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Modern Monetary Theory (MMT) is getting a lot of attention these days, thanks in large part to the excellent work of Stephanie Kelton and Nathan Tankus, two of the movement’s most effective communicators. Over the past few weeks a number of people inspired by their work have asked me whether there is scope for thinking about degrowth from a MMT perspective.  My answer: definitely. In fact, the two belong together.

First, a bit of background.  MMT may sound complicated but in fact it is remarkably simple (here is a good place to start).  It points out that governments that control their own currencies are not like households. They do not have to “balance their budgets”, and, crucially, they do not have to tax or borrow before they can spend.  In reality, they create the money they spend - and they can create as much of it as they want.  This is clear to anyone who has been paying attention since the global financial crisis of 2008.  Countries like the US and UK have created extraordinary amounts of money to prop up the banking system.  The same thing is happening right now, in response to the COVID-19 crisis: governments are simply creating the money they need to respond.  This has always been the case, of course, but right now it’s happening out in the open, for all to see.  The notion of budget constraints has been revealed as a myth.

During the debate about global poverty that unfolded earlier this year, the Bloomberg opinion columnist Noah Smith wrote a piece discussing some of my claims.  While some of Smith’s points are worth engaging, the piece makes a number of misleading assertions — assertations that illustrate the sort of sleight of hand to which many defenders of the grand poverty-progress narrative have resorted.

This tendency is clear beginning with the title: "The world really is getting richer, as poor countries catch up".  The title is incorrect on two fronts. 

How should we measure inequality?  There are two metrics that economists use: relative and absolute. In the past I have argued that the relative metric – which is by far the dominant approach, embodied in the standard Gini index, in the famous “elephant graph”, and in logarithmic distribution graphs – is problematic in that it is aligned with the interests and perspectives of the rich, and effectively obscures real inequalities in the distribution of new income around the world.  From the perspective of justice, and indeed from the perspective of the poor themselves, what really matters is the absolute gap between rich and poor, not relative rates of change.

There are two primary methods for measuring inequality - relative and absolute. In the discipline of economics, the former has become dominant by far. It is embodied in the standard Gini index, in the famous “elephant graph”, and in logarithmic distribution graphs (follow the links to see my critiques of each of these).

According to the relative metric, if the income of the poor increases at a faster rate than the income of the rich, this is recruited as a decline in inequality even if the absolute income gap between the two continues to widen.

Take for example a poor country whose average income goes from $500 to $1,000 (a 100% increase), and a rich country whose income goes from $50,000 to $75,000 (a 50% increase). The poor country’s income has grown twice as fast as the rich country’s, relative to its starting point.  According to the relative metric, this is a decline in inequality (and is represented as such in the Gini index, the elephant graph, and the log scale). But the gap between them has nonetheless exploded, from $45,500 to $74,000.  According to the absolute metric, inequality has worsened.

During the debate about global poverty that erupted earlier this year, one fact kept getting repeated: maybe poor people’s incomes haven’t increased enough to lift them out of actual poverty (grudgingly admitted), but at least they’ve been rising.  For those who seek to defend neoliberal globalization, this fact has become a precious touchstone. 

While it is true that the average incomes of poor people have increased since 1981, there are two crucial caveats to this that we need to pay attention to. 

1) First, the increase has not been steady.  Indeed, there have been long periods over the past few decades where the average incomes of the global poor (those living on less than $7.40 per day, the minimum necessary for decent nutrition and normal life expectancy) didn’t rise at all, and quite often actually fell.  Here are a few examples:

• In Latin America and the Caribbean, the average income of the poor fell after 1981 and didn’t recover its previous level until two decades later.

• In the Middle East and North Africa, the average income of the poor fell after 1990 and didn’t recover its previous level until a decade later.

• In South Asia, the average income of the poor fell after 1996 and didn’t recover until 2008.

There is a powerful infographic that has been circulating on social media for a couple of years now. It illustrates a dramatic transformation from a “two hump world” in 1975 to a “one hump world” today. It was created by Hans Rosling and Gapminder.

Most everyone who’s interested in global inequality has come across the famous elephant graph, originally developed by Branko Milanovic and Christoph Lakner using World Bank data. The graph charts the change in income that the world’s population have experienced over time, from the very poorest to the richest 1%.

We can update the elephant graph using the latest data from the World Inequality Database (WID), which covers the whole period from 1980 to 2016 using a method called “distributive national accounts”. Here’s what it looks like in real dollars (MER), developed in collaboration with Huzaifa Zoomkawala (click through for a series of interactive charts that Huzaifa has created):

Last week Vox published an article on the global poverty debate.  The piece – by journalist Dylan Matthews – raises a few issues that I think are worth addressing.  I set out nine brief points here, responding to specific quotes from the article.

1. “As Roser is quick to note, it’s not ‘his’ chart — it’s similar to charts many economists working on poverty have produced, such as one in Georgetown professor Martin Ravallion’s book The Economics of Poverty.”

There is in fact a key difference between the two charts. It all comes down to context.  Ravallion’s is in an academic text that is intended primarily for circulation among academics.  The inadequate nature of the long-term poverty estimates is well known among academics, who take them with a big grain of salt.  Roser’s chart, on the other hand, is an infographic designed for mass consumption on social media.  The chart itself – as in the version Gates tweeted – makes no reference whatsoever to the problems with the data.  On the contrary, it creates a powerful illusion of certainty. A key piece of my argument has been to say that this is irresponsible public communication. That’s why I say the chart should be taken down.

2. “Roser, as he stressed repeatedly in messages to me, just wants to be clear on what the facts say.”

Max Roser and Joe Hasell have written a post defending the methodology behind their long-term poverty graph.  It is not addressed to me, but it was written in response to my critique (which you can read here).

Unfortunately, their response doesn’t engage with most of my substantive arguments.  They do not address the evidence on how the $1.90 line is too low to be meaningful.  They call $1.90 “extreme”, which it is – and that is precisely why it should not be used in public communication.  Remember, the World Bank has repeatedly pointed out that it is too low to inform economic policy.  Why then should it be acceptable for Gates, Pinker and Roser to use it to inform public discussion about economic policy (i.e., whether the global economy is working for the world’s majority or not)?  As I see it, Roser should stop using $1.90 in his flagship graphs. 

Roser and Hasell also do not address the critique, made by Sanjay Reddy and many others, that the PPP baselines that underpin the $1.90 line overstate the purchasing power of the poor.  Nor do they address my argument that progress against global poverty is actually worsening, when poverty is measured against our capacity to end it.

Australians are sitting with anticipation awaiting August 2024, when the Commonwealth Government promised to deliver a draft bill to update the Privacy Act 1988 (Cth) (Privacy Act). But there’s another bill that’s poised to outshine the Commonwealth’s and champion state privacy rights.

In May 2024, Western Australia (WA) tabled its Privacy and Responsible Information Sharing Bill 2024 (Wa.) (Bill). We’re delighted by this development and in this blog post, our Board member Piotr Debowski will walk you through what we love about the Bill, what we are less keen on, and what we think the WA government needs to do some more thinking on. We focus our attention on the privacy aspects of the Bill, but the Bill does also contain provisions facilitating the sharing of information within the WA government.

The Bill is currently in front of the WA Legislative Assembly. If it passes, it will be handed to the Legislative Council for consideration. 

The BOSE outline the Australian Government’s expectations that apps, websites, social media and other services will take reasonable steps to keep Australians safe. Read more about the BOSE on the eSafety website here.

In late 2023 the Department of Infrastructure, Transport, Regional Development, Communications and the Arts announced they would be amending the Basic Online Safety Expectations (BOSE) Determination. A range of changes to the original BOSE have been proposed, including expectations related to generative AI and recommender systems. Digital Rights Watch provided feedback which you can read below, or download a PDF here.

The original BOSE Determination was made in 2022. You can read Digital Rights Watch’s submission in response to the original draft BOSE here.

The Australian government must act on its commitment to bold reform of Australia’s Privacy Act in order to uphold the safety, wellbeing and autonomy of children, according to an open letter today delivered to Attorney General Mark Dreyfus. The Open Letter was coordinated by Digital Rights Watch, and has been co-signed by 22 organisations across public health, children’s rights, and privacy advocacy. It also has over 800 signatures from members of the public in support. 

The Privacy Act has been the subject of a years-long review process, which has involved extensive community engagement. The latest report from the Attorney General’s department made dozens of recommendations, which were largely accepted by the Australian government in September 2023. The next stage is for a bill to be tabled but advocates are growing concerned about when this will take priority.

Australia’s commitment to privacy rights lags behind similar liberal democracies, posing a particular problem for children given their specific vulnerabilities. There is an urgent need to update Australia’s privacy laws for the twenty-first century. 

The letter highlights the negative impacts of invasive data-driven business models upon children—and indeed everyone—that the Privacy Act currently leaves unchallenged. It warns of the harms caused by endless engagement, targeted online advertising, rampant misinformation, and the normalisation of surveillance as the price for participation in online life.  

Under the Online Safety Act, the eSafety Commissioner can require industry bodies to draft industry codes to deal with Class 1 and Class 2 material. In 2022, a group of industry bodies commenced drafting industry codes to handle Class 1A and 1B material – this includes Child Sexual Abuse Material (CSAM) and/or Child Sexual Exploitation Material (CSEM), “pro-terror” material, as well as material that deals with crime and violence, and drug-related content.

In June 2023, the eSafety Commissioner registered 5 out of the 8 proposed industry codes. Of the remaining 3 codes, a sixth was registered after amendments to reflect the developments in generative AI. The eSafety Commissioner declined to register the final two codes – for ‘Designated Internet Services’ and ‘Relevant Electronic Services’, based on the decision they did not go far enough to safeguard users in Australia. Given the proposed codes did not meet the expectations of the eSafety Commissioner, they then drafted industry standards. In November 2023, the eSafety Commissioner opened public consultation on the draft industry standards for 31 days.

40 organisations from around the world have today delivered a joint letter to Australia’s eSafety Commissioner, calling for protections for privacy, digital security and end-to-end encryption. 

The letter was coordinated by Digital Rights Watch, Access Now, and the Global Encryption Coalition Steering Committee, and has been co-signed by organisations including Signal, Mozilla, Proton, the Tor Project, Electronic Frontiers Australia, and more. It was also signed by 560+ supporting members of the public.

The letter is in response to two draft industry standards proposed by the eSafety Commissioner under the Online Safety Act, which are open for public consultation until 21 December. The standards would apply to a broad range of services including email, messaging, and personal file storage, and include a range of proactive detection obligations to detect, remove, disrupt and deter illegal content. However, as there are no safeguards for encryption, the standards would require end-to-end encrypted services to undermine the security and privacy of their users in order to comply. 

Signatories acknowledge the severity of harm caused by the dissemination of illegal content, and recognise the need for regulation to enhance online safety. Contrary to the goal of the standards, what is being proposed will make everyone less safe online. 

This is our final update for 2023, so here’s a little roundup of the highlights and lowlights of the year, as well as a sneak peek into what’s coming in 2024. But first…

A note from the Digital Rights Watch Chair 

It’s been another big year at Digital Rights Watch HQ (on the internet). Over the course of 2023 we made fourteen submissions to government inquiries, bills and consultations, took part in more than ten roundtables, appeared at three parliamentary hearings, and appeared in the media over 80 times. To me, the critical importance of this work is self-evident. If we don’t fix how our online world is governed, it remains virtually impossible to build functioning community spaces, or a public space to debate difficult problems like climate change, racial injustice and our response to military violence. If we don’t improve our privacy laws, generations of kids will be surveilled by predatory businesses that do not have their best interests at heart. If we don’t get our approach to online safety right, vulnerable people will be pushed further to the margins. I remain hopeful that a rights based approach gives us the best chance at making good policy that puts the power of tech back in the hands of people. If you agree, please consider supporting our organisation however you can. We have some tough adversaries out there and we welcome your support. – Lizzie O’Shea, Digital Rights Watch Chair

Sharing photos of protests is a great way to amplify the impact of collective action, raise awareness on important issues, and encourage more people to participate. We love it! 

But surveillance is on the rise, including the use of facial recognition technology – capturing biometric data from people’s faces. At the same time, the right to protest is under threat in Australia. 

In October 2023 the Digital ID Taskforce (in the Department of Finance) closed a public consultation on the exposure draft of a proposed Digital ID Bill 2023. This follows their previous consultation on a 2021 exposure draft of the Trusted Digital Identity Framework (see our submission for that consultation here).

Following the Optus and Medibank breaches, the idea of a digital identity that enables government bodies and companies to verify people’s identity without each company collecting and holding identity documents has become more popular. Still, it’s not without its privacy and security concerns, and as always, the devil will be in the detail (and implementation).

Digital Rights Watch recognises the potential benefits associated with the establishment of a digital identity system, however we will continue to advocate for a handful of key components that we believe are fundamental for a robust, fair, trustworthy and successful Digital ID system.

The Digital ID system must:

In September 2023 the Identity Verification Services Bill 2023 was introduced to Parliament. The Bill was referred to an Inquiry by the Senate Standing Committees on Legal and Constitutional Affairs, and Digital Rights Watch made a submission. The Committee is required to report by the 9th of November 2023.

The bill creates a legislative framework to support the operation of identity verification services which are already on offer by the Commonwealth to allow government agencies and industry to compare or verify personal information on identity documents against existing government records, such as passports, drivers licenses, and birth certificates.

This includes one-to-one matching services such as the Document Verification Service (DVS) and Facial Verification Service (FVS), which was used over 140 million times in 2022.

Context

This is the ALP’s re-vamped version of the Coalition’s controversial Identity Matching Services Bill 2019, which was so strongly criticised that it was sent back to the drawing board by the Parliamentary Joint Committee on Intelligence and Security due to concerns about the lack of privacy protections and the ability to enable mass surveillance.

Yesterday, the Australian Government released the eSafety Commissioner’s long-awaited roadmap for age verification for online pornography. We are pleased to see that the federal government will not force websites to implement age verification as a result of concerns about privacy and the lack of maturity of the technology.

Age verification is rife with privacy and digital security risks, as well as critical effectiveness and implementation issues. We welcome this sensible announcement from the Australian government.

We have been fighting this proposal for close to three years. Over that period, we made eight submissions related to online safety and age verification, advocated in the media, participated in many consultation roundtables and workshops with government and industry, and collaborated with other privacy and security advocates, researchers, and community groups.

This win shows that when we raise the alarm and put pressure on government we can stop harmful and invasive tech policy proposals. We need to keep up the fight to protect human rights, wellbeing and safety.

In January, the Minister for Communications announced that the Australian Government would introduce new laws to provide the Australian Communications and Media Authority (ACMA) with new powers to combat online misinformation and disinformation. The draft bill was open for public feedback from 20 June to 20 August 2023.

Read the draft bill and the public submissions here.

In our submission, Digital Rights Watch highlights a handful concerns and of areas for improvement, including: