My Thoughts on Technology and Government
By Arnold Kling
Thanks to Bryan for highlighting and hosting Tyler Cowen’s paper. My thoughts:
1. For a long time, I’ve thought that the technologies of the industrial revolution favored centralization, while the technologies of the information revolution shift the balance somewhat more toward decentralization.
2. I think of industrialization as mass production. Lots of labor per factory. Lots of consumers per product. Lots of soldiers per army. Lots of residents per city. Lots of citizens per governmental unit. I think that the information revolution reverses some of these trends, as we shift somewhat away from mass production and more toward innovation and niche market production.
I think that urbanization increases the demand for government. When people are crowded together, many more externalities are created. Water and sewage management become a huge deal. So does planning a road and transportation system.
Technology for long-distance trade also increases the demand for standardization and enforcement of standards. That is likely to raise the demand for government.
2. I have expressed skepticism that small government in early America came from the Constitution. Instead, I have suggested that the ability of citizens to move to the frontier, and the limited needs for government services in a less-urbanized society, made weak government inevitable.
3. I think that the technological theme of the information age is “economies of scale, diseconomies of scope.” In the Internet age, you can distribute a product or service over a wide area, so getting really good at design and really efficient at production can lead you to be really big. However, I doubt that one organization can be really good at design and production of many goods and services. In this environment, government’s advantage is scale but its disadvantage is scope. Today, governments are trying to do too many things, and as a result they are doing them poorly. At some point, this is going to cause widespread dissatisfaction with government.
4. What first attracted me to the Internet was its governance structure. The IETFs were not permanent bureaucracies. They were temporary, voluntary groups that formed to solve particular standardization problems as they emerged. I wish that real-world government would learn from this model. I say that the Internet uses specialized task forces that solve a problem and then get out of the way. Meanwhile, government creates bodies that never solve problems and never go away.
5. My vision for government aligned with today’s technology is described in the widely-unread Unchecked and Unbalanced.