the bureaucratic threat to big tech

By | November 28, 2020

Image from page 156 of “Book of martyrs, or, A history of the lives, sufferings, and triumphant deaths of the primitive as well as Protestant martyrs” Source

Sometimes it’s helpful to remove the technology layer in technology companies and trends and try to see what’s really going on. We talk a lot about platforms and disintermediation but what every company — and increasingly every institution — is trying to do is remove, or automate, unwanted bureaucracy. But is this every going to really work?

Let’s walk our way through it.

The history of bureaucracy is a surprising one. Its modern origins can be found in The Inquisition, set up in the early 13th century to hunt down dissent and enforce Papal control. It developed a system of record-keeping and -discovery that became the model for government, and later business, and is still in use today. It’s not that kings and queens didn’t have their own bureaucracies; it’s that they weren’t efficient in managing, and retrieving useful information from, the mountain of documents created.

Together with the new coherence of canon law there came a revolution in record-keeping as Church chancery clerks developed the art of paperwork—composing in the same legible script, making copies of documents, depositing them in archives, and inventing techniques for retrieving information that had been written down and stored away. They were creating a rudimentary form of something so fundamental to life today—bureaucracy—that we rarely give it a moment’s thought.

(Murphy, Cullen. God’s Jury: The Inquisition and the Making of the Modern World (p. 41). Houghton Mifflin Harcourt.)

And here lies a key oddity. The Vatican set up this extraordinary bureaucracy to manage a vast international system of repression, creating along the way a codified legal system to enforce uniformity of punishment and justification. They recorded everything, including the price of ropes, wood, branches, straw, and executioner’s fees for each burning at the stake. We may not feel the same way from the outside, but bureaucracy and the pursuit of efficiency are intimately tied together. And no goal is too shabby that it cannot benefit from from efficiency and/or automation: the Nazis used IBM punch-cards to better manage the Holocaust, the U.S. under Robert McNamara used computers to win the war in Vietnam, Stalin’s Soviet Union relied on a bureaucracy to run the gulags (so thoroughly, “the increase in the Gulag bureaucracy appeared to outrun the number of prisoners” (Paul Gregory, An Introduction to the Economics of the Gulag) in part because it was a major source of labour to the rest of the economy.

Hamlet security ratings, Vietnam, Nov 30 1970 Source

These may sound like horror shows from history, but similar principles are being applied today. It can be seen in the UK’s ‘hostile environment’ policy towards immigrants, which relied on government bureaucracy becoming more uncaring and more, well, bureaucratic (what sociologist Pierre Bourdieu calls the ‘the rightward tilting of the bureaucratic field’, see Crawford, Joe; Leahy, Sharon; McKee, Kim, More Than a Hostile Environment: exploring the impact of the Right to Rent part of the Immigration Act 2016, PDF). And don’t get me started on the DHS. Bureaucracies are there to be used, and it seems they excel at dehumanising the task, however many distraught humans are involved.

So a bureaucracy’s passion is to make things more efficient. And companies long ago adopted this model. Indeed, British rule of India was, until 1858, conducted by the East India Company with its own army, bureaucracy and courts (and laws). (see The English East India Company and the Modern Corporation: Legacies, Lessons, and Limitations by Philip J. Stern. PDF)

Technology — from the Inquisition’s cross-references and keywords in the margin to IBM’SystemJ360 for running the Hamlet Evaluation System — has always been the efficiency-obsessed bureaucracy’s handmaiden. Apple is in part the world’s most successful company because of its efficient supply chains. Google updated the Inquisition’s boxed synopses and indexes into a search engine, which has made it tolerably rich. Facebook’s algorithms have focused efficiency on maximising the value from our screen addiction. Amazon’s customer obsession has ensured that we never quite satiate our buying fix. Microsoft may not have quite found its own niche, but it’s trying: its 365 product allows managers to evaluate employees for productivity by monitoring how much they collaborate on documents, participate in group chats and email colleagues.

Indeed, this is perhaps the most obvious connection between The Inquisition and modern-day tech: It doesn’t make processes more efficient as much as codifying and entrenching them: eventually everything ends up looking like a nail. The Inquisition spun out of control in part because of its bureaucracy, which as it standardised procedures, so it standardised what being a heretic was, widening the definition until it became a self-fulfilling dynamic. (Cullen Murphy points to the same trend in the McCarthy Red Scare of the 1950s, and life post 9/11 where just learning Arabic is considered worthy of suspicion.)

Here we enter the world of algorithms, which are modern efficiency’s hammer. Microsoft’s 365 productivity scores show both how problematic the world of measuring something is, and also how companies and institutions would love to measure their most expensive factor of production. The irony, of course, is that the components of a bureaucracy are innately hostile to the notion of measuring themselves. It’s a rare manager who fires himself in the cause of efficiency. Bureaucracy’s first and foremost goal is to preserve themselves. Take it from the Mother of all Bureaucracies: The Inquisition lasted, more or less, 700 years (1231-1908). One might wonder whether Microsoft uses its productivity scores on its own employees?

The obvious solution to this is to have two different structures: a bureaucracy within the institution, for ‘managing’ the company, and another, less prized and largely out-sourced machine for doing the awkward parts. Apple is probably best at this. There are few Apple employees who actually make Apple products. Those who do are scattered around the world, and subject to the whims of their ultimate master: a few hours before I wrote this Reuters’ Yimou Lee reported that Foxconn, Apple’s long-time main supplier, is moving some iPad and MacBook assembly to Vietnam from China at the request of Apple Inc, as the U.S. firm diversifies production to minimise the impact of a Sino-U.S. trade war. No mention is made of the employees affected, the layoffs involved, but that’s because none of them are part of the 137,000-strong Apple bureaucracy.

Amazon (1.2 million employees) has also done wonders in this space. In fact, it has its own internal police to patrol threats to itself. According to documents leaked to Vice, Amazon’s Global Security Operations Center, “the company’s security division tasked with protecting Amazon employees, vendors, and assets at Amazon facilities around the world”, in the words of Lauren Kaori Gurley, obsessively monitors its workers’ involvement in union-organising activities. In the somewhat Orwellian language that red tape tends to create, an Amazon spokesperson described the goal to “highlight potential risks/hazards that may impact Amazon operations, in order to meet customer expectation.” No mention is made of the actual workers themselves.

Unsurprising, then, that Gurley reports today (Friday Nov 27, 2020) Amazon warehouse workers and social and environmental justice activists around the world would be staging coordinated protests, strikes, and actions to demand the online retailer respect workers’ rights to participate in union activity, stop circumventing tax laws, and commit to higher environmental standards, according to the event’s organizers. (In their defence, Amazon has given workers a one-time bonus.)

It would be wise, then, to ring-fence the two structures. Indeed. these tech behemoths have largely outsourced what they can, and everyone else is following suit. Amazon outsourced customer service for its Ring internet-connected camera product to a French-owned company in the Philippines, where workers ended up having to sleep on the floor because of a local lockdown, according to an April story by the FT’s Dave Lee (paywall). Amazon said it was urgently investigating it, but whatever they did wasn’t enough to change the minds of workers, who seven months on joined Friday’s protest, albeit virtually. (It’s a strange world where a company which sells automated remote surveillance outsources to another firm in another country the process of helping customers set up and run this service, while its own internal police watch on and try to snuff out dissent. Maybe ‘strange’ isn’t the word. Inquisitorial, perhaps?)

Facebook (56,653 employees), meanwhile outsources most of the stuff it doesn’t like to do, according to Charlotte Jee of the Technology Review:

The overwhelming majority of the 15,000 people who spend all day deciding what can and can’t be on Facebook don’t even work for Facebook. The whole function of content moderation is farmed out to third-party vendors, who employ temporary workers on precarious contracts at over 20 sites worldwide.

This is not pleasant business, but it makes bureaucratic sense. Working for Facebook, Google, Apple and the like are considered high-status jobs, something to get excited about (though some tell me the excitement doesn’t always last; it would be a mistake to think that the free lunches, sleep-pods and logos don’t hide the usual bureaucratic realities). Why would you mess that up by bringing inhouse the messy grunt work of moderating, customer service and actually building products?

Which brings us to automation. In a perfect world all this would be automated, and possibly production lines for iPhones and Rings will be entirely robotic. Customer service and moderating have proved harder. Where they can Facebook has tried to outsource this to the content creators, but the U.S. election has dashed any lingering hopes that algorithms would be enough to manage the rest.

And this is where I believe the tech behemoths’ unseen Achilles Heel lies. Bureaucracies tend to protect themselves, not just in terms of providing work, but in terms of ensuring that the work is, if not pleasant, then at least not unpleasant. Most of the guards patrolling the gulags were prisoners themselves; the executioners of the Inquisition were hired hands. The Nazis were forever refining the mode of murdering concentration camp inmates so their own hands weren’t sullied. Companies like Siemens helped out (they built the electrical infrastructure for camps, while Bosch installed plumbing and water, according to author Karen Bartlett), while a company called Topf & Sons built highly efficient “eight-muffle ovens” operated by prisoners themselves, and was working on an entirely self-contained oven system where incineration would be fuelled by heated corpses when the war ended.

I’m of course not conflating Facebook and any other tech behemoth with the Third Reich and the Final Solution. But there’s an inevitable tendency of large bureaucracies to assign the unsightly work to others, while preserving itself. And this is where I think these companies will encounter problems. Because ultimately, as governments scrutinise big tech more carefully, they will demand more of them, which will challenge the paradigm of efficiency that these companies have pursued.

Amazon is feeling the heat as its owner becomes ever richer. Facebook is feeling the heat as understanding of its impact on democracy and public belief grows. Google too is feeling the heat for Youtube and the way it redirects traffic back to itself. Apple may get to keep its outsourced production of devices, but as it moves more into services, so will it find that outsourcing doesn’t work so well.

In the end big institutions are essentially bureaucracies that protect their own. Technology helps but only so much. Ultimately there is a contradiction there between the notions of platforms and disintermediation. You cannot have both. Tech disruptors big and small think they can remove intermediaries but they only do that by building a competing platform. It may be simpler and better than what exists, but it merely moves the intermediary layer, it doesn’t remove it entirely. And so while every startup dreams of becoming a platform, they will find like all the tech behemoths that the platform ends up becoming a bureaucracy of its own. It may be a fabulously lucrative one, but that merely disguises it. Behind it lie the same inertia, self-justification and passion for efficiency coupled with self-preservation.

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