Regulation

I'm from the government, and I'm here to help (stop progress)*

How regulators in league with crony capitalists stymie technological advancement.

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Bureaucrats
Dept. of the Navy

Over at the journal Democracy, digital business guru Larry Downes as a terrific article, "Fewer, Faster, Smarter,"  outlining how government regulation is all too likely to stymie progress in seven disruptive wealth-creating technologies. He begins by citing the pitched battles of regulators in league with crony capitalists around the world trying to contain and control modern technologies such as the ride-hailing applications like Uber; medical diagnostics and devices like IBM's Watson; and the Federal Communications Commission's efforts to turn the Internet into the moral equivalent of Ma Bell.

What technologies are at risk of heavy-handed regulatory overreach? The seven areas of technological disruption that Downes identifies as being the cross-hairs of backwards regulation are sharing economy technologies (Uber & AirBnB); the Internet of Things (Google's Nest tech); robotics (Rethink Robotics); 3-D Printing (Stratasys); autonomous vehicles and drones (Google & Matternet); digital currency (Ripple Labs); and the quantified self (23andMe). Downes points out that all too often that regulators allied with industry incumbents seek to kill off competitor technologies and the result will be that …

…we'll continue to see violent, counterproductive clashes between the industrial and information economies. And no matter who wins which battles, the result will be the unforgiveable squandering of much of the vast consumer surplus our innovation revolution is creating, whether by endless litigation, inefficient lobbying, or other rent-seeking behavior.

That behavior, it is worth emphasizing, increasingly takes the form of mature businesses urging their longtime regulators to turn their attention to the entrepreneurs, many of whom haven't even hired their first legal counsel. For incumbents, the last line of defense against innovative startups and the venture investors who fund them remains the shoring up of barriers to entry created by decades of regulation. Industry regulators at the federal, state, and local levels now serve as gatekeepers for the disruptors—a role the incumbents are skilled at exploiting to help keep transformation at bay.

Downes' diagnosis is largely correct and could explain a good bit of why post-Great Recession economic growth is slower than were recoveries from earlier economic downturns. Downes is echoing to a great extent the the concerns voiced by economist Mancur Olson in his The Rise and Decline of Nations (1982). In my article, "Is U.S. Economic Growth Over?," I noted that…

…Olson argued that economic stagnation and even decline sets in when powerful special-interest lobbies—crony capitalists if you will—capture a country's regulatory system and use it to block competitors making the economy ever less efficient. Gordon's Northwestern University colleague, economic historian Joel Mokyr, expressed similar fears in his mesmerizing The Gifts of Athena: Historical Origins of the Knowledge Economy (2002). "Sooner or later in any society the progress of technology will grind to a halt because the forces that used to support innovation become vested interests," argued Mokyr. He concluded, "In a purely dialectical fashion, technological progress creates the very forces that eventually destroy it."

Downes does not deal with an even greater and more pernicious threat to innovation: the Precautionary Principle which is favored by all stripes of anti-progress activists and ideologues. In my new book, The End of Doom: Environmental Renewal in the Twenty-First Century, I summarize it thus: Never do anything for the first time.

Ultimately, Downes urges regulators to get out of the way:

Does the collective problem still exist, in other words, or can consumers now solve the problem collaboratively, perhaps with a technology platform provider or private institution managing the regulation more cheaply, or more flexibly, or both? Which model has the capacity to self-correct as market conditions evolve and with lower risk of regulatory capture and regulator corruption?

As the technology revolution proceeds, the concept of government may return to its pre-industrial roots, setting the most basic rules of the economy and standing by as regulator of last resort when markets fail for some or all consumers over an extended period of time (emphasis added).

A hopeful, but unlikely conclusion.

*The nine of most terrifying words in the English language.

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  1. Only government-funded invention is good for society.

    Free-range invention is the tool of anarchists who are intent on destroying civil society.

    1. That’s why Tang is the awesome and Kool-Aid will get you suspended.

      1. Nope Tang was invented privately then tainted later by its association with NASA.

        From Wikipedia:

        Tang is a fruit-flavored drink. Originally formulated by General Foods Corporation food scientist William A. Mitchell[ in 1957, it was first marketed in powdered form in 1959. The Tang brand is owned by Mondel?z International. Sales of Tang were poor until NASA used it on John Glenn’s Mercury flight, and subsequent Gemini missions.

        1. Well now Tang sucks too. Are your proud of yourself?

          1. of course

          2. Tang has always sucked. There is no way to make “powdered fruit-flavored drink” not suck. They tried by associating it with astronauts, but even that wasn’t really enough.

            1. Citrucel’s not bad once you get used to it.

              1. Look, if I want fiber I’ll eat a lot of flax seeds and cabbage.

                (runs to the bathroom)

            2. Yeah, it was never good. I remember it from the powdered stuff in the jars back in the sixties. It’s sort of like how bad Gatorade was when it first came out, it tasted absolutely horrible. But they improved the taste so much it’s actually good now.

              1. Mango Tang is more than halfway decent.

                Tang, like Sunny Delight, is a beverage for people who would like orange juice but can’t tolerate it. They don’t advertise it that way, but that’s how people know them. Orange juice gave my aunt diarrhea so she drank Tang. A columnist wrote how drinking coffee with OJ produces heartburn, but not coffee w Sunny D.

            3. I *loved* Tang when I was a kid. It was a special treat compared to the Kool Aid we usually drank.

  2. I’m still optimistic. I just look around at the world and I can’t help but be in awe of what human beings are capable of. It’s beautiful. We’ve succeed in spite of those opposed to progress before. We’ll find ways to do it again.

    We *are* talking about sexbots, right?

    1. Heh, it’s too funny to think about the mass freakout and pants shitting that will occur when that market kicks off.

    2. Me too. For starters, the success of the cronies is mixed. Uber is stomping all efforts to stop it. They’re like the ISIS of disruptive tech, only more so. I think Net Neutrality is the most dangerous of the weapons the government has and the most likely to cause real harm. I do not agree that technological progress creates conditions that destroy it.

      Second, there is a heavily imperfect but burgeoning and rapidly improving world beyond America. If the US suppresses its disruptors, others won’t at least to the same degree, and their gain will come at America’s expense.

      1. They’re like the ISIS of disruptive tech, only more so

        Marketing isn’t your strong suit.

  3. I can’t believe that in those 7 seven things, medical tech is not included.

    It’s the current promise of the rapid progress of new medical technologies that I worry most about government really fucking up. The exact same technologies that will truly make advanced, I’m talking far more advanced than the primitive hackery we have today, healthcare available and affordable for everyone.

    Look at all the effort government just put into totally fucking up healthcare for an entire country of 350 million people, making healthcare far more expensive and less available for everyone. They aren’t going to give up that success story easily. I mean, lord forbid that people might actually forget about Obama’s ‘legacy’ or even look back on it as a disaster.

    The technology that is coming (if we can keep government out of the way) will make the current healthcare system as obsolete as horse and carriages or quill pens for writing.

    1. Your vision is too limited. Once we all download our consciousnesses into the sexbots medical care will fall under routine maintenance and cleaning.

      1. Don’t forget about upgrades. Cyborg sexbot # 235667 can never get enough upgrades. NEEDZ MOAR UPGRADES!

      2. And your sexbot is too primitive. A good sexbot is self healing.

        1. Self healing, eh? ENB would like to see you in her office….

      3. routine maintenance and cleaning

        *pictures two robots walking along a beach asking personal questions about transmission flushes*

    2. H: Medtech is kind of covered by Downes’ notion of the technologies associated with the quantified self.

      1. Ok, I was wondering about that. Thanks for clearing that up.

  4. This reminded me of an excellent xkcd (but I repeat myself).

  5. Only technology has made better the human condition. That’s always been true and will always be true. Government is just a parasite on humanity.

    1. You can’t have technological progress or much else without government. Government is like fire: you need some to live.

      Also, not sure about technology being the only thing that betters the human condition that seems a little myopic. Double-ended book-keeping was a huge advancement for commerce. Was that an example of technology?

      1. Double-ended book-keeping was a huge advancement for commerce

        Unless you think god created it, how is it not an example of technology?

        1. It came from the obelisk. Chimps started beating each other with their journals and green desk lamps.

          1. And sleeve garters… don’t forget the sleeve garters…

      2. Double-ended book-keeping

        umm, that’s not book-keeping with the two ends, no matter what your mom called it.

        Double entry accounting was a really cool invention, though.

        1. Ohh. oh. Double entry. Yes, very cool invention. I can watch that all night.

  6. The biggest tech advances of the last century have mostly come from the military. The need(desire?) to kill more efficiently and effectively has laid the foundations for our current technological revolution.

    However, it was the commercialization of those technologies that has benefited mankind.

    1. Really? Advances in medicine seem to have come primarily from the private sector. Ditto communication technology and the internet. One of the core components of modern Wi-Fi was invented by a radio astronomer in Australia. I know early internet-like things were funded by DARPA but I’ve always had the impression that was more of a “throw shit at the wall and see what sticks” sort of thing rather than a devious plot to make the next best killing machine.

      1. All of the latest promising new technologies in healthcare and 3D printing are coming from the private sector.

        1. True. I think we’re in a new age where commercial investment and development in technology is outpacing government and military. But it’s a relatively new thing and one that generates backlash from the government. They’re not in the driver seat anymore.

          1. The government god is a jealous god.

      2. Microchips, CDMA (originally a CIA coding scheme I think), GPS, nuclear, digital cameras, radar (and other microwave applications), god knows what else….

        Most of it is base tech that required years and years of commercial refinement to reach its true potential.

        1. I *wish* nuclear had reached its full potential by now. It’s hard to think of another sector that has been so stymied by pants-shitting.

          1. Fusion is the future. The green nazis and lefties in general will of course shit their pants about that also. They shit themselves over pretty much everything.

            I’m waiting for some terrible type of crop blight to hit Europe and then they’ll be begging the USA for their blight resistant GMOs. It will be a real hoot.

            1. Fusion is the future.

              I wish it were true. It seems to be one of those unattainable goals. I’d be happy with production line fission reactors like the Toshiba 4S.

              1. As soon as I find the perfect beer can and perfect my mini fusion in a beer can reactor, I’ll let ya’ll know. Now I’m off to drink more beer, still haven’t found that can. The fact that I prefer bottled beer and draft is slowing down my research a little.

            2. Molten salt reactors are best reactors.

              Nuclear is the victim of government regulation but the nuclear industry is the beneficent of massive subsidies. The tech just doesn’t work as it exists today. MSRs might fix that.

        2. The biggest tech advances of the last century have mostly come from the military.

          If your talking electronics or communication theory then absolutely no.

          Most of it is base tech that required years and years of commercial refinement to reach its true potential.

          As far as semiconductor technology goes this is not true at all. The military and space program were among the early customers that help drive the price down but it all would have happened anyway. There simply were not “years and years of commercial refinement” between discovering a solution and commercial offerings.

    2. no. not even close.

    3. The biggest tech advances of the last century have mostly come from the military throwing mountains of cash at inventors private contractors for exclusive rights.

      FIFY

      1. They should just throw the contractors into the fighting pits 😉

      2. You’re right. But I guess my point is that killing people is one thing that drives technological advancement, killing people and the ever increasing demand for porn.

    4. The biggest tech advances of the last century have mostly come from the military

      That’s if you ignore the contributions of Xerox PARC and the CIX.

  7. I watched a program I *think* was a documentary but could’ve been fiction (It took place in Canada, so who knows, amirite?).

    The main “character” was a clone and she didn’t even know it!!!!! If this industry was properly regulated that would never happen!

    1. In Oblivion, there were 2 people who were clones and didn’t know it.

    2. Are you sure you’re not thinking of Moon? I can understand why you might be confused, as the desolate, sparsely populated Lunar surface closely resembles Canada.

      1. BTW, highly highly recommended for those who haven’t seen it yet.

        1. I saw it. I like Oblivion better, one of the better SciFi flicks I’ve seen in a while. Of course, after Chappie, everything else sort of pales in comparison. That film is in a category of it’s own awesomeness.

          1. Didn’t see Oblivion or Chappie. Cinemasins tore both apart, and that is where I get my movie reviews from now.

            1. Cinemasins sucks as hard as Oblivion and Chappie. Those movies both suck and CS are a bunch of lazy trie-hard assholes.

              Moon was alright, but not spectacular.

              1. I really enjoy Cinemasins. I think it’s really funny. Of course humor, like taste in movies, is subjective.

              2. Are those reviews written by critics or consumers? I don’t pay any attention at all to what critics write.

                1. Cinemasins is a youtube channel that pokes fun at movies, even good ones. They tear everything apart because that is the point. You can tell when they actually think something is good as opposed to truly hating it.

                  1. I liked CS when they weren’t tedious and lazy.

              3. I think most people will enjoy one of those movies. The reviews for Oblivion are pretty good on Amazon, almost 5 stars if I remember. Chappie is a movie that for me, is one of the best I’ve ever seen, but it depends on the person.

                1. Oblivion was entertaining.

                  1. Oblivion was stupid and had car-sized holes in the script.

      2. Possibly, the actors were dressed in horrible bulky clothing (some type of space suit?) and needed a visit with a good stylist (Earth-side).

        1. For really good visuals in a SciFi, I’d highly recommend Prometheus. The film is not so great, but the visuals are.

          I’m almost afraid to watch the 2nd one because the ending will be something about AGW.

          1. It made absolutely no sense. It was such a let down.

            1. Parts of it definitely seem to not make any sense at all.

  8. Regulators are parasites. There is a significant chunk of humanity that exists as a parasite on other humans. Some of this is mutual and often welcomed; your doctor is a parasite because he/she makes money because other people get sick and injured, and if people didn’t, they wouldn’t have a job. That doesn’t mean you don’t want that kind of parasite around. They’re not forcing you to give them money. You do it because you want their services.

    Regulators, politicians, and bureaucrats are completely unwanted parasites, who only exist to extract resources and money from you by force. They fuck shit up because that’s how they operate. It’s how they put the scare into you. Hindering progress is all part of *their* game plan, because it helps them get what they want *now*.

    1. Doctors seem to pretty clearly fall into the symbiotic category.

    2. There is a significant chunk of humanity that exists as a parasite on other humans

      And if our prog friends get their way, the parasite will eventually kill the host because they have no idea what ‘too much of something’ means.

      That doesn’t mean you don’t want that kind of parasite around

      I actually don’t. I hate going to doctors. It’s all just so fucking primitive. I want my device that can tell me everything I need to know about me and then 3D print the perfect supplements and drugs for me. If I need a surgery, I want it done by robots or nanobots, or just something that is made from my own stem cells so that I can heal myself. I don’t want any humans cutting on me or deciding what I need to do for my healthcare. Humans are error prone and will fuck you up or kill you just about as likely as fix anything that is wrong.

  9. Anyone who doubts how awesome the future will be need only consider what wonders will be revealed when you can link your consciousness to that of Agile Cyborg. It will probably take a few generations before your robotic self can handle more than a few nanoseconds of that, but we’ll be on a rapid release cycle.

  10. All that matters is that Virtual Reality technology does not get halted by unnecessary regulation. Once VR is here next year, I can (finally) escape from you all and the rest of the world by immersing myself in videogames and interactive pornography.

    1. Sounds like something worth commenting on.

      1. I’ve already spent $1.5K this year on upgrading my computer so it will be compatible with Oculus Rift.

        1. I honestly don’t know anything about it beyond that one Southpark episode. The graphics didn’t look that good.

          1. That’s such a good episode!!

  11. Nine most terrifying? Surely not.

    “That was your mother, and she really liked it.”

    “President of the United States of America: Michael Moore!”

    “Congress ceded all powers to our new empress Hillary Clinton”

    “Waterboarding isn’t so bad. Here, let me show you…”

    “Sorry, Ron, but North Korea really really wanted you.”

    “It tastes like pork, but is really Jews. Ironic!”.

    Surely we can come up with more…

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    http://www.HomeJobs90.Com

  13. Ah yes, Ronald. Crony capitalists using government to feather their nests. It’s particularly onerous when they do it at the expense of a freer market, right?

    Like solar, a growing new technology trying to compete. Of course, some crony capitalists with ties to oil and gas want government fees in Arizona, and want to keep laws on the books on Florida that dictate who you can buy energy from. Curious why you didn’t mention that one. Maybe this is why

    http://politicaloptic.com/2015…..lar-power/

  14. It’s important to note the relationship between regulation and crony capitalism. Larger businesses can more easily absorb the cost of regulation than small businesses, let alone startup companies.

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