Wishful thinking is a dangerous drug. Some pundits and policymakers believe that, if your intentions are pure and you have the “right” people in power, all government needs to do is sprinkle a little pixie dust (in the form of billions of taxpayer dollars) and magical things will happen.

Of course, reality has a funny way of throwing a wrench into the best-laid plans. Which brings me to the question I raise in a new 2-part series for  Discourse magazine: Can governments replicate Silicon Valley everywhere?

In the first installment, I explore the track record of federal and state attempts to build tech clusters, science parks & “regional innovation hubs” using state subsidies and industrial policy. This is highly relevant today because of the huge new industrial policy push at the federal level is building on top of growing state and local efforts to create tech hubs, science parks, or various other types of industrial “clusters.

At the federal level, this summer, the Senate passed a 2,300-page industrial policy bill, the “United States Innovation and Competition Act of 2021,” that included almost $10 billion over four years for a Department of Commerce-led effort to fund 20 new regional technology hubs, “in a manner that ensures geographic diversity and representation from communities of differing populations.” A similar proposal that is moving in the House, the “Regional Innovation Act of 2021,” proposes almost $7 billion over five years for 10 regional tech hubs. Meanwhile, the Biden administration also is pitching ideas for new high-tech hubs. In late July, the Commerce Department’s Economic Development Administration announced plans to allocate $1 billion in pandemic recovery funds to create or expand “regional industry clusters” as part of the administration’s new Build Back Better Regional Challenge. Among the possible ideas the agency said might win funding are an “artificial intelligence corridor,” an “agriculture-technology cluster” in rural coal counties, a “blue economy cluster” in coastal regions, and a “climate-friendly electric vehicle cluster.”

In my essay, I note that the economic literature on these efforts has been fairly negative, to put it mildly. There is no precise recipe for growing tech clusters, as most economists and business analysts note.

“Despite several attempts, Silicon Valley has not been successfully copied elsewhere,” notes Mark Zachary Taylor, author of “The Politics of Innovation: Why Some Countries Are Better Than Others at Science and Technology.” Judge Glock, a senior policy adviser with the Cicero Institute, offers a more blistering assessment of such efforts: “Almost every American state has tried to fund the creation of biotech clusters, projects that almost inevitably end with weeds growing through the parking-lot pavement and a trail of corrupt bargains.”

I then highlight the key findings from several major studies of these efforts, all of which make it clear that, as cluster scholars by Aaron Chatterji, Edward Glaeser and William Kerr noted in 2014 after gathering all the research conducted on the topic: existing evidence “suggests that the regional foundation for growth-enabling innovation is complex and that we should be cautious of single policy solutions that claim to fit all needs.” Furthermore, “even if clusters of entrepreneurship are good for local growth, it is less clear that cities or states have the ability to generate those clusters.”

I also highlight research from my Mercatus Center colleagues on “The Economics of a Targeted Economic Development Subsidy” documenting costs of state-level planning & case study of Foxconn fiasco. They summarize the fairly miserable track record of state and local mini-industrial policy efforts. As they note, the extensive economic literature on this matter finds that “the net effect of targeted economic development subsidies is likely to be negative” because “the taxes funding the subsidies will discourage more economic activity than will be encouraged by the subsidies themselves.” Similarly, Harvard Business School economist Josh Lerner evaluated dozens of similar targeted development efforts from around the globe in his 2009 book Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed—and What to Do About It. He concluded that “for each effective government intervention, there have been dozens, even hundreds, of failures, where substantial public expenditures bore no fruit.”

In my essay, I also discuss the astonishing array of federal efforts to promote the geographic spread of high-tech sectors and jobs since 2000. Throughout Bush, Obama, Trump & Biden admins, there’s been a lot of spending, but not a lot of success. Just lots of new laws and bureaucracies:

In 2012, the Obama administration launched the multiagency Rural Jobs and Innovation Accelerator Challenge and Advanced Manufacturing Jobs and Innovation Accelerator Challenge. This occurred at roughly the same time President Obama was launching his Startup America initiative. He also signed the JOBS Act (Jump-start Our Business Startups) in 2012. All these efforts included various measures to support the spread of advanced manufacturing and high-tech startups across the U.S. But none of these efforts have borne much fruit so far.

In the second installment of this series, I explore better ways to encourage regional tech innovation and economic development without doubling down on failed programs of the past. Specifically, I explain why, when it comes to economic development efforts, policymakers would be wise to avoid the costly, ineffective “fun stuff” and refocus on time-tested “boring” strategies:

The boring approach to economic development seeks to promote an open innovation culture that is conducive to risk-taking, investment and growth without the need to extend targeted privileges to particular firms or industries. Such a culture comes down to a classic mix of simplified and equally applied taxes, streamlined permitting processes and sensible regulations, limits on frivolous lawsuits, and clear protection of contracts and property rights. As Matt Mitchell and I argued previously, policymakers need to resist the urge to go for broke with splashy policies and programs. They need to appreciate the benefits of generalized economic development policy (a.k.a. the boring approach) as opposed to far riskier targeted development efforts.

I also highlight recent research explaining how perhaps the simplest way to strengthen existing clusters, or give rise to new ones, is to make sure America’s immigration policies are hospitable to the best and brightest minds from across the globe.

And I note how, due to the problems associated with many other forms of government-sponsored R&D assistance, many scholars and policymakers are increasingly turning to the idea of government-sponsored competitions and prizes as a superior way to distribute R&D assistance.

With competitions, governments can set broad goals to help facilitate the search for important societal needs. The prizes then create a powerful incentive for innovators to pursue those goals, not only to win money, but also to gain recognition from peers and the public. Another alternative is just using lotteries to distribute R&D money instead of having agencies target grants. That at least avoids political shenanigans and paperwork delays, although it may not be a particularly effective approach.

There is also some good news is overlooked in today’s rush to make big industrial policy gambles: Venture capitalists and new startups are already spreading out naturally.

A 2021 study on “The State of the Startup Ecosystem” by Engine, a research and advocacy organization supporting startups, revealed that “as Series A funding grew over the last fifteen years, more of that growth has started to shift to areas located outside of the largest ecosystems.” Series A funding refers to the initial round of outside venture capitalist investment in startups. The report looked at Series A deals from 2003 to 2018 and found that “Series A rounds outside of the top five ecosystems grew nearly 900 percent, while the number of rounds outside of the top nine grew nearly tenfold.” Whereas Series A fundings outside of the top five ecosystems stood at 38% in 2003, they had jumped up to 43% in 2018. “The increase in deal location diversity over this period reflects an increasing spread in venture capital investment across the country and less centralization of investment in areas like Silicon Valley,” the report concluded.

Meanwhile, tech innovators and investors are increasingly engaging in innovation arbitrage as they move to cities and states across the nation that are more hospitable to entrepreneurial activities. Firms and investors are voting with their feet (and dollars) by flocking to areas where tech clusters can more naturally sprout because the general policy environment is sound.

But 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. We can do better.

Jump over to  Discourse to read both installments here and here.

Also, down below I list several other things I have written recently on industrial policy efforts more generally.

• Adam Thierer & Connor Haaland, “Does the US Need a More Targeted Industrial Policy for AI & High-Tech?” Presentation for IHS Papers Workshop: Does America Need a New Industrial Policy?, 2021.
• Adam Thierer, “Government Planning and Spending Won’t Replicate Silicon Valley,” Discourse, August 18, 2021.
• Adam Thierer, “To Promote Tech Hubs Across the Country, Governments Should Focus on Improving the General Business Environment,” Discourse, September 9, 2021.
• Adam Thierer, “‘Japan Inc.’ and Other Tales of Industrial Policy Apocalypse,” Discourse, June 28, 2021.
• Adam Thierer, “Industrial Policy as ‘Casino Economics‘,” The Hill, July 12, 2021.
• Adam Thierer & Connor Haaland, “Should the U.S. Copy China’s Industrial Policy?” Discourse, March 11, 2021.
• Connor Haaland & Adam Thierer, “Can European-Style Industrial Policies Create Tech Supremacy?” Discourse, February 11, 2021.
• Matthew D. Mitchell and Adam Thierer, “Industrial Policy is a Very Old, New Idea,” Discourse, April 6, 2021.
• Adam Thierer, “On Defining ‘Industrial Policy,’” Technology Liberation Front, September 3, 2020.
• Adam Thierer, “Skeptical Takes on Expansive Industrial Policy Efforts,” Technology Liberation Front, ongoing series.

One of the keys to improving the standard of living for citizens is to make sure it isn’t too difficult for them to form new businesses or find good jobs. Unfortunately, some governments make that process harder than it should be. San Francisco serves as a prime example. An important new report just out from Arizona State University proves that.

“Doing Business North America,” is a wide-ranging comparison of six types of business regulations in Canada, Mexico and the United States. The almost 200-page report was released by the Center for the Study of Economic Liberty, a joint endeavor of the W. P. Carey School of Business and the School of Civic and Economic Thought and Leadership. The effort was spearheaded by my old colleague Stephen Slivinski and a team of other scholars and students at the Center.

The report is a major undertaking that examines how 115 North American cities rank overall, as measured by six categories: starting a business, employing workers, getting electricity, registering property, paying taxes, and resolving insolvency. Among all U.S. cities, San Francisco ranks dead last with a score of 59.04 out of a 100. Of the 115 cities evaluated in Canada, Mexico, and the U.S., San Fran ranked 77th. By comparison, Oklahoma City ranked first in overall ease of doing business with a score of 85.22.

Shockingly, things appear ready to get a lot worse for the citizens of San Francisco. In my latest column for the American Institute for Economic Research, I discuss the city’s newly proposed Office of Emerging Technology.  This new bureaucracy, which would be within the city’s public works department, would impose a new permitting system on anyone looking to launch new technologies that might somehow use public rights-of-way, such as sidewalks and roads. Innovators who fail to pursue and receive the appropriate permission slips will face civil and criminal penalties.

As I note in my column, this new permitting office “would discourage entrepreneurial efforts, consumer choice, and new employment opportunities,” because:

Whenever bureaucrats are in charge of an innovation-by-permission-slip regime, a line will form to get permits on the best terms possible. Whoever is the most clever and well-connected will get access first. Scrappy start-ups won’t have the resources to play the lobbying game or navigate the costly and complicated permitting system. Innovation will suffer.

Citizens respond to incentives and when laws and regulations raise the cost of doing business it stifles the entrepreneurial spirit. The problem with our ever-expanding “permission society,” as Goldwater Institute attorney Timothy Sandefur describes it in his latest book, is that “when told that they will have to undergo expensive and time-consuming permit processes before being allowed to pursue a new idea, many simply give up without trying.”

Or, they relocate. As I note in my column,

Innovation arbitrage is a phenomenon that the city should be worried about. It refers to the movement of ideas, innovations, or operations to jurisdictions that provide a legal and regulatory environment more hospitable to entrepreneurial activity. Innovation arbitrage is becoming easier in the Internet Age than it was in the past. Many cities and states are experiencing an outflow of talent because of onerous policy regimes that prioritize red tape and vague notions of the public interest over worker opportunities and consumer choice. If San Fran’s new anti-innovation office is established, it wouldn’t be surprising to see many firms and individuals relocate to areas with greater freedom to experiment.

It may already be happening for other reasons. For example, Stripe, one of the world’s most valuable startups, is apparently considering moving out of the city. According to the San Francisco Chronicle, “The payments processing company, valued at $35 billion, is considering moving about 10 miles away to South San Francisco, said two people familiar with the company’s potential plans.” Apparently, Stripe is considering the move due largely to the lack of available office space and the seeming unwillingness of the City to address chronic office and housing shortages.

So, if you add together burdensome permitting processes, high costs of housing and office space, and high taxes (with new ones being proposed all the time), you get a recipe for economic stagnation and a lowered standard of living for your citizenry. What makes this particularly sad in San Francisco’s case is that the city is, at once, brimming with entrepreneurial potential but also chock full of serious social problems. Economic opportunity can be part of the solution to some of those problems, but opportunities of entrepreneurial dynamism won’t happen so long as the city makes it so costly to form new businesses and pursue new jobs. Hopefully, San Francisco and other cities learn this lesson and relax burdens to innovation and new business formation.

My latest AIER column examines the impact increased lobbying and regulatory accumulation have on entrepreneurialism and innovation more generally. Unsurprisingly, it’s not a healthy relationship. A growing body of economic evidence concludes that increases in the former lead to much less of the latter.

This is a topic that my Mercatus Center colleagues and I have done a lot of work on through the years. But what got me thinking about the topic again was a new NBER working paper by economists Germán Gutiérrez and Thomas Philippon entitled, “The Failure of Free Entry.” Their new study finds that “regulations and lobbying explain rather well the decline in the allocation of entry” that we have seen in recent years.

Many economists have documented how business dynamism–new firm creation, entry, churn, etc–appears to have slowed in the US. Explanations for why vary but Gutiérrez and Philippon show that, “regulations have a negative impact on small firms, especially in industries with high lobbying expenditures.” Their results also document how regulations, “have a first order impact on incumbent profits and suggest that the regulatory capture may have increased in recent years.”

In other words, lobbying and cronyism breed a culture of rent-seeking, over-regulation, and rule accumulation that directly limit new startup activity and innovation more generally. This is a recipe for economic stagnation if left unchecked.

I cite almost a dozen sources in my essays which document this problem in far greater detail and which propose a variety of reforms. In a previous essay for AIER, I argued a periodic “spring cleaning for the regulatory state” was essential if we hope to address regulatory accumulation. In continued:

For starters, we need to get the problem of over-licensing and over-permitting under control at the federal, state, and local level. While sometimes justified, licenses are a direct restriction on entry and entrepreneurialism and should only be employed for the riskiest activities and professions. “Permissionless innovation” should be the default.

Other regulatory reforms will be needed, and I continue to be a big fan of “sunsets” as one way of cleaning out the stables. Sunsets are not silver-bullet solutions, but they can help create a periodic reset button of sorts for government programs or regulations that have outlived their usefulness, or did not make sense to begin with.

Some people will push back against such regulatory reforms, suggesting they will undermine public health or welfare. But that’s nonsense. Getting regulatory accumulation under control isn’t just about improving opportunities for innovation, entrepreneurialism, and worker opportunities.  It’s also about ensuring that government functions in more efficient and effective fashion.

When regulations accumulate without any rhyme or reason, it makes it more difficult for public officials to do their jobs effectively. Streamlining rules and cleaning up old, outdated regs will help public officials better serve the public interest and give economic dynamism a boost at the same time.

We need to get serious about getting this problem under control. Again, read my latest and previous AIER columns for more detail about how we can start that process.

I’ve been working on a new book that explores the rise of evasive entrepreneurialism and technological civil disobedience in our modern world. Following the publication of my last book, Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom, people started bringing examples of evasive entrepreneurialism and technological civil disobedience to my attention and asked how they were related to the concept of permissionless innovation. As I started exploring and cataloging these cases studies, I realized I could probably write an entire book about these developments and their consequences.

Hopefully that book will be wrapped up shortly. In the meantime, I am going to start rolling out some short essays based on content from the book. To begin, I will state the general purpose of the book and define the key concepts discussed therein. In coming weeks and months, I’ll build on these themes, explain why they are on the rise, explore the effect they are having on society and technological governance efforts, and more fully develop some relevant case studies.

Key Concepts Defined

• Evasive entrepreneurs – Innovators who don’t always conform to social or legal norms.
• Regulatory entrepreneurs – Innovators who “are in the business of trying to change or shape the law” and are “strategically operating in a zone of questionable legality or breaking the law until they can (hopefully) change it.” (Pollman & Barry)
• Technologies of freedom – Devices and platforms that let citizens openly defy (or perhaps just ignore) public policies that limit their liberty or freedom to innovate.
• The “pacing problem” – The gap between the ever-expanding frontier of technological possibilities and the ability of governments to keep up with the pace of those changes.
• Technological civil disobedience – The technologically-enabled refusal of individuals, groups, or businesses to obey certain laws or regulations because they find them offensive, confusing, time-consuming, expensive, or perhaps just annoying and irrelevant.
• Innovation arbitrage – The movement of ideas, innovations, or operations to those jurisdictions that provide a legal and regulatory environment more hospitable to entrepreneurial activity. It can also be thought of as a form of “jurisdictional shopping” and can be facilitated by “competitive federalism.”
• Permissionless innovation – As a general concept, it refers to Rear Admiral Grace Hopper’s notion that quite often, “It’s easier to ask forgiveness than it is to get permission.” As a policy vision, it refers to the idea that experimentation with new technologies and business models should generally be permitted by default. Permissionless innovation comes down to a general acceptance of change and risk-taking.

Themes of the Book

The book documents how evasive entrepreneurs are using new technological capabilities to circumvent traditional regulatory systems, or at least put pressure on public policymakers to reform or selectively enforce laws and regulation that are outmoded, inefficient, or illogical. Evasive entrepreneurs pursue a strategy of “permissionless innovation” in both the business world and the political arena.  In essence, they live out the adage that, “it is easier to ask forgiveness than it is to get permission” by creating new products and services without necessarily receiving the blessing of public officials before doing so.

Evasive entrepreneurs are taking advantage of the growth of various technologies of freedom and the corresponding “pacing problem” to create new goods and services or just decide how to live a life of their own choosing. We can think of this phenomenon as “technological civil disobedience.” The technologies of freedom that facilitate this sort of civil disobedience include common tools like smartphones, ubiquitous computing, and various new media platforms, as well as more specialized technologies like cryptocurrencies and blockchain-based services, private drones, immersive tech (like virtual reality), 3D printers, the “Internet of Things,” and sharing economy platforms and services. But that list just scratches the surface.

When innovators and consumers use new tools and technological capabilities to pursue a living, enjoy new experiences, or enhance their lives and the lives of others, they often disrupt legal or social norms in the process. While that can raise serious legal and ethical concerns, evasive entrepreneurialism and technological civil disobedience can have positive upsides for society by:

• expanding the range of life-enriching—and even life-saving—innovations available to society;
• helping citizens pursue a life of their own choosing—both as creators looking for the freedom to earn a living, and as consumers looking to discover and enjoy important new goods and services; and,
• providing a meaningful, ongoing check on government policies and programs that all too often have outlived their usefulness or simply defy common sense.

For those reasons, my book will argue that we should accept—and often even embrace—a certain amount of evasive entrepreneurialism and technological civil disobedience. I am particularly excited by the last point. In an age when many of the constitutional limitations on government power are being ignored or unenforced, innovation itself can act as a powerful check on the power of the state and help serve as a protector of important human liberties. Over the past century, both legislative and judicial “checks and balances” in the United States have been eroded to the point where they now exist mostly in name only. While we should never abandon efforts to use democratic and constitutional means of limiting state power—especially in the courts, where meaningful reforms are still possible—the ongoing evolution of technology can provide another way of keeping governments in line by forcing public officials to constrain their worse tendencies and undo past mistakes. If they fail to, they risk losing the allegiance of their more technologically-empowered citizenry.

But evasive entrepreneurialism and technological civil disobedience can have serious downsides, too. We should explore how to address the challenges associated with this more turbulent and sometimes dangerous world. In doing so, however, technological critics and public policymakers should also appreciate how once any particular innovation genie is out of its bottle, it will be increasingly difficult to stuff it back in. Worse yet, attempts to do so can often result in a “compliance paradox,” in which tighter rules lead to increased legal evasion and intractable enforcement challenges. Thus, more flexible and adaptive technological governance mechanisms will be needed.

In coming essays, I will discuss some prominent examples of these trends that are developed at length in my book, I will also do a deeper dive into some of the interesting ways governments are responding to these developments using what Phil Weiser refers to as “entrepreneurial administration,” or what others call “soft law” mechanisms. As Weiser notes, “[t]he traditional model of regulation is coming under strain in the face of increasing globalization and technological change,” and, therefore, governments must think and act differently than they did in the past. And they are already doing so. Even in an age of expanding evasive entrepreneurialism and technological civil disobedience, governments can shape the evolution of technology. But that cannot be done using the previous era’s technocratic, overly-bureaucratic, and top-down regulatory playbook. New policies and procedures will be needed for a new era.

Along with colleagues at the Mercatus Center at George Mason University, I am releasing two major new reports today dealing with the regulation of the sharing economy. The first report is a 20-page filing to the Federal Trade Commission that we are submitting to the agency for its upcoming June 9th workshop on “The “Sharing” Economy: Issues Facing Platforms, Participants, and Regulators.” We have been invited to participate in that event and I will be speaking on the fourth panel of the workshop. The filing I am submitting today for that workshop was co-authored with my Mercatus colleagues Christopher Koopman and Matt Mitchell.

The second report we are releasing today is a new 47-page working paper entitled, “How the Internet, the Sharing Economy, and Reputational Feedback Mechanisms Solve the ‘Lemons Problem.'” This study was co-authored with my Mercatus colleagues Christopher Koopman, Anne Hobson, and Chris Kuiper.

I will summarize each report briefly here.

In our new filing to the FTC, we address the five questions the Commission set forth in its workshop annoucement. Those five questions are as follows:

• How can state and local regulators meet legitimate regulatory goals (such as protecting consumers, and promoting public health and safety) in connection with their oversight of sharing economy platforms and business models, without also restraining competition or hindering innovation?
• How have sharing economy platforms affected competition, innovation, consumer choice, and platform participants in the sectors in which they operate? How might they in the future?
• What consumer protection issues—including privacy and data security, online reviews and disclosures, and claims about earnings and costs—do these platforms raise, and who is responsible for addressing these issues?
• What particular concerns or issues do sharing economy transactions raise regarding the protection of platform participants? What responsibility does a sharing economy platform bear for consumer injury arising from transactions undertaken through the platform?
• How effective are reputation systems and other trust mechanisms, such as the vetting of sellers, insurance coverage, or complaint procedures, in encouraging consumers and suppliers to do business on sharing economy platforms?

We provide detailed answers to each of these questions as well as one additional major question that was not posed by the Commission in its workshop notice but which is, no doubt, on the minds of many at the agency and outside it: What should the FTC do about state and local barriers to entry and innovation that might be thwarting the growth of the sharing economy? (I blogged about that issue here a couple of weeks ago and our filing includes that discussion.)

Please take a look at our filing for detailed answers to each of these questions. (Incidentally, our filing is an extension of an earlier working paper that Koopman, Mitchell, and I released late last year on “The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change.”) But, to briefly highlight the thrust of our argument, here’s a passage from our new filing:

As the debate surrounding the sharing economy moves forward, policymakers must keep in mind that merely because regulations were once justified on the grounds of consumer protection does not mean they accomplished those goals or that they are still needed today. Even well-intentioned policies must be judged against real-world evidence. Unfortunately, the evidence shows that many traditional consumer protection regulations hurt consumers; in the words of New York Attorney General Eric Schneiderman, they are often “cumbersome, and some are just plain protectionist.” Markets, competition, reputational systems, and ongoing innovation often solve problems better than regulation when they are given a chance to do so. There are two reasons for this. First, market imperfections create powerful profit opportunities for entrepreneurs who are able to find ways to correct them. Second, regulatory solutions too often undermine competition and lock in inefficient business models.

We continue on to explain exactly why that is the case, while also offering some constructive solutions to other issues that are on the minds of regulators.

Meanwhile, the new working paper we are releasing today provides much greater detail on the fifth of the five questions the FTC posed in its workshop notice regarding reputation systems and other trust mechanisms. Here is the abstract from the paper:

This paper argues that the sharing economy—through the use of the Internet and real time reputational feedback mechanisms—is providing a solution to the lemons problem that many regulators have spent decades attempting to overcome. Section I provides an overview of the sharing economy and traces its rapid growth. Section II revisits the lemons theory as well as the various regulatory solutions proposed to deal with the problem of asymmetric information. Section III discusses the relationship between reputation and trust and analyzes how reputational incentives affect commercial interactions. Section IV discusses how information asymmetries were addressed in the pre-Internet era. It also discusses how the evolution of both the Internet and information systems (especially the reputational feedback mechanisms of the sharing economy) addresses the lemons problem. Section V explains how these new realities affect public policy and concludes that asymmetric information is not a legitimate rationale for policy intervention in light of technological changes. We also argue that continued use of this rationale to regulate in the name of consumer protection might, in fact, make consumers worse off. This has ramifications for the current debate over regulation of the sharing economy.

We believe that our research makes it clear “how the sharing economy relies upon—and has helped spur the growth of—sophisticated reputational feedback mechanisms that facilitate online trust and commerce, overcoming many of the information asymmetries that seemed intractable… just a generation ago. In combination with online review services and other information-sharing technologies enabled by the Internet,” we conclude, “these reputational tools can help create more effective, and largely self-regulating, markets that provide more information to more individuals than ever before.”

We look forward to continuing engagement with officials at the FTC and other policymakers at the federal, state, and even international level on these issues. We hope our research will help legislators and regulators find sensible ways to adjust policy for the sharing economy so as not to derail the sort of “permissionless innovation” that has thus far powered this exciting sector and produced the many pro-consumer benefits flowing from it. Check out our filing and new paper for more details.

If you want a devastating portrait of how well-intentioned regulation sometimes has profoundly deleterious unintended consequences, look no further than the Federal Aviation Administration’s (FAA) current ban on commercial drones in domestic airspace. As Jack Nicas reports in a story in today’s Wall Street Journal (“Regulation Clips Wings of U.S. Drone Makers“), the FAA’s heavy-handed regulatory regime is stifling America’s ability to innovate in this space and remain competitive internationally. As Nicas notes:

as unmanned aircraft enter private industry—for purposes as varied as filming movies, inspecting wind farms and herding cattle—many U.S. drone entrepreneurs are finding it hard to get off the ground, even as rivals in Europe, Canada, Australia and China are taking off. The reason, according to interviews with two-dozen drone makers, sellers and users across the world: regulation. The FAA has banned all but a handful of private-sector drones in the U.S. while it completes rules for them, expected in the next several years. That policy has stifled the U.S. drone market and driven operators underground, where it is difficult to find funding, insurance and customers. Outside the U.S., relatively accommodating policies have fueled a commercial-drone boom. Foreign drone makers have fed those markets, while U.S. export rules have generally kept many American manufacturers from serving them.

Of course, the FAA simply responds that they are looking out for the safety of the skies and that we shouldn’t blame them. Again, there’s no doubt that the agency’s hyper-cautious approach to commercial drone integration is based on the best of intentions. But as we’ve noted here again and again, all the best of intentions don’t count for much–or at least shouldn’t count for much–when stacked against real-world evidence and results. And the results in this case are quite troubling.

An article last week from Alan McQuinn of the Information Technology and Innovation Foundation (“Commercial Drone Companies Fly Away from FAA Regulations, Go Abroad“) documented how problematic this situation has become:

With no certainty surrounding a timeline, limited access to exemptions, and a dithering pace for setting its rules, the FAA is slowing innovation. . . .  These overbearing rules have pushed U.S. companies to move their drone research and development projects to more permissive nations, such as Australia, where Google chose to test its drones. Australia’s Civil Aviation Safety Authority, the agency in charge of commercial drones, offers a great example of unrestrictive regulations. While it has not yet finalized its drone laws, it still allows companies and citizens to test and use these technologies under certain rules. Instead of forcing companies to reveal their technologies at government test sites, it allows them to test outdoors if they receive an operator’s certificate and submit their test area for approval. Australia’s more permissive nature shows how a country can allow innovation to thrive while simultaneously examining it for potential safety concerns.

The Wall Street Journal’s Nicas similarly observes that foreign innovators are already taking advantage of America’s regulatory mistakes to leapfrog us in drone innovation. He reports that Germany, Canada, Australia and China are starting to move ahead of us. Nicas quotes Steve Klindworth, head of a DJI drone retailer in Liberty Hill, Texas, who says that if the United States doesn’t move soon to adopt a more sensible policy position for drones that, “It’ll reach a point of no return where American companies won’t ever be able to catch up.”

In essence, the United States is adopting the exact opposite  approach we did a generation ago for the Internet and digital technology.  I’ve written recently about how “permissionless innovation” powered the Information Revolution and helped American companies become the envy of the globe. (See my essay, “Why Permissionless Innovation Matters,” for more details and data.) That happened because America got policy right, whereas other countries either tried to micromanage the Information Revolution into existence or they adopted policies that instead actively stifled it. (See my recent book on this subject for more discussion.)

In essence, we see this story playing out in reverse with commercial drones. The FAA is adopting a hyper-precautionary principle position that is holding back innovation based on worse-case scenarios. Certainly the safety of the national airspace is a vital matter. But to shut down all other aerial innovation in the meantime is completely unreasonable. As I wrote in a filing to the FAA with my Mercatus Center colleagues Eli Dourado and Jerry Brito last year:

Like the Internet, airspace is a platform for commercial and social innovation. We cannot accurately predict to what uses it will be put when restrictions on commercial use of UASs are lifted. Nevertheless, experience shows that it is vital that innovation and entrepreneurship be allowed to proceed without ex ante barriers imposed by regulators. We therefore urge the FAA not to impose  any  prospective restrictions on the use of commercial UASs without clear evidence of actual, not merely hypothesized, harm.

Countless life-enriching innovations are being sacrificed because of the FAA’s draconian policy. (Below I have embedded a video of me discussing those innovations with John Stossel, which was taped earlier this year.) New industry sectors and many jobs are also being forgone. It’s time for the FAA to get moving to open up the skies to drone innovation. Congress should be pushing the agency harder on this front since the agency seems determined to ignore the law, which requires the agency to integrate commercial drones into the nation’s airspace.

Additional  Reading

• Filing to FAA on Drones & “Model Aircraft”, Sept. 23, 2014
• Private Drones & the First Amendment, Sept. 19, 2014
• [TV interview] The Beneficial Uses of Private Drones, March 28, 2014
• Comments of the Mercatus Center to the FAA on integration of drones into the nation’s airspace, April 23, 2o13
• Eli Dourado, Deregulate the Skies: Why We Can’t Afford to Fear Drones, Wired, April 23, 2013
• Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom (2014)
• [Video] Cap Hill Briefing on Emerging Tech Policy Issues (June 2014)

Robert Scoble, Startup Liaison Officer at Rackspace discusses his recent book, Age of Context: Mobile, Sensors, Data and the Future of Privacy, co-authored by Shel Israel. Scoble believes that over the next five years we’ll see a tremendous rise in wearable computers, building on interest we’ve already seen in devices like Google Glass. Much like the desktop, laptop, and smartphone before it, Scoble predicts wearable computers represent the next wave in groundbreaking innovation. Scoble answers questions such as: How will wearable computers help us live our lives? Will they become as common as the cellphone is today? Will we have to sacrifice privacy for these devices to better understand our preferences? How will sensors in everyday products help companies improve the customer experience?

Download

Related Links

• Age of Context: Mobile, Sensors, Data and the Future of Privacy , Amazon
• Naked Conversations: How Blogs are Changing the Way Businesses Talk with Customers, Amazon
• The Rackspace Blog & Newsroom, Scoble

Richard Brandt, technology journalist and author, discusses his new book, One Click: Jeff Bezos and the Rise of Amazon.Com. Brandt discusses Bezos’ entrepreneurial drive, his business philosophy, and how he’s grown Amazon to become the biggest retailer in the world. This episode also covers the biggest mistake Bezos ever made, how Amazon uses patent laws to its advantage, whether Amazon will soon become a publishing house, Bezos’ idea for privately-funded space exploration and his plan to revolutionize technology with quantum computing.

Download

Related Links

• One Click: Jeff Bezos and the Rise of Amazon.com, Brandt
• History of Google/About Google, Brandt
• Five minutes with Richard Brandt, Author of One Click, Ennyman

By Geoffrey Manne & Berin Szoka

As Democrats insist that income taxes on the 1% must go up in the name of fairness, one Democratic Senator wants to make sure that the 1% of heaviest Internet users pay the same price as the rest of us. It’s ironic how confused social justice gets when the Internet’s involved.

Senator Ron Wyden is beloved by defenders of Internet freedom, most notably for blocking the Protect IP bill—sister to the more infamous SOPA—in the Senate. He’s widely celebrated as one of the most tech-savvy members of Congress. But his latest bill, the “Data Cap Integrity Act,” is a bizarre, reverse-Robin Hood form of price control for broadband. It should offend those who defend Internet freedom just as much as SOPA did.

Wyden worries that “data caps” will discourage Internet use and allow “Internet providers to extract monopoly rents,” quoting a New York Times editorial from July that stirred up a tempest in a teapot. But his fears are straw men, based on four false premises.

First, US ISPs aren’t “capping” anyone’s broadband; they’re experimenting with usage-based pricing—service tiers. If you want more than the basic tier, your usage isn’t capped: you can always pay more for more bandwidth. But few users will actually exceed that basic tier. For example, Comcast’s basic tier, 300 GB/month, is so generous that 98.5% of users will not exceed it. That’s enough for 130 hours of HD video each month (two full-length movies a day) or between 300 and 1000 hours of standard (compressed) video streaming.

Second, Wyden sets up a false dichotomy: Caps (or tiers, more accurately) are, according to Wyden, “appropriate if they are carefully constructed to manage network congestion,” but apparently for Wyden the only alternative explanation for usage-based pricing is extraction of monopoly rents. This simply isn’t the case, and propagating that fallacy risks chilling investment in network infrastructure. In fact, usage-based pricing allows networks to charge heavy users more, thereby recovering more costs and actually reducing prices for the majority of us who don’t need more bandwidth than the basic tier permits—and whose usage is effectively subsidized by those few who do. Unfortunately, Wyden’s bill wouldn’t allow pricing structures based on cost recovery—only network congestion. So, for example, an ISP might be allowed to price usage during times of peak congestion, but couldn’t simply offer a lower price for the basic tier to light users.

That’s nuts—from the perspective of social justice as well as basic economic rationality. Even as the FCC was issuing its famous Net Neutrality regulations, the agency rejected proposals to ban usage-based pricing, explaining:

prohibiting tiered or usage-based pricing and requiring all subscribers to pay the same amount for broadband service, regardless of the performance or usage of the service, would force lighter end users of the network to subsidize heavier end users. It would also foreclose practices that may appropriately align incentives to encourage efficient use of networks.

It is unclear why Senator Wyden thinks the FCC—no friend of broadband “monopolists”—has this wrong.

Third, charging heavy users more isn’t just more equitable, it’s actually a solution to the very problem Wyden worries about: ensuring that ISPs have an incentive to encourage Internet use. Tiered pricing means they actually benefit from heavy use. So rather than try to slow use or discriminate against bandwidth-heavy applications—which is how the Net Neutrality fight started—ISPs will continue to build out faster networks.

Now, it’s certainly possible that, if the basic tier were set low enough or if additional data were expensive enough, cable companies could discourage their subscribers from canceling a cable subscription and switching to a competing service like Netflix. But it’s hard to see how a 300 GB basic tier deters anyone, especially when users can buy additional blocks of 50 GB for just $10/month—enough for nearly two more hours a day of streamed video. If there actually were a problem here, antitrust law could address it far better than blunt pricing restrictions. Indeed, such an investigation is already ongoing.

Finally, Wyden would require that broadband providers count content download from them against your usage—fearing that a “discriminatory cap” would harm competing video providers. But if the “cap” is high enough, who cares? Under antitrust law, such “discrimination” is illegal only if it harms consumers—and it’s hard to see how consumers suffer from being able to download more video. Would they really be better off if every hour of video they streamed from their cable company meant an hour less they could stream from Netflix? That’s what Wyden’s bill would require.

The recent kerfuffle over Comcast’s decision in October to make some of its television (pay per view) content available through Xbox without counting against Internet usage limits brought this point into stark relief. While activists like Public Knowledge decried the decision for the same reasons Wyden does now, they missed the fact that by removing some of its content from usage limits Comcast was actually freeing up users to access more content at lower prices.

If Wyden’s concern is that usage-based pricing would allow ISPs to extract “monopoly profits” from users who bump up against tiers, then “preferencing” some of their own content will reduce, not increase, that risk: Users would be able to access, say, bandwidth-heavy video content just as they do television content now—without it counting against Internet usage limits. That this might “discriminate” against other Internet-based content providers does not mean that it harms consumers—quite the opposite, in fact. Again, to the extent that it might, antitrust rules are more than sufficient to discourage such practices in the first place or punish them if they arise— without restricting firms’ ability to price their content and manage their networks to ensure a reasonable return on their investments.

Pricing structures for broadband are still evolving. Just this year, Comcast moved from its original 250 GB cap—which it never enforced—to today’s 300 GB basic tier, and other broadband providers will likely follow suit. Those plans will probably continue to evolve towards pricing structures that minimize network congestion—like offering periods of unmetered use in the middle of the night, when network use plummets. That would go a long way to allaying concerns about the effect of tiered plans on competition, since Netflix could send your favorite shows and the next movies in your queue to the device of your choice while you sleep. But pricing structures also have to allow sensible, fair recovery of costs—which the Wyden bill would simply ban.

So much for not blithely regulating the Internet, Senator!

[Cross-posted at Truth on the Market]

Here’s the first of two essays I’ve recently penned making “The Case for Internet Optimism.” This essay was included in the book, The Next Digital Decade: Essays on the Future of the Internet (2011), which was edited by Berin Szoka and Adam Marcus of TechFreedom.  In these essays, I identify two schools of Internet pessimism: (1) “Net Skeptics,” who are pessimistic about the Internet improving the lot of mankind; and (2) “Net Lovers,” who appreciate the benefits the Net brings society but who fear those benefits are disappearing, or that the Net or openness are dying.  (Regular readers of this blog will be familiar with these themes since I sketched them out in previous essays here such as, “Are You an Internet Optimist or Pessimist?” and “Two Schools of Internet Pessimism.”) The second essay is here.

This essay focuses on the first variant of Internet pessimism, which is rooted in general skepticism about the supposed benefits of cyberspace, digital technologies, and information abundance. The proponents of this pessimistic view often wax nostalgic about some supposed “good ‘ol days” when life was much better (although they can’t seem to agree when those were). At a minimum, they want us to slow down and think twice about life in the Information Age and how it’s personally affecting each of us.  Occasionally, however, this pessimism borders on neo-Ludditism, with some proponents recommending steps to curtail what they feel is the destructive impact of the Net or digital technologies on culture or the economy.  I identify the leading exponents of this view of Internet pessimism and their major works. I trace their technological pessimism back to Plato but argue that their pessimism is largely unwarranted. Humans are more resilient than pessimists care to admit and we learn how to adapt to technological change and assimilate new tools into our lives over time. Moreover, were we really better off in the scarcity era when we were collectively suffering from information poverty?  Generally speaking, despite the challenges it presents society, information abundance is a better dilemma to be facing than information poverty.  Nonetheless, I argue, we should not underestimate or belittle the disruptive impacts associated with the Information Revolution.  But we need to find ways to better cope with turbulent change in a dynamist fashion instead of attempting to roll back the clock on progress or recapture “the good ‘ol days,” which actually weren’t all that good.

Down below, I have embedded the entire chapter in a Scribd reader, but the essay can also be found on the TechFreedom website for the book as well as on SSRN.  I have also includes two updated tables that appeared in my old “optimists vs. pessimists” essay.  The first lists some of the leading Internet optimists and pessimists and their books. The second table outlines some of the major lines of disagreement between these two camps and I divided those disagreements into (1) Cultural / Social beliefs vs. (2) Economic / Business beliefs.

The Case for Internet Optimism Part 1 – Saving the Net From Its Detractors (Adam Thierer) http://d1.scribdassets.com/ScribdViewer.swf

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[I’ve been working on an outline for a book I hope to write surveying technological skepticism throughout history. I first started thinking about this topic two years when I noticed that a great number of recent books about Internet policy could generally be grouped into one of two camps: Internet optimists vs. Internet pessimists. I subsequently penned an essay on the subject that generated a fair bit of attention. So, I figured I must be on to something, and the more Net policy books I read, the more I realized that the divisions between these two camps were growing wider and increasingly heated. Thus, I thought I would share this very rough draft (much of it still in outline form) of the opening chapter of that book I want to write about this great intellectual war over the impact of technology on society. I invite reader input. Update Jan. 2011: I finally published a full-length essay on this topic. You can find it here. ]

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The impact of technological change on culture, learning, and morality has long been the subject of intense debate, and every technological revolution brings out a fresh crop of both pessimists and pollyannas. Indeed, a familiar cycle has repeat itself throughout history whenever new modes of production (from mechanized agriculture to assembly-line production), means of transportation (water, rail, road, or air), energy production processes (steam, electric, nuclear), medical breakthroughs (vaccination, surgery, cloning), or communications techniques (telegraph, telephone, radio, television) have appeared on the scene.

The cycle goes something like this. A new technology appears. Those who fear the sweeping changes brought about by this technology see a sky that is about to fall. These “techno-pessimists” predict the death of the old order (which, ironically, is often a previous generation’s hotly-debated technology that others wanted slowed or stopped).  Embracing this new technology, they fear, will result in the overthrow of traditions, beliefs, values, institutions, business models, and much else they hold sacred.

The pollyannas, by contrast, look out at the unfolding landscape and see mostly rainbows in the air. Theirs is a rose-colored world in which the technological revolution du jour is seen as improving the general lot of mankind and bringing about a better order.  If something has to give, then the old ways be damned! For such “techno-optimists,” progress means some norms and institutions must adapt—perhaps even disappear—for society to continue its march forward.

Our current Information Revolution is no different. It too has its share of techno-pessimists and techno-optimists. Indeed, before most of us had even heard of the Internet, people were already fighting about it—or at least debating what the rise of the Information Age meant for our culture, society, and economy.

Web 1.0 Fight: Postman vs. Negroponte

In his 1992 anti-technology screed Technopoly: The Surrender of Culture to Technology, the late social critic Neil Postman greeted the unfolding Information Age with a combination of skepticism and scorn.  Indeed, Postman’s book was a near-perfect articulation of the techo-pessimist’s creed.  “Information has become a form of garbage,” he claimed, “not only incapable of answering the most fundamental human questions but barely useful in providing coherent direction to the solution of even mundane problems.”  If left unchecked, Postman argued, America’s new technopoly—“the submission of all forms of cultural life to the sovereignty of technique and technology”—would destroy “the vital sources of our humanity” and lead to “a culture without a moral foundation” by undermining “certain mental processes and social relations that make human life worth living.”

Postman opened his polemic with the well-known allegorical tale from Plato’s Phaedrus about the dangers of the written word.  Postman reminded us how King Thamus responded to the god Theuth, who boasted of how his invention of writing would improve the wisdom and memory of the masses relative to the oral tradition of learning.  King Thamus shot back, “the discoverer of an art is not the best judge of the good or harm which will accrue to those who practice it.”  King Thamus then passed judgment himself about the impact of writing on society, saying he feared that the people “will receive a quantity of information without proper instruction, and in consequence be thought very knowledgeable when they are for the most part quite ignorant.”

And so Postman—fancying himself a bit of a modern King Thamus—cast judgment on today’s comparable technological advances and those who would glorify them:

we are currently surrounded by throngs of zealous Theuths, one-eyed prophets who see only what new technologies can do and are incapable of imagining what they will undo. We might call such people Technophiles. They gaze on technology as a lover does on his beloved, seeing it as without blemish and entertaining no apprehension for the future. They are therefore dangerous and to be approached cautiously. … If one is to err, it is better to err on the side of Thamusian skepticism.

Nicholas Negroponte begged to differ. An unapologetic Theuthian technophile, the former director of the MIT Media Lab responded on behalf of the techno-optimists in 1995 with his prescient polemic, Being Digital.  It was a paean to the Information Age, for which he served as one of the first high prophets—with Wired magazine’s back page frequently serving as his pulpit during the many years he served as a regular columnist.

Appropriately enough, the epilogue of Negroponte’s Being Digital was entitled “An Age of Optimism” and, like the rest of the book, it stood in stark contrast to Postman’s pessimistic worldview.  Although Negroponte conceded that technology indeed had a “dark side” in that it could destroy much of the old older, he believed that was inevitable, but also not cause for much concern. “Like a force of nature, the digital age cannot be denied or stopped,” he insisted, and we must learn to appreciate the ways “digital technology can be a natural force drawing people into greater world harmony.” (This sort of techno-determism is a theme we would see on display in many of the works by other Internet optimists that followed in Negroponte’s footsteps.)

To Postman’s persistent claim that America’s technopoly lacked a moral compass, Negroponte again conceded the point but took the glass-is-half-full view: “Computers are not moral; they cannot resolve complex issues like the rights to life and to death. But being digital, nevertheless, does give much cause for optimism.”  His defense of the digital age rested on the “four very powerful qualities that will result in its ultimate triumph: decentralizing, globalizing, harmonizing, and empowering.” Gazing into his techno-crystal ball in 1995, Negroponte forecast the ways in which those qualities would revolutionize society:

The access, the mobility, and the ability to effect change are what will make the future so different from the present. The information superhighway may be mostly hype today, but it is an understatement about tomorrow. It will exist beyond people’s wildest predictions. As children appropriate a global information resource, and as they discover that only adults need learner’s permits, we are bound to find new hope and dignity in places where very little existed before.

In many ways, that’s the world we occupy today; a world of unprecedented media abundance and unlimited communications and connectivity opportunities.

But the great debate about the impact of digitization and information abundance would not end with Postman and Negroponte. Theirs would only be Act I in a drama that continues to unfold, and it is growing more heated and complex with each new character that comes on the stage.

Web War II

The disciples of Postman and Negroponte are a colorful, diverse lot. The players in Act II of this drama occupy many diverse professions—journalists, technologists, business consultants, sociologists, economists, lawyers, etc.—and they are disagreeing even more vehemently and vociferously about the impact of the Internet and digital technologies than Postman and Negroponte did.

In Exhibit 1, I have listed the Internet optimists and pessimists and list their key works.

In Exhibit 2, I have sketched out the major lines of disagreement between these two camps and divided those disagreements into (1) Cultural / Social beliefs vs. (2) Economic / Business beliefs.

When you boil it all down, there are two major points of contention between the optimists and pessimists:

1. The impact of technology on learning & culture & the role of experts vs. amateurs in that process.
2. The promise—or perils—of personalization.

The Debate over Learning & Culture

• Internet optimists and pessimists have engaged in heated debates over role of amateur production and benefits of abundant media

• pessimists fear impact of Net and “cult of amateur” on “professional” media

• without “enforceable scarcity” and protection for the “enlightened class,” the pessimists wonder how “high quality” news or “high art” will get funded and disseminated; and they worry about the decline of authority & truth

• optimists argue that new modes of production (namely peer-production) will be an adequate (if not superior) alternative
  • or they believe new business models will evolve to support professional media

• but pessimists argue that all the new choices are largely false choices
  • participatory democracy all bunk (“mob rule” and rumor mill mongering)
  • just more force-fed commercial propaganda; concerns about advertising
  • also worry about “digital sharecropping” where small group of elites make money off backs of free labor

• optimists counter that Web 2.0 offers real choices and voices
  • optimists argue that many (perhaps most) aren’t in it for the money
  • they do it for love of knowledge & “free culture”

• pessimists argue that “free” culture isn’t free at all; often just parasitic copying / piracy
  • could have profound ramifications for future of news, journalism, “high culture”
  • fear loss of trusted intermediaries & authorities
  • could “dumb down” the masses

• the centrality of Wikipedia to the discussion serves as a microcosm of the entire debate
  • does Wikipedia mark the decline of authority?
  • what is “truth,” the pessimists ask? [“truthiness” fear, a la S. Colbert & Manjoo]
  • who and what can be trusted if everyone is considered an authority?
  • on the other hand, what if it works (at least reasonably well)?
  • what does that tell us about peer production / crowdsourcing?

The Debate over the Promise or Perils of Personalization

• both optimists and pessimists agree that Net & Web 2.0 is leading to more “personalized” media experience
  • but they vehemently disagree on whether that is good or bad
  • what will it mean for participatory democracy?

• pessimists fear Negroponte’s “Daily Me” (i.e., hyper-personalization) leads to:
  • homogenization
  • close-mindedness
  • an online echo-chamber
  • overload of choices + just more corporate brainwashing

• optimists counter that personalization leads to:
  • heterogeneity / chance for everyone to be heard
  • openness
  • exposure to new thinking and opinions
  • abundance of choices = diversity of thought / participation
• in the extreme, some pessimists fear the “mechanization of the soul” and the “surrender to the machine”

• while that may sound a bit over the top, it doesn’t help that some optimists speak of the noosphere & “global consciousness” and seem to long for the eventual singularity

Who’s Got It Right?

• On balance, I believe the optimists generally have the better of the argument today
• But pessimists make many fair points that deserve to be taken seriously; they just need a more reasonable articulation of (some of) those concerns
• The better approach is what I call “pragmatic optimism,” which attempts to rid the optimist paradigm of its kookier, pollyannish thinking while also taking into account some of the very legitimate concerns raised by the pessimists, but rejecting its Luddite fringe in the process.

Thoughts on the Pessimists…

• First and foremost, the pessimists need better spokespersons! Or, they at least need a more moderated, less hysterical tone when addressing concerns raised by technological progress (many of which are quite legitimate).

• It’s often difficult to take the pessimists seriously when they persist with their seeming outright hostility to most forms of technological progress / change. Every one of them claim they are not a Luddite, and often I believe them. But the tone of some of their writing, and the thrust of some of their recommendations, have clear Luddite tendencies.

• Moreover, their endless name-calling and derision for the digital generation is, at times, just as insulting and immature as they “mob” they repeatedly castigate in their works. Too often, their criticism devolves into philosophical snobbery and blatant elitism. Constantly looking down their noses at digital natives and all “amateur” production doesn’t help them win any converts.

• It’s quite shocking how the pessimists have almost nothing good to say about Wikipedia and demonize it endlessly. Much the same goes for open source and other collaborative efforts. They don’t appear willing to accept the possibility of any benefits coming from collective efforts. And they wrongly treat the rise of collective / collaborative efforts as a zero-sum game; they seem to imagine it represents a net loss of individual effort & “personhood.” That simply doesn’t follow.

• Most importantly, the pessimists need to come to grips with the Information Revolution and offer more constructive and practical solutions to legitimately difficult transitional problems created by disintermediating influences of the digital technologies and Net.

• The nostalgia the pessimists typically espouse for the past is a common refrain of cultural and technological critics who fear that the “good ‘ol days” are behind us and the current good-for-nothing generation and their new-fangled gadgets are steering us straight into a moral abyss.  The truth typically proves less cataclysmic, of course.  The great thing about humans is that we adapt better than other creatures. When it comes to technological change, resiliency is hard-wired into our genes.  We learn how to use the new tools that are given to us and gradually assimilate them into our lives and culture.  Indeed, we have lived through more radical revolutions than the Information Revolution. We can adapt and learn to live with some of the legitimate difficulties & downsides of the Information Age.

• The pessimists are at their best when highlighting the very legitimate concerns about the challenges that accompany technological change, including the impact of the digital revolution on “professional” media and the decline of authority among trusted experts and intermediaries.
  • we absolutely don’t want to lose all that
  • there are real benefits associated with it
  • and we need to find a way to fund “professional” media / art going forward

• But, practically speaking, what would the pessimists have us do if we can’t mitigate these problems? Would they roll back the clock with burdensome restrictions? As Ben Casnocha noted recently: “the wind at the backs of all techno-optimists … [is] the forward momentum of technological development. You cannot turn back the clock. It is impossible to envision a future where there is less information and fewer people on social networks. It is very possible to envision increasing abundance along with better filters to manage it. The most constructive contributions to the debate, then, heed Moore’s Law in the broadest sense and offer specific suggestions for how to harness the change for the better.”  That’s what many pessimists have failed to do in their works.

Thoughts on the Optimists…

• The optimists currently have the better of the debate as the abundance of Web 2.0 riches is generally benefiting culture / society.

• Relative to the past it is almost impossible to see how one could argue society has not benefited from the Internet and new digital technologies. The Digital Revolution has greatly empowered masses and offered them more informational inputs.

• An age of abundance is certainly preferable to an age of information scarcity!

• But optimists need to be less Pollyanna-ish and avoid becoming the “technopolists”  (or digital utopians) that Postman feared were taking over our society
  • Way too much Rousseauian romanticism at work in some optimist writings. All this talk of the Net “remaking man” or human nature is pure rubbish.
  • Not all change is good change; the optimists need to be mature enough to understand and address the occasional downsides of digital life without dismissing the critics.
  • And they need to acknowledge that sometimes the wisdom of crowds really can = the stupidity of crowds (when does collective intelligence devolve into herd mentality?) And all this crazy talk of “the hive mind” and the “noosphere” must end.  Some of optimists sound like they long for life in The Matrix; bring on the Singularity!  That’s when you know an optimists has crossed over into the realm of quixotic techno-utopianism.

• Optimists often overplay the benefits of collective intelligence, collaboration, and the role of amateur production.  They need to frame Wiki / peer-production models as a complement to professional media, not a replacement for it.
  • Could The New York Times really be cobbled together by amateurs each day?
  • Why aren’t there any really compelling open source video games?
  • There is a big difference between “remix culture” and “rip-off culture”
  • “The Long Tail” is not “the future of all business”; but it is an increasingly important part of it, and it is wonderful that it is so much more accessible than it was in the past.
  • Will we really be better off if all professionals & intermediaries disappear? Optimists play the “old media just don’t get it” card too often and snobbishly dismiss all their concerns and efforts to reinvent themselves

• Optimists need to place technological progress in context and appreciate that, as Postman argued, there are some moral dimensions to technological progress that deserve attention.

• Of course, on the other hand, some of those moral consequences are profoundly positive, which the pessimists usually fail to appreciate or even acknowledge.

Conclusion: Toward “Pragmatic Optimism”

• Generally speaking, I believe the optimists currently have the better of the debate. It is impossible for me to believe that we were better off in an era of information poverty & un-empowered masses.

• But there’s a kernel of truth to what the pessimists predict about how the passing of the old order leaving society without some things that might be worth preserving.  And they are certainly correct that each of us should think about how to better balance new technologies and assimilate them into our lives.

• The sensible middle ground position is “pragmatic optimism”: We should embrace the amazing technological changes at work in today’s Information Age but do so with a healthy dose of humility and appreciation for the disruptive impact and pace of that change. [See my “Pragmatic (Internet) Optimist’s Creed” below]

• We need to think about how to mitigate the negative impacts associated with technological change without adopting the paranoid tone or Luddite-ish recommendations of the pessimists.

• And it is important for us to personally exercise some personal restraint in terms of the role technology plays in our life. While pessimists from Plato and Postman certainly went too far, there is a kernel of truth to their claim that, taken to an extreme, technology can have a negative impact on life and learning.  We need to focus on the Aristotelian mean. We must avoid neo-Luddite calls for a return to “the good ‘ol days” on the one hand, while also rejecting techno-utiopian Pollyanna-ism on the other

• Regardless, the old Theuth-Thamus debate about the relationship between technological change and its impact on culture and society will continue to rage. There is no chance this debate will die down anytime soon. And just wait till virtual reality goes mainstream!  Oh brother, now that is going to be a lively debate. I might turn into a Thamusian once I find my son playing a virtual gangster or pimp in “Grand Theft Auto 12: The Immersive Experience.”

• Nonetheless, generally speaking, I remain quite bullish about the prospects for technology to generally improve the human condition.

The Pragmatic (Internet) Optimist’s Creed

by Adam Thierer

I believe that the Internet and digital technologies are reshaping our culture, economy, and society in most ways for the better, but not without some serious heartburn along the way.

I believe that the world of information abundance that has dawned is vastly superior to the world of information poverty that we just left. But I also understand that not all information is equal and that that the rise of abundance raises concerns about information overload, objectionable content, and the role of “authority” and “truth.”

I believe the era of traditional Mass Media is coming to an end, but “professional” media institutions and creators continue to play a vital role in the creation, aggregation, and dissemination of news, information, culture, and entertainment. The Internet, however, will force gut-wrenching changes on traditional media institutions and some of the more traditionally vital ones (ex: daily local newspapers) will struggle to re-invent themselves, or may wither away entirely. And while I believe that “professional” journalism faces very serious challenges from the rise of the Internet and user-generated content, but I also believe that hybrid forms of news-gathering and reporting are offering society exciting new ways to learn about the world around them.

I believe Wikipedia is an amazing example of collection action / intelligence at work, but I also understand it is not without flaws and limitations. I believe Wikipedia is a wonderful complement, but not a complete substitute, for other media and information sources and inputs.

I believe that free and open source software (FOSS) has produced enormous social / economic benefits, but I do not believe that FOSS (or “wiki” models) will replace all proprietary business models or methods.  Each model or mode of production has its place and purpose and they will continue to co-exist going forward, albeit in serious tension at times.

I believe the Long Tail is a powerful phenomenon, but not “the future of all business.” It is now a more important part of the future of business, but not the entirety of it. But it is wonderful that it is more accessible than ever and that we have found ways to monetize it to benefit less well know creators and innovators.

I believe there is a difference between “remix culture” and “ripoff culture.”  Remix culture generally enhances and extends culture and creativity. Blatant content piracy, on the other hand, can discourage the creative efforts of the citizenry and deprive some of society’s most gifted creators of the incentive to produce culturally beneficial works. Likewise, hacking, circumvention, and reverse-engineering all play an important and legitimate role in our new digital economy, but one need not accept the legitimacy of those activities when conducted for nefarious purposes (think identity theft or chip-modding to facilitate video game piracy.)

I believe that the Internet has empowered the masses and created a world of “pro-sumers” that gives every man, woman, and child a soapbox on which to speak to the world. But that does not mean that all of them will have something interesting to say, and I won’t praise user-generated content as a good in and of itself. It’s quality, not volume, that counts.

I believe that the Internet’s empowering nature has changed much about society and culture, but I do not believe in the romanticism some espouse about how the Net “remaking man” or changing human nature in any fundamental way. The Internet does not liberate us from all earthly constraints and it cannot magically solve all of civilization’s problems.

I believe that the Internet is reinvigorating deliberative democracy and giving us increased exposure to a breathtaking diversity of views previously inaccessible. On the other hand, I understand that some will often seek out only those views that reinforce their pre-existing biases.

I believe in the liberating power of freedom of speech and expression, and appreciate that the Internet and the rise of user-generated content has given us a world of unprecedented information and cultural riches. I also understand, however, that unrestricted freedom of speech and expression permits an increase in the prevalence of objectionable, even loathsome, speech and content. On net, however, (excuse the pun) the Internet is the most important medium of human communication and expression yet.

In sum, there are more reasons to be optimistic than pessimistic about the Internet and its role in shaping our lives, culture, economy, and society. But that doesn’t mean it will be all roses going forward.

­­­­___

Additional Reading (from me):

• Two Schools of Internet Optimism
• The Digital Decade’s Definitive Reading List: Internet & Info-Tech Policy Books of the 2000s
• Grouping Recent Net Books: Internet Optimists vs. Pessimists
• Can Humans Cope with Information Overload? Tyler Cowen & John Freeman Join the Debate
• Book Review: Clay Shirky’s Cognitive Surplus: Creativity and Generosity in the a Connected Age
• Book Review: Jaron Larnier’s You Are Not a Gadget: A Manifesto
• Book Review: A Better Pencil by Dennis Baron
• Book Review: Lee Siegel’s Against the Machine
• Book Review: Nick Carr’s Big Switch and The Shallows
• Book Review: Digital Barbarism by Mark Helprin
• Thoughts on Andrew Keen, Part 1: Why an Age of Abundance Really is Better than an Age of Scarcity
• Thoughts on Andrew Keen, Part 2: The Dangers of the Stasis Mentality
• The 10 Most Important Info-Tech Policy Books of 2009
• The Most Important Tech Policy Books of 2008

Additional Reading (from others):

• Plato on writing
• Cyberspace and Information Overload (by Tim Lee)
• Michiko Kakutani essay in the New York Times, “Texts Without Contexts”
• Andrew McAfee’s terrific essay “I Know I’m Not the Only Internet Optimist…” from his blog
• the great PBS documentary about these issues: “Digital Nation: Life on the Virtual Frontier” (+ my thoughts on the film)
• a video from a Family Online Safety Institute event about the PBS documentary that features a discussion about Internet optimism vs. pessimism
• Gordon Crovitz of The Wall Street Journal asks “Is Technology Good or Bad?”
• Peggy Noonan of The Wall Street Journal argues that “Information Overload is Nothing New“
• “Technology Sabbaths and Other Strategies for the Digitized World,” by Michael Sacasas
• “Are We Too Plugged In? Distracted vs. Enhanced Minds“, by Aaron Saenz at the Singularity Hub blog

• and here’s a great video from 1995 featuring the late Neil Postman with his pessimistic take on cyberspace..

Also, courtesy of the Brain Pickings blog, check out this amazing 1972 documentary based on Alvin Toffler’s famous 1970 book, Future Shock. It perfectly foreshadowed so many of today’s technology policy debates.

Last week I commented on a severely one-sided FCC net neutrality hearing that featured a endless parade of horribles being prophesied by virtually every speaker. The litany of spooky stories became tedious and absurd. Everyone foretold of the impending doom that awaits unless government intervenes to save us from various corporate conspiracies to “silence” our voices.  Unsurprisingly, evidence was in short supply. It was pure Chicken Little poppycock.

This got me thinking again about what I have referred to as the “problem of proportionality.” I have discussed the problem of proportionality in the context of public policy debates about online safety and privacy, but it seems equally applicable to debates about net neutrality. Here’s how I explained the “problem of proportionality” in an earlier essay:

let’s think about how some of our lawmakers and media personalities talk about the Internet.  If we were to judge the Internet based upon the daily headlines in various media outlets or from the titles of various Congressional or regulatory agency hearings, then we’d be led to believe that the Internet is a scary, dangerous place. That ’s especially the case when it comes to concerns about online privacy and child safety. Everywhere you turn there’s a bogeyman story about the supposed dangers of cyberspace. But let’s go back to the numbers. While I certainly understand the concerns many folks have about their personal privacy or their child’s safety online, the fact is the vast majority of online transactions that take place online each and every second of the day are of an entirely harmless, even socially beneficial nature.  I refer to this disconnect as the “problem of proportionality” in debates about online safety and privacy. People are not just making mountains out of molehills, in many cases they are just making the molehills up or blowing them massively out of proportion.

Again, much the same is true of net neutrality. Indeed, it is even more true since actual net neutrality “incidents” are so hard to come by.  I was reminded of this recently when I was reading some stats posted over at the Verizon Policy Blog by Link Hoewing, Verizon’s Assistant Vice President of Internet and Technology Issues. Link wrote, “every day over Verizon’s network, 100 million people connect using a cell phone, landline phone or broadband connection. The amount of information they send back and forth is staggering:”

• 1.7 billion text messages exchanged
• 50 million video/pictures exchanged
• 400 million e-mails received
• 8.7 petabytes of video streamed—the equivalent of 4 million full-length movies
• 1 billion phone calls connected

Indeed, those are staggering numbers. And I have seen similar numbers from other operators, although not quite as large as this.

But what I find most remarkable when I hear data about daily traffic volume is that all this activity is taking place without a peep about net neutrality “violations,” you know, like those nefarious-minded corporate conspiracies to “silence” us by blocking speech or expression.  Now, how can that be?  After all, we don’t have a net neutrality law on the books today.  There’s nothing stopping these carriers from engaging in the sort of behavior the worrywarts were predicting at last week’s hearing.

Of course, the critics would counter with the old “it’s-only-a-matter-of-time!” argument, or claim that the operators are on their best behavior right now because so many are watching for potential net neutrality violations. But there’s no way to prove that one way or the other. It’s all just conjecture at this stage. Regardless, the fact remains: trying to find actual net neutrality “violations” today is not just needle-in-the-haystack hard, it’s darn near impossible.

The better explanation for why that is the case comes down to simple economics and sound business practices: (1) ISPs have no incentive to block traffic since they only make money make money by carrying more content, not less; and (2) angering customers and getting a bad rap with the press is really bad for business — as in lost customers, lost shareholders, and therefore, lost profits.

So, it’s important to bring a little sanity and proportionality back to debates about net neutrality. There’s just no evidence supporting the horror stories bandied about about pro-regulatory critics. Billions of transactions are taking place online each and every day without any neutrality “violations” whatsoever.

2009 was not as big of a year for Internet and information technology (“info-tech”) policy books as 2008 was, but there were still some notable titles released that offered interesting perspectives about the future of the Net and the impact the Digital Revolution is having on our lives, culture, and economy.  So, like last year, I figured I would throw together my list of the 10 most important info-tech policy books of the year.

First, let me repeat a few of the same caveats and disclaimers that I set forth last year.  What qualifies as an “important” info-tech policy book? Simply put, it’s a title that many people are currently discussing and that we will likely be referencing for many years to come.  However, I want to be clear that merely because a book appears on my list it does not necessarily mean I agree with everything said in it. In fact, as was the case in previous years, I found much with which to disagree in my picks for the most important books of 2009 and I find that the cyber-libertarianism I subscribe to has very few fans out there.

Another caveat: Narrowly-focused titles lose a few points on my list. For example, if a book deals mostly with privacy issues, copyright law, or antitrust policy, it does not exactly qualify as the same sort of “tech policy book” as other titles found on this list since it is a narrow exploration of just one set of issues with a bearing on technology policy.

With those caveats in mind, here are my choices for the Most Important Info-Tech Policy Books of 2009.

(1) Chris Anderson – Free: The Future of a Radical Price

Chris Anderson’s 2006 book The Long Tail will be remembered as one of the most influential tech policy books of the decade.  It changed the way we talk about the digital marketplace and it instantly garnered a huge audience outside of the nerdy world of Internet policy.  While Free: The Future of a Radical Price will forever live in the shadow of The Long Tail, it too is an important book and in many ways it is a much better one.

In The Long Tail, Anderson tried too hard to invent the latest business theory du jour, and in doing so he went much too far in proclaiming that, as the subtitle of the book argued, “the future of the business is selling less of more.”  That’s just not true. While there’s certainly a lot more action in the long tail than ever before since it is so much more accessible, that does not mean the entire future of business lies in “selling less of more.”  To the contrary, the fat head of the tail is just as profitable as ever.

Free certainly contains some of the flamboyance on display in The Long Tail, but Anderson has matured as a writer and is now far more willing to point out the limitations of his theories in a business sense.  He does a splendid job in Free of creating a taxonomy of free-oriented business models to guide discussions about these issues.  And he explains how “free” can be part of many different business models and strategies. His historical treatment of the issues is outstanding and includes many entertaining examples of how these “free” strategies have been used over time to offer innovative new goods and services.

The reason his book is important for Internet policy discussions is obvious: “free” is increasingly viewed as a threat to many existing companies, industry sectors, and traditional media business models.  For example, battles about the future of journalism and search engine indexing of news sites are obviously tied up with battles over “free.”  And, it goes without saying that the traditional entertainment industry business models are increasingly challenged by “free” as many struggle to adapt to the new realities of the online world, in which “free” (primarily advertising-supported  and “freemium” models) seems to be the only model with any legs.

Much like my top pick for 2008 book of the year, Jonathan Zittrain’s The Future of the Net and How to Stop It, Chris Anderson’s Free is the most important information technology book of the year because it is the one we will still be talking about the most a decade from now.  However, unlike Zittrain’s book and thesis, which I think will be largely discredited in another ten years, Anderson’s book will likely be viewed as an important and lasting contribution to the field.

(2) Larry Downes – The Laws of Disruption: Chaos and Control in Your Virtual Future

The Laws of Disruption is the closest thing you will find to a genuine cyber-libertarian manifesto these days.  But Downes isn’t a rigid ideologue; his skepticism of government regulation of the high-tech economy is based more on practical considerations and the fundamental “law of disruption”: “technology changes exponentially, but social, economic, and legal systems change incrementally.” Downes says this law is “a simple but unavoidable principle of modern life” and that it will have profound implications for the way businesses, government, and culture evolve going forward. “As the gap between the old world and the new gets wider,” he argues, “conflicts between social, economic, political, and legal systems” will intensify and “nothing can stop the chaos that will follow.” In this sense, The Laws of Disruption reads like an addendum to one of Alvin Toffler’s old books on technology and futurism in that Downes is essentially walking us through the practical consequences of life in a “post-industrial society.”

In terms of what it all means for public policy, Downes doesn’t so much fear legal and regulatory over-reach the way many cyber-libertarians do. Rather, he thinks most regulatory schemes just won’t work. In essence, he is a technological fatalist or consequentialist: Progress happens whether we like it or not, so get used to it!  Thus, the “laws of disruption” he articulates serve primarily as “Just-Don’t-Bother” warnings to over-eager government meddlers. “The best way to regulate innovation is to leave it alone,” he counsels.

In terms of structure, The Laws of Disruption resembles Blown to Bits: Your Life, Liberty, and Happiness After the Digital Explosion by Abelson, Ledeen, and Lewis, (which I reviewed here last year and named to my 2008 list). Both books survey a vast swath of territory — privacy, copyright, security, etc — and each chapter offers unique perspectives on each debate. In that sense, the book is useful to readers if for no other reason than you get a taste for how a wide variety of issues are playing out. Downes also owes much to Clayton M. Christensen and his seminal 1997 book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Like that book, The Laws of Disruption is a business book with a strong policy hook.  That is, both books focus on advice-dishing for companies and innovators looking to “stay ahead of the curve” in the midst of relentless, gut-wrenching technological change, but the books also include important lessons regarding the public policies that should govern high-tech sectors.

I highly recommended The Laws of Disruption and found it to be the most enjoyable of all the books I read this year.

(3) Dawn C. Nunziato – Virtual Freedom: Net Neutrality and Free Speech in the Internet Age

Dawn Nunziato is the perfect foil for Larry Downes. Her book is a manifesto for cyber-collectivism and “media access theory.”  (For those unfamiliar with media access theory, see my old essay: “Your Soapbox is My Soapbox! Thoughts on the Media Access Movement in General and the Media & Democracy Coalition’s ‘Bill of Media Rights’ in Particular.”)  She attempts to bring media access theory up to date by taking the ideas made famous by Jerome Barron, Owen Fiss, Cass Sunstein, and others, and applying them to the Internet and digital technologies.  Like those earlier legal thinkers, she argues for “an affirmative conception” of the First Amendment that would allow government to use the First Amendment to “facilitate the conditions necessary for democratic self-government” (whatever that means). Net neutrality regulation becomes one of many ways she would put this theory into action. Importantly, she would not stop with ISPs. She makes the case for extending the entire regulatory regime to Google and search platforms. Welcome to the Brave New World of the the FCC as the Federal Search Commission or Federal Cloud Commission!

Her attempt to cast Net neutrality as the Internet’s First Amendment is a grotesque contortion of the real First Amendment, and a complete betrayal of the Founder’s original intentions.  As I made clear in my recent essay on “Net Neutrality Regulation & the First Amendment,” the Internet’s First Amendment is the First Amendment, not some new, top-down, heavy-handed regulatory regime that puts the Federal Communications Commission in control of the Digital Economy. Her conception of the First Amendment would convert it from a shield against government control into a sword that the government could use as it wished. It would mean that “Congress shall make no law…” would suddenly be replaced by “Congress shall make whatever law it wants” so long as it serves some amorphous “public interest.” Can you say “tyranny of the majority”?

Regardless, event though I find her views to be morally repugnant and the antithesis of true digital freedom, Nunziato’s book is a concise articulation of that vision and it deserves everyone’s attention. It serves as a blueprint for where the Net neutrality wars are taking us.

(4) David Bollier – Viral Spiral: How the Commoners Built a Digital Republic of Their Own

David Bollier’s Viral Spiral is the first major history of the “digital commons” / “free culture” movement, and despite my many person disagreements with him and this movement, it is an excellent treatment of the topic. Bollier surveys this growing intellectual movement from its early open source days to the rise of the Creative Commons and on into the present.  The cast of characters in this drama will be well-known to anyone involved in modern tech policy debates: Richard Stallman, Lawrence Lessig, Jonathan Zittrain, Yochai Benkler, et al.

There is absolutely no doubt that this intellectual movement is winning the war of ideas in cyberlaw front today, as I noted in a recent debate with Lessig and Zittrain over at Cato Unbound.  As a cyber-libertarian, I find myself occasionally at odds with these guys and this movement on a variety of policy issues, but that didn’t stop me from enjoying David Bollier’s treatment of this movement and these issues.

(5) David Post – In Search of Jefferson’s Moose: Notes on the State of Cyberspace

David Post is one of the early intellectual giants in the field of cyberlaw. Back in the days when most of us were still just trying to get our 14.4 modems to work properly to get on Al Gore’s “Information Highway,” David Post was writing essays and law review articles that were a decade ahead of their time.  In particular, his work on Internet governance and jurisdictional matters was path-breaking, and much of it is updated and extended in Jefferson’s Moose.

I must admit, however, that I was hoping for a bit more from David in this book.  Beyond just being a first-rate intellectual in this space, he is also one of the few remaining defenders of “Internet exceptionalism,” and he has genuine cyber-libertarian leanings.  After waiting almost 10 years for David to wrap this thing up after he first told me about it back around 2000, I was thinking he might come up with the sort of cyber-libertarian manifesto I’ve always hoped he would write.  Although he fell a bit short in that regard, it doesn’t mean it’s not a good book. It is. You will enjoy it no matter what cyber-philosophy you subscribe to.

Read my entire review of Jefferson’s Moose here.

(6) Dennis Baron – A Better Pencil: Readers, Writers, and the Digital Revolution

Baron’s A Better Pencil is a splendid history of techno-pessimism and the endless battles about the impact of new technologies on life and learning, something I have written about here before in my essays on “Internet optimists vs. pessimists” (See: 1, 2, 3).   Baron notes that almost as soon as people learned to put chisel to stone and then quill to paper, a great debate began about the impact of new communications technology on culture and education. And that debate rages on today with a new generation of optimists and skeptics battling over the impact that computing, the Internet, and digital technologies have on our lives and on how we learn about the world.

Baron walks us through a litany of historical examples—the printing press, the telegraph, telephones, typewriters, pocket calculators, personal computers, word processors, webpages, blogs, social-networking sites, and more—and identifies the usual pattern: we greet each new technology with deep distrust and dire warnings, but in time we adapt to the new realities. Indeed, as a species, we have an unparalleled ability to learn new ways of doing things. We don’t always like technological change, and often we deeply resent or fear it, but in the end, we learn to live with it and eventually to embrace it.  With the rise of the Internet and digital technologies, we see this pattern unfolding once again. But Baron counsels patience and understanding instead of the sort f hysteria and backlash we see from the likes of Andrew Keen, Lee Siegel and others.  It’s a refreshing and uplifting perspective.

Highly recommended. See my complete review of Baron’s A Better Pencil over at the City Journal website.

(7) Mark Helprin – Digital Barbarism: A Writer’s Manifesto

No book has been more disappointing to me in recent memory than Mark Helprin’s Digital Barbarism. As someone who still finds a lot to defend in copyright law, I was excited when I learned that one of America’s most gifted authors–and the author of my favorite literary work of the late 20th century (A Soldier of the Great War)–was taking a crack defending copyright in a short manifesto.

Alas, as I argued in my review of the book for National Review, while Helprin occasionally rises to great heights in his defense of copyright, he too often sinks to lamentable lows–by resorting to the same unbecoming rhetorical tactics used by the “cyber-mob” he seeks to condemn. Indeed, his book is filled with gratuitous vitriol and neo-Luddite ramblings about the Internet and Information Age that severely detract from his defense of copyright. Channeling the ghost of the late social critic Neil Postman, Helprin’s critique of copyright skeptics quickly turns into an all-out assault on modern digital culture and cyberspace. He argues that we are witnessing “the decline of culture,” the “mechanization of the soul,” our “intellectual and spiritual destruction,” and the rise of a movement of “wacked-out muppets led by little professors in glasses” that “threatens in a decade or two to dissolve the accomplishments of millennia, reordering the ways in which we think, write, and communicate.” And it just gets worse from there. Much like recent rants by Andrew Keen and Lee Siegel, Helprin speaks repeatedly about the “surrender of human nature” to “the machine revolution” and the corresponding need to “control the machine.”

How a man who has penned some of the most beautiful prose in modern times could craft an off-the-rails screed of this magnitude remains incomprehensible  to me.  What’s worse is that he set back the cause of defending what’s best about copyright in the process. Luckily for Helprin, there’s plenty of hysteria on the other side, as the next book on my list makes clear.

(8) William Patry – Moral Panics and the Copyright Wars

Bill Patry is an angry man. He is the anti-Helprin. The vitriol that Helprin directs against the copyright-haters is reversed in this screed and turned against not just copyright holders and content creators, but against the entire capitalist system. Patry, who is the author of a multi-volume treatise on copyright law, has done the intellectual equivalent of “going postal” within his own intellectual community. He has turned his intellectual guns on anyone and everyone who has ever had a kind word to say about copyright. He cannot find one nice thing to say about copyright or anyone who defends copyright in this book. Not one.

What’s most ironic about the book is that Patry seems utterly oblivious to the fact that in the process of critiquing the inflammatory rhetoric and “misuse of language” occasionally emanating from some copyright defenders, he goes completely over the top himself and engages in even more egregious rhetorical flourishes. Choice gems from the book include: “digital guillotines,” copyright as “cancer,” “copyright dwarves,” Maoism, the “sins” of copyright, “socialism for the wealthy,” and a comparison of the DMCA to “Mussolini’s Fascist Italy.”  Apparently when it comes to the “misuse of language,” Patry believes that two wrongs make a right.

And then there is his mind-boggling conclusion that: “I cannot think of a single significant innovation in either the creation or distribution of works of authorship that owes its origins to the copyright industries.”  Apparently, every great book, every great movie, every great video game, and ever great musical composition of the past century was done solely for the love of it all. Copyright had apparently had absolutely nothing to do with it according to Patry’s logic. That is just an astonishingly naive notion, in my opinion. Apparently this man’s hatred for copyright-related industries is so intense that it has blinded him to any potentially positive effects of copyright law. If nothing else, it would have been nice to see Mr. Patry address how it is that America is the world’s leading creator and exporter of creative arts.  Certainly copyright law must have had something to do with that!

Chapter 5 of his book makes it clear that Patry’s critique of copyright is actually rooted in a much deeper suspicion about capitalism itself.  He speaks of “the myth of economic freedom” and claims that “free market fundamentalism… destroyed much of the world’s economies.”  He then launches into a neo-Marxist critique of property rights more generally, treating property as a zero-sum game of winners and losers.  At times it all begins to sound like a rant from an old Herbert Marcuse book with questions like: “why are the interests of one social group favored over another?” and “What social objective is being furthered by the decision to privilege one group over another?”  And there’s all sorts of talk about “regulation in the public interest,” which I have critique as a meaningless non-standard here many times before.

In the end, Patry’s book will–along with Helprin’s–long be remember as marking the nadir in the “copyright wars;” a moment when grown men of great intelligence decided to trade in their integrity for the opportunity to engage in below-the-belt rhetorical cheap shots that would typically be reserved for college student debating politics over beers and shots at two in the morning.  They should both be ashamed of themselves.

(9) Gary Reback – Free the Market!  Why Only Government Can Keep the Marketplace Competitive

Gary Reback’s over-the-top ode to antitrust as the great savior of capitalism reads like an extended love letter. As I noted in my lengthy critique of his book, his fairy tale narrative of antitrust as the savior of capitalism is hopelessly one-sided, and his recommendations to expand antitrust enforcement wouldn’t “Free the Market” as he argues in his book’s shameful title, but would instead wrap it in regulatory chains.

He repeatedly insults the intelligence of the reader by claiming antitrust is supposedly not a form of economic regulation and that is can only have beneficial effects. He wants antitrust officials to intervene early and often in high-tech markets to guide markets to a supposedly better place. Reback considers just about everything “the Chicago School” taught us to be antitrust apostasy and he would like to erase four decades worth of economic literature and evidence that suggests antitrust law is a form of economic regulation and does have unintended consequences that often hurt consumer welfare.  Even if you are not an inherent antitrust skeptic like me, I think most people would hope for a better treatment of the other side of this story.

Read my lengthy review of Reback’s Strangle Free the Market here.

(10) tie – Tyler Cowen – Create Your Own Economy: The Path to Prosperity in a Disordered World and John Freeman – The Tyranny of E-Mail: The Four-Thousand-Year Journey to Your Inbox

OK, so I just couldn’t figure out which of these two to cut from the list so I took the easy way out by having them tie for the last slot!  In this case, however, there’s another reason it makes sense for both of them to round out the list: Both Freeman and Cowen explore how humans are coping with information overload–albeit from two very different perspectives.

As I noted in my lengthy essay on the topic earlier this year, Cowen is an unrepentant optimist. He believes humans have the ability to adapt to new technological realities and a world of information abundance. In fact, Cowen argues, new tools and information gathering and processing technologies actually “lengthens our attention spans in another way, namely by allowing greater specialization of knowledge.”

John Freeman, by contrast, wants us all to take a high-tech time out. Like other Internet skeptics, he is worried that cyberspace and digital technologies are reshaping humanity–and not for the better. “If we are to step off this hurtling machine, we must reassert principles that have been lost in the blur,” he argues. “It is time to launch a manifesto for a slow communication movement, a push back against the machines and the forces that encourage us to remain connected to them.”

Unlike most other Internet pessimists, however, Freeman’s tone is more measured and his recommendations more reasonable.  Of course, it helps that he is magical wordsmith. Even if you find yourself disagreeing with many of his ultimate conclusions–as I did–you should read The Tyranny of E-Mail for a lesson in how to construct an argument and to appreciate the gift of fine writing. It’s easily the best tract by any Net skeptic since Nick Carr’s The Big Switch, and a much better one in many ways. It will force you to ask tough questions about the impact of the Information Age on you and the world around you.  Nonetheless, I remain an unrepentant techno-optimist (albeit a pragmatic one)!

Honorable Mentions: Here are a couple of other books that I couldn’t fit on my list but that you might want to also consider adding to your bookshelf:

• Manuel Castells – Communication Power
• James Boyle – The Public Domain: Enclosing the Commons of the Mind
• Randall Stross – Planet Google: One Company’s Audacious Plan to Organize Everything We Know [my review]
• Ken Auletta – Googled: The End of the World As We Know It [my review]
• Scott Rosenberg- Say Everything: How Blogging Began, What It’s Becoming, and Why It Matters
• John W. Dozier Jr. and Sue Scheff – Google Bomb

Please let me know what titles might be missing from this list and which books you think are the best of the year.

And speaking of bookshelves, here’s my Shelfari digital bookshelf in case anyone is interested. If you hadn’t figured it out yet, I am a bit of book nerd!  My life is spent swimming through oceans of paper.  My friends often ask me, “How can you spend so much time reading?” My question back to them is: “How can you not?”

Rebecca MacKinnon has an important piece in the Wall Street Journal today about China’s “Green Dam Youth Escort” filtering mandate and the danger of this model catching on with other governments. “More and more governments — including democracies like Britain, Australia and Germany — are trying to control public behavior online, especially by exerting pressure on Internet service providers,” she notes. “Green Dam has only exposed the next frontier in these efforts: the personal computer.”

She’s right, and that’s cause for serious concern.  Moreover, there’s the question of how corporations doing business in China should respond to demands and threats related to installing such filters. She notes:

In a world that includes child pornographers and violent hate groups, it is probably not reasonable to oppose all censorship in all situations. But if technical censorship systems are to be put in place, they must be sufficiently transparent and accountable so that they do not become opaque extensions of incumbent power — or get hijacked by politically influential interest groups without the public knowing exactly what is going on. Which brings us back to companies: the ones that build and run Internet and telecoms networks, host and publish speech, and that now make devices via which citizens can go online and create more speech. Companies have a duty as global citizens to do all they can to protect users’ universally recognized right to free expression, and to avoid becoming opaque extensions of incumbent power — be it in China or Britain.

I generally agree with all that but this is a difficult issue and one that I have struggled with personally. (See this “Friendly Conversation about Corporate High-Tech Engagement with China” that Jim Harper and I had three years ago).  But I do hope that more companies take a hard line with the Chinese as well as there own governemnts when it comes to filtering mandates or even restricitve parental control defaults and settings [an issue I wrote more about in this paper: “The Perils of Mandatory Parental Controls and Restrictive Defaults.”]  On that note, kudos to the business groups that already signed on to a joint letter oppossing China’s new filtering mandate.

Over at the Verizon Policy Blog, Link Hoewing has a sharp piece up entitled, “Of Business Models and Innovation.” He makes a point that I have often stressed in my debates with Zittrain and Lessig, namely, that the whole “open vs. closed” debate is typically greatly overstated or misunderstood.   Hoewing correctly argues that:

The point is not that open or managed models are always better or worse.  The point is that there is no one “right” model for promoting innovation.  There are examples of managed and open business models that have been both good for innovation and bad for it. There are also examples of managed and open models that have both succeeded and failed.  The point is in a competitive market to let companies develop business models they believe will serve consumers best and see how things play out.

Exactly right.  Moreover, the really important point here is that there exists a diverse spectrum of innovative digital alternatives from which to choose. Along the “open vs. closed” spectrum, the range of digital technologies and business models continues to grow and grow in both directions.  Do you want wide-open, tinker-friendly devices, sites, or software? You got it. Do you want a more closed, simple, and safe online experience?  You can have that, too.  And there are plenty of choices in between.

This is called progress!