Dora Maurer, Reversible and changeable phases of movement (Étude 4), 1974.
The history of credit scoring in the United States
 Research Initiative: Digital Ethics

In recent months, reporting on China’s social credit system has led American commentators to decry the patent totalitarianism implicit in a tool that aggregates personal data on individuals, variously constricting purchasing power, mobility, and educational opportunity based on the collected score. Others have justly pointed out the fundamental role that credit scores play in the structuring of American life: the where, how, and if of buying, borrowing, and working in the United States being often similarly determined by one’s credit.

As a recent paper by JONATHAN WEINBERG demonstrates, the system of social ranking via data collection has a long history in the United States, much of which is crucial for ongoing debates in digital ethics. Weinberg explains:

"The story of the 21st-century credit bureau echoes that of the first credit bureau, initially known as the Mercantile Agency, founded before the Civil War. In a world in which such things were unknown, the Mercantile Agency sought to establish and maintain a file on every American who might ever seek commercial credit. Deeply controversial and deeply influential, the Mercantile Agency created an early, computer-free, version of the database system, maintaining and updating files on well over a million people by 1890. It and its rivals put in place a new, pervasive, network of social monitoring that became a central part of the nation's economic infrastructure.

The early credit bureaus faced some of the same issues that the modern ones do, and inspired deep privacy fears. Modern privacy law didn't exist yet, and so privacy issues found their way into the law of credit bureaus in the context of defamation lawsuits. The resulting defamation case law displays remarkably modern concerns about the commoditization of information, and about the untrammeled distribution of information about individuals. It suggests possibilities in the evolution of the law that ultimately went unrealized."

Link to the full paper.

  For more on 19th century credit scoring, a paper by Bruce Carruthers and Barry Cohen examines the rise of credit scoring agencies, including their variable efficacy. Link.  

  Danielle Citron and Frank Pasquale's canonical 2014 paper "The Scored Society" calls for due process in automated predictions. Link.

  A 2017 paper by Mikella Hurley and Julius Adebayo provides an excellent overview of the changes augured by big-data scoring systems: "The credit-scoring industry has experienced a recent explosion of start-ups that take an 'all data is credit data' approach, combining conventional credit information with thousands of data points mined from consumers' offline and online activities." Link

 A 2006 paper, also by Danielle Citron, looks to the past to draw lessons on the management of liability inherent in "digital reservoirs" today: "Public choice analysis suggests that a meaningful public law response to insecure databases is as unlikely now as it was in the early Industrial Age. The Industrial Age's experience can, however, help guide us to an appropriate private law remedy for the new risks and new types of harm of the early Information Age." Link

    digital_ethics  credit_scoring

+ + + 

+   JFI is launching a new seminar on social mobility and opportunity gaps: "A growing body of research has shown that segregation, access to housing, transportation, family formation, schools, and jobs have all been shown to have a correlation with upward mobility; one’s zip code has been shown to have the biggest impact on social and economic mobility. Participants, along with our invited speakers, will explore public and private policies, practices and norms that can foster greater social mobility." Link to further information and registration instructions.  

+   Rethinking infrastructure in an era of unprecedented weather events. Link

+   A report from IPUMS highlights research concerns stemming from the Census Bureau's September announcement to implement differential privacy standards in its research. Researchers could "lose the free access they have enjoyed for six decades to reliable public Census Bureau data...[T]he differential privacy approach is inconsistent with the statutory obligations, history, and core mission of the Census Bureau." Link

+   A blog post by San Jose Mayor Sam Liccardo outlines municipal tax structures in a transparent discussion of what the city can expect from Google's new campus there. Link

+   A new paper asks whether informing students on the benefits of higher education, its costs, and possible funding options increases student applications. Among the findings: "Our results indicate that a low-cost information intervention is an efficient tool to encourage students to translate their college intentions into actual enrollment." Link

+   At People's Policy Project, Matt Bruenig details different types of welfare benefits: "flat, means-tested, trapezoid, and so on." Link

+   A forthcoming paper examines intergenerational occupational mobility across three continents and finds that "higher mobility of 19th-century US relative to Britain might not have been a reflection of 'American exceptionalism', but rather a reflection of more widespread differences between settler economies of the New World and Europe." Link

+   On online school ratings and their effects on economic and social segregation in America. Link

+   An extraordinarily rich literature review on the economic history of Africa: "Starting from the colonial period, which has been linked to almost all of Africa's post-independence maladies, we first review works that uncover the lasting legacies of colonial investments in infrastructure and human capital and quantify the role of various extractive institutions, such as indirect rule and oppression associated with concessionary agreements. Second, we discuss the long-lasting impact of the 'Scramble for Africa' which led to ethnic partitioning and the creation of artificial modern states. Third, we cover studies on the multi-faceted legacy of the slave trades. Fourth, we analyze the contemporary role of various precolonial, ethnic-specific, institutional and social traits, such as political centralization." Link.  

+   "Most firms have a high labor share, yet the aggregate labor share is low due to the disproportionate effect of a small fraction of large, extremely productive 'superstar firms.'" Link

+   Metaresearch: using co-authorship networks to better refine rankings and funding instruments. Link

+   The political economy of lobotomies. "In the late 1940s, the United States experienced a 'lobotomy boom' where the use of the lobotomy expanded exponentially. We engage in a comparative institutional analysis to explain why the lobotomy gained popularity despite widespread scientific consensus it was ineffective. Government provision and funding for public mental hospitals and asylums expanded and prolonged the use of the lobotomy." Link.
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