How data is revolutionizing work and the economy

The invention and use of clay tokens represents a foundational episode in the history of record-making. They illustrate the power of data and the different cognitive and social practices that develop in conjunction or around it. 



Despite the simple materiality and technology supporting them, clay tokens show an impressive closeness to many of the organizational principles and rules of other forms of data .



Without the physical support and semiotic or signifying properties of clay tokens, it would have been unlikely to understand and make the abstract notion of exchange a generalized social practice. Clay tokens provided the standard basis for recording exchanges and objectifying transactions. A more complex idea of social exchange was born. Cast in this light, records are linked to knowledge and institutions that have historically helped to establish the social practices that developed around the notion of a generalized exchange and came to be associated with the use of standardized media such as numbers, money and prices, information, or letters of credit. 



People effectively started to process data, ordering, classifying, and intervening in the ideas and concepts carried by signs, marks, and tokens and further developing and assembling more complex representations and constructs. 



As they became things—like, records opened a space of freedom and interpretation for the concepts that they carried. Facts, events, and ideas could be copied, ordered into collections, and integrated into broader views about knowledge. Records and their acquired status as data meant that knowledge grew endemically or endogenously—out of records rather than out of contexts.



The word “data” started to be used more frequently and became the empirical basis upon which novel rational systems of knowledge and disciplines were established. Even today, the meaning of “data” preserves some of the ambiguities that arose during early modernity.  



The meaning of data as facts, existing outside the conventions of the communication system by which they are conveyed, was carefully crafted by the invention of quantification techniques, the modern idea of scientific, economic, and technological progress, and aided by the birth of the modern, rational state. Thanks to the development of statistical tools and their application in public affairs, the notion of data took on a new meaning. It was gradually accepted and institutionalized as existing out there (given), even when the data were collected and used to describe nominal entities such as averages of unemployment rates, gross domestic product (GDP), or popularity indexes. 



The rise and use of statistics that occurred during modernity brought the identification and institutionalization of areas of social life (e.g., demographics, distribution of diseases, and urban and rural dynamics) that had until then been vaguely perceived or even barely acknowledged. In doing so, measurement and recording help establish social objects, abstract entities that become frequent targets of institutional practices. 



The shift in the epistemic role of data and the relatively tight coupling between measurement, expertise, and institutions advanced a novel idea of society and social institutions that was partly determined by the social objects that they established. Entities such as crime and unemployment rates were granted an existence as independent givens, as attributes of a concept of society that they constructed. On the other hand, these objects necessitated the institutional upbringing of schools, professions, bureaucrats, experts, and central administrations. They became the engines of making reality.  



The invention of new data and the advent of novel data-making technologies contributed to establishing the corporation as a diffuse legal and organizational form, and management as a field. The [resulting] change in the organization of economic production and the creation of mass markets have been closely associated with the sociocultural orientations of modernity and the formation of the modern social order. 



Less obvious are the ways that data have been part of the diffusion of organizational forms that came to dominate the industrial order. To exist and be managed, corporations needed data that were substantially new and, at the same time, had to find new ways of storing, handling, and making sense of these data. 



The fashioning of new objects out of internally produced data started early in the history of modern corporations. The early attempt to establish management practices through objects made of data was relatively successful, and other examples quickly followed. At least, from clay envelopes onward, institutions and organizations have been bound up with objects made of data, working as representational entities and accounting devices, through which they have sought to understand and interpret their internal and external environment and act on it.  



Objects of this sort shape the way in which actors understand themselves and their roles. Social objects have always been relevant for the establishment and diffusion of specific social and organizational practices. They have been commonly perceived as social artifacts across a broad and cross-disciplinary body of literature and variously linked to the making of social practices, organizational configurations, and professional identities. Across many different settings, the introduction of novel social objects made of data is associated with more significant changes in the structure of teamwork, the professional identity of workers, and coordination of collective action. However, the role of data and the cognitive functions, processing techniques, and technologies with which they are associated have yet to be studied in connection with social objects. Objects such as documents, memos, charts, and models are the bearers of a broader class of knowledge or epistemic objects that stand in close connection with data and data practices across organizations. 



These innovations in data-gathering and -processing techniques, the making of new social objects, and the nascent logic and culture that consolidated behind them constituted the notion of administrative control. Data, reports, documents, and statistics became the core of a newly formed administrative body, which specialized in production and processing capabilities.



Data not only allow signification, knowledge, or understanding, but they also enable social action. The complex cognitive and epistemic dimensions of data are seldom acknowledged in critical approaches to digital data, and yet they are fundamental to unravel the links between data and social changes. Digital technology enters frontally in the making of a whole range of novel social objects, such as credit scores, profiles, and ratings, that mediate action and intervention across several spheres of society 



The implications of bracketing and analyzing these vital functions of data unfold across several paths. An inquiry into these vital functions of data reconnects them with their epistemic history and necessitates acknowledging the primary role of culture and institutions in making social objects created by data “real.” Clay tokens, unemployment rates, and medical records, as well as clicks and click-through rates, emerge with novel institutions and forms of organizing. 



Internal data contributed to establishing corporations themselves by measuring and tracking their activities over sites and time. There are no data without institutions. And there are increasingly no institutions without data. 



Data have existed for thousands of years. They have variously been at the center stage of social practices and the operations of the corporations and the modern state and have served as core elements for representing and knowing the world. The belief in the novelty and the pathbreaking role of digital data tends to gloss over the historical functions and practices with which data have been associated and virtually sets their constitutive links to society conveniently aside.  



To appreciate how digital technology transforms the constitutive links between data and society, we need to look back at the social role played by data before the digital revolution. [We need a new look at the history of data.]







Excerpted from Data Rules: Reinventing the Market Economy by Cristina Alaimo and Jannis Kallinikos. Reprinted with permission from The MIT Press. Copyright 2024.