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[Originally published on the Cato Institute blog.]

A pandemic is no time for bad governance. As the COVID-19 crisis intensified, bureaucrats and elected officials slumbered. Government regulations prevented many in the private sector from helping with response efforts. The result was a sudden surge of evasive entrepreneurialism and technological civil disobedience. With institutions and policies collapsing around them, many people took advantage of cutting‐​edge technological capabilities to evade public policies that were preventing practical solutions from emerging.

Examples were everywhere. Distilleries started producing hand sanitizers to address shortages while average folks began sharing do‐​it‐​yourself sanitizer recipes online. The Food and Drug Administration (FDA) looked to modify hand sanitizer guidelines quickly to allow for it, but few really cared because those rules weren’t going to stop them. Gray markets in face masks, medical face shields, and respirators developed. Some people and organizations worked together to make medical devices using off‐​the‐​shelf hardware and open source software. More simply, others just fired up sewing machines to make masks—and then, faced with an emerging public health consensus, the guidance from the federal government shifted dramatically: where formerly ordinary people were instructed not to buy or use masks, within a matter of days, the policy reversed, and all were encouraged to make and use cloth protective masks. Continue reading →

My latest book, Evasive Entrepreneurs and the Future of Governance How Innovation Improves Economies and Governments, is now live. Here’s the launch essay and online launch event. Also, here’s a summary of 10 major arguments advanced in the book. I will have more to say about the book in coming weeks, but here is a list of 13 key terms discussed in the text. This list appears at the end of the introduction to the book:

  1. Compliance paradox: The situation in which heightened legal or regulatory efforts fail to reverse unwanted behavior and instead lead to increased legal evasion and additional enforcement problems.
  2. Demosclerosis: Growing government dysfunction brought on by the inability of public institutions to adapt to change, especially technological change.
  3. Evasive entrepreneurs: Innovators who do not always conform to social or legal norms.
  4. Free innovation: Bottom-up, noncommercial forms of innovation that often take on an evasive character. Free innovation is sometimes called “grassroots” or “household” innovation or “social entrepreneurialism.” Even though it is typically noncommercial in character, free innovation often involves regulatory entrepreneurialism and technological civil disobedience.
  5. Innovation arbitrage: The movement of ideas, innovations, or operations to jurisdictions that provide legal and regulatory environments most hospitable to entrepreneurial activity. It can also be thought of as a form of jurisdictional shopping and can be facilitated by competitive federalism.
  6. Innovation culture: The various social and political attitudes and pronouncements toward innovation, technology, and entrepreneurial activities that, taken together, influence the innovative capacity of a culture or nation.
  7. Pacing problem: A term that generally refers to the inability of legal or regulatory regimes to keep up with the intensifying pace of technological change.
  8. Permissionless innovation: The general notion that “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 innovations should generally be permitted by default.
  9. Precautionary principle: The practice of crafting public policies to control or limit innovations until their creators can prove that they will not cause any harm or disruptions.
  10. Regulatory entrepreneurs: Evasive entrepreneurs who set out to intentionally challenge and change the law through their innovative activities. In essence, policy change is part of their business model.
  11. Soft law: Informal, collaborative, and constantly evolving governance mechanisms that differ from hard law in that they lack the same degree of enforceability.
  12. 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.
  13. 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. Another term with the same meaning is “technologies of resistance.”

I’m pleased to announce that the Cato Institute has just published my latest book, Evasive Entrepreneurs and the Future of Governance How Innovation Improves Economies and Governments. Here’s my introductory launch essay about the book as well as the online launch event. And here’s a list of 13 key terms used throughout the book.

In coming days and weeks I will be occasionally blogging about different arguments made in the 368-page book, but here’s a quick summary of some of the key points I make in the book. These ten passages are pulled directly from the text:

  1. “the freedom to innovate is essential to human betterment for each of us individually and for civilization as a whole. That freedom deserves to be taken more seriously today.”
  2. “Entrepreneurialism and technological innovation are the fundamental drivers of economic growth and of the incredible advances in the everyday quality of life we have enjoyed over time. They are the key to expanding economic opportunities, choice, and mobility.”
  3. “Unfortunately, many barriers exist to expanding innovation opportunities and our entrepreneurial efforts to help ourselves, our loved ones, and others. Those barriers include occupational licensing rules, cronyism-based industrial protectionist schemes, inefficient tax schemes, and many other layers of regulatory red tape at the federal, state, and local levels. We should not be surprised, therefore, when citizens take advantage of new technological capabilities to evade some of those barriers in pursuit of their right to earn a living, to tinker with or try doing new things, or just to learn about the world and serve it better.”
  4. “Evasive entrepreneurs rely on a strategy of permissionless innovation in both the business world and the political arena. They push back against ‘the Permission Society,’ or the convoluted labyrinth of permits and red tape that often encumber entrepreneurial activities.” 
  5. “We should be willing to tolerate a certain amount of such outside-the-box thinking because entrepreneurialism expands opportunities for human betterment by constantly replenishing the well of important, life-enhancing ideas and applications.”
  6. “we should better appreciate how creative acts and the innovations they give rise to can help us improve government by keeping public policies fresh, sensible, and in line with common sense and the consent of the governed.”
  7. “Evasive entrepreneurialism is not so much about evading law altogether as it is about trying to get interesting things done, demonstrating a social or an economic need for new innovations in the process, and then creating positive leverage for better results when politics inevitably becomes part of the story. By acting as entrepreneurs in the political arena, innovators expand opportunities for themselves and for the public more generally, which would not have been likely if they had done things by the book.”
  8. “Dissenting through innovation can help make public officials more responsive to the people by reining in the excesses of the administrative state, making government more transparent and accountable, and ensuring that our civil rights and economic liberties are respected.”
  9. “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 can help serve as a protector of important human liberties.”
  10. “Lawmakers and regulators need to consider a balanced response to evasive entrepreneurialism that is rooted in the realization that technology creators and users are less likely to seek to evade laws and regulations when public policies are more in line with common sense.”

Continue reading →

[First published by AIER on April 20, 2020 as “Innovation and the Trouble with the Precautionary Principle.”]

In a much-circulated new essay (“It’s Time to Build”), Marc Andreessen has penned a powerful paean to the importance of building. He says the COVID crisis has awakened us to the reality that America is no longer the bastion of entrepreneurial creativity it once was. “Part of the problem is clearlyforesight, a failure of imagination,” he argues. “But the other part of the problem is what we didn’t do in advance, and what we’re failing to do now. And that is a failure of action, and specifically our widespread inability to build.”The Mind of Marc Andreessen | The New Yorker

Andreessen suggests that, somewhere along the line, something changed in the DNA of the American people and they essentially stopped having the desire to build as they once did. “You don’t just see this smug complacency, this satisfaction with the status quo and the unwillingness to build, in the pandemic, or in healthcare generally,” he says. “You see it throughout Western life, and specifically throughout American life.” He continues:

“The problem is desire. We need to want these things. The problem is inertia. We need to want these things more than we want to prevent these things. The problem is regulatory capture. We need to want new companies to build these things, even if incumbents don’t like it, even if only to force the incumbents to build these things.”

Accordingly, Andreessen continues on to make the case to both the political right and left to change their thinking about building more generally. “It’s time for full-throated, unapologetic, uncompromised political support from the right for aggressive investment in new products, in new industries, in new factories, in new science, in big leaps forward.”

What’s missing in Andreessen’s manifesto is a concrete connection between America’s apparent dwindling desire to build these things and the political realities on the ground that contribute to that problem. Put simply, policy influences attitudes. More specifically, policies that frown upon entrepreneurial risk-taking actively disincentivize the building of new and better things. Thus, to correct the problem Andreessen identifies, it is essential that we must first remove political barriers to productive entrepreneurialism or else we will never get back to being the builders we once were.     Continue reading →

The race for artificial intelligence (AI) supremacy is on with governments across the globe looking to take the lead in the next great technological revolution. As they did before during the internet era, the US and Europe are once again squaring off with competing policy frameworks.

In early January, the Trump Administration announced a new light-touch regulatory framework and then followed up with a proposed doubling of federal R&D spending on AI and quantum computing. This week, the European Union Commission issued a major policy framework for AI technologies and billed it as “a European approach to excellence and trust.”

It seems the EU basically wants to have its cake and eat it too by marrying up an ambitious industrial policy with a precautionary regulatory regime. We’ve seen this show before. Europe is doubling down on the same policy regime it used for the internet and digital commerce. It did not work out well for the continent then, and there are reasons to think it will backfire on them again for AI technologies. Continue reading →

Here’s a new Federalist Society Regulatory Transparency “Tech Roundup” podcast about driverless cars, artificial intelligence and the growth of “soft law” governance for both. The 34-minute podcast features a conversation between Caleb Watney and me about new Trump Administration AI guidelines as well as the Department of Transportation’s new “Version 4.0” guidance for automated vehicles.

This podcast builds on my recent essay, “Trump’s AI Framework & the Future of Emerging Tech Governance” as well as an earlier law review article, “Soft Law for Hard Problems: The Governance of Emerging Technologies in an Uncertain Future.”

2019 Doing Business North America Report CoverOne 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. Continue reading →

Originally published on the AIER blog on 9/8/19 as “The Worst Regulation Ever Proposed.”


Imagine a competition to design the most onerous and destructive economic regulation ever conceived. A mandate that would make all other mandates blush with embarrassment for not being burdensome or costly enough. What would that Worst Regulation Ever look like?

Unfortunately, Bill de Blasio has just floated a few proposals that could take first and second place prize in that hypothetical contest. In a new Wired essay, the New York City mayor and 2020 Democratic presidential candidate explains, “Why American Workers Need to Be Protected From Automation,” and aims to accomplish that through a new agency with vast enforcement powers, and a new tax.

Taken together, these ideas represent one of the most radical regulatory plans any America politician has yet concocted.

Politicians, academics, and many others have been panicking over automation at least since the days when the Luddites were smashing machines in protest over growing factory mechanization. With the growth of more sophisticated forms of robotics, artificial intelligence, and workplace automation today, there has been a resurgence of these fears and a renewed push for sweeping regulations to throw a wrench in the gears of progress. Mayor de Blasio is looking to outflank his fellow Democratic candidates for president with an anti-automation plan that may be the most extreme proposal of its kind. Continue reading →

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. Continue reading →

I (Eye), Robot?

by on May 8, 2019 · 1 comment

[Originally published on the Mercatus Bridge blog on May 7, 2019.]

I became a little bit more of a cyborg this month with the addition of two new eyes—eye lenses, actually. Before I had even turned 50, the old lenses that Mother Nature gave me were already failing due to cataracts. But after having two operations this past month and getting artificial lenses installed, I am seeing clearly again thanks to the continuing miracles of modern medical technology.

Cataracts can be extraordinarily debilitating. One day you can see the world clearly, the next you wake up struggling to see through a cloudy ocular soup. It is like looking through a piece of cellophane wrap or a continuously unfocused camera.

If you depend on your eyes to make a living as most of us do, then cataracts make it a daily struggle to get even basic things done. I spend most of my time reading and writing each workday. Once the cataracts hit, I had to purchase a half-dozen pair of strong reading glasses and spread them out all over the place: in my office, house, car, gym bag, and so on. Without them, I was helpless.

Reading is especially difficult in dimly lit environments, and even with strong glasses you can forget about reading the fine print on anything. Every pillbox becomes a frightening adventure. I invested in a powerful magnifying glass to make sure I didn’t end up ingesting the wrong things.

For those afflicted with particularly bad cataracts, it becomes extraordinarily risky to drive or operate machinery. More mundane things—watching TV, tossing a ball with your kid, reading a menu at many restaurants, looking at art in a gallery—also become frustrating. Continue reading →