Resources – Technology Liberation Front

Skeptical Takes on Expansive Industrial Policy Efforts

Adam Thierer — Mon, 15 Mar 2021 17:09:11 +0000

[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.

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.

Ben Reinhardt on concerns about The Endless Frontier Act

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.

Congress as a Non-Actor in Tech Policy

Adam Thierer — Tue, 04 Feb 2020 19:28:42 +0000

Congress has become a less important player in the field of technology policy. Why did that happen, and what are the ramifications for technological governance efforts going forward?

I’ve spent almost 30 years covering technology policy. There was a time in my life when I spent almost all my time as a policy analyst preoccupied with developments in the federal legislative arena. I lived in the trenches of Capitol Hill and interacted with lawmakers and their staff morning, noon, and night.

In recent years, however, I have spent very little time focused on the Legislative Branch because it has effectively become a non-actor on technology policy. It is not that congressional lawmakers stopped caring about tech policy. Interest actually remains quite high—perhaps higher than ever before. Congress also continues to introduce lots of bills, host plenty of hearings, and issue mountains of press releases related to tech policy issues.

Nonetheless, all that interest and activity has not really translated into much important legislation. While it is hard to track tech-oriented legislative trends statistically because of the complication of defining “technology policy” over time, judged by substantive output, Congress has largely checked out of technological policymaking.

Think about digital privacy. How many years now have people been predicting a comprehensive “baseline” privacy bill would pass in each legislative session? It never happens. Perhaps it will this year, but if you would like to place a wager on it, I will take that bet.

Speaking of bets, for several years now, I have been wagering with friends that Congress will not pass federal legislation creating a national autonomous vehicles framework. Each session I win that bet. Keep in mind, a framework for driverless cars is far less controversial than privacy policy. Still, nothing substantive ever gets done in Congress.

Same goes for cybersecurity with lots of calls for big measures, but no final action. Folks are now also telling me to expect a big artificial intelligence bill one day soon. I sincerely doubt it. Again, I’ll bet on it if you’d like to lose some money!

Let me be clear, there may actually be some very good reasons why Congress should implement a national framework for privacy, driverless cars, and some AI policy issues. But all the wishful thinking in the world will not magically make it happen.

We need to entertain the possibility that Congress has largely checked out of the world of substantive tech policymaking and isn’t coming back. We may get a few big surprise measures here and there, as we did with clumsily-drafted FOSTA-SESTA. If anything, it is more likely that we instead see misguided legislative riders attached to non-germane measures during late night negotiations. But even haphazard efforts like those will be extremely rare. The days of Congress passing big bills like the Telecom Act of 1996 or the Cable Act of 1992 appear mostly over.

Why Congress Is No Longer the Major Player It Once Was

I think there are probably many obvious explanations for why Congress has checked out of tech policymaking, but let me try to boil it down to a couple of interrelated trends:

The “pacing problem” has intensified: The pacing problem refers to the inability of legal or regulatory regimes to keep adjust to the intensifying pace of technological change. There are just more emerging technologies than ever, and they are evolving faster than ever, too. “New technologies that used to have two-year cycle times now can become obsolete in six months, and the pace of change is not slowing,” says consulting firm Deloitte.

A growing multiplicity of technologies means more tech policy issues to cover. And those issues grow more complicated each year. As soon as lawmakers wrap their heads around one technology (if they do at all), another innovation pops up that complicates things further or crowds out their attention.

Technological convergence and blurring governance boundaries: Technology policymaking increasingly involves metaphysical questions about the underlying nature of things. For example, what is a “phone,” a “medical device,” or an “aerial vehicle”? These things used to be relatively easy to define and had well-understood meanings in federal statutes and regulations. But those concepts evolved rapidly in an age of widespread technological convergence and rapid-fire “combinatorial innovation,” with new technologies multiplying and building on top of one another in the symbiotic fashion. Basically, almost as soon as new tech laws or regulations are enacted, they are confronted with new marketplace realities and technological changes that call into question legal classifications or regulatory distinctions.

For example, today’s smartphones combine dozens of different functions that were previously quite distinct, including health tracking capabilities, mobile payment systems, and video distribution, all of which remain heavily regulated by an assortment of federal laws and agencies. But the convergence of all these capabilities in a single device that we can carry in our pockets creates massive governance challenges, not only for archaic legislative frameworks, but even for newer semantic distinctions that may seem current one moment only to be obliterated the next. These factors also make it harder to figure out who in Congress should be driving policy because technological convergence blurs previously distinct governance categories among legislative committees and the laws they have crafted.

Legislative dysfunctionalism: Policymaking processes move slowly by design. Constitutional constraints and other legal requirements demand it. But things move even slower today because of what Jonathan Rauch calls “demosclerosis,” or the “government’s progressive loss of the ability to adapt.” “[A]s layer is dropped upon layer,” he argued, “the accumulated mass becomes gradually less rational and less flexible.”

Inadequate resources are also part of the problem with Congress facing a complex, rapidly-evolving set of issues but devoting only limited resources to technical staff or studies to better understand these developments. This combined with the factors cited above has led to a never-ending “competency trap,” with lawmakers and their staffs seemingly always one step behind technological developments and societal demands or expectations.

Meanwhile, partisanship increases and the work load on many other fronts grows alongside it. There’s just a lot more on Congress’s plate than ever before. Plus, tech policy matters seemingly always take a back seat to tax, budget, entitlements, defense, and other issues.

Many people hope that boosting technology assessment efforts might help correct these problems. Perhaps better technical advice could help lawmakers ask less ignorant questions at tech-oriented congressional hearings, which have become showcases for the staggering lack of congressional understanding of modern technologies. But just adding new technology assessment capacity, such as in the form of a revived Office of Technology Assessment, won’t likely move the needle much in terms of actual legislative output. More serious structural reforms will be required.

Globalization: Many modern technologies “are truly global and call out for policy approaches that do not respect traditional national borders,” note former NITA officials Lawrence E. Strickling and Jonah Force Hill. Congress only has so much control over technologies that defy national boundaries, further complicating tech governance questions.

Yet, one would think that when America’s global competitive advantage was on the line, Congress would have greater reason to assert itself and craft frameworks to ensure US firms are not disadvantaged by a lack of policy clarity. That has not proven to be the case, however. Congressional lawmakers do plenty of huffing and puffing about the tech governance choices made by Europe, China, and other governments, but they then leave the field wide open to them (as well as lower levels of government) to craft policies that govern national markets throughout the United States.

Endless delegation: Speaking of passing the buck, Congress has been doing it for decades on tech policy by delegating massive and quite amorphous authority to technocratic administrative agencies. Over the past half century, scholars from various disciplines—economics, law, political science, history, and others—have explored the growth of what has been alternatively called the “interest group society,” “receivership by regulation,” “iron triangles,” and “client politics.” This literature identifies the way Congress has increasingly abdicated its constitutional role as lawmaker by shifting hard policy questions to regulatory agencies and then hoping that bureaucrats could figure out all the answers.

Delegation is even more common for the most technical policy matters, and that trend has only accelerated in recent years as the complexity increases and overwhelms lawmakers and their staff.

Ramifications for Tech Governance Going Forward

If Congress remains largely incapable of ever getting the ball over the goal line on important tech policy matters, what are some of the ramifications? There are many, but I will identify just a few of the most obvious ones:

More tech-oriented legislative activity will shift to the states: In fact, it already has. For each of the tech policy issues I identified earlier (privacy, driverless cars, cybersecurity, and even some AI-related issues like facial recognition), states are—for better or worse—picking up the slack. We should expect that trend to accelerate. This will create an increasingly confusing patchwork of policies that will potentially raise serious barriers to entry and innovation. Nonetheless, I can’t see this trend reversing anytime soon. Perhaps Congress will finally act on privacy or driverless cars legislation if for no other reason than to preempt a crazy-quilt of contradictory policies. Of course, that’s what people have been predicting for years, and it never happens.
“Soft law” becomes the dominate governance force for tech: Again, it already has. Soft law refers to informal, collaborative, and constantly evolving governance mechanisms that differ from hard law in that they lack the same degree of enforceability. Soft law can include things like multi-stakeholder processes, industry best practices and standards, agency workshops and guidance documents, and educational efforts. But that just scratches the surface of soft law mechanisms. For better or worse, soft law is becoming the dominant modus operandi for most modern technological governance. We can expect that trend to accelerate to fill the governance gap left by Congressional inaction. For example, we don’t have any formal “rules of the road” for driverless cars, but we do now have four iterations of Department of Transportation guidance on driverless cars. Version 4.0of the DoT guidance for automated vehicles was just released this month. Expect the “soft law-ization” of technological governance to expand considerably in coming years because it is really the only way for agencies to cope with the pacing problem and those metaphysical issues identified earlier. Because soft law is not boxed in by rigid preconceptions of what a particular technology or technological process is or entails, it is often better able to address new marketplace realities. Soft law can adapt as technologies do. With Congress out of the picture, it will have to.
The congressional tech policy death spiral accelerates. Some may think (or at least hope) that the situation described here can’t get any worse. To the contrary, it can get radically worse. With our politics increasingly infected with bitter partisanship and rancor, what are the chances that lawmakers can work together to craft comprehensive tech policy measures? I’d say the odds are approaching zero. The Cable Act, the Telecom Act (and Sec. 230), and the Internet Tax Freedom Act all enjoyed broad, bipartisan support when they passed in the 1990s. People reached across the aisle to get things done. It didn’t always work, and sometimes it resulted in misguided policies (like the Communications Decency Act’s provisions trying to censor internet “indecency”). But bipartisan lawmaking scenarios like those seem almost unthinkable now. To the extent many lawmakers even show up at tech-oriented congressional hearings anymore, it is mostly to score points in front of the cameras for Team Red or Team Blue back home. Serious legislative oversight and policymaking is dead; it’s mostly just show-trials and media circuses at this point.

Should I Care about Congress Anymore?

If you believe this miserable thesis is correct but continue to focus on the Legislative Branch for a living, you may be asking yourself: Am I wasting all my time here? Not necessarily. Congress is still actively interested in tech policy matters. For those who hope to limit that damage Congress might do by hastily passing ham-handed, crisis-driven policy measures, your efforts in the trenches will continue to be important in curbing the worst instincts of some lawmakers. In many instances, preserving a perpetual stalemate may go down as a tremendous victory.

For example, as the debate over Section 230 intensifies—with politicians of all stripes looking to gut the most important of all Internet freedom policies—it is vital that smart people work with lawmakers and their staff to beat back misguided and destructive measures. Hopefully this becomes another instance of legislative gridlock winning out! And I think it will.

More realistically, your role will not be to stop Congress from doing insanely destructive things, it will be to just stop them from saying those things. In fact, that seems to be what a lot of people who work with Congress already do today. When I chat with various inside-the-Beltway policy advocates and industry reps today, they usually acknowledge that the prospects for actual legislation on any given issue are quite slim. They will, of course, continue to try to work with lawmakers, their committees, and their staff to either advance or stop legislative measures. Yet, they all seem to accept the utter futility of it all.

Why do they persist? Most obviously, they want to at least preserve the legislative stalemate and not cede the ground to their enemies who might succeed in getting lawmakers to do something if only one side was communicating with Congress.

But the other thing these policy advocates are hoping to achieve is better messaging. Regulatory advocates want lawmakers to use the power of the bully pulpit to put pressure on various people or groups to change behavior, even in the absence of any legislative action. By contrast, many in industry want to make sure that their technologies are understood and not endlessly demonized. Bad press isn’t good for business, even if all the congressional threats never result in final legislation. Also, those defending innovation more generally will want to make sure that even if lawmakers aren’t making any actual laws, they still better understand and appreciate the importance of new technological capabilities for improving human welfare.

Those are all good reasons not to give up your legislative advocacy. For some of us, however, the personal cost-benefit analysis just doesn’t add up. Our focus has shifted to where the real action is at: federal administrative agencies, statehouses and state administrative agencies, the courts, and the growing world of multi-stakeholder governance and other soft law efforts. Congress has checked out, but technological governance lives on in many other forms and venues.

Five Online Safety Task Forces Have Generally Agreed

Adam Thierer — Thu, 09 Jul 2009 04:06:05 +0000

In an earlier post, I mentioned an important new online child safety task force report that has just been released from the “Point Smart. Click Safe.” Blue Ribbon Working Group. It’s a great report and I encourage you to read the whole thing. It was my great pleasure to serve on this task force, and as we started finalizing our conclusions and recommendations, I started thinking about how much of what we were finding and recommending was consistent with what past online safety task forces had also concluded.

By way of background, over the past decade, five major online safety task forces or blue ribbon commissions have been convened to study online safety issues. Two of these task forces were convened in the United States and issued reports in 2000 (“COPA Commission”) and 2002 (“Thornburgh Commission“). Another was commissioned by the British government in 2007 and issued in a major report in March 2008 (“Byron Review“). Finally, two additional online safety task forces were formed in the U.S. in 2008 and concluded their work, respectively, in January (“Internet Safety Technical Task Force“) and July (“Point Smart. Click Safe.“) of 2009. [And yet another task force — the Online Safety Technology Working Group — was recently formed and has now gotten underway.]

In a new PFF white paper, ” Five Online Safety Task Forces Agree: Education, Empowerment & Self-Regulation Are the Answer,” I walk through a chronological summary of each of these past task forces [click on covers of each report below to read them in their entirety] and highlight some of the similar themes and recommendations from them.

Altogether, these five task forces heard from hundreds of experts and produced thousands of pages of testimony and reports on a wide variety of issues related to online child safety. While each of these task forces had different origins and unique membership, what is striking about them is the general unanimity of their conclusions. Among the common themes or recommendations of these five task forces:

Education is the primary solution to most online child safety concerns. These task forces consistently stressed the importance of media literacy, awareness-building efforts, public service announcements, targeted intervention techniques, and better mentoring and parenting strategies.
There is no single “silver-bullet” solution or technological “quick-fix” to child safety concerns. That is especially the case in light of the rapid pace of change in the digital world.
Empowering parents and guardians with a diverse array of tools, however, can help families, caretakers, and schools to exercise more control over online content and communications.
Technological tools and parental controls are most effective as part of a “layered” approach to child safety that views them as one of many strategies or solutions.
The best technical control measures are those that work in tandem with educational strategies and approaches to better guide and mentor children to make wise choices. Thus, technical solutions can supplement, but can never supplant, the educational and mentoring role.
Industry should formulate best practices and self-regulatory systems to empower users with more information and tools so they can make appropriate decisions for themselves and their families. And those best practices, which often take the form of an industry code of conduct or default control settings, should constantly be refined to take into account new social concerns, cultural norms, and technological developments.
Government should avoid inflexible, top-down technological mandates. Instead, policymakers should focus on encouraging collaborative, multifaceted, multi-stakeholder initiatives and approaches to enhance online safety. Additional resources for education and awareness-building efforts are also crucial. Finally, governments should ensure appropriate penalties are in place to punish serious crimes against children and also make sure law enforcement agencies have adequate resources to police crimes and punish wrong-doers.

The consistency of these findings from those five previous task forces is important and it should guide future discussions among policymakers, the press, and the general public regarding online child safety. As I note in the paper, the findings are particularly relevant today since Congress and the Obama Administration — including 3 federal agencies (NTIA, FCC, & FTC) are actively studying these issues. So, in light of all that, I hope this short paper can shed some light on the collective wisdom of the past task forces. While more study of online child safety issues is always welcome — including additional task forces or working groups if policymakers deem them necessary — thanks to the work of these five task forces, we now have better vision of what is needed to address online safety concerns.

Five Online Safety Task Forces Agree [PFF – Adam Thierer] http://d.scribd.com/ScribdViewer.swf?document_id=17181137&access_key=key-z6cxfgrjkqaqtxbix&page=1&version=1&viewMode=