 The session now underway is titled Can Washington Keep Up with the Next Big Thing? I'm the moderator, Brink Lindsey. I'm a scholar at the Kauffman Foundation, which is a charitable foundation headquartered in Kansas City that's dedicated to promoting entrepreneurship, education, and economic innovation. Let me assert the prerogatives of being moderator and state and I don't believe that this title is quite sufficient. It's not enough, I don't think, to ask, can Washington keep up with the next big thing? I think we must also simultaneously ask, can Washington keep from screwing up the next big thing? Because there are, we need to be cognizant of risks on both sides. The question imagines dutiful but outstrapped, wise, beneficent public-spirited regulators not able to keep up with the pale-mail rush of innovation and therefore allowing unwittingly the next Frankenstein's monster on the loose. But at the same time, we know that ham-handed and sometimes venal regulators and policymakers can get together with vested interests, with a stake in the un-innovative status quo, and squelch the next big thing. So, with our eye on both Silla and Caribdis, we're going to try to shoot the straights. With me today to tack back and forth between these two risks are Gary Marching, who is, let me get his official title because it's quite grandiose. I didn't pick it. He is the Lincoln Professor of Emerging Technologies, Law and Ethics Andrew Day O'Connor School of Law at Arizona State. We also have Larry Downs, who's a fellow at the Center for Internet and Society at Stanford Law School. He is the author of In Search of the Killer App, a term that I believe you coined. Stole. Stole, even better. With which you are closely associated. And most recently, the laws of disruption, harnessing the new forces that govern business and life in the digital age. And on my far left, not coincidentally, is Jim Thomas, a research program manager and writer for the ETC Group, a civil society organization dedicated to conservation and sustainable advancement of cultural and ecological diversity and human rights. Let's, let me lead things off with a question for Gary, really aiming at the question that was presented. You are involved with an initiative called the Pacing Project precisely at this question of the ability of policymakers and regulators to just keep up with what's going on. Maybe you could tell me a little bit about that. Sure. I mean, we're looking at this question directly and basically the answer is no. That our entities that we have in Washington as they're currently structured are simply going to be always left behind by the pace of technologies today. If you look at our legislatures, the word you hear is gridlock and I think you'll hear that a lot more in the next year or two. If you look at our regulatory agencies, at least in the academic circles, the word used is ossification. If you look at our courts, the word often uses glacial, that all three of our legal institutions are sort of moving slower at a time when technology has never been moving faster. And as a result, you get this widening gap. And I don't think it is a fact that our regulators are bad or not doing the right thing. I think they're not capable in the current institutional structure to have reasonable oversight of these kind of technologies. And to jump out there with bad law would be worse than no law. I mean, we don't want bad regulation and to jump ahead of the technologies would be bad. But the problem is we're just simply with these mechanisms not able to provide meaningful oversight. And so the question is what new can we do and that's what our project is trying to address. And Jim, I take it that you would share a similar sense of insufficiency of government oversight of emerging technologies, maybe with a darker twist than Gary alludes to. So why don't you tell me your spin on things? I'm not the right person to answer the question, can Washington keep up? I'm a British-African born Brit living in French Canada. I don't pretend to tell anyone in Washington what Washington can do. But from the outside, it certainly, it depends which part of Washington or what part of government. I mostly follow UN, but there's a part of governments that are actually very good at keeping up with what's happening in technology. Who's done most of drive synthetic biology? It's probably the genomes to life project of the Department of Energy. What we've seen in nanotech is very much being driven by the National Nanotechnology Initiative. There is a lot driven there, but there's the side of government that's about care and welfare and protection that's miles behind. And I'm actually more interested in the question not, can Washington keep up? Can the rest of the world and the governments who are responsible for most of the planet keep up with the impact? So let's just stipulate that we're using Washington metaphorically here. So what are the roots of this incapacity to keep up? Why government has ample resources, has taxing power, it has all kinds of coercive authorities, up against any particular private interest, it bulks quite large. What is it that has governments outgunned? Well, I mean, I think we've heard some of it around money. We've heard some of it in the discussion already. But I think there's a deeper problem with, you know, the side of governments that do track emerging technologies reasonably well who are interested in driving forth innovation to captain the economy. We also exercise a sort of a role of cowing the ability of whether it's the EPA or the environment agencies or the health and safety to ask tough questions because there's a sense that strategically countries need to rush ahead with these technologies and not put any kind of breaks on them. And I think that even where there is interest within governments to question what is the impact of these hugely disruptive technologies, whether it's synthetic biology, nanotechnology, some of the climate technologies we're about to see, there's a sort of a directive almost to, you don't rock that boat. We need to be up ahead. We need to be pushing as fast as possible. I think that reduces the ability of those agencies to be critical and ask critical questions. Larry, your focus is in the information and communication technology sector, not the SIN bio sector. But in your world, the second question that I posed is one that has come up again and again. One of the speakers tomorrow, Tim Wu, in his book The Master Switch Chronicles in Depressing Detail, how the FCC again and again wound up in cahoots with vested interests to squelch the next big thing, delaying the introduction of FM radio, delaying the introduction of television, delaying the introduction of cable television. Maybe you can address this second question and what you see as the environment today in terms of the posture of policymakers, regulators, versus the emerging technologies of the information world. I would actually rather use the phrase disruptive technologies, which is a phrase from Clayton Christensen's work, because I think that's where the distinction comes in terms of what governments and regulators and courts can and can't do. So if you're talking about disruptive technology and the name sort of speaks for itself, you're talking about something that's changing industries and the case of the Internet is changing everything at a very quick pace. And in fact, technology is essentially following the speed of Moore's law, which is everything gets faster and smaller and cheaper all the time. The institutional problems, this is the best case scenario, the institutional problem is that modern democracies are by design, and by the way, it's a good design, are deliberative, they're incremental, and they're slow to change. And of course, in most situations, that's exactly what we want. We don't really want, you know, sort of our passions to run away with us. The problem is when those kinds of institutions are trying to regulate technologies that are changing at an accelerating pace, the mismatch is obvious. And you know, hundreds of examples of even the best intended laws trying to help, trying to regulate, trying to solve problems that come up as a result of the introduction of these disruptive technologies at best they're out of date before the ink is even dry. Now the worst case scenario, I think this gets more to what Tim was writing about, is that, you know, the best intentions aren't always the intentions that legislators have. You look at, you know, the history of disruptive technologies and what you really see in terms of regulation is almost to every example, government's either being naive, being parochial, or being cynical. And we've talked about examples of all of those just in the last 10 years with the Internet. They're captured perhaps by industry. They're after their own best interests, so government's extending their power to do electronic surveillance in ways that they wouldn't be able to do in the physical world, but they think they can get away with it in the electronic world. These are sort of natural tendencies and so in that sense the worst case scenario is what happens when we get bad intended laws trying to regulate the Internet or trying to regulate other disruptive technologies which again can't keep up, can't keep pace as well. So let's get specific. Tell me a couple of areas today where you think Washington is getting it wrong or is squelching innovation or is the flip side the case? Are there important areas where there's a desperate need for government to act to head off bad events down the road and it isn't getting exact together? I wouldn't use the word, I don't need to quibble on words, but I wouldn't use the word squelch in most cases because I don't think in most cases it makes a difference what governments do and don't do. The Internet is a terrific technology for optimizing around inefficiencies. If you look at any laws, I was just talking about in the United States but elsewhere where sort of dumb laws have been passed, the Internet just basically finds a way to route around them anyway. So we ban gambling, we ban porn. Well, for a few days. So I'm taking a slightly bigger picture than a two-day period. We see how that's going to end I think as well in terms of how long it was able to stay off. So I think there are ways in which however governments are skewing the deployment of disruptive technologies with maybe what would be the natural course that they would take to sort of stick with the evolutionary theme of earlier this morning, I've written so much about net neutrality in the last year, even I can't read what I write anymore, I'm so bored with it. But I think that's an excellent example of bad regulation, of sort of, you know, the premise was wrong, the process was wrong, the end result was wrong, nobody was happy with the end result, except perhaps the chairman of the FCC is the only one who, you know, was enthusiastic about it. I think, you know, obviously the Coyka bill which would expand the power of the Department of Homeland Security to seize domain names is coming back up, this internet, supposed internet kill switch that Senator Lieberman is pushing, these are all examples of, you know, kind of the terror reaction to technology because, you know, to the extent we don't understand it. On the flip side, yes, there are very important things that governments can and should do. Certainly if we want to stick, you know, very locally in terms of, you know, this sort of square mile, right now the most important thing, I think in terms of the technologies that my clients at Silicon Valley care about would be spectrum reform. The mobile internet, obviously growing leaps and bounds, wonderful things are happening, but there's a real likelihood that we will run out of available spectrum if we don't start a process now because, you know, the FCC is the only one who can license spectrum. They're the ones who keep track of who has it and who don't. By the way, we don't have an inventory of who has it and who don't, so that would really be a good start right there. But that would be an excellent example of where government could do something quite useful to help the technologies reach their maximum human potential. So why don't you, Gary, why don't you spell out a little bit what needs to happen for government to be able to expand its capacities and be able to play the role that it needs to play? Well, let me give you two examples. I think one of over-regulation, one of under-regulation and what might be needed there. So the over-regulation example I think right now is GM crops. I know they're controversial, but if you look at the record, it's pretty well established. Now, these have created tremendous benefits in terms of reduced environmental impacts, no harms, extremely well studied, and what we're doing is we're basically requiring every GM crop to go through thousands of millions of dollars of safety tests when you can do the exact same product without genetic engineering with zero safety of an oversight. So we're basically tilting the scales against these products. The result is the only people who can actually get one of these approved are large corporations. All the public research institutes and the universities have had to stop their projects because they can't possibly afford the $50 million to get them approved. And so all the ones that were intended for developing countries and so on have been squelched by regulation. In the meantime, the only ones that can possibly survive are these commercially successful ones. And now on top of that, some groups have basically taken advantage of a law called NEPA and says if this is a government action, the government, even though we've studied these things, $50 million of safety tests, the government now has to turn around and do a full environmental impact statement taking two or three years, costing millions of taxpayers money, and repeatedly the courts in the last couple of years have required them to go back and do this and blocking it even further. You step back and say this is just a mess. Here we've got a product that's proven benefits, well studied compared to any other food, and yet we're absolutely suppressing it with regulation. So that's an example going too far that way. One the other side, I think, is nanotechnology right now. Again, there's thousands of these nanotech products coming on board. It's impossible that none of them present a risk, but it's almost impossible for a traditional regulation to govern these. We can't even have a scientifically and legal, robust definition of what is nanotechnology. And the result is we basically have no oversight of this. These agencies are sort of slowly moving forward, but they're four or five years away from any meaningful regulation. And what do we do in the meantime? If something goes wrong, that will read down to every single product that has the word nanotech on it and cause tremendous economic harm to those companies as well as whoever, the unfortunate people are harmed by those products. So we need something else there. Traditional regulation just isn't going to cut it. So the idea that's emerging from a lot of work in the legal community right now is the idea of sort of more soft law things. Not to replace regulation, but to supplement it. And I agree with Michael Crowe when he said that, you know, how we deal with law and technology is a newborn. We're really just starting to think of new models of how to do this. But there's an urgent need to think of more of those, and that's one of the things we're trying to do at ASU. Jim, do you think GM crops are over-regulated? Absolutely not. Certainly not in this country. You know, you're looking at a quite wide penetration. And, you know, the problem with GM crops is that, you know, you seem to think the reason why they're in the hands of the Monsantoes is because of the regulation, quite the opposite. That's where it came from. That's where the technology came from. These have been a tool to concentrate the marketplace and to gain control over seed companies. And it's not that there's a lack of, you know, stifling innovation means that it hasn't gone to the south. That was never the target. That was always a PR trick. We're going to feed the hungry and so forth. That's what we're asking for in the global south. Now, what we're about to see and we're beginning to see is actually those same companies are going to the south. They're taking what they call abiotic stress tolerance, so-called climate-ready crops. And they're going to start taking that to the south as a way of taking over land as part of a general land grab that's happening right now that's going to push more farmers off land. So I just think, you know, you're mixing up cause and effect. But I agree with you on nanotechnology. I agree with you that there we do have a situation where in 1600 at least, that's what's known to be in the market but probably thousands more that haven't been even described. We, as you say, we can't even describe what a nanotech product is. And where there's an unwillingness on the parts of regulators to move towards that. I go back to my earlier comment. That's because since 2000, there's an imperative and a belief that you need to be at the front of some global nano race for the U.S. economy. Well, 10 years later after the National Nanotechnology Initiative, we're not seeing that. The nano market hasn't exploded and become the driver of the economy. It hasn't worked like that. But meanwhile, we're exposed to a lot of risks in products every day that aren't even labeled or even understood by government. Even just assuming that these companies are these big bad evil creatures, I don't think they're quite uniformly that way. The point I was making, is that these public research institutes who were developing crops with much more humanitarian and commercial goals, it's impossible for them to get a product approved. You do not have $50 million there to go through the USDA and FDA approval processes. So what our regulation has done is basically taken those people out of the market. They can no longer produce their products. But as you said, you're able to do it without using genetic modification. You're able to get those same traits. So why go that route with a number of risks and questions associated, escaping trans genes, when you can use traditional breeding methods? Because what you can do is you can radiate them and then you'll get 50 other mutations along the chromosome. We know these are more dangerous and yet they get no regulatory oversight. So we're intentionally creating a less efficient, more dangerous product because of this regulatory mess we have. That's a good example where we also haven't got proper oversight. But in terms of developing whether it's drought tolerance or whatever, that's been done through breeding by farmers all around the world for centuries. Farmers have ways of developing extremely good crops that are so appropriate for their own terrain. The difference is that you've had a set of crops developed for large commodity markets by Monsanto to increase their pesticide sales. That's really all that's happened. Jim, it seems to me that you are concerned not only about health, safety and environmental risks from new biotechnologies, but also economic risks. That is, that high-tech producers can displace from developed countries can displace traditional producers in less developed regions. Isn't this an old, old story that's called economic progress that is that the more efficient product, the lower cost product or the higher value product, wins the day who can't offer market value at a profit go under. It's absolutely an old story. On a global level, it's been a disastrous story. You look back at the history of synthetic chemistry where you had the development of synthetic dyes in the 1850s, 1860s. And within a span of maybe 20 years, that had put out of work hundreds of thousands of indigapes in Bihar and Bengal. That's a good example of what Dan Sarowitz was describing this morning as these creative waves of destruction where there's always winners and losers. Now, if we know that we're creating these waves now and we really are with things like synthetic biology and nanotechnology and the converging technologies, then we have to pay attention to who are going to be the losers, who's going to be cleared away by these waves. And if there's a disparity between if you're looking at destroying the livelihoods of many hundreds of thousands of people who are already in very economically vulnerable positions in order to improve the position of a particular market player, then there's a justice question and you need to have structures that will deal with that justice question. I was going to put a very different spin on this old story. That is that the creative destruction of technological innovation and market-mediated technological innovation is the story of the liberation of humanity from mass poverty and from billions and billions of people being alive today that otherwise wouldn't. Our population has gone up as life expectancy has gone up as education levels have gone up. All the indicators on the Human Development Index are going up. The last 25 or 30 years are the period of the most rapid dizzying progress for humanity overall in all of history. And that is a process that is completely inseparable from the way I understand it about unprofitable, inefficient producers going out of business. That's an ideological argument and you can point to social innovation as being the basis of improvements in health and life expectancy, not just technological innovation. And producers going out of business, I think if we're talking about, for example, synthetic biology, one of the impacts probably is going to be if you're moving to producing materials in vats that previously were farmers in the south, whether they're Artemisia farmers or rubber tappers or whatever. Putting those people off the land in a very short period of time and taking over their land in order to grow biomass, that's the sort of story we're going to have with the growth of a biomass based synthetic biology economy. That's not a... There's no justice or improvement in their lives or improvement in their livelihoods that throws them into poverty and poverty is the first indicator of reducing a lifespan. After the industrial revolution we were talking about different anniversaries. This is the 200th anniversary of the industrial revolution, or at least the resistance to it. The Luddites were 200 years ago this year. We saw a reduction in the UK. We saw a reduction in lifespans and people shortened became shorter as hung a bit as they lost jobs and income. So it's not an upward trend that always... I wouldn't at all want to sugar coat the fact that there are losers in the story of economic progress. But there's absolutely a risk that paying too much attention to short term dislocations can deprive us of enormous long term gains. Can I just ask one point on this? So I think something that is new about these technologies is that a lot of the technologies in the past like nuclear radiation or pesticides the concerns we had are basically health risks that theoretically at least we could govern with our agencies. What's different I think about a lot of the technologies today like synthetic biology or genetically engineered crops or nanotechnologies a lot of the public concerns aren't so much direct health risks. They're these more broader social, economic, ethical type concerns. And one of the problems with our regulatory structures we have no way to accommodate those concerns. A good example is recently on milk and meat from cloned animals. The FDA found there was no health risk from those. Took public comment and got tens of thousands of comments not so much addressing the health risk but saying we have these broader ethical social concerns about these types of products in our food. I don't happen to share those personally but tens of thousands of people took the time to write in and the FDA I think legally correct said we can't look at that. Sorry thanks for writing but we can't talk about that. We can only talk about safety and efficacy. So basically telling him you're out of bounds that when you talk to your government about these issues your concerns we can't consider those. That doesn't seem the right way to run the railroad that there needs to be some way to engage people. That's what they're really worried about to be able to talk to their government have a dialogue on that. It's problematic it starts to overlap with religious issues we really want our government sort of making religious pronouncements so it's a difficult issue to address but we're not structurally able to do it right now. I want to bring Larry back into the conversation and so I want to swing back around to the IT sector that you haven't mentioned you mentioned biotech and nano is IT Goldilocks are they getting it just right there or not? I see IT sort of 10 years or 15 years ahead of these other technologies I mean it's really changing our life today. I see these other technologies going to be hitting in the next few years I think these other ones do raise I think more multi-dimensional issues than the IT does but the IT I think is a great example that we can look at and learn from I mean I think groups like ICANN when we talk about international oversight are very good models to look at so I think there's a lot we can learn from that I think it's a little bit more mature it's a little bit ahead of where these other technologies are You may be sick of your own writings on these subjects but you're more familiar with them than some of us are so why don't you give us sort of brief spills on a couple of the topics that you mentioned net neutrality and the internet kill switch Sure and I should say hearing this conversation I'm so glad that I focus on information technology because I don't want to deal with any of these other issues it's so much more fun and safe apparently the worst thing that happens on the internet is someone defames or slanders you or steals your identity and wrecks your credit score but at least you don't mutate Not yet, not yet Exactly One of the things that's worth pointing out because particularly if this conversation were happening in Silicon Valley most of my colleagues would be very bemused by the question of what can Washington do, what should Washington do we don't really think about I mean I like Washington personally I spend a lot of time here but most of the information technology companies Well, you know I'll have a DC office So even if you're not thinking about Washington you're just thinking about you There's a genetic defect that says if you don't pay attention to Washington it will go away Ask Microsoft Ask Intel Ask Oracle, ask a lot of companies that have dealt with the Department of Justice over the last 10 years and you realize that's not true It is something both that Silicon Valley needs to pay more attention to but also it's worth understanding that in Silicon Valley we just don't think about what is the proper role of how is regulation going to save us how is regulation going to skew us how is regulation going to mess us up And one of the things I think it's worth noting is, again it's in very early stages but I'm very encouraged by what I see as signs of, you know, sort of the internet as a frontier I made this point in my slate piece which infuriated most of the readers of Slate but I said that the internet is like the American West in a lot of key respects and one of those is that it doesn't really accept transplanted legal institutions being forced on it it rejects those and at the same time it develops its own organic structures that make much more sense. So you see, even 10 years ago eBay introduced the buyer-seller rating system. It was a very efficient from a Ronald Koch standpoint it was a brilliantly low transaction cost way of policing certain kinds of behavior. It wasn't perfect by any means but it policed certain behaviors on eBay. It did it in a very nice way that's evolved I think today you see on Facebook in particular because it's a social networking site because they give their users the tools to organize again in a very efficient way every time Facebook makes a change to its terms of service, particularly having to do with privacy, you know, the Facebook users they speak up and if they're not happy and sometimes it's mob rule they do get their voices heard, they get changes made and I think that's the beginnings of what you might think of a sort of frontier law on the internet. It's not coming from a traditional regulator it's not coming from, you know, the folks back east the way it didn't come, you know it's sort of posseys and hanging trees now but it can evolve and I think it will evolve to something much more organic and much more suitable for this unique kind of environmental properties of digital life and that's what I find so encouraging about it. Okay, the net neutrality flat doodle that's been going on for years now is born of the idea that sort of self made frontier law isn't good enough that in fact this process that Tim Wu describes of previously open technologies being sort of taken over by big interests and closed to competition and innovation there's a risk of that happening on the internet and therefore we need a regulatory apparatus to nip those malign trends in the bud. So things like that have happened in the past is the analogy of those past problems to the present wrong-headed or where in your mind or is just the remedy not the right one or so where where is this initiative going wrong in your own. I haven't finished Tim's book I don't want to misrepresent it but I don't single him out there's lots of advocates for there are certainly examples of industry capture and of technologies particularly because of the high network effects of information technologies where companies become quite dominant but I think as Tim also points out in the book those dominant monopolies don't last very long and often they get broken up not by government intervention but by just sort of the next stage it's a creative destruction but kind of on steroids from a shampaterian standpoint it just happens faster all the time. The problem with that I tried for the whole last year to get people in Silicon Valley worked up about the net neutrality debate they couldn't care less they didn't really see it as an issue they didn't really care if something got passed because from their standpoint yes of course there's a risk that bad things will happen but the idea that the FCC and I don't mean to single out the FCC again it's an institution that has by design incremental and deliberative features the idea that the FCC could use the FCC's own work prophylactically figure out what the right rules might be to solve a problem that hasn't exactly materialized yet just didn't make any sense to people back in California and I think in particular what I was most struck by I'm a very boring lonely person over the Christmas break I read the FCC's report which they issued the day before Christmas and 200 pages it was a remarkable effort one of the things that struck me in coming through that was to realize that from the beginning the FCC acknowledged at the beginning of that process last October that they really hadn't looked at the internet and how it had evolved for a very long time and they asked a lot of the original NPRM asked for feedback on how has the internet evolved what's actually happened since the last time we took a close look at and obviously they got lots and lots of feedback on that and I think if you look at how the report ends up and how the final order comes out one of the things you realize is that the FCC understood at least the details they sort of got the trees but not the forest that the internet of 2010 is a very very different environment than the internet of 1996 so if you go through the report you find exception after exception after exception content delivery networks are exempted and e-book readers which offer internet access are exempted coffee shops are exempted mobile broadband is treated differently peering and caching arrangements are exempted so and so what you realize is they got the message that you know there was a lot of non-neutral behavior going on but that had evolved from an engineering standpoint from business standpoint to optimize behaviors that consumers wanted and so they said okay we're going to put those 15 things to the side and say they're okay those technologies, those business arrangements they're fine going forward no more and if you think you've got a network management practice that is good and improves things it appears to be non-neutral even if it doesn't have an anti-competitive direct impact you still have to come to us and get approval for it before you go ahead that's I think where they miss the forest for the trees let's go back to the big picture and sort of take it back a step is it possible for governments to keep up with technological change in an intelligent way that seems like there are some massive handicaps under which a you know a beneficent and public spirited policymaker is operating first of all you are in a centralized deliberative decision-making process that's answerable to all kinds of different stakeholders and interests and you are dealing with an emergent bottom-up decentralized phenomenon so that it swack them all if you try to deal with it here then things are going to pop out there so there's this problem of centralized and lumbering versus decentralized and agile secondly there are just enormous information asymmetries the people who know most about the next thing are not government actors they are people out in the private sector or out in universities, they are people out in the world and the regulators depend on the regulated for the information they need to regulate given those facts what is it what is realistic to expect of governments it's pretty limited in a lot of ways so I think you got to distinguish legislatures from regulatory agencies the legislatures like congress they only address an issue a window every how many years or decades in many cases and then it sort of gets fixed there forever so you basically have outdated legislation very quickly and they never come back a good example right now is the clean water act adopted in 1972 the fine water pollution is coming from a point source today 90% of the water pollution comes from non-point sources it's not regulated by our clean water act it's completely an outdated statute we've known that for 20 years but congress hasn't got around to fixing it yet the delaney clause is another example that banned all carcinogens and food it's impossible to ban carcinogens and food there's just food there everywhere natural and artificial this idea that a risk in 1 in 10 to the 10 to the minus 14 you were not allowed this made no sense in the real world scientists all knew that but it took them 20 years until a court order forced APA to ban all food in the United States before congress finally stepped in so we have these statutes that get adopted by congress and they stay there forever so congress I don't think is a very good agency entity to deal with these kind of fast moving problems you look at regulatory agencies they're stuck by the statutory mandate they can't have a great example again is a project XL program that EPA started in the 90s you had problems like Intel they had a facility near where we are in Phoenix they were basically changing their chip every six months and every time they changed their chip they had to get a new permit from the state that took two years for the permit to get approved it just was completely incompatible with a business model EPA to its credit stepped in and said hey why don't we think of a better way why don't we sort of look more broadly and step back from these regular statutes and say you can improve the environment overall get buy-in from the local public interest groups we will allow you to make these changes without getting a permit renewal if you get a bigger more bang for the buck more environmental improvement it was a great solution and then congress came along and said you're not allowed to do that that's violating the statutes so these agencies are confined within these very narrow mandates and can't think proactively in a lot of ways so I think we have to you know agencies and in congress obviously have their place but we have to be thinking of other institutions other mechanisms other partnerships you look at nanotechnology I think one of the best thing that's going on is something like a Dupont and EDF combining together to create a nano risk framework where you get a public interest group and industry together figuring out here's a sensible way to control the risk of your products move much more quickly than any of these agencies that congress can do said the Dupont don't even use their own framework they've only used it for one I think one thing so you know it's actually gone nowhere in that case I'd like to answer your question please and I'd like to answer it not from you know Washington again I'd like to answer the question you know so what could Addis Ababa do or what could Lusaka do or somewhere you know that what governments like that that really are stressed in terms of the issues they have to deal with the lack of resources they have available and so forth what they rely on are international institutions they rely very much on the institutions provided by the United Nations or even the Bretton Woods institutions and ironically the very institutions that would have given them some sort of heads up for what's going to hit them technologically got dismantled in the middle of the 90s you know you had the international center on trans nationals taken apart also here the office of technology assessment taken apart the need for an institution globally but also you know nationally networks of institutions that are able to track and have the mandate to go to governments and say you have to be watching this and you have to be watching that and don't worry about this this is fine and it's able to not just pull from experts but able to bring lay assessment into that and you know that's here we are at Google there are many ways through social media we can begin to do interesting lay assessment of technologies very rapidly and we do all the time in some ways bringing that together and having an institution that brings together that sort of very quick rapid assessment of technologies and is able to bring it quickly to who matters at the moment there's no institutional actor that has that role and civil society tries to do it but civil society is even more underfunded than academics and so forth so in your mind then what needs to be done is sort of institution building building up institutions that monitor technology risks specifically an international convention for evaluating new technologies to be able to do horizon scanning and be able to identify what are the technologies that we should pay attention to and then put them in some sort of process to bring it to governments and other bodies for whom that matters and building social whether it's social media or cultural institutions where rapidly develop knowledge and assessment of technologies Can I answer your question as well? Please So from my standpoint there's a apocryphal story that the first day of internship for residents in the emergency room the first thing they're told is don't just do something stand there and I think that's a wonderful model when it comes to disruptive technologies there's one thing I think and again we're going to talk nostalgically about what worked in the past one thing that particularly national governments used to do quite effectively that they don't do anymore and that's funding basic research basic research in the market the costs are very difficult to determine the benefits are very difficult to determine so a lot of basic research doesn't happen or doesn't happen on the best possible time frame obviously the internet itself although it wasn't the intention of the Department of Defense to build what we have now but at least from a serendipitous standpoint the funding that was done on the basic initial protocols at TCFAB of course were very important in what's actually now developed into something very very different we're not funding those next generation happenstances and accidental discoveries today at least certainly not to the extent and with the same enthusiasm that we were even ten years ago but certainly not twenty years ago I don't expect that to change but if I could change one thing that's what it would be Gary what's your take on Jim's critique of the dismantling or under supply of national based and international monitoring I think having a technology assessment institution is an important thing to have that we are under utilized on some interesting examples of Great Britain and Singapore creating such entities that are looking forward and trying to anticipate where things are going and trying to give early warning to governments of issues coming down the pipeline I think that's a great type of institution to have and I think losing the office of technology assessment was a shame and we need something like it maybe a little bit more nimble not doing sort of two year studies of what was yesterday's issues but what are the issues coming up in the future I think we need that I think another type of organization to think about is some kind of I'm Canadian too is a law reform commission it's a Canadian event although I became a US citizen this week but Canada and Great Britain have a thing called a law reform commission whose job it is to basically look at existing laws and say where they're outdated where they need to be updated maybe we need something like that so we have these old laws on the books that get sort of out of date updating them and keeping them current with technology and other factors again just to stress my second question aren't there so here I painted this picture of governments just can't possibly keep up with what's going on and maybe you can tinker a little bit with ramping up some monitoring institutions but still it's going to be David versus Goliath it's rearranging deck chairs deck chairs on the Titanic but isn't there then on the other side enormous sort of forces of inertia and stasis that is you have as we've seen from the Hollywood clips a public that has a great appetite for sort of hysterical fears about things that really aren't that scary you have a media that loves to thrive on sensation and if it bleeds it leads or if it may bleed 20 years from now it still leads and also you have often in particular industrial configurations big entrenched interests who don't like the next disruptive technology because they're not going to be in charge of it and therefore they have huge incentives to work together with governments to head off that challenge of the past. I don't recognize what you're saying obviously it's a trope but I think you could see in a different way that what you actually have if I look at the media around technology I see one after another wonder story for what technologies are going to deliver tomorrow which is entirely wrong and entirely hype in order to generate profit or to generate revenue or to generate funding or something like that. I think don't you see both? Well you see both but I you've got both of those at play for sure what I see in terms of governments inability to move governments could move so for example nanomaterials governments are relying so far as they're relying on the charity of organizations civil society groups and so forth to try and come up with lists. Tomorrow the EPA and the FDA could say we're going to create a list of every single product on the marketplace that has nanomaterials in. In fact the Canadians are probably going to do it the European parliament is pushing for it but they've refused to do that they don't want to do that they don't want to do that because the industry pushes back and what you have is you know the sanctity of this sort of innovation led economy that says well let's not just rock the boat that's I think that's a stasis that's a inertia and that's an inertia needs to be overturned you know depends what you think governments role is I happen to think governments role is as much to look after the welfare and well-being of its people and perhaps more so than its companies who tend to do pretty well and that's increasingly true in a global situation trying to just maintain that social net Larry your take on the the forces of stasis that can that counteract this incapacity of governments to keep up I agree with you I see both you know we have the horror stories and we have the wonder stories and we're just inherently schizophrenic about technology that's part of what makes us interesting and maybe to go to the previous panel that's part of what proves that we're human and not the replicants or androids I agree so it really does sometimes come down to who do you trust least you know big corporations or big governments and somehow I think that's a very fundamental psychological question I'm not sure what you know the origin of it is but yeah I definitely go on the side of being much much more skeptical of big government largely in part because as you say a lot of times again when it's a disruptive technology the industries that have the vested interest that are not interested in the change happening that's you know in some ways unavoidable they're going to you know they're going to engage in rent seeking behavior as much as possible to slow down or skew or they won't stop they never do but ultimately you know they're going to try to interfere and you know they have strong allies in the regulatory agencies because of the long working relationship again this was exactly the same thing that happened on the American frontier the east was not interested in regulating the west to make the west as good a place as possible they wanted to exploit the value of the land they wanted to exploit you know the crops and everything the timber and everything that was being developed as quickly as possible to build up their own coffers from a government standpoint or from the industries back east so I don't trust that relationship very much I'm very skeptical of it but you know it often comes down to who do you trust least I don't know what I see more in biotech is companies actually taking over the technology and driving it in ways that are at very interests rather than for other interests so you know we saw the genetic modification driven towards these crops that are about increasing the pesticide sales of a few companies that's a ridiculous direction to go in any kind of rational way but it made sense for Monsanto and what was to become Syngenta and Bayer and so forth what we're now seeing with synthetic biology oil companies taking control so that they can move this towards keeping something a little bit like oil so they can keep their infrastructure and they can create biofuels that look a bit like gasoline and can go straight into a car so they don't have to change their infrastructure so they're taking over the technology in the many ways that could go and driving it in what's actually going to be an extremely destructive direction a couple examples one I think it's interesting it's a nanomagic incident from about three years ago where there's a report from Germany that some hundred people have gotten sick from this brand new nanotech product called Magic Nano and six were hospitalized with the respiratory problems immediately we saw front page newspaper headlines across the country from groups like ETC saying this is our point we need an immediate worldwide ban on all nanotech products or moratorium on all nanotech products a few days later the government of Germany came up with reports that there's actually no nanotech in it no one was saying let's ban the non nanotech products no one was saying you know these people are still in the hospital they're still sick but it didn't matter anymore it only mattered if it was nanotech that hurt them because of this there's no pressure if you guys put out a press release about banning non nanoproducts no you didn't as soon as you never said another word about it once it wasn't nano you didn't care those people can die for all you care then let me give you a second example then you can do my second example is so I got interviewed by local tv station on a couple of wrist things like nail polish and they asked me if you have any other interesting wrist stories I said I do I just found this peer-reviewed study came out today showing organic foods have very high levels of very known carcinogen mycotoxins they get insect damage mold grows and you get this very potent carcinogen and these organic foods have very very high levels of them you should do a story that organic foods have carcinogens in them she's a great idea it goes back call me two days later instead of talk to our boss we can't talk about that people will be too upset with us if we talk about that you know it has as ETC proposed applying to precautionary principle of organic foods is any organic foods safety tested not a single one in the published literature there's thousands on GM foods why aren't you calling for the precautionary principle of organic foods it has known carcinogens 160 people just got sick in Illinois from organic foods there's thousands of documented cases of people getting hurt where's the precautionary principle it's built into organic standards where's the safety testing what safety testing do organic foods have I can't speak for the organic industry I'm not sure but yeah but with no safety tests no testing for carcinogens let me shift gears and just as things are getting interesting can't have that to talk about a kind of adjunct soft regulatory force that often may have maybe much more supple and efficacious or powerful in a benighted and ham-handed way but nonetheless public opinion and the spotlight effect it doesn't always matter if a corporate actor is pleasing a regulator or staying within the letter of the law if he does something in a civil society group or a media organization calls it public attention and it's not popular with the public then that's a huge headache for that corporation that exerts constraints on what corporations can do that often are much tighter and more binding and yet sort of more sort of changeable with the times than the regulatory process and sort of in the bigger picture hasn't our culture moved over the past generation to especially since the huge cultural changes in the 60s towards generally a much more skeptical attitude in public opinion about about the proclamations of science once upon a time if some guy in a white lab coat said it then it was gospel since the environmental movement since experiences with Three Mile Island and so forth there's been a lot more public skepticism about the unquestioned beneficence of all things scientific likewise there's been a huge development of civil society organizations that didn't exist a generation or two before so isn't this kind of adjunct regulatory force kind of much mightier today than it was in the past and isn't that a fairly powerful check on technology producers occasionally it depends who your target is it may be that a company that has a consumer product that is directly affected and it's possible to put them in a spotlight and maybe they'll move but often the company is responsible let's say Cargill Cargill there's a company which has tremendous power in the global food system is pushing very hard in fact on synthetic biology and biofuels and so forth doesn't have shareholders doesn't have any requirement to respond to any consumer because consumers don't buy from Cargill on the whole you can buy some chickens but that's about it it's an effective way of controlling that company and that's true for a lot of actors within the market the market isn't a democracy it doesn't respond to public pressure it responds to whoever has the most money and can spend it appropriately just playing out this adjunct regulatory role it can go awry too right because Demos is a fickle beast and it can get freaked out about things that really aren't very scary and so it becomes a very powerful force I think you see it playing out with the plasticizer BPA where you have government agencies are sort of equivocal these things have been around 50 years the science on it was mostly pretty clean and now there's been some studies raising some concerns about it I've looked at this frankly I don't know what the answer is my kids still have big spinole water bottles but I don't put them in the washer to heat them so I don't know what the answer is I think a lot of people don't know but the market is speaking very clearly there's pressure from these groups and it's being stigmatized and consumers see that now and so we're going to move to a different plasticizer just because the regulatory agencies aren't moving on this but the market is and so the product manufacturers are all moving away from it so it's a very powerful force to move away from this chemical we've been using for 50 years the question is what are we going to move to right most plastic companies are moving to has not really been tested are we going to move something worse or better who knows what does the science say what if we do determine that this is sort of a fairly safe plasticizer I don't know if that's the answer but then we have basically these forces pushing us to do things that are wrong and so I think it is important that people are engaged and speak with their consumer as consumers that's good how do we monitor that how do we ensure that it's consistent with science how do we prevent it from being sort of pushed by scaremongers how do we make sure that the industry flags the wrong way and that's I think a real challenge well I think on BPA it's Health Canada who actually said that BPA shouldn't be used for they were the first act but they also said it's not dangerous for adults at least there's no risk to it but that then that led to moving the market actually the market didn't move until Health Canada said we're laying down this law so it was actually a regulatory move I was going to throw out the vaccines and autism hullabaloo and out of control and then actually prevent people from doing something that's very, very prudent in terms of controlling known risks can I give you an example from my piece I'm amazed to find myself in the position of being a moderate I mentioned before that the sort of potential for mob rule particularly when users get new tools and they're really not quite sure how powerful they are and you're asking about the sort of adjunct railway function I'll give you a good example of how it can be powerful and I think also how it can go wrong and that is with the response some years ago now probably almost ten years ago to the very first experiments with using radio frequency ID technology at the product level well actually it wasn't at the product level it was in fact at the warehouse level but just not to go into great detail but essentially RFID technology is self scanning like a barcode but it has the ability to send and receive signal with very low not no power source and there's great potential for it to improve the efficiency of supply chains and product development and all these other things the initial experiments were being done ten years ago in the warehouse and a group arose in opposition to it that called Caspian and they claimed to have hundreds of thousands of members and they were very effective they were very effective at using the media very effective at getting their message out and you know getting a seat at the table at various discussions there were laws proposed in the national level and state level in California passed essentially banning the use of the technology before the use had ever actually come into anything like a cost effective opportunity and not for good or evil but it turns out that the woman behind Caspian it was very clear and she wrote a book called spy chips and said with RFID technology is that I'm convinced it is the technology that was prophesized in the book of revelations as the sign of the devil that would bring apart the apocalypse and again that's obviously someone can have whatever view they want on the religious merits of it but you know some essentially what it turns out was Caspian was really one person one extremely media savvy person and certainly held back or skewed the deployment of RFID technology by at least 10 years whether that's a good adjunct form of regulation or not I'll leave it to you potentially powerful and let's open it up to questions from the audience now consider what's happened recently in the financial sector here we have an independent monetary authority run by industry experts which is very broadly independent of government influence and an industry which is populated by supposed to be very smart people who operate they're supposed to be maintaining some equilibrium through counterparty scrutiny and yet to take up Larry's metaphor in that case it was the Titanic and sometimes if you're on the Titanic you may not want to move the deck chairs but you might want to do something so perhaps you guys could all address the question given the fact that you were extremely skeptical of all conceivable coordination regimes which might mitigate the risks of catastrophic failures what do you propose that we just suffer catastrophic failures and address them after the fact? first of all I think there is a very appropriate role for government is we get risks that are documented and so on that their role should be to control those and they have a hard time dealing with brand new things to move it in any kind of nimble way to provide any kind of oversight and I think for those we need some kind of other mechanism and I don't think leaving it to industry is the answer I don't think people with trust industry I don't think the record of industry would support trusting them solely but I think industry has to be involved but I think there needs to be partners with it so there has to be responsible parties from the civil society public sector public interest sector who would partner with them to oversee this and provide the kind of model what we call a soft law model an adaptive quick response just to give you another example in Netherlands a lot of environmental regulations done by covenants where you have an environmental group the industry government agency and the industry group who basically sit down and do a contract of what's going to be done about this problem and as soon as there's a change in circumstance they just meet next week and they change it it doesn't go through the kind of public comment so it's sort of cutting out the general public a little bit but it's very fast but it's incredibly nimble, quick and because all the key stakeholders at the parties and maybe it's a much more coherent society than ours is people trust it because everybody's at the table and everybody trusts at least one of the people at the table sorry to take the floor again but I just have a question based on kind of an overall philosophy do you really think that the market sometimes the way I hear the market being spoken of it's almost as if the market were an organic thing when it isn't really the market is a collection of companies that are interested in making profits and do you really think that the market is a better gauge to public policy than the professionals who, let's say who staff the regulatory agencies and government and your universities by the way I will recognize that NGOs occasionally also are more interested in their own short term interests by the way Michael Crichton was mentioned earlier I actually served with Michael Crichton at the senate hearing on climate change in which senator Imhof who was the chair of the senate environment committee actually praised Michael's book which you also should read the novel that he wrote about climate change which he said that basically it was a fraud that the real scientists weren't interested in it and it was the NGOs who were pushing it to gain money from to frighten the public to gain money but the question is basically if you're talking about government agencies versus the market or the government agencies controlling tendencies in the market when we know that the pharmaceutical it's not a myth that the pharmaceutical industry that the food industry has done everything possible to prevent consumers from even being able to read what's on labels and how big the print has to be on how fine the print has to be on the labels it seems to me that the issue is one of a short term time perspective and I just like to get your reaction to it that's why it's a question a short term time perspective which is basically the way most of our private enterprise operates we don't want to make the money as quickly as possible versus a long term time perspective on what's good in general for society when I went to Harvard business school I have a doctorate from Harvard business school many years ago the professors were telling us you know business is not really industry needs to be regulated because based on they're looking to the next annual report and that's too short a time perspective now in the meantime we've seen looking to the next quarterly profit and loss how much they can make or even worse they're looking to what the influence of a business decision is going to be on tomorrow's stock prices this is the trend that I have seen someone who is trained as an economist with some regret over the last years and I just wonder how you react this if you have to just say well who is more likely to come up with the right information or the right judgment is it the guy who is looking at a stock price today or is it some regulatory agency which is staffed by people from your universities so again my comments are limited to the information technology industry I don't think the dichotomy that I see I don't see it the same way you do I don't think it's a choice between traditional governments or the market and I don't necessarily think the market is just the companies but leave that aside I think it's a choice between traditional governments who as I say move at a very slow and deliberative pace I design for good reasons versus more organic forms of governance that are developing within the technology themselves so it's consumers, it's citizens of the digital life, it's citizens of the internet who are developing their own forms of governance and I find those much more promising than yes than the regulatory agencies who do not live where the rest of us live just to come to your question my sense is that the governance that works is the governance where people are paying attention and that's kind of I think what you're saying here that what you require is an active citizenry or an active civil society or whatever that's holding to account whatever the governance structure is and whether it's you know I have problems with the idea of a compact between some chosen NGO and that's easily and in the Netherlands in fact is easily corruptible and I entirely agree with your concern because companies don't have to have a technology doesn't need to work it just needs to work long enough in order to sell it and at that point you can move on and that means that you know I think we've seen that in fact with GMOs we've seen a technology that actually hasn't delivered much of a promise it hasn't really gone very far and hasn't done very much but for the Monsanto's and Singentas of the world would it's done it's allowed them to concentrate the seed industry to gain control of the seed industry to move on and so for them it's worked perfectly but for society it hasn't really done much apart from increased sales of a particular pesticide so that they don't have the interest of society at all in any length I would just chime in and say it's I think it's no good trying to make the call as to sort of who is wiser or a better person a government regulator or a market actor it's rather systems of decision making tend to produce better results over the longer run and I would I would put in and here I wouldn't argue versus market versus government but more broadly decentralized decision making process that pull in information from lots of different sources and that react positively and imitatively to success and negatively to failure are decision making processes that can learn ones that are top down and that double down when they get things wrong are ones that tend to get things wrong again and again and again right there in the red scarf I'm Anne and I think we're missing something of an obvious innovation and that's self-regulation and where associations institutions organizations can internalize certain democratic activities and processes and make them a part of their activities and I've been experimenting with this myself and something I call virtual democratic countries which sit as a layer over existing democracies and are really called in experimentation with democratic and constitutional liberties that doesn't depend on civil laws or criminal laws rather so this experimentation can really go on very robustly and also has its own economic infrastructure just to follow up on that one thing that people in democracies are very good at is internalizing over time some new behavior self control is a part of a democratic at least in an American point of view we stop smoking we decide to overcome slavery not maybe very willingly but I just want to offer that as what do you think of that as an option self-regulation Jimmy you just want to say bar humbug or is there anything to self-regulation self-regulation was proposed for synthetic biology I think four or five years ago synthetic biology 2.0 in Berkeley in 2005 the synthetic biology community said we're going to create a bunch of self-regulation proposals and very clearly said it was a way of staving off regulation that was led there they wanted to and we saw this in fact with biotech in terms of Asilomar back in 1975 that self-regulation is often put forward as a way of saying we're dealing with this back off and that's you know I think where we've seen self-regulation type approaches we've seen it in nanotech where you know voluntary governance can you provide us with some data if you like to it's basically the approach the FDA has taken so the EPA has taken on nanotech 30 companies have responded the UK government did the same thing they got I think it was two it doesn't work companies are not interested in ultimately in self-regulating apart from as a PR front in order to avoid constraints there needs to be some good boundaries if you're going to have some trust we're out of time and we can talk forever about this just to give you one example we talked this morning about virus and DNA virusings for smallpox viruses on the internet the recipe to make a live virus is on the internet there's companies that sell DNA sequences there's no law against ordering the smallpox virus DNA go try doing it you can't do it because of self-regulation there is self-regulation that works it's not only sufficient it's not the only thing but there is effective self-regulation we have to think how to encourage it how to grow it it does play a role please so I think self-regulation does work on the internet quite well one of the best examples of that obviously is the IETF the internet engineering task force which is responsible it's a self-organizing virtual community of engineers who are responsible for maintaining and updating the basic protocols to keep the internet being the internet but it's also worth pointing out that self-regulation has a dark side as well Michael Gottlieb used twice this morning an example of the comic book industry in the 1950s as an example of over-regulation by the government in fact he got every fact about that story wrong what actually happened was there were hearings held the Kfavir commission asked a bunch of questions started rattling the saber about regulation of the industry and what the industry did was to respond by over-regulating itself it created a voluntary self-regulated group called the comics code authority which banned nearly all the content that was currently being published and pretty much destroyed the industry for the next 40 or 50 years definitely gave itself more regulations than would have ever passed supreme court scrutiny had the government done it under a first amendment challenge and so in some sense that form of self-regulation and the same sort of thing happened in the movie industry as well can be overly regulatory and can do more harm than letting the regulators do what they were going to do or what they were threatening to do in the first place with that I'm afraid we're out of time we could go on for a long period but we'll be right back and I'll thank the panelists