Monthly Archives: May 2021

Public policy & public interest

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I enjoyed another short book I opted for this holiday weekend, Power to the Public: The promise of public interest technology by Tara Dawson McGuinness and Hana Schank. It’s about the process of making policy and implementing it, rather than the analysis, and that’s one of the key points: that delivery of outcomes is integrated with the design of policies and the data on which analysis is based. The three ‘Ds’ are all essential, and linked to each other. I was interested in this book because we also published one (Digital Transformation at Scale) on the UK (the focus here is the US) about the digital delivery of public services, by Public Digital, the team that originally set up the Government Digital Service.

There are some clear lessons from the experiences on both sides of the Atlantic. One is that talking to the service users and administrators is essential because they contribute information about outcomes and barriers that is otherwise unknowable. Another is that thinking about the data that is not there is as important as the data that’s available, and this is why diversity of experience is important in public service delivery – a somewhat broader point than data bias. A third lesson is that the project of digitising services opens the door to changing processes and even policies – it is not just a matter or replicating paper processes online. Automating a bad policy is not a good outcome. A fourth lesson is the way the decision to digitise helps to bring about policy co-ordination that never happens at the level of policy analysis, for delivery is impossible without tackling all the obstacles to success. This means – fifth lesson – that it can be difficult and slow, and requires building coalitions of support.

The book has lots of examples and convinced me. The rapidly-growing ‘govtech’ or public interest tech movement is encouraging – for instance the US has Code for America and now New America, which these authors lead, and the UK has Public Digital, and State Up. One advantage the US has over the UK is the federal system, meaning different states can provide many opportunities to reform, and natural experiments. As McGuinness and Schank note, successful projects do require consistent political support right from the top. Let’s hope that the imperatives of having to deliver better outcomes for political reasons and needing to restore some order to the public finances during the recovery will mean that support is there.

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Humanomics – yes please

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After a 700+ page tome, excellent as it was, I went next for Deirdre McCloskey’s 100 page Bettering Humanomics: A New, and Old, Approach to Economic Science. Her style is something of an acquired taste – I like it, but know some don’t. In any case, there is no doubting the extraordinary breadth and depth of her knowledge (which was on full display in her Bourgeois Virtues trilogy).

This essay is an update on a constant theme through McCloskey’s work, which is the need for a broader methodological approach to economics by economists. The discipline is hobbled by a narrow range of methods, an obsession with one particular style of showy reasoning (often powerful, but often tipping over into ‘mathiness‘ or the cult of statistical significance. Nick Crafts refers to the ‘identification police’, a character everybody who has had a paper rejected by Reviewer 2 because he doesn’t think causality has been demonstrated in the approved way will recognise. The methodological constraints are reinforced by the tyranny of the Top 5 and the insider process for selection that characterises them.

Anyway, I was predisposed to agree with McCloskey in Bettering Humanomics. Her main theme is that ideas and language shape the economy, and economics needs to listen. As she points out, rhetoric has often changed things on the ground in dramatic and sudden ways – we are not deterministic products of centuries of culture. Economies can turn around in short periods – think post-war Germany, Ireland and Portugal, or Thailand and South Korea. Such changes – and many other examples from the impact of advertising to same-sex marriage – torpedo a “notion of preknown preferences derived from utilitarian theory of decision without rhetorical reflection.” The implication is that the kind of arguments about economic development popular among economists based on game theory or some other theoretical structure explain too much: they are too universalist, and ignore the way our actions at any moment are shaped by the expectations of others and the contextual specifics. I cover similar ground in my next book, Cogs and Monsters (out October 12th!).

So, I liked Bettering Humanomics. It’s critical of economics but a critique by someone who knows what she’s talking about and loves the analytical and empirical power of the subject. I think economics is changing, re-embracing the work of economists such as Hirschman and Baumol and Veblen – I hope so. 51jI00dx7mL._SX331_BO1,204,203,200_

 

The history – and future – of American capitalism

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Reading Jonathan Levy’s Ages of American Capitalism: A History of the United States has been quite a commitment: over 700 pages of text, plus notes, in hardback. The sheer weight militated against my taking in the grand sweep if its ambition, as I had to read it sitting at home propped on cushions. Nevertheless, it was well worth it.

As the title suggests, the account is organised into different ages: commerce (early days from late 17th century, and the role of slavery); capital (post Civil War to Fordism and the Depression); control (New Deal & postwar golden age); chaos (1980 on). The organising idea is the changed relationship between state and business in each of the eras, but importantly that the state, and political decisions, always ultimately determined the character of capitalism. The private sector – titans such as Morgan and Ford – clearly made a massive contribution to shaping US industrialisation through their business model choices, union-bashing and personal force of will; but they were not writing the story of capitalism on a blank sheet of paper. Government decisions and political forces constrained them and tamed them. And in each of the eras, there were distinct political visions, starting with the conflicting Hamilton and Jefferson visions.

This political economy framing made the final section the most interesting to me, given the many straws in the wind indicating that the 2020s will prove another junction between eras as belief in the “Magic of the Market” (Chapter 19) evaporates. This isn’t to say the Biden presidency will form the template for a new era – and indeed the book stops with the post-GFC recession – but rather that the Reaganite/Thatcherite order has become a disorder.

As in any Big Book, there are lots of interesting details and eye-catching turns of phrase. The superior logistics of the Union Army for example, involving vast military contracts for provisions and even railroad-building: “A highly functional political economy of corruption helped the Union win the war.” The early signs of the importance of the changing geography in US economic development as NASA and companies such as IBM opened facilities in Alabama in the late 1950s, signalling the rise of the sunbelt. The role of JP Morgan in creating forward-looking corporate valuations in the late 19th century merger movement.

There are points at which it seems like the book isn’t 100% in control of the economic terminology. For instance, Levy frequently uses a phrase about deposits ‘pyramiding into New York’ as if it’s a technical term of art. And there are a few scattered graphs that don’t add much to the words – the reproduced paintings are better illustrations of the points being made, be it about the frontier or 1960s consumerism. These are minor quibbles.

The book ends: “I have emphasized that American capitalism is an especially forward-looking economic system, in which expectations of the future play a prominent role in determining the present.” I think this statement is always true, and that it’s the balance between optimism about the future and nostalgia for the past that shapes an economy. The same page later lights on what is particularly distinctive about the US: “its pronounced historical amnesia.” And as Levy concludes, now is the moment for a better imagined future to come into play. Over to the politicians, Biden and the not-yet dormant spectre of Trumpism.

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The cost of malignant obedience

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Why, oh why, can’t I write like Michael Lewis? Surely everyone who reads his books and dabbles in writing themselves must ask this. I read his latest, The Premonition: A Pandemic Story, more or less in one sitting. It has the same pattern as his other excellent explorations of big, systemic things going wrong, The Big Short and The Fifth Risk. They are all superb books to set public policy students (and practitioners) as they concern the interaction between government and private decision-making: group-think, blame games, information and separating the signal from the noise, accountability, the role of expertise in democracies, of fear – and the rarity of clear thinking, moral fibre and courage. And they are all fantastic reads.

The Premonition concerns the lack of preparedness for the pandemic in the US: the politicisation of the CDC, the hollowing out of the public health system in previous decades, the malign ‘medical-industrial’ complex, and finally the toxic Trump presidency. It has some great characters, as in the other books independent-minded people who for whatever reason are not overly swayed by others around them in how they think or act. It has also given me a great addition to my lexicon: malignant obedience.

Anyway, highly recommended.

41oFjCfUWhL._SX324_BO1,204,203,200_Less so – as it’s one for afficionados – Katrina Forrester’s In the Shadow of Justice about the influence of John Rawls. I was of the Rawls and Nozick generation of undergraduates – their magisterial books were reasonably new then. But I found this heavy going, philosophy academese not being a light read. This is another book that has had rave reviews but I struggled with, so I’m sure the fault is mine. Having subsequently read some of the reviews, it’s clearly an important book. I found this one helpful in telling me what to make of it.

Extending the frontier

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I just read the new Princeton University Press edition of Vannevar Bush’s Science, The Endless Frontier, with an interesting introductory essay by Rush Holt. I don’t think I’d ever read the whole of the famous Bush document before, and it was interesting to see how he made the pitch. The rationale is all about the impact of research on living standards, jobs, progress. Famously, though, Bush advocated for expanded government support of basic research carried out independently and governed by scientists themselves. He argued for the early release of wartime results for the benefit of all (interesting given the contrast with the UK – perhaps we would have stayed stronger for longer in computing if the British government hadn’t kept the Bletchley work secret for so long).

I was also interested to see the essay starts by insisting on the need to include the social sciences and humanities in the body he advocated:

“It would be folly to set up a program in which research in the natural sciences and medicine was expanded at the cost of the social sciences, humanities and other studies so essential to national wellbeing.”

He also argued for a single agency to ensure disciplinary silos could be averted. Later in the essay, however, although the latter point is satisfied by Bush’s proposed structure for what became the NSF, he omitted the social sciences and humanities, believing they were ‘too political’.

Rush Holt’s essay notes that a competing proposal by Senator Kilgore wanted a new agency to serve the country’s economic and social needs more directly, and to ensure research funding was distributed around the US. And argues that the Kilgore vision was correct on this point. Holt writes: “Our scientific enterprise is failing to give citizens some importan things they need. These have not been failures of research …. Rather, they have been failures in the relationship between science and the public.” He argues on the one hand for reintegrating the social sciences and on the other for dialogue between scientists and public but also greater scientific literacy. Some research, he concludes, should be directed to social needs, and to regional economic development.

I hadn’t realised that today’s debate about these aspects of science policy dated right back to 1945. Both the Bush and the Holt essays are well worth a read. One of the lessons from the pandemic must be the high cost of not having better integrated social, medical and natural science research. There has been great work across disciplines, on the hoof – it should have been in place to start with. If we don’t fix this now, how on earth are climate change, biodiversity loss, demographic pressures and other big challenges going to be tackled?

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