The Future of Democracy?

Since time immemorial, the land has been the most important asset. The most powerful states of their times—such as the Persian, Macedonian and Roman empires—were also the biggest. However, ever since the Industrial Revolution, the land has been diminishing in importance, while factories and machines have become a true source of power.

In the modern era, data will eclipse both land and machines as the most significant asset, and wars will be waged for control of its flow. Data will be the primary driver of the economy. Digital flows already have a larger impact on GDP growth than does the centuries-old trade in goods and services.

But, as with almost all technologically advanced sectors, a data-driven economy naturally gravitates towards monopolization due to algorithms’ reliance on data. This reliance creates a self-reinforcing cycle. If a company gains an early upper hand over its competitors, it will be very hard to resist the process of market concentration. With better services, it will attract more customers. More users will supply more data, while more data will improve AI algorithms. In turn, more advanced AI algorithms will attract even more customers, who will provide the company with additional data, and so on, ad infinitum. This explains why the tech industry is so heavily monopolized and why companies like Google, Amazon and Microsoft are totally dominant within their fields.

If left unregulated, the economy of the future will consist of monopolies and this will lead to an unprecedented concentration of power, as algorithms and robots based on AI eliminate most of the jobs, leaving millions of people unemployed. How will democracies cope with the demands of a useless class suffering from something worse than exploitation—irrelevance?