Machine Learning Will Lead When It Comes To Algorithmic Rent-Seeking10 Dec 2015
I've long been searching for a term to describe a concept that I see across the API space, where API providers, API consumers, and API service providers take more from the space, than they give back. This concept shows up across the API space in many forms, preying upon the open nature of the open nature of the API sector, and looking to extract value, and generate revenue on the backs of the hard work of others.
After listening to the audio book version of the Price of Inequality by Joseph E. Stiglitz on a recent drive, I re-learned the term rent-seeking. A phrase I had heard before, but had not fully grasped its potentially wide meaning, when applied to financial products, natural, and other types of common resources--Google gives me the following definition:
Rent-Seeking When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.
Rent-seeking is common practice within the API layer of the Internet. When you consider the concept, and apply to the unlimited number of digital resources that are being exposed via APIs, you begin to see unlimited possibilities for rent-seeking, when transparency is not present. Now that I have the the seed planted in my head, and a phrase to apply, I will be exploring this concept more, but I couldn't help but think about one of the biggest offenders I'm seeing unfold across the space--machine learning.
Don't get me wrong. There will be a lot of machine learning solutions that will help move our digital world forward, but there are also lots of smoke & mirror machine learning and big data solutions, which will purely be seeking resources to mine. As an API provider, it can be easy to focus on the individual API consumers who are bad actors, when in reality you should be thinking much bigger, and the potential partners or service providers, who can consume large amounts, or even all of your resources.
This dark side of machine learning that I am focusing on will include the artificial intelligence, machine learning, big data, and analytics providers who will be selling you magical solutions and lofty promises, which will require the ingestion your valuable data, content, and algorithmic resources, before they can return said magic to you. Some of these solutions will offer more value than they consume, but many will not. If you are the steward of a valuable corpus of data, content, and have crafted valuable algorithms, many large companies will be approaching you in coming months and years, interested in helping you generate insights from these valuable resources.
Machine learning isn't bad. I just want to help you be aware that there are providers who just want to mine your resources, looking to add value to their own data, content, and algorithms, or possibly even just passing on, and selling it directly to other providers. Machine learning will be big business, and something that will dramatically incentivize rent-seeking behavior hidden behind an algorithm. I'll be telling stories of other rent-seeking behavior that I see in the API space, but at this point I feel like machine learning will lead when it comes to algorithmic rent-seeking in the API economy.