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Issue #19, Winter 2011
The “More What, Less How” Government
First Principles: The Role of Government
Eric Liu and Nick Hanauer
To generate trust and to encourage cooperation. In a capitalist society, competition is not actually the prime imperative–cooperation is. Trust is the most precious form of capital, generating prosperity and security. That is especially so in a society like ours, so prone to fragmentation along so many lines. One of government’s core purposes is thus the active promotion of trust–not just a personal ethic of honesty but a collective condition of reciprocity built through shared experiences. This is why national service matters, and why it should be mandatory: It enables people who wouldn’t otherwise cross paths, let alone work together, to do so. It’s why any government-funded project should require robust collaboration as a condition of funding. It’s why, at a local level, seed funding that helps neighborhood groups get started is a wise investment.
To sustain true competition and break up concentrations of wealth and power that are unearned and self-perpetuating. In a nonlinear, complex world like ours, advantage and disadvantage compound rapidly. Inequities of opportunity become self-reinforcing. This entails redistribution of wealth through progressive taxation. But let’s be very clear. Conservative leaders already redistribute wealth–toward the already wealthy. This is not consistent with any idea of America. Market fundamentalists contend that inequality is natural and inevitable. We concede that talent is not equally distributed and outcomes will never be equal. But in true capitalism there is true competition, in which unearned and inherited advantage is leveled so that talent can compete against talent. True capitalism is more competitive for being more fair and more fair for being more competitive. This is the opposite of trickle-down economics; it’s bubble-up economics. Government’s job is to foster and sustain it.
How Government Should Do It
If government is to do more what and less how, here are some of the ways to approach the how:
Radically Relocalize
If, as we propose, the federal government is to nationalize goals, then it needs also to radically relocalize the means–and, in contrast to the “devolution” of the Reagan era, actually provide robust funding for those local means. Obama’s Race to the Top education initiative is a good example of combining leverage at a higher level of government in an area of strategic national interest with responsibility and creativity at lower levels. We would go even further. There should be strong national content standards in education, with far more federal education funding. And that funding should then go to a diverse ecosystem of educators who develop a multitude of ways to get kids to the standard. Thus, the parents at each public school should take far more ownership of the quality of the education within the building. That means having more choice about how to staff and run the school, and the style of pedagogy, but it also means taking more responsibility for the results. Creating high and common standards. Funding them fully. Pushing authority ever downward. Setting off waves of experimentation. This is network thinking–or, to use a more old-fashioned term, self-government. The same Brandeisian approach to radical relocalization and powerful webs of small enterprises should be applied to energy policy, health care, and other arenas.
Be a Smarter Prime Contractor
Liberals too often see government as a service provider of first resort. That outlook is inadequate to the times. Government bureaucracies are generally incapable of providing high-quality, low-cost services that adapt to the changing requirements of citizens. At every level, we think the progressive imperative should be to shift responsibility for executing what are now government services to private competitive organizations. This can and should include non-profits, particularly where profit motives in the delivery of social services would be harmful. Government must become a highly disciplined contracting agent with the ability to set standards, create transparency, and hold accountable those who do the work. Wherever possible it should get out of lines of business that it can’t do better than others. The postal service, for instance, does not need to be a public function. Nor does government printing. The licensing of drivers or hunters or boaters should be franchised. As with any franchise model, there ought to be uniform standards of product and service and even branding–but local owners of the actual organization will deliver the service.
It’s true that there’s plenty of contracting already happening in government, particularly at the municipal level. But too much government contracting today merely replicates the non-adaptive, non-competitive dynamics of government agencies. And the job isn’t done once an outside non-governmental contractor has been found. It’s done when the government, like an effective philanthropist or investor, challenges the firms in its operating ecosystem to learn from each other, to improve and exchange practices, to pool resources and leverage learning.
Create and Amplify Positive Feedback Loops
One of the central features of open complex systems like our economy is feedback loops, both good and bad. Government plays a central role in setting both kinds in motion. Governing to anticipate socially destructive feedback loops like financial bubbles or storms of fraud is a central role. But a modern government should seek also to create hurricane-like storms of pro-social activity as well. The national government can and should create prosperity and positive feedback loops by using its capacity to birth new markets through basic research (as DARPA begat Google) and to create demand through its enormous buying power and leverage (as should be happening in alternative energy).
Deploy Pounds and Pounds of Prevention
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ISSUE #19, WINTER 2011

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Eric Liu and Nick Hanauer are co-authors of The True Patriot and founders of The True Patriot Network. Liu served as a speechwriter and deputy domestic policy advisor to President Bill Clinton. He is an author and educator based in Seattle. Hanauer is a Seattle-based entrepreneur and venture capitalist. He is active in many progressive civic and philanthropic organizations and causes.
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Eric Liu and Nick Hanauer: What is government for? Over the last two years, this has been the dominant question of American politics. Yet so few leaders have offered coherent answers.

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