Data is the new lifeblood of capitalism – don't hand corporate America control
Data is the new lifeblood of capitalism – don't hand
corporate America control
Data has become the world’s most important resource. Now
Silicon Valley giants want to keep government from standing in the way of
profits
By Ben Tarnoff Thu 1 Feb 2018 02.00 EST Last modified on
Thu 1 Feb 2018 16.31 EST
One hundred and sixty years ago, the first transatlantic telegram
traveled from Britain to the United States along a rickety undersea wire. It
consisted of 21 words – and took seventeen hours to arrive.
Today, the same trip takes as little as 60 milliseconds.
A dense mesh of fiber-optic cables girdles the world, pumping vast quantities
of information across the planet. The McKinsey Global Institute that 543 terabits of data are flowing across
borders every second. That’s the equivalent of roughly 13 million copies of the
complete works of Shakespeare.
The velocity and the volume of global communication
aren’t the only things that have changed. So has its economic significance.
Telegrams were useful for businessmen. But data is nothing less than the
lifeblood of global capitalism.
The flow of data now contributes more to world GDP than
the flow of physical goods. In other words, there’s more money in moving
information across borders than in moving soybeans and refrigerators.
This is a big shift – and one that has yet to fully sink
in for most people. Corporate America, on the other hand, understands it well.
Which is why the tech and financial industries are pushing hard for
international agreements that prohibit governments from regulating these flows.
The most recent example is Nafta: representatives from the US, Mexico, and
Canada just concluded another round of talks on renegotiating the treaty.
American companies are lobbying for changes that would deregulate data across
the three countries.
The corporate crusade against data governance is only
getting started. If it succeeds, the world’s most important resource will be
entrusted to the private sector and the profit motive, and the rest of us will
have even less power to participate in the decisions that most affect our
lives.
Over the past year, a growing number of people have come
to realize that data has a dark side. The information revolution has turned out
to be something less than total liberation. The digital sphere is not
intrinsically democratic; rather, what matters is who owns it and how it’s
organized.
The digitization of everything has made this abundantly
clear. As more of our lives are made into data, the companies that control that
data have grown rich and powerful. It’s not merely that they know so much about
us, from our favorite type of toilet paper to our favorite type of porn. It’s
that they use what they know to inform algorithmic decisions that have a
significant impact on society as a whole –decisions like what kind of news (if
any) we consume, or how long we go to prison.
But the stakes are even higher. The emphasis on personal
data has obscured the fact that data is not just personal – it’s commercial,
industrial, financial. The reason that corporations are so concerned about who
controls the packets that flow through the world’s fiber-optic cables is
because a vast array of profit-making activities now depends on them.
The global circulation of data, then, is really about the
global circulation of capital. And it has enormous consequences for the global
organization of wealth and work.
Data flows enable employers in higher-wage countries to
outsource more tasks to workers in lower-wage countries. They help firms
coordinate complex supply chains that push manufacturing jobs to the places
with the cheapest labor costs. They empower a handful of big companies to
dominate markets and monopolize digital infrastructure all over the world.
For these reasons, countries may want to make rules about
how information travels across their borders. But corporate America disagrees.
Such laws would amount to “digital protectionism” – an irrational regression to
a more bordered world. Innovation, efficiency, and prosperity would suffer.
So corporations are demanding international agreements
that lock in the total liberalization of data flows. The Internet Association,
a major lobby that represents Google, Facebook, and other tech giants, is one
of the industry groups leading the effort to “modernize” Nafta by making it the
gold standard for data deregulation.
According to the Internet Association, governments should
be prohibited from requiring that certain kinds of data, such as sensitive
personal information, be stored or processed in the country where it’s
acquired. They should be banned from treating platforms like Facebook and
Google as publishers and holding them responsible for the content that appears
on their sites. They should be forbidden from requiring companies to disclose
the secrets of their algorithms, such as the all-powerful Facebook News Feed.
They should be prevented from regulating online services as public utilities,
or imposing tariffs on digital trade.
The audacity of these demands is impressive. At a time of
rising public concern about the power wielded by tech companies, those same
companies want to sharply constrain our capacity to govern data in the public
interest.
Of course, data governance isn’t always in the public
interest. It often serves a different purpose: to protect a ruling regime.
China, for instance, restricts data flows in order to help the government
control the information available to its citizens and watch them more closely.
The Chinese regulations aren’t just about repression,
however – they also play a valuable economic role. By building a fence around
the Chinese internet, the government has nurtured a homegrown tech industry, in
much the same way that restricting imports of manufactured goods can nurture a
homegrown manufacturing industry. It’s hard to imagine that China would have a
booming local tech sector, centered on big firms like Baidu, Alibaba, and
Tencent, without such measures.
The Chinese example is a useful one, because it shows
that the main justification for data liberalization – that it will enrich the
world as a whole – is false. For decades, the United States has been lecturing
developing countries on the importance of free trade and free markets. Yet, as
the economist Ha-Joon Chang has explained, nearly all of today’s rich countries
became rich by doing the exact opposite: they used tariffs, subsidies, and
other protectionist policies to promote their own industries. Indeed, for
nearly a century, the United States was the most protectionist country in the
world.
This isn’t to say that everyone can follow the Chinese
model. Yet regulating data flows for the purposes of economic development is
certainly a legitimate use of state power. And it represents just one of many
reasons that governments may want to actually govern data, rather than
surrendering it to investors.
Letting capital run wild across the globe hasn’t exactly
produced the best of all possible worlds. It’s strange to think that letting
data do the same would yield a different result.
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