Laurence D. CohenTo those who are cranky about the power of the federal government; to those who are willing to utter the words “states’ rights” out loud; to those who revel in the diversity and idiosyncrasy that is 50 states staggering along in their own weird ways; the comforting term of art to explain it all is to describe the states as “laboratories.”

This is not a “Tea Party” philosophical construct that views the federal government as a despotic menace. No, the notion that the states are laboratories for change simply suggests that with 50 clusters of mad scientists attempting many different initiatives in the name of good government, the Feds can pick the ones that work best and apply them across the nation.

Similarly, government experiments that fail in a state can warn off the nation to avoid similar mistakes. Politics being what it is, and bureaucracy being as clumsy as it often is, the “laboratory” thing is quite a bit prettier in theory than in practice, but it is a notion that shouldn’t be forgotten as the nation stumbles along with a sluggish economy and a prickly political environment in Washington.

The Massachusetts experiment in ObamaCare, before there was an Obama, was a worthwhile lab experiment that revealed the dangers of encouraging a sharp increase in demand, without being particularly clever on cost control.

Long forgotten now, Wisconsin was the lab that first tinkered with aggressive welfare reform. It was an interesting initiative that soon inspired the nation to be a bit more enthusiastic about job training and work experience – and a bit less inclined to simply keep writing checks.

The laboratory metaphor can be stretched to within an inch of its sorry little life, but there may well be something to be said, in this time of Tea Party fervor, for treating the states like real labs; that is, picking a state that is instructive – and swooping down on the jurisdiction with social scientists to determine whether a particular state is, indeed, smarter than the rest of us, or at least, smarter than the arrogant despots in Washington.

Carved In Granite

The best lab at the moment may be New Hampshire. It is small, all the people are craggy, and the recent elections saw Republicans win almost every important state and Congressional race. After consorting with Democrats for a while, in a very non-New Hampshire kind of way, the voters rose up as one and ousted almost every last one of them. A budget and tax-slashing frenzy is predicted.

If that actually happens – if budgetary blood flows down the streets of New Hampshire – that would be an opportunity to see what actually works and what just makes us all feel good.

Let the starving graduate students and non-tenured professors from across the land descend on tiny New Hampshire and measure what actually happens when Agency X has its budget whacked 20 percent or so. Does government service deteriorate? Did anyone care? Did things actually get better, despite the theoretical loss of government “investment?”

This is how the “laboratory” notion should work. Connecticut’s new governor, Dan Malloy, has promised to evaluate the state’s hodgepodge of economic development incentives to see whether they work, or whether only some of them work, or whether none of them do very much at all.

Dan, don’t do that all by yourself. Invite in a few dozen academics from out-of-state to do it for you. Be a real laboratory.

Of course, states could do this kind of “results-based budgeting” research themselves, but they are seldom inclined to risk a critical look at the status quo.

It doesn’t have to be a negative thing. For instance, Massachusetts is regularly slapped around for having one of the least-friendly tax environments for small businesses and entrepreneurs – all based on a number of factors that may or may not play much of a role in the location or success of such folks.

Massachusetts could be a real experiment. Does an income tax discourage entrepreneurs and prompt them to move to New Hampshire or South Dakota? Do high gas taxes play a significant role? We could be a laboratory and find out the truth.

Ah, sweet federalism. Fifty laboratories of democracy. We should try it some time.

Good Thinking Starts In The Lab

by Banker & Tradesman time to read: 3 min
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