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As
I write this, the hot war in Iraq
is just ending. Among the many issues that such a
foreign conflict raises, I have been pondering the
evils of authoritarian rule – echoes of which I
find here in
Virginia.
Shocked? Virginia,
the cradle of democracy, an authoritarian
government?
I’m
not thinking about the abuse of human rights as much
as the way authoritarian governments stifle
innovation, increase uncertainty, retard economic
progress, undercut education, and
generally serve as a drag on the development of
civil society. It all comes down to power – the
drive to get it and the drive to keep it.
When
a centralized government makes all decisions, it
disenfranchises society’s innovators. The central
authority substitutes its bureaucratic judgment for
the verdict of the marketplace, preventing
entrepreneurs from pursuing their innovative
visions. Economic progress slows to a crawl as
communications funnel through the central authority, a decision is rendered,
and word moves back down through the
hierarchy – assuming, of course, that a decision
is reached at all. (Perhaps
we should study the matter for another year. Let’s
form a commission.)
Authoritarian
government increases economic uncertainty on two
fronts. Money is a key factor in power, so the
central authority strives to concentrate all money
to its “safekeeping.” It then dispenses largess
as it chooses, securing the loyalty of favored
interests and punishing those out of favor, thereby
reinforcing its centralized power. Uncertainty
arises from the whimsical nature of funding
decisions by the regime and flawed evaluations
divorced from the realities of the local, national,
or global marketplace.
An
uninformed and undereducated population is fertile
ground for authoritarian government, so you find the
funding of education by such governments at the
lower end of peer society rankings. Economies of
authoritarian governments are generally
underdeveloped, heavily based on agriculture and
exploitation of natural resources, and characterized
by low average wages, slow growth, and a focus on
past glories rather than future potential. Does any
of this seem familiar?
The
Virginia General Assembly is the finest example of
its kind, firmly rooted in the traditions of the 19th
century. It centralizes power by applying the Dillon
rule, which originated in Iowa
about 120 years ago to fight corruption in local
government. Essentially,
the rule says that localities have no powers not
expressly granted them under law by the state, and
that interpretation of the law shall be very narrow.
As the rule is construed in Virginia,
localities must ask General Assembly permission to
undertake any action that is not long standing
practice. For example, adjacent localities may not
joint venture on a high technology park project, may
not jointly share a cross-border technology
enterprise zone, and may not consolidate without the
express permission of the General Assembly. Talk
about stifling innovation. Virginia
is the only state in the
United
States
to use the Dillon Rule today. What a distinction!
The
Dillon rule balkanizes the Commonwealth: cities and
counties compete rather than cooperate, fund
separate economic development organizations, build
multiple stadiums, convention centers, entertainment
venues, and find it near impossible to develop
comprehensive land use planning beyond their
political boundaries. And the General Assembly, our
central authority, seems to like it this way just
fine.
Additionally,
Virginia’s
antiquated tax code sends the vast majority of tax
revenues to Richmond,
while the cities and counties starve for revenue to
fund ever growing populations. Locals are reduced to
begging for General Assembly handouts year by year.
The money and the power stay in Richmond.
Further,
I understand, under the established formula for K-2
funding that allocates responsibility between
localities and the General Assembly, localities are
required by law to fully fund their portions of the
K-12 budget while the General Assembly has
never fully funded its share in the modern age
since the formula was established. How’s that for
responsibility?
So,
I suggest that you, as high technology business
people, talk to your local candidates for the House
of Delegates and Senate before the November
election, and ask them if they support:
-
Repeal
of the Dillon Rule
-
Immediate
and substantive tax reform – no more deferral
-
100
percent funding of the state share of the K-12
funding formula – by law
These
principles are of the highest priority to the
Commonwealth, the economic vigor of our high
technology industry, and the prosperity of our
citizens. Your personal and corporate political
contributions would be well guided by these
principles. As the fastest growing sector of the
economy, high-tech industry should lead the
establishment of a new Virginia General Assembly
with a keen focus on the 21st century.
--
May 12, 2003
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