Data protection and the future of liberalism

Claudia Biancotti and Paolo Ciocca

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Policymakers around the world are finally looking for a way to mitigate the dangers inherent to large-scale data collection and AI use. Their decisions will affect more than the fate of a few firms. The limits that governments set, or decline to set, on who can harness the power of data, and for what ends, will define the meaning of freedom in all societies in the future.

Today’s policy choices will determine how strong the rule of law is in the age of AI, by establishing what protection individuals enjoy against new, algorithm-driven incarnations of state and corporate clout. Decisions on which data can cross borders will affect trade and security. There will be implications on geopolitical equilibria, as shared views on such issues become a driver of alliances.

This is where it all begins, and what lawmakers should focus on. The question
must be answered on grounds of values and principles, providing the basis for a consistent framework. So far, this has only happened in some countries.

The challenge of regulating the data sphere is especially salient for liberal democracies. As economic nationalism gains ground, the Washington Consensus principles are being criticized and sometimes abandoned in the very countries that first embraced them. Multilateralism is showing cracks, and some divergence exists among NATO members on how to interpret their
1949 pledge to stand guard together over freedom. Finding common ground on how liberal ideas carry over in the digital world is central to ending this crisis. This goes beyond specific issues, such as data localization or cybersecurity — it is about fundamentals. Failing to build a shared vision
may open the door to the global primacy of competing value systems.

Keywords: GDPR, Data Protection, Liberalism, AI

JEL Classification: D82; D83; L13

Economist at the Bank of Italy. Aging punk rocker. Knows that OTP has (at least) two meanings on the internet. Opinions expressed here are personal.