Government Technocrats Produce Bad Policy, Inflate Government and Undermine Democracy
by Andrew Alexander
The views represented in this article are solely those of the author and may not be construed as in any way representative of the views or policies of Oxford Royale Summer Schools.
With his strict adherence to academic received wisdom in the face of all common sense and not a single day of work done in the real world, former Chair of the Federal Reserve Ben Bernanke is the epitome of a technocrat.
You could make a good case for the Robert W. Service poem The Men Who Don’t Fit In being the most heart-breaking in the English language.
Despite its title it is about a type of person who not only fitted in but epitomised both Britain and America in the years when they held the destiny of the world in their hands. It narrates a mixture of restless energy, self-belief, urge to adventure and contempt for sluggish, cautious men bound to conventional pastimes and conventional wisdom. It is to our age, rather than our tradition, that Service’s heroes do not belong.
Two very profound influences upon modern life stand in contradiction to one another. The first is the doctrine of progress. The second is the doctrine of what I shall call ‘institutional common knowledge’ but which may equally be termed academic capture or the rise of the technocrats. It is difficult to understate the importance of either of these influential ideas, nor how intensely they should conflict in an intellectually honest system.
Marxism and Progressivism in Western Governments
The notion of progress comes from an interbreeding of Left-leaning social theory, Darwinian biological ideas and Marxism. It holds that, as there is progress in biology given the perpetual evolution of successful organisms which adapt to suit the changing demands of their environment, so too is there progress in human society as it develops from one state to another, better one. This is an echo of Marxist theory, which sees the organisation of political units as proceeding in a more or less staggered fashion towards the rule of the proletariat as each system of social organisation leads inexorably to a preferable next. It is relevant that both of these approaches are intrinsically atheistic, in that they reject the concept of fixity in the nature of man. The eternal doctrines of a church rely upon the fact that human nature, and therefore right actions, are unchanging. In contrast the progressive believes that humanity can become better as time goes by and that, as such, morality is and should be constantly in a state of evolution and change. The progressive viewpoint, in other words, embraces change as both desirable and necessary for successful societies and rejects the notion of omnipotence and of the permanent right answer in so doing. I would argue that the doctrine of progress is the single most powerful idea in Western political thought at present.
The doctrine of institutional common knowledge is arguably the most powerful reality in Western political systems. The hallmark of the modern bureaucracy is the exclusion of the generalist from policy making and the privileging of formal academic qualifications and institutional experience over practical experience, interpretive abilities, pragmatism, historical grounding, patriotism, energy, intellect or capacity for leadership. This means that, aside from at ministerial level where appointments are a mixture of happy accidents and horse trading, senior decision makers in strategically important sectors are likely either to have spent their life within a narrow band of institutions with shared cultures, or within an academic community that shares a remarkably common outlook on life despite representing a dissenting tradition.
The prevalence of academics and civil service career specialists in positions of influence is extremely important for public policy. For a start, it explains the disconnection between public and political perception of problems. An academic takes two approaches to winning an argument – either they appeal to numeric evidence as a proof, or they appeal to other authorities as a validation. This feature of academic life has translated directly into political life where ministers cite either the opinions of institutions or survey data as proofs for their policy. This approach is fundamentally incapable of delivering responsive governance or of understanding the people governed because it cannot engage with the moral and emotional prisms through which normal people think. Again, it is also an intrinsically atheistic point of view as it must assume that everything which matters can be measured and that the intangible is entirely incidental.
To see why this doesn’t work, take immigration. The institutional common knowledge is that immigration is a very good thing. This can be confidently asserted by numbers – immigrant communities in the UK have, on the whole, higher employment ratios that the indigenous population, they enter the workforce at a young age thus reducing the dependency ratio, they make substantial spending and investment contributions to UK PLC, they make up a large portion of the workforce in our most export facing industry – financial services. To say all this, however, misses a large part of the point. People will die for their country, they bond with it, or at least some of them do, on a deep level that is a stranger to the rule of workplace ratios. Those who object to immigration do so because, to paraphrase Christopher Caldwell, they ask if a country can be the same with different people in it, and if not, they wonder whether something they love is being taken from them. My point is not that one is right and the other is wrong, but rather that the language through which the government communicates with the governed is indecipherable to them thanks to academic capture and is therefore fundamentally causative of a democratic deficit.
The second problem caused by academic and career capture is that the complexity of the world and of policy making must be reduced to a model. No model can accurately predict either human or market behaviour, and many rest on fundamental assumptions which immediately render them nonsensical when given any real world application. People are rather good (or some of them are anyway) at absorbing and interpreting and weighting the myriad different pieces of information that they encounter and converting these into action. Yet, wisdom such as this is hard to measure. On the other hand, those who have spent their whole lives working or studying one particular, non-technical area (political science, many forms of economics) feel a powerful incentive to entrench their position as decision makers within that discipline. To do so, they must codify that discipline and render it in models – this way it is something that has to be studied, rather than something which can be felt; in this way, outsiders who are perhaps more gifted are excluded.
Quantitative Easing: the Pro-Rich, Anti-Poor Monetary Policy Pushed by Academics
These two beliefs – in progressiveness and the validity of institutional common knowledge – come together with the greatest force in the field of monetary policy. The academic capture of the world’s central banks is almost total – Janet Yellen, the new head of the Federal Reserve is a career academic, as was her predecessor Ben Bernanke – and with it come the very grave consequences of handing over an area of policy making of utmost practical importance to monumentally impractical people.
[pullquote]Ideas that would provoke derision were they placed in layman’s terms are passed into law cloaked in the language of the academic and carrying the sword of progress.[/pullquote]There are good reasons why monetary policy is particularly the plaything of the over-educated and under-mobile. The staid rules of money creation and interest rates appeal to the progressive’s reforming instincts. The old beliefs that printing money necessarily causes inflation, and that interest rate policy should set rates high enough to offer a real return are there to be disproven. Moreover, the career academic finds a wonderful field in which to let his or her love of building and critiquing models run free, given the abundance of measurable numeric data which the field produces. These models are self-evidently wrong most of the time, given that economics helpfully spans almost all human activity and human decision making, rather more than can be captured on two axes on a graph. Economics is also a subject where the insider benefits from the apparent complexity of the science. This is an effect created entirely by the complexity of the literature on the subject and the manner in which its public faces choose to describe it – given the fundamental importance of economics in each of our lives, it ought to be more widely understood, particularly given that the ideas described are not particularly complex.
The operation of institutional common knowledge in monetary policy has been insidious. Ideas that would provoke derision were they placed in layman’s terms and widely debated are passed into law without serious internal dissent cloaked in the language of the academic and carrying the sword of progress. Quantitative Easing is an idea which simultaneously impoverishes the working class, introduces unparalleled instability into the financial system, prevents the efficient functioning of the equity, bond or property markets, debases the currency and provides a state-backed basis for investors to chase under-priced risk around the world. It would be hard to design a financial weapon of mass destruction with such potency if you meant to. Common sense would tell you that printing large amounts of money and using it to buy your own bonds had all of these consequences. Yet common sense cannot be modelled and to a large extent cannot be learned, in addition to which institutional sense has an abhorrence of what is commonly held to be true.
Politicians Wield Power with Irresponsible Narcissism
The application of the technocratic approach to economics is ill-advised but possibly excusable given that a high level of numeracy and a basic ability to understand and interpret complex indicators is an essential feature of the discipline. The exercise of this approach in other areas, however, requires a further a stretch of imagination. Particularly, this is the case with foreign policy.
A hallmark of British foreign policy in the technocratic age is its need to become involved in every single overseas dispute it can find. This foolish strategy requires it to pick sides between what are often two nearly identical combatants, demonise one of these as new Nazis, elevate the other to crusaders for democracy, and pour money, rhetoric and diplomatic capital into creating an unstable regime of haloed gangsters. The Foreign Office has achieved such a thing in Libya, Egypt and Syria. It is straining to achieve something similar in Ukraine, at the cost of a relationship with a Russia that should be a natural ally. It does this because it must justify its existence and because of the pressures outlined in this article’s introduction. Progress is not confined to domestic affairs – there must be progress too in international relations, hence the need to support the revolutionary change creating misery in foreign lands. Likewise, the career expert or the academic feels compelled to identify the good guys in a problem that might be too complex for a layman to demand interference on behalf of one nation or the other – if he or she is unable to do so, then what is their point exactly, how else do they wear the mantle of their authority?
There are few black and white affairs in human history, of course. The need to depict foreign policy in these terms is derived entirely from the existence of a class that create and subscribe to institutional common knowledge. The layman, armed only with common sense, cannot support the conclusions of these experts and yet finds a small cadre contorting his country into ever mode uncomfortable positions.
Humility does not come easily in the new world. At the outset of this article, I noted how antithetical the notions of progress and institutional common knowledge were to theistic faith. Humility is a casualty of that same absence of belief – without the knowledge of a higher authority, humans become apt to believe that their opinion is actually a fact, or at least a very startling and prescient insight into the affairs of the world which demands acting upon whatever the opposition from what Tony Blair used to call “the enemies of progress”. What we have lost from this process is the ability to admit that sometimes, we simply don’t know how to create Nirvana from the green benches of the House of Commons. What is more, where the fate of millions of people rests on your shoulders, you have a duty to move with caution and responsibility, sticking to actions with reasonably foreseeable effects. Again, our leaders have lost that sense of responsibility, so lost are they in the narrative of their own separateness and brilliance. The world is a more dangerous place as a result.