What should the role of law be in Facebook’s digitally connected world?

The Eye Catcher …

Is it important to human existence that seven billion human beings be digitally connected? Facebook seems to think so.  According to its mission statement, Facebook’s mission is:

” … to give people the power to build community and bring the world closer together.  Our top priority is to build useful and engaging products that enable people to connect and share with friends and family through mobile devices, personal computers, and other surfaces.  We also help people discover and learn about what’s going on in the world around them, enable people to share their opinions, ideas, photos and videos, and other activities with audiences ranging from their closest friends to the public at large, and stay connected everywhere by accessing our products.”

Facebook’s view of the world seems to have gone beyond making sure they provide a platform upon which we can find our seemingly long-lost high school crushes.  Now the company wants to facilitate our abilities to make friends and form more connections by introducing emotion-detecting robotics. Just imagine walking down 7th Avenue in Manhattan, your head hung low.  You feel a tap on your shoulder. You turn, and there is Robby the Robot asking if you need a friend.

Just what should the role of law be in an instance where data is being collected first hand on a public street in any American city? First, what is the role of law?

What is the role of law in the digital age?

In a society where data is being collected sometimes without permission or pursuant to some term and condition that has not been read by a subscriber to digital services, what should be the role of law? In other words, to what extent should the State promulgate a body of rules to regulate the behavior of firms that collect by digital means behavioral data from the State’s citizens?

To answer this question I believe we first have to analyze the State’s role in this political economy.  Then, we need to take a look at the relationship between the State and the business firm in general and the data collecting digital firm in particular. After this analysis, we can provide a more accurate picture of the role of law with the added benefit obtaining some insight on the philosophy underlying the State and the laws it promulgates.

The state as ultimate manager of all resources …

To assess the State’s role in this political economy, I place myself in the role of the original “strong man.” I see land and determine to occupy it and control all its resources for my benefit.  Paraphrasing Murray N. Rothbard from his work, Anatomy of the State, I systemize all my political means of acquisition and control, i.e. law, military to create a mechanism for taking the land, whether occupied or unoccupied and convert it to my property to distribute, again for my benefit, at some point in the future.

At this point of acquisition and conquest I have to decide what is the best method for me to optimize the benefits derived from my new territory. Do I and my small band of conquerors do the work ourselves or do we retain labor to do the job?

Entrepreneurs, privateers, and private firms/trading companies step in, petition for charters giving them license to mine and extract resources which they package in return for a fee from me.  These private “going concerns” may also obtain a license from me, the State, allowing them purchase land and extract and package resources, and convert the resources into goods and services for distribution while making a profit along the way.

In my model of a political economy, I have decided that, while I own and maintain the public rights-of-way through which transportation, energy, and communications networks are deployed, commercial trade, the movement of goods and services, will be managed by the privateers.  As long as the privateers serve the “public interest”, they will be allowed to chase profits.

The definition of “public interest” has always been less than clear, but coming from the perspective of the State, as long as the privateer’s activity creates a taxable event and does not erode the public rights-of-way to the point of maintenance costs exceeding benefit, then the privateer keeps her license and is allowed to continue extracting resources and pursuing a profit.

Is the extraction of digital information in the State’s interest? Yes …

Information is a primary resource. It services all endeavors, from manufacturing, mining, farming, public policy decision-making, baking apple pie, etc.  The State has an interest in how it flows.  In a political economy that rides on a corporate-capitalism platform, the State has an interest in allowing information to flow under the least restrictive conditions so that, like other forms of capital, information can move to its next best use. In the case of digital platforms such as Facebook, the State has made a determination, as manifested in its charter to Facebook, that Facebook meets the public interest by creating a taxable event that involves the efficient and profitable extraction of information.  With over 2 billion users and its dominant position in digital advertising, Facebook is demonstrating that it is meeting the State’s public interest.

So, as to the State’s role in a digital economy, the extent to which the State is expected to promulgate a body of rules to regulate the behavior of firms that collect by digital means behavioral data from citizens should be a minimal one; an extent to where the digital firm can leverage its technology to optimize data collected and the revenue obtained from digital services, while the State maximizes collection of taxes from the digital platform.

So what role should law play in a digital economy?

I see the role of law in a digital political economy as three-fold. First, its role is to “apologize” for the State’s role in exercising jurisdiction over the resource called information.  Second, the role of law is to ensure that information flows freely to its best use by licensing the firms that are best at moving information to its next best use.  Lastly, the role of law is to ensure collection of taxes from entities charted to mine, package, and distribute information while allowing these firms to maximize profits.

 

 

 

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Newt Gingrich, 5G, China, and Capital: Nationalist policy doesn’t contribute to long-run Black community sustainability in the long run.

The Eye Catcher …

In an opinion piece posted earlier today, former Speaker of the U.S. House of Representatives, Newt Gingrich (R-Georgia), proposed that the U.S. government provide for a national 5G wholesale network, constructed by a private party. The network would be “carrier-neutral”, according to Mr. Gingrich, and help the U.S. beat China in the race for 5G wireless dominance.

Mr. Gingrich and the Trump Administration are concerned that China through state-subsidized firms such as Huawei and ZTE will be able to continually extend their smartphone and telecommunications manufacturing ability globally.

Mr. Gingrich sees a number of benefits flowing to America as a result of a nationalized 5G network, including the spurring of microelectronics manufacturing; accelerated deployment of next-generation networks; and the demonstration that China’s dominance in 5G is not a foregone conclusion.

It amounts to a nationalism play … that benefits capital

Based on his article, Mr. Gingrich would like to see a national 5G network in place so that telecommunications device and hardware makers can test drive new offerings.  If Huawei, ZTE, or other Chinese firms can get their product to global markets first, the United States will be in a hard place competition wise, trying to put 5G technology in the markets of multiple countries that may not have a problem with ZTE’s relatively inexpensive Android phones, subsidized, in part, by the Chinese government.

The above point is made in an article by Vlad Savov in The Verge.  Citing data from Canalys, a market analysis firm, Mr. Savov describes Europe as a market ready for price competitive wireless products offered by Huawei and sister Chinese firms Oppo and Xiaomi.  The political antipathy held by the United States toward China is not apparent in Europe with roughly 32% of smartphone shipments to Europe coming from Chinese firms.

But let’s suppose that a nationalized 5G network was built in the U.S. Who would gain the most from Mr. Gingrich’s proposal? I believe the greatest benefit would go to the wealthy, primarily those holding shares in telecommunications companies, other internet core companies, and internet edge companies.  A significant number of Blacks would not see the spoils that would flow to shareholders.  The vast majority of Blacks do not own stocks directly.

According to 2002 data by the Social Security Administration, the percentage of Blacks owning stocks directly was approximately nine percent compared to 36% of whites.  By 2014, the percentage of Blacks owning stocks had fallen.  According to data collected by the United States Census Bureau, approximately 5.2% of Blacks owned stocks or mutual fund shares.

Reduced access to components means greater difficulty for Black communities to innovate …

Google Fiber has been in Atlanta for a few years now, but they never deployed in my neighborhood which has a high Black population. Atlanta has its share of Black engineers as well as a few Black entertainers, businessmen, and investors capable of developing and deploying innovative communications technology.  Ideally, Black communities like those in Atlanta should be designing their own technologies, especially given their access to local teaching and research universities.  But if a nationalist policy toward Chinese telecommunications manufacturers limits access to affordable devices and hardware, that would only put a strain on Black community capacity to be resilient, self-sufficient, and sustainable.

Conclusion …

With all the talk of the negative impact of the digital divide on the Black urban community, “telecommunications nationalism” does not serve Black people well. Telecommunications nationalism does not send more capital to Black communities and does not facilitate technological sustainability.  It is not a policy that Blacks should get on board with.

 

Gentrification is white nationalism that may be vanquished by monetary and fiscal policy

The Eye Catcher …

This morning I listened a bit to an interview conducted on C-SPAN’s Washington Journal with Kristen Clarke, president and executive director of Lawyers’ Committee for Civil Rights Under Law.  Ms. Clarke’s purpose for appearing on the show was to discuss the rise in white nationalism in the United States.  As I listened to the discussion I found no new foundation for Ms. Clarke’s concern.  The concerns regarding white nationalism, as expressed by Ms. Clarke and other civil rights advocates, have always come from a place of fear, pain, and suffering: the fear of physical violence perpetrated by a racial majority on a racial minority; the pain of past and perceived current wrongs; and the suffering endured as a result of discriminatory practices in housing, financial services, the labor markets, and the legal system.

Another eye catcher was the diverse group of constituents Ms. Clarke’s organization represents.  About 25 years ago, I visited a friend who worked for Lawyers’ Committee.  She proudly showed me around the office, sharing a little of the history of the organization’s founding; sharing with me that its roots stemmed back to a civil rights initiative by the late President John F. Kennedy to strengthen the legal protections for black people.  That initiative seems to have changed and all for the worse for blacks.

Today, the Committee’s agenda seems to have expanded.  Their agenda has broadened to include every group under the sun that claims to be marginalized: white women, the LGBTQ community, Asians, etc.  I would hazard an ironic guess that if you looked at the wealth accumulated by each of these groups in comparison to blacks that blacks would still be on the bottom of the totem poll.

When this expanded agenda combines with the factors of fear, pain, and suffering, they create a weak platform from which to launch any initiative toward black empowerment.  The platform is weak because of the limits it places on blacks. Fear does not embolden. It causes you to hesitate.  Worse, it may cause you to rely on others, particularly those others who claim that they, too, suffer from inequality, but whose agenda, history, and lineage differ from yours so drastically that when they, these other groups, see progress, they will quickly abandon you.

Most times I believe this “We are in the same boat” argument is nothing but a delay tactic, keeping the weaker group distracted long enough until the weaker group is not even left with crumbs.

Blacks are too easily distracted by emotional buzzwords ….

Groups like the Lawyers’ Committee, National Urban League, and the National Association for the Advancement of Colored People have played expertly on the fear, pain, and suffering of the black community.  They have defined “white nationalism” in emotion-invoking terms, where minorities are expected to shudder in the face of hateful language or crime.

It is expected that threats of physical harm would invoke fear, but what social justice organizations and white liberals fail to accept is that blacks can effectively defend themselves against white nationalism, and that the United States was founded on the principle of acquisition by discovery where European philosophy was deemed so superior that indigenous tribes in North America could be cleared away like so much brush.  White nationalism is global and has been handed down over the last 520 years from the original European settlers of North America to their descendants via various institutions that create the platform for this current political economy.

Yes, white nationalism is about members of the “white race” asserting their dominion over a particular political and geographical space.  But if this behavior is so offensive to blacks to where changes in that behavior is requested, then becoming emotional about whites yelling hateful words and expressing a desire for a “whites only” country won’t get blacks very far.  It is time for blacks to apply critical thinking and develop and promote legal and public policy frameworks for addressing white nationalism.

Gentrification is white nationalism …

One form of white nationalism that Blacks can cut their teeth on is the concept of gentrification.  Gentrification is more than just whites and other non-blacks moving into formerly black neighborhoods.  Gentrification is the result of favorable monetary policy that has driven down interest rates making cheap credit available while increasing the value assets such that these assets support the issue of new debt.  Rising home values and the increased down payments required for mortgages squeeze blacks out of home ownership.  The result is the creation of an environment where whites can leverage cheap capital to increase wealth through property ownership while blacks are forced, via higher property values, rents, and property taxes, to move out.

Toward a legal framework to battle poor monetary policy … 

Rather than having existing black members of Congress lead fruitless emotional belly-ache charges in the media about affordable housing, private citizens should explore and initiate where feasible the legal action necessary for modifying how the Federal Reserve, the Congress, and the Executive are regulating the economy.

For example, the Full Employment Act of 1946 as amended by the Humphrey Hawkins Act of 1978 places the responsibility of managing the American political economy in the hands of the Federal Reserve, the President, and the Congress.  Are these institutions meeting their goals pursuant to the Act? Have fiscal and monetary policy as implemented by the Federal Reserve, the President, and the Congress resulted in increased burden on black citizens?  Should there be remedies?

Conclusion: It will take bravery …

The current initiatives by so called civil rights groups are not aggressive enough.  They are driven by emotion and aim more for symbolism than substantive results.  A more robust legal approach to wealth creation is necessary if blacks are to carve out a sustainable economic niche in America.

 

 

Blacks need a new political law game

The political battle between the Executive and the Congress has been intense to say the least over the last twenty-seven months since Donald Trump took office.  With post-Mueller report hearings ramping up next week, the saga only promises to continue way into campaign season.

My friends and family have expressed varying degrees of interest, with a significant number of opinions fueled more by emotion and less by critical thinking.  For example, the constant reference to “collusion”, a term that has no legal meaning, is disconcerting because it provides an example of how people are ignoring the particulars (even when readily available for examination) and rolling with the globs of misinformation thrown onto the plate most times by the mainstream media.

Black congressional leadership wasting political power …

What should also be disturbing is how two of the highest ranking blacks in the Congress, Maxine Waters and Elijah Cummings, are spearheading the charge in the impeachment debate.  Their distaste for the sitting president is evident, but what is less evident is how the use of a potent political law instrument as impeachment is supposed to translate into any increase in political power, wealth, or capital for black people.

If anything, House Speaker Nancy Pelosi has expressed caution about pursuing impeachment, appreciating the argument from some inside her party that pursuing impeachment could have a negative impact on the Democrats’ ability to oust Donald Trump from the Oval Office in November 2020.  Mrs. Pelosi’s hesitancy on impeachment should have provided Ms. Waters and Mr. Cummings an opening to show leadership and go against the impeachment grain, not because it would be in line with Speaker Pelosi’s sentiment, but as a signal that the energy expenditure behind impeachment does nothing for their prime constituency: black people.

When you are marginalized, you agitate …

With at least 51 voting members in the U.S. House, blacks in the Congress are in a position to be the pivotal swing vote on a number of issues including impeachment. Numerically, black members of the House, where articles of impeachment would originate, could clog the wheel by holding back approximately 20% of the Democratic vote.  With this leverage, black congressmen could attempt concessions from either the House leadership or from President Trump, though it is less likely that the black caucus would try to negotiate with the President for fear of becoming a pariah in the Democratic Party.

Therein lies a telling dilemma. If the premier block of black congressmen cannot leverage numerical strength without fear of reprisal, what good is their strength?  Another irony is that for a group of congressman that represent a marginalized group, their fear of marginalization within Congress does not put them in a position to do more for their black constituents.

Maybe the answer is to stay outside the box …

On the other hand, maybe blacks, particularly those who embrace their status as marginalized, need an approach to political law that allows them to carve out their own independent niche; one that unapologetically finds the seams or openings in the political economy in order to access capital or create substantive platforms for constructing true communities. Current black leadership is too afraid to do that.

Congress hasn’t determined the artificial intelligence behavior it wants to regulate

Congress’ attempt at AI legislation

The 116th Congress has three bills or resolutions of note sitting in a number of committees that attempt to address the use of artificial intelligence in American society.  H.Res. 153 is intended to support the development of guidelines for the ethical development of artificial intelligence.

Meanwhile,  HR 2202 seeks to establish a coordinated Federal initiative to accelerate artificial intelligence research and development of the economic and national security of the United States, while H.R. 827 is concerned about training and retraining workers facing employment disruption by artificial intelligence.

The bills and resolution are more exploratory versus regulatory in nature.  They don’t expressly get at any behavior that needs to be regulated.  The nascent characteristic of artificial intelligence development along with government’s inability to keep regulation at the same pace as technology development may be in part the reason for the “let’s see what we have here” stance of early regulation.  In other words, Congress may just be getting a feel for what AI is while taking care not to interfere with the innovation needed to further develop the technology.

On the other hand, these bills could help Congress get ahead of the issue of labor disruption. Workers read about AI’s capacity to replace jobs that are more pedestrian or mundane; jobs currently occupied by lower income workers.  The prediction about labor disruption won’t leave certain higher-waged jobs untouched either as AI platforms, data mining, and machine learning threaten professions such as accounting or law.  By determining the data needed to thoroughly analyze the impact and growth of artificial intelligence; identifying the industries that will benefit most from or be harmed the most by AI; and comparing today’s existing job skills with the job skills that will be needed in order to work alongside AI, Congress contribute to alleviating labor force disruption.

The Human-Machine Relationship

Unlike a number of dire predictions of the emergence of “SkyNet” and terminator-like machines subjecting humans to slavery or worse, most analysts and commentators see AI as a tool that augments human capabilities, making humans better or more productive.  The emphasis will be on collaborative intelligence, with human and machine working together.  And how well that relationship works depends on how well humans program the machine.

Another consideration is artificial intelligence’s ability to self improve.  The goal of AI development is to build an artificial intelligent agent that can build another AI agent, preferably with even greater capabilities.  The vision is to move from AI’s narrow, single-task capabilities to a more general AI, a concept that sees AI exhibiting greater abilities across multiple tasks, much like humans.

Possible targets of legislation or regulation

If legislation or regulation is to target the machine-human relationship, elected officials and regulatory heads will have to consider their policy initiatives impact on:

  • the ability of humans to train machines;
  • the ability of humans to explain AI outcomes;
  • the ability of machines to amplify human cognitive skills;
  • the ability of machines to embody the the human skills necessary that lead to the extension of human physical capabilities;
  • the ability of artificial intelligence to self-improve;
  • the difference between “safe” AI (the ability to maintain consistency in AI outcomes) versus “ethical” AI (ensuring that AI platforms are not a threat to human life.

Conclusion

Just like the application of artificial intelligence, Congress’ foray into regulation of AI is nascent.  This is the time for AI’s stakeholders to either begin or maintain efforts to influence all levels of government on AI’s use in the commercial sector.

 

Could Trump’s request for less NIST funding be turned into another political football?

Overview

This morning the U.S. House Committee on Science, Space, and Technology Subcommittee on Research and Technology held a hearing to consider the Fiscal Year 2020 budget request of the National Institute of Standards and Technology. NIST’s published mission is “to promote U.S. innovation and competitiveness by advancing measurement science, standards and technology in ways that enhance economic security and improve our quality of life.”  The agency provides measurements, standards, and reference materials for the technology behind a range of products and services, including computers, GPS systems, cellphones, and automobiles.

Leading Democrats Didn’t Share Too Much Concern About Artificial Intelligence 

Based on the opening statement of the chairman of the House Committee on Science, Space, and Technology, Eddie Bernice Johnson, Democrat of Texas, the primary concern of the Democrats appears to be the impact last year’s shutdown had on NIST research and staffing and how the proposed reductions would compound the problem of reduced research output combined with a reduction in staff.

House Subcommittee on Research and Technology chairman Haley Stevens appeared to emphasize the defunding of programs that support the manufacturing sector and also expressed her concerns about the potential of 400 staffers being let go from the agency.

Both Chairman Johnson and Chairman Stevens provided more of a passing reference to artificial intelligence and advanced communication, observations that don’t appear commensurate with the proposed reductions the areas of advanced communications, networks, and data systems.

The Administration’s proposed cuts in advanced communications, networks, and data systems are severe.  The Administration wants to reduce spending in this area by 41.4%, from $68.6 million in FY 2018 and FY 2019 to $40.2 million in FY 2020.  While NIST director, Dr. Walter Copan, explained that there would be a $8 million increase in spending in the area artificial intelligence, he could not provide, during his testimony, the specific methodology leading to the Administration’s proposed overall reductions for artificial intelligence and advanced communications.

What Messages Are Being Sent?

From the Trump Administration’s end, the message appears to be the hope that NIST’s attempts to coordinate research initiatives between the private sector, public sector, and academia will make up for the reduced contribution by the federal government to research.

Congressional Democrats may see the Administration’s proposal as an opportunity to portray funding reductions as a threat to America’s economic growth. The President’s budget may give them the opportunity to make an argument that Mr Trump is continuing his shutdown of the government with this request and again risking the creation of a negative impact on the economy.

Congressional Republicans may have their bluff called on how dedicated they are to economic growth. Supporting the President’s proposed reductions may be seen as in direct conflict with their economic growth narrative. How can the Republicans support infrastructure development and investment while cutting of a conduit for development and investment?

On the other hand, Congressional Republicans could turn this into an opportunity to push back on their party’s leader, just enough to show a little independence from the White House.

In the end, Congress controls the purse strings and could present a budget in the fall that invests more in the NIST than the President is requesting.

Capital. The true digital divide

A couple early morning thoughts on the digital divide.  So far the digital divide narrative has occupied two schools of thought that are not necessarily opposed to each other.

Race and the Digital Divide

The first school of thought revolves around race.  Given that within the black American community there is a higher level of poor households, affordability is keeping blacks from accessing the internet via high-speed broadband infrastructure.  If blacks do not have the income to sustain a broadband business model, then internet access providers are less likely to deploy facilities in poor neighborhoods.  Lack of deployment in these neighborhoods may result in a barrier to valuable information that may lead to greater economic opportunities, according to advocates seeking to close this gap.

Rural Communities and the Digital Divide

The second school of thought revolves around rural communities.  The argument is that lower population density as compared to urban areas makes deploying broadband access facilities in rural areas more expensive.  In addition, terrain, such as that faced by internet access providers in mountain states, has traditionally added to the problem of higher costs to provide broadband access facilities.

An Overlooked Divide

There is another divide, one that is often overlooked and it has to go to what is known as “first-mover advantage.” The real value generated by the internet is the ability to extract, analyze, package, and distribute information, and have that information be available digitally forever.  The focus on a gap between facilities deployed in black neighborhoods versus facilities deployed in white neighborhoods or the gap between rural community deployment versus urban community deployment goes to seeking out new suppliers of information.  The civil right veneer that has been placed over the broadband racial divide hides this supply-side characteristic from the policy debate.  It has also created the opportunity for the political left to craft an electoral package that can be sold to voters.

It is the other side of the equation, the production side, that, in my opinion holds more value.  When we look at the history of the internet, particularly the period when the internet was commercialized, its players included white venture capitalists; Web 1.0 internet service providers, i.e. AOL, CompuServ, Mindspring, etc.; and dial-up access providers such as BellSouth.

Black Americans could always access information from analog sources, i.e. television; print media; or word of mouth, but the efficient extraction, cataloging,  indexing, aggregation, and distribution of information via the internet were the domain of companies invested in and managed by whites.  As whites continued to level their first-mover advantage, this gap between producer/owner of capital and consumer continued to grow.

Capital not only seeks a vacuum, it also seeks a return.  Returns from investing in black or even rural communities were not going to be as high as returns invested in affluent neighborhoods, neighborhoods whose residents probably owned shares in the very companies that commercialized the internet in the first place.  Closing the “digital divide” means first closing the capital divide.

What will Government Do Next?

Government will do nothing from a capital perspective to close the digital divide. The Federal Communications Commission has a number of universal service funding initiatives designed to encourage mobile and fixed broadband deployment in rural areas; to facilitate the delivery of health care via broadband; and to reduce the costs incurred by low-income consumers for accessing and maintaining high-speed broadband service.  By subsidizing the consumer demand for broadband services, the Commission hopes to encourage the delivery of broadband services.  But again, the focus is on consumer demand, not bridging the capital gap.

The philosophical underpinnings of the American economy, where capital is to flow freely to its best use may prohibit government from taking any concrete action for closing a capital gap.  If blacks or rural residents had sufficient capital to purchase, construct, or maintain broadband access facilities, using their intimate knowledge of their communities to distribute services, we might see a decrease in the gap.  We should expect that government will stay on a path of incentivizing capital investment in infrastructure development versus trying to repair capital discrepancies via a capital transfer.