Embracing uncertainty

This book is a pudding with a theme. The pudding is a mélange of observations on the cultural, economic, and political implications of the Internet, genetic engineering, nanotechnology, space exploration, and various other technologies. The chef, David D. Friedman, a self-described “anarchist-anachronist-economist,” concocted his creation with humility and humor, flagging problems while touting benefits, hammering home his arguments with historical antecedents, and spicing his observations with personal stories and humor. The pudding’s theme is libertarianism. Friedman has a strong predisposition for bottom-up decentralized policies and against national governments and international organizations. Within this larger framework, Future Imperfect has three subthemes that are at once its strengths and weaknesses.

First, from Friedman’s libertarian perspective, a significant virtue of technological change is that it often renders existing regulations, statutes, and conventions unenforceable or irrelevant. For example, information technologies have radically reduced the cost of information duplication, undercutting copyright law. The Internet permits anonymous distribution of information, undercutting libel laws and vitiating national controls over international flows of security-sensitive technologies. Cloning, in vitro fertilization, and surrogate motherhood enable physicians to create children using methods that render inapplicable conventional laws on marriage and definitions of child support obligations.

Many, if not most, observers see this process of de facto deregulation through technology development as a curse, and they favor addressing the problem by strengthening laws covering new technologies or, in some cases, limiting the development of technologies that undercut laws. In contrast, Friedman sees this technological disruption as a blessing, providing an escape route from regulatory tyranny and inefficiency, and he recommends that society take advantage of such opportunities to restore freedoms by scrapping laws and replacing them, if needed, with voluntaristic market solutions.

Friedman notes, for example, that the Internet’s present design has reduced the ability of government to detect and punish malicious mischief by hackers, and he recommends turning to private criminal justice systems for solutions. Rather than having society rely on state prosecutors and the criminal courts, individuals could use civil tort actions to recover the costs of crime and to deter criminals from misconduct, or they could form private societies for the prosecution of crimes. Voluntary societies for prosecution, as were used in Great Britain in the 18th and 19th centuries, might be a model for collective action by individual computer users who fear malicious attack today.

In another example, Friedman notes that information technologies have weakened copyright protection for authors and patent protection for inventors, and he suggests that individual and collective self help may work better than state-sanctioned intellectual property rights in this realm. Authors may protect themselves by encrypting their works when published online, by joining together to sanction violators, and by giving away unprotectable intellectual content to stimulate private-sector demand for services, such as lectures and consulting, that they can provide at a profit.

Although these creative examples of voluntary actions are a useful prod to readers to think hard about the need for state action, they face some basic questions. Do private solutions work in the specific examples that Friedman cites? Under what general conditions will private solutions work? The idea of substituting private tort actions for public prosecution of criminals runs directly into several problems. First, individual victims seeking redress for crimes are unlikely to pursue tort actions unless punitive damages far in excess of actual damages are allowed and unless criminals possess deep enough pockets to make good on damages awarded. Second, victims of crimes may not have the financial, legal, or emotional resources to mount tort actions. Inequality in financial resources produces biases in the current system of civil actions, and these biases may be even more pronounced if the state-based criminal law system is supplanted by private civil actions. Third, in the tort system, information on harms is often hidden. Tort actions under current civil law often result in private settlements that include nondisclosure clauses and gag rules. These provisions seal off public access to hard information on actions, damages, and blame that may be needed to defend the public interest in reducing cyber criminality. Similar problems arise in other alternatives to state action.

Friedman’s support for bottom-up defenses of intellectual property parallels positions by Rodney T. Long in “The Libertarian Case Against Intellectual Property Rights” (in Formulations, autumn 1995) and by Jacob Loshin in “Secrets Revealed: How Magicians Protect Intellectual Property Without Law” (in Law and Magic: A Collection of Essays, Carolina Academic Press, 2008). Indeed, the idea of protecting intellectual property without the state commands broad appeal among anarchist libertarian technologists. But Friedman and other bottom-uppers generally fail to consider how this approach to particular technological issues will scale up to general solutions to generic intellectual property and commons problems. For example, Friedman does not systematically discuss to what extent the transaction costs associated with self-help solutions to the protection of intellectual property differ from the nontrivial costs associated with traditional copyright and patent protections. Nor does he discuss the preconditions for private collective action that must be satisfied if collusive sanctioning strategies against infringement are to work. In sum, Friedman and others have yet to define the general conditions that limit the effectiveness of both libertarian and state-centric responses to such problems. The literature in economics on the sources of market failure, in political science on the sources of governmental failure, and in law and economics on the limits of voluntaristic approaches to enforcement are germane and could enrich this discussion.

As his second subtheme, Friedman notes that some emerging technologies pose security, safety, and environmental risks that have the potential, in extremis, to end life as we know it. At a minimum, most of these technologies may disrupt economic, political, and social systems. But Future Imperfect is uneven in its analysis of such risks. The author is at his best in discussing the Internet and computing, offering well-informed and clear analysis of encryption, authenticity, and privacy. He is weaker on genetic engineering, revisiting familiar ground on medical and legal issues associated with genetic engineering. He notes, for example, that DNA sequencing and synthesis are advancing at exponential rates, but he does not discuss the implications of revolutionary improvements in the tools that engineers use to modify evolved biological systems. Nor does he systematically consider the legal, economic, or security implications of modularization in biology, via which biological engineers seek to create Lego-like biological parts that may be assembled into useful devices with greater reliability, at lower cost, with greater speed, and by a larger pool of people than in traditional genetic engineering. To be fair, no book of reasonable length can cover more than a miniscule subset of implications of more than a handful of technologies. But Future Imperfect falls short of what might be considered an acceptable minimum of analytical quality.

For his thematic hat trick, Friedman takes note of the pervasive uncertainty associated with making projections, warns against excessive confidence in extrapolating trends, and suggests that the mitigation of uncertain future costs through present public expenditures is foolish. The opening paragraphs poke fun at a former (unnamed) member of the presidential cabinet for fearing that “in a century or so, someone would turn a key in the ignition of his car and nothing would happen because the world had run out of gas.” To Friedman, such a prediction is likely to prove as accurate “as if a similar official, 100 years earlier, had warned that by the year 2000 the streets would be so clogged with horse manure as to be impassable.” Friedman notes that he cannot know what the world will look like in 100 years, but that he knows for sure that transportation in that world will rely on better technologies than internal combustion engines and better power sources than gasoline. He then recommends deferring costly present actions to contain uncertain future risks, such as climate change, suggesting that future risks may be exaggerated, that technological advances may reduce the costs of mitigation, and that efforts to mitigate may have unforeseen negative consequences. In effect, Friedman turns pervasive uncertainty into another libertarian argument against government action.

But consider in more detail this illustrative case and general argument. A century ago, the streets of some major cities, including New York, were in fact clogged with manure, and futurologists of that time were worried about the health, transportation, and aesthetic implications of such a “brown goo” scenario. The scenario was avoided when governments and companies invested in electric trams, subways and railways, gasoline-powered horseless carriages, and the infrastructure to carry horseless carriages. The brown goo projection was wrong because governments, private companies, and individuals took actions to avoid that future. What appears, post hoc, as a forecasting error is a result of effective governmental and private action.

The mere existence of uncertainty is not justification for public policy inaction. But pervasive and irreducible uncertainty ensures that most public policies will be based on incorrect assumptions. As a rule of thumb, public policies will be wrong not because of stupidity or bias or corruption, but because the information needed to make right choices is not available up front. How can public policies and international agreements take account of uncertainty? They should be designed with provisions for updating, revision, and self-correction.

Indeed, policies should be viewed as experiments that generate information on political, economic, biological, or technical conditions that may, in turn, be used to update policies. Well-designed regulations and international agreements in areas marked by uncertainty will harvest information generated by policy experience, and policymakers can use this information to revise and update policies. For example, the U.S. Clean Air Act contains provisions for gathering information to update standards and quotas, and the Montreal Protocol on Substances That Deplete the Ozone Layer calls for gathering information on a number of issues, including the behavior of sources and sinks of troublesome compounds and the status of chemical substitutes, that may help in revising goals and quotas. To be sure, it may often prove difficult to pass self-correcting statutes and regulations and to negotiate adaptive international agreements, but the pitfalls of allowing uncertainties to block policy action are, in most cases, too great. The old adage “a stitch in time saves nine” remains a relevant reminder for policymakers.

In the end, Friedman deserves praise for his boldness in challenging of conventional wisdom, for his clarity in characterizing technologies, for his narrative gifts in laying out potential opportunities and problems, and for his respect for the intrinsic uncertainty associated with evaluating the social, political, economic, and legal implications of technologies. As readers engage with Future Imperfect, they should be prepared to contest assumptions and evaluate arguments even as they learn.

Kenneth A. Oye ([email protected]) is associate professor of political science and engineering systems at the Massachusetts Institute of Technology.