Permissionless Innovation

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Mercatus Center

The Mercatus Center is an American libertarian, free-market-oriented non-profit think tank. It is located at the George Mason University campus, but is privately funded and its employees are independent of the university. It is directed by Benjamin Klutsey and its board is chaired by American economist Tyler Cowen. The Center works with policy experts, lobbyists, and government officials to connect academic learning with real-world practice. Taking its name from the Latin word for market, the center advocates free-market approaches to public policy. During the George W. Bush administration's campaign to reduce government regulation, The Wall Street Journal reported, "14 of the 23 rules the White House chose for its 'hit list' to eliminate or modify were Mercatus entries". According to the 2017 Global Go To Think Tank Index Report (Think Tanks and Civil Societies Program, University of Pennsylvania), Mercatus is number 39 in the "Top Think Tanks in the United States" and number 18 of the "Best University Affiliated Think Tanks". The Koch family has been a major financial supporter of the organization since the mid-1980s. Charles Koch is an emeritus member of the group's board of directors.

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• The Future of Innovation in the United States: Permissionless or ...

  Permissionless innovation is a term that refers to the idea that anyone should be able to innovate without having to seek permission from a government or other authority. It means that, as a general rule, experimentation with new technologies and business models should be allowed unless there is a strong argument that it will cause significant harm to individuals. Conversely, the precautionary principle suggests that innovations should be limited or prohibited until their inventors can verify their lack of harm toward individuals, groups, specific entities, cultures, or existing laws, norms, or traditions. This principle places the responsibility of proof on those proposing or engaging in an activity to demonstrate its safety rather than on those expressing concerns about potential risks. [...] In a free market, individuals and businesses can freely innovate, compete, and succeed based on their merits without government favoritism or intervention. The culture of permissionless innovation in the US exemplifies this free-market ideal, enabling entrepreneurs and innovators to pursue their ideas and compete in the market freely. This strategy has fostered significant growth and innovation in the tech industry and other sectors. The achievements of American-founded companies like Amazon, Google, and Facebook exemplify the power of the permissionless innovation culture in fostering economic growth and development. Yet recent antitrust suits may indicate an end to that era. Many factors push the US towards greater public involvement, oversight, and stricter regulations. [...] The United States is often associated with a culture of permissionless innovation. The US has traditionally embraced a more of laissez-faire approach to regulation, prioritizing economic growth, competitiveness, and technological advancement. This approach can be seen in various aspects of the US system, such as the relatively minimal regulatory burden on startups and technology companies, the freedom given to entrepreneurs to experiment and invent, and the emphasis on market forces to drive innovation. As a result, the US has been known for fostering groundbreaking innovations in industries like technology, biotech, and finance.

• Permissionless Innovation

  to try new business models and offer new services without seeking the approval of regulators beforehand. But permissionless innovation means much more than that. It refers to the tinkering and continuous exploration that takes place at multiple levels—from professional designers to amateur coders; from large content companies to dorm-room bloggers; from nationwide communications and broadband infrastructure providers to small community network-builders. Permissionless innovation is about the creativity of the human mind to run wild in its inherent curiosity and inventiveness. In other words, permissionless innovation is about freedom. Permissionless innovation, notes Larry Downes, “advances policies that encourage private experimentation and investment, such as exempting emerging [...] laws, norms, or traditions. The other vision can be labeled “permissionless innovation.” It refers to the notion that experimentation with new technologies and business models should generally be permitted by default. Unless a compelling case can be made that a new invention will bring serious harm to society, innovation should be allowed to continue unabated and problems, if any develop, can be addressed later. In this book, I will show how precautionary principle thinking is increasingly creeping into modern technology policy discussions, explain why that is dangerous and must be rejected, and argue that 2 PERMISSIONLESS INNOVATION policymakers should instead unapologetically embrace and defend the permissionless innovation vision—not just for the Internet but also for all new classes [...] First, “permissionless innovation” is not an absolutist position that denies any role for government. Rather, it is an aspirational goal that stresses the benefit of pushing “innovation allowed” as the best default position to begin debates about technology policy. The burden of proof should be on those who favor preemptive, precautionary controls to explain why ongoing trial-and-error experimentation with new technologies or business models must be disallowed. There may indeed be times when a dose of precaution-ary policy is necessary, but a rigorous benefit-cost analysis must be conducted in each case to illustrate why the freedom to experiment and innovate should be curtailed.

• Permissionless Innovation

  But permissionless innovation means much more than that. It refers to the tinkering and continuous exploration that takes place at multiple levels—from professional designers to amateur coders; from big content creators to dorm-room bloggers; from nationwide communications and broadband infrastructure pro­ viders to small community network-builders. Permissionless innovation is about the creativity of the human mind to run wild in its inherent curiosity and inventiveness. In a word, permission­ less innovation is about freedom. [...] The answer comes down to two words: “permissionless innovation.” Vint Cerf, one of the fathers of the Internet, credits permis­ sionless innovation for the economic benefits that the Net has generated.1 As an open platform, the Internet allows entrepre­ neurs to try new business models and offer new services without seeking the approval of regulators beforehand. [...] Yet it will only happen if we preserve the fundamental value that has thus far powered the information age revolution: “permissionless innovation,” which refers to the general free­ dom to experiment and learn through ongoing trial-and-error experimentation. Just as permissionless innovation powered the Internet and the modern digital revolution, we can have this kind of 2 PERMISSIONLESS INNOVATION dynamism in the rest of the economy as well. There is no reason this ethos should be restricted to today’s information sector.

• Permissionless Innovation: A 10-Point Checklist for Public ...

  A PERMISSIONLESS INNOVATION POLICY CHECKLIST Policymakers should make permissionless innovation the basis of their technology policy going forward for the so-called Internet of Things, wearable devices, smart cars, commercial drones, Bitcoin, 3-D printing, robotics, advanced medical devices and applications, and the many other new technologies that are emerging. Policymakers should use this 10-point checklist to help spur the development of dynamic new sectors and technologies, thereby fueling economic growth. 1. Articulate and defend permissionless innovation as the general policy default. [...] ## More from Mercatus # Permissionless Innovation: A 10-Point Checklist for Public Policymakers Technological innovation fuels economic growth. For innovation to flourish, though, policymakers must send entrepreneurs a clear green light signaling a general acceptance of risk-taking that challenges existing business models and traditional ways of doing things. This approach to policy can be labeled “permissionless innovation.” If there were one thing every policymaker could do to help advance long-term economic growth, it would be to commit to making permissionless innovation the lodestar for all future policy pronouncements and decisions. [...] Technological innovation fuels economic growth. For innovation to flourish, though, policymakers must send entrepreneurs a clear green light signaling a general acceptance of risk-taking that challenges existing business models and traditional ways of doing things. This approach to policy can be labeled “permissionless innovation.” If there were one thing every policymaker could do to help advance long-term economic growth, it would be to commit to making permissionless innovation the lodestar for all future policy pronouncements and decisions. PERMISSIONLESS INNOVATION VS. PRECAUTIONARY THINKING Permissionless Innovation Precautionary Principle A PERMISSIONLESS INNOVATION POLICY CHECKLIST

• Permissionless Innovation:

  should be allowed to continue with minimal preemptive restrictions. This approach does not imply or suggest anarchy. Regulators arguably have a more proactive role in an environment of permissionless innovation. Rather than relying on the brittle, costly, and passive old methods of applications, checkboxes, and reporting, regulators are empowered to proactively dialogue with innovators so they may more deeply understand technological work­ ings and implications. Joined by academics and civic groups, they leverage multistakeholder arrangements to identify problems ahead of time and develop surgi­ cal policy reforms to address them.4 Not only does this afford a better environment for innovation, but it may also foster better regulations since policymakers have more intimate and active [...] commission who would review the requests and grant them to businesses which proved great con­ sumer benefit. Putting it all together As the US experience with technology policy demon­ strates, embracing a posture of permissionless innova­ tion is a key determinant of technological development and growth. At the other extreme, the European expe­ rience shows that implementing precautionary barriers to innovation in policy will stymie growth and leader­ ship in cutting-edge industries. The same principles apply on the state level. As states like California and New York continue to implement hostile precautionary measures that prompt firms to reevaluate their positions, Florida has a great opportu­ nity to enshrine permissionless innovation policies in vision and law. [...] can either hew to the “precautionary princi­ ple,” which requires entrepreneurs to seek approval from a government board before being allowed to experiment with new ways of doing things. Or they can create an environment of permissionless inno­ vation, which allows tinkerers to learn and build free from onerous regulations by default.