Should government be more mission-driven?

Only when it’s too late, only when we have a pandemic of the scale we have now, do we realize, uh oh, we have to do the ‘whatever it takes’ mentality. What if we did that more continuously? Which would help us be so much more prepared when we have a climate crisis or pandemic. It can’t just be a speech. How do we govern our capitalist system to produce the results we want?

 

One of the interesting things with the Apollo program is that it was results oriented. We didn’t just stop at the space race or beat the Russians. They turned it into a concrete mission. Get to the moon and back in one generation. I always argue we need the same development approach for all the sustainable development goals. These are challenges — end poverty, end hunger. Let’s transform those into something as concrete as ‘get to the moon and back in one generation.’ That requires a different way of framing the problem and designing an answer.

 

All the agility and flexibility NASA ended up creating because it was purpose driven — it wasn’t that was in the beginning… It became much more horizontal, program managers, delegated tasks, and open communication between organizations and flight centers. That organizational change was important if NASA wanted to get to the moon and back again.

 

… they paid attention to the design of the contracts. They moved from cost plus contracts that could be easily gamed to fixed price contracts with incentives for innovation. They even had in the contracts no excess profits — this wouldn’t be a gambling casino… The idea that being purpose driven requires not only an organizational change, but also requires a particular kind of relationship and contract with business , was useful lesson today.

That was Mariana Mazzucato on the Hidden Forces podcast. That sounds kind of nice until you actually think about what she is saying.

First, Mazzucato says “How do we govern our capitalist system to produce the results we want?” [emphasis added]. Who is the we in this? Only individuals have agency. I think she is trying to say, “How do elected officials govern our capitalist system to produce the results that elected officials have negotiated to in a political process?” That doesn’t sound nearly as appetizing, especially in the partisan divide of today where severe compromises will be made in the political interest that also affects program feasibility.

Second, she argues for turning abstract goals into concrete missions that allows for an engineering design. But how could elected officials, only a handful of which have STEM degrees, make these choices? Well, consultation with so-called experts. But how do you adjudicate which concrete mission is likely to be the right one — particularly when these are “wicked” hard problems (or else they would already have been solved)?

For climate, is it, get to fusion power within 10 years? Is it, find a technology that returns oxygen to the atmosphere at a rate of X pounds per cubic foot per dollar of investment? Or what? Certainly, the fusion power lobby would go for one answer, battery lobby for another, etc.

While I agree existential threats like war, pandemics, and climate probably require government action, it’s hard to imagine one concrete goal to accomplish each of them. It would be absurd to believe that Congress would have said, “We must develop an mRNA program to create fast vaccines.” That popped out of the knowledge and risk-taking of entrepreneurs in the economy.

I forget who said this, but the turning of a policy into a program is the crucial step in administration. Is the moon landing a policy or a program? Well, a program. Mazzucato wants to take DoD’s program budgeting system and apply that to virtually everything in our economy. Imagine if the way government addressed climate, pandemics, healthcare, education, and on and on, was done in the same way the US built the F-35 or CVN-78 carrier. I shudder to think.

Third, Mazzucato’s Apollo example shows she has a vision for acquisition management. She wants horizontal organizations, delegated tasks to program managers, and fixed price contracts for risky development with caps on profits. Thanks for the novel insights. Welcome to a pendulum of complex debate and reform DoD has been experiencing over the past 70 years. There’s no silver bullets on acquisition management.

Calling fixed price contracts a “gambling casino” unless a cap on profits are in place is perplexing. First, you will require these detailed cost accounting systems to measure cost vs. profit that boxes out pretty much every innovative tech company (who wants to kill their company culture with 20th century cost accounting where financial people are in control?). Second, if you cap the upside and leave contractors totally exposed to unlimited downside risk, then that’s not a game contractors want to play. Everyone will artificially inflate their proposals, and then they don’t want to return cost so they will spend more, just like a cost plus contract!