The Laws of Disruption

The Digital World and the “Law of Disruption”

When a new technology is introduced, society must adapt. To understand how a major technological change creates far-reaching ripples, consider the effect of replacing metal stirrups with “flexible leather” stirrups in Europe during Charlemagne’s reign. This simple innovation provided medieval knights with more balance, efficacy and deadly success. Essentially, the leather stirrup “saved Europe.” But, rather than pay their knights directly, kings gave them land and the right to collect rent. This led to a structured feudal society that outlasted – by 1,000 years – the initial need to pay victorious mounted knights. If you buy property in some areas of London even today, you pay “tribute to the Duke of Westminster.”

Consider the effect of another disruptive technology, the railroad, which changed shipping in 19th century America. The courts had no “clear precedent to determine ‘fair’ rates” for rail shipping. Attempts to adapt old laws proved useless. As famous attorney Brook Adams argued, “The character of competition has changed and the law must change to meet it, or collapse.” The legal system had to accommodate this new...