The Tragic Trade-Off of Centralized Policy

By Max Gulker

Progressives have a “complexity problem,” writes law professor Tim Wu in the New York Times:

In recent decades progressives have not prioritized making policies and programs easy for most Americans to understand, use and benefit from. Fixing this problem will mean overcoming a streak of perfectionism and a certain intellectual defensiveness, but it must be done if progressives are to make government popular again.

Kudos to Professor Wu for taking a serious look at policies he favors, identifying a crucial problem, and challenging fellow progressives to do better.

Exhibit A for overly complex progressive legislation is the Affordable Care Act, which Wu writes is “exceptionally hard to understand and discouragingly daunting to make use of.” To Wu, solving this problem is a matter of elegant design. But think about his core analogy:

Avoidance of complexity and minimizing choices are hallmarks of good design, as we have learned from the technological revolution in user interfaces. The age of impossible-to-use computers and incomprehensible TV remote controls has given way to the sleek and intuitive interfaces offered by pioneers like Steve Jobs of Apple. What progressives most need now is not more brains, but better policy designers.

The flip side to Wu’s user-friendliness is a lack of control. When I buy Apple products, I’m voluntarily giving up some of my computing freedom in exchange for something easy to use. Others, mostly more computer-savvy than me, hate Apple products for the same reason: relative to the competition, Apple radically restricts what a user can do.

The difference, however, between a smartphone and government policy is that this trade-off between user-friendliness and control is not a voluntary choice.

Wu’s examples of progressive policies that are “elegant and simple to understand” include Social Security, Medicare, and indoor smoking bans. What these policies have in common is that they’re compulsory. Social Security and Medicare are compulsory retirement saving and old-age health insurance, respectively. The compulsory nature of smoking bans is obvious.

What would it look like if we addressed the items on progressives’ current to-do lists with Wu’s simple and elegant interface? Responding to climate change would mean a hard ban on carbon emissions above a certain level. Poverty would require universal basic income. And health care would be met by the government as universal and mandatory provider of health insurance.

It may well be that Wu favors these policies. But he has exposed a trade-off endemic to centralized control of our society: more draconian rules versus more complex ones. By saying “Let’s not make our programs so complex,” Wu is also saying, “Let’s make them more prescriptive and coercive.” And reducing choices is something Wu directly advocates throughout the article.

What is it about those pesky choices that makes policies inevitably more complex? When you’re making policy to influence the outcome of millions of individual choices, that mass of individuals will find every unplanned situation or way around the rules. For Obamacare to have a semblance of competition or consumer choice, the government must control all those choices sufficiently to achieve the policy goal. And that turned out to mean making the system almost fatally complex.

Most of us would like to see policies and rules that are both less prescriptive and less complex. This means taking a leap of faith that many progressives find problematic — to let outcomes be governed more by individual freedom. This means understanding that there will be instances where individuals abuse the system, but also realizing that there are numerous bad outcomes when a policy is built on either draconian or complex rules.

Wu wrote an interesting article that raises important questions for progressives and others across the political spectrum. But it’s hard to see how the sleek, simple interface he imagines when people interact with government doesn’t carry along with it more government control.

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Max Gulker

Max Gulker is an economist and writer who joined AIER in 2015. His research focuses on two main areas: policy and technology. On the policy side, Gulker looks at how issues like poverty and access to education can be addressed with voluntary, decentralized approaches that don’t interfere with free markets. On technology, Gulker is interested in emerging fields like blockchain and cryptocurrencies, competitive issues raised by tech giants such as Facebook and Google, and the sharing economy. Gulker frequently appears at conferences, on podcasts, and on television. Gulker holds a PhD in economics from Stanford University and a BA in economics from the University of Michigan. Prior to AIER, Max spent time in the private sector, consulting with large technology and financial firms on antitrust and other litigation. Follow @maxgAIER.