Friday, September 16, 2005

Government is bad, isn't it?

Government is bad, isn't it?
Reza Dibadj

The gut-wrenching pictures from the Gulf Coast showing our fellow citizens without food, water and shelter prompt the inevitable question: How could this happen in America? The answer will require debates on global warming, energy policy, coastal development and, perhaps most important, class and poverty.

To these meta-issues, I add an important contributing factor: Our public infrastructure is compromised, making it more vulnerable to disaster. The spectacular failure of the levee system in New Orleans is only the most dramatic example. Recent events have shown how little safety margin, or redundancy, exists in our systems. Think, for example, of the communications problems first responders faced in the Sept. 11 terrorist attacks, the blackout of 2003 in the Northeast, or the vaccine shortage of 2004. In each case, the causes are different and complex, but an overarching theme emerges: We either did not invest enough in public infrastructure, or naively relied on the private sector to provide a public good.

The problem, of course, runs much deeper than isolated crises. Consider that in its 2005 Report Card for America's Infrastructure, the American Society of Civil Engineers surveyed 15 infrastructure categories -- including roads, bridges, drinking water and public schools -- and issued an overall grade of "D." The report notes that "congested highways, overflowing sewers and corroding bridges are constant reminders of the looming crisis that jeopardizes our nation's prosperity and our quality of life." Not to mention crises in public hospitals and housing.

Contrast this assessment with America's stunning historical record of achievement. Recall President Franklin Delano Roosevelt's huge public-works projects emerging from the New Deal or President Dwight Eisenhower's creation of the interstate highway system. When Americans travel throughout much of the world, we lament the lack of clean water and modern transportation and telecommunications infrastructure that we have traditionally enjoyed at home. It would be belaboring the obvious to point out that infrastructure has been an important contributor to America's global leadership.

Of course, pundits who typically clamor for smaller government -- uncharacteristically quiet, at least for a few days -- will no doubt bristle at this suggestion as immediate dangers pass. They will point to the fact that infrastructure decisions come down to a cost-benefit analysis. But cost-benefit analysis, at least as practiced today, typically suffers from three fundamental flaws. First, cost is much easier to measure than benefit; as a consequence, new research is showing that benefits are undervalued, leading to underinvestment. (How to value accurately a human life, clean air or clean water?) Second, despite a veneer of certainty, such analyses are typically done by politicians and economists, who too often bring ideological bias. They are best left to scientists and engineers. It is no coincidence, for instance, that technical experts have been issuing warnings regarding the levee system in New Orleans for years. Third, and perhaps most fundamentally, cost-benefit analysis should only be one input into public policy.

Beneath the veneer of seemingly elegant cost-benefit analysis, the usual trump card employed by those opposed to upgrading infrastructure is that it is simply too expensive. To this, the response should be a purposeful "compared to what?" If we need to pay to be secure, so be it. After all, we are not a nation that cowers from challenges. Resources have been mustered for every problem America has faced in its history, and revamping public infrastructure should be no exception.

Intellectuals are not immune: Many want to "outsource government" and believe democratic discourse can simply be mediated via private-market transactions. Such laissez-faire theories stumble when they face public goods such as infrastructure. In economic jargon, these goods have "positive externalities": Because everyone benefits, no one individually has an incentive to pay for them. Think parks, national defense, roads, highways and, yes, levees. Private markets do not have incentives to produce these goods. Without government's coercive powers, everyone wants a free ride.

Needless to say, however, that investing in public goods is decidedly out of vogue in an era that exults the private. Why should we worry about mundane things such as public roads and sewers when our culture tells us to aspire to personal makeovers, SUVs and gated mansions? After all, according to the conventional wisdom, we need to get government off our backs so we can get on with our lives.

The stunning irony in all of this is that government is considered bad, except when we need it. Tragedies such as the Hurricane Katrina aftermath at least offer us a precious opportunity to re-examine our assumptions. Of course, improving our infrastructure is not a panacea. But it would be a good place to start.

Reza Dibadj is an associate professor of law at the University of San Francisco.

No comments: