The Conservative Reformation: Final Thoughts … for Now

Yesterday, we completed our review of Washington’s key roles in the process of fostering DNS or dispersed, networked solutions. Today, we’ll briefly consider: (i) examples of where aspects of DNS have been employed and where they have not; and (ii) some of the communication and management challenges of implementing this approach.

The Orphan Drug Act is based on a dispersed, networked model, with companies replacing states as nodes in the network. Similarly, the State Children’s Health Insurance Program (SCHIP) borrows from the DNS framework, although SCHIP’s rules are possibly too detailed (crowding out state and local creativity), while Washington’s roles as catalyst and backstop are less-than-fully developed. Still, SCHIP is better than most federal programs in reflecting DNS principles.

Unfortunately, it seems, the Orphan Drug Act, SCHIP, and perhaps a few other programs are exceptions to the rule. Too often, as I’ve argued before, Washington relies on centralized, cloistered solutions rather than DNS. Case in point: The broadband loan program administered by the U.S. Department of Agriculture’s Rural Utilities Service (RUS).

That program is one effort among others to help drive broadband connections to all parts of the U.S.; in particular, the often-overlooked and under-connected rural areas. The RUS was set up as the administrative body for the program, and USDA bureaucrats proceeded to write pages upon pages of rules to guide the program’s implementation. Rather than grants, the program’s funding mechanisms are low-rate (or “cost-of-money”) loans, which require applicants to submit business plans demonstrating how the loans will be collateralized and re-paid. Consistently, these business plans are thwarted by the sparse population of rural areas, which in turn forces many applicants to propose service to a combination of low-density and higher-density areas, even though the latter already enjoy multiple broadband options and thus counter the legislation’s original intent.

Moreover, state and local governments are largely cut out of the equation, usurped by RUS field agents, who act as the primary filters through which local realities are evaluated. Net: The program has suffered multiple inefficiencies and criticisms, including from the USDA’s own Inspector General.

[Disclosure: I work in an industry that agrees with the goals of the RUS broadband loan program but seeks to limit the number of loans going to companies that propose service in areas where multiple broadband options are already available. Such refinements may help improve the program, though I also believe (as an individual voter rather than industry rep) that the program would be even more effective under a DNS model.]

If the RUS broadband loan program was a one-off mistake, we could perhaps look the other way and move on. But it’s not a one-off mistake. Instead, as suggested earlier, it’s emblematic of Washington’s approach, namely: Conceive, fund, and administer solutions from inside the Beltway and implement those so-called solutions via field staff whose loyalties are anchored to District bosses. If any reader can prove me wrong on this assessment, I welcome your challenge. Assuming you can’t or won’t, I stand by my recommendation that we move away from centralized, cloistered approaches like the RUS broadband loan program, and embrace DNS alternatives, favoring more SCHIP-style programs with certain adjustments: e.g., less minutiae, more breathing room for state and local creativity, better “incubation” and proliferation of the best approaches, etc.

Pat Buchanan might dismiss my recommendations as “too esoteric.” He has already reacted similarly to the ideas of writers far more qualified and articulate than I am, including Frum, Douthat and Salam, whose recommendations Buchanan described thus: “They’re not real, they’re ideological constructs … you can write columns and things like that, but they don’t engage the heart” … at least, they “don’t engage the heart” like Nixon did when he talked about “law and order” during the tumultuous years of the late-60’s and early-70’s.

I suppose Buchanan deserves some deference as a pioneer of the last reformation of American conservatism. But he’s wrong, with this particular wave of his hand, to dismiss ideas for the next reformation. He’s wrong, for one, because the law-and-order example he uses to illustrate engagement of “the heart” is little more than playing on voters’ fears, which should sound familiar to anyone who has paid attention to the Bush administration’s tactics.

Buchanan is also wrong because what he ultimately offers is nothing more than a myopic reminder of the power of positioning. That was the Reagan touch. But as I noted in the first installment of this series, Reagan’s rhetorical flourishes were preceded by Goldwater’s studied analysis. The substance of an idea almost always precedes its marketing — which might explain why so many of today’s American conservatives are so incredibly lost. They continue to “market” empty phrases (powered by hot air) rather than wrestle with the weight of what they will believe and stand for in this changed and changing world.

Buchanan’s hesitance notwithstanding, I believe the DNS approach can be simplified and marketed, that it can “engage the heart.” No, it probably shouldn’t be sold via obscure terms like “dispersed, networked solutions.” Instead, it should be framed in the context of quintessential American values, like placing more government more directly in the hands of the governed … and/or empowering those governments that operate closest to the people to address their shared challenges.

Of course, the DNS model invokes more than a communications challenge. It also invokes a management challenge, to wit: Properly structured, the DNS model maximizes local knowledge, input, and influence; but in doing so, it minimizes central authority and thus lessens the system’s ability to mandate action, capture efficiencies of scale, and track progress. The key, then, is balance, with certain functions centralized while most are not. And that tension — between central and local control — can be very healthy, especially when the subsequent balancing act is a dynamic, moving target.

I’ve seen as much in the two companies for which I’ve primarily worked over the course of the last two decades (nearly 14 years at the first and more than five at the second). Both of these companies have been successful using a similar mix of fundamentals. Both have:

* Adopted DNS models

* Centralized certain responsibilities (e.g., I.T. systems, financial controls, etc.), with constant adjustments to how much or how little is centralized

* Required regular, diligent, consistent, and transparent reporting from the various network nodes (offices or regions)

* Prioritized support to teams and projects that delivered the best, most sustainable results – and abandoned (or took steps to correct) those who did not.

The last two bullets on that list (reporting and prioritization) have been especially critical to these companies’ respective success. Unfortunately, reporting and prioritization seem to be unevenly applied in governmental systems. When was the last time you remember reading a non-partisan, non-political “progress report,” compiled and published by your state or federal government? Sure, some of the state or federal agencies issue progress reports, but there’s little consistency between them. What’s more, I don’t recall ever reading a “roll-up report” for all agencies, one that outlines in clear, accessible terms their successes (and failures) versus objectives.

Granted, there are differences between business and government. Among other things, Washington would never “abandon” a state that failed to deliver reasonable results for its citizens. But it could take other approaches, as discussed earlier, such as monetary/funding “carrots and sticks.”

These exceptions notwithstanding, the management challenges of the DNS approach (like its communication challenges) are addressable, in governmental as well as commercial contexts. No, we can’t flip a switch and move to this approach overnight, not without creating chaos. But at the very least, we could borrow pages from Howard, Ormerod, and Surowiecki, and start inching in the direction of DNS, particularly for new programs — what Andrew Sullivan might call “grop[ing] gradually towards reinvention.”

Several commenters on this series have remarked that my discussion of DNS tracks with former Supreme Court Justice Louis Brandeis, who suggested the states be “laboratories of democracy.” The parallels are evident, but DNS would (ideally) take the “laboratories” metaphor a few steps further.

* First, DNS would consider more than just the states in percolating solutions; it would allow for innovation in all jurisdictions: cities, counties, regions, etc.

* Second, rather than rely on a loose-knit series of disconnected laboratories (dispersed nodes), DNS would systematically “connect” or “network” these laboratories with each other and with Washington.

* Third, in this system/network, Washington would play an active role: fostering and encouraging the proliferation of best practices across the country. In other words, if the states are the laboratories, Washington is the incubator that helps them move their experiments outward to the wider “market,” sparking a constant cycle of “innovation, evolution and competition” — what Paul Ormerod identifies as the “hallmarks of a successful system.”

Many conservatives will resist the suggestion, but I’m ready to admit we may have finally reached the day when the traditional argument over smaller versus larger government is passé. As George Packer wrote: “ … people have a right to want their government to improve their lives, not just to instruct them in the vanity of human effort.”

Granted, Washington’s support of the DNS model — via standard-setting, catalyzing, and backstopping — could (and hopefully will) lead to a shrinking of the federal government, as our dispersed network of cities, counties, and states takes greater and more-effective ownership of constituent issues. But shrinking the federal government would be (at best) an outcome of the process, not its starting point or primary goal.

I further believe conservatives are uniquely suited to this task because conservatives have long been among the strongest believers in federalism and free-market enterprise. No: Federalism and free-market enterprise are not the only answers. But they do offer instructive models, decent starting points, for the DNS approach and its proven benefits.