Capitol Hill Campus: Drones, Bitcoin, and 3-D Printing: Regulating Emerging Technologies
“Permissionless Innovation” vs. the
Jerry Brito, Eli Dourado & Adam Thierer
Senior Research Fellows
Mercatus Center at George Mason University
Outline of discussion
1. What is “permissionless innovation”?
– Why is it important?
2. What is the “precautionary principle”?
– What are its costs?
3. Case studies: Why permissionless innovation is
– Commercial drones
– 3D printing
– Other emerging technologies
the general freedom
to experiment & learn
When the Internet was
a warning to students from a 1982 MIT handbook for
the use of ARPAnet, the progenitor of what would
become the Internet:
“It is considered illegal to use the ARPAnet for anything
which is not in direct support of government business...
Sending electronic mail over the ARPAnet for commercial
profit or political purposes is both anti-social and illegal.
By sending such messages, you can offend many people,
and it is possible to get MIT in serious trouble with the
government agencies which manage the ARPAnet.”
Permissionless innovation gave us
today’s Net & digital revolution
• It has driven the explosion of Internet
entreprenuerialism over past 2 decades.
• Again, before early 1990s, online innovation &
commercial activity wasn’t even allowed.
• But the commercial opening of the Net
changed all that. The rest is history.
• We need same revolutionary approach to new
technology, whether based on bits (digital
economy) or atoms (industrial economy).
= Crafting public policies to control or limit new
innovations until their creators can prove that they
won’t cause any harms.
– this “better to be safe than sorry” mentality leads to
“Mother, May I” (“permissioned”) policy prescriptions
& preemptive regulation by bureaucracies
– It is the opposite of permissionless innovation
• Rationales for “precautionary” regulation:
– safety & security
– public morals
The Precautionary Principle vs. Permissionless Innovation
A Range of Responses to Technological Risk
Licensing & permits
Education & Media Literacy
Labeling / Transparency
Experience / Experiments
Learning / Coping
Social norms & pressure
Better way to respond to risk?
Bottom-up approaches to new tech risks:
• New norms
• Ongoing experimentation
• Torts, property rights, contracts & other existing
The problem with
• lost entreprenurialism / less innovation
• diminished marketplace entry / rivalry
• stagnant markets
• protectionism / cronyism
• loss of int’l competitive advantage
• higher prices & fewer services / choices for
Bottom Line: What’s good for the Net
is good for everything else!
• Net freedom advocates are right to extol the
permissionless innovation model—but they
are wrong to believe that it need be unique to
• We can legalize innovation in the physical
• All it takes is a recognition that real-world
innovators should not have to ask permission
• Currently illegal to operate a drone for profit
• FAA must integrate commercial drones in US
airspace by 2015
– Regulations are under consideration now
Private Uses of Drones
• Google Loon
• We don’t know what else yet
What about safety?
• Go to court
• Could quickly become safer than cars
– Compare risk of pizza delivery by auto vs. by
What about privacy?
• Go to court
• There are already federal, state, and local laws
that protect privacy
• Proposed rules are absurd
• Social adaptation
Give adaptation a chance
“Instantaneous photographs and newspaper
enterprise have invaded the sacred precincts of
private and domestic life; and numerous
mechanical devices threaten to make good the
prediction that ‘what is whispered in the closet
shall be proclaimed from the house-tops.’”
— Samuel D. Warren and Louis D. Brandeis, 1890
• World’s first completely decentralized digital
– Solves the ‘double spending problem’
• Cheaper and quicker than traditional networks
– Small business alternative to payment networks
• Access to capital
• Inflation resistant
• Bitcoin as a platform (permissionless)
• Silicon Valley VCs are investing millions
• Could disrupt the payments industry
• Biggest threat to this potential revolution
– Overbroad money laundering regulations
– State money service business licensing
related Mercatus Center research:
Papers & Filings
• Mercatus filing to FAA on Unmanned Aircraft System Test Site Program
• Mercatus filing to FTC on Privacy and Security Implications of the Internet
• Technopanics, Threat Inflation, and the Danger of an Information
Technology Precautionary Principle (Thierer)
• Bitcoin: A Primer for Policymakers (Brito)
Articles & Blog Posts
• Who Really Believes in “Permissionless Innovation”? (Thierer)
• “Permissionless Innovation” Offline as Well as On (Thierer)
• The Third Industrial Revolution Has Only Just Begun (Dourado)
• Mr. Bitcoin Goes to Washington (Brito)
• The Next Internet-Like Platform for Innovation? Airspace (Think Drones)
• Domestic Drones Are Coming Your Way (Brito)
• When It Comes to Information Control, Everybody Has a Pet Issue &
Everyone Will Be Disappointed (Thierer)
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