DOGE and I, Pencil
DOGE struggles for the same reason you don't know how to make a pencil
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The Department of Government Efficiency (DOGE) is off to a rocky start with Democrats and other critics raising hell about looming cuts and the legitimacy of the office. That is well and good—welcome to democracy—but I wanted to focus instead on a distinct, and non-partisan, challenge to the efficacy of Elon Musk and DOGE: the sorting problem.
First, Elon and the tech bros are engaged in a sorting exercise—they are (supposedly) trying to sort Federal spending on programs that are effective and worth the money from programs that many voters would consider to be waste, fraud, and abuse. These are the first two piles. However, there is at least a third pile: stuff that looks like a waste but actually isn’t. Because of the size of the Federal budget—spending trillions of dollars each year across various programs—it should be expected that there would be many programs that look like waste, fraud, and abuse, but in fact are not, whatever it's political and moral values. (In a world where Harris won, and Mark Cuban was in charge of Dem-DOGE, he and his employees would face a major sorting problem too—it isn't a partisan problem).
Perhaps an example here would help. In Season 4, episode 8 (‘Process Stories’) of The West Wing, Donna, an administrative assistant (and much more) to Deputy Chief-of-Staff, Josh Lyman, is upset about what appears to be waste, fraud, and abuse in the Pentagon budget—no doubt a place where a lot is found. Here’s the scene:
DONNA: $500 screwdrivers is why you didn't vote for the President?
JACK: I work for the President. That's a lot.
DONNA: It's wasteful spending.
JACK: No, it's not.
DONNA: A $400 ashtray?
(Jack picks up a wrench and smashes an ashtray that's on his desk. It breaks into three large chunks).
DONNA: What was that?
JACK: A $400 ashtray. It's off the U.S.S. Greenville, a nuclear attack submarine and a likely target for a torpedo. When you get hit with one, you've got enough problems without glass flying into the eyes of the navigator and the Officer of the Deck. This one's built to break into three dull pieces. We lead a slightly different life out there and it costs a little more money.
DONNA: I can't believe you broke a $400 ashtray.
JACK: Yeah, I wish I hadn't done that. It's... 'cause you're blonde.
The example is silly—who expects to still be able to smoke on a submarine?—but the point remains: what looks to Donna like waste really is not, but instead an expense with a reason—not to day that this is the most efficient use of limited military funds, but time and place. She lacked necessary information to place four-hundred dollar ashtrays in the right pile. She put it in the waste, fraud, and abuse pile, when she should have put it in the useful expense pile.
Notice that this is a lack of information problem—it has little to do with ideological or political values. It could happen to anyone without the right information even if they have the right political value and intentions. This is not, of course, to say that Elon Musk and his tech bros do have the best of intentions, but to point out that even if someone did, they could easily mistake some Federal spending for waste, fraud, and abuse, when in fact, it is the opposite even according to their own political values and aims.
Why is it easy to make this mistake? A large part is because the Federal budget is so huge with millions, if not billions, of programs to fund. It is similar to wanting to know how to make a lead pencil—there are numerous skills and processes that go into the making of a simple pencil such that it wouldn’t be possible. As the narrator (a pencil) in the story—I, Pencil—explains about his origins:
My family tree begins with what in fact is a tree, a cedar of straight grain that grows in Northern California and Oregon. Now contemplate all the saws and trucks and rope and the countless other gear used in harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into their fabrication: the mining of ore, the making of steel and its refinement into saws, axes, motors; the growing of hemp and bringing it through all the stages to heavy and strong rope; the logging camps with their beds and mess halls, the cookery and the raising of all the foods.
The pencil (narrator) continues,
Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others. Now, you may say that I go too far in relating the picker of a coffee berry in far-off Brazil and food growers elsewhere to my creation; that this is an extreme position. I shall stand by my claim. There isn’t a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how. From the standpoint of know-how the only difference between the miner of graphite in Ceylon and the logger in Oregon is in the type of know-how.
No one understands fully how to make a simple pencil, not to mention the secondary and tertiary steps required to produce the material needed to make a pencil. And yet the Federal budget is substantially more complex than a pencil. And if one could be mistaken about a pencil—as seems obvious, given the complexity of making one—then Musk and his tech bros are destined to put Federal programs in the cut pile that, even by his own political values, shouldn’t be there. There is no doubt plenty of waste, fraud, and abuse to cut from the Federal budget—but beware the sorting problem.
If a tree is sick and has some corrupt fruit, you can cut those fruit.
If a tree is sick and MOST of the fruit is corrupt, between cutting the tree and doing nothing, most people whould chose the former
I suppose the challenge, in the face of this sorting problem, is how to ensure that government can ever get close to optimal on this. I like how things like school choice vouchers combine state subsidy with market mechanisms to achieve results. I wonder if a similar thing could be done for things like national parks. Create a system of a voucher for those sort of schemes which people can use to allocate funding towards a project.
If no option receives sufficient allocation, then the money could be released to people. It's a way of using public choice to allocate resources without having a free rider problem - since the money is only released conditional on the lack of support for available projects.