Data Autarky
Background
Data is the new oil. This is not a new revelation but common knowledge by now. However, this brings its own problems and challenges to our institutions. These are by no means the first challenge and will definitely not be the last one. As oil brought with a new set of technologies and institutions every new thing would bring its own that would help harness it for the benefit of the society. Technologists and the ecosystem around them is focused on extracting every drop of value from the data available. A parallel and equally important development has been with respect to the demand for data regulation and respect for data privacy. However what matters in these are maximization of welfare of the individuals and at the aggregate level of the society. This is a known territory for most policy makers and what is important is to contextualize the data debate into this well-known frame work. This article attempts to do the same.
Structure of Trade
A look at what is trade and exchange would help us better navigate this issue. It fundamentally involves voluntary exchange of things which is valued by each other. For this seemingly simple thing to happen requires institutions and practices to be aligned. Since most of those who transact assume these or take these for granted. These are felt more by its absence than by its presence. Creation of these are complex processes and in many cases may fail also. Ownership is the most important one as that is the basis for trade to begin and other allied ones like enforcement of contracts, forceful confiscation etc. are taken care of. Such institutions have not only been those provided by the state like courts, police etc. but also private ones like merchant guilds etc. and in some cases even social practices like norms etc. can take care of this. Ownership provides complete independence to its owner to decide whether to enter into a trade. It provides the freedom to decide based on one’s free will. Either forcing to trade or its prohibition is against freedom of the individual. Whenever this freedom is available it has been observed that a lot of people do engage in exchange and benefit in the process. This in no way undermines the ownership rights.
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There is a similar scenario with respect to international agreements between countries. A country has a sovereign right to decide and no one can question the same. However, we have noticed that countries do enter into agreements binding themselves to a certain path of action. This is also a kind of trade between governments where they have ownership rights over sovereign powers, and subsequently enter into exchanges to ensure a higher welfare of the country. In this process a country is technically constrained of its sovereign rights for better returns in terms of economic development or national security. Countries can choose to be possessive of their sovereign right but that would be the most unwise approach.
What has been described is the last 2 paragraphs is a cursory summary and no attempt has been made to describe the complexities involved. However, this would be enough to set the context and draw parallels to the issue with respect to data
Approach to Data
A person should have ownership clearly defined and protected for a legitimate trade to flourish in data. Data privacy and regulations on the same would ensure that it is provided. So those involved in fighting for these are actually creating the bedrock for a trade in data. A lack of these institutions would only lead to an anarchic industry which would prevent it from achieving its full potential. Approaching this from the context explained in the previous section this right needs to be provided along with the freedom to exchange as it at least would have the potential to increase the welfare of the parties involved. Data autarky should not be the goal of regulation but can be the freedom of an individual to choose. As has been seen throughout history in most cases people do not continue to stay in autarchic state but actively create institutions to overcome the issues that would arise. So regulation should not be taken to the extreme of banning any voluntary exchanges. There are legitimate concerns on awareness levels of people but banning any transaction is too heavy handed an approach which would prevent the institutions from evolving.
In a developing country like India, data and digital technologies help leapfrog stages in development. The poor can leverage data to pull them out of cycle of poverty and debt trap. Digitization and data can help reduce the threshold cost of serving them and thereby enable creation of a real commercial case for serving them rather than through budgetary subsidies. Data is expected to spawn business models that would cover for the lack of other institutions. The current narratives for data privacy and regulations are to a great extent devised predominantly on industry segments that are data rich like ecommerce, social media and search. The concerns raised in this regards are serious and valid ones, however one should not lose focus on the contingent nature of this narrative. There are vast industry segments (agriculture, trade etc.) that are not data rich in the same sense as the segments that the current narratives are built upon. Preventing data repositories from being created in these segments would be counter productive and act as an hindrance to leverage data induced productivity. They run the risk of being forced into a policy induced data autarky.
The challenge that is before us is to ensure the creation of institutions for safe exchange and enforcement of property rights over data. Data is a new “thing” and we may baulk at proceeding ahead with this endeavor considering the uncertainties involved. However, societies have seen many such “new” ones arrive due to technological progress and have been successful in regulating it for their benefit. What is required is the will and confidence to make it work as these institutions are work of men and its men who determines it fate. What has been highlighted are just expected outcomes and may seem like the proverbial dangling of carrot. It does not in any way assure us of success but it neither proclaims a certainty of failure.
