Mr. Dreier. I am now pleased to call on my good friend, Dr. Jeffrey Eisenach, who is President, Senior Fellow and cofounder of the Progress and Freedom Foundation. He served as a senior economist at the Federal Trade Commission and in the Reagan administration's Office of Management and Budget. He also worked at the American Enterprise Institute, The Heritage Foundation and Hudson Institute. And his real claim is that he is an alumnus of Claremont McKenna College.

Jeff, we are happy to welcome you.

STATEMENT OF JEFFREY EISENACH, PRESIDENT, SENIOR FELLOW, AND COFOUNDER OF THE PROGRESS AND FREEDOM FOUNDATION

Mr. Eisenach. Mr. Chairman, thank you for having me here. Members of the Committee, it is a pleasure to be here.

I will try to keep my comments short. I should indicate that I am testifying on my own behalf, not on behalf of the foundation of which I am president. I would also like to thank Kent Lassman, who is with me today and is a researcher, for his help in preparing today's testimony.

What I would like to do, and will do so more briefly than in my written statement, is to address what I believe are four potentially dangerous myths about the impact of the information revolution on Congress and on government in general.

The first of those myths is that the Information Age will make government and, therefore, Congress less important. The second is that the Information Age will enhance the functioning of mass democracy as we now understand it. The third is that the Information Age will make Congress in its present form work more efficiently. And the fourth is that questions of how to structure Congress and the legislative process are mostly internal issues about how Congress operates and really have little to do with the larger question of restructuring government. Let me address those one at a time.

First and briefly, the argument that the Information Age is going to make government less important, I believe, is misguided. I believe it will make government less hierarchical. I believe it will make government smaller. I believe it will make government less centralized. But I do not believe it will make it less important, either the Federal Government or the Congress in particular. It will not be less important because many markets which are currently State or local or regional markets are now becoming nationwide markets. The telecommunications legislation and legislation now moving through Congress on electric utility regulation are just two examples of markets which we previously have regarded as regional or statewide markets and which clearly now need to be addressed on a national basis.

Secondly, many markets which have previously been national markets are now becoming international markets, requiring the Congress and the Federal Government to develop approaches and negotiate appropriate institutional arrangements with foreign countries.

Third, as society becomes more complex and diverse, the Federal Government, as the expression of our national democratic process, will be challenged to devise institutional arrangements which permit and enhance freedom while sharing_while preserving our shared principles.

I also think these arguments about the role of government are wrong because the challenge before us is not simply to tear down an industrial age government which most now agree is obsolete. The challenge, and it is a complex and difficult challenge, is to replace that government with one which is arguably more simple, but also needs to be made appropriate for a very complex time; and that is a very difficult task.

Richard Epstein's recent book, Simple Rules for a Complex World, addresses the challenge that now faces the Congress. And I would also point out that you all are privileged and challenged to be Members of Congress at a very interesting time in our history.

Just as the Progressives came of age in the era of the New Deal and enacted legislation which, in a very profound way, created and influenced our society right up through the present day and will for our history long into the future, you live in a time in which we move from an Industrial Age into an Information Age, and the decisions that you make will have long-run impact. So I think Congress is, if anything, more important now as a result of the information revolution. And government in general, while it may become smaller and less centralized, will also become, I believe, more important.

Secondly, the Information Age will enhance the functioning of mass democracy. I think this is a fundamental misunderstanding and it is maybe the most pervasive misunderstanding that I see in terms of taking calls from the press and talking with people in general. The notion is that the Information Age in general and the Internet in particular will allow people to participate more in the functioning of Congress and at the level of macro decisions being made by Congress, because we can all watch Congress on C-SPAN and access copies of bills on THOMAS and send e-mail to our Representatives about how we feel. We will all be more empowered as citizens.

Congress, conversely, will be better informed and more responsive to us because of all the e-mail we send them, and as a result, Congress will make more decisions ever more effectively and more wisely.

I think this myth is somewhat ridiculous on its face, frankly. First, information about the activities of Congress has been widely available for many years. And while C-SPAN and THOMAS make it easier to obtain raw data about what Congress is doing, anyone who has ever listened to a Floor debate or tried to read a bill knows that raw data is not always all that useful.

Second and more to the point, the notion that e-mail on the Internet is going to give every American their own direct line to their Representative is simply silly. No human being can have 550,000 pen pals, and whether the mail shows up via snail nail or a T-1 line doesn't change that simple fact.

Congress already has good data through surveys and focus groups and so on and so forth about what the public believes, and the fact that constituent mail now shows up on an Internet message instead of through the U.S. Postal Service, I don't think is a very fundamental change.

I do think that the ability for individuals to participate more directly is potentially dangerous. It has already been mentioned today in the sense that because we could have a direct representative democracy, that we might choose to have it. I think that is potentially dangerous for the following reason: The problem facing Congress is not that it doesn't have enough information about the decisions before it, it is that it has too many decisions before it. The Toffler's talk about this and I quote them in my testimony.

To make a long story short, they conclude that "...in Washington today, Congress and the White House are racing, trying to make too many decisions about too many things they know too little about." And imposing that same decision load on 260 million people, instead of 535, is no answer to the problem. What we need is to create what the Tofflers refer to as decision division, what I call virtual democracy, and that is a plethora of regional, local, State, county, and in many cases, not even geographically based governmental institutions, and Congress needs to become part, if you will, of a seamless web of all of those governing institutions sitting at the pinnacle, if you will, of interacting with those representative institutions and interacting with those communities, not trying to interact one by one with 260 million Americans. That won't work, and it creates, I think, an illusion of engagement which ultimately will lead to disillusionment, because people will realize that the mail they get back over the Internet is, in fact, no more personalized than the mail that frequently comes off of congressional computers today.

The third myth that I would like to address is that the Information Age will make Congress in its present form work more efficiently. To make a long story short, I think it is true that Congress needs to move rapidly to adopt and put in place the information technologies that are now available. I think that could have been done more rapidly in the past, and I think the fact that you all, and Mr. Ehlers in particular, and you in this hearing, are moving rapidly to do that is important.

I do think it is important to understand technology is not a replacement for structural change. The General Motors of 1960 with computers would not be an efficient firm. General Motors is a fundamentally different company than it was in 1960, and if you go through example after example after example where private sector companies have brought in technology with the notion that they would do everything the way they were doing it, but do it faster, that has proven to be a dangerous illusion.

I would note briefly, and do in my written statement, that I believe the question of remote voting is one that really ought to be considered. I have some familiarity with the schedules of Members and the stresses that are placed upon them. And while I think it is essentially important that Members congregate in Washington on occasion, and perhaps congregate in other places on occasion, I think that the ability to vote from remote locations, the ability to not be dragged across the street three, four, five, six times a day, is one that I think should be seriously considered and would not only make Congresspersons' lives easier, but would allow for a more productive role.

Fourth, and finally, the notion that questions of how to structure Congress and the legislative process are mostly internal issues and don't have much to do with the larger question of restructuring government I think is another myth, and I think it would be hard to find anybody to defend that myth, but at least until 1995 the relatively little attention which has been paid to restructuring Congress, that suggests implicitly at least the question of restructuring Congress in its relationship to restructuring government has received less attention than I believe it needs.

To make a long story short, the phenomenon of power in Washington expressed through the committee structure with each committee corresponding to an agency or group of agencies, a power base in the executive branch makes it very, very difficult to make the kinds of changes in the executive branch that I think we all agree need to be made, or most people agree need to be made.

And I think as you look at the question of restructuring Congress, you need to look at that in the context of how a restructured virtual Congress, if you will, would match up with a restructured virtual executive branch.

And one of the things that I mention in my testimony in particular is I think looking at the committee structure much more as a moving picture rather than a static picture is one that ought to be considered.

The enhanced use of task forces is something I know the Speaker has worked with some this year and last year. I think that that experience, while it has worked in some cases and arguably not worked as well in others, I think that that experience worked well, as you think about restructuring Congress in the future.

The ability to take on a task force, work on the task, complete the task, and dissolve the task force and hopefully, enabled by the Information Age, you can work through teleconferences and the Internet and you don't need to set up a large committee room, a suite of offices, and so on and so forth, in order to get the job done.

Let me conclude with one quotation from a book called The Virtual Corporation written by William Dawidow and Michael Malone. They conclude that the virtual corporation, "in the end, unlike its contemporary predecessors...will appear less a discrete enterprise and more an ever-varying cluster of common activities in the midst of a vast fabric of relationships."

I would like to suggest that that sentence, applied to the U.S. Congress, is worthy of your consideration. A virtual Congress will be more fluid and flexible internally; it will be more dynamic in its decision making and, increasingly, will be woven almost seamlessly into a vast fabric of relationships that will constitute the American political system.

Information technology makes that possible. But it is the efforts of you and your colleagues, Mr. Chairman, who will make it real, and I want to encourage you in your efforts. Thank you.

Mr. Dreier. Thank you very much, Jeff.

[The prepared statement of Mr. Eisenach follows:]

The Prepared Statement of Jeffrey A. Eisenach, PH.D.

Mr. Chairman and members of the Committee, it is an honor to appear before you today to discuss the impact of the information revolution on the legislative process and the structure of Congress.

Before continuing, I should note that while I serve as President of The Progress & Freedom Foundation, a non partisan research and educational institution, the views I express are my own and do not necessarily represent those of the Foundation, its board or other staff. I would, however, like to thank Mr. Kent Lassman, a researcher at the Foundation, for his assistance in helping me prepare for this testimony.

My testimony today is based in large measure on the work of The Progress & Freedom Foundation, as well as my own studies on the impact of the information revolution on government and society. In particular, I will draw heavily on lessons learned in preparing and teaching a course titled The Role of Government in the 21st Century at Harvard's Kennedy School of Government last fall. For the record, I have attached a copy of my curriculum vitae as well as the syllabus for that course.

In addition, much of what I have to say this morning is framed in a larger set of ideas about the nature of the information age and its impact on government. Many of these ideas are expressed in testimony I gave before the Senate Committee on Governmental Affairs last year, a copy of which is also attached to this statement.

Mr. Chairman, what I would like to do this morning is address what I believe are four myths about the impact of the information revolution on Congress, myths which, if they are allowed to masquerade as truth, could lead you and your colleagues to take steps that are not only unproductive but counterproductive.

* Myth Number 1: The information age will make government, and therefore Congress, less important.

* Myth Number 2: The information age will enhance the functioning of mass democracy.

* Myth Number 3: The information age will make Congress in its present form work more efficiently.

* Myth Number 4: The question of how to structure Congress and the legislative process are mostly internal issues about how Congress operates and have little to do with the larger question of restructuring government.

Let me address each of these myths, and as I do so, offer some corresponding thoughts which I believe are closer to the truth in each case.

 

Myth Number 1: The information age will make government, and therefore Congress, less important.

It is argued by many that the impact of the information age will be to lessen the role of government, especially the Federal government, and reduce its impact on society. This is said to be the case because the information revolution heralds a time of less centralization (hence less centralized government), smaller institutions (hence smaller government), greater specialization and customization (hence less national government relative to states and localities) more individual empowerment (hence less government, period), and so forth.

Furthermore, since the task before Congress, it is argued, is little more than rolling back the size of government, and this is inherently a much less complex effort than creating new government programs, this role, relevance, responsibilities and overall importance of the Federal government.

These arguments are misguided, and the conclusions are simply wrong.

First, they are wrong because the role of the Federal government_while it will be very different from what it was during the Industrial Age_will if anything grow in importance in the coming decade. The Federal government will indeed be less centralized, meaning that fewer decisions will be made by bureaucratic hierarchies; it will be characterized by smaller programs, meaning that it will spend less money and raise less in taxes; it will grant greater flexibility to states and localities, meaning less micromanagement from Washington; and it will, indeed, facilitate greater freedom and opportunity for individuals, meaning citizens will spend less time worrying about how to comply with detailed Federal laws, rules and regulations.

But it will not be less important. It will be more important, for three reasons. First, markets which in the past have been regarded as statewide or regional in nature are becoming national markets, requiring national approaches. Second, markets which in the past have been national markets are becoming international markets, requiring the Federal government to negotiate appropriate international arrangements. Third, as society becomes more complex and diverse, the Federal government_as the expression of our national democratic process_ will be challenged to devise institutional arrangements which permit and enhance freedom while preserving our shared principles.

Second, these arguments are wrong because the challenge before us today is not simply to reduce and abolish, cut and tear down the government of the Industrial Age: It is to replace that government with laws and institutions appropriate to the Information Age. That challenge is the most difficult and complex ever faced by any government at any time in history_because the society in which we now live is the most sophisticated and complex ever constructed. As Chicago Law Professor Richard Epstein argues in an important recent book by this title, creating "simple rules for a complex world" is no easy task.

Third, even if one were to believe that the Federal government will someday become less important, the challenge of making the transition from an Industrial Age, Progressive model of government to a digital age model will occupy us for probably a decade to come_and perhaps much longer. In this context, I would point out that our efforts as a nation to come to terms with the implications of the Industrial Revolution took at least 70 years_from the creation of the Interstate Commerce Commission in 1870 to the culmination of the New Deal in 1940_and that this period was marked by tremendous turbulence and spirited debate on very fundamental issues.

A similar debate is now getting underway, and the focal point of that debate will be the U.S. Congress. And, just as the decisions we made during the early part of this century literally determined the nature of the society in which we now live, the decisions Congress makes during the course of the next decade or two will influence the entire future history of our nation.

Myth Number 2: The information age will enhance the functioning of mass democracy.

 

Perhaps the most pervasive myth currently being promulgated about the impact of the information age on government and politics_and the Congress in particular_is that the information age in general, and the Internet in particular, will enhance the functioning of mass democracy. Because we can all watch Congress on C SPAN, access copies of bills on THOMAS and send E mail to our Representatives about how we feel, this argument goes, we will all be more empowered as citizens. And Congress, conversely, will be better informed and more responsive to us because of all the E mail we send them. As a result, Congress will be able to make ever more decisions, ever more wisely.

This myth is ridiculous on its face. First, information about the activities of Congress has been widely available to the interested public for many years, and while C SPAN and THOMAS make it easier to obtain raw data about what Congress is doing, anyone who has ever listened to a floor debate or tried to read a bill knows that raw data is not always all that useful in understanding the real issues behind a piece of legislation. Second, and more to the point, the notion that E mail on the Internet is going to give every American their own direct line to their Representative is simply silly. No human being can have 550,000 pen pals, and whether the mail shows up via snail mail or a "T1" line doesn't change that simple fact. Third, Congress already has extraordinarily good data on public opinion in the form of surveys, focus groups, etc._and has for at least 30 years.

But this myth is also potentially very destructive, if, simply because we are technologically able to do, we find ourselves drawn away from representative democracy towards direct democracy_i.e. frequent plebiscites, digital or otherwise, on issues now voted upon by Congress.

The problem facing Congress today is not that it does not have enough information about the decisions before it, it is that it is trying to make too many decisions. To quote Alvin and Heidi Toffler,

The diversity and complexity of a Third Wave society blow the circuits of highly centralized organizations. Concentrating power at the top was, and still is, a classic Second Wave way to try to solve problems. But while centralization is sometimes needed, today's lopsided, over centralization puts too many decisional eggs in one basket. The result is "decision overload." Thus, in Washington today, Congress and the White House are racing, trying to make too many decisions about too many fast changing, complex things they know too little about.\1\

\1\ Alvin and Heidi Toffler, Creating a New Civilization (Washington: The Progress & Freedom Foundation, 1994), p. 68 9.

Imposing the same decision load on 260 million people, instead of 535, is no answer to this problem. The answer is what the Toffers refer to as "decision division," or what I would call "virtual democracy."

Moving from "mass democracy" to "virtual democracy" means putting the communities that are most knowledgeable about and most affected by specific decisions in charge of making them. In some cases, these communities are well represented by current political boundaries (e.g. states, cities, counties, congressional districts); in others, they cross jurisdictional bounds, and will require the creation of regional governing bodies, often specialized ones to address specific issues (such as environmental concerns); in still others, they are non geographical communities of interest, and will create governing bodies that bear no relationship to geography at all.\2\

\2\ The recently announced creation of an arbitration body to resolve disputes on the Internet_in effect a "court of cyberspace"_ is a good example of this phenomenon already underway.

What we must recognize is that governance, like everything else about our society, is becoming dramatically more complex. The traditional interest groups (with the important ones represented physically in Washington) and the traditional system of geographic representation (embodied in the Constitution itself) will not be replaced_but they will be supplemented by a plethora of pseudo governmental bodies of every kind.

Congress' can and should use information technology_not, you will be glad to hear, to try to respond personally to each and every income E mail message_but to facilitate its interactions with a growing number of increasingly important "virtual communities." The bi partisan "Internet caucus" recently formed by Congressman White, Senator Leahy and others_complete with Internet site_is a good example of an effort to do just this.

Myth Number 3: The information age will make Congress in its present form work more efficiently.

The third myth I'd like to challenge today relates directly to the internal functioning of Congress. Through internal E mail (and eventually video conferencing), greater access to research and information through the Internet, remote voting, etc. some believe, the functioning of Congress will be made more efficient, allowing Congress to address more issues more effectively, without making fundamental structural changes.\3\

\3\ In addition to this discussion immediately below, see both the previous and following sections for reasons I believe this argument to be mistaken.

This argument flies in the face of the experience of every private sector institution in America and the world, to say nothing of the experience of other governments, or of Congress itself.

Do not misunderstand me: improving the information technology support systems within the Congress_which are shamefully outdated_is a necessary condition for improving the way Congress functions. But better information technology will only have the desired effect if it is used to enable an improved structure.

What are those changes? First, one of the things information technology can do is facilitate the operation and integration of increasingly complex and dynamic institutions within Congress. For example, by placing the deliberations of a committee or subcommittee on an "Internet" site, information technology can make it possible for all members to participate_in "real time" or at a time of their choosing_in the deliberations of the committee or subcommittee. The question that arises is, why would they bother? Having no vote or direct influence over the committee's deliberations, and plenty of other things to do, most Members would not take the time to get involved. The result_lots of information, no demand.

A potential answer to this quandary is to supplement committee membership through "virtual membership." Suppose, for example, Members were allotted a certain number of votes during each session which they could use to vote in any committee, on any bill or amendment. Members with particular interests and/or expertise would thereby be empowered to participate in a meaningful way in this key step in the legislative process.

Second, expanding on this same idea, suppose Members were also empowered to create "virtual committees." Under such a system, Members would be permitted to choose, in addition to their current committee assignments, to serve on two virtual committees of their choosing, formed voluntarily by groups of Members and funded out of supplemental budgets provided to their offices for this purpose. Such committees would have standing only for the current session. Through the use of information technology, they could meet, deliberate and vote from any location, with research and staffing provided by virtual staff, potentially located anywhere in the world.

Third, coming to an issue that I know raises strong feelings on both sides, the arguments for permitting remote voting seem to me to dramatically outweigh the arguments on the other side. As every Member knows, being dragged back from the district to vote on a few procedural matters every Monday and Tuesday makes little sense, and detracts significantly from Members abilities to be with their constituents. And once you are here in Washington, being dragged across the street several times a day to vote is debilitating and makes it almost impossible to construct a coherent schedule or be productive at work. As for the arguments on the other side, it ought to be noted that Members managed to get to know one another_to form that bond of community that only face to face contact can allow_even in times when Congress was in session much less than at present.

Myth Number 4: The questions of how to structure Congress and the legislative process are mostly internal issues about how Congress operates and have little to do with the larger question of restructuring government.

The fourth myth is that the structure and process of Congress can or should be seen independently from the larger question of how government is structured. While it might be hard to find anyone to defend this view, the relative paucity of attention paid to the question of restructuring_certainly through 1994 and even since_suggests that many believe it implicitly. Or, that the thought of real restructuring is sufficiently threatening to Members that it ends up on the back burner.

As my comments above, and elsewhere, have suggested, the structure of Congress has a profound impact on how it interacts with the public and on how well it functions in the most basic sense. More broadly, however, the structure of Congress determines the way power is allocated and exercised. Committee Chairs have a natural interest in preserving and expanding the authority of their committees_and that means preserving and expanding the programs over which they have control.

This phenomenon is a natural part of both human nature and the democratic process, but in times of rapid change, it can also be a debilitating barrier to meaningful change. I would suggest to you that the creation of an information age government will necessitate the creation of an Information Age Congress_one organized according to the ideas and principles and institutions of the future, not the past.

As consideration is given to reorganizing Congress, I hope the ideas discussed above, and more broadly the issues you are addressing in this hearing today, will be taken into consideration. In particular, I would hope that such deliberations would begin by recognizing that what is happening to us today is not a move from one steady state to another, but rather a move from one rate of change (intermittent and slow) to another (constant and fast). Government must be prepared_for the indefinite and probably unlimited future_to respond much more rapidly to changing circumstances than ever before in history.

Information technology makes it possible to create institutions with the requisite degree of fluidity and responsiveness needed to deal with constant, rapid change. Indeed, it is the creation of such institutions outside of government_dynamic, constantly innovating corporations and other private sector entities_that has created the demand for a more rapidly responsive government.

But information technology alone will not make Congress more responsive. Fundamental structural changes are absolutely necessary to make this key component of our democratic system work for our future.

Let me conclude my comments by quoting from two of the leading thinkers about the impact of information technology on the corporate world, William H. Dawidow and Michael S. Malone. In their recent book, The Virtual Corporation, they describe how information technology is changing the modern corporation:

In the end, unlike its contemporary predecessors, the virtual corporation will appear less a discrete enterprise and more an evervarying cluster of common activities in the midst of a vast fabric of relationships.\4\

\4\ William H. Dawidow and Michael S. Malone, The Virtual Corporation (New York: Harper Collins, 1992), 7.

I would like to suggest to you that this sentence, applied to the U.S. Congress, is worthy of your consideration. A virtual Congress will be more fluid and flexible internally, more dynamic in its decisionmaking and, increasingly, woven almost seamlessly into "a vast fabric of relationships" that will constitute the American political system.

Information technology will make that possible. You, Mr. Chairman, the Members of this Committee, and all of your colleagues in both Houses, have the opportunity to make real.

Mr. Chairman, that completes my prepared remarks. I look forward to addressing any questions you may have.

Mr. Dreier. As you know, we in the 104th Congress have brought about some very sweeping change. I had a hand in restructuring the committees, the greatest change we have seen in the last century, and we are in the process of reviewing those with a task force put together under the Speaker's direction to review the changes we have made and see what impact they have had on the legislative Congress as we proceed in the 105th Congress.

We appreciate that you have raised a lot of very important questions and I look forward to getting into those discussions.