Radical Tactics for Human Cooperation in the New Normal

by and Apr 14, 2020

The COVID-19 pandemic currently sweeping the planet has revealed significant weaknesses in the institutional capacity of governments and private actors to respond to threats in a globalized context. The causal mechanisms by which zoonotic viruses spread make humanity highly susceptible to these outbreaks in the future. From the vast increase in meat consumption fuelled by expansive and interconnected animal supply chains, to daily global travel and high urban density, we have brought about a new normal in which a viral leap from animal to human affects all of humanity.

The response seen by many governments around the world today is one in which they are closing themselves off, restricting freedom of movement both externally and internally. Countries  are centralizing production and decision-making, rolling back the liberal, global institutions that are being blamed for the crisis. The reality that global institutional failure has played a large role in the COVID-19 pandemic, however, should not lead us to throw the baby out with the bathwater. Institutional failure is not the same as the failure of liberal and global values, and a return to nationalism and state control of the economy must be resisted. The correct course of action to take today is one that helps us create a more prepared world in the future, building social, economic, and epidemiological resiliency.

In this context, it is vital to engage with  mechanism design to develop initiatives that can aid in responses to viral outbreaks, ensure that crises such as the current pandemic do not result in increased inequality, and ensure that international cooperation remains possible even in times of global emergencies. 

Institutional Reforms

Data Dignity (DD): The idea behind DD is that individual data is not just a dead fact about the world or a capital good for someone to own, but rather something creatively produced. As a result, the rights associated with data need to be reframed in a way that acknowledges the creative value that is imbued in all data. Combined with an understanding of the intersectional nature of individual data, with information not being about individuals in isolation, but representing their relationships in overlapping and complex networks, a framework can be developed for making data more accessible while protecting individual and social rights. 

Initiatives such as data trusts highlight this philosophy, being stewards of individual data, and working with the networks that produce data to increase bargaining power while returning democratic control. This bottom-up control over data has also been seen in Taiwan’s approach to the COVID-19 pandemic, with tools being built by citizens rather than by the government, in efforts that generate high degrees of social support and public participation. By providing a voice and control over the use of citizen data, and having a high degree of transparency over why it is needed, democratic assent over data usage is maintained.

In addition, having widely adopted DD principles would make more explicit the value of data, enabling the productive effort people put in to carry economic value. Data laborers are common today, from their online data being used to train AI algorithms to the voluntary data collection spurring government efforts to respond to COVID-19. Developing frameworks that enable collective bargaining to return some of that value to data laborers would provide not only added economic security, but also broader popular investment in shared institutions.

Self-Assessed Licenses Sold at Auction (SALSA): Further, extraordinary fiscal measures taken by states to save economies will result in vast public ownership of formerly-private property. This represents a huge opportunity to rethink the wisdom of old private property tenure systems, from shareholder capitalism to the fee simple. Rather than simply re-introducing these assets to private hands, or embracing a state-led economy, governments should experiment with efficient common ownership systems.

In SALSA systems, assets are not permanently owned, but held pursuant to continuously-auctioned licenses.  License holders must declare the price for which they would sell the license, and pay a property tax against that self-declared price.  Moreover, if any buyer offers them that price, they must sell. This makes holders of scarce property pay a tax to the community that is proportional to the negative externality of their exclusive possession of the property; and allows fair transactions to occur when scarce property is not being held by someone who is using it to maximum benefit.  

This is a deeply more just system of property tenure than the medieval fee simple.  Imagine if states used a system like this to manage real property that falls into its hands after bankruptcies or bailouts.  When property rights organically fall into public hands–as is now happening on an enormous scale–there is no excuse for the public to recycle those assets into 17th-century property tenure systems that fail to either maximize efficiency or protect the public’s interests.

Quadratic Voting: The results of a quadratic vote are more meaningful than a typical poll because those expressing strong preferences must expend huge sums of voice credits to do so. Real-time quadratic voting could provide meaningful guidance to officials in the untenable position of weighing unthinkable options against one another. Polco is currently building a system that would allow local officials to use Quadratic Voting in this way.

We even have some practical evidence that proves the power of Quadratic Voting and digital democracies in this public health crisis. Taiwan engaged more than 10 million citizens in the Quadratic Voting based judging process of projects at the annual Presidential Hackathon led by Taiwan’s Digital Minister, Audrey Tang. Also, using the same digital democracy platform, Taiwan’s citizens can start e-petitions that public officials will respond to when a project gains 5,000 signatures. 

Beyond civic engagement, quadratic voting might help coordinate cooperation in parliaments or even in international institutions such as the European Union or different bodies of the United Nations. Quadratic votes would allow nations to act together in solidarity at an economically optimal tradeoff between free-riding and tyranny of the majority problems.

Quadratic Finance: Quadratic finance is a novel matching fund design that encourages broader participation by valuing small contributions more than large ones. Rooted in a quadratic formula similar to quadratic voting, the mechanism ensures economically optimal incentives for donors.

Gitcoin is doing just that now – leveraging quadratic finance to fight COVID-19. You can find out more about this project in this short blog entry. Whereas Gitcoin accepts cryptocurrencies as donations, quadratic finance systems based on national currencies might accelerate adoption in this particular crisis, enabling more independent funding of public goods, such as viral research initiatives.

Quadratic finance can be applied on different scales. International government bodies could use it to allocate their budget and to drive additional donations by its members. The same is true for national institutions, the private sector, and more decentralized systems–there are many opportunities. Improving funding incentives and corresponding decision-making is absolutely critical in a humanitarian crisis like this one. 

Radical Antitrust: Across industries there has been a decline in competition, holding down worker wages and decreasing the quality of services offered, while increasing prices. One of the main drivers of this trend has been the growth in power of institutional investors relative to retail investors, who have greater incentives to coordinate the behind the scenes activities of firms. In times of crises, as economic shock brings down the value of firms, a small group of actors is better poised to take advantage of the downturn, exacerbating the trend towards concentration. As bailouts are issued, rather than dispersing across the entire economy, they end up lining the pockets of the few. The long-run consequences of this go beyond economic harm, as the current lack of medical supplies in the midst of the COVID-19 may have resulted from concentration in the medical market.

Restricting the power of institutional investors by limiting the amount of firms in an industry they can own a significant share in, would play a large role in helping create a more flexible and antifragile economy. By “dismembering the octopus” of concentrated ownership structures, the risks posed by excessive mergers in times of economic downturn would be lessened, minimizing the risk of redistribution from the many to the few in the midst of crises.

Implications

Viral Resilience: The current pandemic has revealed the centrality of data to effective decision-making and policy response. From early warning systems, such as Blue Dot’s AI epidemiologist that detected the outbreak of COVID-19 ahead of the WHO, to the contract-tracing approaches being adopted in places such as Singapore and Taiwan, technology has proven to be one of our best lines of defenses against viral outbreaks. 

The data being used by governments and the medical community, however, is often sensitive, and there are many risks involved in having poor data governance protocols in place. Data access that is granted through emergency powers in times of crisis, as we have seen in China and South Korea, runs the risk of violating the privacy of citizens and sewing public distrust. Given that medical data is not only descriptive, but predictive, losing the public’s support jeopardizes efforts to effectively develop response technologies in a situation of calm to prepare for another pandemic. 

Data Dignity can provide the institutional framework to allow for more data to be collected and accessed, allowing for decision makers to coordinate more effectively, without performing an end-run around the public. Quadratic financing can help mobilize citizen-funded initiatives to respond to viral threats, such as PEPP-PT, which is building a Pan-European Privacy-Preserving Proximity Tracing approach meant to allow for contact tracing data to be built without compromising sensitive information. This approach, which understands the nature of individual data and social networks, operates in a way that seeks first and foremost to respond to the rights of individuals, and sees citizens as participants in directing public health efforts. Adopting RadicalxChange mechanisms would enable even more of these initiatives to flourish, allowing for improved pandemic monitoring and response. 

Economic Stability: A consequence of periods of crisis is that they often lead to reorganizations of the economy which favor the well-connected at the expense of the general population. Already, we are seeing massive bailouts to industry, tying large corporations closer to the government, and signals of PE firms eyeing to takeover hard-hit firms, profiting off the collapse of whole sectors. The long-term implications of these activities is greater state control of the economy and/or more concentration of private economic power, and rising inequality. With stronger antitrust doctrines, such negative long-term consequences of crises would be lessened. Moreover, SALSA mechanisms would increase the efficiency with which assets are  moved around in times of downturn, allowing more small transactions to take place, reducing the need for drawn-out bankruptcy proceedings which transfer more assets into the hands of the state or already-dominant corporations. 

Not only do crises tend to concentrate power, but their harms are disproportionately borne by lower-income households with less economic security. While individuals with knowledge-economy jobs in the financial or consulting sector are safe from the economic implications of social distancing, those with precarious employment situations or in high-touch service work are at greater risk of having their financial security completely destroyed. The longer they are out of work, the harder it will be for them to reenter the workforce. Further concentration presents a double whammy, closing off labor markets and reducing the bargaining power of labor. These trends, seen after the financial crisis of 2008, harm economic resilience and make sensitivity to future pandemics even greater. Approaches such as DAL help increase the bargaining power of those whose data remains valuable even when they are out of work. As the COVID-19 pandemic accelerates the adoption of automation technologies, adequately compensating data laborers becomes a vital method to ensure economic security.

International Cooperation: The need to restrict travel and support domestic industry in the midst of the current pandemic has fueled a rise of jingoism in policy making. While securing domestic safety is vital, it is impossible without effective international coordination and cooperation. There have already been reports of resurgences of COVID-19 in places that effectively suppressed the virus internally due to the difficulty in completely closing off borders and pulling out of international supply chains. Rather than doubling down on cutting oneself off for security, it is vital to contextualize pandemics as genuinely global problems–in which it is vital for nations to support each other in developing effective responses for both selfish and altruistic reasons. 

Quadratic voting presents an ideal mechanism for coordinating on international policy decisions, allowing representatives from different stakeholder groups to voice their concerns in a way that is bottom-up and collaborative. In addition, DD principles can aid in building data infrastructures that allow for individuals to share information in a verifiable and privacy-preserving manner, which may aid in understanding who has a disease and who does not.  This may allow for travel restrictions to be less draconian in the event of another pandemic. 

Conclusion

Our world is interconnected. This brings innumerable benefits, from greater economic opportunity to the lifting of cultural barriers which once separated people. If governed poorly, however, an interconnected world provides fertile ground for pandemics that take lives and destroy economies. Rather than decrying how dependent we all are on each other, it is necessary to acknowledge the nature of our interdependence, and build institutions that enhance voice and cooperation in times of crisis. Inability to respond to crises is a failing that we cannot afford if democracies aim to resist descent into autocracies. 

RadicalxChange plays a role in building resilience to social and economic upheavals. The ideas we work with are based on a deep appreciation of the social nature of our personal, political, and economic lives, and are designed to increase public engagement, cooperation, and trust. While our solutions are indeed radical, they are not impracticable, as the numerous small-scale implementations underway show. Even on a society-wide level, restructuring does not take as long as generally assumed, as attested by Taiwan’s governance capacity in the light of the current crisis. Hesitancy cannot be a reason to allow for institutional weakness in the midst of COVID-19 or any future viral outbreak, and actions must be taken to limit the social, economic, and political burden placed on citizens, especially the most vulnerable.