Perspectives: Black markets and innovation, why permission is overrated

Bartering goods for services. | Image from Pixabay, public domain, St. George News

OPINION – Recently, I had the opportunity to participate in two highly thought-provoking podcast interviews. One was with Adam Thierer of the Mercatus Center on the subject of technological innovation, the other was with Connor Boyack on the virtue of the black market.

A common thread in both discussions was the necessity that we be willing to act without waiting for official permission.

These days, people freely making choices without some kind of official regulatory oversight tends to give melodramatic types a case of the vapors. For the rest of us, it’s a concept worth considering.

The fears that if someone official isn’t in charge, things will quickly devolve into a “Lord of the Flies” scenario are terribly overblown. Sometimes the results are nothing short of spectacular.

Take, for instance, the internet.

In a little over two decades, this innovation has impacted all of our lives in ways we couldn’t possibly have expected when we first became aware of it. How much of our communications, our commerce, our record-keeping and information seeking are tied to using the internet?

How different would our lives be without it? It’s easily the most disruptive technology most of us have seen within our lifetimes.

And would you believe it was allowed to develop without the micromanaging oversight of bureaucrats and politicians? Sure, the temptation was there. But somehow, they resisted the urge to tell us the precise form it should take.

As Adam Thierer pointed out in our conversation, more than a few people treated the emergence of the internet as somewhat of a novelty. They couldn’t imagine how people might put it to use or what further innovations it might inspire.

Thierer calls it “a fortuitous accident” that the internet didn’t merit greater scrutiny from lawmakers and regulators at first. That hands-off approach allowed for far greater innovation than is possible under rigorous central planning.

Congress also chose to stay out of the way and to limit government interference in the internet by immunizing it against oppressive types of liability and protecting it from predatory state and local taxes.

Instead of the traditional precautionary policy mindset that can hamper emerging technologies, the internet has become an infrastructure where innovation largely takes place without permission.

When writing about permissionless innovation, Michael Munger states:

Permissionless innovation allows us to create truly new things for each other to enjoy – things the experts may not understand or approve of, but that nonetheless hold the potential to transform the world.

This same concept of solving problems or meeting one another’s needs without first seeking government permission reaches much closer to home than most of us realize.

When we hear the term “black market,” television shows have trained us to envision sneaking through the shadows to procure goods that may not be available through legal channels. In reality, the black market in our communities is much more benign.

It can consist of a person who cuts their neighbor’s hair for pay but without having a cosmetology license. The black market can include kids who smuggle salt and pepper to school to spice up otherwise bland school lunches.

It could be a neighbor who barters unpasteurized milk or honey from their own cow or beehive in return for piano lessons for their kids.

Not so many years ago, an out-of-work investment banker in New York made a killing at selling hot, fresh grilled cheese sandwiches to people who contacted him via his pager.

Each of these activities could be construed as illegal at some level. Yet none of them have caused objective harm that would justify the state’s intervention. So why do some grind their teeth in frustration that people are solving one another’s problems without government permission?

It’s because we have been trained to believe that we must ask permission first, and it angers us when someone else points out the shackles we’ve grown used to wearing.

Think about how many things require us to seek government permission before we can safely act. Really think about it. It would take a lot less time to list the few things we don’t yet have to obtain permission to do.

Can we honestly say that we are still a free society when we must beg permission for even the most minor acts?

Eric Peters puts into perspective how we’ve allowed freedom to become illegal:

A child must ask permission of its parents. He is not free. A bondsman must ask permission of his master; he is not free. Anyone who must ask permission before he is permitted to act is not – cannot – be free.

The fact that some interpret freedom to act without permission as tantamount to the law of the jungle shows precisely how brainwashed we’ve become.

Our rights exist because we exist. This means that bureaucratic permission isn’t necessary to live self-governing and productive lives. We’d likely surprise ourselves with how innovative we can be if we simply started believing this once again.

Bryan Hyde is an opinion columnist specializing in current events viewed through the lens of common sense. The opinions stated in this article are his and not representative of St. George News.

Email: bryanh@stgnews.com

Twitter: @youcancallmebry

Copyright St. George News, SaintGeorgeUtah.com LLC, 2017, all rights reserved.

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15 Comments

  • statusquo October 30, 2017 at 8:17 am

    Good points Bryan. While it is true that free markets have risks, it is also true that regulated markets have more risks. No regulator has the knowledge to forsee market forces that impact buyers and sellers. Market decisions need to be made by the participants, not by a bureaucratic oversight committee. Obamacare is an excellent example of the failure of a regulated market.

  • theone October 30, 2017 at 9:43 am

    You people live under a rock. You have this imaginary fear of not being free to do as you please. Regulations are created by a free society to protect the masses from fraud, disease, or even lice from an unlicensed Barber, the list goes on. Think about it, regulations become law after the damage has been done. Stay under your rock and remain ignorant for all I care, but stop with the fear mongering already.

    • bikeandfish October 30, 2017 at 10:41 am

      I agree Hyde often fear mongers but I think he critique here doesn’t fall into that category this time. I think highlighting the spectrum any market can exist on is important. I don’t necessarily agree with the idea that black markets are better or more innovative but I can see the value in talking about that option.

      • theone October 30, 2017 at 1:41 pm

        Actually, I take his argument from the premise of him losing individual freedom. I do agree that regulations can and do become egregious at times, but we do and can roll back or make changes where needed. In the end, I agree with you a market regulated is far better than leaving people to their own devices or risk-taking as in the black market trade where all could go wrong. If Hyde were to argue that change is needed instead of going down this rabbit hole of fear I would give him some credit for being reasonable, but he doesn’t.

        • bikeandfish October 30, 2017 at 2:13 pm

          I agree as a general premise. Hyde manufactures fear in his essays to promote a generic ideology on a regular basis. Anybody that self-promotes himself as the voice of common sense should be taken with more than a grain of salt. I mean remember, the recent Bundy trial was a “modern day lynching” in which they just happened to be found innocent and walk away alive. Talk about common sense.

          One of my complaints about this ideological bent is they never explain how to get from point A to Z. It can be a tempting worldview but its an ideology that is poor in context and detail. I think that is why individuals like Hyde so readily engage in fear mongering, but that is just a guess.

          • theone October 30, 2017 at 2:46 pm

            You are correct on no end game or plan when it comes to this ideology Hyde promotes. This is why I can’t give him credit for rational discourse when he pretty much just gives lip service to nowhere. If he were to choose a particular avenue for change then offer up some reasonable solutions he would pull my attention away from having to fixate on his imagined fears. When Hyde can bring a particular regulation to the table with some needed tweaking, and an idea for change then we can have a discussion.

    • desertgirl October 31, 2017 at 9:32 am

      You live under the dark veil of the communist/socialist ideology; never in history has it served the general population well. Most government agencies are hands with which to reach out and remove this republic’s liberties. Rational people know that some regulation is necessary, most know that many of those regulations serve no purpose other than to take citizens money, control them, and enforce the power of a few single-minded totalitarian/globalist government thugs. Life is meant to be lived, risks taken, and along the way learn self-reliance. The majority of people do not need a label on a hair dryer to remind us not to take in the shower. We all pay dearly for this obscene government baby-sitting. Actually, theone, the fear-mongering comes from people like you who go out of your way to raise young people into generations who believe they can’t take care of themselves without the progressives taking their liberties for their own good; all under the guise of the government knows better than you. How very Engles/Marxist of you.

  • bikeandfish October 30, 2017 at 10:38 am

    “Black Market” economies aren’t inherently good or bad anymore than regulated markets. But what makes a regulated market potentially better is the framework of education and accountability, which is more subjective in a black market. Take general contractors. In Utah a licensed general contractor has a verified educational background, insurance and administrative code that guides their actions and legal accountability. If/when negligence happens, then a customer has objective channels and means of being made whole. Not so in the black market as it relies on the good faith of the service provider. Its inherently more tenuous.

    I support the conversation and framework this type of Libertarian dialog brings to the table. Regulation can become overly burdensome and purely bureaucratic. But such conversation requires nuance about the history of such policy, which Hyde normally lacks. We regulate doctors, Wallstreet, real estate transactions, etc because of explicit history that caused citizens undue harm. Should individuals be able to buy unpasteurized milk from farmers? Likely but that requires an educated buyer and market that understands the risk, like listeria.

    Issues of scale and context matter here. Its definitely a complex situation but I do believe no system is beyond such constructive criticism and reconsideration. If for nothing else we relearn why the regulations exist and maybe we can make the systems better, which can include reducing or eliminating such policy.

    • statusquo October 30, 2017 at 2:47 pm

      Black markets did not exist before government regulation. You cannot even define a black market unless you contrast it with an approved “white market”. Will this thread now be labeled “racist”? And we call this progressive? The first world is devolvin into a third world, and rapidly!

      • bikeandfish October 30, 2017 at 3:08 pm

        Black markets aren’t solely defined by government regulation, currently or historically. They can and are defined by existing outside “institutional” policy and code as well. Think about how the medical or legal fields self-regulate beyond law, ie boards, etc. Humans have always defined ethical and appropriate behavior and activity with and without government intervention.

        Look to the way the “wellness” market has largely self-regulated itself. There are a handful of regulations from the government about marketing, manufacturing, etc but most of its internal mechanisms that try and lend legitimacy to itself. Just look into the relatively unregulated world of essential oils for an example of how a concern for market share, legitimacy and control evolves without government intervention and the real “underground” economies that exist within and between such communities. We are bound to eventually see more government regulation there because of the multi-million dollar economy that contains many shucksters and quacks that victimize real citizens. Until then you have institutes, self-regulation, and administrative code that tries to curtail the worst of behaviors, ie to maintain itself as long as possible. That always creates arenas for individuals and organizations who refuse to be constrained.

        Concerns about “big government” can be legit but it can clearly be taken too far and your notion that “black markets” didn’t exist before government intervention is one such example.

        • desertgirl October 31, 2017 at 9:33 am

          Fear mongering is brain-washing people that they can’t make decisions without the government nannies. Snowflake is so fitting. Comrade.

          • bikeandfish October 31, 2017 at 10:31 am

            Interesting that your only insult is calling people comrade. Haven’t seen too many communist or socialist in my day but maybe since today is Halloween I should keep an eye out. Beware the Red Menace.

            I don’t know too many people that are dependent on the government or brainwashed by government nannies. Do these nannies wear a particular type of matching uniform?

            I know people of diverse political stripes and none have been brainwashed. Ironically, one of the principle signs of such indoctrination is an inability to understand other political viewpoints or recognize any merit to such perspectives.

      • theone October 30, 2017 at 3:17 pm

        Umm, black markets became a thing because of rationing and had nothing to do with open markets, it was a supply and demand thing. The only thing devolving into a 3rd world demise is your imaginary fear of losing individual freedoms.

  • DRT October 30, 2017 at 10:56 am

    Bryan, you do a good job of bringing up the problems, although I don’t agree with you most of the time. Now, how about figuring out how to solve those problems, short of anarchy?

    • Bryan Hyde Bryan Hyde October 30, 2017 at 7:08 pm

      You ask a very relevant question, one which also clearly reflects the fear that has been programmed into us that everything not under the control of the state is, by definition, out of control. Lack of a ruler (anarchy) doesn’t mean a lack of appropriate consensual rules.

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