Innovation’s Dependence on Regulation

The article focuses heavily on government regulation which makes me feel like it subconsciously paints a picture of "those evil capitalists trying to escape regulation...haha fail". In the light of recent mass surveillance revelations I think less government is still very much a valuable goal to strive for.

The counterexamples regarding infrastructure are a bit too tongue in cheek for me, too. The point about the legal system makes sense on the surface but only if contrasted with no legal system at all. Pretty much all "freedom utopias" I'm aware of are heavily based on a strong belief in property rights and private contracts.

> Some of the most explosive tech companies today benefit intensely from various pockets of regulation: Spotify and Netflix[...]; Lyft and Uber [...]; Stripe, Square, and even much of Mr. Thiel’s early success at PayPal [...]. And don’t forget the Internet itself [...]

All his examples are bogus/fallacies.

> without copyright law, for instance, no one would pay for those services

If copyright law did not exist and people did not pay for the artists, artists would have no incentive to compose/perform/record/distribute their work. That would create the incentive for people to pay for those services. As lawl pointed out, people already pay for these services for their convenience.

> ever been to a country without paved roads?

The private sector would happily pave the entire world. Road pavement is not something only the government can do. We have numerous examples of roads built by the private sector (private toll roads, anyone?).

> without SEC regulations to limit our financial losses on identity theft, who would so freely hand out their credit card information?

The same people who would use a credit card in the first place.

> And don’t forget the Internet itself, which began as a scientific communications network started by the government.

Really? How can you predict it would not be created in some other form by the private sector?

As I pointed out the last time this came up, it's been tried at least four times, with projects that got far enough to have people on an offshore construct.[1] All failed.

There is, of course, one huge success - Hong Kong. It's a collection of islands and a peninsula that run under a much more liberal set of rules than its parent nation.

There are various "special economic zones" around the world, in about 25 countries.[2] They're usually intended for export-oriented industries. India has had the most success with this concept.

The closest thing the US has to this is the Reedy Creek Improvement District, which is the legal arrangement which makes Disney almost a government around Disney World in Florida.

Note that neither Uber nor Airbnb would benefit from being on an island.

[1] http://en.wikipedia.org/wiki/Micronation [2] https://en.wikipedia.org/wiki/Special_economic_zone

> “Why do people feel perfectly comfortable forming a startup when they know that 90 percent of them fail? Because they know that corporate laws and bankruptcy laws protect them from personal liability. They know that they won’t lose their house if the company goes bust.”

This is a intellectually dishonest statement. Even if you had no laws you would still be able to find investors willing to invest in an company, with the understanding that it could fail. The very concept of "personal liability" only makes sense inside a regulated society.

Hypothetically speaking, living in a everything-goes society, it's true you might get killed or have your house burned down - but that's only if you are bad at PR, communicating expectations, or self-defense.

In fact, a lot of people did just this earlier in history. The main reason startups are more successful now is because of the leverage technology provides. That and the fact that, for the most part, government/bandits don't take the money you get for creating wealth. Stability plays some role too, but there has been plenty of stable societies that didn't have anything resembling startups, and a lot of startups thrive in macro-economically unstable climates.

EDIT: Of course, the above hypothetical scenario is not prescriptive, i.e. it's not desirable. It's simply an extreme example that illustrates why Mr. Regulator's statements are wrong and intellectually dishonest.

> Spotify and Netflix (without copyright law, for instance, no one would pay for those services);

Really? People already decide to pay for it instead of pirating it, because it's more convinient, not because they're scared of breaking the law.

> Dempsey argues there should be greater recognition of the extent to which startups benefit from government infrastructure. "I can guarantee that if you don’t have a legal structure you will not have innovation," he says. "Instead you will have chaos."

I'd say that one doesn't necessarily imply the other. It's possible to agree on a legal framework (code of conduct, how contracts are enforced etc.) without government infrastructure. Government infrastructure on the other hand doesn't necessarily imply a well-structured, consistent legal system. Just ask any entrepreneur in any country about the intricacies and inconsistencies of local tax laws. Common law by its very nature is complex and often contradictory.

Interestingly, the software industry is the least regulated industry I can think of, and the most rapidly evolving. I wouldn't be quick to dismiss the correlation.

The D programming language tools are also developed under the Boost license, which is pretty much a rejection of copyright protection.

The first thing that came to my mind when I saw this man made island in international waters was that someone can just get a boat and a few armed men and rob the place. I agree with all the complaints about government surveillance, intrusion and so on, but the one thing that they do provide that would be sort of important for a place like that is protection. So then they would have to raise money for an army to protect themselves... next thing you know you are paying taxes for the military...and so on and son, you get the idea, you are right back where you started.

I'm sorry to say (as someone who has worked at Wired two different times) that this is not one of Wired's most convincing pieces.

First, the pro-seasteading folks are not "letting go" -- as far as I can tell, they're in it for the long haul and have said for the better part of a decade that they intend to take small steps to learn about the engineering requirements for a blue-water seastead. Here are articles I wrote on the topic when they were saying that back in 2009: http://www.cbsnews.com/news/next-frontier-seasteading-the-oc... http://www.cbsnews.com/news/seasteaders-take-first-step-towa...

Second, the reporter talks about startups "benefit[ing]" from regulation. But it doesn't mention how government agencies have targeted drones, genetic tests (23andMe), 3D printing (DD), Uber and Lyft (in some states), Tesla (dealer sales), Airbnb (in some cities), Bitcoin (FinCEN), etc. The reporter mentions Spotify and Netflix as companies that benefit from regulation, which is false; they benefit from copyright law. The thing is you can have copyright law without FCC/SEC-style top-down rate-setting regulation (US copyright law predated the FCC/SEC by over a century).

Third, the reporter mentions Balaji Srinivasan of Andreessen Horowitz, but neglects to say whether he changed his mind and is "letting go." I heard Srinivasan speak three days ago in Palo Alto, and I suspect he hasn't. The reporter quotes YC's own Sam Altman as speaking dismissively about seasteading, but never said he's changed his mind (as far as I know Altman always held that opinion). You might as well quote Democrats talking about Hillary Clinton one day and Republicans the next and claim Americans are "letting go" of that presidential candidate.

Maybe seasteads will never happen, maybe the darknet will never be robust, maybe we'll never get to Mars, and maybe there's a case to be made that Silicon Valley is "letting go" of these dreams. But this article failed to make it.

Nice resort model. Where are the gun emplacements to fend off the pirates?

The article also neglected to mention another difference between, say, California and Texas: employers don't own your every stray thought in California. Hard to get smart people to work for you under dumb conditions.

What, you don't want to come work in Petopia??? (or whatever it was in the "Family Guy" episode where the dad finds out he has the right to make his house into its own country)

Building a nation is hard, much like building a software stack; you have to stand on tons of infrastructure to be able to make it work, and the underpinnings often aren't pretty and/or efficient. Look at the mess that most TCP/IP stacks are, and at some of the more baroque forms of administration you find out there, like those old livestock rights they have in the City of London.

Fake title. Actual title is "Silicon Valley Is Letting Go of Its Techie Island Fantasies".

A bit off topic, but that image looks a bit like the board game Carcassonne.