Governing the Invisible Economy: Digital Rights, Market Structures, and Global Governance in the Age of Intangibles

This podcast episode, "Implications for Government: The Invisible Economy Episode 3," delves into three critical challenges posed by the digital age: the erosion of privacy and human rights, the rise of monopolistic firm structures, and the absence of adequate global governance institutions for the digital world. The speaker argues that these issues transcend purely economic considerations, necessitating a broader discussion on values, normative approaches, and the fundamental re-evaluation of existing frameworks. Key arguments include the inadequacy of the Universal Declaration of Human Rights (UDHR) for the digital era, the need for algorithmic accountability, and the re-thinking of intellectual property regimes to serve global public goods. The discussion highlights several crucial distinctions. It contrasts the "black and white" approach of traditional rights with the "large in between gray area" of digital realities, proposing new rights like the right to accurate information and freedom to think. The speaker differentiates between treating data solely as an adjunct to e-commerce versus recognizing its profound normative and societal implications, exemplified by the data localization debate. Furthermore, the episode contrasts the current IP regime, designed to ration use, with the urgent need to galvanize the creation and widespread adoption of game-changing technologies for global challenges like pandemics and climate change. It also critiques the US and China data models, which largely exclude individual agency, in favor of the EU's GDPR approach that attempts to balance private and governmental control with citizen rights. To address these challenges, the episode proposes several practical solutions. It advocates for a "Digital Declaration of Human Rights" as a beacon and guide for national legislation, potentially evolving into an enforcement mechanism. The speaker calls for algorithmic accountability, suggesting an audit system similar to financial accounting, even for proprietary algorithms. Recommendations also include a renewed emphasis on competition policy, more effective global taxation regimes for digital firms, and a re-imagining of intellectual property to promote global public goods, citing the SER model for compute infrastructure as an example. Crucially, the episode champions the creation of a "Digital Stability Board," a multi-stakeholder global institution akin to the Financial Stability Board, to monitor risks, share best practices, and potentially penalize bad actors in the digital economy. The broader implications underscore the revolutionary nature of the Fourth Industrial Revolution and the transformative potential of AI, which promises to make lives easier but also poses significant governance challenges regarding job displacement and ethical use. The speaker emphasizes that realizing this optimism hinges on effective governance and policies that guide society "from data to wisdom," rather than merely accumulating data. The current balkanized approaches to data and the lack of global cooperation are identified as major impediments. Ultimately, the episode argues that solutions, while varied across countries, must be congruent with shared human values and guided by something beyond the narrow remit of economic policy, recognizing the multi-dimensional nature of digital challenges.

One way to summarize the things we've been talking about is to think of three buckets of issues.

And yet without a good national societal discussion on how we understand privacy, what we mean by human rights and security in the digital age. We will not be able to get to many of the vexacious issues and certainly not get treat this as simply an economic issue.

But in an age of ubiquitous use of digital tools and the tracking that they bring about, is that really a meaningful right the way we see it? In fact, is the black and white approach of rights the appropriate one in an age in which everything seems to be the large in between gray area?

If my factory floor is an algorithm, it is a complete black box for regulators. In most cases, there's no way we know, nor is there a way to know how the algorithm is designed, whose purposes and what purposes it serves, and how the product it produces has been made.

We wouldn't stand for that with a real product made in a real factory. We should ask ourselves why we think that it's okay when the product is an intangible and when the factory happens to be an algorithm.

We're not going to be able to fight the next pandemic or fight climate change by simply selling technology to the highest bidder. We're going to want to treat these technologies as the global public goods that they are.

This is very much about balancing the profit motive with the public good through smart intelligent public interventions.

Some of us would argue yes and we've been arguing for some time for the creation of something we'd call the digital stability board. a global institution that is multistakeholder that monitors and is the custodian of the various aspects of the digital economy that we now live in.

The US and China models in some ways are mirror images of each other in the sense that the individual citizen is almost dealt out and has no agency in this process.

Ultimately we have to be guided by something beyond the narrow remmit of economic policy.

The optimism will be realized only if governance and policies for the intangibles era lead us from data to wisdom.