Market-based innovation through patents reinforces antisocial, catastrophic risk. Directed innovation grants promote the good but avoids the bad

As these examples attest, many innovations are, on balance, harmful to people. While we don’t deny the value of lifesaving breakthroughs like the Covid-19 vaccine, it is important for policymakers to recognize that many, and perhaps most, innovations do not fit the rosy image offered by politicians and tech gurus. This Article begins to challenge that image, and it offers a renewed vision of policymaking in a world where innovation can be beneficial but where it can just as easily be awful.

Our first step in this direction is to categorize and taxonomize antisocial innovations. From a legal and policymaking perspective, our concern is with innovations that are privately beneficial to innovators and their clients but socially harmful. For example, some financial innovations, like credit default swaps, made a lot of money for their creators, but wreaked havoc on the global economy.40 Similarly, the pricing algorithms just discussed are principally a means to extract money from consumers for the benefit of suppliers.41 And many chemicals may help firms increase profits at the expense of the environment.42 With this understanding of what makes an innovation a net benefit or harm, we propose a taxonomy of antisocial innovations according to the kinds of harms that they cause. We categorize and elucidate six main varieties of antisocial innovation harms: individual harms to people’s health, wealth, and well-being; environmental harms; harms to competition; harms to labor; privacy harms; and a catch-all category that we label social harms, involving concerns for democracy, stability, and the fair distribution of society’s resources. Of course, some technologies will cause multiple varieties of harm.

The taxonomy’s purpose is to demonstrate antisocial innovation’s distressing breadth. We hope that it offers a valuable corrective to the widely accepted vision of innovation’s beneficence. But our goals are not this modest. We also hope to begin reorienting innovation law and policy, and we conclude with a series of proposals for doing so.

We begin by noting that two of society’s most important tools for promoting innovation—patents and antitrust law—treat all innovation as socially valuable.43 Borrowing from administrative law, we refer to this as the Inverse Precautionary Principle.44 While some regulatory agencies apply the Precautionary Principle, whereby new activities should be regulated if they pose any meaningful risk of harm,45 patent and antitrust law apply the inverse—all innovations should be promoted irrespective of their risks.46 Outside of pharmaceuticals and some other chemicals, our innovation governance approach is one of “beneficial until proven harmful.”

A more nuanced framework, however, is required. Policymakers should realize that innovation governance involves risk-risk tradeoffs.47 While excessive regulation may deprive society of valuable new inventions, insufficient regulation poses serious, even catastrophic risks to society. Innovation necessarily produces new and, thus, unknown pathways. It may be difficult for policymakers and regulators to know, early on, whether an innovation will be salutary, harmful, or neither. But once they recognize that society’s only compelling interest in innovation currently is to generate more of it, their strategies should change.

More concretely, our account of the magnitude of antisocial innovation counsels a shift from patent incentives towards more targeted incentives like grants and prizes. Patent law is agnostic to an invention’s utility.48 A patent on a vaccine is just as valid and lasts just as long as one on a bump stock or a chemical that devastates the planet. Patent law relies on markets to sort out good innovations from bad ones.49 Due to distortions, externalities, and cognitive biases, however, markets are often not great at picking society-wide winners and losers.50 Accordingly, policymakers should consider spending a greater proportion of their innovation-incentivizing dollars on grants and prizes that are devoted to prosocial developments.