S5E16: Lifeboats: Brink Lindsey

This is Larry Lessig. You have to give him hope. That was the most famous line from San Francisco's most famous member of its Board of Supervisors, Harvey Milk, said in his speech on the steps of San Francisco City hall during a mass rally to celebrate California gay Freedom Day, June 25, 1978. But however sacrilegious this may be, I think the line has a life outside of that profoundly important context. If we're ever going to make progress with a government that works, we have to begin by giving people hope that the idea of a government that works is, at least for us, not oxymoronic. That it is today oxymoronic is testament to the enormous power Ronald Reagan had in his ability to capture our imagination and make his ideas seem real. I remember as a kid, I was still a teenager, listening to Ronald Reagan's 1981 inaugural address where he declared with infinite confidence, quote, unquote, government is not the solution to our problem. Government is the problem. End quote. And I remember feeling shaken and inspired by this extraordinary declaration. Here was an entity that we thought was here to help. It's not here to help, it is the problem. And persuading America of the truth of that statement has been the keen focus of many on the right for many, many years before Reagan spoke and for all of the years after he spoke. My favorite recent book, the Big Myth by Eric Conway and Naomi Oreskes, tells the extraordinary story of the capital driven campaign to convince America and the world that the only way we can save us is to unrestrain capitalism and that every effort by government to help us inevitably does more, more harm than good. A slippery slope from good intentions to authoritarianism. If you try to do good, you will inevitably fail with the corollary that only those who are trying to benefit themselves ever do any good for the rest of us. It's an extraordinary thought. And yet, astonishingly, it's kind of how we all think about government now. At the least, we think it's inept. At the worst, we think it's corrupt. We might all recognize the huge problems we see before us, but too few see government as central to the solution of those problems. My guest today grew up in the libertarian movement. Like most great libertarians, he's grown tall enough to see beyond that movement alone. My first favorite book of his was written not with a libertarian, but a liberal, Stephen the Captured Economy. That book described the many ways in which regulation had been structured to achieve a reverse trickle down effect by sucking wealth from the lower and middle classes up. And that dynamic of course, is what anyone focused on the failure of government would focus upon. But what's brilliant about that book is that it's not trying to convince us to do nothing. To the contrary, it's focused on getting us to fix these obvious problems. So in fact, government could do something good. And that's the nature of the conversation I'm going to have with Brink Lindsay today. How can we improve the efficiency of government, improve its ability, that is, to do the good that we all, or at least all of us in this conversation believe it must do? How, in other words, could we have hope that government could indeed be the solution to the critical problems that any sensible soul would recognize we need to solve now? Brink Lindsey is widely respected as an author and analyst for his works examining economic growth, inequality, and the dynamics of globalization. He's the vice president and director of the Open Society Project at Niskanen center and was for many years with the Cato Institute. He's a contributing editor at Reason Magazine and a frequent guest with the more famous of these podcasts, including Bloggingheads TV beyond the Captured Economy with Talas. He's the author of the Age of Abundance, How Prosperity Transformed American Politics and Culture and Human Capitalism How Economic Growth Has Made Us Smarter and More Unequal. I've not read the last book, but knowing Brink a bit more, I'm going to assume he agrees that making us all more unequal is not, all things considered, a good thing. Stay tuned for the conversation.

Brink, thank you so much for talking to us. So the subject I want to ask you to think about, and it's based on your writing, but I'm going to ask you to think a little bit beyond your writing. Is the general problem that you describe of our governance capacity, the ability to actually bring about the objectives which we've set at a policy level in a practical way. Your work has spanned a wide range of contexts where structures develop that interfere with that capacity. One class of examples I'm thinking of comes from your book the Captured Economy, where you can see the self interest of participants in the political process creating barriers to government, achieving what any of us from a welfare perspective would think makes sense. And then another interesting set of cases are cases where you're almost identifying the ideology of different movements, the conservative movement, the progressive movement that builds barriers to the capacity of government to actually achieve what it's trying to achieve. I want to start with the the Captured Economy ideas though, and my objective is just to help those in this podcast kind of understand the flavor of the examples and Enough to make it easy for them to begin to look at all the other contexts where they're going to find the same dynamic that you're describing here. Because even though you describe six clear cases there, I think both of us think that we can find it. So you tell me what your favorite is to introduce this topic, because there's a lot of great stuff in the capture economy, but is it finance or is it licensing, which you think is the most surprising, where somebody doesn't think about it when they first.

Well, or we could take housing and land use. So just to back up a little bit the, the big picture, which is what I've been doing more recently, is this issue of state capacity, which started out as a political science and economic history term in looking at the fact that when societies got rich, their governments also simultaneously got strong, not necessarily big and multitasked, but they became able to raise a lot of money, they became effective at securing public order, and they started to be able to provide public goods in an effective and pro social way. So right now, when we look at a lot of the problems of governance that we're experiencing, they come down to a breakdown in the space between intentions and results. That policies are being designed in a poor way or implemented in a poor way, or something is derailing them along the way. They're being misconceived at the outset. Why? So anyway, we've got a whole lot of problems and we can identify sort of interest group reasons for policy dysfunction, for deviations of policy making from furtherance of the public interest. And we can look at ideological reasons, which has been sort of a more recent focus of mine. But to go back to the Captured Economy, which is a. A book that Steve Telles is a political scientist and an a Scannon center colleague. He's a political scientist at Johns Hopkins. We wrote this book together in 2017, back when I was still with the Cato Institute. So it was this novelty idea of a libertarian and a think tanker and a liberal professor teaming up and finding common ground in the suite of policies that, that we refer to as upward redistribution. That is policies that simultaneously gum up the works of market competition, usually by putting up barriers to entry and impeding competition and preventing new entrants and redistributes income and wealth up the socioeconomic spectrum. So we came at this originally, look, Steve, looking for ways to tackle the problems of high inequality, me looking for ways to revive sluggish 21st century growth and finding, like in the old Reese's commercial, that we got our Peanut butter and chocolate together. And it tasted great because he had written an article for national affairs and I'd written a Cato paper. Me a growth agenda and he an inequality agenda, but both with the idea of crossing ideological boundaries to get things done in a polarized time. And we came up with a very similar bunch of policy ideas. So we decided to write the book.

So I just want to make sure that we're making a very important point clear. So there's a fierce debate, at least in the political world. I don't know if economists really debate this anymore about whether trickle down economics exist or make sense. This is a kind of trickle up economics that you're describing. And whereas trickle down economics might have political valence, like one side might like it, the other side might not. Nobody should like trickle up economics or nobody in a politically neutral.

Yes, nobody except the most influential people in the country, right? Surprise, surprise, yes. So we picked four case studies. Two at the federal policy level, two at the state and local level, the federal level, financial regulation. And there you have a system of financial regulation that creates windfall gains for a very small number of people and massively inflates the incomes of the top 1% and meanwhile regularly exposes the economy to economic meltdowns and possible depressions through instability, and then more chronically seems to starve the economy of or to undermine innovation and productivity growth by misallocating resources to things that are easily financeable by standard financial institutions. So that's the one big issue. The second federal policy case study we looked at is one near and dear to your heart, which is patent and copyright protection, or known as intellectual property law, intellectual property being one of those just great marketing coups up there with the Republicans, you know, death tax. The idea that these temporary monopolies extended to copyright holders and patent holders for reasons to serve the public interest, to encourage the arts, to encourage innovation. But the idea that these are actually the same thing as Fee simple in land. And if private property and goods is good and the American way, then private property and intangibles is similarly sort of beyond debate about costs and benefits. This is sort of a key principle such that the people on the wrong side of the issue we call thieves and pirates. So anyway, all of that sets up a system that creates again temporary monopolies and therefore windfall gains for some of the richest people in the world are IP holders in high tech. But meanwhile, as you well know, policies that at a certain modest level can accomplish some good have metastasized to the point that they are significant bars to innovation these days. So those were those two case studies. Then we looked at occupational licensing, which is very broad. There are hundreds of occupations now subject to licensing. Back in the 50s, only about 5% of the workforce was subject to licensing. Now it's about 20 to 25%. But we focus particularly on the oldest and best known forms of licensing for the legal and medical professions, where they are part of a whole system of artificial constraints on supply designed to, to drive up incomes for those professions. So and then finally we looked at land use and zoning laws that especially in the big coastal cities, but more and more throughout the country, anywhere where there's demand to live somewhere, you're getting nimby, not in my backyard responses of making it harder and harder to build new housing. And so therefore the demand to move into cities is expressed not in new housing construction, but in rising home costs, windfalls for incumbent homeowners, which is actually a significant part of the rise in wealth inequality in the past generation or so, really comes down to property values, but is terrible for the country on a whole bunch of different fronts. It's bad for economic growth because it keeps people from moving to the places where they're making the most gdp. It's bad for racial and income based segregation. It's bad for the planet because it encourages sprawl. So there's just a whole range of different ways in which our current patterns of land use, which are driven by regulation, are dysfunctional. So we looked at, in our case studies, we thought that we would sort of gradually expand the scope of potential readers, that we would be alienating with our arguments. So we, we, we figured there'd be a few bankers who would read our books and, and of course some people in tech that would, and then yes, some doctors and lawyers for sure would read our book. But then we get all the rest with taking a dig at homeowners.

So anyway, yeah, let's start with the land use one because I think it's a great example and just to make the point very tangible. So you know, I am fortunate to live in a very beautiful quasi suburb of Boston, a place called Brookline, which has lots of zoning rules which prohibit building of multi unit facilities in many, many contexts. So the dynamic you're describing is if people who are interested in affordable housing come to the town meeting and they say we want the following proposal to allow multi unit facilities and then somebody from the other side stands up and says, well you know that the housing value is going to fall in your district if this Change is made. Everybody who has any power in the town of Brookline would rise up and say, hell no. Because why would we adopt a policy that basically throws away the value of our house or part of the value of our house? What you're describing is this pattern is an obvious pattern in every context where this question might get raised. Which is why when the question gets raised, it's rarely answered in a way that facilitates more housing.

Yeah, and the problem, I mean, the folks on the pro housing liberalization side have a tendency to sort of demonize the opposition and demonize NIMBYism, but really it's just utterly inevitable that there are hassles associated with new construction. And those hassles fall disproportionately on the people in the immediate neighborhood. So they have a predisposition to just status quo bias. And the temporary hassles of construction, the real possibility of worse traffic in the future if infrastructure doesn't keep up with new entrants, all of that naturally predisposes people in the immediate neighborhood to be hostile to new construction. That's not the problem. The problem is that people in the immediate neighborhood are given such disproportionate influence over land use decisions, because these decisions don't just affect those people, they affect all the people who could move into this area. They affect the whole metro area and its economic prospects. But typically land use decisions are really done on a micro basis, parcel by parcel, and only a tiny group of potential stakeholders have a seat at the table. And that again and again and again we look at bad policies. And Steve, my co author and the political scientist, really drummed this into me that when you, when you see a bad policy, you need to look for a bad policy making process. Like if parts are coming off the assembly line defective, you got to find the place that things are going wrong. And typically it's an imbalance in representation that when one side just isn't at the table at all, the other side completely dominates. And then there are things that give one side disproportionate influence. If a subject is God awfully complicated, like financial regulation or ip, the insiders have an expertise that they can use to intimidate and use a squid ink because there's a real dependency of the government on their expertise, but it's not going to be presented straight. So there's all kinds of ways in which imbalances of who's at the table when policies are conceived and drafted can show up. But that's a common denominator and it's certainly the case in zoning.

So one response to this, which as I was both reading this work and also the more recent work that I just want to ask you about is you might think of it as a kind of anti federalism response, but the more general way to describe it is we ought to be evaluating at what level a decision should be made by deciding which level would include the right mix of interest in that decision. So making the land use decision at the most local level, your point is, defeats that objective because obviously there's a whole bunch of people whose interests are affected who aren't part of that decision. So we should up it to the place where those people could be part of the process. And that might be at the city level, it might be at the state level, it might be at the federal level. But the point is we, we should be deciding the level based on where we have confidence that everybody whose interest is affected, or not everybody, but enough, are actually part of the process.

Yes, I don't think on these federalism issues, sometimes local decision making is a good thing because you're close to the ground, you're close to the participants, but sometimes you're only close to a very small share of the relevant participants. And so therefore, you know, excessively local decision making is bad. And so yes, and we're fine. So if you move land use decisions up to the municipal level, you could picture having a housing budget, right? So like a target, a five year target, you're going to increase housing by X percent. And until those targets are met, or only as long as you're on course to meet those targets, then you can't do any down zoning at all. So you can have restrictions on what you can do, you can have mechanisms at the municipal level to share some of the tax revenues that are going to come from extra construction with the immediate neighborhood. So presently we have mechanisms where the actual builder will pay off the neighborhood, but that increases the cost of construction. If the payoff could come out of tax revenues, that would be more efficient. Meanwhile you can move decision making up to the state level. So that's what we're seeing in California, real breakthroughs. After decades of just utterly sordid misgovernment and slow burning of the stews towards this terrible housing crisis that California is currently experiencing, well, they're finally getting serious about doing things and it's a tenacious fight, but they're winning victories. And it's occurring by moving decision making up to the state level and then having the state ride heard on the legalis to make sure that they follow through.

So occupational licensing is a different kind of unrepresentativeness. Right. So I mean the medical and lawyers ones I think people intuitively have a sense of and that argument's pretty familiar. But what I loved about the book was the extraordinary range of occupations that get licensed. You know, even things like barbers or like beauty, you know, beauty salons or all of these really, you know, seems not rocket science. Like professions, you have a licensing process you could have imagined initially there would have been a pro public interest justification like let's make sure somebody's haircut is not terrible because it could really make them sad. But in the end it's really just those who are in the business trying to protect themselves from those who are not in the business or protecting themselves from this.

It's an interesting. I don't think there's a really good history of the takeoff of licensing in the United States, but I have a feeling it starts semi innocently that a whole bunch of professions want to up their prestige, want to up their status, want to have some code that they meet and that shows that they are high quality service providers and they get a trade association and the trade association wants to promulgate this code. And then also now you've got a trade association and they want stuff to do, so they want to lobby on behalf of their profession and show that they're useful. So you get a kind of a path dependency of creating lobbies for your interest. But then of course always that you, the water's running downhill, which is that the incumbents, all of this is tending towards coming up with laws that make it hard that you have to pass some test before you can do this job. And those are presented to the public as a mechanism for keeping out disreputable operators and ensuring high quality. Typically when you look at it, the tests are terribly. There's no demonstration of any efficacy along those lines. Also, as a licensed professional, supposedly if you, you know, if you behave unprofessionally, you could lose your license. But in fact, licensing license revocations are laughably rare. And in the case of medical profession, they're almost always only about like dealing drugs to patients or having sex with patients. They're never about negligence and incompetence. So anyway, they got a plausible sell. But in real life what they do is basically just restrict supply and therefore boost incomes without really enhancing quality.

Medicine's a great example where there's plausibly a very good public policy reason why this process began. Paul Starr tells this story and in his History of the Evolution of Medicine. Because medicine in the 19th century was poison.

Basically.

You had all these quacks who were producing all sorts of medicines that they would give people and they would literally be poisons, they'd be heroin. And so the profession needed to find a way to begin to distinguish some good, really science driven people from others. But as it gets copied, it's obviously just a way to protect yourselves against these other competitors who obviously could be just as good as you.

Yeah. And of course, for medicine we want people who have our lives in our hands. We want them to be highly trained. Right. And so we tend to think, of course we want licenses for doctors, but it turns out that, so the license that you get from the state is a license to practice medicine. So if you go and get a residency in podiatry and you pass the state medical exam, you can hang out your shingle as a brain surgeon. It's not illegal. It's just nobody would go, nobody's going to go to you because you're not a board certified brain surgeon. But board certification is completely voluntary. And of course no hospital is going to hire you to do brain surgery because you're not board certified. And because they got to pay negligence, they got to pay malpractice insurance, premia, and they want to keep those premium low. So there's all kinds of other mechanisms, just the commercial incentives to hospitals and larger medical practices not to hire unqualified people operating on top of a very low baseline for qualification, which is just a GP qualification. So we're not licensing brain surgeons at all. That's all happening through voluntary certification and through commercial pressures. And so we tend to find that there's very little relevant quality control happening through medical licensure. But through medical licensure and through the restriction in the number of medical school slots, which is controlled by the ama, and through the restriction in the number of residencies, and through the requirement that doctors to practice in the United States have to complete a residency, have to complete their training in the United States, can't do it in Canada, can't do it in Europe. Sometimes they can do it in Canada, but can't do it in Europe. So all kinds of protectionist measures to squeeze the supply and boost their incomes. Which is one important reason why doctors in the United States make a lot more than they do anywhere else.

Right. So what's interesting about that explanation is it's trading on what feels like a neutral justification, which is like quality. But we can obviously see that it's in lots of contexts, especially like hair salons. That's a pretty weak justification for restricting access. There's a related kind of complementing justification in the context of intellectual property, which I think that the book is really, really wonderful in taking apart. You're right. I spent a lot of time unsuccessfully trying to advance the constitutional problem with the intellectual property issue in some context. The context we were fighting was the extension of existing copyright terms.

So you know, the retrospective extension.

Right, right, retrospective, right. So you can, you can, we can have an argument about how long it needs to be to create incentives. Like does it have to be 10 years or 20 years? The idea that it's even longer than 20 years is crazy. But what we know about incentive, you

can't incentivize dead people. Yeah, right, right.

So this argument, when we were trying to advance it constitutionally, Milton Friedman said he would sign an economist brief only if the word no brainer was in the brief somewhere. Because so obvious was it that it couldn't have a public policy justification. But at the same time that we were advancing this policy or this economic rationale, the other side was advancing this kind of self actualization conception of property. Like, it's my work, it's like what I created. And so therefore you're taking something of mine. And that intuitive idea is pretty strong. It's coming back in the context of the debate about AI and whether AI machines can read everybody's work on the web. And you're like, well, it's mine. But it really forces us to decide what is it we're trying to accomplish through this massive regulation of intellectual property? Are we trying to create more innovation and creativity or are we trying to be allocated and protecting the personalities of people expressed in all sorts of different forms? Is that the problem as you saw it?

So I think the, as I mentioned earlier, I think the marketing of patent and copyright protection as intellectual property protection is a masterstroke and is just a thought killer. It just induces brain fog in legislators that they just associate anybody talking about liberalizing these rules with people who just don't take property seriously. So there is, it moralizes their side in a wonderfully, you know, wonderfully effective way. Terribly, tragically effective way. But yes, so that's. And at the Niskanen Center, a lot of our work has just been patiently just continuing to hammer away, particularly with, you know, right of, you know, with Republican pro market folks to look at these laws not as property because it just doesn't work. And that's a complicated argument to get into, but those arguments are really, really weak. But to look at them as government regulation and you typically favor a light touch in that. So let's apply some of your typical skepticism about government interventions in the marketplace to this particular. But that is a massive barrier to clear thinking. Yeah.

Especially in a country like the United States where the coolest people are all from Hollywood, so.

Right. But then on the, you know, on the progressive Democratic side, the natural association with the creative types and their strong representation on the left makes them sympathetic characters and wanting to. And it sounds like you're in favor of creativity and innovation, that those are great things to be in favor of. When Democrats wanted to present, you know, themselves as pro business, it was nice to find the recording industry and the tech industry, which were clean and non polluting and didn't abuse workers. So they were good businesses to be in the pockets of. But it's all headed off the rails pretty badly.

Okay, you mentioned, you talked about one other case which is really interesting. We're not going to go into the finance case. I'm going to offer a gift though, as we pass from this to the other channel of work. Here's another example you're going to really love. So my friend Daniel Biss, who ran for governor in Illinois on the Democratic ticket and didn't win in the primary but then became mayor of Evanston, describes that when he was in the state legislature, he noticed something pretty profound about the state's pension funds. So that basically there were three major public pension funds for police and fire and government employees. And those three pension funds were run separately in every county in the state of Illinois. So you had 60, I think it's 67 counties where each county had three separate pension boards that would meet quarterly to review the investments. And you know, Biss obvious point was, my God, if we just put all of this money together in one fund, the cost would be radically lower and the return would be much higher. So why don't we do that? So he introduced this legislation and of course it was dead on arrival because every one of those petty bureaucrats who, lawyers or whatever at the county level went down to Springfield and, and said, this is a destruction of the confidence that we're going to have in the pension system. And he couldn't even move it. So what should have been the obvious example in a state like Illinois, which is suffering because of the cost of these pensions, dramatically even there, you can't get clear thinking to get us ahead.

Anytime you see a governance outcome which just makes no policy sense. It makes very good political sense somewhere. It's a great way to put it.

Okay, now I'm going to shift to the later work, which I do find incredibly interesting, because I think it's very powerful and important to recognize the way ideologies on both sides are producing in unplanned ways, obviously really harmful consequences to our capacity to govern, which is a very nice way you've described it. I want to talk about a couple of the examples, but I want to focus on an example which is suggested, but we could fill out a bit, which is the Inflation Reduction act, or the whole objective of dealing with climate change through all of these government incentive programs which have been produced, which presume a capacity, which I want to see whether we have any real reason to think about. And in a very practical example too, which you don't talk directly about, but which is going to be easy to hum the tune about rail, like high speed rail, for example, which is something we've been totally incapable of doing, but lots of other countries do it quite well. But let's start with the framing. What are the two ideological frames which yield the same unproductive policy outcome here?

Yeah, so I think the, the sort of public analog to our inability to build houses is our inability to build public infrastructure. And the former has become a crisis because unaffordability levels have hit crisis levels in major municipalities across the country. The latter is now becoming a crisis because of climate change that to make the successful and successfully rapid transition to clean energy is going to require just enormous amounts of construction and building new things. But our entire political economy is set up to make building new things very, very hard. And the fault for that lies significantly on the progressive side. But when we look at the ideological origins of state incapacity, of undermining the state's ability to do what it wants to affect its will. There's the obvious story of the rise of the libertarian right since the 70s and this kind of small government conservatism, which might have originated as a useful corrective to 60s liberal argues and to just a quarter century of rapid government growth and just sort of a let's tap the brakes and think about things. And there were a whole lot of areas where government was doing things poorly, so could have started out, you know, as a sensible corrective, but which over time has curdled into this just sort of toxic hostility to the public sector. As such that Ronald Reagan said his famous line from the inaugural, the government isn't the solution, it's the problem was either preceded or followed by in this crisis. But that, that dropped out. And so it just became this sort of self fulfilling prophecy that the government can't accomplish anything. So it's fine if we appoint total hacks into government because they can't do anything anyway. And when they totally mess things up, that just furthers our ideological point that you can't trust government to do anything. That dynamic, we've seen that play out and we see how it pushes government into a whole lot of dysfunctional ways of accomplishing things. To get around that ideological hostility. All kinds of reliance on tax credits and tax incentives rather than just spending programs which end up benefiting the wrong people and not accomplishing things correctly. Huge reliance on government contractors rather than hiring new civil servants. We have the same number of civilian government employees now that we did in the 60s, about 2 million. Despite the fact that the scope and complexity of government is just grown many, many, many fold. The difference is made up by a huge invisible army of contractors.

I want to pause on that point because it's a really powerful point you make. The presumption that got the government contracting game going was that the contractors would be cheaper than the government employees.

Right. Because the private sector is better.

Right, Right. But once you cross that bridge and you just have a commitment to doing things in the private sector, then those costs are wildly greater than the cost of doing it.

Right?

Yeah.

So you know, government has always relied on contractors, but you need a hawk eyed principal to look after the agents. And when the agents overwhelm the number of principals, then they just run amok and there's a huge principal agent problems. And so we experience those. So anyway, the right of hostility to government producing kind of dysfunctional government is a familiar one, one that's come into focus just in recent years and that I highlighted in this paper I did on state capacity had its origins in the turn of liberalism during the 60s from the New Deal era to the New left tinged post 60s liberalism. There's a very good book written by a Yale historian, Paul Sabin, called Public Citizens, I think about this turn and particularly a central figure is Ralph Nader. But we know the story of the, of the right, of, you know, suspicion of government on the right and from Goldwater to Reagan, that whole story of libertarian or take over the Republican party and Republican take over the government. But likewise there was a kind of libertarian turn on the left that there were that people on the left had a whole lot of reasons to be suspicious of government power. They had reasons to be suspicious of Sheriff's offices in the south, brutalizing African Americans. They had reasons to be suspicious of the government in Vietnam, the government and the military industrial complex, building nuclear weapons that threatened everybody on earth. They had reasons to. In the newly dawning environmental consciousness, they had reason to be suspicious of government working hand in glove with dirty polluting industries. So whereas the New Deal liberals saw government as a tool to serve the public interest, they wanted to make it muscular. They didn't want a lot of oversight from the judiciary. They just wanted to have the right people in charge and get enough power and get things done. But by the 60s, people on the left were disillusioned with or disenchanted with that model and for many important ways, another important one that technocratic big muscular government gave us urban renewal and the mass dislocation of ethnic and African American neighborhoods and the sort of murder of cities with transecting highways. So anyway, there was a lot of reason for pushback. So what we got was this public interest liberalism, Ralph Nader epitomizing, with the new thrust not being to ensure that government has a lot of carte blanche power, but rather to ensure that every turn government is subject to second guessing by self appointed guardians of the public interest. And so you would have this army of Nader's Raiders and other public interest groups that grew up like topsy during the 60s and 70s and you had the change in standing rules to make it much easier for these kind of groups to sue. You had all the new regulatory legislation being created in the 60s and 70s opening up to litigation. And so a very different model of government again created with very clear, important intentions, but steering between sort of the Scylla of Robert Moses just trampling over neighborhoods and property rights and people's lives versus the Charybdis of where we are now, which is just mixing metaphors. It's Gulliver tied down by a million Lilliputians, not able to accomplish anything. So there's some happy medium that we missed somewhere along the line. But the origins of libertarian tinged progressive suspicion of government, translating into the empowerment of this unaccountable vetocracy, which, which now is able to make it very difficult for government to accomplish really important things, has come to a head. And in particular it's come to a head because the whole meaning of being an environmentalist has changed. Back when the environmental movement started, they were standing athwart history yelling stop. Their whole goal was there were a bunch of dirty industries polluting the planet and we need to slow them down and make it harder for them to impose these external costs on all the rest of us. And they had some signal successes. Now the challenge is different. Now facing climate change, we've got to build stuff. We got to build a whole lot of stuff, and we've got to build it fast. So we have an entire mindset, ideological formations, interest group formations, governance formations built around the worthy goal of slowing bad stuff from happening, which are now making it almost impossible for good stuff to happen. But that crisis is creating some rethinking, particularly on the progressive side. We're seeing it in Ezra Klein's regular columns on supply side liberalism, supply side progressivism. Derek Thompson, the Atlantic's writing regularly about an abundance agenda. So these ideas are taking root on the center left. There is now a dawning red recognition of their own ideological complicity and the problems that are currently making governance so difficult.

So let's think about it in the particular context of climate change and the strategy that would be most effective to be pursuing right now. And so broadly, you can think there's two types of strategies. One way you might think of as a climate as a carbon tax strategy, which is about imposing costs inside the system and letting the system take care of itself. And the other is the strategy of the ira, which is to say we've got lots of incentive structures we're going to build and lots of intent to build, as you're describing, infrastructure to deal with this. Between these two strategies, given the kind of governmental incapacity that's been produced by the Nader raider cultures, which would be the better strategy to deploy? I mean, we could. And we should also think about how to undo the harm from the Nader raider strategies. But given the NATO rater strategies, which of these two would be most effective to bring about climate change?

Yes. So as a recovering libertarian, I see the elegance of the carbon tax as a climate policy because it economizes on government competence. Government's pretty good at taxing. It doesn't require government to. It then, you know, pushes everything to the private sector. It incentivizes them to figure things out on their own on the ground. And so I think, to me, that's the first best thing you should be doing. At the same time, I think there are collective action problems with regard to innovation, that there are reasons for the government to support R and D. And in the climate context, it turns out that R and D isn't doing just stuff in the lab, that right now we have the technologies. The key is the cost and to drive innovations that drive down Cost is to head down learning curves, which means requirements to build out or to subsidize building out solar infrastructure, even when it was cost and competitive, could be seen, I think as a utterly defensible and now in retrospect, a highly effective R and D expenditure. Because in particularly Germany back a decade or more ago, was pouring a lot of money into encouraging solar and everybody was laughing at them because the prices weren't going down. But they have now fallen dramatically over time because the industry has been going down this learning curve. And so prices have fallen 90% over the past decade or so. So it's really a dramatic Silicon Valley style win. But that has occurred because of government support for R and D through actual mandates. So I think there's a larger case for R and D support in addition to the carbon tax. Meanwhile, unfortunately, carbon tax, despite its blackboard elegance, is an ugly duckling in the political theater. It has a very, very difficult time getting public support and getting enacted in a lot of green jurisdictions that have tried. So carbon pricing generally either taxing or through pricing emissions, both turn out to be very, very hard to do. And so the direct support of subsidies could be politically possible. Second best solution. That however, isn't really a solution unless you overcome, overcome these bottlenecks. And so, and likewise with the carbon tax, if you're incentivized people to build, but they can't build, then you still have those bottlenecks. So we're going to have to deal with the just tangle. So we have to have we build these huge solar facilities. We've got to then connect them to where people live. And so we have to build a whole new infrastructure of transmission to get clean energy resources to where the demand is. And there is just a absolute maze of a thicket of state, local and federal permitting issues that have to be gone through to get this done. And so there are, now there's an appreciation of this problem, there are some tentative steps towards, towards making it easier, but it's a real huge regulatory problem that has to be overcome to make the IRA actually do what it's intending to do.

So is the solution that's being deployed just becoming more efficient in going through the permitting processes, or is it almost exercising a supremacy power to kind of just displace the local policies and say we have a national policy here. And so, so therefore, here's the permit you need to build this facility?

Yeah, I think in some cases it's got to be, it has to be consolidation of the requirements because they're too various Right now. But I'm not filled in all the details. My colleagues at the Niskanen center know all this chapter in verse. So I encourage people interested in this to check out our work in that area.

Yeah, we'll link to that. But in the context of like the kind of permitting issues that are involved, it seems like there's a number of dimensions. Right. So there's. That you're pointing to. So some are obvious kind of land use permitting issues, some are environmental permitting issues, some are employment permitting issues. You got to have the right kind of mix of people in the employment. And so the point you're making in the argument about vetocracy is that when you have so many dimensions of restriction or requirements that you've got to clear in order to engage or to actually build, failing in any of these can basically stop a project which makes these projects so complicated and expensive and take so long to do.

Yes.

So this is the same story we would tell if we were thinking about, for example, rail. This is exactly why we've got no high speed rail in the United States.

Same story. I mean there's the depressing thing with the infrastructure costs. So there's, there's delays, make everything more expensive. And so if you can litigate and produce delays that way. But if you change the project as you go along again and again, and often that happens because of interaction with litigation, that inflates costs and it induces delays which inflate costs as well. So meanwhile we just. If you look at why does building a mile of subway in the United States cost some multiple of what it costs in France or Spain or Germany, not the Wild west, places that have high labor standards and high labor costs. But why is it so expensive here? The maddening thing is it's not any one thing. It's like every single phase of the operation is bloated. And so it's just like it feels like a more just a general cultural trend, just an overwhelming cultural trend. We're just going to take care of the insiders and everybody else can go stuff themselves. And that's just where this sort of complacent place where we kind of had decided the whole built environment's done, we don't have to do anything new. We're just going to freeze everything in place and make everybody happy that way. But that's just not the way the world works. Reality has bitten back. People want to move to different places and if they won't build houses for them, then that causes problems. The climate's warming. We got to do something about that. So this kind of fantasy we had since the 70s, that we could just sort of turn the world off and not change the build environment in any important way ever again, we just got to wake up from that. Yeah, no, it's a rude awakening. Yeah.

Because what's at stake is so great. But I want to link this back now, just at the end, to a point we agreed on at the very beginning. So in the context of thinking about land use policies, it was a general way of understanding the problem was that we were not at the right level of decision maker. Like if in Brookline, you had to decide these policies alone, you would not take into account all the people who would like to move into Brookline or like to move into the area. So that was about getting at the right level to include the right range of people. In this context, it's conceptually similar, but structurally different. So it's not about the right people, it's about the right level to be able to trade off different kinds of interests. Because you start and you think about the land use interests, those are important. And so you have 20 things you've got to do to think about erosion and all sorts of things that might be affected there. And then you have a bunch of things to think about with employment interests, and you have a bunch of things to think about with each of these dimensions that you might be invoking to decide whether to go forward. But you need a place where somebody can say, okay, I actually think that the climate interest is more important than the employment interest here. So therefore, I'm going to compromise on the employment interest in order to make a more efficient objective to go. Go forward there. And nobody has that ability right now. Nobody has the ability to say, this veto point is just going to be

removed because it's not important enough in just situation after situation. In contemporary governance, we don't have someone who has the final say to make a decision and then be accountable for that decision. And we have gajillions of those decisions to make. And yet in every one, what we do is we set up a process for making that decision, and then fidelity to that process can be litigated until the end of time. And so everyone pays attention to what they can really be held accountable on is fidelity to the process. But what ultimately is the foundations for democratic accountability is governing successfully in the public interest. And so real democratic legitimacy is being systematically undermined by the failure of government to do what it is promising to do. And it's failing to do that in the Name of this sort of chasing this will of the wisp of legitimacy in the name of procedural regularity. So we, we desperately need to change our whole mindset in, in a very deep way from this procedure fetish, which is what University of Michigan law professor Nick Bagley calls it, to a reconception of government legitimacy rooted in actual, effective and accountable governance. But that requires actually trusting people to make decisions and then holding them accountable for being the right decisions. You've got to be able to make a call.

So, last question on that then. So if you were trying to think about a context where we could demonstrate the success or the effectiveness of this rethinking, what would be the context that you would pick? I mean, obviously the climate change one is the most important, but it might be too big. Is there a particular place you would say, let's try this. It's almost like the Roman dictator structure, like this temporary powerful person who has the ability to make calls that override everybody, but is ultimately accountable for what he or she accomplishes. What is the place where we should try that first?

Well, you know, an interesting area and where there's glimmers of hope amidst grotesque dysfunction is in government use of information technology. So once upon a time, government was the pacesetter, the patron of information technology, right? They needed those first big mainframes were to plan nuclear war and to run Social Security databases. But over time, the private sector demand for it swamped the government demand and the government just became a purchaser. Government came to think of it as just, you know, as just something that you buy off the shelf that we're just basically buying automated accountants. But then when the Internet revolution happened and actually it became not buying automated accountants doing back office functions, but actually buying the provision of government services as government interacts with the citizenry online instead, they were still caught in this total out off outsourcing mode and with no capacity to understand how their policies were being implemented digitally in it. This all came to a head with the debacle of healthcare.gov which was rolled out and couldn't do anything because there was no in house IT expertise to manage the contractors and to get things done. In response to that, there is now some moves to actually to pull in people involved with digital implementation into higher level policy drafting phases and to create opportunities for deciders to make calls, to make trade offs between gathering every single conceivable bit of information you could on a form, or producing a form that people will actually use and get the benefits that they qualify for. So there's a small area, but it's an area where it has huge impacts because in place after place where we interact with government is online and often it's frustrating and dysfunctional and particularly the people who really need government most don't have the are unable to navigate those complexities. So that's an important area. There's a woman, Jennifer Palka, who started this organization, Code for America, to put technologists in government slots and help them solve public sector problems. She then was in the Obama administration during the healthcare.gov crisis and helped start the US digital service, which is this sort of in house group of technologists. She's just written this great new book called Recoding America which looks at the state capacity problem through the lens of it. But she's seen so many just amazing examples of gobsmacking dysfunction occurring not because anybody's evil, but just because nobody was connecting the wheel of state with the actual rudder. It's a great book. I think there's some progress being made there. If there was some way that's an area where there needs to be a reconception of how government uses it. We're starting to see that and if we could get that right, it would pay huge dividends.

So that's a perfect place to end because we in fact are going to talk to Jennifer. And so this is now great, you've set it up so she is the next in the series.

Fantastic.

So that's great. I'm really grateful for your time and especially for your work and especially for your demonstrating how valuable it is for people who otherwise seem to be from different places, political persuasions, to actually stand together and make progress in explaining ideas in a way that both sides understand powerfully. I think the captured economy is extremely important for that purpose and this new work as well. So thank you so much, Brink, for that contribution.

Well, Larry, thank you so much. It was great chatting with you and thanks for having me on.

This has been episode 16 of the season 5 of the podcast Another Way. These podcasts are produced by Equal Citizens. They are physically produced by Josh Elstrow of Elstro Productions. You can find out more about Equal Citizens at equalcitizens Us and you can give us your thoughts and feedback on that site. I love the feedback, especially the ideas. And you can and please do spread this podcast from that site or share it with anybody you know who likes podcasts, which of course must be everybody. And of course you can also find the wonderful red donate button at Equal Citizens Us because though everything I do for equal citizens is pro bono. We have a team that needs to eat, so help us make it possible for them to continue to eat. Thanks again. Stay tuned for the next episode.