Three short responses to the pacing problem of tech policy

Contemporary tech criticism displays an anti-nostalgia. Instead of being reverent for the past, anxiety about the future abounds. In these visions, the future is imagined as a strange, foreign land, beset with problems. And yet, to quote that old adage, tomorrow is the visitor that is always coming but never arrives. The future never arrives because we are assembling it today.

The distance between the now and the future finds its hook in tech policy in the pacing problem, a term describing the mismatch between advancing technologies and society’s efforts to cope with them. Vivek Wadhwa explained that, “We haven’t come to grips with what is ethical, let alone with what the laws should be, in relation to technologies such as social media.” In The Laws of Disruption, Larry Downes explained the pacing problem like this: “technology changes exponentially, but social, economic, and legal systems change incrementally.” Or, as Adam Thierer wondered, “What happens when technological innovation outpaces the ability of laws and regulations to keep up?”

Here are three short responses.

Technological Determinism

Part of what drives the worry about a pacing problem is rooted in a belief in technological determinism. Determinism aligns human actors and technological objects in a causal relationship. Technology acts on society as an outside force. In this view of the world, technology is separate from society and thus can advance by leaps and bounds before society and regulation can catch up. In other words, technology is made an independent variable with acts upon us all.

Yet, that doesn’t describe the world in which technological objects are created and sustained. The iPhone was created by Apple following the success of the iPod in melding the hardware platform with the content of the mobile web, ultimately for the purpose of boosting sales. And people became enamored with it, lining up days before its release to grab one. Technologies aren’t alien objects. They are molded by particular interests and institutional goals, and rooted in society, especially the bourgeois virtues.

Technologies exist within human ecology, just as economic systems do. To make technology an outside force misplaces the role of human values in the creation and adoption of innovation. As separated from society, determinism allows for technology to be both mythologized and demonized. Technologies cannot outpace our ability to adapt. Rather, the speed of change, of innovation, is rate limited by society’s ability to adapt. As Robin Hanson explained, “society’s ability to adapt is the primary constraint on how fast we adopt new technologies.”

The Technological Accident

The pacing problem also gains purchase because new technologies create the possibility for new accidents. As philosopher Paul Virilio wrote,

To invent the sailing ship or the steamer is to invent the shipwreck. To invent the train is to invent the rail accident of derailment. To invent the family automobile is to produce the pile-up on the highway.

Every newly created technology comes with the potential for problems. So the possibility set for accidents increases dramatically when a new technology comes onto the scene. But it isn’t the case that all of those risk will be manifested. Only a subset of potential problems will ever become realized. As such, it isn’t is that social and regulatory responses systems need to have all answers. Rather, there needs to be in place flexible systems to deal with actualized issues.

Regulation as a Real Option

Perhaps, however, we have been thinking about the pacing problem incorrectly. Maybe the pacing problem isn’t a problem as much as it is a reflection of uncertainty. Again, Vivek Wadhwa pithilty explained this problem, saying, “We haven’t come to grips with what is ethical, let alone with what the laws should be, in relation to technologies such as social media.” Consider that phrase I have highlighted. There is little agreement as to how we should regulate social media. In other words, there is regulatory uncertainty. The concept of real option might help make sense of this.

Real options are the investment choices that a company’s management will makes in order “to expand, change or curtail projects based on changing economic, technological or market conditions.” While originally used in strictly financial terms, economists Avinash Dixit and Robert Pindyck have adapted this concept to understand how firms invest, or not, in the face of regulatory uncertainty. As you read this paragraph from the first chapter of their book on the subject, replace the term investment with regulation and see what you think,

Most investment decisions share three important characteristics it varying degrees. First, the investment is partially or completely irreversible. In other words, the initial cost of investment is at least partially sunk; you cannot recover it all should you change your mind. Second, there is uncertainty over the future rewards from the investment. The best you can do is to assess the probabilities of the alternative outcomes that can mean greater or smaller profit (or loss) for your venture. Third, you have some leeway about the timing of your investment. You can postpone action to get more information (but never, of course, complete certainty) about the future.

There are strong corollaries. First, most regulatory decisions are difficult to reverse. It is rare for regulations to be stricken from the books, and even if they are, the affected industries are often impacted in more subtle ways. Second off, the potential benefits from a regulatory action are uncertain as Wadhwa pointed out. And finally, government bodies do have some leeway about the timing of their regulatory. Putting all of this together then, regulation might be thought of as a real option.

As economists Bronwyn H. Hall and Beethika Khan explained,

The most important thing to observe about this kind of [investment] decision is that at any point in time the choice being made is not a choice between adopting and not adopting but a choice between adopting now or deferring the decision until later.

In the same way, government regulation isn’t about regulating now or not regulating at all, but about regulating now or deferring the decision until later. That sounds a lot to me like the pacing problem.

First published Nov 27, 2018