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Ben Tarnoff, The Guardian:

The flow of data now contributes more to world GDP than the flow of physical goods. In other words, there’s more money in moving information across borders than in moving soybeans and refrigerators.

This is a big shift – and one that has yet to fully sink in for most people. Corporate America, on the other hand, understands it well. Which is why the tech and financial industries are pushing hard for international agreements that prohibit governments from regulating these flows. The most recent example is Nafta: representatives from the US, Mexico, and Canada just concluded another round of talks on renegotiating the treaty. American companies are lobbying for changes that would deregulate data across the three countries.

The corporate crusade against data governance is only getting started. If it succeeds, the world’s most important resource will be entrusted to the private sector and the profit motive, and the rest of us will have even less power to participate in the decisions that most affect our lives.

The global circulation of data, then, is really about the global circulation of capital. And it has enormous consequences for the global organization of wealth and work.

Data flows enable employers in higher-wage countries to outsource more tasks to workers in lower-wage countries. They help firms coordinate complex supply chains that push manufacturing jobs to the places with the cheapest labor costs. They empower a handful of big companies to dominate markets and monopolize digital infrastructure all over the world.

The Chinese example is a useful one, because it shows that the main justification for data liberalization – that it will enrich the world as a whole – is false. For decades, the United States has been lecturing developing countries on the importance of free trade and free markets. Yet, as the economist Ha-Joon Chang has explained, nearly all of today’s rich countries became rich by doing the exact opposite: they used tariffs, subsidies, and other protectionist policies to promote their own industries. Indeed, for nearly a century, the United States was the most protectionist country in the world.

This isn’t to say that everyone can follow the Chinese model. Yet regulating data flows for the purposes of economic development is certainly a legitimate use of state power. And it represents just one of many reasons that governments may want to actually govern data, rather than surrendering it to investors.

Letting capital run wild across the globe hasn’t exactly produced the best of all possible worlds. It’s strange to think that letting data do the same would yield a different result.

Paul Ciano

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