Today, the U.S. Department of Transportation released its eagerly-awaited “Federal Automated Vehicles Policy.” There’s a lot to like about the guidance document, beginning with the agency’s genuine embrace of the potential for highly automated vehicles (HAVs) to revolutionize this sector and save thousands of lives annually in the process.

It is important we get HAV policy right, the DOT notes, because, “35,092 people died on U.S. roadways in 2015 alone” and “94 percent of crashes can be tied to a human choice or error.” (p. 5) HAVs could help us reverse that trend and save thousands of lives and billions in economic costs annually. The agency also documents many other benefits associated with HAVs, such as increasing personal mobility, reducing traffic and pollution, and cutting infrastructure costs.

I will not attempt here to comment on every specific recommendation or guideline suggested in the new DOT guidance document. I could nit-pick about some of the specific recommended guidelines, but I think many of the guidelines are quite reasonable, whether they are related to safety, security, privacy, or state regulatory issues. Other issues need to be addressed and CEI’s Marc Scribner does a nice job documenting some of them is his response to the new guidelines.

Instead of discussing those specific issues today, I want to ask a more fundamental and far-reaching question which I have been writing about in recent papers and essays: Is this guidance or regulation? And what does the use of informal guidance mechanisms like these signal for the future of technological governance more generally?

When Is “Voluntary” Really Mandatory?

The surreal thing about DOT’s new driverless car guidance is how the agency repeatedly stresses it “is not mandatory” and that the guidelines are voluntary in nature but then — often in the same paragraph or sentence — the agency hints how it might convert those recommendations into regulations in the near future. Consider this paragraph on pg. 11 of the DOT’s new guidance document:

The Agency expects to pursue follow-on actions to this Guidance, such as performing additional research in areas such as benefits assessment, human factors, cybersecurity, performance metrics, objective testing, and others as they are identified in the future. As discussed, DOT further intends to hold public workshops and obtain public comment on this Guidance and the other elements of the Policy. This Guidance highlights important areas that manufacturers and other entities designing HAV systems should be considering and addressing as they design, test, and deploy HAVs. This Guidance is not mandatory. NHTSA may consider, in the future, proposing to make some elements of this Guidance mandatory and binding through future regulatory actions. This Guidance is not intended for States to codify as legal requirements for the development, design, manufacture, testing, and operation of automated vehicles. Additional next steps are outlined at the end of this Guidance. [emphasis added.]

The agency continues on to request that “manufacturers and other entities voluntarily provide reports regarding how the Guidance has been followed,” but then notes how “[t]his reporting process may be refined and made mandatory through a future rulemaking.” (p. 15)

And so it goes throughout the DOT’s new “guidance” document. With one breath the DOT suggests that everything is informal and voluntary; with the next it suggests that some form of regulation could be right around the proverbial corner.

Agency Threats Are the Future of Technological Governance

What’s going on here? In essence, DOT’s driverless car guidance is another example of how “soft law” and “agency threats” are becoming the dominant governance models for fast-paced emerging technology.

As noted by Tim Wu, a proponent of such regimes, these agency threats can include “warning letters, official speeches, interpretations, and private meetings with regulated parties.” “Soft law” simply refers to any sort of informal governance mechanism that agencies might seek to use to influence private decision-making or in this case the future course of technological innovation.

The problem with agency threats, as my former Mercatus Center colleague Jerry Brito pointed out in a 2014 law review article, is that they are fundamentally undemocratic and represent a betrayal of the rule of law. The use of “threat regimes,” Brito argued, “places undue power in the hands of regulators unconstrained by predictable procedures.” Such regimes breed uncertainty by leaving decisions up to the whim of regulators who will be unconstrained by administrative procedures, legal precedents, and strict timetables. “[B]ecause it has no limiting principle,” Brito concluded, the agency threats model “leaves the regulatory process without much meaning” and “would obviously be ripe for abuse.”

The danger exists that we are witnessing gradual mission creep as the DOT’s “guidance” process slowly moves from being a truly voluntary self-certification process to something more akin to a pre-market approval process. Every “informal” request that DOT makes — even when those requests are just presented in the form of vague questions — opens the door to greater technocratic meddling in the innovation process by federal bureaucrats.

Coping with the Pacing Problem

Why are agencies like the DOT adopting this new playbook? In a nutshell, it comes down to the realization on their part that the “pacing problem” is now an undeniable fact of life.

I discussed the pacing problem at length in my recent review of Wendell Wallach’s important new book, A Dangerous Master: How to Keep Technology from Slipping beyond Our Control. Wallach nicely defined the pacing problem as “the gap between the introduction of a new technology and the establishment of laws, regulations, and oversight mechanisms for shaping its safe development.” “There has always been a pacing problem,” Wallach noted, but like other philosophers, he believes that modern technological innovation is occurring at an unprecedented pace, making it harder than ever to “govern” it using traditional legal and regulatory mechanisms.

Which is exactly why the DOT and whole lot of other agencies are now defaulting to soft law and agencies threat models as their old regimes struggle to keep up with the pace of modern technological innovation. As the DOT put it in its new guidance document: “The speed with which HAVs are advancing, combined with the complexity and novelty of these innovations, threatens to outpace the Agency’s conventional regulatory processes and capabilities.” (p. 8)  More specifically, the agency notes that:

The remarkable speed with which increasingly complex HAVs are evolving challenges DOT to take new approaches that ensure these technologies are safely introduced (i.e., do not introduce significant new safety risks), provide safety benefits today, and achieve their full safety potential in the future. To meet this challenge, we must rapidly build our expertise and knowledge to keep pace with developments, expand our regulatory capability, and increase our speed of execution. (p. 6)

Rarely has any agency been quite so blunt about how it is racing to get ahead of the pacing problem before it completely loses control of the future course of technological innovation.

But the DOT is hardly alone in its increased reliance on soft law governance mechanisms. In fact, I’m in the early research stages of a new paper about what soft law and agency threat models mean for the future of emerging technology and its governance. In that paper, I hope to document how many different agencies (FAA, FDA, FTC, FCC, NTIA, & DOT among others) are using some variant of soft law model to informally regulate the growing universe of emerging technologies out there today (commercial drones, connected medical devices, the Internet of Things, 3D printing, immersive technology, the sharing economy, driverless cars, and more.)

If nothing else, I would like to devise a taxonomy of soft law/agency threat models and then discuss the upsides and downsides of those models. If anyone has recommendations for additional reading on this topic, please let me know. The best thing I have seen on the issue is a 2013 book of collected essays on Innovative Governance Models for Emerging Technologies, edited by Gary E. Marchant, Kenneth W. Abbott and Braden Allenby. I’m surprised more hasn’t been written about this in law reviews or political science journals.

What Does It Mean for Innovation? And Accountable Government?

So, what does all this mean for the future of driverless cars, autonomous systems, and other emerging technologies? I think it’s both good and bad news.

The good news — at least from the perspective of those of us who want to see innovators freed up to experiment more without prior restraint — is that the technological genie is increasingly out of the bottle. Technology regulators are at an impasse and they know it. Their old regulatory regimes are doomed to always be one step behind the action. Thus, a lot of technological innovation is going to be happening before any blessing has been given to engage in those experiments.

The bad news is that the regulatory regimes of the future will become almost hopelessly arbitrary in terms of their contours and enforcement ceiling. Basically, in our new world of soft law and agency threats, you can tear up the Administrative Procedures Act and throw it out the window.  When regulatory agencies act in the future, they will do so in a sort of extra-legal Twilight Zone, where things are not always as they seem. Agencies will increasingly act like nagging nannies, constantly pressuring innovators to behave themselves. And sometimes that nagging will work, and sometimes it will even improve consumer welfare at the margin! It will work sometimes precisely because government still wields a mighty big hammer and no innovator wants to be nailed to the ground in the courts, or the court of public opinion for that matter. Thus, many — not all, but many — of those innovators will go along with whatever agencies like DOT suggests as “best practices” even if those guidelines are horribly misguided or have no force of law whatsoever. And because agencies know that many (perhaps most) innovators will fall in line with whatever “best practices” or “codes of conduct” that they concoct, it will reinforce the legitimacy of this model and become the new method of imposing their will on current or emerging technology sectors.

Again, agency threats won’t always work because some innovators will continue to engage in rough forms of “technological civil disobedience” and just ignore a lot of these informal guidelines and agency threats. Agencies will push back and seek to make an example of specific innovators (especially the ones with deep pockets) in order to send a message to every other innovator out there that they better fall in line or else!

But what that “or else!” moment or action looks like remains completely unclear. The problem with soft law is that, by its very nature, it is completely open-ended and fundamentally arbitrary. It is really just “ non-law law.” That’s the “legal regime” that will “govern” the emerging technologies of the present and the future.

Isn’t Soft Law Better Than the Alternative?

Now, here’s the funny thing about this messy, arbitrary, unaccountable world of soft law and agency threats: It is probably a hell of lot better than the old world we used to live in!

The old analog era regulatory systems were very top-down and command-and-control in orientation. These traditional regimes were driven by the desire of regulators to enforce policy priorities by imposing prior restraints on innovation and then selectively passing out permission slips to get around those rules.

As I noted in my latest book, the problem with those traditional regulatory systems is that they “tend to be overly rigid, bureaucratic, inflexible, and slow to adapt to new realities. They focus on preemptive remedies that aim to predict the future, and future hypothetical problems that may not ever come about. Worse yet, administrative regulation generally preempts or prohibits the beneficial experiments that yield new and better ways of doing things.” (Permissionless Innovation, p. 120)

For all the reasons I outlined in my book and other papers on these topics, “permissionless innovation” remains the superior policy default compared to precautionary principle-based prior restraints. But I am not so naïve as to expect that permissionless innovation will prevail in the policy world all of the time. Moreover, I am not one of those technological determinists who goes around saying that technology is an unstoppable force that relentlessly drives history, regardless of what policymakers say. I am more of a soft determinist who believes that technology often can be a major driver of history, but not without a significant shaping from other social, cultural, economic, and political forces.

Thus, as much as I worry about the new “soft law/agency threats” regime being arbitrary, unaccountable, and innovation-threatening, I know that the ideal of permissionless innovation will only rarely be our default policy regime. But I also don’t think we are going back the old regulatory regimes of the past and we absolutely wouldn’t want to anyway in light of the deleterious impacts those regimes had on innovation in practice.

The best bet for those of us who care about the freedom to innovate is to make sure that these soft law governance mechanisms have some oversight from Congress (unlikely) and the Courts (more likely) when agencies push too far with informal agency threats. Better yet, we can hope that the pace of technological change continues to accelerate and pressures agencies to only intervene to address the most pressing problems and then largely leaves the rest of the field wide open for continued experimentation with new and better ways of doing things.

But make no doubt about it, as today’s DOT guidance document for driverless cars makes clear, “agency threats” will increasingly shape the future of emerging technologies whether we like it or not.

I want to highlight an important new blog post (“Slow Down That Runaway Ethical Trolley“) on the ethical trade-offs at work with autonomous vehicle systems by Bryant Walker Smith, a leading expert on these issues. Writing over at Stanford University’s Center for Internet and Society blog, Smith notes that, while serious ethical dilemmas will always be present with such technologies, “we should not allow the perfect to be the enemy of the good.” He notes that many ethical philosophers, legal theorists, and media pundits have recently been actively debating variations of the classic “Trolley Problem,” and its ramifications for the development of autonomous or semi-autonomous systems. (Here’s some quick background on the Trolley Problem, a thought experiment involving the choices made during various no-win accident scenarios.) Commenting on the increased prevalence of the Trolley Problem in these debates, Smith observes that:

Unfortunately, the reality that automated vehicles will eventually kill people has morphed into the illusion that a paramount challenge for or to these vehicles is deciding who precisely to kill in any given crash. This was probably not the intent of the thoughtful proponents of this thought experiment, but it seems to be the result. Late last year, I was asked the “who to kill” question more than any other — by journalists, regulators, and academics. An influential working group to which I belong even (briefly) identified the trolley problem as one of the most significant barriers to fully automated motor vehicles. Although dilemma situations are relevant to the field, they have been overhyped in comparison to other issues implicated by vehicle automation. The fundamental ethical question, in my opinion, is this: In the United States alone, tens of thousands of people die in motor vehicle crashes every year, and many more are injured. Automated vehicles have great potential to one day reduce this toll, but the path to this point will involve mistakes and crashes and fatalities. Given this stark choice, what is the proper balance between caution and urgency in bringing these systems to the market? How safe is safe enough?

That’s a great question and one that Ryan Hagemann and put some thought into as part of our recent Mercatus Center working paper, “Removing Roadblocks to Intelligent Vehicles and Driverless Cars.” That paper, which has been accepted for publication in a forthcoming edition of the Wake Forest Journal of Law & Policy, outlines the many benefits of autonomous or semi-autonomous systems and discusses the potential cost of delaying their widespread adoption. When it comes to “Trolley Problem”-like ethical questions, Hagemann and I argue that, “these ethical considerations need to be evaluated against the backdrop of the current state of affairs, in which tens of thousands of people die each year in auto-related accidents due to human error.” We continue on later in the paper:

Autonomous vehicles are unlikely to create 100 percent safe, crash-free roadways, but if they significantly decrease the number of people killed or injured as a result of human error, then we can comfortably suggest that the implications of the technology, as a whole, are a boon to society. The ethical underpinnings of what makes for good software design and computer-generated responses are a difficult and philosophically robust space for discussion. Given the abstract nature of the intersection of ethics and robotics, a more detailed consideration and analysis of this space must be left for future research. Important work is currently being done on this subject. But those ethical considerations must not derail ongoing experimentation with intelligent-vehicle technology, which could save many lives and have many other benefits, as already noted. Only through ongoing experimentation and feedback mechanisms can we expect to see constant improvement in how autonomous vehicles respond in these situations to further minimize the potential for accidents and harms. (p. 42-3)

None of this should be read to suggest that the ethical issues being raised by some philosophers or other pundits are unimportant. To the contrary, they are raising legitimate concerns about how ethics are “baked-in” to the algorithms that control autonomous or semi-autonomous systems. It is vital we continue to debate the wisdom of the choices made by the companies and programmers behind those technologies and consider better ways to inform and improve their judgments about how to ‘optimize the sub-optimal,’ so to speak. After all, when you are making decisions about how to minimize the potential for harm — including the loss of life — there are many thorny issues that must be considered and all of them will have downsides. Smith considers a few when he notes:

Automation does not mean an end to uncertainty. How is an automated vehicle (or its designers or users) to immediately know what another driver will do? How is it to precisely ascertain the number or condition of passengers in adjacent vehicles? How is it to accurately predict the harm that will follow from a particular course of action? Even if specific ethical choices are made prospectively, this continuing uncertainty could frustrate their implementation.

Again, these are all valid questions deserving serious exploration, but we’re not having this discussion in a vacuum. Ivory Tower debates cannot be divorced from real-world realities. Although road safety has been improving for many years, people are still dying at a staggering rate due to vehicle-related accidents. Specifically, in 2012, there were 33,561 total traffic fatalities (92 per day) and 2,362,000 people injured (6,454 per day) in over 5,615,000 reported crashes. And, to reiterate, the bulk of those accidents were due to human error.

That is a staggering toll and anything we can do to reduce it significantly is something we need to be pursuing with great vigor, even while we continue to sort through some of those challenging ethical issues associated with automated systems and algorithms. Smith argues, correctly in my opinion, that “a more practical approach in emergency situations may be to weight general rules of behavior: decelerate, avoid humans, avoid obstacles as they arise, stay in the lane, and so forth. … [T]his simplified approach would accept some failures in order to expedite and entrench what could be automation’s larger successes. As Voltaire reminds us, we should not allow the perfect to be the enemy of the good.”

Quite right. Indeed, the next time someone poses an an ethical thought experiment along the lines of the Trolley Problem, do what I do and reverse the equation. Ask them about the ethics of slowing down the introduction of a technology into our society that would result in a (potentially significant) lowering of the nearly 100 deaths and over 6,000 injuries that occur because of vehicle-related fatalities each day in the United States. Because that’s no hypothetical thought experiment; that’s the world we live in right now.

(P.S. The late, great political scientist Aaron Wildavsky crafted a framework for considering these complex issues in his brilliant 1988 book, Searching for Safety. No book has had a more significant influence on my thinking about these and other “risk trade-off” issues since I first read it 25 years ago. I cannot recommend it highly enough. I discussed Wildavsky’s framework and vision in my recent little book on “Permissionless Innovation.” Readers might also be interested in my August 2013 essay, “On the Line between Technology Ethics vs. Technology Policy,” which featured an exchange with ethical philosopher Patrick Lin, co-editor of an excellent collection of essays on Robot Ethics: The Ethical and Social Implications of Robotics. You should add that book to your shelf if you are interested in these issues.

I’ve got a new essay up over at the City Journal about John Nichols and Robert McChesney’s proposal to have the government heavily subsidize failing media enterprises to “save journalism.” It follows below:

“Socializing Media in Order to Save It“ by Adam D. Thierer

City Journal March 27, 2009

With proposals to nationalize or heavily subsidize various segments of our economy more in vogue than ever, it was probably only a matter of time before someone suggested that America’s media marketplace should be brought into the government fold. John Nichols of The Nation and the prolific neo-Marxist media theorist Robert W. McChesney have now provided the road map for media’s march to serfdom. The cost to the American taxpayer would be at least $60 billion, but the cost for the First Amendment and our democracy would be incalculable.

Nichols and McChesney have coauthored several books and essays about media policy that view the world through the prism of class struggle, “manufactured consent” (á la Noam Chomsky), and the rest of the typical Marxoid tripe about history and economics. In their view, private, for-profit media cannot be trusted. As they stated in their 2003 call to arms, Our Media, Not Theirs: The Democratic Struggle Against Corporate Media, media-reform efforts must begin with “the need to promote an understanding of the urgency to assert public control over the media.” “Our claim,” they continue, “is simply that the media system produces vastly less of quality than it would if corporate and commercial pressures were lessened.”

In a new Nation essay, “The Death and Life of Great American Newspapers,” the authors bring their earlier work to its logical conclusion. Saving journalism, they argue, essentially requires that media become an appendage of the state. Journalism, they claim, is a “public good,” which—like education and defense—requires constant government oversight and support: “A moment has arrived at which we must recognize the need to invest tax dollars to create and maintain news gathering, reporting and writing with the purpose of informing all our citizens.” They propose that government devote $60 billion to “subscription subsidies, postal reforms, youth media and investment in public broadcasting.” Think of it as a “free press ‘infrastructure project,’” they say. “It would keep the press system alive. And it has the added benefit of providing an economic stimulus.” (Isn’t it amazing how everything stimulates the economy these days?)

Perhaps most audaciously, they argue that policymakers must respond to the crisis in journalism “with the same urgency with which they would approach the threat of terrorism, pandemic, financial collapse or climate change.” And they proclaim that their subsidy proposals are entirely consistent with what the nation’s Founders would have wanted:

We have to open the door to enlightened public policies and subsidies. . . . We need an organized citizenry demanding the institutions that make self-government possible. Only then can we, like our founders, build a free press. The technologies and the economic challenges are, of course, more complex than in the 1790s, but the answer is the same: the democratic state, the government, must create the conditions for sustaining the journalism that can provide the people with the information they need to be their own governors.

The Founders cared about a free press, of course, but they didn’t call for massive public subsidies to achieve it. They did put in place one rather important provision—the First Amendment—suggesting what they believed constituted a truly free press: “Congress shall make no law . . . abridging the freedom of speech, or of the press.”

Nichols and McChesney seem utterly naive, however, about the dangers to the First Amendment of putting government in control of media’s purse strings. “We must have a system that prohibits state censorship and that minimizes commercial control over journalistic values and pursuits,” they maintain. Well, good luck with that. If eight decades of Federal Communications Commission meddling in media markets have taught us anything, it’s that if you give bureaucrats the power to regulate the size and the shape of a soapbox, they will inevitably use their authority to regulate the speech delivered on that soapbox—indecency regulation, educational-television mandates, public-access rules, and the Fairness Doctrine are only a few examples. If the FCC received grant-making authority to dole out subsidies to media operators as Nichols and McChesney desire, it’s hard to imagine how journalists won’t be expected to surrender something in exchange. (Consider in this light the bill that Senator Benjamin L. Cardin (D-MD) introduced this week that would allow newspapers to become nonprofit organizations in an effort to help them stay afloat, but would also disallow political endorsements on their editorial pages.)

Nichols and McChesney in fact do envision strings being attached to public financing. They call, for example, for an annual tax credit for the first $200 each American spends on daily newspapers. To be eligible for this indirect subsidy, though, the reader must purchase media that meet criteria set by . . . Nichols and McChesney: “Newspapers would have to publish at least five times per week and maintain a substantial ‘news hole,’ say at least twenty-four broad pages each day, with less than 50 percent advertising.” Missing, moreover, is any mention of who defines what constitutes “news.” It wouldn’t take long for such a process to become a politicized nightmare.

Nichols and McChesney would also require that recipients of this “stimulus subsidy” make at least 90 percent of their content immediately available, free of charge, online. That’s an underhanded way of converting journalism into a giant, government-sponsored commons. (Incidentally, I can’t help but notice how many of Nichols’s essays are locked down on the Nation website, available only to subscribers.)

Nichols’s and McChesney’s argument shouldn’t simply be dismissed as radical, pie-in-the-sky theorizing. The authors have successfully spearheaded an increasingly influential media-reform movement through Free Press, the activist group they cofounded in 2002. The organization’s boisterous band of reformistas work tirelessly to mobilize troops whenever the slightest whiff of media liberalization is in the air. Nichols’s and McChesney’s new article gives us a taste of what we might expect their reform allies in Congress to propose next.

Nichols and McChesney are right about one thing: America’s media operators are struggling in the face of unprecedented competition and unexpected technological change. But the medicine they prescribe is far worse than the disease—for both the profession of journalism and for democracy itself.