In just one generation, we’ve moved from a world of informational scarcity to informational abundance thanks to the Internet and digital technology. A recent U.S. Bureau of Economic Analysis report revealed that, in 2022 alone, the U.S. digital economy accounted for over $4 trillion of gross output, $2.6 trillion of value added (translating to 10 percent of U.S. GDP), $1.3 trillion of compensation, and 8.9 million jobs.
These are staggering numbers, but what’s equally important is how citizens gained access to an unparalleled cornucopia of communications, computing, and media technologies and services that would have been unimaginable a half century ago.
Smart, forward-thinking policy choices, particularly those in the 1990s, led to this progress.
We are now facing a new opportunity that could further solidify America’s dominance in innovation and technological prowess. Artificial intelligence presents us with the opportunity to unlock massive economic growth and profound public health opportunities that could extend and improve lives around the world.
But success in this moment isn’t guaranteed. America’s last digital revolution bears many lessons for us today. In order to replicate that success in the age of artificial intelligence (AI) we must look back to the late 1990s.
In remarks delivered twenty-five years ago this week before an earlier incarnation of the TPI Aspen Forum, Ira C. Magaziner set forth a powerful vision for how the United States should approach governance of the Internet and the emerging digital world. Magaziner had recently finished serving as a senior advisor in the Clinton White House, where he had earlier helped craft the 1997 Framework for Global Electronic Commerce, a blueprint for how government should approach online speech and commerce.
The Clinton administration’s Framework and Magaziner’s 1999 Aspen remarks are worth revisiting today because they highlight the policy decisions that spawned the digital revolution. Those same principles can guide how emerging technology should be governed today to unleash the next great technological revolution.
Free to Innovate
In an essay summarizing his remarks at Aspen, Magaziner began by asserting that “the Internet is a medium that has tremendous potential for promoting individual freedom and individual empowerment,” and that, “where possible, the individual should be left in control of the way in which he or she uses this medium. We should maximize the opportunity for human freedom,” he argued.
Magaziner also argued that, more practically, a flexible approach to digital policy would be needed to cope with what scholars later came to label “the pacing problem.” As Magaziner explained the notion back then, “[t]he Internet moves rapidly, mutating as technology changes. Governments inherently move slowly, bureaucratically – slower than is necessary for the Internet to flourish.” Therefore, he concluded, “any policy that is tied to a given technology is going to be outmoded before it is enacted.”
To ensure the Internet realized its full potential as a technology of openness and opportunity, the Clinton administration’s policy Framework said governments should “avoid undue restrictions on electronic commerce” and allow the digital world to develop as “a market driven arena not a regulated industry.” The goal was bottom-up governance through reliance on contractual negotiations, voluntary agreements, multistakeholder processes, and ongoing marketplace experiments. The Framework recommended “minimal government involvement or intervention,” but where intervention was needed, the document said, “its aim should be to support and enforce a predictable, minimalist, consistent and simple legal environment for commerce.”
By contrast, the more heavy-handed, top-down approach developing across the Atlantic at that time should be discouraged, Magaziner insisted. “Our main concerns about the European-style approach are that government regulations and government privacy boards will create a more bureaucratic and inflexible solution than is necessary, and that such a system will be unpredictable.”
With these statements and principles, the Clinton administration made the freedom to innovate the cornerstone of information technology and computing policy in the United States. A Republican-led Congress generally endorsed this approach through bipartisan legislation that President Clinton signed into law. In doing so, U.S. policymakers made a firm break with the command-and-control regulatory models of the analog era, which had constrained competition and choice. Permissionless innovation, not the precautionary principle, had become America’s guiding star for the digital sphere.
A Vision Is Vindicated
This free-to-innovate policy paradigm would generate one of the greatest outpourings of economic and social activity in history, even though many at the time didn’t think it would. In the mid-1990s, some pundits thought the net would be a passing fad. In 1998, Nobel Prize-winning economist Paul Krugman infamously predicted that the Internet’s impact on the global economy would be “no greater than the fax machine’s.”
President Clinton thought differently. When announcing the Framework for Global Electronic Commerce in 1997, he predicted that the Internet’s potential would be “nothing short of revolutionary” and that “[i]n just a few years, it will generate hundreds of billions of dollars in goods and services.” In his Aspen speech, Magaziner specifically predicted $300 billion in economic output by 2002.
Their bullishness on the Internet and electronic commerce was vindicated—and then some. Thanks to Clinton and Magaziner’s pro-freedom policy vision, we today enjoy ubiquitous and robust broadband systems and wireless networks, massive data storage and processing systems, cutting-edge cloud and computational systems, countless user applications on social networking and gaming platforms, and mini supercomputers we carry in our pockets that serve as the equivalent of digital Swiss Army knives.
Fast forward to 2024, and this digital policy vision has unleashed trillions of dollars of economic output, and an unquantifiable amount of social output. Moreover, American innovators have dominated the digital revolution thanks to these policy choices. Today, 18 of the 25 largest digital companies in the world are based in the United States, while it is difficult to name any major European digital leaders. Precisely as Magaziner predicted 25 years ago, the European Union’s highly bureaucratic and risk-averse approach to digital governance created an environment of regulatory uncertainty that resulted in many of their best innovators and investors fleeing for America’s shores to taste the sweet waters of digital freedom and online opportunity. A recent Wall Street Journal headline observed that Europe now regularly “regulates its way to last place” in emerging technology. The most important digital export from the EU these days mostly seems to be red tape, not notable new products.
The Best Approach to Problems
Magaziner didn’t get everything right 25 years ago. Like many oracles of those early days, he was a bit overzealous in proclaiming that the Internet would revolutionize education, force autocratic nations to become more democratic, and make censorship “effectively impossible.” We know now that these goals are much harder to accomplish. Some challenges are multi-faceted and extraordinarily complicated; the Internet was never going to provide a silver-bullet solution to government’s worst impulses and policies.
Yet, Magaziner was also wise enough to acknowledge that life in the digital age “will have some negative side effects,” but he rightly noted that, when we look to address these concerns, the ultimate question is: “How do you deal with those side effects… while allowing mankind to reap the benefits of the Internet and related technologies?”
That same question still animates policy debates around AI and other advanced emerging technologies. This balancing act will never go away, but the question remains whether governments should be setting our initial policy defaults closer to permissionless innovation or the precautionary principle.
The Clinton-Magaziner approach was rooted in policy pragmatism. Magaziner concluded his Aspen remarks by noting how he hoped “we will retain a sense of humility and to acknowledge that none of us can, on these issues at least, claim to have all the answers.” The best way for government to keep pace with emerging technology is to roll with the punches and rely on evidence-based oversight in combination with agile, iterative responses. However, we should not expect government to be able to preemptively forecast or regulate away every problem. If we did that, fear-based policies would limit new technologies and innovators, thus freezing past policies and industries in place. That’s a recipe for stagnation.
Lobbying for the Future
Instead, America should double-down on freedom and policy forbearance in the age of AI. In closing out his Aspen remarks a quarter century ago, Magaziner stressed that policy forbearance “involves governments agreeing to do something that is very difficult for governments to do, which is to agree not to act.”
“Agreeing not to act,” he argued, “helps create a more predictable environment for business, and in the long run will make the Internet available sooner, to more people, not just in the United States or the developed world, but to people around the world.”
To prepare ourselves for unprecedented global high-tech competition and geopolitical threats from China and other adversaries, we should recommit ourselves to fostering an innovation culture for AI and other related emerging technologies that enshrines the same four interrelated policy principles that powered the digital revolution.
First, reiterate that the freedom to code, the freedom to compute, and the freedom to innovate represent America’s default policy position for computational commerce and algorithmically-enabled speech. AI-era entrepreneurs should be given a green light and be free to develop new computational systems and applications without prior restraint. Any party or government agency who opposes a new technology or service should bear the burden to demonstrate why such innovations should not go forward. And for speech, new algorithmic censorship schemes must be firmly rejected.
Second, block any effort to create new technocratic computing bureaucracies or new licensing schemes for AI and other emerging tech. Existing policies and court-based remedies can be leveraged to address AI problems that develop. And, as Clinton and Magaziner recommended, we should continue to tap a diverse set of solutions and actors to govern emerging tech in a more flexible and agile fashion that will keep pace with technological change.
Third, reform or sunset outmoded policies that undermine the freedom to code and compute. There are 439 departments in the federal government, and countless more state and local bureaus. Many of them are looking to impose archaic rules on new technologies all the time. We need a comprehensive house cleaning to get rid of the old regulatory deadwood. Agencies should be required to conduct a review of existing rules and identify policies that limit the efficient and widespread rollout of algorithmic systems and applications.
Fourth, establish a national policy framework to protect the free flow of algorithmic commerce and speech. America’s bipartisan approach to Internet policy began by recognizing it was a global medium and that, far too often, state and local regulation of communications and media acted to thwart competition and consumer choice. Speech and commerce in the algorithmic age must not be subjected to death-by-a-thousand parochial cuts. Congress should preempt conflicting and costly state and local regulations as needed.
For freedom to have a chance in the age of AI, policymakers must remain open to the future, no matter how messy and unknowable it may be. Former Democratic Representative Jim Cooper put it best when he observed that, “The past, in general, is over-represented in Washington. The future has no lobbyists.”
It is time for us to become lobbyists for the future. We must recommit ourselves to the freedom to innovate so we can, once again, unleash the mighty ingenuity of the American people and enjoy the boundless fruits of our nation’s remarkably creative energy.
Fight for the future!
* Adam Thierer is a senior fellow at R Street’s Technology & Innovation team, advocating for “permissionless innovation” to support entrepreneurs. With a background at the Mercatus Center, Progress and Freedom Foundation, and other think tanks, he has authored ten books on topics like internet governance and media regulation. He holds advanced degrees in international business and political science, and lives in Falls Church, Virginia.
Fuente: Rstreet
