biden – Technology Liberation Front https://techliberation.com Keeping politicians' hands off the Net & everything else related to technology Thu, 03 Apr 2025 23:20:10 +0000 en-US hourly 1 6772528 Quick Thoughts on Biden’s Tech-Bashing in the State of the Union https://techliberation.com/2023/02/07/quick-thoughts-on-bidens-tech-bashing-in-the-state-of-the-union/ https://techliberation.com/2023/02/07/quick-thoughts-on-bidens-tech-bashing-in-the-state-of-the-union/#respond Wed, 08 Feb 2023 03:43:49 +0000 https://techliberation.com/?p=77080

  • President Biden began his 2023 State of the Union remarks by saying America is defined by possibilities. Correct! Unfortunately, his tech-bashing will undermine those possibilities by discouraging technological innovation & online freedom in the United States.
  • America became THE global leader on digital tech because we rejected heavy-handed controls on innovators & speech. We shouldn’t return to the broken model of the past by layering on red tape, economic controls & speech restrictions.
  • What has the tech economy done for us lately? Here is a look at the value added to the U.S. economy by the digital sector from 2005-2021. That’s $2.4 TRILLION (with a T) added in 2021. These are astonishing numbers.
  • FACT: According to the BEA, in 2021, “the U.S. digital economy accounted for $3.70 trillion of gross output, $2.41 trillion of value added (translating to 10.3 % of U.S. GDP), $1.24 trillion of compensation + 8.0 million jobs.”

In 2021…

  • $3.70 trillion of gross output
  • $2.41 trillion of value added (=10.3% percent GDP)
  • $1.24 trillion of compensation
  • 8.0 million jobs

FACT: globally, 49 of the top 100 digital tech firms with most employees are US companies. Here they are. Smart public policy made this list possible.

  • FACT: 18 of the world’s Top 25 tech companies by Market Cap are US-based firms.
  • It’d be a huge mistake to adopt Europe’s approach to tech regulation. As I noted recently in the Wall Street Journal, “The only thing Europe exports now on the digital-technology front is regulation.”  Yet, Biden would have us import the EU model to our shores.
  • My R Street colleague Josh Withrow has also noted how, “the EU’s approach appears to be, in sum, ‘If you can’t innovate, regulate.’” America should not be following the disastrous regulatory path of the European Union on digital technology policy.
  • On antitrust regulation, here is a study by my R Street colleague Wayne Brough on the dangerous approach that the Biden administration wants, which would swing a wrecking ball through the tech economy. We have to avoid this.
  • It is particularly important that the US not follow the EU’s lead on artificial intelligence regulation at a time when we are in heated competition w China on the AI front as I noted here.
  • American tech innovators flourished thanks to a positive innovation culture rooted in permissionless innovation & policies like Section 230, which allowed American firms to become global powerhouses. And we’ve moved from a world of information scarcity to one of information abundance. Let’s keep it that way.
]]> https://techliberation.com/2023/02/07/quick-thoughts-on-bidens-tech-bashing-in-the-state-of-the-union/feed/ 0 77080 Self-Inflicted Technological Suicide https://techliberation.com/2023/01/26/self-inflicted-technological-suicide/ https://techliberation.com/2023/01/26/self-inflicted-technological-suicide/#comments Fri, 27 Jan 2023 00:26:11 +0000 https://techliberation.com/?p=77077

The Wall Street Journal has run my response to troubling recent opeds by President Biden (“Republicans and Democrats, Unite Against Big Tech Abuses“) and former Trump Administration Attorney General William Barr (“Congress Must Halt Big Tech’s Power Grab“) in which they both called for European-style regulation of U.S. digital technology markets.

“The only thing Europe exports now on the digital-technology front is regulation,” I noted in my response, and that makes it all the more mind-boggling that Biden and Barr want to go down that same path. “[T]he EU’s big-government regulatory crusade against digital tech: Stagnant markets, limited innovation and a dearth of major players. Overregulation by EU bureaucrats led Europe’s best entrepreneurs and investors to flee to the U.S. or elsewhere in search of the freedom to innovate.”

Thus, the Biden and Barr plans for importing European-style tech mandates, “would be a stake through the heart of the ‘permissionless innovation’ that made America’s info-tech economy a global powerhouse.” In a longer response to the Biden oped that I published on the R Street blog, I note that:

“It is remarkable to think that after years of everyone complaining about the lack of bipartisanship in Washington, we might get the one type of bipartisanship America absolutely does not need: the single most destructive technological suicide in U.S. history, with mandates being substituted for markets, and permission slips for entrepreneurial freedom.”

What makes all this even more remarkable is that they calls for hyper-regulation come at a time when China is challenging America’s dominance in technology and AI. Thus, “new mandates could compromise America’s lead,” I conclude. “Shackling our tech sectors with regulatory chains will hobble our nation’s ability to meet global competition and undermine innovation and consumer choice domestically.”

Jump over to the WSJ to read my entire response (“EU-Style Regulation Begets EU-Style Stagnation“) and to the R Street blog for my longer essay (“President Biden Wants America to Become Europe on Tech Regulation“).

]]> https://techliberation.com/2023/01/26/self-inflicted-technological-suicide/feed/ 1 77077 Running List of My Research on AI, ML & Robotics Policy https://techliberation.com/2022/07/29/running-list-of-my-research-on-ai-ml-robotics-policy/ https://techliberation.com/2022/07/29/running-list-of-my-research-on-ai-ml-robotics-policy/#respond Fri, 29 Jul 2022 12:51:54 +0000 https://techliberation.com/?p=77020

[last updated 4/3/2025 – Check my Medium page for latest posts]

This a running list of all the essays and reports I’ve already rolled out on the governance of artificial intelligence (AI), machine learning (ML), and robotics. Why have I decided to spend so much time on this issue? Because this will become the most important technological revolution of our lifetimes. Every segment of the economy will be touched in some fashion by AI, ML, robotics, and the power of computational science. It should be equally clear that public policy will be radically transformed along the way.

Eventually, all policy will involve AI policy and computational considerations. As AI “eats the world,” it eats the world of public policy along with it. The stakes here are profound for individuals, economies, and nations. As a result, AI policy will be the most important technology policy fight of the next decade, and perhaps next quarter century. Those who are passionate about the freedom to innovate need to prepare to meet the challenge as proposals to regulate AI proliferate.

There are many socio-technical concerns surrounding algorithmic systems that deserve serious consideration and appropriate governance steps to ensure that these systems are beneficial to society. However, there is an equally compelling public interest in ensuring that AI innovations are developed and made widely available to help improve human well-being across many dimensions. And that’s the case that I’ll be dedicating my life to making in coming years.

Here’s the list of what I’ve done so far. I will continue to update this as new material is released:

2025

2024

2023

2022

2021 (and earlier)

]]> https://techliberation.com/2022/07/29/running-list-of-my-research-on-ai-ml-robotics-policy/feed/ 0 77020 The Classical Liberal Approach to Digital Media Free Speech Issues https://techliberation.com/2021/12/08/the-classical-liberal-approach-to-digital-media-free-speech-issues/ https://techliberation.com/2021/12/08/the-classical-liberal-approach-to-digital-media-free-speech-issues/#comments Wed, 08 Dec 2021 20:41:45 +0000 https://techliberation.com/?p=76930

On December 13th, I will be participating in an Atlas Network panel on, “Big Tech, Free Speech, and Censorship: The Classical Liberal Approach.” In anticipation of that event, I have also just published a new op-ed for The Hill entitled, “Left and right take aim at Big Tech — and the First Amendment.” In this essay, I expand upon that op-ed and discuss the growing calls from both the Left and the Right for a variety of new content regulations. I then outline the classical liberal approach to concerns about free speech platforms more generally, which ultimately comes down to the proposition that innovation and competition are always superior to government regulation when it comes to content policy.

In the current debates, I am particularly concerned with calls by many conservatives for more comprehensive governmental controls on speech policies enforced by various private platforms, so I will zero in on those efforts in this essay. First, here’s what both the Left and the Right share in common in these debates: Many on both sides of the aisle desire more government control over the editorial decisions made by private platforms. They both advocate more political meddling with the way private firms make decisions about what types of content and communications are allowed on their platforms. In today’s hyper-partisan world,” I argue in my Hill column, “tech platforms have become just another plaything to be dominated by politics and regulation. When the ends justify the means, principles that transcend the battles of the day — like property rights, free speech and editorial independence — become disposable. These are things we take for granted until they’ve been chipped away at and lost.”

Despite a shared objective for greater politicization of media markets, the Left and the Right part ways quickly when it comes to the underlying objectives of expanded government control. As I noted in my Hill op-ed:

there is considerable confusion in the complaints both parties make about “Big Tech.” Democrats want tech companies doing more to limit content they claim is hate speech, misinformation, or that incites violence. Republicans want online operators to do less, because many conservatives believe tech platforms already take down too much of their content.

This makes life very lonely for free speech defenders and classical liberals. Usually in the past, we could count on the Left to be with us in some free speech battles (such as putting an end to “indecency” regulations for broadcast radio and television), while the Right would be with us on others (such as opposition to the “Fairness Doctrine,” or similar mandates). Today, however, it is more common for classical liberals to be fighting with both sides about free speech issues.

My focus is primarily on the Right because, with the rise of Donald Trump and “national conservatism,” there seems to be a lot of soul-searching going on among conservatives about their stance toward private media platforms, and the editorial rights of digital platforms in particular.

In my new  Hill essay and others articles (all of which are listed down below), I argue there is a principled classical liberal approach to these issues that was nicely outlined by President Ronald Reagan in his 1987 veto of Fairness Doctrine legislation, when he said:

History has shown that the dan­gers of an overly timid or biased press cannot be averted through bureaucratic regulation, but only through the freedom and compe­tition that the First Amendment sought to guarantee.

Let’s break that line down. Reagan admits that media bias can be a real thing. Of course it is! Journalists, editors, and even the companies they work for all have specific views. They all favor or disfavor certain types of content. But, at least in the United States, the editorial decisions made by these private actors are protected by the First Amendment. Section 230 is really quite secondary to this debate, even though some Trumpian conservatives wrongly suggest that it’s the real problem here. In reality, national conservatives would need to find a way to work around well-established First Amendment protections if they wanted to impose new restrictions on the editorial rights of private parties.

But why would they want to do that? Returning to the Reagan veto statement, we should remember how he noted that, even if the First Amendment did not protect the editorial discretion of private media platforms, bureaucratic regulation was not the right answer to the problem of “bias.”  Competition and choice were the superior answer. This is the heart and soul of the classical liberal perspective: more innovation is always superior to more regulation.

For the past 30 years, conservatives and classical liberals were generally aligned on that point. But the ascendancy of Donald Trump created a rift in that alliance that now threatens to grow into a chasm as more and more Right-of-center people begin advocating for comprehensive control of media platforms.

The problems with that are numerous beginning with the fact that none of the old rationales for media controls work (and most of them never did). Consider the old arguments justifying widespread regulation of private media:

  • “Scarcity” was the oldest justification for media regulation, but we live in the exact opposite world today, in which the most common complaint about media is the abundance of it!
  • Conversely, the supposed “pervasiveness” of some media (namely broadcasting) was used as a rationale for government censorship in the past. But that, too, no longer works because in today’s crowded media marketplace and Internet-enabled world, all forms of communications and entertainment are equally pervasive to some extent.
  • State ownership and licensing of spectrum was another rationale for control that no longer works. No digital media platforms need federal licenses to operate today. So, that hook is also gone. Moreover, the answer to the problem of government ownership of media is to stop letting the government own and control media assets, including spectrum.
  • “Fairness” is another old excuse for control, with some regulatory advocates suggesting that five unelected bureaucrats at the Federal Communications Commission (or some other agency) are well-suited to “balance” the airing of viewpoints on media platforms. Of course, America’s disastrous experience with the Fairness Doctrine proved just how wrong that thinking was. [I summarize all the evidence proving that here.]

That leaves a final, more amorphous rationale for media control: ” gatekeeper” concerns and assertions that private media platforms can essentially become “state actors.” In the wake of Donald Trump’s “de-platorming” from Facebook and Twitter, many of his supporters began adopting this language in defense of more aggressive government control of private media platforms, including the possibility of declaring those platforms common carriers and demanding that some sort of amorphous “neutrality” mandates be imposed on them. But as Berin Szóka and Corbin Barthold of Tech Freedom note:

Where courts have upheld imposing common carriage burdens on communications networks under the First Amendment, it has been because consumers reasonably expected them to operate conduits. Not so for social media platforms. [. . . ] When it comes to the regulation of speech on social media, however, the presumption of content neutrality does not apply. Conservatives present their criticism of content moderation as a desire for “neutrality,” but forcing platforms to carry certain content and viewpoints that they would prefer not to carry constitutes a “content preference” that would trigger strict scrutiny. Under strict scrutiny, any “gatekeeper” power exercised by social media would be just as irrelevant as the monopoly power of local newspapers was in [previous Supreme Court holdings].

Put simply, efforts to stretch extremely narrow and limited common carriage precedents to fit social media just don’t work. We’ve already seen lower courts declare that recently when blocking the enforcement of new conservative-led efforts in Florida and Texas to limit the editorial discretion of private social media platforms. If conservatives really hope to get around these legal barriers to regulation, what would be needed would be a more far-reaching strike at the First Amendment itself. That would entail a jurisprudential revolution at the Supreme Court — reversing about a century of free speech precedents — or an some sort of an effort to amend the First Amendment itself. These things are almost certainly not going to occur.

But, again, this hasn’t stopped some conservatives from pitching extreme solutions in their efforts to regulate digital media at both the state and federal level. I discuss these efforts in previous essays on, “How Conservatives Came to Favor the Fairness Doctrine & Net Neutrality,“ “Sen. Hawley’s Radical, Paternalistic Plan to Remake the Internet,“ and “The White House Social Media Summit and the Return of ‘Regulation by Raised Eyebrow’.“ Perhaps some Trump-aligned conservatives understand that these legislative efforts are unlikely to work, but they continue to push them in an attempt to make life hell for tech platforms, or perhaps just to troll the Left and “own the Libs.”

On the other hand, some conservatives seem to really believe in some of the extreme ideas they are tossing around. What is particular troubling about these efforts is the way — following Trump’s lead — some conservatives, including even more mainstream conservative groups like the Heritage Foundation, are increasingly referring to private media platforms as “the enemy of the people.” That’s the kind of extremist language typically used by totalitarian thugs and Marxist lunatics who so hate private enterprise and freedom of speech that they are willing to adopt a sort of burn-the-village-to-save-it rhetorical approach to media policy.

And speaking of Marxists, here’s what is even more incredible about these efforts by some conservatives to use such rationales in support of comprehensive media regulation: It is all based on the “media access” playbook concocted by radical Leftist scholars a generation ago. As I summarized in my essay on, “The Surprising Ideological Origins of Trump’s Communications Collectivism“:

Media access advocates look to transform the First Amendment into a tool for social change to advance specific political ends or ideological objectives. Media access theory dispenses with both the editorial discretion rights and private property rights of private speech platforms. Private platforms become subject to the political whims of policymakers who dictate “fair” terms of access. We can think of this as communications collectivism.

Media access doctrine is rooted in an arrogant, elitist, anti-property, anti-freedom ethic that suggest the State is a better position to dictate what can and cannot be said on private speech platforms. “It’s astonishing, yet nonetheless true,” I continued on in that essay, “that the ideological roots of Trump’s anti-social media campaign lie in the works of those extreme Leftists and even media Marxists. He has just given media access theory his own unique nationalistic spin and sold this snake oil to conservatives.” Yet, Trump and other national conservatives are embracing this contemptible doctrine because now more than ever the ends apparently justify the means in American politics. Nevermind that all this could come back to haunt them when the Left somehow leverages this regulatory apparatus to control Fox News or other sites and content that conservatives favor! Once media platforms are viewed as just another thing to be controlled by politics, the only question is which politics and how are those politics enforced? Certainly both the Left and the Right cannot both have their way given all that current divides them.

Finally, what is utterly perplexing about all this is how much thanks national conservatives really owe to the major digital platforms they now seek to destroy. As I noted in my new Hill op-ed:

There has never been more opportunity for conservative viewpoints than right now. Each day on Facebook, the top-10 most shared links are dominated by pundits such as Ben Shapiro, Dan Bongino, Dinesh D’Souza and Sean Hannity. Right-leaning content is shared widely on Twitter each day. Websites like Dailywire.com and Foxnews.com get far more traffic than the New York Times or CNN.

Thus, conservatives might be shooting themselves in the foot if they were able to convince more legislatures to adopt the media access regulatory playbook because it could have profound unintended consequences once the Left uses those tools to somehow restrict access to “hate speech” or “misinformation” — and then define it so broadly so as to include much of the top material posted by conservatives on Facebook and Twitter ever day.

Not all conservatives have drank the media access kool-aid. In the wake of Trump’s deplatforming from a few major sites, a wave of new Right-leaning digital services are being planned or have already launched. (Axios and Forbes recently summarized some of these efforts.) I don’t know which will of these efforts will succeed, but more competition and platform-building are certainly superior to current calls by some Trump supporters for government regulation of mainstream social media services.

Again, this is the old Reagan vision at its finest! We can achieve a better media landscape, “only through the freedom and compe­tition that the First Amendment sought to guarantee,” not through bureaucratic regulation. It remains the principled path forward.

Additional Reading :

Older essays & testimony :

]]> https://techliberation.com/2021/12/08/the-classical-liberal-approach-to-digital-media-free-speech-issues/feed/ 2 76930 Skeptical Takes on Expansive Industrial Policy Efforts https://techliberation.com/2021/03/15/skeptical-takes-on-expansive-industrial-policy-efforts/ https://techliberation.com/2021/03/15/skeptical-takes-on-expansive-industrial-policy-efforts/#comments Mon, 15 Mar 2021 17:09:11 +0000 https://techliberation.com/?p=76845

[Last updated 3/25/22]

Industrial Policy is a red-hot topic once again with many policymakers and pundits of different ideological leanings lining up to support ambitious new state planning for various sectors — especially 5G, artificial intelligence, and semiconductors. A remarkably bipartisan array of people and organizations are advocating for government to flex its muscle and begin directing more spending and decision-making in various technological areas. They all suggest some sort of big plan is needed, and it is not uncommon for these industrial policy advocates to suggest that hundreds of billions will need to be spent in pursuit of those plans.

Others disagree, however, and I’ll be using this post to catalog some of their concerns on an ongoing basis. Some of the criticisms listed here are portions of longer essays, many of which highlight other types of steps that governments can take to spur innovative activities. Industrial policy is an amorphous term with many definitions of a broad spectrum of possible proposals. Almost everyone believes in  some form of industrial policy if you define the term broadly enough. But, as I argued in a September 2020 essay “On Defining ‘Industrial Policy‘,” I believe it is important to narrow the focus of the term such that we can continue to use the term in a rational way. Toward that end, I believe a proper understanding of industrial policy refers to targeted and directed efforts to plan for specific future industrial outputs and outcomes.

The collection of essays below is merely an attempt to highlight some of the general concerns about the most ambitious calls for expansive industrial policy, many of which harken back to debates I was covering in the late 1980s and early 1990s, when I first started a career in policy analysis. During that time, Japan and South Korea were the primary countries of concern cited by industrial policy advocates. Today, it is China’s growing economic standing that is fueling calls for ambitious state-led targeted investments in “strategic” sectors and technologies. To a lesser extent, grandiose European industrial policy proposals are also prompting new US counter-proposals.

All this activity is what has given rise to many of the critiques listed below. If you have suggestions for other essays I might add to this list, please feel free to pass them along. FYI: There’s no particular order here.

Scott Lincicome and Huan Zhu, “Questioning Industrial Policy: Why Government Manufacturing Plans Are Ineffective and Unnecessary,” Cato Institute Working Paper, June 16, 2021.

[I]ndustrial policy – properly defined – has an extensive and underwhelming history in the United States, featuring high costs (seen and unseen), failed objectives, and political manipulation. Surely, not every U.S. industrial policy effort has ended in disaster, but facts here and abroad argue strongly against new government efforts to boost “critical” industries and workers and thereby fix alleged market failures. Such efforts warrant intense skepticism – skepticism that today is unfortunately in short supply.

Adam Thierer, “Industrial Policy as Casino Economics,” The Hill, July 12, 2021.

While some government investments will always be necessary, policymakers engaging in casino economics means bad industrial policy bets and taxpayer money squandered on risky ventures best made by private actors. We need to keep Uncle Sam’s gambling habits in check.

Adam Thierer, “Thoughts on the America COMPETES Act: The Most Corporatist & Wasteful Industrial Policy Ever,” Technology Liberation Front, January 26, 2022.

As far as industrial policy measures go, the COMPETES Act is one of the most ambitious and expensive central planning efforts in American history. It represents the triumph of top-down, corporatist, techno-mercantilist thinking over a more sensible innovation policy rooted in bottom-up competition, entrepreneurialism, private investment, and free trade.

Adam Thierer & Connor Haaland, “Does the US Need a More Targeted Industrial Policy for AI & High-Tech?” Mercatus Center at George Mason University, Special Study, November 2021.

This paper considers how both the recent history of high-tech industrial policy efforts at the national and international level—as well as some state and local economic development efforts in the United States—might better inform the wisdom of proposed efforts for AI or other high-tech sectors. That history is spotted with some limited successes alongside a long string of costly failures. We explore the reasons for those failures and recommend that the US refocus on the policy prerequisites that helped give rise to the computing and internet revolutions: a more generalized approach to economic development rooted in light-touch regulation and taxation of emerging technology.

Samuel Gregg, “Can America Build A Broad-Based Economy?”  Law & Liberty, March 1, 2022

Of course, if a government decides to put enough money and resources behind a given industrial policy, it will likely produce some results. Yet the same is true of the gambler. If she stays in the casino long enough and spends enough money, she will win a few hands of cards. But the odds are that she will also lose a great deal of money, especially if she is as inept a gambler as the government is maladroit at identifying industry trends or entrepreneurial opportunities. Moreover, just as a compulsive gambler’s behavior will have numerous negative effects on her family’s well-being, so too does industrial policy risk inflicting wider damage upon a nation’s economy and political system. The harms range from gross misallocations of resources to the rampant cronyism and rent-seeking that seems inseparable from industrial policy (which, I again note, its advocates studiously avoid discussing), to name just a few.

Phil Gramm & Mike Solon, “Peace Through Strength Requires Economic Freedom,” Wall Street Journal, March 1, 2022.

The America Competes Act is the House’s effort to outdo the Chinese Communist Party’s latest five-year plan. The 2,900-page bill would make an old Soviet commissar blush.  [. . . ] America’s success in the world economy has never depended on industrial policy or government subsidies. It has come from the relative absence of government planning and subsidies. This is hardly news. The U.S. government provided support for the efforts of Samuel Langley, the greatest aviation expert of the 1890s, in his effort to make America first in powered flight. His manned Aerodrome flopped into the Potomac River. It was the Wright brothers, two unsubsidized but determined bicycle makers from Dayton, Ohio, who flew at Kitty Hawk, N.C., and changed the world.

Scott Lincicome, “Moving Fast and Breaking Things,” Capitolism, February 2, 2022.

Adam Thierer, “The Coming Industrial Policy Hangover,”  The Hill, February 16, 2022.

In the rush to pass legislation, we’ve barely heard a peep about the $250-$350 billion price tag. This follows a massive splurge of recent government borrowing, which led to the U.S. national debt hitting another lamentable new record: $30 trillion. China already owns over $1 trillion of that debt, making one wonder if we’re really countering China by adopting a massive, new and unfunded industrial policy that they will end up financing indirectly.

Podcast: “What’s Wrong with Industrial Policy,” Hold These Truths with Rep. Dan Crenshaw, February 16, 2022.

Tad DeHaven and Adam Thierer, “ The Military-Industrial Complex Offers a Cautionary Tale for Industrial Policy Planning,” Discourse, March 25, 2022.

Wayne Crews, “What To Do Instead Of The America COMPETES Act,” Forbes, February 2, 2022.

All this spending and expansion of the federal government, atop which our leaders would lay the America COMPETES Act and doubtless its own accompanying guidebook, has massive, ignored regulatory effects. Trillions in government spending (”investment”) have altered and will alter the entire trajectory and competitive environment of industries engaged in large-scale enterprises and transactions. This removes vast swaths of business activity from free competitive enterprise altogether, and creates displacements and distortions such that the restoration of free enterprise becomes a near-impossible disentanglement. The result is, after 100 years of big government and seduction of and fusion with big business, the greatest endeavors—from infrastructure to artificial intelligence, from smart cities to space—now consist of “partnerships” with governments rather than free enterprise, at scales and at costs so gigantic they can only be ignored.

Adam Thierer, “‘Japan Inc.’ and Other Tales of Industrial Policy Apocalypse,” Discourse, June 28, 2021.

Perhaps the most ironic indictment of industrial policy punditry lies in the way all the earlier books and essays about Japanese planning not only failed to forecast the many flops associated with it, but also did not foresee China as a potential future economic juggernaut. [. . .] What might that tell us about the ability of experts to predict the future course of countries and economies?

Adam Thierer, “Can Government Reproduce Silicon Valley Everywhere?”  Technology Liberation Front, September 12, 2021.

government efforts to artificially try to create regional innovation hubs in a top-down, technocratic fashion will almost certainly persist. As they do, some will argue that this time will be different! Perhaps, but it is more likely that the past is prologue; these new hubs will likely cause federal politicians to jockey for position to have their regions named one of the winners and get a big cut of all the new high-tech pork being served up by Washington.

Weifeng Zhong, “Beijing Can’t Make Sense of Biden’s China Strategy. Can Biden?” Washington Examiner, July 01, 2021.

America is not China, and it would be a fatal mistake to equate competing with China with imitating what China does. Doing so would risk the advantageous U.S. position as the world’s chief innovator, whose ideas are turned into products by vibrant private sectors both domestically and internationally.

Mike Watson, “Industrial Policy in the Real World,” National Affairs, Summer 2021.

Given the nature of industrial policymaking in the United States, there’s little reason to believe future attempts at industrial planning will result in a more coherent, rational, or strategic allocation of resources than they have in the past. [. . .] In short, industrial policy in the United States cannot be steered by a small group of enlightened individuals, because a small group of enlightened individuals will never be at the helm. Indeed, in some sense, there is no single “helm” to speak of.
 

Samuel Gregg, “Industrial Policy Mythology Confronts Economic Reality,” Law & Liberty, September 3, 2021.

If prizes in policy debates were given out for persistence, those advocating for more widespread use of industrial policy in America would be first in line. No matter how many times it is pointed out that they don’t understand the nature and workings of comparative advantage; or avoid acknowledging how industrial policy fosters rampant cronyism and corruption; or highlight what they consider examples of countries in which industrial policy has been employed successfully (only to have it demonstrated that it didn’t quite work out the way they suggested), they don’t give up.

Elizabeth Nolan Brown, “If This Is How America COMPETES, We’re Going to Lose,” Reason, January 26, 2022.

the bill can’t simply address one main issue or a few critical needs. Instead, it tries to insert the government into every aspect of all sorts of industries and markets and pretend that bureaucrats can solve complex social and cultural issues.

Chang-Tai Hsieh, “Countering Chinese Industrial Policy Is Counterproductive,” Project Syndicate, September 15, 2021.

US political leaders have long tried to counter Chinese industrial policy. And now they seem to have decided that the best way to do that is to emulate it. But their agenda betrays a profound lack of understanding of the unique challenge posed by China’s coupling of an authoritarian political regime with a dynamic market economy.

Adam Thierer, “Industrial Policy Advocates Should Learn from Don Lavoie,” Discourse, November 5, 2021.

“In light of the inherent deficiencies of central planning,” Lavoie said, “it might be argued that the U.S. should instead try to reduce current government interference with the competitive process to the absolute minimum consistent with other political goals.” It remains wise advice for today’s policymakers.
Image

Anne O. Krueger, “America’s Muddled Industrial Policy,” CGTN, June 25, 2021.

Governments have a poor track record of identifying “winners” – be it a company or a category of technology – whereas private companies have proved better at transforming new discoveries into new products or cost savings. That is why the U.S. state traditionally has stuck to funding basic research.

Eric Boehm, “Massive Subsidies Won’t Solve the Semiconductor Supply Chain Crisis,” Reason, January 28, 2022.

Tracy C. Miller, “The Case for Limiting Government Semiconductor Subsidies,” The Hill, June 26, 2021.

Without the subsidies, firms would be more cautious about building or expanding foundries. If long-term production capacity is truly insufficient, high prices and anticipated profits give firms the right incentives to build or expand and satisfy demand at cost-covering prices.

Scott Lincicome, “The ‘Endless Frontier’ and American Industrial Policy,” Cato Institute Blog, May 26, 2021.

U.S. industrial policy has a long history of struggling to overcome political pressures, just as public choice predicts, and the EFA is no different. None of this means that all legislating is bad, or that politicians don’t at least occasionally vote in the national interest. Instead, the public choice framework simply adds another hurdle—along with things like the “knowledge problem,” seen and unseen costs, and misaligned incentives—to designing and implementing commercial policies specifically intended to beat the admittedly messy and imperfect situation that the market generates. It’s imperative that we understand these risks before supporting policies that, while they might look good on paper, could easily morph into a counterproductive boondoggle—one we’ve seen countless times with respect to U.S. industrial policy.

Daniel W. Drezner, “Is the United States capable of industrial policy in 2021?” Washington Post, June 14, 2021.

To believe that the United States can pursue a high-caliber industrial policy, however, requires assuming a more competent state than I have seen in the past decade.

Douglas Holtz-Eakin, “The Nicest Thing I Can Write About Supply Chain Policy,” The Daily Dish, June 10, 2021.

Nevertheless, the Senate just passed a provision for $50 billion to subsidize chip fabrication – something the president had requested – and the House will doubtlessly concur. That might seem like an industry victory, but wait until it realizes that the administration will assume it gives it the right to insist on union jobs, micromanage the design of chips, and dictate the pricing and distribution of the products. Good luck with that. As the definitive volume on policy analysis (Benjamin Franklin’s Poor Richard’s Almanack) put it, “He that lieth down with dogs shall rise up with fleas.”

Lipton Matthews, “Industrial Policy—a.k.a. Central Planning—Won’t Make America Great,” Mises Wire, November 5, 2021.

Although industrial policy is in vogue, the evidence suggests that it is not necessary for long-term development. Moreover, despite the popularity of industrial policy in China, America remains the world’s economic power, and by following China, it may lose this vaunted position.

Richard Beason, “Japanese Industrial Policy: An Economic Assessment,” National Foundation for American Policy, November 2021.

There is no evidence to support the claim that Japanese industrial policy during the 1955-1990 period enhanced growth rates by sector, industries with economies of scale (greater efficiency when produced in increased amounts), productivity growth or “competitiveness.” The reality of the political process and government spending priorities makes it very difficult for such policies to be effective. Furthermore, even if political pressures had not intervened, it seems questionable to suggest that government policymakers would be better than actual market participants in determining the most efficient allocation of resources to produce the best economic outcomes.

Douglas Irwin, “ Memo to the Biden administration on how to rethink industrial policy,” Peterson Institute for International Economics, October 2020.

The challenge for policymakers is to identify such industries without succumbing to the notion that every industry is vital to some public objective. For example, the goal of “economic security” is so broadly defined and open-ended that virtually every domestic producer could claim the need for government support on that basis. The risk is that ill-conceived government programs will encourage corrupt behavior in which industries benefit themselves without contributing to national welfare.

Jim Pethokoukis, “Will Biden’s embrace of industrial policy pay off?” AEI Blog, January 15, 2021.

The history of such efforts in advanced capitalist economies gives ample reason for skepticism about the effectiveness of such top-down government planning, from Japanese economic stagnation to the now-mothballed Concorde supersonic jet to France’s failed attempt to create a thriving tech sector. The Internet might seem like the exception that negates the rule, but what turned out to be a successful partnership of government and entrepreneurs didn’t arise out of some master plan from Washington. And what do even the smartest plans look like when filtered through the dodgy quality of American governance? Maybe as an excuse for cronyism and protectionism.

Adam Thierer & Connor Haaland, “Should the U.S. Copy China’s Industrial Policy?” Discourse, March 11, 2021.

America needs to embrace its already vibrant venture capital market, the benefits of basic science and prize competitions, and a light-touch regulatory approach instead of gambling taxpayer dollars on grandiose industrial policy schemes that would likely become boondoggles.

Connor Haaland & Adam Thierer, “Can European-Style Industrial Policies Create Tech Supremacy?” Discourse, February 11, 2021.

Thus far, however, the Europeans don’t have much to show for their attempts to produce home-grown tech champions. Despite highly targeted and expensive efforts to foster a domestic tech base, the EU has instead generated a string of industrial policy failures that should serve as a cautionary tale for U.S. pundits and policymakers, who seem increasingly open to more government-steered innovation efforts.

Phil Levy & Christine McDaniel, “ Does the U.S. Need a Vigorous Industrial Policy?” Discourse, February 16, 2021.

we are certainly hearing new enthusiasm these days about industrial policy. It seems to have proponents or converts on both sides of the aisle. This either means that a new consensus has emerged, or it means that the term is being used so loosely that it has lost its original meaning. I’ll go with the latter; it now means different things to different people.

Wall Street Journal columnist Greg Ip discussing why “ The traditional skepticism toward industrial policy is well deserved.”

The traditional skepticism toward industrial policy is well deserved. Once Washington starts writing checks for semiconductors, other industries may get in line with the outcome determined more by political clout than economic merit. As in shipbuilding, the targeted companies may end up in perpetual need of federal protection and unable to compete internationally

David Ignatius, “The U.S. is quietly mobilizing its economy against China,” Washington Post, March 4, 2021.

The industrial policy the AI commission recommends could unlock talent and innovation. But if officials aren’t careful, government intervention could also afflict our best companies with the dead weight and dysfunction of our broken political system. We need government to spawn brainpower, not bureaucracy.

Veronique de Rugy, “Support for Industrial Policy is Growing,” AIER, January 18, 2020.

Looking at the federal government today tells me that the problems surrounding R&D programs in the past continue today, and will continue tomorrow, because they are simply a consequence of the normal functioning of government. It is hard to wish these problems away, even in the face of the private sector’s “imperfections.” Those arguing for more funding in R&D should proceed with caution.
This bill is proposing to give money with risk-averse restrictions to a risk-averse organization (the NSF) to be dispersed among other risk-averse organizations (Universities) into a system with increasingly risk-averse incentives. Note that I’m not saying “it’s all fubar’d lets burn it to the ground!” but I am suggesting that instead of slamming on the accelerator, we should be asking “what would a tune-up and an oil change look like instead?”

Ryan Bourne, “Do Oren Cass’s Justifications for Industrial Policy Stack Up?”  Cato Commentary, August 15, 2019.

Oren Cass asserts that markets cannot generally allocate resources efficiently by industry. Yet he provides no meaningful metrics to show this is the case, nor shows why his policies would deliver better outcomes. His two main claims about the benefits of a manufacturing sector — “stable employment” and “strong productivity growth” — are directly contradictory. A plethora of evidence suggests as countries’ get richer due to automation and technological improvements, they demand relatively more services, and so the industrial sector declines in employment terms.
Scott Lincicome, “ Manufactured Crisis: ‘Deindustrialization, Free Markets, and National Security,” Cato Policy Analysis No. 907, January 27, 2021.
This skepticism—mostly absent from Washington—is indeed warranted: analyses of the U.S. manufacturing sector and the relationship between trade and national security, as well as the United States’ long and checkered history of security‐​related protectionism, undermine the theoretical justifications for imposing protectionism and industrial policy in the name of national defense. Instead, open trade, freer markets, and global interdependence will in almost all cases produce better outcomes in terms of national security and, most importantly, preventing wars and other forms of armed conflict.
Matthew Lau, “Trudeau government’s ‘industrial policy’ creates all the wrong incentives,” Toronto Sun, March 16, 2021.
]]> https://techliberation.com/2021/03/15/skeptical-takes-on-expansive-industrial-policy-efforts/feed/ 4 76845 Podcast: Tech Policy in the Biden Admin & 117th Congress https://techliberation.com/2021/01/11/podcast-tech-policy-in-the-biden-admin-117th-congress/ https://techliberation.com/2021/01/11/podcast-tech-policy-in-the-biden-admin-117th-congress/#comments Mon, 11 Jan 2021 14:47:46 +0000 https://techliberation.com/?p=76828

I wanted to bring to your attention this Federalist Society podcast discussion I hosted a few weeks ago on, “Tech Policy Under the Biden Administration and 117th Congress.” I was joined by Jennifer Huddleston, Director of Technology & Innovation Policy at the American Action Forum, and Blake Reid, Clinical Professor at the University of Colorado Law School.

We discussed key policy debates – such as antitrust and “Big Tech,” online speech and Section 230, and the race to 5G – and considered how the new presidential administration and Congress might approach innovation and the tech industry in 2021 and beyond. Note: You might also want to check out this earlier essay by Jennifer on, “5 Tech Policy Topics to Follow in the Biden Administration and 117th Congress.”

]]> https://techliberation.com/2021/01/11/podcast-tech-policy-in-the-biden-admin-117th-congress/feed/ 5 76828 “Bigger than Jesus” https://techliberation.com/2008/09/17/bigger-than-jesus/ https://techliberation.com/2008/09/17/bigger-than-jesus/#comments Thu, 18 Sep 2008 02:01:19 +0000 http://techliberation.com/?p=12778

In the beginning, there was Obamamania:

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