January 24, 2012
To My French Friend:
You raise lots of good questions, Jean-Luc, about my previous letter on the speeches of Presidents Theodore Roosevelt and Barack Obama at Osawatomie. For the moment, let me comment on just one.
I think you are right to say that Mr. Obama drew a false parallel in his speech, when he compared himself to Roosevelt as he did. Just as Roosevelt argued that the government had to have more power to counter the centralization in corporations of the wealth and power created by the industrial revolution, so did Obama argue that the government required yet more power to counter the centralization in corporations of the wealth and power created by the information revolution, the more recent transformation the President acknowledged our economy has gone through.
The problem with this parallel is that the two revolutions are very different—in fact, they are opposed—in their effects. Corporations centralized power during the industrial revolution because it was the most efficient way to get their work done. All decisions, all actions require information. Manufacturing a product requires thousands of decisions, for example, about raw materials, design, marketing, and many other things. Getting the information to make those decisions is costly. Bringing all those decisions and the processes they make possible under central control in a corporation reduces those costs. Furthermore, when dealing with a mass of less skilled workers a hundred years ago, it made sense to give them simple tasks and to centralize control over them by giving them rules and regulations that they had to follow in carrying out those tasks. The information revolution is changing all this.
Consider your own situation. You design and can manage industrial control systems for corporations around the world from France because the internet connects you to thousands of sensors that automatically feed you information. The cost of gathering the information you need to decide and act on a problem in a California plant is a fraction of what it would have been even a few decades ago for the plant itself to do that work. And you can do it more cheaply than they can because you can do it for many others at the same time. Furthermore, you and your colleagues are skilled. The company in California does not need to give you detailed rules on how to do your work. In fact, such rules would make you less useful and productive. They merely tell you what they want and they leave it to you to figure out how to do it. The information revolution means that corporations can and need to decentralize, to disperse their power and authority.
The administrative state of rules and regulations that Theodore Roosevelt championed was a response to industrialization. The industrial age is ending, as the President himself acknowledged. Shouldn’t the administrative state be ending as well then? Instead, the President proposes more rules and regulations.
Everywhere we look, whether the streets of Cairo or New York City, offices in France or family rooms in America, the information revolution is putting more information and thus more power into the hands of individuals. Everywhere that is but in the minds of people like the President who acknowledge that our case is new, but who cannot think or act anew. It is striking how backward looking, how trapped in the past so-called progressives are. I agree with you that they should be called regressives.
It is true, of course, that the transfer of power to individuals that I just spoke of will never be complete. Neither you nor I are arguing for some kind of absolute individualism. As I noted in my previous letter, we acknowledge, for example, that governmental action is necessary to ensure that none have unfair advantage. But this does not mean that government action and power must always be the same or must always grow. Given the information revolution, the transformation that the President acknowledged, our real task is not to keep building up the centralized industrial age bureaucracy but to figure out what aspects of that bureaucracy we can do without and what might need to be preserved but changed.
The transformation we are going through has the potential to enhance human freedom, but while the President acknowledges the transformation, he does not acknowledge its potential. At Osawatomie, he presented it not as an opportunity but as a problem that only government could fix. If Jefferson were alive today, I think he would see this potential for freedom as he once saw such potential in America’s abundant land. Living on one’s own land, Jefferson thought, was the best way to ensure that citizens would live free and be safe in the enjoyment of what they labored to achieve. Our circumstances have changed. The age of the family farm has passed for most of us. But the age-old longing for freedom and justice that Jefferson sought to satisfy can find fulfillment still, I believe, in the new forms made possible by the latest transformation of our lives. Indeed, that transformation can give fresh life to individual liberty. We should not let it be smothered in rules, regulations, and thinking suited to a by-gone era.
There is more to say about all this, Jean-Luc, as you know, and I look forward to our future correspondence.