Monday, June 19, 2017

Oh Dear. Not Another Push to Make Government More Efficient

Oh dear. The tech titans are meeting at the White House today and one of the items on the agenda is to bring the government up to date. The idea, apparently, is to make the federal government "operate like a modern technology enterprise." After all, "modernizing government services is not politicized."

Oh please. The reason that government is such a mess is not because government hasn't kept up with the new technology. It is because government tries to run the country as though it were a feudal fief, with the lord providing protection to his vassals in return for their fealty or support. And the problem with such vertical relationships is that they are notoriously resistant to change.

The reason we no longer have a feudal system is that it is a system that does not increase human welfare, because it cannot respond to new information. In fact, under the feudal system, the poor go to the wall when periodic famine occurs. Sorry about that.

But under the price system and the exchange economy change is constant and ceaseless and everyone, whether they like it or not -- and usually they do not -- must adjust to the  price signals.

Not surprisingly, people go to government for help when they want to escape from the price system. That's when government sets up a new program to shelter its supporters from the harsh winds of the price system.

But  what about 30 or 50 years down the road? Do we update the program? Do we make it more efficient? Do we blame the program's failure on greedy bankers or uncaring corporate CEOs?

Let us look at a specific example, the catastophic fire at London's Grenfell Tower. This building is what we in the US would call government housing, and the Brits call "social housing" or "council housing." It was built according to fashionable notions in the 1970s (think Pruitt-Igoe) and was refurbished recently according to modern ideas of green energy. Unfortunately it is not owned by the Trump Organization but by government and its unaccountable bureaucrats. And the tenants are not no-nonsense Manhattanites who would be outta there if the management didn't keep the place up; they are welfare recipients and immigrants who only know protest and complaint.

So the question about Grenfell Tower is not who to blame, and whether Theresa May is sufficiently compassionate as the feudal lord of the helpless serfs, but why in the world do we have the government getting into the housing business anyway?

Why does Grenfell Tower exist, 30 years after everyone agreed that tower blocks were a terrible way to warehouse the poor? It is because even though there is garbage in the hallways and discarded mattresses in the doorways, and the residents are always complaining, it is still a pretty good deal for the tenants who are getting half-decent housing at way-below-market rents. Humans will put up with a lot of inconvenience and humiliation when they are getting free stuff.

Grenfell Tower really is a poster-boy for government in general. After years of complaint they put up "cladding" to spiff up the building and make it greener with more insulation. So the bureaucrats were killing two birds with one stone. The first is that such "tower blocks" are stunningly ugly; the second is that they are energy inefficient, being designed before the first OPEC oil embargo. Wonderful. Only the bureaucrats made it worse, because the new cladding was not fire-resistant or fire-retarding but a fire accelerant.

There is settled science on this and if you disagree you are a denier. The settled science is called the Law of Unintended Consequences, and it applies to all government programs. Actually it applies to life in general. In life, when you are faced with an unintended consequence, you fix it. In government you have to wait 30 years until the program is irretrievably broken. And then you paper the problem over with a new efficiency program or technology update and hope that it will go away.

The question remains. Is it better to paper over a failing government program and throw good money after bad? Or not.

No comments:

Post a Comment