The Gardens of Democracy: A New American Story of Citizenship, the Economy, and the Role of Government (13 page)

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Authors: Eric Liu,Nick Hanauer

Tags: #Political Science, #Political Ideologies, #Democracy, #History & Theory, #General

BOOK: The Gardens of Democracy: A New American Story of Citizenship, the Economy, and the Role of Government
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Modern systems thinking shows these assumptions to be false. Humans are not rational and calculating and only some are cooperative enough to respect other people’s rights. A significant part of any human population does not respect the rights of others and will act affirmatively, absent regulation, to subjugate others’ rights to their own. Moreover, the behavior of these selfish non-cooperators influences others and pushes them to a tipping point of wholesale distrust. As a result, in societies where there are few curbs on or consequences for bad behavior, cooperation collapses and soon so does the society.
This is why any societies that are
truly
libertarian are in various states of civil war, and why the most cooperative societies with activist governments are the only prosperous, stable, and secure societies on earth. Libertarianism is a luxury available only in communitarian societies. If it were anything more, then somewhere there would be a high-functioning libertarian society.
In the prevailing narrative of political economy—told by Democrats as well as Republicans—regulation destroys prosperity by limiting the ability of businesses to operate and create value. That this is hogwash becomes obvious if we allow ourselves to see the evidence around us. Seatbelt laws didn’t reduce the size of the auto industry; they increased it, as the safety and thus the marketability of driving increased. Food safety laws didn’t decrease the size of the food business; they increased it, as consumers came to trust mass providers of food.
Despite claims to the contrary, we see with our eyes that the more highly regulated countries are the more prosperous ones and that countries with little or no regulation are more impoverished. Does this mean regulation is intrinsically good, or that more is always better? No. The former Soviet Union is a case in point. And even in non-outlier cases like India, the burdens of complying with regulation can inhibit growth. But as a general matter, regulation is essential for prosperity in just the way that tending a garden is essential for its productivity.
The libertarian thesis of limited government depends, again, on a 19th-century notion that an economy or a society is a closed system, like a gas-powered car engine. If you take away gas, the car will go more slowly or less far. The system has decreasing returns. There is a zero-sum relationship between its elements. On such a story of an economy, it follows naturally that if there is more government regulation, there must be less business activity. If taxation increases, then economic growth must decrease.
In fact, our economy isn’t closed. It is open. The feedback loops aren’t negative. They are positive. The elements of the system are not in zero-sum relationship to one another. They are in symbiosis.
Zero-sum economic reasoning suffers from what we call the plants-and-animals fallacy. In nature, it would be folly to assert that the way to create more animals would be to limit plants. Plants nourish animals, which spread the seed and increase the number of plants that can now sustain a greater number of animals. Ecologically, more of one thing doesn’t mean less of another; in fact, it almost always means more. Relationships are not zero-sum; they are positive-sum. If you want more animals, you need more plants.
Limiting government to increase business makes no more sense than limiting plants to increase animals. Robust private enterprise requires robust state involvement and investment. This is not to say that big government is by definition effective government. In a non-equilibrium economy, the role of government is to eliminate harmful kinds of increasing returns, like speculation bubbles, and to encourage and propel pro-social kinds like the Internet revolution and the attendant wealth creation. Government can do this effectively or ineffectively; but it must do it.
Prosperity, after all, is a consequence of our ability to innovate. Innovation requires ever-increasing amounts of technology. That technology, in turn, can only be created and managed by people with ever-increasing amounts of training and education. The number of hours of schooling it takes to train someone to plow a field is orders of magnitude smaller than to train them to write computer code. Prosperity also requires more trade. More trade requires more infrastructure—not just roads and bridges, or airports and train stations, but also treaties, trade agreements, contracts, and the people who create them.
These investments don’t just enable prosperity, they propel it. And the story isn’t just that government does this once and then gets out of the way; it is about continually investing to sustain positive feedback. Limited-government theory is anti-growth and anti-prosperity. It refuses to acknowledge the way these collective investments propel innovation, and must be continually renewed.
The Failure of the Left: Big What, Big How
 
Ah, but the left doesn’t fare much better. Though we think the left gets more things right than the right, it needs a wake-up call.
We have from progressives an approach to government that for decades has been on autopilot. At the center of this Obama has put forth some positive reforms that seek to re-imagine progressive governance, from Race to the Top in education to health-care innovation incubators to clean-energy challenge grants. But he has not made such initiatives the signature of his governing philosophy. More to the point, he has yet to spell out a governing philosophy, a big story of what government is for. For all the self-doubt and handwringing among progressives today, the reality is that we still live in a nation where the New Deal/Great Society template is dominant. Far too many of us accept a substantial state role in every aspect of society.
It turns out that the left is as prone as the right to the assumption that humans calculate their self-interest rationally. Where the left differs is in its penchant for top-down prescriptive solutions. This is a big what
and
a big how. This is progressive Machinebrain thinking. As James Scott describes in
Seeing Like a State
, his illuminating survey of social engineering schemes of the 20th century, the very idea of “social engineering” treats complex human problems as orderly, predictable, manageable. The trouble, of course, is that they are not. This desire to “bracket uncertainty,” as Scott writes, is self-defeating in three ways: sclerosis, impracticality, and crowding out.
Sclerosis.
In a society as dynamic as ours, problems come too fast, and big institutions are too slow. Bigness—whether at GM, AIG, or HUD—is maladaptive and creates great vulnerability and risk. Bigness means too much complexity of organization, and “complexity catastrophes”—the seizing up of systems too densely packed with networks—are beginning to become the order of the day in public life. In juvenile justice or public education or health care, real people pay the price for bigness and complexity catastrophes. Once upon a time in all these realms, someone built, on an industrial model and metaphor, a machine for solving a problem of that moment. And then people stopped running or adjusting the machine. Worse, sometimes they have locked the machine in place so that it cannot change. For instance, while unions are important and have surely improved the lives of millions of Americans, they have also left us with protectionist workplace rules that can undermine the adaptability of both public and private organizations.
Impracticality.
What makes big government non-adaptive is not only its size and slowness. It is also its substitution of central expertise for on-the-ground practical knowledge. If this sounds like a classic right-wing talking point, well, so be it. It is truth. The reality is that when not only goals but also means are determined at the center, government is always a step behind reality. What real people end up doing is making end-runs and workarounds—in the best case. In the worst case, as in the famines that followed collectivization in Soviet Russia, people are forced to live and die by the mechanistic rules. When instead the means are determined by those who can make close observation of the actual environment, and make sense of the patterns they perceive—again, whether in child welfare or hospice care—what becomes salient is practical, informal, intuitive, local knowledge. James Scott uses the Greek term
mētis.
You could call it common sense, know-how, the art of
doing
in a particular case: shepherding a particular patient to health, putting out a particular kind of house fire. The more top-down a state becomes, the less
mētis
it allows for.
Crowding out citizens.
Another negative consequence of the big-government bargain is that we’ve stopped noticing all the ways that state action crowds out community and citizen ownership of problems and solutions. When Americans come to think of government as a vending machine—drop in the coins and expect a great society to come out—then good citizenship shrivels. Citizens start to think their role is to pay, consume, and kick the machine when they’re unsatisfied. Government, as it has developed, too often drains first the incentive and then the capacity of groups of people to address problems on a human scale. Economist and Nobel laureate Elinor Ostrom has written powerfully about groups of citizens, all around the world, who have created their own networks to allocate resources, police a commons, punish free riders, and sustain high norms of mutual obligation and strong reciprocity. These networks certainly collaborate with government but they did not emerge from it. One needn’t be Newt Gingrich to ask why progressives can’t foster more such nongovernmental networks. Progressives say “it takes a village,” but then too often rely on an agency. We acknowledge that some problems—like the interstate behavior of rapacious health-insurance firms—happen on a scale that requires action of equal reach. We insist, however, that many more problems happen on a scale that we citizens can and should own and address.
The Government We Need: Big What, Small How
 
Our call, in short, is for an end to the big vs. small government debate and for the beginning of
government that is big on the what and small on the how
: a stronger hand in setting great national goals and purposes; a lighter touch in how we reach those goals. Government, as we explain below, should be less a service provider and more a tool creator; less wielder of stick than of carrot; less the parent than the coach; and less the vending machine than the toolkit for civic action. A Big What, Small How government should set the bar high and invest fully in a great springboard—then let people, through dedication and practice, compete to get over the bar.
This approach recognizes that both strategic direction
and
adaptability are essential to any successful endeavor: strategy, so that the energies of the nation can be focused; adaptability, so that quick response to changing local conditions can influence the direction. This is the pattern of biological evolution: central nervous systems whose most sensitive receptors to change are at the edges.
To be very clear, we are not calling for a Reagan-style devolution that pushes responsibility down without providing the resources to do the job. We are not calling for unfunded mandates. We are calling for
funded
mandates and, even better, funded challenges. If government is to set bigger whats, it must invest accordingly. When we say citizens should be doing more of the how, we mean they should get the tools to do it. The idea that states (or communities) should be laboratories for democracy is meaningful only if the labs are funded sufficiently to run good experiments.
 
 
Theories of Government
 
 
 
Left
Right
New
Big government
No/limited government
Self-government
Services & programs
Do-it-yourself
Tools
Mom
Dad
Coach
Mandates
Silence
Goals
Rules
No rules
Incentives
Centralized
Decentralized
Polycentric
Big what / big how
Small what / small how
Big what / small how
 
 
 
Many libertarians will resist the “Big What” side of our equation, warning of the unintended consequences that will ensue when the government sets broad goals and direction for private sector activity. But unintended consequences are the very font of innovation—not least in the private sector. Whether welcome or unwelcome, they are what give rise to new technologies and force competitors to adapt. Unintended consequences are precisely why the other side of our equation is “small how.” We can’t know whether a push for clean energy might one day lead to a revolution in early learning, any more than we might have predicted that the space race would have given us Teflon-coated skillets.
Limited-government advocates say that the state should do precious little because every act creates unintended consequences. But unintended consequences cannot be used as an excuse for inaction because inaction has its own unintended consequences, no less potentially harmful than the kind that result from action.
From the other side, some strong statist liberals will ask why we are being so timid. Why not federalize and centralize more activity? They will point to Social Security and say, here is an example of something government-run that works great—let’s do more. We agree, actually, that a program like Social Security that involves an implied promise of benefits, straight income transfers, and the cutting of checks is best administered centrally by the state. There are certain activities where the economies of scale, the stability of need, or the cleanness of execution lend themselves well to execution by the government. Our point is that the list of such activities is not long and is getting shorter every day. Where the behavior of people and the emergence of trends are dynamic and continuously affect the nature of the endeavor, government needs to be more nimble, more adaptive, more responsive, and thus far less involved directly in the delivery of service.

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