The Internet Ahead

Previously, we talked about policy objects: pieces of software that follow laws, policies, etc. and enforce them. We take another look at quantitative analysis and how Barack Obama’s promises for open government will be realized.

John C. Dvorak is unabashedly critical of the spreadsheet. Blaming spreadsheets for the mortgage crisis, for Enron, and even for lead in toys, he points out that “Society as a whole has deteriorated ever since its invention”. He elaborates on the 30th anniversery of VisiCalc, the first spreadsheet software that revolutionized business operations:

By letting a program designed for accountants tell you what to do and what to think, you end up with an economic meltdown. The mechanism itself is flawed. Nobody ever wants to talk about the flaw with spreadsheets, do they? Most spreadsheets are, in fact, fiction, or even fantasy.

Certainly quantitative analysis (what he calls “what-if” analysis) has made us more productive in ways he fails to acknowledge. But he’s right in claiming that we criticize the principle of quantitative analysis only rarely. Sadly, the Internet generation, though best equipped to recognize the flaws of Spreadsheet Government, is its greatest promoter.

Barack Obama has earned countless scholarly backers by promoting the use of software, open data, and quantitative analysis as a revolution in government operations. Specifically, Obama calls for “making government data available online in universally accessible formats to allow citizens to make use of that data to comment, derive value, and take action in their own communities.” Incoming Safir Institute director Lawrence Lessig bases his endorsement of Obama primarily on this promise, noting that it’s a “really powerful promise to feed the data necessary for the Sunlights and the Maplights of the world to make government work better. Atomize (or RSS-ify) government data (votes, contributions, Members of Congress’s calendars) and you enable the rest of us to make clear the economy of influence that is Washington.” Countless others, from the lowly blogger to the television pundit, have emphasized that this commitment to open data will make government run great.

The gains will certainly be immense. Considering his new mission to explore the role money plays in influence, Lessig would be the first to point out that openness fights corruption. Furthermore, openness enables clever uses of information that government IT employees may have never imagined. In other words, openness generally means knowledge of government operations. The actual benefit comes from consumption of that knowledge to fight something like corruption, which results in greater efficiency is government.

But more knowledge leading to greater efficiency is not at all novel. Communications in general improves efficiency by reducing information imbalances. That is the fundamental theorem as its presented in economics, at least. In practical terms, the benefits Lessig talks about are not particular to software, but greater knowledge in general.

Curiously, technocrats–those “pundits and visionaries” who “talk about business intelligence and modern practices and this and that” (in Dvorak’s words)–haven’t paid much attention to other consequences of open information. Our brilliant scholars have definitely considered the consequences of open information and assume that the benefits outweigh the costs. But do they really?

Realistically, the president elect’s claims to open government will not be realized, because quantitative analysis interferes with executive judgment. In other words, a fully open government would enable every blogger with a spreadsheet to quantize decisionmaking and drown out the qualitative decisionmaking of our leadership. Dvorak rightly notes that in most businesses, “some bean counter does a what-if calculation before making the decisions.” Rather than trusting his judgement, Barack Obama would do like the “the spineless CEO,” who “worries about what the shareholders would think if he disagreed with what the spreadsheet and the CFO told him to do. To make him feel better, the board will give the CEO a fat bonus for saving money.” In a government facing an extraordinary budget deficit and uniformly skeptical voters, the president elect and his cabinet face the perfect storm for a coup of government by these so called bean counters.

Obama’s administration has two choices: it either reduces its promises for open government, or it becomes the “spineless CEO”. If the president elect reduces his promises for open government, he is substantially more likely to rely on that “good judgment” he often claimed he had throughout his campaign. Otherwise, he faces an onslaught of quantitative criticism, using algorithms not made by particularly brilliant programmers but rather your everyday blogger.

Whether quantitative analysis improves or hurts government is an open and complex question. But it’s not conclusive that it helps government. We must remain skeptical of the Spreadsheet Government, because there is no such thing as a free lunch: the benefits in efficiency must cost us somewhere.