PERMISSIONLESS INNOVATION AND PUBLIC POLICY · mart innovation policy begins with a particular disposition toward experimentation, risk-taking, and even failure. For innovation to

PERMISSIONLESS INNOVATION AND PUBLIC POLICY: A 10-Point Blueprint

ADAM THIERER

Permissionless Innovationand Public Policy:

A 10-Point Blueprint

BY ADAM THIERER

Arlington, Virginia

A B O U T T H E ME R C AT U S C E N T E R AT G E O R G E M A S O N UNI V E R S I T Y

The Mercatus Center at George Mason University is the world’s premier university source for market-oriented ideas—bridging the gap between academic ideas and real-world problems.

A university-based research center, Mercatus advances knowledge about how markets work to improve people’s lives by training graduate students, conducting research, and applying economics to offer solutions to society’s most pressing problems.

Our mission is to generate knowledge and understanding of the institutions that affect the freedom to prosper and to find sustainable solutions that overcome the barriers preventing individuals from living free, prosperous, and peaceful lives.

Founded in 1980, the Mercatus Center is located on George Mason University’s Arlington and Fairfax campuses.

© 2016 by Adam Thierer and the Mercatus Center at George Mason University. All rights reserved. Printed in the United States of America

Mercatus CenterGeorge Mason University3434 Washington Blvd., 4th FloorArlington, VA 22201www.mercatus.org703-993-4930

This report is based on the findings and recommendations contained in Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom, revised and expanded edition (Mercatus Center, 2016). For more infor-mation, visit permissionlessinnovation.org.

http://www.mercatus.org

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CONTENTS

I. Introduction ..............................................................................................................1

II. A Conflict of Visions ..............................................................................................3

III. What Fuels Economic Growth? ..........................................................................5

IV. A Permissionless Innovation Policy Blueprint ................................................7

1. Articulate and defend permissionless innovation as the general

policy default. ....................................................................................................8

2. Identify and remove barriers to entry and innovation. .........................9

3. Protect freedom of speech and expression. ............................................ 11

4. Retain and expand immunities for intermediaries from liability

associated with third-party uses. ............................................................... 11

5. Rely on existing legal solutions and the common law to solve

problems. ......................................................................................................... 13

6. Wait for insurance markets and competitive responses

to develop. ....................................................................................................... 15

7. Push for industry self-regulation and best practices. ......................... 16

8. Promote education and empowerment solutions and be patient as

social norms evolve to solve challenges. ................................................. 17

9. Adopt targeted, limited legal measures for truly hard problems. .... 18

10. Evaluate and reevaluate policy decisions to ensure they pass a

strict benefit-cost analysis. .......................................................................... 19

V. Conclusion .............................................................................................................. 21

Notes ...............................................................................................................................23

About the Author ........................................................................................................ 33

1

I . I N T R O D U C T I O N

Smart innovation policy begins with a particular disposition toward experimentation, risk-taking, and even failure. For innovation to blossom, entrepreneurs need a clear green

light from policymakers that signals a general acceptance of risk-taking—especially risk-taking that challenges existing busi-ness models and traditional ways of doing things.

We can think of this disposition as “permissionless innova-tion,” and if there was one thing every policymaker could do to help advance long-term economic growth, it would be to commit themselves to advancing this ethic and making it the lodestar for all their future policy pronouncements and decisions.1

This paper presents a 10-point checklist that policymakers can follow to achieve that goal.

3

I I . A C O N F L I C T O F V I S I O N S

P ermissionless innovation refers to the idea that “experimenta-tion with new technologies and business models should gen-erally be permitted by default. Unless a compelling case can

be made that a new invention will bring serious harm to society, innovation should be allowed to continue unabated and problems, if they develop at all, can be addressed later.”2

This disposition can be contrasted with so-called precautionary principle reasoning, which refers to the belief that new innovations should be curtailed or disallowed until their developers can demon-strate that they will not cause any harms to individuals, groups, spe-cific entities, cultural norms, or various existing laws, or traditions.3

The tension between these two dispositions dominates almost all modern technology policy debates.

A new Mercatus Center book, Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom (now in its second edition), highlights the importance of permissionless innovation and explains how technological advancement is the fundamental driver of long-term economic growth and human flourishing more generally.4 The book explains how the ongoing search for new and better ways of doing things drives prosperity in every sense—economic, social, and cultural. Technological inno-vation improves economic efficiency, expands the range of goods and services available to the public, and generally lowers prices and

4 PERMISSIONLESS INNOVATION AND PUBLIC POLICY

raises quality in the process.5 It also expands the range of potential social and cultural opportunities. This raises living standards over the long term by promoting greater health and happiness.6

5

I I I . W H A T F U E L S E C O N O M I C G R O W T H ?

Indeed, technological innovation is “widely considered the main source of economic progress”7 among economic historians and scholars. Brink Lindsey notes that a widespread consensus

exists among these scholars that “the long-term future of economic growth hinges ultimately on innovation.”8 Numerous economic studies and historical surveys document the positive relationship among technological progress, economic growth, and overall social welfare. A 2010 Department of Commerce report revealed that “technological innovation is linked to three-quarters of the nation’s post-WWII growth rate,” that “innovation in capital goods is the primary driver of increases in real wages,” and that “across coun-tries, 75% of differences in income can be explained by innova-tion-driven productivity differentials.”9

Echoing these findings, two major economic surveys similarly found that technological progress accounts for 30 to 34 percent of growth in Western countries.10 Thus, nothing could be more import-ant for raising long-term living standards than creating a legal and regulatory environment conducive to ongoing technological change and the general freedom to innovate.11

The power of permissionless innovation in action can be best seen in the explosive growth of the Internet and digital technology. A diverse, nonpartisan coalition of US policymakers embraced per-missionless innovation as the basis of Internet policy beginning in


the early 1990s, and it soon became the “secret sauce” that propelled the rise of e-commerce, online speech, and the modern digital revo-lution.12 While Europe handcuffed its tech sector with heavy-handed regulatory policies, America’s embrace of permissionless innovation catapulted tech firms into a position of global dominance, making them the envy of the world.13

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I V . A P E R M I S S I O N L E S S I N N O V A T I O N P O L I C Y B L U E P R I N T

The permissionless innovation policy disposition can be applied more broadly beyond the Internet.14 The dazzling array of growth and innovation that we enjoy in Internet-

related industries can be unleashed in many other sectors of our economy.

But first, we have to get policy right. Policymakers should make permissionless innovation the basis of their technology policy going forward for the so-called Internet of Things,15 wearable devices, smart cars,16 commercial drones,17 Bitcoin,18 3-D printing,19 robot-ics,20 advanced medical devices and applications,21 and the many other new technologies that are just now beginning to emerge.

Accordingly, this paper offers a 10-part checklist that poli-cymakers can use to help spur the development of dynamic new sectors and technologies, thereby fueling economic growth. This blueprint is as follows:

1. Articulate and defend permissionless innovation as the general policy default.

2. Identify and remove barriers to entry and innovation.

3. Protect freedom of speech and expression.


4. Retain and expand immunities for intermediaries from lia-bility associated with third-party uses.

5. Rely on existing legal solutions and the common law to solve problems.

6. Wait for insurance markets and competitive responses to develop.

7. Push for industry self-regulation and best practices.

8. Promote education and empowerment solutions and be patient as social norms evolve to solve challenges.

9. Adopt targeted, limited legal measures for truly hard prob-lems.

10. Evaluate and reevaluate policy decisions to ensure they pass a strict benefit-cost analysis.

Each recommendation will be discussed.

1 . A R T I C UL AT E A ND D E F E ND P E R MI S S I O NL E S S IN N O VAT I O N A S T H E G E NE R A L P O L I C Y D E FA ULT.

Social attitudes and political pronouncements profoundly influ-ence opportunities for entrepreneurialism, innovation, and long-term growth.22 For progress and prosperity to be possible, a socio-political system must respect what economic historian Deirdre McCloskey refers to as the “bourgeois virtues” that incentivize invention, encourage risk-taking, and propel an economy for-ward.23 “If we learn anything from the history of economic devel-opment,” noted David Landes in his magisterial The Wealth and Poverty of Nations: Why Some Are So Rich and Some Are So Poor, “it is that culture makes all the difference.”24

To encourage a culture of permissionless innovation, poli-cymakers should make it clear in their policy pronouncements that innovators will generally be given wide leeway in their cre-ative endeavors and that policy will not be based on hypothetical concerns or addressed through preemptive, ex ante regulatory controls. Instead, innovators and average citizens alike will be

IV . A PERMISSIONLESS INNOVATION POLICY BLUEPRINT 9

generally left at liberty to experiment with new technologies; problems that develop will be addressed in an ex post fashion.25

An excellent example of how to promote permissionless inno-vation as a policy default for a new technology or sector can be found in the Clinton administration’s 1997 Framework for Global Electronic Commerce. The document outlined the US government’s approach toward the Internet and the emerging digital economy.26

The Framework was a succinct, market-oriented vision for cyber-space governance that recommended reliance on civil society, contractual negotiations, voluntary agreements, and ongoing marketplace experiments to solve information-age problems.27 Specifically, the Framework recommended that

• “[T]he private sector should lead [and] the Internet should develop as a market driven arena not a regulated industry;”28

• Governments should “avoid undue restrictions on elec-tronic commerce;”29

• “[P]arties should be able to enter into legitimate agree-ments to buy and sell products and services across the Internet with minimal government involvement or inter-vention;”30

• And, finally, that “Where governmental involvement is needed, its aim should be to support and enforce a predict-able, minimalist, consistent and simple legal environment for commerce.”31

Just as the Clinton administration’s embrace of permissionless innovation helped to spur the digital revolution, policymakers can extend that ethos to new sectors and help fuel similar technological revolutions.32

2 . ID E N T IF Y A ND R E M O V E B A R R IE R S T O E N T R Y A ND IN N O VAT I O N .

Oftentimes, the most serious barriers to permissionless innova-tion are the well-intentioned but counterproductive laws and reg-ulations of the past. For example, occupational licensing regimes

1 0 PERMISSIONLESS INNOVATION AND PUBLIC POLICY

were established at the state and local levels to protect consumers from a variety of supposed dangers. But merely because restric-tions were once justified on consumer protection grounds does not mean they actually accomplished those goals, or that they are still needed today.33 That is particularly true if those policies are raising prices, limiting competition, or undermining new forms of life-enriching innovation that could better serve the public.34

Worse yet, incumbent companies who oppose increased com-petition sometimes “capture” legislators and regulators and con-vince them to apply otherwise outmoded rules (especially licens-ing laws35) to new entrants in the name of fairness.36 The sharing economy provides a good recent example of this problem.37 Older taxicab operators do not like the new competition they face from ride-sharing services such as Uber and Lyft, and those incumbent firms also argue that new entrants should face the same regulatory burdens that they do.

On one hand, those incumbents have a fair point: generally speaking, all competitors should play by a common set of rules. But the solution here is not to discourage new technologies and sectors by simply rolling old regulatory regimes onto them. The better alternative is to level the playing field by “deregulating down” to put everyone on equal footing, not by “regulating up” to achieve parity.38 Policymakers should relax old rules on incumbents as new entrants and new technologies challenge the status quo—especially when new innovations seem to correct market imperfections better than the outmoded regulations. By extension, new entrants should face only minimal regulatory requirements as more onerous and unnecessary restrictions on incumbents are relaxed.

Licensing restrictions represent a barrier to telemedicine efforts, too. Patients seeking access to care remotely can take advantage of virtual health firms (e.g., Doctor on Demand, RetraceHealth, MedZed, MD Live, American Well, and First Opinion) in some states.39 But licensing restrictions could limit the ability of such ser-vices to reach their fullest potential. Meanwhile, at the federal level, overly precautionary Food and Drug Administration regulations could also hold back many new advanced medical technologies.40

IV . A PERMISSIONLESS INNOVATION POLICY BLUEPRINT 1 1

Clearing out old regulatory deadwood is never easy, but solutions must be devised to ensure that new competition and life-enriching innovation are not discouraged. Recommendation 10 below offers additional ways to do so.

3 . P R O T E C T F R E E D O M O F S P E E C H A ND E X P R E S S I O N .

Almost all modern networked technologies enhance speech or expression in some fashion. Accordingly, policymakers should always look to reiterate the importance of the First Amendment and protections for freedom of speech for emerging technologies.41

In his 1983 book, Technologies of Freedom: On Free Speech in an Electronic Age, political scientist Ithiel de Sola Pool offered a pas-sionate defense of technological freedom and freedom of speech in the electronic age. In setting forth several “Guidelines for Freedom” to ensure that new information technologies could realize their full potential, he asserted that “regulation is a last recourse. In a free society, the burden of proof is for the least possible regulation of communication.”42

That same principle can and should be applied to the many new technologies that enhance human communication and creativ-ity. Policymakers can do so by constantly reiterating that the First Amendment protects the speech and expression facilitated by new “technologies of freedom.”

4 . R E TA IN A ND E X PA ND IMM UNI T IE S F O R IN T E R ME D I A R IE S F R O M L I A B IL I T Y A S S O C I AT E D W I T H T H IR D - PA R T Y U S E S .

To advance permissionless innovation as a policy guideline, it may be necessary to immunize some intermediaries (e.g., platform providers or device manufacturers) from punishing forms of liabil-ity, or at least to limit liability to avoid the chilling effect that exces-sive litigation can have on life-enriching innovation. Specifically, intermediaries should be immunized from liability associated with the ways third parties use their platforms or devices to speak, exper-iment, or innovate.


Advocates of intrusive forms of technological control often seek to “deputize the middleman” and force intermediaries to police their networks, systems, or devices, for any number of things that those regulatory advocates do not like. But such counterproduc-tive proposals should be extremely limited because they can signifi-cantly hinder both speech and commerce.

In fact, US law already partially accomplishes immunization of this sort through Section 230 of the Telecommunications Act of 1996.43 Today’s vibrant Internet ecosystem likely would not exist without Section 230 because many of today’s most popular online sites and services might have been hit with huge lawsuits for the content and commerce that some critics (especially companies) didn’t approve of on those platforms.44 That law immunized online intermediar-ies from onerous liability for the content and communications that traveled over their electronic networks. The immunities granted by Section 230 let online speech and commerce flow freely.45 For exam-ple, sites such as eBay, Facebook, Wikipedia, Angie’s List, Yelp, and YouTube all depend on Section 230’s protections to shield them from potentially punishing liability for the content that average Americans post to those sites. But Section 230 protects countless small sites and services just as much as those larger platforms.46

In a similar way, Internet intermediaries are immunized from copyright infringement liability, provided they follow certain rules established under Section 512 of the Digital Millennium Copyright Act (DMCA) of 1998. Intermediaries must promptly block access to alleged infringing material (or remove such material from their systems) when they receive notification of an infringement claim from a copyright holder or the copyright holder’s agent.47 So long as online intermediaries abide by these “DMCA takedown notices,” they generally will be granted what is known as a “safe harbor” exemption from copyright liability.48

By extension, the creators of newer general purpose technol-ogies, such as 3-D printers or certain robotic technologies, may need to receive certain limited immunizations from liability for third-party uses of their devices. If potential troublemakers use certain general purpose technologies to do harm—cybersecurity


violations, privacy invasions, copyright infringement, etc.—it is almost always more sensible to address those problematic users directly and hold them accountable for their actions. The other approach—deputizing intermediaries or holding those interme-diaries accountable for the actions of others—will discourage innovators from creating vibrant, open platforms and devices that could facilitate new types of speech and commerce. Therefore, an embrace of permissionless innovation requires a rejection of such middleman deputization schemes.

5 . R E LY O N E X I S T IN G L E G A L S O L U T I O N S A ND T H E C O MM O N L AW T O S O LV E P R O B L E M S .

When serious concerns are raised about new technologies, some policymakers—often spurred by regulatory advocates—argue that “something must be done!” to address their worries. This sort of “precautionary principle” thinking typically entails preemptive forms of legislative restrictions or expanded regulation by various agencies.49 But before rushing to legislate, lawmakers should exer-cise restraint and first consider whether any existing laws might address the issues in question.50

For example, many states are currently debating how to address cryptocurrency service businesses. One low-cost, effective solution can be found in the traditional money transfer regulations already on the books: merely clarifying that cryptocurrency businesses will be regulated like traditional currency businesses can save time and money for industry, consumers, and governments alike while ensuring an appropriate level of oversight.51

Others worry about the potential for “big data”—the massive datasets that collect and correlate disperse facts about individuals to make inferences for various purposes—to be used in a discrimina-tory fashion.52 But laws such as the Fair Credit Reporting Act already cover many of these databases,53 and to the extent discrimination becomes a real problem—and currently no evidence exists that big data creates such problems—a plethora of existing anti-discrimina-tion federal statutes would be applicable.54


Even in the absence of existing laws or regulation, policymak-ers should wait to see how common law solutions develop. These common law mechanisms include strict liability, negligence, design-defects law, failure to warn, and breach of warranty. The genius of the common law is that it does not preemptively attempt to eliminate all potential harms; rather, it deals with problems as cases and controversies develop. When they do, the collective wisdom of the ages is applied to those problems and remedies are devised.55 Many legal scholars have already noted that common law mechanisms are likely to develop for the safety and security concerns surrounding commercial drones, driverless cars, robot-ics, and other advanced technological systems.56 Likewise, prop-erty and contract law can help solve many controversies that arise from new technologies.

For example, concerns have already been raised about security vulnerabilities associated with the Internet of Things57 and driv-erless cars.58 Legislation has even been floated to address the latter concern through federal certification standards.59 But it is possible to achieve reasonable security for such technologies without pre-emptive, top-down mandates.60 Developers in these fields under-stand that security lapses could result in serious harm to users and that failure to achieve a reasonable degree of safety in their devices and systems could result in massive liability. America has no short-age of trial lawyers eager to launch class action claims at the first hint of safety or security lapses.

Finally, there are ways outside the courts to ensure that tech-nology developers keep the contractual promises they make to their customers. The Federal Trade Commission possesses broad consumer protection powers under Section 5 of the Federal Trade Commission Act,61 which prohibits “unfair or deceptive acts or practices in or affecting commerce.”62 And state attorneys general also play a similar role in enforcing consumer protection statutes.

In sum, to foster permissionless innovation, policymakers should strive for “simple rules for a complex world,” to borrow the title from a 1995 book by legal scholar Richard Epstein.63


Many laws and legal standards already exist that can be applied to new challenges before we look to impose additional laws or heavy-handed, technocratic controls on innovation.

6 . WA I T F O R IN S UR A N C E M A R K E T S A ND C O MP E T I T I V E R E S P O N S E S T O D E V E L O P.

Policymakers should also consider how insurance markets or new forms of competition might solve some perceived problems associated with new technologies. Every new technology involves risks and the possibility of accidents, which is why insurance mar-kets typically emerge to provide greater peace of mind. For exam-ple, as automobiles became more prevalent throughout society, insurance contracts were devised to deal with collisions, thefts, and other risks to owners.

Similarly, insurance contracts will likely develop to cover risks that might develop for newer technologies, including driverless cars,64 drones,65 and 3-D printers.66 Indeed, it is unlikely that some new technologies—especially autonomous robotic technologies—will achieve mass-market adoption until insurance mechanisms emerge to cover the most risky scenarios.67 Insurance products might also be developed to help guard against intellectual prop-erty–related claims for 3-D printers or virtual reality technologies in case the products or experiences that can be created with them are alleged to violate existing copyrights, patents, or trademarks.68

As insurance products develop in these and other sectors, new firms will also likely emerge to offer competing products and appli-cations that satisfy other public needs and demands. Those rivals might also compete with existing companies by offering different levels of service or safety. For example, many companies already compete today by adopting different privacy and security standards and stressing that their systems are more private or secure than those of rivals.69

Importantly, solutions and developments such as these are not always immediately evident and they take time to evolve, which counsels patience and humility among policymakers.


7. P U S H F O R IND U S T R Y S E L F- R E G UL AT I O N A ND B E S T P R A C T I C E S .

The Clinton administration’s Framework for e-commerce noted that “governments should encourage industry self-regulation and private sector leadership where possible.”70 Such industry self- regulation can include, but is not limited to, private codes of con-duct or “best practice” guidance for developers, third-party certifi-cation and accreditation of devices or their standards, and corpo-rate labeling and transparency efforts.

The growth of “privacy-by-design,” “safety-by-design,” and “security-by-design” efforts reflects a renewed focus on evolving industry self-regulation and codes of conduct. “Privacy by design,” for example, is one of the hottest concepts in the field of informa-tion policy today.71 It refers to efforts by organizations to “embed privacy into the architecture of technologies and practices.”72

Technology companies and trade associations have already come together to formulate such privacy and security “by design” best practices for online advertising,73 connected cars,74 and personal wellness devices,75 to name just three examples.

Similar efforts have been under way for many years on the online safety front. Various online safety advocates and child safety experts have pushed companies to adopt online safety best practices and products to ensure that digital sites and services offer users safer online experiences.76 Similar “security-by-design” efforts have been going on for years as well.77 Corporations and other organizations have a vested interest in keeping their systems and devices secure from viruses, malwares, breaches, spam, and so on.78

Going forward, privacy and safety professionals within firms and other organizations will need to be on the front lines of this rapidly evolving technological landscape to solve the hard problems presented by new technologies, such as the Internet of Things, wearable technologies, 3-D printing, facial recognition, driverless cars, and private drones. These professionals will need to be responsive to user concerns and continuously refine corporate practices to balance the ongoing services that the public demands against the potential negative impacts associated with these tech-


nologies. As noted next, they will need to work simultaneously to educate the public about appropriate use of these new tools.

8 . P R O M O T E E D U C AT I O N A ND E MP O W E R ME N T S O L U T I O N S A ND B E PAT IE N T A S S O C I A L N O R M S E V O LV E T O S O LV E C H A L L E N G E S .

Education is one of the most important but frequently over-looked solutions to concerns associated with new technologies. Governments, industry, and other institutions should focus more energy on educating both the public and producers of new technol-ogy about its proper uses.

“Legislate and regulate” responses are often not productive or effective approaches to safety, security, or privacy concerns because preemptive and prophylactic regulation of technology can be costly, complicated, and overly constraining. Oftentimes, the better approach is to “educate and empower,” which refers to strategies that can help build individual resiliency and ensure proper assim-ilation of new technologies into society. This approach is built on media literacy and “digital citizenship” and focuses on encouraging better social norms and coping strategies.79

The goal should be to encourage ethical online behavior, pro-mote online civility and respect, and encourage the proper use of new technologies. Digital citizenship education of this sort helps not only technology users but also technology developers, who should be encouraged to design their devices, apps, and platforms in a way that respects other values that their customers and the pub-lic care deeply about. Toward that end, better transparency about business practices is particularly essential in building trust between developers and the public.

Importantly, some of today’s concerns about the misuse of new technologies may simply fail to materialize as attitudes adjust and people assimilate new tools and services into their lives.80 Social pressure and private norms of acceptable use often act as a “regu-lator” of the uses (and misuses) of new technologies because, quite often, “norms dissuade many practices that are feasible but unde-sirable.”81 For example, the advent of the camera and widespread


public photography a century ago created new privacy-related tensions, but social norms and etiquette simultaneously evolved to discourage the most privacy-intrusive uses of cameras in public spaces.82

More recently, the rapid rise of online review sites and rep-utational feedback mechanisms has also helped the public have a greater voice and put social pressures on providers to deliver higher-quality services.83

In other words, policymakers should realize that new technolo-gies can be “regulated” by more than law.84 This is yet another rea-son that they should avoid rushing to legislate and instead exercise regulatory restraint in the face of rapid technological change.

9. A D O P T TA R G E T E D, L IMI T E D L E G A L ME A S UR E S F O R T RULY H A R D P R O B L E M S .

If all else fails, policymakers can adopt targeted legislation or reg-ulation as needed to address the most challenging concerns where the potential for clear, catastrophic, immediate, and irreversible harm exists.

Specifically, some morally significant issues may exist that demand a more exhaustive exploration of the impact of technolog-ical change on humanity. Perhaps the most notable examples arise in the field of advanced medical treatments and biotechnology. Genetic experimentation and human cloning, for example, raise profound questions about altering human nature or abilities as well as the relationship between generations.85

The case for policy prudence in these matters is easier to make because we are quite literally talking about the future of what it means to be human.86 Controversies have raged for decades over the question of when life begins and how it should end. These debates will be greatly magnified and extended in coming years to include equally thorny philosophical questions about the nature of humanity.87

But most technology policy issues don’t raise such profound, morally weighty issues. Instead, we generally allow innovators and


consumers to freely experiment with new technologies, and even engage in risky behaviors, unless a compelling case can be made that precautionary regulation is absolutely necessary.

10. E VA L U AT E A ND R E E VA L U AT E P O L I C Y D E C I S I O N S T O E N S UR E T H E Y PA S S A S T R I C T B E NE F I T- C O S T A N A LY S I S .

Even when new laws or regulations are being considered, how-ever, a strict benefit-cost analysis should be conducted to determine whether the rule will achieve the desired goal without imposing excessive burdens on society. Benefit-cost analyses help policymak-ers formally identify the tradeoffs associated with regulatory pro-posals and, to the maximum extent feasible, quantify those benefits and costs.88

Existing laws and regulations should also be periodically reevaluated to make sure they are keeping pace with ongoing marketplace and technological realities. Technology lawyer and consultant Larry Downes has highlighted the importance of the “Law of Disruption,” or the fact that “technology changes exponentially, but social, economic, and legal systems change incrementally.”89 “Emerging technologies change at the speed of Moore’s Law,” he argues, “leaving statutes that try to define them by their technical features quickly out of date.”90 Moore’s Law is the principle named after Intel cofounder Gordon E. Moore, who first observed that, generally speaking, the processing power of computers doubles roughly every 18 months while prices remain fairly constant.91

With today’s technology markets evolving at the speed of Moore’s Law, we should demand that public policy do so as well by requiring that (a) every new technology proposal include a provision sunsetting the law or regulation 18 months to two years after enactment—policymakers can always reenact the rule if they believe it is still sensible;92 and (b) existing technology laws and regulations be regularly reviewed to reassess their sensibility. If no compelling reason for their continued existence can be identified and substantiated, those laws or rules should be repealed within


18 months to two years. If a rationale for continuing existing laws and regulations can be identified, the rule can be reimplemented.

This, more than any other single step, would help ensure that permissionless innovation will be the cornerstone of the nation’s innovation policy going forward. If disruption is good for business, it’s good for government, too.

2 1

V . C O N C L U S I O N

W e stand on the cusp of the next great industrial revolution thanks to technological innovations and developments that could significantly enhance the welfare of people across

the world. “Inventions previously seen only in science fiction, such as artificial intelligence, connected devices and 3D printing, will enable us to connect and invent in ways we never have before,” notes a recent World Economic Forum report on the amazing tech-nological revolutions that could be coming.93

By following the blueprint set out herein, policymakers can make permissionless innovation the cornerstone of innovation policy to help spur the development of a wide array of new life-enriching technologies and demonstrate, once again, “the endless potential of the human mind to improve the human condition.”94

2 3

N O T E S

1. Adam Thierer, “Embracing a Culture of Permissionless Innovation,” Cato Online Forum, November 2014, http://www.cato.org/publications/cato-online-forum /embracing-culture-permissionless-innovation.

2. Adam Thierer, Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom (Arlington, VA: Mercatus Center at George Mason University, 2014), http://mercatus.org/permissionless/permissionlessinnovation.html.

3. Ibid.

4. Ibid.

5. Aki Ito, “Six Things Technology Has Made Insanely Cheap,” Bloomberg Business, February 5, 2015, http://www.bloomberg.com/news/articles/2015-02-05/six-things -technology-has-made-insanely-cheap.

6. “Producers create new products and services, make old ones obsolete, and create and destroy profits and industries in the process, all to the better on average over time,” notes economist Lynne Kiesling. Lynne Kiesling, “Technological Change, Culture, and a ‘Social License to Operate,’” Knowledge Problem, July 7, 2015, http://knowledgeproblem.com/2015/07/07/technological-change-culture-and-a-social -license-to-operate.

7. Joel Mokyr, Chris Vickers, and Nicolas L. Ziebarth, “The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?,” Journal of Economic Perspectives 29, no. 3 (Summer 2015): 31, http://www.ingentaconnect.com /content/aea/jep/2015/00000029/00000003/art00002;jsessionid=58w6sj0v1f6vm .alexandra.

8. Brink Lindsey, “Why Growth Is Getting Harder” (Policy Analysis No. 737, Cato Institute, October 8, 2013), 11, http://www.cato.org/publications/policy-analysis /why-growth-getting-harder.

9. Arti Rai, Stuart Graham, and Mark Doms, “Patent Reform: Unleashing Innovation, Promoting Economic Growth, and Producing High-Paying Jobs” (White Paper, US Department of Commerce, April 13, 2010), 1, 2–3, http://2010-2014.commerce.gov /sites/default/files/documents/migrated/Patent_Reform-paper.pdf.

10. Yasmina Reem Limam and Stephen M. Miller, “Explaining Economic Growth:


Factor Accumulation, Total Factor Productivity Growth, and Production Efficiency Improvement” (2003), 10, https://faculty.unlv.edu/smiller/EFFICIENCY _PRODUCTIVITY_PAPER.pdf. (“In Africa and the West, technological progress accounts respectively for 17 and 30 percent of total output growth.”); Scott L. Baier, Gerald P. Dwyer Jr., and Robert Tamura, “How Important Are Capital and Total Factor Productivity for Economic Growth?,” Economic Inquiry 44, no. 1 (2006): 23–49, http://onlinelibrary.wiley.com/doi/10.1093/ei/cbj003/abstract. (“TFP accounts for about 34% of the average growth of output per worker in the Western Countries and 26% in Southern Europe and the NICs. Other regions have less, negli-gible, and even negative growth of TFP. These negative growth rates are consistent with the importance of institutional changes and conflicts.”)

11. Michael Mandel, “Your Regulatory Strategy IS Your Innovation Strategy,” Mack Institute News, October 28, 2015, https://mackinstitute.wharton.upenn.edu/2015 /your-regulatory-strategy-is-your-innovation-strategy. (“More than ever before, innovation strategies are affected by the regulatory environment, and not just the regulatory environment in the U.S. but the regulatory environment in Europe and Asia, as well.”)

12. Thierer, “Embracing a Culture.”

13. Adam Thierer, “How Attitudes about Risk & Failure Affect Innovation on Either Side of the Atlantic,” Medium, June 19, 2015, https://readplaintext.com/how-attitudes -about-risk-failure-affect-innovation-on-either-side-of-the-atlantic-b5f0f41c3466; Stephen Ezell and Philipp Marxgut, “Comparing American and European Innovation Cultures,” in Shaping the Future: Economic, Social, and Political Dimensions of Innovation (Austrian Council for Research and Technology Development, August 2015), 193, http://www2.itif.org/2015-comparing-american-european-innovation -cultures.pdf. (“[C]ultural aspects have a significant impact on innovation and inform how entrepreneurial countries, organizations, and people can be. The United States maintains the world’s most vibrant innovation culture, where risk and fail-ure are broadly tolerated, inquiry and discussion are encouraged, and the govern-ment’s role in business plays a less prominent role. . . . [T]here are elements in the European innovation culture that need improvement: a simpler regulatory environ-ment, a broader availability of risk capital, and more tolerance of risk and change being critically important.”)

14. Eli Dourado, “‘Permissionless Innovation’ Offline as Well as On,” Umlaut, February 6, 2013, http://theumlaut.com/2013/02/06/permissionless-innovation-offline-as -well-as-on.

15. Adam Thierer, “The Internet of Things and Wearable Technology: Addressing Privacy and Security Concerns without Derailing Innovation,” Richmond Journal of Law and Technology 21, no. 6 (2015), http://papers.ssrn.com/sol3/papers.cfm ?abstract_id=2494382.

16. Adam Thierer and Ryan Hagemann, “Removing Roadblocks to Intelligent Vehicles and Driverless Cars” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, September 17, 2014), http://mercatus.org/publication /removing-roadblocks-intelligent-vehicles-and-driverless-cars.

17. Jerry Brito, Eli Dourado, and Adam Thierer, “Federal Aviation Administration: Unmanned Aircraft System Test Site Program Docket No: FAA-2013-0061” (Public Interest Comment, Mercatus Center at George Mason University, Arlington, VA, April 23, 2013), http://mercatus.org/publication/federal-aviation-administration -unmanned-aircraft-system-test-site-program; Eli Dourado, “The Next Internet-Like

NOTES 2 5

Platform for Innovation? Airspace. (Think Drones),” Wired, April 23, 2013, http://www.wired.com/opinion/2013/04/then-internet-now-airspace-dont-stifle -innovation-on-the-next-great-platform; Adam Thierer, “Filing to FAA on Drones & ‘Model Aircraft,’” Technology Liberation Front, September 23, 2014, http:// techliberation.com/2014/09/23/filing-to-faa-on-drones-model-aircraft.

18. Jerry Brito and Andrea Castillo, Bitcoin: A Primer for Policymakers (Arlington, VA: Mercatus Center at George Mason University, August 19, 2013), http://mercatus.org /publication/bitcoin-primer-policymakers.

19. Adam Thierer, “The Right to Try, 3D Printing, the Costs of Technological Control & the Future of the FDA,” Technology Liberation Front, August 10, 2015, http:// techliberation.com/2015/08/10/the-right-to-try-3d-printing-the-costs-of -technological-control-the-future-of-the-fda.

20. Adam Thierer, “Problems with Precautionary Principle-Minded Tech Regulation & a Federal Robotics Commission,” Medium, September 22, 2014, https://medium .com/@AdamThierer/problems-with-precautionary-principle-minded-tech -regulation-a-federal-robotics-commission-c71f6f20d8bd.

21. Richard Williams, Robert Graboyes, and Adam Thierer, “US Medical Devices: Choices and Consequences” (Arlington, VA: Mercatus Center at George Mason University, October 21, 2015), http://mercatus.org/publication/us-medical-devices -choices-and-consequences.

22. Joel Mokyr, Lever of Riches: Technological Creativity and Economic Progress (New York: Oxford University Press, 1990), 12. (“[E]conomic and social institutions have to encourage potential innovators by presenting them with the right incentive structure.”); Lawrence Harrison and Samuel Huntington, Culture Matters: How Values Shape Human Progress (New York: Perseus Books Group, 2000).

23. Deirdre N. McCloskey, The Bourgeois Virtues: Ethics for an Age of Commerce (Chicago: University of Chicago Press, 2006); Deirdre N. McCloskey, Bourgeois Dignity: Why Economics Can’t Explain the Modern World (Chicago: University of Chicago Press, 2010).

24. David Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some Are So Poor (New York: W.W. Norton & Co, 1998), 516. Also see Michael Porter, “Attitudes, Values, Beliefs, and the Microeconomics of Prosperity,” in Harrison and Huntington, Culture Matters, 27. (“Indeed, the forces in the new economy are so strong that it is no overstatement to suggest that economic culture is no longer a matter of choice. The question is, Will a country voluntarily embrace a productive economic culture by changing the old beliefs, attitudes, and values that are imped-ing prosperity, or will the change eventually be forced upon it?”)

25. Ithiel de Sola Pool, Technologies of Freedom: On Free Speech in an Electronic Age (Cambridge, MA: Harvard University Press, 1983), 231. (Regarding regulation of information markets, Pool stressed that “enforcement must be after the fact, not by prior restraint” and that “regulation is a last recourse. In a free society, the burden of proof is for the least possible regulation of communication.”)

26. White House, The Framework for Global Electronic Commerce (July 1997), http://clinton4.nara.gov/WH/New/Commerce.

27. Adam Thierer, “15 Years On, President Clinton’s 5 Principles for Internet Policy Remain the Perfect Paradigm,” Forbes, February 12, 2012, http://www.forbes.com /sites/adamthierer/2012/02/12/15-years-on-president-clintons-5-principles-for -internet-policy-remain-the-perfect-paradigm.


28. White House, Framework for Global Electronic Commerce.

29. Ibid.

30. Ibid.

31. Ibid.

32. Good examples of how legislators can promote permissionless innovation in their policy pronouncements can be found in some of the speeches of Senators Cory Booker (D-NJ), Deb Fischer (R-NE), and Kelly Ayotte (R-NH). See Adam Thierer, “A Nonpartisan Policy Vision for the Internet of Things,” Technology Liberation Front, December 11, 2014, http://techliberation.com/2014/12/11/a-nonpartisan-policy -vision-for-the-internet-of-things; Adam Thierer, “What Cory Booker Gets about Innovation Policy,” Technology Liberation Front, February 16, 2015, http:// techliberation.com/2015/02/16/what-cory-booker-gets-about-innovation-policy. Similarly, no regulator in recent memory has done more to promote permissionless innovation as a policy guidepost than Maureen K. Ohlhausen, a commissioner with the Federal Trade Commission. See Adam Thierer, “FTC’s Ohlhausen on Innovation, Prosperity, ‘Rational Optimism’ & Wise Tech Policy,” Technology Liberation Front, September 25, 2015, http://techliberation.com/2015/09/25/ftcs-ohlhausen-on -innovation-prosperity-rational-optimism-wise-tech-policy.

33. Veronique de Rugy, “Occupational Licensing: Bad for Competition, Bad for Low-Income Workers,” Mercatus Center at George Mason University, March 25, 2014, http://mercatus.org/publication/occupational-licensing-bad-competition -bad-low-income-workers. (“Licensing can become a powerful tool to limit innova-tion and competition and act to limit upward mobility.”)

34. Steve Horowitz, “Breaking Down the Barriers: Three Ways State and Local Governments Can Get out of the Way and Improve the Lives of the Poor” (Mercatus Research, Mercatus Center at George Mason University, Arlington, VA, July 21 2015), http://mercatus.org/sites/default/files/Horwitz-Breaking-Down-Barriers.pdf; Brief of Antitrust Scholars as Amici Curiae in Support of Respondent, North Carolina State Board of Dental Examiners v. FTC (August 6, 2014), 2. (“Occupational licensing has been abused by incumbent market participants to exclude rivals, often in unreason-able ways, and to raise prices. This disturbing trend already costs consumers bil-lions of dollars every year and impedes job growth.”)

35. Maureen K. Ohlhausen and Gregory P. Luib, “Brother, May I?: The Challenge of Competitor Control over Market Entry,” Journal of Antitrust Enforcement (2015): 1–23, http://antitrust.oxfordjournals.org/content/early/2015/09/10/jaenfo.jnv028 .abstract.

36. George J. Stigler, “The Theory of Economic Regulation,” Bell Journal of Economics and Management Science 2, no. 1 (April 1, 1971): 3–21, doi:10.2307/3003160; Sam Peltzman, “Toward a More General Theory of Regulation,” Journal of Law and Economics 19, no. 2 (August 1, 1976): 211–40; Ernesto Dal Bó, “Regulatory Capture: A Review,” Oxford Review of Economic Policy 22, no. 2 (June 20, 2006): 203–25.

37. Christopher Koopman, Matthew Mitchell, and Adam Thierer, “The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, December 8, 2014), http://mercatus.org/publication/sharing-economy-and -consumer-protection-regulation-case-policy-change; Michael Farren, “Taxis and TNCs — How Platform Firms Self-Regulate Better than Bureaucrats,” Medium, January 12, 2016, https://medium.com/concentrated-benefits/taxis-and-tncs-how -platform-firms-self-regulate-better-than-bureaucrats-858d8d007843#.aosrm4jtx.

NOTES 27

38. Christopher Koopman, Matthew Mitchell, and Adam Thierer, filing before the Federal Trade Commission workshop on “The ‘Sharing’ Economy: Issues Facing Platforms, Participants, and Regulators,” May 26, 2015, http://mercatus.org /publication/sharing-economy-issues-facing-platforms-participants-and -regulators.

39. Melinda Beck, “Startups Vie to Build an Uber for Health Care,” Wall Street Journal, August 11, 2015, http://www.wsj.com/articles/startups-vie-to-build-an-uber-for -health-care-1439265847.

40. Williams, Graboyes, and Thierer, “US Medical Devices.”

41. Jonathan W. Emord, Freedom, Technology and the First Amendment (San Francisco: Pacific Research Institute, 1991).

42. de Sola Pool, Technologies of Freedom.

43. 47 U.S.C. § 230.

44. David Post, “A Bit of Internet History, or How Two Members of Congress Helped Create a Trillion or So Dollars of Value,” Volokh Conspiracy, August 27, 2015, https://www.washingtonpost.com/news/volokh-conspiracy/wp/2015/08/27 /a-bit-of-internet-history-or-how-two-members-of-congress-helped-create-a -trillion-or-so-dollars-of-value. (“[I]t is impossible to imagine what the Internet ecosystem would look like today without [Section 230]. Virtually every success-ful online venture that emerged after 1996—including all the usual suspects, viz. Google, Facebook, Tumblr, Twitter, Reddit, Craigslist, YouTube, Instagram, eBay, Amazon—relies in large part (or entirely) on content provided by their users, who number in the hundreds of millions, or billions.”)

45. Adam Thierer, “The Greatest of All Internet Laws Turns 15,” Forbes, May 8, 2011, http://www.forbes.com/sites/adamthierer/2011/05/08/the-greatest-of-all-internet -laws-turns-15.

46. Ibid.

47. 17 U.S.C. § 512.

48. Electronic Frontier Foundation, “DMCA,” https://www.eff.org/issues/dmca.

49. See David Auerbach, “It’s OK to Be a Luddite,” Slate, September 9, 2015, http://www.slate.com/articles/technology/bitwise/2015/09/luddism_today_there_s_an _important_place_for_it_really.single.html; John Frank Weaver, “We Need to Pass Legislation on Artificial Intelligence Early and Often,” Slate, September 12, 2014, http://www.slate.com/blogs/future_tense/2014/09/12/we_need_to_pass _artificial_intelligence_laws_early_and_often.html.

50. John Villasenor, “The Fast-Evolving Uses and Economic Impacts of Drones” (Testimony before the House Committee on Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade, November 19, 2015), 8, http://docs.house .gov/meetings/IF/IF17/20151119/104207/HHRG-114-IF17-Wstate-VillasenorJ -20151119.pdf. (“To ensure a balanced approach when contemplating new pol-icy solutions addressing these technologies, I think it is important to take a full accounting of existing frameworks, some of which can be more applicable than might initially be apparent.”)

51. Brito and Castillo, Bitcoin: A Primer.

52. Federal Trade Commission, Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues (January 2016), https://www.ftc.gov/reports/big-data -tool-inclusion-or-exclusion-understanding-issues-ftc-report.

https://www.eff.org/issues/dmca


53. 15 U.S.C. §§ 1681–1681x (2014).

54. These include the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 et seq. (2014); Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. (2014); Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq. (2014); Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq. (2014); and Fair Housing Act, 42 U.S.C. §§ 3601 et seq. (2014).

55. Dourado, “‘Permissionless Innovation.’” (“The alternative to permission-based reg-ulation is centuries old and well tested—the common law of tort. Under tort law, instead of asking for permission to introduce a potentially dangerous product, a firm must pay for the damages its dangerous product creates if it is found liable in court. Brilliantly, the tort system operates retrospectively—there must be actual damages before it steps in to stop the potentially dangerous activity. It is restitu-tion-based, not permission-based. This creates an incentive to make safe prod-ucts, and it keeps the barriers to starting a company or rolling out a product low.”)

56. John Villasenor, “Who Is at Fault When a Driverless Car Gets in an Accident?,” Atlantic, April 25, 2014, http://www.theatlantic.com/business/archive/2014/04 /who-is-at-fault-when-a-driverless-car-gets-in-an-accident/361250. (“[W]hen confronted with new, often complex, questions involving products liability, courts have generally gotten things right. . . . Products liability law has been highly adap-tive to the many new technologies that have emerged in recent decades, and it will be quite capable of adapting to emerging autonomous vehicle technologies as the need arises.”)

57. Byron Acohido, “Hackers Take Control of Internet Appliances,” USA Today, October 15, 2013, http://www.usatoday.com/story/cybertruth/2013/10/15/hackers-taking -control-of-internet-appliances/2986395.

58. Ed Markey, Tracking & Hacking: Security & Privacy Gaps Put American Drivers at Risk, US Senate, February 2015, http://www.markey.senate.gov/imo/media /doc/2015-02-06_MarkeyReport-Tracking_Hacking_CarSecurity%202.pdf.

59. Ed Markey, “Markey, Blumenthal to Introduce Legislation to Protect Drivers from Auto Security and Privacy Vulnerabilities with Standards and ‘Cyber Dashboard,’” press release, February 11, 2015, http://www.markey.senate.gov/news/press -releases/markey-blumenthal-to-introduce-legislation-to-protect-drivers-from -auto-security-and-privacy-vulnerabilities-with-standards-and-cyber-dashboard.

60. Adam Thierer, “Achieving Internet Order without Law,” Forbes, June 24, 2012, http://www.forbes.com/sites/adamthierer/2012/06/24/achieving-internet-order -without-law; Eli Dourado, “Internet Security without Law: How Security Providers Create Online Order” (Mercatus Working Paper No. 12-19, Mercatus Center at George Mason University, Arlington, VA, June 19, 2012), http://mercatus.org /publication/internet-security-without-law-how-service-providers-create-order -online.

61. See J. Howard Beales III, “The FTC’s Use of Unfairness Authority: Its Rise, Fall, and Resurrection,” Federal Trade Commission, June 2003, https://www.ftc.gov/public -statements/2003/05/ftcs-use-unfairness-authority-its-rise-fall-and-resurrection; J. Thomas Rosch, “Deceptive and Unfair Acts and Practices Principles: Evolution and Convergence,” speech at the California State Bar, Los Angeles, May 18, 2007, http://www.ftc.gov/speeches/rosch/070518evolutionandconvergence.pdf; Andrew Serwin, “The Federal Trade Commission and Privacy: Defining Enforcement and Encouraging the Adoption of Best Practices,” San Diego Law Review 48 (Summer 2011).

NOTES 2 9

62. 15 U.S.C. § 45(a).

63. Richard Epstein, Simple Rules for a Complex World (Cambridge, MA: Harvard University Press, 1995).

64. Noah Buhayar, “Can the Insurance Industry Survive Driverless Cars?,” Bloomberg Businessweek, July 30, 2015, http://www.bloomberg.com/news/articles /2015-07-30/can-the-insurance-industry-survive-driverless-cars-. (“One opportu-nity for the industry could be selling more coverage to carmakers and other com-panies developing the automated features for cars. While the new systems could reduce accidents significantly, they won’t be perfect.”)

65. Vikki Stone, “Rise of the Drones,” Risk & Insurance, March 3, 2014, http://www .riskandinsurance.com/rise-drones; “Market for Drone Insurance Expected to Take Off in Next 5 Years,” Insurance Journal, May 15, 2015, http://www.insurancejournal .com/news/national/2015/05/13/368051.htm.

66. Hannah Rose Mendoza, “Insuring 3D Printing, An Industry About to Expand?,” 3DPrint.com, September 23, 2014, http://3dprint.com/15362/insuring-3d -printing; Graeme Newman, “The New Age of Technology: 3D Printing,” Insurance Journal, May 6, 2013, http://www.insurancejournal.com/magazines/features /2013/05/06/290460.htm.

67. Gillian Yeomans, “Autonomous Vehicles, Handing Over Control: Opportunities and Risks for Insurance,” Lloyd’s 5, 2014, https://www.lloyds.com/~/media/lloyds /reports/emerging%20risk%20reports/autonomous%20vehicles%20final.pdf. (“Because potential losses may be high, a commercial market for autonomous and unmanned technology is unlikely to evolve unless insurance is available.”)

68. Susannah Levine, “3D Printing Offers New Risk Challenges,” Risk & Insurance, March 17, 2014, http://www.riskandinsurance.com/3d-printing-offers-new-risk-challenges.

69. Dina Gerdeman, “Why Companies Should Compete for Your Privacy,” Working Knowledge, Harvard Business School, May 19, 2014, http://hbswk.hbs.edu/item /why-companies-should-compete-for-your-privacy; Jennifer Valentino-DeVries, “Can Search Engines Compete on Privacy?,” Wall Street Journal Digits Blog, January 25, 2011, http://blogs.wsj.com/digits/2011/01/25/can-search-engines-compete-on -privacy.

70. White House, Framework for Global Electronic Commerce.

71. Ira S. Rubinstein, “Regulating Privacy by Design,” Berkeley Technology Law Journal 26 (2011): 1409; Peter Schaar, “Privacy by Design,” Identity in the Information Society 3 (2010): 267.

72. Ann Cavoukian, “2011: The Decade of Privacy by Design Starts Now,” ITBusiness, January 15, 2011, http://blogs.itbusiness.ca/2011/01/2011-the-decade-of-privacy-by -design-starts-now.

73. Digital Advertising Alliance, “Self-Regulatory Principles,” accessed January 7, 2016, http://www.aboutads.info/principles.

74. Alliance of Automobile Manufacturers, Inc., and Association of Global Automakers, Inc., Consumer Privacy Protection Principles: Privacy Principles for Vehicle Technologies and Services, November 12, 2014, http://www.autoalliance.org/ ?objectid=865F3AC0-68FD-11E4-866D000C296BA163.

75. Consumer Technology Association, “Association Unveils First-of-Its-Kind, Industry Supported Principles on Wellness Data Privacy,” October 26, 2015, https://www

http://www.autoalliance.org/?objectid=865F3AC0-68FD-11E4-866D000C296BA163

http://www.autoalliance.org/?objectid=865F3AC0-68FD-11E4-866D000C296BA163


.cta.tech/News/News-Releases/Press-Releases/2015-Press-Releases/Association -Unveils-First-of-Its-Kind,-Industry-Su.aspx.

76. Thierer, Parental Controls & Online Child Protection: A Survey of Tools and Methods (Washington, DC: Progress & Freedom Foundation, 2009), http://www.pff.org /parentalcontrols.

77. Thierer, “Achieving Internet Order.”

78. Dourado, “Internet Security without Law.”

79. Marsali Hancock, et al., “From Safety to Literacy: Digital Citizenship in the 21st Century,” Threshold Magazine (Summer 2009).

80. Adam Thierer, “Muddling Through: How We Learn to Cope with Technological Change,” Medium, June 30, 2014, https://medium.com/tech-liberation/muddling -through-how-we-learn-to-cope-with-technological-change-6282d0d342a6.

81. Daniel Castro and Alan McQuinn, “The Privacy Panic Cycle: A Guide to Public Fears about New Technologies,” Information Technology and Innovation Foundation, September 10, 2015, 28, http://www.itif.org/publications/2015/09/10/privacy -panic-cycle-guide-public-fears-about-new-technologies. Also see Cass Sunstein, “Social Norms and Social Roles,” Columbia Law Review 96 (1996); Cristina Bicchieri, The Grammar of Society: The Nature and Dynamics of Social Norms (Cambridge: Cambridge University Press, 2006).

82. Thierer, “The Internet of Things and Wearable Technology.”

83. Adam Thierer, Anne Hobson, Christopher Koopman, and Chris Kuiper, “How the Internet, the Sharing Economy & Reputation Feedback Mechanisms Solve the ‘Lemons Problem’” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, May 2015), 11–24, http://mercatus.org/publication /how-internet-sharing-economy-and-reputational-feedback-mechanisms-solve -lemons-problem.

84. Adam Thierer, “Technopanics, Threat Inflation, and the Danger of an Information Technology Precautionary Principle,” Minnesota Journal of Law, Science & Technology 14, no. 1 (2013): 312–50.

85. “The Threat of Human Cloning: Ethics, Recent Developments, and the Case for Action,” A Report of the Witherspoon Council on Ethics and the Integrity of Science, New Atlantis 46 (Summer 2015), http://www.thenewatlantis.com /publications/number-46-summer-2015.

86. Wendell Wallach, A Dangerous Master: How to Keep Technology from Slipping beyond Our Control (New York: Basic Books, 2015), 13. (“The power to alter the genome, and most specifically the human genome, signals a major inflection point in the history of humanity.”)

87. These issues are thoroughly explored in Joel Garreau, Radical Evolution: The Promise and Peril of Enhancing Our Minds, Our Bodies—And What It Means to Be Human (New York: Broadway Books, 2005).

88. See Susan E. Dudley and Jerry Brito, Regulation: A Primer, 2nd ed. (Arlington, VA: Mercatus Center at George Mason University, 2012), 97–8. (“The cost of a regula-tion is the opportunity cost—whatever desirable things society gives up in order to get the good things the regulation produces. The opportunity cost of alterna-tive approaches is the appropriate measure of costs. This measure should reflect the benefits foregone when a particular action is selected and should include the change in consumer and producer surplus.”); Jerry Ellig and Patrick A. McLaughlin,

NOTES 3 1

“The Quality and Use of Regulatory Analysis in 2008,” Risk Analysis 32, no. 855 (2012).

89. Larry Downes, The Laws of Disruption: Harnessing the New Forces That Govern Life and Business in the Digital Age (New York: Basic Books, 2009), 2.

90. Ibid., 60.

91. “Definition of Moore’s Law,” PC Magazine Encyclopedia, http://www.pcmag.com /encyclopedia_term/0,,t=&i=47229,00.asp. See also Bret Swanson, Moore’s Law at 50: The Performance and Prospects of the Exponential Economy (Washington, DC: American Enterprise Institute, November 2014), http://www.aei.org/publication /moores-law-at-50-the-performance-and-prospects-of-the-exponential-economy.

92. Sofia Ranchordás, “Does Sharing Mean Caring? Regulating Innovation in the Sharing Economy,” Minnesota Journal of Law, Science & Technology 16, no. 1 (2015): 39. (“Regulators can increase flexibility of regulations to accompany the pace of inno-vation both by including a sunset clause—which predetermines their expiry at the end of a certain period—or by experimenting with new rules. . . . Terminating reg-ulations by employing sunset clauses or by experimenting on a small-scale can be useful to ensure that rules keep up with the changes in technology and society.”)

93. World Economic Forum, Deep Shift: Technology Tipping Points and Societal Impact (Geneva, Switzerland: September 2015), 3, http://www3.weforum.org/docs/WEF _GAC15_Technological_Tipping_Points_report_2015.pdf.

94. Joel Mokyr, The Enlightened Economy: An Economic History of Britain 1700-1850 (New Haven, CT: Yale University Press, 2010), 134.

3 3

A B O U T T H E A U T H O R

Adam Thierer is a senior research fellow with the Technology Policy Program at the Mercatus Center at George Mason University. He specializes in technology, media, Internet,

and free-speech policies, with a particular focus on online safety and digital privacy. His writings have appeared in the Wall Street Journal, the Economist, the Washington Post, the Atlantic, and Forbes, and he has appeared on national television and radio. He also contributes to the Technology Liberation Front, a leading tech policy blog.

Thierer has authored or edited eight books on topics ranging from media regulation and child safety issues to the role of feder-alism in high-technology markets. He has served on several distin-guished online safety task forces, including Harvard University’s Internet Safety Technical Task Force and the federal government’s Online Safety Technology Working Group, and he has testified numerous times on Capitol Hill.

Previously, Thierer was president of the Progress and Freedom Foundation, director of telecommunications studies at the Cato Institute, and a senior fellow at the Heritage Foundation. He received his MA in international business management and trade theory from the University of Maryland and his BA in journalism and political philosophy from Indiana University.

Documents

PERMISSIONLESS INNOVATION AND PUBLIC POLICY · mart innovation policy begins with a particular disposition toward experimentation, risk-taking, and even failure. For innovation to