Internet

Do We Need a World Data Organization?

Democratic presidential hopeful Andrew Yang thinks so.

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"I want to propose a new World Data Organization, like a WTO for data, because right now, unfortunately, we're living in a world where data is the new oil and we don't have our arms around it," declared presidential hopeful Andrew Yang at Wednesday's Democratic debate. My initial reaction was negative, but on reflection I think there may some merit to the idea after all. But first let's push back against Yang's use of the catchphrase "data is the new oil."

International Center for Law & Economics research fellow Alec Stapp has neatly taken apart the data-is-oil meme at the Truth on the Market blog. Among other things, Stapp points that data, unlike a barrel of oil, can be consumed again and again; that oil is a fungible commodity that is basically the same everywhere, whereas data is non-fungibly heterogeneous; that oil has positive marginal costs, whereas data has zero marginal costs; and that oil has constant returns to scale, while data has rapidly diminishing returns. Stapp boldly concludes that oil is valuable while data is worthless.

That cuts strongly against Yang's proposal to make our individual data a property right. Yang is correct that companies profit from collecting and reselling our data. But Stapp points to research that finds "general information about a person, such as their age, gender and location is worth a mere $0.0005 per person." Data about potential auto buyers is valued at about $0.0021 per person, and data about a specific individual's health conditions is worth a whopping $0.26 per person. The upshot: For most of us, the value of our data is less than a dollar. Companies realize value only through amassing, sorting, and analyzing millions if not billions of bits of data. If these calculations are approximately right, none of us will be retiring to a beach villa to live off of our data earnings anytime soon.

As Adam Schlosser of the World Economic Forum once put it, "The next time you hear someone say 'data is the new oil,' ask them when the earth will have no more data to extract and see if you get an answer."

Putting the misconceived oil analogy aside, is Yang right about the desirability of a World Data Organization? Maybe. Schlosser notes that "the movement of data across borders generates yearly global economic gains equivalent to the GDP of France"—about $2.5 trillion. But countries are increasingly requiring that data be localized within their jurisdictions. The increases costs while enabling governments to monitor and restrict their citizens' access to data.

Alarmingly, countries such as Russia, China, Iran, and North Korea are pushing for global norms that would allow governments to further control data flows across their borders in the name of "internet sovereignty." On Monday, a rogues' gallery of authoritarian countries got the United Nations to approve a resolution to launch negotiations on a treaty that would supposedly "counter…the use of information and communications technologies for criminal purposes." Earlier this month, an open letter from human rights organizations warned that the actual purpose of this cybercrime treaty would be to criminalize ordinary online activities, such as exercising free speech and engaging in political protest.

A World Data Organization (WDO) comprised of governments that support online openness could counter the balkanization of the world's information ecosystem via the pernicious poison of internet sovereignty.

"America, Europe, Japan, and like-minded willing-and-able partners must work together to set future standards for artificial intelligence, data, privacy, citizens' rights, and intellectual property," argued Eurasia Group president Ian Bremmer this week. A World Data Organization would "develop a permanent secretariat to determine these digital norms together, and a judiciary mechanism to enforce them." The World Trade Organization is far from perfect, but it has lowered trade barriers considerably. Global merchandise trade has grown from about $5 trillion in 1995, when the organization was established, to nearly $20 trillion now.

A global organization aiming to keep data barriers low could similarly boost economic growth and technological progress while also defending human rights and liberty. The actual details would matter, of course. But at the very least, Yang's proposal is worthy of urgent consideration.

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  1. If “data were the new Oil”, Jezebel would be bigger than Chevron.

    1. Google and Facebook are worth many times more than Chevron. And their only product is data.

        1. No. Their product is data about me.

          1. I’m being facetious. I agree. My point was to say that they’re drilling your property for your data.

            1. I agree. That is exactly what they are doing. Or taking my personal novel and selling it for a profit. What is a novel except information that belongs to the author?

              1. I disagree the organization of the information is what the novelist owns not the information in raw form. Otherwise I couldn’t right any of this.

                1. But that is true of personal information. What I own is how the information is organized such that it applies to me. I don’t own the information “white guy of so and so age” I own the combination of such things that makes me and allows marketers to tarken their marketing to me. My personal information is together like my own little personal novel.

                  1. If you click on the Like button on a Facebook posting, how is this ‘your data?’ Facebook published the posting and created the Like button and the software that stored and analyzed your actions. I don’t think you own the data (the responses) you supply to pollsters or marketeers, so it’s a stretch to claim ownership to Facebook responses.

  2. If I stole a quarter from you, the fact that you don’t miss it doesn’t make it anything besides theft.

    Beyond that, a person’s data is sold more than once. Sure, it may only be worth a quarter but it can be sold virtually an unlimited number of times. So, I am not following the claim that we would only get a few cents from this. If I got a quarter every time someone new sent me a targeted marketing email or put up an advertisement on a web page I am browsing, I would likely do quite well. I would probably still have to work but those quarters would add up quick.

    If I write a novel, I am entitled to every dime it makes. You can’t just take it from me and sell it because “hey it is only worth a quarter”. Why should my personal data be any different? I think Yang has a point here.

    1. “If I stole a quarter from you”

      But Facebook isn’t stealing from you when you click on their Like button. Facebook makes money by selling user attention (clicks and other interactions) to advertisers.

    2. If you make express an opinion on a product you bought and I respond by recommending a similar item, have I stolen your opinion from you?
      That is, one a small scale, what google does when they use your data to curate ads for you. You have lost nothing. This reminds me of corporations who try to convince us that piracy is on par with auto theft.
      The novel analogy does not apply very well because a novel is a creative work that you put effort and intelligence into. Claiming ownership of your data is like claiming to own the fact that you wore a green shirt to work.
      I can understand your position but I fail to see how anything is being taken away from me when my data is collected. Privacy, however, is a completely different issue and one I am concerned with.

  3. I think the WTO-WDO analogy isn’t so good. The WTO (mostly, and imperfectly) seeks to reduce barriers to trade; that is, to make people freer. That doesn’t mean that it never makes people less free, or that it isn’t “managed trade” or whatever, but overall the goal of free trade is part and parcel of the goal of freedom generally.

    This “WDO” thing seems to be the opposite. It is a global regulatory regime that will impose regulations even more unaccountable than the ones at the federal or EU level.

    That said, a treaty that relieved some balkanization but didn’t apply substantial new burdens would be acceptable in my view. However, if the choice is between a balkanized internet and globally-harmonized internet regulation, I’ll take balkanized internet.

    1. I would take a balkanized one too. But, isn’t the deeper question why isn’t your data your property? And if it is your property, how can anyone who believes in property rights object to a system that ensures people are paid for the use of their property?

      The assumption behind Bailey’s argument is that data seems to be that data is a part of the commons such that it belongs to anyone who can exploit it. I don’t see why that is necessarily the case. It can be the case but I don’t see why it has to be.

      1. The difficult part of this equation is “us”. We willingly give our data to many of these entities with no further thought about what will happen to it.

        Here was a fascinating video (cut at the most important part IMHO) about how this person who lived through the early, ‘federated’ internet found it jarring that people were willing to put their profiles online, their full first and last names, pictures of themselves.

        The problem (for which I don’t have an answer) is this: People by the millions willingly throw all of their personal details online and then are SHOCKED to find their data has leaked to dozens of other sites that they never explicitly sanctioned it to be.

        This is not to say that data is abused in ways that legally should be protected. My credit card information is stored on an Amazon server somewhere. If that gets out, that’s on Amazon. But with regimens like GDPR and COPPA and the like, we’re essentially hamstringing the internet with constant fear of prosecution over the sudden spasms of a few users who decide they’re annoyed when the data they willingly put into a public sphere turns out to be… public.

        1. This is a better stated version of what I meant to say.

          Also: none of the current talk even gets in to mandatory data collection like KYC at banks, which in the age of the internet leads to a massive attack surface.

        2. Yes people give their data away. But I don’t think that choice is informed or voluntary. You can’t exist in this society without giving your data away. And companies are never forthright about what they plan to do with it. Moreover, there is no mechanism for controlling what the person I share it with does with it. Just because I give you my information to get a credit card from you doesn’t mean I want you out selling it or authorize you to sell it. But, how could I do anything in this society and also in any way restrict that?

          1. This is in the practical, not legal realm, but still interesting I think: one way that some have proposed to use data without being able to re-sell it is to have the data owners directly participate in the training of the machine learning model. There are algorithms which allow the learned model to be used by the company that paid for or otherwise secured data owner participation without actually ever seeing the data.

            Not something to be mandated, for sure–but interesting anyway.

            1. What is wrong with a model that says you can’t sell someone’s data without compensating them or getting explicit permission? And by permission I don’t mean a blanket authorization. I mean you go to the person and ask them “can we give your information to Amazon?” every time the information is sold or transferred?

              1. Nothing, I just don’t know how you would enforce it.

              2. Well, adding to that: what if, with full knowledge of what will happen with the data, people genuinely don’t care? That is, they’d rather have free Facebook, Google, etc. than privacy or the continued rights of their data. How, in this situation, would such a person voluntarily relinquish rights to their data?

                1. They might not. But if they don’t care, then they will never object to how it is being used or demand compensation. That still doesn’t mean we shouldn’t give them a means to do so.

                  As far as how to enforce my rule, it is simple, pass a law and make any company who breaks it subject to liability for attorney’s fees and statutory damages. Do that and it is worth it to sue to enforce the law and companies have an incentive to follow it.

                  1. Seems like a reasonable idea.

          2. Also, data is sort of like intellectual property in this regard. It can be infinitely copied and resold, so I think you have a point. It’s ordinarily difficult to understand or know how our data is being used, sold, resold, etc. which kind of dampens the whole informed consent thing.

      2. I think it makes sense for your data to be your property. But property can be given away for free, too: when you use a service and by your consent give them your data, it’s still perfectly consistent with property rights. It would also be consistent to demand payment for your data; some decentralized social media and advertising networks are trying that route.

        I agree that I don’t necessarily see why a person’s data would be part of the commons.

        1. See my response to Paul above. I do not think that people are giving up their data in an informed enough way for it to be voluntary.

      3. I see what you’re saying, John, and I’d like to enthusiastically support it.
        But…
        The commons argument is also strong. Data comes in various forms and from various sources, but is fundamentally the product if observation.
        For example, a t-shirt company could have a person whose job is to go to X location for Y hours and mark down the colors of everybody’s shirt, pants, hats he sees.
        Are all those people the employee observes owed anything for the data they’ve provided?
        That would be absurd.

        So, the issue isn’t simply people’s potential ownership of their data, but specific types of data, methods of collection, and use.
        No?

        Interesting concepts

    2. However, if the choice is between a balkanized internet and globally-harmonized internet regulation, I’ll take balkanized internet.

      I tend to agree.

  4. “a permanent secretariat to determine these digital norms together, and a judiciary mechanism to enforce them”

    OK, I suddenly lost my enthusiasm for this idea.

  5. Earlier this month, an open letter from human rights organizations warned that the actual purpose of this cybercrime treaty would be to criminalize ordinary online activities, such as exercising free speech and engaging in political protest.

    Activities we readily support unless it’s Backpage.com or some alt-right conspiracy site.

    1. Or some woman who says mean things about Muslims.

  6. How about a system whereby everyone who wants to signs up for database. Every time data about that person is transferred for commercial purposes, ten cents goes into an account similar to what the ASCAP people do for music royalties. Then at the end of the year you get a check paying you for every time someone accessed your data for commercial purposes.

    It wouldn’t be perfect but it would have the virtue of paying people for their property.

    1. The problem with this is it seems you’re suggesting a government mandated price for your data. Music royalties are set by markets and industry players. While an intriguing idea, I see no way of enforcing the royalty payouts for accessing your data, let alone creating a realistic ‘price’ for your data.

      1. That is a fair point. And I don’t see why you couldn’t set up some market mechanism to set the price. It wouldn’t be perfect but you could surely set up something. I just picked the 10 cent figure for the sake of argument.

      2. Music royalties are set by markets and industry players.

        No, they aren’t you total fucking retard. There is a statutory rate for music licensing.

        1. You can negotiate around the statutory rate by direct negotiation with a songwriter in the same way that company could theoretically negotiate directly with consumers to get their data for something less than the statutory rate.

          1. While I didn’t know there was a statutory rate for per-minute music royalties, my point (which you made in your addendum) is I suspect most music royalties are negotiated outside the statutory rate. And of course, we’re getting bogged down in “music” royalties. There are royalties or all manner of works which expire in different ways and timelines depending on the work and how it was initially licensed.

            I suppose we could make a standard for personal information, but that seems awfully prone to natural mutation over time.

  7. Well that’s just silly. Every good libertarian knows the only thing we need supranational global government for is to manage trade and refugee relocation.

  8. “”Do We Need a World Data Organization?””

    Google and China are leading the way.

    1. You joke but the combination of authoritarian governments and corporations is a real threat. We can’t control our data anymore. So, we have no privacy. Thanks to companies like Google, all of the information about us can be collected in one place. This allows governments and corporations to judge you in all sorts of ways. In the same way China gives its citizens a social score or whatever they call it and prevents dissidents from getting jobs or functioning in society, the big banks and internet companies could do that here. There are only three credit score companies for example. There is absolutely nothing to stop those companies and the few large banks that control nearly all of the financial sector from deciding that owning a gun or going to web sites deemed insufficiently woke or expressing an unapproved opinion negatively affects your credit score. If you have a bad credit score, you can’t so much as rent an apartment and in most cases even get a job. Employers often look at perspective employees credit scores and will not hire anyone with a bad one.

      This is where all of this is leading. A few companies are going to have access to everything about every person in the country. They will then be able to judge everyone based on whatever criteria they like and that judgement will determine whether you are allowed to function at anything above the lowest and most basic level of society.

      But the reason staff seems to view this as a good thing because “meh principles” or something.

  9. We don’t need a ‘world’ anything.
    For proof, I offer the UN and the WTO.

  10. Jesus, can people quit pretending like tech is the most important thing in life and the most valuable thing in the economy. CAD, CAM, automation, online shopping, etc… is definitely useful. Most of that is having minor incremental improvements and is nothing new. Most of the focus now though is better ways to waste time via digital entertainment and social media and petty conveniences like using your iPad on your couch as opposed to a desktop computer where you have to walk 10 feet to your desk. 90% of modern high tech development do not give us big gains in productivity, lower production costs of goods, allow us to do things we couldn’t do before.
    And yes, I’m well aware I’m using tech right now. However I’m at work and bored waiting on a coworker for something and I’m wasting time on a forum that isn’t worth enough to me to use if it weren’t free.

    1. All google and Facebook are are marketing schemes. They don’t employ many people or raise productivity that much. Mostly they just shuffle wealth around and skim some of it off the top as they do.

      If Elizabeth Warren won the Presidency and went on the warpath and put Google, Facebook, and Amazon out of business, the economy would hardly notice it.

      1. Amazon has Amazon Web Services, which has definitely created enormous wealth in creating elastic, scalable computing resources for other companies. Google has done something similar. I think it would be pretty disastrous for all the companies (and there are a lot) depending on those services.

        1. That is a good point. I was thinking more of Google’s search engine and Amazon’s retail business. I didn’t mean the other things they do that you mention.

  11. A global organization aiming to keep data barriers low

    What does that even mean?

    1. I don’t know. And if the goal is to protect people’s privacy, don’t you want to keep data barriers high?

  12. Who is this guy?

  13. Well, you can sell oil easily. Data is different, but not worthless.
    I’d pay top dollar to obtain the data about Yang’s porn habits. I’d spend a good sum to become privy to his masturbatory fantasies. Then I’d capitalize off of that data with my new book Yang Yanks It: Yaoi and Huge Titties.

  14. know we *don’t* need an Andrew Yang.

  15. If anything data income would be a new source of revenue (income) for government..democrats. Most of the leftie welfare schemes are failing. The NHS in Britain is in freefall and collapsing in real time. Leftie states public union pensions and new deal entitlements have a little longer, but not much.

  16. Disagree that data has diminishing returns e.g. income changes, job changes = purchasing power.

  17. Hmmm…every time you use public sewer system you could be mined for data. What you eat, soaps you use, diseases, how often you do laundry, DNA etc. What’s my point? Data can be collected in a lot of ways and none of those ways appears to be under my control. Nor can I control what is done with the information. It could be used to harm me or to my benefit. I suppose I just don’t care because I am old and can’t relate. But Yang is a forward thinker so my point is consider what he has to say.

  18. Well, we’re ignoring the law of scarcity in this discussion. What compels me to think Yang is on to something is that the ability for individuals to monetize their own data depends first on the ability of individuals to, first, be able to limit the supply. The faster more individuals can hide or secure their own data, the easier it is for the cost for that data to be increased incrementally. But only if most people opt to do this. Sounds like a capital idea for an entrepreneurial endeavor selling software to get our on-line lives encrypted and, well, off-line.

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