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September 22, 2011

Governance: À la carte menu or CommonWealth?

Since all politics appears to be local, we start with the recent Post-Gazette article about how the South Side is considering a Neighborhood Improvement District to maintain (or possibly upgrade) city services in the face of municipal budget austerity.

A group of people want to do better for themselves, for their business, for their neighborhood and property values get together (freedom of assembly, right?), pool resources, and benefit from economies of scale. That sounds as American as Apple Pie.

Then you realize that the NID can impose taxes, enforce collection, and set local rules (all businesses must close at 11pm, etc), and it seems a bit less All-American. Then you look at the process that legitimizes, recognizes, and establishes a NID and you see that it's a mail-based survey, which defaults to NID approval as long as no more than 40% of the stakeholders say No.

That takes a minute. If 75% of the stakeholders (in America we used to have citizens, but...) ignore that letter in the mail, and the remaining 25% vote poll against the NID, then the NID is approved - because unless more than 40% of the stakeholders vote No, the NID is enfranchised. That doesn't sound very Apple Pie-ish.

Let's do a thought experiment; let's assume that the SouthSide decides it needs more frequent street cleanings, more public rest rooms, and more security. The super-majority of stakeholders don't vote against it, so the NID takes effect, funds/fees/taxes are assessed, and let's say that everybody plays nice. Nobody complains. What are the likely downstream effects?

For one thing, now the neighborhood has a private security force, which is given quasi-police powers with none of the civilian control and public accountability of a police force. Let's call this investment the SouthSide Stakeholder's Militia.

There are secondary effects when one area gets a Militia. Scoundrels, blackguards, and ne'er-do-wells tend to go elsewhere. Criminals may seek other environments. So maybe the situation in Oakland deteriorates, and new problems start appearing on the NorthSide. After a while, maybe Oakland gets a militia, and maybe the NorthSide doesn't.

What's really happened is:
  • Southside and Oakland have paid to outsource their trouble to Northside
  • Citizens (non-stakeholders?) are going to learn to see different areas as different corporate spheres of control
  • the legitimacy of local elected government is diminished
  • the perceived effectiveness of democracy is reduced
  • the rich get richer, and the poor get less - to an even greater degree than we now see
  • we lose our sense of commonwealth
  • we become more like Baghdad and less like 1776 Philadelphia

By responding to challenges of funding and leadership by shifting into an ala-carte private governance rather than doing the hard work of comprehensive, table d'hôte governance, we reduce the social fabric that our entire system relies upon.

There are wide-spread cultural and social benefits that come from our commonwealth. Shifting costs to alacarte pricing has simple, pragmatic, and attractive short-term effects, but the long term social implications are pernicious.

Most school districts take their operating funds (at rates approved by elected officials) through real estate taxes or income taxes. Periodically, a childless citizen or a senior citizen with grown children challenges the practice of universal taxation for education, which is a service that only a portion of the population benefit from. The justification is that we all benefit from a society in which children go to school through high school.

Maybe you travel to Cleveland. You have the bad fortune to have chest pains in a neighborhood that didn't invest in an NID ambulance service. You're starting to sweat and feel funny, and you walk out to the corner to hail a cab. You fumble with a SmartPhone app that's supposed to get you a cab. Damn, there's only one bar on my cell coverage, I guess this NID didn't get the enhanced Verizon package. You die waiting for the cab. The cab, of course, is a free market solution to impromptu disorganized transportation needs. Sucks to be you. Clearly, you're no John Galt.

Here's an example on the federal level. The Obama administration has proposed a $100 user fee for every airplane operation in controlled airspace. So the Acme jet flies from Homeplate to Springfield to Podunk and back to Homeplate, that's $300. Pretty simple, it associates a cost with the activity, people get what they pay for, etc.

That works real well conceptually. The reality is, there's a company that's on the verge of bankruptcy. They're avoiding every possible cost. On the last flight of the day, from Podunk to Homeplate, they make a decision, balancing cost and benefits. they decide to save the $100 and make the flight without those alacarte ATC services. It's a short hop, they're locally based, they know the area, no problem. The weather deteriorates a bit, it turns into a scud-run, they hit a windmill near Somerset and the wreckage tumbles into somebody's house.

If you're not involved in this specific transaction, it's a sad story and a news teaser while you're waiting for the weather forecast. But if that's your house that the airplane tumbles into, you've just borne the cost of the alacarte pricing system.

We all benefit from a society of law, a culture of democracy, and an economy of commonwealth. You might nibble at the fringes without destroying the house, but it's not sustainable. It wouldn't be OK if everybody did it, all the time. Doesn't pass the Categorical Imperative sniff-test.

Today, Elizabath Warren introduced this to our public conversation:

I've got to say, Warren's vision seems much more American Apple-Pie than the South Side NID and ala-carte government. Unfortunately, it doesn't fit into a soundbite or a 140-character Tweet. Neither did the Declaration of Independence, or the Bill of Rights.

I live in a federal constitutional republic, in the Commonwealth of Pennsylvania.
I don't want to live in the South Side NID, with Halliburton Security, Lockheed Martin air ambulances, and enhanced Verizon 4G broadband.

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