By James Pethokoukis and Mark Jamison

What, exactly,
is the metaverse? How do you access it? And what do cryptocurrencies and
non-fungible tokens have to do with it? Mark Jamison appeared on a recent episode
of “Political Economy” to answer those questions and give his assessment of the
public policy implications of the burgeoning metaverse landscape.

Mark is the
director of the Public Utility Research Center at the University of Florida’s
Warrington College of Business and a nonresident senior fellow here at the
American Enterprise Institute. Over the past several months, Mark has
been writing about the metaverse and the challenges it faces.

Below is an
abbreviated transcript of our conversation. You can read our full
discussion here.
You can also subscribe to my podcast on Apple Podcasts or Stitcher, or download the podcast on Ricochet.

Pethokoukis: What can you do in the metaverse
right now that you can’t do in the real world or on a Zoom call?

Well, there
are a lot of things you can do right now. You can play games in the metaverse.
You can have meetings. You can engage in financial transactions. You can hire
consultants and be a consultant yourself. So more and more, anything that you
want to try and do in the physical world, if you will, you can start doing in
the metaverse as well.

Once you step
into the metaverse, it becomes abundantly clear how different it is. When I
first held a meeting in this space, I was impressed by how different it was
than being on Zoom, because I actually turned to people and talked with them
and we shared documents around with each other. It was much more like being
together physically. So there are lots of things like that around the edges,
but that’s something to keep an eye on because anytime we have a jump in
technology, basically what we do is take that new technology and do what we did
before. At some point, though, someone says, “Hey, wait a minute. This
enables a whole other world.” And that will be what the killer app will
look like, but we don’t know what that is yet.

Is this a lightly regulated universe right
now? And are regulators paying attention to it?

It is right
now because, frankly, it’s just moving too fast for someone to step in and try
to regulate it. I think that holds some people back. I would be concerned if
governments did try to step in and regulate at this moment. So for example, one
of the things I’m trying to think about is how there’s a lot of interest in
creating new privacy regulations. And we’re building those based upon a paradigm
of social media and Google search. I don’t know if that applies in a metaverse,
but if we pass these laws, do they stop people from being able to engage in the
universe? So if these were US-oriented laws, for example, does that mean the metaverse
actually grows someplace else, if our laws don’t match that future?

I don’t know
how much attention people are giving it at the federal level, so I can’t really
answer that. It does worry me some that people would step in. We could see situations
where if a traditional legacy government tried to impose regulations on a metaverse
space, people could just end up going elsewhere.

People are going to be worried about depictions
of violence and sexual content in the metaverse. How relevant are those kinds
of concerns?

Probably even
more relevant than they were in our traditional internet, because it’s easier
for you to hide your identity. Now that you can do things in three-dimensions,
do things more visually, you can be more abusive than you were in our
traditional Facebook areas, Twitter areas, etc. And it’s easy to have all the
gambling and things like that can go on, and it’s hard to screen. So there’s
potential for abuse here that people need to pay attention to. Although, there
are also new mechanisms. So for example, the main way to step into the
metaverse is going to be through three-dimensional goggles. Some of those
goggle makers are now including features that screen things, that are protecting
privacy, maybe providing parents greater control than they would’ve had when
everybody’s just using a laptop or a desktop PC to get to the traditional
internet.

At this point, what advice would you give
lawmakers?

Stay well
informed. Keep watching, keep listening, and resist the temptation to step in
and say, “I’m going to now take control of this.” Because we’re all
overly confident that we understand this world that’s changing, and we’re
always viewing that future through a rear-view mirror. So we’re going to do it
incorrectly. So be very careful, hesitate, and check yourself before you step
in and try to pass laws. And have some confidence that, at least in some
countries like the United States, we have a common law approach where the law
can evolve as problems emerge. So that helps us a lot as well. And I guess
that’s the other thing I would keep in mind as well: These decentralized
autonomous organizations, these government bodies, they’re going to evolve as
well. For the ones that don’t perform well, people are going to exit that part
of the metaverse. The ones that give people what they want, those protections
they want, the safety to securities that they want—those are the ones that are
going to attract people and attract commerce.

Do you expect this to be a US-focused thing?
Or will there be big global players or America and China, with Europe a distant
third?

That’s to be determined yet. We’re moving into a space in the United States where a lot of our government officials want to take control. And that means that the innovations move elsewhere. And some of the really interesting spaces are being developed elsewhere. There’s one coming out of China that’s pretty useful at this point. How long China tolerates that, we’ll see. Another of the big ones was actually started by a couple of people, one from France and one from Argentina. So they’re working together. We’ll see if the US companies still have the freedom and the creativity to be big players in the future.

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