Moral Economy

 'The Moral Economy of High-Tech Modernism' by Henry Farrell and Marion Fourcade Author and Article Information in (2023) 152(1) Daedalus 225–235 comments 

Algorithms-especially machine learning algorithms-have become major social institutions. To paraphrase anthropologist Mary Douglas, algorithms “do the classifying.” They assemble and they sort-people, events, things. They distribute material opportunities and social prestige. But do they, like all artifacts, have a particular politics? Technologists defend themselves against the very notion, but a lively literature in philosophy, computer science, and law belies this naive view. Arcane technical debates rage around the translation of concepts such as fairness and democracy into code. For some, it is a matter of legal exposure. For others, it is about designing regulatory rules and verifying compliance. For a third group, it is about crafting hopeful political futures. 

The questions from the social sciences are often different: How do algorithms concretely govern? How do they compare to other modes of governance, like bureaucracy or the market? How does their mediation shape moral intuitions, cultural representations, and political action? In other words, the social sciences worry not only about specific algorithmic outcomes, but also about the broad, society-wide consequences of the deployment of algorithmic regimes-systems of decision-making that rely heavily on computational processes running on large databases. These consequences are not easy to study or apprehend. This is not just because, like bureaucracies, algorithms are simultaneously rule-bound and secretive. Nor is it because, like markets, they are simultaneously empowering and manipulative. It is because they are a bit of both. Algorithms extend both the logic of hierarchy and the logic of competition. They are machines for making categories and applying them, much like traditional bureaucracy. And they are self-adjusting allocative machines, much like canonical markets. 

Understanding this helps highlight both similarities and differences between the historical regime that political scientist James Scott calls “high modernism” and what we dub high-tech modernism. We show that bureaucracy, the typical high modernist institution, and machine learning algorithms, the quintessential high-tech modernist one, share common roots as technologies of hierarchical classification and intervention. But whereas bureaucracy reinforces human sameness and tends toward large, monopolistic (and often state-based) organizations, algorithms encourage human competition, in a process spearheaded by large, near-monopolistic (and often market-based) organizations. High-tech modernism and high modernism are born from the same impulse to exert control, but are articulated in fundamentally different ways, with quite different consequences for the construction of the social and economic order. The contradictions between these two moral economies, and their supporting institutions, generate many of the key struggles of our times. 

Both bureaucracy and computation enable an important form of social power: the power to classify. Bureaucracy deploys filing cabinets and memorandums to organize the world and make it “legible,” in Scott's terminology. Legibility is, in the first instance, a matter of classification. Scott explains how “high modernist” bureaucracies crafted categories and standardized processes, turning rich but ambiguous social relationships into thin but tractable information. The bureaucratic capacity to categorize, organize, and exploit this information revolutionized the state's ability to get things done. It also led the state to reorder society in ways that reflected its categorizations and acted them out. Social, political, and even physical geographies were simplified to make them legible to public officials. Surnames were imposed to tax individuals; the streets of Paris were redesigned to facilitate control. 

Yet high modernism was not just about the state. Markets, too, were standardized, as concrete goods like grain, lumber, and meat were converted into abstract qualities to be traded at scale. The power to categorize made and shaped markets, allowing grain buyers, for example, to create categories that advantaged them at the expense of the farmers they bought from. Businesses created their own bureaucracies to order the world, deciding who could participate in markets and how goods ought to be categorized. 

We use the term high-tech modernism to refer to the body of classifying technologies based on quantitative techniques and digitized information that partly displaces, and partly is layered over, the analog processes used by high modernist organizations. Computational algorithms-especially machine learning algorithms-perform similar functions to the bureaucratic technologies that Scott describes. Both supervised machine learning (which classifies data using a labeled training set) and unsupervised machine learning (which organizes data into self-discovered clusters) make it easier to categorize unstructured data at scale. But unlike their paper-pushing predecessors in bureaucratic institutions, the humans of high-tech modernism disappear behind an algorithmic curtain. The workings of algorithms are much less visible, even though they penetrate deeper into the social fabric than the workings of bureaucracies. The development of smart environments and the Internet of Things has made the collection and processing of information about people too comprehensive, minutely geared, inescapable, and fast-growing for considered consent and resistance. 

In a basic sense, machine learning does not strip away nearly as much information as traditional high modernism. It potentially fits people into categories (“classifiers”) that are narrower-even bespoke. The movie streaming platform Netflix will slot you into one of its two thousand-plus “microcommunities” and match you to a subset of its thousands of subgenres. Your movie choices alter your position in this scheme and might in principle even alter the classificatory grid itself, creating a new category of viewer reflecting your idiosyncratic viewing practices. Many of the crude, broad categories of nineteenth-century bureaucracies have been replaced by new, multidimensional classifications, powered by machine learning, that are often hard for human minds to grasp. People can find themselves grouped around particular behaviors or experiences, sometimes ephemeral, such as followers of a particular YouTuber, subprime borrowers, or fans of action movies with strong female characters. Unlike clunky high modernist categories, high-tech modernist ones can be emergent and technically dynamic, adapting to new behaviors and information as they come in. They incorporate tacit information in ways that are sometimes spookily right, and sometimes disturbing and misguided: music-producing algorithms that imitate a particular artist's style, language models that mimic social context, or empathic AI that supposedly grasps one's state of mind. Generative AI technologies can take a prompt and generate an original picture, video, poem, or essay that seems to casual observers as though it were produced by a human being. 

Taken together, these changes foster a new politics. Traditional high modernism did not just rely on standard issue bureaucrats. It empowered a wide variety of experts to make decisions in the area of their particular specialist knowledge and authority. Now, many of these experts are embattled, as their authority is nibbled away by algorithms whose advocates claim are more accurate, more reliable, and less partial than their human predecessors. 

One key difference between the moral economies of high modernism and high-tech modernism involves feedback. It is tempting to see high modernism as something imposed entirely from above. However, in his earlier book Weapons of the Weak, Scott suggests that those at the receiving end of categorical violence are not passive and powerless. They can sometimes throw sand into the gears of the great machinery. 

As philosopher Ian Hacking explains, certain kinds of classifications-typically those applying to human or social collectives-are “interactive” in that when known by people or those around them, and put to work in institutions, [they] change the ways in which individuals experience themselves-and may even lead people to evolve their feelings and behavior in part because they are so classified. 

People, in short, have agency. They are not submissive dupes of the categories that objectify them. They may respond to being put in a box by conforming to or growing into those descriptions. Or they may contest the definition of the category, its boundaries, or their assignment to it. This creates a feedback loop in which the authors of classifications (state officials, market actors, experts from the professions) may adjust the categories in response. Human society, then, is forever being destructured and restructured by the continuous interactions between classifying institutions and the people and groups they sort. 

But conscious agency is only possible when people know about the classifications: the politics of systems in which classifications are visible to the public, and hence potentially actionable, will differ from the politics of systems in which they are not. 

So how does the change from high modernism to high-tech modernism affect people's relationships with their classifications? At its worst, high modernism stripped out tacit knowledge, ignored public wishes and public complaints, and dislocated messy lived communities with sweeping reforms and grand categorizations, making people more visible and hence more readily acted on. The problem was not that the public did not notice the failures, but that their views were largely ignored. Authoritarian regimes constricted the range of ways in which people could respond to their classification: anything more than passive resistance was liable to meet brutal countermeasures. Democratic regimes were, at least theoretically, more open to feedback, but often ignored it when it was inconvenient and especially when it came from marginalized groups. 

The pathologies of computational algorithms are often more subtle. The shift to high-tech modernism allows the means of ensuring legibility to fade into the background of the ordinary patterns of our life. Information gathering is woven into the warp and woof of our existence, as entities gather ever finer data from our phones, computers, doorbell cameras, purchases, and cars. There is no need for a new Haussmann to transform cramped alleyways into open boulevards, exposing citizens to view. Urban architectures of visibility have been rendered nearly redundant by the invisible torrents of data that move through the air, conveying information about our movements, our tastes, and our actions to be sieved through racks of servers in anonymous, chilled industrial buildings. 

The feedback loops of high-tech modernism are also structurally different. Some kinds of human feedback are now much less common. Digital classification systems may group people in ways that are not always socially comprehensible (in contrast to traditional categories such as female, married, Irish, or Christian). Human feedback, therefore, typically requires the mediation of specialists with significant computing expertise, but even they are often mystified by the operation of systems they have themselves designed.

Birds and unconscionability

Edelman J in Productivity Partners Pty Ltd v Australian Competition & Consumer Commission; Wills v Australian Competition & Consumer Commission [2024] HCA 27 comments 

 The difficulty with the application of the values of Australian common law and statute is that they apply at such a high level of generality, and can point in so many different directions, that the concept of unconscionability has been said to be no more useful than the category of "small brown bird" to an ornithologist. In one recent case, three members of this Court considered conduct to be unconscionable where it involved a system of exploitation of illiterate and innumerate Aboriginal customers involving sales on credit at up to three times market value, without any proper accounting, with requirements of tied purchasing and the surrender of the customer's bank card and personal identification number. But four members of this Court considered that this exploitation of vulnerable persons from another culture took on a different perspective of conscience because, among other things, it was said that the conduct: was "appropriate" according to other cultures and values; was "a convenient way of managing money"; "suited the interests" of those vulnerable persons "and their families having regard to their own preferences and distinctive cultural practices"; and took place in a remote Aboriginal community where onerous terms were more "acceptable".

Section 22 of the Australian Consumer Law does not codify the values of Australian statute and common law, nor does it resolve such difficulties in application. Rather, it articulates a list of wide-ranging matters to consider when applying these values, including: the terms and conditions of the supply (ss 22(1)(b), 22(1)(e), 22(1)(j), 22(1)(k)); discrimination, undue influence, pressure, unfair tactics and the extent of good faith towards customers by the supplier (ss 22(1)(d), 22(1)(f), 22(1)(l)); conduct of the parties in connection with their relationship, difference in bargaining power and ability to negotiate (ss 22(1)(a), 22(1)(j)); the contents of any industry code (ss 22(1)(g), 22(1)(h)); and the ability of a customer to understand documents and the extent of any unreasonable failure of the supplier to disclose (ss 22(1)(c), 22(1)(i)). 

In applying the relevant values of Australian common law and statute, all matters and circumstances enunciated in s 22 that are potentially relevant must be considered. So too must any other circumstance that potentially bears upon standards of trade and commerce be considered. Otherwise, the assessment of conscience will have proceeded by reference only to a subset of the relevant values. However, contrary to the submissions of the College, the need for all relevant matters to be considered does not require an assumption that all matters weigh in favour of a supplier unless shown otherwise.

Digital Assets

The Law Commission of England and Wales has provided recommendations for reform of the law on digital assets. 

 The Commission states 

 Digital assets – which include crypto-tokens (sometimes referred to as ‘cryptocurrencies’) and non-fungible tokens (NFTs) – are used for an increasing variety of purposes in modern society, such as for investment, for making payments, and for linking to or embodying debt and equity securities. 

Over the last 15 years, personal property law in England and Wales has proven sufficiently flexible to accommodate digital assets. However, as the digital asset market and related technology continue to change, there remains some residual legal uncertainty and complexity. 

The Government therefore asked the Law Commission to carry out a first-ever rigorous common law analysis, showing how the law in England and Wales can respond to this kind of emerging technology. 

The Commission’s recommendations for reform and development of the law aim to provide a comprehensive legal foundation for digital assets which will allow these new technologies to flourish, enabling a diverse range of market participants to interact with and benefit from them.

The recommendations are summarised - 

 1. Legislation to confirm the existence of a distinct third category of personal property under the law which can better recognise, accommodate and protect the unique features of digital assets. The report does not set out clear boundaries for this third category, arguing instead that common law is the best vehicle to determine which objects can fit within it. This will allow for a nuanced approach to recognising that things such as crypto-tokens, export quotas or different types of carbon emissions allowance can be objects of personal property rights. 

2. Creation of a panel of industry-specific technical experts, legal practitioners, academics and judges to provide non-binding advice to courts on complex legal issues relating to digital assets. 

3. Creation of a bespoke legal framework that better facilitates the entering into, operation and enforcement of collateral arrangements relating to crypto-tokens and crypto-assets. 

4. Statutory law reform to clarify whether certain digital assets fall within the scope of the Financial Collateral Arrangements (No 2) Regulations 2003.

The report states

Digital assets are fundamental to modern society and the contemporary economy. They are used for an expanding variety of purposes — as valuable things in themselves, as a means of payment, or to represent or be linked to other things or rights — and in growing volumes. Electronic signatures, cryptography, distributed ledgers, smart contracts and associated technology have increased the ways in which digital assets can be created, accessed, used and transferred. Such technological development is set only to continue. As technology advances and humans spend increasing amounts of time online, our relationships with digital assets will become ever more important. Digital assets The term digital asset is extremely broad. It captures a huge variety of things including digital files, digital records, email accounts, domain names, in-game digital assets, digital carbon credits, crypto-tokens and non-fungible tokens. The technology used to create or manifest those digital assets is not the same for each. Nor are the characteristics or features of those digital assets. We use “digital assets” as a general term, but most of our report and recommendations are concerned with a subset of digital assets with particular characteristics. Personal property rights Personal property rights are vital to social, economic and legal systems. They are important for many reasons. Property rights feature in the analysis of most commercial transactions relating to things of value. Property rights are the key to a proper characterisation of numerous modern and complex legal relationships, including intermediated holding arrangements, collateral arrangements and structures involving trusts. Property rights are also important in cases of bankruptcy or insolvency, when objects of property rights are interfered with or unlawfully taken, and for the legal rules concerning succession on death. Property rights are particularly valuable because, in principle, they are good against the whole world, whereas other — personal — rights are good only against someone who has assumed a relevant legal duty. Digital assets and personal property rights Over the last 15 years or so, the law of England and Wales has proven itself sufficiently resilient and flexible to recognise certain digital assets as things to which personal property rights can relate. That is not surprising, because treating certain digital assets (including crypto-tokens) as things to which personal property rights can relate is a practical and effective way in which to bring the law into line with the expectations of the parties that interact with them. We conclude that the law in this respect is now relatively certain and that the areas of legal uncertainty that remain are highly nuanced and complex. That complexity remains, in part, because both the digital asset market and the technology in question is evolving and will continue to do so. We identify the remaining areas of residual uncertainty and recommend law reform to reduce that uncertainty, but in a way that acknowledges the distinct features of different digital assets. The law reform that we do recommend aims to ensure that the legal system, as part of a wider social framework, can reinforce the overall strength of digital asset ecosystems (which also rely on social elements). Our recommendations also aim to ensure that the private law of England and Wales remains a dynamic, globally competitive and flexible tool for market participants in the digital asset space. Uses for digital assets to which personal property rights can relate Digital assets are used for a number of purposes, including: 1. making payments for goods and services; 2. transferring or communicating value by electronic means (often on a cross-border basis); 3. broadening the scope of and access to markets and increasing the transferability, composability and liquidity of other things; 4. recording other things and recording provenance; and 5. speculation and investment. xx Complex, international (albeit still relatively small) markets have evolved for products and services involving digital assets and specifically crypto-tokens. A crypto-token can be used in a variety of ways: 1. as a thing of interest or of value in itself; 2. as part of a register or record of interests instead of a conventional database entry (albeit a register or record composed of “things”, analogous to the beads on an abacus); or 3. to link to or embody rights such that the holder of the crypto-token can claim performance of the obligations recorded by the crypto-token. Tokenisation of securities One clear use-case for crypto-tokens is the tokenisation of existing things, including securities. Using crypto-tokens to record, to link to or to embody debt and equity securities can be very appealing to market participants, because it allows for easily transferable, non-intermediated securities, accessible both to institutional and retail investors. While existing securities markets enjoy a high degree of legal certainty, tokenised securities markets (or certain parts thereof) might operate differently or need to evolve to recognise the different features of digital assets and crypto-tokens. We think that many of our recommendations and conclusions — along with the work of bodies such as the UK Jurisdiction Taskforce — will be relevant to tokenised securities markets, and will help provide legal certainty in this growing area of finance. Our tripartite approach to law reform in our report In our report we make very few recommendations for law reform. That is for two reasons. First, because we conclude that the common law of England and Wales is, in general, sufficiently flexible, and already able, to accommodate digital assets. Second, because we want our recommendations to be as direct and as implementable as possible. We therefore take a tripartite approach to law reform. Prioritising common law development First, we champion the common law of England and Wales and draw its successes in the digital asset and crypto-token markets to the attention of market participants. Our analysis is intended to form the foundation on which further common law development can be based. We conclude that the law in this area is now relatively certain and that any areas of residual legal uncertainty are highly nuanced and complex. We discuss these remaining areas of residual uncertainty and draw conclusions as to the most appropriate way for the common law to develop in relation to them. Targeted statutory law reform Second, we make two recommendations for statutory law reform. We conclude that, although some digital assets are not easy to place within traditional categories of things to which personal property rights can relate, this does not prevent them from being capable of attracting personal property rights, and that this is clearly the position at common law. Nonetheless, some consultees, including senior and specialist members of the judiciary, said to us that it would be helpful to express this position in legislation. We recommend such legislation and conclude that it will confirm and support the existing common law position. In addition, we conclude that there is one area where the common law cannot give market participants sufficient legal certainty: the development of a new regime for collateral arrangements involving digital assets (specifically, crypto-tokens and cryptoassets). We acknowledge that this issue does not merely involve legal questions; it also involves policy-based judgements beyond the scope of our report. We recommend that, as a matter of priority, the Government sets up a multi-disciplinary project to formulate and put in place a bespoke statutory legal framework that better and more clearly facilitates the entering into, operation and enforcement of (certain) crypto-token and (certain) cryptoasset collateral arrangements. Support from industry-specific technical experts Third, we acknowledge that increasingly advanced technology is likely to lead to a proliferation of digital assets over time, in terms of number, use-case, design and technological functionality. Many of those digital assets are likely to be complex, composable (that is, built up of different interchangeable components and so malleable in their functionality over time) and multi-faceted, and to use different technology. This in turn will give rise to diverse products and services that the law will have to accommodate. We conclude that common law development is better able to keep up with this change than statutory law reform. However, it is an enormous task for the judiciary to remain alive to such technological development. We recommend therefore that the Government creates or nominates a panel of industry-specific technical experts, legal practitioners, academics and judges to provide non-binding guidance on the complex and evolving factual and legal issues relating to control involving certain digital assets (and other issues relating to digital asset systems and markets more broadly). We conclude that such detailed and technology-specific guidance will facilitate clear, logical and consistent applications of legal rules and reasoning over time. xx This would need to include those with expertise in the crypto-token markets, and not just those with expertise in traditional finance markets or intermediated securities markets. A “third” category of thing to which personal property rights can relate We conclude that some digital assets are neither things in possession nor things in action, but that nonetheless the law of England and Wales treats them as capable of being things to which personal property rights can relate. Legislation to confirm and support the existing common law position Some consultees, including senior and specialist judges, said that it would be helpful to express this position in legislation. They said that this would confirm the existing position at common law, facilitate the law’s continued development on the point and lay to rest any lingering authority suggesting that there can be no “third” category of this nature. We recommend such legislation and conclude that it will confirm and support the existing common law position. Avoiding defining hard boundaries of a third category of thing We recommend statutory confirmation that a thing will not be deprived of legal status as an object of personal property rights merely by reason of the fact that it is neither a thing in action nor a thing in possession. However, we conclude that it is not necessary or appropriate to define in statute the hard boundaries of such a third category of thing. We conclude that the common law is the better vehicle for determining those things that properly can (and should) be objects of personal property rights, and which fall within the third category: third category things. These might not necessarily always be digital things and could include things like milk quotas or certain carbon emissions allowances. We call digital things falling within the third category “digital objects”. 

Our third category recommendation and conclusions in practice 

We consider in detail consultees’ concerns with defining hard boundaries for a third category of thing to which personal property rights can relate. Given that our recommendation relating to the third category amounts to a confirmation and restatement of the existing common law position that such a third category exists, we do not consider that it will cause any additional legal uncertainty. 

Application to crypto-tokens, private, permissioned blockchain systems, voluntary carbon credits, in-game digital assets and digital files 

We demonstrate how our recommendations and conclusions might work by reference to a variety of digital assets, including crypto- tokens, private, permissioned blockchain systems, voluntary carbon credits, in-game digital assets and digital files. We conclude that pre-existing boundary issues will remain and that those boundary issues cannot be solved (and indeed, would likely be exacerbated) by statutory law reform. We conclude that the common law is the most appropriate tool for dealing with difficult boundary issues relating to digital assets that are based on very different technologies and for determining whether such digital assets can (and should) attract personal property rights on particular sets of facts. 

Our indicia of third category things 

We discuss consultees’ responses to the provisional criteria we proposed in our consultation paper for the third category. We make consequential modifications and clarifications to those criteria and now treat them as indicia. Our indicia (as modified in this report) accurately describe a certain “core” type of digital asset — namely crypto- tokens manifested by distributed, public, permissionless systems — that are things to which personal property rights can relate at law and which are neither things in possession nor things in action. In our consultation paper we provisionally proposed that a thing should be capable of falling within our proposed third category of thing to which personal property rights can relate if:

1. it is composed of data represented in an electronic medium, including in the form of computer code, electronic, digital or analogue signals; 

2. it exists independently of persons and exists independently of the legal system; and 

3. it is rivalrous. 

Composed of data 

Based on consultee responses, we conclude that “composed of data” need not be a criterion in itself, because the criterion (1) overly focuses the conceptualisation of the thing in question on data; and (2) potentially creates an unnecessary hard boundary for the third category. A thing is rivalrous if the use or consumption of the thing by one person (or a specific group of persons) necessarily prejudices the use or consumption of that thing by one or more other persons. Tulip v Van der Laan [2023] EWCA Civ 83, [2023] 4 WLR 16 at [24], by Birss LJ. 

Existence independent of persons and independent of the legal system 

We clarify the application and interpretation of our second criterion — that a thing must exist independently of persons and exist independently of the legal system — and respond to some concerns raised by consultees about this criterion. 

Rivalrous 

We reiterate and confirm our analysis of the criterion that a thing must be rivalrous. Specifically, we clarify that whether a thing is rivalrous is binary and we distinguish our criterion that a thing must be rivalrous from the concepts of exclusivity of control and excludability. We conclude that our indicia — specifically, the concept that a thing must be “rivalrous” (as endorsed by the Court of Appeal in Tulip Trading) — usefully distinguish this type of digital asset from other digital things such as digital files that are not (as currently designed) capable of attracting personal property rights as a matter of law. 

Control 

We describe (but deliberately do not define) the factual concept that best captures the ability to (1) exclude or to permit access to a third category thing; and (2) put the third category thing to the uses of which it is capable. We call this factual concept “control”. We discuss the legal significance of the concept of control over third category things. We conclude that both the factual concept of control and the legal consequences of control work differently for, and are highly complex in relation to, digital objects. 

Factual control 

First, we conclude that common law jurisprudence will be enhanced and made easier to understand for market participants by focusing on better descriptions and real- world examples of factual control. Factual control in this context is a highly technology- specific concept, in large part determined by the way in which the particular technology in question facilitates the imposition or creation of varying degrees of technical encumbrances in respect of the digital object in question. 

Legal control 

Second, we note that the legal consequences of control are necessarily complex and varied. We do not think that the concept of control alone is sufficiently nuanced, refined, or sensitive to market specificities adequately and definitively to determine the consequences of complex legal arrangements. Instead, we see control as a composite part of more complex legal principles and mechanisms (such as legal transfers, intermediated holding arrangements, collateral arrangements and actions and remedies in respect of digital objects). There are also a vast number of technically distinct digital assets, some of which function more like “digital bearer instruments” and some of which do not. Control works differently for different digital assets, by virtue of the inherent features and functions of the technology itself. The application of control and its legal consequences will therefore be different for different digital assets. Specifically, control works differently for things in possession, things in action and third category things (and, potentially, between different third category things). We conclude that the law should recognise and accept this reality. 

Technical expert group 

We recommend therefore that the Government creates or nominates a panel of industry-specific technical experts, legal practitioners, academics and judges to provide non-binding guidance on the complex and evolving factual and legal issues relating to control involving certain digital assets (and other issues relating to digital asset systems and markets more broadly). 

Transfers We consider how legal transfers of crypto- tokens operate based on, among other things, how a crypto-token transfers as a matter of fact, and the different perspectives of consultees on this issue. 

Extinction/creation vs persistent thing 

We discuss our observation in our consultation paper that “a transfer operation within a crypto-token system typically involves the replacement, modification, destruction, cancellation, or elimination of a pre-transfer crypto-token and the resulting and corresponding causal creation of a new, modified or causally-related crypto-token.” We discuss two opposing views put forward by consultees as to the legal characterisation of such a transfer operation that effects a state change. First, that such a transfer extinguishes a pre- transfer object of personal property rights and creates a “new”, post-transfer object of personal property rights (the “extinction/ creation analysis”). Second, that such a transfer involves the persistence of an object(s) of personal property rights through the transfer (the “persistent thing analysis”). 

A transfer by a change of control 

We conclude that it is possible to effect a legal transfer of a crypto-token offchain, by a “change of control” (along with the requisite intention). An example might include the physical transfer of control through the transfer of hardware, or a transfer on a Layer 2 system. 

A common law special defence of good faith purchaser for value without notice applicable to crypto-tokens 

We recognise that the majority of consultees made strong arguments in favour of the recognition and development of a common law special defence of good faith purchaser for value without notice applicable to crypto- tokens (and third category things more broadly). We agree with the arguments made by consultees. At the same time, we acknowledge that our recommendation for targeted, confirmatory legislation combined with common law development of the parameters of a third category of thing to which personal property rights can relate does not include a statutory definition of such third category things (or some subset thereof ). We acknowledge that this in turn precludes a general statutory “innocent acquisition rule” in respect of such objects of personal property rights, because a statutory innocent acquisition rule would almost certainly need to define the objects of personal property rights in question that benefitted from the rule. We conclude that a special defence of good faith purchaser for value without notice applicable to crypto- tokens can be recognised and developed by the courts through incremental development of the common law. We conclude that this reasoning can also be extended to other third category things. Intermediated holding arrangements We consider how intermediated holding arrangements in respect of crypto-tokens can be structured under the law of England and Wales. We consider crypto-tokens by way of example given the importance of intermediated holding arrangements to crypto-token markets. 

Clarification of terminology 

We discuss consultee responses to the terminology that we used in our consultation paper to describe crypto-token specific intermediated holding arrangements, particularly our use of the term “custody”. In light of consultee responses, we now draw a distinction between “custodial intermediated holding arrangements”, “non-custodial intermediated holding arrangements” and “non-holding arrangements” based on the legal consequences of such arrangements. In particular, we highlight the risks that users of intermediated holding arrangements could be exposed to on the onset of insolvency proceedings of a holding intermediary. 

Contract and trust-based intermediated holding arrangements 

We consider the application of contract and trust law to crypto-token intermediated holding arrangements. We conclude that trusts can support a broad range of custodial intermediated holding arrangements, including where the underlying crypto-token entitlements are held on a consolidated unallocated basis for the benefit of multiple users. We confirm our preferred conceptual approach to the establishment of a such a trust arrangement under the law of England and Wales. We conclude that a presumption of trust for intermediated holding arrangements involving crypto-tokens is neither necessary nor appropriate. 

Section 53(1)(c) of the Law of Property Act 1925 

We consider the potential impact of statutory formalities on the operation of trust-based crypto-token intermediated holding arrangements. We conclude that the existing common law is sufficiently certain in this area and that statutory law reform in respect of section 53(1)(c) of the Law of Property Act 1925, which requires the disposition of an equitable interest to be in writing and signed, is not necessary at this time. We leave open the possibility that it might be necessary or warranted in future as the market evolves. 

Shortfall allocation rule 

We consider, but do not at this stage recommend, a general pro rata shortfall allocation rule in respect of commingled unallocated holdings of crypto-tokens or crypto-token entitlements held on trust by a custodial holding intermediary that enters insolvency proceedings. We conclude that a more extensive, in-depth assessment of the merits of potential insolvency law reform applicable to specific custodial holding intermediaries is necessary. 

Alternative and supplementary legal structures for custodial intermediated holding arrangements 

We discuss the possibility of the common law developing alternative and supplementary legal structures for custodial intermediated holding arrangements that do not rely on trusts. We conclude that this could take the form of holding intermediaries being recognised as acquiring a control-based proprietary interest in held crypto-token entitlements that is subject to a superior title retained by users. We also discuss the application of other private law principles including agency and fiduciary duties. 

Collateral arrangements 

We consider how collateral arrangements in respect of crypto-tokens and cryptoassets can be structured under the law of England and Wales. Again, we specifically consider crypto-tokens and cryptoassets given their prominence in the digital asset markets. 

Title transfer, non-possessory security and possessory security 

We discuss how title transfer and non- possessory security-based arrangements can be used to structure crypto-token and cryptoasset collateral arrangements without the need for law reform. We also explain that possessory security-based arrangements do not apply to crypto-tokens and cryptoassets. 

A control-based security interest in respect of crypto-tokens 

We discuss how the recognition of a control- based proprietary interest to facilitate both the holding of and the grant of security over crypto-tokens and cryptoassets might be a beneficial development within the common law. We conclude that the common law could develop to recognise a control-based security interest in respect of crypto-tokens and cryptoassets (possibly by analogy with pledge). But the development of such a security interest would likely not be a complete solution given that such a security interest would likely be reliant on static, comprehensive notions of control. 

Application and clarification of the Financial Collateral Arrangements (No 2) Regulations 2003 

We consider the applicability of the Financial Collateral Arrangements (No 2) Regulations 2003 (“FCARs”) to crypto-tokens, other collateral that might use and/or be linked to public, permissionless crypto-token systems or private, permissioned blockchain systems (including Central Bank Digital Currencies (“CBDCs”), stablecoins, equity and debt securities and credit claims) and mere register/record tokens. We conclude that many crypto-tokens are likely to fall outside of the scope of the FCARs regime. However, for other collateral that might use and/or be linked to public, permissionless crypto-token systems or private, permissioned blockchain systems (including CBDCs, stablecoins, equity and debt securities and credit claims) or mere record/register tokens, we think the answer is possibly different. For at least some of those things, there is a better argument that they fall within the scope of the FCARs regime. We recommend law reform to clarify this position, although we do not ultimately conclude on what the complete scope of the FCARs regime should be, given that question necessarily involves policy considerations which fall outside of the scope of our current work. 

Tokenisation of securities 

We discuss the tokenisation of equity and other registered corporate securities. We recommend that the laws governing the tokenisation of equity and other registered corporate securities by UK companies are reviewed. The aim of this review would be to confirm, and where appropriate extend, the range of technological facilities (including potentially to public, permissionless ledgers) and operational arrangements through which the valid creation, transfer, and use of such tokenised equity and other registered corporate securities would be legally possible. This would require further legislative change. 

A bespoke statutory legal framework for crypto-token and cryptoasset collateral arrangements 

We conclude that although the law of England and Wales does provide options for granting security in respect of crypto-tokens and cryptoassets, those options are not adequate. As such, we recommend that, as a matter of priority, the Government sets up a multi- disciplinary project to formulate and put in place a bespoke statutory legal framework that better and more clearly facilitates the entering into, operation and enforcement of (certain) crypto-token and (certain) cryptoasset collateral arrangements. Although this recommendation and the work required to implement it are significant, we conclude that there is a very high degree of demand for such law reform among consultees, markets participants and industry bodies. 

Causes of action and associated remedies 

We consider causes of action and associated remedies in the context of third category things. We conclude that much of the current law concerning causes of action and remedies can be applied to third category things without law reform. Often the law does not distinguish between causes of action and remedies that apply to things in possession, to things in action or to third category things and we identify where that is currently the case. In those cases there is no need for bespoke rules or for law reform. Instead, what is required is that the courts continue to recognise the nuances or idiosyncrasies of third category things (including their distinct functionality and technical characteristics) and apply existing legal principles to such things as appropriate. 

Contract and vitiating factors 

We consider the application of various causes of action that arise in relation to contracts, with particular focus on the legal characterisation of an obligation to “pay” non-monetary units such as crypto-tokens. We also discuss the application of various vitiating factors to contracts involving third category things. We conclude that the vitiating factors of mistake, misrepresentation, duress, and undue influence apply similarly to contracts involving third category things as they do to contracts involving things in possession and things in action. We also conclude that the legal principles relating to void contracts can apply to third category things, in the same was as they do to other objects of personal property rights, without law reform. 

Following and tracing 

We consider how the evidentiary processes of following and tracing might apply to third category things and discuss how the factual nature of third category things might complicate legal analysis in relation to those evidentiary processes. 

Breach of trust, equitable wrongs, and constructive trusts 

We consider the application of principles relating to breach of trust, equitable wrongs, and constructive trusts. We conclude that, as regards breach of trust and fiduciary duty, the principles of equity are sufficiently flexible to be applied in situations involving third category things. In relation to constructive trusts, we conclude that the common law is perfectly able to evolve in a logical and clear way and we do not recommend law reform. 

Proprietary restitution, restitution for unjust enrichment and conversion 

We consider three key common law causes of action and how they apply to factual scenarios involving third category things: proprietary restitution; restitution for unjust enrichment; and conversion. We conclude that claims in proprietary restitution and restitution for unjust enrichment likely will be available in the context of third category things, whereas a claim in conversion will not be available. This is because conversion only applies to things in possession. However, despite the broad availability of claims in proprietary restitution and restitution for unjust enrichment, we conclude that such claims are unlikely to succeed where a claimant’s crypto-token is burned by a defendant. Burning involves irreversibly sending a crypto-token to an inaccessible “burn address”, the result being that the token is removed from circulation. Given the unavailability of a claim for proprietary restitution, restitution for unjust enrichment, or conversion following a defendant’s burning of a claimant’s crypto-token, we conclude that there is a lacuna in the law relating specifically to objects that fall within the third category. We do not consider that common law development of the principles of proprietary restitution or unjust enrichment would be the most appropriate means by which to fill this lacuna. Instead, we conclude it would be better for the courts to develop specific and discrete principles of tortious liability by analogy with, or which draw on some elements of, the tort of conversion to deal with unlawful interferences with digital objects. This conclusion acknowledges that the lacuna currently existing within the law arises in situations where a claim based on unjust enrichment or proprietary restitution cannot be made out. 

Injunctions, enforcement, and monetary awards 

Finally, we consider some procedural aspects of the law of remedies, specifically the law relating to injunctions, enforcement, and monetary awards. 

Cause of action 

Generally available in relation to third category things? Capable of providing recourse following the burning of a crypto-token? 

Proprietary restitution Restitution for unjust enrichment 

Conversion Tortious liability for wrongful interference with third category things

Recommendations 

Recommendation 1 We recommend statutory confirmation that a thing will not be deprived of legal status as an object of personal property rights merely by reason of the fact that it is neither a thing in action nor a thing in possession. 

Recommendation 2 We recommend that the Government creates or nominates a panel of industry-specific technical experts, legal practitioners, academics and judges to provide non-binding guidance on the complex and evolving issues relating to control (and other issues involving digital objects more broadly). This panel would need to include those with expertise in the crypto-token markets, and not just those with expertise in traditional finance markets or intermediated securities markets. 

Recommendation 3 We recommend statutory amendment to the FCARs: 1. To clarify the extent to which and under what holding arrangements crypto-tokens, cryptoassets (including CBDCs and fiat currency-linked stablecoins) and/ or mere record/register tokens can satisfy the definition of cash, including potentially by providing additional guidance as to the interpretation of “money in any currency”, “account” and “similar claim to the repayment of money”. 2. To confirm that the characterisation of an asset that by itself satisfies the definition of a financial instrument or a credit claim will be unaffected by that asset being merely recorded or registered by a crypto-token within a blockchain- or DLT-based system (where the underlying asset is not “linked” or “stapled” by any legal mechanism to the crypto-token that records them). 3. To confirm that, where an asset that satisfies the definition of a financial instrument or a credit claim is tokenised and effectively linked or stapled to a crypto-token that constitutes a distinct object of personal property rights from the perspective of and vested in the person that controls it, the linked or stapled token itself will similarly satisfy the relevant definition. 4. We recommend that laws applicable to UK companies should be reviewed to assess the merits of reforms that would confirm the validity of and/or expand the use of crypto-token networks for the issuance and transfer of equity and other registered corporate securities. In particular, we recommend that any such review should consider the extent to which applicable laws could and should support the use of public permissionless ledgers for the issuance and transfer of legal interests in equity and other registered corporate securities. 

Recommendation 4 We recommend that, as a matter of priority, the Government sets up a multi-disciplinary project to formulate and put in place a bespoke statutory legal framework that better and more clearly facilitates the entering into, operation and enforcement of (certain) crypto-token and (certain) cryptoasset collateral arrangements. 

Conclusions 

Conclusion 1 We conclude that factual control (plus intention) can found a legal proprietary interest in a digital object. We conclude that in certain circumstances such a control-based legal proprietary interest can be separated from (and be inferior to or short of) a superior legal title. 

Conclusion 2 We conclude that it is possible (with the requisite intention) to effect a legal transfer of a crypto-token offchain by a change of control or onchain by a transfer operation that effects a state change. 

Conclusion 3 We conclude that a special defence of good faith purchaser for value without notice applicable to crypto-tokens can be recognised and developed by the courts through incremental development of the common law. We conclude that this reasoning can also be extended to other third category things. 

Conclusion 4 We conclude that under the law of England and Wales, crypto-token intermediated holding arrangements can be characterised and structured as trusts, including where the underlying entitlements are (1) held on a consolidated unallocated basis for the benefit of multiple users, and (2) potentially even commingled with unallocated entitlements held for the benefit of the holding intermediary itself. We conclude that the best way to understand the interests of beneficiaries under such trusts are as rights of co-ownership in an equitable tenancy in common. 

Conclusion 5 We conclude that recognition of a control-based legal proprietary interest could provide the basis for an alternative legal structure for custodial intermediated holding arrangements in addition to trusts. This could take the form of holding intermediaries being recognised as acquiring a control-based proprietary interest in held crypto-token entitlements that is subject to a superior legal title retained by users. 

Conclusion 6 We conclude that it would be constructive for the courts to develop specific and discrete principles of tortious liability by analogy with, or which draw on some elements of, the tort of conversion to deal with wrongful interferences with third category things.

Privacy

'Distinguishing Privacy Law: A Critique of Privacy as Social Taxonomy' by María P Angel and Ryan Calo comments 

What distinguishes violations of privacy from other harms? This has proven a surprisingly difficult question to answer. For over a century, privacy law scholars labored to define the illusive concept of privacy. Then they gave up. Efforts at distinguishing privacy came to be superseded at the turn of the millennium by a new approach: a taxonomy of privacy problems grounded in social recognition. Privacy law became the field that simply studies whatever courts or scholars talk about as related to privacy. 

And it worked. Decades into privacy as social taxonomy, the field has expanded to encompass a broad range of information-based harms—from consumer manipulation to algorithmic bias—generating many, rich insights. Yet the approach has come at a cost. This article diagnoses the pathologies of a field that has abandoned defining its core subject matter, and offers a research agenda for privacy in the aftermath of social recognition. 

This critique is overdue: it is past time to think anew about exactly what work the concept of privacy is doing in a complex information environment, and why a given societal problem—from discrimination to misinformation—is worthy of study under a privacy framework. Only then can privacy scholars articulate what we are expert in and participate meaningfully in global policy discussions about how to govern information-based harms.

Privacy Taxonomy

'How Data Can Be Used Against People: A Classification of Personal Data Misuses' by Jacob Leon Kröger, Milagros Miceli and Florian Müller comments 

Even after decades of intensive research and public debates, the topic of data privacy remains surrounded by confusion and misinformation. Many people still struggle to grasp the importance of privacy, which has far-reaching consequences for social norms, jurisprudence, and legislation. Discussions on personal data misuse often revolve around a few popular talking points, such as targeted advertising or government surveillance, leading to an overly narrow view of the problem. Literature in the field tends to focus on specific aspects, such as the privacy threats posed by ‘big data’, while overlooking many other possible harms. To help broaden the perspective, this paper proposes a novel classification of the ways in which personal data can be used against people, richly illustrated with real-world examples. Aside from offering a terminology to discuss the broad spectrum of personal data misuse in research and public discourse, our classification provides a foundation for consumer education and privacy impact assessments, helping to shed light on the risks involved with disclosing personal data. 

 

The protection of personal data is a highly controversial issue. While scores of researchers, activists and politicians advocate the right to informational privacy and stress the importance of comprehensive data protection laws, others argue against strong legal restrictions, pointing to the wide-ranging benefits of data collection and use. Many people, asserting they have “nothing to hide”, even dismiss the importance of data protection altogether, believing that privacy only truly matters for those on the wrong side of law. While the nothing-to-hide argument has long been exposed as misguided, it is not only held by ordinary citizens but also backed by some of the most powerful organizations on earth, including governments and multinational corporations. 

 

During his time as Google’s CEO, Eric Schmidt notoriously stated, “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place”. Following the same reasoning, the British government chose the campaign slogan “If you’ve got nothing to hide, you’ve got nothing to fear” to promote a nation-wide CCTV surveillance program. As these examples illustrate, the various ways in which privacy invasions can cause harm to law-abiding citizens are often ignored, underestimated or even deliberately concealed. As a result, many people, including court members, struggle to articulate why the protection of personal data is important. This state of misinformation has severe consequences on policy and public discourse, with data protection advocates being referred to as “privacy alarmists” and privacy itself being framed as “old-fashioned[,] antiprogressive, overly costly” and “primarily an antiquated roadblock on the path to greater innovation”.  This widespread sentiment also helps legitimize and perpetuate current privacy laws, which are riddled with loopholes and fail to consistently safeguard people from harmful, abusive and ethically questionable data practices. 

 

In the face of these challenges, researchers have called for a closer examination and better understanding of the actual harms that can result from the disclosure and processing of personal data. In this vein, Solove argues that “Privacy is far too vague a concept to guide adjudication and lawmaking, as abstract incantations of the importance of ‘privacy’ do not fare well when pitted against more concretely stated countervailing interests”. Along these lines, many theorists have made attempts to convey the importance of privacy protection by presenting categories and real-life examples of personal data misuse. Some notable examples are the “Data Harm Record” by the Data Justice Lab, an “Inventory of Risks and Harms” provided by the Centre for for Information Policy Leadership and Wolfie Christl’s extensive work on corporate surveillance in everyday life. Furthermore, scholars have written several essays on the societal values related to and protected by informational privacy (e.g., [1, 3, 4]) with Magi, for example, providing a list of “fourteen reasons privacy matters”. 

 

Existing classifications often focus on data practices of companies, on novel privacy threats posed by big data technologies and/or specific categories of harm resulting from personal data use (e.g., bodily harm, loss of liberty, financial loss, reputational harm). What seems to be lacking thus far, however, is a general classification of the possible actions that lead to these harms – in other words: a classification capturing the manifold ways in which personal data can be used against people, by criminal, private, public and governmental organizations, or by other individuals. 

 

In an attempt to fill the identified gap, this paper proposes a classification scheme of personal data misuses. As previous work has stated, taxonomies comprise subjective social, technical, and political choices. Classifications (ours included) are always normative attempts to “impose order onto an undifferentiated mass”. While we acknowledge the subjective character of our endeavor, we also strive for a holistic overview and see value in creating a structured classification of the possible ways in which personal data can be weaponized. We argue that without a comprehensive and clear overview, many potential paths of harm can easily be overlooked in privacy impact assessments and public discourse, leading to an overly narrow view of the problem. This paper is based on extensive literature research, including previous investigations and press articles, as well as discussions among the three authors and, occasionally, advisors and fellow researchers throughout many months until reaching theoretical saturation. 

 

Our classification scheme comprises the following eleven categories: 

 

1. Consuming data for personal gratification – Section 2.1 

 

2. Generating coercive incentives – Section 2.2 

 

3. Compliance monitoring – Section 2.3 

 

4. Discrediting – Section 2.4 

 

5. Assessment and discrimination – Section 2.5 

 

6. Identification of personal weak spots – Section 2.6 

 

7. Personalized persuasion – Section 2.7 

 

8. Locating and physically accessing the data subject – Section 2.9 

 

9. Contacting the data subject – Section 2.8 

 

10. Accessing protected domains or assets – Section 2.10 

 

11. Reacting strategically to actions or plans of the data subject – Section 2.11 

 

While we acknowledge that a holistic exploration of the topic is particularly important in view of the rapid proliferation of data-based services and the accompanying rise of governmental and corporate mass surveillance, the focus of this paper is not limited to the domain of big data, nor even to the digital domain. The classification is meant to be universally applicable, independent of how the data was obtained (e.g., online or offline, legally or illegally, collected or inferred, with or without the knowledge of the data subject), who causes the threat (e.g., individual person, corporation, organized crime group, intelligence agency) and what motivations lie behind it (e.g., financial gain, political objectives, revenge). These parameters will only be included in examples for illustrative purposes. 

 

As even de-identified data has the potential to cause harm to individuals (cf. Sect. 3.2), we chose to adopt a very broad understanding of “personal data” for the purpose of this classification. While privacy law usually applies to information relating to an identified or identifiable natural person (e.g., Art. 4 GDPR), our proposed classification may apply to any information that is, or once was, personal data according to the above definition, including even anonymized data – as long as it still has the potential to cause or facilitate harm against the data subject. 

 

The remainder of this paper is structured as follows. Section 2 presents the eleven identified categories of personal data misuse. Section 3 then explains the utility of the classification scheme and discusses its scope and limitations. Section 4 concludes the paper.

Privacy

'The New Privacy Law' by Ari Ezra Waldman in (2021) 55 UC Davis Law Review comments 

We are in a second wave of privacy law. The first wave was characterized by privacy policies, self-regulation, and notice and choice. But in the last three years, nine proposals for comprehensive privacy legislation have been introduced in the United States Congress and 42 have been introduced in the states. From the perspective of practice, almost all of these proposals are roughly the same – they require individuals to exercise control rights and rely on internal corporate compliance for ongoing monitoring. This second wave of privacy law is undoubtedly different from the first, but how? This essay provides a new taxonomy to understand changes in US privacy law, distinguishing between two ‘waves’ along three metrics: their practices, theories of governance, and underlying ideologies. A first wave was characterized by privacy policies, self-regulation, and limited regulatory enforcement. Its practices were focused on notice, its governance was self-regulatory, and its ideology was laissez faire. A second wave almost uniformly relies on internal corporate compliance structures to manage data collection, processing, and use. Its practices are focused on compliance, its governance is managerial, and its underlying ideology is neoliberal. This taxonomy offers privacy law scholars a new way to understand and critique the current state of the field. The essay concludes with four research questions for scholars to pursue.

In Western Australia, following statutes in the ACT, Victoria and elsewhere (and Kathleen Clubb v Alyce Edwards and Anor; John Graham Preston v Elizabeth Avery and Anor [2019] HCA 11 noted here), the Attorney-General has introduced the Public Health Amendment (Safe Access Zones) Bill 2021 (WA) which amends the Public Health Act 2016 (WA) to 

create safe access zones around premises at which abortions are provided. These zones will ensure that those who want to access abortion services can do so in a safe and private manner. The Bill also prohibits publication and distribution of certain recordings to protect the privacy and dignity of those who access abortion services.

Hohfeld

'Private Law, Analytical Philosophy and the Modern Value of Wesley Newcomb Hohfeld: A Centennial Appraisal' by Kit Barker in (2018) Oxford Journal of Legal Studies comments

Hohfeld is one of the best-known analytical philosophers to have written in the area of private law in western, common law legal systems in the twentieth century, but it is sometimes suggested that his scheme has had little impact on the law. One hundred years after his death, this article assesses the man and the impact of his work, noting a resurgence of interest in him amongst both commentators and courts. It suggests that there are two good reasons why his analytical philosophy is more relevant and useful today than ever – its potential to discipline and rationalise an increasingly insistent and ubiquitous rhetoric of rights; and the assistance it can provide in unpicking the complexity of the relationship between private law and the modern administrative state. 

Barker argues

 Wesley Newcomb Hohfeld died prematurely one hundred years ago of endocarditis, at the age of only 39. Although he is one of the best-known Western analytical philosophers to have written about private law, it is sometimes suggested that his work has had little real impact.1 My claim here is that his influence, whilst patchy, has nonetheless been profound and, more importantly, that, far from oxidising beneath the patina of time, or being buried by less ‘formal’ approaches toward law that developed through the legal realist and critical legal studies movements in the United States in the twentieth century, his approach is currently undergoing something of a renaissance amongst commentators and courts. I shall explore some possible explanations for this and identify the features of his thinking that continue to commend it. I shall also suggest some reasons why his approach is especially well-suited to the challenges faced by private law in the current age. 

Looking ahead, I shall propose three reasons why Hohfeld remains useful to us today. First – and this was genius in itself – he told us not what to think about legal rights, but ‘how’ to think about them. Because his approach does not predicate any particular set of values, or the use of the law to any particular end, it is more readily transmissible from one time to another and one jurisdiction to the next. He gave us a language to use in respect of rights, not a defined text to read. That is the beauty and the freedom of analytical philosophy. 

A second reason is that the world of law is now increasingly saturated with both the fact and ever-more-insistent rhetoric of rights. Often, the aim of this new rights-speak is strongly socially progressive, being directed at enhancing welfare and respect for fundamental human interests and realms of choice (human rights); sometimes, by contrast, it is associated with a more conservative political agenda that mandates judges not to use private law in welfarist ways. Either way, however, the exponential increase in rights discourse in recent years invites new controversy, as well as importing new concepts and, sometimes, a certain looseness of language. In such conditions, a stable method for understanding the way in which legal relationships are being reconfigured and what the reconfigurations might mean proves especially valuable. 

Thirdly, the rise of the administrative state throughout the twentieth century has made the modern relationship between private and public law extremely complicated. Unpicking this relationship – between the state and private interests; and between the state and private law systems of civil justice – requires a keen analytical intelligence. Hohfeld has much to offer in this process and his framework is useful, I shall argue, in understanding the modern dynamics between private and public law. 

Hohfeld’s modern relevance is hence in part, I shall suggest, a facet of the durable, scientific objectivity of his analytical technique and, in part, of its disciplining nature and utility at a point in time in which rights have become highly politically charged and the set of legal relationships existing between the state and its citizens is more intricate than ever. This is not to suggest that would be impossible to understand modern private law without Hohfeld, but his techniques are very well adapted to this end.

Surveillance

'Humpty Dumpty Was Wrong - Consistency in Meaning Matters: Some Definitions of Privacy, Publicity, Secrecy, and Other Family Members' by Gary T Marx in (2016) 1(1) Secrecy and Society states 

“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”

“The question is,” said Alice, “whether you can make words mean so many different things.”

“The question is,” said Humpty Dumpty, “which is to be master – that’s all.”

- Lewis Carroll Through the Looking Glass

Humpty Dumpty was partially right. His words may mean what he chooses to have them mean, but that is just his story.  There is nothing inherent or eternal in the words (or what they represent). Granted that he has the power to say what he means, but others have the power to say what they mean, not to mention hearing what they choose to hear. Alice is the more interesting of the two when she wonders what the consequences are of making "words mean so many different things." For the understanding of secrecy and related phenomena those consequences are decidedly negative.

In the beginning there was the concept. And in beginning an inquiry into surveillance (Marx 2015), I argue that the failure to  adequately define and differentiate terms can cloud and contort ethical and empirical understanding and lead to unnecessary conflict and unwise policies. Consider surveillance and privacy, terms central to understanding secrecy. What "are" they really? (Or better what do people mean when they use the terms)?

In popular and academic dialogue surveillance is often wrongly seen to be only the opposite of privacy—the former is seen as bad and the latter good. For example, social psychologist Peter Kelvin (1973) emphasized privacy as a nullification mechanism for surveillance. But Kelvin’s assertion needs to be seen as only one of four basic empirical connections between privacy and surveillance. Surveillance is not necessarily the dark side of the social dimension of privacy.  Surveillance implies an agent who accesses personal data (whether through discovery tools, rules, or physical and logistical settings). Privacy, in contrast, involves a subject who can restrict access to personal data through related means. But both can be connected in a variety of ways.

Surveillance can obviously invade privacy—that’s what the fuss is all about (e.g., the employee in a lab testing for AIDS who sold information on positive results to a mortuary). Yet surveillance can also be the means of protecting privacy (biometric identification and audit trails, video cameras that film those with access to sensitive data). And privacy can also protect surveillance (undercover police who use fake IDs and call forwarding to protect their identity) just as it can nullify it (e.g., encryption, whispering, and disguises). Privacy for whom and surveillance of whom and by whom and for what reasons need to be specified.

Depending on how it is used, active surveillance can affect the presence of privacy and/or publicity. As nouns, the latter can be seen as polar ends of a continuum involving rules about withholding and disclosing, and seeking or not seeking, information. Thus, depending on the context and role played, individuals or groups may be required to engage, find it optional to engage, or be prohibited from engaging in these activities, whether as subjects or agents of surveillance and communication .

The rules applying to agents and subjects are in principle independent. When the rules specify that a surveillance agent is not to ask certain questions of (or about) a person and the subject has discretion about what to reveal, we can speak of privacy norms. When the rules specify that the subject must reveal the information or the agent must seek it, we can speak of publicity norms (or, better perhaps, disclosure norms). With publicity norms there is no right to personal privacy that tells the agent not to seek information, or that gives the subject discretion regarding revelation. Rather there is the reverse — the subject has an obligation to reveal and/or the agent to discover

Privacy Taxonomy and the GDPR

'Property and (Intellectual) Ownership of Consumers’ Information: A New Taxonomy for Personal Data' by Gianclaudio Malgieri in (2016) 4 Privacy in Germany – PinG 133 comments

This article proposes a new personal data taxonomy in order to determine more clearly ownership and control rights on different kinds of information related to consumers. In an information society, personal data is no longer a mere expression of personality but a strong economic element in the relationships between companies and customers. As a consequence, the new General Data Protection Regulation recognises different levels of control rights to consumers in accordance with a ‘proprietorial’ approach to personal data. Moreover, existing data taxonomies (based on a subject matter approach) are anachronistic. In an IoT world, the information industry is interested in any data related to consumers: not only their commercial preferences or habits, but also their health conditions, their family and financial status, their sports habits, friendships, and so on. At the same time, there exists a great conflict between privacy concerns and IP interests of companies regarding customer data processing.

This article proposes to change the perspective on personal data taxonomy and to classify personal information in accordance with its ‘relationship’ to the data subject and to reality, and with intellectual activity of businesses in acquiring and processing such data. Three categories are identifiable in this respect: strong relationship data (data provided directly by customers), intermediate relationship data (data observed or inferred and related to the present life of consumers), and weak relationship data (predictive data). Each category reflects different individuals’ rights under the EU General Data Protection Regulation. Data portability is provided just for strong relationship data, whereas no control rights are provided by weak relationship data. At the same time, other rights rebalance information asymmetries between consumers and enterprises (right to information, right not to be subjected to automated profiling, etc.). Therefore, the best balancing approach in order to both respect the IP rights of companies and the information privacy rights of consumers is to distinguish ‘control rights’ (access, portability, oblivion) from ‘reaction rights’ (right to information, opposition to automated profiling, etc).