Neoliberalism, public and private goods and the digital revolution: Part one

The office of intelligence in every problem that either a person or a community meets is to effect a working connection between old habits, customs, institutions, beliefs, and new conditions.

John Dewey, Liberalism and Social Action, 1935

As I’ve argued before, our engagement with the digital world is suffering horribly from a metaphor hangover. We deploy the policy language articulated for micro-economic reform – the project of ridding ourselves of the tired and corrupt detritus of a century of political favouritism and relying where possible on market competition instead. It’s always worth continuing to ask such questions but, as we’ve learned to our cost, there are lots of areas where simple deregulation and market forces don’t work well and though it may not be easy to work out what the best strategy is, the reasons to be suspicious of simple market solutions are obvious enough. (Thus for example, and with the greatest respect for the authors of the report, why government decided to throw the commissioning of human services at the Harper Review into competition is an example of the problem. As far as I know none of the members of the review had much background in the area.

As I’ve argued, one of the exciting things about the digital world is that the relation between public and private goods is almost always different there. Often it makes sense to ignore this and just watch the market do its thing. But always and everywhere, a digital artefact is a potential public good. Indeed most of the new public goods that have evolved so far in the 21st century have been privately built. Google, Facebook, Twitter and Wikipedia.

So it’s an exciting area for new thinking, some of which I’ve tried to do here and here.

For that reason I was intrigued to see a paper from Policy Network – which styles itself as “promoting the best progressive thinking on the major social and economic challenges of the 21st century” entitled “A Digital Progressive Project“. Alas it’s the usual two step – refashion the welfare net for our new age of insecurity – end those pesky ‘one size fits all’ entitlements. And unleash digital technology to improve the productivity of human services like education and health.

Citizens should be as empowered in their dealings with the government, just as they are as customers – casting a ballot from the comfort of their own living room, filing income tax returns in just five minutes, signing a legally-binding contract over the Internet from anywhere in the world via a mobile phone, registering new businesses in as little as 20 minutes. For example, in Kansas City, Missouri, new business owners use an online tool to help navigate complex regulations and approval processes in place of the old system in which business owners were expected to identify which permits they would need and work with multiple departments.

Well who could argue with any of that? (OK – well I don’t much like citizens as customers, and lowering the transactions costs of voting, may do more harm than good, but we’ll leave that to one side.) Still somehow, the article doesn’t get to grips with the possibilities – with the way in which the digital world should be reconfiguring the way we think about the provision of public goods, and what a gift to the left this should be.

Meanwhile PM&C has recently published a paper on public sector management of data. It’s yet another go at the open data and data linkage agenda that’s been bubbling along since the Government 2.0 Taskforce or earlier but which has failed to get much traction owing to lack of support from the top of either the political or bureaucratic layers of government. I may be excessively cynical, but it’s a most unusual report from the public service, because it’s quite candidly critical of the way in which government has not implemented policies it adopted – to open up data. From a position of something like equality in 2010, as the report says

Australia lags the United States (US) and United Kingdom (UK) in releasing public data for business, and lags New Zealand (NZ) in the application of data to policy design. All three countries made an upfront investment to drive data policy with a top-down mandate from Ministers. . . . is a central point of access to data from across governments. It currently links to 6,700 datasets, compared to 25,461 in the UK and 132,865 in the US. Notably:

    • over 75% of the datasets come from just four organisations;
    • there are big gaps, including in areas such as health, employment and socioeconomic data; and
    • less than 25% of the data is enabled by an Application Programming Interface (code that allows programs to access data).

Most agencies do not release data via as a matter of course. In consultations, many said it simply does not enter their mind to do so. Consultations indicated that had been under resourced (although some agencies such as DHS also have staff who prepare data for publication on

So it’s all good. Now, back on page 7, the report specifies the three things it’s trying to achieve. The first two are to Improve service delivery and Develop more effective government. That’s good too. The third objective isn’t the overarching one of improving lives or even improving economic outcomes. Instead the frame is mercantilist. It’s to “Drive the digital economy: Public sector data is available to support private sector innovation and productivity.” Sigh.

Meanwhile the ALP recently called for National Information Policy

National Information Policy would follow the model of the Keating Government’s National Competition Policy and systematically scan institutions (public, private and community), policies and regulations to identify obstacles to optimal data generation, protection, access and use.

What with imitation being the sincerest form of flattery and all, this was music to my ears of course. For, after outlining it in the Fin, this is the proposal I took to the 2020 Summit:

Just as we did with National Competition Policy we should systematically trawl through our markets and indeed other social institutions, asking how well informed they are, and what can be done to improve information flows. The economic and human benefits could be immense. The costs minimal.

 So I’m naturally very pleased with this initiative. This is the itemisation of the agenda in the ALP’s policy statement.

The National Information Policy reform agenda will cover multiple fronts, over an extended period of time, while also delivering short term dividends to maintain momentum for reform. It could potentially pursue issues like:

  • A comprehensive audit of existing government data sets;
  • Access to government data for public good research;
  • A review of existing public sector data generation policies (eg ‘Smart Infrastructure’ telemetry standards for public infrastructure);
  • A detailed review of the impact of existing laws on data utility;
  • Data generation mandates (eg Building Information Models);
  • ‘Internet of Things’ standardisation and certification;
  • Personal Information Management Systems (PIMS).

All of this is worthwhile. The second item is focused on data for public good research which is well and good. And it’s all about government doing its job better – and government is pretty much axiomatically producing public goods or goods with public good characteristics. So I can’t complain. Yet it’s notable that every one of the seven points relates to the latest hot trend – data. And the flavour is managerial and mercantilist. The state becomes a joint venturer with the private sector in growing wealth. Consumer benefits – which one might have thought is the essential point of production, is downplayed. 

More importantly, there’s a whole agenda that’s not covered – and it has ‘progressive’ or left-of-centre written all over it. Because if knowledge and digital artefacts are always and everywhere a potential public good, you’d expect that expressing the collective interest in that fact would lead to a role for collective institutions (not necessarily government) representing the public interest as a countervailing force against private interests. As Robert Kuttner argues, an identifying idea of progressives since the turn of the 20th century if not before that capital needs a counterweight – in the state and other collective institutions. An obvious agenda is IP, which is becoming progressively more unbalanced towards the interests of private IP holders (Will Mickey ever go free?). Likewise arrangements for the creation of knowledge about drugs is a big mess, incredibly poorly suited to the interests of lower income countries but also to economic efficiency more broadly. Here’s (pdf) Dean Baker’s sketch of how to fix things. These would be worthy subjects of a systematic trawl through our institutions for creating or importing and disseminating knowledge. Note that action in both these areas is likely to both improve economic efficiency and equity as monopolistic rents will be funded from relatively flat taxes on consumers and go to the disproportionately wealthier owners of capital.

Now I can understand why, if it had thought of such things, an Opposition might want to steer clear of such politically thorny subjects. But our current institutional arrangements regarding information are full of these kinds of problems, many of which would not present very difficult political obstacles. So in the next instalment, I’ll explain another defining characteristic of ‘markets’ for information – that in addition to being a potential public good, all informational artefacts embody public goods in their very makeup and I’ll offer two striking cases that call for ‘information policy’ which, if it was well prosecuted could make major and enduring improvements to knowledge formation and dissemination promoting simultaneously promoting equity while making a growing contribution to productivity. And they’d have little electoral downside.


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