The Problem With Digital Public Goods | Episode 56 | Everything is Everything

Summary

In this episode of 'Everything is Everything', Amit and Aay discuss the implications of India's digital public infrastructure, particularly UPI and Aadhaar. They critique the state monopoly on these systems, the lack of a business model, and the potential for increased state surveillance. The conversation delves into the importance of competition, consumer protection, and the need for a philosophical approach to technology policy.

Takeaways

• 💡 The conversation discusses the impact of digital public infrastructure (DPI) and digital public goods (DPG) in India, highlighting concerns about the monopoly and coercive nature of these systems.
• 🚀 The speakers critique the terminology of 'public goods' being applied to systems like UPI and Aadhaar, arguing that these are not true public goods as they are not non-rival and non-excludable.
• 🤔 The script emphasizes the importance of language and terminology in economic discussions, suggesting that misuse of terms like 'public goods' can lead to confusion and misinterpretation of their true nature.
• 🏦 The discussion points out the lack of a business model in systems like UPI, which can lead to inadequate investment and innovation, ultimately affecting the system's sustainability and effectiveness.
• 🛑 The script raises concerns about the top-down approach of government monopolies, suggesting that such systems often fail to account for the complexity and messiness of real-world situations, leading to inefficiencies.
• 💼 The speakers argue that the state's monopoly on systems like UPI and Aadhaar can lead to a lack of incentives for improvement and innovation, as competition is a key driver of progress in technology and services.
• 🔒 The script discusses the potential for increased state surveillance and control through systems like Aadhaar, raising concerns about privacy and the balance of power between the state and citizens.
• 🌐 The conversation highlights the importance of competition and the dangers of a single standard or monopoly in technology, drawing parallels with historical examples like the competition between TCP/IP and X.25.
• 🌳 The speakers advocate for a diverse and competitive ecosystem in technology, suggesting that this leads to better innovation, consumer protection, and overall progress in the field.
• 📚 The script recommends reading works like 'The Cathedral and the Bazaar' by Eric Raymond and engaging with political philosophy to better understand the implications of technology and its impact on society.

Q & A

What is the main concern expressed by Amit in the script regarding digital payments and cash?

Amit's main concern is that although digital payments are convenient, the lack of cash usage over time worries him because he views cash as a symbol of freedom. He is concerned about the potential loss of privacy and the power that digital infrastructure gives to the state.

What does Amit find problematic about the term 'Digital Public Infrastructure' or 'Digital Public Goods'?

Amit finds the terms problematic because they are misapplied to systems like UPI and Aadhaar, which are not public goods by the economic definition. They are government monopolies with limited access and capabilities, unlike the open-source software which can be considered a digital public good.

What is the concept of 'High Modernism' as discussed in the script?

High Modernism, as discussed in the script, is the idea that society can be designed and controlled by powerful entities like scientists, engineers, bureaucrats, and politicians from the top down. Amit criticizes this concept for not adequately addressing the complexity and messiness of the real world.

What are the issues with the UPI system according to Amit?

Amit points out several issues with the UPI system: it lacks a business model, leading to inadequate investment; it is a public sector monopoly, which lacks the energy and incentives for evolution; and it has led to transaction failures and fraud due to a lack of consumer protection mechanisms.

What is the importance of having a competitive environment in technology and digital infrastructure?

A competitive environment is important because it drives innovation, improvement, and adaptation. It prevents stagnation and mediocrity by encouraging multiple systems to compete and evolve, leading to better services and solutions for consumers.

What is the 'Cathedral and the Bazaar' metaphor used by Eric Raymond to describe the open-source movement?

The 'Cathedral and the Bazaar' is a metaphor used by Eric Raymond to describe the contrast between the closed, centralized model of software development (the Cathedral) and the open, collaborative, and decentralized model of open-source software development (the Bazaar).

What are the potential dangers of a state monopoly on digital infrastructure?

The potential dangers include a lack of competition leading to stagnation, the misuse of personal data due to increased state surveillance, and the erosion of individual privacy and freedom. It also allows the state to exert control over citizens more effectively.

What is the concept of 'State Legibility' as introduced by James C. Scott?

State Legibility refers to the ability of the state to see and understand its citizens clearly. It involves the state's efforts to amass information about individuals, which can lead to increased control and potential abuse of power.

What is the 'narrow corridor' concept as discussed by Acemoglu and Robinson?

The 'narrow corridor' concept by Acemoglu and Robinson refers to the delicate balance between state power and societal check and balances that is necessary for liberty and prosperity. It suggests that this balance is rare and can easily tip towards state dominance.

What is the argument made by Amit regarding the role of engineers in public projects?

Amit argues that while engineers may be motivated by good intentions to build effective systems, they also have a responsibility to consider the broader implications of their work, including the potential for misuse by the state or the erosion of individual freedoms.