Economy

When Divides Collide: How COVID-19 Has Further Exposed the Link Between the Digital Divide and the Education Gap

Schuyler Troy, MJLST Staffer

As we enter what public health experts warn will be the worst phase yet of the coronavirus pandemic, many Americans have been forced to reckon with the world of remote work—as of June 2020, 42 percent of the U.S. work force was working from home full time. Zoom, the now-ubiquitous video teleconferencing platform, saw an increase in meeting participation from approximately 10 million daily participants in December 2019 to at least 200 million by the end of March 2020. Zoom snafus have taken their place in the cultural zeitgeist, ranging from relatively harmless and even humorous technical snafus to more serious issues like “Zoombombing” and privacy concerns.

Among the more serious problems coming into sharper focus is the effect that remote learning has had on school-aged children, their parents, and their teachers. Without a national strategy regarding how to reopen schools for in-person instruction, states and localities were left to devise what ultimately became a patchwork of solutions. As of September 2, 2020, 73 percent of the largest school districts in the United States had chosen to offer only remote instruction at least to start the year, affecting more than 8 million students.

Early data from this massive shift to remote instruction has revealed some worrying signs. A majority of teachers across the United States report that fewer than half of their students are attending remote classes; 34 percent of teachers report that only 1 in 4 students are attending remote classes. Perhaps more distressing is the data showing stagnation in academic progress. Researchers at Brown University and Harvard University analyzed data gathered for over 800,000 students across the United States and found that through late April 2020, “student progress in math had decreased by about half in classrooms located in low-income ZIP codes, [and] by a third in classrooms in middle-income ZIP codes” as compared to a typical school year. An analysis by McKinsey & Company indicates that the effects on Black and Hispanic students could be even more pronounced.

While racial and socioeconomic education achievement gaps are not new, the shift to remote instruction nationwide appears to have exacerbated them. Pew Research data provides some clues as to one factor that may be driving this phenomenon: lack of access to reliable, high-speed Internet that is necessary for videoconferencing and online coursework. As of 2019, 61 percent of Hispanic Americans and 66 percent of Black Americans used broadband to access the Internet, as compared to 79 percent of white Americans. Only 56 percent of Americans making under $30,000 per year had access to broadband Internet at home, as compared to 92 percent of Americans making over $75,000. Rural communities, which tend to have higher poverty rates than urban and suburban communities, are also less likely to have access to broadband Internet; only 63 percent of rural communities had access to broadband Internet, as compared to 75 percent of urban communities and 79 percent of suburban communities.

Taken together, the data paints a clear and rather sobering picture: remote instruction is leaving some of America’s most vulnerable students even further behind than before.

Congress has taken action in recent years to address the broadband access disparity with the Digital Equity Act, introduced in the Senate in 2019 but not yet passed, which would require the National Telecommunications and Information Administration to establish grant programs promoting digital equity and inclusion, and building capacity for state governments to increase adoption of broadband by their residents. President-elect Joe Biden also pledged throughout the 2020 presidential campaign to expand access to broadband Internet through infrastructure plans and subsidies to low-income Americans who cannot afford broadband. With seeming bipartisan agreement, a rarity in today’s polarized Congress, the United States may be on track to begin closing the digital divide. How that affects the education gap is yet to be seen, but there is good reason to believe closing the digital divide will help narrow the education gap as well.

Pandemics are fairly rare, but they are near impossible to predict, either in frequency or severity. The world was caught off-guard by COVID-19, but the lessons learned, including the lessons on remote instruction, can and should endure. Further, remote instruction is now another metaphorical “tool in the belt” for school districts; many districts are now considering eliminating snow days and replacing them with remote instruction. The sooner there is action on bridging the digital divide, the better the chances that students have to maintain their learning goals.


Ad Astra Per Aspera – “To the stars through difficulties”

Carlton Hemphill, MJLST Staffer

With upcoming elections and the ongoing pandemic on the minds of many, it’s easy to get lost in the negatives of 2020. However, one shining star of a historic event took place on May 30, 2020, NASA astronauts once again launched from U.S. soil, and for the first time on commercially produced and maintained spacecraft. The mission to the International Space Station (ISS) went as well as anyone could have hoped for: uneventful. It sounds ironic to describe such a monumental moment as being “uneventful,” but in the context of strapping humans to the tip of a rocket and blasting them into space, “uneventful” is good. It is also a testament to how far the privatization of space exploration has come. SpaceX, the company responsible for the successful launch of NASA astronauts to the ISS, did not start out with success. Many of their early launch attempts of the Falcon 1 ended in disaster, nearly putting the company out of business. However, with the help of government contracts SpaceX was able to continue researching and developing their rockets to the point of being an industry leader.

What about the economy? Good news for the U.S. economy and taxpayers alike.

Besides allowing for this milestone of American science and engineering to occur, government contracts for commercial space exploration prove to be economically beneficial. Prior to the May 30th mission, NASA was paying a premium to launch astronauts on Russian spacecraft, and virtually all commercial satellite launches had been outsourced to Russia and China. It appeared as if the United States was out of the space game. With the then existing technology, domestic aerospace companies were unable to match the prices offered by foreign competitors. The economic incentives provided by government contracts to domestic companies such as SpaceX, have reversed this trend. They have allowed companies to invest in research that has led to tremendous cost savings, such as a reusable first stage rocket engine, and increased reliability and safety. Domestic companies are now able to offer safe and reliable space travel cheaper than foreign competitors. This has once again shifted power back to the United States, with SpaceX controlling the market for commercial satellites, as well as the future launches of NASA astronaut missions. NASA plans to continue using commercial spacecraft for its next mission to the ISS. The mission, named SpaceX Crew–1, is slotted for November 14, 2020, and will bring three NASA astronauts and one Japanese mission specialist to the ISS. So, stay tuned, and stay excited!

Is there more to commercial space exploration than satellites and astronauts? Sure there is.

The idea of sending paying customers into space is nothing new and has been talked about since space travel first became a reality. The recent success of commercializing space has reignited talk about profiting from those curious to venture out of this world (especially with the way 2020 has gone). NASA has even gotten on board with economizing space and is planning on allowing “private astronauts” to spend up to 30 days on the ISS for the low cost of $35,000 per night, plus shipping and handling (i.e. launch costs for commercial spacecraft). It seems that the end goal of both the government and private companies is to stimulate a space economy. While this concept might initially seem hard to imagine, one need only look to the evolution of the aviation industry for a reality check.

Of course, when a space economy becomes reality, there will be a pressing need for increased laws and regulations. While space travel has been around for over half a century, and a good body of laws pertaining to space already exist, the concept of commercialized space travel is still relatively new and uncharted territory. Lawmakers will most likely turn to the aviation industry for guidance on how to regulate this growing field. As technology advances and propels people further into previously uncharted territory, the law must follow hand in hand and evolve to the changing circumstances.

 


It’s a Small World, and Getting Smaller: The Need for Global Health Security

Madeline Vavricek, MJLST Staffer

The word “unprecedented” has been used repeatedly by every news organization and government official throughout the last several months. Though the times that we live in may be unprecedented, they are far from being statistically impossible—or even statistically unlikely. Based on the most recent implementation of the International Health Regulations released by the World Health Organization (WHO) in 2005, more than 70% of the world is deemed unprepared to prevent, detect, and respond to a public health emergency. The reality of this statistic was evidenced by the widespread crisis of COVID-19. As of September 29, 2020, the global COVID-19 death toll passed one million lives, with many regions still reporting surging numbers of new infections. Experts caution that the actual figure could be up to 10 times higher.

The impact of COVID-19 has made pandemic preparedness paramount in a way modern times have yet to experience. While individual countries look inward towards their own national response to the coronavirus, it is apparent now more than ever that global issues demand global solutions. The ongoing COVID-19 pandemic indicates a need for increased resiliency in public health systems to manage infectious diseases, a factor known as global health security.

The Centers for Disease Control and Prevention (CDC) defines global health security as “the existence of strong and resilient public health systems that can prevent, detect, and respond to infectious disease threats, wherever they occur in the world.” Through global health security initiatives, organizations such as the Global Health Security Agenda focus on assisting individual countries in planning and resource utilization to address gaps in health security in order to benefit not only the health and welfare of the individual countries, but the health and welfare of the world’s population as a whole. The Coronavirus has been reported in 214 countries, illustrating that one country’s health security can impact the health security of dozens of others. With the ever-increasing spread of globalization, it is easier for infectious diseases to spread more than ever before, making global health security even more essential than in the past.

Global health security effects more than just health and pandemic preparedness worldwide. Johnson & Johnson Chief Executive Officer Alex Gorsky recently stated that “[g]oing forward, we’re going to understand much better that if we don’t have global public health security, we don’t have national security, we don’t have economic security and we will not have security of society.” As demonstrated by COVID-19, failure to adequately prevent, detect, and respond to infectious diseases has economic, financial, and societal impacts. Due to the Coronavirus, the Dow Jones Industrial Average and the Financial Times Stock Exchange Group saw their biggest quarterly drops in the first three months of the year since 1987; industries such as travel, oil, retail, and others have all taken a substantial hit in the wake of the pandemic. Unemployment rates have increased dramatically as employers are forced to lay off employees across the majority of industries, amounting in an estimated loss of 30 million positions in the United States alone. Furthermore, Coronavirus unemployment has been shown to disproportionally affect women workers and people of color. The social and societal effects of COVID-19 continue to emerge, including, but not limited to, the interruption of education for an estimated 87% of students worldwide and an increase in domestic violence rates during shelter in place procedures. The ripple effect caused by the spread of infectious disease permeates nearly every aspect of a nation’s operation and its people’s lives, well beyond that of health and physical well-being.

With a myriad of lessons to glean from the global experience of COVID-19, one lesson countries and their leaders must focus on is the future of global health security. The shared responsibility of global health security requires global participation to strengthen health both at home and abroad so that future infectious diseases do not have the devastating health, economic, and social consequences that the coronavirus continues to cause.

 


Boeing Bailout: 737 Max Crashes and the Coronavirus

Bernard Cryan, MJLST Staffer

Boeing Overview

Boeing plays a major role in the aerospace industry—both domestically and internationally. Boeing employs over 160,000 people worldwide and had a revenue of $76 billion in 2019. According to Forbes’ 2019 Fortune Global List, Boeing is ranked as Fortune 100 company. In fact, Boeing is America’s largest manufacturing exporter. Boeing’s business operations are organized into three units: Commercial Airplanes; Defense, Space & Security; and Boeing Global Services. Boeing’s Commercial Airplanes division is responsible for producing “almost half the world fleet” with more than 10,000 Boeing-built jetliners in service worldwide and “about 90% of the world’s cargo is carried onboard Boeing planes.”

737 Max Crashes

Boeing’s popular commercial airplane—the 737 Max—was recently involved in two deadly crashes. In October 2018, 189 passengers were killed on a Lion Air flight taking off from Indonesia. Again, in March 2019, 157 passengers were killed on an Ethiopian Airlines flight just minutes after takeoff. In response, Boeing grounded all 737 Max airplanes around the world and created a $100 million relief fund “to meet the family and community needs of those affected by the accidents.” Nevertheless, Boeing has received harsh criticism and scrutiny over deficiencies in its product and training. The 737 Max airplanes are still not cleared to fly causing Boeing customers to revise or even cancel orders. Certain airlines have also demanded compensation from Boeing for flight cancellations that resulted from the grounding of 737 Max airplanes. Boeing’s stock price fell after the crashes and Boeing’s revenue fell from $101 billion in 2018 to $76 billion in 2019. Boeing even replaced its CEO after he was unable to stabilize the company following the crashes. In sum, the 737 Max crashes have forced Boeing into a vulnerable financial position.

Coronavirus

The recent COVID-19 outbreak has posed additional challenges for Boeing and the entire aerospace industry. Boeing has publicly acknowledged the struggles of the entire industry caused by the coronavirus. For example, coronavirus’ impact on travel has forced American Airlines to fly its first cargo-only flight in 36 years. Boeing is directly impacted by the coronavirus because struggling airlines are not currently in the position to place orders for new airplanes.

Government’s Response

Although there is fierce competition amongst airlines, there is little competition in the manufacture of commercial airplanes. Boeing and Airbus, a European company, are the two main global suppliers of large commercial aircraft and have almost complete market power. President Trump has recognized Boeing’s indispensable role in keeping America competitive in the global industry and has recently stated, “Yes, I think we have to protect Boeing. We have to absolutely help Boeing.” Boeing has publicly expressed support for the government’s plan to bailout the aerospace industry.

Boeing is requesting a bailout of the aerospace industry in the amount of $60 billion. Boeing has suspended paying dividends and CEO Dave Calhoun has given up his pay temporarily. Additionally, United Airlines has threatened to cut jobs if the bailout relief is not passed by Congress. The aerospace industry wants help from the government. Some, however, caution against using the term ‘bailout’ for this type of situation because the airlines did not cause the hardship resulting from the coronavirus. Although Boeing and the airlines are not responsible for the coronavirus, they are at least partly responsible for their current inability to survive through these challenging times—Boeing and the airlines have spent billions of dollars in recent years buying back their own stock. For example, airlines have spent $42.5 billion on buy backs between 2014 and 2019 which is almost identical to the amount the industry is now requesting from the government.

The Bailout and The Takeaway

A government bailout can be in the form of legislation providing money or resources to a company or even an industry to help that company or industry avoid bankruptcy. For example, Congress approved a $15 billion bailout to the airlines in response to the 9/11 terrorist attacks. Another example is the Emergency Economic Stabilization Act of 2008 where the government provided bailout relief to banks after the mortgage crisis. AIG initially received an $85 billion loan (later receiving more money totaling $150 billion) from the Treasury in exchange for 79.9% equity in AIG. The loan was to be repaid with interest; the U.S. government and taxpayers eventually made $22.7 billion from interest payments.

A government bailout of the aerospace industry appears imminent. Boeing is likely to be considered “too big to fail.” The main questions are how much money will go to Boeing and the aerospace industry, in what form, e.g., debt or equity, and what strings will be attached to that money. Will the government acquire some ownership of Boeing as they did with AIG? Boeing CEO has said Boeing may reject any relief from the government if the government demands stake in the company. Will Boeing be required to change any of its Commercial Airplane division business practices? Will there be more government oversight of Boeing’s operations? Will Boeing be required to cut emissions from its planes to help protect the environment? The aerospace industry bailout will be interesting to monitor as things should come together quickly in the next few weeks, or even days.


The Music Modernization Act May Limit Big Name Recording Artists’ Leverage in Negotiations with Music Streaming Companies

By: Julia Lisi, MJLST Staffer

Encircled by several supportive recording artists, President Trump signed the Music Modernization Act (“MMA”) into law on October 11, 2018. Supporters laud the MMA as a long overdue update for U.S. copyright law. Federal law governs roughly 75% of recording artists’ compensation, according to some estimates. The federal regulatory scheme for music license fees dates back to 1909, before the advent of music streaming. Though the scheme has been tweaked since 1909, the MMA marks a major regulatory shift to accommodate the large market for music streaming services like Spotify and Apple Music.

Prior to the MMA, streaming services virtually had two options for acquiring music catalogs: (1) either acquire licenses for each individual song or, (2) provide music without licenses and prepare for infringement suits. Apple Music adopted the first strategy and as a result initially suffered from a much leaner music catalog. Spotify went with the second strategy, setting aside funds to weather litigation.

The MMA offers a preexisting mechanism, the mechanical license, on a broader scale. Once the MMA takes full effect, streaming services can receive blanket licenses to entire catalogs of music, all in one transaction. The MMA establishes the Mechanical Licensing Collective (the “Collective”), a board of industry participants, which will set license prices. The MMA is, in part, meant to ensure that more participants in the music industry will be paid for their work. For example, music producers and engineers can expect to receive more compensation under the MMA.

While the MMA may broaden the pool of industry participants who get compensation from streaming, the MMA could weaken big name artists’ bargaining positions with streaming services. Recording artists like Taylor Swift and Adele have struggled to keep their albums off streaming services like Spotify. Swift resisted music streaming based on her conviction that streaming services did not fairly compensate artists, writers, and producers. While Swift may have come to an agreement with Spotify and allowed her albums to be streamed, there are still holdouts. More than two years after its release, Beyoncé’s Lemonade still is not on Spotify.

With the Collective controlling royalty rates, big name artists might not have the holdout power that they wield now. If Swift’s music had been lumped into a collective mechanical license, she may not have had the authority to withdraw or withhold her albums from streaming services. The MMA’s mechanical licenses are compulsory, indicating the lower level of control copyright owners may have. Despite this potential loss of leverage, the MMA is widely supported by artists and industry executives alike. Only time will tell whether the Collective’s set prices will make compensation within the music industry fairer, as proponents suggest.


And Then AI Came For The Lawyers…?

Matt McCord, MJLST Staffer

 

Artificial intelligence’s possibility to make many roles redundant has generated no small amount of policy and legal discussion and analysis. Any number of commentators have speculated on AI’s capacity to transform the economy far more substantially than the automation boom of the last half-century; one discussion on ABC’s Q&A described the difference in today’s technology development trends as being “alinear” as opposed to predictable, like the car, a carriage with an engine, supplanting a carriage drawn by a horse.

Technological development has largely helped to streamline law practice and drive new sources of business and avenues for marketing. Yet, AI may be coming for lawyers’ jobs next. A New Zealand firm is working to develop AI augmentation for legal services. The firm, MinterEllisonRuddWatts, looks to be in the early stages of developing this system, having entered into a joint venture agreement to work on development pathways.

The firm claims that the AI would work to reduce the more mundane analytic tasks from lawyers’ workloads, such as contract analysis and document review, but would only result in the labor force having to “reduce,” not be “eliminated.” Yet, the development of law-competent AI may result in massive levels of workforce reduction and transformation: Mills & Reeve’s Paul Knight believes that the adoption will shutter many firms and vastly shrink the need for, in particular, junior lawyers.

Knight couches this prediction in sweetening language, stating that the tasks remaining for lawyers would be “more interesting,” leading to a more efficient, more fulfilled profession engaging in new specialties and roles. Adopting AI on the firm level has clear benefits for firms looking to maximize profit per employee: current-form AI, according to one study, AI is more accurate than many human attorneys in spotting contract issues, and vastly more efficient, completing a 90-minute task in 30 seconds.

Knight, like many AI promoters, claims that the profession, and society at large, should embrace AI’s role in transforming professions by transfiguring labor force requirements, believing AI’s benefits of increasing efficiency and work fulfillment by reducing human interaction with more mundane tasks. These words will likely do little to assuage the nerves of younger, prospective market entrants and attorney specializing in these “more mundane” areas, who may be wondering if AI’s development may eliminate their role from the labor force.

While AI’s mass deployment in the law is currently limited, due in part to high costs, experimental technology, and limited current applications, machine learning, especially recursive learning and adaptation, may bring this development firmly into the forefront of the field unpredictably, quickly, and possibly in the very near future.


Airbnb Regulations Spark Controversy, but Have Limited Effect on Super Bowl Market

MJLST Staffer, Sam Louwagie

 

As Super Bowl LII descends upon Minneapolis, many Twin Cities residents are hoping to receive a windfall by renting out their homes to visiting Eagles and Patriots fans. City regulations placed last fall on online short-term rental platforms such as AirBnB, which prompted an outcry from those platforms, do not appear to be having much of an effect on the dramatic surge in supply.

The short-term rental market in Minneapolis has been a renter’s market in the opening days since the Super Bowl matchup was set. There are 5,000 placements in the Twin Cities on AirBnB this week, as compared to 1,000 at this time last year, according to the Star Tribune. The flood of posted housing options has limited prices, as the average listing has cost $240 per night—more than usual, but much less than the thousands of dollars some would-be renters had hoped for. One homeowner told the Star Tribune that she had gotten no interest in her 4,000-square-foot, six-bedroom house just five blocks from U.S. Bank Stadium, and had “cut the price drastically.”

The surge in AirBnB listings comes despite ordinances that went into effect in December in both Minneapolis and St. Paul. The cities joined a growing list of major U.S. cities that are passing regulations aimed at ensuring guest safety and making a small cut of tax revenue from the rentals. Minneapolis’ ordinance requires a short-term renter to apply for a license with the city, which costs $46 annually. St. Paul’s license costs $40 per year. As of mid-December, according to MinnPost, only 18 applications had been submitted in Minneapolis and only 32 in St. Paul. That would suggest that many of the thousands of listings during Super Bowl week are likely unlicensed. The cities both say they will notify renters they are not in compliance before taking any enforcement action, but a violation will cost $500 in Minneapolis and $300 in St. Paul.

The online rental platforms themselves had strongly objected to the passage of the ordinances, which would require Airbnb to apply for a short-term rental platform license. This would bring a $10,000 annual fee in St. Paul and a $5,000 large platform fee in Minneapolis. According to MinnPost, as of mid-December, no platforms had submitted an application and it was “unclear whether they [would] comply.” Airbnb said in a statement that it believes the regulations violate the 1996 federal Communications Decency Act, and that “the ordinance violates the legal rights of Airbnb and its community.”

While the city ordinances created controversy in the legal world, they do not seem to be having a similar effect on the ground in Minneapolis, as Super Bowl guests still have a dramatic surplus of renting options.


The Electric Vehicle: A Microcosm for America’s Problem with Innovation

Zach Sibley, MJLST Staffer

 

Last year, former U.S. Patent and Trademark Office Director, David Kappos, criticized a series of changes in patent legislation and case law for weakening innovation protections and driving technology investments towards China. Since then it has become apparent that America’s problem with innovation runs deeper than just the strength of U.S. patent rights. State and federal policies toward new industries also appear to be trending against domestic innovation. One illustrative example is the electric vehicle (EV).

 

EVs offer better technological upsides than their internal combustion engine vehicle (ICEV) counterparts. Most notably, as our US grid system moves toward “smart” infrastructure that leverages the Internet of Things, EVs can interact with the grid and assist in maximizing the efficiency of its infrastructure in ways not possible with ICEVs. Additionally, with clean air and emission targets imminent—like those in the Clean Air Act or in more stringent state legislation—EVs offer the most immediate impact in reducing mobile source air pollutants, especially in a sector that recently became the highest carbon dioxide emitter. And finally, EVs present electrical utilities that are facing a “death spiral” an opportunity to recover profits by increasing electricity demand.   

 

Recent state and federal policy changes, however, may hinder efforts of EV innovators. Eighteen state legislators have enacted EV fees—including Wisconsin’s recent adoption, and the overturned fee in Oklahoma—ranging from $50 to $300 in some states. Proponents claim the fee creates parity between traditional ICEV drivers and the new EV drivers not paying fuel taxes that fund maintenance of transportation infrastructure. Recent findings, though, suggest EV drivers in some states with the fee were previously paying more upfront in taxes than their ICEV road-mates. The fee also only creates parity when solely focused on the wear and tear all vehicles cause on shared road infrastructure. The calculus for these fees often neglects that EV and ICEV drivers also share the same air resources and yet no tax accompanies EV fees that would also charge ICEVs for their share of wear and tear on air quality.

 

At the federal level, changes in administrative policy are poised to exacerbate the problem further. The freshly proposed GOP tax bill includes a provision to repeal a $7,500 rebate that has made lower cost EVs a more affordable option for middle class drivers. This change should be contrasted with foreign efforts, such as those in the European Union to increase CO2 reduction targets and offer credits for EV purchases. The contrast can be summed up with one commentator’s observation regarding The New York Times who reported, within the span of a few days, about the U.S. EPA’s rollback of the Clean Power Plan and then about General Motors moving toward a full electric line in response to the Chinese government. The latter story harkens back to Kappos’ comments at the beginning of this post, where again a changing U.S. legal and regulatory landscaping is driving innovation elsewhere.

 

It is a basic tenant of economics that incentives matter. Even in a state with a robust EV presence like California, critics question the wisdom of assessing fees and repealing incentives this early in a nascent industry offering a promising technological future. The U.S. used to be great because it was the world’s gold standard for innovation: the first light bulb, the first car, the first airplane, the first to the moon, and the first personal computers (to name a few). Our laws need to continue to reflect our innovative identity. Hopefully, with legislation like the STRONG Patents Act of 2017 and a series of state EV incentives on the horizon, we can return to our great innovative roots.


In Doge We Trust

Richard Yo, MJLST Staffer

Despite the closure of virtually all U.S.-based Bitcoin exchanges in 2013 due to Congressional review and the uncertainty with which U.S. banks viewed its viability, the passion for cryptocurrencies has remained strong, especially among technologists and venture capitalists. This passion reached an all-time high in 2017 when one Bitcoin exchanged for 5000 USD.** Not more than five years ago, Bitcoin exchanged for 13 USD. For all its adoring supporters, however, cryptocurrencies have yet to gain traction in mainstream commerce for several reasons.

Cryptocurrencies, particularly Bitcoin, have been notoriously linked to dark web locales such as the now-defunct Silk Road. A current holder of Bitcoin, Litecoin, or Monero, would be hard pressed to find a completely legal way to spend his coins or tokens without second guessing himself. A few legitimate enterprises, such as Microsoft, will accept Bitcoin but only with very strict limitations, effectively scrubbing it of its fiat currency-like qualities.

The price of your token can take a volatile 50% downswing or 3000% upswing in a matter of days, if not hours. If you go to the store expecting to purchase twenty dollars’ worth of groceries, you want to be sure that the amount of groceries you had in mind at the beginning of your trip is approximately the amount of groceries you will be able to bring back home.

After the U.S. closures, cryptocurrency exchanges found havens in countries with strong technology bases. Hotbeds include China, Russia, Japan, and South Korea, among others. However, the global stage has recently added more uncertainty to the future of cryptocurrency. In March 2017, the Bank of Japan declared Bitcoin as an official form of payment. Senators in Australia are attempting to do the same. China and Russia, meanwhile, are home to most Bitcoin miners (Bitcoin is “mined” in the sense that transactions are verified by third-party computers, the owners of which are rewarded for their mining with Bitcoins of their own) due to low energy costs in those two nations and yet are highly suspicious of cryptocurrencies. China has recently banned the use of initial coin offerings (ICOs) to generate funds and South Korea has followed suit. Governments are unsure of how best to regulate, or desist from regulating, these exchanges and the companies that provide the token and coins. There’s also a legitimate question as to whether a cryptocurrency can be regulated given the nimbleness of the technology.

On this issue, some of the most popular exchanges are sometimes referred to as “regulated.” In truth, this is usually not in the way that consumers would think a bank or other financial institution is regulated. Instead, the cryptocurrency exchange usually imposes regulations on itself to ensure stability for its client base. It requires several forms of identification and multi-factor authentication that rivals (and sometimes exceeds) the security provided by traditional banks. These were corrections that were necessary after the epic 2014 failure of the then-largest cryptocurrency exchange in the world, Mt. Gox.

Such self-adjustments, self-regulation, and stringency are revealing. In the days of the Clinton administration when internet technology’s ascent was looming, the U.S. government adopted a framework for its regulation. That framework was unassuming and could possibly be pared to a single rule: we will regulate it when it needs regulating. It asked that this technology be left in the hands of those who understand it best and allow it to flourish.

This seems to be the approach that most national governments are taking. They seem to be imposing restrictions only when deemed necessary, not banning cryptocurrencies outright.

For Bitcoin and other cryptocurrencies, the analogous technology may be the “blockchain” that underlies their structure, not the tokens or coins themselves. The blockchain is a digital distributed ledger that provides anonymity, uniformity, and public (or private) access, using complex algorithms to verify and authenticate information. When someone excitedly speaks about the possibilities of Bitcoin or another cryptocurrency, they are often describing the features of blockchain technology, not the coin.

Blockchain technology has already proven itself in several fields of business and many others are hoping to utilize it to effectuate the efficient and reliable dissemination and integration of information. This could potentially have sweeping effects in areas such as medical record-keeping or title insurance. It’s too early to know and far too early to place restrictions. Ultimately, cryptocurrencies may be the canary that gets us to better things, not the pickaxe.

 

*Dogecoin is the cryptocurrency favored by the Shina Inu breed of dog, originally created as a practical joke, but having since retained its value and now used as a legitimate form of payment.

**The author holds, or has held, Bitcoin, Ether, Litecoin, Ripple, and Bitcoin Cash.


The “Fourth Industrial Revolution”: Queue Chaos And Disarray

Rhett Schwichtenberg, MJLST Staffer

We are all familiar with Hollywood’s drastic miscalculations when predicting the future. In Timecop, which took place in 2004, time-travel was the conventional means of transportation. In the world of Marty McFly, 2015 marked the year where hoverboards were the standard means of transportation. In 2001: A Space Odyssey, the moon was colonized by 2001. The list goes on. While we [unfortunately] see none of this today, perhaps Hollywood was not too far off.

Today, robots are shaping the way we live and have contributed a world of good to society. While Google Glass might have been an utter failure, Google’s Self-Driving Car Project is making fast advances to provide the world with hand-free, piece-of-mind driving. Taxi giant, Uber, has also entered the self-driving market with the implementation of self-driving Uber vehicles in the Pittsburgh market. Self-driving technology has the ability to eliminate the extreme and unnecessary amount of traffic deaths occurring every day in addition to providing a reliable mode of transportation for individuals that cannot operate a vehicle. Apart from the transportation industry, robots are growing rapidly in nearly every industry including the agriculture, food service, manufacturing, military, and rehabilitation industries.

Earlier this year, the EU made a proposal calling for the classification of autonomous  robots as “electronic persons.” If codified, this proposal could bestow legal rights upon robots, require companies to pay a social security tax for using them, and impose a liability insurance upon companies using robots in order to protect against any harm they might cause. While ridiculed by many, is there no merit in this proposal?

The age of robotics that is currently among us is being referred to as the “fourth industrial revolution” by economists. The first industrial revolution introduced steam power, the second, electric power, and the third, electronics and information technology. While the past three industrial revolutions have advanced at a linear rate (occurring approximately one-hundred years apart) the current revolution is advancing exponentially. Previous technology has threatened blue-collar jobs, but has never caused us to question whether jobs will even exist in the near future. With the implementation of quantum computing looming, the professionals in scientific and medical fields might experience issues of job security.

Alan Manning, leading author in labor economics and professor at the London School of Economics, seems to remain calm, cool, and collected when tasked with answering the question of how autonomy will affect the labor market. He strongly opines that such technology should not be taxed. Implementing the proposed tax will slow the advancement and use of such technology. Instead, Manning expects investment in modern technology to increase productivity and, at worst, leave the labor market where it currently stands. Manning believes the expert prediction that 47% of jobs will be threatened by autonomic robots is just that, a mere prediction. He retorts that such a prediction is grounded in ignorance rather than educated measures. Manning states that the entire job market must be looked at, not just the specific occupations that will see job reduction. Looking at the job market as a whole, Manning admits that jobs will be lost in some areas, but trusts that new jobs will arise due to an increase in companies’ spending power through the use of autonomic robotics.

So given that autonomic robotics and advanced computing technology is already written in our future, what are the implications of such technology? The simple answer is: we must wait and see.