The fact that the new tech-friendly policies are furthering the development of a networked economy that undermines the traditional centralized authority of the nation-state itself is rarely mentioned. But if this era does indeed herald “the end of big government,” as Bill Clinton famously noted a few years back, where will that leave Washingtonians, the custodians of the old company store?

Perhaps the biggest public policy question facing our society as the millennium turns is barely being discussed inside the United States, though it hangs over everything here just like those winter storm clouds that hover but never seem to burst, and that is: “What’s the new role for government?”

In order to find a substantive discussion of this issue in the past year, you would have had to travel quite a ways beyond the Beltway — over to the great hall of the Palazzo Vecchio in Florence, Italy, where near the end of November there was what was called the Third Way Conference. President Clinton was there, along with other nascent globalists like Tony Blair (Britain), who’s just learned how to send e-mail; Gerhard Schroeder (Germany); Lionel Jospin (France); and Fernando Henrique Cardoso (Brazil).

Clinton and Blair, bouyed at home by their robust economies, argued for a new role for government — empowering citizens through universal education and access to technology so all can participate fully in the new economy. They consider their philosophy “progressive governance,” i.e., not strictly a public sector nor a private sector option, which is to say, a Third Way.

France’s Jospin worried out loud: “I see that we have a new economy but it’s not going to sweep away history, it’s not going to sweep away the various social groupings and it must not sweep away the nation-state. I’ll accept a networked economy but I don’t want a world dominated by networks, because that will be run by the private sector.”

Clinton later agreed with Jospin’s position: “We’ll say yes to the market economy, but no to the market society.” He went on to say that “what we’re striving for is to replace a divided way of looking at politics and talking about our common lives with a unifying theory.”

Here in the capital, it is rare to hear such debates. Behind most of the Neoclassical facades on archaic government buildings, entire floors of bureaucrats continue to occupy themselves with matters of amazingly minimal relevance to most people’s lives.

The cumbersome insititutions of government have undergone remarkably little change this decade, even as the world around them has melted away to reveal a new one in formation — an economy where people switch jobs constantly, building private portfolios and networks they carry with them, joining informal teams to invent new opportunities, generating wealth through equity culture — all based on digitized information as the common currency of a post-industrial, post-ideological society in the making.

A world where, as Walter Wriston has noted, information can be literally more valuable than money; one where ideas based on scarcity are being replaced by new ideas based on abundance.

In its own odd way, Washington sits poised on the bleeding edge of all this change. No other town on the continent is so information-obsessed, which explains its “most wired” distinction. Washington is, and long has been, the candy store for information junkies, so much so that the emergence of searchable databases linked to each other represents a perfect virtual replica of the space that Washington, Inc., has long occupied in the physical world. (According to a year-end survey, the Washington area actually has more tech firms — 12,183 — than any other in the country, even Silicon Valley, which has 11,930.)

The biggest difference is that physical Washington with its hallowed corridors of power is built only for the insiders. The main business in this place is making sure that you’ve got equal access to Republicans and Democrats — everyone wants to be bi- and to have it both ways.

Until recently, therefore, anybody who told you they could detect the fine cuts of positioning separating, an Al Gore, say, from a George W. Bush, had been paying way too much attention, or was making a buck on the detail work. (That changed a bit when both candidates had to start articulating their positions due to unexpectedly strong challenges within their own parties.)

Still, there’s no ideology left here, nothing that can stand alone without a modifier, like “compassionate” conservatives who say they support faith-based organziations, or “pragmatic” liberals who say they support faith-based organizations.

As they slice and dice their way to the bank, the old hands in Washington don’t yet fully comprehend that their world is dying. Their old system, based on the hoarding of access to power and classified information, is crumbling; it’s being replaced by the new chaos of a frenzied trade in information by everybody.

Even that most hallowed insider transaction — campaign fundraising — is being subverted by the Internet. Minnesota Governor Jesse Ventura used the Web to develop grassroots support for his unlikely campaign, helping him to raise hundreds of thousands in matching funds for much-needed television and radio ads. His eventual election was a shock to many journalists, though not necessarily on the Web.)

This year, Republican presidential hopeful Sen. John McCain has used the Internet to raise more than $1 million from his supporters at his Web site — which is one reason he has been able to challenge Bush for his party’s nomination.

In a move that perhaps was more than just another photo op, McCain and former Democratic Sen. Bill Bradley joined hands across party lines earlier this month to pledge that if they win their parties’ nominations, they will enforce a ban on accepting “soft money” donations. Like McCain, Bradley has been successful raising money online, more so than the frontrunner for the Democratic nomination, Vice-President Gore.

Of all these candidates, Gore may be the one most aware of the need for a Third Way, though he seems too cautious a politician to do much about it. During Clinton’s final year in office, look for him to do a lot of talking of the sort he did in Florence; starting in 2001, as a civilian from his base in Little Rock, he certainly will be a leading international advocate for constructing a new civic culture.

Back here at the center of the empire, if you look closely, the marble atop the swamp in this fine old town shows evidence of hairline fractures, as it gradually is coming undone from the inside by the pink ethernet vines, T-1′s, and DSL that are creeping in under the red, white and blue carpeting from all sides.

Most of the inmates of the marble asylum remain, for now, blissfully unaware of the threat.

That too, however, will be changing.