From Singapore to Hamburg, Uncertainty Changes the Nature of Law
This apartment house in Munich was built under experimental law. (Photo by Joe Mathews.
This essay was published by NOEMA Magazine.
MUNICH — Shortly after wandering into the Munich Urban Colab this summer, I found myself trying to follow an intense conversation in German about the city’s new experiment with autonomous buses. A local official, clocking my curious puzzlement, offered an aside in English: “We are asking ourselves: ‘What does it mean when the law is an experiment too?’”
No question may be more essential to governance in our era of dangerous uncertainty.
Global warming is accelerating faster than global treaties on mitigation can be negotiated. Climate catastrophes occur with a sudden ferocity beyond what current adaptation laws anticipate. Biological threats surface and kill before public health responses can be formulated. And AI is evolving faster and more wildly than regulators or lawmakers, or even its designers, expect.
All this dizzying unpredictability is undermining traditional legal structures. The threat is not just to the rule of law, but to the very nature of law, at least as humans have conceived it.
Our societies have long considered the law a slow and steady force, “the essential foundation of stability and order” in the words of J. William Fulbright. To that end, law is backward-looking — “the government of the living by the dead,” according to Oliver Wendell Holmes. The lawmaking process in republics and democracies is age-old: observe a problem, study its particularities, debate solutions and then carve out a rule that will endure for years or decades.
But what happens when the future arrives faster than your regional regulator or local parliament can make a rule?
The emerging answer is experimental law or, in Germany, where Munich is a hotbed, Experimentierklauseln. “Experimental clauses” refer to sections and parts of laws that are made flexible, often for set time periods, to allow for real-time adaptation or alteration in response to changing threats, climate or technology.
The shift toward such experimentation has begun, albeit slowly, in only certain areas of the law. Contract law and administrative law, especially where they touch on technology or other advanced sectors of the economy, are becoming more fluid.
Contracts, once used to protect against all contingencies, are now written more openly — explicitly anticipating new knowledge and adjustments. Among startups and innovation-oriented companies, written agreements are less likely to specify payments for specific work at specific times and more likely to establish processes for collaboration and shared decision-making.
For example, start-ups use Agile contracts with vendors that, instead of pledging a final digital product at a price, set parameters of a creative process involving a test phase, iterative feedback loops and product benchmarks. Biotech startups rely on a “relational contract” with manufacturers to create a collaboration framework that includes regular meetings, shared lab notes and a commitment to use best efforts to scale a prototype.
Meanwhile, smart contracts have become commonplace in supply chains to allow for real-time changes in inventory levels. Union contracts in digital workplaces often incorporate adaptive provisions — “continuous bargaining” in 21st-century labor parlance — with guidelines for how workers participate across the lifecycles of systems and products.
Modern tech procurement uses what’s called “Dynamic Service Level Agreements” that feature automatic updates, scalable license adjustments, and continuous remote monitoring and interventions by seller and buyer. “Data Processing Agreements” within cloud contracts dynamically adjust data handling and security protocols as privacy regulations and digital risks shift. In some cases, AI agents have written contracts in code rather than in English. Put simply, some contracts now write themselves.
Similarly, regulatory agencies and public administrations have moved away from the time-consuming traditional rulemaking process, since rules quickly become outdated in a world so strange and fast-changing. Instead, agencies and administrative judges, particularly in advanced economies, are more likely to offer “guidance” — advisories, memos, letters or protocols that are regularly tweaked or edited in response to updated knowledge and changing circumstances.
These shifts point toward an emerging and quite radical recognition, especially in law, that extreme uncertainty is not a problem to be solved, but a reality and even an ally. The fact that the future is too hard for anyone to know is leveling. The regulator, the regulated and the everyday person all know the same thing: almost nothing.
The act of lawmaking then becomes a great collaboration between governments and experts and firms and workers and the regular people most affected. And that collaboration is a search, never-ending, for improvements and innovations and solutions.
Such collaboration turns lawmaking as we know it on its head. Implementation is required first to understand what the policy should be. In this new paradigm, resilience is grounded in fragility. Resilience does not come from buffering organizations against known risks, but by designing them to show quickly when they are broken, so they can be reconfigured. It is a kind of deliberately induced and carefully controlled institutional fragility. Strain is immediately apparent, triggering investigation and countermeasures well before it ramifies into catastrophe.
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