Later today I’m speaking at Nesta’s FutureFest about future economic institutions, in what looks to be a terrific session, compered by Mark Stevenson, author of the excellent [amazon_link id=”1846683572″ target=”_blank” ]An Optimist’s Tour of the Future[/amazon_link]. Yesterday I popped in and heard Cambridge political scientist David Runciman give a thought-provoking talk on the future of democracy. I heard him speak on democracy in the 2011 Princeton University Press lecture, and his book [amazon_link id=”0691148686″ target=”_blank” ]The Confidence Trap: A History of Democracy from World War I to the Present[/amazon_link] is out soon.
[amazon_image id=”0691148686″ link=”true” target=”_blank” size=”medium” ]The Confidence Trap: A History of Democracy in Crisis from World War I to the Present[/amazon_image]
The quick summary (based on my tweets of a 15 minute talk) is that political institutions have not kept pace with technological change – indeed, they’ve hardly moved at all in the 25 years of dramatic advance in information and communications technologies. (Indeed, the mismatch between the pace of technological and social change is a commonplace.) However, he continued by saying that technology has in fact become the way political change has happened, to the extent it has. This manifests itself as technocracy – either the Chinese type, run by engineers, or the western type, run by economists and financiers. Technocracy is unsustainable, however. Democracy needs a reboot, by changing its scale of application, to the city level and to the supra-national, continental level.
It sounds intriguing enough to make the book a wanna-read.
David Runciman at FutureFest
When you answered my rather challenging question about what reforms you would make if you were installed as some technocratic dictator – I thought many suggestions were sensible, but politically infeasible.
Policies can either be economically sensible, or popular, but rarely both. Politicians reach for energy price freezes and house price increases, and eschew sensible planning laws and tax reforms.
I suspect this is due to the innate preferences of many voters. The emotional cost of having homes built near you outweighs any consideration of young people unable to afford homes, or the number of potential jobs that are not being created.
In the conflict between technocracy and democracy, perhaps the fault is not in our institutions, but in ourselves?
There is something in that, but institutions can shape our beliefs and behaviour.
Undoubtedly. I’m sure that over the long run institutions matter more than technical policy. I may whine about certain policies – but that’s a little self-indulgent when so many live under extractive elites, with little access to justice, education, health, industrial organisation and other public goods.
I’m also sure that our institutions and economic policy has improved over time – with a professional Civil Service, Central Bank, academia, think tanks, and an increasingly educated public reading excellent blogs such as this 😉
Also I’m sure that the intrinsic value of democracy outweighs the occasional suboptimal policies thrown up by populism.
All that said, there is a trade off between democracy and technocracy, as many voters lack the knowledge (or incentives – rational inattention and ignorance and all that) to adjudicate between economic policies, and will
systematically differ from ‘expert’ opinion on many issues (of course, with due skepticism of expertise).
So do we:
(A) improve democracy? – institutions will emerge which will engage the mass of voters in economic decision making and give them the technical
knowledge to choose wisely. Better economic and civic education in schools. Better journalism. Citizens panels. Vibrant local democracy with real economic decentralisation. Maybe some online social network institution that could be thrown up over time.
(B) reduce the role of democracy? Reduce government involvement in the economy or delegate policy to technocratic institutions. Monetary policy went to the BofE – could not something similar happen to fiscal policy or planning?
(C) accept that there is and always will be a great deal of ruin in a nation? Newspaper headlines will take precedence over economic expertise – silly policies will be adopted – let’s just accept it and find something more useful to do than worrying about political economy.