Closing The Income Gap

The New Economy Uses Your Data As Labor: Here’s How You Own It.

We are solving income inequality for economic exclusion between asset owners and works at the Keith Institute. The problem in the modern economy is not wages, it’s ownership. The article below is not nearly as technical as the economics paper I published yesterday, so let me explain in plain English what the equation "Y equals F of K, L, and I" represents. I am calculating your personal data’s as an input to the economic productivity of every company or product you engage. We have built this into an application to render what I call a Data Cap Table , and it can quantify the value of any system of data. The economics of the 20th Century only considered capital and labor. This new one considers data you input as your property.

Output (Y) is a function of capital (K), labor (L), and inputs (I).

Read The Entire Paper

Why Every Company Has a Hidden Data Cap Table For more than a century, we have understood companies through a simple idea: a cap table . A capitalization table shows who owns what share of a company—founders, investors, employees. It is the ledger of value distribution.

But modern companies are increasingly built on something that never appears in that ledger: data generated by human activity .

Every interaction with a product—every purchase, search query, route taken, or support ticket filed—creates observations. Those observations reduce uncertainty about future behavior. When uncertainty falls, predictions improve. When predictions improve, decisions become more efficient. Efficiency translates into productivity, and productivity into economic value.

The strange thing about the modern economy is that we measure the value produced by these systems, but we rarely measure the inputs that made them possible .

In practice, every data-driven company already operates with what could be called a hidden Data Cap Table .

The Invisible Input Behind Modern Production Traditional economic models describe production as a combination of capital and labor. Machines, buildings, and infrastructure represent capital. Human effort represents labor. Together they produce goods and services.

But in a world of predictive systems and artificial intelligence, there is a third input: information .

Information arises when observations reduce uncertainty about outcomes. When a retailer predicts demand more accurately, it can stock the right inventory. When a logistics network predicts delivery times, it can route vehicles more efficiently. When a mobility platform predicts where riders will appear, it can position drivers in advance.

Each of these improvements comes from observations generated by people interacting with systems.

Those observations accumulate into informational stock —predictive knowledge about the world.

Companies rarely record this stock as an asset. Yet they build entire business models around it.

From Human Activity to Economic Value The chain is simple once you see it.

Human activity generates data. Data reduces uncertainty. Reduced uncertainty improves predictions. Better predictions improve decisions. Better decisions increase output.

At the end of that chain is revenue, profit, and ultimately firm value.

Financial markets already recognize the outcome. The majority of the value of large public companies now resides in intangible assets rather than physical capital. Investors understand that something beyond machines and labor is creating productivity.

But the accounting system stops short of identifying what that “something” actually is.

In reality, much of that value is derived from observational data created by people using the system .

The Hidden Ledger Imagine a retailer with millions of customers. Each purchase teaches the company something about demand patterns, pricing sensitivity, and product preferences. Over time, the retailer’s predictive systems become more accurate.

Now imagine listing the sources of those insights:

purchase history