Casting off the digital chains

The joy of travel to conferences – conversations with people you wouldn’t set up a Zoom to chat to, hearing new research you wouldn’t dial in to a webinar to hear, and the travel time for reading. It definitely (still) outweighs the aggravation of checking in. My recent Eurostar journeys saw me through Jamie Susskind’s The Digital Republic: On Freedom and Democracy in the 21st Century.

We held a workshop on a first draft of the book at the Bennett Institute, where Jamie is an affiliated researcher, so I suppose I’m bound to look kindly on it. It’s an ambitious and largely persuasive diagnosis of the political problems caused by the power of big tech, and a set of proposed solutions. It’s thoroughly argued – as you’d expect from a skilled lawyer –  and avoids the sweeping generalisations and analytical wooliness of some well-known attacks on the digital giants.

The book has many parts. It starts by setting out the fact of digital power and why this is a significant political problem – and one created by law: “There is nothing natural about the power of modern business corporations. They accrue power because the law allows them to.”  It follows this with an analysis of the more granular problems, such as dark patterns, the coding of significant ethical decisions, the pretence that ticking the T&C box is meaningful consent (“When we click ‘I agree’ we are usually surrendering, not agreeing”), and so on.

The book then moves on to set out four republican principles (NB not in the US party sense of the word, but in the engaged, free citizen sense):

  • the preservation principle: democracy must be protected
  • the domination principle: no power can be unaccountable
  • the democracy principle: powerful tech should reflect the moral and civic values of those it affects
  • the parsimony principle: governments shouldn’t constrain companies more than they have to.

All seem perfectly reasonable, at least in the abstract. Then, refreshingly for a book about the need for countervailing power to big tech, Jamie has a lot of proposals. Among them are:

  • deliberation and mini-publics to determine the limits of digital behaviours
  • tribunals to hear complaints about treatment by big tech
  • professional certification of software and ML engineers
  • an inspectorate of algorithmic decision making
  • a duty of openness on tech companies
  • more appropriate anti-trust policies
  • minimum standards for social media platforms eg to prevent harassment, foreign interference in elections etc

I don’t agree with all of the suggestions – some (eg compulsory licensing for anyone who codes software) seem to fall foul of the parsimony principle – but that isn’t the point; the point is that governments are not powerless in the face of digital power. Indeed there is an awful lot they could be doing to tackle the ills while recognising the great benefits the tech titans have brought.

Anyway, I enjoyed reading the book, and relished its can-do approach. I agree about the need for constraint on unaccountable digital power. Was I wholly persuaded? No, and mainly because there’s an assumption of beneficent governments doing all this on our behalf. It’s reasonable to doubt either their goodwill or their competence. More on this in my next post after I’ve finished reading Deirdre McCloskey’s latest offering.

61pyJfOI4FL._AC_UY436_QL65_Other reviews: Joahn Naughton in The Guardian, Andrew Lilico in The Telegraph….


What comes after the Knowledge Economy?

Nick O’Donovan’s Pursuing the Knowledge Economy: A Sympathetic History of High-Skill, High-Wage Hubris is an interesting evaluation of the policy consensus of the 1990s and early 2000s concerning the opportunities afforded by digital technology and globalisation for a transition to better jobs in the western economies. My own 1997 book The Weightless World (25 years ago this year!) features as one of several capturing that economic policy zeitgeist, what the book terms (following Peter Hall) a ‘growth regime’ – “a set of economic policy ideas and assumptions that are underwritten politically by a distinctive coalition of supporters.” In other words, a mental model of how the economy can prosper that becomes the policy zeitgeist. (Although I’d challenge the focus of this concept on just firms and governments, as the concept ignores the household and voluntary sector, both large and being affected by digital.)

The book traces the historical evolution of the policy ideas, mainly the centre left (Blair & Brown in the UK, Clinton in the US), and the way the financial crisis torpedoed any optimism about new opportunities to upskill the workforce and create satisfying new jobs. It also politely critiques the knowledge economy analysis in itself, essentially for unfounded optimism about the scope for new technologies to complement rather than substitute for labour and for ignoring the transition costs associated with globalisation. O’Donovan also points out the policy blind spot – until very recently – about increasing market concentration and rent extraction. Just a few people have long pointed to this as a source of economic problems, among them Brett Christophers.

There certainly was plentiful hype – Thomas Friedman’s books leap to mind. I’d defend The Weightless World on the basis that it predicted greater spatial and income inequalities and paid attention to social tensions, and would argue that I was prescient (much too soon…) about gig employment patterns and new digital currencies. But I also overlooked the costs for some people of the reordering of global production, or at least assumed policy would be sensible enough to look after them. At the same time, the Knowledge Economy paradigm did encapsulate some significant changes under way in the structure of the economy. I think O’Donovan somewhat underplays the insights while rightly pointing out the irrational exuberance.

The book ends by linking the failure of the Knowledge Economy growth regime to post-2008 political polarisation, and hoping that the current period of disillusion and volatility will in fact prove an opportunity for a new, better “growth regime” to develop. Let us hope….

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Politics by numbers

Limits of the Numerical: the abuses and uses of quantification (editors Christopher Newfield, my dear colleague Anna Alexandrova, and Stephen John) is right up my street. It’s a collection of thoughtful essays exploring exactly what the subtitle says, some general and some relating to specific issues of quantification in education and healthcare, and (by Anna and Ramandeep Singh) the measurement of wellbeing.

The aim of the volume is to move beyind what it characterises as the Original Critique (set out in some classics like Desrosières and Porter). This critique points to the historical context of measurement and quantification, and the use of the presumed authority and objectivity of numbers as an instrument of politics or power. As the introduction points out, the Original Critique assumes this deployment of numerical thinking is successful. Yet in recent years expertise – generally involving evidence and numbers – has been steadily demonized, and independent evidence-based agencies have either been targets for populism or lost legitimacy more broadly.

One sign of the demise of expertise was the New Public Management era of Blair and Clinton, disciplining experts by use of quantitative targets. Subsequently populists have deployed numbers against experts too, but in their case appealing to public opinion or crowd size. Thus, “The numerical idiom became just another part of the degraded rhetoric of politics.” But perhaps the real nail in the coffin of quantified expertise was the financial crisis and its aftermath: whatever the experts were doing, it didn’t deliver: “Against the promise of governance by the numbers, the 2008 meltdown and everyday experience both revealed a regime of incompetence, political interference and elite bias.”

There are interesting dives into the spread and effects of higher education rankings – as the book notes, audit culture here has become performative, bringing into being the measureable phenomena; orphan drugs – featuring the “unholy alliance” between patients and pharma companies seeking to profit from financial incentives to develop drugs for rare diseases; and climate science.

I was particularly interested in the chapter on the measurement of wellbeing as Anna and I are co-authors on this subject, and indeed I attended an excellent conference on wellbeing research last week. The chapter sets out the different definitions and hence methods of quantification of wellbeing and sets out what it calls “Letwin’s dilemma” after the former minister who helped introduce wellbeing measurement to UK official statistics. The dilemma is that most philosophical and psychological approaches recognise separate dimensions of wellbeing, but a political sponsor needs a simple, measurable and comparable concept  to compete with other ‘hard’ metrics in the choices facing givernments. This is a genuine dilemma; but the chapter argues against what has become the single metric in policy debates, a scale-based measure of Life Satisfaction, as too reductive and detached from underlying psychological phenomena. This is exactly the debate I had at the conference with Richard Layard, the UK’s most influential researcher on wellbeing.

I polished off the book in just over a day, and it would interest anybody working on the sociology and politics of measurement and related areas, taking forward the now well-known critique of quantification and linking it persuasively to the political trends of the past decade.

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Profit and time

Avner Offer’s new, shortish book Understanding the Private-Public Divide: Markets, Governments and Time Horizons is superb. It sets out a persuasive argument for locating the boundary between private and public production in terms of the payback period for investment. The book starts: “In economics… the present is all there is. Past costs are sunk and can be ignored. The future is only what we make of it today.” What if we take seriously the need to invest for the future? As he points out, government accounts for 30-40% of GDP in most rich countries, and when you add in non-profit and household production well under half of economic welfare is produced on a for-profit basis – and that couldn’t happen without government-provided infrastructure or other support such as franchises or patents.

The central point is that for-profit investment needs to pay off in a relatively short period: “The higher the rate, the shorter the wait.” The prevailing interest rate defines a unique break-even period. Private markets can produce efficiently if the pay-off period is shorter. Otherwise, government has to act as the “commitment agent for society.” When it steps back from this, delegating to private agents, corruption is often the result, or else the enrichment of managers and shareholders at the expense of workers and consumers. There are no grounds for expecting efficiency gains – quite the contrary.

Offer writes: “There is no warrant for extending market norms to the rest of social activity, to the family, government, infrastructure, education, healthcare, science and arts, social insurance, old age, defence, protecting the environment and climate. Together, these are the source of most economic welfare.” He adds, for good measure, that much financial sector activity serves no social purpose.

Stirring stuff. The chapters set out the basic economic argument about credit time horizons, and then discuss the ethical and political consequences of governments delegating long-term activities to the private sector. Subsequent chapters discuss specific issues – housing and climate change.

When you add to the mix the well-known Herbert Simon point (in his 1991 Journal of Economic Perspectives article Organizations and Markets: “The economies of modern industrialized society can more appropriately be labeled organizational economies than market economies.”) about the limited scope of the market within private enterprises, it seems hard to understand how we’ve been through the past 40 years of markets-first political philosophy and practice.

Avner Offer has delivered a bracing counterblast to this. His main omission is non-market, non-government economic activity, civil society and the household (hence my book was Markets, State and People). But that would have been a different book. Highly recommended.

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The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era by my Cambridge colleague Gary Gerstle has quite rightly been highly praised. It covers a whole century, starting with the New Deal and post-world war 2 era to preface the bulk of the book, its characterisation of the neoliberal turn from the start of the 1980s. It ends with Trump and the turn away – so Gary argues – from neoliberalism to something as yet undefined. Neoliberalism is described as a commitment to free trade and financial flows, to free movement of people and openness to others, and to deregulation and the expanded scope of markets. Interestingly, he frames the point about the expansion of the market domain in terms of characterising people as consumers, instead of workers, and argues that Ralph Nader played a key role in this regard through his influence on Jimmy Carter, as the old order started to give way to the new.

The book gives a twin-tracked account of what drives these transitions from one era to another. One set of drivers consists of events – economic crisis in particular, so the 1970s commodity shocks at the start and the GFC at the end. More surprising is the role attributed to the Soviet Union: the 1917 Revolution as a stimulus for New Deal politics; Cold War contestation paving the way for business and financial interests to reach a modus vivendi with organised labour through the 1960s in order to avert any threat of domestic socialism; and consequently the collapse of the Soviet Union in 1989 as a destabilising force because it took the brakes off corporate and financial self-restraint.

Another interesting aspect of the argument is the linking of administrations generally seen as being opposed to each others’ policies – the difference between Republican and Democrat being less decisive than that between Eisenhower and Reagan or Kennedy and Clinton. As Gary puts it, the feature of a ‘political order’ is that the opponents of the government also buy into it; it becomes the water in which almost everyone swims.

The FT review described the book as an instant classic. There are lots of talks and pods online for anybody who wants a taster. As the subtitle says, it’s US-focused; an analysis of how the neoliberal order got exported would be interesting. I highly recommend it – I read it in just a couple of days of travel. And it set me thinking about what the next political order might turn out to be…..