Intervention

Right, so today’s subject is the role of government…

History would show us that various forms of government have been the critical input that has dragged us out of the dark ages and into the enlightenment. In fact democratic government as we know it is a child of the enlightenment.

The question is what is the best and most effective role of government in the modern era?

One cannot, of course, simply map out the future based on what has happened in the past. That would be lazy and and prone to error. Times have changed and technology has moved on; we need different solutions to those past. Also, there is not one answer that fits all situations; so I am really just describing the vibe here; that set of governing philosophies of government that help set default responses. Of course rules are always defined by the exception.

I see two broad category of government intervention in the so-called ‘free’ economies:

1. ‘Strategic’ intervention which implies a high level response to problems or a required area of change; typically policy that encourages legislation that drives the required change simply by setting up the thermodynamic environment that most favours natural kinetic implementation by the market, the workforce, or whatever unit has to change in order to meet the objectives of change. The idea typically is to create market certainty so investment of time and capital can flow to problem in an environment of certainty.

2. ‘Tactical’ intervention where government actually gets directly involved in implementing a solution by deployment of tax-funded capital or people, or both. Typically there is some sort of implied government monopoly associated with these efforts.

I would argue because modern economies are so complex that government is best advised to favour strategic intervention and to only prosecute tactical intervention when there is a market failure of sorts. Even in the latter case I would argue for BOOT schemes; i.e build, own, operate and transfer (to the private sector) where possible.

Why do I argue this? In my experience direct government intervention is very inefficient and only succeeds because government has the ability to legally provide itself a monopoly in any area of human activity. Part of me simply dislikes inefficiencies but more importantly, in a world running short of resources we can’t afford to run inefficiently any more. We only have so many resources at hand and we should preserve as many of them as we can so we have longer to solve the problems that we face. We will need all the time we can get.

Most commentators have very little understanding that our current gluttonous lifestyles and all its associated rights and opportunities, is fully under-written by an unsustainable consumption of the world’s resources. The first victim of a critical shortage of resources will be democracy and human rights; of that I am sure. Unless by some miracle we can transition across to a high-tech sustainable lifestyle; this will not happen unless government stay out of tactical intervention because these are by their very nature inefficient and therefore unsustainable.