government can forcibly buy valleys. evict people who live there, flood the valleys and then dig up everywhere to put in trunk water piping. 1848 public health care In Britain, essentially initiated that process, every country in the world copied. So you can see something similar in electricity, rail, roads, broadcasting telephony, air traffic control, gas canals, and so on. Every so often there’s a technology that needs something that only government can do. And governments for all the right reasons are slow to do it, you know, governments should not just intervene on a whim, there needs to be an absolute clear cut case of market failure. But eventually, one does, and one government gets it right. And, you know, got modesty aside, Britain and British was, has done pretty well at this. And then when the first country gets it, right, others follow. And eventually everyone does. So every country has a coordinated postage system, a coordinated currency. And right now, government has dictated this possibility when it comes to economic platforms. They really are, you know, this, what’s happening now with economic platforms would be akin to the British government in the 1840s, trying to beat up these little water companies, and there were hundreds of them and get them to be more inclusive, get them to pump clean water, well, they couldn’t pump clean water because they couldn’t stop other people using the river as a sewage outlet. Only government could put people in jail for chucking sewage in rivers. So it wouldn’t have worked. They needed to start with, what is this technology need to deliver its potential? what can government do to deliver that? And the answer is it needs reservoirs. And for that, you need compulsory land purchase rights, which even the most ambitious startup doesn’t have. So in answer to your question, don’t focus on the existing ones, the existing platforms, they’re kind of interesting. They’re not bad people. But their job isn’t to create an inclusive version of capitalism. Their job is to maximise return for their shareholders, and some of them are doing reasonably well at that. It’s we elect governments to create equitable economy, inclusive, dynamic, efficient economy, that minimises public assistance costs. It’s government that needs to start asking these questions. That’s what’s missing.

Gene Tunny  22:26

Okay. And so this is what you’re you’re trying to get governments to, to do something. Are you Wingham? Could you tell me a bit about what you’re doing in California at the moment? What’s your mission?

Wingham Rowan  22:39

Yeah, so take this notion of that we call modern markets for all this idea that just as government provides us routinely with its government’s responsibility, generally, to make sure we have electricity, that we have clean, drinkable water, that we have a coherent road network, and so on all these facilities that we just utterly take for granted as part of a modern economy. So what we’re saying is this now, the latest on this list is a platform for economic activity. And just like all the other public utilities, it needs to be completely inclusive, it needs to do a whole set of things that the private sector can’t do or has no incentive to do. So. Yeah. If you take that as the kind of guiding spirit here, once we’ve kind of figured this out, the worry. And once we realised that actually, it wasn’t obvious that other people weren’t going around saying it at the time. We, the question became, so what are we going to do about it now, and what we didn’t want is what I’m going to possibly unjustly called the The Tobin tax syndrome, where, as I understand it, the Tobin tax is a very elegant idea that could do a lot of good, but it’s never been implemented. And Tobin has toured the world economic conferences talking about it and won a lot of applause for his work. But it’s never been done. And we don’t want to be in that category. We wanted to get something going. So we tried to figure out which bit of this huge sort of public utility vision could we just bite off and get going? And the answer is, markets for what’s now called gig work. So about 35% of adults cannot work regular hours. They have complex parenting needs, medical issues that fluctuate day to day, family caregiving commitments that are unpredictable. They’re studying on a fluid schedule increasingly, their numbers being swollen by people who are partially employed and never know their work schedule. So you’ve got this huge mass of adults who need at work that fits around other things going on in their lives. And so that’s it over here, over there, you have what are called government employment services, job centres. I forgotten what they’re called in Australia. But typically, in America, they are called America’s job centres. And the government invests hundreds of millions a year in this infrastructure to create equitable labour markets. It’s bipartisan, nobody doubts it’s worth it. It grows the economy, it gets people off public assistance, it upskill the workforce, it brings in investment, it’s just a good thing all around. But these government employment services do nothing for people who don’t fit into the neat pigeonhole, of having regular availability for work. People who have complex lives, who just aren’t lucky enough to be able to say, Yeah, I can do 36 hours every week at the same time in the same place. So the small mission, the small vision, as we call it, at this end is extend government employment services, so that they bring everything that they aim to do for job seekers, too. We don’t like the term gig workers, because it’s it carries too much baggage. And it only describes a small proportion of the people we’re aiming for. So we use the phrase non standard workers. So the British government actually got off his butt and funded this. And I was appointed to lead the initiative, we built a platform that is all about protections and control and progression for people outside of standard employment. It was launched by 20 city governments in Britain, it was what seemed like really good news at the time, but turned out to be a disaster. It was then made a cornerstone of ambitious programmes to completely overhaul Britain’s buys and time welfare regime. And it was all these city pilots were shut down, it was all incorporated into this big amazing programme called universal, universal benefit, a sort of Universal Credit. Anyway, you’ve probably heard in your line of work, Gene, but Universal Credit has turned into an absolutely epic disaster. And opinions are the contributors own not not an official statement from the British government. But it’s something like five years behind schedule on four times over budget or the other way around. Anyway, they began shedding everything that wasn’t core and included us. And so we suddenly find ourselves looking around the world and realise, well, no other countries done anything like this. We’ve got this sophisticated platform. And we talked to the British embassies, philanthropist took over paying my salary and said, we’ll go figure this out. We put the tech in a nonprofit for open source into the world. And we talked to the British embassies and they said, go to America. They’ve got something called the public workforce system. They invest billions of it a year. It’s consists of 2400 local workforce boards. And we did and I toured various workforce, public workforce boards around America, and we ended up launching in California with public agencies funded by national philanthropies like all these workforce systems around the world, America’s federally funded workforce dollars can only go on traditional job creation and retention. It’s just a rather 20th century view of the world. But there is this the Franklin’s sort of guerrilla operation within farsighted workforce boards, who realise Yeah, why am I turning away people just because they’re trying to make rent on Friday, rather than because, you know, they want to be upskilled to a better job. And why am I throwing them at the mercy of these, frankly, rather unpleasant Silicon Valley companies that will treat them as cannon fodder. And yeah, I don’t want to paint a picture of this is easy and we’re on a meteoric trajectory. It’s three steps forward, two steps back public sector led innovation is always difficult. But we are steadily making the case that, yeah, Public Employment Services can sustainably scalable expand, to embrace people who are not fortunate enough to have regular availability for work. They need a platform to do that. It’s going to be very different from the platform that silicon for kind of platforms that Silicon Valley churns out, our platform is called Good Flexi. Yeah, I mean, you could have it for Australia. It’s just we don’t have the resources to engage anyone in the Australian Government.

Gene Tunny  29:52

Yep. So you’ve got, I just want to make sure I understand all the facts properly. So you’ve got your non-for-profit, Modern Markets For All. Is that what it’s called? 

Wingham Rowan  30:00

Yep. 

Gene Tunny  30:05

Okay. And you’re, you’re working with California, is it the California state government?

Wingham Rowan  30:10

No, it’s public workforce boards at local levels.

Gene Tunny  30:11

Oh, public workforce boards at local levels.

Wingham Rowan  30:16

It’s narrow, it’s expanding outside California.

Gene Tunny  30:19

Good one, okay. And you’re encouraging them to extend their services to people who are in non standard employment. So you’re encouraging them to offer is it training or advice on the workforce of connecting them with opportunities.

Wingham Rowan  30:35

all the above, okay, you want all sorts of interventions and non standard workers are an incredibly diverse bunch. They have different needs different aspirations, they’re on different pathways. But the core of it is if you are to systematically sustainably scalablely support these people, you have to have some sort of platform. This is such a fiddly complex part of labour markets. And when you go to a horizontal model, all types of work because that’s how you get progression, you need people to be able to move along from one type of work to another, that’s better paid higher skilled and keep moving up the ladder. Once you do that, it gets more complex. Once you make everything legal, once you make everything what’s called in America, a w-2, essentially, someone with employee status and protections not an independent contractor, it gets exponentially more complex, when you want to give everyone the data they need, it gets very complex. So you need a completely different kind of platform. And that’s what the British government created. It’s been Americanized with philanthropic funding. And yeah, it’s it’s now launched and the battle is, is persuading this huge system to pioneer something like this, given that all their federal funding and their targets, and their assessment is geared towards their ability to create jobs and keep people in jobs. And if you’re a workforce director in America, you are strongly disincentivized, from bringing non standard workers into your customer base, because they will drag down your outputs. Because somebody who only needs eight hours of work a week is bad news, if you’re being marked on your ability to get people into full time or formal part time work. So yep, so that’s the implementation at the moment. But what’s interesting Gene, from our point of view, is the kind of crisis of capitalism. I suppose, you know, 40% of Americans think socialism is a good thing. Now COVID, I can’t remember there’s some survey about the number of people who want to go back to pre COVID capitalism, and it’s something like 7% of the population. Now, and then you’ve got what capitalism is doing, as it currently can, constituted what it’s doing to the climate. So the drivers sense that somewhere there is going to be an ambitious politician who says, I got it, you know, I’m not going to fight in the old trenches of tax versus welfare and all this sort of stuff. Let those battles raged on. I am going to colonise a whole new era of political thinking, and it around, I am going to articulate what’s wrong with the new plumbing of capitalism. And what we need to what the questions we need to ask to get it right. And at the moment, I really would stress for a politician that the the policy space to be grabbed just involves asking questions, you don’t need to commit to do anything to be a trailblazer here, this is all this growth of platforms, and what they’re doing, particularly to people at the economic base, is kind of, I mean, we all know there’s something not right there, but it’s not being coherently articulated. It’s very poorly understood. So that’s what we’re trying to do. But yeah, we wanted to do something real. We didn’t want to be in the Tobin situation. And so, for what it’s worth, we dived in and you know, we’ve made mistakes, we’ve gone down cul de sacs. We’ve had disappointments, but my God, the body of learning around all this is fascinating. I mean, what, what platforms could what platform technologies could be doing? With a different structure with a different set of incentives is mind blowing.

Gene Tunny  34:42

Right. So you’re good? Was it Good Flexi you were talking about?

Wingham Rowan  34:47

Yeah, that’s what we call the platform for non standard employment. Yeah. Which is kind of think of it as a proof of concept for something much bigger. That is, it spans the entire range of micro economic activity rather than just people who need very fluid work?

Gene Tunny  35:06

And what sort of numbers have you got on that at the moment when I’m able to disclose that?

Wingham Rowan  35:11

Yeah, I mean, it’s small. I can tell you it’s in the hundreds. It was due to launch in Easter 2020 in California, focused on hospitality and elder care. Originally, I don’t need to tell you what happened to those sectors as COVID hit, we were refocused around responsive child care for essential low income essential workers. So we have a pool of childcare workers who could be booked as required. They’ve all vetted and everything. And then that was funded largely with COVID money. And then there was public funding to expand across all sectors. And that’s what we’re now doing in Los Angeles County. And meanwhile, philanthropies come forward to fund expansion into other cities. So right now, in terms of number of people transacting today, it’s in the hundreds. You know, this, you’ve caught this story early. It’s not a story of wow, I’m blown away by your Facebook like growth. It’s, I can tell you the procurement hurdles, the legal barriers, and the complexity of getting big blocks of demand from flexible, flexible labour into a new platform are formidable. And we have to turn to the public sector demand for flexible labour, school districts, Parks and Rec departments, public services, because we cannot, in the early stage tempt the big private sector buyers of flexible labour, retail, hospitality, distribution, care building, and so on, out of their workforce scheduling systems, which are so cost effective for them. If you’re running a workforce of 1000s. In a monopsony market, where you are the only buyer where you your system decides who’s called in and who’s sent home when, in the exact line with your needs, where anybody who gets a pity, you just tick a box and never see them again. Why on earth should you move that demand for labour and your workers into a platform that’s going to expose those workers to a whole range of other opportunities is going to systematically work to get new boundaries and new skills to monetize a whole range of each person’s unique abilities? Why would you do that? You’re not. You’re not going to do it in phase one. Now if we can build the demand from public sectors, by have flexible labour and government in aggregate is the biggest buyer flexible labour in any economy, then we’re going to leave you as the supermarket chief, finding his workers migrating into the public sector platform in unless you come in and offer to buy them through the platform that is going to be advancing them and giving them data and showing them where their new opportunities are, and so on. So that’s the challenge. And it is three steps forward, two steps back, it requires patience, it can be frustrating, but my God, it’s needed.

Gene Tunny  38:26

Okay, we’ll take a short break here for a word from our sponsor.

Female speaker  38:32

If you need to crunch the numbers, then get in touch with Adept Economics. We offer you Frank and fearless economic analysis and advice. We can help you with funding submissions, cost benefit analysis studies, and economic modelling of all sorts. Our head office is in Brisbane, Australia, but we work all over the world. You can get in touch via our website, http://www.adepteconomics.com.au. We’d love to hear from you.

Gene Tunny  39:01

Now back to the show. So this platform, do you envisage it? It has to be publicly funded?

Wingham Rowan  39:11

No, absolutely not. So it is partially publicly funded at the moment, and not with Federal workforce dollars. But that’s because it’s small vision, small scale, if we go back to the Big Vision, so let’s assume for a moment that the Australian Government says we’re gonna take a worldwide lead on this, we are going to instigate a policy of modern markets for all we are going to assume that it’s government’s role to ensure that everybody has access to the best markets now possible, not the best markets, Silicon Valley wants to give the best markets now possible in which to pursue their economic potential. So the Australian Government says that they then say, well, we’re not going to fund this because that would be politically unpalatable. And it’s all got to be based on choice. We are just here to give people a choice of economic infrastructure, we’re not going to shut down eBay, or Airbnb or Uber or DoorDash, or Postmates, or any of these 1000s of platforms that are out there. Now, we’re just going to give everyone a choice. They can use the public utility if they want, use it a bit, use it not at all, totally up to them. It’s the same with electricity. Nobody forces you to connect to the public electricity supply, go and buy your own generator. So assume the Australian Government says that, what do they do? And the short answer is, and there’s a huge amount of detail behind this. But you, you want a concession. It’s the model that governments typically use to create lotteries. So government has key features, key facilities that it alone can bestow on any platform for economic activity. So first of all, it can direct its huge spend on things like labour through the new platform. So that’s nurses, teachers, everything. Secondly, it can allow the platform to interface into all the official databases. So I say I want to be, I want to sell my time as a truck driver, I want to rent out my room for which I need to prove I’ve got a fire certificate. The platform will say to me, Well, do you give me the platform permission to look up your truck driving licence on the official government register of driving licences. And then once it’s done that I can sell my time as a truck driver. You want the government’s promotion channels, you want to be promoting the platform to tourists, to businesses, to taxpayers, to welfare claimants, to students, to all the people that the government routinely reaches, you want to interface into the courts. So if let’s say you hire me to come and drive a forklift truck in your warehouse today, and I drive through a wall and the warehouse collapses, and it turns out that I was high on drugs, that you don’t have to pursue it. Well, no, take a less dramatic example, you know, I back the forklift into some unit and damage it. You don’t have to sort of tediously begin a whole process of getting me downgraded and everything. The platform allows me to tell my side of the story and captures yours. It’s kept my payment in escrow, so it’s taking the money from you and held it. But ultimately, if the platform cannot push us to a resolution, it can put it into the courts, and the courts can downgrade me in the same way that the courts have the unique power to downgrade our driving licences. So I have an officially backed record of trading reliability that is really useful to me, and I can’t go market to market to market. In the public markets, there is only one official track record. It’s a bit like your driving licence, if you get, you know, six points in a disqualification, you can’t go to someone else to get another driving. That’s it, you can’t use the government roads, which are all roads effectively. So these are the kind of benefits there’s a whole set of obligations that need to be enforced as part of the concession I can go into those to ensure that the platform really is driving micro economic activity. That’s fair, it’s equitable. It’s fully featured, that it’s federal, it’s not got concentrated power, that it’s truly independent, and so on. And it charges a flat percentage markup on each transaction to fund a return for the operators. Because they’re going to fund the whole thing, design it and build it. And then you say, right, this concession is for 15 years across the whole of Australia. In that time, no one else will get these government awarded benefits. And whoever whichever consortium will build, fund and operate our platform for those 15 years for the lowest percentage cut of each transactions value gets the deal. And you do the modelling and the figure. It might be a bit higher for Australia, but it’s a random 1.5- 2% markup. It’s not 30%, which is what people at the base of the economic pyramid tend to be paying as a benchmark now. Yeah, so that’s it. We call this platform Poems, Public Official E-Markets. It is just a public utility that’s regulated. It’s there to use if you want, and if you don’t, that’s fine. You might choose to use it to get a haircut, get your lawn cut, and so on. But you choose not to use it when you want to book childcare or when you want to sell your time as a bookkeeper. It’s if it doesn’t work, the shareholders of the consortium are backed it takes a huge hit. If it works, it will massively grow economic activity. At the base, and the shareholders will be getting 2% of what could be billions and billions of dollars of new economic activity that they took all the risks they designed. No capital mass, good luck to them. They deserve it.

Gene Tunny  45:14

Yeah. Okay. So that model, that financial model, you’re talking about where you’re estimating, you could actually just have a 1 to 2% markup, there’s no, you’re not assuming any community service obligation paid by government.

Wingham Rowan  45:29

No, yeah, there is a public service obligation. Yeah. So nearly all public utilities have a non revenue component, you know, cyclists use the road network without paying road tax. Broadcasters have to carry religious and preschool programming, without advertising. So yeah, in this case, yes, there’s a range of things, once you’ve got the infrastructure to do this, that is able to check people’s identity, constantly keep monitoring it, if they wish. Yes, you might want to use it for things like voting, forming social networks. So connecting isolated elderly, people, volunteering, things like that. So yes, that is a community service obligation within that,

Gene Tunny  46:19

Okay. And then there would have to be a payment from the government to this.

Wingham Rowan  46:26

Not necessarily so you think if government says, where we want a platform that does X, Y, and Z across the base of the micro, the whole micro economy, and we are going to give that among the benefits we’re going to give that platform is we’re going to direct all public spending down to community level through that platform, that’s 30-35% of GDP in most developed countries. That’s a heck of a business opportunity. Now, if you’re going to say, as a government. Oh, and as part of that, you’ve got to fulfil certain community service obligations. Yeah, I as a consortium bidding to run your Poems or whatever it’s called platform, it’s just going to price that in, frankly, the infrastructure I’m going to have to build to monetize all these assets in the micro economy can run a, a plebiscite on whether, you know, a bunch of neighbours want to shut the road to traffic this weekend, so the kids can play in the road with no problem. I mean, we are talking about something a platform that will be hugely, hugely sophisticated, that will cost billions to build. That’s why you need a kind of 15 year concession, you’ve got to give them a chance to recoup that investment.

Gene Tunny  47:46

Yeah, well, I think it’s a great vision. One thing I’d like to ask you about is, how constrained are you by regulations that exist at the moment. And I’m thinking particularly in the labour market in Australia, we’re currently having a debate about the Fair Work Act and check possible changes to that. There’s, there are awards and there are all sorts of rules around hiring people, and what minimum shift lengths are that are just frustrating for employers? And I mean, I think that they’re, they are limiting people from taking on opportunities. I don’t think they’re in the best interests of workers necessarily. But then you’ve got the unions, you’ve got a political party here, that is very closely tied to the union movement, that I mean, I’m not sure exactly what they would think of this this type of thing. I’m, I’m concerned that the way that we do things in Australia, and I mean, this is something that I mean, regardless of the party that’s in government. There’s, we’ve got, we’ve had a highly regulated labour market, is that a barrier to the rollout of Poems?

Wingham Rowan  49:12

It isn’t necessary. So it goes without saying that the Poems platform has to enforce the law. And if the law is you have to have a minimum shift length of six hours. That’s what it will do. Personally, because I’ve spent an awful lot of time with people who are in non standard work. I think regulations like that can be very cruel. If I’ve got an injury that means I have back pain that comes and goes day to day and I’m waking up every morning thinking, well can I work today and the answer might be I’ll have to decide after lunch. I certainly can’t at the moment, depending on if my back pain goes away, depends if I get my parents into the Alzheimer’s centre, depends if one of my siblings can look after my disabled kid this afternoon. So the intention behind these rules is undoubtedly good. And it is undoubtedly true that big employers are using these aggressive workforce scheduling systems to push people into very precarious work, which is incredibly debilitating of their family, finances and their mental health even. So, I totally support the reasons that people are doing this. Unfortunately, a lot of these acts don’t work. And I mean, just to digress for a moment, what’s happened in America, where they’ve been having these Fair Work Week acts in some cities for some time, is that you then get a whole crop of companies that spring up with what’s called Tap the app staffing. So they will go, typically imagine a store manager, who’s told we’ve got to schedule the staff in your supermarket for weeks ahead. And these companies will say to the store manager, when you don’t know how busy your store is going to be, you know, this afternoon, let alone four weeks from now. So why don’t you just sort of let employees go. And we’ll just have a pool of temporary workers. And you just tell us how many you want each day, just tap the app in the morning, we’ll put it out to bed, we’ll see who will do it, we’ll send them along to anyone you don’t like just tap next to their name. And as I say, you’ll never see them again. And some of these apps will algorithmically calculate the lowest wage they need to pay to get the required number of people into your store today. So don’t underestimate the deviousness, the deep pockets, the aggression of the companies that are driving this, it really you we really need to think about what’s an alternative model, because in a healthy market, a healthy labour platform. You give people far, far more choice. So if the employer is bad, I might be flipping burgers today. And the employer might be awful. But if I’m proving reliability, and I’ve got all this data? Well, you know, there’s a real short, you know, we noticed you like you’re using the platform to spend time in an amateur soccer team. Well, did you know that there’s a chronic shortage of a system soccer coaches at the moment? Do you want to start doing some of that work on Saturdays, we noticed that you’ve got a qualification in gardening from when you were at school. Did you know that there are landscape crews now staffing up for the summer rush in public parks? Do you want some of that work, and eventually, you’re going to be able to turn off the burger flipping, which means the burger company that’s such a rubbish employer is now going to be constantly in churn. They’re just constantly onboarding people who build some sort of track record of reliability, and then they’re off up the ladder. So I mean, I need to make absolutely clear that unions in a democratic society have an absolute place in any platform. And there’s all sorts of new services and new models that the platform can enable for them. So there is absolutely you know, please don’t assume that when I talk about a platform, it’s synonymous with very short term, churning relationships sort of work. The problem I have talking about platforms Gene is that our conception of platform technologies at the moment is so distorted by the business models that work for Silicon Valley, they have nothing to do with the potential of these technologies. They aren’t just about maximising profits for, you know, the corporate operator or the owner of the market platform. That’s very different from running a public utility.

Gene Tunny  54:00

Yeah, yeah, absolutely. Okay. So to wrap up, when would you be able to talk about your next steps? And anything? Well, guess what’s where to from now? Well, and then I guess, in the next year or so, what are you hoping to do?

Wingham Rowan  54:17

Fascinating question, Gene. Absolutely. Fascinating. So I banks, I’m almost tempted to banks the question back to you, okay. We, if you look at this history of public utilities, they’re often a key part played by individuals who then pretty much get forgotten by history. But what we now take for granted as the public road system was pretty much invented by a New York property manager called William Phelps, you know, in the 1890s. And everyone opposed him and that was just the people who didn’t completely ignore him, and it took him 30 years before there was recognised that oh my god, if the government initiated a system of roads, it could be so much better than the sort of dirt tracks and random toll roads that we’re all using now. And the public water supply was pretty much the brainchild of a civil servant called Edwin Chadwick, a school teacher in the English Midlands called Rowland Hill, pretty much invented what we now call the Postal Service, but which he called Penny postage, and his model was copied around the world. So my question, my philosophical point that I discuss with people all the time is, what’s the 21st century equivalent of that? You know, these people badgered away for years in total obscurity, well, we got that under the belt. And eventually, they kind of made their argument through reason and luck, and they plugged into the right person at the right time. So New York State was the first to recognise government had a role in creating a coherent road network. And then the government of France. Europe was next. So it’s pretty random. But how do you do it in the 21st century? How do you do it when politics is so polarised when there is 1000 times the attention that is paid to platform issues is paid to the issue of what kind of bathrooms transgender kids use, you know, when men leave it to the schools and get back to focusing on what really matters here? Why isn’t this issue? Getting the attention it deserves? Yeah, if I was going to be really cheeky, Gene, I’d say, well, why don’t you use your clout to assemble a group of Australian policymakers and let’s do some sort of webinar and test the waters on it, because sooner or later, somebody who can move the dial is going to come across all this, and kick the tires and realise there’s something here, you know, us at this end may not have got it completely, right. But this notion that government could now initiate platforms for economic activity that would solve so many problems that are out there at the moment, isn’t going to go away, somebody is going to do the political land grab and get the kudos for it. And we’re just looking for that person plus, just to be completely transparent and honest, we’re also looking for resources. You know, this is a very cash strapped operation, because people typically don’t really don’t understand what we’re doing. They would rather be pouring money into fighting Silicon Valley. Yeah. So they aren’t. Let me ask you, what could you do? We’re ready to explain it. We, we, we’ve had the tires kicked in multiple scenarios, we have not connected to the right people yet in terms of policy leaders, or the people with the resources to say, You know what, here’s a million dollars, just go and talk to the world, you know, get a team together and go and talk to the world’s governments and start to move on this.

Gene Tunny  58:11

Yeah. I like the idea of a webinar to start with. And there’s certainly people I know who would be interested in this. One of my colleagues, Nicholas Gruen and has written a lot about digital public private partnerships. So I think he is of a similar mind, in the potential of, of the web, have the technology just been underutilized at the moment? So I think, I think you’d have a lot of potentially a lot of interest in this. So yeah, but it’s something you’ll have to leave with me

Wingham Rowan 58:49

I’ve completely put you on the spot.

Gene Tunny  58:51

That’s fine. I think it’s a good question.

Wingham Rowan  58:54

There is this tendency to say, Oh, that’s really interesting. And we’ll talk about something else next week. And what I’m trying to find is the people who say, actually, this is really interesting. And we need to seriously get the people together who can do something about it. Because otherwise it just stays in obscurity. And we’re all fighting the old battles and trying to battle with the Silicon Valley behemoth. And we’re not getting anywhere.

Gene Tunny  59:21

Yeah, yeah, I think it’d have to be this concession model that you’re talking about. And because I think if the proposal came up, that we’d have this new platform and the government had something to do with it, then people would be concerned because we haven’t had a great history in Australia in the last couple of decades of governments building platforms like that.

Wingham Rowan  59:45

You absolutely don’t want government building, running or funding the platform. It would be terrifying. It’d be like government running broadcasting. You just don’t go there. You absolutely want the government to use its leverage to create a new private sector organisation consortium that hasn’t, but the legislation that creates it has to make sure it has no incentive to do anything other than massively grow economic activity at the economic base. That is the only way they can make their return. You’ve got to block off air all the dirty tricks that Silicon Valley plays at the moment. They’ve just got to grow the economy. And if they get very rich from getting everyday Australians more and more employment and opportunity and monetizing their household assets, good. We’re very happy for them. And if they can’t make it work, they’re gonna lose a lot of money. But frankly, who cares? It’s not Australia’s problem.

Gene Tunny  1:00:45

Yeah. Okay. So we’re gonna, how can we find more about your work? So I’ve got I do have listeners all around the world, but I do have a lot here in Australia. That’s probably in terms of any one country I’ve probably got the most from Australia, followed by The States. How can people learn more about what you’re doing and connect with you if they’re interested in having a further conversation?

Wingham Rowan  1:01:06

Modernmarketsforall.org. Modernmarketsforall.org?

Gene Tunny  1:01:12

Okay, very good. Well, okay, so we can all get onto that. And yeah, I’ll, I’ll see what I’ll be certainly talking to people about this and sharing the episode, and we’ll see what comes of it. So that’s, that’s been terrific. So Wingham Rowan, thanks so much for your time. I really enjoyed that conversation and, and learning more about your proposal, and I thought that was great. I thought we got into quite a lot of the tricky things I was always concerned about. So I really appreciate that. Thanks so much.

Wingham Rowan  1:01:45

Not at all, likewise.

Gene Tunny  1:01:48

Okay, that’s the end of this episode of Economics Explored. I hope you enjoyed it. If so, please tell your family and friends and leave a comment or give us a rating on your podcast app. If you have any comments, questions, suggestions, you can feel free to send them to contact@economicsexplored.com And we’ll aim to address them in a future episode. Thanks for listening. Till next week, goodbye.

Thanks to Josh Crotts for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au

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