For decades now we’ve understood the Internet to be wonderfully empowering and a bastion of freedom and creativity. We have the world’s knowledge at our fingertips, instant communication, and entertainment galore. Commerce. Intelligence. The wisdom of the crowds, whatever that is. Yes, those are the good parts, or the rewards, but they’re only half the story.

More important than reward is value. Value includes both reward and risk; real risk, not hand-wavy “it’s not perfect” dismissals of the downside, and real reward, not simply “this is amazing, let’s get everyone on it ASAP”. Considering how deeply we’re integrating the Internet into our lives, and how broadly we’re spreading it across the globe, it seems prudent to examine the overall value equation in great detail and depth.

Silent risk distorts value

In all cases, obscured or ignored risks lead to a distorted perception of value. If it turns out there’s twice the risk we previously thought there was, that means we were receiving half the value we thought we were. And so our behavior was irrational. Oops, we say, let’s try to correct our course. If we have time.

Do we go Skydiving without verifying that our parachute is properly packed? Some of us might, and may profoundly enjoy the experience, but it would still be stupid. Would we drill up all the oil we could find, happily burn it as fast as we can extract it, then scour the earth for more? We’ve done that, and now we’re worried about climate change. Would we have burned as much oil if the risks were as real to us as the rewards? Unfortunately, at decision time risks are rarely as real as rewards; vested interests naturally do a good job of promoting rewards. When looking toward the future, risks seem abstract and complex, making it difficult to temper exuberance. Progress at any cost, right?

After uncovering all major risks, do we keep doing what we’re doing or do we make other choices? Each person and group has their own threshold of value, but with incomplete or outright false information our ability to make good choices and behave rationally is compromised.

Not too long ago smoking cigarettes was fully accepted by society. Almost everyone smoked. Slick advertising campaigns promoted and amplified the rewards into absurdity while the risks were largely unstudied at first and later actively suppressed. Looking back now, it took decades for the risks to be fully exposed and popularized. But we’ve grown to understand the risks of cancer, lung disease, and heart disease, so smoking has fallen out of favor. Its value equation has changed. The risks were always there but we weren’t accounting for them, much the same as our poor accounting of the environmental impact of oil combustion.

And now, the Internet

Like smoking and oil, the Internet has its own dangerous undercurrent that’s been similarly masked by early enthusiasm. On one side, the rewards and bright techno-centric futures are trumpeted. Fun and creativity! Freedom and empowerment! On the other side, privacy invasions, tracking, data-mining, and generally poor security practices are largely swept under the rug. Yes, many tech-savvy and creatively-oriented people understand the risks and implications in the same way that many researchers and medical professionals recognized the risks of smoking early on, but the general population remains largely unaware.

Like with the tobacco industry’s interest in suppressing the risks of heavy smoking while playing up the benefits, the interests of the big tech companies, information-hungry organizations, and everyone who works for them are completely at odds with what’s good for an individual. It would be stupid of them to lay bare and promote the risks, just as it would be stupid of us to latch onto the rewards without an equally deep understanding of the risks.

The most powerful organizations have both tight privacy and massive amounts of information along with almost incomprehensible computing power to mine the gold out of it. Google claims to care about our privacy, but that’s not true at all: they track everything we do, save it indefinitely, and desperately want more. What they actually care about is maintaining their own privacy from their competitors so that the value of their accumulated information does not diminish. Their ability to generate revenue and grow their power is directly linked to the privacy and quality of their information. They would be stupid to expose it.

Thousands of other organizations engage in the same behavior and say the same things about our privacy. They all try so hard to protect our information from everyone except themselves and their marketing partners, but that’s not privacy no matter how often they say it. It’s a hand-waving distraction; a palatable spin on an exploitative business practice.

A seriously bad deal

Privacy and freedom are inextricably linked in that an individual without privacy has no freedom. Prisoners are constantly watched while the wealthy enjoy exclusive clubs, gated communities, private islands, and remote retreats. Somewhere in the middle of those two extremes, where most people lie, it seems the trend has been away from privacy and thus away from freedom, regardless of how it feels or what the official message is.

Every person behaves differently in the privacy of their home or while truly anonymous compared to the middle of a public square. Under observation, the risk of consequence causes us to narrow the range of our expression. Our choices become more conservative and we no longer say exactly what we’re thinking. Yet with privacy and its links to trust, creativity shines. New ideas take shape, expression blossoms as emotions are let loose, we take a critical eye to old ideas, and from all of that we discover new allies and directions. But it all shrivels under the gaze of an all-seeing eye.

An individual with little information (or worse, bad information) has little power. Under these conditions, an individual is unable to make good choices and better their position in life.

The current state of the Internet is like a rigged roulette wheel where the house is winning big but the entertaining atmosphere keeps everyone playing long into the night. Information about our increasingly extensive online activities is being voraciously consumed in increasing detail by ISPs, cloud services, media producers, ad networks, and innumerable apps. It’s a one-directional flow of information that gradually tilts the balance of power away from us and toward them. After all, they are aggregating and leveraging all of that information to empower themselves. Not us. That would be stupid of them.

The information given back by the Internet does little to balance the outward flow. We’re giving up unique and valuable information about ourselves in exchange for generic, often untrustworthy, and broadly shared information. Most of that activity tracked in detail too.

Google can spend a few billion dollars to build a search engine and a bunch of other software, cheaply distribute it to a billion people with a $0 price tag, and then capture detailed, real-time information of the exact type and structure it wants in perpetuity. A gift to us that keeps giving back to them, making the original Trojan horse look like child’s play. And then, the same infrastructure Google uses to host its services is used to data-mine the value out of its information. Then some of the hundreds of billions in revenue get rolled back into developing more ways to capture information and better ways to extract value out of it. Brilliant strategy, no question. A strategy worth copying.

Each individual on the Internet is trading high quality real-time information about themselves for low quality stale information about people and things they mostly don’t care about. This is buying high and selling low, both a losing strategy and a hefty dose of risk. Like trading land for trinkets, or gold for cash, or freedom for pleasure. It seems that the organizations are not being stupid while we certainly are.

What to do?

Put generally, the solution is for each person to look very carefully at the value equation and to what degree the real risks offset (or even overshadow) the real rewards. We’ll each have our own opinion in that it comes down our personal ratio of reward to risk. A risk-averse person maybe comfortable with a reward of 10 and a risk of 1. But if information comes to light that puts the risk closer to 10, they’ll be drawn toward another choice; their behavior will change.

Put slightly less generally, the outward flow of our personal information must be reduced to the bare minimum and kept under our individual control. This cranks up our privacy and puts an end to the rigged roulette wheel, taking care of a good chunk of the risk component. After doing that, it seems sensible to do what the organizations are doing: capture our personal information in our own computer, keep it private, and transform it into personal benefit. By cranking up the reward and cutting back on risk, the value equation begins to look quite appealing.

There are many ways to achieve such value, but we can expect them to contradict conventional wisdom and established patterns. Different outcomes demand different methods; we’d be insane to think more of the same could lead us to a different place.

For my part, I’m developing a type of personal computer that focuses exclusively on value to individuals. Value is what this computer does. Like a Nintendo does games for individuals and a watch does time for an individual, this computer does value for an individual. Perhaps a strange concept, but necessary.

By focusing on value to an individual, the most difficult problem of all — improving the quality of a single person’s behavior — no longer feels impossible.