The need to guard the guardians has been a slow concept to develop in human history. Rulers had God on their side, or were gods, and it’s only in the last few centuries that there’s been even a concept of checks and balances. But, as usual, the powerful find workarounds and we’re back to the point where “you can’t fight City Hall” is considered a cliché.
In a sustainable system, that is, in a fair one, that feeling can’t exist. If it does, the system won’t be sustainable. Without effective oversight of the government, a sustainable system won’t happen.
Real oversight depends on the independence and intelligence of the overseers, with the first factor apparently much more important than the second. The financial meltdown, the false evidence for the US to start a war in Iraq, the astonishing loss of consumer control over purchased digital products: these all depend(ed) on cozy relationships among the powers-that-be. Those powerful people are, if anything, smarter than average. So the first requirement of oversight is that it has to be distributed, not concentrated among an elite. It should, furthermore, stay distributed and avoid creeping concentration from re-emerging. This is where current methods fall down. Elections happen too rarely and voters can be manipulated for the short periods necessary. Lawsuits take too much time and money to be more than a rearguard action. Our current feedback loops are far too long to work consistently.
There are a few pointers showing what will work. Although no current government has effective oversight unless officials cooperate (which suggests the system relies more on the hope of honesty than a requirement for it) many governments do employ elements of oversight. Some things clearly work better than others.
First is that transparency prevents the worst behavior, or at least enables citizens to mobilize against it. Full scale looting of public money and dreadful decisions taken for self-serving ends require secrecy.
Second is that elections do cause politicians to sit up and take notice. Unfortunately, when the elections occur on a schedule, the politicians only pay attention on that schedule. One essential change is a framework to call elections — in the system described here that would be recall elections — at any time.
Third, and now we’re already in largely untested territory, is the need for finer-grained feedback. It’s essential to have ways of communicating dissatisfaction and implementing the necessary corrections which are both effortless and scalable. An escalating system of complaints might be a solution.
Fourth, in the case of plain old criminal wrongdoing, there need to be criminal proceedings, as there officially are now.
Fifth is the need for oversight to have its own checks and balances. Government is a tensegrity structure, not a pyramid. Officials need to have ways of responding to complaints. And the system of oversight itself must be overseen.
Who does the overseeing is as important as how. Distributed — in other words, citizen — oversight is the essential part, but citizens have other things to do besides track officials. There also need to be professional auditors whose task is the day-to-day minutia of oversight. They keep tabs on all the data provided by transparency, take appropriate actions as needed, and alert the public to major developing problems that are overlooked. This is another area where professionals are needed for the boring or technical details and the general public is needed to ensure independence and functional feedback.
So, starting with transparency, the first thing to note is what it isn’t. It is not a data dump. It is not an exercise in hiding some data under a mountain of other data. It does not mean keeping every record for the sake of theater. It doesn’t mean stifling interactions by perching the Recording Angel on everyone’s shoulders.
Transparency means the optimum data for the purpose of promoting honesty in government. Information not relevant to that purpose is just noise that masks the signal. However, as always when an optimum is required, the difficulty is finding the right balance. If the right to know is defined too narrowly, there’s the risk of oversight failure. If it’s defined too broadly, official interactions may be stifled for nothing or privacy may be recklessly invaded. Organizations such as Transparency International have considerable data on how to approach the optimal level. The more governments that have a commitment to providing clear and honest data, the more we’d learn about how to achieve the most useful transparency with the least intrusion and effort.
What we know so far is that financial data and records of contacts and meetings provide two of the clearest windows on what officials (also non-governmental ones) are up to. Financial data in the hands of amateurs, however, can be hard to understand, or boring, or vulnerable to attitudes that have nothing to do with the matter at hand. For instance, accountants have the concept that tracking amounts smaller than what it costs to track them are not worth following. Amateurs, on the other hand, will notice a trail of gratuitous donuts but feel too bored to follow statements of current income as present value of net future cash flows. The fact that the statement is Enron’s means nothing beforehand. It is important to ignore the easy distractions of small stuff and to notice the big stuff, especially when it’s so large it seems to be nothing but the background.
There were plenty of auditors involved in the Enron fiasco who knew better, of course. That wasn’t a simple matter of amateurs distracted by ignorance. However, the auditors received vast sums of money from the company, which simply underlines the need for true independence in oversight, including independence from membership in similar networks. Real transparency would have made the necessary information available to anyone, and would have prevented both the disaster and the pre-disaster profits, some of which flowed to the very people supposedly in oversight … which is why oversight wasn’t applied in time.
Records of meetings and contacts are another important source of data about what officials are doing, but that raises other problematic issues. People need to feel able to speak candidly. After all, the whole point is to promote honesty, not to generate ever newer layers of speaking in code. A soft focus is needed initially, followed by full disclosure at some point. Maybe that could be achieved by a combination of contemporary summaries of salient points and some years’ delay on the full record. The interval should be short enough to ensure that if it turns out the truth was shaded in the summaries, corrective action and eventual retribution will still be relevant. The interval would probably need to vary for different types of activity — very short for the Office of Elections, longer perhaps for sensitive diplomatic negotiations between countries.
Presentation of information is a very important aspect of transparency, although often overlooked. This may be due to the difficulty of getting any accountability at all from current governments. We’re so grateful to get anything, we don’t protest the indigestible lumps. Governments that actually served the people would present information in a way that allows easy comprehension of the overall picture. Data provided to the public need to be organized, easily searchable, and easy to use for rank amateurs as well as providing deeper layers with denser data for professionals. If these ideas were being applied in a society without many computers, public libraries and educational institutions would be repositories for copies of the materials.
A related point is that useful transparency has a great deal to do with plain old simplicity. The recordkeeping burden on officials should be made as simple and automatic as possible. In an electronic world, for instance, any financial transactions could be routed to the audit arm of government automatically and receive a first pass computer audit. Some simplicity should flow naturally from requiring only information relevant to doing the job honestly, rather than all information.
Information relevant to other purposes, such as satisfying curiosity, has nothing to do with transparency. Or, to put it another way, the public’s right to know has limits. An official’s sex life, for instance, unless it affects his or her job, is not something that needs to be detailed for the sake of transparency, no matter how much fun it is. Officials, like everyone else, do have a right to privacy on any matter that is not public business.
The professional audit arm of the government would have the job of examining all departments. The General Accounting Office fulfills some of that function in the US now, but it serves Congress primarily. In the system I’m thinking about, it would serve the citizenry with publication of data and its own summaries and reviews. It would also have the power to initiate recalls or criminal proceedings, as needed. (More on enforcement in a moment.)
A professional audit agency doesn’t provide enough oversight, by itself, because of people’s tendency to grow too comfortable with colleagues. Citizens’ ability to take action would counteract the professionals’ desire to avoid friction and ignore problems. But citizen oversight, by itself, is also insufficient. Its main function is as a backstop in case the professionals aren’t doing their jobs. The day to day aspects, the “boring” aspects of oversight need to be in the hands of people paid to pay attention.
Feedback is the next big component of oversight, after transparency. The sternest form of feedback is recall elections, but in the interests of preventing problems while they are still small, a system that aims for stability should have many and very easy ways to provide feedback.
The easiest way to give feedback is to complain. That route should be developed into an effective instrument regarding any aspect of government, whether it’s specific people, paperwork, or practices. Complaints could address any annoyance, whether it’s a form asking for redundant information or it’s the head of the global Department of Transportation not doing his or her job coordinating intercontinental flights. Anyone who worked for a tax-funded salary, from janitors to judges, could be the subject of a complaint.
It’s simple enough to set up a complaints box, whether physical or electronic, but effectiveness depends on three more factors. The first two are responsibility and an absence of repercussions. People have to be able to complain without fear of retribution. On the other hand, complaints have to be genuine in all senses of the word. They have to come from a specific individual, refer to a specific situation, and be the only reference by that person to that problem. Anonymity is a good way to prevent fear of retribution. Responsibility is necessary to make sure complaints are genuine. Somehow, those two conflicting factors must be balanced at an optimum that allows the most genuine complaints to get through. Possibly a two-tiered system could offer a solution: one tier would be anonymous with some safeguards against frivolous action, and one not anonymous (but with bulletproof confidentiality) that could be more heavily weighted.
The third factor is that the complaints must actually be acted upon. That means sufficient staffing and funding at the audit office to process them and enforce changes. Since effective feedback is crucial to good government, staffing of that office is no more optional than an adequate police force or court system. It needs to be very near the front of the government funding line to get the money determined by a budget office as its due. (The budget office itself would have its funding level determined by another entity, of course.)
It’s to be expected that the thankless jobs of officials will generate some background level of complaints. Complaints below that level, which can be estimated from studies of client satisfaction across comparable institutions, wouldn’t lead to action by others, such as officials in the audit agency. An intelligent official would note any patterns in those complaints and make adjustments as needed. If they felt the complaints were off the mark, they might even file a note to that effect with the audit agency. The fact that they were paying attention would count in their favor if the level of complaints rose. But until they rose, the complaints wouldn’t receive outside action.
In setting that baseline level, the idea would be to err on the low side, since expressed complaints are likely indicative of a larger number of people who were bothered but said nothing. The level also should not be the same for all grades. People are likelier to complain about low level workers than managers whom they don’t see.
Once complaints rise above what might be called the standard background, action should be automatically triggered. Some form of automatic trigger is an important safeguard. One of the weakest points in all feedback systems is that those with the power to ignore them, do so. That weakness needs to be prevented before it can happen. The actions triggered could start with a public warning, thus alerting watchdog groups to the problem as well. The next step could be a deadline for investigation by the audit office (or the auditors of the audit office, when needed). If the volume of complaints was enormous, then there’s a systemic failure somewhere. Therefore, as a last resort, some very high number of genuine complaints should automatically trigger dismissal, unelection, or repeal of a procedure. Transparency means that the volume of complaints and their subject is known to everyone, so when that point was reached would not be a secret.
I know that in the current environment of protected officialdom, the feedback system outlined sounds draconian. The fear might be that nobody would survive. That’s not the intent. If that’s the effect, then some other, more well-tuned system of feedback is needed. But whatever it’s form, an effective system that’s actually capable of changing official behavior and altering policies is essential. In a system that worked, there would be few complaints, so they’d rarely reach the point of triggering automatic action. In the unattainable ideal, the selection process for officials would be so good that the complaints office would have nothing to do.
I’ve already touched on recall elections, but I’ll repeat briefly. The recall process can be initiated either by some form of populist action, such as a petition, or by the government’s audit arm. After a successful recall, an official should be ineligible for public service for some period of time long enough to demonstrate that they’ve learned from their mistakes. They’d be starting at the lowest rung, since the assumption has to be that they need to prove themselves again.
The fourth aspect of oversight, punishment for crimes, corruption, or gross mismanagement by officials, is currently handled correctly in theory, but it needs much stricter application in practice. The greater the power of the people involved, the more it’s become customary, at least in the U.S., to let bygones be bygones after a mere resignation. It’s as if one could rob a grocery store and avoid prosecution by saying, “Oh, I’m sorry. I didn’t mean it.” Worse yet, the response to criminal officials is actually less adequate than it would be to treat shoplifters that way. The state sets the tone for all of society, so crimes committed by representatives of the state do more damage. So there must be real penalties for any kind of malfeasance in office. If there has been financial damage, it should be reimbursed first out of the official’s assets. Nor should there be any statute of limitations on negligence or problems generated by officials. They are hired and paid the big money to pay attention. If they don’t, they must not escape the consequences merely because people are so used to letting government officials get away with everything.
So far, my focus has been on ways of controlling officials, and that is the larger side of the problem. But, that said, officials do need ways of contesting overactive oversight, downright harassment, or unjustified recalls or prosecutions. The point of draconian oversight — draconian from our perspective that teflon officials are normal — is to have public servants who live up to their name. They must serve the public.
On the other hand, they’re an odd sort of servant because a significant part of their job is doing things for the public good which the public usually doesn’t like very much at the time. (If that weren’t true, there’d be no need for officials to do them. They’d get done without help.) So, there are two reasons why officials must be protected from capricious oversight. One is that servants have rights. Two is that they have to be able to take necessary unpopular steps without fear of reprisals. The public, after all, is as capable of abusing power as the individuals it’s composed of.
Complaints are the earliest point where an official could disagree with the public’s assessment. If the complaints are caused by a necessary but unpopular policy, the official needs to make clear why it’s necessary, and why something easier won’t do. Complaints happen over time, so if they’re a rising tide, that’s not something that can come as a surprise to the responsible party. The official’s justifications would become part of the record. When complaints reach a high enough level to be grounds for unelection or dismissal, and if the official is convinced that a decisive proportion of the complaints is unwarranted, they could ask for independent review. (An example of possible specifics is given below.)
However, after repeated cases that go against a complainant, those individuals should no longer have standing to bring future cases of that type. A case that went against an official would result in recall or firing, so repeated cases wouldn’t arise.
The audit arm of the government is another source of oversight that an official could disagree with. The ability to respond to its charges would be built into the system. If the responses passed muster, the case would be closed. If not, there could be appeals to a review board, and eventually the legal system. As in the example box, I’d see this as a process with limits.
Recalls are the most far-reaching form of oversight, and the ability to contest them the most dangerous to the health of the system. Contesting a recall should be a last resort and something that’s applied only in exceptional cases. Normally, if an official felt a recall was unjustified, they should make that case during the unelection and leave the decision to voters. However, for the exceptional case, officials could contest a recall if they had a clear, fact-based justification for why it had no valid basis. It would then go to reviewers or a legal panel with the necessary specialized expertise, chosen by the opposing sides as discussed earlier.
The biggest difference between those reviewers and others is that potential conflicts of interest would have to be minutely scrutinized. More nebulous loyalties should be considered as well in this case. The tendency to excuse the behavior of colleagues is very strong and it’s one of the biggest problems with oversight of government by government. As with any process involving a balance of rights, ensuring the independence of the arbiters is essential.
To provide an additional dose of independence, a second review track could be composed of a more diffuse pool of people with less but still adequate expertise, along the same lines as selectors who determine the eligibility of candidates for office. A matter as serious as contesting a recall should use both tracks at once, and be resolved in favor of the official only if both agreed.
As I’ve done before, I’ve provided some specific ideas about implementation not necessarily because those are good ways to do it, but mainly to illustrate my meaning. Whatever method is applied, the goal is to ensure the right of public servants to defend themselves against injustice, just like anyone else, and to prevent that from becoming an injustice itself.
Because of the potentially far-reaching consequences of contesting recalls, overuse absolutely must be prevented. If it was the considered opinion of most reviewers involved that an official who lost a bid to prevent a recall did not have grounds to contest in the first place, then that attempt should be considered frivolous. One such mistake seems like an ample allowance.
A structural weakness of oversight by the public is that officials have training, expertise, and familiarity with the system. That gives them the advantage in a contest with a diffuse group of citizens. An official’s ingroup advantage may be smaller against an arm of the government tasked with oversight, but that’s not the issue. The important point is that citizen action is the oversight of last resort so it sets the boundary conditions which must not fail. Since officials have the upper hand in the last-resort situation, it is right to err on the side of protecting oversight against the official’s ability to contest it. Officials must have that option, but it can’t be allowed to develop into something that stifles oversight. It’s another balance between conflicting rights. It may be the most critical balance to the sustainability of a fair system, since that can’t survive without honest and effective government.
The government’s regulatory functions flow directly from its monopoly on force. What those functions should be depend on the government’s purpose which, in the case being discussed here, is to ensure fairness. People will always strive to gain advantage, and the regulatory aspects of government must channel that into fair competition and away from immunity to the rules that apply to others.
In an ideal world, the regulatory function would scarcely be felt. The rules would be so well tuned that their effects would be self-regulating, just as a heater thermostat is a set-it-and-forget-it device. More complex systems than furnaces aren’t likely to achieve this ideal any time soon, but I mention it to show what I see as the goal of regulation. Like the rest of government, when it’s working properly, one would hardly know it was there.
However, it is regulation that can achieve this zen-like state, not deregulation. This is true even at the simplest levels. A furnace with no thermostat cannot provide a comfortable temperature. In more complex human systems, deregulation is advocated by those powerful enough to take advantage of weaker actors. (Or those who’d like to think they’re that powerful.) It can be an even bigger tool for exploitation than bad regulations. The vital point is that results expose motives regardless of rationalizations. If regulation, or deregulation, promotes concentrations of power or takes control away from individuals, then it’s being used as a tool for special interests and not in the service of a level playing field.
Current discussions of regulations tend to center on environmental or protectionist issues, but that’s because those are rather new, at least as global phenomena. In other respects, regulations are so familiar and obviously essential that most people don’t think of them as regulations at all. Remembering some of them points up how useful this function of government is. Weights and measures have been regulated by governments for thousands of years, and that has always been critical for commerce. Coins and money are a special instance of uniform measures — of value in this case — and even more obviously essential to commerce. The validity of any measure would be lost if it could be diddled to favor an interested party. Impartiality is essential for the wealth-producing effects to operate. That is so clear to everyone at this point that cheating on weights and measures is considered pathetic as well as criminal. And yet, the equally great value of fairness-preserving regulation in other areas generally needs to be explained.
Maintaining a level field is a primary government function, so undue market power is one area that needs attention. The topic overlaps with the discussion about competition and monopolies under Capital in the Money and Work chapter, but it is also an important example of regulation that can be applied only by a government, so I’ll discuss it briefly here as well.
Logically, monopolies shouldn’t exist because there ought to be a natural counterweight. They’re famous for introducing pricing and management inefficiencies that ought to leave plenty of room for competitors. But, people being what they are, market power is used to choke off any competition which could reduce it. The natural counterweight can’t operate, and only forces outside the system, such as government regulations, can halt that process.
One point I’ve tried to make repeatedly is that fairness is not only a nice principle. Its practical effects are to provide stability and wealth. That is no less true in the case of preventing unbalanced market power. Imbalance leads to chaotic consequences during the inevitable readjustment. Having enough market power to tilt the field is not only unfair and not only expensive. It’s also unstable, with all the social disruption that implies. Recognition of that fact has led to the establishment of antitrust laws, but they tend to be applied long after economic power is already concentrated. They assume that the problem is one hundred percent control.
The real evidence of an imbalance is price-setting power. When a business or an industry can charge wildly in excess of their costs, that’s evidence of a market failure and the need for some form of regulation. I’ll call entities who are able to dictate prices “monopolies” for the purposes of discussion, even though they have only a controlling market share, not necessarily one hundred percent of it.
Some monopolies are well understood by now. The classical ones involve massive costs for plants or equipment and very small costs to serve additional customers. Railroads are one example. The initial costs are high enough to prevent new startups from providing competition. Equally classic are natural monopolies where one supplier can do a better job than multiple competing ones. Utilities such as water and power are the usual examples. There’d be no money saved if householders had water mains from three separate companies who competed to supply cheap water. The duplicated infrastructure costs would swamp any theoretical savings.
So far, so good. The need for regulated utilities is well understood. Regulated transport is a bit iffier. The need for a state to handle the roads is accepted, even among the free market religionists in the US, but the need for state regulation and coordination of transport in general is less widely recognized. The free marketeers here can be puzzled about why it takes a week to move things from Coast A to Coast B using the crazy uncoordinated patchwork of private railroads. But, on the whole, the need to enforce limits on pricing power, the need for standards and for coordination is known, if not always well implemented.
The same need for standards, coordination and limits on pricing holds with all other monopolies, too, but this isn’t always grasped, especially in newer technologies. Money is not the only startup cost that can form a barrier to entry. An information industry is a recent phenomenon that started with the printing press and has begun exponential growth after the computer. The main “capital cost” is not equipment but the willingness of people to learn new habits.
Imagine, for instance, that Gutenberg had a lock on printing from left to right. All later presses would have had to convince people to read right to left just so they could get the same book but not printed by Gutenberg. Good luck with that. Similarly with the qwerty keyboard. People learned to use it, it turned out to be a bad layout from the standpoint of fingers, and we’re still using it over a hundred years later. Only one cohort of people would have to take the time to learn a new layout, and that just doesn’t happen. If there had been a modern DMCA-style copyright on that layout, there’d still be nobody making keyboards but Remington.
History shows that people simply won’t repeat a learning curve without huge inducements. And so it also has dozens of examples of companies which had the advantage of being over the learning curve and thus had a natural monopoly as solid as owning the only gold mine. Any monopoly needs regulation. If it works best as a monopoly, then it has to become a regulated utility. If it’s important enough, it may need to be government run to ensure adequate transparency and responsiveness to the users. If it doesn’t need to be a monopoly, then it’s up to regulation to ensure that the learning curve is not a barrier to entry.
Regulation that was doing its job would make sure that no single company could control, for instance, a software interface. As discussed in the chapter on Creativity, an inventor of a quantum improvement in usability should get the benefit of that invention just as with any other. But it cannot become a platform for gouging. Compulsory licensing would be the obvious solution.
Another new technology that’s rapidly getting out of hand is search. Methods of information access aren’t just nice things to have. Without them, the information might as well not be there. A shredded book contains the same information as the regular variety; there’s just no way to get at it. Organizing access to information is the function of nerves and brain. Without any way to make sense of sight or sound or to remember it, an individual would be brainless. Nor would having two or three brains improve matters. If they’re separate, any given bit of information could be in the “wrong” brain unless they all worked together. They have to work as a unit to be useful. Information access is a natural monopoly if there ever was one.
The fact that search is a natural monopoly seems to have escaped too many people. Like a nervous system, without it all the information in cyberspace might just as well not be there. The usual answer is to pooh-pooh the problem, and to say anyone can come up with their own search engine. But having multiple indexers makes as much sense as having multiple water mains. It’s a duplication of effort that actually reduces value at the end.
That’s not to say that different methods can’t exist side by side. Libraries, for instance, organize information in a fundamentally different, subject-oriented way than do search engines, and that facilitates deeper approaches to the material. Left to itself, over time, the need for that approach would lead to the development of the more laborious subject-based indexes in parallel with tag-based ones. But that’s another danger with having a monopoly in the latter kind. Undue influence might not leave any parallel system to itself. To put it as a very loose analogy, word-based methods could become so dominant that mathematics hardly existed. Whole sets of essential mental tools to handle information could fall into disuse.
On the user’s side, there’s a further factor that makes search a natural monopoly. Users don’t change their habits if they can help it. (That’s why there are such heated battles among businesses over getting their icons on computer desktops. If it’s what people are used to and it’s right in front of them, the controlling market share is safe.) Instead of pretending there is no monopoly because people have the physical option to make an initially more effortful choice — something people in the aggregate have shown repeatedly they won’t do — the sustainable solution comes from facing facts. More than one indexer is wasteful, and people won’t use more than one in sufficient numbers to avoid a controlling market share. It’s a natural monopoly. So it needs to be regulated as a public utility or even be part of the government itself.
There are further considerations specifically related to search. Any inequality in access to knowledge leads to an imbalance in a wide array of benefits and disadvantages. Further, an indexer is the gateway to stored knowledge and therefore potentially exercises control over what people can learn. In other words, a search engine can suppress or promote ideas.
Consider just one small example of the disappearance at work. I wanted to remove intercalated video ads from clips on Google’s subsidiary, Youtube. But a Google search on the topic brought up nothing useful in the first three screens’ worth of results. That despite the fact that there’s a Greasemonkey script to do the job [Update, 2014-05-09, the script is no longer there]. Searches for scripts that do other things do bring up Greasemonkey on Google.
Whether or not an adblocker is disappeared down a memory hole may not be important. But the capability to make knowledge disappear is vastly important. Did Google “disappear” it on purpose? Maybe not. Maybe yes. Without access to Google’s inner workings, it’s impossible to know, and that’s the problem.
We’re in the position of not realizing what exists and what doesn’t. Something like that is far more pernicious than straight suppression. That kind of power simply cannot rest with an entity that doesn’t have to answer for its actions. Anything like that has to be under government regulation that enforces full transparency and equality of access.
(None of that even touches on the privacy concerns related to search tools, which, in private hands and without thorough legal safeguards, is another locus of power that can be abused.)
There are two points to this digression into the monopolies of the information age. One is that they should and can be prevented. They have the same anti-competitive, anti-innovative, expensive, and ultimately destabilizing effect of all monopolies. And a good regulator would be breaking them up or controlling them for the public good before they grew so powerful that nothing short of social destruction would ever dislodge them.
My second point is that monopolies may rest on other things besides capital or control of natural resources. All imbalances of market power, whether they’re due to scarce resources, scarce time, ingrained habits, or any other cause need to be recognized for what they are and regulated appropriately.
Regulations as the term is commonly used — environmental, economic, financial, health, and safety — are generally viewed as the government guaranteeing the safety, not the rights, of citizens to the extent possible. But that leads straight into a tangle of competing interests. How safe is safe? Who should be safe? Just citizens? What about foreigners who may get as much or more of the downstream consequences? How high a price are people willing to pay for how much safety?
If the justification is safety, there’s no sense that low-priced goods from countries with lax labor or environmental laws are a problem. Tariffs aren’t applied to bring them into line with sustainable practices. The regulatory climate for someone else’s economy is not seen as a safety issue. Egregious cases of slavery or child labor are frowned on, but are treated as purely ethical issues. Since immediate physical harm to consumers is not seen as part of the package, regulation takes a back seat to other concerns. Until it turns out that the pollution or CO2 or contaminants do cause a clear and present danger, and then people are angry that the situation was allowed to get so far out of hand that they were harmed.
Approaching regulations as safety issues starts at the wrong end. Sometimes safety can be defined by science, but often there are plenty of gray areas. Then regulations seem like a matter of competing interests. Safety can only be an accidental outcome of that competition unless the people at the likely receiving end of the harm have the most social power.
However, when the goal is fairness, a consistent regulatory framework is much easier to achieve. The greatest good of the greatest number, the least significant overall loss of rights, and the least harm to the greatest number is not that hard to determine in any specific instance. In a transparent system with recall elections, officials who made their decisions on a narrower basis would find themselves out of a job. And safety is a direct result, not an accidental byproduct, of seeking the least harm to the greatest number.
Consider an example. The cotton farmers of Burkina Faso cannot afford mechanization, so their crop cannot compete with US cotton. Is that a safety issue? Of course not. Cotton is their single most important export crop. If the farmers switch to opium, is that a safety issue? Sort of. If the local economy collapses, and the country becomes a haven for terrorists, that’s easy to see as a safety issue. A much worse threat, however, would be the uncontrolled spread of disease. Collapse is not just some academic talking point. The country is near the bottom of poverty lists, and who knows which crisis will be the proverbial last straw. So, once again, is bankrupting their main agricultural export a safety issue? Not right now. So nothing is done.
Is it, however, a fairness issue? Well, obviously. People should not be deprived of a livelihood because they are too poor to buy machines. There are simple things the US could do. Provide regulation so that US cotton was not causing pollution and mining land and water. The remaining difference in price could be mitigated with price supports to Burkinabe cotton. The only loss is to short term profits of US cotton farmers, and where that is a livelihood issue for smallholders assistance could be provided during the readjustment.
There may be better ways of improving justice in the situation, but my point is that even an amateur like me can see some solutions. The consequences of being fair actually benefit the US at least as much as Burkina Faso. (Soaking land in herbicide is not a Good Thing for anyone.) And twenty or thirty years down the road, people both in the US and in Burkina Faso will be safer. The things they’ll be safer from may be different — pollution in one case, social disruption in the other — but that doesn’t change the fact that safety oriented regulation has no grounds for action, but fairness oriented regulation can prevent problems.
Globalization is yet another example where regulation based on fairness facilitates sustainability. Economists like to point out that globalization can have economic benefits, and that’s true, all other things being equal. The problem is other things aren’t equal, and globalization exposes the complications created by double standards. If it applied equally to all, labor would have to be as free to move to better conditions as capital. (See this post for a longer discussion.) Given equal application of the laws, globalization couldn’t be used as a way of avoiding regulations. Tariffs would have to factor in the cost of sustainable production, and then be spent in a way that mitigated the lack of sustainability or fairness in the country (or countries) of origin. There’d be less reward for bad behavior and hence fewer expensive consequences, whether those are contaminants causing disease or social dislocation caused by low wages and lost work. Those things are only free to the companies causing the problem.
Enforcement must be just as good as the regulations or else they’re not worth the paper they’re printed on. The financial meltdown is a stark recent example showing that good regulations are not enough. Maintaining the motivation for enforcement is at least as important. In the US and in many other countries, the regulations existed to preserve the finances of the many rather than the narrow profit potential of the few. In hindsight, the element missing was any desire to enforce those regulations. (E.g. see Krugman’s blog and links therein.)
Enforcement is necessarily a task performed by officials, who are hired precisely to know enough to use foresight so that hindsight is unnecessary. That’s understood everywhere, and yet enforcement is repeatedly the weak link in the chain. That’s because the responsible officials are not really responsible. Rarely do any of them have any personal consequences for falling down on the job. That is the part that has to change.
Officials who enable catastrophe by not doing their jobs commit dereliction of duty, something that has consequences in a system emphasizing feedback and accountability. There has to be personal liability for that. People are quick to understand something when their living depends on it. (With apologies to Upton Sinclair.) The right level of personal consequences for responsible officials is not only fair, it would also provide the motivation to do the job right to begin with and avoid the problem.
For personal responsibility to be justified, the right path to take does need to be well known. I’m not suggesting officials be punished for lacking clairvoyance. I’m saying that when the conclusions of experts exceed that 90% agreement level mentioned earlier, and yet the official ignores the evidence, then they’re criminally culpable. Then a lack of action in the face of that consensus needs to be on the books as a crime, punishable by loss of assets and even jail time, depending on the magnitude of the lapse. Nor should there be any statute of limitations on the crime, because there is none on its effects. The penalties need to be heavy enough to scare officials straight, but not so heavy they’re afraid to do their jobs. Finding the right balance is another area where study is needed to find optimal answers. But regulation is a vital function of government, so it is equally vital to make sure that it’s carried out effectively. Dereliction of duty is no less a crime of state than abuse of power.
Officials who are actually motivated to do their jobs are important in a system which works for all instead of for a few. The point of fair regulation, as of fairness generally, is that avoiding problems is less traumatic than recovering from them. Prevention of problems is an essential function of regulation. Prevention takes effort ahead of time, though, when there’s still the option to be lazy, so it only happens when there’s pressure on the relevant officials. That means there have to be penalties if they don’t take necessary steps. It’s unreasonable to punish a lack of clairvoyance, and yet it’s necessary to punish officials who let a bad situation get worse because it was easier to do nothing.
In short, the government’s regulatory functions should serve to maintain a fair, sustainable environment where double standards can’t develop. Safety or low prices might be a side effect, but the purpose has to be enforcing rights.
This is one of the few areas where the highest expression of the art of government is more than invisibility. Some of the greatest achievements of humankind come from the type of concerted action only governments can coordinate. The great pyramids of Egypt, medieval European cathedrals, and space flight were all enterprises so huge and so profitless, at least in the beginning, that they couldn’t have been carried out by any smaller entity.
People could — and have — questioned whether those projects were the best use of resources, or whether some of them were worth the awful price in suffering. The answer to the latter is, obviously, no. Where citizens have a voice, they’re not likely to agree to poverty for the sake of a big idea, so that problem won’t (?) arise. But that does leave the other questions: What is worth doing? And who decides?
There’s an irreducible minimum of things worth doing, without which a government is generally understood to be useless. The common example is defense, but on a daily level other functions essential to survival are more important. A police force and court system to resolve disputes is one such function. Commerce requires a safe and usable transportation network and reliable monetary system. In the system described here, running the selection and recall processes would be essential functions. And in a egalitarian system, both basic medical care and basic education have to be rights. It is fundamentally unfair to put a price on life and health, and equally unfair to use poverty to deprive people of the education needed to make a living.
As discussed in the chapter on Care, the definition of “basic” medical care depends on the wealth of the country. (Or of the planet, in a unified world.) In the current rich countries, such as the G20, it simply means medical care. It means everything except beauty treatments. And even those enter a gray area when deviations from normal are severe enough to cause significant social problems. On the other hand, in a country where the majority is living on a dollar a day and tax receipts are minimal, basic medical care may not be able to cover much except programs that cost a tiny fraction of the money they eventually save. That’s things like vaccinations, maternal and neonatal care, simple emergency care, pain relief, treatments against parasites, and prevention programs like providing mosquito netting, clean water, and vitamin A.
The definition of basic education likewise depends on the social context. In a pre-technological agrarian society it might be no more than six grades of school. In an industrial society, it has to include university for those who have the desire and the capacity to make use of it. The principle is that the level of education provided has to equal the level required to be eligible for good jobs, not just bottom tier jobs, in that society.
I’ve gone rather quickly from the irreducible minimum to a level of service that some in the US would consider absurdly high. Who decides what’s appropriate? I see that question as having an objective answer. We are, after all, talking about things that cost money. How much they cost and how much a government receives in taxes are pretty well-known quantities. From that it’s possible to deduce which level of taxes calls for which level of service.
The concept that a government can be held to account for a given level of service, depending on what proportion of GDP it uses in taxes, is not a common one. And the application of the concept is inevitably empirical. It is nonetheless interesting to think about the question in those terms.
As I’ve pointed out, there are several governments who have total tax receipts of about a third of GDP and provide all the basic services plus full medical, educational, retirement, and cultural benefits, as well as providing funds for research. Hence, if a country has somewhere between 30% to 40% of GDP in total tax receipts, it should be providing that level of service. If it isn’t, the citizenry is being cheated somewhere.
On a local note, yes, this does mean the US is not doing well. Total taxes here are around 28%. Japan provides all the services and benefits listed above while taking in 27% of total GDP. The low US level of services implies taxes should be lower, or services should be higher. The US does, of course, maintain a huge military which, among other things, redistributes federal tax dollars and provides some services such as education and medical care to its members. If one factors in the private cost of the tax-funded services elsewhere, US total tax rates would be over 50%. Given the gap between the US and other rich countries, the US is wasting money somewhere … .
On the other hand a poor country, which can’t fairly have much of a tax rate, might have only 5% of an already low GDP to work with. Services then would be limited to the minimums discussed earlier. Even poor governments can provide roads, police, fire protection, commercial regulation to make trade simpler, basic medicine and education. (It should go without saying, but may not, that a poor country may not have the resources to deal with disasters, and may need outside help in those cases.) The only thing that prevents some of the world’s countries from providing the basics now are corruption, incompetence, and/or the insistence of elites on burning up all available money in wars. None of those are essential or unavoidable. Fairness isn’t ruinously expensive, but its opposite is.
At any level of wealth, the receipts from fair levels of taxes dictate given levels of service. Citizens who expect more without paying for it are being unfair, and governments who provide less are no better.
There is now no widespread concept that a government is obligated to provide a given level of service for a given amount of money. Even less is there a concept that taking too much money for a given level of service is a type of crime of state. The government’s monopoly on force in a might-makes-right world means that there aren’t even theoretical limits on stealing by the state. However, when it’s the other way around and right makes might, then those limits flow logically from what is considered a fair tax level.
So far, I’ve been discussing taxes and what they buy on a per-country basis which feels artificial in a modern world where money and information flow without borders, and where we all breathe the same air. A view that considers all people equal necessarily should take a global view of what’s affordable. I haven’t discussed it that way because it seems easier to envision in the familiar categories of nations as we have them now, but there’s nothing in the principles of fair taxation and corresponding services that wouldn’t scale up to a global level.
Finally, there’s the most interesting question. In a country — or a world like ours — which is doing much better than scraping by, what awe-inspiring projects should the government undertake? How much money should be devoted to that? Who decides what’s interesting? Who decides what to spend?
Personally, I’m of the opinion that dreams are essential, and so is following them to the extent possible. I subscribe to Muslihuddin Sadi’s creed:
If of mortal goods you are bereft,
and from your slender store two loaves
alone to you are left,
sell one, and from the dole,
buy hyacinths to feed the soul.
Or, as another wise man once said, “The poor you shall always have with you.” Spend some money on the extraordinary.
So I would answer the question of whether to spend on visionary projects with a resounding “yes.” But I’m not sure whether that’s really necessary for everyone’s soul or just for mine. I’m not sure whether it’s a matter of what people need, and hence whether it should be baked into all state budgets, or whether it’s a matter of opinion that should be decided by vote. If different countries followed different paths in this regard, time would tell how critical a role this really plays.
It seems to me inescapable that countries which fund interesting projects would wind up being more innovative and interesting places. Miserly countries would then either benefit from that innovation without paying for it, which wouldn’t be fair, or become boring or backward places where fewer and fewer people wanted to live. Imbalances with unfortunate social consequences would then have to be rectified.
As for the ancillary questions of what to spend it on, and how much to spend, those are matters of opinion. Despite that, it’s not clear to me that the best way to decide them is by vote. People never would have voted to fund a space program, yet fifty years later they’ll pay any price for cellphones and they take accurate weather forecasting for granted. I and probably most people have no use for opera, and yet to others it’s one of the highest art forms.
Further, another problem is that budget instability leads to waste. Nobody would vote for waste, but voter anger can have exactly that effect. Jerking budgets around from year to year wastes astronomical sums. A good example of just how much that can cost is the tripling, quadrupling, and more of space program costs after the US Congress is done changing them every year. Voters, on the whole, are not good at the long range planning and broad perspective that large social projects require. I discuss a possible method of selection under Advanced Education. Briefly, I envision a similar system to the one suggested for other fields. A pool of proposals is vetted for validity, not value, and selection is random from among those proposals that make methodological sense. However it’s done, decisions on innovation and creativity have to be informed by innovative and creative visionaries without simultaneously allowing corrupt fools to rush in.
A fair government, like any other, has a monopoly on force, but that is not the source of its strength. The equality of all its citizens, the explicit avoidance of double standards in any sphere, the renunciation of force except to prevent abuse by force, short and direct feedback loops to keep all participants honest, and all of these things supported in a framework of laws — those are the source of its strength. The strength comes from respecting rights, and is destroyed in the moment rights get less respect than might. The biggest obstacle to reaching a true rule of law is that intuition has to be trained to understand that strength is not muscle.