Here’s a new animated explainer video that I narrated for the Federalist Society’s Regulatory Transparency Project. The 3-minute video discusses how earlier “tech giants” rose and fell as technological innovation and new competition sent them off to what the New York Times once appropriately called “The Hall of Fallen Giants.” It’s a continuing testament to the power of “creative destruction” to upend and reorder markets, even as many pundits insist that there’s no possibility change can happen.
Does anyone remember Blockbuster and Hollywood Video? I assume most of you do, but wow, doesn’t it seem like forever ago when we actually had to drive to stores to get movies to watch at home? What a drag that was!
Yet, just 15 years ago, that was the norm and those two firms were the titans of video distribution, so much so that federal regulators at the Federal Trade Commission looked to stop their hegemony through antitrust intervention. But then those firms and whatever “market power” they possessed quickly evaporated as a wave of Schumpeterian creative destruction swept through video distribution markets. Both those firms and antitrust regulators had completely failed to anticipate the tsunami of technological and marketplace changes about to hit in the form of alternative online video distribution platforms as well as the rise of smartphones and robust nationwide mobile networks.
Today, this serves as a cautionary tale of what happens when regulatory hubris triumphs over policy humility, as Trace Mitchell and I explain in this new essay for
National Review Online entitled, “The Crystal Ball of Antitrust Regulators Is Cracked.” As we note:
There is no discernable end point to the process of entrepreneurial-driven change. In fact, it seems to be proliferating rapidly. To survive, even the most successful companies must be willing to quickly dispense with yesterday’s successful business plans, lest they be steamrolled by the relentless pace of technological change and ever-shifting consumer demands. It is easy to understand why some people find it hard to imagine a time when Amazon, Apple, Facebook, and Google won’t be quite as dominant as they are today. But it was equally challenging 20 years ago to imagine that those same companies could disrupt the giants of that era.
Hopefully today’s policymakers will have a little more patience and trust competition and continued technological innovation to bring us still more wonderful video choices.
Here’s a video chat I did today with Americans for Prosperity – Virginia. My thanks to Benjamin Knotts for hosting the discussion. We talked about my recent book (Evasive Entrepreneurs) and my last one (Permissionless Innovation). We also discussed my new proposal with Matt Mitchell and Patrick McLaughlin to create “Fresh Start Initiatives” to address rules suspended during the COVID crisis. Watch the 30 min video here:
I was pleased to see the American Psychological Association’s new statement slowly reversing course on misguided past statements about video games and acts of real-world violence. As Kyle Orland reports in Ars Technica, the APA has clarified its earlier statement on this relationship between watching video game depictions of violence and actual youth behavior. The APA’s old statement said that evidence “confirms [the] link between playing violent video games and aggression.” But the APA has come around and now says that, “there is insufficient scientific evidence to support a causal link between violent video games and violent behavior.” More specifically, the APA says:
The following resolution should not be misinterpreted or misused by attributing violence, such as mass shootings, to violent video game use. Violence is a complex social problem that likely stems from many factors that warrant attention from researchers, policy makers and the public. Attributing violence to violent video gaming is not scientifically sound and draws attention away from other factors.
This is a welcome change of course because the APA’s earlier statements were being used by politicians and media activists who favored censorship of video games. Hopefully that will no longer happen.
“Monkey see, monkey do” theories of media exposure leading
to acts of real-world violence have long been among the most outrageously
flawed theories in the fields of psychology and media studies. All the evidence points the
opposite way, as I documented a decade
ago in a variety of studies. (For a summary, see my 2010 essay, “More
on Monkey See-Monkey Do Theories about Media Violence & Real-World Crime.”)
In fact, there might even be something to the “cathartic
effect hypothesis,” or the idea first articulated by Aristotle
(“katharsis”) that watching dramatic portrayals of violence could
lead to “the proper purgation of these emotions.” (See my 2010 essay on
this, “Video
Games, Media Violence & the Cathartic Effect Hypothesis.”)
Of course, this doesn’t mean that endless exposure to video
game or TV and movie violence is a good thing. Prudence and good parenting are
still essential. Some limits are smart. But the idea that a kid playing or
watching violent act will automatically become violent themselves was always nonsense.
It’s time we put that theory to rest. Thanks to the new APA statement, we are
one step closer.
A decade ago, a heated debate raged over the benefits of “a la carte” (or “unbundling”) mandates for cable and satellite TV operators. Regulatory advocates said consumers wanted to buy all TV channels individually to lower costs. The FCC under former Republican Chairman Kevin Martin got close to mandating a la carte regulation.
But the math just didn’t add up. A la carte mandates, many economists noted, would actually cost consumers just as much (or even more) once they repurchased all the individual channels they desired. And it wasn’t clear people really wanted a completely atomized one-by-one content shopping experience anyway.
Throughout media history, bundles of all different sorts had been used across many different sectors (books, newspapers, music, etc.). This was because consumers often enjoyed the benefits of getting a package of diverse content delivered to them in an all-in-one package. Bundling also helped media operators create and sustain a diversity of content using creative cross-subsidization schemes. The traditional newspaper format and business is perhaps the greatest example of media bundling. The classifieds and sports sections helped cross-subsidize hard news (especially local reporting). See this 2008 essay by Jeff Eisenach and me for details for more details on the economics of a la carte.
Yet, with the rise of cable and satellite television, some critics protested the use of bundles for delivering content. Even though it was clear that the incredible diversity of 500+ channels on pay TV was directly attributable to strong channels cross-subsidizing weaker ones, many regulatory advocates said we would be better off without bundles. Moreover, they said, online video markets could show us the path forward in the form of radically atomized content options and cheaper prices.
Last month, it was my great honor to be invited to be a keynote speaker at Lincoln Network’s Reboot 2018 “Innovation Under Threat” conference. Zach Graves interviewed me for 30 minutes about a wide range of topics, including: innovation arbitrage, evasive entrepreneurialism, technopanics, the pacing problem, permissionless innovation, technological civil disobedience, existential risk, soft law and more. They’ve now posted the full event video and you can watch it down below.
What happens when technological innovation outpaces the ability of laws and regulations to keep up?
This phenomenon is known as “the pacing problem,” and it has profound ramifications for the governance of emerging technologies. Indeed, the pacing problem is becoming the great equalizer in debates over technological governance because it forces governments to rethink their approach to the regulation of many sectors and technologies.
The Innovation Cornucopia
Had Rip Van Winkle woken up his famous nap today, he’d be shocked by all the changes around him. At-home genetics tests, personal drones, driverless cars, lab-grown meats, and 3D-printed prosthetic limbs are just some of the amazing innovations that would boggle his mind. New devices and services are flying at us so rapidly that we sometimes forget that most did not even exist a short time ago. Continue reading →
On March 19th, I had the chance to debate Franklin Foer at a Patrick Henry College event focused on the question, “Is Big Tech Big Brother?” It was billed as a debate over the role of technology in American society and whether government should be regulating media and technology platforms more generally. [The full event video is here.] Foer is the author of the new book, World Without Mind: The Existential Threat of Big Tech, in which he advocates a fairly expansive regulatory regime for modern information technology platforms. He is open to building on regulatory ideas from the past, including broadcast-esque licensing regimes, “Fairness Doctrine”-like mandates for digital intermediaries, “fiduciary” responsibilities, beefed-up antitrust intervention, and other types of controls. In a review of the book for Reason, and then again during the debate at Patrick Henry University, I offered some reflections on what we can learn from history about how well ideas like those worked out in practice.
My closing statement of the debate, which lasted just a little over three minutes, offers a concise summation of what that history teaches us and why it would be so dangerous to repeat the mistakes of the past by wandering down that disastrous path again. That 3-minute clip is posted below. (The audience was polled before and after the event and asked the same question each time: “Do large tech companies wield too much power in our economy, media and personal lives and if so, should government(s) intervene?” Apparently at the beginning, the poll was roughly Yes – 70% and No – 30%, but after the debated ended it has reversed, with only 30% in favor of intervention and 70% against. Glad to turn around some minds on this one!)
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology. Learn more about TLF →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.