Tim OReilly – COVID-19 is an opportunity to break the current economic paradigm – Diginomica

(Image credit Tim O'Reilly)

Tim O'Reilly has played a critical part in framing some of the most influential conversations about the role of technology in economies and across society since the early 1990s. Concepts and movements such as open source software, Web 2.0, Government-as-a-Platform and the WTF Economy are all well known and referenced widely within the technology industry. In other words, when O'Reilly speaks up about something, people tend to pay attention.

Given the fundamental shifts we are seeing across the economy now and the rapid escalation of using digital tools to counter the effects of the COVID-19 pandemic, it's unsurprising that O'Reilly has some opinions.

Just as a disclaimer, the following ideas have been selected from a wide-ranging conversation that covered a variety of topics (including at one point, O'Reilly wrangling some chickens - no, really). But I feel that almost all the talking points played into the same overarching theme - COVID-19 has shown us that drastic change is possible when there is enough will and force used. With this in mind and knowing that the status quo doesn't have to be sustained, what sort of society would we like to build going forward?

O'Reilly said:

I think the impact of the pandemic is sort of meta, in that it has simply told us, loud and clear, that the way things are can change. We've had this big resetting of the Overton window in politics in recent years and now we're having this big reset of the Overton window in the economy.

This is just the beginning of changes, not the end. A lot of people frame this up as What happens post pandemic?'. I don't think that's the right way to think about it. This is the century of things that we can imagine could happen but never really took seriously and never prepared for actually happening. And that's a big deal.

O'Reilly said that people and commentators always point to the digital revolution' over the past decade or so as a period of unprecedented change. However, he believes that this is not accurate and there have been similar disruptive developments in recent history, for example the period between 1890-1930. In fact, O'Reilly argues that the digital change we have been experiencing, whilst meaningful, was pretty continuous with what went before.

But COVID-19 is different, and because of that, we now have an opportunity to build a collective consensus on how to shape society and the economy going forward. He said:

I think we in the developed world are facing our first serious period of change in a way that we have not seen before, for a very long time. And because everything is up for grabs, I think there is a real opportunity and a requirement to shape that. Instead of just taking whatever we get.

Social, racial and economic equality are front of mind for O'Reilly. So too is the urgency around climate change. O'Reilly spoke about capitalism being the best of the worst economic systems, but argued that we don't have to accept it in its current form and we can use the technology we have available to us to build something better (more on that later). However, it will require a conscious effort to drive the change we want to and ought to see. This will come eventually, he said, but it would be better that it happened sooner rather than later.

This is why I'm excited in a way because it's breaking the old paradigm. I don't think it's entirely going to go away and I don't think it's going to go away easily. I say to people, look we can have a positive 30/40/50 years, or we can have a really negative one before we wake up. We can rise to the occasion and put the machines to work alongside us or we can keep building this fundamentally trivial consumer economy, where we are making stuff that nobody really wants and throws away.

But how do you build this consensus for change? That's not an easy question to answer, particularly in a world where divisions between ideas and fields of thought are growing wider by the day and lines are being drawn left, right and centre. O'Reilly is of the view that we can't expect society as a whole to just understand what truth' is within the context of swathes of information being distributed online, via often unknown sources. People are influenced easily and we need to develop tools and educate ourselves on discerning truth from fiction. He said:

We can't just let people go off into these disjunct realities and then hate on each other. I'm not sure how we get back to that, but we are going to have to. I do think that through the power of, in some sense, persuasion - for example, in America Donald Trump persuaded a group of people that a set of feelings were okay to express. And now a group of people associated with Black Lives Matter has persuaded a different group of people to express and to have solidarity. What you see are these vast contests for human belief. These media idea storms are the future.

I think one of the most important technologies that we're going to have to develop, is that you can't rely on people to be media literate. You can't rely on people to sort out truth from falsehood. A lot of people say Facebook's algorithm is the problem - yes, Facebook's algorithm is the problem today, but it's also the solution. I feel very strongly that there has to be more curation, not less.

These are all big ideas and it can sometimes seem difficult to pinpoint exactly what kind of change we should be striving for. One area of particular interest for O'Reilly, unsurprisingly, is intelligent machines, AI and algorithmic systems. He is adamant that the fundamental skill that society has to get better at in the 21st Century is partnering with intelligent machines - instead of driving out human capital to reduce cost, we need to think about how these intelligent systems can be used to reshape the economy (where the driver isn't just share price).

O'Reilly said that he often uses a quote by Dr. Paul Cohen, the founding Dean of School of Computing and Information at the University of Pittsburgh, which is:

The opportunity of AI is to help humans model and manage complex interacting systems.

We need to look at our economies through this lens, O'Reilly argued.

We are engaged in this massive project to rebuild our economy, with all of the signals we have today, rather than the signals that we had 100 years ago.

The algorithm of our financial markets is to maximise corporate profits and stock share prices and humans are a cost to be eliminated. And then you say, well why do we have this society of inequality and inequity? It's because we built a machine and told it to optimise for that. I think where we are right now is that we are at a moment where we can recognise the choices that we've made in building the society we built.

Again, COVID-19 is playing a significant role in driving this shift in thinking forward, given that people are recognising that the way governments find and spend money is down to political choice. For example, the US government arguing that there is no money for universal healthcare, but then finding trillions of dollars to prop up industries and the stock market.

We need to get better at using these new intelligent systems to reshape the economy in a way that works for everyone. O'Reilly said:

The fundamental skill we have to get better at in the 21st Century is partnering with intelligent machines. It's easy to see things like Amazon's next day delivery or Uber and their ilk through the lens of current broken labour markets. But you could look at them through the lens of this massive algorithmic coordination of human effort. We are in the early stages of that.

I found this conversation with O'Reilly fascinating in many ways. Writing this story was a challenge, given that the ideas are so big and almost seem incomprehensible within the current system that we operate. But I think O'Reilly is right, COVID-19 has highlighted that change is possible and we *do* have a choice and we *do* have control over how we shape the economy. Building a consensus over what sort of economy and society we'd like to have isn't an easy thing to do, but I think it's becoming clear to many that the current system we have in place isn't working for a significant chunk of people. We need to focus our efforts on coalescing people around real change that lifts us all, rather than getting distracted with disinformation. And we need to stop assuming that access to economic opportunity isn't gated in many ways, because it is.

I'll finish with the following quote from O'Reilly:

I think there are more COVID-like wildfires in our future. So our ability to respond is going to be super important. There are some really important things about capitalism - in many ways it's the worst economic system, except for all the rest. But that doesn't mean it can't be improved. And part of what makes it better is more perfect knowledge. We have tools for knowledge and coordination that we didn't have before.

We are now building systems at scale and shape what billions of people believe, new kinds of systems. We need to understand how to use those systems effectively. We do need to redirect our economy in some pretty fundamental ways, but I have more hope that we're actually going to be able to do that than I've ever had before. We've seen that it's possible to do it in different ways.

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Tim OReilly - COVID-19 is an opportunity to break the current economic paradigm - Diginomica