The reaction to the end of Warren’s campaign captures the blindness of the academic lounge and the establishment press to which it is intimately connected.
Washington Post columnist Neil Irwin celebrates, kind of, the rise of independent experts over elected politicians. It’s happening all over the world, he writes. In the United States, an Independent Payment Advisory Board (IPAB) will decide how to keep Obamacare spending under control, and a global warming policy empire is being stick-built, one rulemaking at a time, by the EPA. Congress is awol. Irwin’s chief example, predictably, is the rise of central banks, here and in Europe, as central decision-makers in the 2008 crisis and ever since. Irwin isn’t terribly fond of the trend, but despairs of political institutions and their ability to act. “When the world is on the brink,” he concludes, “decisive problem-solving trumps the niceties of democratic process. I won’t like it much—but I’ll take it.”
Let the record reflect that I, too, prefer expert interventions—however dubious—to global annihilation. Beyond that, though, I’m rather more skeptical of the experts’ record. I’m not at all sure Irwin has the analysis right, and I suspect that his expert heroes may be in for a crash landing.
Way back in the 1960s, the “experts” (along with every other major institution) lost their credibility for well-rehearsed, public choice-ish reasons: they were “captured” by regulated industries; maximized their budgets rather than public benefits; hankered for post-government employment, etc. That critique has lost of a lot of its oomph. We quickly concluded that we need the experts for the things that democratic institutions (especially parties and parliaments) are bad at: values and stability. What we did, then, was to reform expert institutions: insulate them against “capture,” subject them to publicity and “reasoned deliberation” requirements, and above all give them better tools: cost-benefit analysis. Really nifty macro-economic models. And now, behavioral economics!
How is this working out? Not so well, in my judgment—not for the pubchoice reasons of old, but for more Hayekean reasons.
For starters, it’s obvious that the experts don’t have a clue. The Fed’s pronouncements anno 2007, to the effect that everything was firmly in hand, are the stuff of legend, and its models have proven lamentably inaccurate in predicting even short-term economic performance. As for the experts’ climate change models about the planet’s behavior a century hence, right.
Even so, expert government proceeds on an implied premise of omniscience. The intergovernmental committee that decides, under and pursuant to the Endangered Species Act, whether the One-Eyed Toad shall live or die is called, only semi-ironically, the “God Squad.” (That would have been a terrific title for IPAB, but it’s already taken.) The squad’s reasoned decision-making is one step up from shooting dice. We can live with that, even if the toad cannot. However, expert ignorance increases with the scale, scope, and complexity of the experts’ mandate; and when we’re taking about the U.S. economy or the planet, that’s biggish. Still, we’re supposed to believe that there’s nothing wrong with the attempt to predict and manage these systems—nothing, that is, that can’t be fixed by an econometrician in the Fed’s basement or perhaps the Mann Brothers’ Earth Band (Michael with the hockey stick and Manfred with the keyboards).
Hard to say, from where I sit, what’s worse: the dark suspicion that the experts may actually believe their own models, or the fact that they’re putting on a game face in public and, in so doing, impede a serious discussion over what the institutions can and cannot do.
Nothing to worry about on that score, says Irwin: “The technocrats can make complex decisions quickly, quietly and efficiently.” Hm. Like they did in the European financial crisis, now in its glorious fourth or fifth year, with no end in sight? Its (for now) latest installment, the Cyprus “crisis,” was predictable; predicted for over a year; and teensy in scale. What does it say about the capacity of expert institutions that even that sort of thing can’t be handled without global fuss and agony?
(No, this does not have to do with global connectedness, complexity, or some other Tom Friedman trope. GM is a complex, worldwide enterprise; it doesn’t go into full-scale crisis mode over a failed dealership in Dubuque. It’s the institutions.)
Final and to my mind crucial point: I’m not at all sure Irwin’s dichotomy between democratic and expert institutions captures what’s going on. It’s true that parliaments around the globe have dithered and lost or surrendered authority. But power hasn’t migrated exclusively or even primarily to independent expert bodies; it has also migrated to executive bodies. (See, again, Chris DeMuth’s essay on that topic.) While it’s hard to tell which of these tendencies is dominant, the most salient fact is that independent and executive agencies are now joined at the hip. The experts remain independent in the sense of being unelected. But the age of politically independent institutions is over: they’ve long inherited the political instabilities that they are supposed to contain and have become political players and partners. Bailouts, the business cycle, financial regulation, structural reforms of entire countries, the control of rising health care costs and sea levels—all these are (or will be) joint executive-“independent” undertakings.
The world is a bit more democratic, and quite a bit less technocratic, than Neil Irwin makes it out to be. Whether that’s a reason for confidence is a different matter.