One of the biggest business stories of the year is that Uber has been banned in London. Politicians there cite public safety as their main concern. But could it also be an effort by London’s cabbies to block disruptive competition? Adam Thierer, author of Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom, thinks so. He says the Uber ban is the latest in a long string of “techno-panics” that tend to arise whenever innovation unsettles the status quo.
Thierer’s ground-breaking book is now in its second edition, and the author continues to write columns and position papers at the Technology Policy Program at the Mercatus Center at George Mason University, where he is a Senior Research Fellow. One of his latest arguments is how “global innovation arbitrage” is encouraging innovators to move around the globe in search of environments that are hospitable to their brainstorming. What are the consequences of attempting to stem that flow? We sat down with him to ask.
What inspired you to focus on permissionless Innovation? Where did the phrase come from?
The concept gained popularity in late 1990s, especially in places like Silicon Valley. The closest anyone ever came to using the term was former Navy Rear Admiral Grace Hopper, who was a computer scientist. She reputedly said: “It is easier to ask forgiveness than to get permission.” That became known as Hopper’s Law.
I try to apply the term as an alternative to the Precautionary Principle, which is well known in fields such as environmental law and food and drug law. No one had ever coined an antithesis to the precautionary principle. I argue in my book that permissionless innovation is the best term to counter it.
The culture of permissionless innovation on the internet really took hold in the Clinton Administration. How and why did that happen?
First, presidential administrations haven’t differed radically in their approaches to the Internet. I have always been pleasantly surprised by how tech policy has been non-partisan. There’s been a general hands-off approach that encourages further development of these technologies.
That said, the Clinton Administration deserves credit for a policy of regulatory restraint. They made sure the Internet wasn’t treated like traditional telecommunications companies. Doing so allowed for commercial development of the Internet to occur organically. We forget today, but in the early years, commerce wasn’t allowed to be conducted on the Internet.
The Clinton Administration’s framework for global Internet commerce essentially said that the Internet should be a market-driven arena with minimal interference. They didn’t mess up that moment in time. That’s unlike Europe, which immediately tried to pigeon-hole the Internet into old regulatory paradigms.
There’s been tremendous attention on immigration recently—including legal immigration. What could happen if we make it harder for people to come to America and start new companies?
Immigration has been hugely important in fueling the Internet age in America. And venture capital followed those innovative minds. It has allowed for such a robust and innovative ecosystem. If we reverse that we’d be closing the door on next wave of technological innovation.
At the same time some people are criticizing America’s largest technology companies– that they have almost become monopolies. Do you think that’s fair?
In the late 1990s, I spent most of my time on platforms with names like AOL Time Warner, MySpace, Blackberry, and Microsoft. The winds of Schumpeterian change blew in and gave us a new bunch of players. They, too, can be leap-frogged by another crop of players. These companies are providing the public with services that they value greatly – and the services are either free of charge or very cheap. We should not take those services for granted simply because they come from large companies.
What books ( besides your own) are you finding exciting right now?
(Calestous) Juma’s Innovation and Its Enemies: Why People Resist New Technologies is a fascinating look at the history of technological innovation and how vociferous the opposition to each new one can be. Initially, when both cameras and cars made their debut, a bit of techno-panic ensued. In fairly short order, however, the public came to embrace, and then even hotly demand, both cameras and cars.
Another book I would recommend is The Permission Society by Timothy Sandefur of the Goldwater Institute. The book deals with permissioning in a traditional economy – from furniture companies to property disputes to hair braiding. In most cases these businesses require licenses and permits. It’s insane. What I like is how he discusses the potential legal strategies for undoing this permission society.
Naysayers out there warn that the “American Century” has passed. What do you think—are our greatest days still ahead?
I’m always bullish on the American economy and its innovators. That said, we risk losing our advantage in this age of global innovation arbitrage. It’s essentially the same thing that happened with capital flows in the post-War period. Money went wherever financial innovators were treated the most hospitably. The same things are happening with innovation flows, with everything from drones to medical devices to genetics. Europe is opening markets for genetics and drones. Here, the FAA is so restrictive that we might lose innovators to countries that are more encouraging to what is done in their airspace. And there’s Bitcoin. The United States is pushing back. It will be interesting to see if the UK will be a hotbed of cryptocurrency innovation. But I remain bullish on America being a leader in the next industrial revolution. It’s up to us to make sure it happens sooner.