Big government advocates are always looking for reasons why this time big government will work. They have to do this because every time big government is tried, it fails. Big government can’t work as well as a free market because the amount of information a central government can absorb and use to make decisions is far less than the information that markets process to set prices. The latest excuse for big government is that computerized big data will finally make big government possible. I think this is another big lie.
When you use any model, you have to check it against reality. No matter how big a model is, it involves simplification at some level because your computational power has limits and you can’t run the model with the behavior of every person in society mapped into the model. The temptation is to manage to the model, rather than manage to reality, because the model has a prettier dashboard display and is more accessible. You can run lots of different “what if?” scenarios through your model and convince yourself you understand everything. In fact, all you understand is how the model behaves, not how the real world is going to behave.
The fashion in big government at the moment is to assume that a central government can run everything more efficiently than a collection of disorganized private firms, charities, states, provinces and local governments. This conceit has led to world-wide malaise, economic stagnation and civic frustration. For one thing, it’s insulting. The old John Locke model of government by the consent of the governed implicitly assumes that the governed are smart enough to give informed consent. The current, Big Brother, style of government assumes that the government knows better than individuals what’s good for them. No matter how big your data is, that’s insulting and ridiculous. You can never know someone better than they know themselves.
You should also take note that large political organizations have a tendency to resist innovation and then to implement innovation poorly. When they implement new technology, they tend to spend a lot of money and buy over designed garbage, like the F-35 Joint Strike Fighter. Government is good at sponsoring basic research and even proof of concept. They have no idea how to implement things efficiently. The Obamacare roll out disaster is a typical big government technical project.
If you check the growth rates in the US and UK under Reagan and Thatcher, and compare them to the last 8 years, you will notice a big difference. The lesson is that big government doesn’t work, even with big data.