Using Liberty & Decentralization To Grow
Putting The Afterburners On Drones & Flying Cars
A clip emerged from Marc Andreessen’s odyssey on Joe Rogen last week; hat tip @AutismCapital. He cites the Federal Aviation Authority's (FAA) policies on drones as strangling the industry in the United States.
He’s only half right.
The regulation piece is being solved, albeit too slowly. The other half is solved by embracing liberty, decentralization, and price signalling.
"The FAA killed the drone industry. The reason why the Chinese are winning in the drone wars is because the FAA made drones illegal in the US. Legally you can not fly a drone in the US that is beyond line of sight if you do not have a pilots license” - Marc Andreessen.
Yes, the FAA wants drone companies to have licences. If you have the correct licence (Part 107) and the commercial drone company has passed the tests with the FAA and has any required waivers, they can fly if they have permission from the owner of the airspace to be there. Commercial drones do fly drones in the US, even without the permission of private airspace owners, which doesn’t even pass the smell test. They are getting shot down in certain towns and States as they don’t have the private airspace owners permsssion to be there.
Legality is less about the FAA's blessings because, with that, you are allowed to fly drones Beyond the Visual Line Of Sight (BVLOS). The FAA does not own the low-altitude airspace to permit drone companies to be there. That’s the central issue, unless the FAA has purchased or expropriated private airspace and given it to commercial entities. The access problem is not the FAA.
"Whenever the legislators endeavor to take away, and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any farther obedience, and have a right to recover and establish their former liberties and privileges." - John Locke
Drone Transit Is About Liberty
Property rights are essential for both personal liberty and the efficient operation of markets. Secure property rights encourage investment and growth. The right to own and trade property (air rights) is necessary for political freedom. The exchange and transactions of property are foundational to human liberty - in the US, people are free to transact their property. Air rights are property rights that extend into low-altitude airspace, which is the airspace drones need to be able to operate in under 400 feet.
How can we connect the dots between a lack of drone transit, property owners' rights to control and transact their air rights, and decentralization? A legal system that protects property rights is a cornerstone of freedom. Individual control over air rights fosters decentralized decision-making. When it comes to decisions people make for their towns, cities, and neighbourhoods, local knowledge matters. This decentralized decision-making leads to better outcomes. A decentralized system of air rights permits and trading is needed. No central authority can have this level of local knowledge.
Individual air rights owners use their local knowledge to make more efficient economic decisions, leading to a more dynamic and adaptive economy. Like all markets, the rental prices the air rights owners signal for drones in their airspace show the commercial drone entities where they are most needed and where their most significant returns can be after struggling for decades.
Air Rights Are Not Just For Drones
It’s not only drones that boost the economic outcomes for air rights owners. Owners can sell or lease air rights, which results in efficient land usage and density in urban settings, which is a win-win for growth and individual freedom. People need a place to do this trade, where decentralized information leads to the best outcomes for the owners and traders.
New York has been at the forefront of this, leading the way, and other cities from Sacramento to Sydney have adopted the practice. Recently, the ‘City of Yes’ in New York has set about reforming the zoning regulations, boosting the value of air rights in the five boroughs and encouraging density. Using the airspace above your property is like finding money. Increased housing requirements mean an increased need for airspace; it’s up and to the right over time.
Air rights owners can buy, sell, or lease their air rights. They can also build into the airspace; people can buy and not build into the space to protect views. Owners can lease and rent air rights to drone companies, traders, and infrastructure projects through a marketplace for liquidity.
Usefully, air rights can be transferred from one lot to another in certain locations, which frees them up; if an air rights owner does not want to use them, they can cash in, and the buyer can transfer and use them.
Well-defined and secure property rights are crucial to individual liberty and autonomy. As an extension of property rights, air rights must continue to be safeguarded and determined by their owners. Europeans do not have the same valuable say over their air rights outside of the U.K. and Ireland as people in the United States do; they have been expropriated in Europe, and it’s vital that does not happen in the U.S. - using air rights is the best way to guard against this.
Air rights owners have control and influence over decisions concerning their airspace, aligning with the ideals of freedom and economic efficiency. This is why Marc was only half right about drone growth, but the positive part that can give him solace is that pushing for freedom and liberty does help solve the problem.
Thanks for reading, and if you want to chat, email me at jonathan@sky.trade
