What is Broken, and What is Not

Last week I was in Palo Alto, California for a two-day conference at Singularity University, a think tank created to address the fast-moving effects of the information-technology revolution on the world.  Presenting at this event were Peter Diamandis, creator of the X Prize, and Ray Kurzweil, inventor and futurist.

Diamandis discussed a spectrum of the world’s most urgent issues, such as clean water in the developing world, and detailed how new technology will radically improve the lives of the poorest billion people in the world within the next decade.  To give a single example, inventor Dean Kamen has created a box the size of a washing machine, called a Slingshot, that can process even the most polluted water source, producing 1,500 liters a day of water clean enough to use for medical injection.  This single invention, once disseminated to poor communities in Africa and Asia, could save millions of lives each year.

It was an inspiring presentation by two extraordinarily bright and energetic guys.  Flying back Friday night, my head was buzzing with possibilities and action plans.  Until I got off the airplane and got to work finishing my recent post on the fiscal cliff deal. Thinking about our nation’s failure to address our long term fiscal imbalances will surely beat the optimism right out of you.

I feel it necessary to make a point about public policy, which hopefully will not be seen as a partisan comment on the current Washington stalemate.  The crisis of our time is fundamentally a crisis of government — of its size, cost, power and purposes.

Back in 2008, many on the Left believed we faced a crisis of capitalism and free markets, red in tooth and claw, susceptible to correction by energetic new regulation and equally energetic new spending.  Then Greece blew up, followed by Spain and Italy, with France in the on-deck circle. There is a growing recognition, across the political spectrum, that changing demographics, large debt overhangs, and slower economic growth all contribute to a crisis of the modern welfare state.

Saying that we face a crisis of government does not suggest that government is bad or useless, any more than having your cardiologist tell you, after a heart attack, that cardiac disease is the greatest risk to your health suggests that your heart is a bad or useless organ.  I will leave open for the moment questions about whether government is the only thing we have in common, should be shrunk small enough to be  drowned in a bathtub, must be fixed by tax increases or spending cuts (or both), should regulate more or less, and ignore the question of which party is the bigger obstacle to solving our problems, and when and whether they will eventually be resolved.

For now, my intent is simply to note that government is the place, within the vast and complex workings of our modern mixed economy, that the decision-making structures are so dysfunctional, the inputs and outputs so fundamentally out of sync, the promises so inconsistent with the resources, and the potential financial consequences so negative and profound, as to imperil the operation of the rest of the mechanism.

Here is a small thought-experiment to test whether I am right.  If the lead story on tonight’s news was that Congressional leaders had met in secret over the weekend, and had emerged with a bipartisan deal including a restructure of the tax code; a bold infrastructure construction program valued at $500 billion and suspending Taft-Hartley contracting restrictions; reform of Social Security and Medicare, raising the retirement age and partially means-testing benefits; reform of Sarbanes-Oxley, reinstatement of Glass-Steagall, imposing taxes on too-big-to-fail financial institutions (is this list long enough yet?)…if all this happened, would you not feel more optimistic about the future?

Now, let’s turn this around and look at it from the other side.  Identifying government as the thing that is broken, without requiring ourselves to take sides on how it should be fixed, lets us open ourselves up to the reality that there are vast open meadows of human endeavor, apart from government, that not only are not broken, but offer possibilities for progress that have rarely been observed in human history.

Over the next decade, more than one billion new brains and voices will join the global conversation, connected online with smartphones, ready to invent, produce, consume and discuss.  This is great news.  We just need to be willing to hear it.

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