As part of the work I’m doing for my book, I’ve been working with my research manager, LeeAnn Prescott, staring at various charts and graphs related to how we’ve funded our “Commons” over the past half century or so. I’ve got a working hypothesis that we are in the process of transitioning very important portions of our “public lives” to private corporations, and that this transfer is related to our adoption of digital technologies and platforms. Examples include identity (from driver’s licenses and SSNs to Visa, MasterCard, Amex, and Facebook), delivery of important information and items (from the Post Office to Telcos, Internet, and FedEx and UPS), and protection (outsourcing both prisons and military jobs to private companies). Not to mention retirement (from Social Security to 401ks, etc.).
Of course, were such a hypothesis true, one might imagine that the over percentage of GDP represented by government workers would have gone *down* over the past few decades. However, as this chart shows, that’s not the case:
If we’re depending on government less and less, as I hypothesize, how on earth could government employees go *up* by ten percent in the past six decades?
Either my hypothesis is wrong, or there are devils in the details. And indeed, as you drill down further, some interesting things start to pop up.
For example, check out this chart of what’s growing in our government, and what’s not:
Aha! Turns out, the Federal Government has actually shrunk by more than half, but we, as a society, have simply moved the burden to State and Local Governments. I wonder how the folks at the Tea Party HQ would respond to this data: They spend an awful lot of time talking about Big Government, but they seem overly focused on the Big Bad Feds. They might take aim at their own backyards instead.
Let’s take a look at some detail:
Ahh….Education. Very interesting. As local governments have taken over the once Federally run education system, payroll there has skyrocketed (has performance? Nope. But that’s another story).
Also interesting to note how dramatically our Military spending has dropped, but, given we’re comparing to Cold War, Korean War and WWII eras, that’s not too surprising.
Now let’s compare Government as a percent of GDP to private Industry. If my hypothesis is to hold water, I’d wager that private industry is taking over more and more of our GDP over time. Is it? Yep.
As one might expect, the numbers show the rise of the services industry, and the decline of manufacturing in our economy. But they also show a rise in percent of GDP by government, due in the main to state and local increases.
Here is more detail by industry on what’s growing and shrinking:
Check out that first item: Financial services has nearly doubled and now leads our nation in terms of contribution to GDP. No wonder 2008 was such a (continuing) disaster.
But it’s clear to me we have an education and healthcare problem on our hands (quite a surprise, eh?). Now, education is, in the main, a government enterprise. Healthcare, not so much (Obama’s plan is in essence private, folks). So the question then becomes, will education make the transition from public to private sector in the digital era, and might Healthcare move the other way? I can imagine an argument for both. I post these charts not to draw conclusions, but to open debate.
One last chart of detai on how our Federal Government spends money:
Huh. Social security has risen a lot. So has Treasury and Health. One might reasonably conclude that 1. Our population is aging, creating the demand for more Social Security services. And the two dominant private industries in our country – finance and health – require significant regulation, hence the rise of Treasury and Health.
But I’m not a government economist, so I’m just guessing. I look forward to interviewing many of them as I dig in. Meantime, I just thought it’d be fun to share these data points with you. Enjoy.