The great stagnation is just a failure of imagination

The Great Stagnation thesis offers deep insights into the past few decades yet is oddly unimaginative on the implications of the digital revolution.  Is the economic importance of the internet really limited to tech company revenues plus the consumer surplus of scrolling through lol-katz on the low end and Marginal Revolution type links for the higher brow?

From wikipedia: "In  economics , total-factor productivity (TFP), also called multi-factor productivity, is a variable which accounts for effects in total  output  not caused by traditionally measured inputs of labor and capital. If all inputs are accounted for, then total factor productivity (TFP) can be taken as a measure of an economy’s long-term technological change or technological dynamism."

From wikipedia: "In economics, total-factor productivity (TFP), also called multi-factor productivity, is a variable which accounts for effects in total output not caused by traditionally measured inputs of labor and capital. If all inputs are accounted for, then total factor productivity (TFP) can be taken as a measure of an economy’s long-term technological change or technological dynamism."

The tech community bifurcates into two camps on this question: the "software is eating the world" triumphalism of Marc Andreesen against the "twitter for cat fanciers" realpolitik of Peter Thiel.  Everyone's asking what's the next great technology and completely skating over a super obvious but much less sexy frontier: getting government operations to harness the power of the digital revolution.  

Everyone from Kleiner Perkins (see slide 8) to Barack Obama puts government way in the rear of the digital adoption curve.   Transforming that reality doesn't require invention but instead involves a complex problem of coordinating the deployment of largely existing tools (not to mention navigating political, bureaucratic and other fun landmines).  A host of civic minded organizations and increasingly high profile initiatives have started the yeomans work of implementing modern digital practices in government.  

Yet the goal ultimately shouldn't be to design a better user experience for the department of horse and buggy whips.  We need to pragmatically imagine what digitally native government operations look like and show how that new paradigm can deliver an order of magnitude better public service delivery outcomes.  There's no better opportunity today to pioneer that new paradigm than the California drought, which frankly requires new thinking.

Basic questions like "what's the mean, median and key percentiles of retail water bills across California?" or "how much water was used last month by households with a home value over a million dollars?" at best leave experts scrambling for back of the envelope answers or outdated non-comprehensive surveys.  How is that acceptable in the home of the digital revolution?  Shouldn't that data just be a couple google searches away?  

The answer begins with a "pretzel palace of incredible complexity" as Jerry Brown is fond of saying.  A patchwork quilt of hundreds of cities, public irrigation districts, mutual water nonprofits, special local government districts and private water companies (each with a different set of regulations and a different relationship with state and federal government) manages California's water.

Digital tools can help abstract away that underlying operational complexity and put the focus on how we're going to meet California's need for water conservation.  The quality of today's secure, web native off-the-shelf database management technologies mean that there's no technical reason every drop of metered water sold in California can't be aggregated to answer our earlier questions.  

That pool of water usage data offers the potential to create water demand forecasts like those employed in the energy sector so that water managers can plan operations better and have an improved understanding of potential policy shifts like water rate changes.  More near term, that sort of civic data science offers the ability to coordinate and target a next generation social action campaign.

Governor Brown has focused on removing ornamental lawns to reduce urban water usage and utilities have spent hundreds of millions of dollars on rebates to get households to tear out their lawns.  Yet beautiful California friendly plants still only represent a percent or two of the outdoor landscaping market. Getting the necessary seismic shift in conservation attitudes demands something more like the transformatively data-driven Obama campaigns than standard public education efforts.

These approaches to civic data science have larger implications.  Late 19th century New York did not have a formal budget.  Instead the city simply spent money until it ran out.  Today we measure in exquisite detail expenditures of public funds yet how we track the impact of those dollars is largely as ad hoc and informal as budgeting in a 19th century municipality.  What if measuring impact from simple performance analytics all the way to rigorous peer reviewed research became as sophisticated and commonplace as municipal budgeting today?

That's not impossible -- just a hard problem with lots of moving parts.  A substantial part of the cost of conducting everything from performance analytics to social science research involves simply acquiring, cleaning and managing messy data yet the technologies to purify public data at scale now exist.  The trick is developing mechanisms to appropriately share data across various actors and aligning incentives so that this sort of civic data science marketplace can function.  It's ultimately a human rather than technical challenge.

The resulting measurements of impact would have nontrivial implications for everything from how we implement clean water regulations to how we fight crime to how we maintain our roads to how we ensure effective access to green space to how we pilot new public school structures to how we might develop a radically more experimental approach to tackling civic challenges (sorta a marginal revolution if you will).  It's a big frontier though and that's probably far from all of what's possible so please do feel free to use your imaginations.  

Cynics will argue that sort of thing is impossible, that middling government operations are simply an intractable condition.  Yet it's important to remember public administration isn't a metaphysic.  The Romans didn't manage their water infrastructure with 50,000+ page reports like California's BDCP, and there's no fundamental reason we can't pioneer a new way of administering environmental quality requirements more robustly than giant pdfs.

That's actually a driving motivation in starting this plucky little ARGO nonprofit: to test this idea at scale in the coming months.  We will measure its success or failure not merely in the dry dollars and cents of total factor productivity but in the improvements in California's water demand management and ultimately in how much digitally native public administration delivers a more free and just society.  

More than just an economic engine, the internet is the greatest commons humanity has ever known, uniting more people from more places into a sprawling web of connectivity.  The internet has transformed countless entrenched industries while most government operations would be eerily similar to a time travel from the early 20th century.  Is it really just dreaming to believe the digital revolution offers a new frontier for how we tackle old civic challenges?

Anyway, just one Californian's conjecture.  



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