An Interesting Alternative To Ayn Rand’s Prescription For The Future

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The Estonian government is so eager to take on big problems that many ambitious techies leave the private sector to join it.Illustration by Eiko Ojala

This is about people with an idea pursuing it with confidence in the ability of government to achieve something that its people want. Not everyone, everywhere, would want this to be sure. But it is a vote in favor of pursuing the common good together. It is worth the read, on a cold winter’s night (or wherever you may be) for a glimpse of the future for those in small, flexible places:

Estonia, the Digital Republic

Its government is virtual, borderless, blockchained, and secure. Has this tiny post-Soviet nation found the way of the future?

Up the Estonian coast, a five-lane highway bends with the path of the sea, then breaks inland, leaving cars to follow a thin road toward the houses at the water’s edge. There is a gated community here, but it is not the usual kind. The gate is low—a picket fence—as if to prevent the dunes from riding up into the street. The entrance is blocked by a railroad-crossing arm, not so much to keep out strangers as to make sure they come with intent. Beyond the gate, there is a schoolhouse, and a few homes line a narrow drive. From Tallinn, Estonia’s capital, you arrive dazed: trees trace the highway, and the cars go fast, as if to get in front of something that no one can see.

Within this gated community lives a man, his family, and one vision of the future. Taavi Kotka, who spent four years as Estonia’s chief information officer, is one of the leading public faces of a project known as e-Estonia: a coördinated governmental effort to transform the country from a state into a digital society.

E-Estonia is the most ambitious project in technological statecraft today, for it includes all members of the government, and alters citizens’ daily lives. The normal services that government is involved with—legislation, voting, education, justice, health care, banking, taxes, policing, and so on—have been digitally linked across one platform, wiring up the nation. A lawn outside Kotka’s large house was being trimmed by a small robot, wheeling itself forward and nibbling the grass.

“Everything here is robots,” Kotka said. “Robots here, robots there.” He sometimes felt that the lawnmower had a soul. “At parties, it gets close to people,” he explained.

A curious wind was sucking in a thick fog from the water, and Kotka led me inside. His study was cluttered, with a long table bearing a chessboard and a bowl of foil-wrapped wafer chocolates (a mark of hospitality at Estonian meetings). A four-masted model ship was perched near the window; in the corner was a pile of robot toys.

“We had to set a goal that resonates, large enough for the society to believe in,” Kotka went on.

He is tall with thin blond hair that, kept shaggy, almost conceals its recession. He has the liberated confidence, tinged with irony, of a cardplayer who has won a lot of hands and can afford to lose some chips.

It was during Kotka’s tenure that the e-Estonian goal reached its fruition. Today, citizens can vote from their laptops and challenge parking tickets from home. They do so through the “once only” policy, which dictates that no single piece of information should be entered twice. Instead of having to “prepare” a loan application, applicants have their data—income, debt, savings—pulled from elsewhere in the system. There’s nothing to fill out in doctors’ waiting rooms, because physicians can access their patients’ medical histories. Estonia’s system is keyed to a chip-I.D. card that reduces typically onerous, integrative processes—such as doing taxes—to quick work. “If a couple in love would like to marry, they still have to visit the government location and express their will,” Andrus Kaarelson, a director at the Estonian Information Systems Authority, says. But, apart from transfers of physical property, such as buying a house, all bureaucratic processes can be done online.

Estonia is a Baltic country of 1.3 million people and four million hectares, half of which is forest. Its government presents this digitization as a cost-saving efficiency and an equalizing force. Digitizing processes reportedly saves the state two per cent of its G.D.P. a year in salaries and expenses. Since that’s the same amount it pays to meet the nato threshold for protection (Estonia—which has a notably vexed relationship with Russia—has a comparatively small military), its former President Toomas Hendrik Ilves liked to joke that the country got its national security for free.

Other benefits have followed. “If everything is digital, and location-independent, you can run a borderless country,” Kotka said. In 2014, the government launched a digital “residency” program, which allows logged-in foreigners to partake of some Estonian services, such as banking, as if they were living in the country. Other measures encourage international startups to put down virtual roots; Estonia has the lowest business-tax rates in the European Union, and has become known for liberal regulations around tech research. It is legal to test Level 3 driverless cars (in which a human driver can take control) on all Estonian roads, and the country is planning ahead for Level 5 (cars that take off on their own). “We believe that innovation happens anyway,” Viljar Lubi, Estonia’s deputy secretary for economic development, says. “If we close ourselves off, the innovation happens somewhere else.”

“It makes it so that, if one country is not performing as well as another country, people are going to the one that is performing better—competitive governance is what I’m calling it,” Tim Draper, a venture capitalist at the Silicon Valley firm Draper Fisher Jurvetson and one of Estonia’s leading tech boosters, says. “We’re about to go into a very interesting time where a lot of governments can become virtual.”

Previously, Estonia’s best-known industry was logging, but Skype was built there using mostly local engineers, and countless other startups have sprung from its soil. “It’s not an offshore paradise, but you can capitalize a lot of money,” Thomas Padovani, a Frenchman who co-founded the digital-ad startup Adcash in Estonia, explains. “And the administration is light, all the way.” A light touch does not mean a restricted one, however, and the guiding influence of government is everywhere.

As an engineer, Kotka said, he found the challenge of helping to construct a digital nation too much to resist. “Imagine that it’s your task to build the Golden Gate Bridge,” he said excitedly. “You have to change the whole way of thinking about society.” So far, Estonia is past halfway there.

One afternoon, I met a woman named Anna Piperal at the e-Estonia Showroom. Piperal is the “e-Estonia ambassador”; the showroom is a permanent exhibit on the glories of digitized Estonia, from Skype to Timbeter, an app designed to count big piles of logs. (Its founder told me that she’d struggled to win over the wary titans of Big Log, who preferred to count the inefficient way.) Piperal has blond hair and an air of brisk, Northern European professionalism. She pulled out her I.D. card; slid it into her laptop, which, like the walls of the room, was faced with blond wood; and typed in her secret code, one of two that went with her I.D. The other code issues her digital signature—a seal that, Estonians point out, is much harder to forge than a scribble.

“This pin code just starts the whole decryption process,” Piperal explained. “I’ll start with my personal data from the population registry.” She gestured toward a box on the screen. “It has my document numbers, my phone number, my e-mail account. Then there’s real estate, the land registry.” Elsewhere, a box included all of her employment information; another contained her traffic records and her car insurance. She pointed at the tax box. “I have no tax debts; otherwise, that would be there. And I’m finishing a master’s at the Tallinn University of Technology, so here”—she pointed to the education box—“I have my student information. If I buy a ticket, the system can verify, automatically, that I’m a student.” She clicked into the education box, and a detailed view came up, listing her previous degrees.

“My cat is in the pet registry,” Piperal said proudly, pointing again. “We are done with the vaccines.”

Data aren’t centrally held, thus reducing the chance of Equifax-level breaches. Instead, the government’s data platform, X-Road, links individual servers through end-to-end encrypted pathways, letting information live locally. Your dentist’s practice holds its own data; so does your high school and your bank. When a user requests a piece of information, it is delivered like a boat crossing a canal via locks.

Although X-Road is a government platform, it has become, owing to its ubiquity, the network that many major private firms build on, too. Finland, Estonia’s neighbor to the north, recently began using X-Road, which means that certain data—for instance, prescriptions that you’re able to pick up at a local pharmacy—can be linked between the nations. It is easy to imagine a novel internationalism taking shape in this form. Toomas Ilves, Estonia’s former President and a longtime driver of its digitization efforts, is currently a distinguished visiting fellow at Stanford, and says he was shocked at how retrograde U.S. bureaucracy seems even in the heart of Silicon Valley. “It’s like the nineteen-fifties—I had to provide an electrical bill to prove I live here!” he exclaimed. “You can get an iPhone X, but, if you have to register your car, forget it.”

X-Road is appealing due to its rigorous filtering: Piperal’s teachers can enter her grades, but they can’t access her financial history, and even a file that’s accessible to medical specialists can be sealed off from other doctors if Piperal doesn’t want it seen.

“I’ll show you a digital health record,” she said, to explain. “A doctor from here”—a file from one clinic—“can see the research that this doctor”—she pointed to another—“does.” She’d locked a third record, from a female-medicine practice, so that no other doctor would be able to see it. A tenet of the Estonian system is that an individual owns all information recorded about him or her. Every time a doctor (or a border guard, a police officer, a banker, or a minister) glances at any of Piperal’s secure data online, that look is recorded and reported. Peeping at another person’s secure data for no reason is a criminal offense. “In Estonia, we don’t have Big Brother; we have Little Brother,” a local told me. “You can tell him what to do and maybe also beat him up.”

Business and land-registry information is considered public, so Piperal used the system to access the profile of an Estonian politician. “Let’s see his land registry,” she said, pulling up a list of properties. “You can see there are three land plots he has, and this one is located”—she clicked, and a satellite photograph of a sprawling beach house appeared—“on the sea.”

The openness is startling. Finding the business interests of the rich and powerful—a hefty field of journalism in the United States—takes a moment’s research, because every business connection or investment captured in any record in Estonia becomes searchable public information. (An online tool even lets citizens map webs of connection, follow-the-money style.) Traffic stops are illegal in the absence of a moving violation, because officers acquire records from a license-plate scan. Polling-place intimidation is a non-issue if people can vote—and then change their votes, up to the deadline—at home, online. And heat is taken off immigration because, in a borderless society, a resident need not even have visited Estonia in order to work and pay taxes under its dominion.

Soon after becoming the C.I.O., in 2013, Taavi Kotka was charged with an unlikely project: expanding Estonia’s population. The motive was predominantly economic. “Countries are like enterprises,” he said. “They want to increase the wealth of their own people.”

Tallinn, a harbor city with a population just over four hundred thousand, does not seem to be on a path toward outsized growth. Not far from the cobbled streets of the hilly Old Town is a business center, where boxy Soviet structures have been supplanted by stylish buildings of a Scandinavian cast. Otherwise, the capital seems pleasantly preserved in time. The coastal daylight is bright and thick, and, when a breeze comes off the Baltic, silver-birch leaves shimmer like chimes. “I came home to a great autumn / to a luminous landscape,” the Estonian poet Jaan Kaplinski wrote decades ago. This much has not changed.

Kotka, however, thought that it was possible to increase the population just by changing how you thought of what a population was. Consider music, he said. Twenty years ago, you bought a CD and played the album through. Now you listen track by track, on demand. “If countries are competing not only on physical talent moving to their country but also on how to get the best virtual talent connected to their country, it becomes a disruption like the one we have seen in the music industry,” he said. “And it’s basically a zero-cost project, because we already have this infrastructure for our own people.”…

Read or listen to the whole story here.

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