by Viktor Mayer-Schönberger and Thomas Ramge
In modern history, the story of capitalism has been a story of firms and financiers. That’s all going to change thanks to the Big Data revolution. As Viktor Mayer-Schönberger, bestselling author of Big Data, and Thomas Ramge, who writes for The Economist, show, data is replacing money as the driver of market behavior. Big finance and big companies will be replaced by small groups and individual actors who make markets instead of making things: think Uber instead of Ford, or Airbnb instead of Hyatt. This is the dawn of the era of data capitalism. Will it be an age of prosperity or of calamity? Reinventing Capitalism in the Age of Big Data provides the indispensable roadmap for securing a better future.
About Viktor Mayer-Schönberger and Thomas Ramge
Viktor Mayer-Schönberger is Professor of Internet Governance and Regulation at the University of Oxford and the coauthor, with Kenneth Cukier, of the bestselling book Big Data. His research focuses on the role of information in a networked economy. Earlier he spent ten years on the faculty of Harvard’s Kennedy School of Government.
Thomas Ramge is the technology correspondent of the business magazine brand eins and a contributing editor at the Economist.
Wenlong Li on SCRIPTed; A Journal of Law, Technology & Society wrote:
"Data-rich markets are sweeping across the global economy. 'Until recently, communicating such rich information in markets was difficult and costly. So we used a workaround and condensed all of this information into a single metric: price,' they write. 'In data-rich markets, we no longer have to condense our preferences into price and can abandon the oversimplification that was necessary because of communicative and cognitive limits.' [...] Mayer-Schönberger [...] and Ramge [...] explain all of these advantages. To their credit, though, they spend more time in their book on the downsides of data-rich markets. These include the potential to put people out of work and to concentrate corporate power among a small number of firms that control the most valuable data. [...] The only way to avoid this fate, all of these authors agree, is a smart, activist government dedicated to protecting its citizens’ interests. [...] In modern times, the most effective way to coordinate behavior, other than through government, has been through a company, also known as a firm. [...] But the firm is not the only way for the private sector to coordinate. The market offers a different model for doing so, one that both complements and competes with the firm’s hierarchical approach. The market is decentralized. It has no top-down authority. Participants come and go with ease. [...] For all their differences, the firm and the market do share a central flaw. They often are not self-correcting. Early winners can use their strength to beat back competition, amassing yet more strength — and ultimately hurting the public interest. [...] Mayer-Schönberger and Ramge offer several intriguing ideas for limiting the excesses of data-rich capitalism."
Michael D. Schrage on Finance & Development wrote:
"As before, Mayer-Schönberger co-authors with an experienced journalist, Thomas Ramge, who writes for The Economist. His first-hand observations and skillful narrative have significantly contributed to the book’s readability, presenting intriguing debates with a wealth of examples, stories and anecdotes. This will aid the reader in grasping the transition of market and multidimensional implications that the authors aim to reveal in this book. In addition to the authors’ respective expertise, the combination of their strengths makes this book highly valuable for academics from various fields and friendly to readers who have a general interest in the role of information in a data-driven economy. Both authors are big believers in the market and their argument that rich streams of data will fully grease and transform the market is noticeable throughout the whole book. [...] Apart from a detailed account of data capitalism, Reinventing Capitalism also includes quite some normative insights. A full package of solutions starts to emerge from Chapter 7 on, engaging various areas of law and policy. [...] The wide coverage of almost every controversial issue in relation to data capitalism gives Reinventing Capitalism a massive and holistic view of the contemporary capitalist society [...]. Nevertheless, the book’s strong advocacy of market has almost inevitably lessened the accounts of market failure and regulatory responses. [...] Unfortunately, this book stops short of further substantiating its proposals in reality and aligning with existing schemes. In addition, some technical issues determining the feasibility of those proposals are left unaddressed, such as interoperability."
"Smoothly written and provocative, Reinventing Capitalism in the Age of Big Data is one of those rare pop future books that takes fundamental economics seriously. Nobel laureates from Friedrich Hayek to Alvin Roth don’t just make cameo appearances: their insights drive the book’s arguments. [...] To be sure, Mayer-Schönberger and Ramge aren’t Pollyannas. Their proposals for regulating data-dominant oligopolies are thoughtful. [...] That said, the book champions governance over government. Indeed, the authors celebrate markets. [...] The book’s singular weakness is an overweening Western bias. The Chinese, Indian, and African ontologies receive only perfunctory review. Possible—even probable—global clashes of big data’s economic and commercial culture are unexplored. These omissions undermine the authors’ optimism and cheat the serious reader. If future wealth, growth, and living standards depend on data-ism, then it will surely be as much a source of rivalry and competition as collaboration and trade."
Interview with Mayer-Schönberger about the Book
A 17-minute interview by the Oxford Internet Institute, where Mayer-Schönberger is employed:
Table of Contents of Reinventing Capitalism in the Age of Big Data
- Reinventing Capitalism
- Communicative Coordination
- Markets and Money
- Data-Rich Markets
- Companies and Control
- Firm Futures
- Capital Decline
- Feedback Effects
- Unbundling Work
- Human Choice