"Algorithmic Money Faucet"

Trading our humanity for content and engagement

The last couple of years I’ve been learning a lot from Kyla Scanlon, an economics expert who creates a lot of really entertaining and informative economic and finance content on TikTok and now YouTube. She’s funny. She’s taught me a lot. And, in my opinion, she’s mastered an effective way of communicating about the economy on the internet.

Back in August she posted a video to YouTube called “How Social Media Drives the Economy.” I’ll embed the video at the end of this newsletter, but I’ve linked it there as well. The video is based on the article she wrote here.

In the video she reflects on the summer dust-up around Instagram and its incessant efforts to become TikTok and why that’s indicative of a broader phenomenon, especially in relation to social media’s effects on economics conversations in a particularly tumultuous time for economics.

First, let me paraphrase something Kyla says and explain why it’s great:

Instagram’s “growth at any costs” mindset is yet again demonstrating the commodification of users.

Kyla makes this point, and it’s a good one.

The commodification of users that was once sort of hidden in the machinations of the social internet is becoming more apparent as platforms are beginning to change in an effort to chase the attention market rather than the interests of users. What results is a commodification of users in which their interests are cast away in a platform’s pursuit of growth. One would think this will ultimately backfire as the users choose to not use the platform that has commodified them. But we don’t know.

Further, the commodification of users is dehumanizing. As Joanne McNeil says in her book Lurking: How a Person Became a User, “Facebook is an ant farm of humanity.” Truly, this is all of social media. But Facebook being the largest gives it a special place among the pantheon of platforms.

Kyla explains this more directly:

Platforms are pushing stuff that nobody wants, and users want their needs to be respected. The reason people are upset [about Instagram] because they felt like something that they liked—pictures of their friends—was being co-opted into a larger algorithmic money faucet. Our lives are content machines, for better or worse.

Let’s get into this image of an algorithmic money faucet.

The Algorithmic Money Faucet

Here’s a diagram Kyle shares of the algorithmic money faucet:

She cites Gutwinder, an author who writes on how we’re fooled in the digital age, who wrote in an article called “The Perils of Audience Capture”:

Just as lacking a mirror to dress ourselves leaves us disheveled, so lacking other people's eyes to refine our personalities leaves us uncouth.

Put simply, in order to be someone, we need someone to be someone for. Our personalities develop as a role we perform for other people, fulfilling the expectations we think they have of us.

Kyla says:

We are shaped by people and people shape us. People create content, so content shapes us, too.

In the algorithmic money faucet, content is water, social media is the faucet itself, the spigots are controlled by more money, and the water that actually comes out of the faucet is the algorithmic recommendation, drenching us in content.

Kyla goes on to say what I have said in my book Terms of Service and in this newsletter plenty of times: “Our brains are just not designed for all of that [content].”

Social Media Is Economically Designed for Outrage and Unhealth

Kyla cites a study called “How social learning amplifies moral outrage expression in online social networks,” in which one of its authors, Molly Crockett, writes:

Amplification of moral outrage is a clear consequence of social media’s business model, which optimizes for user engagement… Platforms create incentives that change how users react to political events over time.

The algorithmic money faucet rewards outrage. Not grace. Not kindness. 

Like social psychologist Jonathan Haidt and technology ethics writer Tobias Rose-Stockwell wrote in December 2019:

If we want our democracy to succeed—indeed, if we want the idea of democracy to regain respect in an age when dissatisfaction with democracies is rising—we’ll need to understand the many ways in which today’s social-media platforms create conditions that may be hostile to democracy’s success. And then we’ll have to take decisive action to improve social media.

So much has changed since December 2019, so much has happened, and it all proves out these ideas. 

Until the economics of social media are not dependent upon us being nasty to one another, I am uncertain we have much hope for substantial change. 

What Is the Cost?

When a force as strong as social media drives the economy and culture as much as it does, and when that social media force incentivizes anger, there is a great cost we all pay without us maybe even realizing it. That is, until its consequences have already been felt.

The cost is our humanity. When our humanity is stripped away for content and showered on everyone else as a means of entertainment in an effort to harvest attention and generate profit, we lose ourselves.

Joanne McNeil writes in Lurking, “At its worst and at its best, the internet extracts humanity from users and serves it back to other users.”

Likewise, it is easy for us to become prisoners of the characters we create online. As Gutwinder says in at the end of his piece I cited above:

This is the ultimate trapdoor in the hall of fame; to become a prisoner of one's own persona. The desire for recognition in an increasingly atomized world lures us to be who strangers wish us to be. And with personal development so arduous and lonely, there is ease and comfort in crowdsourcing your identity. But amid such temptations, it's worth remembering that when you become who your audience expects at the expense of who you are, the affection you receive is not intended for you but for the character you're playing, a character you'll eventually tire of. And so be warned: being someone often means being fake, and if you chase the approval of others, you may, in the end, lose the approval of yourself.

When we are imprisoned by the persona we create online we lose ourselves. In pursuing the approval of the masses we lose the approval of ourselves. 

When we let our humanity be constantly molded by the winds of the social internet, we may find that after a while we no longer recognize ourselves.

Here’s Kyla’s great video: