CA Blog – (Fewer than) Five Reasons The Tech Sector Isn’t All That Different

(This post was originally written in February of 2018.)

Greetings, and welcome to the first blog post inspired by Boston University’s Cyber Alliance seminar series. The authors are a second-year Ph.D. student in computer science at BU (Sarah), and a third-year law student at BU (Jacob). We’ll be making posts based on our personal musings after each Cyber Alliance seminar. While our views are colored by the lenses of our respective fields of study, we hope that we’ll all learn something through discussion and debate when they diverge.

For our first post, we’re discussing the decision-making process in the tech sector. Inspired by a talk by Professor Paul Ohm of Georgetown University, we wish to examine the extent to which the modern tech industry makes decisions according to moral or societal values, as opposed to the economic principles traditionally viewed as driving market participants. Further, if this is the case, does it make sense to allow regulators to make decisions on a similar basis?

We’re defining a “value-driven” entity as one that makes decisions by methods other than economic analysis. This goes beyond a consideration of externalities and market failures – for an organization to be value driven, moral or societal values must be the primary basis for its decisions. This could take the form of a business protecting its privacy, or a policy that says “Don’t be evil.”  There isn’t anything inherently wrong with the value-driven approach, but neither is it necessarily a good approach.  Few people would disapprove of a company that tries to adhere to a set of values.  But what if the decision-maker’s values don’t align with the user’s? What if the decision-maker simply adopts an inefficient strategy?  Economics provides a broadly objective set of criteria from which to evaluate business and regulatory decisions, and while we may feel that it doesn’t sufficiently account for abstract factors, it would be hasty to dismiss it.  On the other hand, we also don’t want businesses to pursue their bottom line to the exclusion of all moral thought.

This brings us to our first question: Is the tech sector value-driven?  

Jacob: I don’t think so. The tech sector has generated visible improvements to most of our lives over a remarkably short period of time, but that doesn’t necessarily imply the absence of a profit motive. It might be tempting to take tech companies’ frequently lofty self-characterizations at face value, but this doesn’t really weigh against their operation as market participants seeking to maximize shareholder value. If there were substantial evidence to the contrary, I suspect we would see those shareholders rush to correct the behavior by means of lawsuit. The tech sector may take pains to look especially value-driven, to both consumers and employees, but this is just sensible marketing. I don’t mean to say that the tech sector is particularly cynical, or has some negative impact to compensate for; businesses are doing what makes economic sense, and consumers largely reap the benefits.

Sarah: I agree with Jacob.  I don’t believe the tech sector is value-driven in any meaningful way, at least not more than any other industry.  It’s easy to look at technology, and how much it has improved people’s lives, and assume that the forces behind such an improvement must be due to a dedication to improving society, rather than strict economic benefit.  But value-driven decision making implies that the company made its decision using its principles as the main motivating factor, possibly to the detriment of monetary reward.  I see no evidence that this took place.

Even if the tech industry isn’t value-driven, is there something else that sets it apart?  Is there something about technology – especially the internet – that makes it so exceptional that the standard rules don’t apply?  Does it move so quickly that economics truly cannot account for increasingly critical values of privacy, security, and trust?

Sarah: I do think the tech industry is different than everything that came before it, even if it’s motivated by money just as much as anyone else.  The tech industry has completely revolutionized the way we interact with the world in the course of a few decades. The main change has been one of automation.  I’m using the term in a broad sense – anything that doesn’t require a human to take action to cause an effect is automation. Music and movie recordings are a kind of automation – you can watch a performance without any human intervention.  Email and texting are automation – you can communicate with someone without a human having to deliver the message. Web pages are automation, they allow people anywhere in the world to access information you publish. The tech industry has made such an impact on our lives because we no longer have to wait for human intervention when we want to do something.

Jacob: I differ from Sarah here; I don’t think that the tech sector is unique. Automation is an important development, but it’s not of a fundamentally different character than other labor-saving innovations that came before it. There has been a gradual increase in the speed of transportation and communication technologies over the past several centuries, of which the this is the latest iteration. All these technologies changed the world in their time, and just as the aircraft industry needed different business models than railroads, so does the internet need a different model than traditional telecommunications. The differences between these sectors don’t necessarily mean that the economic system of decision-making behind them is inherently flawed.

Sarah: Fair enough.  The main difference I see is the scale that full automation enables.  Perhaps it’s not an inherently different field, but we do need to be able to deal with it in a way that keeps pace with its development.  It often seems like law is completely out of touch with the tech sector. We’re trying to regulate modern systems the same way we would have done it in the 80’s.  Tech companies provide valuable services to society, and I don’t have a problem with them profiting while doing so. But the other side of the coin is that they’re paid in staggering amounts of personal data, and we’re only just starting to see the impact that can have on people’s lives.  I don’t think I trust the purely economic approach to protect individuals from the potential future misuse of this data. It seems like we should at least try to take other perspectives into account when evaluating a company’s actions.

Jacob: I will readily agree that there are inefficiencies in in tech sector regulation and internal decision-making due to reliance on the economic model. Moreover, I don’t think anybody would have an issue with a tech company making a value-based decision to prioritize the security of their private data. But I’m uncomfortable with value-based regulations; who gets to decide which values are used, and how would we measure inefficient results without an objective metric? I’m concerned this would be an invitation arbitrary regulations, especially given the tech sector’s pace of change. That said, I also think there’s a strong likelihood that the economic model isn’t sufficiently safeguarding abstract values such as privacy, due to difficulty in weighting them. This isn’t to say that there’s anything wrong with the the economic model per se, but I agree that it doesn’t seem to be producing the most desirable outcome as presently applied.

The traditional economic approach isn’t perfect.  Sometimes there are inefficiencies and harms caused by putting economics first, and this problem is made worse by the rapid pace of technology.  But removing economics from the decision-making process entirely is neither practical nor desirable. Perhaps we can bring non-economists to the table and find an approach that balances monetary needs with other values, and adjust to the fast-changing needs of society.

Thank you to Professor Ohm for the Cyber-Alliance seminar that inspired this discussion. We hope that our readers find it as interesting as we did, and look forward to continuing these posts for future seminars.