

by Charles Hugh-Smith

It’s self-evident that we cannot possibly understand trade, soaring corporate profits, Facebook’s data collection or the economy without understanding the core role played by Big Data in reaping outsized profits and pushing narratives.



“If I had a lot of money, would I want to do:

A) –invest in the exploration forbidding areas of the globe for oil reserves with a 50/50 chance of no results
–Pay for the oil extracting and transportation infrastructure
–deal with the fluctuating market values – which may make my whole investment worthless



Why I keep thinking we’ve moved past ‘the sky is falling’ to ‘the sky fell’ with this is that we haven’t yet seen what happens when next generation AI gets a hold of this data and starts using it.

That’s no concern of anyone in the data mining, acquisition, or aggregation business now – as their goal is very simple: get as much data as possible from any kind of source that you can beg borrow or steal from – as the AI and algorithms of the future will find more and more uses for this data.

Data will only become more valuable. I don’t think there is an equivalent ‘substance’ in our universe, that no matter what happens, the data holder will be wealthier and wealthier.


I thought it was very telling that there were numerous reports recently that the Senators grilling Supreme Leader Zuckerberg clearly, by the nature of their questions 1) did not understand what Facebook does and why this is and issue, and 2) didn’t want to piss Zuck off as they are going to need to use Facebook’s data in their next campaign, as their opponents surely will.”

Mark G.:

“Perhaps one way to underline this for readers (i.e. that corporations have benefited from “free trade” far more than consumers and workers) is to see what wasn’t outsourced and offshored. This is control of the product marketing and distribution channels. This is the sector the “Free Traders” have maintained a death grip on.


If we totaled up the proverbial ‘80%’ of retail value in any class of products I’m certain we’d be staring at a series of oligopolies that generally have fewer than ten members in any category, and often fewer than five.”

Here’s how I’m connecting the dots of data collection/data mining and the new model for maximizing profitability: the entire model of “capitalism” (maximizing return on capital and labor) has shifted from getting rich making stuff/providing services to distributing/marketing goods and services in a cartel structure.


Let’s stipulate that those corporations whose entire value proposition is manufacturing expertise will continue to extract profits from manufacturing. But this doesn’t mean that this manufacturing remains exclusively in the domestic economy, or that Big Data isn’t increasingly a core value-generator for manufacturers.

Boeing is a good example. In terms of trade, it’s noteworthy that Boeing is careful to have major airliner components manufactured in major markets for its aircraft: Japan and China come to mind.


GFB made an important point in one of our many email exchanges on these topics: small data sets are a dime a dozen. What’s truly valuable is data sets covering tens of millions or hundreds of millions of individuals.

There are of course beneficial uses for large data sets: pharmaceutical and healthcare R&D is informed by large data sets about patients and their responsesto lifestyle changes, medications, etc.

To Mark’s point: to identify what is most profitable, look at what isn’t offshored, and what is most zealously guarded by political/regulatory moats.

Alternatively, to identify what’s low-value and not very profitable, look at what’s offshored. That would be manufacturing and assembly.

To GFB’s point: given a choice between an intrinsically risky enterprise such as discovering and extracting oil in harsh landscapes and unstable nations (pretty much all that’s left to explore/extract), and extracting the value from large data sets, which is more profitable and lower risk?



This connects the dots linking trade, the value of Facebook’s “business model,” and the tremendous demand by corporations and political campaigns for large data sets that can be analyzed and exploited to market products, services and political narratives/candidates.

It’s self-evident that we cannot possibly understand trade, soaring corporate profits, Facebook’s data collection or the economy without understanding the core role played by Big Data in reaping outsized profits and pushing narratives–in Noam Chomsky’s phrase, manufacturing consent.

Big Data, Big Government, Influencers / Marketers, Corporate America and politicos never had it so good. As for the rest of us–not so much.


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