After USTR’s Move, Global Governance of Digital Trade Is Fraught with Unknowns

Curated on Posted on by Stefaan Verhulst

Article by Patrick Leblond: “On October 25, the United States announced at the World Trade Organization (WTO) that it was dropping its support for provisions meant to promote the free flow of data across borders. Also abandoned were efforts to continue negotiations on international e-commerce, to protect the source code in applications and algorithms (the so-called Joint Statement Initiative process).

According to the Office of the US Trade Representative (USTR): “In order to provide enough policy space for those debates to unfold, the United States has removed its support for proposals that might prejudice or hinder those domestic policy considerations.” In other words, the domestic regulation of data, privacy, artificial intelligence, online content and the like, seems to have taken precedence over unhindered international digital trade, which the United States previously strongly defended in trade agreements such as the Trans-Pacific Partnership (TPP) and the Canada-United States-Mexico Agreement (CUSMA)…

One pathway for the future sees the digital governance noodle bowl getting bigger and messier. In this scenario, international digital trade suffers. Agreements continue proliferating but remain ineffective at fostering cross-border digital trade: either they remain hortatory with attempts at cooperation on non-strategic issues, or no one pays attention to the binding provisions because business can’t keep up and governments want to retain their “policy space.” After all, why has there not yet been any dispute launched based on binding provisions in a digital trade agreement (either on its own or as part of a larger trade deal) when there has been increasing digital fragmentation?

The other pathway leads to the creation of a new international standards-setting and governance body (call it an International Digital Standards Board), like there exists for banking and finance. Countries that are members of such an international organization and effectively apply the commonly agreed standards become part of a single digital area where they can conduct cross-border digital trade without impediments. This is the only way to realize the G7’s “data free flow with trust” vision, originally proposed by Japan…(More)”.

Governing the economics of the common good

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Paper by Mariana Mazzucato: “To meet today’s grand challenges, economics requires an understanding of how common objectives may be collaboratively set and met. Tied to the assumption that the state can, at best, fix market failures and is always at risk of ‘capture’, economic theory has been unable to offer such a framework. To move beyond such limiting assumptions, the paper provides a renewed conception of the common good, going beyond the classic public good and commons approach, as a way of steering and shaping (rather than just fixing) the economy towards collective goals…(More)”.

Social Economy Science

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Open Access Book edited by Gorgi Krlev, Dominika Wruk, Giulio Pasi, and Marika Bernhard: “Lack of progress in the area of global sustainable development and difficulties in crisis management highlight the need to transform the economy and find new ways of making society more resilient. The social economy is increasingly recognized as a driver of such transformations; it comprises traditional forms of cooperative or solidarity-based organizations alongside new phenomena such as impact investing or social tech ventures that aim to contribute to the public good. Social Economy Science provides the first comprehensive analysis of why and how social economy organizations create superior value for society. The book draws on organizational theory and transition studies to provide a systematic perspective on complex multi-stakeholder forms of action. It discusses the social economy’s role in promoting innovation for impact, as well as its role as an agent of societal change and as a partner to businesses, governments, and citizens…(More)”.

The battle over right to repair is a fight over your car’s data

Curated on Posted on by Stefaan Verhulst

Article by Ofer Tur-Sinai: “Cars are no longer just a means of transportation. They have become rolling hubs of data communication. Modern vehicles regularly transmit information wirelessly to their manufacturers.

However, as cars grow “smarter,” the right to repair them is under siege.

As legal scholars, we find that the question of whether you and your local mechanic can tap into your car’s data to diagnose and repair spans issues of property rights, trade secrets, cybersecurity, data privacy and consumer rights. Policymakers are forced to navigate this complex legal landscape and ideally are aiming for a balanced approach that upholds the right to repair, while also ensuring the safety and privacy of consumers…

Until recently, repairing a car involved connecting to its standard on-board diagnostics port to retrieve diagnostic data. The ability for independent repair shops – not just those authorized by the manufacturer – to access this information was protected by a state law in Massachusetts, approved by voters on Nov. 6, 2012, and by a nationwide memorandum of understanding between major car manufacturers and the repair industry signed on Jan. 15, 2014.

However, with the rise of telematics systems, which combine computing with telecommunications, these dynamics are shifting. Unlike the standardized onboard diagnostics ports, telematics systems vary across car manufacturers. These systems are often protected by digital locks, and circumventing these locks could be considered a violation of copyright law. The telematics systems also encrypt the diagnostic data before transmitting it to the manufacturer.

This reduces the accessibility of telematics information, potentially locking out independent repair shops and jeopardizing consumer choice – a lack of choice that can lead to increased costs for consumers….

One issue left unresolved by the legislation is the ownership of vehicle data. A vehicle generates all sorts of data as it operates, including location, diagnostic, driving behavior, and even usage patterns of in-car systems – for example, which apps you use and for how long.

In recent years, the question of data ownership has gained prominence. In 2015, Congress legislated that the data stored in event data recorders belongs to the vehicle owner. This was a significant step in acknowledging the vehicle owner’s right over specific datasets. However, the broader issue of data ownership in today’s connected cars remains unresolved…(More)”.

Markets and the Good

Curated on Posted on by Stefaan Verhulst

Introduction to Special Issue by Jay Tolson: “How, then, do we think beyond what has come to be the tyranny of economics—or perhaps more accurately, how do we put economics in its proper place? Coming at these questions from different angles and different first principles, our authors variously dissect formative economic doctrines (see Kyle Edward Williams, “The Myth of the Friedman Doctrine”) and propose restoring the genius of the American system of capitalism (Jacob Soll, “Hamilton’s System”) or revising the purpose and priorities of the corporation (Michael Lind, “Profit, Power, and Purpose”). Others, in turn, prescribe restraints for the excesses of liberalism (Deirdre Nansen McCloskey “An Economic Theology of Liberalism”) or even an alternative to it, in the restoration of “common good” thinking associated with subsidiarity (Andrew Willard Jones, “Friendship and the Common Good”). Yet others examine how “burnout” and “emotional labor” became status markers and signs of virtue that weaken solidarity among workers of all kinds (Jonathan Malesic, “How We Obscure the Common Plight of Workers”) or the subtle ways in which we have reduced ourselves to cogs in our economic system (Sarah M. Brownsberger, “Name Your Industry—Or Else!”). Collectively, our authors suggest, the reluctance to question and rethink our fundamental economic assumptions and institutions—and their relation to other goods—may pose the greatest threat to real prosperity and human flourishing…(More)”.

The Future of AI Is GOMA

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Article by Matteo Wong: “A slate of four AI companies might soon rule Silicon Valley…Chatbots and their ilk are still in their early stages, but everything in the world of AI is already converging around just four companies. You could refer to them by the acronym GOMA: Google, OpenAI, Microsoft, and Anthropic. Shortly after OpenAI released ChatGPT last year, Microsoft poured $10 billion into the start-up and shoved OpenAI-based chatbots into its search engine, Bing. Not to be outdone, Google announced that more AI features were coming to Search, Maps, Docs, and more, and introduced Bard, its own rival chatbot. Microsoft and Google are now in a race to integrate generative AI into just about everything. Meanwhile, Anthropic, a start-up launched by former OpenAI employees, has raised billions of dollars in its own right, including from Google. Companies such as Slack, Expedia, Khan Academy, Salesforce, and Bain are integrating ChatGPT into their products; many others are using Anthropic’s chatbot, Claude. Executives from GOMA have also met with leaders and officials around the world to shape the future of AI’s deployment and regulation. The four have overlapping but separate proposals for AI safety and regulation, but they have joined together to create the Frontier Model Forum, a consortium whose stated mission is to protect against the supposed world-ending dangers posed by terrifyingly capable models that do not yet exist but, it warns, are right around the corner. That existential language—about bioweapons and nuclear robots—has since migrated its way into all sorts of government proposals and language. If AI is truly reshaping the world, these companies are the sculptors…”…(More)”.

FickleFormulas: The Political Economy of Macroeconomic Measurement

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About: “Statistics about economic activities are critical to governance. Measurements of growth, unemployment and inflation rates, public debts – they all tell us ‘how our economies are doing’ and inform policy. Citizens punish politicians who fail to deliver on them.

FickleFormulas has integrated two research projects at the University of Amsterdam that ran from 2014 to 2020. Its researchers have studied the origins of the formulas behind these indicators: why do we measure our economies the way we do? After all, it is far from self-evident how to define and measure economic indicators. Our choices have deeply distributional consequences, producing winners and losers, and they shape our future, for example when GDP figures hide the cost of environmental destruction.

Criticisms of particular measures are hardly new. GDP in particular has been denounced as a deeply deficient measure of production at best and a fundamentally misleading guidepost for human development at worst. But also measures of inflation, balances of payments and trade, unemployment figures, productivity or public debt hide unsolved and maybe insoluble problems. In FickleFormulas we have asked: which social, political and economic factors shape the formulas used to calculate macroeconomic indicators?

In our quest for answers we have mobilized scholarship and expertise scattered across academic disciplines – a wealth of knowledge brought together for example here. We have reconstructed expert-deliberations of past decades, but mostly we wanted to learn from those who actually design macroeconomic indicators: statisticians at national statistical offices or organizations such as the OECD, the UN, the IMF, or the World Bank. For us, understanding macroeconomic indicators has been impossible without talking to the people who live and breathe them….(More)”.

Lifelines of Our Society

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Book by Dirk van Laak: “Infrastructure is essential to defining how the public functions, yet there is little public knowledge regarding why and how it became today’s strongest global force over government and individual lives. Who should build and maintain infrastructures? How are they to be protected? And why are they all in such bad shape? In Lifelines of Our Society, Dirk van Laak offers broad audiences a history of global infrastructures—focused on Western societies, over the past two hundred years—that considers all their many paradoxes. He illustrates three aspects of infrastructure: their development, their influence on nation building and colonialism, and finally, how individuals internalize infrastructure and increasingly become not only its user but regulator.

Beginning with public works, infrastructure in the nineteenth century carried the hope that it would facilitate world peace. Van Laak shows how, instead, it transformed to promote consumerism’s individual freedoms and our notions of work, leisure, and fulfillment. Lifelines of Our Society reveals how today’s infrastructure is both a source and a reflection of concentrated power and economic growth, which takes the form of cities under permanent construction. Symbols of power, van Laak describes, come with vulnerability, and this book illustrates the dual nature of infrastructure’s potential to hold nostalgia and inspire fear, to ease movement and govern ideas, and to bring independence to the nuclear family and control governments of the Global South…(More)”.

The danger of building strong narratives on weak data

Curated on Posted on by Stefaan Verhulst

Article by John Burn-Murdoch: “Measuring gross domestic product is extremely complicated. Around the world, national statistics offices are struggling to get the sums right the first time around.

Some struggle more than others. When Ireland first reported its estimate for GDP growth in Q1 2015, it came in at 1.4 per cent. One year later, and with some fairly unique distortions due to its location as headquarters for many US big tech and pharma companies, this was revised upwards to an eye-watering 21.4 per cent.

On average, five years after an estimate of quarterly Irish GDP growth is first published, the latest revision of that figure is two full percentage points off the original value. The equivalent for the UK is almost 10 times smaller at 0.25 percentage points, making the ONS’s initial estimates among the most accurate in the developed world, narrowly ahead of the US at 0.26 and well ahead of the likes of Japan (0.46) and Norway (0.56).

But it’s not just the size of revisions that matters, it’s the direction. Out of 24 developed countries that consistently report quarterly GDP revisions to the OECD, the UK’s initial estimates are the most pessimistic. Britain’s quarterly growth figures typically end up 0.15 percentage points higher than first thought. The Germans go up by 0.07 on average, the French by 0.04, while the Americans, ever optimistic, typically end up revising their estimates down by 0.11 percentage points.

In other words, next time you hear a set of quarterly growth figures, it wouldn’t be unreasonable to mentally add 0.15 to the UK one and subtract 0.11 from the US.

This may all sound like nerdy detail, but it matters because people graft strong narratives on to this remarkably flimsy data. Britain was the only G7 economy yet to rebound past pre-Covid levels until it wasn’t. Ireland is booming, apparently, except its actual individual consumption per capita — a much better measure of living standards than GDP — has fallen steadily from just above the western European average in 2007 to 10 per cent below last year.

And the phenomenon is not exclusive to economic data. Two years ago, progressives critical of the government’s handling of the pandemic took to calling the UK “Plague Island”, citing Britain’s reported Covid death rates, which were among the highest in the developed world. But with the benefit of hindsight, we know that Britain was simply better at counting its deaths than most countries…(More)”

Toward Bridging the Data Divide

Curated on Posted on by Stefaan Verhulst

Blog by Randeep Sudan, Craig Hammer, and Yaroslav Eferin: “Developing countries face a data conundrum. Despite more data being available than ever in the world, low- and middle-income countries often lack adequate access to valuable data and struggle to fully use the data they have.

This seemingly paradoxical situation represents a data divide. The terms “digital divide” and “data divide” are often used interchangeably but differ. The digital divide is the gap between those with access to digital technologies and those without access. On the other hand, the data divide is the gap between those who have access to high-quality data and those who do not. The data divide can negatively skew development across countries and therefore is a serious issue that needs to be addressed…

The effects of the data divide are alarming, with low- and middle-income countries getting left behind. McKinsey estimates that 75% of the value that could be created through Generative AI (such as ChatGPT) would be in four areas of economic activity: customer operations, marketing and sales, software engineering, and research and development. They further estimate that Generative AI  could add between $2.6 trillion and $4.4 trillion in value in these four areas.

PWC estimates that approximately 70% of all economic value generated by AI will likely accrue to just two countries: the USA and China. These two countries account for nearly two-thirds of the world’s hyperscale data centers, high rates of 5G adoption, the highest number of AI researchers, and the most funding for AI startups. This situation creates serious concerns for growing global disparities in accessing benefits from data collection and processing, and the related generation of insights and opportunities. These disparities will only increase over time without deliberate efforts to counteract this imbalance…(More)”