Review by Justus Baron, Northwestern University

by Guest Blogger — Tuesday, Oct. 8, 2019

JoAnn Yates and Craig Murphy compiled a compelling and enjoyable history of private standardization from the late 19th to the earliest 21st century. I read the book from the perspective of an empirical economist who studies today’s Standards Development Organizations (SDO). Economic analysis is often oblivious of the history of the organizations it studies, and the economics of standardization is no exception. To a large extent, I discovered the history of SDOs through Yates’ and Murphy’s book, and I highly recommend it to fellow economists interested in standardization.

“Engineering Rules” however expresses skepticism of an economic analysis of standardization. The book’s main thesis is that standardization was shaped by individuals that were guided by their personal beliefs and the shared values of what Yates and Murphy call the “standardization movement”. The book thus sheds significant light on two aspects that escape the existing economic analysis of standardization: the actions and influence of individuals rather than firms; and the role of non-monetary interests and values. These aspects highlighted in the book may give useful direction to economic research; and in turn, this new economic research may fill some of the gaps in the book’s historical analysis. 

In large parts, the book tells the story of standardization as the story of great standardizers. Yates and Murphy introduce the reader to individuals such as Charles Dudley, Olle Sturén, and Tim Berners-Lee. The book portrays these individuals as the “leaders” of standardization at different times of its history (which Yates and Murphy describe as a succession of three waves); and most of them occupied leading positions in some of the largest SDOs of their respective time. Many of these prominent standardizers were academics or government officials; but others were, like most participants in standardization, firm employees. 

Economists usually analyze the interests and strategies of firms to describe the actions of firm employees. Nevertheless, the context of standardization provides good reasons for a rare exception to this rule. Standardization favors strong individual ties across affiliations; and the institutional culture of standardization somewhat shields participating individuals’ independence vis-à-vis their employer. These characteristics of standardization have e.g. allowed standardization to succeed across the iron curtain during the Cold War, one of the most fascinating episodes in the book. Furthermore, individuals participating in standardization are often highly specialized and difficult-to-replace technical experts. Firms thus rarely fully control the actions of their employees participating in SDO meetings. These individuals may often “wear two hats” or feel bound by a double allegiance to their employer on one hand and on the other hand to the SDO or their specific working groups composed of peers with whom they share technical interests, a common goal, and a non-negligible part of their work time. Exploring the decision-making of individuals with such potentially conflicted objectives is a fascinating research avenue.

In addition to pointing to the importance of individuals, the book emphasizes the non-economic goals of these standardizers. Yates and Murphy highlight the values of an overarching “engineering movement”; including an ardent belief in technological progress for the good of humanity, commercial neutrality, and internationalism. Throughout the book, the authors give priority to these beliefs and values to explain the conduct of individuals. Where the primacy of economic motivations is impossible to deny, such as representatives of browser vendors in a case study of a W3C working group, the book criticizes these individuals for their failure to give priority to higher goals – a stark contrast to the highly sympathetic description of standardizers and their work that otherwise prevails in the book. 

Notwithstanding the authors’ evident sympathy for individuals’ non-economic objectives, the book acknowledges that most SDOs have explicitly welcomed the participation of stakeholders with economic interests: while some individuals initially proposed to keep economic interests out of standardization, this is decidedly the road that was not taken by the history of private standardization. Rather, SDOs developed institutional norms and processes for the balancing of divergent economic interests. At the same time, there are numerous instances in which individuals are expected to dissociate themselves from any special interests, and such instances have been present throughout the history of SDOs. Exploring the interactions among these governance principles, and comparing their effectiveness in aligning the outcomes of SDO decision making processes with the needs of society is another fascinating task for economic research. 

“Engineering Rules” thus offers promising avenues to enrich economic analysis. This economic analysis may in turn fill some of the gaps left by the book. In particular, the book largely relies on the portraits of SDO leaders to narrate the history of standardization. One is left wondering to what extent these individuals are representative of the larger population of standardizers, in particular with respect to their willingness to put the SDO and non-economic objectives ahead of the employer’s economic interests. Shifting the focus from the leaders to the general population of participants also seems to require a shift in methodology from individual biographies to a more comprehensive data analysis.  

The book is also overly uncritical of standardizers’ societal objectives. The book here lacks some balance on both the normative and the descriptive side of the question. On the normative side, there is very little discussion whether the values of the “standardization movement” align with the needs and expectations of the society for which the standards are developed. On the descriptive side, there is little discussion whether individuals’ stated goals are genuine. There are good reasons to suspect that many individuals participating in standardization over-emphasize the social interest dimension of their work, and downplay the more immediate economic considerations. Economics offers well-understood tools to analyze individuals’ “revealed preferences”, i.e. not the stated reasons and motives, but the reasons revealed by individuals’ choices and behavior. A statistical analysis using methods of causal inference may help disentangling the respective roles and interactions between societal and economic motivations. 

Overall, I enjoyed the book, and I would like to thank the authors and organizers for the opportunity to read it and comment on it.

 

Dr. Justus Baron is a Senior Research Associate at the Searle Center on Law, Regulation, and Economic Growth, Northwestern University Pritzker School of Law.

This post is part of a symposium reviewing JoAnne Yates and Craig N. Murphy‘s Engineering Rules: Global Standard Setting since 1880 (John Hopkins University Press). Previous posts in the symposium can be viewed here.

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