What will be the consequences of this wound inflicted on a very mighty power? It’s obvious that in future, states won’t be able to put any restricted information on line anymore: that would be tantamount to posting it on a street corner. But it is equally clear that, given today’s technologies, it is pointless to hope to have confidential dealings over the phone. Nothing is easier than finding out whether a head of state flew in or out or contacted one of his counterparts. So how can privy matters be conducted in future? Now I know that for the time being, my forecast is still science fiction and therefore fantastic, but I can’t help imagining state agents riding discreetly in stagecoaches along untrackable routes, bearing only memorised messages or, at most, the occasional document concealed in the heel of a shoe. Only a single copy thereof will be kept – in locked drawers. Ultimately, the attempted Watergate break-in was less successful than WikiLeaks.
I once had occasion to observe that technology now advances crabwise, i.e. backwards. A century after the wireless telegraph revolutionised communications, the Internet has re-established a telegraph that runs on (telephone) wires. (Analog) video cassettes enabled film buffs to peruse a movie frame by frame, by fast-forwarding and rewinding to lay bare all the secrets of the editing process, but (digital) CDs now only allow us quantum leaps from one chapter to another. High-speed trains take us from Rome to Milan in three hours, but flying there, if you include transfers to and from the airports, takes three and a half hours. So it wouldn’t be extraordinary if politics and communications technologies were to revert to the horse-drawn carriage.
Here is the sort of thing you notice anew after being in India or China, the two rising powers of the day: there is still so much nature, and so much space, available for each person on American soil. Room on the streets and sidewalks, big lawns around the houses, trees to walk under, wildflowers at the edge of town—yes, despite the sprawl and overbuilding. A few days after moving from our apartment in Beijing, I awoke to find a mother deer and two fawns in the front yard of our house in Washington, barely three miles from the White House. I know that deer are a modern pest, but the contrast with blighted urban China, in which even pigeons are scarce, was difficult to ignore.
-- James Fallows, "How America Can Rise Again," The Atlantic, January/February 2010
The 20th century is well behind us, but we have not yet learned to live in the 21st, or at least to think in a way that fits it. That should not be as difficult as it seems, because the basic idea that dominated economics and politics in the last century has patently disappeared down the plughole of history. This was the way of thinking about modern industrial economies, or for that matter any economies, in terms of two mutually exclusive opposites: capitalism or socialism.
We have lived through two practical attempts to realise these in their pure form: the centrally state-planned economies of the Soviet type and the totally unrestricted and uncontrolled free-market capitalist economy. The first broke down in the 1980s, and the European communist political systems with it. The second is breaking down before our eyes in the greatest crisis of global capitalism since the 1930s. In some ways it is a greater crisis than in the 1930s, because the globalisation of the economy was not then as far advanced as it is today, and the crisis did not affect the planned economy of the Soviet Union. We don't yet know how grave and lasting the consequences of the present world crisis will be, but they certainly mark the end of the sort of free-market capitalism that captured the world and its governments in the years since Margaret Thatcher and President Reagan.
Impotence therefore faces both those who believe in what amounts to a pure, stateless, market capitalism, a sort of international bourgeois anarchism, and those who believe in a planned socialism uncontaminated by private profit-seeking. Both are bankrupt. The future, like the present and the past, belongs to mixed economies in which public and private are braided together in one way or another. But how? That is the problem for everybody today, but especially for people on the left. . . .
The test of a progressive policy is not private but public, not just rising income and consumption for individuals, but widening the opportunities and what Amartya Sen calls the "capabilities" of all through collective action. But that means, it must mean, public non-profit initiative, even if only in redistributing private accumulation. Public decisions aimed at collective social improvement from which all human lives should gain. That is the basis of progressive policy - not maximising economic growth and personal incomes. Nowhere will this be more important than in tackling the greatest problem facing us this century, the environmental crisis. Whatever ideological logo we choose for it, it will mean a major shift away from the free market and towards public action, a bigger shift than the British government has yet envisaged. And, given the acuteness of the economic crisis, probably a fairly rapid shift. Time is not on our side.
-- Eric Hobsbawm, "Socialism Has Failed. Now Capitalism Is Bankrupt. So What Comes Next?," The Guardian, April 10, 2009.
Matt Yglesias on American federalism and regulatory excess:
I wouldn’t disagree with the observation that there are some elements of our economy that are badly over-regulated. It’s much more difficult to start or expand a business than it should be and this is one of the reasons why our economy has gotten so dominated by cookie-cutter chains that have enough scale to amass expertise and legal clout needed to navigate this thicket. There’s more occupational licensing than their needs to be. There’s too much regulation saying that buildings have to be short, or can only occupy so big a percentage of the lot, or have to have so many parking spaces. At the same time that I think the country’s overall policy dynamic is too tilted toward the automobile, the actual vehicle registration process is weirdly cumbersome, and the rules governing auto dealers are positively insane.
But all this malfeasance is done by state and local governments.
Rather than the small scale of the units leading to better policy via competition, what seems to me to happen is that the lack of public attention paid to policymaking at the state, county, and municipal level leads to much more pure interest-group capture than you see on the federal level. Not that interest groups don’t have a lot of clout in federal politics. But the relatively competitive nature of elections and the relatively bright spotlight shown on national politics puts a check on these things. At the state level, bad policy really runs amok. So I wind up being skeptical that you could really improve much of anything even in those areas when I think the libertarian perspective is broadly correct by devolving more authority downward.