Skin In The Game

The old-fashioned school districts that provided me with a convenient example in last week’s post here on The Archdruid Report represent a mode of politics that nobody, but nobody, talks about in today’s America.  Across the whole landscape of our contemporary political life, with remarkably few exceptions, when people talk about the relationship between the political sphere and the rest of life, the political sphere they have in mind consists of existing, centralized governmental systems.

That’s as true of those who denounce political interference in the lives of individuals and communities, by and large, as it is of those who insist that such interference can be a very good thing. It’s as though, in the American collective imagination, the political sphere consists only of the established institutions of government, and the established—and distinctly limited—ways that individual citizens can have an influence on those institutions.  The idea that citizens might create their own local political structures, for purposes they themselves choose, and run them themselves, using the tools of democratic process, has vanished completely from our national conversation.

Less than a lifetime ago, however, this was a standard way of making constructive change in America.Local school districts were only one example, though they were probably the most pervasive. Most of the time, when people in a community wanted to create some public amenity or solve some community problem, they did it by creating a local, single-purpose governmental body with an elected board and strictly limited powers of taxation to pay the bills.  Sewer districts, streetcar lines, public hospitals, you name it, that’s usually how they were run.  The state government had supervision over all these bodies, which was normally taken care of by—you guessed it—state boards whose members were, once again, elected by the general public.

Was it a perfect system?  Of course not.  The interlocking checks and balances of board supervision and elections were no more foolproof than any other mode of democratic governance, and a certain fraction of these single-purpose local governmental bodies failed due to corruption or mismanagement. Still, a substantial majority of them do seem to have worked tolerably well, and they had a crucial advantage not shared by today’s more centralized ways of doing things:  if something went wrong, the people who had the power to change things were also the people most directly affected.

If the management of your local sewer district turned out to be hopelessly incompetent, for example, you didn’t have to try to get a distant and uninterested state or federal bureaucracy to stir out of its accustomed slumber and do its job, nor did you have to try to find some way to convince tens of thousands of unaffected voters in distant parts of the state to cast their votes to throw somebody out of office for reasons that didn’t matter to them in the least.  The right to vote in the next sewer board election was limited to those people who were actually served by the sewer district, who paid the bills of the district with their monthly assessments, who’d had to deal with balky sewers for the last two years, and were thus qualified to judge whether a “Throw the Rascals Out” campaign was justified. Keeping control of the system in the hands of the people most directly affected by it thus served as a preventive to the serene indifference to failure that pervades so much of American government today.

It might be worth proposing as a general rule, in fact, that democratic governance works best when the people directly affected by any function of government have direct control over those people who run that function of government, subject to appropriate oversight by those responsible for maintaining the public commons.  In the case of our imaginary sewer district, that means giving those who live within the district the sole power to choose members of the board, while placing the local board under the supervision of a state board tasked with making sure local decisions didn’t violate state public health standards and the like. In the case of the school districts described in last week’s post, it meant giving the local school boards broad powers to set policy for the schools they administered, giving citizens who lived within the school district the sole right to vote in school elections, and placing the school boards under the supervision of a state board of education that was charged with enforcing a few very broad educational standards, health and safety regulations, and so on.

As long as the roles of state and federal governments remained that of policing the commons, the system worked quite well—better, by most measures, than the failed equivalents we have today.  What put paid to it was the explosive spread of government centralization after the Second World War, and this in turn was driven by the imperial tribute economy I described earlier in this series of posts:  the set of deliberately unbalanced economic arrangements by which something like a third of the world’s wealth is channeled every year to the five per cent of humanity that live in the United States.

The linchpin of local control, as it turned out, was local funding.  Sewer districts, school districts, and all the other little local governmental bodies received all their funding directly from the people they served, by whatever arrangements the voters in the district had accepted when the district was founded. When federal and state governments gained the power to dangle million-dollar grants in front of the various local governments, most if not all of them took the bait, and only later discovered that the power to grant or withhold funding trumps every other form of political power in our society.  That was how the local single-purpose governments were stripped of their autonomy and turned into instruments of centralized government, subject to micromanagement by state and federal bureaucracies.

That process of centralization was justified in many cases by claims of efficiency.  Now of course when somebody starts prattling about efficiency, the question that needs to be asked is “efficient at what?” A screwdriver is highly efficient at turning screws but very inefficient as a means for pounding nails; the modern corporate economy, in much the same sense, is highly efficient at concentrating paper wealth in the hands of the already rich, and very inefficient at such other tasks as producing goods and services. It’s interesting to speculate about just what it is that centralized bureaucracies can do more efficiently than local single-purpose governmental bodies, but in retrospect, we can be certain that running schools, sewer districts, and other public goods do not belong in that category.

I discussed last week some of the reasons for thinking that today’s massively centralized American education system is much less effective at teaching children to read, write, calculate, and exercise the other basic skills essential to life in a modern society than the old-fashioned, locally managed, locally funded school districts of the not so distant past.  The responses I fielded to those comments intrigued me. One typical commenter insisted that she found it “incredibly hard to believe” that educational standards in the one-room schoolhouses of yesteryear were higher than those in school districts today. Now of course it takes only a glance at the old McGuffey’s Readers, the standard reading textbooks in those one-room schoolhouses, to show that levels of reading comprehension, grammar, and vocabulary that were considered normal at every elementary school grade level in the late 19th century were vastly greater than those achieved in today’s schools; in fact, the reading ability assumed by the first pages of the 8th grade McGuffey’s is by no means common in American college classes today.

The collapse of educational standards that can be observed here, and in a hundred similar examples, has had many causes.  Still, it’s far from irrelevant to note that a similar collapse has taken place in many other areas in which the old system of independent local governmental bodies has been replaced by micromanagement by state or federal bureaucracies.  That collapse has been discussed nearly as widely in the media as the implosion of American education, and it’s ironic to note that, just as media discussions of public education’s breakdown have gone out of their way to avoid considering the role of overcentralization in driving that collapse, the media coverage of the parallel breakdown I have in mind has been just as careful to avoid touching on this same issue.

The collapse in question?  The disintegration of America’s infrastructure in recent decades.

A great many factors, to be sure, have had a part in creating the crisis in our national infrastructure, just as a great many factors have contributed to the parallel crisis in our national public education system. In both cases, though, I’d like to suggest that overcentralization has played a crucial role in both crises. There are at least three reasons why, all other things being equal, a centralized government bureaucracy will by and large be less able to provide good schools, working sewers, and other public goods than a local governmental body of the type we’ve been discussing.

First, centralized government bureaucracies aren’t accountable for their failures.  To borrow a bit of gambler’s slang, they have no skin in the game.  No matter how disastrous the consequences of an administrative decision made in the state or national capital, the bureaucrats who made the decision will continue to draw their pay, exercise their authority, and pursue whatever fashionable agendas they picked up in college or elsewhere, even if their actions turn out to be hopelessly counterproductive in terms of the goals their bureaucracy ostensibly exists to serve.  Local single-purpose governmental bodies by and large don’t have that freedom; if the local sewer board pursues policies that fail to provide adequate sewer service to the people in the sewer district, the members of the board had better look for other jobs come the next local election.

Second, centralized government bureaucracies provide many more places for money to get lost. If you’ve got a bureaucracy at the national level—say, the federal Department of Education—another bureaucracy at each state level—say, state Departments of Education—and still another bureaucracy at the local level—say, current school districts, a good many of which have hundreds of employees filling administrative positions these days—and all of these are doing a job that used to be done by a handful of employees working for each school board, one whale of a lot of money that might otherwise go to improve schools is being siphoned off into administrative salaries and expenses.  The same thing is true of the money that might go to repair bridges and sewer pipes; how much of that goes instead to pay for administrative staff in the federal Department of Transportation and the equivalent state and county bureaucracies?  All this is aside from graft and corruption, which is also an issue; it’s a good general rule that the more hands money must pass through on its way to a project, the higher the likelihood that some of those hands will have sticky fingers. 

The third reason is subtler, and ties back into the proposal I made several weeks back, that the proper role of government is that of preserving the public commons. To make a commons work, there needs to be some system in place to monitor the state of the commons, assess how changes will impact it, and prohibit those things that will cause harm to it.  On a purely local level, as Elinor Ostrom showed, a self-regulating commons is easy to establish and easy to maintain, since it’s in the direct self-interest of everyone who benefits from the commons to prevent anyone else from abusing it. The local single-purpose governmental bodies discussed in this week’s post rely on that logic: if you depend on the local sewer board to provide you with sewage service, to return to our example, you have a very strong incentive not to permit the board to ignore its duties.

Still, for a variety of reasons, the mechanisms of local government don’t always function as they should.  It’s for this reason that the American political tradition long ago evolved the useful habit, already referred to, of making the decisions of local government subject to review at the state level, by way of the supervisory boards discussed earlier.  The state boards, like the local boards they supervised, were elected by the voters, so they remained accountable for their failures. More importantly, though, was the simple fact that the officials tasked with assessing the legality and appropriateness of policies were not the same officials that were making the policies.

This is a basic principle of cybernetics, by the way. If you’ve got one system carrying out a function, and another system monitoring how well the first system carries out its function, you need to make sure that the only input the second system receives from the first system is the input that allows the second system to carry out its monitoring function. Otherwise you get feedback loops that prevent the second system from doing what it’s supposed to do. That’s exactly the problem we have now.  When public schools are being micromanaged by regulations drafted by federal bureaucrats, who is assessing the legality and appropriateness of those regulations? The same federal bureaucrats—and whether you analyze this by way of cybernetics, politics, or plain common sense, this is a recipe for disaster.

These three factors—the lack of accountability endemic to centralized professional bureaucracies; the tendency for money to get lost as it works its way down through the myriad layers of a centralized system; and the unhelpful feedback loops that spring up when the policy-making and monitoring functions of government are confounded—go a long ways to explain the cascading failure of many of the basic systems that an older, more localized, and less centralized approach to government used to maintain in relatively good order.  The accelerating decline of American public education and the disintegration of the national infrastructure are only two examples of this effect in practice; there are plenty of others—a great deal of what’s wrong with America’s health care system, for example, can be traced to the same process of overcentralization.

I’m pleased to say, though, that help is on the way. On second thought, “pleased” is probably not the right word, since the help in question will almost certainly bring about the wholesale implosion of a great many of the basic systems that provide public goods to Americans, and its arrival will have to be followed by the slow, costly, and potentially painful rebuilding of those systems from the ground up.  The source of that unwelcome assistance, of course, is the twilight of America’s global empire.  In the absence of the torrents of unearned wealth American society currently receives from the imperial wealth pump, a great many of the centralized systems in place today—governmental, corporate, and nonprofit—will probably stop functioning altogether. Those who think they will cheer this development are invited to imagine how they will feel when their sewers stop working and nobody, anywhere, is willing or able to do anything about that fact.

As the impact of America’s imperial decline echoes through the fabric of the nation, a great many of the basic systems of everyday life will need to be repaired and replaced.  One of the very few tools that might enable that to be done effectively is the system of local single-purpose governmental bodies that I’ve discussed in this post.  As municipal services become intermittent or stop altogether, schools shut down, and infrastructure collapses, people with skin in the game—local residents, that is, who want basic services enough to tax themselves at a modest rate to pay for them—could readily use the old system to pick up the pieces from imploding government bureaucracies. 

Equally, the same process can be used to pursue any number of public goods not currently served at all by existing governmental systems. All that’s needed is for something that used to be an integral part of American community life to be rediscovered and put back to work, before the imperial structures that replaced them finish coming apart.  Mind you, the system of local single-purpose government bodies is far from the only elements of an older way of community that could use being rediscovered and restored; next week we’ll talk about another.

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