Published: June 24^th, 2018

The tension between innovation and regulation is well known, but a relatively new term has gained prominence in recent years – permissionless innovation.

While it remains uncertain who originally coined the term, it has been adopted by those who consider it “the most important concept in political economy”[1]. Vint Cerf, one of the “parents” of the internet, says that permissionless innovation “underlies extraordinary internet-based economic growth.”[2] The best-articulated exposition of this approach can be found in Adam Thierer’s book Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom.[3]

The permission question, as Thierer defines it, is: “Must the creators of new technologies seek the blessing of public officials before they develop and deploy their innovations?”[4] He argues that there are two possible approaches to this question – the “precautionary principle” and that of “permissionless innovation”. The precautionary principle holds that -

New innovations should be curtailed or disallowed until their developers can prove that they will not cause any harm to individuals, groups, specific entities, cultural norms, or various existing laws, norms, or traditions.[5]

The permissionless innovation approach, as Thierer defines it, is the

"Notion that experimentation with new technologies and business models should generally 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 any develop, can be addressed later."[6]

In other words, the idea is that public regulations stifle technological progress and innovation and should a-priori be removed, unless it is compellingly proven that a certain innovation will cause serious harm.

The permissionless innovation approach ignores an important issue, namely the fact that technological innovations are being produced at an ever-increasing pace. Since drafting, approval, and implementation are not speedy processes, regulation becomes a rearguard action. Furthermore, advocates of permissionless innovation neglect to mention that the implications of new technologies are not always immediately apparent, and that it takes time to evaluate them. While the pace of technological innovation in the past allowed for a certain amount of time between innovations, so that there was more opportunity to study their implications (and then decide whether or how to regulate them), at the current rate of advancement this is virtually impossible.

To take but one example of the problematics of permissionless innovation, let us briefly mention the issue of informational privacy. Perhaps more so than in other fields, innovation in technologies that collect and process data about users online is advancing much more quickly than the smaller, slower steps of the regulators chasing after these advances. The average user is being tracked and her information processed and analyzed countless times each day, in every action she does online, by an entire army of different technologies, with different intents – almost all unknown to her. Sometimes, even the commissioners of such tracking do not really know what is being done with the data.[7] To say that such data collection and processing may lead to economic growth is one thing, but to say that it will lead to a better, happier, and more flourishing life is quite another.

Obviously, Thierer is aware of the fact that challenges related to issues such as privacy and security can be raised against permissionless innovation. However, he attempts to assure us by claiming that “a world of permissionless innovation will make us healthier, happier, and more prosperous—if we let it.”[8]
 

I beg to differ. It seems to me that a crucial issue is missing from the debate: the question of purpose. What is the purpose of innovation? Is there some intrinsic value to innovation itself? Is innovation a means or an end?

If any scholar of religion were to follow the inhabitants of Silicon Valley, they might think that a new religion has sprung up in the area, gaining worshippers all over the world since the end of the last century. This religion worships one thing – technological progress; its axiom is innovation = good.

What we have here, I would argue, is a confusion of means and ends. Despite the fact that the discussion regarding innovation can often lead to the assumption that advocates of permissionless innovation see innovation as an end in itself, Thierer himself does not make this claim. He appears to hold the view that innovation may be considered a means to a greater good – material progress. Thierer claims that “Technological innovation is the single most important determinant of long-term economic growth and improvements in living standards. This is the consensus opinion among economists, political scientists, and economic historians.”[9]

Thus, even the leading proponents of permissionless innovation themselves do not argue that innovation is an end in itself, but a means to an end – “economic growth and improvements in living standards”. However, the question they neglect to ask is whether economic growth or living standards (“The degree of wealth and material comfort available to a person or community.”[10]), are ends in themselves. I would argue that innovation, and even economic growth, are not an end in themselves, but only a means to a greater good – that of happiness and a flourishing life. The idea that material progress is always a good thing should not be accepted as a guiding principle for society. Innovation might have brought about many good things, but it has also brought many other far less positive developments. Even improvements in health – and the question one always encounters when raising such precautions is would you rather live in a cave? Or be treated by a medieval doctor? – can sometimes be a negative thing, if physical health is the sole criterion at the expense of mental health.

As Thierer notes, there are indeed many problems with the current state of affairs and perhaps also with the methods of regulation. However, this does not mean that regulation should be removed by default and innovation given free, unrestrained reign.

Regulation, for all its many flaws, is an absolute necessity in this day and age. I would even venture to argue that it is needed now more than ever before – even at the cost of slowing down innovation. If this is the price we need to pay so that our decisions are more calculated, better informed, and hopefully show more consideration for their long-term implications, then so be it.

 

[1] Michael Munger, “Permissionless innovation: The fuzzy idea that rules our lives”, Learn Liberty, Sep 19, 2017, https://www.learnliberty.org/blog/permissionless-innovation-the-fuzzy-id...

[2] Vinton G. Cerf, "Keep the Internet Open", The New York Times, May 24, 2012.

[3] Adam Thierer. Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom, Mercatus Center at George Mason University, 2016.

[4] Ibid., p. 1.

[5] Ibid.

[6] Ibid.

[7] Saskia Naafs, “'Living laboratories': the Dutch cities amassing data on oblivious residents”, The Guardian, March 1, 2018, https://www.theguardian.com/cities/2018/mar/01/smart-cities-data-privacy...

[8] Ibid. p. 8.

[9] Adam Thierer, “Converting Permissionless Innovation into Public Policy: 3 Reforms”, Plain Text, Nov 29, 2017, https://readplaintext.com/converting-permissionless-innovation-into-publ...

[10] standard of living, Oxford Dictionaries Online, https://en.oxforddictionaries.com/definition/standard_of_living