Alexander Stubb’s virtual job pitch

Former Finnish prime minister auditions to be EU’s next digital czar.

Technically, Alexander Stubb isn’t running for anything at the moment, but he’s still got a stump speech.

It’s all about how the lightning-speed pace of technological advancement will change life as human beings know it — indeed even change the human life form. It’s also about how EU politicians and policymakers need to race to catch up.

A former Finnish prime minister, Ironman triathlete and recent aspirant for European Commission president, Stubb is a leading prospect for a senior EU post when virtually all of the bloc’s top jobs become vacant later this year.

How convenient, then, that he sees a need for a European commissioner for artificial intelligence — possibly at first vice president level — functioning as a “digital czar” in an EU civil service fully reoriented to make technology and its implications a top priority.

For now, Stubb is back at his day job as vice president of the European Investment Bank. But his short-lived bid to become the center-right European People’s Party’s candidate for Commission president may turn out to have been an audition for something more digitally focused. His campaign speeches often sounded like TED talks focused more on technology than traditional European political issues.

“It’ll change and is changing science and the future of mankind” — Alexander Stubb

In an interview with POLITICO this week, Stubb reverted immediately to his main talking points from the campaign trail and his view that digitization is driving virtually everything.

“For me, the big picture is that artificial intelligence and robotization is going to change three things fundamentally,” he began, sipping water at a small table at the EIB offices on Schuman Circle in Brussels. “No. 1 is the economy and the way in which we work. It’s doing it already: platforms, the face of modern work changing daily, whether it’s blue-collar or white-collar.

“Secondly, it’ll change politics and media as we know it,” he continued. “It’s already done it. Social media. Fake news. You know, election-meddling being the example on the media side. And on the politics side, we thought that we were going towards digital democracies, but in many places around the world we have ended up with digital dictatorships.”

“Thirdly,” he concluded, “it’ll change and is changing science and the future of mankind.”

Blue-collar workers are feeling the pinch from the rise of AI | Sean Gallup/Getty Images

Policymakers looking to promote innovation, he continued, are facing another three-pronged fork in the policy highway: “We have the Chinese way, the American way and the European way.”

“The Chinese way is a single-party system, authoritarian and controlled, and the philosophy is different,” he said. “It’s Confucian. It says it’s quite OK to share you privacy and information and have social rankings, and so on.”

“Then there’s the American way, which right now you could argue is the ‘Art of the Deal.’ It’s very polarized, but it tries to get things done. And then there’s the European way, which is the art of the compromise.”

“If you really simplify things, the Chinese model is full control, the American model is no control and the European model is somewhere between the two,” he said. “What I am trying to say is it’s much better having the good guys doing the algorithms than the bad guys.

“Someone needs to regulate those algorithms so they don’t go haywire,” he said. “And I think Europe is quite good at that.”

So what are the EU’s most urgent imperatives?

Stubb is likely to be in line for a top job at the European Commission | Ben Pruchnie/Getty Images

On economy and work, Stubb said the bloc must work to protect citizens from disruption and upheaval.

“How do we make sure that the European middle class, if you will, stays on board and is still willing to defend a social market economy, globalization and liberal democracy?” he said. “Probably the reason that we are seeing so many populist movements at the moment is that we haven’t been very good at dealing with socio-economic issues on a European level … I am an advocate of the Nordic welfare model and I wish we could somehow juxtapose or bring that model to Europe as well.”

Going forward, Stubb said he would urge the EU to focus its efforts in the areas where it has most leverage: trade policy, competition policy and encouraging public and private investment.

It should also continue to make use of its considerable regulatory powers to both encourage technological innovation and stop powerful forces — whether big corporations or autocratic governments — from taking exploitative advantage of the rapid changes in the economy.

“If I were to have a chance to influence the agenda of the next European Commission, I would even have a commissioner for artificial intelligence” — Alexander Stubb

“The EU is a regulatory superpower, and regulation does count in all the three fields that I mentioned: economy and work, politics and media, and science and the future of mankind,” he said.

While he lost the Commission president nomination to Manfred Weber, the German leader of the EPP group in the European Parliament, Stubb was widely applauded within the party for conducting a positive campaign that avoided any damaging in-fighting, virtually assuring that he will be offered a prominent portfolio.

Exactly what job, or even in which EU institution, remains to be seen. Developments in Finnish politics, especially the results of a national election on April 14, will also be a factor.

“If I were to have a chance to influence the agenda of the next European Commission, I would even have a commissioner for artificial intelligence,” he said. “For some it might sound a little bit sort of science fiction, but you know you have some rather sophisticated countries that are already doing that.”


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The political establishment’s sense of entitlement has overtaken their sense of democracy

If you found yourself in conversation with a top executive from the tax-shy American multinational Amazon what do you think you would say? My guess is that most people would start with something like: “Why don’t you stop avoiding our taxes and pay your fair share, you scabrous fat cat?!” Taking this obvious line did not […]

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If you found yourself in conversation with a top executive from the tax-shy American multinational Amazon what do you think you would say? My guess is that most people would start with something like: “Why don’t you stop avoiding our taxes and pay your fair share, you scabrous fat cat?!”

Taking this obvious line did not seem to occur to the man responsible for raising taxes, Chancellor Philip Hammond. Instead, in conversation with Amazon Vice President Doug Gurr and other top executives of multinationals, he chose to explain how he would thwart both the decisions of the House of Commons and the electorate on Brexit. No talk of Amazon tax but commitments given to conspire against the electorate and Parliament.

This gives us a useful insight: that multinationals want to keep the EU just as it is. It’s not surprising as the deflationary Stability and Growth Pact – Thatcherism internationalised – has created a pool of unemployed and low-paid people, particularly in Southern Europe, desperate for work. These multinationals can manipulate the regulations and policies of the EU to their own ends. The EU is the multinational’s happy playground. They find the Chancellor of the Exchequer is one of many stooges who is willing to subvert their own democracy, apparently to protect the EU, but really working in their interests.

Hammond is not on his own in trying to undermine our democracy and parliamentary procedures. Extraordinarily, the Speaker of the House of Commons, whose prime purpose is to ensure fair play and that the rules are obeyed, has decided to bend those rules in favour of those who wish to overturn the 2016 referendum. He recently allowed an inadmissible, according to the rules, pro-EU amendment. He not only flaunted procedure, he neither consulted nor informed MPs, with the exception of former Conservative Attorney General Dominic Grieve, thus managing to discriminate against any other MP who wanted to put in previously inadmissible amendments, as well as destroying his own neutrality.

Some Remain MPs, like Labour’s Margaret Beckett, think having a partial Speaker is OK because the EU is more important than our parliamentary democracy. She is wrong. We are losing a precious part of our political inheritance. Speakers in future will be able to support one cause above another. This Speaker was always a risk: as an MP he fought literally night and day against the minimum wage legislation, and before entering the Commons associated with those who wore ‘Hang Nelson Mandela’ T-shirts. I and a majority of MPs thought, in the middle of the MPs’ expenses scandal, he had reformed and would honour the traditional neutrality of the chair. We were wrong.

The EU referendum question was unconditional and unambiguous. Commitments were given on all sides that whatever the decision, it would be honoured. Prominent campaigner to overturn the decision, Chuka Umunna stated: “A majority of one is sufficient.” Alongside fellow Remainer Hilary Benn: “This is not for MPs to decide but you the electorate.”

Both Chuka and Hilary have now changed their tune. They both make the seemingly sensible point that “nobody voted to make themselves poorer”. Of course they didn’t. Nor did they vote to make themselves richer, or anything else. They simply voted to Leave. Adding extra conditions is casuistry of the worst kind. Some who follow this line are blatant in wanting to overturn the referendum decision in the Commons, while others argue for a second referendum. How on earth could anybody trust another referendum when the one held in 2016 had not been honoured?

The EU debate has exposed a shallowness in our democracy that many did not suspect. The Remain establishment cannot believe the hoi polloi did not accept their advice to remain in the EU, they assume these people must be stupid or too old to reason. It has always been an essential part of our democracy that all votes are equal and that the minority accepts the majority decision. Both these fundamentals are being challenged by the political establishment of left and right whose sense of entitlement has overtaken their sense of democracy.

Project Fear has continued apace, led by the Bank of England who predicted a recession and the loss of half a million jobs immediately after the referendum if we voted Out. Jobs increased and there was no recession. These people make Mystic Meg’s predictions look like accurate science. The EU has been the slowest growing economy on the planet (except for Antarctica), it is anti-democratic and job-destroying. If the EU referendum, the largest single vote in our history, is overturned, it will have irreparably damaged the world’s oldest parliamentary democracy and the multinationals will have won.

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Greg Clark should not be offering Brexit apologies to some of the world’s biggest companies

As reported in the Telegraph at the end of last week, last Wednesday night the Chancellor, the Business Secretary and the Brexit Secretary had a conference call with a group of 330 businessmen, within 2 hours of the largest defeat of a government bill in the history of the UK Parliament. Is this even news? […]

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As reported in the Telegraph at the end of last week, last Wednesday night the Chancellor, the Business Secretary and the Brexit Secretary had a conference call with a group of 330 businessmen, within 2 hours of the largest defeat of a government bill in the history of the UK Parliament. Is this even news? If the Chancellor had been saying to them “sorry about that, looks like you should continue preparing for the UK to leave the EU on WTO terms,” the call could have easily been brushed aside – but unfortunately that is not what was discussed.

Instead the Chancellor was explaining the process of taking the option of “no deal” off the table using a backbench MPs bill tabled on Wednesday with further amendments about to be tabled. He also talked about how they could possibly extend Article 50 after reaching across the Commons, surprisingly he did not mention reaching out to the 118 MP’s from his own party who also voted against the Withdrawal Agreement.

Some parts of the transcript are amusing: incredibly, one chief executive admitted he was “very much behind the Withdrawal Agreement” and was surprised that it was so resoundingly defeated. As he is a German executive of a German company, this shouldn’t be a surprise. What did surprise me was that he could not understand why British MPs voted against it. One can only marvel at the exulted distance this man must keep from average humans, their newspapers and other media outlets. How can someone run a company and know so little about the political temperature in the country that is technically their marketplace. But this is not a critique of multinational management. What I want to talk about is Crony Capitalism and why it should not be left unchecked.

Let’s start with Greg Clark – the Secretary of State for Business, Energy and Industrial Strategy – apologising to managing directors, stating that he “completely understands the seriousness and urgency of the situation that you face”. Seriousness and urgency? Surely the very successful businesses on the conference call should have been preparing for the UK to leave the EU since 24th June 2016? But the transcript of the phone call implies that this might not have been the case. We get the impression that these businesses were delaying their preparations. We get the impression that they were actually expecting the UK to give up its sovereignty, just so their companies could retain low transaction costs on their EU27 imports and exports. Surely a CEO would have to be a compulsive gambler to wait until 70 days to the deadline before starting to prepare for it? But CEOs are rarely compulsive gamblers. So maybe they had been given reason to believe that the Withdrawal Agreement would pass.

But Clark’s apology goes further as he says he knows that “some of them have had to make decisions at the expense of more productive uses of the funds you have”. But the people on this call run some of the biggest companies in the world. One can only assume half of them had the mute button on at this point as they fell about laughing at this remark. The UK has supplied these businesses with the rule of law, property rights, an international language, low levels of perceived corruption, a well-organised capital market, the lowest corporate taxes in the G7 and the second lowest in the G20, highways, airports, a transport system, free healthcare for their employees and an educated workforce – not to mention 66 million affluent customers. But Greg Clark is apologising that some of the biggest companies in the UK have had to invest in extra warehouse space or engage an import agent. Or maybe not, as most of them are large multinationals and so probably already have offices in other EU27 countries.

For 40 years, British taxpayers have been subsidising these companies’ transport costs to the EU and in some cases even their low-paid workforces – and finally the British taxpayer has said “enough!” I understand the companies’ displeasure, but they must have realised that the merry-go-round would eventually stop. Corporate life in the UK will still be better than most of the other countries in which they operate. So why is the Business Secretary making a grovelling apology to them?

It beggars belief that Amazon, one of the companies on this call, has gone from the global disruptor that changed the way that the world shops, to its UK head asking the Chancellor for assurances that the UK will rule out “no deal”, in order to placate Amazon’s global board. I wonder how often Amazon tells its business counterparties that “Amazon will not be walking away without a deal, so name your price”? If only established companies spent as much time adapting to new circumstances as they do lobbying government to keep all rules and regulations unchanged…

The biggest problem capitalism faces at the moment is the lack of competition in the market – and this is not helped if incumbent businesses are able to work with governments to develop laws that ensure their market dominance. The life cycle of private enterprise can move very quickly from disruptor company to entrenched incumbent: in cahoots with the ruling party, having a chatty conversation on a first name basis with the Business Secretary, all leading to strategising how backbench MPs will bring forward motions that thwart the Government’s own manifesto commitments in order to enforce the status quo for the incumbent corporate elite.

This transcript would have been less shocking if the politicians on the call had been from opposition parties contesting government policy; but they weren’t. The politicians were the Government. Not only were they Cabinet Ministers, they included the Chancellor of the Exchequer, the second most important member of the Government or – possibly, if they pull off this coup – the most important member of the Government.

The head of Siemens wants confirmation (for his board, of course) that the UK will not go by default into a “no deal”, the head of Amazon complains that he has “incurred quite significant costs”. (His company’s third quarter revenues in 2018 were $56bn (£43bn), which is £4bn more than the £39bn that the UK will have to pay the EU according to the Withdrawal Agreement.)

The head of Scottish Power wants to know when, not if, the Government will apply for an extension to Article 50. The Chairman of Tesco is also worried about the Government not ruling out “No Deal” (How often does Tesco rule out “No Deal”? Try haggling for your groceries next time you shop there.) The head of the Co-Op wants clarity on the “end state” deal in 2020. The head of BP wants to know about the chances of a second referendum. The managing partner of McKinsey wants a clear message from the Prime Minister “in a more balanced way.”

What I very much doubt is that the people on this conference call have any interest in balance. This is Crony Capitalism at its worst: ensuring that entrenched companies remain that way. None of them want balance, they want the cards stacked, very definitely, in their favour.

However, without a doubt the most reprehensible people on this call must surely be the politicians. I am aware that since the Middle Ages incumbent business interests have sought the ear of government to ensure that regulations favour their companies. But in the 21st century I would have hoped that this practice had diminished. Sadly this telephone call makes it obvious that it hasn’t. While Greg Clark and Philip Hammond were both happy to stand on the Conservative Party manifesto promise that the UK would leave the Single Market and the Customs Union, it would appear they are content that a group of patsy backbenchers will prevent this from happening. So 17.4 million voters do not equal 330 company heads working with half a dozen backbench MPs for manoeuvrability, while a handful of Cabinet ministers ensure the direction of travel.

But what has this got to do with free market capitalism, surely this is what capitalism advocates? Well, no it doesn’t. For capitalism to work, companies must be allowed to fail. A healthy capitalist system requires some creative destruction. Capitalism must allow new market entrants and it must also stand aside as inefficient companies fail. Companies must be prepared to change when circumstances change, not lobby governments to keep circumstances rigid.

When business is writing the rules, it is unlikely to write in anything that upsets its market share or its profits. Like Amazon, it is a natural instinct for a market disruptor to itself become a market incumbent, and join the chummy phone calls to Cabinet Ministers to explain what their boards would really appreciate. And if this is such a basic instinct, then it is even more important that the heads of government don’t spend their time acquiescing to every whim of incumbent business. Government Ministers are meant to serve the country and backbench MPs are meant to serve their electorates; neither group should be caught surreptitiously working against their own manifesto to the benefit of a small group of established companies.

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In 2019, the ‘techlash’ will go from strength to strength

From tech nationalism to the dark side of data, the New Year will see the recent pushback against the global industry take on even greater importance.

Digital Politics is a column about the global intersection of technology and the world of politics.

LONDON — When it came to tech, 2018 was a cracker.

Facebook fumbled its way from scandal to scandal. Google was slapped with another record antitrust fine over its Android mobile software. And officials in Brussels, Washington and elsewhere struggled to get their heads around how tech went from a legislative sideshow to the center of policymaking worldwide.

For those hoping the new year will bring respite from this ‘techlash,’ I have bad news: We’ve only just begun.

No matter where you look — from early-stage European Union investigations into Amazon and Facebook to potential federal privacy legislation in the United States — the era of laissez-faire policymaking on tech has come to an end.

Gone are the days when tech was supposed to save the world.

In its place, politicians are taking their battle with Silicon Valley’s biggest names to the next level, while doing all that they can to support domestic digital programs and local startups as the digital economy becomes central to the wider economy.

As 2019 approaches, the list of upcoming regulatory stand-offs feels never-ending.

Facebook (which outmuscled Google this year to become the tech giant everyone loves to hate) faces a slew of regulatory investigations into its Cambridge Analytica scandal, privacy sanctions under Europe’s new data protection rules and its role in the spread of misinformation in elections around the globe.

Margrethe Vestager, Europe’s competition czar, is in a race against time before her tenure ends at the European Commission to complete a series of investigations into many of the world’s largest tech firms. The U.S. Congress — never known for its willingness to regulate tech — is slowing waking up to the fact that it may need to act.

European Commissioner for Competition Margrethe Vestager | Mario Cruz/EPA

And from France to the Philippines, lawmakers are fast-tracking new rules aimed at curbing the power of Big Tech. From laws to tackle “fake news” to demands that firms pay more tax into national coffers, policymakers are eagerly trying to rejigger the playing field, all while most of these countries’ voters continue to embrace the latest tech wizardry faster than you can say “Hey, Alexa.”

With so much on deck, it’s easy to miss the big picture. Here are four predictions for 2019 to help guide you through what awaits us next year.

Tech nationalism

Gone are the days when tech was supposed to save the world.

Now, national lawmakers want to know how some of the world’s biggest tech companies are going to help them at home — either through paying more out in taxes (France’s new digital levy on Facebook and Google comes into force on January 1) or by investing in local operations, which can offer both high-tech jobs and digital know-how for countries’ national tech industries.

It doesn’t stop there. Expect to see politicians putting increasingly tough restrictions on who can acquire domestic tech players as the battle for talent, intellectual property and investment ratchets up amid the growing importance of digital industries to countries’ future economic prosperity. That already has started to happen with Germany, the United Kingdom and the U.S. balking at Chinese players scooping up national champions.

Serious cracks are starting to show in people’s faith in Silicon Valley — and those will expand even further.

It’s the start, not the end, of such strategies.

Even as Western allies look to outdo each other on tech, the era of digital cooperation will likely be tested to its limits as governments move to impose national laws on the internet age.

Data as a toxic asset

It’s become a cliché to claim data is the ‘“oil of the 21st century.” But now that Europe’s revamped data protection rules are in full swing (and tens of thousands of complaints have been filed across Europe), this seemingly never-ending pot of digital information is starting to look a lot less appealing — even if it still underpins the online digital advertising industry, or the main cash cow that keeps the digital economy running.

Already, competition authorities are investigating whether the collection of large amounts of information by a few tech firms (Facebook, Google and, increasingly, Amazon dominate the online ad world) could represent unfair competition. The first blockbuster fines under Europe’s General Data Protection Regulation, or GDPR, will likely be doled out in the second half of 2019.

And with new data breaches and online hacks revealed daily, the vast treasure troves of data that companies now hold on us may soon leave them open to almost limitless regulatory risk.

Public awakening to tech’s ugly side

Last year, I predicted policymakers and consumers would diverge on how they viewed Big Tech, with officials taking a significantly more skeptical line than the tech-mad voters. That held true for most of 2018. But as we head into the New Year, serious cracks are starting to show in people’s faith in Silicon Valley — and those will expand even further amid increasing regulatory pressure on how these firms operate globally.

Will the influx of “fake news” throw an upcoming election in favor of one side or another?

In the U.S., for instance, a recent Pew Research Center study found that while roughly three-quarters of people still believed tech companies and their products had more of a positive impact than a negative one on their own lives, almost one-third of the same individuals now thought these firms had a harmful effect on the wider society.

Sure, that’s not a tidal wave of users running to the door — at least, not yet. But with investors pushing Facebook’s stock price down more than 20 percent this year and people from Lyon to Los Angeles openly questioning the role these players have in their daily lives, the optimistic drumbeat that surrounded the tech industry for years is coming to an end.

Misinformation, on steroids

With both India and the EU heading to the polls in two of the world’s largest-ever elections next May, 2019 marks the biggest test to date for how social media companies and governments worldwide confront digital misinformation. It’s not going to be pretty.

Many policymakers still base their tactics on what happened in the 2016 U.S. presidential election. But online tricksters (both those looking to make a quick buck and those backed by foreign governments) haven’t stood still, updating their tactics to keep one step ahead of regulatory and corporate responses. That includes shifting to internet messaging services like WhatsApp (which are almost impossible to police because of built-in encryption standards) and moving to smaller, less protected social media sites like Instagram whose policies aren’t yet robust enough to cope. One word to get to know for 2019: deepfakes, or almost real-life copies of public figures saying the most outrageous things powered by artificial intelligence and machine learning.

Will the influx of “fake news” throw an upcoming election in favor of one side or another? That, unfortunately, is almost impossible to predict. But with the reputations of both politicians and tech players on the line, the failure to clamp down on misinformation, particularly around elections, will only further polarize electorates.

Mark Scott is chief technology correspondent at POLITICO.


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