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.