Earlier this week, I was at SXSW for CTA‘s annual Innovation Policy Day.

My session, on Labor and the Gig/Sharing Economy, was a lively discussion including Sarah Leberstein from the National Employment Law Project, Michael Hayes from CTA’s policy group (which reps companies from their membership including Uber and Handy), and Arun Sundararajan from NYU, who recently wrote a book on the Sharing Economy.

But, that’s not the point of this post! The point of this post is to discuss an idea that came up and a subsequent session, on Security & Privacy and the Internet of Things. The idea that struck me the most from that session was the tension — or depending on how you look at it, codependence — between the “freedom to innovate” and the “freedom to investigate“.

Defending the Freedom to Innovate was the Mercatus Center‘s Adam Thierer. Adam is one of the most thoughtful folks looking at innovation from a libertarian perspective, and is the author of a book on the subject of permissionless innovation. The gist of permissionless innovation is that we — as a society and as a market — need the ability to experiment. To try new things freely, make mistakes, take risks, and — most importantly — learn from the entire process. Therefore, as a general rule, policy should bias towards allowing experimentation, rather than prescribing fixed rules. This is the foundation of what i call Regulation 2.0[1].

Repping the Freedom to Investigate was Keith Winstein from the Stanford CS department (who jokingly entered his twitter handle as @Stanford, which was reprinted in the conference materials and picked up in the IPD tweetstream). Keith has been exploring the idea of the “Freedom to Investigate”, or, as he put it in this recent piece in Politico, “the right to eavesdrop on your things”. In other words, if we are to trust the various devices and services we use, we must have a right to inspect them — to “audit” what they are saying about us. In this case, specifically, a right to intercept and decrypt the messages sent between mobile / IoT devices and the web services behind them. Without this transparency, we as consumers and a society have no way of holding service providers accountable, or of having a truly open market.

The question I asked was: are these two ideas in tension, or are they complimentary?

Adam gave a good answer, which was essentially: They are complimentary — we want to innovate, and we also need this kind of transparency to make the market work. But… there are limits to the forms of transparency we can force on private companies — lots of information we may want to audit is sensitive for various reasons, including competitive issues, trade secrets, etc. And Kevin seemed to agree with that general sentiment.

On the internet (within platforms like eBay, Airbnb and Uber), this kind of trade is the bedrock of making the platforms work (and the basis of what I wrote about in Regulation the Internet Way). Users are given the freedom to innovate (to sell, write, post, etc), and platforms hold them accountable by retaining the freedom to investigate. Everyone gladly makes this trade, understanding at the heart of things, that without the freedom to investigate, we cannot achieve the level of trust necessary to grant the freedom to innovate!

So that leaves the question: how can we achieve the benefits of both of these things that we need: the freedom to experiment, and the freedom to investigate (and as a result, hold actors accountable and make market decisions)? Realistically speaking, we can’t have the freedom to innovate without some form of the freedom to investigate. The tricky bit comes when we try to implement that in practice. How do we design such systems? What is the lightest-weight, least heavy-handed approach? Where can this be experimented with using technology and the market, rather than through a legal or policy lever? These are the questions.

[1] Close readers / critics will observe an apparent tension between a “regulation 2.0” approach and policies such as Net eutrality, which I also favor. Happy to address this in more depth but long story short, Net Neutrality, like many other questions of regulations and rights, is a question of whose freedom are we talking about — in this case, the freedom of telcos to operate their networks as they please, or the freedom of app developers, content providers and users to deliver and choose from the widest variety of services and programming. The net neutrality debate is about which of those freedoms to prioritize, in which case I side with app developers, content providers and users, and the broad & awesome innovation that such a choice results in.