Assorted links, monthly round-up, and the COBOL blues
Scroll all the the way to the bottom to sing the COBOL blues
Thank you for joining our community of smart and curious readers! Assorted links and our monthly round-up are below (plus a bonus all the way at the bottom).
Assorted links
Progress is a policy choice. That’s what Alec Stapp and Caleb Watney argue in the inaugural essay from the Institute for Progress, funded by the people you’d expect if you’ve been following the progress studies movement: Emergent Ventures, Patrick Collison, and so on. Nothing about fintech here, but Canada is mentioned! “And when Gallup asked potential migrants around the world which country they most wanted to move to, by far the most common answer was the U.S. (second was Canada).”
How do you measure the success of open banking? This is David Birch’s point of departure in the debate about whether the lack of bank account switching observed in the United Kingdom is a sign of open banking’s failure. “The success of Open Banking should be measured not by account switching but by the growth of the ecosystem,” he wrote.
Casey Newton has a post about the day NFTs went mainstream—or when Twitter let users buy NFTs as their profile pictures. The reaction was polarized. Newton digs into stories about the gaming industry’s reaction to NFTs to figure out what this means for NFTs going forward. These stories “all generally include the phrase ‘massive backlash.’”
The UK’s fintech scene is attracting dirty money. This from Bloomberg suggests a trade-off between improving access to financial services and reducing money laundering and other nefarious activity. Make no mistake: there is a trade-off. Who’s brave enough to publicly state how much of one and how little of the other we should be willing to tolerate? Keep in mind that no dirty money is a bad goal, like no environmental pollution is.
The culture of ideas and debate in web3 is alive and well. First came the Moxie critique. Vitalik Buterin clapped back on Reddit. Others responded, too. Professor Galloway echoed some of what you may have already read in the Moxie Critique. Packy McCormick responded to Galloway at Not Boring.
What is the deal with NFTs? At Economic Forces, Josh Hendrickson tries to answer the question. If you’re going to click the link, expect a “property rights” analysis of NFTs. After all, Josh is an economist who’s passionate about price theory: a man after my own heart.
The Logic’s Jon Victor reported on how the Bank of Canada is preparing for its new role as the regulator of technology companies in payments. When it was first decided that the Bank of Canada was going to be the regulator, I was ambivalent. Central banks have always struck me as technocratic institutions. I thought their supervisory approach would be developed in a black box. But the Bank of Canada is proving me wrong. Thanks a lot, Ron.
The OECD released a report on the policy implications of decentralized finance (DeFi). This is a comprehensive report, and so it’s not easily summarized. But there are snippets that shed light on how some people are thinking about bringing DeFi into the regulatory architecture. E.g., “As a first step, there may be a need to ‘recentralise’ DeFi in order to get some comfort from a regulatory and supervisory standpoint, without necessarily completely undermining decentralisation.”
Here’s Patrick McKenzie on buy now, pay later. If you were looking for a deep dive from someone who works at a rockstar payments company, and who lives where new payment methods are emerging every day, look no further. Also: “Credit card networks were and are a stupendous achievement for the world, but a bit of competition helps to keep them, like anyone, on their toes.”
When it comes to being a crypto hub, can Alberta be Canada’s Miami? Claire Brownell tries to answer the question at the Logic. Alberta’s innovation minister “said cryptocurrency is ‘a big part’ of Alberta’s larger push to attract tech jobs.”
The US, EU drop idea of removing Russia from Swift, according to Bloomberg. Apparently, retaliating against Russia by removing them from an international payment system would destabilize financial markets. It just goes to show you how some governments are accustomed to using payment systems as alternative ways to achieving their own objectives. What about our own? Swift isn’t the only payment system in town.
Who owns which data?
This month, we explored the neglected question of whether “your” financial data is even yours to share. Spoiler: you don’t own “your” data.
After this piece ran, one reader sent me an essay by Lothar Determann, a lawyer who specializes in IT law. Determann makes a similar case in his essay, entitled “No One Owns Data,” but he does it with a lawyerly precision and more knowledge than I can presume to have. I read the essay and was struck by two things:
Treating data like the other things you own is a case that undermines itself. For example, ownership commonly includes the ability to sell what you own, which excludes your future self from ownership and all the benefits that come with it. Imagine a world where you’ve sold your personal information and have no way of owning it and controlling its dissemination ever again. This outcome is absurd, and so it’s part of the case against owning data like we own our more traditional possessions.
According to Determann, data rights are created for the purposes of data minimization, not maximization, i.e., not “to incentivize creation or production” of data. One example he gives is the EU’s General Data Protection Regulation, which gives people a data portability right. Determann said the data portability right “is quite limited: it applies only to personal data provided (not created or acquired by an “owner”), by the data subject (not any “owner”), based on consent or contract (not legitimate interests, law or other bases), and does not confer any exclusion, usage or alienation rights.”
I’m not sure how normatively comfortable I am with the second point. Data are valuable inputs. They make ideas and technology work better, which makes economies more productive if the externalized costs of data are appropriately internalized. Whether data minimization is the goal is one question. Whether it ought to be is another.
How exactly will NFTs save artists?
We also tried to understand what’s happened to the arts over the years to guess whether NFTs will make things better for artists.
The best feedback I got was from an artist: they described their experience and it so closely mirrored what Will Deresiewicz described in his book, The Death of the Artist (which I heavily relied on for the post). But should I be surprised? Deresiewicz interviewed more than 100 artists for his book.
The COBOL blues
On Marginal Revolution, Tyler Cowen shared a paper that estimated the tax of COBOL on the US economy at the outset of the pandemic. The estimate is in the billions.
For those who don’t know, common business-oriented language, or COBOL for short, is the antiquated computer language that so many crucial systems run on.
Clive Thompson wrote a longer piece for Wealthsimple Magazine on COBOL, where it comes from, and why it still persists in the financial system today.
Invented in the late 1950s, COBOL solved a big problem of the day. At the time, developers had to manually reprogram applications to make them run on different computers.
Following calls from computer programmers, the U.S. Department of Defense sponsored a conference to create a new language that could run on different computers. You can find the minutes from that conference in the Annals of the History of Computing.
That the antiquated computer language is still kicking is a huge risk. The problem is that it’s hard to find people who know the language because of its age.
Given how so many crucial systems run on COBOL, we don’t want to live in a world where the last person who knows COBOL has died. Byrne Hobart has a solution: we should either subsidize the learning of COBOL or ban it.