The new lawmaker and connected machines

“If the digitally automated relationships between machines keep developing at such speed, with the law lagging behind, there will come a point — similar to that superseding the feudal system — where the current legal system collapses.”

In a world of constant progress, often the law fails to keep up. Starting the 1760’s when the first industrial revolution changed the world, the bond between law and economics broken and a new one was formed. The parliament alongside its legislations had to adapt with the repercussions following the industrial revolution and organize the newly founded relationships between rising entities; such as the new factory acts — which the feudal system failed to recognize; hence its eminent collapse. With the fourth industrial revolution and an overwhelming era of digitization and less personification, there comes a whole new set of challenges facing the lawmakers that requires them to organize the relationships between newly formed set of entities that were not necessarily recognized prior. Hence much deliberation should be directed towards the evident evolution in our laws to mitigate the legal challenges that could arise from the fourth industrial revolution if left unmanaged.

New tax system?

In a world of “I agree on the terms and conditions” that tends to exclude the government and lawmakers outside of the loop, comes multiple challenges. For instance, the world’s biggest taxi provider is now an online platform that doesn’t physically own any taxis; the world’s largest accommodation provider is also an online platform that doesn’t physically own any apartments. In such example, the country’s tax laws fails its purpose, where it’s no longer able to identify regular citizens conducting business as independent contractors; This is the first challenge facing the lawmakers. The inexistence of solid tax system triggered global outrage by licensed taxi drivers against the renowned taxi-booking mobile application.


With such newly formed digital relationships — that the current laws can’t identify -the second challenge is for the government to include itself in the ongoing conversation between such entities. This is technically infeasible in a world where such digital relationships are encrypted for a crucial purpose of product control systems, in order to avoid unauthorized data access or, in the worst case, manipulation and industrial espionage. However, this encryption is a double edged weapon; with the rise of encrypted electronic currency (Bitcoin, BlackCoin, Litecoin ..etc), it has become far easier to be involved in illegal activities without having to face the consequences. This was recently embodied in an online market that sold illegal drugs using Bitcoin; this left the authorities in a dilemma where the only entity they can trace is the platform creator; where encryption guarantees the anonymity of the clientele.

Smart contracts and IoT

Finally, the third challenge, would be for the government to understand and adapt to the Internet of Things (IoT). Beyond the online platforms that provide services such as renting cars and accommodation, the fourth industrial revolution can bypass such contracts using ‘smart contracts’; where let’s say, if you’re renting out your house which has internet-enabled locks, a smart contract would automatically unlock the house upon the payment of rent. Where now both parties have to trust the smart contract rather than manual platforms. This is far more efficient in terms of maximizing consumers’ welfare as we eliminate the fees charged by such platforms.

Overall, the ultimate goal of technology is to serve the social good and the fourth industrial revolution comes bearing consumers’ welfare as a priority. This, however, may create more work for officials in other sectors such as state security. Parliaments and lawmakers used to protect their societies by fighting off projects they can’t always physically see or access, similar to when David Cameron has pledged to ban encryption on the web, however, the UK parliamentary office of Science and Technology reported that this is technically infeasible. The debate between U.S. congressmen and technology entrepreneurs in Silicon Valley is running in the same direction.

The good news is no authority can cease the advancement of the fourth industrial revolution. However, if the digitally automated relationships between machines keep developing at such speed, with the law lagging behind, there will come a point — similar to that superseding the feudal system — where the current legal system collapses.

The new lawmaker..

Moving forward, industry 4.0 requires a new breed of lawmakers and parliamentarians who can capitalize on the IoT rather than fighting it; such capitalization could allow them to architect participatory laws — rather than top-down laws — that are able to understand the evolution of economic relationships between entities; this entails their utilization of big data to legislate comprehensive laws that are studied using simulation of all new relationships and machines to supersede the current rather static, scattered and underutilized laws that are failing to organize new economic relationships.

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