Trade-offs? Wow, what a concept

An amusing article in the latest Bloomberg Businessweek describes a game called Buy A Feature that helped residents of San Jose prioritize the city’s budget.

Why is the story amusing? Because it exposes how little San Jose residents — and business executives who also have employed game designer Luke Hohmann’s products — seemed to know about a key tenet of economic thought: trsde-offs.

Tom Wesselman, an executive at Cisco who used a Hohmann game to make decisions about design features in the company’s Cius tablet, says Hohmann helped overcome a cultural hurdle: Every department expected perfection, and to ship the product, everyone had to accept a little imperfection.

“We learned there were deep tradeoffs,” he says.

That’s Hohmann’s specialty: getting people with seemingly competing interests and vastly different viewpoints to understand tradeoffs and make hard choices. It’s a skill he thinks government needs right now.

“We’re just a little Silicon Valley company with a little dream to have 200 million Americans all playing a game together to fix Social Security.”

Like many U.S. cities, San Jose lost revenue during the recession and faces growing employee retirement expenses. The city is projecting a deficit of $22.5 million in 2013. Before 2011, its community budget meetings typically featured PowerPoint lectures, a question and answer session with the mayor, and an open forum for public comment.

That format gave the most weight to “the most vocal people,” says Harkness. “That’s a bad sample. People can say whatever they want without having to wrestle with complexity. It encourages extreme thinking.”

Perhaps it’s a good time to highlight Thomas Sowell‘s definition of economics: “the allocation of scarce resources which have alternative uses.” In other words, economics forces people to deal with trade-offs, rather than lament the fact that we “aren’t doing enough” to address some favored public policy goal.

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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