Impact of information policy

Whether voters would favor the proposed information policy depends on its impact. Operational information policy would promote better decisions in general and would tend to vastly improve the decision-making capabilities of individuals. Scientific information policy would promote a faster rate of innovation. Voters would gain more from better decisions and a higher rate of innovation than they would lose in loss of privacy.

In current society the cost and power of information technology means larger institutions such as major corporations and government have much greater information access and processing capability than individuals. In current society individuals make most decisions based on intuition with little access to databases. Operational information policy would greatly reduce the asymmetry between individuals and institutions. With the expanding social nervous system database entrepreneurs would create numerous databases for individual decision making. These database entrepreneurs would have the resources to obtain negative information such that their clients would make more informed decisions. With much more powerful home computers and distributive processing through the social nervous system, individuals would be able to analyze their alternatives systematically.

Scientific informational policy would stimulate innovation by greatly improving the empirical content of social sciences and the allied business disciplines. Researchers would have information archives for the study of empirical issues of society and the political economy. These archives would consist of observations from experiments, sampled observations of social and political economic behavior, data files constructed from administrative data, and finally public and private data and documents with a time release schedule. These archives would be accessible to researchers. With this access to better measurements, all disciplines studying social and political economic issues would be able to more rapidly discriminate between hypotheses. Also, much more effort would be made to collect data to discriminate between important hypotheses than currently.

Furthermore, the impact of scientific information policy on disciplines studying social and political economic behavior would be more than just better hypothesis testing. Consider, for example, the field of economics. Current economic data makes the study of economics in real time very difficult. As microbinics advances, however, the time interval between economic measurements will decrease. At the same time, the scientific right of observation will enable economists to study economic behavior with approximately continuous measurements. As a consequence, these measurements will accelerate the trend to study economic behavior from the perspective of dynamic models in real time.

With constant change in technology all political economic agents must constantly adapt to change. With information policy that supports the methodology of empirical science, all agents, both private and public, could harness the methodology of science to innovate better decision rules, incentive systems, and organizations to cope with an environment of constant change.

To illustrate this point consider the decision rules for preliminary screening in databases or for such activities as granting credit. Because of the requirement that decision rules be placed in the public domain, the scientific information policy would create enormous incentives for systematic study of decision rules. As better decision rules are discovered they would be quickly implemented and the requisite data placed in operational databases. In this process researchers would use much more extensive scientific databases based on a selected sample of unlabeled subjects to test theories. Database managers would then quickly add to the labeled operational databases those variables found to be significant for decision making.

The greater emphasis on empirical science would promote innovation in general in two ways. First better hypothesis testing would tend to eliminate spurious theories from consideration as the basis for innovation much more rapidly than currently. Second with better hypothesis testing the predictive capacity of theory should increase. Thus innovators would be in a much better position to analyze the projected impact of possible innovations without having to subject them to an empirical test.

The public acceptance of a more open informational policy depends on a majority of citizens gaining from the change. Given a system of social inheritance, the motivation of all citizens is modified. As he inherits his share of the capital stock, everyone simultaneously plays the role of consumer, producer and public. As a consumer, the individual would like to acquire goods at the competitive market prices. As a producer, however, he would want the highest rate of return, and as a citizen he would like an effective government. Not only are these goals in conflict, but their resolution will change as new knowledge is acquired about the environment, more efficient production technologies, and consumer needs.

What individuals gain from operational information policy is better decisions in each of their roles and better information to resolve the conflicts between their roles. Scientific information policy promotes a higher rate of innovation. What individuals would lose in selling their labor services in the marketplace, however, is control over the release of pertinent data, and they would, also, be subject to more census type compulsory data samples for scientific studies. Firms would lose a competitive advantage which is now based on poor flows of information. On balance between the positive and negative aspects, most people would be better off as such a political economy would be much more competitive in international competition than the current political economy with a more restrictive information policy. As we shall see in the next chapter, the proposed information policy leads to better government.