For the next few weeks I hope to initiate a dialogue about the nature of public knowledge or as some would call it: The Common Good. It seems to me that the United States is undergoing a profound transition in the interface between politics, technology and economics. Since the Reagan administration we have been living with an economic philosophy based on an 18th century economist (Adam Smith), and now we have to accept that the notion that the Market Fundamentalism of lowering taxes on wealth and removing all regulation from industry are not working in the Digital Age. Adam Smith's theory of the Invisible Hand is that out of your basic self-interest, and all citizens pursuing their own selfish interests, the invisible hand of the marketplace allocates the scarce resources and delivers the right outcomes for society as a whole. But Adam Smith never encountered Moore's Law, the Internet or the Free Software Movement. If you had told him that 25,000 man years had been donated for free to build Linux, Apache and Mozilla he would have committed you to an insane asylum. I would suggest that the cooperative economics of the digital age require a rethinking of the 18th century economic philosophy of scarcity that George Bush and Dick Cheney so steadfastly believe in.
We could begin by asking why the mixed economies of Asia and Scandinavia are producing growth and decent education, technology and health care outcomes for their people. If the U.S. economic system instituted in 1980 by Reagan is supposed to produce the perfect outcome why have we fallen to 23rd in the world in infant mortality rates or 21st in life expectancy? Why are we 28th in the world in high school math and science scores? Why are we 16th in the world in broadband diffusion and a net importer of high tech knowledge and goods? Could it be that the religion of deregulation which both Republicans and Democrats have bought into, actually allows profound misallocation of resources that inevitably will cause us to fall behind in innovation because our basic public infrastructure (The Common Good) is so inefficient? Assuming that the Invisible Hand works perfectly in creating a world class Broadband, Health Care or Educational infrastructure may be a faith in 18th century economics that is no longer justified. What I want to suggest is that the Digital Age provides an economy of cooperation that allows individuals, companies and government to innovate in ways we could have never considered before Gordon Moore set down his critical law. Do you think for a minute that Google could have grown from zero to $100 billion in value without access to free software? They run the largest data center operation in the world and they pay no server licenses.
A very smart man named Warren Buffet said that we risk becoming a “Sharecropper Society”, owing so much to the high growth economies of Asia and Europe that we become a second class power. Buffet suggests that a start away from that disaster would be to grasp that cutting taxes on people like him is not smart policy. Borrowing from the Chinese to finance the wars in Iraq and Afghanistan will lead to catastrophe. But that is not our focus here. Let us think about how government (state, local as well as federal) can play a role in building the infrastructures for The Common Good. I will try to put forth some ideas in the next few weeks. They involve both public investment and public regulation. Aware that even thinking about taxes and regulation have been out of favor for 25 years, I move forward with both trepidation and hope.