Cato Policy Report, March/April 1998
Niskanen, Litan Review the Digital Age
First joint Cato-Brookings book
In his ominous novel Nineteen Eighty-Four, George Orwell foresaw some of the technological developments that have since occurred, such as two-way telescreens that we know as videoconferencing or the speak-write machine that transcribes speech into electronic text," write Robert E. Litan, director of the economic studies program at the Brookings Institution, and William A. Niskanen, chairman of the Cato Institute, in Going Digital! A Guide to Policy in the Digital Age. "But Orwell was wrong, at least so far, in claiming that the new technologies would greatly augment the power of the state and lead to a massive centralization of power. To the contrary, the digital revolution has been a major decentralizing force that has empowered people to change their lives, their institutions, and their governments in previously unimaginable ways."
In Going Digital! the first joint
publication of the Brookings Institution and the Cato Institute, Litan and Niskanen
predict that the Internet and related technologies will become increasingly important to
both businesses and individuals, tackle many of the arguments made by "digital
skeptics and pessimists," and discuss what governments can (and cannot) do to create
a legal and institutional framework in which digital activity can flourish.
If the digital revolution is to proceed, the authors argue, policymakers should follow four broad guides:
- Markets should be allowed to address problems associated with digital technology. "Efforts to regulate or tax electronic commerce run a grave risk of stalling further technological advance."
- Existing barriers to electronic trade and commerce should be removed.
- Pleas of incumbent firms and technologies for protection should be resisted.
- Government intervention may be useful, but not essential, in very limited instances. For example, the harmonization of international legal rules might prove beneficial.
This article originally appeared in the March/April 1998 edition of Cato Policy Report.