Thursday, April 7, 2011

Debating Government: The Competing Values of Public Service and Market Activity

JFK, Space-Aliens, and Government
I am not a big believer in conspiracies. It was a single shooter in Dallas in 1963 and there is no massive government cover-up over space aliens and area 51 in New Mexico. Yet the events unfolding in Wisconsin over efforts to strip public employees of their bargaining rights and the ugly Prosser/Kloppenburg Supreme Court race, the potential government shutdown in DC, and the coming train wreck over the budget in Minnesota are all connected. The common thread in all these events is a simple question and debate: “Why Government?”

Why Government?
More specifically, the question is over the value of government in terms of what it uniquely does or performs. It is a core debate over whether the free market and logic and values are sufficient for ordering American society, distributing wealth and income, and delivering the good life, or whether the government itself is necessary or needed to accomplish this task. The core debate then is over whether there are unique values and contribution that government and its workers offer, thereby distinguishing them from the free market.

This is a question that has dominated my teaching in classes on ethics, public policy, and economic development policy for at least a decade. It is also a question that has become the focus of many talks I give to community and governmental groups. The latter especially are asking me to address it as they feel increasingly assaulted and demonized.

Americans have never really liked government. It started perhaps with our animosity to George III when we dumped tea in Boston Harbor. American ambivalence can be seen in attitudes over government programs such as welfare and Social Security (we hate one, like the other), and views on government regulation (we like the FDA to regulate drugs to be sure they are safe but dislike this regulation when it slows down what we hope are new cures for cancer). Even the TEA party is torn over government–they want less taxes and less government and plea for a more libertarian society, yet they demand that the government keep their hands off of their Medicare and Social Security.

But the most recent disdain toward government was launched by Ronald Reagan in 1981 when he declared government the problem, not the solution, and also stated that one of the most feared statements one can hear is “I'm from the government and I'm here to help.” Statements such as this demonized government, and it is not hard to connect this spirit to current attacks on school teachers and public employees by NJ and WI Governors Christie and Walker.

Not Necessarily a Partisan Issue
At the crudest level the debate over the unique value of government is a Republican/Democrat one, with the former described as anti-government and the latter pro. This is not a fair characterization. Many GOP like some aspects of government–the military and the police, and many Democrats dislike parts of government–regulation of reproductive and marital rights. But even more deeply, under president Clinton and VP Gore, embraced ideas from Reinventing Government by Gaebler and Osborne to re-engineer the public sector. The latter argued for the introduction of many private sector ideas and the spirit of entrepreneurship into the government in order to revitalize it. They wanted to make government, as Ross Perot said: “Run more like a business.”

Thus we saw statements that government should treat citizens more like customers, that it should be more market savvy, and that it should do more privatization and encourage competition to save money and improve performance. Why all this discussion is charming, what it failed to do was two things: 1) It misunderstood something the constitutional framers saw; and 2) it failed to capture a unique conception or role for government.

Markets versus Government
The American Constitutional framers feared powerful government. Efficient governments are a threat to individual liberty. Their goal in designing a complex government with checks and balances, separation of powers, bicameralism, and staggered electoral terms was to slow down the process of political change. It was to prevent an impulsive tyranny of the majority from infringing the rights of the minority. Better to create an inefficient government than an efficient one that makes the trains run on time at the expense of individual rights. Thus, a constitutional government such as ours was never meant to be efficient in the sense of competing with the private sector.

Efficiency is only one of the values of government, but there are others. This is the second mistake now being made. Governments are not just supposed to be efficient, they are also supposed to be fair, care about equity and equality, and respect other values such as transparency and respect for individual rights. Gaebler and Osborne failed to appreciate this, and so do many in both parties as they argue over the value of government.

Thus, on one level, listen to economists and they will tell you that the rationale for government is to address the problem of market failure. Government must act when the market either cannot or is not able to solve problems. Classically these are problems involving public goods such as national defense or security, or externalities such as pollution. These are issues where there is no market incentive to solve the problems.

The Value of Government
Yet this economic justification of government is thin. There is a broader value for government based on democracy and the public interest. As I discussed with my students the other day, many local governments in MN have recreation centers, parks, and libraries. True there may be no return on investment to them and they may not be efficient to operate, but that is not the end of the debate on whether government should provide them. Instead, it is about whether the people want these amenities. It is the peoples’ choice to offer these goodies. Moreover, the way the government makes choices and decisions are not always efficient but again, efficiency is not the final value. We do not value elections, due process, or civil liberties and rights because they are efficient, we prize them because they promote fairness and accountability.

The private sector almost singularly promotes efficiency and the bottom line. In the end, while many businesses claim “they do it all for you,” how many of you believe that is true? It is only to the extent that doing it for you is profitable or makes sense. Think about how much we all hate phone trees with businesses–it may be cheap to do this but does any customer think this is good service.

Citizens are not Customers
Contrary to what some may contend, citizens are not customers. A business-customer relationship is a cash nexus with loyalty determined along a singular dimension. A government-citizen relationship is deeper, reflecting many more complex values and connections regarding democracy, transparency, and accountability. “No taxation without representation” captures this sentiment while “No user fee without representation” misses it. The former suggests a right to a voice, the latter not necessarily. There is a big worry when some advocate that government should be more like a business. It is a logic that changes and challenges the basic values of government–suggesting government is not necessary and that it is simply a thorn in the side of the market.

The real debate in Wisconsin, DC, and St. Paul is one over government versus the market. It is one about the values of government and what it can contribute to the promotion of a good society. This is a debate worth having, and it is one that advocates for government need to reframe in terms of a language and set of values that describes what government uniquely can do. If they fail to do that they will lose the debate.

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