WAITING FOR TURGOT:
TALES OF POLITICAL ECONOMY
by Edward H. Clarke
2000
"Esperanto, par specila instrumento"
"One who hopes, with a special instrument"
Contents
TALES OF POLITICAL ECONOMY
Forward
Part I: "Red"
(1) The Practice of Social Art
(2) Waiting for Turgot
Part II: "White"
(3) L'An 2440: View from A Phalanstery
(4) View from Port-au-Prince (1987)
(5) View from A Red Brick Building (1995)
Part III: "Blue"
(6) A Political Economy of Memory and Hope
(6) Epilogue: "L'An 2001"
FORWARD
This work is about the theory and practice of politics, including "a strict theory of politics" and the practice of a "rational social art". The practice aims at incentive-compatible design of institutions, using the demand-revealing process by way of example. The work is written to stir political entrepreneurship, aimed at social change and a philosophy of hope.
The demand revealing process has been called a "new and superior" process for making social choices. I approach the development of the idea from the viewpoint of "concretizing utopia" and "heresthetics" (the art of political entreprenuership). In these contexts, I present a vision of the demand revealing process as a means of practicing a more rational social art in the next century and beyond. The vision is admittedly somewhat utopian, even though following a modern conception of Ernst Bloch, it is a "utopia of the concrete", Simply put, the book presents ways of dealing with problems of information and incentive (and bounded rationality) that provide paths toward out individual and collective utopias.
The book aims particularly at "concretizing utopia" in terms of a "political economy of mobility". It is aimed at demonstrating the use of the demand revealing process in designing intergovernmental and private sector arrangements affecting the movement of people, goods and services. The initial focus of the work has been largely on domestic and international air travel.
The book is also, in large part, a personal memoir aimed at the "anticipatory consciousness" of prospective practitioners of social art. It brings my perspective of some 25 years of travel (wanderings) in the policymaking sphere to what could constitute useful practice of social art. It interprets both "theory" and "the practice of social art" for a non-technical audience and is aimed at policymakers. The book ranges across an ideological landscape, from Marx to Mises. This is natural because the heart of the problem being addressed is the possibility of "rational calculation in the socialist community" (Mises, 1920) which was also the subject of my earlier book (see Clarke, 1980 and 2000, chapter I).
What kind of political philosophy is it? It depends, as I often suggest to students. Having returned to the domestic bureaucracy or civil service in Washington, D. C. in late 1988, I have often had the opportunity to instruct students (interns or other new co-workers) in dealing with public policy problems. They often inquire about my political philosophy to which I reply. "I'm a libertarian socialist". But they (Alice figuratively) would say; That's impossible, isn't it? To which I usually reply: "Yes, but only in reality. In reality, I am a moderate liberal heresthetician."
As this work tries to show, there is no fundamental contradiction in the philosophy of incentive-compatible libertarian socialism, although there may be in political reality. In reality, one looks at politics as the art of the possible. I have tried to keep in mind what is possible in advocating an approach to institutional design built upon the modern theory of incentive compatibility which is a means of better taking account of individual preferences in making social choices. (For readers with no knowledge of incentive compatibility and demand revealing, the basic concept are presented in a brief appendix at http://www.pair.com/flower1/example.html
For students of philosophy, of politics and the concrete realities of economics, the policy sciences, and "heresthetics", I have written this book in order to stimulate greater interest in the art of incentive compatible institutional design -- the practice of a more rational "social art", if you will. I propose an approach to design that will explain a lot of contradictions, a lot which I have worked out in my own character and mind over the last 8 years.
In drawing together and sharing fragments that I had written over the years, I learned a lot about my character in relation to society. The work reflects a strong desire to create more workable communities and more "user friendly" networks among them. Often I use the metaphors of Utopian literature -- for example the Utopian communities or phalansteries of someone like Charles Fourier. By background and historical accident, I am not much of a social architect and am often guided more by the spirit of a Bestiat who eschewed the efforts of the system builders while constructing his own "economic harmonies". This work demonstrates how the two conflicting philosophies might be reconciled, and how, as I tried to demonstrate in my 1980 book, how capitalism and socialism could be reconciled within the framework of modern representative democracy.
By way of background, I had started my working career (around 1965) working on the economics of new towns and became a fan of sorts of Ebenezer Howard's "garden cities". I did not realize then what these communities would become some 30 years later as I now explore modern sociological criticisms of the economic and political realities that have transpired in these communities during the intervening years. During that early career, I also tried the economics of building new airports (indeed a third international airport for Chicago about 8 miles out in Lake Michigan during the late 1960s). During my subsequent working in State Government in Illinois, I was instrumental in not having the Lake Airport built, and of avoiding the building of any airport for some 30 more years. During the time I was working on "new towns" and a "new airport", I discovered demand revelation, the implementation of which is largely the subject of this book.
To try to demonstrate how a single idea puts capitalism and socialism together and has relevance for the planning and management of communities and of networks (i. e. of roads and airports), one runs the risk of appearing to be infected with a certain degree of "monomania", a possibility I alluded to in the first chapter of the earlier book. This is, in part, the confessions of a "monomaniac". There is something often comical or tragic about the belief that a single idea can cure the world's ills. If I did not pursue this work sensibly, it could likely rank among one of the good tragicomedies of our time, but still have enough entertainment value to win some kind of prize in such a competition. Maybe it could be bowdlerized by others to compete in the new millennial competitions and called something like the 21st century public accountant or public administrator and sell some (if not much less) than the sales of the 21st Century stockbroker (a book I have recently seen on the shelves across the street from the White House).
As a serious piece of work, trying to avert tragedy or comedy, I am seeking to prepare a serious piece of utopian scholarship that induces the use of demand revealing decision techniques in the practice of governing institutions. During this millennium, we have seen about 500 years of serious utopian scholarship and I to influence the work of the next 500 years in ways that will bear more fruit in terms of practical application. The work is a serious attempt at selling the "pivotal mechanism" or "Clarke tax" mechanism (named after myself) as a method of organizing collective activity and achieving a future that might otherwise continue to be regarded as Utopian, instead of a philosophy (and way of implementing it) of the "here and now".
Manuel and Manuel (1979) in writing about the "Utopian propensity" noted that paradoxically the great Utopians have been great realists. "They have an extraordinary comprehension of the time and place in which they are writing and deliver themselves of powerful reflections on socioeconomic, scientific and emotional conditions and their meaning in history... without taking leave of reality, utopians have performed symbolic acts to dramatize their break with the present".
I conceived of the book in November, 1987 in a house on a mountaintop next to the French embassy in Port au Prince Haiti. My cook had returned from the elections of November 27 with a story that he had seen at least 5 people killed (machine gunned) at the polls. I was then seething with a militant (utopian) optimism which I briefly describe below.
Over the course of a few weeks I had conceived of this work which I had entitled "Sketches" (or Esquisse) after Condercet's last work. I wanted to provide a sketch of sorts involving about 25 years of "reflections on political economy" followed by a second part of the book which suggested directions for a "rehabilitation of the political economy". Over the succeeding years, the work took a more modest direction and was entitled "A Political Economy of Mobility".
In reconstructing and seriously pursuing this work during the intervening eight years (having worked out an application to management of the Nation's air travel system), I decided that I would have to try somehow to become a more effective apostle of change. (If not an active agent of change, then I wish to try to stimulate such agents). Change is a word that creates deep conflicts, even moral ones, for myself and society. In my spiritual development, I constantly hear that it is the single greatest ingredient of "progress". The other ingredient is "living in the moment", which when taken together with change, has often struck me as problematic, if not a contradiction. In any case, the idea of change over much of the last year became a sort of intellectual and spiritual pursuit of sorts in which I integrated my ideas for practical application of demand revealing under the broad rubric of "mobility policy" and linked these to the philosophers of the enlightenment, mainly the Baron Turgot, the great "progressivist" and apostle of change in the ancient regime of prerevolutionary France. How I work this out in my attempt to find myself as an agent of change appears in Chapter 2 of this work, entitled "Waiting for Turgot". It is also reconciled there in terms of the "stay awhile" of the Faust legend which drives the spirit, and much of the content, of the work.
Between 1995 and now (Y2K), this has been a work in progress, consisting of what appears here and my work to implement demand revealing in aviation management institutions. It is tied to the kind of intellectual calling I espouse in Part I of the book and which my work on applications of demand revealing tries to illustrate. This involves the practice of social art, in a manner foreshadowed by Turgot and carried forward in the work of Condercet.
In reality, of course, one must put the pursuit of the rational social art in some perspective. The poet and philosopher Goethe during the early 1800s was fascinated with the ideas of the physiocrats (of Turgot, Adam Smith and others) as well as the ideas of Condercet as carried forth by Saint Simon and others.
But Goethe, for one, interpreted and practiced the implementation of ideas reasonably. In this context, I am a moderate liberal heresthetician. As Goethe observed towards the end of his life (in conversations with Eckerman) and in speaking about the English and Swiss utilitarians (Bentham and Dumont), "Dumont, you see, is a moderate liberal, as all reasonable people are, or should be. I myself am one, as I have tried to practice all my life."
The reconciliation of the practice of social art with the political theory (centering on the demand revealing process) that I espouse in this work reflects, at bottom, the spirit of Goethe's philosophy and "stay awhile" approach to the art of public administration.
The art of public administration, however, is not ideology free, nor are the ethical foundations of ideas on implementing demand revealing that are espoused in the several books of this work.
The book (particularly Parts II and III) is also about the "ethical" foundations of the demand revealing process, which has strong normative content. Around 1997, in a short article on "some aspects of the demand revealing process, I defended it in Benthamite terms (i. e. cost avoidance relative to existing institutions). It was to my mind, in the lexicon of Bentham, a means of providing "security" (against the tyranny of the majority) and achieving political economy in the sense of the "expenses" of the State.
Twenty years later, my thoughts on the evolution of the idea had evolved into a social philosophy about change and about the processes of "concretizing utopia" in the sense of personal striving, involving both self and society. This is a set of philosophical reflections on advancement of ideas in the liberal-humanitarian style of Turgot and Condercet. But this style can be compared and contrasted with other styles -- Chiliaistic, conservative or socialist-communist. (See Mannheim, 1936). Part II sets forth these philosophical reflections in the context of several approaches towards "concretizing utopia" utilizing a philosophy (or principles) of Hope (Bloch, 1986). The way in which this is done tests the potential success or failure of what I espouse, determining whether incentive compatibility improves the "prospects of scientific politics" (Mannheim, 1936).
The tensions in these philosophic reflections obviously bear on the composition of the book and its underlying ideology. I do not pretend that a work on the practice of social art will be free of ideology, though my rendition of it may be more explicit (about the underlying ideology) than others. Perhaps more than anything, however, I seek to present "the Practice" in a form that will be useful and stimulating to practitioners both outside of and inside the United States.
When the work began in Port-au-Prince, Haiti in late 1987, it was filled with a much more passionate, if militant optimism, that may have resembled Condercet's last work (Esquisse). I was infected with a combination of liberation theology and disgust, bordering on Chiliaism. Almost a decade later, it is more reflective, less passionate and more guided by the burgeois liberalism of the practicing American economist. The more passionate liberal optimism has been relegated to a final Part III for family and friends, so that I can enjoy a meaningful dialogue with social scientists or practitioners of public policy in the United states, somewhat free of the "militant optimism" that still infects the philosophic foundations of this work. The "optimism" has been at least turned inward and is strongly conditioned by the American Ethos and the possibilities facing the moderate liberal practice of political economy in the United States today.
What is different from the directions taken in my work up to 1980 and now can perhaps be understood in the epilogue to this book. Happy Valley (borrowed from Foldvary, 1995) is enjoying a birth of an "anticipatory consciousness" (embedded in hope) that results from participation in the shaping of community decisions, work and living experiences, and the network of systems (communications, transportation) that extend beyond the territorial boundaries of Happy Valley. What is happening in Happy Valley at the beginning of the new millennium is concrete and the mechanisms used for collective decisions do not appear all that different from what its residents have become accustomed to using in the past.
If you asked the average resident: "Where are you going?", he or she might reply: "Nowhere, we're now here". The residents of Happy Valley are living in the moment, in the true "Stay Awhile" of the here and now. This is the moment (Faust, Part I) for which the protagonist will gladly sell his soul.
Living in the moment in the archaic theories of public economics, and translating these into public policy is both an exciting and daunting task. I began to find a philosophy of hope (the "stay awhile" philosophy) alternating between transportation regulatory management responsibilities on which I worked and the Flower (Happy?) Valley where I lived over the last 15 years, interspersed with living in an autocracy (Morocco) and Haiti (then an anarchy or kleptocracy). I began to see a link (or have a vision) between community building, transportation (road and airport projects) and consequent voyages to Erehwon (nowhere) which are communicated in this work. I continue to believe Ereh (here) can be "won" (now) in the "anticipatory consciousness" and "stay awhile" of the lived moment of the here and now.
In the way of two concluding notes, this work (in its current form) was inspired around 1993 by a short paper by Gordon Tullock which he presented at the Henry Simons Society and later at the Mont Pelerin Society, entitled "Consent?" Professor Tullock and I share a common interest in community governance (whether on Sunshine Mountain or Flower (happy) Valley and transportation networks as well as the various paths to Erehwon in "a world where our options are limited and Erehwon is nowhere."
As a "conservative" utopian tract, the work is colored in the red, white and blue that covered material that I wrote (Private Enterprise, Urban Policy) or oversaw the preparation of in the Agency for International Development during the early 1980s. I aspired at some future time to write my own red, white and blue which covers (colors) this work. Part I is red, the "red dawning" of the revolutionary consciousness which is then translated into the more conservative white of practical application and cold rational analysis. The eventual blue of evening is a philosophy of hope, and hopefully of wisdom.
Chapter 1
THE PRACTICE OF SOCIAL ART
1.0 Introduction:
In 1980, I published a book, entitled Demand Revelation and the Provision of Public Goods. This was my Ph. D. dissertation to which I added ideas for application of the demand revealing process in the real world. Work on these applications began in 1965 on issues of "governance" affecting "water quality management" institutions. This second book extends my earlier work and deals more broadly with institutional architecture, applying the theory of "incentive compatibility" of which demand revealing is a part.
I began the latest manifestations of what is Book II of this work in 1991, working with a colleague on aviation management institutions (air traffic control and airports). At the time, I became very interested in a treatment by Albert and Hahnel, entitled The Quiet Revolution in Welfare Economics which stimulated my interest in institutional architecture for the next century and beyond. Robert Heilbroner, who authored the first book, The Worldly Philosophers, on economics I ever read referred to their work in the conclusions of his 1993 book on 21st Century Capitalism, some of the spirit of which is reflected in this work. In a more recent work, Visions of the Future, Heilbroner (1995) essentially writes a modern version of Condercet's Esquisse which also greatly influences this work.
Struggling with the design of aviation management institutions in the context of works referred to above leads to some form of personal and ideological deconstruction. Some of my early ideas relating to privatization were challenged by readers of the early aviation management work. This fed into experiences I had in working on privatization problems during several years as an economist for the Agency for International Development, before returning in 1988 to the Office of Management and Budget to work on transportation "regulatory management" issues.
During the period 1980-95, I devoted a good deal of time considering how "regulatory management" ought to work in the context of American Federalism. Before presenting in any detail in Part II a treatment of how an "incentive-compatible" federalism could be brought about, I would like to put the work in the context of certain reflections on political economy as these relate to incentive-compatible institutions. I start with certain observations about "the practice of social art".
1.1 The Practice of Social Art: The Utopian Mind and Social Reality
Since about the time of the French Revolution, and shortly after the death of the Marquis de Condercet and the interpretation of his work by the Ideologues, the social sciences in the Western World have been largely divided into three spheres.(1) Two of these -- moral and political economy -- are involved with discovering the nature of human desires and needs and examining the social effects and consequences of these actions and needs. Emerging from those two was a third: that of directing our actions in such a way as to produce "the greatest satisfaction of desire".
This latter part of the science, maintained De Tracy (1801), one of the Idealogues, who built on Condercet's ideas, did not have an appropriate name: "for what is ordinarily called the science of government rarely possessed the goal we have just indicated, and that known under the term social science embraces only a part of the subject." This area generally became known, but not well defined, as the "social art".
For about 200 years, at least in the part of the world that embraced an "architecture of freedom", the social art was practiced aggressively by legislators and the social sciences studied what legislators do. To my mind, the science determined that the result of legislation reflects what people want and the changes in their desires over time. In the rest of the world, there was little opportunity to practice any such art because there was little or no freedom to do so.
In the West and with some exception (the Benthamites in England) and the Utopians in France (Proudhon, Fourier, and St. Simon), the social sciences became less concerned with institutional architecture in the sense that it would have been pursued during the height of the French Enlightenment (by, for example, Condercet or his mentor, Turgot). Efforts in the direction of constructing institutions that will "produce the greatest satisfaction of desire" became subordinated to positive, empirical social science (as exemplified, for example, by Compte). During the 19th and 20th centuries, institutional architecture, or social art, as defined in this book, was often denigrated as Utopian. Practitioners of the social art became, in particular, consumed in ideological struggles (witness, for example, Proudhon vs. Bestiat in mid-19th century France).
In the struggles between Capitalism and totalitarianism (both Fascism and Communism), such work took second place to the deeper struggles for Freedom itself and in the United States such work was often dismissed as "socialist calculation" and portrayed by intellectuals devoted to preserving the status quo as failing to achieve the greatest satisfaction of desire by reason of the failure of information and incentives in the institutions designed to accomplish this end.
An important exception was the work of the "public choice" school which began in the early 1960s. Buchanan and Tullock (1962) began work on the (economic) theory underlying the design of constitutions. I discovered and was stimulated by the "theoretical forerunners" in a "strict theory of politics" described in note 2 of Buchanan and Tullock, which led me into problems of "methodological individualism" in the provisioning of public goods (Buchanan, 1968) so as to construct the demand reveling process as a means of addressing the fundamental problems of public ggods (Clarke, 1971) and the broader difficulties in social choice procedures related to public goods provisioning (Tideman and Tulock, 1976).
During a twenty year period between what are known as the revolutions of 1968 and 1989, I began to sense a quiet revolution in the social sciences, or at least in a small branch called "welfare economics". For a good exposition of what this revolution seems to be all about, I refer to Albert and Hahnel, The Quiet Revolution in Welfare Economics. During the early 1990's, this book provoked some fundamental questions in my own mind about institutional architecture, in particular the architecture of public economics (and public expenditure and regulation in the United States). As one who pursued the "social art" in spite of a lack of great demand for it, I had largely adopted a paradigm known as "the new institutional economics", largely built around the idea of property rights and their exchange and the modern science of public choice. For a good treatment of how this can become translated into a practical philosophy and practice of the social art of government from the traditional public choice perspective, see Randall Holcombe, The Economic Foundations of Government.
For about 20 years, much of my own work has been set in the public choice, property rights tradition, except that between 1981 and 1983, it began to change. I had struggled for a year during 1977-78 to apply what Albert and Hahnel call "incentive-compatible theory" to real world institutional architecture, creating "a free-market socialism" for the public sector. I viewed this a greatly superior to bureaucratic socialism, the Leviathan, "or whatever you want to call the overwhelming control of the State over the lives of individuals".
Today, I believe that the general sketch set forth in that book provides the basis for the practice of social art as envisioned in this book, except that it will require some elaboration and to more squarely confront some ideological conflicts that were skipped or glossed over, or simply ignored, in the earlier work (Clarke, 1980).
One of these conflicts goes to the heart of the property rights paradigm -- that government should address itself to the determination of property rights and then let markets make the desired allocation. Despite the case made by Holcombe (1995) and others, I believe that the allocation of rights should be approached cautiously. The objections of Gaffney (1995) and others need to be heard. In addition demand revealing theory adds new prspectives to this debate over societal collection of the rent of land and other natural resources (including government priviledge).
The conflict with majority rule institutions as well as a potential remedy to this conflict, also further elaborated in later chapters, is introduced in the remainder of this chapter, in a brief discussion of incentive compatibility under a heading: "The Utopian Mind, Incentive Compatibility and the Present Reality".
1.2 The Utopian Mind, Incentive Compatibility, and the Present Reality
A satisfying institutional architecture requires a "vision", and the vision can often be in conflict with the present reality. We have been at least 500 years in the making of an Utopian vision and this three part work represents an attempt to synthesize or marry the Utopian vision with the architecture of present day public finance and regulation in the United States. It presents, for purposes of social discourse, a new architecture that can move us towards, rather than away from, social goals -- for example, liberty, equality, fraternity, and the pursuit of happiness. It also presents a path towards development of the new architecture in other societies in ways that can lead towards a more harmonious social order.
As stated above, the work represents an extension of ideas presented in Clarke 1980. That work explained the development of what has become known as the theory of "incentive compatibility". This theory presented a means by which the preferences of individuals (or social units) could be taken into account, when the behavior of one individual or unit will have (external) effects on another.
The basic principle of the demand revealing process is that each person (or unit) is given the choice of accepting the decision that would be made without his participation or changing the decision to whatever he wants, upon paying an amount of money equal to the net costs of doing what he wants rather than what would otherwise be done. This process comes extremely close to the "ideal of guaranteeing that collective decisions will be made efficiently" (Tideman, 1977). This is because each individual has an incentive to make a truthful statement of his or her preferences.
My efforts to apply demand revealing in the real world started in earnest around 1976 in an article contained in a special issue of Public Choice (1977) devoted to demand revealing. I discussed the techniques of persuasion ("selling the idea"), the ethical justification for the idea, and an outline of how it might be applied through techniques of representation. I used a somewhat Utopian style -- a "parable" which assumed that by "some magic process" the demand revealing process was made applicable to all social choice in our nation. I further developed many of the ideas (though not the representative form) in a subsequent book (Clarke, 1980). I left aside the problem of transition and how you marry use of the process to a society that uses majoritarian voting institutions for general public resource allocation by way of taxes, subsidies or other regulatory forms. In this book, I deal with the problem of marrying demand revealing to majority rule institutions as a means of "concretizing utopia".
I also adopt a principle of social justice which reflects the neo-Georgian, or geoliberal perspective of Tideman and others. These geoliberal principles are based on a premise that society should collect the rent from land, natural resources, and entitlements made available by government priviledge. This principle is particularly important in the realm of transportation (or mobility) policy as will be more completely elaborated in this volume, again with reference to demand revealing institutions.
This somewhat new perspective grows out of work in the late 1980s and early 1990s where I have focused on the area of aviation management (basically the allocation of resources to airspace management, airport development and the allocation of airport landing rights) where I believed that the idea can have productive application. The basic technique that is used was developed with Drs. Brough and Tideman in a recent article on "Airport Congestion and Noise" and is here elaborated in terms of (a.) the public budgeting of several billion dollars annually to transportation infrastructure and (b.) dealing with associated "regulatory management" problems. I have in fact established a prototype approach to budgeting transportation dollars at the state and regional level once Congress has determined the broad allocations for these purposes. I show how such an approach, which might be experimented with first in the allocation of about one billion dollars in a transportation "discretionary" account might be used more broadly in a new approach for developing "incentive-compatible performance partnerships and in "reinventing" fiscal federalism. This approach is laid out in what now constitutes the use of incentive compatible design in mobility policy in Book II of this work. It is summarized in the following section (1.3) of this chapter and in many related examples contained in the chapters which follow.
In terms of the broad outlines of this work, I consider the approach as an approach to public administration in the spirit of Turgot's "Memoire sur les municipalities" or Condercet's later "Projet Girondin". If the spirit strikes one as bringing excessive coordination to public administration, let me note that the "Projet Girondin" was praised in an important footnote in Hayek's Constitution of Liberty.
At this point in the development of the work, I have not dealt with many problems in the current political order and the methods by which demand revealing institutions address them, nor with many criticisms of demand revealing, including lack of an ethical justification. This is what is being developed in Chapters 3 through 5 of Part II {"White"}, and some of it is captured or at least foreshadowed in the following Chapter 2 -- entitled "Waiting for Turgot". The portion of this chapter that has been written for public consumption at least, leads to the development of several chapters concerned with fiscal federalism and aviation management summarized in this Part and further elaborated in Part II.
Readers must of course judge how well it comports with present reality. Since many criticisms of demand revealing are implicitly criticisms of the way we go about taxing and making public expenditure decisions, it would be unfair to level criticisms that demand revealing sometimes may lead to results that are not "individually rational". These and other criticisms, following the work of Tideman (1985) and others, are presented in Part II. Also in a world of changing tastes and technologies, and where institutions influence preferences, many strengths of demand revealing may tend to be ignored, a basic message imparted by Albert and Hahnel (1990) and which is elaborated at some length in Part II (Chapter 4). Lest these approaches to persuasion appear too abstract to those of a more "practical" persuasion, Part II, Chapter 5 seeks to persuade solely on the basis of the present reality, and upon which Part II is largely premised. It points to reforms that could be undertaken in the period of a few (five years) rather than speculating on means and ends during the next 50 or 500 years.
1.3 "Concretizing Utopia": A "Budget" Experiment
The central idea is an attempt to marry the demand revealing process to modern representative democracy through an "experiment" in "budget reform". The process, based on current policy trajectories, envisions Congress as setting broad priorities such as Federal dollars (expenditures) allocated to broad purposes (such as transportation) and determining an initial distributional status quo. This is basically what underlies the current strong push for "block grants to the States in such areas as transportation.
In turn, regions, States and their political subunits would determine the timing and allocation of funds and these units could also choose not to spend funds, which would in turn be allocated to other units of government.
The gains could be significant. If, for example, the process resulted in a shift of 10% of transportation dollars ($20 billion) from projects that yield a 5% rate of return to projects that yielded a 15% rate, there is a modest $200 million increase in societal returns annually.
Consider the incentives facing Congresspersons and community leaders (entrepreneurs) in communities within the districts. Each Congressperson can say to his/her constituents: "You can save or spend the entitlement. If for example $20 billion in transportation amounted to about $300 per family in annual entitlements and you saved this amount each year at 7%, the amount saved in 10 years would yield a return equal to your annual cost that you pay to your residential association (about $300 for a typical association)"
There are two key ways in which this is implemented relating to (1.) determining the opportunity cost of funds and (2.) whether there are benefit spillovers in other jurisdictions that should be taken into account. Both factors are taken into account through incentive-compatible means.
The first basic idea takes the form of one of the simpliest incentive-compatible mechanisms, a second price auction first described by Vickrey (1961). We want to allocate a fixed supply of public funds to their most efficient use irregardless of some initial politically equitable or acceptable distribution of funds. For example, two jurisdictions are each initially allocated funds sufficient for five $100 million projects which yield returns over costs (also for a sixth, marginal project) shown below:
J(1) 100, 90, 80, 70, 60, 60.
J(2) 100, 100, 100, 90, 90, 90.
For an efficient allocation, jurisdiction 2 would carry out six projects because the $90 million it earns on an extra (sixth) project is greater than the $60 million foregone by jurisdiction 2 on the fifth project. If jurisdiction 1 reveals a true opportunity cost of $60m, then jurisdiction 2 must pay an amount equal to this opportunity cost (equal to $100m + 60m = 160m) in order to achieve $190m in overall returns for the extra project in jurisdiction 2. The appendix following chapter 6 descibes why we get truthful revelation of project returns in using this procedure.
The budget experiment is driven by this basic concept. As an exercise in speculative heresthetics, let me posit an exercise (using the concept) that one could imagine taking place over the next five years between the Congress, the President, representatives of subnational governments and the people.
In order to resolve a growing conflict (already apparent in 1995), there has been a growing consensus among fiscal technicians (including many in the Executive Branch and Congress) that there is a need for incentives to accompany the transfer of funds to the States in the form of block grants.
Dr. G, an expert on fiscal federalism somewhere in the midwest, suggests a conceptual approach for marrying a "Pigovian" subsidy with a Clarke tax (See also Sinn, 1993) in a brief article in a national tax journal.
Conceptually, he argues that for most programs (welfare, job training, transportation, etc., about 70% of the benefits of the programs are captured within the average state with 30% of the benefits captured outside of the state. Therefore, on average and depending on the mix of programs, the Pigovian subsidy is set at 70% of the overall program cost. If States could then "vote" (using the "pivotal" or Clarke tax mechanism), each state would move from some initial distributional status quo towards an efficient level of public expenditure. No state would have incentives to lower welfare or medicaid expenditures, for example, with the anticipation that other states would get migrants and pick up a larger share of the tab).
Dr. G shows conceptually how this might be accomplished for about $250 billion annual in intergovernmental program expenditures, aimed at both State and local governments and individuals. (The mechanism, which is basically similar to the second price auction, is elaborated in diagrammatic form in a recently published paper, entitled "Incentive Compatible Planning and Budgeting of 'Distributive' Federal Programs" http://www-pam.usc.edu
The conceptual approach is also presented as an improved means of reducing the deficit while encouraging more efficient investments in infrastructure and work skills (e. g. adult training and investment). The concept sells in both political parties and overcomes "public interest" views that the grant system is designed to correct for "benefit spillovers". There are still distributional concerns, but the fact that every district is getting funds (which it can spend or save) overcomes most of the distributional concerns.
The critical element is the "government savings" dimension which leads to a more efficient way of coping with the deficit. Even if it isn't reduced, it finances more efficient projects. For both governments and individuals, there is basically a critical decision on whether to "save" i. e. because the benefits of the investment are less than the "opportunity cost" to others of using the funds) or to spend (i. e. because benefits are greater than costs.
In addition, the design of the Pigovian subsidy for each jurisdiction/individual takes into account the opportunity cost in terms of desired levels of deficit reduction and there are also means of adjusting the "status quo" distribution of funds (say at the end of five years) to reflect politically determined distributional goals as well as the fact that the distribution of expenditures in the intervening period may affect some jurisdictions more favorably than others (i. e. the rents from projects of national scope may be unevenly distributed.
These distributional problems are not of great moment, however, because the program is basically to be implemented with respect to regional groupings of States (i. e. nine standard administrative regions) and it is left to the individual regions to determine how to deal with distributional issues within the regions. Exceptions, as explained below, involve the split of funds between urban and rural areas and major regulatory issues involving the allocation of funds (i. e. strong desires to retain "strings" on the allocation of funds to meet important "National" purposes such as civil rights and the use of funds to meet the needs of disabled populations).
To provide a brief illustration, we take an example (discussed further in Part II and Clarke, 1999)of incentive-compatible fiscal and regulatory coordination for transportation, among and within two of the administrative regions. The first example involves urban/rural setasides in a large urban state in terms of fiscal project allocation decisions and the second is an example of a large state where the issues involve regulatory coordination.
The program from which the examples are drawn appears in the President's FY1996 Budget which calls for the consolidation of some 30 categorical grant programs into a Unified Infrastructure Grant Program with about $20 billion in budget authority for a "block grant" to the States and $1 billion reserved for projects which are more general in scope. The program also has set asides for urban areas (about $4 billion) and safety initiatives (about $400 million).
Example: Urban set-asides in New York State.
Consider first the distribution of unified grants in New York which, for illustrative purposes, has $1,055 million with $726 million for its urban allocation. Suppose that there is a $100 million proposed shift from the urban areas to nonmetropolitan areas. (This reflects an issue in program design regarding means by which the State's allocation for urban areas can be "flexed" to another part of the state).
Absent any external effect, the shift is taken care of through a credit to urban areas which is equal to the $100 million times the interest rate. However, consider more complex effects where there is heavy competition for funds (i. e. further development of the New York area airport system which includes improved surface transportation access). When the net benefits to all affected parties are taken into account, the preferences for keeping the funds in the urban areas for airport improvement in New York City (Option A) vs. allocating them to nonurban areas (Option B) are as follows:
| Option A | Option B | |
| New York (Urban) | $10 million (m) | 0 |
| New York (nonurban) | 0 | $15 million |
| Other Regional | $5 million | 0 |
| Other Regions | $5 million | 0 |
| Total | $20 million | $15 million |
Source: Incentive Compatible Planning and Management of 'Distributive' Federal Programs (Clarke, 1999)
In the face of such a preferred option (such as Option A), one would look to negotiations or fiscal technicians administering the process to arrive at a further $10 million adjustment for nonurban areas that might be debited to New York City or split between New York and the other regional parties and other regions. After this allocation, the net benefits of Option A (say to New York) would be $5 million and the project allocation would be accepted unanimously. Otherwise, if there were no further adjustments, and the options were put to a demand revealing vote, New York City would pay a $5 million penalty against its urban share of the set aside because its vote is pivotal (i. e. when its preferences are excluded, option B would have been accepted by a vote of $15m to $10m with a difference of $5m).
Suppose that the adjustments had been made interegionally by allocating $15 million more to nonurban areas and less to other areas within the region contingent on the choice of Option B. In this case, the jurisdictions within the region would be indifferent between the choice of options. In this case the national preference in the form of the expressed preferences of other regions for option A would dominate and there would be no penalty because in the absence of their vote, there would have been a tie.
Note here how the procedure can adapt to taking into account national interests which may override aggregate preferences of subnational governments. For example, the Federal government believes that a certain configuration of transportation services is important for national security reasons, and casts its vote for an option (like A) which reflects its preferences for a system that embodies the desired security attributes.
Example: Regulatory Coordination in Texas.
Consider now an example involving regulatory decisionmaking. To use a current example, take speed limits on the rural portions of interstate highways and the metrification of highway signs (building on an example mentioned above). Suppose that the nine regional decision-makers were facing agenda items as follows:
Option A: Require quick metrification of all highway signs and do not allow any change from the current policy of 55 mile per hour limits on Federally financed highways (exceptions still subject to a penalty on highway funds).
Option B: Allow more flexibility in the timing or do not require metrification in rural areas and allow state option to raise speed limits in nonmetropolitan areas.
Between the two regions, assume that 8 regions outside the South Central Region (including Texas) prefer option B to A by $51 million to $50 million. In the South Central region, option B is preferred by $4 million to zero. Thus in this case, the option B permitting more state flexibility would be adopted unanimously and without penalty (it is assumed that no region changes the outcome) and States would then determine how to proceed with the implementation of the more flexible policies.
Suppose, however, that the system is also adapted to account for intraregional or intrastate differences and that, for example, there is conflict within a state (Texas in the South central Region) and that the preferences among options (relative to S, the status quo) is as shown below:
| Option/
Entity |
S | A | B | Penalty |
| 8 regions | 0 | 50 | 51 | |
| 1region
(metro) |
0 | 6 | ||
| (rural) | 0 | 10 | 5 | |
| Total | 0 | 56 | 61 | 5 |
In this case, the preference revelation mechanism would lead to the same choice of Option B. However, the split in Texas' allocation (assume illustratively as $236 million urban and $425 rural) is adjusted $5 million to reflect the selection of the less flexible option A in the absence of the Texas rural vote. The penalty reflects the difference in the amount vote for option A vs. option B in the absence of the rural vote.
To avoid the result that the dollars would flow outside of Texas to be used for deficit reduction, it is assumed that Texas would strike some internal compromise by changing the urban rural split by $5 million contingent on the selection of option B) so that the preferred and more flexible option B would be selected unanimously. Alternatively, this could be accomplished by fiscal technicians, assuming that they had a means to assess the "personal disutilities" associated with alternative options involving speed limits and metrification (obviously more difficult to measure than say changes in set asides involving flows of dollars within a state or between regions).
The above example also illustrates a point treated in another chapter about what options can get on the agenda. Relative to some status quo which is the initial block grant allocation and regulations affecting the use of those dollars, options A and B would be accepted as legitimate options. However, if option A were the status quo and B were introduced, then the latter might fail a the threshold test in that net benefits of $6 million would come at the expense of some $56 million in votes for the status quo plus $5 million in penalties. If some discount factor (say 20%) were applied to these magnitudes, then the resulting amounts would greatly exceed net benefits. The threshold test is used to control "zero sum" redistributive games which (in the absence of adjustments by the fiscal technicians to avoid redistributions), can lead to coalitions and the selection of inefficient outcomes.
These are but small steps envisioned in the next several years to "concretize utopia", which would however, consume a good deal of herestheical energy. The examples also remain utopian unless truth can effectively speak to power.
To begin, I must try to answer the proverbial fiscal technician's So What? question. What difference does this make once you have begun to decentralize with the admittedly clever joining of hands (Clarke and Pigou). To answer this, I set forth in the following three chapters a rendition of demand revealing theory that draws largely on Pook II (a political economy of mobility and Part III (a political economy of hope).
The following chapter 2 summarizes the philosophical underpinning in both of these works, setting a stage for further development in Part II (Chapter 3 to 5) of approaches towards implementing the demand revealing process. As a word of caution, I conclude this chapter with some observations on what I believe are some limitations of the practice of "rational" social art.
1.4 The Limits Of Rational Social Art. Ou'est-ce que cela prouve?
One perceives both possibilities and limitations on these possibilities when one attends a large Conference as I did (of economists) in early 1995. One can get a sense of what is interesting to American economists at such a Conference by looking through the "red" covered Proceedings (May, 1995) or even the lead article (the Richard Ely lecture) by George Shultz on "Institutions, Ideas, and Economics".
In the past I have usually attended the Conference or read the Proceedings looking for developments in "incentive compatibility" but there was little to be said about these subjects except in a late Sunday a. m. session on Chinese political economy (J. J. Laffont presented an interesting paper on incentive compatible planning and regulation in the Chinese political economy). It had been almost twenty years since incentive-compatibility had been featured as one of the most important developments in modern economics (at a past Conference) and as I met with people and listened to them, I got various perspectives on why these ideas created such voluminous work (partcularly along mathematical, "Beyesian incentive-compatible" lines) but so little action. Dr. Laffont spoke gently of the need to deal with "distributional issues" and "auditing" as problems to be confronted in the years ahead.
If I sought to inject a dose of enthusiasm into the profession in future years, what should be done? How to address the So What? question and even if it passes the So What and Laugh Test of technicians (economists), what about the social information structure that guides political leaders and people and which represses what I call the "anticipatory consciousness" (very much alive 20 years ago, but presently very repressed in my view).
In the next chapter, I resort to an apolitical Marxian speculation of sorts about the pursuit of "rational social art" and social change. I argue as did Marx and a little known heterodox interpreter (E. Bloch) that the latter (social change) requires both both a "coldness and warmth of concrete anticipation... Its unexhausted fullness of expectation shines upon revolutionary theory - practice as enthusiasm, its strict determinations which cannot be skipped over demand cool analysis, cautiously precise strategy, the latter indicates cold, the former warm red." (Bloch, 1986).
In the following chapters, I wish to present the warm red stream of "anticipatory consciousness" as it affects experimentation with the demand revealing process. I do this from an economic perspective focusing on two factors of production (land and labor). As other authors (Tideman, Albert and Hahnel) have already suggested, these perspectives can add a radically different "anticipatory consciousness" in the drive towards "improving" (or removing distortions in) the overall social information structure.
To put anticipatory consciuousness in much more concrete terms, Chapter 2 following focuses on issues/reflections on the annual meeting of economists (January, 1995), where many of the papers and proceedings there focused on the economics and political economy of health care (See Proceedings of the AEA, May 1995).
In one of the papers, Tullock explains the phenomenal growth in health care expenditures, comparing it with the growth of transportation expenditures (the focus of much of the work in this and the following book) in the 1920s. In Tullock's view, the growth can be explained largely in terms of normal demand and supply factors. In a separate paper, Professor Thompson, however, points empirically to a large portion of the phenomenal increase as traced to the actual costs of two inputs, prescription drugs and hospital beds. In each case, the accelerated cost-increase was initiated by a landmark law-suit opening the floodgates to tort liability suits against private suppliers. A simple tort reform by an objectively informed polity, one efficiently forcing punitive damages to be paid to the State rather than the private plaintiffs or their lawyers ... would solve the problem but damage the trial lawyers" ... who have acquired "excessive influence over our political and legal thought systems. Enormous improvements in economic policy can be achieved, but in each case, the improvement requires improvement in the overall social information structure.."
Professor Thompson's paper also goes to the core debates in this and the related books about the "art of political manipulation" (Riker, 1986). In a related paper (Riker and Sened, 1991) on airport slots (see following chapter), the authors postulate rational political actors "who achieve their goals through popular support which they acquire by ideological appeals and by various forms of grants, including (1) money (e. g. subsidies, welfare, pork barrel), (2.) chances for rents (monopolies, regulation), and (3) property rights". The rights will also be organized so that "duty bearers" respect the enforcement regime.
Professor Thompson (1995) also adds interesting illustrations in the form of the administration of health and safety regulation, showing the tendency of "duty-bearers" (regulated parties) to prefer vague and arbitrary fines and OSHA enforcement to the potential expected high costs of punitive lawsuits. In terms of the rational behavior of duty-bearers, Riker's postulate means that they respect the right (or enforcement regime) if the net benefit of respecting, if any, is greater than the net benefit (including the cost of punishment) of not respecting it.
I introduce Professor Thompson's "rationalization of observed health and safety regulation" also as suggesting both the importance (and limitations) of the practice of rational social art. For example, the existing social information structure may well not be conducive to the "budget" experiment suggested here. If it were perceived that the budget experiment, which would permit states to continue to determine what they will spend on health care for the elderly and the poor (with medicaid and medicare accounting for the major portion of the $250 billion annual in health care intergovernmental expenditures) and states were also permitted (individually or through regulatory coordiantion) to limit the cost exposure of their citizens through tort reform including the allocation of punitive damages to the state, we would have a more efficient health care system, though damaging the interests of the trial lawyers.
The interests of the political elite (trial lawyers) would likely correctly portray the effects of such a system leading states to in effect save or divert funds from poorer classes at the expense of these classes and themselves (the trial lawyers). Thus a system that would appear to be "win-win" (almost every state and political jurisdiction within every state would, on average, be better off) will not be perceived as "win-win" for every class of the citizenry and those that manipulate the social information structure.
However, for the transportation sector (and aviation management in particular) the merits of the system (including the stimulation of government saving and more efficient investment patterns) may outweigh the objections of particular classes (those who benefit disproportinately from existing expenditure patterns). However, it would be naive to think that any such (utopian) system as is imagined here could be put in place without a greater appreciation of how the grantors stake out ideological positions so as to try to win public support.
If, as in the case (airport slots) that I consider in the following chapter, the grantors are divided, it will be very difficult to put together policies anywhere near resembling those advocated in this work.
This, however, is not a cause for disillusionment and despair, but rather calls for a philosophy of hope, and some "militant optimism". As illustrated in the following chapters, such an enterprise is not for the faint-hearted or those who do not wish to question the social information structure. At times, one sees a glimmer (as in Professor Thompson's paper) of the desire to combat the "false consciousness" and to foster the Not-yet-Being or "anticipatory consciousness" of the electorate, which perhaps foreshadows a militant optimism elaborated in the following chapter and in the concluding chapter on a philosophy of hope.). The exercise is aimed at persuasion of the residents of Happy Valley, a hypothetical community in the not very distant future of the forthcoming millennium.
There the residents of Happy Valley are making mostly "win-win" incentive compatible decisions in the here and now concerning about $300 per residential unit in territorial community public goods and a similar amount in transportation goods and services affecting communities outside of Happy Valley. What brings this about is recounted in the following Chapter, entitled "Waiting for Turgot" and a "herestheical" exercise in "concretizing utopia: airport slots" followed by a section on the "possibilities" in a rational social art pertaining to Happy Valley which lays the basis for the remainder of this book and the related work to follow.
Chapter 2
WAITING FOR TURGOT
2.0 Ideology and Utopia
"What strikes the eye in all contemporary scientific utopias is their rejection of the ideal political order as the principal subject of inquiry". (Manuel and Manuel, 1979).
The conservative ideology is at the heart of such a rejection in that the task of a "rational social art" certainly should not be the creation of "the State". I argue, however, for understanding the State and asking (along the lines of De Jasay, 1985 (The State) -- "what would you do if you were "the State"? I also point to a way out of the dilemmas posed by De Jasey, all growing out of the "problem of majority rule", which leads him to portray modern Sate capitalism as subject to growing "redistributive addiction" and "churning", moving inexorably towards "a plantation State". How could incentive-compatible institutions combat this inexorable tendency?
In a treatment of problems of ideology and utopia (see Mannheim, 1936), in the world political economy, I try to focus the more widespread attention of scientists and the general world public on the need for a rehabilitation of political economy along incentive compatible lines. The work speaks to a political economy of mobility (and change) as well as of hope. This work does not cure the world's ills, but focuses attention on what can be done by way of information and incentive (recognizing also the limits of bounded rationality) to make the process of living together on this planet a more harmonious one.
The best of utopian thought has often shown an optimistic hope or faith in both science and humanity as well as the ability of people to discover the truth. Even if people were to discover the truth, why are incentives to tell the truth of any particular meaning? I began this work almost 20 years ago when the American economics profession discovered the demand revealing process. Professors Tideman and Tullock (1976) elaborated on demand revealing as one of the truth telling mechanisms, the family of which became known over the years as the modern theory of incentive compatibility.(2)
More importantly, this book is part of collective endeavors during the end of this century (millennium) to reconstruct and rehabilitate a political economy for the next century and millennium. The work anticipates a politics of hope and of change. I am aware of work by at least one prominent economist to publish several volumes of such work, beginning this year (1995). I may be a minor figure in this important work and the style that I use is certainly not a traditional one in political economy. To many, this work my read like a travelogue, say Graham Greene's Travels With My Aunt, with not even the entertainment value of real world fiction, in my reluctance to name people other than long dead economists or 18th century enlightenment philosophers.
The work is reflective of the need in moral philosophy to put one's ideas in a historical context as instanced by the work of postmoderns and postpositivists such as MacIntyre, (1981), Ricouer (1984), Dirreda (1976) and others. The historical context here is the stuff of comedy and tragedy, and any entertainment value is muted by the analytical requirements of the dismal science. There is often little entertainment value or moral insight in discussion of topics like economic rent (i. e. the rent to land natural resources and collective goods provision) and public expenditure theories, except to the extent that the stylized facts presented by the author in contrasting a rather idealized system with what exists in the present world of taxation and public expenditure will interest a large body of people in the social sciences and the citizenry at large.
This might be viewed as a self serving attempt to popularize an idea that has created a great deal of excitement in the social sciences and about which much has been written. It is called the modern theory of incentive compatibility. Every student whether in economics or in policy studies at some schools learns something about incentive compatibility and often it is the "Clarke tax", because this formulation is relatively simple to present and for students to understand. After teaching it, the subject is then often dismissed because of "difficulties" associated with its practical application.
In earlier attempts to popularize and disseminate the idea, it was claimed as a "revolution" in economics and politics (Tullock, 1975), quoted in Clarke, 1980. The years since have been somewhat disappointing although they help sustain my life in journey through a large segment of the world political order, where polities were themselves undergoing what amounted to a revolution, symbolized by the end of the Cold War. Although I had not always fully appreciated how this had all come about, I began to better understand and appreciate these events in reading the 1993 Memoirs of George Shultz (1993), a former Secretary of State who had played a key role in engineering the transformation, or presiding over the execution of it. See also Shultz address (Richard Ely lecture) of January 1995 to the AEA. Or one could read others which might simply note that the political order to which we had become accustomed to was simply sowing the seeds of its own destruction, with personalities playing a very minor role.
In any case, and as I noted in the last chapter, this work seriously began in early 1995 as I attended the annual Allied Social Science meetings (mainly of economists) in Washington, hearing former Secretary Shultz deliver the annual Richard Ely lecture. Two decades before I had worked assiduously to have some of my own ideas on the political ordering of U. S. economic policymaking entered into a very similar Richard Ely lecture being drafted for the same meeting by Herbert Stein, then Chairman of the White House Council of Economic Advisers.
During the course of several days in early 1995, I encountered acquaintances, some with whom I had only corresponded, as I moved through the halls of this meeting of thousands of economists, whose ideas played critical roles in the shaping of the current political order and those to come. One individual, whose work (Thompson, 1965) had stimulated or provoked my truth-telling discovery because it provoked me along with the "water economics cost allocation" question I was studying to spend endless hours studying his (the first known to me) solution or the manifestations of what I was trying to discover.
In the conversation he told me of a prospective 3 volume work (the first to be published this year in 1995) to Reconstruct Political Economy. It provoked me into at least two months of writing this essay (chapter 2) as well as beginning an introduction to the somewhat more modest work, entitled The Practice of Social Art.
If Professor Thompson's book creates a sensation, then I would be a modest fellow traveler. As a political bureaucrat, engineering the end of my long tenure in the U. S. Government, I am still too much a follower of Mayor Daly's ward healer's dictum/motto that I remember from the revolutionary days of 1968: "Don't rush to the front of the parade".
But the economist's remark about a work that I had not read (only a short revelation in a paper he gave me on a Pascalian rationalization) of health and safety regulation with a suggestion that he had done a Hegelian reconstruction struck me as what I thought would have been produced in great quantities since 1968. Perhaps it is there, like much good Utopian thought, and I have not become aware of it. Perhaps the work lurks near the surface. If so, this essay and other collective work may help to reveal and uncover it.
As part of what I believe to be the need for collective endeavors during the end of this century (millennium) to reconstruct a political economy (polity) for the next, the economist's work is the only manifestation I know of (like the discovery of mechanisms to motivate truth-telling), As was the case in that example, there had been others (William Vickrey, 1961) and these works helped to engineer a flowering of such mechanisms, which is largely the subject of this work.
As is the case with the truth telling mechanisms, mine and that of the reconstructionist economists's work may be minor scenes in these flowerings in that the mechanisms that will be used to achieve "economic harmonization" may seem quite divorced from the mechanisms used to order "power" relations in the existing social order, and the transitional mechanisms from one order to the other may have many qualities that appear different from those I discuss in this book, and many examples are provided in Chapters 3 and 4 (See also Varian, 1994). Perhaps this work (and that of other reconstructionists) will do as much as can be expected to link the mechanisms explored here to the existing "power" relations, but it will be unsatisfying to many even as an exercise in Utopian thought. Worse, it may seem like the idle musings of "system builders" and planners rather than those who might employ their energies on the architecture of freedom. (One is reminded of controversies in 19th century France between Bestiat and the system builders like Saint Simon and even Proudhon.
One even has to question the utility at the beginning, to even try to make this linkage, in order to try to overcome a writer's own resistences, much less those of the world's polities. Perhaps what finally helps this writer overcome them was another work from California (an essay on the Corruption of Economics) largely about the temples in which I and many of my colleagues had worked, and which led me to seriously pursue the Practice as a means of fostering a more modest rehabilitation of the political economy.
In the last chapter, I focused on an example of the political unconscious that must be dealt with from the standpoint of the "anticipatory consciousness" in the development of an idea. I spoke to Professor Thompson "Pascallian" rationalization of health care provision and health and safety regulation in the United States. Professor Thompson would direct the flow of some important "societal rent" (damages in tort law suits) to the State rather than plaintiffs and trial lawyers. In foreshadowing and explaining the political economy of demand revealing as set forth in this book, let me turn to debates among economists themselves about the development of America in modern times as summarized in Mason Gaffney's "corruption of economics".
2.1 Gaffney's "The Corruption of Economics"
This is about the relation of my idea to the work of a 19th Century social philosopher in America -- Henry George, and the efforts of Mason Gaffney whose work as a "water resources" economist I came to know in my early work trying to design a regime for water quality governance institutions.
First, with respect to Henry George. Over the years, I have been led to believe that the idea I had discovered could play an important role in relation to the idea that George had borrowed from the French Physiocrats. Both the "impot unique" and the "single tax" played enormously important roles in shaping political thought in the two previous centuries, under the influence of men like Turgot and Henry George. I wanted to similarly popularize my own idea even though it could meet much the same fate as the "single tax".
This brings me to societal resistances as well as to Richard Ely and my matrix, if you will, some 100 years later. I put myself in the position of someone like Professor Gaffney carrying out an institutional assessment 100 years from now. If he were writing about land policy, mobility policy, entitlements policy, international resource allocation or everything put together, what would I have him say. It is usual, following the usual standards of the profession to let the dead economists off somewhat more easily than has Gaffney in this portrayals. To the extent that Gaffney is right, and I believe him at least from what I have been able to learn, to be largely right, then there is a large amount of deconstruction to be carried out by American economists. This would be a healthy activity and it would help to at least alleviate the kind of damage that is being done to newly developing countries (such as South Africa) that are portrayed at the conclusion of the corruption. Different messages would be carried to Russia, to Haiti and elsewhere. Revolutions might be ignited, sooner rather than later, but they could be accepted with a spirit of hope as did men like Turgot who was encouraging our own during his Prime Ministership in 1775 shortly before his downfall.
In the book that might be written by Professor Gaffney
in 2095, I care very much what is said even if I'm a very minor figure. If one reads about a minor but key figure such as Alvin Johnson on p. 72. If one is to understand Johnson, it is important to understand his matrix. On can then understand the historical context in which Johnson was led to write a critical Atlantic Monthly piece called "The Case Against the Single Tax" in that prestigious journal during 1914.
What profoundly disturbed me about Gaffney's work was the result of past deconstruction which is a lot of what the profession of economics needs, Gaffney's work notwithstanding. It struck very hard at me because as a student, I had started as an accountant. I was paid to leave Princeton University and to go through New York by a large unnamed accountancy firm to learn accountancy at the University of Chicago. Along the way, I learned much about "the corruption of accounting". When I began to learn the "economics of accounting" at Chicago, I read and had to absorb all the classics (J. B. Clark, Alvin Johnson and others) on rent. He and many of the other classics. I learned the work of Frank Fetter and his disciples at the Chicago Business School. I used this training to discover (as explained in my 1980 book) demand revelation. It finally won me at doctorate, even though the process engendered a lot of pain. I do not intend to betray the institutions which bred me but some apologies are due by the apologists for American institutions.
It is a perfectly understandable act for the owners of property to defend very hard the entitlements to their property and that of the universities such as Stanford, Chicago and Columbia. This is more respectable that the use of gangs to punish strikers and other more onerous behaviors in the late 1900s. The landowners and the railroads used universities and this is a fairly high minded form of corruption. Gaffney's complaint is almost Proudhonian, reading like "What is Property? -- Property is Theft". It is journalism Froncophone style rarely practiced in the respectable fields of economics. Nevertheless, it helps to add a perspective to other views on the "economic foundations of government" that legitimize the award of property rights to those who will presumably use, or efficiently reallocate them to others, who will use them efficiently.
I feel pained and uncomfortable siding with it, except that I anticipate entering the fray under the guise of mobility policy and in communicating my concerns and having them understand me, I need to tell them what I understand mobility policy to be.
I conclude by referring to Ely and his matrix. As explained by Gaffney, he did everything (much of it organized as a powerful stratagem against Georgism). He took the Land question and as only lawyers can do "defined all the issues". He organized much of the government (agriculture, public utility regulation and much else) in terms of his issues and others followed and collaborated with him. He started the prestigious JOURNAL OF LAND (AND PUBLIC UTILITY) ECONOMICS, a journal I read avidly for years looking for insights. I sometimes got quietly exorcized when someone like Tideman prepared an article on how implementation of land taxation would work in modern times and it would be quietly trashed by the editors (cite the case). But in general, I did not understand. I did not know the history or the matrices of the characters involved.
Gaffney's story reads like Macbeth when one realizes the nature of Ely's "vaulting ambition" (see Book III and the discussion of Wills' "Witches and Jesuits in Shakepeare's Macbeth) and it can lead to results than are even worse than regicide, especially if you measure happiness in terms of a Turgovian view of human progress. On some fronts 100 years of "progress" was lost because we did not really understand or comprehend institutional reality.
Comprehending institutional reality is what my work now is all about. When I put it in Dirredaian terms, we of course can't fully comprehend but we can take the next best steps toward comprehension and keep ourselves on what appear to be the right trajectories. In 1994 and 1995 I found my self talking often with a friend, a political scientist, about what I have come to call mobility policy. It appears a little different from the concerns above with the land question. The reader may at first suspect opportunism of the Ely variety -- a clever stratagem to define an issue in ways that will relieve the world's largest industry (transportation, including travel and tourism) of its fair share of taxes and that it is a simple front for a powerful World Travel and Tourism Organization located in Brussels. One might think of me about to leave the government and join the rent-seekers, who I complain about so loudly in Star Wars. (See Book III).
But it will become apparent I think that this is not the case. I'm certainly an entrepreneur like Ely though not as talented and energetic in doing everything and knowing everybody. I care about the verdict of history. I don't want to make a lot of money and then lose it (1929 like) as we reach the next trough of the Kondratiav cycle early in the next century. And most of all, believing in Karma, I don't want bad biographies or things said about me, if my work comes to become more than a textbook footnote. I obviously suffer from a certain amount of ambition, am a social reformer, and care about the verdicts of history on the schools of thought I find myself representing. Before I try to found a school of thought I need some time for quiet preparation which I seek in my next chosen place of endeavor.
This may be a place like Jill Conroy (a former president of Smith College) found in England before she came to the United States. It wasn't like what she had imagined in her fantasies, but it set the stage for what was to come, and was an important break with the past. George too found a lot of receptivity for his ideas in England. In the area of inquiry that I seek to explore while in England, there is probably only one decent journal (Journal of Transport Economics and Policy) that publishes the kind of work that helps make good advances in the area of policy I am talking about. Returning from England, I could help engineer a competing journal of sorts, after a few years of experimenting with a friend on what we call now the Mobility Policy Review. These tasks, which are also part of the matrix underlying my proposal, are set forth in Part II of this work.
The material following has been largely relegated to Book III. The material basically elaborates on what has been said in terms of the choices facing me in trying now to construct this calling I have defined for myself. It is more in the vein of what I could say to people who unaccustomed to my kind of deconstruction could receive without perceiving me as some form of lunatic.
Those who continue to look at the world in terms of its architecture can often be viewed as such. Turgot who I talk about in much that follows observed his own reservations about his own patterns of thought. "If a man could foresee with certainty all the events that depend upon chance and if he directed his conduct in the light of this knowledge, he would pass for a lunatic because men would not understand his motives." Manuel on "Turgot on the Future of the Mind", quoting from a MS in the Turgot archives in the Chateau de Lantheil.
Turgot once also spoke to Condercet of truth: "to know the truth in order to make the social order conform to it, that is the sole source of public happiness. It is therefore useful, even necessary, to extend the limits of knowledge."
The body of "Waiting for Turgot" has been relegated as mentioned above to Book III (a personal memoir, presently for family and friends) which underpins a philosophy and political economy of hope.
The remainder of Book I (chapters 3 - 7) draws on material I have generated in fragmentary form over the last decade on implementation of the demand revealing process -- articles such as the "demand revealing governance of communities", and the "demand revealing governance of enterprise". Part IIelaborates on an area of implementation that I have developed the most fully and is concerned with a political economy of mobility, mainly involving the allocation of resources to transportation improvements and the governance of institutions that affect air travel, domestically and internationally. Taken together, Books I and II describe an approach to the practice of social art, centered on the design of incentive-compatible institutuions.
I am mainly concerned, of course, not as much with design, as with implementation. Part III is then concerned largely with "heresthetics" or political entrepreneurship, guided by a kind of spirtual philosophy that I call "the philosophy of hope" (Bloch, 1986). The book, tentatively called "A Political Economy of Hope" is basically about the act of introducing new dimensions to policy discourse which can be perceived as radical changes to existing policy discussions where "the entrepreneur pushing for a true innovation stands a high chance of failure" (Schneider, Teske, and Mintrom, 1995). The political economy of hope is thus an attempt to improve the chances of success as opposed to failure.
Part III is then about my private thoughts concerning political entrepreneurship or "heresthetics" and a philosophy of hope. In large part it drives the composition of Books I and II.
2.2 Political Entrepreneurship: The Case of Airport Slots
I spoke of truth and extending the limits of knowledge. From a postmodern perspective, this is not a simple unilinear progression. Today we look rather skeptically at how truth speaks to power and how ideologies shape social change. (See notes for Part III).
A book can often be read by simply looking at its cover. Book I (this book) is covered in red. It is a "red dawning" combining both warm red enthusiasm and cold rational analysis -- white, like the color of a snowcapped volcano.
Book II is white (colorless) -- posed usually in opposition to the warm red revolutionary fervor. Some twenty or thirty years from the "red dawning" of demand revelation, my wife believed that my life revolved around "airport slots".
Indeed, "airport slots" had become a metaphor at the Front of "anticipatory consciousness". In a sense, it had become a personal (and institutional) struggle in the advancement of an idea.
I explain this in terms of a debate over the practice of "herestetics" between Professor Riker and Sened and myself (with two coauthors).
Notes: The development of this chapter compares the heresthetics of Riker and Sened in "A Political Theory of the Origins of Property Rights: Airport Slots" and an alternative view by Brough, Clarke and Tideman (BCT, 1995) in "Airport Congestion and Noise: Interplay of Allocation and Distribution".
Riker's book (1986) The Art of Political Manipulation provides an even better illustration of what is at stake in the debate portrayed here. The debate carried forth in Book III also gets into political stability and the nature of disequilibrium, including punctuated equilibrium (Baumgartner and Jones, 1993).
In this context, I describe a case study of airline deregulation in the United States (which I helped father in 1974) and the persistent, ever changing "anticipatory consciousness" that drove my conceptions of supply-side policies to make the newly "contrived competition" (See Vietor, 1995) work effectively. The effectiveness of the contrived competition (for airlines) centered on the problem of airport slots.
Underlying the problem is the basic issue of who should receive the societal rent from airport slots -- the airlines or society (communities).
2.2.1. Riker and Sened's Political Theory of the Origin of Property Rights: Airport Slots.
Riker and Sened present an interesting and accurate story of the creation of the grandfathered market in slots. For about 16 years (1969-85), four of our most congested airports (LaGuardia, Kennedy, O'Hare and Washington-National) have operated under a high-density rule (HDR) that limited the number of landings and take-offs allowed. Each airport operated under a "scheduling committee" which semi-annually adjusted slot allocations. "This allocation procedure was the first step towards private property." The scheduling committees, operating under CAB's antitrust immunity, "worked well for allocations under cartel members but the system collapsed when applied to allocations under competitors, including new entrants". Before deregulation (1978), indeed after the controller's strike (1981), the committees usually agreed, but gradually after deregulation. the equilibrium allocation approached the worst outcome, where default (failure to agree) was often the best option.
At this point, the government had several options: (grandfathering and permitting the free exchange of slots or "buy-sell", auctions, lotteries, "open-skies' or quenes, or FAA assignment. The government, during the PATCO strike, experimented with buy-sell (beginning in mid-1982). However, the FAA still wanted to retain its politically valuable activity of allocating slots, so it suspended the activity (at the end of 1982) until the end of 1985. But during this interregnum, default options (and deadlock) among the scheduling committeees emerged and carriers learned that when FAA then allocated the status quo (1983), deadlock was costless. Deadlock continued until a committee led by Charles Plott and OIRA was convened to discover mechanisms to break deadlock. While OMB/OIRA and the Executive Office strongly preferred auctions, the only means to prevent further deadlock between the government and the carriers (the latter fearing that as many as 4200 slots might cost upwards of $1 billion or more than 10 percent of industry capitalization) appeared to be the buy-sell option (with grandfathering).
Riker and Sened expand on the external and internal policy considerations influencing OIRA and the FAA, leading towards their surprising and "counterintuitive" conclusion about "the pervasive role of government officials in creating rights". In this case, "the dominance of government is clear because the configuration of rights granted satisfied the grantor's interest (that is, the OMB's interest after it defeated the FAA) rather more than the holder's, most of whom were content to keep their rents and avoid FAA's possibly arbitrary allocation".
Riker and Sened's methodologically positive investigation also yields positive conclusions in terms of probable efficiency results. "Unlike money transfers (subsidies, entitlements) and the deadweight losses of pork barrel and regulatory cartels, property rights increase efficiency by encouraging owners to use assets more productively. Efficiency makes for prosperity which redounds to politicians' credit. Hence we expect ambitious and clever politicians to give bureaucrats career incentives to create rights. President Reagan did this with OIRA and the new rulers of formerly Marxist lands are now creating rights on a grand scale".
A somewhat contrary view is expressed in Brough, Clarke and Tideman (BCT, 1995). We take the view that a history of use of common property does not create an exclusive right to privileged access when the opportunity to use such property becomes scarce. At the same time, it is reasonable to permit commitments of slots to carriers for some span of time -- for example, in exchange for the carriers investment in developing schedules. Accordingly, there could be a transition, at a rate that was appropriate in view of prior commitments, from entitlements based on past usage to social collection of the scarcity value of slots.
It is not my purpose to weigh or throughly evaluate the philosophies and ideological positions at work here concerning the allocation of airport slots. It is best, however, to consider solutions(s) that are made possible when we can think of ways of separating the allocation from distributional concerns, much as I try to do in the "budget experiment" in the previous chapter. The point, which is driven home by a thorough reading of Riker and Sened is that the distributional struggles (within the government, and between the grantors and duty bearers) are enormous and the winning heresthetician or political entrepreneur is driven to "inferior" solutions from the standpoint of what I consider to be the relevant criteria.
Also, this experience reflects the first significant effort to introduce incentive-compatible mechanisms into a significant resource allocational problem (Grether, Issaac and Plott) and also FAA (1980) and ways of carrying out the idea in a way that is sensitive to distributional considerations (effects on carriers) is elaborated in more detail in Brough, Clarke and Tideman.
2.3 Concretizing Utopia: Airport Slots
While auctioning (or collecting the annual rental value of) slots continues to be a perennialy futile exercise in heresthetics, it continues to be routinely advanced as a revenue raising element in the annual deficit reduction package (CBO, 1995) and is estimated to raise approximately $500 million annually at the four airports. (Note that this remains much lower than the potential value of slots if carriers take account of the probabilities of future appropriation of what still remains a quasi-property right). Applied to the largest 50 airports (with the four high density airports accounting for about 16% of enplanements) would yield about $3 billion annually.
The average taxpayer/consumer would normally look at such an initiative as another "tax" (making only a minor inroad into the deficit problem and likely to go into "project" pork barrels of the FAA and airport authorities. Further, such an approach was susceptible to the same coalitions that usually oppose peak-load pricing or airport congestion fees under the control of airport authorities.
Alternatively, "heresthetical" winning coalitions can be imagined. For example, the $3 billion could be looked at as a way of reducing the existing 10% ticket tax which would also contribute to potentially significant reductions in airport congestion. The $3 billion can, in fact, be viewed as the difference between existing air carrier landing fees (about $1.5 billion annual) supplemented by about $1 billion annual in passenger facility charges. This difference (of $3 billion) would essentially raise landing/departure fees to market clearing levels. perhaps adjusted by airport authorities to more precisely account for residual congestion costs in hours where there is still a "bunching" of flights.
Let us now look at the political dynamics of an extension of the "budget" experiment described in the last chapter, where we also include decisions on the level of taxation. Suppose that $3 billion in annual slot rentals were equally distributed among regions and even communities (recognizing that a different distribution relating say to the origin of ticket taxes could be easily justified).
In effect, this adds a large portion of the FAA budget (i. e. facilities and equipment) to the $20 billion transportation block grant described in the last chapter. In the beginning, the regions would then be able to collectively determine how much of the budget (if any) would be used to offset the 10% ticket tax as well as determine the allocations to FAA "facilities and equipment" as well as airport modernization and improvement. As for the portion of the existing budget used for deficit reduction, there would be a sufficient incentive for regions/communities that choose to save rather than spend entitlements to cover the desired level of deficit reduction in a way that also allocates funds to the most beneficial uses. That is, communities that spend less than the entitlement level save and contribute to deficit reduction while higher spending communities invest in projects with relatively high rates of return.
Perhaps it would take a decade to introduce and integrate the extension into the budget experiment envisioned in the previous chapter. Some carriers depreciate their investments in slots over a seven-year period which might be the appropriate period for continuing the existing stop-gap" solution of grandfathered rights while moving towards a system that amounts to a "second price" auction of slots.
Meanwhile, the system would be introduced as part of a system of allocating newly available slots, including presently available commuter and even international slots at the four airports where the buy-sell rule is currently operational.
NOTE TO THE READER: The following is an extension of chapter 2 which amounts to an essay (mostly prepared in January-February, 1995) which led me toward the writing of the Practice. Much (or most) will eventually be relegated to Part III or expurgated to the archives. However, it might communicate what is going into a "political economy of change" and a "political economy of hope" and helps to explain the ethical/philosophical underpinnings of Chapters 3 through 6.
Notes for Part III (from "Waiting for Turgot"), some of which will be incorporated into A Political Economy of Hope (Part III).
In June, 1995, I envisioned three short parts of my book as an exercise in postmodern political economy. I will have taken an idea (demand revealing) and concretized the idea (Book II on a political economy of mobility, relating largely to institutions that influence air travel, including worldwide travel and tourism) as well as embodied it into a philosophy of hope that is more in the realm of art and poetry than a deep philosophical discourse.
The following reflects a discourse (largely with myself) on how all this came together during early 1995 in an original essay, called "Waiting for Turgot" (a great French "budget director" or Comptroller-General of France shortly before the Revolution). Turgot's earlier Sorboniques (1750) to me set the society and the world on a path which reflected the best of the "progressivist" traditions in the Practice of the Social Art.
At the beginning of Chapter 2 in "conversations with Condercet", I spoke of "extending the limits of knowledge". Since Turgot (and Condercet's) time, societies (and individuals within them) have looked somewhat skeptically at the "progressivist view of history. The unilinear progression of truth and extending the limits of knowledge must confront the issue of how truth speaks to power, if you will. As I extended this work (the limits of knowledge, if you will), I went through a personal kind of deconstruction, a kind of "rewriting or scripting of self". Book III, basically written for family and friends, describes what this process has been about. If the ideas and practices I advocate in Books I and II begin to have influence in the near future, I leave to my daughters as to whether this book (or parts thereof) should be published (perhaps on December 26, 2000). Otherwise, I ask them to archive the philosophy of hope in the hopes it will have relevance in a more distant time, parhaps Decemeber 26, 2100 (one hundred years later). This decision has a lot to do with the coming shape of politics and social art during the next millennium. (It is also a defensive measure against the Farmer Generals who may rise up and I do not want to provide ammunition they can use against me).
The notes began in early 1995 as a deliberation on personal choices about how I could best develop Part I (The Practice of Social Art) and Part II (A Political Economy of Mobility). I call it (notes to myself) "Notes for Birmingham: Why England?"
Notes for Birmingham: Why England?
This starts out as a sort of confessional, Augustine style. Not being a Catholic, I started out in 1994 trying a reconstruction of self and most recently in deciding on a course. A year of reading in all the social sciences, and in modern " deconstruction" (also a psychological one), I decided that I would seek to be a visiting scholar at an English University, Birmingham. It had been suggested to me by a professor friend as perhaps a good place to go to write what I call a "concrete utopia" which is the foundation of The Practice of Social Art and A Political Economy of Mobility.
I wanted the work in England on the political economy of mobility to be the heart of my next book along with a part that addressed the land question, a much more difficult thing to write. This would not be so difficult if I decided to make the rest of the contemplated book a treatment of resource allocational question from the usual American perspective, or at least the dominant neoclassical perspective which I call NCE. But I had decided that the rest of my life was going to be devoted to speaking and writing "the truth" as best I knew it. The problem was how to do so in a manner that spoke truth to power and led to "success" not "failure".
I had been the day before at the local "political economy" bookstore on H st. (adjoining the World Bank) and a little book about the "Corruption of Economics" flew into my hands. I suppose it revealed what I already knew basically but about which I had a lot of denial because I am a reconciler like Henry George and a person trained in the NCE tradition which according to the author of the portion I read organized a 'fantastical' plot against George near the end of the last century.
My work on mobility policy was basically going to be something that took "georgian political economy" as I viewed it perhaps 100 years later and reconcile it with the NCE upsetting only a few applecarts along the way. Perhaps the domestic airlines would be a little difficult but I had already beat them in ways that greatly advanced their own good (at least in my view) during the mid - 1970's and felt that I could also engineer something comparable of the supply side 20 years later. They would end up paying for the landing rights they used at congested airports and perhaps also for some of the noise externalities created by airplanes. Although I had always denigrated the "noise" problem, I had spent a year on P St. near Georgetown University under one of the main flight paths entering and leaving Washington's National Airport. In many other ways, I also became involved in the "ecology" of Washington, D. C. and in many ways the book is a reflection of Mercier-like thinking of the Washington (like his Paris) that might exist some 500 years hence in "L'An 2440".
But what if I succeeded in doing something like this? Would it help to sustain the larger goals? Or would I just be a footnote in public policy (I have not even been given that for airline and trucking deregulation, and have tried to take the credit only in little speeches that I gave standing in for more important figures during the last significant "political revolutionary" year (1981)). It was a year when even my immediate superior was afraid to leave Washington and another figure (his boss) who was to become another important figure asked me to stand in and I delivered a rather vitriolic history on "regulatory star wars" which is part (along with this) of my autobiographical sketches.
I wanted my daughters years later to know why it was that their father had not won a Nobel Prize even though he clearly thought he might or could have deserved one.
The authors of "A Quiet Revolution in Welfare Economics" (Albert and Hahnel) apparently agreed when they noted in 1990:
"We do not intend this as a criticism of Groves et. al. we see no reason why societies heavily endowed with graduates of higher education should not enjoy the luxury of intellectual labor that includes a role for those with a special talent for formal abstract theorizing. We merely point out that there was no rush of economists with a more political 'bent' to promote the theorists of incentive-compatibility for Nobel consideration!" (Albert and Hahnel, p417 footnote 4).
I once thought that perhaps we could do a better job of "promoting ourselves. However, given the "political" bent of American economics one could also understand that the course that I am taking here in my "scripting of self" will not win me a Nobel prize, even if deserving. It might gain a Pulitzer Prize, if that becomes what I am seeking. My thesis chairman (George Stigler, a Nobel Laureate) in the Fall of 1977 to learn what I needed to do to complete my dissertation advised me what I should do and said perhaps jokingly, "you'll probably win a Nob.. (eh) a Pulitzer prize".
Years later, when I was reading about "Sociobiology" or rather the autobiography of its author (Wilson, 1994) entitled Naturalist, I began to feel comfortable about the "naturalistic" course I was setting and targeted on a kind of inquiry that may fit into the line of inquiry that was being encouraged at the University I was thinking about applying to which is what my work in the "new institutional economics" and public choice/public finance had been all about.
But I was talking about a striking new direction in public finance -- abandoning the entire NCE determined American tax system for one constructed among neo georgian lines. Unless pursued carefully, this is a possible recipe for rejection and failure.
In thinking about sending this epistle to some of my correspondents to at least get a reality or p. c. or "political noncorrectness" check on my direction, I realized that the setting I was seeking was the only way that I would really have any good chance of succeeding.
What Is Success?
My formal writings and addresses started with a valedictory address at Thomas Jefferson High School in Richmond, Va. in 1958. The speech often called by my friends and family a the best ever given for that school, perhaps because my life was measured like the son of a Richmond school superintendent who work like me in the field of applied public choice also appeared to be a success, even though the Prime Minister I call him (a former Secretary of the Treasury, for whom I worked as a special assistant, in some difficult days, often wondered why the other person constantly went down rather than up in the bureaucracy. Social criticism, of course, is simply not an easy occupation and certainly doesn't breed success in the American political bureaucracy. I'm sure the Prime Minister knew the answer to his own question.
The Prime Minister is of course appointed by the President and the Prime Minister to whom I refer -- a Turgovian kind of man, and a model to which I refer later (not knowing if he shared any of my own admiration for A. Turgot) was for a fleeting moment in the late summer of 1974 one of the three leading candidates to be the first appointed President in American history. President Ford was appointed instead and I became an adept of sorts in the small counter bureaucracy that I had imagined when I made contributions to the Prime Minister's "Reflections on Political Economy" in December 1993. This is the annual Richard Ely Lecture named after a man I will talk about later in this introduction. Twenty one years later the Prime Minister appeared at the same lecture again, delivering much the same in the way of reflections but a much more targeted "bottom line" on the integration of trade questions, the IMF and the World Bank. The Prime Minister had become an even more important Minister of sorts during the Reagan years, and one of I perhaps most admired of all those on the political landscape. I include his memoir (thank you note) along with President Nixon's last Christmas card on my office wall.
In subsequent years, after the carriage of NCE-- Chicago style into the deregulation of transport (airlines and trucking), and writing a first book on the central idea (the pivotal or Clarke tax mechanism) which is the central theme also of this book. However, the idea is tied to my own reflections about what it would take to make civil servants behave more like Hegelian civil servants in the idealistic Hegelian traditions (where they also eschew worship of "the State"). For this reason, this book (Book III) is also about the civil service and was originally intended as a separate book that had been tentatively titled "Civil Servants, Civil Societies". I had been (I felt) the founder of a counter bureaucracy at the top of the U. S. Federal Government", designed to control regulation using modern cost-benefit analysis, which is the principle tool of NCE.
In 1981, I anticipated a lot of what was to come in terms of the sharp criticism of NCE practice in two speeches that I performed as a stand in. My speeches of which I recall only four (the valedictory, the speeches of 1981 and another during the 1980's for my father in Richmond for the retired teachers along with my history teacher who had agreed that myself, and the other individual who had worked for the Prime Minister, were successful. These speeches might strike the reader as disturbing and funny, which they were intended to be at the time. I thought I was right and that I was speaking the truth, taking a chance not to be caught (because if they had been used to publically embarrass the institution where I worked, I would have been finished). I show these speeches to few people today although they foreshadow much of which is to come.
Summarize here the basic message in:
"Regulatory Star Wars: OMB, EPA and Democracy" which also had the subtitle "How will the President Dispose of EPA's Garbage Truck Noise Rule. In my life I was to be plagued by noise rules (see later) and in this introduction to my book (future work) I am plagued by a counterpart which seems to be another metaphor of government overregulation -- the rule or policy of the Federal Highway Administration to require metric conversion of highway signs. Like the garbage truck noise rule, metrification of highway signs became a metaphor which stimulated and energized this work, hopefully in a more constructive and balanced direction.
Clearly, at that time (1981) I was tired of being the garbageman and felt that there was more to life than the other heroes and heroines of the institution I had created than disposing of silly rules like the noise rule or (in the presnt context) of finding solutions to the metrification dilemma. But as I will argue, this is an important part of life that can set the stage for higher forms of progress, which I elaborate upon in what follows.
The second speech is also funny except that it was given not to students but to a more respectful professional audience of academic intellectuals, and businessmen. It was about regulatory reform and where it would be going in the new Republican Administration. I was playing the unaccustomed role of political bureaucrat foretelling the future.
Insert here some comment on "Wealth Redistribution in the Large and Small" as comment on Harrison and Portney's "Regulatory Reform in the Large and Small". (February 1981). As I look back on these speeches some 15 years later, I find that growth and change has led to a much different view of the world and how I should go about presenting my ideas to the world. This is the heart of chapter 5 and obviously the last chapter in the short -run to be written.
Here, at this point in time, I find myself 14 (or seven Congressional elections later) in much the same, if not a radically different, kind of discourse. What I was foretelling in early 1981 was a moratorium on regulation. This was followed 11 years later with another moratorium and the House of Representatives had just passed a third moratorium. Given all the other changes I saw myself with a very good chance of inserting the pivotal mechanism in a garb that I had pushed rather far during the two years following the two speeches but which had floundered during the period of my worldwide travels from 1983 to 1988. I had ended up in a revolution in Haiti, during June through December 1987, also in the massacre of Haitian voters in November 1987 playing the role of the American economist stationed in Haiti for what everyone believed was a renaissance of NCE economics in solving problems in that country. I saw on television the other night Minister Delatour, the Chicago trained Finance Minister who I was supposed to be aiding.
It was during that period that I started on this, my second book, that was laid aside in the succeeding years as I came back to the "oversight" of regulation. I didn't have many books and the ones I had (Henry George, Edward Belamy's Looking Backward and Utopian Thought in the Western World got me going on what would eventually I hope (Esperanto -- one who hopes) be called Esquisse after the last work of the Marquis de Condercet.
I an only in the Act of trying to become a philosopher of History. I do this mainly because I'm trying to fit this work into a philosophy of history that is concerned with Progress and Justice. Probably the greatest work along such lines is Condercet's Esquisse. I have tried to express this in the research prospectus in the section on What is Mobility Policy? This traces the work back to Turgot's sketches in the Sorboniques of 1750. Of all the great men whose philosophy I espouse, Turgot is at the forefront because I feel so much like him and would wish to be like him as an apostle of change. I am enigmatic for many reasons like him. He began the kind of progressivism I foresee for the next century and millennium.
If my youngest daughter prepares a sketch of the kind I told her about in discussing my work and a sketch to include in my work (even if posthumous, it would be like the one described on Turgot (in Manuels' Utopian Thought, which she saw me reading while she was studying painting in her visit of February, 1995. Turgot above all had my most valued attitude, one of (stoic) equanimity. Upon his dismissal after the Edicts of 1776: "If he was outraged by the betrayal of the King, there is no report of his indignation. The slightly skeptical smile continued to hover above his lips; it is preserved in Ducreaux's pastel in the Chateau de Lantheil." The papers of this man have also reveled no secret. If I have them then they are locked (Mark Twain like in a vault to be opened on December 26, 2100 if at that day someone with the permission of my grandchildren wanted to look backward over a history of the last 117 years as did the character in my favorite Utopian novel, "Looking Backward" For Bellamy the period was December 1887 to the year 2000 when I expect Esquisse (renamed the Practice) will be published as one of the many millennial works of that year.
In looking back on what is success, there was a lot of Christian sentiment (Victorian sentiment with the likes of Matthew Arnold and I remember best the lines that carried me through many years. I wanted to plant, trees, write a book and have sons. The pursuit of equality in the last hundred years had made me quite happy having daughters, and I envision progression in a family like one of my favorite 20th century novelists (who helped me find Goethe). The novel was the first by Mann, Buddenbrooks, which showed the progress in a family from materialism (commercial life) to politics and to art. I have daughters who I see as inclined to both of the latter. For my oldest daughter, much of this work is really dedicated because I am seeking to define politics and the "practice of social art". The central theme is a "mobility policy" for the next century in which she can participate and be involved. I am taking the world's largest industry and showing how it can be a test bed for everything else. As I have been taught by some of my past mentors I start with the frontier of growth which is mobility policy and link this to the frontier of deterioration, much as did Henry George in the last century, in his Progress and Poverty.
Even before a former wife told me about a new bestseller in the international politics section (not just the new age section) of the bookstore adjoining the White House (it is called Spiritual Politics), I knew about karma, a practice which is practiced by those colleagues in the house where I live. It is live and let live, or what goes around, comes around, or shit on the road and smell flies upon your return. The Corruption Of Economics, about which I began this essay is not karma as I practice it. But it is written by a first class economist and is most disturbing, even if I take it with an enigmatic Turgot-like half smile. How could NCE be corrupted; it was like reading a short book passed around by the LaRouche crowd almost a decade ago with a picture of Milton Friedman, entitled "Milton Friedman is a Fascist" which goes on to attack the University of Chicago as some Austrian-Hapsburg plot now being run out of the annual meetings of the Mont Perlian Society where I was invited by Dr. To once but begged out of because of the expense of traveling by air from Morocco to Northern Italy. (as shown later I am entering into a project to cut these expenses).
But the corruption strikes at more than just a belief I once had that George had missed some important fundamental elements of political economy. Students learn certain truths, with certainty and faith that the professors or masters have presented accurately the truths about subjects which would be much too difficult to figure out on one's own. My own, sometimes celebrated attempt to challenge one of the truths got me into a lot of difficulty, until it was learned later that I had the truth about motivating truth telling behavior. In the case of the Corruption, I Was shocked by the enormity of the misapplication of the truth and how it can be bent ever so subtlety to carry out a strategm against an idea that is wining too many adherents.
What I do in the way of discourse in now dealing with this shock is an important element in my proposal to Birmingham in which I take the basic ideas elaborated in Book I and suggest how they may be further developed in the context of international aviation relations (thus addressing the "infamous" U. S. vs. Heathrow problem). But for reasons elaborated here, perhaps I'm not ready to do this. Nevertheless, it sets a direction for work that if it doesn't suceed intitially, it may succeed in years to come. I may have a Winnacott Paper in the meantime (the product of several months at Birmingham). Airline and transportation deregulation took from 1957 when first proposed to 1980 to reach full fruition.
There are notes like these that are very similar that have been collected under "memoirs" (1992 in particular as well as early 1993) when I was trying to jump start this work and to sustain myself in a through inquiry and portrayal of using the pivotal mechanism to solve the airport problem the "airport problem" is the central metaphor of this work. Along with the picture of Turgot, I want a little sketch which accompanies a working paper on the airport problem, a little professorial man with a good number of pens in his pocket, tie askew and looking somewhat dishevelled, with a sign entitled "Free the Airports".
A little more on the spirit of all this, which my colleague rejected as just not appropriate for jump starting a Mobility Policy Institute or a Mobility Policy Review. My once former wife in a letter from Seattle in November had encouraged me to read "Spiritual Politics" (and a few other associated readings) and the note follows as part of an introduction to what I see myself doing. As much as anything else, it tries to communicate what one would do to change politics, if one did not find refuge in a scholarly community, but fearing there one would also find the Corruption of Economics. This is followed by a section on "Choices" in a letter to Birmingham.
As mentioned earlier, this book was conceived in the midst of the last Haitian uprising of November, 1987. As the American A. I. D. economist stationed in Port-au-Prince, I contemplated my life's work and the future (not being exactly certain I had one, given the circumstances (footnote).
Seven years later, in late 1994, I was told that it had been rumored (through my father's "housekeeper" that I was dying of a dread disease (perhaps a rumor that I had contracted AIDs in A. I. D. because I had lived in Haiti and although quite untrue, I asked what I would have done if it were true). I conceived of this piece of reconstruction after a short conversation with an eminent economist (my evaluation of him) who told me he was about to publish Volume I of his "Reconstruction of Political Economy", a Hegalian reconstruction if you will. I decided then I wanted to keep at work on my own, if somewhat more limited reconstruction or rehabilitation.
Nevertheless, in spite of my more modest approach, I decided that I too wanted to help reconstruct political economy and that an idea I had invented, known as the "pivotal" mechanism, or "Clarke tax" (sometimes the butt of economists' jokes) had a key role to play in my version of the reconstruction.
It was at a time, shortly after the Congressional elections of November, 1994, that the United States seemed to be going through a political reconstruction (or deconstruction if you will) and a colleague and I began to put together a small two person Institute and Review, called the Mobility Policy Institute and the Mobility Policy Review. Although, for reasons elaborated later, the Institute and the Review, will not necessarily ever really exist in actuality, they provide a useful metaphor for the kind of science and social art that is espoused in this work.
By way of example, the following is what I conceived the Institute to be doing:
"Objectives:
The Institute is a self-funded society of friends who take active, outer steps in the world that reflect our understanding of the inner causes of events. Begun in late 1994, we have worked on 15 steps (suggested by Corinne McLaughlin and Gordon Davidson in their 1994 book Spiritual Politics) to lend a new direction to politics. We and they use a whole systems or "holistic" approach that brings together all constituents in building new solutions together. Our work reflects the efforts of practical people trying to define practical solutions to practical problems, each following an inner light. We appeal to Transformational Leaders to help us all better define and shed that light.
We work from common material and share and disseminate our ideas. During the last year we have been working from Osborne and Gaebler's Reinventing Government using, as a fulcrum, policy issues affecting transportation (including worldwide travel and tourism).
Our central focus is institutional design, applying principles of mechanism design. Mechanism design permits the parties in a social (collective) interaction to better take account of each other's preferences in shaping collective decisions. In our first working paper, we have taken a potentially lively topic relating to the Clinton's Administration efforts at Federalism and reinventing government (REGO II) as a focus for this effort. We look in particular at the challenges presented in a new law that calls for innovation in balancing national and localized interests in our Federalism.
How We Work
We try to demonstrate the broad relevance of our ideas in a specific area of National and subnational/international transportation policies. Our specific focus is transportation regulation -- how to design better, smarter, and more "optimum" regulation at these various levels of government in a manner that responds to the interconnectedness of people , places and things. We believe that better, smarter, and more "optimum" regulation can be achieved through effective mechanism design.
The Institute does not offer anything startlingly new in a vast (economic) literature of mechanism design that has evolved over the last quarter of a century. However, we do suggest some novel ways to practically implement these mechanisms in ways that are complementary to existing voting and negotiations techniques. We use one mechanism, called the "pivotal" mechanism, because it is perhaps the best known of the universe of mechanisms that can be applied to the problems we want to solve. The mechanism says simply that every person (or pivotal unit) can change a social outcome to what that person wants by paying a sum equal to the social cost to others of making the change. By setting up the mechanism, one would rarely have to calculate the sum (of money or karma or any other medium of exchange) yet the mechanism drives collective choices towards social outcomes that are likely to be superior to those chosen in its absence.
The solutions that are arrived at are, to the extent feasible and desirable, "win-win". While the exact procedures may be difficult for the individual citizen to understand, they can be quickly grasped by representatives. In order to advance understanding we also suggest experimentation, along the lines first suggested by those who advanced their use in the early 1980's for intragovernmental decisionmaking. A first step is to use the new laboratory of change that has been constructed by President Clinton and Vice-President Gore. In this laboratory, we point to specific examples of possible areas of change relating to the implementation of new legislation on Federal Mandates, just signed into law by President Clinton.
A working paper (which forms the heart of Book II) entitled "A Political Economy of Mobility" outlines a possible approach to the "win-win" solutions we envision. It is not surprising that a society of friends that has spent much of their life "stuck in traffic" would look to "win-win" solutions to this problem.
We work on these problems also because they are fun. We think of institutional design as an art form. We hope to engage social scientists and policy makers in this art form of institutional design. This can be as fun and satisfying as graphic design, furniture design or any other artistic activity. Carried into the real world of (intergovernmental/international) political economy and activity, it can also be controversial and mysterious, possibly regarded even as irrelevant (which doesn't always inhibit the production of good art).
To take the mystery out of our artistic endeavor and to communicate its relevance to the problems of today, let's start with an apocryphal story of how it all began - a discussion between scientists (one political) and an economist of how to grow the world's largest industry -- travel and tourism (as opposed to opening a can on the island). The economist ends up saying "Well, let's assume a can opener".
In our proposal, we assume that certain decision procedures can be implemented within the decision procedures that characterize the current State. One does not know how exactly the State is going to behave in response. We appeal to its Leaders because the mechanisms for decision seem to fit into a widely shared set of objectives, a kind of Divine Plan, without exactly knowing how. This is the spirit in which we have undertaken this work, as a kind of spiritual politics." (End of Quote)
With my colleague, I quickly rejected "spiritual politics" as an overt objective, but it does infect, to a great extent, the dimensions of this work. This kind of politics has also helped me shape some useful new dimensions and to see my work in its historical contexts.
I conceived of this work as something worth working on for perhaps another 30 years where I would then (around 2025) reach or exceed the age of my 84 year old father. It would be a working model of my chosen field of endeavor -- public expenditure and regulation -- that could be integrated into the Ethos or Culture of my society at any point in time. Around 1990, applied to "Aviation Development", I called it an E-procedure, using the "pivotal" mechanism as an evolutionary procedure of sorts to deal with problems that had concerned me for almost 15 years and looking forward, could occupy me for another 30 years.
The E procedure is borrowed from Esperanto, the language of hope -- "Esperanto, par specila instumento" or "One who Hopes, with a special instrument".
Esquisse (in the form of Books I - III) is the rest of my life's work, past and future, with respect to which I am arranging with my daughters to a plan of sorts for determining their disposition. While some of this is captured in the body of this work (1996 and up to the end of this millennium), some of the rest will likely be set aside (Mark Twain like) for any reader interested in it for December 26, 2100. Much of this is personal remenicences for my family (which would remain otherwise unread) and some of the intervening portion is for students of political economy that might find uses for it in other cultures in other times -- at least for the next 105 years or so.
In my lonely Chateau in Port-au-Prince in November and December, 1987, I sat like the Marquis de Condercet virtually imprisoned. I had with me his last book Esquisse, Henry George's Progress and Poverty and Edward Bellamy's Looking Backward.
All of these books are today regarded as utopian or visionary. Because of Esquisse, Condercet is often regarded as the world's greatest futurist. He also stimulated modern interest in social choice procedures and our project is a modern day "Projet Girondin" which was a project in fiscal federalism. Links to George and Bellamy, who are widely regarded as those who stimulated the progressive movement in the 1900's are explored elsewhere. I happened to be writing on the same day 100 years later than the character in Bellamy's Looking Backward and it seemed appropriate to remember him too as one of the spiritual fathers of this work.
Esquisse: Reflections on Political Economy.
In beginning this work in early 1995, I contemplated the world around me and what message(s) I wanted to communicate to that world.
I started with certain fragments of that message -- papers like "demand revealing reconsidered" and "the demand revealing governance of enterprise" as well as this "reconstruction", a portion on mobility or transportation policy which had occupied me from 1988, the earlier work being dated May 1987.
Conversation With Turgot.
In the not unusual mode of "I'm standing on the shoulders of giants", I selected the most incorruptible of them all (Turgot) and thought of myself as a Frenchman leaving French Court around the time of the French Revolution. I wondered what a man like Turgot of today would say about this work.
Perhaps he would advise me to consult with others -- perhaps Condercet and Bestiat. After the consultations, he might advise that I go and do some preparatory work even though some of the experiments that are suggested as a program of research could be undertaken most immediately, particularly those under the rubric of mobility policy. But Turgot did not have to struggle with constituent assemblies. One could have letters drafted by one's friends to the Vice President and in the current climate perhaps win friends in the modern assemblies.
As I reached my mid fifties, I began to have fears of death -- if possibly misplaced ones, perhaps reflecting really the fears of my father. So too, most of the heroes which fill some of these pages died in their mid to late fifties -- Henry George, Turgot, Condercet (Turgot at 54, six years after his demise at court where he spent much time trying to determine cheap ways to reproduce the written word, via communications).
I had somewhat more time at 56 to take my fragments collected since my last work (Clarke 1980) and to try to communicate their relevance. In my head, I held a discourse with Condercet and also with Bestait. My work had already had much "success" through the work of adepts somewhat like them. I wanted though to put together this work so that I would be more than a footnote in textbooks or history. Even if my idea got five pages in textbooks, I wanted five pages in the history of ideas or perhaps an entry in the next Palgrave Dictionary 50 or 100 years hence.
Not being a modern Condercet or Bestait or even a "ranking" economist, I decided to follow the path of a great "sociobiologist" who knows something about his strengths and weaknesses and if I cannot win a Nobel Prize with this work (for reasons that will become more obvious, I could win a Pulitzer Prize.
At the age of 55, a federal "civil servant" faces choices and this is about my "choices" in where to take this work. I am looking for advice from my friends and mentors.
In a letter to Birmingham which constitutes much that follows, I posed the nature of my dilemma. Again a private letter to myself where I try to explain the choices to myself.
Why England?
I thought of England (the home of my ancestors) and decided to target my initial research proposal on a new "international" university north of London who one of the adepts I admired had suggested to me.
Away from the pressures of Washington, I could at least bring together the piece on mobility policy and its relation to international aviation relations, of which I had already sketched the part on aviation development domestically.
My other choices were Moscow (or Kiev) or to remain in Washington. I had been actively recruited for the past year to do taxation and fiscal federalism in Russia or the Ukraine. I had avoided it not as much from fear of change but from logistical problems in settling my marital affairs and taking care of my 84 year old father in Richmond, Va.
As regards Russia or the Ukraine, I was dissatisfied with purveying the old NCE taxation policy that I complained about in the introduction -- the so called "corruption of economics". I had surfaced my conflicts in a question to Dr. G about the famous "American economists' letter to Gorbachev" of 1990 (on land taxation) and received an explosive, if gentle and negative reaction. My mentor about change had advised, you as a counterweight might be good for Russia but Russia may not be good for you. I had tried foreign assistance in A. I. D. for several years and know a lot about the realities. I would not likely be happy, for reasons elaborated in this book, the American system of "compulsory taxation" nor the current system of fiscal federalism.
But maybe I was taking too narrow a view of the choices. At the AEA meetings, I had run into Dr. Olson who had his own A. I. D. supported project. I had promised to send him a vitae , but had delayed it for three month while I dealt with my choices and constraints and the present realities.
In Washington, after more than 20 years, I know a lot about the present realities. There is a lot of excitement about change and I can spend time contemplating and becoming excited about my own "Projet Girondin" of the kind that occupied Condercet shortly before his death (probably at the hands of the Jacobins). I expressed that fear too about the Jacobins in the author's introduction to my 1980 book. My mentor had advised correctly that if you pursue that beyond the most limited contexts of your current assignment, you will be destroyed. As a surefooted Capricorn with a love of the English weather, I would just "think about England".
Should I present this to a "secret society" (the only group I belong to is the Henry Simons Society, started by Dr. To). The mobility policy part could be probably endorsed but the Land Policy part would likely be denounced, not as wrong but just as irrelevant. As Dr. Tu has said, "no one knows how to get there".
As a final choice, I could try a sequel to my book which describes a Fourierian "phalthanstery". Perhaps I could continue to do the work that I do and occupy time in a fantasy world that shows how demand revealing works in a community of slightly more than 1600 persons who use the method for collective decisionmaking. I was almost driven to such a sequel as part of that work, but it does make up another kind of option.
The wise Turgot surveyed the entire "historical picture of the progress of the human mind" which had sparked Condercet's "Esquisse" (sketch) and his "Vie of Turgot".
Turgot viewed the entire landscape of policy that I addressed under the political economy and noted:
first in a brilliant apercu about change:
"Before we have learned that things are in a given situation, they have already been altered several times. Thus we always become aware of events when it is too late, and politics has to foresee the present so to speak." (Turgot was a real heresthetician).
One can also look at all of this in a new deconstructionist light which is what the "scripting of self is all about". How does all this fit into the sociology of knowledge? As Derrida (1976) has suggested, the "human world, owing especially to its being bathed in language is so ambiguous, complex, and heterogeneous that any attempt to capture it and hold it steady, as if it were a physical object or thing is simply not possible, The idea of capturing the world, perhaps like my models of the French enlightenment, may be judged impossible in the classical style. One doesn't even try to say it all and if one does not have the words to say it all then all we can do is speak and write, in the hope of moving towards that promised land of the truth.
What much that I want to say outside the work that I define in my research proposal is not about political economy. It is rather about the scripting of self that leads one into an intellectual calling. It is a process by which people reinterpret the meaning and significance of past experience in a way that destines them to be free. An example of such work is Mark Freeman's "Rewriting the Self" and one of the Chapters in his book about Jill Conroy, a president of Smith College who describes a development experience in going from the grassslands of Australia, and to England, becoming a historian and becoming the President of Smith College. I have contemplated the purchase of Conroy's book "Road From Coorain" which I wanted to give to my eldest daughter when she travels to Japan this summer because it expresses much that I have learned in dealing with the past, with guilt, and becoming free. It is one of the best books I have uncovered about change, reinventing oneself, and of going forward and not backwards.
The process in which I have been engaged also permits one to become a better combatant in the world of ideas, rather than a mere footnote in the textbooks. The scripting of self is about character, the building of hope and courage in building and communicating truth.
This brings me to the heart of the matter -- my work, its relation to Henry George and Richard Ely. I suggested in my first book (Clarke 1980) in a two page aside the link between the "pivotal mechanism" or Clarke tax and the single tax There I suggested that the goal of public expenditure theory was the collection or appropriation of all rent and then I attempted to demonstrate this in Chapter 6 in terms of an initial sketch of the demand revealing governance of community. In 1985, Professor Tideman developed the idea in much more detail in an article entitled "Efficient Provision of Local Public Goods Without Compulsory Taxation". Tideman (1985) recognizes that "networks" of communications, of transportation, and of the advance of knowledge, and in later work (of the use of planetary resources) falls outside the rubric of efficient local provision and this is largely what my rendition of "mobility policy" is all about. Having communicated "the remedy" for governance of these networks, one could then retreat to a Fourierian phalanstery governing it by demand revealing means. Almost all known objections to demand revealing governance would be resolved as I am suggesting in a more recent version of demand revealing reconsidered. Even the bias towards wealth is resolved by using hours of work in community service in the Fouriarian type community. Tideman actually describes such a small scale experiment in using the demand revealing process for governing a college fraternity. There was no success in using it for governing a condominium development.
Real estate developers are not dumb. My first job as a graduate student was working for the Real Estate Research Corporation (RERC) in Chicago in the mid 1960s. The first Fourierian experiment was about to begin in Rumania when a wealthy nobleman was willing to donate land, but the adjoining landowners rose against the project. Manuel (1979) on Fourier: The Burgeoning of Instinct". If not landowners, what about the intellectual community, say the National Science Foundation using taxpayer funds to support such a project. Stories could be told about the scientific community within the government when they found themselves supporting even intragovernmental applications of the approach in the area of communications. I treat the issue of experimentation with demand revealing at some length in Parts I and II of this work.
Through my travels and some of my writings, I have been as much as anything a student of "power" relations in society, as well as the flow of ideas through the intellectual establishment and how these are translated into social action. As much as anything I have been fascinated by the NCE paradigm, as embodied by Chicago economics and how it has influenced worldwide economic and development policy. Much of this has been for the good where a powerful case for some policy is built, such as the deregulation of much of the transport sector in the United States, where I found myself as the personal envoy of such a policy. I found myself avoiding pitfalls in areas where I thought the knowledge was inadequate (such as deregulation of banking), and sometimes making mistakes where I thought there was adequate knowledge or I knew a lot but not enough like repealing fair trade laws in the 1970's or the application of certain antitrust laws. I find myself as a sort of charactiture in a book by a Presidential speechwriter when he has no one to turn to except me to interpret presidential policies on application of new antitrust laws and policies -- to make a determination on whether a speech by the President is good "republican" antitrust policy, and I was a mere civil servant.
I have often dreamed of myself as the ultimate "Hegelian civil servant" and this work is basically intended to educate a new class in the universities and those who find actualization in the civil service to appreciate the world view portrayed herein, one aimed at a true societal "devolution". One must begin by squarely confronting error. To this end I resurrect the history of the NCE's stratagems against George. Gaffney's work is a telling indictment that needs to be read by all. Gaffney starts by saying that at first he did not believe all this, even though as I, he and I had suspected it.
I came to suspect it when I was working for RERC around 1966 and the Douglas Commission had published its famous report calling for a thorough study of Land taxation. I learned a little from Anthony Downs and also from reading about Paul Douglas, a Chicago economics professor in his early days, about the background of all this. This story is developed somewhat more fully in my vignette on intellectual history which accompanies the Chapter on Aviation Development.
One will now find the flavor of some of the above in what is to follow: I have not decided what, if any at all, role it should or would play in a reflections on political economy near the end of this century. A separate set of notes (yet untyped also supplements the above which also talks about this in a related milieu). Each year over the past three years (since 1992), I have prepared these reflections between the months of December and January), and at some point they become integrated with the work itself, or as in Wilson's Naturalist, separate. But they are critical to understanding deconstruction, before one attempts serious reflections or a reconstruction. This is the kind of criticism that I might suggest to another reconstuctionist, although when I mentioned "what about post-modernism". He immediately replied that he simply ignored them. Maybe this is useful, though for me it has been critical in discovering truth before trying to talk meaningfully about social change.
Memoirs are often written late in life as a form of expost justification. I write them in the process of shaping a work, that is intended to stimulate discovery and the advancement of knowledge. While it may seem a self serving attempt to create a new paradigm, I hope it is eventually viewed as something different. Thee matrices of development set a historical context that is important.
This is at bottom an attempt to explain all this to my family. Was my life devoted largely to bringing home money from the exercise of power as a regulatory policeman to protect mobility (or even as was often the case to restrict it with overzealous regulation which I was unable to do much to restrict). Or how did what I did fit into the reconstructionist's Pascalian theory of health and safety regulation? Was my work just rambling memoirs like this with a concentration on Clarke taxes and Airport slots where the raw material filled voluminous files. A fellow graduate student said I was like the character in Barth's "The Floating Opera" as my rooms were filled with yellow pages as I delved into the cost allocations for a water pollution project in Lake Michigan which brought about the discovery of the Clarke tax. Then my life seemed to revolve around the airport which I was hired by RERC to justify from an economic point of view and which became a metaphor of sorts for much of this work.
Two economists of a more radical bent (authors of the Quiet Revolution) who talk a lot about incentive compatible mechanisms in their renditions of future forms of governance also focus on an airport in their somewhat utopian "looking forward" so I am not alone in this focus and it helps to bring the subject matter into concrete reality. It makes the "tires hit the road" so to speak in the world of policy making. In the work to follow we are talking about actual policymaking in terms of processes that could be implemented almost immediately. Since they may not in fact be easily implemented, the fact warrants some investigation and may lead itself to discoveries about why things are as they are. This would be a useful form of discovery even if the processes I envision are not implemented.
Around 1977, I applied much a I am doing today to an English University to the Smithsonian Institution and won a year's fellowship to study and write about the demand revealing process. This work is really a completion of what I would like to have done. What I in fact did was to complete a Chicago dissertation (Part I of my book, reinserting a paragraph on Austrian economics which professor Stigler suggested I remove in the actual dissertation. In addition, I wrote an overview about a "new synthesis" entitled "The New Incentive Mechanisms; Capitalism, Socialism, and Henry George" and then wrote a Part II on "The Information Problem" -- sort of in the vein of Heyek's two divisions of economics. If individuals don't know their own preferences, how would demand revealing institutions evolve so as to best represent the unknown preferences. This was really about politics as I now understand it which is about how preferences are discovered. I then went into a fairly detailed treatment of a demand revealing phalanstery which over the years has become my contribution to utopian literature and is entitled "The demand revealing governance of a community". In between the work that I have done (including all the fragments collected between my last published work (1983) and a recent small paper with Drs. Brough and Tideman on "Airport Noise and Congestion" is the two part reconstruction that I hope will complement the reconstruction of the "eminent" economist. I had discovered demand revelation as a result of tirelessly studying his work which to my mind really became the first of the new voting processes structured on incentive compatible lines and became hopeful when, while not totally endorsing my work, when no one else had done it and I was frantically searching for at least one endorsement (other than my adviser Professor Tol who was powerless to advance my work in face of the opposition from the Chicago Business School), he at least gave me all the conditions under which the process would be "Pareto Optimal". I copied these into a footnote in my first article on demand revealing and this helped in endless ways to protect my work from obscurity when the Empire (of econometricians) struck, so to speak. Now to proceed beyond the babble in the life of Dr. C, this is the plan of the book, the first chapter in Part I and which is the heart of it in terms of the field of inquiry I want to advance -- which myself and a political science colleague (Mr. C) called "Mobility Policy".
I am mostly doing the political economy of mobility and Mr. C is doing everything else. Our Institute is largely fictional and I use it largely as a cover (respectably) I think for advancing my ideas in the Royal Court surrounding 16th and Pennsylvania ave. If I advance some of the work in transportation as I did about a decade ago in communications, then (if I continue to draw a salary), I will need a cover because someone will say I am not paid a high civil service salary to do this. They will say I should have been fighting transportation regulation more aggressively rather than trying to "reconstruct" transportation policy. However, I do what I am supposed to do and simply have my dreams (My own views or dreams in relation to the present reality of "regulatory management" are best expressed in Chapter 5 unexpurgated which is a spirted defense of my personal views and the practical experiences underpinning them -- about 15 years after "Regulatory Star Wars", I am a much more mature and mellowed individual).
In any case, my first and second book (about implementation of the demand revealing process) start out with the observation of Professors Tideman and Tullock (1976) that the DR process could be used to determine the federal budget. I treat each domain of budget (and regulatory) policy as it is now organized within the U. S. Federal Government -- (a.) transportation, commerce, justice (immigration), then (b) land, environment and natural resources, (c) entitlements, and finally (d.) international relations.
I develop the resource allocation model primarily in the context of mobility policy broadly defined, and centering around the first of these divisions in (a. ) above. I want to research the implications of what I have already done in the context of a research proposal that Dr. T and I constructed back in 1991. This proposal was not accepted because of "other resource priorities". Euphemistically put, there are cycles in the priorities the U. S. Government might give this kind of thing depending on the condition of the author's own "networks" (not functioning particularly well at the time). For reasons elaborated in the proposal, I could accomplish a lot in studying the British model of "peak load pricing", privatization and ATC/airport governance using the British model.
Following the ideas of Tideman, I also develop an approach towards dealing with land, environment and natural resources which may appear in some ways to be divorced in many respects modern day neo-georgism though the latter is of course inherent in "Airport Congestion and Noise". To call all this "georgist" might kill it prematurely. My style is to try to follow the truth but not to stir unnecessary opposition. Why stir up landowners and mortgage bankers when I'll have enough problems with domestic and international airlines who, as in the case of airline deregulation, I think I'm promoting their long run interests (though short-run they don't always perceive it that way).
In this context, the "airport slots" problem whether at the four congested airports or "Heathrow and the other British airports" becomes my metaphor, focusing on an intense investigation of the "how to do it" of the pivotal mechanism or in this case, compensated incentive compatibility. The research proposal should be understood in this context. Like a "biologist", I am studying something that seems "antlike" in terms of the general world order or the larger order in the spatial/temporal world that Turgot conceived, but it presages more to come in terms of a "political" sociobiology of sorts.
My mother for many years worked for three entomologists in the Department of Agriculture in Richmond, Va. So I'm always fascinated by the life of an entomologist. In terms of his "sociobiology" and life and work as a "naturalist", I see Wilson's work in terms of a Turgovian world view. For example, Turgot's etymologie in the IXth volume of the Encyclopedie and which later became much that Condercet carried forward in the Esquisse. This is recorded at the beginning of the research proposal called " A Political Economy of Mobility".
I am in the process of asking a friend, a writer and journalist, how best to edit some of these "raw" thoughts into a piece, that if it ever became public, would not damage my cause. He knows, for example, "mortgage bankers" and that I am in the process of "becoming" something very different from Professor Ely. How do I separate the private from the public, something I constantly inquire about with another mentor who sees public and private lives as quite separate. They are usually separate except when one is rising into a very high level of spiritual consciousness, in which case the exposure of the two together can lead others to believe one is a crank or lunatic. This was perhaps best captured by Turgot himself in the quote from the MS in his archives presented earlier in this essay.
Turgot (and his friend Condercet) enjoyed the "pleasures of foretelling the future" and today both (at least Condercet) are heroes in the eyes of the futurists while their optimism is skeptically received in other quarters. J. Coates in an 1994 issue of Technological and Social Change (the futurist journal) named Condercet as the world's greatest futurist. Condercet is largely known to economists through his analyses of probabilities and his study of voting, so (if properly recognized) he might be regarded also as the world's greatest futurist and social scientist (particularly in the realm of political science and sociology).
What follows in Parts I and II is a kind of "Projet Girondin" that I hope would capture the attention of technologists and of many in the social sciences as well as policy makers. If it does not succeed, it might capture the imagination of "policy scientists" (professors and their students) who become excited by and wish to practice "the social art" which is what the larger book is about. In the meantime I proceed on the path of personal growth and change, and resolution of internal conflicts (personal ones) which would allow me to proceed with this work.
What follows which is unexpurgated and only for family and friends (my daughters and a few others including my mentors) and the Clarke archives.
First on the Mobility Policy Institute (and Review) and Professor Ely. I did the somewhat pedestrian work which follows in Chapter (my research prospectus) with the idea during some periods that I would work to construct an institution and attach it somewhere (like Ely did to the University of Wisconsin). He called it a part of the University.
As I gradually leave the federal establishment, I thought that maybe even I could attach the Institute to a "reinvented government" (evil or self promotion lurks in the minds of all people). Maybe I'll be an adjunct because the Institute could make quite a lot of money (as did Ely) who then speculated and then lost in all as mentioned above. I don't want the fate of Ely even though the name is sort of worshiped I guess when all the world's economists gather each year (as they did recently in Washington) where I attended as a non paying, non-member guest. Perhaps I will now just simply join the Association which requires that I pay an annual fee and reveal my fields. (Collective choice, social justice and mobility policy). Except for mobility policy, the first two are preempted by an economist I admire and whose work I freefully plagiarize. I don't pretend to be an expert on collective choice and social justice, though I have spent a good while studying these in trying to implement demand revealing. My success in doing so will be measured in the remainder of this book which will be measured (I hope) from the standpoint of art, science and the practice of public administration. (See my reference below to "Magic and Money" by Binswanger).
In any case, during the early morning of February 27, 1995 I concluded these notes and began to write the introduction to my research prospectus about reinventing government in the area of mobility policy which I hoped to "carry to England".
Perhaps I'll never, of course, go to England. Like my present wife, I've learned how to have constructive dreams -- real world dreams about change. It is remarkable that a man, like myself, who was always seeking change for everyone but himself, would in the spirit of Turgot adopt a philosophy of change for himself and for society. Architects of change must of course realize that there are a vast array of other personality types, whether these be the 16 on the modern Meyer-Briggs (where I am the architect) or the 810 uncovered by Fourier.
In putting this altogether in a way that the different personality types become agents of change, a certain artfulness is demanded. This is also a skill that i am learning in reaching out as the books that a former wife has taught me -- popular books like spiritual politics, where the spirit of what is talked about can be grounded in reality. A close friend who has helped me to construct "mobility policy" and who is an ultimate geo-realist" dismisses much of what is said in this (having constructed a real world Institute of Peace). But as a set of marketing skills in constructive social change I see what my former wife is really talking about.
This is more than anything else a set of private notes for my wives (former ones) as I enter the Turgovian stage of my life. I think I can have my daughters read this, perhaps my first former wife and eventually my second (former) wife when the marriage is dissolved. I have written the ultimate dissolution contract which if anything should become famous in the "family law' of the late 20th and into the 21st century. My geo-realist friend wanted me to write and book on this and go on the lecture circuits throughout the country. My writer friend could have helped me translate it into action and living words and he could have also become rich and famous. (Instead, mu wife's lawyer gets paid several thousand dollars "interpreting the work" -- reminds me of a French sketch on the bathroom walls of my former home entitled "Justice".
My wife described her lawyer as a "characterture". I wonder if she chose him with the sketch in mind. In any case, I wrote important chapters in the 50 page treatise with his (the friend's) dissolution contract and experiences in mind. It was frankly Condercetian in conception which brings me to all of the bad words or "the secrets" of my character. This is basically a part of what they call the 4th step in the rituals of the 12 step programs that have become sort of a "new age" religion in America. The perceived tyranny of these programs can lead "a snowcapped volcano" like Condercet toward death or destruction as can the vicissitudes of life in late 20th century Washington or America. I think I am (and I hope he is also) finding solace in each others company as I help 12 step him in the constructive sense of the word. I will also probably send this to my sponsor, and "the mentor" for more education about my choices. Maybe I'll buy a used Toshiba 2000 SX from my mentor at the "just" price and work with my friend on his insights after a couple of decades in observing Washington. In any case, I believe my friend "the snowcapped volcano" (described in Manuel and Manuel's Chapter 20 (Condercet: Progression to Elysium) needs the advice of his mentor Turgot, with the half smile on his face (perhaps hiding enigmatically his own torment). Perhaps my friend can write one day of the constructive revolution of sorts that is being invented here. It is sort of like the end of slavery where we did not get to the rest in ways that are gently revealed in Tideman's work. Although I do not manipulate my friends without telling them, my friend is very pissed off by the "mortgage bankers" and if I revealed too much too soon, (about the "corruption of economics"), he might launch a nucular writing piece into the pages of the Atlantic Monthly (perhaps spoiling prematurely much of this effort).
As my daughters read (perhaps a somewhat expurgated version of this along with pages of the Esquisse (the real one), I am looking for a definition that I want to help them find in politics and art. They have to take a "futuristic" approach not as it has been bowdlerized by the media. They have to appreciate what equality as envisioned by Condercet (of nations, of classes, of gender, and all the rest is all about). One can find much of it in George and the second part of my prospective work. At some point, I'll seek a sketch which I will commission from my daughter. It will be the only extant portraiture of me (alone or in a group). If alone it would look more like Turgot rather than Fourier (looking like a misanthrope) contemplating a "phalanstery". Maybe it would be more like a modern Courbet with two stonebreakers and become a classic of 21st century art. Rather than an individual holding "Esquisse" and contemplating a "progression to elysium", it would be two or more astronauts building institutions (like I talk about in the "spiritual politics" portion of this essay, titled "esperanto, par speciala instrumento" in the language of Esperanto, which appears at the lead of the working chapter on aviation development -- the quote from esperanto is "one who hopes, with a special instrument".
As an art form , this is what I want this work to be as a classic of sort in the institutional art of the 21st century and the new millennium. It would be more than just a collection of fragments if I had written nothing else where speeches like "regulatory star wars" was combined with a space station (with 1600 people in a Fourierian phalanstery) governed by the pivotal mechanism interspersed with my Greenian travelogues. "The sort of life" would be a different life indeed.
Thus begins the prospectus on my prospectus for a reconstruction of mobility policy (where I pose to my friend the task of suggesting an answer to a Foucautian question):
"What is Mobility Policy? (This could be a deeply serious if funny project where in 1995 an economist, a political scientist and an artist are sitting on P St. in Washington D. C. on both sides of Georgetown University writing a definition about a new school of institutional design under the rubric of Mobility Policy. It will become an Institute and a Bi-annual review. The Economist will write the political economy of it all and it will no doubt be challenged by the hired guns from those who serve the various affected interests. It would certainly create excitement. If it turned out badly, the three friends could always joke in the vein of the famous economists joke which ends with the economist saying after the scientist and engineer had tried every way to make order out of chaos "Who do you think created the chaos"? (A joke that bothered me for 20 years when I became an architect of airline deregulation but could not until now compete the "supply side" aspects of all of it. I then found my friends and Dr. Coates (famous futurist) talking about airlines (sleezeballs) run by Dr. Death (he FAA) which I oversee on regulation in the pages of Technological Forecasting and Social Change. At least the result of all this is a modest treatise on mobility policy which is my definitive piece on what should and could be done to make the American airways a nice place to fly. After six years of dreaming about it, I would have made a contribution to "reinventing government" in America with serious attention given the (Esperanto) procedure for the development of aviation.
If to my friends (if I share it beyond my closest colleague(s)) think this is the work of a lunatic, it can only be explained by the above Turgovian quote. In any case the personal piece can be titled (instead of Why Birmingham), it can be called: "Waiting For Turgot". This finally became the title of the second chapter of Book I which was followed by these and other vignettes which were drawn from personal notes during 1991-1993. They are indeed put together for a closer or more distant time -- perhaps that time (hopefully) when incentive compatible methods of collective choice begin to flower perhaps after the end of the trough of the Kondratiev cycle early in the next century. We will have seen a spate of millennial writings and much more in the way of alternative communities which will answer Putnam's (my former carpool's question in "Bowling in America". Putnam, a geo-politicist, really did not appreciate incentive compatibility, nor did the sociologists who attacked it. That of course reflected my own lack of education and presaged the work I undertook since 1980. I'm very much better prepared to sell all this to social scientists but that isn't the only audience that I had envisioned.
Waiting for Turgot is thus becoming a set of personal notes which reads sort of like the "naturalist" (Wilson's autobiography). There is of course no market except for entertaining travelogues about Washington and other places and I have a more serious purposes of advancing the idea. If Turgot, Condercet, and say Bestiat (three sort of present real world figures) were plotting a common strategy (which I have not even proposed) the autobiography would fit into all of this, so it is sort of a weapon in the arsenal (so to speak). But to me it is more useful in the early part of the next century where we have averted revolution (I hope) though Turgot embraced these (at least America's) also. I have always wondered though what he would have relaly thought of Condercet's final end and would it have been accepted enigmatically -- with the pained half smile. Or would one have peered into deeper recesses of emotion as in the Mona Lisa. Perhaps my daughter's work of art will answer this question as one contemplates the politics of the next millennium.
What follows:
Notes for memoirs from 1991 to 1994 and going back to "The Giant Family" (Springfield, Ill). around 1970. This is more of the foretelling that is captured in my two 1981 speeches. All of this is wrapped together and interpreted in the next installment where I try to interpret while transcribing this mostly (handwritten notes). This tells more about the thought of returning to Richmond (my boyhood home) where I would write and serve the aspirations of a governor who had told me of his aspirations to be Governor in 1996. (He lost out becoming Senator in 1994). This is really a lot about my roots -- and is where I try to separate the personal and the emotive (for my vaulted memoirs for December, 2100 from what I thought was then a book on reconstruction, called "civil servant, civil societies" -- a book written by the modern "Helgelian civil servant (a Utopian fiction of sorts). I was surprised really when the eminent economist told me of writing the Hegelian reconstruction of political economy which may be quire stupendous I believe, though poorly received if the reaction of the Presidential candidates wife sitting along with my colleagues at the AEA meetings in January is any indication. There was an incredible misunderstanding even of his Pascalian description of health and safety regulation and the political economy of health insurance. The man will be badly misunderstood even if, as he hopes, the work will be sensational. This simply foretells the importance of the millennial writings of which we have had almost nothing in this century. In any case, the current interpretation of these previous writings, sparked in 1991 or 1992, by the politician (a Turgovian figure of sorts to my own mind, another good Director of the institution where I sit (sat) had singled me out in a speech on the state of the economy and said "also ---- (my name) " he is one of the finest civil servants in this country." This is when I began to portray all of this writing in the metaphor of the Hegelian civil servant. I also dreamed of "going backward" not forward. With no disrespect to my friend, I dreamed of standing on the steps and working in the grand old Capitol building in the city where I was born.
Events have shown the wisdom of not going backward, only forward. I will not go back to Richmond (to Coorain if you will as attractive an alternative as it might be). I live a life which is no longer a Confederate plot (return power to the States) against the Nationalists which is already in the process of being realized. (I speak and write softly here because of possible consequences) and end the conclusion of this year's (the 1994-95 assessment here) at the end of February when I must turn to my taxes and the mechanics of marital dissolution. Maybe my friend will help me convert the contract into a family law article and he can make some money and I in turn (a friendly barter) will get his advice on the spiritual communication which this is all about. If you wanted to write the ultimate Saint Simon or Fourierian book for this century, what art form should it take -- this is what I hope to find out in the several pages of What is Mobility Policy of which I thought he would be a wonderful editor. But his would sure take time and we all are faced with the reality of earning our daily bread. For some solutions to problems of "family law", perhaps a rich divorce lawyer could be found, and this could lead at least to a fine piece for the legal profession called CONDERCET's LAW by C and W.
If things do not go well, as my mentor and mediator have already foretold, the article may well be my defense in the Maryland higher courts. where my lawyer who found himself suddenly heading the agency that oversees all employment law introduces the article as part of the defense against modern slavery. We actually discussed the potential problem as we sat for two hours in a tenth floor office overlooking the White House where we discussed some aspects of male slavery in the writing of divorce contracts. Maybe my lawyer would join as a co-author. But this is a bad end -- like the world's most prominent political futurists (The Speaker) in his wife's hospital room where he is polishing off the contract as she may be dying of cancer. Ironically, it is as my mentor has said the most important part of my personal life and the part to which I must now turn. In so doing, I may add several pages of reflection called Condercet's Law and if it confuses the other side my wife will be happily surprised several years from now. And I will be proud (unlike the speaker -- if he cares) about what I have done. This is the ethics and character of someone who cares what kind of feelings are in his daughter as she contemplates a portraiture of her father -- to wish it is a Turgot and not a Fourier, even though I could live or die happily I suppose with either.
I now turn to the areas of life that most concerned someone like Fourier -- the instincts. (This is the province of psychology and what concerns most my mentor the good doctor). Soon I will give him all of this with the commitment that I have seriously begun again he work on the contract, I work on all my finances through the ides of March, begin communications with England while the possibility of a six month sabbatical remains a possibility (such liberalization in my organization may disappear if my political official should disappear or become a Supreme Court judge, Also, I must turn to the psyche (and not just to metaphysics) to please my mentor and hopefully myself in order to ensure that the "choices or my conscious and the unconscious are in harmony". He still believes me to be the most repressed human being he has ever treated. I think sardonically that he must have spent 18 years "Waiting for Turgot" when I broke into his life, The result was a fairly healthy one because it truly allowed me to "discover Turgot" and my own Esquisse which had hovered so many years in my unconscious rising to the surface in only the most troublesome and revolutionary times when I really confronted death either at the hands of others or my own. Now to the secrets with the only fingerprints being like Turgots's (he left none) stored away in the post 2000 vault where if my grandchildren uncovered them and they hurt no one (not even the memory of the sacred Braddocks). They would shine a light on the century before and the rest of the millennium beyond. At the fatherest extension of the galaxy of my dreams (the distant future), this is what I wish my art and that of my daughters in the three realms of Buddenbrooks would do. It would reveal a spiritual light on what had been actually accomplished and hoped for in terms of one of the great (if suppressed discoveries of this century). Then my inquiring daughter would truly understand what it is and was to or could become.
Finding Turgot -- the private thoughts).
An example of the secret thoughts go back really to past misdeeds such as plagiarism and/or "vaulting ambition." To become the head of the class (the valedictorian), I had to perform as the editor of the school literary magazine around 1957. I wrote a story (sort of a bowdlerization of what I had seen in a James Stewart movie). An angel that comes to earth to talk to a dying man (check this -- the usual Christmas movie type of stuff and the ideas were the foundation for my short story -- the first thing I was to publish. But my "competitor" for valdictorian, a young Jewish lady with all the A's (I only had A's and B's and even C's (in French) accused me of plagiarism which I categorically denied, successfully. I recalled all this years later helping my daughter write literary criticism on Macbeth, where certainly she did not want to engage in plagiarism, but I was haunted by my vaulting ambition.
The process of finding Turgot and changing, so as to be an apostle of sorts for change, is to resolve inner conflict, often deep moral ones. One of these, perhaps not a minor one, is reflected in a precis that I helped my daughter prepare about a deep moral conflict in Shakespeare's Macbeth, basically about the perils that grow out of a man's "vaulting ambition".
Beginning of QUOTE from precis: Early in the play, there is a foreshadowing of Macbeth's vaulting ambition, the fatal flaw in his character which eventually leads to his tragic death.
In the third scene of Act I, Macbeth hears from the witches that he will become Thanne of Cowder and "King hereafter". During the rush of events (including Cowder's treachery in the battle) Macbeth does become Cawdor and he thinks for a moment of killing Duncan, the King, "whose murder is but fantastical". Later he mentions the thought to L. M. who begins to think more seriously of it.
Macbeth's aside (in scene iii) is picked up again in a long speech to himself at the beginning of the seventh scene. This scene clearly and powerfully expresses Macbeth's morally significant internal conflict and then shows, through discussion with his wife how he is led to firmly commit to the murder.
The fifth and seventh scenes take place at Inverness where the killing of Duncan will eventually take place. Macbeth has written his wife of the witches's premonitions which she reads at the beginning of scene v. During this scene, Lady Macbeth comes to stir Macbeth with serious thoughts of what should be done to carry it out. When Macbeth tells his wife that Duncan will visit them, she says: Bear welcome in your eye..., but be the serpent under it."
In the following paragraphs, an analysis of the seventh scene of Act I will be made in order to show how this scene expresses Macbeth's morally significant internal conflict and how he was led by his wife to commit the murderous deed.
The exciting force at this stage of the drama is the clear discovery by the tragic hero (Macbeth) of a significant moral conflict. -- a vaulting ambition to become King, but many reasons not to kill the King to become king. The reasons are both moral and otherwise. Macbeth is also a good man. In his wife's words "Too full of the milk of human kindness".
At the beginning of the seventh scene, the scene is set for Macbeth's internal conflict which is expressed in a long soliloquy that seems to resolve all doubt about Macbeth's direction. Macbeth's goes over in this speech to himself all the reasons why it would be a terrible thing to kill Duncan.
As he is the kinsman and subject of the King, he has no spur to prick the sides, but "vaulting ambition".
In the English of that day (explained in an editor's introduction), the word "vaulting" means rising onto a horse, but then falling to the other side. If Macbeth could have done the deed quickly and well with no bad consequences, he would have done it, but he has doubts. Taking all of these doubts, which also include the possibility of damnation, he decides the deed will not be done. He determines that "we will proceed no further in this business".
Lady Macbeth turns him around. She is the "spur to prick the sides of (his) intent." Throughout the first act, Macbeth has made no commitment to murder the king, but Lady Macbeth believes his mentioning of the subject makes this a commitment. She pounds the man with ridicule, questions his manliness, or at least suggests that the courage to do the deed is manly, and in her own grotesque description of what she would do if she had made the commitment she wants of both: "She would tear her nursing baby from her breast and tear its brains out" if she had sworn as she says her husband did. Also, Lady Macbeth puts the deed in warrior terms rather than moral terms and presents the murder not only as good but as heroic. Also she convinces Macbeth that the deed can be done quickly and the blame clearly laid on the guards which they (Macbeths) will offer drink and the guards will be blamed. This helps also to help resolve doubts about "vaulting ambition". Thus, the end of Act I sets a clear direction for the entire tragedy Macbeth's doubts have been resolved. END OF QUOTE.
I took this plagiarized version from my daughter's essay to conclude the section of this for my vaulted papers and to portray my own moral conflict and vaulting ambition. (The essence of this part of MacBeth is directly related to the section entitled "Regulatory Star Wars" in Part II). The entire work of rehabilitation might be viewed by some as a product of vaulting ambition and one where I risk falling on the other side. There is deep moral conflict driven by fear, of being disgraced professionally and otherwise, not because I am not right but at the hands of those who would employ Ely-type stratagems against my ideas. But it does or did not stop me because I wanted to communicate truth in the selling of my idea. I didn't commit a Macbethian crime nor have I been driven to revolution, although all this amounts to "a quiet revolution". In essence, I had been working through deep moral conflicts (including helping my daughter with her precis, sensitive to her concerns about committing plagiarism from an all too "helpful" father.
Through this process, I also began to see some "promises" which began to be translated into an "anticipatory consciousness" which became quite different from the "road backward" that had formed a "false consciousness" of earlier years. A following chapter (in this Part III) discusses a system of beliefs that I once had which I might capsulize under the title "Road to Richmond". As much as anything, it compares belief systems (or ideologies), embodied in my own, that mix the liberal humanitarian with the conservative ideology.
The work is also about other moral conflicts and how the "promises" are leading me to resolve these. "Vaulting ambition" is only a small one and some of the others revolve against other great writings not confined to Shakespeare other Acts of Shakespeare (I'm only in the process of reading Wills' "Witches and Jesuits: Shakespeare's MacBeth". Some of the other moral conflicts sometimes appear to be better captured in Goethe's Faust.
When I compare this winter's writings with last years winter writings, I see "progress" in projecting fewer of my own conflicts on to society and a much different philosophy than projected in the 1981 "Star Wars". Last year in a letter to a friend, I was quoting from Faust (the Emperor and the Archbishop): "Then you (the Emperor) give for the church, while it originates, all income of the land: all tithes, interests, and rates, In all eternity. For worthy preservation requires much; so, too, a good administration". This year I'm reading more deeply -- a translation Professor Binswanger's book (a former World Bank economist whose wife had taught me French) had just appeared. It was about Goethe and Faust, entitled "Magic and Money: Alchemy in Goethe's Faust (about the way of science, the way of art and the way of the economy -- as expressed in Faust and Goethe's experience in public administration). I can send this to my friend with the hope that next year's winter letter will be more instructive and indicative of constructive change. Stopped here on March 3, 1995 (and continued with edits and further reflections in late April, 1995).
It says something though about the state of moral progress when a man can admit somewhat publically to at least one fault (a simple indiscretion on the cusp of pre-maturity years) and go on to "promise" that he will deal creatively and constructively with other faults, at least in his vaulted papers. He projects (or expiates) some of his possible faults onto others (like dead economists) as a means of trying to find salvation -- how really Faustian in character?. For discussion with my friends.
Also for those for whom I share the more public part of this, I have attached a short two-page biographical sketch. Surprisingly, I wrote this a couple of years ago for Senior Executive Service training. Not surprisingly, I was not accepted. I was not terribly unhappy and accepted the non-selection with the usual equanimity. Despite my Hegelian wish-dreams, I am clearly not the model of "the administrator" in the modern public state. So I polish my writings about "aviation development" and try to accomplish the ploughing of some inroads in "mobility policy" over the next two years while I "dream of England".
What this all translated into in late April, 1995 was the preparation of the beginning of Part II where I present the outlines of a Projet Girondin, which also involves States in the important activity of deficit reduction and presents an approach to fiscal and regulatory coordination in the transportation sector along demand revealing lines (the design of "incentive-compatible" performance partnerships" using the current parlance in the Federal government). Although I express some reservations about getting very far, based on a previous (1982-83) project on incentive-compatible arrangements for intragovernmental decisionmaking, I saw a great deal of long run potential (and treacherous pitfalls) because this was much larger than intragovernmental decision processes involving the acquisition of information technology.
At least I could try this out among friends in my personal network and if it seems likely to raise too many problems, I could defer pushing forward until near the end or after my current tenure in the area of "transportation regulatory management". I could also communicate with England about the part of this work relating to "aviation agreements" among North America and Europe. Maybe this would be another entree of sorts into "international affairs" which I had successfully engineered with a project on telecommunications and developing countries. In any case, I developed a project proposal of sorts to begin communications with England. This is where I stand now at the beginning of Summer, 1995.
During the next couple of years, I set the manuscript aside, devoting more of my energies to Part II: White (and Reality).
I would present papers like one I presented at the Annual Meeting of the Council of Georgist Organizations (September 1997), entitled "Geoism and the Practice of Public Economics".
I concluded that paper at http:www142.pair.com/flower1/geoism.html
with a story that went through my head in the dark days following the Haitian massacre of November, 1997.
In a scene borrowed from Waiting for Godot, I turned to the Haitian Finance Minister, after informing him that we had withdrawn several million dollars of aid and that I was preparing an infamous "Lights Out Over Haiti" cable to the Secretary of State, and said "Let's Be Happy"
After a long pause, he replied:
"OK. Now That We Are Happy, What Shall We Do?
The answer to this question is taken up in Part II.
Edward H. Clarke
Washington, D. C.
July, 2000
1. For a description of how the work of what many believe to be the world's greatest futurist, Concercet, was translated by the idealogues into such a threefold division, see K. Baker, Condercet: From Natural Philosopher to Social Mathematician University of Chicago Press, 1975, particularly Appendix B, "A Note on the Early Uses of the Term 'Social Science'."
2. Of course, some deny that I had any significant role in this discovery. See Palgrave Dictionary of Economics entry on "incentive compatibility" by John Ledyard which does not even mention my name and credits himself and T. Groves as the first to discover a solution to the "free rider" problem.