Eakinomics: Regulation and the Robots

The robots are coming! The robots are coming! We’ve heard this alarm being raised for years now, but it really misses the point. Of course the robots are coming – and if not robots, then some sort of emerging technology that will be more or less disruptive. That kind of innovation is an essential element of the growth process. The real question is how will the robots be regulated or, even more important, how will those who invent the robots be regulated?

As Jennifer Huddleston points out in the most recent installment of her comparison of the tech policies of the presidential candidates, “the approach the next president takes to the administrative state and regulatory policy in general will impact a wide range of emerging technologies.” Unfortunately, the comparison is a bit more difficult and subtle than, say, noting that candidate Biden has proposed $3.8 trillion in tax increases over the next 10 years, while President Trump has proposed none (and even mentioned cutting taxes). In the end, it is less a matter of rulemaking and published regs, and more a matter of guidance and other informal agency actions indicating to the private sector whether a precautionary rulemaking or reduction in regulatory barriers might be in the future or not.

For example, in looking at autonomous vehicles the Trump Administration has taken a relatively hands-off approach and used informal agency actions to encourage autonomous vehicles. In contrast, under the Obama Administration – the best guide to a future Biden approach – the guidance on autonomous vehicles “was precautionary and focused on restraining potential worst-case scenarios rather than enabling the beneficial uses of this technology.” As the American Action Forum’s regulatory experts Dan Bosch and Dan Goldbeck discussed in their analysis of the candidates’ regulatory policy, “President Trump has focused primarily on repealing or seriously amending Obama-era regulations and will look to continue this approach in a second term. If elected president, former Vice President Biden would likely seek to reinstate or strengthen those Obama Administration rules rolled back by the Trump Administration.”

That is problematic because in addition to placing burdens on technology development, regulation can also “signal to innovators that they should expect to need permission from the government before undertaking their activities,” Huddleston writes. This raises the risk that not only are risky outcomes avoided, but potentially beneficial ones are suppressed as well. Moreover, the expertise that is rewarded is how to navigate government red tape rather than improving their products and responding to consumer demands.

Yes, the robots are coming. But think of the good things that they will do.