Regulating the Future

Government pretends it's the cause of progress, then it strangles innovation.


Government pretends it's the cause of progress. Then it strangles innovation.

We know government understands that new technologies are important. The military invests in robots and traffic cops use radar guns. But when the rest of us use robots or fly drones, government gets eager to put rules in place before things get "out of control."

When it's hard to innovate in the U.S., innovation happens elsewhere. The Japanese already offer largely automated hotels. At the Henn-na (or "Weird") Hotel, the front desk clerk is a robot dinosaur—popular with the kids. Another robot stores your luggage, and another takes you to your room.

This may sound like an expensive stunt, but the robot hotel is cheaper than others nearby—partly because it employs fewer people.

That alarms politicians who fear change. Whenever there's been innovation, experts predict massive unemployment.

They react to what they see. Fewer receptionists work at that Japanese hotel. Military robots will replace soldiers, and self-driving cars will take away delivery people's jobs. Often politicians pass rules to stop this "job destruction."

But the more efficiently we can do things, the more human energy is free to be turned toward the unseen, tasks we haven't even thought of yet but which may be more pleasant to do, and these jobs will create new opportunities.

If we crushed every machine that did things humans used to do, we'd still be living in caves and hunting tigers with spears. Every time there's a new invention, some people lose jobs, and there's a period of adjustment.

But we come out ahead.

You don't believe employment recovers? Remember that 200 years ago, 90 percent of Americans worked on farms.

Now fewer than 2 percent do. But that doesn't mean that 90 percent of the population has been left unemployed.

"We saw the car displacing horses, buggies and buggy whips, but we don't lament that passage, do we?" says Max Borders, author of Superwealth.

"The blacksmiths of old had to figure out something else to do," observes Borders. "They all found jobs. The economy evolves. It's an evolving ecosystem."

Some don't want it to evolve. Cab drivers and their unions demand that government protect their jobs from competition by ride-hailing services such as Uber.

But if government stepped in to protect jobs, we'd be stuck with the jobs and industries of the past, millions of buggy-whip makers and all those extra farmers.

I think we're better off celebrating new ways of doing things—and the inventors and entrepreneurs who keep thinking them up. That gives us choices that are "better, faster, cheaper and cooler," says Borders.

But today, with America's ever-increasing regulation, it's often tougher to create new things. Uber offers obviously better and safer service, but to succeed it has to overcome protests and break government rules.

"It was legally questionable," says Borders, "but people did it anyway." Uber thrived only because it grew popular and rich before the politicians and regulators noticed. By then, Uber had millions of customers and billions of dollars, so they could bully politicians back.

In New York City, Uber defeated my anti-progress mayor by telling its customers: Waiting too long for a car? Blame the politicians.

We are better off because Uber won, but the battles continue. Some airports, to protect their taxi monopolies, recently banned Uber.

Uber is fortunate that its most important innovation is just an app on phones. It didn't need to first get government permission to create that.

More traditional innovators, however, ones who want to build big, visible things like a better nuclear plant or chemical plant or invent a lifesaving new drug, are often crushed by today's byzantine rules—crushed before they can make our lives better.

When that happens, we may never know what good things we miss. "The future is going to be full of surprises, full of awesome things that almost fall from the sky," says Borders. "We can't even imagine it today."

It's easier to imagine if government stays out of the way.

NEXT: 3 Takeaways From the Super Tuesday Primary Elections

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  1. I'm ready to tell you my secret. I see unseen costs.

  2. 150 years after Bastiat why are we still needing to explain this to people?!

    1. Because no one reads French Economists?

      1. They read Piketty happily enough and he's French. Although maybe not an economist...

    2. Because they believe in anecdotes not facts. "My cousin's ex-husband's sister lost her job because it was sent to Ghana" carries far more weight than "US jobs grew faster when companies were less regulated".

    3. because the frauds with their hands on the levers and strings have buried Bastiat, Smith, von Mises, and others with brains within their crania. WHY? The frauds are threatened that despite their hands on the levers and strings they will no longer gain from their charade.

  3. If the world is just powered by'renewable energy' ,as many greens want, we may need the horse and buggy again.

  4. Progs say central committee knows what's best.

    Central committee members studied governmentality at elite universities to help guide hapless citizens through life.

    1. While they would never admit it even to themselves this is pretty much what they believe.

  5. Do you want to earn from home by working basic work using your desktop or laptop for 4 to 6 h on daily basis, get paid 75 bucks an hour qc and get a paycheck every week and choose yourself your working time?


    1. What if I already make more than $75/hr? Ever think about that, Mr. Smartybot!!!!

    2. WHY is there not a spam flag for posts like this?

  6. Who handles the complaints at the robot hotel if the guests find that their rooms are not clean?

    1. That would be Bender Rodriguez.

      1. Their customer service is going to get them a lot of negative reviews...

        1. Only if their able to post. And all the theft will hep the bottom line.

      2. Thanks for the laugh.

    2. The sexbot handles the complaints.

  7. The INs always fight the OUTs. It is called the bottom of the Kondratieff Cycle.

  8. It just seems kind of naive to believe that just because new technologies have generated more new jobs than they cost in the past, that there is any reason to expect that this will always be true, unless someone can articulate a theory about why it is so that is a bit more rigorous than "it always happened before."

    It seems equally plausible that there is an upper bound to the amount of meaningful work that is worth doing and at some point there will be far fewer jobs than there are people willing and able to do them.

    Will this be a bad thing? No way to tell.

    1. Well, we'll have a hard time figuring all that out when "free stuff" is run through central planning instead of letting the market decide what will be made and how much it will cost. It's frustrating to see a world of incredible production, labor efficiency per person, and broadly distributed REAL wealth - at incredibly low costs - just around the corner,but instead have the Romantics of this world commandeer the productive sector and twist it all up into a cluster fuck of ineptitude where costs spiral out of control and quality plummets. We are on the doorstep of robots and wireless remote control machines produce just about everything at very low overall costs, creating a level of abundance that makes what we have today seem like destitution, but instead we have fascists/communists/socialists, blinded by their notions, driving us to the brink of economic collapse and deeply uncivil times.

      1. Winston Churchill once said that Americans can be trusted to do the right thing but only after they've tried everything else. He got away with that because he really loved the birthplace of his mother. Unfortunately, what he said has some truth to it.

        The Great Depression was far worse than anything we face now. Dictatorship by Roosevelt and his "brain trust", micro management of the economy, WW II and the internment of American citizens without charges. Yet we recovered. Nixon and price controls. Yet we recovered.

        Despite the dead weight of the hangers-on of an equally dead philosophy of complete control, we still may get past this period of Hillary-Trump.

      2. Oh, definitely not arguing for central planning. I'm all for letting the market decide. I'm just speaking specifically to the "There will always be more and more jobs" trope.

        Chances are if you could run everything in the world by one guy (I'm imagining Homer Simpson) just pushing a button every 10 minutes on the Giant Robotic Plant of Human Bounty, many people would find a way to engage in exchanges of goods and services in ways we haven't thought of, as Stossel says. But there will always be some number who aren't equipped to participate successfully in that world. It will/would be interesting to see how that problem is solved, if central planners and People Who Know What's Best For You would get out of the way.

    2. the solution to that problem, if, indeed it IS a problem (questionable) is the free market. I mean a TRULY free market. One where if the hotel service suffers because of the robots the clientele of that bototel shrinks to the point it no longer produces dividends for the shareholders. That will ALWAYS lead to change.

      By the bye, it has NOT "always happened before". Plenty of innovations never went far... try the STanley Steamer, the Studebaker Electric, the Edsel, etc. And some VERY cheap to buy, feed, and run cars from offshore never made it here. Why? Could not handle the long stretches of freeway at the insane speed of 65 MPH all day long. That almost killed the MG Sports cars.... the MGA did not last all that long at such high speeds... 100K was about the high end. They realised the problems and fixed them... a five main bearing engine with counterbalanced crank, larger gudgeoon pins, a large oil cooler, cammed for a different RPM then greared higher, with electric Laycock Overdrive.... exxentially the same car, but well suited for the wide open spaces....

      1. bottom line, the market is a cruel master. NSU Prinz, Fiat Cincuacento, Borgward, Isabella, even the first Honda 500 and Subaru Microvan...... never made it here, except for short run slow town runabouts. Others designed amazing cars, some of which, if produced today, would beat most of what is currently produced... except Uncle Stupid would never let them be sold here. That was the fate of the original BMC Mini... Uncle Stupid deemed them too short, and BMC fingered their nose at we Yanks, not wanting to jig to their fiddle. Mine would cruise at 80 MPH all day, dleiver 50+ mpg, anbd cornered better than any of today's production cars. "UNSAFE" cried Uncle Stupid.....

  9. This robotization MUST STOP!

    -Piano Tuner and Mover Consolidated Union 101.

    Screw pianos, let's worry about REAL problems.

    -Equine Leather Goods Guild

    1. You Equine Leather Goods Guild guys are always stealing the show.

      We need a huge government of robots to have zero idea what Liberty means- since they are programmed and therefore not free- to monitor all these article and forum comments and destroy the trolls.

      -Forum and Article Commenters Local 69

  10. Keep up the good work Stossel.

    I still don't understand why, as a Libertarian, you are not more upset with unconstitutional domestic spying on Americans. You can have more than 100 things the government does that need to be changed.

  11. ??Start working at home with Google! It's by-far the best job I've had. Last Wednesday I got a brand new BMW since getting a check for $6474 this - 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go to tech tab for work detail.


  12. My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do..
    Clik This Link inYour Browser....

    ? ? ? ?

  13. My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do..
    Clik This Link inYour Browser....

    ? ? ? ?

  14. My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do..
    Clik This Link inYour Browser....

    ? ? ? ?

    1. where is the spam flag button? This clown and his brothers need to be run out of town on a rail.. AFTER a liberal dose of hot tar and duck feathers.

  15. "But the more efficiently we can do things, the more human energy is free to be turned toward the unseen, tasks we haven't even thought of yet but which may be more pleasant to do, and these jobs will create new opportunities."

    I think you'll see more people playing MMO's and dying of morbid obesity personally. When you can make magical 'does everything' slaves that are physically incapable of rebelling...well...doesn't that mean we end up in a gilded cage?

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