Good innovation can coexist with regulations, but not regulations of yesterday. We cannot manage an airport the way we manage a train station, nor can we manage the future the way we managed yesterday. (Jack Ma, Jack Ma’s speech at the Bund Summit 2020 in Shanghai," Apple News (11 August 2020))
There are four interrelated stories that have tended to be treated as distinct affairs by what passes for the press and their academic organs. That s a pity, because in their intense desire to vindicate their own view of the way the world is (or ought to be ) understood, these organs of authoritative societal sharpers of meaning continue to miss one of the most important trajectories of power emerging in the last decade--the fusion of state, governance, and markets rough platforms.
From this fusion, new forms and approaches are emerging to the control and management of the productive forces of society, and of the shaping of the human factors of production organized in well behaved communities manifesting values through behaviors that advance the interests, obligations or perceived responsibilities of (market, political, societal or other) vanguards. What appears to be the relationship between consumables and consumers is effectively reversed. Individuals now serve as the ultimate consumable for the production of communal stability and prosperity that is understood as the product of metrics measured against aggregate ideals applied to ensure the maximization of value from the societal, economic, and political consumption of human activity.
What then becomes critically important as a site of politics is not what passes for democratic expression (voting, engagement, etc.-these are carefully managed for all the right reasons in the context of the political model in which they are manifested). Instead first tier politics now centers on the control of the machinery of consumption, that is on the data (Foucault's now updated notion of "statistics" of importance to his theory of governmentality, to suit the technologies of the times) through which the ordering and control of social, political, religious, and economic production may be retained and enhanced.
The interrelated stories are these: (1) the disciplining of Jack Ma; (2) the completion of the first cycle of data protection and cybersecurity laws in China; (3) the detachment of data services from Ant; (4) the glimmerings of the Western parallel developments in the contest between Australia and Facebook. Each is briefly considered below. Together they suggest the intertwining of platforms as a governance space, and its power to bring together within its "spaces" all of the coordinate parts necessary for the management and consumption of human production in the service of the stability ad prosperity of collectives overseen by those given that task under contextually different political-economic models.
1. The disciplining of Jack Ma. On 24 October 2020, Jack Ma gave what will posthumously be considered a brilliant forecast of the forward thrust of global governance wrapped up in a plea for a very different relationship between platforms and regulators, between the state and private bodies corporate, and between experts and scholars (Jack Ma, Jack Ma’s speech at the Bund Summit 2020 in Shanghai," Apple News (11 August 2020); for Kevin Xu's unofficial translation, see here). At the time he mentioned that "misgivings about whether to come here and give this speech today. But I thought people like me do have an inescapable responsibility to think about the future." (Ibid). And events proved him right. The state was not amused--he committed an act of lèse majesté that was not forgivable, though not sufficiently grave to cost him his life--just his relation to power.v He disappeared for a while, his massive public offering was cancelled, China produced a new data protection law and eventually the company that Jack Ma once controlled was split in a quite important way; he gave the speech as a self described "somewhat retired man" (ibid.). He has as a consequence now been retired fully to serve the platform, and through it, the state, from the far more obscure position of expert walled up in his (luxurious to be sure) monastery. (Alibaba founder Jack Ma delivers video speech to China’s rural teachers in first public appearance in three months).
But the point was made: "Now, all around the world, there is a trend towards an increased focus on risk control, but not on development. Very few people talk about opportunities for the younger generation or where the opportunities are in developing countries" (Ibid.). The resulting construct of imbalance between monitoring and control has produced a world that stifles innovation. What Ma might have been implying was not that innovation has been stifled, but rather that it has been bent to the overarching mania for control, but a control that exorcises risk (to the state, to the economy, to society, to notions of stability and (limited but sufficient) prosperity. What Ma exposed--unacceptable in either liberal democratic or Marxist-Leninist (control) systems--was that trajectory and its deleterious effects.
I have noticed another phenomenon. While many regulatory departments around the world have become risk-free themselves, the whole economy – as well as society as a whole – has become risky. The race tomorrow will be a race of innovation, not regulatory capabilities. Today all countries are vying to be the most ruthless regulator, and all developments are empty talk. But the rules outlawing this or that are all as sharp as razors (Ibid.).
But that insight necessarily produces the impulse to profoundly provocative acts of lèse majesté.
As far as I know, the “improvement of the ability to govern”, as mentioned by President Xi, is about maintaining healthy and sustainable development under orderly regulations. It is not about having no development under regulations. Regulations are not difficult in themselves. What is difficult is achieving regulations that are aimed at maintaining sustainable and healthy development. Regulations should be aimed at achieving healthy development.(Ibid).
It platforms are the new locus of innovation and the core infrastructure for communal life, then the question of the management and control of the platform and its technology becomes the central element of politics--a power that Jack Ma seriously underestimated himself even as he predicted its character.
The rest follows.
2. The new Chinese Data Protection Law. October 21, 2020, China issued a draft of Personal Information Protection Law (“Draft PIPL”) for public comments. It forms part of a number of provisions issued over the last several years that focus on data protection and cyber security.
The express protection of personal information under the Civil Code represents a new era of privacy and personal information protection. Moreover, on 3 July 2020, the Data Security Law of the People's Republic of China (Draft) (only available in Chinese here) ('the Draft Data Security Law') was issued for public comments and, on 21 October 2020, the Personal Information Protection Law (Draft) (only available in Chinese here) ('the Draft Personal Information Law') was issued for public comments. The above legislation together symbolises the establishment of a complete system of personal information protection (China - Data Protection Overview).
Like Jack Ma's speech there is a lot of meat. But for our purposes, it evidences one measure of control intimated by Jack Ma but fundamental to the ordering of politics to platforms--the localization of data and the imposition of significant barriers (borders) to the free movement of data across borders (for analysis here). It adds though doesn't change the trajectory of control already signaled by the New Draft Rules on Cross-Border Transfer of Personal Information Out of China (translation here). Informality is power--that is now almost a cliché; but in this case power quite specifically understood as fuel rewards and punishment for behaviors judges against ideal types for the transformation of governance to systems of algorithmically managed
3. The reconstitution of Ant. The disciplining of Jack Ma plus the thrust of the localization principles in Chinese approaches to data provided a background (it is hard to imagine connection vectors with any degree of certainty) for the reconstitution of Ant in a form that also contributed to the governmentalization of platforms. "Ant Group Co plans to spin off its consumer-credit data operations, people with knowledge of the matter said, a concession to aggressive regulators that should help the Chinese fintech giant get its massive public share sale back on track." (Exclusive: China's Ant to hive off credit data in revamp; sees IPO in 2 years - sources). The objective was obvious.
Ant Group Co plans to spin off its consumer-credit data operations, people with knowledge of the matter said, a concession to aggressive regulators that should help the Chinese fintech giant get its massive public share sale back on track. Hiving off the treasure trove of data on more than 1 billion people is a key part of Ant’s business overhaul in response to a regulatory crackdown that resulted in the abrupt suspension of its $37 billion initial public offering (IPO), which would have been the world’s biggest, the people told Reuters. (Ibid.)
The reward was good behavior was evident as well. But the significance of its consequences are revealed only in the4 shadow of the revisions of law and the political contests that were waged around it.
Ant, which began as Alibaba’s payments arm, sits on an enormous cache of consumer data. That is the backbone of China’s internet platforms, with companies offering financial products from consumer loans to investment products via smartphones. Big platforms have been hesitant to share or hand over their data to credit agencies run or backed by regulators. (Ibid.).
And there it is. Mountains of data organized and generated through platforms; platforms serving as the efficient vehicle for the coordination of monitoring and control, and as the backbone of systems of rewards and punishments to align with the objectives of those who govern. In China, as Jack Ma was reminded, that is the Communist Party and its state apparatus. It is not Jack Ma. And yet Jack Ma remains a necessary element of the equation--he may not direct the platform, but he certainly can be instrumentalized as its caretaker, its engineer and its visionary--serving at the pleasure of state. And here is where Jack Ma's speech turns in on itself in an ironic way.
4. Facebook's blocking News and other media sources in Australia. The dynamics so publicly exposed in the shifting relationships between Jack Ma and the state with the object the control of the platforms and its instrumentalization, also has a western, liberal democratic, analogue. Though harder to expose, at least some of what is at stake can be seen where rifts occur (as between Ma and the central authorities) over the management of platforms. In the West, of course, full frontal control is impossible for the moment. Such an objective still violates core taboos of the publicly professed principals of the liberal democratic order. Control is sought in the usual levers of liberal democratic states--taxation, and regulation of markets with a direct or indirect effect on the integrity or balance of power in, between or around platforms. The financial sector model is easily transposed to a broader framework:
Importantly, platforms do not need to provide financial services themselves: they can monetize their comparative advantages without maintaining a dedicated balance sheet. On the communication side, the platforms’ activity can be viewed as “match-making”, which does not require risk-taking. On the information side, customer data can be passed on to other financial service providers. ("Financial Intermediation and Technology: What’s Old, What’s New?;" IMF Working Papers 2021, p. 17).
Indeed, the authors of that IMF Working Paper point to the way that platforms now make it possible to directly interlink information that even a few years ago would have been treated as unrelated. The result is to reshape analytics (of risk, for example for credit), and the power of behaviors generally to shape access to societal goods (Ibid., p. 10; "The rise of the internet permits the use of new types of non- financial customer data, such as browsing histories and online shopping behavior of individuals, or customer ratings for online vendors").
The spark that lite the exposure (and exposed the political contest for control of platforms within markets) was a proposed law in Australia that would require the social-media giant to pay publishers for content. The background was typical of disputes of this kind within the liberal democratic political-economic model: government in aid of another market segment eager to deploy state power in their economic contest against another market sector on which their bad decision making reduced them to dependence--the usual story in the West in the relations between power-economics-politics). But the stakes here were higher if only because of the already advanced stage of governance integration between political and economic structures within platforms.
On Wednesday, Facebook pulled the trigger, even before the News Media Bargaining Code, which also affects Google, has become law. The decision was big and controversial given the increasing number of people who rely on the social network for information on topics ranging from the coronavirus to politics. The retaliatory step quickly sparked outrage from politicians, civil rights groups and news outlets, which view it as another example of why the power of Big Tech needs to be checked. (Facebook's news blackout: Why folks outside Australia should care).
Canada followed suit (Canada vows to become second country to make Facebook pay for news as global backlash against tech giant continues ("'I suspect that soon we will have five, ten, 15 countries adopting similar rules. Is Facebook going to cut ties with Germany, with France?" Quoting Canadian Heritage Minister Steven Guilbeault)). And, as in China, a deal will be struck that effectively passes greater control to the state, through the market, but leaves power divided between both (Google and Facebook are 'very close' to agreeing deal with Australian media to pay for news as the tech giants scramble to avoid regulation). The further consequence is an even greater elaboration of the power of government through and as platform in the liberal democratic order. One will likely see more media consolidation--with platforms. But platforms will continue to dominate the societal, and therefore, the political, spheres.
Within these stories is the story of the development and elaboration of the platform. It contains some of the characteristics of a market--a meeting point for actors and a place where goods are negotiated. It contains some of the elements of a political community--it serves as the modern expression of the ancient agora. It is structured as the great open spaces--Tienanmen, Plaza Mayor, a Commons--where people are gathered or gather for instruction or action. And the differences between these functions merge and express permutation in ways that are difficult to control. They are last, the great space for social experimentation that can be controlled--in the form o predictive analytics they can serve as the beta testing site for new and improved control, and for the better management of human resources that consumed. They become simultaneously all of these spaces that because of its construction, permits the separation of physical community even as it promises much more intimate abstract contact.
The stories, though, suggests that each political economic system faces quite distinct dilemmas. Both are moving to platform governance vehicles, and eventually the platforms themselves will become used with or into the state apparatus. Around it the production of objectives, of monitoring, and of control will shift around the administrative apparatus' heart and its logic. It will also in the process reshape the nature and content of politics (showing in different ways) in liberal democratic and Marxist Leninist regimes. Liberal democratic orders build strength and projects outward through principles of free movement of goods, capital, investment (and to a limited extent) people. It relies on markets and projections into markets to control and accepts the diffusion of control within tightly interlocked networks of actors (see our preliminary discussion: The Algorithmic Law of Business and Human Rights). "The recently announced partnerships between Apple and Goldman Sachs as well as Google and Citigroup are consistent with this view, and most likely only mark the beginning of Bigtech platform involvement in financial services provision." ("Financial Intermediation and Technology: What’s Old, What’s New?;" IMF Working Papers 2021, p. 17).)
Marxist-Leninist approaches are grounded, as Jack Ma saw clearly, in state control--and it is state control that is projected outward, into markets. It generative power is grounded in tightly constructed networks coordinated through platforms around a centralizing core. The differences then touch everything--from the construction of the Belt and Road Initiative (China's application of its platform ecology governance principles of hub and spoke control) to the United States' new multilateralism (a "nicer" vocabulary for the old system and the application of markets governance diffused systems of interlocking power sharing tightly managed through hierarchies of stake holding).