Andrew Yang, a former test prep entrepreneur, is an unlikely candidate for President of the United States. Once, we would have dismissed unlikely candidates out of hand. But Donald Trump has demonstrated that anyone, even someone without prior government service experience, can be elected to high office.
Yang's signature policy recommendation is to give a $1,000 per month universal basic income stipend to every over-18 adult in America. Bob Reselman and I discussed the whole basic income idea two years ago and explored what might happen if everything were automated. You can watch that video here.
I'm skeptical about the effectiveness of Yang's so-called "freedom dividend." The $1,000-per-month stipend is too little for a family to live on but might drive prices up while creating an enormous tax burden.
When my editors asked me to look into Andrew Yang's plan to regulate technology firms, I wasn't sure how many of our readers would even care. However, Yang is one of 10 candidates who have qualified for the November debate, which means he has met both polling and donor thresholds that indicate some level of popularity. As of this writing, in mid-November, Yang has not met the more strict qualification thresholds to make the December debate.
Contender or not, he is providing serious thought leadership in the area of technology's impact and future in our society.
In Yang's policy statement, Regulating technology firms in the 21st century, he explores the issues of personal data ownership, the health impact of our attention economy, the spread of misinformation, and taking a "21st-century approach" to regulation.
Data as a property right
Yang begins his policy treatise with the premise that data should be a property right. Today, he says, the big tech companies can profit off our data without restriction. He cites a report by for-profit strategy center Future Majority that claims "Extraction of personal data is America's fastest-growing industry, worth $197.7 billion by 2022."
Whether or not it's the fastest-growing industry, Yang's premise that the big tech giants are making bank from our digital footprints is undeniable That makes his proposal for a digital bill of rights compelling. He proposes codifying the following rights into law:
- The right to be informed as to what data will be collected, and how it will be used
- The right to opt-out of data collection or sharing
- The right to be told if a website has data on you, and what that data is
- The right to be forgotten; to have all data related to you deleted upon request
- The right to be informed if ownership of your data changes hands
- The right to be informed of any data breaches that include your information in a timely manner
- The right to download all data in a standardized format to port to another platform
Where he starts to go off the rails is his plan for a value-added tax on digital data. His idea is that, if companies like Facebook and Google make money off of our data, they should be taxed and that money should be somehow shared with the users who are mined for the data.
In my judgment, the amount of money sent back to consumers would be minimal, and the accounting and processing overhead, not only on the part of the tech companies but on the US government, which would need to enforce these VAT taxes, would be prohibitive. I think it's enough to establish a rock-solid policy that makes it possible for consumers to be able to opt-out of data retention.
I was also disappointed that he didn't discuss the problem of mandating backdoors in encryption. Many governments are moving forward in their desire to embed backdoors in all encryption algorithms. However, there's a strong case to be made that not only do backdoors benefit the bad guys more than the government, they also directly impinge on citizens' privacy rights. If Yang truly wants a digital bill of rights, he should outright condemn any efforts to force encryption backdoors by federal agencies or legislation.
Department of Attention Economy
This next proposal is well-meaning and does identify a real problem, but proposes a level of government involvement that's both intrusive and impractical. Yang specifically talks about issues regarding children and their attention to digital devices.
I want to call out two of Yang's observations that could provide food for thought. Talking about internet platforms like Facebook and Instagram, Yang states:
"Even the content for children on these platforms isn't subject to any rules and standards the way they are on TV. This lack of regulation means that our children are exposed to extreme and inappropriate content at younger and younger ages."
He does make an interesting point, in that many of our other media modalities have restrictions and regulations, but internet communication does not. My perspective is we've left the internet unregulated to foster growth, but I agree with Yang that it might make sense to put some restrictions in place, especially since so many companies are using the lack of regulation to behave in a predatory nature.
The gotcha is that the internet is international, and while we might regulate behavior on the part of American companies, non-American companies can easily reach our children at any time and we can't police that.
Second, he states:
"Many experts are worrying that the widespread adoption of a poorly understood technology has caused mental health and developmental problems for an entire generation."
This is a tangible concern and worth further discussion. The level of attention paid to small screens could impact sleep, eyesight, and performance in school. We already know about how dangerous it is when people text and drive.
Where Yang again goes astray is in his proposal for a cabinet-level department aimed at policing the attention economy. He specifically calls out features like recommendation engines, screen time, and even screen design and states that this cabinet department should provide guidelines and even possibly regulate the UI of these online and mobile experiences.
My take on this, as a guy who's launched hundreds of software products and managed development teams, is that it's hard enough to create solid products based on vendor UI guidelines. If the government gets into the game of approving or policing user interfaces, that will slow down the pace of innovation, stifle creativity, and give everyone a massive headache.
Stop the spread of disinformation
This is a real problem and Yang is right to call it out. Solving it, though, may be harder than Yang thinks. It's unlikely that we can legislate reality back into media, in particular, because perspective (or bias, if you will) is a natural side-effect of a human-written story.
That said, he does make a credible go at a problem statement:
"Social media platforms have catalyzed mass disinformation campaigns over the past decade, threatening not just our wellbeing but our democracy."
He expands on that here:
"Digital giants such as Facebook, Amazon, Google, and Apple have scale and power that renders them more quasi-sovereign states than conventional companies. They're making decisions on rights that government usually makes, like speech and safety. Their business models are predicated on keeping people engaged, driven by algorithms that are supercharged by technology to predict our behavior, such as artificial intelligence and machine learning, and that feed off of our data, creating an increasing asymmetry of power without any accountability."
Unfortunately, his solutions again lean impractically on government involvement. The one that I believe is dangerously wrong-headed is his recommendation that there be "a higher VAT on digital advertisements in order to incentivize companies to shift to an ad-free, subscription model."
It appears that he thinks the solution to #fakenews is to tax the free internet out of existence and force a subscription model on all producers, just to improve information accuracy. That's both draconian and counter-productive. By doing this, he'd merely wipe out a wide range of outlets, including many legitimate ones, and force citizens to pay for information. This would only serve to increase the digital divide between those who can afford to pay for information and those that can't.
Does he truly believe that propagandists and hostile nation-states won't simply pay the few extra bucks to get their message out? What will happen is that only those propagandists and nation-states will be able to reach the vast majority of Americans who will refuse to pay for subscriptions.
A '21st-century approach' to regulation
Ah, regulation. Almost nothing is more contentious in American politics.
Well, let's get this out of the way upfront. America's economy is not solely based on true market forces. When you hear someone say that the market should be allowed to progress on its own, it's important to understand that the market has never been allowed to progress on its own.
Whether it's subsidies for certain players in certain industries, tax breaks that are so closely defined so as to only help certain companies, or even regulations that favor certain business interests over others, the market is constantly being hacked.
Regulation, when done right (which is admittedly very rare) is kind of like the anti-malware software of the market economy. Regulation can help diminish the unfair economic hacks brought about by multi-million dollar lobbying budgets and deeply entrenched K Street influencers. But regulation can also slow down or damage a perfectly good market force as well.
The antitrust battles of the late 70s over AT&T's monopoly or the 90s over Microsoft's dominance in the browser wars seem almost quaint by comparison to the challenges facing us today. Now, we're looking at monopolistic behavior over massive segments of the US economy, artificial intelligence that threatens jobs worldwide, and the rise in fake news and altered media threatening our ability to discern reality itself.
In light of all this, Yang makes a compelling case that, to regulate technology, our government officials need to first understand it. It's hard to argue with his statement that, "It's embarrassing to see the ignorance some members of Congress display when talking about technology."
Another premise of his also is inarguable. He states, "Without a base level of understanding, it's unreasonable to expect proper regulation of major tech companies or the drafting of legislation that addresses the critical technological issues that we'll continue to face in artificial intelligence and cybersecurity."
Yang wants to bring back the Office of Technology Assessment (OTA), a non-partisan congressional research office that was shuttered back in the mid-1990s. He also wants to create a cabinet-level Department of Technology to oversee all aspects of technology innovation and disruption in the US economy.
Neither of these are bad ideas, although I'd have to say it's unlikely that our Congress-critters will read any information provided by a revitalized OTA. Even if that office is in place, they're more likely to take their cues from their parties and from the lobbyists that help them keep them in power.
A cabinet-level Technology Department is interesting. The big challenge here is that there are so many other departments, ranging from the Pentagon to Homeland Security to the Commerce Department, that will need to have a say in technology policy. If such a Secretary of Technology role were to be created, one of the key challenges would be defining the range and purview of the department in concert with how it would interact with other agencies, government-wide.
As for regulation and anti-trust, Yang once again does a good job of identifying the problem. He states:
"We must recognize that 20th century frameworks of breaking up companies just based on size or pricing impact on consumers won't be effective. Network effects will always ensue, as a dominant player invariably emerges. And no one wants to use the fourth best search engine."
In other words, you could theoretically split Google from Alphabet (Google's parent company) and even possibly split out the Adwords business from Google into a separate company. But the issue is that users will continue to flock to dominant players and even if Google just does search and then sells its valuable ad space to its spin-out ad vendor, it will still have an unreasonable stranglehold on search.
Yang goes on to talk specifically about cyber currency and loot boxes (the upsell involvement gimmicks in free-to-play mobile games) as examples of areas that need further regulation and management. He has some good points, so I'll let you read his comments for more details.
I want to end by calling out two statements he makes in his policy document:
"Determining monopoly power requires us to make clear distinctions on market player vs. market platform. If Amazon is the marketplace, it shouldn't be competing as a market player, as well. It's difficult for Amazon or Apple to guarantee credibility to other market actors that they won't take advantage of their access to information and their ability to shape the market conditions."
Yang seems to be implying that the iOS app store and Amazon's commerce platform should be separated from their product offerings. Oddly, he chose to conflate those two companies. Amazon sells, well, everything. Apple provides a distribution channel for software. Amazon has effectively destroyed the entire retail landscape. Apple sells phones.
That said, he does offer some insight into what might be a solution to the centralization of distribution power:
"Require platforms that are market players and market platforms to maintain an even playing field for competitor products or services on their platforms, or exit the market."
Essentially, this means that these vendors who have virtual monopolies in their markets would be prohibited from keeping their competitors out of their stores. It's a small point when you consider there are far bigger issues in terms of interoperability, API access, and security updates, but it's not unreasonable to ask that platforms support all other vendors that can work on those platforms.
"Consolidation of data assets, shutting down competition (even if it won't affect prices), and the lack of competitive business formation should all be considered when determining whether the government needs to take action against a business."
It's not clear to me that any of these actions will help consumers or citizens, but may instead take a lot of time and energy, diminish our economy, and open opportunities to foreign competitors. On the other hand, when a giant, industry-eating company that has abandoned "don't be evil" as its slogan is no longer willing to try to live up to even that very low bar, perhaps a more aggressive approach (or at least the threat of regulation) is in order.
My take on Yang's proposals
As I said earlier, I'm not sure what chance Yang has to win in the 2020 cycle. But it's clear that, when it comes to 21st-century technology issues, he understands the problems. That alone is quite impressive. In my opinion, some of his solutions are workable and others, not so much.
I don't know that I'd vote for him (and no, I'm not decided on any other favorite, either), but I'm certainly going to listen to him more attentively.
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