Democracy in America

American politics

Infrastructure and democracy

National Infrastructure Bank versus democracy

Sep 7th 2010, 13:17 by W.W. | IOWA CITY

STEVEN PEARLSTEIN argues that taxes ought to be raised to pre-Bush levels, and that the revenue gained thereby should be used to fund a "National Infrastructure Bank".   

For several decades, policymakers have tossed around the idea of a National Infrastructure Bank to provide loans and matching grants for highway and transit projects, a new air traffic control system, high-speed rail, clean-energy generation and smart electric grids, and an expansion of state college and university systems. Over the years, this idea has won bipartisan support from business groups, labor unions, governors and big-city mayors. And with interest rates at record lows, construction costs down 25 percent and so many construction workers unemployed, there is no better time to launch such an effort.

With an independent board, a professional staff and its own sources of operating funds, the Infrastructure Bank could be insulated, as much as possible, from political influence and the pork-laden congressional appropriation process.

In a speech yesterday, President Obama unveiled a new infrastructure plan which includes the creation of an infrastructure bank. I'm interested not so much in the wisdom of increasing tax-financed infrastructure as in the idea that the entity Mr Pearlstein envisions to dole out the funds should be "insulated, as much as possible, from political influence and the pork-laden congressional appropriation process."

This seems problematic for several reasons. Unless I misremember the lessons of sixth-grade social studies, it is democracy that makes legitimate the coercion of taxation. Mr Pearlstein's proposal seems to be that the peoples' representatives today should seek to enact a scheme specially designed to disburse funds extracted from tomorrow's taxpayers without the interference of their duly-elected democratic representatives. Infrastructure: too critical to leave to risky democracy! 

Now, I certainly understand the desire to insulate one's own cherished pet projects from the vicissitudes of the democratic appropriations process. However, an argument for withdrawing matters of infrastructure, of all things, from the domain of democratic authority suggests equally persuasive arguments for similarly immunising defence spending, entitlement spending, spending on subsidies to "strategic" industries, etc. If we generalise Mr Pearlstein's reasoning, we end up with, at best, a ruthlessly rational and efficient Singapore-style technocracy, which wouldn't be so bad, but isn't anybody's idea of liberal democracy. More likely, we would end up with a system even more corrupt, corporatist, and inefficient than the one we've got, but with fewer of the protections afforded by democracy.    

This is not to say nothing should be immune from democratic discretion. Our basic rights should not be subject to the whims of majorities. And monetary policy is bound to lead to disaster unless central banks are afforded a good deal of independence from the exigencies of electoral politics. Yet high-speed rail is not among our basic rights and policy regarding "smart electric grids" is not in any relevant respect similar to monetary policy. A better general theory of the circumstances under which independence from democratic politics is justified would be useful here. But it seems clear enough that if we can't trust democracy do infrastructure, we probably can't trust democracy, period.

Readers' comments

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Genghis Cunn

SM, your 2008 link is very interesting, I've often found Coase's work highly relevant to current issues. I've saved that post for further consideration, thanks. I can't think of an apposite Coase quote of the top of my head, but I think that he might have seen mechanisms for achieving mutually beneficial outcomes as preferable to entrenched "rights" which allow for no accommodation to increase overall welfare, including that of the right claimant. The attachment to particular rights can often create rigidities which reduce the scope for exploring ways of achieving better outcomes.

Genghis Cunn

Stephen M, I found your first link interesting. You say that "Much of what passes for reasoned argument in everyday life is actually the presentation of opinions and preferences ..." More broadly, it is the conscious, thinking, mind verbalising positions determined in the non-thinking so-called subconscious, where our views, attitudes and reactions are determined in processes driven by past experience and conditioning of which we are rarely aware. It is therefore very hard to determine an optimal policy position (such as what is a basic right) based on rational, logical argument; and even harder to get broad agreement on it.

Of course, people of goodwill will keep trying to develop ideas and policies for the greater good of the community, but each individual's perception of what that is will be driven by the conditioned subconscious. These blogs might be pretty boring if it were otherwise, but it's helpful to understand and detach from your conditioning.

Genghis Cunn

"Our basic rights should not be subject to the whims of majorities." There are no rights in nature; all rights are social constructs. What is seen as a right in any society/culture will depend on many factors, cultural, religious, ideological, subject to economic resources and priorities. So all rights ultimately rely on majority support, and will change over time as people's views, understanding and disposable income vary.

So what you are actually saying is that "I think certain rights should be inalienable, even if a majority of the population no longer support them." So democracy is presumably not one of your favoured basic rights?

Heimdall

Stephen,

I made my last comment before scanning through yr most recent posts.

Believe it or not, I haven't thought about Godel in about 2 decades, since I had a bunch of free time on my hands and read stuff like Chomsky (his linguistics, not politics), Fuller (Synergetics) and, yes, GEB.

Your last comment triggered a memory of logical incompleteness, hence the Godel #1/#2 quip. And when I peruse yr recent comments, what do I find from yesterday?

A reference to Godel's Incompleteness Theorem, on an unrelated thread.

Weird stuff.

Should you ever make it to OR, look me up. The beer's on me (Doug was kind enough to treat the last time 'round, so I've got the $$) And if Doug's in town, we can have a shindig. (3 paragraph limit...)

Heimdall

Stephen,

re a), quite true, although it might give us insight into what the system of government *ought not* to be.

re b), well, one way of narrowing down the field might be to propose boundary conditions that begin to exert pressure from two (or more) sides in a sort of political science "squeeze theorem" (see: http://en.wikipedia.org/wiki/Squeeze_theorem)

re "for anyone who accepts the premise that the method of solution should not require the doing of something that is logically impossible to do."

Can I invoke Godel #1 (or is it #2?)

Cheers!

Stephen Morris

Even if most people “here reading these comments” did agree that California is dysfunctional (hypothetical evidence), that would be irrelevant to any discussion of the decision-making systems of government. It would tell us neither:

a) what the decision-making systems of government ought to be; nor

b) how we might go about choosing what the decision-making systems of government ought to be.

Democracy is unique in providing a solution to (b) for anyone who accepts the premise that the method of solution should not require the doing of something that is logically impossible to do.

- - - - - - -

Also, I was racing to get to a meeting earlier so I neglected to ask:

How does the writer of the article know what “[o]ur basic rights” are in any specific instance?

I’ve been trying to find an answer to this for years, but all I ever get is vague rhetorical blancmange that fails to give unambiguous answers for specific instances.

Is there some Cosmic Teachers’ Guide somewhere with all the correct answers in the back of the book? (It must be a very, very, very big book!) Does the writer of the article have one? Does anyone know where I can get hold of a copy?

If a copy is available, can we arrange to have it distributed . . . and then save money by abolishing the Supreme Court (which will obviously be superfluous in the presence of such a conclusive authority)?

Failing that, how does one determine (other than as a matter of individual preference – see comments above on a priori privileging) when a specific case results in a breach of “our basic rights”????

Heimdall

Ahh, Stephen, with "Eigenfunction #1" (or is it "Citizen Preference #3"?

What I meant by:

""I think most of us would agree that CA represents "too much democracy'".

Was that most of *us* (i.e., here reading these comments) would agree that CA is dysfunctional as a result of their particular brand of direct democracy. There may be other ways around their specific debacle. I suspect that they haven't read "Eigenfunction #1"...

;)

Pacer

Why not just give some of the federal income tax receipts back to the states, on a per capita basis, and let their voters decide how to spend them? High speed rail and alternative energy subsidies are the thing for California? Great. Georgia needs water storage and efficiency projects? Fine. New England states want to remediate and prevent watershed damage from winter road salt use? Let them vote on it.

Could it end up worse than the ARRA stimulus?

Stephen Morris

"I think most of us would agree that CA represents "too much democracy'".

Most of whom??

Not - it would seem - most Californians! They are at liberty to call a referendum to abolish their democratic institutions. Indeed, since the introduction of the right of initiative in 1911 there have been three attempts to do so and all have either been defeated or been withdrawn in the face of imminent defeat. The same is true of other states with democratic government, as well as countries like Switzerland.

In contrast, the people of the United States as a whole have never had the opportunity to voted directly on the adoption or rejection of democracy.

As noted many times before, democracy is a logical concept: the eigenfunction for preference aggregation in the absence of (logically indefensible) a priori privileging. When a set of individuals come to choose a system of government, democracy is the only device for aggregating their (potentially conflicting) preferences which does not require the doing of something that is logically impossible to do (i.e. identifying individuals whose preferences are to be privileged a priori).

The matter is discussed in greater detail here.

Of course, that leaves the question of how to define "the people", with one possible solution discussed here.

jouris

I'm not entirely clear on what a "National Infrastructure Bank" is supposed to add. It's not like there was any serious problem in selling state and local bonds (once approved) to pay for infrastructure. At a pretty low interest rate, too. So why add a government lender (which is what this appears to come down to)?

Not to say that our infrastructure doesn't need work. because it clearly does -- both overdue maintenance on existing infrastructure and some new stuff as well. But how exactly is this new bank supposed to help?

Heimdall

john,

"Can't you get a little more consistent and find a 5th way to strangle Freedom of Speech?"

Shut up!

;)

But seriously, corporations aren't living entities, they are artificial legal entities that are owned by actual persons with actual speech. I certainly wouldn't want to prevent the actual people from actually speaking.

Publicly funding elections would end the sale of public office to the highest bidder, not restrict anyone from speaking.

Prohibiting excessive/continual campaigning wouldn't stop anyone from speaking, but it might help focus attention on doing one's job.

Requiring elected officials to actually work wouldn't restrict speech either, as far as I can tell.

And the revolving door between being an elected official and a lobbyist is a clear conflict of interest. Conflicts of interest are Bad Things that can distort a functioning democracy.

What are your ideas?

john powers

H,

4/5 ideas that you have run counter to the very basics of the 1st amendment. Can't you get a little more consistent and find a 5th way to strangle Freedom of Speech?

JBP

Heimdall

Well, on the one pole we have direct democracy, the closest of which we have in the US is CA. I think most of us would agree that CA represents "too much democracy", with mandates to never raise taxes yet always raise services.

On the other pole we have dictatorship, which we don't really have in the US despite the efforts of some administrations to dramatically expand executive power (and subsequent administrations retain that power..) I think most of us would agree that dictatorship is a dangerous path as well.

Somewhere in the middle we have representative democracy, but it seems that it has been corrupted by corporatism (thank you, SCOTUS), demagoguery (thank you, Republicans), and cowardice (thank you, Democrats).

I got to agree w/WW on this one. The National Infrastructure Bank is intended to do the job of Congress, which is to make better decisions than direct democracy while still being held accountable to the citizenry.

The fact that Congress seems unwilling or unable to do the job doesn't imply that we should create a new organization that will undoubtedly become even more corrupted. It implies that we should fix what's broken with Congress:

1) 86 the ridiculous idea of corporate "speech".
2) Make elections publicly funded
3) Prohibit campaigning more than a month before an election.
4) Ensure that representatives spend a minimum amount of time working (including working on infrastructure items)
5) Slam the door shut between representatives and lobbyists. If you choose to be one, you are prohibited from being the other.

Nothing's perfect, but those seem like reasonable changes to improve the ability of Congress to do its job...

Joru

The answer is simple: the recent failures of democratic regimes and the relative economic "resurgence" of illiberal countries is making many people uneasy about democracy. We all know that Democracy was never about getting policy "right" but about stabilizing policy through popular consent. Yet at times like these, many wonks and experts are eager to trade a little long-term stability for a little short-term righteousness.

There aren't many available answers to reaffirming democracy. The best way is to convince ourselves that we have an informed and reasonable electorate. Unfortunately, I don't think there's enough profit to be made by publishers, teachers, and politicians to actually push a non-partisan civil-society agenda.

Barring that kind of positive action, the best we can hope for is we can do what we did in the 80s -- put all our chips on our illiberal competitors failing miraculously. Nothing like a victory lap to make us forget about the problems festering in the body politic.

Doug Pascover

I agree with this: "we would end up with a system even more corrupt, corporatist, and inefficient than the one we've got." The spine twitches at the thought of who would sit on the board of directors.

The rest of this post seems like a non-sequitur to me, though. Particularly "Unless I misremember the lessons of sixth-grade social studies, it is democracy that makes legitimate the coercion of taxation." Presumably any appropriation of taxpayer funds for the purpose would come by congressional resolution, therefore meeting all the demands of our constitution and the democratic republican form of government.

john bauman

Isn't the National Infrastruture Bank mostly just a slight enlargement of the DOT? Being set up in the executive branch, it should already be insulated from the whims of random senators and congressmen.

About Democracy in America

In this blog, our correspondents share their thoughts and opinions on America's kinetic brand of politics and the policy it produces. The blog is named after the study of American politics and society written by Alexis de Tocqueville, a French political scientist, in the 1830s

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