Guiding Innovation’s Hand: Industrial Policy Against Inequality

This is the second post in our series discussing The Meritocracy Trap by Daniel Markovits. Click here to read all posts in the series. 

Jeff Gordon – 

Most of the critical attention directed at Daniel Markovits’s The Meritocracy Trap has focused on its claim that well-off parents launder inequality through schooling. While Markovits brings masterfully comprehensive reams of data to bear on the concept of the “meritocratic inheritance,” the most original and provocative part of the book comes later, when Markovits offers his explanation of why educational sorting has come to matter so much: elite schooling leads to top jobs, and “[t]he top jobs pay so well because a raft of new technologies has fundamentally transformed work to make exceptional skills enormously more productive than they were at mid-century and ordinary skills relatively less productive.” This is provocative because it contradicts the pervasive myth that technological change is natural, self-directing, or inevitable. Few reviewers have remarked on this part of the book or reflected on what it suggests: that industrial policy will be vital to building a more equal economy.

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The Second Wave of Algorithmic Accountability

Frank Pasquale –

Over the past decade, algorithmic accountability has become an important concern for social scientists, computer scientists, journalists, and lawyers. Exposés have sparked vibrant debates about algorithmic sentencing. Researchers have exposed tech giants showing women ads for lower-paying jobs, discriminating against the aged, deploying deceptive dark patterns to trick consumers into buying things, and manipulating users toward rabbit holes of extremist content. Public-spirited regulators have begun to address algorithmic transparency and online fairness, building on the work of legal scholars who have called for technological due process, platform neutrality, and nondiscrimination principles.

This policy work is just beginning, as experts translate academic research and activist demands into statutes and regulations. Lawmakers are proposing bills requiring basic standards of algorithmic transparency and auditing. We are starting down on a long road toward ensuring that AI-based hiring practices and financial underwriting are not used if they have a disparate impact on historically marginalized communities. And just as this “first wave” of algorithmic accountability research and activism has targeted existing systems, an emerging “second wave” of algorithmic accountability has begun to address more structural concerns. Both waves will be essential to ensure a fairer, and more genuinely emancipatory, political economy of technology.

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The Uber/Lyft “Workers’ Association” Debate: A Response to Dubal

N.B.: Benjamin Sachs penned this response to Part I of Veena Dubal’s post on comparing solidarity unionism with company unions earlier this week. In the spirit of debate, we’re cross-posting from On Labor. 

Benjamin Sachs –

Veena Dubal writes an important piece that raises concerns about Uber and Lyft’s suggestion that drivers in California form a “workers’ association.” Dubal worries that such an association would amount to a company union that would “necessarily impede” the development of fully independent, exclusive-representative unions at the gig firms. Given the essential role that independent unions play in our economy and our politics, Dubal is highly critical of the workers’ association idea.

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Gig Worker Organizing for Solidarity Unions

Veena Dubal – 

The “gig economy” is one place where organizing outside of traditional trade unions is undoubtedly happening in surprising and perhaps unexpected ways. For example, on May 8, 2019, a group of independent app-based drivers in Los Angeles called the LA Rideshare Drivers United organized and launched an unprecedented international picket and work stoppage against Uber and Lyft. They were joined by similar driver groups all over the United States (including in New York City) and as far off as Nigeria, Australia, and the United Kingdom.   This was an incredible feat given that, as my co-authors and I have argued, gig workers—particularly those who work for a platform-based company—face unique hurdles to organizing. Among other factors, these workers are unusually dispersed, atomized, and differentially dependent on gig work.

Having studied gig workers for over a decade, I was surprised by the magnitude of the May 8 strike. Two things stood out to me. First, I was struck by the large number of driver-led groups in the U.S. which participated in the coordinated work stoppages. Drivers’ groups from Boston, San Diego, Los Angeles, Chicago, New York City, and Washington, D.C. issued a joint statement calling their action a “strike” (not just a rally or protest) and announcing themselves “united as one joint council of grassroots driver labor organizations with the shared goal of winning job security, livable incomes, and respect for App drivers.” Not all drivers’ groups that participated in their regions signed onto this statement—presumably because of the legal risks of calling this action a “strike.”

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Solidarity Unionism v. Company Unionism in the Gig Economy

Veena Dubal – 

The CEOs of the two top-competing gig firms—Uber and Lyft—penned a June 12, 2019 OpEd in the San Francisco Chronicle in which they claim that after over six years of local, state, federal, and international law-breaking, ignoring the concerns of drivers, and viciously fighting any efforts to achieve living wage and benefits, they are ready to compromise…in California. They claim that in exchange for getting rid of a bill that just passed the state assembly—which would extend California labor protections to many “gig workers” by making it easier for them to claim employee status under state law—they will agree to establish a wage floor, a “workers’ association,” and potentially, a deactivation appeals process.

Why, after six years of legal and political intransigence, are these companies so ready to come up with a salve? And what should we make of their concessions?

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Radical Skepticism About Information Fiduciaries

NB: This post is part of the “Skepticism About Information Fiduciaries” symposium. Other contributions can be found here.

Tamara Piety – 

fbookI was delighted to read Lina M. Khan and David E. Pozen’s recent article, A Skeptical View of Information Fiduciaries describing the reasons to be skeptical of the “information fiduciary” concept as a promising one for solving the problems posed by giant companies like Facebook. As Khan and Pozen point out, its proponents are a bit fuzzy about the details of how to reconcile these for-profit companies’ existing duties to shareholders, with some kind of fiduciary duty to users. The users’ attention is what these companies are selling. Khan and Pozen are skeptical that such a fundamental conflict can be resolved and I agree.

I only have a couple of additional points:

(1) Before looking to import the concept of a “fiduciary” to this new application, we might ask how well that concept has worked, as a means to check anti-social behavior, in the areas in which it has traditionally applied. If that area is corporate law where officers and directors are said to have fiduciary duties to the corporation and its shareholders, the answer is “Not very well.” It does not seem to have deterred much corporate misconduct.

(2) Although Khan and Pozen rightly observe that Facebook does more than sell passive viewers to its advertisers, it uses the data it collects from those users to construct or identify vulnerabilities that go far beyond the information asymmetry as it conventionally is understood in the fiduciary concept, in their discussion of the problems that the information fiduciary concept is meant to solve, they note (18-19) that many of these problems are already “proscribed by existing consumer protection laws,” they may not be confronting the degree to which Balkin, et al. may be attempting to offer alternative rationales for that existing consumer protection law given that it is no longer resting on as firm a foundation as in the past. However, the Supreme Court has been increasingly hostile to the government’s attempt to regulate any speech at all and increasingly willing to use the First Amendment as a weapon of deregulation. As Khan and Pozen note, to the extent that other arguments for special status or duties as a way to end run the Court’s more aggressive, the Supreme Court has not signaled much receptiveness to this approach.

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When All You Have Is a Fiduciary

NB: This post is part of the “Skepticism About Information Fiduciaries” symposium. Other contributions can be found here.

James Grimmelmann – 

fbookOnline platforms do different things for (and to) users. Some of these things are a good fit for fiduciary principles, some are not.

Perhaps most obviously, platforms collect data about users. Some of that data is inherently sensitive, like health records; some of it is sensitive in the aggregate, like months of Facebook likes. Either way, the users could be harmed if their data got into the wrong hands or were used against them.

Fiduciary principles are a good fit for platform data collection in two overlapping ways. First, the core fiduciary duty of confidentiality has long applied to knowledge professionals like doctors and lawyers when they receive information about their patients and clients. Like digital platforms, they need information to do their jobs; fiduciary law makes sure they use it only to do their jobs. Second, fiduciary duties of care and loyalty have long applied to parties who are entrusted with a thing of value. That’s what happens in a literal trust, the paradigmatic source of fiduciary duties. It is not difficult to extend those duties to parties who hold information, rather than money or other tangible property. Current U.S. information privacy law is patchy and hesitant, but its best version of itself would cash out fiduciary principles in specifying when and how platforms can use and share user data.

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Scaling Trust and Other Fictions

NB: This post is part of the “Skepticism About Information Fiduciaries” symposium. Other contributions can be found here.

Julie E. Cohen – 

fbookThe Centenal Cycle, the Hugo-nominated trilogy by novelist Malka Older, describes a not-too-distant future in which the existing liberal world order has been replaced by a regime of mass-mediated micro-democracy. With some exceptions—a handful of so-called null states that opted out and a more intriguing smattering of territories that opted for self-rule without the mass mediation—nation-states and their subordinate governance units have been dissolved. The vast majority of people live in centenals—contiguous territories of no more than 100,000 citizens—administered by entities of various persuasions that compete for their affiliation. Governments range from powerful, globally distributed operations such as Liberty, Heritage, and PhilipMorris to the nerdy Policy1st to regional players like AfricaUnity and DarFur to small, quirky outfits like the generally libertarian and fun-loving Free2B.

The regime of micro-democracy relies on networked information and communication services provided by an entity called, simply, Information. When we encounter it, it has assumed the status of an independent, nongovernmental entity with an unambiguously public-regarding mandate to function as a neutral guarantor of information quality.

Of course, that is easier said than done. Governments, splinter groups, and null states have incentives to sow mis- and disinformation for their own purposes. Guaranteeing information quality requires both comprehensive surveillance and an impressive array of counter-espionage capabilities. There are intricate cat-and-mouse games between the watchers and those attempting to evade them. Technologically sophisticated separatists spoof surveillance cameras and disinformation-detection algorithms and devise means of lurking undetected within secure communications channels and data streams. Resistance and subversion also establish bases of operation within Information itself. The dream of a sustainable micro-democratic order mediated by a neutral corps of public-spirited technocrats ultimately proves untenable, and yet the dream is so compelling that as the narrative closes on the aftermath of a systemic breakdown, Older’s band of protagonists is hatching plans to rebuild infrastructures, redesign institutions, and try again.

What does any of this have to do with Khan and Pozen on Balkin? The monolithic, public-spirited Information, the multiple, capitalist information fiduciaries of the Balkin proposal (see here and here), and the regime of structural regulation of information intermediaries that Khan and Pozen appear to imagine would seem to have very little in common. But they are imagined responses to the same problem: that of governing data-driven algorithmic processes that operate in real time, immanently, automatically, and at scale. More specifically, they are visions that engage with the problems of speed, immanence, automaticity, and scale in radically different ways.

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The Role of Technology in Political Economy: Part 3

Yochai Benkler 

In the prior two posts in this set I described how the leading mainstream economic explanation of rising inequality and its primary critique treat technology.  The former takes technology as central, but offers too deterministic or naturalistic a conception of both technology and markets such that it functions, in effect, to legitimize the present pattern of rising inequality and to limit the institutional imagination of how to deal with it.  The latter focuses so exclusively on the institutional determinants of bargaining 46038488 - law concept: circuit board with  scales icon, 3d renderpower, that it largely ignores technology as a distraction.  Here, what I’ll try to do is synthesize out of the work of many of us in the field an understanding of a political economy of technology that gives technology a meaningful role in the dynamic, but integrates it with institutions and ideology such that it becomes an appropriate site of struggle over the pattern of social relations, rather than either a distraction or a source of legitimation.

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The Role of Technology in Political Economy: Part 2

Yochai Benkler 

Yesterday I outlined the ways in which the dominant “skills-biased technical change” and “winner-take-all economics” explanations of inequality share an idealized view of both markets and technology as natural and necessary.  Today I’ll write about the most influential criticism of these dominant stories that have been developed by labor economists.  These focus on the central role that institutional choices played in shaping 46038488 - law concept: circuit board with  scales icon, 3d renderbargaining power, and through it, the ability of the managerial class and shareholders to cause stagnating wages for the median worker and the great extraction by the 1%.  Larry Mishel of the Economic Policy Institute, with various co-authors, played a central role for over twenty years in pushing back on the SBTC narrative. Richard Freeman early emphasized the central role of unions, work later extended and deepened by David Card and collaborators. The pro-labor economists’ story is that policy choices as diverse as minimum wage erosion (particularly for women), deregulation, monetary policy, trade, immigration, as well as legal and political attacks on unions and unionization combined to weaken labor’s negotiating power and enable managers and shareholders to extract an ever-growing share of productivity growth, leaving labor running as fast as it can just to stay in place, at best.


In this framework, widely used in left-leaning labor economics, technology is absent as an explanatory dimension.  Its role is, at most, to divert attention from the political origins of the shape of inequality in society.  If they are right, then those of us spending our lives thinking about how technology shapes social relations are spinning our wheels and wasting energy—at least insofar as we are trying to explain the future or work or the rise and response to inequality.

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