How technology can disrupt divide over government’s role

Reflections in the aftermath of a roads bill finally being passed and signed into law in Lansing:
Think about this: Roads are an example of what economists call “public goods,” things we all need, have access to and share. Other examples include national defense, (hopefully) good schools, local fire and police departments, clean air and water.

Who pays for public goods? Usually it’s government of one sort or another. And governments are paid for by our tax money. When Oliver Wendell Holmes, Jr., a justice of the U. S. Supreme Court, wrote in 1927 that “taxes are what we pay for civilized society,” he was suggesting that public goods are vital aspects of a civilized society and that they are usually provided by government, which in turn is funded by our tax money.

Now, we all know that Michigan roads are a mess. Our state spends less ‒ per person ‒ on road building and maintenance than any other state. All you have to do is drive over the border from Ohio or Indiana or drive around at break-up time in the spring to know it.

And bad roads cost money – more than the cost of fixing them. Potholes produce blown tires, bent rims, broken axles, misaligned front ends – all considerable expenses for the average driver. And traffic tie-ups caused by bad roads make us late to work and slow down the transport of goods and services.

Failing to fund our roads properly makes us all less well off, at least in terms of the public good we expect from good roads.

The road bill passed earlier this month by the legislature allocates $600 million from the state’s $9 billion general fund to pay for fixing our roads. Unless our economy grows at an unusually rapid rate over the next decade or so, those behind this road bill chose road repair at the expense of other public goods such as good schools, access to higher education, clean air and so forth.

That’s understandable, if not necessarily wise. One of the jobs politicians have is to balance competing priorities for the ways taxes are spent. Money is not infinite, so choices have to be made between various kinds of public goods that compete for support.

That’s quite a different issue than the big argument now dominating our politics: Republicans, by and large, think government is bad, much too big and too expensive, usually inefficient, often dysfunctional, something, in the famous words of Grover Norquist, to be strangled in the bath tub. Democrats argue that government is often the best solution to our problems and that all we need to do is spend more money to get better results.

As is usually the case, both extremes are wrong. Certainly, many government activities are too expensive and often not particularly effective. But that does not mean all government activities are bad. Nor does relying on government to perform a variety of functions mean we have surrendered our freedoms forever to the tender mercies of the “nanny state.”

Quite possibly the onrush of technology will make parts of the pro- versus anti-government argument moot, sterile and pointless.

Computer technology already makes it possible for citizens and consumers to interact directly with providers of goods or services in ways not previously possible. The fancy term for computer-based elimination of the middleman is “disintermediation,” which means individuals can enter into a transparent marketplace on their own.

Outfits like Uber make it possible for people to arrange urban transport without having to go through local monopolistic taxi companies. Airbnb puts travelers into direct contact with people wishing to rent a spare bedroom without having to rely on the intermediary of a hotel. Computer-based crowdfunding makes it possible for entrepreneurs to pull together capital to fund startups without having to rely on intermediary investment banks.

Ordinary citizens now trapped in the political classes’ endless and mindless pro- and anti-government arguments may suddenly be able to escape from that sterile maze, thanks to technology.
It isn’t yet clear how this can help fix the roads.

But it is clear that ideology may have scant appeal to people – normal, ordinary human beings who want and need public goods, and who suddenly can find new ways to get them at an affordable cost and with an efficiency that is far too rare in today’s polarized world.

Let’s hope so.