May this Crisis Shock Us Into Embracing Freedom


During a crisis like the COVID-19 pandemic, certain things suddenly come into sharp focus. In this case, we are overwhelmed with examples of how regulatory barriers, restrictions, and blockages have hindered the ability of society to adapt to rapidly changing conditions.

In his preface to the 1982 edition of his classic Capitalism and Freedom, Milton Friedman wrote:

Only a crisis‐​actual or perceived‐​produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.

Change of some kind is politically inevitable. My new hope is that what was until a couple of months ago politically impossible–a widespread embrace of what Adam Thierer calls Permissionless Innovation–becomes if not politically inevitable at least politically feasible.

In a lot of ways, the pandemic is bringing into high relief the problems interventionism and restrictionism have created. Perhaps, as people see and appreciate how regulation has made the problem worse, they will finally be convinced to dispense with the notion that someone should have to get permission from an alphabet soup of government agencies before producing or trying something new. At the very least, I can hope. Here are a few ways embracing permissionless innovation would make it easier for people to thrive during and after the COVID-19 pandemic.

1.  Drone Delivery

The world oohed and aahed a few years ago when Jeff Bezos unveiled Amazon’s delivery drone prototype. So where has it been? According to the website for Amazon’s Prime Air, “We will deploy when and where we have the regulatory support needed to safely realize our vision.” Adweek reports that “The biggest challenge is regulatory approval.” It is important and a little depressing that the biggest hurdle we have to overcome before revolutionizing the transport of goods and services is regulatory rather than technological. There might be strong arguments to be made for subsidies for basic scientific research, but what good are new technologies when the regulators won’t let people use them?

The FAA should suspend rules and regulations governing drone delivery and get out of the way of companies that wish to use it. There are obviously complex liability issues at stake, but the history of common law makes me optimistic that they can be handled creatively and acceptably by the legal system. It’s kind of nice when Shipt shoppers, delivery drivers, and the mailman come by, but during a pandemic lockdown it seems obvious that we should be exploring other, literally-hands-off technologies for delivering goods. If it has in fact been a good idea to shut down big chunks of the global economy in order to stop the spread of COVID-19, it is almost certainly a good idea to open the floodgates to permissionless innovation in package delivery. It’s cool when our mailman comes by, but in light of recommendations about social distancing, we would likely do well to look for other ways to deliver the mail. Of course, a lot of what the USPS is carrying is resource-wasting junk mail anyway, and I suspect that without the helping hand of government a lot of these little potential disease vectors wouldn’t be sent in the first place.

2.  Home Testing

As I wrote recently, it is simply astounding that the FDA moved to limit the production and distribution of at-home COVID-19 tests. While it is true that false negatives could lead to sick people traveling more and false positives could lead to healthy people clogging doctor’s offices and hospitals, I think these possibilities pale in comparison to improved detection and treatment.

3.  Mask Sterilization and Production

Columbus, Ohio-based Battelle has come up with a process to decontaminate N95 masks that are in very short supply. In spite of Battelle’s claim that each of their machines could decontaminate 80,000 masks per day, the FDA at first only approved 10,000 mask decontaminations per day. Eventually, the FDA relented in response to bad publicity and pressure from President Trump (here is coverage from the Dayton Daily News). It’s another example of the FDA stepping in and actively obstructing an innovative response to a global crisis. Even if brand-new masks are better than sterilized masks, sterilized masks are better than no masks or over-used masks and are a good stopgap measure until more masks hit the market.

Once again, though, regulators are standing in the way. At MarginalRevolution.com, Tyler Cowen points to a claim that getting approval from the National Institute for Occupational Safety and Health approval for a new mask production facility would take 45 to 90 days. This is yet another example of government stepping in and actively preventing the free market from addressing the problem. Yes, there are spillover costs and information asymmetries, but it’s not at all clear we should let the perfect become the enemy of the good.

4.  Eliminate Medical Licensing

In Capitalism and Freedom, Friedman criticized medical licensure for restricting output and raising prices. He acknowledged that there are information problems in medical markets, but he argued (correctly) that this is at best an argument for government certification, not licensure that requires someone to have government permission to practice.

Quality is a valid concern, but just as it is well known that we probably wouldn’t be doing any favors for people if we only allowed Cadillacs and Lexuses, we hurt them by requiring that certain medical procedures can only be done by Cadillac and Lexus-equivalent doctors. At a bare minimum, we should be looking for ways to make it easier for medical personnel trained in foreign countries to work legally in the United States.

Of course, these would all be good policy ideas even if we weren’t in the middle of a global pandemic, but as Friedman suggests, “real change” is usually a non-starter in normal times. With tens of thousands of lives on the line, restrictions on innovation are “luxuries” we can ill afford.

Art Carden

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Art Carden is a Senior Fellow at the American Institute for Economic Research. He is also an Associate Professor of Economics at Samford University in Birmingham, Alabama.

 

This article is republished with permission from the American Institute for Economic Research.



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