Balkinization: Artificial Sovereigns: A Quasi-Constitutional Moment for Tech?

Artificial Sovereigns: A Quasi-Constitutional Moment for Tech?

Guest Blogger

K. Sabeel Rahman

Consider the following developments:

In recent weeks, the explosive revelations about Cambridge Analytica and its systemic data-mining of Facebook profiles has cast into relief the way in which our contemporary digitized public sphere is not a neutral system of communication but rather a privately built and operated system of mass surveillance and content manipulation.
Meanwhile, Alphabet has announced that its subsidiary, Sidewalk Labs, will take over management of a major redevelopment of part of Toronto’s waterfront, in an effort to build from the ground up a modern “smart city.”
These developments come amidst the longer-term development of new forms of technological transformations of our political economy, from the rise of Amazon to its position as the modern infrastructure for the retail economy, to the ways in which technology is transforming the nature of work and the social safety net.

There has been a growing sense of concern about the twin crises of twenty-first-century democracy on the one hand and of the growing problems of inequality and insecurity on the other. Technological change is at the heart of both of these transformations. Technological change alters the distribution and dynamics of political and economic power, creating new forms of “functional sovereignty”—state-like powers concentrated in entities and systems that are not subject to the institutional and moral checks and balances that we associate with the exercise of public power. Such arbitrary power represents a kind of quasi-sovereignty that, left unchecked, poses a threat of domination.

The rich scholarly debate on law and technology has surfaced a range of approaches for addressing some of these concerns, from legal standards for privacy and data use to antitrust and public utility regulation, and more. These proposals and interventions can be reframed as part of a broader challenge of defusing the threat of domination created by these technological systems. Regulating and responding to new technologies and modern forms of economic and political power thus represent a variation on familiar questions of public law and constitutional design: how to structure the exercise of potentially arbitrary, state-like power, rendering it contestable, and therefore legitimate.

Defusing domination: a familiar problem of institutional and system design

The problem of concentrated power—whether in its public, private, or technological variations—is best conceptualized as a problem of domination. In republican political thought, domination refers to the concentration of arbitrary, unchecked power. The remedy for domination is not necessarily the elimination of power, but more specifically the contestability of power. So long as power is exercised in contestable, legitimate, and thus nonarbitrary ways, its exercise can be consistent with freedom. Domination is thus prescriptive in that is suggests the remedy to arbitrary power is to find ways to balance it with adequate mechanisms of contestation and accountability.

The classic cases of defusing domination come from conventional traditions in constitutionalism and public law. The threat of arbitrary tyrannical rule—of master over slave, of tyrant over public—formed one of the central dangers for constitutional design. The remedy for such threats can be found in conventional public law institutional design models: direct accountability through elections; institutionalized checks and balances through the separation of powers; structural limits on public power through enumeration of governmental authorities and codification of rights-based limits.

Following the industrial revolution, a new generation adapted the normative critique of domination and anti-domination institutional designs to the new forms of private economic power unleashed by industrial capitalism. This was the intellectual revolution of the Progressive Era that set the stage for the New Deal transformation of American capitalism. For Progressive Era critics, one of the central problems of the new economy was that private actors had accumulated a degree of state-like, quasi-sovereign influence on social, economic, and political life—but absent any of the checks and balances we might require of public sovereigns. The language of sovereignty and arbitrary, dominating power suffused the writings of figures like Brandeis, labor republicans, legal realists, and more.

The response of these thinkers to the problem of privatized economic sovereignty launched another quasi-constitutional founding moment for the industrial economy, beginning in the Progressive Era and culminating with FDR’s New Deal. First, a range of legal developments sought to defuse the problem of concentrated corporate power: corporate governance mechanisms, antitrust laws limiting concentration, and public utilities that converted private power into outright public or quasi-public actors. Second, the creation of the modern administrative state provided a mechanism for public oversight, a form of indirect voice and accountability of the public channeled through general regulatory power in areas like labor relations, consumer protection, and securities regulation. At the same time, modern administrative law transposed domination-defusing constitutional designs to diminish the threat of arbitrary administrative power. Finally, reformers created more robust forms of countervailing power, building mass movement organizations particularly around labor.

The constitutionalization of public power in the Founding and the New Deal compact around economic power responded to a common set of problems with a common set of solutions. The problem in both is the potential creation of quasi-sovereigns that possess arbitrary, dominating power. The solution involves the development of legal institutional systems that create adequate checks and balances that defuse the threat of domination, rendering these forms of power accountable and legitimate.

A constitutional moment for tech?

Technology today presents a similar set of problems: state-like powers that increasingly govern our economic, social, and political life, yet exist outside the kinds of institutional checks and balances needed to prevent domination. Some forms of techno-power are concentrated: the concentrated power of Facebook as information platform structuring the digital public sphere, or the concentrated power of Amazon as platform for the retail economy. Other forms of techno-power are structural, more diffuse—such as the proliferation of hidden algorithmic systems governing everything from workplace surveillance and management to policing to economic risk assessments.

Both forms occupy a liminal space between public and private. They exercise state-like powers of control and influence whether directly through platforms or indirectly through algorithmic systems, yet these powers are housed in nominally private actors. For instance, Uber, Airbnb, and similar services are effectively rewiring the patterns of zoning, land use, and urban flow in a subtle form of implicit privatization, yet are not subject to the formal processes that govern public land use regulation. Facebook and Google similarly structure our public sphere in both state-like and private ways.

We can identify three distinct species of anti-dominating institutional design to address these different forms of techno-power. First, we might create systems to facilitate voice, participation, and accountability of power. This can be done directly, analogizing to the role of elections and participatory mechanisms in public law. Or it can be achieved indirectly, by expanding regulatory oversight of techno-power, where that oversight is itself an expression of, and responsive to, the democratic public.

Second, we might impose structural limits on the organizations themselves. Thus revived antitrust laws might inhibit the concentration of too much power and control in too few hands, breaking up tech monopolies and data-opolies. We might “firewall” away different functions, preventing them from concentrating in the same parent company and thus mitigating potential conflicts of interest. If Amazon, for example, wants to operate as a platform, it cannot also at the same time produce material for sale on that platform. A variation on organizational structural change might be to tackle the corporate form of tech companies themselves. Through changes to securities laws and corporate governance requirements, we might alter the balance of interests and powers within the firm itself, in ways that might better align the corporate interest with the public interest.

Third, we might create limits on techno-power and domination by altering not just the structure of tech firms, but the structure and dynamics of the larger market systems in which they operate. Antitrust law features here as well: part of what makes antitrust work as a strategy for preventing economic domination is not just its limits to the individual firms’ size and powers, but also the ways in which it fosters a larger system of market competition that checks the power of any one firm. Other forms of regulation also shape market structure: through changes to how code, AI, and algorithms operate, we might create a more transparent, accountable, and self-managing system. A big data tax, for instance, would shift the ways in which tech firms deploy their technologically-mediated forms of power and influence.

I’ve previously suggested that these various tools can be applied to infrastructural tech firms in particular, regulating them as public or quasi-public utilities. The public utility framework in some ways combines all three of these approaches—oversight and accountability; changes to organizational structure; and changes to the larger market system. On the public utility approach, we might pursue anything from outright nationalization of tech infrastructure, to the creation of public options that compete alongside private actors, to the imposition of tight regulatory restraints that limit private tech firms to acting as de facto public utilities.

In context of specific forms of techno-power, these various approaches are suggestive of a possible way forward. We might respond to Facebook’s control over the digital public sphere through some combination of structural remedies—antitrust enforcement reducing concentration and creating more competition for media platforms, for example—with public options and public utility-style regulations. The absorption of public powers of urban planning—as in the Toronto case with Sidewalk labs, or the de facto ceding of urban planning control by many cities to Airbnb, Uber, and other such platforms—could be addressed through other combinations: again, choosing among antitrust, public utility, or public oversight approaches.

From domination to democratic agency

Viewing the various problems posed by technology today through the lens of power, domination, and contestation highlights a number of general conceptual points. First, the central problem of technology is not so much discrete violations or actions of tech companies. Rather, we should look to the underlying structure that makes these violations and actions possible.

Second, when we think of how to respond to these problems of domination and power, the above sketch suggests that we must take a similarly broad, structural view of what regulatory and public-minded responses look like. We might build institutions for expanding direct voice and accountability, or for asserting greater oversight by public regulators. Or we might impose structural limits on the organizational forms and market dynamics around these firms.

Finally, at the highest level of abstraction, these efforts to diagnose and then defuse concentrations of power suggest a more fundamental tradeoff at work. At some point, defusing domination will necessarily require eliminating some forms of technological activity and innovation. But that is a choice we should be willing to make. We tend to think of “innovation” as a generic good. But taking domination seriously means effectively choosing between some kinds of innovation over others. To the extent that we think technology and the power it creates and concentrates is not contestable or controllable, we ought not to permit its continuation. The application of domination-defusing institutional designs represents at root attempts to rebalance sovereignty and agency, to reassert the primacy of public and democratic control over the accumulation of private and autocratic control.

Cross-posted at Law and Political Economy

K. Sabeel Rahman is an Assistant Professor of Law at Brooklyn Law School and a Visiting Professor of Law at Harvard Law School.

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