It’s now clear that this shift in the use of behavioral data was an historic turning point. Behavioral data that were once discarded or ignored were rediscovered as what I call behavioral surplus. Google’s dramatic success in “matching” ads to pages revealed the transformational value of this behavioral surplus as a means of generating revenue and ultimately turning investment into capital. Behavioral surplus was the game-changing zero-cost asset that could be diverted from service improvement toward a genuine market exchange. Key to this formula, however, is the fact that this new market exchange was not an exchange with users but rather with other companies who understood how to make money from bets on users’ future behavior. In this new context, users were no longer an end-in-themselves. Instead they became a means to profits in a new kind of marketplace in which users are neither buyers nor sellers nor products. Users are the source of free raw material that feeds a new kind of manufacturing process.
While these facts are known, their significance has not been fully appreciated or adequately theorized. What just happened was the discovery of a surprisingly profitable commercial equation –– a series of lawful relationships that were gradually institutionalized in the sui generis economic logic of surveillance capitalism. It’s like a newly sighted planet with its own physics of time and space, its sixty-seven hour days, emerald sky, inverted mountain ranges, and dry water.
A parasitic form of profit
The equation: First, the push for more users and more channels, services, devices, places, and spaces is imperative for access to an ever-expanding range of behavioral surplus. Users are the human nature-al resource that provides this free raw material. Second, the application of machine learning, artificial intelligence, and data science for continuous algorithmic improvement constitutes an immensely expensive, sophisticated, and exclusive twenty-first century “means of production.” Third, the new manufacturing process converts behavioral surplus into prediction products designed to predict behavior now and soon. Fourth, these prediction products are sold into a new kind of meta-market that trades exclusively in future behavior. The better (more predictive) the product, the lower the risks for buyers, and the greater the volume of sales. Surveillance capitalism’s profits derive primarily, if not entirely, from such markets for future behavior.
While advertisers have been the dominant buyers in the early history of this new kind of marketplace, there is no substantive reason why such markets should be limited to this group. The already visible trend is that any actor with an interest in monetizing probabilistic information about our behavior and/or influencing future behavior can pay to play in a marketplace where the behavioral fortunes of individuals, groups, bodies, and things are told and sold. This is how in our own lifetimes we observe capitalism shifting under our gaze: once profits from products and services, then profits from speculation, and now profits from surveillance. This latest mutation may help explain why the explosion of the digital has failed, so far, to decisively impact economic growth, as so many of its capabilities are diverted into a fundamentally parasitic form of profit.