At a 1939 exhibit at the New York World’s Fair, American giant General Motors displayed their vision of what the world would look like in 20 years; a world brimming with self-driving vehicles and automated highway systems. However, 80 years on, this vision is yet to be fulfilled. Why is that after decades of innovation, we have yet to accomplish a dream envisaged almost a century ago? Perhaps we can help accelerate this dream into a reality, through the advocacy of effective free market policy reforms.
Crucially, one of the greatest barriers presented to the self-driving industry is the plethora of government regulations encompassing the development and testing of autonomous vehicles. Although numerous bills and acts have been passed in recent times, bestowing greater freedom for firms to test their vehicles, regulations surrounding the manufacture of cars still greatly discourage new firms from entering the market. In lifting such regulations, increased competitiveness between firms would be enabled, allowing for greater incentives to increase productivity and innovation.
Tax also presents itself as a critical hurdle. For instance, in the UK, the higher tax rate lies at a staggering 40%. However, by reducing income tax rates, it is likely that people will be incentivised to work harder, leading to greater productivity, and in turn, the swift development of self-driving vehicles. Furthermore, by reducing corporation tax, currently at 19% in the UK, this would encourage firms to reinvest larger amounts of their profit back into research and development.
Unfortunately, overregulated labour markets pose a hindrance too. For instance, in France, rigidities have been so vast such that the level of unemployment has soared at an average of around 10% over the past decade; 5 percentage points greater than that of the OECD average. However, by eliminating such regulations, firms would be enabled to more easily hire and fire workers, and by enabling zero hour contracts, firms would be allowed to employ workers when demand is greater, enabling greater productivity and innovation when a firm requires it most, as is currently desired. Such deregulation would enable firms to economise considerably, allowing for further investment into research and testing.
We are on the brink of making the vision General Motors once displayed into a tangible reality; let’s make the effective policy reforms now, to help us shift into the new, and exciting future.
Prerak Goel is the winner of the under 18s category in the ASI's 'Young Writer on Liberty' competition.