I would describe myself as a post-liberal economist. During my studies at the University of Zurich, one of my subjects was “ Globalism“ and how it would impact the world. This was the big hype back then and we discussed the power of free markets, political systems, and the need for regulations.
However, as much as I admired those discussions and lectures, my deep love was/is the „digital world.“ Back then, we were more than sure any regulations would harm this sparkling digital development. We believed in a new world, completely self-regulated and saw it as serving the basis for global democratization.
Today, we know better.
The internet is under control and the „open spirit“ is long gone.
Accepting this status quo was very hard for me – but now is the moment of truth and I have stopped dreaming about the old digital world. I’ve had to rethink my opinion and one fundamental change I have with regard to the past is: Yes, we need (a lot) regulations.
Let me clarify two conditions in advance. I strongly believe:
- There are no perfect regulations
- Regulations are never a free lunch
So, should we regulate tech companies and in doing so break the speed of (digital) innovation? My answer is „Yes.“
Let me illustrate a very pure example from history. Nowadays, every self-claimed digitalization expert (remember the social media experts?) calls our time the beginning of the „fourth industrial revolution.“
Let us say this is true and look back in history to learn about previous industrial revolutions. The first revolution was 1780 – 1850. This was the beginning of industrialization. The second revolution was 1880 – 1930 and was driven by electricity and engines.
Both industrial revolutions brought us unbelievable befits and for sure radical thinkers and open frameworks were essential to kick starting these historical transformation processes.
Now back to the present and to the assumption that we are at the beginning of the fourth industrial revolution. By doing so we have to be honest and compare the „beginning of a revolution with the beginning and not the end of a revolution.“
What did the beginning of the first and second revolution look like? It was a mess! Pollution, sick factory workers, missing safety rules, etc.
Do we like to live in such a world? Of course not*.
To create today’s wealth and prosperity, the world back then needed responsible companies, „wise“ innovators, engaged employees, and…regulations.
I believe this is true for every industrial revolution. Even ours, the fourth. Because without regulations and rules (like safety), the free market will fail and so will the revolution.
So yes, we need to strongly regulate the digitalization, and it is our job as digital specialists to be reasonable and support the politicians.
In our imperfect world, rules are the only guarantees we have to create sustainable growth. It hurts but saves humanity in the long term.
*In the western world, we look over to those factories mostly in the Asian part of the world with thousands of badly protected factory workers and we all (even the biggest fans of the fourth revolution) say „those political systems failed horribly.“
Title photo by ev on Unsplash