Articles by Will Rinehart 
Will Rinehart is Senior Research Fellow at the Center for Growth and Opportunity at Utah State University, where he specializes in telecommunication, Internet, and data policy, with a focus on emerging technologies and innovation. Rinehart previously worked at the American Action Forum and TechFreedom. He was also previously the Director of Operations at the International Center for Law & Economics. He can be contacted at will at thecgo dot org.
Economist Mariana Mazzucato has a full spread in the Wired UK humbling suggesting that she “has a plan to fix capitalism.” The plan is an outgrowth of her 2013 book The Entrepreneurial State, which contends that government involvement in research and development (R&D), loans, and other business subsidies are the true drivers of innovation, not the private sector. Her plan is simple: governments need to do better on funding innovation.
It goes without saying that the government is massively involved in innovation and for good reason. Open any introductory economics text and you’re likely to see an argument for why. Private actors are short sighted and often fail to plan for the long term by investing in R&D that will lead to technological progress. Basic research also might lead to advances or products outside of the company’s niche. Knowing that they won’t be able to capture all of the gains from research, private entities will choose a lower level of investment than is optimal, leading to a market failure. Governments solve this market failure by allocating resources to expanding scientific and technological knowledge.
While Mazzucato might be finding an audience with policy makers in the UK and doers in Silicon Valley, innovation economists are a little more wary of her state first theory of innovation. Here are some things worth considering when reading her work: Continue reading →
Jaron Lanier was featured in a recent New York Times op-ed explaining why people should get paid for their data. Under this scheme, he estimates the total value of data for a four person household could fetch around $20,000.
Let’s do the math on that.
Data from eMarketer finds that users spend about an hour and fifteen minutes per day on social media for a total of 456.25 hours per year. Thus, by Lanier’s estimates, the income from data would be about $10.95 per hour. That’s not too bad!
By any measure, however, the estimate is high. Since I have written extensively on this subject (see this, this, and this), I thought it might be helpful to explain the four general methods used to value an intangibles like data. They include income methods, market rates, cost methods, and finally, shadow prices. Continue reading →
When it comes to the threat of automation, I agree with Ryan Khurana: “From self-driving car crashes to failed workplace algorithms, many AI tools fail to perform simple tasks humans excel at, let alone far surpass us in every way.” Like myself, he is skeptical that automation will unravel the labor market, pointing out that “[The] conflation of what AI ‘may one day do’ with the much more mundane ‘what software can do today’ creates a powerful narrative around automation that accepts no refutation.”
Khurana marshals a number of examples to make this point:
Google needs to use human callers to impersonate its Duplex system on up to a quarter of calls, and Uber needs crowd-sourced labor to ensure its automated identification system remains fast, but admitting this makes them look less automated…
London-based investment firm MMC Ventures found that out of the 2,830 startups they identified as being “AI-focused” in Europe, 40% used no machine learning tools, whatsoever.
I’ve been collecting examples of the AI hype machine as well. Here are some of my favorites. Continue reading →
Cato Unbound is taking on the issue of tech expertise this month and the lead essay came from Kevin Kosar, who argues for the revival of the Office of Technology Assessment. As he explains,
[N]o one wants Congress enacting policies that make us worse off, or that delay or stifle technologies that improve our lives. And yet this kind of bad policy happens with lamentable frequency. Pluralistic politics inevitably features some self-serving interests that are more powerful and politically persuasive than others. This is why government often undertakes bailouts and other actions that are odious to the public writ large.
He continues, “Congress’s ineptitude in [science and technology policy] has been richly displayed.” To help embed expertise in science and technology policy, Kosar argues for the revival of the Office of Technology Assessment, which was established in 1972 and defunded in 1995.
I have been on the OTA beat for a little while now, and so I offered some criticism of Kosar’s proposal, which you can find here. I’ll lay out my cards: I’ve been skeptical of reving the OTA in the past and I remain so. Here is my key graf on that:
Elsewhere, I have argued that the OTA should be seen as a last resort; there are other ways of embedding expertise in Congress, like boosting staff and reforming hiring practices. The following essay makes a slightly different argument, namely, that the history of the OTA shows the razor wire on which a revived version of agency will have to balance. In its early years, the OTA was dogged by accusations of partiality. Having established itself as a neutral party throughout the 1980s, the OTA was abolished because it failed to distinguish itself among competing agencies. There is an underlying political economy to expertise that makes the revival of the OTA difficult, undercutting it as an option for expanding tech expertise. In a modern political environment where scientific knowledge is politicized and budgets are tight, the OTA would likely face the hatchet once again. Continue reading →
Many have likened efforts to build out rural broadband today to the accomplishments of rural electrification in the 1930s. But the two couldn’t be further from each other. From the structure of the program and underlying costs, to the impact on productivity, rural electrification is drastically different than current efforts to get broadband in rural regions. My recent piece at ReaclClearPolicy explores some of those differences, but there is one area I wasn’t able to explore, the question of cost. If a government agency, any government agency for that matter, was able to repeat the dramatic reduction in cost for broadband, the US wouldn’t have a deployment problem. Continue reading →
After reading LM Sacasas’ recent piece on moral communities, I couldn’t help but wonder if the piece was written in the esoteric mode.
Let me explain by some meandering.
Now, I am surely going to butcher his argument, so take a read of it yourself, but there is a bit of an interesting call and response structure to the piece. He begins with commentary on “frequent deployment of the rhetorical we,” in discussions over the morality of technology. Then, channeling Langdon Winner, he notes approvingly that “What matters here is that this lovely ‘we’ suggests the presence of a moral community that may not, in fact, exist at all, at least not in any coherent, self-conscious form.” Continue reading →
It is now been a year since network neutrality rules supported by Title II were officially repealed, marking the end of the Obama-era legislation. Writing in Wired, Klint Finley noted that, “The good news is that the internet isn’t drastically different than it was before. But that’s also the bad news: The net wasn’t always so neutral to begin with.”
At the time, many worried what would happen. Apple co-founder Steve Wozniak and former FCC Commissioner Michael Copps suggested that two worlds were possible. “Will consumers and citizens control their online experiences, or will a few gigantic gatekeepers take this dynamic technology down the road of centralized control, toll booths and constantly rising prices for consumers?”
Continue reading →
Contemporary tech criticism displays an anti-nostalgia. Instead of being reverent for the past, anxiety about the future abounds. In these visions, the future is imagined as a strange, foreign land, beset with problems. And yet, to quote that old adage, tomorrow is the visitor that is always coming but never arrives. The future never arrives because we are assembling it today.
The distance between the now and the future finds its hook in tech policy in the pacing problem, a term describing the mismatch between advancing technologies and society’s efforts to cope with them. Vivek Wadhwa explained that, “We haven’t come to grips with what is ethical, let alone with what the laws should be, in relation to technologies such as social media.” In The Laws of Disruption, Larry Downes explained the pacing problem like this: “technology changes exponentially, but social, economic, and legal systems change incrementally.” Or, as Adam Thierer wondered, “What happens when technological innovation outpaces the ability of laws and regulations to keep up?”
Here are three short responses. Continue reading →
Recently, Noah Smith explored an emerging question in tech. Is there a kill zone where new and innovative upstarts are being throttled by the biggest players? He explains,
Facebook commissioned a study by consultant Oliver Wyman that concluded that venture investment in the technology sector wasn’t lower than in other sectors, which led Wyman to conclude that there was no kill zone.
But economist Ian Hathaway noted that looking at the overall technology industry was too broad. Examining three specific industry categories — internet retail, internet software and social/platform software, corresponding to the industries dominated by Amazon, Google and Facebook, respectively — Hathaway found that initial venture-capital financings have declined by much more in the past few years than in comparable industries. That suggests the kill zone is real.
A recent paper by economists Wen Wen and Feng Zhu reaches a similar conclusion. Observing that Google has tended to follow Apple in deciding which mobile-app markets to enter, they assessed whether the threat of potential entry by Google (as measured by Apple’s actions) deters innovation by startups making apps for Google’s Android platform. They conclude that when the threat of the platform owner’s entry is higher, fewer app makers will be interested in offering a product for that particular niche. A 2014 paper by the same authors found similar results for Amazon and third-party merchants using its platform.
So, are American tech companies making it difficult for startups? Perhaps, but there are some other reasons to be skeptical. Continue reading →
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