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Privatizing personal identity – part five – The Time to Start is Now

Eben WilsonPosted by

In the last in a series of articles, economist Eben Wilson (St Andrews) proposes that the time to seek legislation that privatises personal identity is now. This is an opportunity for Scotland to take a lead on the basis that it is a small country with room to explore innovations in law more easily than larger nations.   

The Time to Start is Now

In my previous articles I have explained the economic basis for proposing that private identity data should be defined as a private property. It could then be protected by a new statute in the form of a Privatisation of Personal Identity Act through which all parties using data would be required to contract with Private Identity Banks acting on behalf of individual data owners as agents of its use.  This would create a market in the value of data through which individuals would obtain economic power to control mischief by data aggregators operating intrusive digital platforms.

The steps to achieve the institutional arrangements required are not hugely complex, although it would need some sharp legal minds to write the statute and frame the Bank institutions. However, the interests that stand in the way, and the incentives they have to retain the status quo, are high.  The tech companies and their investors enjoy a huge asset in their control of our data, commerce generally does not want more overheads in data handling, the bureaucracy is fast building an administrative empire, and of course the political estate is always less than keen to relinquish its power of control over us.  Economic history tells us how difficult it is to obtain genuinely atomised democratic control over individual property rights. Tea Party’s apply, liberty has to be engineered and fought for.

Theory of micro-politics in political economy

At the same time, there is a theory of micro-politics in political economy; whereby the persuasive forces of logic, reason and good economics seek to obtain small cracks in the tyranny of the status quo by taking small steps that gradually force the conservative power-holders to change their ideas.  Britain’s privatization programme of the 1980’s followed this course; starting with the easy state-controlled entities that all could see were failures. That got people used to the idea that the commanding heights of the economy could be sold off which then turned into the tide of change that got rid of the loss-making monopolies.

So let me be subversive. Is there an iterative approach to introducing private control of data that could bring today’s centralist controllers and regulators to the negotiation table where we introduce them to lawyers who understand jurisprudence and good economics?

Personal Identity Bank

I think there is. We need some private entity to start up a Personal Identity Bank.  That Bank would then seek commercial concerns that would voluntarily accept the installation of systems that would log those computing transactions that touch our data and deliver those logs to the Bank.

Were the Bank then released by its clients to analyse logged data use and report it privately to them, my belief is that this service would be seen by consumers to be both valuable and good – in the moral sense.

My belief is also that when other individuals heard of the service, they too would want a Personal Identity Bank to act as managing agent of their identity data.  The business would grow and hopefully gain competitors.

At that point, what would be needed would be some seriously astute legal minds to formalise the constitutional rules that governed the Identity Bank, or Banks, of the future. Technically, this could initially be done purely on a private contractual basis, as long as Identity Bank customers accepted that those constitutions were robust and always adhered to.

“The best laid schemes o’ mice an’ men gang aft a-gley.”

I say, initially, because my hunch is that we need to accept Rabbie Burns’ dictum here that “the best laid schemes o’ mice an’ men gang aft a-gley.”  In short, some idiot, in some Bank, on some day, will inevitably break the rules. That’s a challenge to the private Identity Bank service, but given their tight mandate and constrained purpose I think it would be unlikely that any miscreant could easily create great damage, especially if new dispersed ledger block chain type audit records form the basis of the way that data is held.

Statute law has the advantage that it can constrain stupidity using the sanctions of large fines, denial of the right to trade, enforced bankruptcy, and ultimately the prison cell.  It would only be wise to explore the potential for new statutory forms to constrain adverse behaviour. Well drafted, they would incorporate the principles of the Rule of Law, respecting the common moral sentiments of us all about infringements on our liberty through coercive practices based on access to our personal data.

New infrastructure

If data is a new infrastructure that is extending our affluence, our best legal parallel (with a major caveat) is in the way that the Railway companies went to Parliament in the 19th century to obtain permanent way rights to build their track beds.  The caveat is that, in the 21st century, we need lawyers to petition parliament on behalf of individuals not railway companies, and so avoid monopolies taking advantage of skewed privileges. Then we can all gain from our social desire to be part of a collective whole, at a price that we agree.

As good a place as any to get this started is Scotland; where law practice is of a very high standard, we have our own legal system to allow us to innovate and, dare I say it, a legacy of classical liberal thinking – at least at an intellectual level – that can inform and advise on the moral foundations of Scottish jurisprudence within the Rule of Law.

1. The Value of Data

2. Who Owns Personal Data?

3. Power Through Dispersed Knowledge

4. The Value of Keys

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